Opinion
CV F 96-5948 AWI SMS
August 12, 2002
ORDER DENYING MOTION FOR RELIEF FROM AUCTION SALE [Document #269] BACKGROUND
On April 1, 1998, the court granted summary judgment to the United States. The same day, the court denied Simmons' motion to file an amended counterclaim. On May 5, 1998, the court filed an Order of Judicial Sale, which was amended by Order entered on April 27, 2000, respecting the sale of coins, and amended by Order entered on October 24, 2000, respecting the sale of real property. On July 2, 1998, Simmons filed a notice of appeal from the final judgment and the Order of Judicial Sale. The Ninth Circuit affirmed the court's grant of summary judgment and entry of judgment in favor of the United States. On September 14, 2001, Simmons filed a notice of appeal concerning the court's amendments to the Order of Judicial Sale. On July 29, 2002, the Ninth Circuit affirmed this court.
On April 12, 2002, Simmons filed an ex parte application for a stay of the auction sale of the real property pending appeal. On May 14, 2002, the court denied Simmons' motion to stay the auction sale without prejudice to Simmons paying a supersedeas bond or agreeing to alternative conditions as required by Rule 62 of the Federal Rules of Civil Procedure.
On May 22, 2002, the real property was sold by action.
On May 23, 2002, Simmons filed objections to the auction sale.
On June 3, 2002, the United States lodged a proposed order confirming the judicial sale. Accompanying the United States' proposed order was a report providing information about the auction sale of the real property.
On June 11, 2002, Simmons filed a motion for the court to give relief from the auction sale of May 22, 2002. Simmons contends that the auction sale was conducted in violation of the Local Rules. Simmons argues that he received improper notice and the sale was improperly conducted by the IRS.
On July 3, 2002, the United States filed an opposition. The United States contends that the auction sale was valid because it was conducted in accordance with the Order of Judicial Sale.
On July 23, 2002, Simmons filed a reply brief.
DISCUSSION
Simmons' requests relief from the auction sale of real property. Simmons' motion does not contend that the auction sale was conducted in violation of the court's Order of Judicial Sale. Rather, Simmons' motion contends that the auction sale was conducted in violation of Local Rule A-570. Simmons argues that the sale did not conform to Local Rule A-570 because the IRS conducted the sale but Local Rule A-570 provides that the United States Marshal must conduct a judicial sale of real property. Simmons also argues that the sale did not conform to Local Rule A-570 because notice was not published daily for a period of four calendar days prior to the sale as required by Local Rule A-570.
Preliminarily, the court notes that because the parties agree the auction sale was conducted pursuant to the Order of Judicial Sale, the real issue before the court is whether the Order of Judicial Sale contained improper terms. On September 18, 2002, the United States filed a motion to amend the order of judicial sale, and Simmons filed an opposition to the proposed amended order of judicial sale. On October 24, 2000, the court entered the Order of Judicial Sale at issue. Simmons filed challenges to the Order of Judicial Sale on June 27, 2001, and April 12, 2002. At no time did Simmons ever challenge the Order of Judicial Sale on the ground that it violated the Local Rules. Simmons never challenged the Order of Judicial Sale's notice provisions. While Simmons did challenge the Order of Judicial Sale's provision that the IRS instead of the Marshal conduct the auction sale and the court rejected Simmons' argument, Simmons challenge was on grounds other than a violation of the Local Rules. Because Simmons was given the opportunity to file objections to the Order of Judicial Sale and Simmons did oppose various terms in the Order of Judicial Sale on several occasions it is questionable if Simmons can now challenge the Order of Judicial Sale's terms after the auction sale has already been completed. Nevertheless, Simmons' contention that the auction sale is invalid because it did not comply with the Local Rules is without merit.
Simmons is correct that Local Rule A-570 provides that notice is to be published for four calendar days prior to the sale instead of four times during the four weeks proceeding the sale as was done in this case. When describing how a sale of property is to be conducted, Local Rule A-570 names the United States Marshal as the individual who is to conduct the sale. Thus, Simmons is correct that the auction sale conducted in this case pursuant to the Order of Judicial Sale did not comply with all of Local Rule A-570's terms. However, the Local Rules also provide that by court order the court can deviate from the Local Rules. Local Rule 1-102(d) provides:
Unless contrary to the Federal Rules of Civil and Criminal Procedure, the Court in its discretion may make such orders supplementary or contrary to the provisions of these rules as it may deem appropriate and in the interests of justice and case management under Fed.R.Civ.P. 16 or Fed.R.Crim.P. 17.1 in a special action circumstance.
Because notice was given in the four weeks proceeding the auction sale and the court has previously found sale by the IRS appropriate, under the circumstances of this case any departure from the Local Rules was "so slight and unimportant that the sensible treatment is to overlook [it]."Allen v. United States Fidelity Guaranty Co., 342 F.2d 951, 954 (9th Cir. 1965). As discussed below, no Rule of Civil Procedure requires the exact notice procedure used in Local Rule A-570 and no Rule of Civil Procedure requires that an Order of Judicial Sale be conducted by the Marshal instead of the IRS. Thus, the court had the ability to prescribe conditions for the auction sale that differed from Local Rule A-570.
The court does note that in Professional Programs Group v. Department of Commerce, 29 F.3d 1349 (9th Cir. 1994), the Ninth Circuit stated that "Local rules have the `force of law' and are binding upon the parties and upon the court, and a departure from local rules that affects "substantial rights' requires reversal." Id. at 1353. However, the Ninth Circuit's legal authority for this proposition was Martel v. County of Los Los Angeles, 21 F.3d 940, 946-47 (9th Cir. 1994). After Professional Programs was issued, an en banc panel of the Ninth Circuit vacatedMartel and in the en banc panel's opinion omits any reference to Local Rules having the force of law. See Martel v. County of Los Angeles, 56 F.3d 993 (9th Cir. 1995) (en banc). Thus, the Ninth Circuit's statement in Martel and Professional Programs that Local Rules have the force of law is no longer binding authority. Regardless, the Ninth Circuit in Professional Programs recognized that a departure from Local Rules is justified "if the effect is so slight and unimportant that the sensible treatment is to overlook it." Professional Programs, 29 F.3d at 1353 (quoting Allen, 342 F.2d at 954). Because notice was given and because the court has already determined that a sale by the IRS instead of the United States Marshal is lawful, the court finds any difference between Local Rule A-570 and the Order of Judicial Sale can be overlooked within the meaning of Allen and Professional Programs.
To the extent Simmons challenges the sale by the IRS instead of the Marshal, the court previously determined that the amendments to the Order of Judicial Sale, including the provision for sale by the IRS, fell within the court's broad discretion to set terms and conditions of judicial sales. See 28 U.S.C. § 2001(a); United States v. Branch Coal Co., 390 F.2d 7, 10 (3d Cir. 1968); United States v. Heasley, 283 F.2d 422, 426 (8th Cir. 1960); Revere Copper Brass, Inc. v. Adriance Machine Works, 68 F.2d 708, 709 (2d Cir. 1934). Because no Rule of Civil Procedure mandated sale by the Marshal, the court's Order of Judicial Sale's deviation from Local Rule A-570 was not improper. Thus, the auction sale by the IRS was not invalid despite the fact that it was not conducted by the Marshal.
Simmons bases much of his motion on alleged lack of notice. However, this is not a case where Simmons alleges he did not have any notice of the auction sale. Clearly Simmons had actual notice of the auction sale because he filed a motion to stay the auction sale on April 12, 2002. This is also not a case where the court's Order of Judicial Sale allowed for sale without any notice and the real property was sold at auction with no published notice. Notice was provided by publishing the sale for four weeks in the Fresno Business Journal. Simmons' disagreement is over the fact that notice was conducted differently than provided for by the Local Rules. However, as discussed above, such a deviation from Local Rule A-570 is allowed by Local Rule 1-102(d). There is no argument or authority that publishing notice for the four days proceeding a sale instead of four times in the four weeks proceeding a sale is mandated by the Rules of Civil Procedure. Further, Simmons was not prejudiced by the change. Notice over four weeks, as was done in this case, instead of notice for only four days arguably gives better notice. In addition, the Order of Judicial Sale gave Simmons knowledge of the way notice would be given in this case. Thus, the auction sale was not invalid despite the fact that notice was given in a way other than that provided for by Local Rule A-570.
In its opposition, the United States also discusses Simmons' argument in his objection to the auction sale that the notice was improper because it was in the Fresno Business Journal instead of the Fresno Bee. This argument was not made in Simmons' motion. Neither the Local Rules nor the court's Order of Judicial Sale required notice be in the Fresno Bee. Further, there is no evidence before the court that the Fresno Business Journal is not a newspaper of general circulation in Fresno County. Thus, any argument before the court that notice was insufficient because it was not in the Fresno Bee is without merit.
Accordingly, the court ORDERS that:
1. Simmons' June 11, 2002 motion for the court to give relief from the auction sale is DENIED;
2. The United States' request for an order confirming the judicial sale is GRANTED; and
3. An Order Confirming Judicial Sale accompanies this Order.