VI Derivatives, LLC Ex Rel. VIFX, LLC v. Director of Virgin Islands Bureau of Internal Revenue United States , 561 F. App'x 193 ( 2014 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
__________
No. 13-1108
__________
VI DERIVATIVES, LLC, BY VIFX, LLC, ITS TAX MATTERS PARTNER,
BY RICHARD G. VENTO, ITS TAX MATTERS PARTNER
v.
DIRECTOR OF VIRGIN ISLANDS BUREAU OF INTERNAL REVENUE
UNITED STATES OF AMERICA,
Intervenor-Defendant-Appellee
(D.C. No. 3-06-cv-00004)
VIFX LLC BY RICHARD G. VENTO ITS TAX MATTER PARTNER
v.
DIRECTOR OF VIRGIN ISLANDS BUREAU OF INTERNAL REVENUE
UNITED STATES OF AMERICA,
Intervenor-Defendant-Appellee
(D.C. No. 3-06-cv-00005)
GAIL VENTO
v.
DIRECTOR OF VIRGIN ISLANDS BUREAU OF INTERNAL REVENUE
UNITED STATES OF AMERICA,
Intervenor-Defendant-Appellee
(D.C. No. 3-06-cv-00006)
RICHARD VENTO
v.
DIRECTOR OF VIRGIN ISLANDS BUREAU OF INTERNAL REVENUE
UNITED STATES OF AMERICA,
Intervenor-Defendant-Appellee
(D.C. No. 3-06-cv-00007)
RENEE VENTO
v.
DIRECTOR OF VIRGIN ISLANDS BUREAU OF INTERNAL REVENUE
UNITED STATES OF AMERICA,
Intervenor-Defendant-Appellee
(D.C. No. 3-06-cv-00008)
NICOLE MOLLISON
v.
DIRECTOR OF VIRGIN ISLANDS BUREAU OF INTERNAL REVENUE
UNITED STATES OF AMERICA,
Intervenor-Defendant-Appellee
(D.C. No. 3-06-cv-00009)
LANA VENTO
v.
DIRECTOR OF VIRGIN ISLANDS BUREAU OF INTERNAL REVENUE
UNITED STATES OF AMERICA,
Intervenor-Defendant-Appellee
(D.C. No. 3-06-cv-00010)
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VI DERIVATIVES, LLC, BY VIFX LLC, ITS TAX MATTERS PARTNER, BY
RICHARD G. VENTO, ITS TAX MATTERS PARTNER
v.
UNITED STATES OF AMERICA; DIRECTOR OF VIRGIN ISLANDS
BUREAU OF INTERNAL REVENUE
(D.C. No. 3-06-cv-00012)
VIFX LLC BY RICHARD G. VENTO ITS TAX MATTER PARTNER
v.
UNITED STATES OF AMERICA
(D.C. No. 3-06-cv-00013)
GAIL VENTO, LLC.
v.
UNITED STATES OF AMERICA
(D.C. No. 3-09-cv-00003)
RENEE VENTO, LLC.
v.
UNITED STATES OF AMERICA
(D.C. No. 3-09-cv-00004)
NICOLE VENTO, LLC.
v.
UNITED STATES OF AMERICA
(D.C. No. 3-09-cv-00005)
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VI DERIVATIVES, LLC, BY VIFX, LLC, ITS TAX MATTERS PARTNER,
BY RICHARD G. VENTO, ITS TAX MATTERS PARTNER;
VIFX LLC BY RICHARD G. VENTO ITS TAX MATTER PARTNER;
GAIL VENTO; RICHARD VENTO; RENEE VENTO; NICOLE MOLLISON;
LANA VENTO; VI DERIVATIVES, LLC, BY VIFX LLC, ITS TAX MATTERS
PARTNER, BY RICHARD G. VENTO, ITS TAX MATTERS PARTNER;
VIFX LLC BY RICHARD G. VENTO ITS TAX MATTER PARTNER; GAIL VENTO,
LLC.; RENEE VENTO, LLC.; NICOLE VENTO, LLC.,
Appellants
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On Appeal from the District Court of the Virgin Islands
(D.C. Nos. 3-06-cv-00004, 3-06-cv-00005, 3-06-cv-00006, 3-06-cv-00007,
3-06-cv-00008, 3-06-cv-00009, 3-06-cv-00010, 3-06-cv-00012,
3-06-cv-00013, 3-09-cv-00003, 3-09-cv-00004, 3-09-cv-00005)
District Judge: Honorable Juan R. Sanchez
ARGUED DECEMBER 9, 2013
BEFORE: FISHER, COWEN, and NYGAARD, Circuit Judges
(Filed: March 27, 2014)
Alan R. Feuerstein, Esq. [Argued]
Feuerstein & Smith
475 Delaware Avenue
Buffalo, NY 14202
Counsel for Appellants
Tamara W. Ashford, Esq.
Thomas J. Clark, Esq. [Argued]
Gilbert S. Rothenberg, Esq.
Jennifer M. Rubin, Esq.
United States Department of Justice Tax Division
950 Pennsylvania Avenue, N.W.
P.O. Box 502
Washington, DC 20044
Counsel for Appellee, United States of America
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OPINION OF THE COURT
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NYGAARD, Circuit Judge.
This appeal arises from the District Court’s denial of Appellants’ post-trial
motions for discovery and an evidentiary hearing following the disclosure of the
Government’s lead counsel that his bar membership had lapsed prior to his involvement
in this case. The District Court’s denial of post-trial discovery requests is subject to a
review for abuse of discretion. Hewlett v. Davis, 844 F.2d 109, 115 (3d Cir. 1988). We
will affirm.
As this opinion lacks any precedential value, we write only for the benefit of the
parties whose familiarity with the case obviates the need for a recitation of the facts and
procedural history. After trial, on November 2, 2012, Stuart Gibson notified the District
Court that, while representing the Government as lead counsel in this case, he had an
inactive membership status in the Minnesota bar, the only state in which he was licensed
to practice law. Subsequently, Appellants sought discovery and an evidentiary hearing
on the theory that “all of the actions purportedly taken on behalf of the United States [by
Mr. Gibson] were null and void and without legal effect.” Appellants now claim error by
the District Court, asserting that its denial of their motions improperly relied upon their
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failure to show prejudice. They also assert that Gibson’s practice of law with an inactive
bar status during this case constitutes a fraud on the court.1
In their motions for discovery and an evidentiary hearing, Appellants alleged the
following:
Many proceedings in this and in other companion cases were
brought by and defended by Mr. Gibson, including numerous
motions to quash subpoenas and appellate proceedings that
challenged lower court rulings. Mr. Gibson also held a
foreign deposition in the Republic of Singapore, which was
used by the Court in formulating findings.
Appellants also state:
The issue for resolution is whether, under the law of the
Virgin Islands, Minnesota and the Republic of Singapore, the
defect of Mr. Gibson not having been a licensed attorney
meant that the United States prosecuted the case through a
DOJ officer who was not validly or properly delegated, and
thus all of the actions purportedly taken on behalf of the
United States were null and void and without legal effect.
Such a defect cannot be cured by a nunc pro tunc designation.
Appellants offered no other statement or allegation in support of their motions.
The District Court noted that Appellants’ references to Mr. Gibson’s involvement
in various aspects of the case (motion practice, appeals, and a deposition in Singapore)
failed to articulate any particular misconduct, and lacked any mention of particular
prejudices they suffered. From this, it determined that Appellants pleaded nothing to
plausibly ground the grant of a new trial. We conclude that it properly foreclosed
1
Appellants’ fraud on the court claim is raised for the first time on appeal. After
reviewing the record, we conclude that there are no extraordinary circumstances here.
Thus, this cause is waived.
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Appellants’ frivolous request for a fishing expedition that promised to be an utter waste
of judicial resources.
Next, in response to Appellants’ assertion that Mr. Gibson’s status precluded his
authorization by the Government to represent its interests in this case, the District Court
observed that Gibson had co-counsel from the Department of Justice’s Tax Division who
were duly authorized to represent the Government. Moreover, while Appellants are
correct that membership in a state’s bar is necessary to represent the Government, the
absence of such status alone—a situation that the District Court correctly characterized as
a purely administrative form of misconduct in this case—is inadequate to show prejudice
sufficient to deserve a new trial. We note that merely labeling various acts as unethical
or outrageous in an appellate brief is not enough. Additionally, Appellants failed to
provide legal support for their contention that Mr. Gibson’s inactive bar status de facto
rendered the Government’s actions in this case null and void.
The District Court properly relied upon our precedent for the rule that a new trial
is appropriate only where there is a reasonable probability that the verdict was prejudiced
by the attorney’s misconduct. Our review of the record provides no evidence of any
irregularities or improper acts that would ground a reasonable probability of a tainted
verdict, or support a ruling of any prejudice at all. There was no reason for discovery or a
hearing here, and the District Court did not err by dismissing the motions.
For all of these reasons we will affirm the District Court’s order.
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