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United States v. Bigley

United States District Court, D. Arizona

August 10, 2017

United States of America, Plaintiff,
v.
Michael A Bigley, et al., Defendants.

          ORDER

          HONORABLE G. MURRAY SNOW UNITED STATES DISTRICT JUDGE

         Pending before the Court are the Verified Motion for Relief from Order and for Disqualification of Judge of Defendant Michael A. Bigley, (Doc. 231), and the Motion for Relief from Order and for Disqualification of Judge Holland of Defendants Robert B. Kelso and Raeola D. Kelso, (Doc. 232). The underlying action is presided over by Judge H. Russel Holland; the consideration of Defendants' motions for disqualification was assigned to this Court by random lot. For the reasons set forth below, the Court denies the motions for disqualification and refers the motions for reconsideration back to Judge Holland.

         BACKGROUND

         The United States commenced a civil action on April 8, 2014 against Michael A. Bigley, Carolyn E. Bigley, Robert B. Kelso, Raeola D. Kelso, and ISA Ministries (together, “the Defendants”) to obtain a judgment for outstanding income taxes from 2004-2007. The United States alleged that the Bigleys, in an effort to defraud present and future creditors, fraudulently transferred ownership of their real property to the Kelsos and to ISA Ministries. The United States sought to enforce federal tax liens on Defendants' real property, because it represented substantially all of the Bigleys' assets. The case was assigned to Judge Holland, a visiting senior judge from the District of Alaska.

         Throughout the proceedings, Defendants raised repeated challenges to Judge Holland's decisions as well as his ability to hear the case at all. They argued, among other things, that the district courts of the United States can entertain actions initiated by the “United States, ” but not by-as here-the “United States of America”; that the United States District Court for the District of Arizona is not actually an Article III court but an Article I legislative court; and that Judge Holland, as a visiting senior judge, lacked authorization to hear the case. These arguments were rejected.

         The United States moved for summary judgment against the Bigleys and the Kelsos and for default judgment against ISA Ministries. On May 10, 2017, Judge Holland granted those motions. In, his order, Judge Holland reiterated his rejection of the Defendants' jurisdictional arguments. (Doc. 227 at 2-3.)

         On June 6, 2017, Michael Bigley and the Kelsos filed the motions now pending before this Court. In their motions, Defendants assert that Judge Holland lacked jurisdictional authorization to preside over the action. (Doc. 231 at 3-7; Doc. 232 at 2- 7.) Defendants further assert that Judge Holland demonstrated bias by issuing discovery sanctions against them, denying the Bigleys' request to dismiss the action, and granting the government's summary judgment motion. (Doc. 231 at 1-2.) Defendants assert that Judge Holland, by granting the government's Motion for Summary Judgment, deprived Defendants of due process, insofar as Defendants were denied the right to a jury trial on disputed facts, denied the right to testify and demonstrate errors in the government's exhibits, and deprived of real property as a result of the judgment entered against them. (Doc. 231 at 8-13; Doc. 232 at 8-10.) The motions thus largely take issue with legal rulings Judge Holland made (in some cases multiple times), and further assert that the rulings demonstrate that Judge Holland must be disqualified from presiding over the case.

         Judge Holland requested that the pending motions be referred for an independent judicial evaluation of whether the Defendants' allegations merit his recusal. (Doc. 234.) The consideration of the motions was assigned to this Court by random lot. The United States has filed a response to the motions insofar as they seek Judge Holland's disqualification, (Doc. 235), and the Defendants have replied, (Doc. 237). Michael Bigley also filed a document entitled “Notice to Principal is Notice to Agent, Notice to Agent is Notice to Principal” in which he purported to order “all Officers of the Court including all Judges and Attorneys” to cease and desist “any actions bringing harm to [Bigley] in any way” and threatening suit for any such harm. (Doc. 236.)

         DISCUSSION

         I. Legal Standard

         Two statutes govern whether a federal judge must recuse in a particular case. The first, 28 U.S.C. § 144 states:

Whenever a party to any proceeding in a district court makes and files a timely and sufficient affidavit that the judge before whom the matter is pending has a personal bias or prejudice either against him or in favor of any adverse party, such judge shall proceed no further therein, but another judge shall be assigned to hear such proceeding. The affidavit shall state the facts and the reasons for the belief that bias or prejudice exists, . . . A party may file only one such affidavit in any case. It shall be accompanied by a certificate of counsel of record stating that it is made in good faith.

28 U.S.C. § 144. The second statute, 28 U.S.C. § 455, further specifies:

(a) Any justice, judge, or magistrate of the United States shall disqualify himself in any proceeding in which his impartiality ...

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