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United States v. Gutierrez

United States District Court, D. New Mexico

May 5, 2018

UNITED STATES OF AMERICA, Plaintiff,
v.
DARRYL J. GUTIERREZ, Defendant.

          John C. Anderson United States Attorney Reeve L. Swainston Holland S. Kastrin Margaret M. Vierbuchen Assistant United States Attorneys United States Attorney's Office Albuquerque, New Mexico Attorneys for the Plaintiff

          Jason Bowles Bowles Law Firm Albuquerque, New Mexico Attorney for the Defendant

          MEMORANDUM OPINION AND ORDER

         THIS MATTER comes before the Court on: (i) the Defendant's Pro Se Notice of Challenge to Jurisdiction, filed May 31, 2016 (Doc. 21)(“Motion”); (ii) the Defendant's Notice of Default, filed July 27, 2016 (Doc. 25)(“Default Notice”); (iii) the Defendant's Notice of Challenge to the Court's Conduct and Memorandum of Law, filed August 9, 2016 (Doc. 26)(“Challenge Motion”); and (iv) the United State[s'] Motion to Strike or to Deny Whatever Relief is Requested in Docket Entries 26 and 27, filed August 12, 2016 (Doc. 28)(“United States' Motion”). The Court held a hearing on August 19, 2016. The primary issues are: (i) whether the Court has jurisdiction to try Defendant Darryl Gutierrez for corruptly endeavoring to obstruct the administration of the internal revenue laws and for lying on his 2000-2009 tax returns; (ii) whether Gutierrez is a “taxpayer”; (iii) whether the Court is disqualified from the case for being a partial decision maker; (iv) whether the Court must dismiss the case, because the Court did not respond to the Motion within thirty days; and (v) whether the Court should strike the Default Notice and Challenge Motion, because counsel represents Gutierrez, because those filings are untimely, and because they lack merit. The Court concludes that the arguments which Gutierrez asserts bear the hallmarks of traditional, meritless tax-protestor arguments. “The federal courts are hostile to such arguments -- frankly, not just to accepting them, but to even hearing them.” United States v. Rivera, 2015 WL 4042197, at *19 (D.N.M. June 30, 2015)(Browning, J.). Accordingly, the Court denies the Motion, the requests in the Default Notice, and the requests in the Challenge Motion. The Court also grants in part and denies in part the United States' Motion. It concludes that striking Gutierrez' filings is not warranted, as the Court stated it would not shut the courthouse door on Gutierrez. The Court, however, grants the United States' Motion to the extent that it requests that the Court deny Gutierrez' requested relief.

         FACTUAL BACKGROUND

         The Court takes its facts from the Indictment, filed November 5, 2015 (Doc. 2)(“Indictment”). The Court does not set forth these facts as findings or the truth. The Court recognizes that the Indictment is largely the United States' version of events and that Gutierrez is presumed innocent.

         From 2000 through 2009, Gutierrez filed federal income tax returns falsely claiming tax refunds in the amount of $173, 526.00. See Indictment ¶ 1, at 1. Gutierrez, however, was not entitled to that amount in refund; instead, he owed $125, 624.00 in federal taxes. See Indictment ¶ 1, at 1. Gutierrez also falsified his W-4 forms for many years claiming exemption from federal income tax withholding. See Indictment ¶¶ 11-15, at 2-3. In addition, he lied on his 2000-09 1040 forms by claiming that he had no wage income even though he earned wages and knew of those wages. See Indictment at 5-9. From 2011 through 2013, Gutierrez sent various notices to the Internal Revenue Service stating that he is not liable for income tax under 26 U.S.C. Subtitle A or for the penalties assessed against him, because he is not a “taxpayer.” Indictment ¶¶ 19-25, at 4-5.

         PROCEDURAL BACKGROUND

         On November 5, 2015, the Grand Jury returned an eleven-count indictment against Gutierrez. See Indictment at 1-9. On December 2, 2015, Gutierrez was arrested and arraigned before the Honorable Steven C. Yarbrough, United States Magistrate Judge for the United States District Court for the District of New Mexico. See Clerk's Minutes before Magistrate Judge Steven C. Yarbrough at 1, filed December 2, 2015 (Doc. 5). On February 8, 2016, the Court held a status conference in which Gutierrez mentioned the possibility that he might raise motions that his counsel would not join, and the Court stated that it would not close the courthouse door on Gutierrez. See Clerk's Minutes Before District Judge James O. Browning, at 1-2, filed February 8, 2016 (Doc. 17); Motion ¶ 4, at 2.

         1. The Motion.

         The Motion raises a variety of arguments of which the general theme is that the Court has no power over Mr. Gutierrez. See Notice of Challenge to Jurisdiction at 2, filed May 31, 2016 (Doc. 21-1)(“Motion Mem.”).[1] For example, he asserts: “The Constitution fixed jurisdiction limit[s] for Congress to exercise legislative jurisdiction only within the exterior borders of District of Columbia, herein ‘D.C.'. Gutierrez demands the Court provide incontrovertible, lawfully gathered, admissible evidence of claimed authority to arbitrarily enlarge its Constitution[ally] fixed jurisdiction limit beyond the exterior borders of D.C.” Motion Mem. at 2 (emphasis in original). See id. at 3. He also contends that the Court has no jurisdiction “within [the] New Mexico Republic, particularly within Santa Fe County borders.” Motion Mem. at 2 (emphasis in original).

         Flowing from the general theme, he also asserts that the Court has no power over him, because he is a sovereign citizen not subject to the Court's jurisdiction. See Motion Mem. at 3. According to Gutierrez, in the Treaty of Paris of 1783, “King George III . . . recognized for posterity this victorious body of American People, of which Gutierrez' ancestor was a member, were, and are sovereigns equal with the King himself.” Motion Mem. at 3 (emphasis in original).[2] It follows, so Gutierrez' assertion goes, that he, as a descendant of one of those Americans, is his own sovereign, so cannot be a “taxpayer” who owes taxes to the United States. Motion Mem. at 3. He also contends that, because he is a sovereign that did not consent to being taxed, the indictment is invalid. See Motion Mem. at 6-7. Continuing the theme, he asserts that, pursuant to Penhallow v. Doane's Administration, 3 U.S. 54 (1795), the Court cannot “interface with” him, as he is not “an artificial person, ” so the United States cannot indict him. Motion Mem. at 5 (purporting to quote Penhallow v. Doane's Administration, 3 U.S. 54 (1795)(“[E]very government is an artificial person and can only interface with another artificial person.”)).[3]

         Separate from the purported jurisdictional issues, Gutierrez also argues that the Court cannot lawfully serve as a judge, because the Court has a pecuniary interest in the case. See Motion Mem. at 7 (citing 18 U.S.C. § 208; 28 U.S.C. §§ 144, 455). He also contends that, because the tax laws at issue have no implementing regulation published in the Federal Register, he cannot be indicted for violating those laws. See Motion Mem. at 4.

         While Gutierrez had an attorney for every stage of the proceeding, Gutierrez filed the Motion without counsel joining it. See Motion ¶ 5, at 2. Gutierrez subsequently filed a Notice of Correction to Court Filed Defendant's Pro Se Challenge to Jurisdiction at 1, filed June 27, 2016 (Doc. 22)(“Correction Notice”), in which he notifies the Court that, contrary to the Motion's labeling that his motion was filed pro se, he “is NOT pro se.” Correction Notice at 4 (emphasis in original). In the Correction Notice, John Butcher, Gutierrez' appointed Assistant Federal Public Defender, noted that he had used the term “pro se, ” because pro se seemed the most accurate of the available CM/ECF labels, as Mr. Butcher needed to show that he was not joining the Motion. Correction Notice at 2.

         2. The Response.

         The United States responds that the Motion is a frivolous tax protestor motion, so the Court should dismiss it out of hand. See United State[s'] Response to Defendant's Pro Se Notice of Challenge to Jurisdiction at 1-2, filed July 14, 2016 (Doc. 23)(“Response”). In support of that contention, it notes that the Motion Mem. and its exhibits “appear to have been obtained from a tax protestor website called Sovereignty Education and Defense Ministry.” Response at 1 n.1. Although the United States argues that it need not respond to Gutierrez' arguments to prevail, it contends that those arguments fail on their own terms and also under D.N.M. L.R.-47.7. See Response at 2.

         First, the United States argues that the Court has jurisdiction. See Response at 3. According to the United States, Gutierrez ignores both 18 U.S.C. § 3231, which vests the federal district courts with jurisdiction over all offenses against the United States, and the Constitution of the United States of America, which empowers Congress to define and punish crimes “irrespective of where they are committed, ” and to “create and provide for the administration of an income tax.” Response at 4 (citing United States v. Collins, 920 F.2d 619, 629 (10th Cir. 1990)). The United States concludes that, because Congress imposed criminal sanctions for Gutierrez' purported conduct under 26 U.S.C. § 7201, and because Congress lawfully did so pursuant to its constitutional powers, the Court has jurisdiction over the case pursuant to 18 U.S.C. § 3231. See Response at 4 (citing Lonsdale v. United States, 919 F.2d 1440, 1448 (10th Cir. 1990)).

         Second, the United States argues that the Court has jurisdiction, notwithstanding Gutierrez' arguments that he is not subject to federal taxation as a sovereign or as a New Mexico citizen. See Response at 4-5. The United States does not grapple with this argument substantively, but asserts that it fails, because it is one of the twelve tax protestor arguments that the United States Court of Appeals for the Tenth Circuit dismisses out of hand. See Response at 5 (citing Lonsdale v. United States, 919 F.2d at 1448).

         Third, the United States argues that Gutierrez did not need to consent to or contract with the United States for the United States to tax him. See Response at 6. It contends that consent is unnecessary, because several laws on the books require individuals to file tax returns or be subject to criminal penalties. See Response at 6 (citing 26 U.S.C. §§ 1, 6012, 6301-07, 7201-17). It follows, according to the United States, that Gutierrez' lack of consent does not affect the indictment. See Response at 4.

         Fourth, the United States argues that, contrary to Gutierrez' contentions, the criminal statutes at issue do not need implementing regulations for the United States to charge Gutierrez. See Response at 7. To support that proposition, the United States argues that 44 U.S.C. § 1505(a) does not require implementing regulations “for each section of the United States Code.” Response at 7. It adds that the Tenth Circuit has recognized this argument as another frivolous tax protestor argument. See Response at 7 (citing Lonsdale v. United States, 919 F.2d at 1447). The United States concludes that the Court's jurisdiction is proper, and that Gutierrez' other arguments lack merit, so the Court should deny the Motion.

         3. The Reply.

         Undeterred, Gutierrez replies. See Alleged Defendant Replies to United States' Response at 1, filed July 27, 2016 (Doc. 24-1)(“Reply”).[4] Unlike the Motion, the Reply lacks a uniting theme, and its desultory approach in refuting the United States' arguments is more of a shotgun spray than a targeted assault. See Reply at 1-7. The Court attempts to capture all of Gutierrez' arguments below.

         Gutierrez maintains that the Court lacks jurisdiction, because the Constitution limits the Court's jurisdiction. See Reply at 1. He also avers that the United States violated the Declaratory Judgment Act, 28 U.S.C. §§ 2201-02, because it “arbitrarily changed Gutierrez' declared status as a nontaxpayer to a tax protestor.” Reply at 3. Gutierrez adds that the case raises political questions beyond the Court's jurisdiction. See Reply at 3-4. He argues that the Court cannot label his arguments frivolous without “a separate pleading and trial on the matter of being frivolous.” Reply at 4. It follows, according to Gutierrez, that the Court would violate due process if it labeled his arguments frivolous and that it would also present a conflict of interest. See Reply at 4.

         Gutierrez also argues that the United States “cited irrelevant case law” when it cited Tenth Circuit precedent, because the Court is an Article IV legislative court, which “can only rule on what Congress says that [it] can rule on.” Reply at 3. See id. at 5. Gutierrez also accuses the United States of spewing political propaganda by citing Tenth Circuit caselaw. See Reply at 3 (“[The] United States abus[es] irrelevant case law as a means of [disseminating] political propaganda.”); id. at 4 (“[The] United States is: . . . abusing federal case law and stare decisis as political propaganda that is irrelevant.”); id. (“[The] United States is: . . . [t]rying to deceive the audience that [is] the target of such propaganda in order to deprive them of [c]onstitutionally protected rights to life, liberty, and property.”).

         Gutierrez concludes his Reply by arguing generally that the United States fails to refute his arguments. See Reply at 5-7. Specifically, he contends that the United States does not demonstrate that he consents to jurisdiction or consents to being taxed, nor does the United States demonstrate that he is not a sovereign. See Reply at 5-6. He also argues that the United States does not present evidence to support the indictment. See Reply at 6. He adds that the United States does not refute any of the caselaw he cites. See Reply at 7. Finally, Gutierrez argues that the United States does not refute his contention that the Court has a pecuniary interest in the proceeding. See Reply at 7 (“[T]hereby its silence admits the Court is judicially unsanitary.”)(emphasis in original).

         4. Default Notice.

         Gutierrez subsequently files the Notice of Default, in which he argues that, because the Court did not respond to his Motion within thirty days, the Court admits that: (i) it lacks jurisdiction; (ii) Gutierrez is a sovereign; (iii) Gutierrez is a nontaxpayer; (iv) Gutierrez did not consent to being taxed; (v) Gutierrez has no tax liability; (vi) the indictment is invalid; and (vii) the Court has a pecuniary interest, or, as Gutierrez phrases it, “the Court is not judicially sanitary.” Notice of Default at 2-3 (emphasis in original). He concludes that the Court and the United States, by continuing to hold him, is violating the Fifth Amendment to the Constitution of the United States of America, and the Court is estopped from challenging anything in the Motion. See Notice of Default at 3. Thus, according to Gutierrez, the Court must dismiss the Indictment with prejudice. See Notice of Default at 3.

         5. Challenge Motion.

         Gutierrez also files the Challenge Motion, which raises many of the same arguments already mentioned. See Notice of Challenge to the Court's Conduct at 3-4, filed August 9, 2016 (Doc. 26-1)(“Challenge Motion Notice”); Memorandum of Law at 2-7, filed August 9, 2016 (Doc. 26-2)(“Challenge Motion Mem.”).[5] The Court details only those arguments that diverge from Gutierrez' prior filings.

         First, Gutierrez argues that Damon P. Martinez, former United States Attorney for the District of New Mexico, and Assistant United States Attorneys (“AUSA”) Reeve Swainston and Margaret M. Vierbuchen -- the AUSAs prosecuting the case -- violated the United States Attorneys' Manual. See Challenge Motion Notice at 5-7; Challenge Motion Mem. at 12-16. This argument's general thrust is that the United States Attorneys' Manual requires the United States to let the grand jurors know all of Gutierrez' arguments -- e.g., that Gutierrez is a sovereign -- before the grand jurors may return an indictment. See Challenge Motion Notice at 5-7; Challenge Motion Mem. at 12-16. Second, Gutierrez appears to assert a freeform due process argument that the United States is depriving him of property without process by prosecuting him for tax crimes. See Challenge Motion Notice at 6-7 (“Give me Liberty or give me death.”)(emphasis omitted); Challenge Motion Mem. at 16-17. Accordingly, Gutierrez requests that the Court dismiss the indictment. See Challenge Motion Mem. at 17.

         6. The United States' Motion.

         The United States argues that the Court should strike or deny the requests in the Default Notice and the Challenge Motion, because: (i) Gutierrez filed those documents without his counsel joining them; (ii) those documents are untimely; (iii) and they lack merit. See United States' Motion at 1. First, the United States asserts that, while Gutierrez has the right to represent himself, he does not have a right to hybrid representation where his counsel files some motions and Gutierrez files others. See United States' Motion at 1 (citing United States v. Hill, 526 F.2d 1019, 1025 (10th Cir. 1975)). It follows, according to the United States, that the Court should strike or deny the requests in the Default Notice and Challenge Motion, because Gutierrez has counsel, and his counsel has not joined those motions. See United States' Motion at 1-2. The United States next asserts that the Court must dismiss the Default Notice and the Challenge Motion, because they are untimely under the Court's scheduling order. See United States' Motion at 2. The United States also argues that the Court should dismiss the Default Notice and the Challenge Motion, because they are frivolous tax protestor arguments. See United States' Motion at 2-3.

         7. The Hearing.

         The Court held a hearing on August 19, 2016. See Transcript of Motion Proceedings at 2:1-2 (taken August 19, 2016)(Court), filed September 16, 2016 (Doc. 34)(“Tr.”). On the Motion, Gutierrez asserted succinctly that “from the record before you, it has not been proven that jurisdiction has been properly given to the Court to proceed” and had nothing more to say. Tr. 3:23-4:1 (Gutierrez). The United States, similarly, remained brief, and rested on its written filings. See Tr. 4:9-11 (Vierbuchen). The Court orally denied Gutierrez' challenge to its jurisdiction, noting that it had seen similar arguments and that the Tenth Circuit's decisions on these arguments bind it. See Tr. at 4:12-5:10 (Court). Turning to the Default Notice, Gutierrez had nothing further to say except requesting that the Court publish its findings of fact and conclusions of law. See Tr. at 5:20-24 (Gutierrez). He requested the same work for the Challenge Motion. See Tr. at 7:19-21 (Gutierrez). The United States rested its arguments again on the briefings. See Tr. at 6:21-7:3 (Vierbuchen). The Court agreed to write an opinion for Gutierrez. See Tr. at 5:25-6:12 (Court); id. at 7:4-25 (Court, Gutierrez).

         Turning to the United States' Motion, the United States rested on its briefing. See Tr. at 9:11 (Vierbuchen); id. at 10:22 (Vierbuchen). Gutierrez made four quick arguments. See Tr. at 9:16-10:17 (Gutierrez). First, he contended that the United States represents that he submitted this argument pro se; he argued that, instead, he submits them “sui juris, ” so the United States argument is “irrelevant.” Tr. at 9:17-21 (Gutierrez). Second, he argued that his Motion, the Default Notice, and the Challenge Motion are timely, because challenges to jurisdiction can be made at any time. See Tr. at 9:22-25 (Gutierrez). Third, he contended that his arguments are not frivolous and that, contrary to the United States' assertions, he cites authority, because he cited the Supreme Court of the United States and the Constitution. See Tr. at 10:2-11 (Gutierrez). Finally, he contended that the United States misconstrues the relief he requests; the only relief he requests is “justice.” Tr. at 10:14-17 (Gutierrez). The Court subsequently granted the United States' Motion in part and denied it in part. See Tr. at 8:16-9:8 (Court); id. at 10:23-11:8 (Court). It denied the United States' Motion to the extent that it requested the Court to strike the Default Notice and the Challenge Motion, because the Court had told Gutierrez that it “wouldn't shut the courthouse door” on Gutierrez' motions filed separately from his counsel, and because the Court had to always be mindful of its jurisdiction. Tr. at 8:16-9:5 (Court); id. at 10:23-11:3. It granted the United States' Motion, however, to the extent that the United States requests that the Court deny Gutierrez relief. See Tr. at 9:3-8 (Court); id. at 11:5-6 (Court). The Court told Gutierrez it would also write an opinion on this issue. See Tr. at 11:6-8 (Court).

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