Before Newman, Circuit Judge, Skelton and Friedman, Senior Circuit
The opinion of the court was delivered by: Friedman, Senior Circuit Judge.
Appealed from: United States Court of Federal Claims
These are nine consolidated appeals in which Canadian citizens sought refunds of United States income taxes paid on income received for playing professional ice hockey for United States teams. The Court of Federal Claims denied the exclusions and deductions from income that the plaintiffs sought. The trial judge also denied a motion that she disqualify herself. We affirm.
These cases were filed in the Court of Claims (the trial division of which was the predecessor to the Court of Federal Claims) in the mid-1970's, seeking refunds of federal income taxes paid in the mid and late 1960's and early 1970's. They were part of a larger number of similar cases (approximately 200) that were so filed, all asserting substantially the same claims. A single lawyer, Charles L. Abrahams, represented all the plaintiffs.
The plaintiffs in the present nine cases (like those in most of the other cases) are Canadian citizens who played professional ice hockey for United States teams (the "Players" which, where appropriate, includes their spouses who are parties). They seek refunds of United States income taxes they paid between 1967 and 1974. Their complaints asserted two types of refund claims. First, they alleged that they were entitled to exclude from their taxable United States income amounts reflecting the portion of their salaries "earned" while living and performing services in Canada during the off-season. Second, they sought to deduct expenses allegedly incurred throughout the year in connection with their hockey playing activities while living in the United States in their respective teams' home cities and while traveling with their respective teams during the hockey season. These expenses included the costs of sports equipment and other personal items, including haircuts, entertainment, home telephone lines and television.
After the Internal Revenue Service denied their refund claims, the Players filed the present suits. Following separate trials, the Court of Federal Claims, in a series of opinions, rejected all the claims and dismissed the complaints.
The court held that the Players had not established that a portion of their salaries was excludable from taxable income under 26 U.S.C. §§ 861(a)(3), 862(a)(3), 871(b), or 26 C.F.R. § 1.861-4, discussed in part III, below, because it was for services that they had rendered in Canada in the off-season. The court ruled that a provision in their employment contracts requiring them to report to the training camp "in good physical condition" was not a contractual promise to undertake specified physical conditioning during the off-season, but merely a condition of their employment. The court further found that they had not established the number of days they spent in Canada attending training camp or playing games there during the regular season.
The court rejected the Players' claims for deductible business expenses for three reasons. With respect to some claims, it held that the Players failed to prove that a valid power of attorney was on file with the Internal Revenue Service when their attorney filed them. The court dismissed a number of other claims because the Players had not filed administrative refund claims with the Service, as section 7422(a) of the Internal Revenue Code required. See 26 U.S.C. § 7422(a). The court dismissed the remaining claims because the Players failed to substantiate them with adequate records or credible testimony.
A. In 1986 the hockey player cases were reassigned to Judge Horn of the Court of Federal Claims after Judge Miller, to whom they originally had been assigned, retired. In May 1991, the appellant Favell and the "plaintiffs" in "related cases" moved to disqualify Judge Horn "because of her personal bias and prejudice against plaintiffs and their counsel." The motion was combined with a thirty-eight page supporting memorandum and accompanied by a sixteen page "Declaration" of Mr. Abrahams, which set forth various alleged facts.
After oral argument, Judge Horn ruled that the Players had not established a basis for recusal. She stated that she had "seen nothing in the record that raises the specter" of her "having a personal bias against the Plaintiffs and their counsel . . . or anything that raises the appearance of that." Toward the end of the hearing, she stated:
In sum, I have no personal bias. I have no antipathy towards either you or your clients. I have not stepped off the bench and become an advocate for the Defendant as you have alleged. The Defendant will be held to the same strict standards to which you will be held.
As you know, rulings adverse to a party certainly cannot form the basis for disqualification. To the extent that you have taken any of my remarks to be sarcastic or curt, which you have alleged in your pleadings, they were not meant to be disparaging. Certainly I have tried to be accurate as I have tried to tell you that I do or do not believe something that you may be arguing.
You may not like the manner of my speech. I'm sorry about that, but not everybody is going to like everybody else, and it may well be that you don't care for my style. It may well be that you don't care for the manner in which I conduct proceedings, but that still does not suggest that I have a bias or a prejudice against you, and certainly since I have had no contact with your clients whatsoever, I can have no bias or prejudice towards them, and do not.
She concluded that "there are no grounds for me to recuse myself in this case." The court wrote no opinion and entered the following order: "DENIED at an oral argument and status conference on 6/27/91. See transcript of recorded hearing."
The Players filed with this court a petition for writ of mandamus to compel Judge Horn to recuse herself, which this court denied. In re Favell, 949 F.2d 402 (table), 1991 U.S. App. LEXIS 33058, at 2 (Sept. 20, 1991).
B. The motion to disqualify was based upon 28 U.S.C. § 455 and Rule 63(b) of the Rules of the Court of Federal Claims. Section 455 provides in relevant part:
(a) Any justice, judge, or magistrate of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.
(b) He shall also disqualify himself in the following circumstances:
(1) Where he has a personal bias or prejudice concerning a party . . . .
Rule 63 provides in relevant part:
(b) Voluntary Disqualification. A judge shall withdraw from a case when required by 28 U.S.C. § 455, and, at any time, may withdraw from a case if otherwise such judge deems such judge disqualified by bias or prejudice.
(c) Affidavit of Bias or Prejudice.
(1) Whenever a party to any proceeding makes and files an affidavit that the judge before whom the matter is pending has a personal bias or prejudice either against such party or in favor of any adverse party, such judge, if such judge determines that the affidavit is sufficient and timely, shall proceed no further therein, but another judge shall be assigned to hear such proceeding. The ruling of the judge shall be by order.
(2) The affidavit shall state the facts and the reasons for the belief that bias or prejudice exists . . . . It shall be accompanied by a certificate of counsel of record stating that it is made in good faith.
Assuming arguendo that the attorney's declaration satisfied the requirements of Rule 63(c) that the affidavit of bias and prejudice be filed by "a party" and be accompanied by a certificate of counsel that it is "made in good faith"-a dubious assumption-the documents filed did not establish a disqualifying personal bias or prejudice or the appearance of partiality.
Rule 63 contains the same requirements and standards as 28 U.S.C. § 144, the federal statute governing recusal of district court judges for personal bias or prejudice. Cases construing and applying section 144 therefore may properly may be looked to in interpreting Rule 63. See Northcross v. Board of Educ., 412 U.S. 427 (1973). Under those provisions the challenged judge must accept as true the factual allegations upon which recusal is sought, and determine whether those facts "give fair support to the charge of a bent of mind that may prevent or impede impartiality of judgment." Berger v. United States, 255 U.S. 22, 33-34 (1921) (interpreting the predecessor to section 144); Bell v. Chandler, 569 F.2d 556, 559 (10th Cir. 1978) (interpreting section 144).
It cannot be determined from Judge Horn's statements at the disqualification hearing whether she denied recusal because (1) she concluded that the facts set forth in the Memorandum and the Declaration (as distinguished from the Player's characterizations of those facts and the inferences they drew therefrom in those documents) were legally insufficient to establish personal bias and prejudice or to create the appearance of partiality or (2) she determined that she was not so biased and prejudiced and had not created such an appearance. To whatever extent she relied upon the latter determination, such reliance would have been inappropriate. Any such error, however, was harmless because even accepting the facts the Players alleged, they were insufficient to establish personal bias and prejudice or the appearance of partiality.
Although the Players have not made clear the precise factual bases and theory of their claims, it apparently rests largely upon Judge Horn's treatment of and actions respecting their counsel, Mr. Abrahams. Other than conclusory statements, the Players make no attempt to demonstrate personal bias and prejudice against them. The claim seems to be that the judge was personally biased and prejudiced against Mr. Abrahams.
At the argument on the motion, Mr. Abrahams stated that there was "a deep-seeded [sic] [judicial] bias against me that has to have an impact on my clients" and referred to "the bias the Court has against me and it has to have an impact on my clients and against my clients." Ordinarily an allegation of judicial bias relates to bias against a party. Although it is possible that judicial bias against the lawyer may become so pervasive and clear that the client's rights are likely to be affected, cf. Rosen v. Sugarman, 357 F.2d 794, 798 (2d Cir. 1966), this is not such a case.
The closest the Players come to explaining their theory are their statements that "Judge Horn erred as a matter of law by not recusing herself" and that "[t]here were numerous instances reflecting the Court's bias which forced dismissals and caused unnecessary protracted [sic] litigation." These instances, the Players urge, included several occasions on which Judge Horn accused Mr. Abrahams of malpractice, defrauding the court, filing a frivolous action, and doctoring the record and instances when Judge Horn prevented Mr. Abrahams from conferring with his clients.
The judicial comments and actions upon which the Players rely, however, merely reflect Judge Horn's evaluation and criticism of Mr. Abrahams' handling of the cases and her perception that his professional performance was severely deficient. For example, viewed in context, they reflected her concern over Mr. Abrahams' failure to maintain regular contact with his clients, irregularities in documents he filed, certain plaintiffs' failure to appear for trial, and the lack of adequate documentary support for the Players' claims. These were factors that she derived solely from her conduct of the litigation. The judge's comments and actions, however, do not establish either personal bias and prejudice or the appearance of partiality. "The alleged bias and prejudice to be disqualifying must stem from an extra-judicial source and result in an opinion on the merits on some basis other than what the judge learned from his participation in the case." United States v. Grinnel Corp., 384 U.S. 563, 583 (1966). As the Supreme Court has pointed out,
judicial rulings alone almost never constitute a valid basis for a bias or partiality motion . . . . [O]pinions formed by the judge on the basis of facts introduced or events occurring in the course of the current proceedings . . . do not constitute a basis for a bias or partiality motion unless they display a deep-seated favoritism or antagonism that would make fair judgment impossible. Thus, judicial remarks during the course of a trial that are critical or disapproving of, or even hostile to, counsel, the parties, or their cases, ordinarily do not support a bias or partiality challenge. They may do so if they reveal an opinion that derives from an extra-judicial source; and they will do so if they reveal such a high degree of favoritism or antagonism as to make fair judgment impossible . . . . Not establishing bias or partiality, however, are expressions of impatience, dissatisfaction, annoyance, and even anger, that are within the bounds of what ...