First National Repossessors, Inc. v. Commissioner of Internal Revenue

Background

First National Repossessors, Inc. (FNR) and its president, Don Mashak, applied to proceed without paying the filing fee under a federal statute commonly called the in forma pauperis procedure. The court explained that only a natural person may receive that status, so FNR was ineligible. Because FNR remained a plaintiff, Mashak also could not proceed under that status in the same action. The plaintiffs were given the choice of paying the filing fee and continuing as non-IFP litigants or removing FNR so Mashak could proceed alone. They refused both options, and the action was dismissed without prejudice.

Appeal application

Mashak later asked to proceed without paying the filing fee on appeal. The court noted that FNR was not a party to the appeal, so Mashak alone could potentially qualify based on his statement that he could not pay the fee. But a district court may not allow an appeal to proceed without payment if it certifies that the appeal is not taken in good faith. The court defined a frivolous appeal as one lacking an arguable basis in law or fact.

Ruling

The court concluded that Mashak’s appeal was frivolous. It reasoned that FNR could not proceed without paying the filing fee, that Mashak refused either to pay the fee or remove FNR from the litigation, and that his arguments could not overcome the governing statute and Supreme Court precedent. Judge Susan Richard Nelson therefore denied Don Mashak’s application to proceed in forma pauperis on appeal. The order did not alter the earlier dismissal without prejudice.