Opinion
Civ. No. 02-00119 HG-BMK
May 14, 2002
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS WITH PREJUDICE AND DENYING PLAINTIFF'S REQUEST FOR CONTINUANCE
Plaintiff Debra L. March, proceeding Pro Se, filed an action an state court against Internal Revenue Service employee Randy K. Harper in his individual capacity. Defendant removed the action from state court to this Court.
Plaintiff alleges abuse of process and unlawful debt collection in the issuing of a levy on taxpayer's wages. Plaintiff seeks damages and injunctive relief.
This action is before the Court on Defendant's Motion to Dismiss for lack of subject matter jurisdiction and for failure to state a claim. The motion is GRANTED.
PROCEDURAL HISTORY
On February 4, 2002, Plaintiff Debra L. March ("Plaintiff"), proceeding pro se, filed a Complaint entitled "Complaint for Damages and Injunction, Abuse of Process Unlawful Debt Collection" against Randy K. Harper individually in the Fifth Circuit Court for the State of Hawaii.
The Complaint alleges that Defendant mailed to Plaintiff's employer a Notice of Levy on wages, salary, and other income in the amount of $9,625.93.
The first cause of action for abuse of process alleges, in relevant part, the following:
3. No judgement has been rendered in this action. There has been no affidavit or complaint filed in this case, ex parte or otherwise, there is no docket number and Plaintiff has not been notified of any pending hearing in which plaintiff could have rendered any defense plaintiff may have had. Prior to seizure no judgement has been rendered.
4. On or about November 13, 2001, Defendant caused a garnishment of plaintiff's wages, although plaintiff duly filed a claim of exemption pursuant to Code of Civil Procedure § 706.05, under which all of plaintiff's earnings were declared exempt from execution.
5. Despite defendant's knowledge that all of plaintiff's earnings were exempt from execution, Defendant has caused a garnishment of plaintiff's wages to be made each week since approximately November 13, 2001, with malice and the intent to cause plaintiff embarrassment with plaintiff's employer and to coerce plaintiff to pay the unlawfully assessed funds from plaintiff's exempt wages in order to avoid embarrassment to plaintiff and inconvenience the employer resulting from the garnishment.
6. As a proximate result of the conduct set forth above, Plaintiff has suffered mental distress and has become highly nervous and unable to properly perform plaintiff's duties at plaintiff's place of employment. Plaintiff has thereby sustained injury to plaintiff's nervous system and person and has suffered general damages in a sum to be determined by the Court.
7. In engaging in the conduct described above, Defendant has acted maliciously, willfully, and with specific intent to injure plaintiff and endanger plaintiff's employment. Plaintiff is therefore entitled to exemplary and punitive damages in an amount to be determined by the Court.
(Complaint at 2.)
The second cause of action for unlawful debt collection alleges that Defendant is a debt collector within the meaning of Civil Code § 1788.2(c) duly licensed by the State of Hawaii and Plaintiff has suffered mental distress as a result of Defendant's conduct.
In her third cause of action, Plaintiff seeks injunctive relief because of alleged abuse of process. The third cause of action for injunctive relief from abuse of process alleges, in relevant part, the following:
12. The practices of Defendant as herein alleged are defendant's usual and customary methods to collect debts. None of plaintiff's wages are subject to garnishment each week. Unless restrained by the court, defendant will attempt to garnish all of plaintiff's wages repeatedly each week in an effort to collect the entire alleged amount owed, namely, approximately $9,625.93. Plaintiff will therefore be compelled to file repeated exemption claims, causing plaintiff and plaintiff's employer further annoyance and harassment, and causing plaintiff irreparable harm in the employment relationship.
13. Plaintiff has no defense to defendant's abuse of process, has no adequate remedy at law, and would suffer permanent and unconscionable damages by defendant's continuance unless defendant is enjoined and restrained from continuing the practice of garnishing plaintiff's wages.
(Id. at 3.)
In her fourth cause of action, Plaintiff seeks injunctive relief from unlawful debt collection. Plaintiff seeks the following relief:
1. For a temporary injunction staying garnishments during the pendency of this action until this matter is decided and for a temporary restraining order staying such garnishments until a hearing may be had on the application for a temporary injunction.
2. For a permanent injunction against defendant restraining it from garnishing by writ of execution the wages due defendant for personal services rendered at any time within 30 days next preceding the levy.
3. For general damages as this Court deems proper.
4. For punitive damages as this Court deems proper.
5. For costs of suit herein incurred.
6. For such other and further relief as the court may deem proper.
(Id. at 3-4.)
Also attached to Plaintiff's Complaint is a motion entitled "Notice of Motion to Quash Service of Order to Withhold (Levy) for Lack of In Personam and Subject Matter Jurisdiction; and to Set Aside Any Right to Attach Order (CCP 492.050) Verified Declaration of Debra L. March; and Points Authorities in Support Thereof."
On February 22, 2002, Defendant Randy K. Harper ("Defendant") filed a Notice of Removal of Civil Action.
On March 4, 2002, Defendant filed an Application by Defendant for Writ of Certiorari Ordering Transmission of District Court of the Fifth Circuit, State of Hawaii Records. Defendant sought an order directing the state court record to be transmitted to this Court.
On March 7, 2002, this Court issued an Order Directing Clerk to Issue Writ of Certiorari. Also on March 7, 2002, a Writ of Certiorari to the District Court of the Fifth Circuit, State of Hawaii was issued.
On March 22, 2002, the state court records were filed in this Court.
Included in the records was Plaintiff's Opposition to Notice of Removal filed on March 11, 2002 in the Fifth Circuit Court for the State of Hawaii.
On March 27, 2002, Defendant filed a Motion to Dismiss seeking dismissal of Plaintiff's action claiming the Court lacks subject matter jurisdiction and for failure to state a claim upon which relief can be granted. The United States asserts it is the only proper defendant in this matter.
On April 15, 2002, Plaintiff filed an Opposition to Motion to Dismiss.
Pursuant to Local Rule 7.4, Plaintiff's opposition to Defendant's Motion to Dismiss was due by April 11, 2002. See Local Rule 7.4 ("[a]n opposition to a motion set for hearing shall be served and filed not less than eighteen (18) days prior to the date of hearing.") Due to Plaintiff's pro se status, the Court will accept Plaintiff's late filing.
On April 26, 2002, a reply entitled "United States' Reply Brief" was filed. Both Defendant and the United States are represented by the same counsel, the Department of Justice.
Pursuant to Local Rule 7.4, Defendant's reply was due by April 18, 2002. See Local Rule 7.4 ("[a]ny reply in support of a motion set for hearing shall be served and filed by the moving party not less than eleven (11) days prior to the date of hearing."). Defendant's Reply states that Plaintiff's opposition was not received by Defendant until April 22, 2002. In light of Plaintiff's late-filed opposition, the Court will accept Defendant's late-filed reply.
Pursuant to 28 U.S.C. § 516, the Department of Justice may represent an officer of the United States that is a party to litigation.See 28 U.S.C. § 516 ("[e]xcept as otherwise authorized by law, the conduct of litigation in which the United States, an agency, or officer thereof is a party, or is interested, and securing evidence therefor, is reserved to officers of the Department of Justice, under the direction of the Attorney General").
Defendant's Motion to Dismiss came on before this Court on April 29, 2002.
At the hearing, Plaintiff orally requested the hearing be continued to allow her time to obtain counsel.
STANDARD OF REVIEW
A motion to dismiss will be granted where the plaintiff fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). A complaint should not be dismissed unless it appears to a certainty that plaintiff "would be entitled to no relief under any state of facts that could be proved." Fidelity Fin. Corp. v. Federal Home Loan Bank, 792 F.2d 1432, 1435 (9th Cir. 1986), cert. denied, 479 U.S. 1064 (1987);Stender v. Lucky Stores, Inc., 766 F. Supp. 830, 831 (N.D. Cal. 1991). All allegations of material fact are taken as true and construed in the light most favorable to the plaintiff. Stender, 766 F. Supp. at 831.
Pursuant to a 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, the Court may receive, among the forms of competent evidence, affidavits to resolve any factual dispute. Biotics Research Corp. v. Heckler, 710 F.2d 1375, 1379 (9th Cir. 1983). The Court may also consider the following material: (1) documents attached to the complaint; (2) undisputed documents alleged or referenced in the complaint; and (3) public records. Fed.R.Civ.P. 10(c); Parrino v. FHP, 146 F.3d 699, 706 (9th Cir. 1998); In re Stac Electronics Securities Litigation, 89 F.3d 1399, 1405 n. 4 (9th Cir. 1996). The consideration of such evidence does not convert a motion to dismiss into one for summary judgment. See Heckler, 710 F.2d at 1379.
ANALYSIS
I. Motion to Continue
At the hearing Plaintiff orally requested, for the first time, a continuance of the hearing in order to obtain counsel.
At the hearing the Court denied Plaintiff's motion for continuance. The Court denied Plaintiff's request for continuance as untimely and without merit.
II. Removal
On February 22, 2002, Defendant removed Plaintiff's action from state court to federal court. Defendant's removal was based on 28 U.S.C. § 1441, 1442(a), and 1446.
Plaintiff challenges the removal from state court to federal court contending the removal was improper because the United States is not a named party to the action and Defendant was sued in his individual capacity rather than in his official capacity. Plaintiff requests that the case be remanded to state court.
Defendant's removal of the instant action to federal court was proper and this Court has subject matter jurisdiction over the instant action.See 28 U.S.C. § 1442.
Section 1442 provides for removal where actions are brought against government officials in their individual capacities. Section 1442 provides, in relevant part, as follows:
(a) A civil action or criminal prosecution commenced in a State court against any of the following may be removed by them to the district court of the United States for the district and division embracing the place wherein it is pending:
(1) The United States or any agency thereof or any officer (or any person acting under that officer) of the United States or of any agency thereof, sued in an official or individual capacity for any act under color of such office or on account of any right, title or authority claimed under any Act of Congress for the apprehension or punishment of criminals or the collection of revenue.28 U.S.C. § 1442(a)(1) (emphasis added).
Defendant asserts, in the Notice of Removal, that he was acting within the scope of his employment out of which this suit arose. While Plaintiff contends that Defendant is being sued for actions outside of Defendant's scope and authority, removal is not prohibited. See Christensen v. Ward, 916 F.2d 1462, 1483 (10th Cir. 1990). The focus of Plaintiff's complaint is on Defendant's actions taken in his official capacity as an employee of the Internal Revenue Service.
The instant action was properly removed from state court and is properly before this Court. Plaintiff's objection to the removal is DENIED.
III. Proper Defendant
Defendant claims that although the United States is not a named party in Plaintiff's complaint the United States is the real party in interest. Defendant argues that the instant action is essentially one brought against the United States.
In opposition to this argument, Plaintiff maintains her action is not one against the United States but rather against Defendant Harper individually. Plaintiff argues that Defendant Harper's actions were outside his official capacity and therefore he is individually liable, but Plaintiff provides no basis for the position.
While Plaintiff maintains her action is against Defendant Harper in his individual capacity, the actions she complains of consist of those performed by Defendant Harper in his official employment capacity with the Internal Revenue Service ("IRS"). Additionally, Plaintiff also seeks the type of equitable relief that only the United States can provide.
As Plaintiff seeks injunctive relief, which only the United States may grant, Plaintiff's action is against the United States rather than Randy Harper in his individual capacity. See e.g. Gilbert v. DaGrossa, 756 F.2d 1455, 1458 (9th Cir. 1985); Krieg v. Mills, 117 F. Supp.2d 964, 967 (N.D. Cal. 2000).
The United States, therefore, is substituted as the proper defendant. Due to Plaintiff's pro se status, the Court will consider whether the allegations in Plaintiff's Complaint could support a claim against Defendant Randy Harper in his individual capacity.
IV. Sovereign Immunity
Plaintiff's claims against the United States are barred by the doctrine of sovereign immunity.
The United States, as a sovereign, is immune from suit unless the United States waives immunity and consent to the suit. See Gilbert, 756 F.2d at 1458 (citations omitted). If the United States does not consent to the suit, dismissal of the action is required. See id.
Plaintiff's claims are barred by the doctrine of sovereign immunity.
Although Plaintiff does not raise any exceptions to the United States' sovereign immunity, the Court will address the exceptions below due to Plaintiff's pro se status.
V. Exception to Sovereign Immunity
A. Anti-Injunction Act
Plaintiff seeks an injunction to restrain the further collection of her tax deficiency. The Court lacks jurisdiction to grant injunctive relief in the present case. The Anti-Injunction Act (the "Act"), 26 U.S.C. § 7421(a) , prohibits courts from enjoining the collection of federal taxes in most circumstances, even when other preconditions for injunctive relief are present. There are several statutory exceptions and one judicial exception to the Act. See Elias v. Connett, 908 F.2d 521, 523 (9th Cir. 1990). If a taxpayer fails to establish that his or her suit falls within an exception to the Act, the district court lacks subject matter jurisdiction and must dismiss the complaint. See id.; Jensen v. Internal Revenue Service, 835 F.2d 196, 198 (9th Cir. 1987).
26 U.S.C. § 7421 provides, in relevant part, the following:
(a) Tax. — Except as provided in sections 6015(e), 6212(a) and (c), 6213(a), 6225(b), 6246(b), 6330(e)(1) 6331(i) 6672(c), 6694(c), 7426(a) and (b)(1), 7429(b) and 7436, no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.26 U.S.C. § 7421(a).
1. Statutory Exceptions to the Anti-Injunction Act
None of the statutory exceptions to the Act are applicable.
Plaintiff has not alleged which exception is applicable, nor has Plaintiff established that any exception to the Act applies in the instant action. In light of Plaintiff's pro se status, the Court will address each of the statutory exceptions.
The exception contained in section 6015(e) provides relief from joint and several liability on a joint return. See 26 U.S.C. § 6015. This exception is inapplicable as Plaintiff has not sought relief from joint and several liability as a result of a joint return.
The exception contained in sections 6212(a) and (c) provides relief if the Secretary fails to send the taxpayer a notice of deficiency or if the taxpayer files a petitioner in Tax Court contesting the deficiency. See 26 U.S.C. § 6212(a) and (c). This exception is inapplicable as Plaintiff has not alleged in her complaint that she failed to receive a notice of deficiency. The exhibits attached to Defendant's reply indicate that Plaintiff properly received notice of the deficiency.
The exception contained in section 6213(a) provides a time frame for challenging a notice of deficiency once it is mailed. As discussed above, this exception is also inapplicable as Plaintiff has failed to allege any statutory irregularities concerning any notice of deficiency.
The exceptions contained in sections 6225(b) and 6246(b) relate to partnership proceedings. See 26 U.S.C. § 6225(b), 6246(b). These exceptions are inapplicable as Plaintiff has alleged no facts regarding the existence of a partnership.
The exception contained in section 6330(e)(1) provides relief by staying an action while a hearing on the levy is pending. See 26 U.S.C. § 6330. Under section 6330 a taxpayer is entitled to a hearing after receiving notice of the levy. See 26 U.S.C. § 6330(b). This exception is inapplicable as Plaintiff has failed to allege she requested a hearing.
The exception contained in section 6331(i) provides relief by enjoining a levy during pendency of a divisible tax refund proceeding. See 26 U.S.C. § 6331(i). This exception is likewise inapplicable as Plaintiff failed to allege the existence of any divisible tax refund proceeding.
The exception contained in section 6672 applies only to "[a]ny person required to collect, truthfully account for, and pay over any tax imposed by this title . . . ." 26 U.S.C. § 6672(a). This exception clearly is inapplicable to Plaintiff as a taxpayer.
The exception contained in section 6694(c) applies to the understatement of taxpayer's liability by an income tax return preparer.See 26 U.S.C. § 6694(c). Plaintiff has alleged no facts to support this exception.
The exception contained in sections 7426(a) and (b)(1) applies to civil actions brought by persons other than the taxpayer. See 26 U.S.C. § 7426. This exception is inapplicable as Plaintiff has brought suit as a taxpayer challenging her own tax liability.
The exception contained in section 7429(b) applies to jeopardy levy or assessment proceedings. See 26 U.S.C. § 7429. Plaintiff's Complaint does not allege that the instant action involves a jeopardy levy or jeopardy assessment.
The exception contained in section 7436 applies to proceedings for determination of employment status. Plaintiff's employment status is not at issue in the instant action, therefore, the exception is inapplicable.
As discussed above, none of the statutory exceptions to the Anti-Injunction Act are applicable.
2. Judicial Exception to the Anti-Injunction Act
The judicial exception to the Act is also inapplicable. The Supreme Court has created a judicial exception to the Act. The judicial exception applies if Plaintiff proves: (1) that the government cannot under any circumstance ultimately prevail on the merits of its claim; and (2) that equity jurisdiction otherwise exists. See United States v. American Friends Service Committee, 419 U.S. 7, 10 (1974); Enochs v. Williams Packing Navigation Co., 370 U.S. 1, 7 (1962).
a. Validity of the Government's Claim
Plaintiff bears the burden of showing that the government's claim is baseless. Church of Scientology of California v. United States, 920 F.2d 1481, 1486 (9th Cir. 1990). In order to determine if the government has a chance of ultimately prevailing, the Court must examine the evidence presented at the time of the filing of the action. See id. at 1485-86. The first prong of the judicial exception to the Act is only met if it is "manifest, under the most liberal view of the law and the facts, that the government cannot prove its claim." Id. at 1486.
Plaintiff does not indicate how her allegations in her Complaint, even if proven, would establish that the government cannot possibly prevail on its claim to collect the taxes at issue.
b. Entitlement to Equitable Relief
The second prong of the judicial exception to the Act requires Plaintiff to prove that she is entitled to equitable relief. American Friends Service Committee, 419 U.S. at 10. To satisfy this requirement, the taxpayer must show that she has no adequate legal remedy and that the denial of injunctive relief would cause her immediate, irreparable harm.Church of Scientology, 920 F.2d at 1486.
Because Plaintiff has failed to establish that the government cannot possibly prevail on its claim, the Court does not need to address whether Plaintiff has established the ordinary preconditions of equitable relief. See Alexander v. "Americans United," Inc., 416 U.S. 752, 758 (1974) (noting that "[u]nless both conditions are met, suit for preventive injunctive relief must be dismissed); accord Church of Scientology, 920 F.2d at 1486.
Even if Plaintiff meets the first prong of the test, Plaintiff fails the second prong. Plaintiff does have a legal remedy. Plaintiff may challenge the validity of her tax liability by way of a tax refund suit.
Plaintiff has failed to establish the instant action falls within any exception to the Anti-Injunction Act. The Court lacks subject matter jurisdiction to issue either a preliminary or permanent injunction.
VI. Defendant Harper's Individual Liability
Plaintiff alleges that Defendant, in his individual capacity, violated Plaintiff's Constitutional rights under the Fourth and Fifth Amendments. Plaintiff's constitutional violation claims against Defendant in his individual capacity proceeds under Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971). In Bivens the Supreme Court held that federal employees may be sued in their individual capacities when they have violated the Constitution while acting under color of federal law.
Plaintiff's claims, however, fail because Plaintiff has alleged no recognized constitutional violation arising from the collection of taxes. See Wages v. Internal Revenue Service, 915 F.2d 1230, 1235 (9th Cir. 1990).
Plaintiff's claims, to the extent they are against Defendant Harper both in his official and individual capacities, are dismissed.
CONCLUSION
In accordance with the foregoing, Defendant's Motion to Dismiss is GRANTED with prejudice and Plaintiff's Request for Continuance is DENIED. Plaintiff's Complaint is DISMISSED.
IT IS SO ORDERED.