Opinion
No. 5:18-CV-452-FL
11-01-2018
KENNETH R. PARSONS, JR, Plaintiff, v. NORTH CAROLINA DEPARTMENT OF REVENUE, et al., Defendants.
MEMORANDUM AND RECOMMENDATION
This matter is before the court for frivolity review of the complaint [DE-3] pursuant to 28 U.S.C. § 1915(e)(2)(B). For the reasons that follow, it is recommended that Bank of America, N.A. be dismissed and the case be allowed to proceed against the remaining defendants.
I. STANDARD OF REVIEW
Pursuant to 28 U.S.C. § 1915(e)(2)(B), the court shall dismiss the complaint if it is frivolous or malicious, fails to state a claim upon which relief may be granted, or seeks money damages from a defendant immune from such recovery. 28 U.S.C. § 1915(e)(2)(B)(i—iii); see Adams v. Rice, 40 F.3d 72, 74 (4th Cir. 1994) (explaining Congress enacted predecessor statute 28 U.S.C. § 1915(d) "to prevent abuse of the judicial system by parties who bear none of the ordinary financial disincentives to filing meritless claims"). A case is frivolous if it lacks an arguable basis in either law or fact. See Neitzke v. Williams, 490 U.S. 319, 325 (1989); McLean v. United States, 566 F.3d 391, 399 (4th Cir. 2009) ("Examples of frivolous claims include those whose factual allegations are 'so nutty,' 'delusional,' or 'wholly fanciful' as to be simply 'unbelievable.'"). A claim lacks an arguable basis in law when it is "based on an indisputably meritless legal theory." Neitzke, 490 U.S. at 327. A claim lacks an arguable basis in fact when it describes "fantastic or delusional scenarios." Id. at 327-28.
In determining whether a complaint is frivolous, "a court is not bound, as it usually is when making a determination based solely on the pleadings, to accept without question the truth of the Plaintiff's allegations." Denton v. Hernandez, 504 U.S. 25, 32 (1992). Rather, the court may find a complaint factually frivolous "when the facts alleged rise to the level of the irrational or the wholly incredible, whether or not there are judicially noticeable facts available to contradict them." Id. "The word 'frivolous' is inherently elastic and not susceptible to categorical definition. . . . The term's capaciousness directs lower courts to conduct a flexible analysis, in light of the totality of the circumstances, of all factors bearing upon the frivolity of a claim." Nagy v. Fed. Med. Ctr. Butner, 376 F.3d 252, 256-57 (4th Cir. 2004) (some internal quotation marks omitted). In making its frivolity determination, the court may "apply common sense." Nasim v. Warden., Md. House of Correction, 64 F.3d 951, 954 (4th Cir. 1995).
In order to state a claim on which relief may be granted, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "Factual allegations must be enough to raise a right to relief above the speculative level . . . .'" Twombly, 550 U.S. at 555. While a complaint need not contain detailed factual allegations, the plaintiff must allege more than labels and conclusions. Id. In the present case, Plaintiff is proceeding pro se and pleadings drafted by a pro se litigant are held to a less stringent standard than those drafted by an attorney. See Haines v. Kerner, 404 U.S. 519, 520 (1972). The court is charged with liberally construing a pleading filed by a pro se litigant to allow for the development of a potentially meritorious claim. See id.; Estelle v. Gamble, 429 U.S. 97, 106 (1976); Noble v. Barnett, 24 F.3d 582, 587 n.6 (4th Cir. 1994). However, the principles requiring generous construction of pro se complaints are not without limits; the district courts are not required "to conjure up questions never squarely presented to them." Beaudett v. City of Hampton, 775 F.2d 1274, 1278 (4th Cir. 1985).
II. ANALYSIS
Plaintiff alleges that the North Carolina Department of Revenue ("NCDOR"), by way of a garnishment executed by Bank of America, seized money from his checking account to satisfy alleged tax debts on three occasions without affording him due process. Compl. [DE-3] at 3. Plaintiff specifically asserts that he challenged the tax debt with the NCDOR, by requesting a hearing and proof of the debt and by mailing a formal challenge, a cease and desist order, and a notice of intent to file lawsuit, but received no response. Id. at 3-6. Plaintiff seeks money damages to compensate him for mental and financial damage and a permanent injunction barring the defendants from collecting, withholding, and levying Plaintiff's property without due process. Id. at 18.
A. Bank of America
Plaintiff alleges that NCDOR seized his property "through a legal order that was issued to garnish Plaintiff's Bank of America checking account . . . ." [DE-3] at 3. This allegation fails to state a claim against Bank of America because "North Carolina makes clear that the garnishee [Bank of America] must comply with a notice of garnishment, and by doing so, [its] liability to the taxpayer is extinguished." Gust v. Tolson, No. 3:05CV444-MU, 2006 WL 1215414, at *2 (W.D.N.C. May 4, 2006) (holding a garnishee has no liability to the taxpayer resulting from its compliance with a facially valid Notice of Garnishment issued by NCDOR) (citing N.C. Gen. Stat. § 105-262(b)), aff'd, 204 F. App'x 179 (4th Cir. 2006). Although Plaintiff alleges that the garnishment orders were ulawful, Compl. [DE-3] at 5-6, "[t]here is no requirement, either by statute or by the Constitution, that [a garnishee] investigate the legality of a state notice of garnishment, then, based solely on their own opinion of that legality, decide to obey or disobey the notice, subjecting themselves to potential criminal liability in the process." Gust, 2006 WL 1215414, at *2. Accordingly, it is recommended that Bank of America be dismissed because the allegations of the complaint fail to state a claim against it.
B. The State Defendants
Plaintiff alleges that the NCDOR garnished his bank account without affording him due process. Compl. [DE-3] at 3. North Carolina provides an administrative process through which a taxpayer may challenge a tax liability. See Gust v. N.C. Dep't of Revenue, 231 N.C. App. 551, 553-54, 753 S.E.2d 483, 484-85 (2014) (citing N.C. Gen. Stat. Ch. 105). Furthermore, federal courts lack jurisdiction over certain tax disputes pursuant to The Tax Injunction Act, 28 U.S.C. § 1341, which provides that "[t]he district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State." See Mee v. Hoyle, No. 5:13-CT-3261-FL, 2015 WL 5714910, at *3 (E.D.N.C. Sept. 29, 2015) (dismissing claims as barred by the Tax Injunction Act where the "North Carolina state statutory scheme provides plaintiff with various administrative remedies for the improper assessment or collection of taxes, as well as review by state courts.") (citations omitted). However, "the Tax Injunction Act [] does not preclude jurisdiction to adjudicate a challenge to procedural due process." Ervin v. Hammond, No. CIV. 3:05CV059, 2008 WL 901185, at *12 (W.D.N.C. Mar. 31, 2008). Determinations on these issues requires further development of the record. Accordingly, the undersigned recommends that the claims against the state defendants be allowed to proceed at this time.
III. CONCLUSION
For the reasons stated herein, it is RECOMMENDED that Bank of America, N.A. be dismissed arid the case be allowed to proceed against the remaining defendants.
IT IS DIRECTED that a copy of this Memorandum and Recommendation be served on Plaintiff. You shall have until November 20, 2018, to file written objections to the Memorandum and Recommendation. The presiding district judge must conduct his or her own review (that is, make a de novo determination) of those portions of the Memorandum and Recommendation to which objection is properly made and may accept, reject, or modify the determinations in the Memorandum and Recommendation; receive further evidence; or return the matter to the magistrate judge with instructions. See, e.g., 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(3); Local Civ. R. 1.1 (permitting modification of deadlines specified in local rules), 72.4(b), E.D.N.C.
If you do not file written objections to the Memorandum and Recommendation by the foregoing deadline, you will be giving up the right to review of the Memorandum and Recommendation by the presiding district judge as described above, and the presiding district judge may enter an order or judgment based on the Memorandum and Recommendation without such review. In addition, your failure to file written objections by the foregoing deadline will bar you from appealing to the Court of Appeals from an order or judgment of the presiding district judge based on the Memorandum and Recommendation. See Wright v. Collins , 766 F.2d 841, 846-47 (4th Cir. 1985).
Submitted, this the 1st day of November 2018.
/s/_________
Robert B. Jones, Jr.
United States Magistrate Judge