Opinion
1:01cv59-C.
August 17, 2001
MEMORANDUM AND RECOMMENDATION
THIS MATTER is before the court upon defendant Rosa L. Shade's Motion to Dismiss, defendant Norfolk Southern Railroad Company's Motion to Dismiss, and plaintiff's Motion to Strike Norfolk Southern's Motion to Dismiss. Having carefully considered those motions and reviewed the pleadings, the undersigned enters the following findings, conclusions, and recommendation.
FINDINGS AND CONCLUSIONS
I. Background
Plaintiff filed this action in the North Carolina General Court of Justice, Superior Court Division. The federal defendant promptly removed the action to this court as a matter of right. 28, United States Code, Section 1442. Unlike removal involving nongovernmental defendants, removal by the United States does not require consent of other named defendants to be effective as to all defendants. Wright, Miller Cooper, Federal Practice and Procedure, § 3727, at 166-68 (3rd Ed. 1998).
In his Motion to Strike Norfolk Southern's Motion to Dismiss, plaintiff attacks the jurisdiction of this court, inasmuch as Norfolk Southern did not join in the removal entered by the United States. Plaintiff believes that his claims against the railroad are still pending in state court. The undersigned will recommend that the motion to strike be denied because the United States properly removed the entire action as a matter of well-settled law.
Plaintiff contends that the Internal Revenue Service, through Revenue Officer Rosa L. Shade, improperly caused a Notice of Levy to be served on his employer, the Norfolk Southern Railroad Company. Disputing the tax liability, which underlies the levy, plaintiff contends that both Officer Shade and Norfolk Southern have violated his right to due process. Plaintiff attempted to bring this action under North Carolina law and has not availed himself of the administrative remedies afforded by the Internal Revenue Service. After seeking and receiving an extension of time to respond, plaintiff argues that it is not his intent to sue the United States, but to sue defendant Rosa L. Shade for her alleged violation of "clearly defined IRS procedural processes." See plaintiff's Motion to Strike [the government's] Motion to Dismiss.
II. Applicable Standard
Defendants have moved for dismissal pursuant to Rules 12(b)(1) and 12(b)(6), Federal Rules of Civil Procedure. Rule 12(b) authorizes dismissal based upon a dispositive issue of law. Neitzke v. Williams, 490 U.S. 319, 109 S.Ct. 1827, 1832 (1989); Hishon v. King Spalding, 467 U.S. 69, 73 (1984); Conley v. Gibson, 355 U.S. 41 (1957). As the Court recently discussed in Neitzke:
This procedure [for dismissal], operating on the assumption that the factual allegations in the complaint are true, streamlines litigation by dispensing with needless discovery and fact finding. Nothing in Rule 12(b)(6) confines its sweep to claims of law which are obviously insupportable. On the contrary, if as a matter of law "it is clear that no relief could be granted under any set of facts . . . a claim must be dismissed, without regard to whether it is based on outlandish legal theory . . . . What Rule 12(b)(6) does not countenance are dismissals base on a judge's disbelief of a complaint's factual allegations."Id., at 1832 (citation omitted). For the limited purpose of making a recommendation as to disposition of defendants' motions, the undersigned has accepted as true the facts, as they can be discerned, alleged by plaintiff in his complaint and viewed them in a light most favorable to him. Thereafter, the undersigned will determine whether plaintiff has stated a claim which falls within the jurisdiction of this court and on which relief may be granted.
III. Discussion
A. Dismissal of Claims Against Federal Defendant
In order to maintain a suit in this court against the United States of America, there must be a specific grant of jurisdiction and an explicit waiver by Congress of the nation's sovereign immunity from suit. See Block v. North Dakota, 461 U.S. 273 (1983); Norton v. United States, 581 F.2d 390 (4th Cir.), cert. denied, 439 U.S. 1003 (1978).
Jurisdiction is contingent upon a waiver of sovereign immunity because the United States is immune from suit except to the extent that it has consented to be sued. United States v. Testan, 424 U.S. 392, 399 (1976). In order to waive sovereign immunity, Congress must express unequivocally its intention to do so, and waiver cannot be judicially inferred. Block v. North Dakota, supra, at 287. In turn, the limits of consent to suit are also the limits of this court's jurisdiction. United States v. Dalm, 494 U.S. 596, 608 (1990).
Rather than name the Internal Revenue Service or the United States as defendant, plaintiff has attempted to sue Revenue Officer Rosa L. Shade for acts done in furtherance of her official duties. Plaintiff clarifies in his response that such acts consisted of her alleged failure to follow IRS policies. Simply naming an individual employee rather than the United States or its agency does not, as plaintiff proposes, circumvent the bar of sovereign immunity. Hawaii v. Gordon, 373 U.S. 57 (1963). The bar of sovereign immunity extends to agents and officers of the United States to the extent they are sued in their official capacities. Spalding v. Vilas, 161 U.S. 483 (1896). In determining whether a suit is one against an officer in his or her official capacity (and, therefore, is in reality a suit against the United States subject to the bar of sovereign immunity), the critical question is whether the relief sought would operate against the United States. Hawaii, supra, at 58. Plaintiff seeks damages resulting from the efforts of the Internal Revenue Service to collect his income tax liabilities and also seeks return of the money seized — relief that would operate against the United States. No suggestion appears in plaintiff's pleading that Officer Shade acted in any way other than in her official capacity. Even if this court were to consider, as plaintiff suggests, that this action is only a tort claim under the FTCA against Defendant Shade for failure to follow IRS regulations, policies, or procedures, it is well settled that the FTCA provides no remedy. Jayvee Brand, Inc. v. United States, 721 F.2d 385 (D.C. Cir. 1983). Sovereign immunity, therefore, is a complete bar to this action. To the extent plaintiff contends that Officer Shade committed a tort in placing the levy with his employer, plaintiff can have no recovery because the Federal Tort Claims Act excludes claims arising from the collection of tax. 26 U.S.C. § 2680(c).
In Jayvee, the appellate court held, as follows: "Appellants ask us to make a major innovation in the law by holding that the FTCA provides damage actions as an additional means of policing the internal procedures of governmental agencies. . . . There is, in the first place, absolutely no evidence that in enacting the FTCA Congress intended to police internal governmental law-making procedures with damage actions. Appellants' theory of governmental liability because of . . . failure to follow the procedures specified . . . would seem to impose liability for . . . failure to follow procedures prescribed by any regulation or statute, including the Administrative Procedure Act." Id., at 391.
In discussing the administrative history of the FTCA, the Supreme Court in Dalehite v. United States, 346 U.S. 15, 24-30 (1953), quoted the following testimony from the Congressional Record:
`[It was not] intended that the . . . propriety of a discretionary administrative act, should be tested through the medium of a damage suit for tort.'Id., at 27 (quoting transcript of Hearings on H.R. 5373 and H.R. 6463, House Comm. on the Judiciary, 77th Cong., 2dSess. 6, 25, 33 (1942)).
Finally, plaintiff, mistakenly, has attempted to bring this action against Revenue Officer Shade under the North Carolina General Statutes. The complaint, however, is in reality against the United States, and the United States has not consented to be sued under North Carolina law.United States v. Shaw, 309 U.S. 495, 500-01 (1940). North Carolina cannot grant to this court (or its own courts, for that matter) jurisdiction over the United States because the United States is immune from suit under such statutes. The undersigned, therefore, must recommend dismissal of this action in accordance with Rule 12(b)(1), Federal Rules of Civil Procedure, for lack of subject-matter jurisdiction.
Plaintiff also does not state a cognizable due-process violation under Bivens v. Six Unknown Named Agents, 403 U.S. 388 (1971), because Congress has provided a specific statutory remedy for plaintiff under 26, United States Code, Section 7433. Schweiker v. Chilicky, 4877 U.S. 412, 423 (1988). Even if the court were to liberally construe plaintiff's complaint to be a Section 7433 action for failure of a revenue officer to follow the revenue code, such action would also have to be dismissed because Section 7433 requires exhaustion of administrative remedies as a precursor to jurisdiction in this court. Plaintiff has not availed himself of any administrative remedies. See affidavit of S.J. Williams.
B. Dismissal of Claims Against the Corporate Defendant
Construing the complaint and all the pleadings in a light most favorable to plaintiff, his employer paid $928.09 of his wages to the Internal Revenue Service in accordance with the instructions contained in the Notice of Levy. Plaintiff has attempted to assert claims of common-law fraud and conversion, along with a constitutional claim for violation of due process.
An employer that complies with a Notice of Levy issued by the Internal Revenue Service is immune from suit by the employee as to any claim that arises from compliance with the levy. 26 U.S.C. § 6332(e); Pawlowske v. Chrysler Corp., 623 F. Supp. 569, 570 (N.D. Ill. 1985), aff'd, 799 F.2d 753 (7th Cir. 1986). The validity of the levy is irrelevant to the immunity afforded the complying employer. Moore v. G.M. Pension Plans, 91 F.3d 848 (7th Cir. 1996).
As to the due-process claim, it is apparent from the face of the pleadings that defendant employer is a private corporation, not a state actor. Under Bivens, supra, plaintiff would have to allege that the corporate defendant conspired with governmental officials to deprive him of constitutional rights. A private defendant acts under color of state law if "he is a willful participant in joint action with the state or its agents." Dennis v. Sparks, 449 U.S. 24, 27-28 (1980). The mere fact that the government highly regulates an industry does not provide color of law where the regulatory or subsidizing function does not cause the complained-of action. Arlosoroff v. NCAA, 746 F.2d 1019 (4th Cir. 1984). Where an employer simply complies with a Notice of Levy issued by the Internal Revenue Service, fifth- and fourteenth-amendment protections are not implicated. The undersigned, therefore, will recommend dismissal of plaintiff's common-law and constitutional tort claims.
RECOMMENDATION
IT IS, THEREFORE, RESPECTFULLY RECOMMENDED that
(1) defendant Rosa L. Shade's, eo nominee United States of America's, Motion to Dismiss the complaint be ALLOWED, and that all claims be DISMISSED as to such defendant;
(2) defendant Norfolk Southern Railroad Company's Motion to Dismiss be ALLOWED, and all claims against such defendant be DISMISSED; and
(3) plaintiff's Motion to Strike Norfolk Southern's Motion to Dismiss be DENIED.
The parties are hereby advised that, pursuant to 28, United States Code, Section 636(b)(1)(C), written objections to the findings of fact, conclusions of law, and recommendation contained herein must be filed within ten (10) days of service of same. Failure to file objections to this Memorandum and Recommendation with the district court will preclude the parties from raising such objections on appeal. Thomas v. Arn, 474 U.S. 140 (1985), reh'g denied, 474 U.S. 1111 (1986); United States v. Schronce, 727 F.2d 91 (4th Cir.), cert. denied, 467 U.S. 1208 (1984).