Opinion
Case No.: CV-02-01613 CAS (JTLx)
June 18, 2002
FEDERAL DEFENDANTS' MOTION TO DISMISS
I. BACKGROUND
Plaintiff, acting pro se, filed the complaint in this action on February 25, 2002, alleging that he provided information to the Internal Revenue Service ("IRS") Center's Criminal Investigation Department in Fresno, California, which led to the collection of taxes from a delinquent taxpayer. Plaintiff purports to bring this action pursuant to the Federal Tort Claims Act, 28 U.S.C. § 2671 et sect., and seeks the monetary reward he alleges is due to him. On May 10, 2002, defendants filed the instant motion to dismiss plaintiff's complaint pursuant to Fed.R.Civ.P. 12(b)(1), (2), (5), and (6).
Although the moving parties refer to themselves as "the federal defendants," all defendants joined in the instant motion. Therefore, the Court will refer to them simply as "defendants."
On May 20, 2002, plaintiff attempted to file an opposition to defendants' motion; however, on May 22, 2002, the Court rejected plaintiff's opposition because no proof of service was attached to the document and because plaintiff had attached a state court summons. On June 3, 2002, defendants, who had received a copy of plaintiff's opposition, filed a reply brief. On June 4, 2002, plaintiff properly filed his opposition to defendants' motion to dismiss. Thereafter, the Court took the matter under submission.
II. FACTS
Plaintiff alleges that on December 4 and 5, 1997, he provided information regarding a "60 million dollar I.R.S. rip off" to the IRS Center Criminal Investigation Department in Fresno. Complaint ("Comp.") ¶¶ 2, 3. Plaintiff appears to allege that as a result, the IRS collected millions of dollars in taxes, fines, and penalties from several individuals. Id. ¶ 7. Plaintiff alleges that in March 2001, he wrote to the IRS requesting assistance in obtaining the reward he contends he is due. Id. ¶ 12. Plaintiff alleges that on approximately August 1, 2001, he completed a "claim for reward" form and sent it to the IRS informant claims examiner for processing. Id. ¶ 14. Plaintiff alleges that in November 2001, claims examiner Laverna Taylor informed him that she required more time to process the claim; shortly thereafter, plaintiff sent Taylor additional information regarding his claim. Id. ¶¶ 15, 16. Plaintiff alleges that on January 11, 2002, he received a letter denying his claim for reward. Id. ¶ 18. Plaintiff then initiated this lawsuit.
In the caption of the complaint, plaintiff names as defendants the following persons and entities: (1) the IRS Center at Fresno; (2) the Criminal Investigation Department, Department of the Treasury; (3) Informant Claims Examiner at Fresno; (4) the United States Government; and (5) Laverna Taylor, Informant Claims Examiner at Ogden, Utah.
III. STANDARD FOR MOTION TO DISMISS PURSUANT TO 12(b)(1)
A motion to dismiss an action under Federal Rule of Civil Procedure 12(b)(1) raises the question of the federal court's subject matter jurisdiction over the action. The objection presented by this motion is that the court has no authority or competence to hear and decide the case. This defect may exist despite the formal sufficiency of the allegations in the complaint. See T.B. Harms Co. v. Eliscu, 226 F. Supp. 337, 338 (S.D.N.Y.), aff'd 339 F.2d 823 (2d Cir. 1964) (the formal allegations must yield to the substance of the claim when a motion is filed to dismiss the complaint for lack of subject matter jurisdiction). When considering a Rule 12(b)(1) motion challenging the substance of jurisdictional allegations, the Court is not restricted to the face of the pleadings, but may review any evidence, such as declarations and testimony, to resolve any factual disputes concerning the existence of jurisdiction. See McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988).
The burden of proof on a Rule 12(b)(1) motion is on the party asserting jurisdiction. See Sopcak v. Northern Mountain Helicopter Serv., 52 F.3d 817, 818 (9th Cir. 1995). If jurisdiction is based on a federal question, the pleader must show that he has alleged a claim under federal law and that the claim is not frivolous. See 5A Charles A. Wright Arthur R. Miller, Federal Practice and Procedure, § 1350, pp. 229-30. On the other hand, if jurisdiction is based on diversity of citizenship, the pleader must show real and complete diversity, and also that his asserted claim exceeds the requisite jurisdictional amount of $75,000,00. See id.
IV. DISCUSSION
Defendants contend that this action should be dismissed pursuant to Rule 12(b)(1) of the Fed.R.Civ.P. for lack of subject matter jurisdiction. Motion of Federal Defendants to Dismiss ("Mot.") at 5. As a sovereign, the United States is immune from suit unless it has expressly waived its sovereign immunity. Gilbert v. DaGrossa, 756 F.2d 1455, 1458 (9th Cir. 1985); see also Carelli v. Internal Revenue Service, 668 F.2d 902, 904 (6th Cir. 1982) (sovereign immunity bars informant's suit to claim reward for providing information about underpaid taxes). Naming federal agencies, agency components, and employees as defendants "does not keep this action from being a suit against the United States," as parties sued in their official capacity are also immune from suit unless there is an express statutory waiver of immunity of the United States. Gilbert, 756 F.2d at 1258.
In the instant case, plaintiff purports to sue the United States, its agencies, and an agency employee to recover a monetary reward from the IRS. See Comp., passim. A suit is considered "against the sovereign" if the judgment sought would be paid out of the public treasury, or if the effect would be to restrain the government from acting or compel it to act. Dugan v. Rank, 372 U.S. 609, 620 (1963). Because the relief requested by plaintiff in the instant action is against the United States as sovereign, plaintiff must allege a waiver of sovereign immunity in order to maintain this lawsuit. Gilbert, 756 F.2d at 1458; Carelli, 668 F.2d at 904.
Plaintiff purports to bring this suit pursuant to the Federal Tort Claims Act, 28 U.S.C. § 2671 et sect. ("FTCA"). Camp., Caption. Defendants argue that the FTCA does not waive the government's sovereign immunity for suits to recover monetary rewards from the IRS, because the granting of rewards is a discretionary function of the government. Mot. at 7. Pursuant to 26 U.S.C. § 7623, the statute authorizing the IRS to make monetary rewards for informants, and the regulations thereunder, see 26 C.F.R. § 301.7623-1(a) , the IRS has discretion to determine whether a reward is paid to an informant and the amount of any reward. Krug v. U.S., 168 F.3d 1307, 1310 (Fed. Cir. 1999); Carelli, 668 F.2d at 904; Destefano v. U.S., 52 Fed.Cl. 291, 293 (2002) (26 U.S.C. § 2973 and 26 C.F.R. § 301.7623-1 "do not mandate monetary rewards and consequently do not create a substantive right to money damages.")
26 C.F.R. § 301.7623-1(a) provides:
In cases where rewards are not otherwise provided for by law, a district or service center director may approve a reward, in a suitable amount, for information that leads to the detection of underpayments of tax, or the detection and bringing to trial and punishment of persons guilty of violating the internal revenue laws or conniving at the same.
"Discretionary activities belong to a class of conduct of government officials in which the Congress has expressed an intention not to waive sovereign immunity." Carelli, 668 F.2d at 904; see also Hutchinson v. United States, 677 F.2d 1322, 1327 (9th Cir. 1982) ("the provisions of the [FTCA] specifically exclude claims based upon the performance of a discretionary function by a government officer and claims arising with respect to the assessment and collection of any tax," citing 28 U.S.C. s 2680(a) and (c)); see also Destefano, 52 Fed.Cl. at 293 (because they are discretionary, "plaintiff cannot premise jurisdiction on either [ 26 U.S.C. § 7623] or the regulation.") Thus, because the provision of rewards to tax informants is discretionary, plaintiff's claim is barred by the doctrine of sovereign immunity.
In light of this holding, the Court does not reach defendants' additional arguments that this matter should be dismissed for failure to state a claim, insufficient service of process, and lack of personal jurisdiction. Mot. at 11-17.
Plaintiff does not offer any argument or authority in response. See Motion in Opposition to Defendants' Motion to Dismiss ("Opp. Mot."), passim. Instead, plaintiff appears to contend that defendants must answer the complaint before the Court can consider the motion to dismiss. Opp. Mot. at 1-2. Plaintiff's contention is without basis. Defendants are not required to answer the complaint before filing a motion to dismiss pursuant to Rule 12.
In his opposition, plaintiff also appears to request appointment of counsel. Opp. Mot. at 2. There is no constitutional right to counsel in a civil case. Lassiter v. Dep't of Social Services, 452 U.S. 18, 25 (1981). However, pursuant to 28 U.S.C. § 1915(e)(1), a district court may request that an attorney represent a litigant who is proceeding in forma pauperis. The court may ask counsel to represent an indigent litigant under § 1915 only in "exceptional circumstances," the determination of which requires an evaluation of both (1) the likelihood of success on the merits and (2) the ability of the plaintiff to articulate his claims pro se in light of the complexity of the legal issues involved. Terrell. v. Brewer, 935 F.2d 1015, 1017 (9th Cir. 1991); Wilborn v. Escalderon, 789 F.2d 1328, 1331 (9th Cir. 1986). Insofar as plaintiff's request can be construed as a request for appointment of counsel, the Court declines to appoint counsel.
V. CONCLUSION
Therefore, defendants' motion to dismiss is GRANTED. Plaintiff shall file a First Amended Complaint curing the defect noted herein within 20 days hereof.
IT IS SO ORDERED.