Class v. Kentuchy
Decision Date | 10 May 2019 |
Docket Number | No. 6:18-cv-323-REW,6:18-cv-323-REW |
Parties | CHRISTOPHER R. CLASS, Plaintiff, v. STATE OF KENTUCKY, et al., Defendants. |
Court | U.S. District Court — Eastern District of Kentucky |
Pro se Plaintiff Christopher Class challenges Kentucky's imposition of state taxes on his federal employment income. DE 1. Defendants1 move to dismiss under Federal Rules 12(b)(1) and (6). DE 7.2 The Court, on sua sponte review and for the following reasons, DISMISSES Class's complaint for lack of jurisdiction.
When testing pro se pleading sufficiency, the Court applies a forgiving construction, accepting as true all non-conclusory factual allegations and liberally construing legal claims toward encompassing a valid claim for relief. Davis v. Prison Health Servs., 679 F.3d 433, 437-38 (6th Cir. 2012). Nonetheless, the Court's liberal construction obligation has limits. Wells v. Brown, 891 F.2d 591, 594 (6th Cir. 1989); Wilson v. Lexington Fayette Urban County Government, No. 07-cv-95-KSF, 2007 WL 1136743 (E.D. Ky. April 16, 2007). The Court will not "conjure allegations on a litigant's behalf." Erwin v. Edwards, 22 F. App'x. 579, 580 (6th Cir.2001); see also Coleman v. Shoney's, Inc., 79 F. App'x 155, 157 (6th Cir. 2003) ().
Affording Class the leniency due a pro se litigant, the Court construes Class's complaint as seeking a refund of his 2015 Kentucky income tax payment of $3,500 (plus 17% annual interest) based on alleged RICO violations. See DE 1 at 5-12.3 Class also appears to seek a declaration that he (and other federal employees) owe no state income tax to the Commonwealth. Id. at 5, 12-13. None of Class's claims are properly before this Court.
Preliminarily, to the extent Class seeks any relief "on behalf of a class of people of similar circumstances," DE 1 at 13, "plaintiffs in federal court may not appear pro se where interests other than their own are at stake." Olagues v. Timken, 908 F.3d 200, 203 (6th Cir. 2018) (internal quotation marks and citation omitted). Put another way, pro se litigants may not "try[ ] to assert the rights of others." Id. Thus, the Court rejects a class theory for structural reasons and turns to Class's individual claims.
The Court undoubtedly has an omnipresent "duty to consider [its] subject-matter jurisdiction in regard to every case and may raise the issue sua sponte." Answers in Genesis of Ky., Inc. v. Creation Ministries Int'l, Ltd., 556 F.3d 459, 465 (6th Cir. 2009); see also Hertz Corp. v. Friend, 130 S. Ct. 1181, 1193 (2010) (); see also Pitt Exavating, LLC v. Pitt, 603 F. App'x 393, 396 (6th Cir. 2015) ( ). The Court, for several reasons, plainly lacks subject-matter jurisdictionin this case. See, e.g., Thornton v. Southwest Detroit Hosp., 895 F.2d 1131, 1133 (6th Cir. 1990) ( ).4
Class repeatedly invokes diversity of citizenship. DE 1 at 2-3, 7. Section 1332 vests district courts with original jurisdiction over civil actions between citizens of different states where the amount in controversy exceeds $75,000. See 28 U.S.C. § 1332(a). This action does not satisfy either § 1332 predicate. The parties are not diverse—Class lists his address as Nancy, Kentucky, and identifies all three named Defendants as Kentuckians. And, less than $75,000 is disputed—Class seeks a refund of $3,500 along with 17% annual interest, beginning in 2015. DE 1 at 5, 9. Thus, § 1332 provides no federal jurisdictional hook for Class's suit.
Class also cites a myriad of federal statutes—perhaps in an effort to invoke federal question jurisdiction. Yet scattered references to federal statutes do not, alone, provide the Court federal question jurisdiction under 28 U.S.C. § 1331. Arbaugh v. Y&H Corp., 126 S. Ct. 1235, 1244 n.10 (2006) . For instance, Class cites 28 U.S.C. § 1340 as the jurisdictional basis for his suit. DE 1 at 3. While § 1340 does authorize federal district court jurisdiction in certain circumstances, Class entirely ignores that such jurisdiction is limited to actions "arising under any Act of Congress providing for internal revenue, or revenue from imports or tonnage[.]" 28 U.S.C. § 1340. Class founds his complaint (which addresses state tax collections) on RICO, DE 1 at 1, which falls outside § 1340's purview.
A RICO claim may provide a § 1331 jurisdictional basis. However, Class does not ultimately allege any discrete act of RICO "racketeering activity" by any Defendant. See 18 U.S.C. § 1961(1). Plaintiff references wire and mail fraud, see DE 1 at 5, and certainly, RICO's civil remedies provision, 18 U.S.C. § 1964, "provides a private right of action for treble damages to any person injured in his business or property by . . . a pattern of acts indictable as mail [or wire] fraud." Bridge v. Phoenix Bond & Indem. Co., 128 S. Ct. 2131, 2138 (2008).5 Yet, at bottom, Class simply claims that it is illegal for Kentucky to tax the income of federal employees because they "hold federal immunity from any suit or claim against any employee who operated within a scope of his office or employment." DE 1 at 7; see also id. at 11 ( ).6 Class's attempt to wield the shield of immunity as a sword against the Commonwealth hardly amounts to a non-frivolous allegation of a scheme to defraud under the federal wire or mail fraud statutes. See Neitzke v. Williams, 109 S. Ct. 1827, 1831-32 (1989) ( ); Hamdi ex rel. Hamdi v. Napolitano, 620 F.3d 615, 624 (6th Cir. 2010) .
Most importantly, and as a foundational flaw of the entire case, Class fails to address the most relevant federal statute: 28 U.S.C. § 1341. The Tax Injunction Act, divests, rather than bestows, jurisdiction on this Court. See id. (). The Act erects a "broad jurisdictional barrier," see Moe v. Confederated Salish & Kootenai Tribes, 96 S. Ct. 1634, 1640 (1976), and "has its roots in equity practice, in principles of federalism, and in recognition of the imperative need of a State to administer its own fiscal operations." Tully v. Griffin, Inc., 97 S. Ct. 219, 222 (1976). The Act bars claims that a state tax is illegal or unconstitutional. Id. ( ); Thiokol Corp. v. Dep't of Treasury, State of Mich., Revenue Div., 987 F.2d 376, 378 (6th Cir. 1993) (). "[I]t is generally recognized that federal suits for state tax refunds are also barred by the Act." Coleman v. Campbell Cnty. Library Bd. of Tr, 901 F. Supp. 2d 925, 929-30 (E.D. Ky. 2012) (collecting cases); see also Northwest Airlines, Inc. v. Tennessee State Bd. of Equalization, 11 F.3d 70, 73 (6th Cir. 1993) ().
The Tax Injunction Act thus bars Class's challenges to Kentucky's taxation policy so long as the Commonwealth offers a plain, speedy, and efficient remedy. See 28 U.S.C. § 1341. While Class vaguely alludes to failed attempts at administrative relief, see DE 1 at 9-10, 12, Class does not allege that the state remedies are sluggish or inefficient. See Colonial Pipeline Co. v. Morgan, 474 F.3d 211, 218 (6th Cir. 2007) . "A state remedy is plain, speedy and efficient if it provides the aggrieved party with a 'full hearing and judicial determination at which a taxpayer may raise any and all constitutional objections to the tax,' with ultimate review available in the United States Supreme Court." Id. (citation omitted).
Kentucky courts routinely resolve tax questions like those Class presents. For example, courts in the Commonwealth have resolved declaratory judgment actions based on constitutional attacks against state and city taxes. See, e.g., St. Ledger v. Revenue Cabinet, et al., 942 S.W.2d 893 (Ky. 1997) ( ); City of Bromley v. Smith, 149 S.W.3d 403 (Ky. 2004) ( ). Kentucky courts also have adjudicated tax-refund propriety. See, e.g., Revenue Cabinet v. Gossum, 887 S.W.2d 329 (Ky. 1994) (...
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