Connor v. Matthews

• Decision Date: 19 March 2001
• Docket Number: No. 3:00-CV-2764-X.,3:00-CV-2764-X.
• Citation: 134 F.Supp.2d 797
• Parties: Dwight CONNOR Plaintiff, v. Ron MATTHEWS, Defendant.
• Court: U.S. District Court — Northern District of Texas

134 F.Supp.2d 797

Dwight CONNOR Plaintiff, v. Ron MATTHEWS, Defendant.

No. 3:00-CV-2764-X.

United States District Court, N.D. Texas, Dallas Division.

March 19, 2001.

MEMORANDUM OPINION AND ORDER

KENDALL, District Judge.

Before the Court are Defendant's Motion to Dismiss, filed January 31, 2001; Plaintiff's Response/"Motion to Return to Constitutional Court," filed February 12, 2001; and Defendant's Supplement to the Motion to Dismiss, filed February 14, 2001. Plaintiff's Response contains a request that the Court remand this action to state court; the Court DENIES Plaintiff's Motion for Remand. The Court GRANTS Defendant's Motion to Dismiss.

I. Plaintiff's Remand Issue

At the outset, Plaintiff labels his February 12, 2001 filing as "Motion to Return to Constitutional Court," although the first page characterizes it as his response to Defendant's Motion to Dismiss. Construing the document as a Motion to Remand, that Motion is DENIED. The Complaint asserts causes of action against Defendant, an IRS agent, either in his official or individual capacity. Removal to federal court is proper where an officer of the United States is "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 collection of the revenue." 28 U.S.C. §§ 1441(a), 1442(a)(1). This case is properly in federal court.

II. Defendant's Motion to Dismiss

This is a tax protestor case. Plaintiff Dwight Connor, pro se, has sued Ron Matthews, a collection agent for the Internal Revenue Service. Plaintiff's Original Complaint alleges: (1) Defendant used "unconstitutional procedures" to levy on Plaintiff's paycheck "without the permission and ... knowledge" of Plaintiff; (2) Plaintiff's actions "show great disregard for contracts between Plaintiff and [his employer]";¹ and (3) Defendant misled Plaintiff as to the actions Defendant would take, thus constituting a fraud on Plaintiff. The Complaint does not identify any statutory bases for relief, nor does it identify a particular provision of the Constitution. The Complaint does state that the claims are of a common law and "not of a statutory nature." See Pl.'s Orig. Compl. at 3. Plaintiff's prayer for relief seeks only money damages, stating:

Plaintiff is entitled to the alleged amount of alleged levy of $17,997.71 under the Common Law, reasonable legal fees in all court levels and any additional punitive damages of $250,000.00 for the purpose of making sure that this Defendant will never take such fraudulent action in the future and any and all additional damages as may be set in the discretion of the Judge of the Court.

Pl.'s Orig. Compl., at 3. The Complaint fails to set forth any reason that sovereign immunity should not apply.

Defendant's Motion to Dismiss involves both 12(b)(1) and 12(b)(6) bases for dismissal, and characterizes Plaintiff's complaint as a suit against Matthews in his official capacity. See Notice of Removal at ¶ 2. Plaintiff never states whether his intent is to sue Matthews in his individual or official capacity, but does not contest Defendant's characterization. The Court will nevertheless evaluate both possibilities.

A. Suit Against Matthews in his Official Capacity

First, suits brought against IRS employees in their official capacities are treated as suits against the United States. State of Hawaii v. Gordon, 373 U.S. 57, 58, 83 S.Ct. 1052, 10 L.Ed.2d 191 (1963); Atkinson v. O'Neill, 867 F.2d 589, 590 (10th Cir.1989). Sovereign immunity bars suits against the United States unless the United States has expressly consented to suit. See Federal Deposit Ins. Corp. v. Meyer, 510 U.S. 471, 475, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994); United States v. Dalm, 494 U.S. 596, 608, 110 S.Ct. 1361, 108 L.Ed.2d 548 (1990). Plaintiff has not identified, and this Court's research has not revealed, any basis for finding that the United States has consented to be sued for the common law causes of action alleged in the Plaintiff's Complaint. Furthermore, to the extent that consent and valid causes of action do exist, the Court of Claims has exclusive jurisdiction.

(1) The United States has expressly withheld consent to be sued under the Federal Tort Claims Act for claims arising from the assessment or collection of taxes. 28 U.S.C. § 2680(c). The section 2680(c) bar is valid despite the fact that Plaintiff attempts to characterize his causes of action as common law tort claims. See Interfirst Bank Dallas v. United States, 769 F.2d 299, 306 (5th Cir.1985)(holding that section 2680(c) barred a common law claim for conversion based on tax collection activities).

(2) The Administrative Procedure Act does not provide consent to be sued for money damages. See APA, 5 U.S.C. § 702; Wilhite v. United States, 2001 WL 124937, *4 (N.D.Tex. Jan.12, 2001)(citing Kanemoto v. Reno, 41 F.3d 641, 644 (Fed. Cir.1994)). To the extent that Plaintiff states a claim by alleging that Defendant used "unconstitutional procedures," Plaintiff's suit is nevertheless barred because he seeks only money damages.

(3) The Internal Revenue Code does provide a damages remedy for unauthorized collection activities. 26 U.S.C. § 7433. Section 7433, also known as the Taxpayer's Bill of Rights, serves as Congress's statement that the United States consents to suit where IRS employees or agents "recklessly or intentionally disregard" certain procedures or regulations.

However, Plaintiff's complaint does not allege that agent Matthews recklessly or intentionally disregarded any IRS procedures or regulations. The Complaint does not refer to section 7433, and in fact expressly disclaims any statutory basis. Section 7433 is in any case unavailing until Plaintiff has exhausted his administrative remedies under that provision, and there is no allegation that he has done so. Failure to exhaust administrative remedies is a jurisdictional bar to proceeding under section 7433. Venen v. United States, 38 F.3d 100, 103 (3d Cir.1994); Conforte v. United States, 979 F.2d 1375, 1377 (9th Cir.1992).

(4) The Internal Revenue Code also provides a remedy for refund of taxes improperly collected. 26 U.S.C. § 7422. However, section 7422, like section 7433, has administrative exhaustion requirements, including full payment of the amount assessed, that Plaintiff does not allege have been fulfilled. And, as noted above, Plaintiff has disclaimed any intention of proceeding under a statutory cause of action.

(5) To the extent that Plaintiff's Complaint can be construed as a suit under the Tucker Act against the United States founded on the Constitution or any Act of Congress, and is not a suit for refund under 28 U.S.C. § 1346(a)(1), the Court of Claims has exclusive jurisdiction because Plaintiff's claims are for more than $10,000. Wilkerson v. United States, 67 F.3d 112, 118-19 & n. 12 (5th Cir.1995).

The Court therefore GRANTS Defendant's Rule 12(b)(1) Motion to Dismiss Plaintiff's claims against Defendant Matthews in his official capacity, because of the doctrine of sovereign immunity, and for lack of subject matter jurisdiction.

B. Suit Against Matthews in his Individual Capacity

To the extent that any of Plaintiff's causes of action may be construed as targeting Matthews in his individual capacity, sovereign immunity does not serve as a bar to suit. The Court therefore considers whether Plaintiff has stated a claim for which relief may be granted. Rule 12(b)(6) motions to dismiss for failure to state a claim are viewed with disfavor and are rarely granted. See Lowrey v. Texas A & M, 117 F.3d 242, 247 (5th Cir.1997). There are two primary considerations for a court's analysis of the propriety of dismissal under Rule 12(b)(6). First, the court must accept as true all well-pleaded facts in the Complaint, and the Complaint is to be liberally construed in favor of the plaintiff. See Baker v. Putnal, 75 F.3d 190, 196 (5th Cir.1996). The plaintiff must plead specific facts, not mere conclusory allegations. Guidry v. Bank of LaPlace, 954 F.2d 278, 281 (5th Cir.1992). Second, a Complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts that would entitle him to relief. See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Kaiser Aluminum Chem. Sales, Inc. v. Avondale, 677 F.2d 1045, 1050 (5th Cir.1982). Dismissal is warranted under Rule 12(b) when the facts alleged, taken as true, fail to state a claim for relief. See Kaiser Aluminum, 677 F.2d at 1050.

Where government employees acting under color of federal law violate individual rights, Courts may recognize an action for damages against that federal employee. Bivens v. Six Unknown Federal Agents, 403 U.S. 388, 395-96, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971). Courts will not imply a Bivens remedy where (1) "special factors counsel hesitation in the absence of affirmative action by Congress"; or (2) there is another remedy, equally effective in the view of Congress. Id. at 397, 91 S.Ct. 1999. In the present case, the Court cannot imply a Bivens remedy both because Plaintiff has not pled a violation of his rights, and there is an effective alternative remedy. The existence of a Congressionally established alternative remedy for Plaintiff's wrongful collection claims makes 12(b)(6) dismissal particularly appropriate; no matter what facts Plaintiff could adduce in support of his three claims, the remedies contained in the tax code render a Bivens remedy unavailing. See Haas v. Schalow, 1998 WL 904727 (7th Cir.1998)(table disposition, 172 F.3d 53, 1998 WL 904727)(motion to dismiss proper when no Bivens remedy available in a wrongful levy case); Lawrence v. United States, 2000 WL 1182452 (6th Cir.2000)(table disposition, 229 F.3d 1152)(dismissal proper when taxpayer sought individual damages via Bivens for collection activities); Barron v. United States, 998 F.Supp. 117, 121 (D.N.H....