Fisher v. US

• Decision Date: 16 October 2009
• Docket Number: Case No. C09-933JLR.
• Citation: 676 F. Supp.2d 1165
• Parties: Kevin FISHER, et al., Petitioners, v. UNITED STATES of America, et al., Respondents.
• Court: U.S. District Court — Western District of Washington

676 F.Supp.2d 1165

Kevin FISHER, et al., Petitioners, v. UNITED STATES of America, et al., Respondents.

Case No. C09-933JLR.

United States District Court, W.D. Washington, at Seattle.

October 16, 2009.

Kevin Fisher, Kingston, WA, pro se.

Carrie Fisher, Kingston, WA, pro se.

Shayla McCormally, U.S. Department of Justice, Washington, DC, for Respondents.

ORDER

JAMES L. ROBART, District Judge.

I. INTRODUCTION

This matter comes before the court on the United States of America's motion to dismiss and summarily deny Petitioners Kevin Fisher and Carrie Fisher's ("Fishers") amended petition to quash third-party summonses (Dkt. # 5). The Fishers have not filed a response to the motion.¹ Having reviewed the motion, as well as all papers filed in support and the balance of the record, and deeming oral argument unnecessary, the court GRANTS the motion (Dkt. # 5) and directs the Clerk to DISMISS this action with prejudice and to enter judgment in favor of the United States.

II. BACKGROUND

The Fishers have not filed federal income tax returns for the 2003 to 2008 tax years. (Declaration of Sandy Bowman ("Bowman Decl.") (Dkt. # 6) ¶ 4.) In response, the Internal Revenue Service ("IRS") initiated an investigation to determine the Fishers's tax liabilities. (Bowman Decl. ¶ 2.) Sandy Bowman, the IRS agent conducting the investigation, states that the Fishers have used multiple "nominee entities" to divert income. (Bowman Decl. ¶ 3.)

In June and July of 2009, Agent Bowman issued a total of 23 administrative summonses on 12 companies for records related to the Fishers and their nominee entities. (Bowman Decl. ¶¶ 7-10.) Agent Bowman provided notice of the summonses to the Fishers. (Id.) In filing this petition, the Fishers invoked 26 U.S.C. § 7609 to quash the summonses, naming the United States, the IRS, and Agent Bowman as respondents.

III. ANALYSIS

This matter raises legal issues similar or identical to those addressed by the Honorable Richard A. Jones in a previous petition filed by the Fishers to quash IRS summonses. See Fisher v. United States, No. C08-1795RAJ, 2009 WL 2187552 (W.D.Wash. May 18, 2009). In that action, Judge Jones issued two orders, ultimately dismissing the Fishers's petition with prejudice and concluding that their arguments were meritless. Having reviewed Judge Jones's thoughtful and well-reasoned orders, the court adopts much of Judge Jones's reasoning, as discussed below.

A. The Court Dismisses the IRS and Agent Bowman as Respondents

The court grants Respondents' request to dismiss the IRS and Agent Bowman as Respondents in this matter. (Mot.(Dkt. # 5) at 7-9.) The sole jurisdictional basis for the Fishers's petition is 26 U.S.C. § 7609, which only permits a suit against the United States, not against the IRS or its agents. See Kernan v. Internal Revenue Serv., No. MC05-0172-PHX-JAT, 2006 WL 2091668, at *1 & n. 2 (D.Ariz. July 25, 2006). Regardless whether the Fishers have valid claims against the IRS or Agent Bowman, they cannot pursue them via their 26 U.S.C. § 7609 petition. The court therefore dismisses the IRS and Agent Bowman as Respondents in this action and substitutes the United States in their stead.

B. Subject Matter Jurisdiction and Transfer

26 U.S.C. § 7609(h)(1) vests the "United States district court for the district within which the person to be summoned resides or is found" with jurisdiction to hear a petition to quash an IRS summons. The Ninth Circuit interprets this provision to strip subject matter jurisdiction from any district court in which the person to be summoned neither resides nor is found. Fortney v. United States, 59 F.3d 117, 119 (9th Cir.1995). However, Ninth Circuit case law provides no clear answer as to when an entity is "found" within a judicial district for purposes of assessing subject matter jurisdiction. While some courts ask solely whether the address from which the records are summoned is within the judicial district, others inquire whether the entity has a branch office or other physical presence within the district. See Fisher, 2009 WL 2187552, at *1-2; Grant v. Internal Revenue Serv., No. MC-06-0079-PHX-DGC, 2006 WL 3716752, at n. 2 (D.Ariz. Nov. 28, 2006) (citing cases).

Here, Agent Bowman issued summonses to certain financial institutions at their corporate headquarters located outside of Washington. (Bowman Decl. ¶¶ 14-17.) Specifically, Agent Bowman issued summonses to Equifax Information Services, LLC, in Atlanta, Georgia (Bowman Decl. ¶ 14); to TransUnion LLC in Chicago, Illinois (Bowman Decl. ¶ 15); to Experian Information Solutions in Allen, Texas (Bowman Decl. ¶ 16); and to PayPal, Inc. by facsimile in San Jose, California (Bowman Decl. ¶ 17). The United States argues that the court should interpret the term "found" to require that the summonsed entity maintains branch offices within the district. (Mot. at 11.)

The court need not determine the meaning of "found" for purposes of the present motion. See Fisher, 2009 WL 2187552, at *2. To the extent any of the summoned entities were "found" in this district, the court would dismiss the Fishers's petition as to those entities on the merits, for the reasons stated below. By contrast, to the extent any of the summonsed entities were not "found" in this district, the court lacks subject matter jurisdiction and, as discussed below, declines to transfer the petition to another district

Pursuant to 28 U.S.C. § 1631, a transfer to cure a want of jurisdiction is mandatory, provided it is in the interest of justice. Rodriguez-Roman v. I.N.S., 98 F.3d 416, 423 & n. 9 (9th Cir.1996); Hays v. Postmaster Gen., 868 F.2d 328, 331 (9th Cir.1989). As the Ninth Circuit teaches, "jurisdictional defects that arise when a suit is filed in the wrong federal court may be cured by transfer under the federal transfer statute, 28 U.S.C. § 1631." Clark v. Busey, 959 F.2d 808, 812 (9th Cir.1992). Section 1631 provides as follows:

Whenever a civil action is filed in a court. . . and that court finds that there is a want of jurisdiction, the court shall, if it is in the interest of justice, transfer such action or appeal to any other court in which the action or appeal could have been brought at the time it was filed. . . .

28 U.S.C. § 1631. Although the parties did not raise the issue of transfer, the court raises it sua sponte. Hays, 868 F.2d at 331. The court's consideration of a § 1631 transfer has three parts: (1) the court must find that it lacks subject matter jurisdiction, (2) it must find that the transferee court would have had subject matter jurisdiction if the case had been filed on the same date as the instant action, and (3) it must find that the transfer is in the interest of justice. Id.

The first two factors are easily satisfied here. The court will assume that it lacks subject matter jurisdiction as to one or more of the summonsed entities because they are not "found" in this district. Further, had the Fishers challenged the summonses issued on these entities in districts in which the entities could be "found," the courts hearing those actions would have had subject matter jurisdiction.² Transfer thus turns on the third factor, namely, whether transfer is in the interest of justice. It is not. In addressing this factor, a court may consider whether the petitioner was aware of the jurisdictional issue when he or she filed the action, and may also consider whether the petitioner is pro se. Puri v. Gonzales, 464 F.3d 1038, 1043 (9th Cir.2006); Rodriguez-Roman,

98 F.3d at 424. However, the interests of justice are not served where the action was brought for an improper purpose, Puri, 464 F.3d at 1038, or the action is weak on the merits, Howitt v. U.S. Dep't of Commerce, 897 F.2d 583, 584 (1st Cir.1990). The court may also consider the petitioner's good faith or bad faith in bringing the action, and any prejudice that would accrue to the petitioner. Cruz-Aguilera v. I.N.S., 245 F.3d 1070, 1074 (9th Cir.2001).

Here, the court finds that transfer of the Fishers's petition is not in the interest of justice. The court acknowledges that the Fishers are pro se petitioners, that the law remains unsettled regarding where a summoned entity is "found," and that the Fishers cannot simply re-file petitions challenging the administrative summonses in the proper venue because the 20-day window for doing so has passed. 26 U.S.C. § 7609(b)(2)(A); Ponsford v. United States, 771 F.2d 1305, 1309 (9th Cir.1985). Nonetheless, the Fishers would not suffer prejudice because their petitions would fail on the merits even if transferred. As discussed below, the Fishers have raised no meritorious bases for quashing the summonses. Furthermore, the court is mindful that the majority of the arguments raised by the Fishers in this action were previously considered and rejected on the merits by Judge Jones. The Fishers thus had every reason to know that their arguments would find no better favor when repeated here. Finally, the Fishers have not responded to the United States' motion or requested transfer themselves. In sum, the whether the court dismisses the petition for lack of subject matter jurisdiction or on the merits, the Fishers's petition would be dismissed. Transfer therefore would not further the interest of justice and the court declines to do so.

C. To the Extent Not Dismissed for Lack of Subject Matter Jurisdiction, the Court Dismisses as Moot the Petition With Respect to the Summons Issued on Bank of America

The court dismisses as moot the Fishers's petition to the extent they seek to quash the summons issued to Bank of America. Agent Bowman withdrew this summons on September 3, 2009. (Bowman Decl. ¶ 12.) In general, a petition to quash is rendered moot when the summons is withdrawn. See Thompson v. United States, No. 06-4572 (PAM/JSM), 2007 WL 773713, at *1 (D.Minn. Mar. 12, 2007); Dame v. United States, 643 F.Supp. 533, 534 (S.D.N.Y.1986). The Fishers have made no showing that this claim is not moot....