Gust v. U.S.

• Decision Date: 06 June 2011
• Docket Number: Civil Action No. 10–cv–00252 (ABJ).
• Citation: 789 F.Supp.2d 58,2011 USTC P 50446,107 A.F.T.R.2d 2011
• Parties: Thomas E. GUST, Plaintiff,v.UNITED STATES of America, Defendant.
• Court: U.S. District Court — District of Columbia

789 F.Supp.2d 58

107 A.F.T.R.2d 2011-2443

2011-1 USTC P 50,446

Thomas E. GUST, Plaintiff,

v.UNITED STATES of America, Defendant.

Civil Action No. 10–cv–00252 (ABJ).

United States District Court, District of Columbia.

June 6, 2011.

Thomas E. Gust, Mooresboro, NC, pro se.Yonatan Gelblum, U.S. Department of Justice, Washington, DC, for Defendant.

MEMORANDUM OPINION

AMY BERMAN JACKSON, District Judge.

Before the Court is defendant's motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Defendant contends that the Court lacks subject matter jurisdiction over three counts in the complaint and that plaintiff fails to state a claim upon which relief can be granted for the remaining three counts. For the reasons stated below, defendant's motion to dismiss will be granted.

BACKGROUND

Plaintiff Thomas E. Gust, proceeding pro se, brings this action against defendant, the United States of America, alleging six counts under the Taxpayer's Bill of Rights, 26 U.S.C. § 7433 (2006). He avers generally that the Internal Revenue Service (“IRS”) “recklessly and/or intentionally, and/or by reason of willful negligence, violated, disregarded, and/or simply ignored several provisions of federal law, resulting in collection activities which the IRS personnel knew or should have known were unlawful.” Compl. ¶ 3. In its motion to dismiss, Defendant argues that the Court lacks jurisdiction over Counts I, II, and III because section 7433 “only waives sovereign immunity from suits relating to actions taken in connection with tax collection.” See Def.'s Mem. at 2 (emphasis in original). Defendant further contends that Counts IV, V and VI fail to state a claim upon which relief can be granted because “they do not allege concrete facts[ ] and do not describe violations of the Internal Revenue Code.” Id.

ANALYSIS

I. Standard of Review

In evaluating a motion to dismiss under either Rule 12(b)(1) or 12(b)(6), the Court must “treat the complaint's factual allegations as true ... and must grant plaintiff ‘the benefit of all inferences that can be derived from the facts alleged.’ ” Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113 (D.C.Cir.2000) (quoting Schuler v. United States, 617 F.2d 605, 608 (D.C.Cir.1979) (citations omitted)). Nevertheless, the Court need not accept inferences drawn by the plaintiff if those inferences are unsupported by facts alleged in the complaint, nor must the Court accept plaintiff's legal conclusions. Browning v. Clinton, 292 F.3d 235, 242 (D.C.Cir.2002). Where the action is brought by a plaintiff proceeding pro se, “the court must take particular care to construe plaintiff's filings liberally, for such complaints are held “to less stringent standards than formal pleadings drafted by lawyers.” Cheeks v. Fort Myers Constr. Co., 722 F.Supp.2d 93, 107 (D.D.C.2010) (quoting Haines v. Kerner, 404 U.S. 519, 520–521, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972)).

A. Rule 12(b)(1) Motion to Dismiss

Plaintiff bears the burden of establishing jurisdiction by a preponderance of the evidence. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992); Shekoyan v. Sibley Int'l Corp., 217 F.Supp.2d 59, 63 (D.D.C.2002). Federal courts are courts of limited jurisdiction and the law presumes that “a cause lies outside this limited jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1995); see also Gen. Motors Corp. v. Envtl. Prot. Agency, 363 F.3d 442, 448 (D.C.Cir.2004) (“As a court with limited jurisdiction, we begin, and end, with examination of our jurisdiction.”). Because “subject-matter jurisdiction is an ‘Art. III as well as a statutory requirement, [...] no action of the parties can confer subject-matter jurisdiction upon a federal court.’ ” Akinseye v. District of Columbia, 339 F.3d 970, 971 (D.C.Cir.2003) (quoting Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982)).

Moreover, unlike when deciding a motion to dismiss under Rule 12(b)(6), the court “need not limit itself to the allegations of the complaint.” Hohri v. United States, 782 F.2d 227, 241 (D.C.Cir.1986) vacated on other grounds, 482 U.S. 64, 107 S.Ct. 2246, 96 L.Ed.2d 51 (1987). Rather, a court “may consider such materials outside the pleadings as it deems appropriate to resolve the question whether it has jurisdiction in the case.” Scolaro v. D.C. Bd. of Elections & Ethics, 104 F.Supp.2d 18, 22 (D.D.C.2000) (citing Herbert v. Nat'l Acad. of Sciences, 974 F.2d 192, 197 (D.C.Cir.1992)); see also Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C.Cir.2005).

B. Rule 12(b)(6) Motion to Dismiss

“To survive a [Rule 12(b)(6) ] motion to dismiss a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (internal quotation marks omitted); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim is facially plausible when the pleaded factual content “allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 129 S.Ct. at 1949. “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not ‘show[n]’ ‘that the pleader is entitled to relief.’ ” Id. (quoting Fed. R. Civ. Pro. 8(a)(2)). A pleading must offer more than “labels and conclusions” or a “formulaic recitation of the elements of a cause of action,” id., (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955), and “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Id. In ruling upon a motion to dismiss, a court may ordinarily consider only “the facts alleged in the complaint, documents attached as exhibits or incorporated by reference in the complaint, and matters about which the Court may take judicial notice.” Gustave–Schmidt v. Chao, 226 F.Supp.2d 191, 196 (D.D.C.2002) (citations omitted).

II. Lack of Jurisdiction Under Rule 12(b)(1)

Defendant argues that Counts I, II, and III in plaintiff's complaint concern the IRS's “determination of tax liabilities” and are therefore tax assessment activities as opposed to collection practices. See Def.'s Mem. at 2. Defendant argues that this leaves the Court without subject matter jurisdiction under section 7433. Id. The Court agrees.

The United States is immune from suit unless Congress has expressly waived the defense of sovereign immunity by statute. United States v. Mitchell, 463 U.S. 206, 212, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983) (“It is axiomatic that the United States may not be sued without its consent and that the existence of consent is a prerequisite for jurisdiction.”). Such consent may not be implied; it must be “unequivocally expressed.” United States v. Nordic Vill., Inc., 503 U.S. 30, 33–34, 112 S.Ct. 1011, 117 L.Ed.2d 181 (1992). Waivers of sovereign immunity are “strictly construed ... [and] in favor of the sovereign.” Lane v. Pena, 518 U.S. 187, 192, 116 S.Ct. 2092, 135 L.Ed.2d 486 (1996). If sovereign immunity has not been waived, federal courts lack subject matter jurisdiction over the claims. See Jackson v. Bush, 448 F.Supp.2d 198, 200 (D.D.C.2006) (“a plaintiff must overcome the defense of sovereign immunity in order to establish the jurisdiction necessary to survive a Rule 12(b)(1) motion to dismiss.”).

Plaintiff brings his claims under the Taxpayer's Bills of Rights, 26 U.S.C. § 7433, which includes a limited waiver of sovereign immunity. Section 7433 provides in relevant part:

If, in connection with any collection of Federal tax with respect to a taxpayer, any officer or employee of the Internal Revenue Service recklessly or intentionally, or by reason of negligence disregards any provision of this title, or any regulation promulgated under this title, such taxpayer may bring a civil action for damages against the United States in a district court of the United States .... such civil action shall be the exclusive remedy for recovering damages resulting from such actions.

26 U.S.C. § 7333(a).

A number of circuits, as well as several judges in this district, have examined the plain language of this statute and have concluded that a cause of action exists only for claims related to the collection of income taxes and not for claims related to the investigation or assessment of taxes.¹ See, e.g., Miller v. United States, 66 F.3d 220, 222–23 (9th Cir.1995) (“[A] taxpayer cannot seek damages under [ section] 7433 for improper assessment of taxes.”) (internal quotations and citations omitted); Shaw v. United States, 20 F.3d 182, 184 (5th Cir.1994) (affirming district court determination that IRS activity unrelated to tax collection was not actionable under section 7433); Gonsalves v. IRS, 975 F.2d 13, 16 (1st Cir.1992) (“[A]n action under [ section 7433] may not be based on alleged ... disregard in connection with determination of tax.”) (internal quotations and citations omitted); Bean v. United States, 538 F.Supp.2d 220, 225 (D.D.C.2008) ( “This [c]ourt now joins the well-supported holdings of other courts in this District that [s]ection 7433 does not provide a cause of action for actions not related to the collection of income tax.”); Buaiz v. United States, 471 F.Supp.2d 129, 135 (D.D.C.2007) (“[O]nly actions in connection with the collection of taxes are actionable; conduct associated with investigation or assessment of income tax is beyond the statute's waiver of sovereign immunity.”); Wesselman v. United States, 501 F.Supp.2d 98, 101 (D.D.C.2007) (same).

In Count I, plaintiff...