Hill v. McMartin

• Decision Date: 09 May 1977
• Docket Number: Civ. A. No. 7-70267.
• Citation: 432 F. Supp. 99
• Parties: Joe HILL et al., Plaintiffs, v. Hugh McMARTIN et al., Defendants.
• Court: U.S. District Court — Western District of Michigan

432 F. Supp. 99

Joe HILL et al., Plaintiffs, v. Hugh McMARTIN et al., Defendants.

Civ. A. No. 7-70267.

United States District Court, E. D. Michigan, S. D.

May 9, 1977.

Wilfred C. Rice, Detroit, Mich., for plaintiffs.

Michael A. Hathaway, Detroit, Mich., for Hugh McMartin and Jerry Simmons.

Michele Coleman Mayes, Asst. U. S. Atty., U. S. Dept. of Justice, Detroit, Mich., James H. Jeffries, III, Trial Atty., Tax Div., U. S. Dept. of Justice, Washington, D. C., for federal defendants.

Richard A. Miller, Asst. City Atty., Southfield, Mich., for other defendants.

OPINION

FEIKENS, District Judge.

Joe Hill, Robert Wayne Hill, and L. J. Pittman bring this lawsuit seeking the return of approximately $63,000 admittedly taken from their possession in the course of a search of an automobile owned by L. J. Pittman and occupied at the time by the two Hill brothers. Plaintiffs also seek actual and punitive damages for false arrest, and ridicule and scorn they claim they were subjected to in the course of the search, the arrest, and their subsequent efforts to obtain the return of their $63,000.

It is undisputed that the Hill brothers had driven to Boyer Bracey's house to deliver the $63,000 to him but had not delivered it because he was not at home. At oral argument the government suggested that this money was in fact Boyer Bracey's and the Hill brothers were simply delivering it to him, but no testimony was introduced to this effect. Plaintiffs claim that this money was to be a down payment on a house they had offered to purchase from Boyer Bracey. Since they never were able to give him that money and since IRS has taken the house for unpaid taxes, the money never became Boyer Bracey's and Plaintiffs still claim possession and full and exclusive control.

Plaintiffs filed suit in this Court on February 3, 1977 against 1) Hugh McMartin and 2) Jerry Simmons, who are officers of the Police Department of the City of Southfield, Michigan; 3) Phyllis D. Vidler, who is a Revenue Officer of the Federal Internal Revenue Service; 4) the Department of the Treasury-Internal Revenue Service, itself; 5) the Honorable Norman W. Feder, who is a District Judge of the 46th District Court in Oakland County in the State of Michigan; and 6) the United States. On March 11, 1977, pursuant to directive of the Court (and an argument of these parties that Judge Feder should be dismissed as a defendant in this matter)¹ Plaintiffs filed a first Amended Complaint, including a Petition for a Writ of Mandamus, and a Motion for Return of Property or Partial Judgment. Defendant Judge Feder is omitted, and four new Defendants, Joe Doe, a/k/a Sgt. Hinderlong; Richard Roe, a/k/a Officer Smith, Sam Doe, Southfield Police Officer, and Joe Doe, Southfield Police Officer, are added.

The Amended Complaint contains three unnumbered counts. The first count (hereinafter Count I) sets forth that two of the Plaintiffs, Joe Hill and Robert Wayne Hill, allege that they were wrongfully arrested and the car they were driving was illegally searched. In the course of that search the $63,000 in cash was taken. When Plaintiffs' attorney demanded the return of this money he was, after some delay, told that it had been turned over to the Internal Revenue Service to pay an assessment owed by Boyer Bracey.

Plaintiffs also allege that the refusal to return monies owed to them was a willful and intentional scheme or conspiracy to deprive Plaintiffs of their property; and that IRS Agent Vidler was negligent in accepting the money as that of Boyer Bracey without a sufficient investigation into the true ownership of the money.

In Count I Plaintiffs seek the return of the $63,000 pursuant to Rule 41(e) of the Federal Rules of Criminal Procedure, an order to show cause followed by an order requiring the immediate return of the $63,000, and actual and punitive damages of 3 million dollars, plus costs and attorney's fees.

The second count (hereinafter Count II) is styled as a Petition for a Writ of Mandamus pursuant to 28 U.S.C. § 1361, seeking the return of the $63,000. The third count (hereinafter Count III) is a Motion for Return of Property pursuant to Rule 41(e) and a Motion for Partial Judgment in the amount of $63,000.

Argument was heard and testimony taken with regard to the prayer for an order requiring the immediate return of the $63,000. Both parties have moved for summary disposal of this issue by the Court; Plaintiffs in their prayer for an order to show cause to be followed by an order requiring immediate return of the property, and the United States and associated Defendants by motion to dismiss for failure to state a cause of action, and lack of jurisdiction.

The mandamus provisions of 28 U.S.C. § 1361 are inapplicable in the present case. The only individual Federal Defendant named in this action, Revenue Officer Vidler does not have the authority or capacity to give the Plaintiffs the relief they seek. The relief sought can only be obtained from the United States itself. Hawii v. Gordon, 373 U.S. 57, 83 S.Ct. 1052, 10 L.Ed.2d 191 (1967). In Hawii v. Gordon, Plaintiff sought an order which would require action by the Director of the Bureau of the Budget. The Court was of the view that relief nominally sought against an officer is in fact against the sovereign if the decree would operate effectively against the latter. The Court concluded that the suit in mandamus was in reality a suit against the government of the United States and still required the specific consent of the sovereign to suit.

To the extent that the Amended Complaint seeks to rely on the Federal Civil Rights Act, 42 U.S.C. §§ 1983, 1985 and 1986, such provisions do not extend to the Federal Government itself, against whom the present equitable relief is sought.

Plaintiffs' claim for the immediate return of the money taken insofar as it relies on Rule 41(e) is also inappropriate. Rule 41(e) only applies when a Federal criminal prosecution is pending. It is a rule of procedure for criminal actions and not a basis of general jurisdiction. See Richey v. Smith, 515 F.2d 1239, 1242-3 (5th Cir. 1975). Some recent cases have stated a general equitable power in the Federal courts to order the return of property seized although no criminal action is pending. Richey, supra; Hunsucker, supra. See also In Re Fried, 161 F.2d 453 (2d Cir.), cert. dismissed, 332 U.S. 807, 68 S.Ct. 105, 92 L.Ed. 384 (1947); Coury v. United States, 426 F.2d 1354 (6th Cir. 1970). In these cases, however, the seizure was by Federal agents, and the courts premised their power to act in equity on the assertion that there was no adequate remedy provided for at law. In this case, the seizure complained of was executed by the police of the City of Southfield and was in no way at the request of or in cooperation with Federal authorities. Also, in the case at hand a remedy is specifically provided for at law. See 26 U.S.C. §§ 7426 and 6532(c)(1).

The case is here in the unusual posture of a petition for mandamus and a Rule 41(e) motion because the nine month time limitation on the statutory right to challenge a wrongful levy ended some two weeks before the original complaint was filed. Defendants, in their motion to dismiss, argue that the wrongful levy statute was intended by Congress to be the exclusive remedy for a third party whose property has been taken pursuant to a levy against a taxpayer. Dieckmann v. United States, 550 F.2d 622 (10th Cir. 1977);² Mill Factors Corp. v. United States, 391 F.Supp. 387 (S.D.N.Y.1975);³ DeJesus v. United States, (E.D.N.Y., 5/17/74, reported only in Standard Federal Tax Reports, 74-2 U.S.T. C.);⁴ Gantt v. United States, 36 A.F.T.R.2d 75-5926 (N.D.Ill.1975);⁵ Busse v. United States, 542 F.2d 421 (7th Cir. 1976);⁶ and Reiling v. United States, (N.D.Ind., unreported, Civil Action No. L. 76-19, February 4, 1977.)⁷

To avoid this argument, Plaintiffs urge that since the `levy', by its own terms, was only for monies belonging to Boyer Bracey, monies not belonging to Boyer Bracey were never subject to a `levy' and thus the wrongful `levy' statute (with its nine month time limitation) does not apply.

This argument exalts from over substance. A wrongful levy is still a `levy' for the purposes of the wrongful levy statute. United Pacific Insurance Co. v. United States, 320 F.Supp. 450 (D.Or.1970); Hamilton Nat'l Bank v. United States, 367 F.Supp. 1110 (E.D.Tenn.1972). The purpose of the wrongful levy statute is to provide for levies that are `wrongful' in a broad sense of the word.⁸ If a mere defect in the levy could render it not a levy and thereby take it out of the statute's provisions, it would be difficult to imagine a case where the statute would be of any effect.

On the other hand, the Internal Revenue Code, which severely limits judicial interference in the collection of taxes in the interest of insuring the prompt collection of necessary revenues, may have a harsh effect in a given case where the proper powers of an agent of the IRS are exceeded. Accordingly, the courts have, of necessity, found certain narrow exceptions to those provisions of the Internal Revenue Code which restrict the right of a citizen to recourse to the courts.

For example in Yannicelli v. Nash, 354 F.Supp. 143 (D.N.J.1973), while noting that,

Under the rule of sovereign immunity, a suit against the United States is barred unless the United States specifically waives its immunity by statute and consents to be sued. (at 149, citations omitted)

the Court went on to state:

I.R.C. § 7421 states that "Except as provided in sections 6212(a) and (c), 6213(a), and 7426(a) and (b)(1), not suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court. . . ." This provision does not prohibit any and all suits to restrain the assessment or collection of a tax. In Miller v. Standard Nut Margarine Co., 284 U.S. 498, 52 S.Ct. 23, 76 L.Ed. 517 (1932), the Supreme Court held that

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