Hollett v. Browning
| Decision Date | 30 November 1988 |
| Docket Number | No. CV-F-88-402 REC.,CV-F-88-402 REC. |
| Citation | 711 F. Supp. 1009 |
| Parties | John M. HOLLETT, Plaintiff, v. Leroy BROWNING, et al., Defendants. |
| Court | U.S. District Court — Eastern District of California |
John M. Hollett, Fresno, Cal., for plaintiff.
Thomas F. Carlucci, Trial Atty., Tax Div., U.S. Dept. of Justice, Washington, D.C., for defendants.
DECISION AND ORDERS RE MOTIONS TO DISMISS OR FOR SUMMARY JUDGMENT AND FOR ATTORNEY'S FEES
On November 14, 1988 the court heard defendants' Motion to Dismiss or For Summary Judgment and For Attorney's Fees. The court took the matter under submission pending the receipt of additional briefing by plaintiff. All briefing is now complete. Accordingly, upon due consideration of the written and oral arguments of the parties and the record herein, the court issues its orders for the reasons set forth herein.
John M. Hollett, proceeding in pro per, has filed a "First Amended Complaint Seeking Redress for Violation of Civil Rights, and Violation of Due process by and through Declaratory and Injunctive Relief (In the Nature of Mandamus)." The First Amended Complaint names as defendants R. Browning and C. Pope, Revenue Agents of the Internal Revenue Service, who are sued in their official and individual capacities, the United States of America, the Internal Revenue Service and Does 1-20. The action involves the allegedly improper levy and seizure of certain vehicles and a bank account and an allegedly improper disclosure.
The First Amended Complaint alleges that this court has subject matter jurisdiction of this action:
Under 42 USC, Section 1983 and/or 28 USC, Section 1331 (as to Federal Employees), to redress the deprivation, under color of state and/or Federal Statute/law, of rights secured by the Constitution of the United States. The court has jurisdiction under 28 U.S.C., Section 1343. In addition the court has jurisdiction under 26 U.S.C., Section 7214(a)(1) and Section 7214(a)(7). Plaintiff seeks declaratory relief pursuant to 28 U.S.C., Sections 2201 and 2202.
Defendants contend that to the extent this action is a suit against the United States and its employees acting in their official capacities and seeks money damages, it is barred by the doctrine of sovereign immunity, Gilbert v. Da Grossa, 756 F.2d 1455, 1459 (9th Cir.1985), an immunity that has not been waived in connection with this action.
Plaintiff, however, alleges a violation of the nondisclosure provisions of 26 U.S.C. § 6103. 26 U.S.C. § 7431 provides for money damages in the event of such violation. The United States is the sole proper defendant in an action for violation of Section 6103. Mid-South Music Corp. v. Kolak, 756 F.2d 23, 25 (6th Cir.1984). Consequently, the United States has waived its sovereign immunity to the extent plaintiff seeks damages for the alleged violation of Section 6103.
In his opposition to this motion, plaintiff suggested that subject matter jurisdiction could lie with respect to the allegedly improper levies and seizures pursuant to 28 U.S.C. § 1340, the United States waiving its sovereign immunity pursuant to 28 U.S.C. § 2410.1 Defendants in their reply brief concede that these two statutes could give the court subject matter jurisdiction.
Defendants argue, however, that Sections 1340 and 2410 do not constitute a waiver of sovereign immunity to the extent the amended complaint seeks money damages from the United States for the actions of the revenue agents. The court agrees. "The United States, as sovereign, is immune from suit save as it consents to be sued ..., and the terms of its consent to be sued in any court define that court's jurisdiction to entertain the suit." United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 769, 85 L.Ed. 1058 (1941). Nothing in Section 2410 even remotely suggests that Congress intended the waiver of sovereign immunity set forth therein to encompass actions for money damages. Section 2410(a) provides:
Plaintiff cites no authority so holding, defendants flatly state there is none, and the court cannot find any.
Consequently, while this court has subject matter jurisdiction to award damages against the United States for violation of the non-disclosure provisions of Section 6103, the court does not have subject matter jurisdiction to award money damages against the United States on any other basis set forth in the First Amended Complaint.2
The courts have recognized that sovereign immunity does not bar damage actions against federal officials in their individual capacity for violation of a individual's constitutional rights. See Bivens v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971).
However, defendants move for dismissial of the claims of denial of constitutional rights alleged against Browning and Pope on the ground that a Bivens action may not lie at all against revenue agents. Defendants refer the court to Schweiker v. Chilicky, ___ U.S. ___, 108 S.Ct. 2460, 101 L.Ed.2d 370 (1988). In Chilicky the Supreme Court reversed the Ninth Circuit and held that the improper denial of Social Security disability benefits allegedly resulting from violations of due process by government officials who administered the Federal Social Security program does not give rise to a cause of action for money damages against those officials because such a remedy has not been included in the elaborate remedial scheme devised by Congress.
Even prior to Chilicky, courts had concluded under a similar rationale that a Bivens remedy should not be available in actions for damages against federal revenue agents. Baddour, Inc. v. United States, 802 F.2d 801, 807-809 (5th Cir. 1986); Cameron v. I.R.S., 773 F.2d 126, 129 (7th Cir.1985); Felak v. United States, 677 F.Supp. 606, 607-608 (D.Minn.1988); compare Rutherford v. United States, 702 F.2d 580 (5th Cir.1983).
The position of the Ninth Circuit relative to the implication of a Bivens remedy against Internal Revenue Service agents has not been definitively stated. In the last of the opinions in Bothke v. Fluor Engineers and Constructors, Inc., 713 F.2d 1405 (9th Cir.1983), vacated and remanded, 468 U.S. 1201, 104 S.Ct. 3566, 82 L.Ed.2d 867 (1984), on remand, 739 F.2d 484 (9th Cir.1984), on further appeal, 834 F.2d 804 (9th Cir.1987), the Ninth Circuit suggested that there might be a cause of action for deprivation of a liberty interest under the substantive due process clause resulting from abusive tax collection practices. In Bothke, referring to Rutherford v. United States, supra, the Ninth Circuit assumed for purposes of argument that such a cause of action existed but found for the revenue agent. But see Todd v. United States, 849 F.2d 365, 368 (9th Cir. 1988) wherein the Ninth Circuit refuses to discuss United States' defense on appeal that Todd's Bivens action is supplanted by alternative adequate and effective remedies, confining its analysis to qualified immunity.
In the court's opinion, the rationale of Chilicky should be applied to preclude a Bivens remedy for damages for alleged violations of constitutional rights in the collection of federal taxes. It is hard to imagine a statutory system more equitable to the Social Security Act than the Internal Revenue Code. As stated in Cameron v. I.R.S., supra, "Congress has given taxpayers all sorts of rights against an overzealous officialdom, including, most fundamentally, the right to sue the government for a refund if forced to overpay taxes, and it would make the collection of taxes chaotic if a taxpayer could bypass the remedies provided by Congress simply by bringing a damage action against Treasury employees." Consequently, the court holds that plaintiff cannot state a Bivens action against the individual defendants and dismisses plaintiff's claims for damages for alleged violations of constitutional rights.
The First Amended Complaint seeks to enjoin any further levies and seizures pursuant to the assessment until plaintiff has been given "fair and impartial administrative hearings and a valid procedurally correct assessment is made against plaintiff." The United States agrees with plaintiff that a failure to follow the procedures set forth in 26 U.S.C. §§ 6212(a) and 6213(a) for the issuance of an assessment can constitute an exception to the Anti-Injunction Act, 26 U.S.C. § 7421. Jensen v. I.R.S., 835 F.2d 196, 198 (9th Cir.1987). The United States further concurs that Section 2410 encompasses an action questioning the validity of the procedures used to enforce a lien or levy and not the validity of the assessment itself. See, e.g., United States v. Coson, 286 F.2d 453 (9th Cir.1961). However, defendants argue that they are entitled to summary judgment that they followed all the statutorily required procedures in this action.
As near as the court can determine from the First Amended Complaint and plaintiff's opposition to the motion, the facts upon which plaintiff relies in contending that the levy and seizure of the vehicles and his payroll check were procedurally unlawful are essentially four.
First, he alleges in paragraph 23 of the First Amended Complaint:
... Plaintiff alleges that upon Notice given to Plaintiff of possible levy and seizure on October 26, 1987, (Exhibit `B'), Plaintiff requested of Defendant, Internal Revenue Service, a formal hearing to resolve any dispute...
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Hatley v. Department of Treasury, IRS
...officials where Congress had enacted a statutory scheme for adjudication and not included such a remedy), see also Hollett v. Browning, 711 F.Supp. 1009, 1012 (E.D.Cal.1988) (applying Chilicky rationale to conclude that a Bivens claim was not allowed against IRS officials); Wages v. I.R.S.,......
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...suit for damages against a revenue agent under this provision is the criminal conviction of the agent." Hollett v. Browning, 711 F. Supp. 1009, 1012 n.2 (E.D. Cal. 1988). Plaintiffs' reliance on 42 U.S.C. Secs. 1983, 1985 (and their jurisdictional counterpart, 28 U.S.C. Sec. 1343) is mispla......
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