Keese v. United States

• Decision Date: 10 February 1985
• Docket Number: Civ. A. No. G-84-360.
• Citation: 632 F. Supp. 85
• Parties: Emma KEESE v. UNITED STATES of America.
• Court: U.S. District Court — Southern District of Texas

632 F. Supp. 85

Emma KEESE v. UNITED STATES of America.

Civ. A. No. G-84-360.

United States District Court, S.D. Texas, Galveston Division.

February 10, 1985.

COPYRIGHT MATERIAL OMITTED

Emma Keese, pro se.

Cary L. Jennings, Atty., Tax Div. Dept. of Justice, Dallas, Tex., for defendants.

MEMORANDUM AND ORDER

HUGH GIBSON, District Judge.

Plaintiff, Ms. Emma Keese, brings this pro se action seeking damages from and injunctive relief against the United States of America, the Internal Revenue Service ("IRS"), the IRS Commissioner, and various named and unnamed IRS employees. Defendants' move to dismiss or, alternatively, for summary judgment and plaintiff moves for default and for detailed justification, itemization, and indexing.

I.

Ms. Keese prepares income tax returns. The IRS, Criminal Investigative Division, is currently investigating Ms. Keese for wilful preparation of false and fraudulent federal income tax returns in violation of IRC § 7206(2).¹ Reading plaintiff's complaint in the best possible light², she contends that in the course of this investigation, the defendants have:

1) trespassed upon her property while conducting an illegal search and seizure;

2) placed plaintiff and her husband under surveillance and harrassed them;

3) harassed her clients, threatened to withhold or have withheld clients' refund checks, scheduled simultaneously audits of plaintiffs clients so as to prevent plaintiff from being present, and defamed plaintiff to her clients by telling them about her irrelevant past criminal record, that her pricing methods were illegal, that she is not qualified to represent clients before the IRS, and that she is unreliable; and

4) refused to release information plaintiff has requested under the Freedom of Information Act ("FOIA"), 5 U.S.C. §§ 551-559.

Ms. Keese claims that these acts are the result of a government conspiracy to destroy her business.

Plaintiff's prayers for relief essentially follow her actual allegations. First, she seeks to enjoin the alleged IRS activity concerning her business and to enjoin the IRS from mentioning plaintiff when contacting plaintiff's clients. Second, she seeks to enjoin the IRS from using any information gathered from illegally seized records or obtained by duress from her clients and to have the information destroyed. Third, she seeks an order requiring the IRS to comply promptly with her FOIA request. Finally, she seeks $250,000.00 as well as punitive damages for injury to her reputation, loss of income, and emotional distress.

II.

A. The Court denies plaintiff's motion for default. By order of this Court, defendants had until January 4, 1985 to answer or otherwise respond to plaintiff's complaint. On that date, defendants moved to dismiss or, alternatively, for summary judgment. Defendants' motion is timely under the Court's order. Defendants are defending within the meaning of Fed.R.Civ.P. 55(a) by asserting defenses under Fed.R.Civ.P. 12 and 56. And the Court may not enter default against the United States, or an officer or an agency thereof, unless plaintiff establishes her "claim or right to relief by evidence satisfactory to the court." Fed.R.Civ.P. 55(e). See Campbell v. Eastland, 307 F.2d 478, 491-92 (5th Cir.1962), (discussing the public interest protected by and the liberal construction of Rule 55(e)), cert. denied, 371 U.S. 955, 83 S.Ct. 502, 9 L.Ed.2d 502 (1963). Plaintiff has made no such evidentiary showing, and as the Court's order will make clear, she could make no such showing.

B. The Court sua sponte fines plaintiff fifty dollars ($50.00) pursuant to Fed.R.Civ.P. 11. Rule 11 provides in part:

A party who is not represented by an attorney shall sign his pleading, motion, or other paper.... The signature of an attorney or party constitutes a certificate by him that he has read the pleading, motion, or other papers, that to the best of his knowledge, information, and belief formed after reasonably inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.... If a pleading, motion, or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, shall impose upon the person who signed it, a represented party, or both, an appropriate sanction....

Plaintiff, in her motion for default, indicates that she knows of the Court's order extending defendants' time to answer to January 4, 1985. Yet, based upon her assertion that defendants should have responded prior to December 31, 1985, the Court can only conclude that plaintiff failed to read the Court's order. Plaintiff's motion, therefore, was not well grounded in facts which reasonable inquiry would have revealed. Neither was plaintiff's motion well grounded in law. As discussed above, Rule 55(e) precludes her from success on her default motion.

The Court is aware that plaintiff prosecutes her action pro se. Courts must liberally construe pro se pleadings and motions. See, e.g., Haines v. Kerner, 404 U.S. 519, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972) (per curiam). Nonetheless, Rule 11 explicitly requires pro se litigants to make reasonable inquiry that the pleading or motion is well founded in fact and law. The advisory committee note provides that "the standard is ... reasonableness under the circumstances." The Court finds that plaintiff did not make reasonable inquiry under the circumstances.

Unlike many pro se litigants, Ms. Keese is not a prisoner or a pauper. Rather, Ms. Keese claims to be a tax preparer—one who interprets the tax laws for clients. By her briefs and pleadings, she has shown herself capable of reading and understanding the law. More importantly, she has shown herself capable of reading a Court order which she has acknowledged exists. In these circumstances, the policy expressed in Rule 11 of discouraging dilatory tactics and streamlining litigation, and the need to prevent the waste of judicial resources while meritorious claims wait, outweighs the policy of liberally construing pro se litigant's papers. Cf. Dore v. Schultz, 582 F.Supp. 154, 158 (S.D.N.Y. 1984) (pro se law student fined $200.00 as Rule 11 sanction for filing frivolous lawsuit); Snyder v. IRS, 596 F.Supp. 240, 252 (N.D.Ind.1984) (sanctions against pro se tax protester who brought frivolous suit).

III.

The Court dismisses with prejudice plaintiff's action for injunctive relief concerning IRS activities with plaintiff's clients—harassing clients, scheduling audits, withholding refund checks, and defaming plaintiff.

The Anti-Injunction Act, I.R.C. § 7421(a) provides: "with certain exceptions not applicable sua sponte no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed." Section 7421(a) explicitly applies to third parties to an audit, such as plaintiff. See Commissioner of Internal Revenue Service v. Americans United, Inc., 416 U.S. 752, 760, 94 S.Ct. 2053, 2058, 40 L.Ed.2d 518 (1974). EDUCO v. Commissioner of Internal Revenue, 557 F.2d 617, 620 (7th Cir.1977).

Courts should liberally construe § 7421 to protect the government's "need to assess and collect taxes as expeditiously as possible with a minimum of pre-enforcement interference." Bob Jones University v. Simon, 416 U.S. 725, 736, 94 S.Ct. 2038, 2046, 40 L.Ed.2d 496 (1974). Under § 7421, therefore, the Courts do not have jurisdiction to enjoin the IRS from collecting information that is intended to or may culiminate in the assessment or collection of taxes. Linn v. Chivatero, 714 F.2d 1278, 1283 (5th Cir.1983); Kemlon Products & Development Co. v. United States, 638 F.2d 1315, 1320 (5th Cir.), modified on other grounds, 646 F.2d 223, cert. denied, 454 U.S. 863, 102 S.Ct. 320, 70 L.Ed.2d 162 (1981). For example, courts have held that they are without jurisdiction to enjoin IRS investigations or "harassment" in the course thereof. United States v. Dema, 544 F.2d 1373 (7th Cir.1976), cert. denied, 429 U.S. 1093, 97 S.Ct. 1106, 51 L.Ed.2d 539 (1977); Black v. United States, 534 F.2d 524 (2d Cir.1976). See also Abramson v. Quarles, 1982-1 U.S. Tax Cases (CCH) ¶ 9293 (W.D.La.1982) (court may not enjoin IRS from requesting taxpayer to schedule a meeting to discuss taxpayer's return). Section 7421 similarly prohibits courts from enjoining the IRS from disclosing information in a taxpayer's return to the taxpayer's customers for the purpose of gathering information useful to make a tax assessment. Kemlon, 638 F.2d at 1321.

Plaintiff, however, claims that § 7421 is inapplicable because the IRS is investigating her for criminal acts, not to collect taxes. The Court finds it irrelevant that the IRS audits and interviews with plaintiff's clients may have criminal consequences for plaintiff. Although the IRS investigators are members of the Criminal Investigation Division, they may be charged with criminal and civil responsibilities. United States v. Lask, 703 F.2d 293, 298 (8th Cir.), cert. denied, 464 U.S. 829, 104 S.Ct. 104, 78 L.Ed.2d 107 (1983); United States v. Pillsbury Credit Union, 661 F.2d 1195, 1197 (8th Cir.1981) (per curiam). The IRS is investigating plaintiff for wilful preparation of fraudulent tax returns. Obviously, audits of those returns may lead to the collection of taxes if the IRS determines that they are fraudulent.

In a factually similar case, Black v. United States, 534 F.2d 524 (2d Cir.1976), a tax preparer and a number of his clients claimed racially motivated IRS harassment. Plaintiffs claimed that the IRS conspired to destroy the tax preparer's business by scheduling harassing audits and withholding his clients' refund checks unless they cooperated in the investigation. The tax preparer...