Living Care Alternatives of Utica, Inc. v. U.S.

• Decision Date: 22 March 2004
• Docket Number: No. C2-02-717.,C2-02-717.
• Citation: 312 F.Supp.2d 929
• Parties: LIVING CARE ALTERNATIVES OF UTICA, INC., Plaintiff, v. UNITED STATES of America, Internal Revenue Service, Defendant.
• Court: U.S. District Court — Southern District of Ohio

312 F.Supp.2d 929

LIVING CARE ALTERNATIVES OF UTICA, INC., Plaintiff, v. UNITED STATES of America, Internal Revenue Service, Defendant.

No. C2-02-717.

United States District Court, S.D. Ohio, Eastern Division.

March 22, 2004.

Carla Irwin Struble, Westerville, OH, for Plaintiff.

Stacy Hallett, U.S. Department of Justice, Tax Division, Washington, DC, for Defendant.

OPINION AND ORDER

SARGUS, District Judge.

This case was initiated by Plaintiff (Living Care) filing a document entitled "Complaint for Redetermination of Notice of Intent to Levy and Appeal of Defendant's Sustaining of Levy and Appeal of Liability." Doc. 1, Comp., Title. Asserting this Court's jurisdiction pursuant to 26 U.S.C. § 6330(d)(1)(B), Living Care says in effect that it is appealing "an adverse determination by the Internal Revenue Service ... at a due process hearing under Sec. 6320 of the Internal Revenue Code [IRC] ... as to the appropriateness of a filed Notice of Federal Tax Lien ... and under IRC Sec. 6330 as to the appropriateness of the Notice of Levy." Doc. 1, Comp., ¶¶ 1, 5, and Attachment One. The liens and levies in question relate to Living Care's failure to pay or pay timely all its federal withholding taxes¹ due for various periods between 1995 and 2001. Id. Living Care says it seeks to have its subject tax liabilities "removed," to have the subject "determination of the due process hearing be reversed," that the liens and levies "not be sustained," and that the "collection effort cease." Doc. 1, Comp., p. 8.

Defendant IRS has moved under Rule 12(b), Fed.R.Civ.P., for dismissal of that portion of Living Care's Complaint respecting the filing of the subject tax liens, essentially on the grounds that the Court lacks subject matter jurisdiction because that portion its ruling is not subject to appeal under the statutes relied on and the Defendant otherwise enjoys sovereign immunity. Doc. 8, pp. 1, 7-10. At the same time, the IRS has also moved under Rule 56, Fed.R.Civ.P., for summary judgment as to the remainder of the Complaint, asserting that there is no genuine issue of material fact and that it, the IRS, is entitled to judgment as a matter of law. Id., pp. 1, 10-13. The case is now before the Court on this dual motion, Plaintiff Living Care's memorandum contra (Doc. 9.), and Defendant's reply memorandum (Doc. 10), together with the pleadings and other undisputed materials submitted by one or the other of the parties.

Request for Oral Argument

Relative to the above motions the Court has also received Living Care's Request for Oral Hearing (Doc. 17). Southern District of Ohio Civ. R. 7.1(a) provides that motions such as the above, expressly including those under Rule 56, shall be decided based on memoranda "and without oral hearings unless ordered by the Court." From the content of Living Care's request, it appears that what it seeks is an opportunity for oral argument rather than an evidentiary hearing. In such case, Rule 7.1(b)(2) provides for scheduling the same upon request if deemed by the Court "essential to the fair resolution of the case because of its public importance or the complexity of the factual or legal issues presented."

In this case, the Court does not consider that any of the above factors are present in such degree as to warrant departure from the normal procedure. The Rule 12(b) issue appears clear and not difficult to resolve on the pleadings and written arguments of the parties, in large part because Plaintiff does not assert or argue that this Court has jurisdiction other than under 26 U.S.C. § 6330(d)(1)(B). Further, the Rule 56 motion for summary judgment issues have already been fully considered and decided against this same Plaintiff by another branch of the court in a separate case² on pleadings virtually identical to those in this case except for the dates of the IRS's levies and lien actions involved. This Court will therefore decline Plaintiff's request and proceed to decide Defendant's combined motions without scheduling oral argument.

The Motion to Dismiss

Defendant IRS does not specify whether its motion to dismiss is made under Rule 12(b)(1), lack of subject matter jurisdiction, or Rule 12(b)(6), failure to state a claim upon which relief can be granted. It is generally recognized, however, that Rule 12(b)(1) is the appropriate vehicle for a court's consideration of claims that are asserted to be untimely or barred by sovereign immunity. See Gervasio v. United States, 627 F.Supp. 428, 430 (N.D.Ill.1986); Cleveland v. Secretary of Health and Human Services, 1993 WL 321755 *2 (N.D.Ill. Aug.19, 1993) (noting also that where lack of subject matter jurisdiction is asserted along with other grounds for dismissal, the Rule 12(b)(1) challenge is properly considered first); Porter v. Board of Trustees of Manhattan Beach, 123 F.Supp.2d 1187, 1194 (C.D.Cal.2000) rev'd on other grounds, 307 F.3d 1064. Furthermore, the Court is bound to examine the question of its subject matter jurisdiction, in any event. See Morrison v. Morrison, 408 F.Supp. 315, 316 (N.D.Tex.1976); Lacy v. Dayton Board of Education, 550 F.Supp. 835, 843 (S.D.Oh.1982).

... The Sixth Circuit recognizes two types of 12(b)(1) motions: a "facial" attack challenging the sufficiency of the plaintiff's factual allegations, in which all well-pleaded factual allegations in the complaint are taken to be true; and a "factual" attack challenging the actual fact of subject-matter jurisdiction, which is analyzed under Fed.R.Civ.P. 56 standards.... The difference is often significant, because under a factual challenge the district court is empowered to weigh evidence, and no presumptions apply as to the truthfulness of plaintiff's allegations.... The Sixth Circuit has clearly recognized that a district court is empowered [to] consider evidence beyond the pleadings and to resolve factual disputes when necessary to resolve challenges to subject-matter jurisdiction under Rule 12(b)(1).

Gillett v. United States, 233 F.Supp.2d 874, 877 (W.D.Mich.2002) (citations omitted).

The United States and its agencies are immune from suit under the doctrine of sovereign immunity and may be sued only to the extent that such immunity has been waived. See United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 63 L.Ed.2d 607 (1980); United States v. Dalm, 494 U.S. 596, 608, 110 S.Ct. 1361, 108 L.Ed.2d 548 (1990). Further,

.... [a] waiver of the Federal Government's sovereign immunity must be unequivocally expressed in statutory text, see, e.g. United States v. Nordic Village, Inc., 503 U.S. 30, 33-34, 37[, 112 S.Ct. 1011, 117 L.Ed.2d 181] (1992), and will not be implied, Irwin v. Department of Veterans Affairs, [498 U.S. 89] at 95[, 111 S.Ct. 453, 112 L.Ed.2d 435 (1990)]. Moreover, a waiver of the Government's sovereign immunity will be strictly construed, in terms of its scope, in favor of the sovereign. See, e.g., United States v. Williams, 514 U.S. 527, 431[531, 115 S.Ct. 1611, 131 L.Ed.2d 608] (1995) (when confronted with a purported waiver of the Federal Government's sovereign immunity, the Court will "constru[e] ambiguities in favor of immunity."); Library of Congress v. Shaw, 478 U.S. 310, 318[, 106 S.Ct. 2957, 92 L.Ed.2d 250] (1986); Lehman v. Nakshian, 453 U.S. 156, 161 [, 101 S.Ct. 2698, 69 L.Ed.2d 548] (1981) ("[L]imitations and conditions upon which the Government consents to be sued must be strictly observed and exceptions thereto are not to be implied").

Lane v. Pena, 518 U.S. 187, 192, 116 S.Ct. 2092, 135 L.Ed.2d 486 (1996) (parallel citations omitted); See also Department of the Army v. Blue Fox, Inc., 525 U.S. 255, 261, 119 S.Ct. 687, 142 L.Ed.2d 718 (1999).

In this case, the Court need look no further than the pleadings, Defendant's motion with its exhibits, and Plaintiff's response to determine that in fact it does not have subject matter jurisdiction to review the ruling of the IRS with respect to the notice of tax liens dated May 24, 2001. The dates and nature of various documents relative to the tax liens and the levies thereon that are the subject of this case are set out and supported in numbered paragraphs 1 through 8 and referenced exhibits in the Facts statement of Defendant's memorandum. Doc. 8, pp. 2-3. In addition, Plaintiff's response memorandum expressly concedes: "The factual outline by Defendant in items 1 through 8 (Memorandum, p. 2) is accurate in its recitation of the dates of the notices of the filings etc." With respect to the May 2001 Notice of Federal Tax Liens, the above establish that Plaintiff did not request a Collection Due Process hearing from the IRS, as provided for in 26 U.S.C. § 6320(a)(3)(B) and 26 C.F.R. § 301.6320-1(b), until late September, well past the 30 days permitted by the statute and regulation for such a request. Plaintiff's September request for hearing (Doc. 8, Ex. C) thus resulted in what is termed an "equivalent hearing" (see 26 C.F.R. § 301.6320-1(i)) respecting the May liens notice; but that is a hearing provided only by the IRS regulations, not the statute. Hence, the results of such an equivalent hearing (see Decision Letter dated June 21, 2002, Doc. 8, Ex. E) are not within the statute's limited waiver of sovereign immunity that permits the results of a statutory Collection Due Process hearing to be appealed. 26 U.S.C. §§ 6320(c) and 6330(d)(1); see Johnson v. Commissioner of Internal Revenue, 2000 WL 1041191 *2 (D.Or. June 21, 2000); Fabricius v. United States, 2002 WL 31662301 *2 (E.D.Cal. Oct.18, 2002).

The Court therefore concludes that it does not have subject matter jurisdiction to review the results of Plaintiff's equivalent hearing respecting Notice of Federal Tax Liens against Living Care dated May 21, 2001 (Doc. 8, Ex. A), as expressed in Defendant IRS's Decision Letter dated June 21, 2002. Doc. 8, Ex. E. Consequently, the Defendant's motion to dismiss that portion of the Complaint seeking such review and/or other action by the Court respecting the filing of...