McHugh v. Carini, Case No. 17-CV-35-GKF-FHM
| Decision Date | 10 August 2017 |
| Docket Number | Case No. 17-CV-35-GKF-FHM |
| Parties | BRENDAN M. MCHUGH, Plaintiff, v. JASON CARINI, individually and in his official capacity; and DAVID WALLIS, individually, Defendants. |
| Court | U.S. District Court — Northern District of Oklahoma |
Before the court is defendants' Motion to Dismiss [Doc. No. 23] plaintiff Brendan McHugh's Second Amended Complaint. For the reasons set forth below, the motion is granted in part and denied in part.
This dispute arises from a tax debt owed by Mr. McHugh, and the seizure and threatened seizure of his property to satisfy the same. On November 29, 2016, Mr. McHugh entered into a payment agreement with the Rogers County Treasurer's Office for "delinquent personal tax." The parties dispute the meaning of that agreement—specifically, the portion that Mr. McHugh would "pay the oldest year of delinquent personal tax to [ ] Rogers County" on a monthly basis over "a period of 7 consecutive months." [Doc. No. 22-1]. Mr. McHugh interprets the agreement to allow payment of the oldest year of tax delinquency in seven (7) monthly installments, [Doc. No. 22, p. 2, ¶ 14]; Rogers County interprets the agreement to require payment of the entire amount of the oldest tax debt still owing on a monthly basis—that is to say, it obligated Mr. McHugh to pay all seven (7) years of outstanding tax debt over the course of seven (7) months, [Doc. No. 23, p. 1]. Because of that difference in interpretation, a dispute arose when Mr. McHugh tendered an amount of money—$300—which was less than Rogers County believed was owed.
Defendant Jason Carini—the Rogers County Treasurer—refused to accept the $300 offered by Mr. McHugh on December 19, 2016. Mr. Carini issued a tax warrant, canceled the payment schedule, and accelerated the total amount of tax plus costs to become immediately due. On January 10, 2017, defendant David Wallis—a deputy sheriff—arrived at Mr. McHugh's home to seize his vehicle pursuant to the tax warrant issued by the Rogers County Treasurer's Office, [Doc. No. 17-1]; Mr. Wallis did not have a judicial warrant. As alleged, Mr. Wallis also threatened to seize bank assets, including tax exempt veteran's benefits, and previously had threatened to seize office furniture not belonging to Mr. McHugh at Mr. Carini's behest. [Doc. No. 22, pp. 4, 6-7, ¶¶ 19, 25]. Mr. Carini is also alleged to have denied Mr. McHugh the benefit of a grace period on the payment of delinquent taxes in effect through January 20, 2017. [Id. at 6-7, ¶ 25]. Mr. McHugh disputed the above behavior in person and in writing to the county treasurer.
On January 18, 2017, Mr. McHugh filed suit, bringing claims for conversion, trespass, invasion of privacy, fraud, violations of 42 U.S.C. § 1983, and a permanent injunction. Shortly thereafter, defendants filed a motion to dismiss, which Mr. McHugh mooted by filing a First Amended Complaint on April 25, 2017. The First Amended Complaint contained the same causes of action as the original Complaint, except that it sought relief from Mr. Carini in his official capacity as well. Defendants against moved to dismiss on May 9, 2017, arguing, among other things that the Tax Injunction Act ("TIA") and principles of comity and federalism divested this court of jurisdiction over Mr. McHugh's claims.
The court dismissed the First Amendment Complaint on June 13, 2017. McHugh v. Carini, Case No. 17-CV-35-GKF-FHM, 2017 WL 2568936 (N.D. Okla. June 13, 2017). Though it declined to apply the TIA, the court held: (1) principles of comity and federalism barred Mr. McHugh's § 1983 tax-related damages claims because he has an adequate remedy at state law; (2) as pled, the First Amended Complaint did not allege or plausibly allege violations of the First, Fourth, or Fifth Amendments; and (3) absent federal question jurisdiction, it would decline to exercise supplemental jurisdiction over Mr. McHugh's state law claims. Id. The court granted Mr. McHugh ten (10) days to file a Second Amended Complaint, which he did on June 22, 2016.
The Second Amended Complaint alleges claims for conversion, trespass, invasion of privacy, breach of contract, and violations of § 1983 under the First and Fourth Amendments; it does not contain a request for an injunction and sues defendants only in their individual capacities. This motion followed.
Under the Federal Rules of Civil Procedure, a plaintiff must allege facts that—taken as true—give rise to jurisdiction and actionable claims. Fed. R. Civ. P. 12(b)(1), (6); Holt v. United States, 46 F.3d 1000, 1002 (10th Cir. 1995); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Specifically, Rule 12(b)(1) allows dismissal of a case where subject matter jurisdiction is lacking, Fenix Constructors, Inc. v. Sheltering Palms-Tulsa I, LLC, No. 06-CV-546-GKF-FHM, 2007 WL 2323432, at *1 (N.D. Okla. Aug. 9, 2007); Rule 12(b)(6) requires a complaint contain "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. Ordinarily, federal courts address subject-matter jurisdiction before the merits of a claim.United States v. Fisher, 805 F.3d 982, 990 n. 2 (10th Cir. 2016), cert. denied, 136 S.Ct. 1528 (2016); Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 587-88 (1999).
Defendants argue that Mr. McHugh's claims are barred by: (1) the TIA; (2) principles of comity and federalism; and (3) qualified immunity. The court addresses each argument in turn.
The TIA bars federal courts from "enjoin[ing], suspend[ing] or restrain[ing] the assessment, levy or collection of any tax under [s]tate law." 28 U.S.C. § 1341. To that end, it "divest[s] the federal courts of subject matter jurisdiction over claims challenging state taxation procedures." See Marcus v. Kan. Dep't of Rev., 170 F.3d 1305, 1309 (10th Cir. 1999) (quotation marks and citation omitted). But not all claims. "[A] suit cannot be understood to 'restrain' the 'assessment, levy or collection' of a state tax if it merely inhibits those activities." See Direct Mktg. Ass'n v. Brohl, 135 S.Ct. 1124, 1133 (2015); accord McHugh v. Carini, Case No. 17-CV-35-GKF-FHM, 2017 WL 2568936, at *4 (N.D. Okla. June 13, 2017). Rather, an action must "to some degree stop" state taxation activity to fall under the TIA. See Green Solution Retail, Inc. v. United States, 855 F.3d 1111, 1118-19 (10th Cir. 2017) (citing Direct Mktg., 135 S.Ct. at 1130, 1133) (emphasis in original).
Mr. McHugh's § 1983 claims do not produce that result here. Indeed, neither depends on Rogers County's assessment, levy, or collection of taxes. As to the Fourth Amendment claim, Mr. McHugh alleges state officials trespassed on his curtilage without a judicial warrant in order to seize his property. [Doc. No. 22, pp. 4-5, 9-10, ¶¶ 20-23, 46-48]. That may state a claim for unlawful seizure under § 1983. See McHugh, 2017 WL 2568936, at *2-3. And it addresses a legal injury—unconstitutional trespass—separate and apart from the calculation and collection oftaxes. See id.; Bormann v. Tomlin, 461 F.Supp. 193, 196-98 (S.D. Ill. 1978) ().
So too for the First Amendment claim. Mr. McHugh alleges Rogers County officials retaliated against him for asserting certain tax exemptions and pursuing legal remedies in connection with his tax liability. [Doc. No. 22, pp. 2-7, 10-11, ¶¶ 10-25, 51-53]. Among other things, he claims Rogers County officials unlawfully seized his property, threatened seizure of exempt property and property that he did not own, and abridged a grace period on the payment of delinquent ad valorem taxes. [Id. at 4, 6-7, ¶¶ 19, 25]. Such conduct is actionable. See Van Deelen v. Johnson, 497 F.3d 1151, 1159 (10th Cir. 2007) ().
To be sure, "[o]ne might well . . . question the merits of [Mr. McHugh's] [claim] or [its] significance, arising, as [it] does from an ongoing and increasingly personal spat with [c]ounty tax officials." See id. at 1156. "But a private citizen exercises a constitutionally protected . . . right anytime he . . . petitions the government for redress; the petitioning clause of the First Amendment does not pick and choose its causes." See id. (emphasis in original). Mr. McHugh therefore identifies a legal harm—government chilling of protected conduct—that is distinct from the actual administration of the state's taxation system.
At bottom, Mr. McHugh's request for damages under § 1983 does not seek to "stop" tax assessment and collection in Rogers County. See Green Solution, 855 F.3d at 1118-19 (citing Direct Mktg., 135 S.Ct. at 1130, 1133). And that is proven by the fact his claims do not depend on his tax liability or exemption status of his property. A contrary holding would ignore the "more limited function" of the TIA, which is only "'a partial codification of [ ] federalreluctance to interfere with state taxation.'" See McHugh, 2017 WL 2568936, at *4 (quoting Nat'l Private Truck Council v. Okla. Tax Comm'n, 515 U.S. 582, 590-91 (1995)). Where, as here, a plaintiff seeks damages for violations of rights independent of the correctness of a state tax assessment, levy, or collection, the mere fact a case springs from a tax-based factual predicate will not bar federal jurisdiction. See Green Solution, 855 F.3d at 1118-19 (citing Direct Mktg., 135 S.Ct. at 1130, 1133).
Mr. McHugh's state law claims also clear the TIA. To start, the trespass and invasion of privacy claims [Doc. No. 22, pp. 8-9, ¶¶ 33-40] implicate separate legal interests from Mr. McHugh's tax liability: trespass protects a landowner's ability to exclude individuals from unwarranted entries on his property, see Moore v. Texaco, Inc., 244 F.3d 1229, 1233 (10th Cir. 2001); and invasion of privacy protects...
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