Shannon v. United States

CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
Decision Date29 June 2016
Docket NumberCase No. 1:16-cv-00640-AWI-SAB
PartiesMARLA D. SHANNON, et al., Plaintiffs, v. UNITED STATES OF AMERICA, et al., Defendants.



Marla Shannon and Guy Shannon ("Plaintiffs"), proceeding pro se and in forma pauperis, filed this action pursuant to 28 U.S.C. § 1361, 26 U.S.C. §§ 7214 and 7433, and 18 U.S.C. § 872 on May 6, 2016. On May 11, 2016, the Court ordered Plaintiffs to file long form in forma pauperis applications or pay the filing fee. (ECF No. 4.) On May 27, 2016, Plaintiffs filed long form applications to proceed in forma pauperis. (ECF Nos. 5, 6.) On June 1, 2016, the Court granted Plaintiffs' motions to proceed in forma pauperis. (ECF No. 7.)


Pursuant to 28 U.S.C. § 1915(e)(2), the Court must dismiss a case if at any time the Court determines that the complaint fails to state a claim upon which relief may be granted. In determining whether a complaint fails to state a claim, the Court uses the same pleading standard used under Federal Rule of Civil Procedure 8(a). A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief. . . ." Fed. R. Civ. P. 8(a)(2). Detailed factual allegations are not required, but "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

"[A] complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). "[A] complaint [that] pleads facts that are 'merely consistent with' a defendant's liability . . . 'stops short of the line between possibility and plausibility of entitlement to relief.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557). Further, although a court must accept as true all factual allegations contained in a complaint, a court need not accept a plaintiff's legal conclusions as true. Iqbal, 556 U.S. at 678.


Plaintiffs bring this action for alleged violations related to the collection of income tax from Plaintiff Marla Shannon by the Internal Revenue Service ("IRS"). Plaintiffs filed the complaint under 26 U.S.C. §§ 7433 and 7214, 28 U.S.C. § 1361, and 18 U.S.C. § 872. Plaintiffs seek both monetary and non-monetary relief in the complaint.

A. Criminal Prosecution

Plaintiffs argue that IRS Settlement Officer Sylvia Perez made an unlawfully extortionate demand that Plaintiff Marla Shannon provide irrelevant financial information in order to receive a face-to-face CDP hearing. Plaintiffs attempt to bring a claim under 18 U.S.C. § 872, which states:

Whoever, being an officer, or employee of the United States or any department or agency thereof, or representing himself to be or assuming to act as such, under color or pretense of office or employment commits or attempts an act of extortion, shall be fined under this title or imprisoned not more than three years, or both; but if the amount so extorted or demanded does not exceed $1,000, he shall be fined under this title or imprisoned not more than one year, or both.

Section 872 of Title 18, United States Code is part of the crimes and criminal procedure section of the United States Code, and does not provide for a civil remedy.

Plaintiffs also bring a claim under 26 U.S.C. § 7214. Section 7214 also does not provide for a civil remedy, as it is part of Chapter 75, which is titled Crimes, Other Offenses, and Forfeitures. Section 7214 states:

(a) Unlawful acts of revenue officers or agents.--Any officer or employee of the United States acting in connection with any revenue law of the United States--
(1) who is guilty of any extortion or willful oppression under color of law; or
(2) who knowingly demands other or greater sums than are authorized by law, or receives any fee, compensation, or reward, except as by law prescribed, for the performance of any duty; or
(3) who with intent to defeat the application of any provision of this title fails to perform any of the duties of his office or employment; or
(4) who conspires or colludes with any other person to defraud the United States; or
(5) who knowingly makes opportunity for any person to defraud the United States; or
(6) who does or omits to do any act with intent to enable any other person to defraud the United States; or
(7) who makes or signs any fraudulent entry in any book, or makes or signs any fraudulent certificate, return, or statement; or
(8) who, having knowledge or information of the violation of any revenue law by any person, or of fraud committed by any person against the United States under any revenue law, fails to report, in writing, such knowledge or information to the Secretary; or
(9) who demands, or accepts, or attempts to collect, directly or indirectly as payment or gift, or otherwise, any sum of money or other thing of value for the compromise, adjustment, or settlement of any charge or complaint for any violation or alleged violation of law, except as expressly authorized by law so to do;
shall be dismissed from office or discharged from employment and, upon conviction thereof, shall be fined not more than $10,000, or imprisoned not more than 5 years, or both. The court may in its discretion award out of the fine so imposed an amount, not in excess of one-half thereof, for the use of the informer, if any, who shall be ascertained by the judgment of the court. The court also shall render judgment against the said officer or employee for the amount of damages sustained in favor of the party injured, to be collected by execution.

The Constitution delegates powers of the Federal Government into three defined categories: the Legislative Branch, the Executive Branch, and the Judicial Branch. Bowsher v. Synar, 478 U.S. 714, 721 (1986). It is the Executive Branch of the United States that has exclusive authority and absolute discretion to decide whether to prosecute a case. United States v. Nixon, 418 U.S. 683, 693 (1974). As the Judicial Branch, this Court does not have the power to criminally prosecute any individual or issue an order for the arrest of the IRS Agents. Therefore, Plaintiffs cannot initiate a criminal prosecution in this civil action. Accordingly, Plaintiffs' claims under 18 U.S.C. § 872 and 26 U.S.C. § 7214 should be dismissed without leaveto amend.

B. Fourth Amendment and Fifth Amendment Claims

Plaintiffs also assert claims for violations of the Fourth Amendment and Fifth Amendment to the United States Constitution. To the extent Plaintiffs are attempting to sue IRS agents for civil rights violations of the Fourth and Fifth Amendments, such claims must be brought under Bivens v. Six. Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971). Lawsuits against federal officials for constitutional deprivations that occur under color of federal law are actionable pursuant to Bivens. While this doctrine provides for private rights of action for violations of the Fourth Amendment, Bivens, and the Fifth Amendment Due Process clause, Davis v. Passman, 442 U.S. 228 (1979), the United States Supreme Court usually does not extend Bivens to claims where Congress has already provided "an avenue for some redress." Correctional Services Corporation v. Malesko, 534 U.S. 61, 68-69 (2001); Libas Ltd. v. Carrillo, 329 F.3d 1128, 1130 (9th Cir. 2003). The Ninth Circuit has found that taxpayers have no right to Bivens relief for any allegedly unconstitutional actions of IRS officials engaged in tax collection. Adams v. Johnson, 355 F.3d 1179, 1188 (9th Cir. 2004). The Ninth Circuit found that because the complex statutory scheme of Title 26 of the United State Code ("Internal Revenue Code" or "IRC") included a comprehensive remedial scheme, Congress considered any wrongs could be addressed in the Code's administration. Id. at 1185-1186.

Section 7433 of the Internal Revenue Code is the exclusive remedy for damages caused by the reckless or intentional disregard of the Internal Revenue Code by IRS employees in the collection of taxes. Accordingly, Plaintiffs' claims against Defendants for alleged violations of the Fourth Amendment and Fifth Amendment should be dismissed without leave to amend.

C. Conversion Claim

Plaintiffs also raise a common law claim for conversion. The Federal Tort Claims Act, 28 U.S.C. § 2671, et seq., ("FTCA") "vests the federal district courts with exclusive jurisdiction over suits arising from the negligence of Government employees." Jerves v. United States, 966 F.2d 517, 518 (9th Cir.1992). "The FTCA is the exclusive remedy for tortious conduct by theUnited States, and it only allows claims against the United States." Fed. Deposit Ins. Corp. v. Craft, 157 F.3d 697, 706 (9th Cir. 1998). "Section 1346(b) [of the FTCA] grants the federal district courts jurisdiction over a certain category of claims for which the United States has waived its sovereign immunity and 'render[ed]' itself liable." Fed. Deposit Ins. Corp.v. Meyer, 510 U.S. 471, 477 (1994) (citations omitted). Plaintiffs bear the burden of establishing FTCA jurisdiction. Prescott v. United States, 973 F.2d 696, 701 (9th Cir. 1992).

The United States has waived its immunity for suits alleging certain common law torts, such as conversion, by federal officials acting within the scope of their employment under the FTCA. However, there is an exception to recovery under the FTCA which prohibits suits for any "claim arising in respect of the ... collection of any tax." 28 U.S.C. § 2680(c). Plaintiffs' claim for conversion involves the collection of tax, so Plaintiffs cannot proceed on a conversion claim in this action. See Hutchinson v. United States, 677 F.2d 1322, 1327 (1982). Accordingly, Plaintiffs'...

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