Taylor v. USIRS, C 93-0180.
| Decision Date | 01 February 1996 |
| Docket Number | No. C 93-0180.,C 93-0180. |
| Citation | 915 F. Supp. 1015 |
| Parties | Frank J. TAYLOR, Plaintiff, v. UNITED STATES of America INTERNAL REVENUE SERVICE, Defendant. |
| Court | U.S. District Court — Northern District of Iowa |
Marlyn S. Jensen, Osceola, Iowa, for Plaintiff Frank J. Taylor.
Gerald A. Role, Trial Attorney, Tax Division, U.S. Department of Justice, Washington, DC, for Defendant IRS.
TABLE OF CONTENTS
I. INTRODUCTION AND BACKGROUND ........................................ 1016
II. LEGAL ANALYSIS ..................................................... 1017
A. Applicable Standards ............................................ 1017
B. The "Bivens" Claim .............................................. 1019
C. The Constitutionality Of 26 U.S.C. § 6103 .................. 1019
1. The statute in question ...................................... 1019
2. The appropriate constitutionality analysis ................... 1021
3. The constitutionality of § 6103 ......................... 1023
III. CONCLUSION ......................................................... 1025
Following summary judgment in its favor on a number of plaintiff's claims relating to disclosure of tax return information to state revenue officials, the defendant has moved to dismiss the remaining claims it failed to challenge. Plaintiff's remaining claims assert a "Bivens" action against the defendant and challenge the constitutionality of 26 U.S.C. § 6103, which authorizes the federal Internal Revenue Service to disclose information it has obtained from and about taxpayers to state revenue services under certain conditions and through specified procedures. Plaintiff asserts that the statute violates his constitutional right to financial privacy.
Plaintiff Frank J. Taylor filed his pro se complaint in this matter on March 11, 1993, as an adversary complaint in his Chapter 7 bankruptcy filed on September 4, 1987. Mr. Taylor is now represented by counsel. The defendant is the United States of America "acting as" the Internal Revenue Service (IRS). The court has already considered extensively the procedural and factual background to this litigation in its prior ruling, entered September 27, 1995, granting the IRS's motion for summary judgment on the two claims on which the IRS asserted its entitlement to such judgment. See Taylor v. United States, 186 B.R. 441, 443-45 & 446-49 (N.D.Iowa 1995). The court concluded that the IRS had not, however, moved for summary judgment on Mr. Taylor's "Bivens" claim, although the court did indicate its doubt that Mr. Taylor could properly assert such a claim, nor had the IRS moved for summary judgment on Mr. Taylor's claim that 26 U.S.C. § 6103, which imposes certain confidentiality and disclosure limitations on the IRS, is unconstitutional, even though the IRS had labeled that claim "frivolous." Id. at 448.
The IRS soon rectified its oversight of these additional claims by moving to dismiss them on November 3, 1995. The IRS contends that Mr. Taylor cannot mount a "Bivens" claim against the United States or one of its agencies, and that, had he named any individual defendants, they would be entitled to qualified immunity. The IRS contends further that 26 U.S.C. § 6103 is not unconstitutional, because no provision of the U.S. Constitution imposes a confidentiality requirement on information collected by the IRS and Congress's protections and provisions for disclosure are reasonable and founded on legitimate governmental policies.
Plaintiff Frank J. Taylor belatedly resisted the IRS's motion to dismiss on December 26, 1995, but only after the court directed him to do so or face dismissal of this action for want of prosecution. In his resistance to the motion to dismiss, Mr. Taylor contends that he is unable to name individual IRS officials against whom his "Bivens" claim might properly be asserted, because such information as to the identity of the actors responsible for misconduct toward him is in the exclusive control of the defendant agency. He therefore contends that the court should not dismiss his "Bivens" action without first allowing extensive discovery. As to his challenge to the constitutionality of § 6103, Mr. Taylor reiterated his principal argument, previously raised in his complaint and resistance to the motion for summary judgment, where constitutionality was not in fact at issue, that the statute violates a constitutionally protected, fundamental expectation of privacy, which includes financial matters. Mr. Taylor also offers some rather nebulous assertions that the statute, which permits sharing of information between federal and state revenue officials, violates principles of federalism and state sovereignty.
This matter is now fully submitted. Therefore, the court turns to identification of the standards applicable to this motion to dismiss, followed by determination of the proper disposition of the motion to dismiss as to each of Mr. Taylor's remaining claims.
Although the United States has stated that its motion to dismiss is brought "pursuant to Rule 12, Fed.R.Civ.P.," it has not identified which Rule 12 subsection or ground in fact provides the authority for its motion. However, it appears that a "motion to dismiss" a case more than two years old, in which partial summary judgment has already been granted, is most likely a motion for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c), not a motion pursuant to Fed.R.Civ.P. 12(b)(6), which must be filed before an answer is made. Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir.1990) (). Also, Rule 12(h)(2) states that the defense of failure to state a claim upon which relief can be granted, the IRS's apparent ground for dismissal of the constitutionality challenge, may be advanced in a 12(c) motion. Id.; see also Kornblum v. St. Louis County, Mo., 48 F.3d 1031 (8th Cir.1995) (). Furthermore, defenses of immunity, similar to that asserted here, may properly be brought pursuant to a motion under Rule 12(c). See, e.g., Jones v. Moore, 986 F.2d 251, 252 (8th Cir.1993) (); Ansley v. Heinrich, 925 F.2d 1339, 1346 (11th Cir.1991) ().
The nicety of which subsection of Rule 12 provides the ground for the United States's motion to dismiss is, perhaps, "purely formal," at least as to "failure to state a claim," because the Eighth Circuit Court of Appeals reviews the grant or denial of a motion to dismiss on this ground pursuant to Rule 12(c) against the same standards applicable to a motion pursuant to Rule 12(b)(6). Westcott, 901 F.2d at 1488. These standards were briefly stated in Westcott:
It is settled in this circuit that "whether a complaint states a cause of action is a question of law which we review on appeal de novo." We assume that well-pleaded factual allegations in the complaint are true "and construe the complaint, and all reasonable inferences arising therefrom, most favorably to the pleader." We do not, however, blindly accept the legal conclusions drawn by the pleader from the facts. After so construing the complaint, we should affirm the granting of a 12(b)(6) motion and hence a 12(c) motion to dismiss for failure to state a claim only if "it appears beyond doubt that the plaintiff can prove no set of facts which would entitle him to relief."
Westcott, 901 F.2d at 1488 (internal citations omitted); see also National Car Rental Sys., Inc. v. Computer Assocs. Int'l, Inc., 991 F.2d 426, 428 (8th Cir.) (), cert. denied, ___ U.S. ___, 114 S.Ct. 176, 126 L.Ed.2d 136 (1993).
Perhaps of more concern when the litigation is so well-advanced before a motion to dismiss is made is the question of whether consideration of matters outside of the pleadings is suggested or undertaken, requiring conversion of the motion into one for summary judgment pursuant to Fed.R.Civ.P. 56, with concomitant requirements of notice to the parties of such a conversion. Fed. R.Civ.P. 12(c). Even where matters outside of the pleadings are presented to the court, however, a motion to dismiss is not converted into a motion for summary judgment "where the district court's order makes clear that the judge ruled only on the motion to dismiss." Skyberg v. United Food and Commercial Workers Int'l Union, AFL-CIO, 5 F.3d 297, 302 n. 2 (8th Cir.1993). Where the district court has made the posture of its disposition clear, the appellate court will "treat the case as being in that posture." Id.
Here, the parties have presented and argued the questions raised by defendant's motion to dismiss purely as questions of law. See National Car Rental, 991 F.2d at 428 (). No party has submitted any documents in support of its arguments, nor asserted any issues of material fact as precluding judgment on...
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