Wilson v. Dep't of Treasury Internal Revenue Serv.

• Decision Date: 02 May 2022
• Docket Number: 1:21-cv-1051 JLT EPG
• Parties: CHRISTOPHER JOHN WILSON, Plaintiff, v. DEPARTMENT OF TREASURY INTERNAL REVENUE SERVICE, Defendant.
• Court: U.S. District Court — Eastern District of California

CHRISTOPHER JOHN WILSON, Plaintiff, v. DEPARTMENT OF TREASURY INTERNAL REVENUE SERVICE, Defendant.

No. 1:21-cv-1051 JLT EPG

United States District Court, E.D. California

May 2, 2022

ORDER GRANTING THE GOVERNMENT'S MOTION TO DISMISS AND GRANTING LEAVE TO AMEND (DOC. 19)

Christopher John Wilson asserts he did not receive economic impact payments to which he was ntitled under the Coronavirus Aid Relief, and Economic Security Act. (See generally Doc. 1) The overnment^[1] seeks dismissal of the matter pursuant to Rule 12(b)(1) and Rule 12(b)(6) of the Federal ules of Civil Procedure, arguing the Court lacks jurisdiction and Wilson failed to state a claim upon hich relief can be granted. (Doc. 19.)

The Court finds the matter suitable for decision without oral argument and a hearing date will ot be set pursuant to Local Rule 23(g). For the reasons set forth below, the Government's motion to ismiss is GRANTED, and the complaint is dismissed with leave to amend.

I. Background and Allegations

Wilson notes the CARES Act “established a mechanism for the Internal Revenue Service, IRS to [i]ssue Economic Impact Payments.” (Doc. 1 at 3.) Wilson alleges that he filed a Form 1040 for his individual income tax return “in February 2021 and received no return.” (Id.) Wilson asserts he “then wrote several letters to the IRS and none were responded to, ” after which he “again filed another Form 1040 in March 2021 claiming the recovery Rebate Credit.” (Id.) According to Wilson, he did not receive the refund payments of $1 200.00; $600.00; or $1, 400.00. (Id.) Wilson asserts he again “wrote letters to the IRS and still received no response.” (Id.) As a result, Wilson contends the IRS is “denying ... his rightful Economic Impact Payments seemingly because Plaintiff is currently incarcerated.” (Id.) Thus, Wilson requests the IRS provide “a check for $3, 200.00” “and or the remaining unissued [r]efunds.” (Id. at 4.)

Wilson initiated this action by filing his complaint on July 6, 2021. (Doc. 1.) The Court issue an order reviewing the allegations of the complaint, and determined service was appropriate on September 22, 2021. (Doc. 7.) In doing so, the Court indicated: “By allowing the case to proceed pas screening, the Court is not precluding Defendant from moving to dismiss based on a lack of private right of action or any other grounds.” (Id. at 9, n. 4.)

On March 14, 2022, the Government filed its motion to dismiss the action pursuant to Rule 12(b)(1) and Rule 12(b)(6) of the Federal Rules of Civil Procedure. (Doc. 19.) Wilson did not oppose-or otherwise respond to- the request for dismissal.

II. Dismissal under Rule 12(b)(1)

The district court is a court of limited jurisdiction, and is empowered only to hear disputes “authorized by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); Exxon Mobil Corp v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005). The federal courts are “presumed to lack jurisdiction in a particular case, unless the contrary affirmatively appears.” A-Z Int'l. v. Phillips, 323 F.3d 1141, 1145 (9th Cir. 2003). Thus, a plaintiff carries the burden of demonstrating the Court has subject matter jurisdiction. Kokkonen, 511 U.S. at 377 (citing McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 182-83 (1936)); Vacek v. United States Postal Serv. 447 F.3d 1248, 1250 (9th Cir. 2006).

Pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, a party may challenge a claim for relief for lack of subject matter jurisdiction. A motion to dismiss under Rule 12(b)(1) “may either attack the allegations of the complaint or may be made as a ‘speaking motion' attacking the existence of subject matter jurisdiction in fact.” Thornhill Pub. Co., Inc. v. Gen. Tel. & Electronics Corp., 594 F.2d 730, 733 (9th Cir. 1979) (citing Land v. Dollar, 330 U.S. 731, 735 (1947)). Thus, “[a jurisdictional challenge under Rule 12(b)(1) may be made either on the face of the pleadings or by presenting extrinsic evidence.” Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003) (citing White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000)). The Ninth Circuit explained:

In a facial attack, the challenger asserts that the allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction. By contrast, in a factual attack, the challenger disputes the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction.

Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1038 (9th Cir. 2004). On a motion to dismiss under Rule 12(b)(1), the standards that must be applied by the Court vary according to the nature of the jurisdictional challenge.

If a defendant presents a facial challenge to the Court's jurisdiction, the Court must presume the truth of the plaintiff's factual allegations “and draw all reasonable inferences in his favor.” Doe v. Holy, 557 F.3d 1066, 1073 (9th Cir. 2009); Savage v. Glendale Union High Sch. Dist. No. 205, 343 F.3d 1036, 1039 n.1 (9th Cir. 2003), cert. denied, 541 U.S. 1009 (2004). The Court should not “assume the truth of legal conclusions merely because they are cast in the form of factual allegations.” W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). However, the Court “may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment” when resolving a facial attack. Safe Air, 373 F.3d at 1039.

On the other hand, if a defendant presents a factual challenge to the Court's jurisdiction, the Court “may review any evidence, such as affidavits and testimony.” McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988), cert. denied, 489 U.S. 1052 (1989); Warren, 328 F.3d at 1139. The Ninth Circuit explained: “Faced with a factual attack on subject matter jurisdiction, ‘the trial court ma proceed as it never could under 12(b)(6) or Fed.R.Civ.P. 56. No presumptive truthfulness attaches t plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.'” Thornhill Pub. Co., 594 F.2d at 734 (quoting Mortenson v. First Fed. Sav. & Loan Assoc., 549 F.2d 884, 891 (1977)).

III. Dismissal under Rule 12(b)(6)

A Rule 12(b)(6) motion “tests the legal sufficiency of a claim.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal of a claim under Rule 12(b)(6) is appropriate when “the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). Thus, under Rule 12(b)(6), “review is limited to the complaint alone.” Cervantes v. City of San Diego, 5 F.3d 1273, 1274 (9th Cir. 1993).

The Supreme Court explained: “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The Supreme Court explained,

A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a “probability requirement, ” but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are “merely consistent with” a defendant's liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.'”

Iqbal, 556 U.S. at 678 (internal citations omitted).

“The issue is not whether a plaintiff will ultimately prevail, but whether the claimant is entitled to offer evidence to support the claims. Indeed it may appear on the face of the pleadings that a recovery is very remote and unlikely but that is not the test.” Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). To the extent pleading deficiencies can be cured by the plaintiff alleging additional facts, leave to amend should be granted. Cook, Perkiss & Liehe, Inc. v. Northern Cal. Collection Serv., 911 F.2d 242, 247 (9th Cir. 1990) (citations omitted).

IV. Discussion and Analysis

The Government contends Wilson is unable to obtain an economic impact payment under the CARES Act, because the deadline for such payments has passed. (Doc. 19 at 6-7.) In addition, the Government asserts the matter should be dismissed because Plaintiff did not allege that he filed an administrative claim for refund with the IRS. (Id. at 6, 8-10.) Because the Government limits its jurisdictional arguments to the allegations in the complaint, the Government makes a facial challenge to the Court's jurisdiction. See Safe Air, 373 F.3d at 1038.

A. Economic Impact Payments

In response to the COVID-19 pandemic, three federal acts provided economic impact payments (“EIPs”) to eligible individuals. Payments in the amount of $1, 200 per individual were made under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), passed on March 27, 2020, Pub. L. 116-136, 134 Stat. 281 (2020). 26 U.S.C. 23 § 6428(a)-(d). Payments in the amount of $600.00 were issued under the Consolidated Appropriations Act, 2021, passed on December 27, 2020, Pub. L. 116-260, 134 Stat. 1182 (2020). 26 U.S.C. § 6428A(a)-(d). Finally, payments in the amount of $1, 400 were made under the American Rescue Plan Act of 2021, passed March 11, 2021, Pub. L. 117-2, 135 Stat. 4. 26 U.S.C. § 6428B(a)-(d). Wilson asserts that he was entitled to the EIPs in the amount of $1, 200.00; $600.00; [and] $1, 400.00” (Doc. 1 at 3) but did not receive them.

B. Payments under the CARES Act

The CARES Act established a mechanism...