Opinion
CIV. 02-4087
April 13, 2004
ORDER
Pending is the court's Order directing each plaintiff to show cause why he should not be sanctioned for violating FRCivP 11(b)(2). A hearing was had April 12, 2004. Richard Mathis appeared pro se. Doyle Mathis did not appear. According to Richard Mathis, Doyle was sick. Scot Mathis did not appear. According to Richard Mathis, Scot had to stay home and run the business. The government appeared by its counsel Michael Raum.
On April 26, 2002, plaintiffs' filed a "Petition for Damages" relating to $69,000 which they assert was illegally seized by the government for unpaid income taxes. On March 18, 2003, Judge Piersol granted summary judgment in favor of the United States and against plaintiffs. Even assuming plaintiffs had standing, and further assuming they had exhausted their administrative remedies, which Judge Piersol also decided adversely to plaintiffs, Judge Piersol granted summary judgment because the two year statute of limitations for making their claim had expired. 26 U.S.C. § 7433(d)(3). Only the government's counterclaim against the plaintiffs remains to be resolved in the lawsuit.
Plaintiffs filed a motion for reconsideration. Judge Piersol denied the motion on October 6, 2003.
After receiving two adverse decisions regarding their claim to the $69,000, plaintiffs filed the same claim for a third time. The third claim was referred to the Magistrate Judge for decision. The third claim was denied, because it had already been decided against them before. Additionally, plaintiffs were ordered to show cause why they should not be sanctioned for violating Rule 11(b)(2). Rule 11(b)(2) provides an unrepresented party, by signing and filing a pleading, motion or other written paper, is certifying to the court that the claim or other legal contention is warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal or existing law or the establishment of new law.
At the hearing Richard Mathis had no explanation which would show the third filing of the same, already decided claim was not filed in violation of the Rule 11 certification. (The name of the claim was different, but the substance of the claim was the same.) Plaintiffs argue they have paid the taxes, but nobody will listen to them, or give them a hearing at which they can prove they paid the income taxes. Despite their sincere belief that they have paid the taxes, and that they have evidence to prove that they have, they waited too long to make the claim. Without deciding whether they have or have not paid the $69,000, even if they have paid the taxes, and even if their claim to the $69,000 is meritorious, the law does not allow them to wait until 2002 to make the claim about which they knew as long ago as 1994, 1995, and 1998. Plaintiffs' claim may be brought only within 2 years after the date the right of action accrues. 26 U.S.C. § 7433(d)(3). Nonetheless, some of the documents upon which they rely were marked as exhibits at the hearing, and they are hereby received into evidence as Exhibits 1-14. The government objected to all of them as being irrelevant, and to Exhibit 9 for the additional reason it is incomplete.
Having found no reasonable explanation for their violation of F.R.Civ.P. 11(b)(2), there remains the issue of what to do about it. Because the sanction was raised by the court, as distinguished from by motion of the defendant, the court cannot order plaintiffs to reimburse the government for the amount of reasonable attorney fees and expenses relating to the third claim. F.R-Civ-P. 11 (c)(2). Plaintiffs' claim for the $69,000 has already been dismissed as a matter of law, so the option to strike pleadings or dismiss the complaint is not available. It is concluded a reprimand and small monetary penalty are sufficient to stop plaintiffs in the future from filing claims or making legal contentions which are not warranted by law or which cannot be supported by a reasonable argument for the extension, modification, or reversal of existing law or the establishment of new law.
At the hearing, Plaintiff Richard Mathis filed a document entitled "Motion to Dismiss this Show Cause Hearing for Failure to Meet Rule 11 Criteria for Consideration of Sanctions." The motion is wholly without merit.
Accordingly, it is, therefore,
ORDERED, that Plaintiff Richard Mathis' Motion to Dismiss Show Cause Hearing is DENIED; and it is
FURTHER ORDERED that plaintiffs are hereby reprimanded for violating F.R.Civ.P. 11(b)(2); and it is
FURTHER ORDERED that each plaintiff shall pay $100 into court as a penalty pursuant to FRCIVP 11(c)(2). Payment shall be made to the Clerk of the U.S. District Court, 400 S. Phillips Ave, Sioux Falls, SD, 57104, not later than May 15, 2004.