Opinion
No. 5:02-cv-316-0c-10GRJ
January 14, 2003
REPORT AND RECOMMENDATION
Specific written objections may be filed in accordance with 28 U.S.C. § 636, and Rule 6.02, Local Rules, M.D. Fla., within ten (10) days after service of this report and recommendation. Failure to file timely objections shall bar the party from a de novo determination by a district judge and from attacking factual findings on appeal.
Pending before the Court are Defendant, Wenzel's Motion To Dismiss (Doc. 8) and Memorandum In Support of Motion To Dismiss (Doc. 9). For the following reasons, Defendant, Wenzel's Motion To Dismiss (Doc. 8) is due to be GRANTED.
I. INTRODUCTION AND BACKGROUND
Earlier, the other named defendant in this case — Robert Lowder, the President of Colonial Bank — filed a separate motion to dismiss, which this Court has recommended be dismissed with prejudice. (Doc. 7).
Although Plaintiff's Complaint is disjointed and incoherent in many respects and does not comply with the short and plain statement requirement of Rule 8(a), Fed.R.Civ.P. — a review of the Complaint (and attachments) discloses the following material details.
Defendant, Bob Wenzel, the Acting Commissioner of Internal Revenue, has been sued in his capacity as "an agent of the International Monetary Fund Internal Revenue Service, acting as agent for the bankrupt United States and bankrupt State of Florida. . ." (Doc. 1 at 3.) The United States has not been named, however, as a defendant in this case. In fact, Plaintiff contends that "the United States is not a party in interest to this action" (Doc. 1 at 3).
Although, Plaintiff refers to the Defendant as "Bob Wenzel" and the Acting Commissioner of Internal Revenue is Robert E. Wenzel, the Court will assume that Plaintiff meant to name Robert Wenzel, the Acting Commissioner of Internal Revenue.
On or about June 21, 2002, the IRS served a Notice of Levy on Colonial Bank concerning two bank accounts listed in the name of American Rights Litigators (purportedly accounts in which the Plaintiff has an interest), and pursuant to the Notice of Levy, Colonial Bank placed an administrative freeze on the accounts.
Plaintiff alleges that the withholding of these funds is somehow improper and he demands the release of $64,870.21, the amount of monies presently frozen in the two accounts. While the Plaintiff fails to identify the precise nature of his "cause of action" he does make reference to a "debt action in assumpit" and suggests that the freezing of the funds is a "conveyance through theft to the defendant." Conspicuously absent from the complaint are any facts, whatsoever, concerning the conduct or involvement of Defendant, Wenzel, either individually, or in his role as the Acting Commissioner of the IRS. Thus, as against Defendant, Wenzel, the most that can be divined from Plaintiff's Complaint is a request for the Court to restrain Defendant, Wenzel from collecting any tax or alternatively a claim of wrongful levy on the bank accounts.
Although, for purposes of ruling on a motion to dismiss the Court is only required to look to the four corners of the Complaint, and not resort to matters outside the Complaint, the context in which this suit arose can be gleaned from a review of Defendant's Motion To Dismiss and the supporting brief. These filings disclose that on June 27, 2002 Plaintiff filed for bankruptcy on behalf of the American Rights Litigators, identified as a business trust (Case No. 02-10645-6B7). Colonial Bank filed a Motion for a Declaratory Judgement in that case, seeking a determination of its rights and obligations as to the accounts. That motion is pending as of the date of the filing of Defendant's present motion. Thereafter, the United States of America commenced a civil action in this Court for unpaid federal income tax liabilities. See, case no. 5:02-cv-230-Oc-10GRJ.
In his Motion to Dismiss, Defendant, Wenzel requests the court to dismiss Plaintiff's Complaint on the following grounds: (1) lack of subject matter jurisdiction; (2) lack of personal jurisdiction; (3) insufficiency of process and insufficiency of service of process and (4) failure to state a claim upon which relief can be granted. Plaintiff has not filed a response, and the time for doing so has expired.
Defendant contends that he was not served in accordance with either Fed.R.Civ.P. 4(e) or 4(i)(2). Although Defendant has presented nothing to the court in support of his challenge to the sufficiency of process and the sufficiency of service of process, the Court need not address these issues because, as a threshold matter, Defendant Wenzel is not a proper party to this case and the Court does no have subject matter jurisdiction.
II. DISCUSSION
A. Defendant Wenzel Is Not A Proper Party
As a preliminary matter, the Court will address Defendant Wenzel's argument that he is not a proper party to this case. Despite Plaintiff's contention to the contrary, the Court agrees with Defendant, Wenzel that the United States, not the Commissioner of Internal Revenue, is the real party in interest.
"A suit against IRS employees in their official capacity is essentially a suit against the United States." Plaintiff's Complaint does not allege any wrongdoing by Defendant, Wenzel in his personal capacity. Although Plaintiff's Complaint also is devoid of any allegation of improper execution of duties by Defendant, Wenzel as the Acting Commissioner of IRS, it is readily apparent that Plaintiff's Complaint stems from the IRS's service of the levy on two bank accounts, an act presumably within the official duties of IRS employees in the collection of tax. A suit of such nature can only be asserted against the United States. As such, this action will be treated as an action against the United States, and, therefore, any claim against Robert Wenzel in his individual capacity is due to be dismissed with prejudice.
Bilger v. United States of America, 2001 WL 169568, 4 (E.D.Cal. 2001) (substituting the United States as the defendant in a claim brought against IRS employees). See also Militello v. Bardell, 970 F. Supp. 1022, 1024 (M.D.Fla. 1997) (dismissing the IRS employee named as a defendant who was sued in his official capacity); White v. Rateau, 1994 WL 649537, 1 (M.D. Fla 1994)) ("when a plaintiff files an action seeking to restrain the collection of taxes, the United States is the real party in interest and the proper defendant in the action.").
Guzman v. Commissioner of Internal Revenue, 2002 WL 31662300 (S.D.Fla. 2002) (treating action seeking arising out of a federal tax lien on property as result of failure to file federal income taxes against Commissioner of Internal Revenue as an action against the United States).
B. Subject Matter Jurisdiction
Even assuming, however, that the Plaintiff intended to sue the United States, the Complaint is still due to be dismissed because the Court lacks subject matter jurisdiction in this matter.
Because the real party in interest, the United States, is a sovereign, the Court must determine whether the Court has subject matter jurisdiction, in light of the doctrine of sovereign immunity. The doctrine of sovereign immunity protects the United States from suit, absent a waiver of sovereign immunity, which waiver must be unequivocally expressed. Accordingly, it follows that "a party who sues the United States has the burden of identifying the specific statutes waiving the government's sovereign immunity and showing that the requirements of such statutes have been met."
United States v. Mitchell, 445 U.S. 535, 538 (1980).
Macelvain v. United States of America, 2002 \VL 31409568 (M.D.Ala. 2002) (citing Cole v. v. U.S., 657 F.2d 107, 109 (7th Cir. 1981). See also Krieg v. Mills, 117 F. Supp.2d 964, 967 (N.D.Cal. 2000) (stating that the party suing the government has the burden of showing waiver of sovereign immunity); Hughes v. Internal Revenue Service, 62 F. Supp.2d 796, 801 (E.D.N.Y. 1999) ("Regardless of whether any basis for waiver exists, the absence of any allegation of waiver in the complaints mandates dismissal of these actions.").
In the instant case, Plaintiff has not met his burden of establishing a waiver of sovereign immunity. In his Complaint, Plaintiff contends that this Court has subject matter jurisdiction under either federal question, diversity and/or admiralty jurisdiction but makes no reference whatsoever to any factual allegations with which Plaintiff could assert a waiver of sovereign immunity under a statutory scheme. As discussed above, under a liberal interpretation of Plaintiff's Complaint, this suit involves a request for injunctive relief from the collection of taxes or a claim of a wrongful levy. This Court lacks jurisdiction to entertain either claim.
Clearly, there is no jurisdiction based on admiralty. See Report and Recommendation, Doc. 7 for the discussion on subject matter jurisdiction based on admiralty.
To the extent that Plaintiff requests injunctive relief from the collection of taxes, this court lacks jurisdiction pursuant to 26 U.S.C. § 7421 "Federal courts are expressly proscribed, by (this statute, from entertaining suits to restrain 'the assessment or collection of any tax'" unless: (1) "plaintiff can show that under no circumstances could the government ultimately prevail; and (2) there exists an independent basis for equity jurisdiction." Plaintiff has failed to show that either of these exceptions apply. Because, Plaintiff's Complaint is devoid of any legal or factual bases for claiming that the levy or the tax assessment is unlawful or improper it cannot be said that "under no circumstances could the government ultimately prevail." In addition, Plaintiff has an adequate remedy at law by paying his tax liabilities and then suing for a refund.
26 U.S.C. § 7421(a) states that except as provided in limited circumstances, "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person . . . Nothing in Plaintiff's Complaint reveals that the exceptions apply in this case.
Hobson v. Fischbeck, 758 F.2d 579, 580-81 (11th Cir. 1985). See also Krieg, 117 F. Supp.2d 964 (N.D.Cal. 2000) ("The Anti-Injunction Act withdraws jurisdiction from state and federal courts over any actions seeking injunctions prohibiting the collection of federal taxes.); Landon v. Boyington, 1993 WL 23361, 1 (N.D.Fla. 1993) ("As such, insofar as the plaintiff challenges the right of the IRS to seize his property for purposes of satisfying a tax liability, the complaint must be dismissed.").
To the extent that this action can be construed as an action for wrongful levy, the Internal Revenue Code section 7426(a) permits such an action in a district court only for persons "other than the person against whom is assessed the tax out of which such levy arose". The Court is not aware of any other statutory authority under which a taxpayer is permitted to sue the United States in connection with a wrongful tax levy.
Accordingly, the Court concludes that there has been no waiver of sovereign immunity by the United States and, therefore, this Court does not have subject matter jurisdiction over Plaintiff's claims against the United States. As such, to the extent Plaintiff's Complaint is construed as a suit against the United States it is due to be dismissed with prejudice.
C. Other Grounds for Dismissal
In light of the foregoing, the Court finds it unnecessary to address the other grounds for dismissal of the present action raised by Defendant. The Court notes, however, that if the funds in the two bank accounts are the property of the estate in the pending bankruptcy proceeding, then Plaintiff would not have standing to request the return of the funds in this action and should have requested the return of the funds in an adversary action filed in the bankruptcy proceedings.
III. RECOMMENDATION
In view of the foregoing, it is respectfully RECOMMENDED that Defendant, Wenzel's Motion To Dismiss (Doc. 8) be GRANTED and that Plaintiff's claims against Defendant Wenzel, or alternatively against the United States, be DISMISSED with prejudice.