Opinion
CIVIL ACTION NO. 1:19-CV-4610-LMM
2020-01-31
Michael T. CHRISLEY, et al., Plaintiffs, v. Joshua WAITES, Defendant.
Christopher S. Anulewicz, Jonathan Raymond DeLuca, Michael J. Bowers, Patrick Nicholas Silloway, Balch & Bingham LLP, Atlanta, GA, for Plaintiffs. Terry L. Long, Annarita L. McGovern, Satcher & McGovern LLC, Alpharetta, GA, William Winford Peters, Georgia Department of Law Office of the Attorney General, Atlanta, GA, for Defendant.
Christopher S. Anulewicz, Jonathan Raymond DeLuca, Michael J. Bowers, Patrick Nicholas Silloway, Balch & Bingham LLP, Atlanta, GA, for Plaintiffs.
Terry L. Long, Annarita L. McGovern, Satcher & McGovern LLC, Alpharetta, GA, William Winford Peters, Georgia Department of Law Office of the Attorney General, Atlanta, GA, for Defendant.
ORDER
LEIGH MARTIN MAY, UNITED STATES DISTRICT JUDGE This case comes before the Court on Defendant Joshua Waites's Motion to Dismiss [6]. After due consideration and a hearing, the Court enters the following Order:
Unless otherwise indicated, the following facts are taken from Plaintiffs’ Complaint, Dkt. No. [1], and are construed in the light most favorable to Plaintiffs as the non-moving party.
Plaintiffs Michael "Todd" Chrisley and Julie Chrisley are stars of the reality television show, "Chrisley Knows Best," which has aired on USA Network since 2014. Defendant is the Director of the Georgia Department of Revenue's ("GDOR") Office of Special Investigations and has worked with the GDOR since 2013.
In 2017, Defendant began investigating into whether Plaintiffs complied with their State of Georgia tax obligations between 2009 and 2016 and, as part of the investigation, Defendant accessed Plaintiffs’ federal and State of Georgia tax returns. To assist with his investigation, Defendant contacted several of Plaintiffs’ children, including Lindsie Chrisley Campbell ("Campbell"), Todd Chrisley's estranged daughter. Over a period of 18 months, Defendant spoke with Campbell via text message and informed Campbell that: (1) Plaintiffs were subject to tax audits; (2) Campbell, her siblings, her grandmother, and her husband were subject to tax audits without notice; (3) the United States Department of Internal Revenue ("IRS") had completed a criminal tax audit of Plaintiffs; (4) Defendant was investigating Plaintiffs for allegedly mispresenting their Georgia residency; (5) a tax levy had been placed on Plaintiffs; (6) the federal government had subpoenaed Plaintiffs’ tax records and, as a result, the GDOR had suspended its investigation; and (6) the federal government was going to "take everything of value" from Plaintiffs’ home in Nashville.
On October 15, 2019, Plaintiffs filed a Complaint against Defendant, alleging that Defendant violated: (1) 26 U.S.C. § 6103 by disclosing Plaintiffs’ tax return information; and (2) 42 U.S.C. § 1983 by disclosing Plaintiffs’ return information in violation of § 6103. Defendant now moves to dismiss Plaintiffs’ § 1983 claim on the basis that it cannot serve as a vehicle to assert a violation of § 6103(a). Dkt. Nos. [6-1] at 11–18; [13].
Plaintiffs also raised several state law claims in their Complaint. In their Response to Defendant's Motion, Plaintiffs inform the Court that they seek to voluntarily dismiss their state law claims. Dkt. No. [7] at 1 n.1. The Court therefore GRANTS Defendant's Motion to Dismiss as to Count II, Count IV, and Count VI of the Complaint.
II. LEGAL STANDARD
Federal Rule of Civil Procedure 8(a)(2) requires that a pleading contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). While this pleading standard does not require "detailed factual allegations," the Supreme Court has held that "labels and conclusions" or "a formulaic recitation of the elements of a cause of action will not do." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). To withstand a Rule 12(b)(6) 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.’ " Id. (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955 ). A complaint is plausible on its face when the plaintiff pleads factual content necessary for the court to draw the reasonable inference that the defendant is liable for the conduct alleged. Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955 ).
At the motion to dismiss stage, "all well-pleaded facts are accepted as true, and the reasonable inferences therefrom are construed in the light most favorable to the plaintiff." FindWhat Inv'r Grp. v. FindWhat.com, 658 F.3d 1282, 1296 (11th Cir. 2011) (quoting Garfield v. NDC Health Corp., 466 F.3d 1255, 1261 (11th Cir. 2006) ). However, this principle does not apply to legal conclusions set forth in the complaint. Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.
III. DISCUSSION
A. Legal Framework to Determine Whether A Claim May Proceed Under § 1983
In Count III of their Complaint, Plaintiffs allege that Defendant violated § 1983 by disclosing their confidential tax return information in violation of § 6103(a). Dkt. No. [1] ¶¶ 40–44. Defendant moves to dismiss Count III on the basis that § 1983 cannot be used as a vehicle to assert a § 6103(a) violation. Dkt. No. [6-1] at 13–15.
"Section 1983 provides a private cause of action against any person who, under color of state law, deprives an individual of ‘any rights, privileges, or immunities secured by the Constitution and laws’ of the United States." Burban v. City of Neptune Beach, 920 F.3d 1274, 1278 (11th Cir. 2019) (quoting 42 U.S.C. § 1983 ). The Supreme Court has interpreted § 1983 to allow for actions "brought to enforce rights created by federal statutes as well as by the Constitution." Id.; see also Maine v. Thiboutot, 448 U.S. 1, 4–8, 100 S.Ct. 2502, 65 L.Ed.2d 555 (1980). However, " § 1983 does not provide an avenue for relief every time a state actor violates a federal law," City of Rancho Palos Verdes v. Abrams, 544 U.S. 113, 119, 125 S.Ct. 1453, 161 L.Ed.2d 316 (2005), and, instead, provides only an avenue for violations "federal right[s]. " Blessing v. Freestone, 520 U.S. 329, 340, 117 S.Ct. 1353, 137 L.Ed.2d 569 (1997). Thus, to bring a § 1983 action for a violation of federal law, a plaintiff "must demonstrate that the federal statute creates an individually enforceable right in the class of beneficiaries in which he belongs." Rancho Palos Verdes, 544 U.S. at 120, 125 S.Ct. 1453.
This demonstration creates a rebuttable presumption that § 1983 may serve as a remedy to enforce the federal right. A.W. v. Jersey City Pub. Sch., 486 F.3d 791, 801 (3d Cir. 2007) ; see also Rancho Palos Verdes, 544 U.S. at 120, 125 S.Ct. 1453 ("Even after this showing, there is only a rebuttable presumption that the right is enforceable under § 1983." (quotation marks omitted)). To rebut this presumption, a defendant may show that Congress did not intend for § 1983 to "remedy ... a newly created [federal] right." Id. "[T]he crucial consideration" in making this showing "is what Congress intended." Fitzgerald v. Barnstable Sch. Comm., 555 U.S. 246, 252, 129 S.Ct. 788, 172 L.Ed.2d 582 (2009) (quotation marks and alteration omitted).
Defendant concedes that § 6103(a) creates an individually enforceable federal right to confidential tax return and return information. Dkt. No. [6-1] at 13. Defendant nonetheless argues that Plaintiffs’ § 1983 claim should be dismissed because Congress enacted a "comprehensive ... scheme" to enforce § 6103(a) through 26 U.S.C. § 7431 and, thus, did not intend for § 1983 to remedy violations of § 6103(a). Id. at 13–15. In response, Plaintiffs contend that § 6103(a) violations can be remedied through § 1983 because § 7431 and § 1983 provide for identical remedies. Dkt. No. [7] at 6–7. In particular, because the remedies under § 6103(a) are not "less restrictive" than those under § 1983, Plaintiffs argue that Congress intended for § 6103(a) claims to be asserted through § 1983. Id.
In Rancho Palos Verdes, the Supreme Court examined whether Congress meant the remedy available under § 1983 to coexist with the more restrictive remedy available under the Telecommunications Act of 1996 ("TCA"), 47 U.S.C. § 332(c)(7). 544 U.S. at 120–23, 125 S.Ct. 1453. Although the Supreme Court clarified several factors to determine Congress's intent in crafting a statute, including the text of the statute itself or whether the statute creates a " ‘comprehensive enforcement scheme that is incompatible with individual enforcement under § 1983,’ " the Supreme Court stressed that the key consideration is whether a statute includes "an express, private means of redress." Id. at 120–21, 125 S.Ct. 1453 (quoting Blessing, 520 U.S. at 341, 117 S.Ct. 1353 ). The inclusion of a private judicial remedy serves as the main indication that Congress "did not intend to leave open" remedies through § 1983. Id. Nonetheless, the Supreme Court stated that this inference may be overcome "by textual indication, express or implicit, that the remedy [provided by the statute] is to complement, rather than supplant, § 1983." Id. at 122, 125 S.Ct. 1453.
Applying this framework, the Rancho Palos Verdes Court concluded that § 1983 relief was unavailable for a violation of the TCA. Id. at 127, 125 S.Ct. 1453. In doing so, the Supreme Court noted that the TCA included highly detailed administrative and judicial remedies, including, among other things, required administrative review, a 30-day statute of limitations for judicial review, and the exclusion of attorney's fees and costs. Id. at 122–25, 125 S.Ct. 1453. The Supreme Court thus explained that by allowing the plaintiff to proceed under § 1983, the Court would therefore allow him to evade the TCA's "deliberate" remedial scheme. Id. at 124, 125 S.Ct. 1453. Without other evidence showing Congress's intent to provide § 1983 relief, the Rancho Palos Verdes Court held that the plaintiff could not use § 1983 as an avenue to assert a TCA violation. Id. at 124–25, 127, 125 S.Ct. 1453.
The Supreme Court revisited Rancho Palos Verdes in Fitzgerald, where the Court grappled with whether Title IX of the Education Amendments of 1972, 20 U.S.C. § 1681(a), was sufficiently comprehensive to preclude § 1983 relief. Fitzgerald, 555 U.S. at 252–54, 129 S.Ct. 788. Again, in reaching its decision, the Supreme Court stressed "plac[ing] primary emphasis on the nature and extent of [a] statute's remedial scheme" to determine Congress's intent. Id. (" ‘When the remedial devices provided in a particular Act are sufficiently comprehensive, they may suffice to demonstrate congressional intent to preclude the remedy of suits under § 1983.’ " (quotation marks omitted)). Ultimately holding that the plaintiff could bring claims under both Title IX and § 1983, the Fitzgerald Court distinguished Title IX from the statute at issue in Rancho Palos Verdes because Title IX included no express private judicial remedy or damages scheme. Fitzgerald, 555 U.S. at 254–55, 129 S.Ct. 788 (explaining that statute in Rancho Palos Verdes contained "unusually elaborate enforcement provisions" and "highly detailed and restrictive administrative and judicial remedies"). Thus, "parallel and concurrent § 1983 claims [would] neither circumvent required procedures, nor allow access to new remedies" if brought together with a claim under Title IX. Id. at 255–56, 129 S.Ct. 788.
From the decisions in Rancho Palos Verdes and Fitzgerald, the Court understands that it must first determine if, and to what extent, the statute at issue provides for private remedies. See Rancho Palos Verdes, 544 U.S. at 121–22, 125 S.Ct. 1453 ; Fitzgerald, 555 U.S. at 253–55, 129 S.Ct. 788. A statute's inclusion of a comprehensive remedial scheme creates an "inference" that Congress intended to foreclose § 1983 relief. See id. A plaintiff may rebut this inference by providing an "indication, express or implicit," that the statutory remedy is intended "to complement, rather than supplant, § 1983." Id.; cf. Morris-Hayes v. Bd. of Educ. of Chester Union Free Sch. Dist., 423 F.3d 153, 161 (2d Cir. 2005) (denying § 1983 relief because the plaintiff showed no indication that Congress intended for § 1983 to complement the remedies provided in the statute at issue).
Plaintiffs and Defendant offer different interpretations of this framework. Relying on Middlesex Cty. Sewerage Auth. v. Nat'l Sea Clammers Ass'n, 453 U.S. 1, 101 S.Ct. 2615, 69 L.Ed.2d 435 (1981), a predecessor case to Rancho Palos Verdes and Fitzgerald, Defendant maintains that remedies under § 1983 are not available when a statute enacts "a comprehensive enforcement scheme." Dkt. No. [6-1] at 15. In contrast, Plaintiffs contend that under Rancho Palos Verdes, Congress precludes § 1983 relief only when it enacts a statute with remedies "more restrictive" than those available under § 1983 regardless of whether the statute includes a "comprehensive enforcement scheme." Dkt. No. [7] at 6–7.
Defendant also points to the Court to several cases regarding the interaction between § 6103(a) and the Privacy Act, 5 U.S.C. § 552a. See Dkt. No. [13] at 5–9. These cases are inapplicable to the issue before the Court because they address whether § 6103(a) preempts the more general remedies found in the Privacy Act. They do not concern whether § 6103 and § 7431 preclude § 1983 relief. See, e.g., Hobbs v. U.S. ex rel. Russell, 209 F.3d 408 (5th Cir. 2000) ("It is fair to say, then, that § 6103 is a more detailed statute that should preempt the more general remedies of the Privacy Act, at least where, as here, those remedies are in conflict.").
Both parties construe too narrowly the Supreme Court precedent upon which they rely. Contrary to Defendant's assertion, the presence of a comprehensive enforcement scheme is not dispositive. See Dkt. No. [6-1] at 15; see also Rancho Palos Verdes, 544 U.S. at 122, 125 S.Ct. 1453 (rejecting the argument that the availability of a private judicial remedy conclusively establishes congressional intent to preclude § 1983 relief). Instead and as set out above, the presence of a comprehensive enforcement scheme creates only an inference that Congress did not intend for § 1983 relief to be available. See id. The Court is therefore unpersuaded by Defendant's narrow construction of Sea Clammers and will consider the inclusion of a comprehensive remedial scheme as solely—albeit a weighty—indication of Congress's intent.
Likewise, the Court is also unpersuaded by Plaintiffs’ contention that Rancho Palos Verdes and Fitzgerald hold that Congress precludes § 1983 relief only when a statute's remedies are "more restrictive" or "conflict" with those provided by § 1983. Dkt. No. [7] at 7. To be sure, the Supreme Court explained in Rancho Palos Verdes and Fitzgerald that the presence of "more restrictive remedies" was a deciding factor to deny § 1983 relief. Id. at 121, 125 S.Ct. 1453. But the Supreme Court did not conclusively hold in either case that § 1983 relief is precluded only when a statute at issue contains more restrictive remedies. 544 U.S. at 121–22, 125 S.Ct. 1453. Rather, the Supreme Court stressed that the inclusion of more restrictive remedies indicates Congress's intent for a statute's remedial scheme to be the sole avenue for relief. See id. Thus, and like the inclusion of a comprehensive enforcement scheme, the presence of more restrictive remedies is but a factor used to ascertain Congress's intent. See id. The Court will therefore not treat this factor as decisive as Plaintiffs suggest the Court should.
B. Application of Rancho Palos Verdes and Fitzgerald
Under the framework described above, the Court assesses the remedies provided by § 6103(a) and § 7431 to determine Congress's intent. Section 6103(a) provides that federal tax "[r]eturns and return information shall be confidential" and imposes this confidentiality obligation on, among other persons, officers and employees of States who receive access to returns or return information. 26 U.S.C. § 6103(a), (a)(2). Section 7431 creates a private judicial remedy for violations of § 6103(a), including a statutory scheme for damages. 26 U.S.C. § 7431. In sum, § 7431 provides that a defendant may be liable to a plaintiff for $1,000 for each unauthorized disclosure, or the actual damages sustained by the plaintiff, whichever is greater. Id. § 7431(c). A defendant may also be liable for attorney's fees and costs. Id. § 7431(c)(2), (3). In the case of a willful disclosure or a disclosure which is the result of gross negligence, a defendant may be liable for punitive damages. Id. § 7431(c)(1)(B)(ii). Section 7431(b) also provides for a good faith exception. Id. § 7431(b) ("No liability shall arise under this section with respect to any inspection or disclosure ... which results from a good faith, but erroneous, interpretation of section 6103.").
Given these provisions, the Court finds that § 7431 creates a comprehensive remedial scheme for violations of § 6103(a). See Morris-Hayes, 423 F.3d at 161 (holding that the statute at issue included a comprehensive remedial scheme because it provided for, among other things, compensatory damages in the form of lost wages, liquidated damages, and injunctive relief). Section 7431 sets forth a detailed scheme for damages, costs, and attorney's fees, see 26 U.S.C. § 7431(c), and includes a good faith defense for the disclosure of return information, see id. § 7431(b). Thus, and unlike the statutory scheme in Fitzgerald, § 7431 provides a remedial scheme "carefully tailored" to rectify a violation of § 6103(a). 555 U.S. at 255, 129 S.Ct. 788.
Moreover, the Court finds no indication to rebut the "ordinary inference" that Congress intended for § 7431 to supplant § 1983. See Rancho Palos Verdes, 544 U.S. at 122, 125 S.Ct. 1453. Plaintiffs argue that Congress intended for both § 7431 and § 1983 ’s remedies be available because § 7431 ’s remedies are identical to those provided by § 1983 and are thus "complementary." Dkt. No. [7] at 6–9. But the extensiveness of § 7431 ’s remedial scheme belies Plaintiffs’ assertion. By enacting § 7431, Congress created an elaborate, deliberate scheme that provides a plaintiff with damages, attorney's fees, and costs if his or her confidential return information is improperly disclosed. See 26 U.S.C. § 7431(c). It is inapposite that Congress would enact such a comprehensive remedial scheme only to allow a plaintiff to sidestep it through § 1983. See Smith v. Robinson, 468 U.S. 992, 1012, 104 S.Ct. 3457, 82 L.Ed.2d 746 (1984) (denying § 1983 relief because it would allow a plaintiff to evade a statutes’ provisions in a "way that would have been inconsistent with Congress's carefully tailored scheme."). Because Plaintiffs have failed to point the Court to "any indication, express or implicit, that [ § 7431 ] is to complement, rather than supplant, § 1983," the Court therefore finds that Plaintiffs cannot use § 1983 as an avenue to assert a § 6103(a) claim. For this reason, the Court dismisses Count III of Plaintiffs’ Complaint. Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ("[A] complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face." (quotation marks omitted)).
Plaintiffs have moved to file a surreply in response to Defendant's Reply. Dkt. No. [17]. Plaintiffs seek to address further similarities between the remedies afforded by § 7431 and § 1983. See Dkt. No. [17-1]. Plaintiffs’ Motion for Leave to File Surreply [17] is GRANTED , as the Court has considered Plaintiffs’ Surreply and found that it does not change the outcome of this matter.
IV. CONCLUSION
In light of the foregoing, Defendant's Motion to Dismiss [6] is GRANTED . The Court DISMISSES Count II, Count III, Count IV, Count V, and Count VI of Plaintiffs’ Complaint [1]. Plaintiffs Motion for Leave to File Surreply [17] is GRANTED .
IT IS SO ORDERED this 31st day of January, 2020.