Opinion
No. 3:01-170-CIV-J-21-TEM
February 15, 2002
ORDER
This cause comes before the Court on Defendant's Motion to Dismiss (Dkt. 6) to which Plaintiffs have not filed a formal response.
Defendant's Motion to Dismiss was filed April 20, 2001. Pursuant to Rule 3.01(b), Local Rule, Middle District of Florida, Plaintiffs' response thereto was due to be filed ten days after Plaintiffs were served with said motion. Subsequently, on October 31, 2001, and again on January 7, 2002, Defendant has filed its Notices (Dkts. 7 8) to the Court, informing the Court of this pending dispositive motion. The first Notice (Dkt. 7) also tendered supplemental authority in support of Defendant's motion. After the filing of Defendant's second Notice (Dkt. 8), the Plaintiffs filed a Response (Dkt. 9) thereto, wherein Plaintiffs (i) argue the inapplicability of the supplemental authority referenced in Defendant's first Notice; (ii) ask the Court to take judicial notice of a ruling made by the Judge of this Court presiding over Plaintiffs' criminal trial; and (iii) grant additional declaratory relief, to wit: (a) declaring correct the above referenced ruling of the Judge presiding over the criminal case; (b) declaring incorrect Defendant's legal authority relied on in support of its Motion to Dismiss; (c) declaring unconstitutional the Declaratory Judgment Act, 28 U.S.C. § 2201 et seq; (d) declaring Plaintiffs are not liable to pay the federal revenue tax which is the basis for the criminal case. The Court will consider Plaintiffs' Response (Dkt. 9) — however untimely — as a response to Defendant's Motion. The Court will not construe Plaintiffs' Response as a motion to amend their complaint, not because of the improper fashion in which it has been presented to the Court, but rather because the seemingly additional declaratory relief requested therein is, in fact, the same basic relief as that requested in Plaintiffs' Complaint or is merely argument in opposition to Defendant's Motion to Dismiss.
I. Motion to Dismiss Standard
It is well established that "a motion to dismiss for failure to state a claim should not be granted unless it appears to a certainty that the plaintiff would not be entitled to recover under any state of facts which could be proved in support of his claim." Cook Nichol, Inc. v. Plimsoll Club, 451 F.2d 505, 506 (5th Cir. 1971); accord Conley v. Gibson, 355 U.S. 41, 47-48 (1957). In evaluating the sufficiency of a complaint for purposes of a motion to dismiss, the factual allegations of the complaint must be accepted as true, Hishon v. King Spalding, 467 U.S. 69 (1984), and viewed in a light most favorable to the plaintiff. Scheuer v. Rhodes, 416 U.S. 232 (1974). of course, the Court is not required to accept as true allegations which state conclusions of law. Solis-Ramirez v. United States, 758 F.2d 1426, 1429 (11th Cir. 1985).II. Factual and Procedural Background
Plaintiffs are two of multiple individuals currently being criminally prosecuted in this Court for conspiracy to defraud the United States, tax evasion, witness tampering, and other charges. See United States v. Donald C. Fleming, Joyce L. Fleming, etc., Case No. 3:00cr262-20-J-HTS. This case is the third in the trilogy of civil suits that these two Plaintiffs have commenced at various times during investigation into their activities, their indictments, and/or their ongoing prosecution. See Donald C. Fleming and Joyce L. Fleming v. USA Case No. 3:96cv279-J-21-HTS; Donald C. Fleming and Joyce L. Fleming v. A. William Mackie, etc., Case No. 3:98cv459-J-21-HTS. Both of those prior suits are currently administratively stayed.In the present case, the Plaintiffs seek a judgment declaring void certain contracts entered into between Plaintiffs and the United States government. In their Complaint, Plaintiffs assert three counts: Count I, entitled "Void Contract"; Count II, entitled "Slavery and Involuntary Servitude in Application of the Collective Entity Rule"; and Count III, entitled "Fraud in the Application of the Collective Entity Rule."
The contracts which Plaintiffs seek to avoid are those allegedly entered into and/or created when Plaintiffs applied for their Social Security cards/numbers and/or when Plaintiffs filed various tax returns over the years. The asserted grounds for the unenforceability of these contracts are as follows: that they are void because they were entered into when the Plaintiffs were minors (Count I); that they are void because they create a condition of involuntary servitude in violation of the Thirteenth Amendment to the U.S. Constitution; and that they are fraudulent because of "[t]he withholding of definitions [of particular terms]" from the Plaintiffs and because the contracts violate the Supreme Court's Collective Entity Rule. More simply stated, as Plaintiffs themselves have put it, they
The "collective entity rule" provides that a personal privilege against self-incrimination cannot provide a basis for refusing to produce corporate or partnership records. See, e.g., In Re Grand Jury Subpoena c/d 91R0052-011, 142 F.R.D. 122, 124 (M.D.N.C. 1992)(citing, inter alia, United States v. Braswell, 487 U.S. 99 (1988)). It is not clear what application this rule has to the instant civil suit.
have been studying the voluntary nature of the Social Security, Federal Income Tax and Internal Revenue Code and they have reached the conclusion that they no longer choose to voluntarily participate in any government programs.
(Dkt. 1 at ¶ 7). In the portion of their Complaint entitled "Remedy," Plaintiffs demand that this court enters a declaratory judgment in his and her favor and against the Federal Government declaring each and every contract between the Plaintiffs and the Federal Government is voided.
(Id. at unnumbered p. 4).
Defendant's Motion to Dismiss seeks to dismiss the Plaintiffs' Complaint based on (i) insufficient service and service of process; (ii) sovereign immunity of the U.S. government; (iii) failure to state a claim because the Declaratory Judgment Act expressly excludes this type of Federal tax case; and (iv) the Anti-Injunction Act prohibits the injunctive relief that Defendant infers Plaintiffs' Complaint to seek.
IV. Discussion
It is clear, as Defendants have argued, that the Declaratory Judgment Act, 28 U.S.C. § 2201-2202, expressly excludes matters "with respect to Federal taxes other than actions brought under section 7428 of the Internal Revenue Code." See 28 U.S.C. § 2201. Further, even assuming that Plaintiffs' claims are properly brought as a federal question under 28 U.S.C. § 1331, or otherwise, Plaintiffs have not shown that the United States has waived its sovereign immunity in this regard, a necessary prerequisite to this Court's exercise of subject matter jurisdiction over any suit against the United States. See United States v. Dalm, 494 U.S. 596, 608 (1990).
That section relates to declaratory judgments of 501(c)(3) charitable corporations and other entities not applicable to the instant case. See 26 U.S.C. § 7428.
Therefore, on the basis of the arguments presented by the Defendant in its Motion (Dkt. 6), including, inter alia, the case of Fogel v. United States, Case No. 00-CV-2293-J (LSP), 2001 WL 306496 at *1-2 (S.D. Cal. Feb. 6, 2001), and the authority cited therein, it appears to a certainty that the Plaintiffs would not be entitled to recover under any state of facts which could be proved in support of their claims. Accordingly, Defendant's Motion to Dismiss is due to be granted. See Cook, 451 F.2d at 506; accord Conley, 355 U.S. at 47-48.
Because the Court has determined this case is due to be dismissed based on the issues of the sovereign immunity and the unavailability of the requested relief under the Declaratory Judgment Act, the Court need not consider Defendant's other arguments regarding service of process and the Anti-Injunction Act.
V. Leave to Amend
Having dismissed all of Plaintiffs' claims in their Complaint, there remains the issue of whether to allow Plaintiffs leave to amend those claims — that is, whether the dismissal should be with or without prejudice. Circuit precedent requires that "[w]here a more carefully drafted complaint might state a claim, a plaintiff must be given at least one chance to amend the complaint before the district court dismisses the action with prejudice." Bank v. Pitt, 928 F.2d 1108, 1112 (11th Cir. 1991). The Eleventh Circuit has stated only two exceptions to this rule: (i) where the plaintiff has indicated that he does not wish to amend his complaint; and (ii) where a more carefully drafted complaint could not state a claim under the Conley standard. Id.In this case, Plaintiffs have not stated whether they wish leave to amend. The Court will presume that Plaintiffs impliedly seek such leave. However, as to the second exception stated in Pitt, the Court concludes that Plaintiffs would not be able to amend the dismissed claims so as to state any claim against Defendant. The dismissal of the above set-forth claims of the Complaint, therefore, will be with prejudice.
Upon consideration of the foregoing, it is hereby ORDERED:
1. Defendant's Motion To Dismiss (Dkt. 6) is GRANTED. Plaintiffs' Complaint (Dkt. 1) is dismissed with prejudice.
2. The Clerk is DIRECTED to enter judgment in favor of Defendant.
3. Pursuant to Rule 11(c)(1)(B), Federal Rules of Civil Procedure, the Court, sua sponte, hereby directs Plaintiffs Donald Charles Fleming and Joyce Lana Fleming to show cause: (1) why they have not violated Rule 11(b) by presenting frivolous, harassing, and vexatious claims, through the assertion of claims clearly outside this Court's jurisdiction, seeking relief clearly barred by the Declaratory Judgment Act, and/or presenting claims clearly barred by sovereign immunity; and (2) why appropriate sanctions against them under Rule 11 (c)(2) should not be imposed therefore. Such cause, if any, shall be shown by the said Plaintiffs in writing filed herein on or before March 5, 2002. Defendant United States may file a response thereto on or before March 19, 2002. The Court retains jurisdiction of this case for the purposes of disposing of this Rule 11 proceeding.
DONE AND ORDERED, at Jacksonville, Florida.