Opinion
Case No. 2:03-cv-1133.
May 17, 2004
OPINION AND ORDER
On November 7, 2003, Kevin C. Hart filed a petition for "extraordinary writs of habeas corpus, prohibition, sui juris and mandamus" in the Ohio Supreme Court against the United States and Elizabeth Lan. On December 5, 2003, Respondents removed the action to this Court pursuant to 28 U.S.C. § 1441 and 1442. Also on December 5, 2003, Respondents filed a motion to transfer venue pursuant to 28 U.S.C. § 1404 and a motion for an extension of time to file an answer. On December 22, 2003, Mr. Hart filed a response in opposition to the notice of removal, which the Court will construe as a motion to remand On January 6, 2004, Respondents filed a response to Mr. Hart's motion to remand On January 9, 2004, Respondents filed a motion to dismiss. For the following reasons, Respondents' motion to change venue will be denied. Respondents' motion to dismiss will be granted. Respondents' motion for an extension of time will be denied as moot.
I.
The following statement of facts is taken from Mr. Hart's petition and Respondents' notice of removal. On January 24, 2002, Mr. Hart filed an action against the United States in the United States District Court for the Northern District of Ohio. See Hart v. United States, Case No. 1:02-cv-147 (N.D. Ohio 2002). Mr. Hart sought the district court's appellate review of the Internal Revenue Service (the "IRS") appeals officer's determination that the IRS may collect unpaid taxes from Mr. Hart. In the court proceeding, the United States was represented by Ms. Lan, an attorney with the tax division of the United States Department of Justice located in Washington, D.C. The Honorable Patricia J. Gaughan presided over the action and affirmed the appeals officer's determination. On September 5, 2003, Judge Gaughan entered judgment dismissing the action. It does not appear that Mr. Hart appealed the decision to the Sixth Circuit Court of Appeals. See Respondents' Motion To Dismiss, Docket Sheet for Hart v. United States, Case No. 1:02-cv-147 (N.D. Ohio 2002).
On November 7, 2003, Mr. Hart filed a petition for "extraordinary writs of habeas corpus, prohibition, sui juris and mandamus" in the Ohio Supreme Court against the United States and Ms. Lan. Mr. Hart makes a number of claims including the allegation that Ms. Lan and Judge Gaughan committed "state crimes" against him. Mr. Hart makes this claim based on a telephone conference call made by Ms. Lan and Judge Gaughan to him on May 16, 2003. Mr. Hart also contends that the administrative review of the appeals officer's decision should have been "judicial review with a full right to a jury trial." Notice of Removal, Petition at 2. Mr. Hart claims that he is under attack by Department of Justice attorneys and the IRS.
In sum, Mr. Hart appears to seek relief from Judge Gaughan's Order affirming the appeals officer's determination. He also challenges the assessment of a tax penalty by the IRS. He asserts that as a result of the hearing before the IRS, he has been denied property, privacy, and due process rights. It is on the basis of these facts that the pending motions will be decided.
II. A. Opposition To Removal
On December 22, 2003, Mr. Hart filed a response in opposition to the notice of removal, which the Court construes as a motion to remand Mr. Hart asserts that the action is not properly before this Court for a number of reasons including that he does not live in the Southern District of Ohio and that Ms. Lan and Judge Gaughan committed state crimes against him during a conference call. See Opposition To Notice Of Removal at ¶¶ 1, 2, 5. The Court construes these assertions as a claim that: (1) the action was not removed to the proper district court, and (2) that the Court does not have subject matter jurisdiction over Mr. Hart's claims. The Court will address each claim in turn.
The action was removed pursuant to 28 U.S.C. § 1441 and 1442. Section § 1441(b) allows removal of cases over which the district court has original jurisdiction because the case arises under federal law or under the Constitution of the United States. Section § 1442(a) allows removal of an action against the United States or an officer of the United States. Both §§ 1441 and 1442 provide that an action may be removed to the district court of the United States for the district and division embracing the place where such action is pending.
At the outset, the Court notes that the fact that Mr. Hart does not live within the jurisdiction of the Southern District of Ohio is not relevant to the determination of whether the action was properly removed. See 28 U.S.C. § 1441, 1442. The record reveals that this action was removed by the United States from the Ohio Supreme Court which is located in Columbus, Ohio to this Court which is also located in Columbus, Ohio. See Notice of Removal. Therefore, the action was removed to the district court and division embracing the state court where it was pending, as the statutes require.
Further, such removal was timely. Pursuant to 28 U.S.C. § 1446(b), a notice of removal is to be filed "within thirty days after the receipt by defendant, through service or otherwise, of a copy of the initial pleading." The United States received a copy of the initial pleading on November 12, 2003. See Notice Of Removal. The notice of removal was filed on December 5, 2003, which is within the requisite thirty days.
The Court now turns to the question of whether it has subject matter jurisdiction over Mr. Hart's claims. Mr. Hart claims that the action is not properly before this Court because Ms. Lan and Judge Gaughan committed state crimes against him during a conference call.
Federal courts are not courts of general jurisdiction and are bound by the power authorized by Article III of the Constitution and the statutes enacted by Congress. See Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541 (1986). The two bases for asserting removal jurisdiction are diversity jurisdiction or federal question jurisdiction. The party seeking removal bears the burden of proving by a preponderance of the evidence that the jurisdictional requirements are met. See Gafford v. General Electric Co., 997 F.2d 150, 158 (6th Cir. 1993). Federal courts are to strictly construe removal in favor of state court jurisdiction. See Shamrock Oil Gas v. Sheets, 313 U.S. 100 (1941); Her Majesty The Queen v. City of Detroit, 874 F.2d 332, 339 (6th Cir. 1989).
Although 28 U.S.C. § 1442(a) permits the United States or officer of the United States to remove an action, the statute "cannot independently support Art. III `arising under' jurisdiction." Mesa v. California, 489 U.S. 121, 136 (1989). In the event that the complaint does not present a federal question or diversity jurisdiction, the removing party must present a colorable federal defense. See id. at 129.
In the instant action, the Court concludes it has subject matter jurisdiction over Mr. Hart's claims. First, Mr. Hart has asserted federal questions. For example, Mr. Hart claims that the action in the Northern District resulted in a violation of his right to a jury trial as guaranteed by the Seventh Amendment to the United States Constitution. See Notice Of Removal, Petition at 2. He also claims that he has been denied due process as guaranteed by the Fifth Amendment to the United States Constitution. See id. at 4. Second, the United States has asserted a claim of sovereign immunity as a colorable federal defense. See Holton v. Blue Cross and Blue Shield of South Carolina, 56 F. Supp.2d 1347, 1352 (M.D. Ala. 1999) (finding the defense of sovereign immunity to be a colorable federal defense). Consequently, the Court concludes that the action was properly removed.
B. Motion To Dismiss For Lack Of Personal Jurisdiction
On January 9, 2004, Respondents filed a motion to dismiss, in part claiming that the Court lacks personal jurisdiction over Ms. Lan. Mr. Hart does not appear to dispute that Ms. Lan is a citizen of Washington, D.C., nor do his filings provide any basis for concluding that the Court has general personal jurisdiction over Ms. Lan. See Conti v. Pneumatic Products Corp., 977 F.2d 978, 981 (6th Cir. 1992) (explaining that the "exercise of general jurisdiction requires the defendant's contacts with the forum state [to be] of such a continuous and systematic nature that the state may exercise personal jurisdiction over the defendant even if the action is unrelated to the defendant's contacts with the state." (internal quotation omitted)). Thus, the Court now turns to the question of whether it has specific personal jurisdiction over Ms. Lan.
In order to subject a defendant to the in personam jurisdiction of this Court, the Court must find that the Ohio long arm statute, R.C. § 2307.382, permits the exercise of jurisdiction and that the Court's assertion of jurisdiction is within the limits dictated by due process. See National Can Corp. v. K Beverage Co., 674 F.2d 1134 (6th Cir. 1982); Poyner v. Erma Werke GMBH, 618 F.2d 1186, 1187 (6th Cir. 1980. Since plaintiff is asserting the existence of jurisdiction, the burden of proof rests upon plaintiff to establish the existence of any minimum contacts between defendants and the forum State of Ohio.See KVOS, Inc. v. Associated Press, 299 U.S. 269, 278 (1936);Welsh v. Gibbs, 631 F.2d 436, 438 (6th Cir. 1980). However, because the issue of jurisdiction is being determined solely on the basis of briefs and affidavits, plaintiff is required only to make a prima facie showing of jurisdiction, and the Court must consider the pleadings and affidavits in the light most favorable to plaintiff. See Welsh v. Gibbs, 631 F.2d at 438-39. If the Court concludes that the written materials raise issues of disputed facts or credibility, it may conduct an evidentiary hearing, in which case the plaintiff must show by a preponderance of the evidence that jurisdiction exists. See Data Disc, Inc. v. Systems Technology Associates, Inc., 557 F.2d 1280, 1285 (9th Cir. 1977). The only matters considered by the Court in the case at bar were the written materials submitted by the parties. Therefore, the Court must consider the pleadings and affidavits in a light most favorable to the plaintiff.
The law of the forum state determines whether personal jurisdiction exists over a defendant. The Ohio long-arm statute is not as expansive as the constitutional limits of due process.See Calphalon Corp. v. Rowlette, 228 F.3d 718, 720 (6th Cir. 2000). Nevertheless, the Court must still examine the facts to determine if the exercise of jurisdiction is consistent with traditional notions of fair play and substantial justice. See id.; see also Bird v. Parsons, 289 F.3d 865, 871 (6th Cir. 2002). Thus, this Court will conduct a traditional due process analysis.
The due process clause "does not contemplate that a state may make binding a judgment in personam against an individual or corporate defendant with which the state has no contacts, ties, or relations." Worldwide Volkswagen Corp. v. Woodson, 444 U.S. 286, 194 (1980) (citing International Shoe Co. v. Washington, 326 U.S. 310, 319 (1945)). The minimum contacts necessary to establish jurisdiction in the forum state must be ". . . such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe, 326 U.S. at 316. The minimum contacts test may be satisfied by doing acts in the state that bring about a substantial connection with a state, or cause a known or expected consequence in the state. See McGee v. International Life Ins. Co., 355 U.S. 220, 223 (1957). "The two related functions of the minimum contacts requirement are that it protects a defendant from the burden of litigating in an inconvenient forum and prevents the states from reaching out, through their courts, `beyond the limits imposed on them by their status as coequal sovereigns in a federal system.'" American Greetings Corp. v. Cohn, 839 F.2d 1164, 1169 (6th Cir. 1988).
The Sixth Circuit has developed a three-part test for determining whether the particular circumstances in any case provide sufficient contact between a non-resident defendant and the forum state to support the exercise of personal jurisdiction:
First, the defendant must purposefully avail himself of the privilege of acting in the forum state or causing a consequence in the forum state. Second, the cause of action must arise from the defendant's activities there. Finally, the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable.Southern Machine Co. v. Mohasco Industries, Inc., 401 F.2d 374, 381 (6th Cir. 1968). If the above criteria are satisfied, jurisdiction is appropriate if the facts of the particular case are such that "maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'"International Shoe, 326 U.S. at 316. While this test established a useful analytical framework, each case must be determined on its particular facts. See Velandra v. Regie Nationale des Usines Renault, 336 F.2d 292, 295 (6th Cir. 1964).
The first step of the three part analysis enunciated inSouthern Machine requires an inquiry into whether a defendant has acted or caused consequences within the forum state. This step requires that the defendant "purposefully avail itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253 (1958). In most cases, it is a common sense inquiry as to "whether the defendant has transacted business within the forum state in the usual, commercial sense of `doing business.'" American Greetings Corp. v. Cohn, 839 F.2d 1164, 1169 (6th Cir. 1988). This provision is designed to ensure that a plaintiff's unilateral activity will not "drag an unsuspecting and unwilling defendant into a foreign forum."In-Flight Devices Corp. v. Van Dusen Air, Inc., 466 F.2d 220, 226 (6th Cir. 1972). It is a "baseline" requirement that the defendant has become involved with the forum state through actions freely and intentionally done, which have effects in the forum state. Id. at 228.
The second part of the Southern Machine test requires an analysis of whether the plaintiff's cause of action arises out of or is related to the defendant's contacts with the forum state. The third part of the Southern Machine test requires inquiry into whether a defendant's conduct establishes a ". . . substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable."Southern Machine, 401 F.2d at 381. This analysis requires a determination whether the Court's exercise of jurisdiction would offend "traditional notions of fair play and substantial justice," International Shoe, 326 U.S. at 316, and whether the defendant's conduct relating to the forum was such that he should reasonably anticipate being haled into court here. See Worldwide Volkswagen, 444 U.S. at 197. In reaching the decision on fair play and substantial justice, the court must consider such factors as the burden on the defendant, the interest of the forum state, the plaintiff's interest in obtaining relief, and the interest of other states in securing the most efficient resolutions of controversies. American Greeting Corp., 839 F.2d at 1169-70 (citing Asahi Metal Industry Co., Ltd. v. Superior Court of California, 480 U.S. 102, 113 (1987)). When the first two elements of the Southern Machine test have been met, an inference arises that the third is also present. See First National Bank of Louisville v. J.W. Brewer Tire Co., 680 F.2d 1123, 1126 (6th Cir. 1982).
The Court will first determine whether Ohio's long arm statute confers jurisdiction over Ms. Lan and then whether exercise of personal jurisdiction over Ms. Lan comports with due process requirements. Ohio's long arm statute, R.C. § 2307.382, permits a court to "exercise personal jurisdiction over a person who acts directly or by an agent, as to a cause of action arising from the person's: (1) Transacting any business in this state. . . ." R.C. § 2307.382(A)(1). In Ucker v. Taylor, 72 Ohio App.3d 777 (Franklin Co. 1991), an attorney who lived and practiced law in Michigan traveled to Ohio to take a deposition of an expert witness. The expert later filed an action against the attorney in an Ohio court for the payment of fees for his expert services. The court held that the long arm statute conferred jurisdiction over the attorney because "[e]ngaging in the practice of law in this state falls within the plain and common meaning of the phrase `transacting any business' as employed in R.C. § 2307.382(A)(1)." Id. at 780.
Likewise, the Court concludes that Ms. Lan practiced law in Ohio and thus transacted business within the meaning of the long arm statute. Ms. Lan represented the United States during the pendency of Mr. Hart's action in the Northern District of Ohio. Thus, the Court presumes that Ms. Lan, like the attorney inUcker, had some contact with Ohio. The Court now turns to the question of whether Ms. Lan's contacts with Ohio are sufficient to support the Court's exercise of personal jurisdiction consistent with due process requirements.
Regarding the first step of the Southern Machine analysis, as was stated above, it is a "baseline" requirement that the defendant has become involved with the forum state through actions freely and intentionally done, which have effects in the forum state. See In-Flight Devices Corp., 466 F.2d at 228. In the instant action, Ms. Lan did not freely choose to transact business in Ohio. Rather, Mr. Hart brought suit against the United States in the Northern District of Ohio and Ms. Lan was assigned the responsibility of representing the United States in the action.
Further, in Porter v. Berall, 142 F. Supp.2d 1145 (W.D. Mo. 2001), the court concluded that "providing out-of-state legal representation is not enough to subject an out-of-state lawyer or law firm to the personal jurisdiction of the state in which a client resides." Id. at 1147. For example, in Austad Co. v. Pennie Edmonds, 823 F.2d 223 (8th Cir. 1987), the Court concluded that the lower court did not have personal jurisdiction over the out-of-state attorneys or their law firm in part because the law firm did not maintain offices in the forum state, the attorneys did not live in the forum state, and the firm had never solicited business in the forum state. See id. at 226-27. In the instant action, Ms. Lan and the Department of Justice maintain offices in Washington, D.C. and did not solicit business in Ohio. Ms. Lan's presence in Ohio was simply the result of Mr. Hart's having filed an action against the United States in the Northern District. Consequently, for want of additional facts to establish the extent of Ms. Lan's contact with or presence in Ohio, the Court cannot conclude that she had sufficient minimum contacts with Ohio to justify this Court's exercise of personal jurisdiction over her. Because the first step of the Southern Machine analysis is not met, the Court need not reach the second or third steps. Thus, the Court concludes that exercise of personal jurisdiction over Ms. Lan does not satisfy due process requirements. Respondents' motion to dismiss the claims against Ms. Lan for lack of personal jurisdiction will be granted.
C. Motion To Transfer Venue
On December 5, 2003, Respondents filed a motion to transfer venue pursuant to 28 U.S.C. § 1404 to the United States District Court for the Northern District of Ohio. Section 1404(a) permits transfer of venue from one district court to another where venue is proper in each. The Court will first consider whether venue is proper in this Court.
As was stated above, the action was removed pursuant to 28 U.S.C. § 1441(b) and 1442(a). Typically, proper venue is determined by the venue statute, 28 U.S.C. § 1391. However, in determining the proper venue of a removed action, "§ 1391 has no application." Polizzi v. Cowles Magazines, 345 U.S. 663, 665 (1953). The venue of removed cases is governed by the removal statute. See id.; Kerobo v. Southwestern Clean Fuels, Corp., 285 F.3d 531, 534 (6th Cir. 2002). Both § 1441(a) and § 1442(a) provide that the proper venue of a removed action is the district court of the United States for the district and division embracing the place where such action is pending.
As was explained above, this action was removed by the United States from the Ohio Supreme Court which is located in Columbus, Ohio to this Court which is also located in Columbus, Ohio. Therefore, the action was removed to the district court and division embracing the state court where it was pending. Thus, venue is proper in this Court.
The next issue is whether venue is proper in the United States District Court for the Northern District of Ohio. The venue statute, 28 U.S.C. § 1391, permits an action in which an officer of the United States or the United States is a defendant to be "brought in any judicial district in which . . . a substantial part of the events or omissions giving rise to the claim occurred [or] . . . the plaintiff resides." 28 U.S.C. § 1391(e)(2), (3).
The Court concludes that venue is proper in the Northern District because the events that gave rise to Mr. Hart's petition occurred in the Northern District during the pendency of his case there. Further, Mr. Hart resides in the Northern District in North Olmstead, Ohio in Cuyahoga County.
The Court now turns to the question of whether it is in the interest of justice to transfer the action to the Northern District of Ohio. See 28 U.S.C. § 1404(a). As will be explained in Part D below, justice would not be served by a transfer of this action because the United States may not, by virtue of its sovereign immunity, be sued for the claims raised in Mr. Hart's petition. Therefore, Respondents' motion to transfer venue will be denied.
D. Motion To Dismiss Claims Against the United States
On January 9, 2004, Respondents filed a motion to dismiss Mr. Hart's petition, in part claiming that Mr. Hart's claims against the United States are barred by the doctrine of sovereign immunity. The United States is immune from suit unless it consents to be sued. See United States v. Sherwood, 312 U.S. 584, 586 (1941). If the United States has consented to be sued, the terms of its consent define the court's jurisdiction to hear the suit. See id.
Mr. Hart seeks relief from Judge Gaughan's Order affirming the appeals officer's determination that the IRS may collect unpaid taxes from Mr. Hart. He also challenges the assessment of a tax penalty by the IRS. Thus, the Court must determine whether the United States has waived its immunity for these claims.
The Court concludes that the United States has waived its immunity for suits against the United States for improper collection of taxes. See 26 U.S.C. § 7433. But, this waiver is limited to a challenge of improper collection procedures. See Shaw v. United States, 20 F.3d 182, 184 (5th Cir. 1994). This waiver does not extend to a challenge of tax liability, see id., like Mr. Hart raises in his petition. Thus, the Court concludes that the United States has not waived its sovereign immunity for Mr. Hart's claims. Therefore, Respondents' motion to dismiss the claims against the United States will be granted.
The Court notes that Mr. Hart properly challenged the assessment of tax liability when he filed the action in the Northern District challenging the appeals officer's determination. See 26 U.S.C. § 6330(d)(1). The proper way in which to challenge the district court's affirmation of the appeals officer's determination is by way of an appeal to the Sixth Circuit Court of Appeals, not through the filing of the instant petition.
III.
Based on the foregoing, Respondents' motion to dismiss (file doc. #8) is GRANTED. Respondents' motion to transfer venue (file doc. #2) is DENIED. Respondents' motion for an extension of time to file an answer (file doc. #3) is DENIED AS MOOT. This case is TERMINATED.