Opinion
Civil Case No. 03-40183.
May 10, 2004
ORDER OF DISMISSAL
There are three motions and a show cause order pending in this case. This order will resolve all the pending matters.
Joseph Howell, plaintiff, owes some $20,648.10 in unpaid taxes and interest to the Internal Revenue Service ("IRS"), and the IRS has issued a levy on Mr. Howell's wages. Mr. Howell's employer, Wayne County Airport Authority ("WCAA"), defendant, has honored this levy. On July 23, 2003, Mr. Howell, who is proceeding pro se, initiated this civil action against WCAA for honoring the IRS levy. In addition to answering the complaint, WCAA filed a third-party complaint against the IRS on August 19, 2003. WCAA's third-party complaint requests a judgment against the IRS for all sums that may be adjudged against WCAA as the result of this action. On October 9, 2003, the IRS filed a motion to dismiss WCAA's third-party complaint. See Fed.R.Civ.P. 12(b)(1) (6).
Upon review of the IRS's motion and other filings in this action, the Court questioned whether it had subject matter jurisdiction because the allegations in the complaint appeared to be "totally implausible, attenuated, unsubstantial, frivolous, devoid of merit, or no longer open to discussion." Apple v. Glenn, 183 F.3d 477, 479 (6th Cir. 1999); see also Fed.R.Civ.P. 12(b)(1); Fed.R.Civ.P. 12(h)(3). Thus, on October 27, 2003, the Court, sua sponte, ordered Mr. Howell to show cause why this civil action should not be dismissed.
Meanwhile, WCAA appears to have been thinking along the same lines as the Court: WCAA filed a motion to dismiss the complaint for failing to state a claim upon which relief could be granted.See Fed.R.Civ.P. 12(b)(6). This motion was filed in the clerk's office on October 24, 2003. The Court received this motion after it had issued its show cause order. Because the reasoning in the Court's show cause order is so similar to the arguments in WCAA's motion, the Court will dismiss its sua sponte show cause order as moot.
Finally, with his response to WCAA's motion, Mr. Howell filed his own motion, a motion for summary judgment in opposition, on November 7, 2003. His response and his motion are contained within a single document and are indistinguishable from one another.
As argued by the IRS in its motion and by WCAA in its motion, Plaintiff has clearly failed to state a claim upon which relief can be granted. First of all, WCAA has no alternative but to honor the levy: the Internal Revenue Code mandates that "any person in possession of (or obligated with respect to) property or rights to property subject to levy upon which a levy has been made shall, upon demand of the Secretary [of the Treasury], surrender such property or rights . . . to the Secretary." 26 U.S.C. § 6332(a). Further, entities failing to honor a levy are subject to personal liability and penalties under the Internal Revenue Code. See 26 U.S.C. § 6332(d)(1)-(2).
More importantly, the Internal Revenue Code, specifically 26 U.S.C. § 6332(e), shields entities, such as WCAA, from any liability that results from honoring an IRS levy. See 26 U.S.C. § 6332(e); State Bank of Fraser v. United States, 861 F.2d 954, 958 (6th Cir. 1988). Consistent with § 6332(e)'s grant of immunity, 26 U.S.C. § 7421(a) provides that, absent a specified exception, "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed." See 26 U.S.C. § 7421(a). "The purpose of [§ 7421(a)] is to give the [IRS] a free hand in assessing and collecting taxes claimed to be due without intervention on the part of the courts." Queen City Sav. Loan Ass'n v. Sanders, No. C78-800M, 1980 WL 1642, at *2 (W.D. Wash. Aug. 7, 1980) (citing Enochs v. Williams Packing Co., 370 U.S. 1 (1962)).
26 U.S.C. § 6332(e): "Any person in possession of (or obligated with respect to) property or rights to property subject to levy upon which a levy has been made who, upon demand by the Secretary, surrenders such property or rights to property (or discharges such obligation) to the Secretary (or who pays a liability under subsection (d)(1)) shall be discharged from any obligation or liability to the delinquent taxpayer and any other person with respect to such property or rights to property arising from such surrender or payment."
Moreover, if the IRS issued the levy in error, any challenge by Mr. Howell concerning the levy should be brought against the United States and not his employer who has dutifully obeyed the law in honoring the levy. See 26 U.S.C. § 7426(a)(1); State Farm Mut. Auto. Ins. Co. v. Internal Rev. Serv., No. 5:03-CV-1013, 2003 WL 22429275, at *1 (N.D. Ohio Sept. 18, 2003).
Consequently, as the Internal Revenue Code protects WCAA from liability in this situation, Mr. Howell's complaint against WCAA for honoring the IRS levy fails to state a claim upon which relief can be granted, and the Court will dismiss the complaint as well as the corresponding third-party complaint. See Fed.R.Civ.P. 12(b)(6).
ACCORDINGLY, IT IS HEREBY ORDERED that Defendant Wayne County Airport Authority's motion to dismiss [docket entry 18] and Third-Party Defendant's motion to dismiss [docket entry 14] are GRANTED: the complaint and the corresponding third-party complaint are DISMISSED. IT IS FURTHER ORDERED that Plaintiff Joseph Howell's motion for summary judgment in opposition [docket entry 24] is DENIED. IT IS FURTHER ORDERED that the Court's show cause order [docket entry 22] is DISMISSED AS MOOT.