Opinion
No. CS-01-0211-JLQ
November 13, 2002
ORDER DISMISSING CLAIM DENOMINATED AS COUNTERCLAIM
Before the court is a claim denominated as a counterclaim by Respondents Jeffrey Kent Townley and Anne Constance Townley against Nolan Clark, a United States Revenue Officer, in his private capacity. (C.R. 10 at 3). The Townleys are proceeding pro se. The United States of America is represented by W. Carl Hankla, Trial Attorney, Tax Division, United States Department of Justice. Nolan Clark has not been served and has not appeared.
On October 9, 2001, this court entered an Order approving a petition by the United States to levy on the Townleys' principal residence to satisfy all or part of their unpaid tax liabilities pursuant to 26 U.S.C. § 6334(e)(1). (C.R. 19). The Townleys filed a timely Notice of Appeal to the Ninth Circuit Court of Appeals on March 11, 2002. (C.R. 37). Or May 16, 2002, the Townleys filed a motion (C.R. 43) for the entry of a default judgment or their claim against Nolan Clark, which has never been adjudicated. This court subsequently ordered the Townleys to serve and file a memorandum setting forth the basis for the court's jurisdiction over their claim. (C.R. 45 at 3).
In response, the Townleys filed a statement asserting that "Suitors are without standing to show cause regarding an alleged counterclaim, 'Respondents, Townleys, pro se v. USA,' as Suitors are not a party thereto." (C.R. 47 at 1). The Townleys argue that "[i]t appears that the 'court' mistakenly construed Suitors' Entry of Default, specifically and exclusively related to Their Claim against Nolan Clark, in his private capacity . . . as somehow being meant for the alleged counterclaim of 'Respondents v. USA.'" Id. at 2. The Townleys contend that "[t]here is no mention of the United States of America, in whatever capacity, nor of any Revenue Officer of the United States, as being counter defendants [sic] or as having committed any actions complained of, in any capacity." Id. at 6.
If, as the Townleys argue, their claim is against Nolan Clark in his private capacity and not against the United States, their claim is not a counterclaim. A counterclaim is a claim against an opposing party. Black's Law Dictionary 243-44 (6th ed. 1991). Here, the only opposing party is the United States, which originated this action as a petition to levy on the Townleys' residence. (C.R. 1). Nolan Clark is not a party to the government's petition. Accordingly, this action is not a proper case for the filing of a counterclaim against Nolan Clark. To bring in a person not a party to the action, the Townleys must implead the third party. Fed.R.Civ.P. 14 (Third-Party Practice).
Rule 14(a) permits a third-party complaint "upon a person not a party to the action who is or may be liable to [the original defendant] for all or part of the plaintiff's claim." United States v. One 1977 Mercedes Benz, 708 F.2d 444, 452 (9th Cir. 1983). A third-party claim may be asserted only when the third party's liability is in some way dependant on the outcome of the original claim and the third party's liability is secondary or derivative. Id. (citing Baker v. Limber, 647 F.2d 912, 914-15 n. 2 (9th Cir. 1981); House v. Mine Safety Appliances Co., 573 F.2d 609, 622 (9th Cir. 1978)). Thus, impleader is narrow, permitting assertion of derivative liability against third parties, but not assertion of all transactionally related claims. 3 Moore's Federal Practice § 14.04[3][c] (3d ed. 2000). Moreover, Rule 14 does not create any new right of action, nor does it authorize impleader for practices than violate the limits of federal jurisdiction, or infringe upon rights recognized under the governing substantive law. 6 Charles Alan Wright, Arthur R. Miller, Mary Kay Kane Federal Practice and Procedure § 1442 (2d ed. 1990).
In the case sub judice, the Townleys contend that Nolan Clark attempted "to make claims on non-existent, alleged contracts"; threatened to seize their property or the property of others; made slanderous statements and libelous writings to their detriment; and exhibited "other harassing and threatening behavior." (C.R. 10 at 4-5). The Townleys also contend that "Clark's actions appear to have culminated in his preparing a 'Declaration of Nolan Clark' . . . upon which alleged U.S. attorneys have based their petition alleged as cause no CS-010211-JLQ." Id. at 5. The Townleys claim that the Declaration "makes false and erroneous statements, attempts to mislead and misrepresent, . . . and demonstrate[s] an ongoing Trespass on the Case as against Suitors." Id.
The Townleys' claims are related to, but not dependent on, the petition of the United States to levy on the Townleys' residence. As noted supra, however, it is not sufficient than the Townleys' third-party claims are related claims; the claims must be derivatively based on the original claim. United States v. One 1977 Mercedes Benz, 708 F.2d at 452. That is not the case here. To obtain approval of the levy petition, the United States demonstrated that the Townleys' tax liability was owed, that the requirements of applicable law for the levy were met, and that no reasonable alternative for the collection of the Townleys' tax indebtedness existed. (C.R. 1 at 5; C.R. 2 at 4). The liability of Nolan Clark, if any, for allegedly improper collection activities, or for alleged threats, slander, or misrepresentation is neither dependent on, nor derivative of, the disposition of the United States' levy petition. Consequently, the Townleys' third-party claims are improper under Rule 14(a) and must be dismissed.
Under Rule 14(a), a third-party plaintiff must serve a third-party defendant with process. Fed.R.Civ.P. 14(a). Service of process is important in impleader cases because impleader joins a new party to the case, and that erstwhile nonparty must be brought before the jurisdiction of the court. 3 Moore's Federal Practice § 14.22. The court exercises its personal jurisdiction over the third-party defendant through service of process. Id.
The Townleys have not served Nolan Clark with a third-party summons or a copy of the complaint as required under Rule 14(a). Hence, Clark has not been put on notice of the Townleys' claims, and this court has not acquired personal jurisdiction over Clark. Service on the United States was insufficient under the impleader rule because Nolan Clark is not a party to the petition brought by the United States against the Townleys. Thus, there is no third-party defendant before the court.
Apart from the fact that the Townleys' claims against Nolan Clark are procedurally barred, their claims against Nolan Clark in his private capacity also lack any independent basis for federal subject matter jurisdiction. The Federal Tort Claims Act (FTCA) provides that the federal district courts have exclusive jurisdiction of civil actions against the United States for injuries caused by the negligent or wrongful act or omission of any employee of the Government, under circumstances where the United States, if a private person, would be liable to the claimant under the law of the place where the act or omission occurred. 28 U.S.C. § 1346(b)(1). The Townleys' pleadings state claims against neither the United States, nor Nolan Clark in his official capacity. Accordingly, there is no jurisdiction for the Townleys' claims under § 1346(b)(1) of the FTCA.
The FTCA provides that the above remedy against the United States is generally exclusive of any other action against federal employees for damages arising from torts committed while acting within the scope of their employment. 28 U.S.C. § 2679(b)(1). However, there are two exceptions to the rule of exclusivity: government employees may be sued for (A) violations of the Constitution; or (B) violations of a federal statute under which an action against an individual is otherwise authorized. 28 U.S.C. § 2679(b)(2).
The Townleys' characterize their claims as an action for "trespass on the case," the ancestor of the modern tort action. An action for trespass on the case does not state a constitutional claim which could give rise to an action under 28 U.S.C. § 2679(d)(2)(A), or under Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971). Furthermore, the only statutory basis which the Townleys cite for their claims ( see C.R. 10 at 4) is 28 U.S.C. § 3002(15)(A), which does not create jurisdiction for, or a right of action against, any individual. Thus, the Townleys have not demonstrated that jurisdiction for their claims arises under § 2679(b)(2) of the FTCA.
The Internal Revenue Code authorizes certain types of damages actions against the United States for improper conduct by an officer or employee of the United States. Gerald A. Kafka Rita A. Cavanagh, Litigation of Federal Civil Tax Controversies ¶ 20.09 (2002) (1999 WL 629628 at 1) (emphasis added). One provision of the Code authorizes a civil action for damages for certain unauthorized collection activities. Id. (citing 26 U.S.C. § 7433). The provision states:
If, in connection with any collection of Federal tax with respect to a taxpayer, an officer or employee of the Internal Revenue Service recklessly, intentionally, or by reason of negligence, disregards any provision of this title, or any regulation promulgated under this title, such taxpayer may bring a civil action or damages against the United States in a district court of the United States. . . . [S]uch action shall be the exclusive remedy for recovering damages resulting from such actions.26 U.S.C. § 7433(a).
Hence, an action for damages under § 7433 can only be filed in the appropriate United States district court, and only against the United States. Gerald A. Kafka Rita A. Cavanagh, supra at ¶ 20.09[3][b]. Any action filed against the Commissioner of Internal Revenue or other individual service officer or employee must be dismissed for lack of jurisdiction. Id. (citing Person v. Commissioner, 90-2 U.S.T.C. ¶ 50,365 (D. Haw. 1990) (1990 WL 107423); see also Gilbert v. DaGrossa, 756 F.2d 1455, 1459 (9th Cir. 1985)). In addition, since § 7433 provides the exclusive remedy for improper collection activities by an IRS employee, the provision precludes actions premised on the FTCA, under RICO or on a Bivens theory. Kafka Cavanagh, supra, n. 430 (citing Fishburn v. Brown, 125 F.3d 979, 983 (6th Cir. 1997); Miklautsch v. Gibbs, 90-2 U.S.T.C. ¶ 50,587 (D. Alaska 1990) (1990 WL 236045)); Wages v. Internal Revenue Service, 915 F.2d 1230, 1235 (9th Cir. 1990) (holding that remedies provided by Congress foreclose a Bivens action for due process violations).
Accordingly, the Townleys' claims for trespass on the case against Nolan Clark in his private capacity do not arise under the Constitution, laws, or treaties of the United States, and therefore do not implicate federal question jurisdiction under 28 U.S.C. § 1331. Nor do the Townleys suggest that Nolan Clark is a citizen of a state other than Washington, so as to give rise to diversity jurisdiction under 28 U.S.C. § 1332(a). Thus, to the extent that the Townleys' common-law claims are not preempted by federal law, the only possible basis for jurisdiction over those claims would be supplemental jurisdiction under 28 U.S.C. § 1367.
In civil actions in which a federal district court has original jurisdiction over a claim the court also has supplemental jurisdiction over all other claims that are so related to claims in the action within that original jurisdiction that they form part of the same case of controversy under Article III of the United States Constitution. 28 U.S.C. § 1367(a); see also United Mine Workers v. Gibbs, 383 U.S. 715, 725 (1966). This court has original jurisdiction of United States' levy petition under 28 U.S.C. § 1340, 26 U.S.C. § 6334 (e)(1) and 26 U.S.C. § 7402(a). However, the court may decline to exercise jurisdiction over supplemental claims in exceptional circumstances, when there are compelling reasons to do so. 28 U.S.C. § 1367(c)(4).
In the case sub judice, there are compelling reasons to decline jurisdiction over the Townleys' claims against Nolan Clark. The Townleys' claims purport to be against "Nolan Clark d/b/a nul tiel IRS d/b/a United States as an insolvent, bankrupt, federal corporation in evasion of solemn Constitutional obligations." (C.R. 10 at 4). The Townleys assert that "Nolan Clark d/b/a nul tiel IRS d/b/a United States . . . has acted at all times in his private capacity without any Sovereign authority or Sovereign immunity of the United States of America." Id. In effect, the Townleys argue that the United States has no sovereign authority, and that there is no such thing as the Internal Revenue Service, so Nolan Clark must have acted in his private capacity. These arguments are patently frivolous.
The Townleys also complain that the allegedly libelous Declaration of Nolan Clark (C.R. 2) formed the basis for the United States' levy petition herein. (C.R. 10 at 5). However, the Declaration of Nolan Clark is obviously related to Clark's duties as an agent of the Internal Revenue Service. Consequently, this court is exceedingly skeptical that the Townleys' claims may be properly characterized as claims against Clark in his private capacity.
The United States has a compelling interest in a reliable and efficient tax system. If delinquent taxpayers could bring frivolous and dilatory claims against revenue agents it their private capacity merely by denying the authority of the United States or the existence of the Internal Revenue Service, the national system of revenue collection might be impaired. Accordingly, pursuant to 28 U.S.C. § 1367(c)(4), this court declines to exercise supplemental jurisdiction over the Townleys' claims.
The federal courts have a duty to raise any jurisdictional defects not raised by the parties themselves. Louisville Nashville R.R. v. Mottley, 211 U.S. 149, 152 (1908). For that reason, this court ordered the Townleys to show cause as to why their claims should not be dismissed for lack of federal subject matter jurisdiction. (C.R. 45 at 3). Once challenged, the party asserting jurisdiction has the burden of proving its existence. 2 Moore's Federal Practice § 12.30[5] (citing Bally Export Corp. v. Balicar, Ltd., 804 F.2d 398, 401 (7th Cir. 1986)).
The Townleys have failed to set forth any proper jurisdictional basis for their third-party claim. Moreover, the Townleys' claim is procedurally barred. Accordingly, the Townleys' claim herein denominated as a counterclaim is DISMISSED with prejudice The Townleys' Motion for Entry of Default and Judgment on Counterclaim Pursuant to Alleged FRCP 55 (C.R. 43) is DENIED as moot. IT IS SO ORDERED. The Clerk is hereby directed to enter this Order and forward copies to Jeffrey K. Townley and Anne C. Townley and to counsel for the Petitioner Counsel for Petitioner shall forward a copy of this Order to Nolan Clark. The Clerk shall thereafter close this file. The Respondents are hereby ordered not to file any further pleadings in this matter, with the sole exception of a Notice of Appeal to the United States Court of Appeals for the Circuit.