Opinion
No. MO-03-CV-163.
March 29, 2004
ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND FOR ORDER PROHIBITING FUTURE ACTIONS AGAINST DEFENDANT AND ITS EMPLOYEES REGARDING TAXES
Before the Court is the Defendant's Motion to Dismiss or for Summary Judgment and for Order Prohibiting Future Actions Against Defendant and Its Employees Regarding Taxes, filed December 8, 2003, and Plaintiff's Reply to Defendant's Answer to the Complaint, filed December 15, 2003 in the above-captioned cause. The Court held a hearing on the Motion on March 29, 2004. After careful consideration of the Motion, the oral argument, and the relevant law, the Court is of the opinion that Defendant's Motion for Summary Judgment and for Order Prohibiting Future Actions Against Defendant and Its Employees Regarding Taxes should be GRANTED.
BACKGROUND
On November 7, 2003, Plaintiff Bill Max Overton, proceeding pro se, filed his Original Complaint, in which he is complaining of four federal tax liens filed in Texas, New Mexico, and California. However, the remainder of the Plaintiff's Complaint does not specifically complain about tax liens. Instead, Plaintiff alleges Defendant United States of America unreasonably demanded payments for tax due for the tax years 1989 and 1990. Plaintiff states that under Section 6241 of the Taxpayer Bill of Rights, he may recover damages for unreasonable actions taken by the Internal Revenue Service ("IRS") in connection with the collection of Federal taxes. Plaintiff further claims that the IRS violated Internal Revenue Code Section 7214 by knowingly demanding a sum greater than that authorized by law when it demanded payments for tax years 1989 and 1990. Plaintiff maintains he has no tax liability for tax years 1989 and 1990, nor for any other year.
On December 8, 2003, Defendant filed a Motion to Dismiss for failure to state a cause of action or for Summary Judgment on res judicata grounds. In its Motion to Dismiss, Defendant claims that Plaintiff fails to allege a violation of the Internal Revenue Code. Therefore, Defendant requests that Plaintiff's claim be dismissed. Defendant also argues this action is barred by the doctrine of res judicata because the Plaintiff's complaints about the assessment and collection of his 1989 and 1990 tax liabilities are numerous. See Overton v. United States, 48 Fed. Appx. 295, 2002 WL 31230837 (10th Cir. Oct. 4, 2002); see also Overton v. United States, 2003 WL 21693605 (E.D. Wash. May 29, 2003). Additionally, Defendant asks the Court to enter an Order prohibiting Plaintiff from filing future actions against Defendant and its employees regarding taxes because Plaintiff has a history of filing frivolous pleadings.
Plaintiff filed a Reply to Defendant's Motion on December 15, 2003. In his reply, Plaintiff states that he has presented a claim for which relief may be granted, that the cases relied upon regarding res judicata were decided before the alleged illegal demands for payment in this case, and that the entry of an order prohibiting future filings would deny his right to due process.
As a note, the Defendants filed a Motion to Dismiss or for Summary Judgment. Federal Rules of Civil Procedure 12(b) and (c) provide that if, on motion to dismiss under Rule 12(b)(6) or motion for judgment on the pleadings, matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment and disposed of as provided in Rule 56. See FED.R.CIV.P. 12(b) and (c). The Defendant has referenced in its Motion other similar cases previously filed by the Plaintiff in various district courts throughout the United States. These matters presented by the Defendants are outside the pleadings and will not be excluded by this Court in its consideration of the Defendants' Motion. Thus, the Court will treat the Defendants' Motion as one for summary judgment.
STANDARD OF REVIEW
Summary judgment should be granted only where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c). The party seeking summary judgment bears the initial burden of informing the court of the basis for the motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which the moving party believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Meadowbriar Home for Children, Inc. v. Gunn, 81 F.3d 521, 533 (5th Cir. 1996). Further, the moving party has the burden of showing that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Willis v. Roche Biomedical Lab., Inc., 61 F.3d 313, 315 (5th Cir. 1995). A dispute about a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty-Lobby, Inc., 477 U.S. 242, 248 (1986); Bodenheimer v. PPG Indus., Inc., 5 F.3d 955, 956 (5th Cir. 1993). "If the moving party fails to meet this burden, the motion must be denied, regardless of the nonmovant's response." Tubacex, Inc. v. M/V Risan, 45 F.3d 951, 954 (5th Cir. 1995).
If the movant carries this burden, the burden shifts to the nonmovant to show the existence of a genuine issue for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). A party opposing a properly supported motion for summary judgment may not rest upon mere allegations or denials of his pleading, but must set forth specific facts showing the existence of a genuine issue for trial. FED. R. CIV. P. 56(e); Anderson, 477 U.S. at 256. Unsubstantiated or conclusory assertions that a fact issue exists will not suffice. Krim v. BancTexas Group, Inc., 989 F.2d 1435, 1442 n. 4 (5th Cir. 1993); Thomas v. Price, 975 F.2d 231, 235 (5th Cir. 1992). The nonmovant "must adduce admissible evidence which creates a fact issue concerning the existence of every essential component of that party's case." Krim, 989 F.2d at 1442 n. 4. Only disputes over facts that might affect the outcome of the suit under the governing substantive law will properly preclude the entry of summary judgment. Anderson, 477 U.S. at 248. Factual disputes that are unnecessary or irrelevant will not be counted. Id. In considering a motion for summary judgment, the district court must view the evidence through the prism of the substantive evidentiary burden. Id. at 254.
All justifiable inferences to be drawn from the underlying facts must be viewed in the light most favorable to the nonmovant. Matsushita, 475 U.S. at 587. If the record, so illuminated, could not lead a rational trier of fact to find for the nonmovant, summary judgment is proper. Kelley v. Price-Macemon, Inc., 992 F.2d 1408, 1413 (5th Cir. 1993) (citing Matsushita, 475 U.S. at 577-78). On the other hand, if the factfinder could reasonably find in the nonmovant's favor, summary judgment should be denied. Id. (citing Anderson, 477 U.S. at 250). Finally, even if the standards of Rule 56 are met, a court has discretion to deny a motion for summary judgment if it believes that it would be prudent to proceed to trial. Anderson, 477 U.S. at 255.
DISCUSSION
I. Motion for Summary JudgmentIn the Fifth Circuit, the doctrine of res judicata or claim preclusion bars an action when: "1) the parties are identical in both actions; 2) the prior judgment was rendered by a court of competent jurisdiction; 3) the prior judgment was final on the merits; and 4) the cases involve the same cause of action." Travelers Ins. Co. v. St. Jude Hosp. of Kenner, La., Inc., 37 F.3d 193, 195 (5th Cir. 1994). To determine whether the same cause of action is involved, the Fifth Circuit applies a transactional test. Id.; see also Matter of Howe, 913 F.2d 1138, 1144 (5th Cir. 1990). Under this test, "the critical issue is not the relief requested or the theory asserted but whether plaintiff bases the two actions on the same nucleus of operative facts." Howe, 913 F.2d at 1144. "The rule is that res judicata `bars all claims that were or could have been advanced in support of the cause of action on the occasion of its former adjudication, . . . not merely those that were adjudicated.'" Id. (quoting Nilsen v. City of Moss Point, Miss., 701 F.2d 556, 560 (5th Cir. 1983) (en banc)).
It is with these policies in mind that the Court compares Plaintiff's complaint in this action with his complaints in prior actions and the courts' rulings in those cases. That examination reveals that every claim asserted against the United States in the present complaint was raised and rejected in prior actions. The crux of the Plaintiff's argument is that the IRS demands for payment of tax years 1989 and 1990 underlying the current claims were made on October 14, 2002. The Plaintiff claims these demands are new and were made after the demands previously litigated. However, the Plaintiff misses the point that all of the demands previously litigated are nevertheless for the tax years 1989 and 1990. That is, the IRS decided that the Plaintiff was not entitled to the $33,812 in withholding credits he claimed on his 1989 tax return and demanded repayment of the credited amount with interest. See Overton v. United States and Sanchez, 48 Fed. Appx. 295, 2002 WL 31230837, *1 (10th Cir. Oct. 4, 2002). Further, the IRS reexamined the Plaintiff's tax liability for 1989 and 1990 and determined that he owed additional taxes, penalties and interest for those years. Id. Thus, all subsequent demands, liens and levies that have been litigated, although for differing sums due to interest and the amount collected to those dates, relate back to the initial demand for tax years 1989 and 1990. Accordingly, the current complaint arises out of the same nucleus of operative facts as prior litigated complaints.
To name a few: see, e.g., Overton v. United States, MO-02-CV-169 (W.D. Tex. May 29, 2003); Overton v. United States and Sanchez, 48 Fed. Appx. 295, 2002 WL 31230837 (10th Cir. Oct. 4, 2002); Overton v. United States, CIV-01-601, 89 A.F.T.R.2d 2002-1858, 2002-1 USTC P 50,356, 2002 WL 741641 (W.D. Okla. March 19, 2002), aff'd, 44 Fed. Appx. 932, 90 A.F.T.R.2d 2002-6141, 2002-2 USTC P 50, 613, 2002 WL 1938599 (10th Cir. Aug. 22, 2002); Overton v. United States and Sanchez, CIV-00-973-L (W.D. Okla. Sept. 18, 2001); Overton v. United States, CIV-00-1266-L, 88 A.F.T.R.2d 2001-6483, 2001 WL 134668 (W.D. Okla. September 18, 2001); Overton v. United States, CIV-00-1518-L, 88 A.F.T.R.2d 2001-6572, 2001 WL 1399379 (W.D. Okla. September 14, 2001), aff'd, 48 Fed. Appx. 295, 2002 WL 31230837 (10th Cir. Oct. 4, 2002); Overton v. Sanchez, CIV-99-585 (D.C.N.M. April 11, 2000), appeal dismissed, 23 Fed. Appx. 962, 2001 WL 1580910 (10th Cir. Dec. 12, 2001); Overton v. United States, 98-CV-1012 (D.C.N.M. Feb. 10, 1999), aff'd, 202 F.3d 282 (Table), 85 A.F.T.R.2d 2000-510, 2001-1 USTC P 50,148 (10th Cir. Aug. 22, 2002); Overton v. United States, CIV-97-1454-MV (D.C.N.M. May 14, 1998), aff'd, 166 F.3d 1221 (Table), 83 A.F.T.R.2d 99-493, 99-1 USTC P 50,201 (10th Cir. Jan. 14, 1999); Overton v. United States, 925 F.2d 1282 (10th Cir. 1991).
After reviewing the previous litigated cases and the case currently before the Court, the parties are identical in previous actions and the current action, the prior judgments were rendered by courts with competent jurisdiction, the judgments were final on the merits, and the cases clearly involve the same cause of action. Therefore, these claims are barred by the doctrine of res judicata.
II. Motion for Order Prohibiting Future Actions against Defendants Regarding Taxes
Defendant seeks an injunction order against the Plaintiff to prevent him from filing future repetitive and frivolous lawsuits. Specifically, Defendant requests the Court to require the Plaintiff to seek judicial permission from the United States District Court prior to bringing any future actions involving his 1989 and 1990 federal income tax liabilities, and the frivolous return penalties for 1998 or 2000. Defendant requests such an order based on the Tenth Circuit's previous warning that Plaintiff's continued filing of frivolous lawsuits may result in the imposition of filing restrictions. See Overton v. United States and Sanchez, 48 Fed. Appx. 295, 2002 WL 31230837, *6 (10th Cir. Oct. 4, 2002).
Plaintiff's many lawsuits regarding the assessment and collection of his taxes are an abuse of the federal judicial system. Although the judicial system is generally accessible and open to all individuals, "abuse of the process may result in actions to protect the courts' ability to effectively control the numerous matters filed therein." Kaminetzky v. Frost Nat'l Bank of Houston, 881 F. Supp. 276, 277 (S.D. Tex. 1995); see also Harrelson v. USA, 613 F.2d 114 (5th Cir. 1980) (holding a court has the authority under 28 U.S.C. § 1651(a) to enjoin litigants who abuse the court system). Further, several federal courts, including the Fifth Circuit, "have held that there is no constitutional right of access to the courts to prosecute an action that is frivolous or malicious and consequently approved the practice of enjoining certain litigants from filing pleadings and complaints when necessary to deter vexatious and frivolous filings or to protect the integrity of the courts and the orderly and expeditious administration of justice." Kaminetzky, 881 F. Supp. at 277. An injunction against future filings "must be tailored to protect the courts and innocent parties, while preserving the legitimate rights of litigants." Farguson v. MBank Houston, N.A., 808 F.2d 358, 360 (5th Cir. 1986). "The court's power to enter such orders flows not only from various statutes and rules relating to sanctions, but the inherent power of the court to protect its jurisdiction and judgments and to control its docket." Id.
To name a few: see, e.g., Overton v. United States, MO-02-CV-169 (W.D. Tex. May 29, 2003); Overton v. United States and Sanchez, 48 Fed. Appx. 295, 2002 WL 31230837 (10th Cir. Oct. 4, 2002); Overton v. United States, CIV-01-601, 89 A.F.T.R.2d 2002-1858, 2002-1 USTC P 50,356, 2002 WL 741641 (W.D. Okla. March 19, 2002), aff'd, 44 Fed. Appx. 932, 90 A.F.T.R.2d 2002-6141, 2002-2 USTC P 50, 613, 2002 WL 1938599 (10th Cir. Aug. 22, 2002); Overton v. United States and Sanchez, CIV-00-973-L (W.D. Okla. Sept. 18, 2001); Overton v. United States, CIV-00-1266-L, 88 A.F.T.R.2d 2001-6483, 2001 WL 134668 (W.D. Okla. September 18, 2001); Overton v. United States, CIV-00-1518-L, 88 A.F.T.R.2d 2001-6572, 2001 WL 1399379 (W.D. Okla. September 14, 2001), aff'd, 48 Fed. Appx. 295, 2002 WL 31230837 (10th Cir. Oct. 4, 2002); Overton v. Sanchez, CIV-99-585 (D.C.N.M. April 11, 2000), appeal dismissed, 23 Fed. Appx. 962, 2001 WL 1580910 (10th Cir. Dec. 12, 2001); Overton v. United States, 98-CV-1012 (D.C.N.M. Feb. 10, 1999), aff'd, 202 F.3d 282 (Table), 85 A.F.T.R.2d 2000-510, 2001-1 USTC P 50,148 (10th Cir. Aug. 22, 2002); Overton v. United States, CIV-97-1454-MV (D.C.N.M. May 14, 1998), aff'd, 166 F.3d 1221 (Table), 83 A.F.T.R.2d 99-493, 99-1 USTC P 50,201 (10th Cir. Jan. 14, 1999); Overton v. United States, 925 F.2d 1282 (10th Cir. 1991).
See, e.g., In re McDonald, 489 U.S. 180, 183-85 (1989) (denying a petitioner's request to proceed in forma pauperis and moreover, directed the clerk of the court not to accept any further petitions from the petitioner for extraordinary writs until the docketing fees were paid); Goodman v. Ballou, et al., No. 94-00162, 1994 WL 792365, * 1 (5th Cir. Nov. 1, 1994) (sanctioning contentious conduct by parties and prohibiting them "from contacting the Clerk's office of this Court or the chambers of any judge on this Court by telephone or in person" and acknowledging that those individuals who abuse the courts may be denied access to the judicial system); Perry v. Pogemiller, 16 F.3d 138, 140 (7th Cir. 1993) (holding that courts may impose regulatory injunctions designed to prohibit the filing of duplicative and frivolous actions); Tripati v. Beaman, 878 F.2d 351, 352-53 (10th Cir. 1989) (stating that there is no constitutional right of access to the courts to prosecute an action that is frivolous or malicious and a district court has the power to enjoin litigants who abuse the court system); Filipas v. Lemons, 835 F.2d 1145, 1146 (6th Cir. 1987) (holding that an order requiring leave of court before plaintiffs file any further complaints is the proper method for handling the complaints of prolific litigators); Farguson v. MBank Houston, N.A., 808 F.2d 358, 359-60 (5th Cir. 1986) (stating that a plaintiff acting pro se has no license to harass others, clog the judicial machinery with meritless litigation, and abuse already overloaded court dockets); Urban v. United Nations, 768 F.2d 1497, 1500 (D.C. Cir. 1985) (per curium) (declaring that it is well settled that a court may employ injunctive remedies to protect the integrity of the courts and the orderly and expeditious administration of justice); In re Martin-Trigona, 737 F.2d 1254, 1261 (2d. Cir. 1984), cert. denied, 474 U.S. 1061 (1986) (affirming the district court's order granting an injunction against a vexatious pro se litigant); Green v. Warden, 699 F.2d 364, 370 (7th Cir.), cert. denied, 461 U.S. 960 (1983) (holding that the Court of Appeals has authority to issue an injunction requiring petitioner's future claims to be "original"); In re Green, 669 F.2d 779, 787 (D.C. Cir. 1981) (per curium) (ordering district court to enjoin a pro se litigant from filing suit without leave of the court, and requiring the litigant to certify, on penalty of contempt, that his claim had not previously been litigated in federal court).
The power to impose sanctions results from specific congressional grants and from court rules. Representative citations include: 5 U.S.C. § 552b(i); 15 U.S.C. § 4303; 26 U.S.C. § 6673; 28 U.S.C. § 1912, 1927, 49 U.S.C. § 1686(e), 2014; FED. R. APP. P. 38; FED. R. CIV. P. 11; 28 U.S.C. § 1651(a).
The Plaintiff filed his first suit in this Court in 2002. Overton v. United States, MO-02-CV-169 (W.D. Tex. May 29, 2003). This Court concluded because MO-02-CV-169 was the first complaint filed by Plaintiff in this Court, it was not appropriate for it to enter such an injunctive order. However, since then the Plaintiff has filed two further complaints: the current complaint and MO-03-CV-092. Both of these complaints are repetitious and therefore frivolous. Because Plaintiff's repetitious filings must come to an end, as admonished by the Tenth Circuit, this Court determines that enjoining further filings without leave of the Court is warranted in this instance.
Note, the Court entered an injunction against the Plaintiff for future frivolous filings in MO-03-CV-092.
CONCLUSION
Based on the above stated reasons, the Court is of the opinion that Defendant's Motion for Summary Judgment and for Order Prohibiting Future Actions Against Defendant and Its Employees Regarding Taxes should be granted. Accordingly,
It is ORDERED that Defendant's Motion for Summary Judgment is hereby GRANTED.
It is FURTHER ORDERED that Defendant's Motion for Order Prohibiting Future Actions Against Defendant and Its Employees Regarding Taxes is hereby GRANTED.
It is FURTHER ORDERED that until such time as the Court may order otherwise, the Plaintiff or any individual or entity acting on his behalf, or Plaintiff acting on behalf of any other individual or entity, is hereby ENJOINED from filing any action, complaint, or motion that directly or tangentially raises an issue alleged in cause numbers MO-02-CV-169, MO-03-CV-092 and MO-03-CV-163 in this Court without first obtaining leave of Court from the Chief Judge of the United States District Court for the Western District of Texas. Any new motions, complaints, or actions which the Plaintiff seeks to file in this Court will not be docketed until the Chief Judge of the United States District Court for the Western District of District of Texas grants Plaintiff written leave to file.
Any new motion, complaint, or action which the Plaintiff seeks to file in this Court shall be accompanied by a Motion for Leave to File Complaint/Motion. The Clerk of this Court shall forward such action and motion to the Chief Judge of the United States District Court for the Western District of Texas for submission of the motion.
Failure of the Plaintiff to comply with this Order or continuous filing of any vexatious and/or frivolous complaints, motions, or actions raising similar issues addressed in the above referenced cases may result in the imposition of sanctions and/or a criminal contempt citation.