WALTON, District Judge.
The plaintiffs, Steven J. Lindsey and Patricia L. Lindsey, bring this action alleging that the United States Internal Revenue Service ("IRS") "recklessly, intentionally or by reason of negligence[,] disregarded and continue to disregard provisions of [the Internal Revenue Code (`IRC'),] Title 26 of the United States Code[,] and the regulations promulgated thereunder." Complaint ("Compl.") ¶ 1. In response to the complaint, the defendant initially filed a motion to dismiss on the ground that the plaintiffs failed to properly execute service of process ("Def.'s Mot.") and thereafter submitted a supplemental motion to dismiss based on the plaintiffs' failure to exhaust their administrative remedies before bringing this lawsuit ("Def.'s Supp. Mot."), which the Court construes as a motion to dismiss for failure to state a claim upon which relief can be
This case is one of at least a dozen virtually identical lawsuits brought by taxpayers, proceeding pro se, alleging a variety of forms of misconduct by the IRS.
In any event, the plaintiffs catalogue seventeen distinct provisions of the IRC which they claim have been violated. Compl. ¶¶ 7(a)-(r). The complaint seeks several forms of relief to redress the harm the plaintiffs have allegedly suffered, including a declaratory judgment that the defendant has violated one or more provisions of the IRC, Compl. ¶ 31, an injunction barring any further collection of taxes from. the plaintiffs, Compl. ¶ 34, a refund of all unassessed taxes and the return of property unlawfully seized, Compl. ¶ 33, and an award of damages under 26 U.S.C. § 7433 (2000), Compl. ¶ 32. The plaintiffs attempted to effect service on the defendant by mailing a copy of the summons and complaint via certified mail to the Attorney General and the United States Attorney for the District of Columbia on September 19, 2005. Pls.' Resp. at 2.
The defendant first moved to dismiss the plaintiffs' complaint for insufficient service of process pursuant to Federal Rule of Civil Procedure 12(b)(5) on December 1, 2005. Def.'s Mot. at 1. The plaintiffs filed an "Objection" to the defendant's first motion on December 16, 2005. Pls.' Obj. at 1. Several months later, the defendant brought a second motion to dismiss the plaintiffs' complaint alleging that the Court lacks subject matter jurisdiction over each of the plaintiffs' claims for relief under Rule 12(b)(1). Def.'s Supp. Mot. at 1. For the reasons discussed below, the Court construes this motion, in part, as challenging the Court's subject matter jurisdiction pursuant to Rule 12(b)(1) and, in part, as seeking dismissal of the complaint for failure to state a claim for which relief can be granted under Rule 12(b)(6). The plaintiffs filed a "Response" to this second motion on April 18, 2006. Pls.' Resp. at 1. The Court will address in turn each of these motions and their oppositions.
II. Standards of Review
The Court may dismiss a complaint for ineffective service of process pursuant to Federal Rule of Civil Procedure 12(b)(5) if the plaintiff fails to establish that he or she has properly effectuated service pursuant to Rule 4. See Light v. Wolf; 816 F.2d 746, 751 (D.C.Cir.1987). "[T]he party on whose behalf service is made has the burden of establishing its validity when challenged; to do so, he must demonstrate that the procedure employed satisfied the requirements of the relevant portions of Rule 4 and any other applicable provision of law." Id. (internal quotation marks and citation omitted); see also Hilska v. Jones, 217 F.R.D. 16, 20 (D.D.C.2003) (holding that "the plaintiff carries the burden of establishing that he has properly affected service") (citing Light, 816 F.2d at 751).
Once a defendant has moved to dismiss a case pursuant to Rule 12(b)(1), "the plaintiff bears the burden of establishing the factual predicates of jurisdiction by a preponderance of the evidence." Erby v. United States, 424 F.Supp.2d 180, 182 (D.D.C.2006) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)); see also Al-Owhali v. Ashcroft, 279 F.Supp.2d 13, 21 (D.D.C.2003) (Walton, J.) ("Throughout the Court's jurisdictional inquiry, it is plaintiffs burden to establish that the Court has jurisdiction."). "The [C]ourt, in turn, has an affirmative obligation to ensure that
A court ruling on a Rule 12(b)(1) motion to dismiss "may consider documents outside the pleadings to assure itself that it has jurisdiction." Al-Owhali, 279 F.Supp.2d at 21; see also Haase v. Sessions, 835 F.2d 902, 906 (D.C.Cir.1987) ("In 12(b)(1) proceedings, it has been long accepted that the judiciary may make appropriate inquiry beyond the pleadings to satisfy itself on [its] authority to entertain the case." (internal citations and quotation marks omitted)). The level of scrutiny with which the Court examines the allegations in the complaint that support a finding of jurisdiction, however, depends upon whether the motion to dismiss asserts a facial or factual challenge to the court's jurisdiction. See I.T. Consultants v. Pakistan, 351 F.3d 1184, 1188 (D.C.Cir.2003).
Facial challenges, such as motions to dismiss for lack of standing at the pleading stage, "attack the factual allegations of the complaint that are contained on the face of the complaint." Al-Owhali, 279 F.Supp.2d at 20 (internal quotation marks and citation omitted). "If a defendant mounts a `facial' challenge to the legal sufficiency of the plaintiff's jurisdictional allegations, the court must accept as true the allegations in the complaint and consider the factual allegations of the complaint in the light most favorable to the non-moving party." Erby, 424 F.Supp.2d at 181; see also I.T. Consultants, 351 F.3d at 1188. The court may look beyond the allegations contained in the complaint to decide a facial challenge, "as long as it still accepts the factual allegations in the complaint as true." Abu Ali, 387 F.Supp.2d at 18; see also Jerome Stevens Pharm., Inc. v. Food & Drug Admin., 402 F.3d 1249, 1253-54 (D.C.Cir.2005) ("At the pleading stage. . . . [w]hile the district court may consider materials outside the pleadings in deciding whether to grant a motion to dismiss for lack of jurisdiction, the court must still accept all of the factual allegations in the complaint as true." (internal citations and quotation marks omitted)).
Factual challenges, by contrast, are "addressed to the underlying facts contained in the complaint." Al-Owhali, 279 F.Supp.2d at 20. Where a defendant disputes the factual allegations in the complaint that form the basis for a court's subject matter jurisdiction, "the court may not deny the motion to dismiss merely by assuming the truth of the facts alleged by the plaintiff and disputed by the defendant." Phoenix Consulting, Inc. v. Republic of Angola, 216 F.3d 36, 40 (D.C.Cir. 2000). Instead, a court deciding a Rule 12(b)(1) motion asserting a factual challenge "must go beyond the pleadings and resolve any disputed issues of fact the resolution of which is necessary to a ruling upon the motion to dismiss." Id. In such situations, "the plaintiffs jurisdictional averments are entitled to no presumptive weight; the court must address the merits of the jurisdictional claim by resolving the factual disputes between the parties." Erby, 424 F.Supp.2d at 181 (internal quotations omitted); see also Mortensen v. First Fed. Say. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir.1976) (holding that a court ruling on a factual challenge to its jurisdiction is not required to accept the plaintiff's factual allegations as true, but rather "is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case . . . and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims").
The defendant's supplemental motion to dismiss raises both facial and factual attacks upon the Court's jurisdiction. The
When adjudicating a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), the Court must view all the allegations and facts in the complaint in the light most favorable to the plaintiffs, and it must grant the plaintiffs the benefit of all inferences that can be derived from those facts. See Barr. v. Clinton, 370 F.3d 1196, 1199, (D.C.Cir. 2004). However, the Court need not accept inferences or conclusory allegations that are unsupported by the facts set forth in the complaint. See Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276 (D.C.Cir.1994). The Court may only consider the facts alleged in the complaint, any documents attached as exhibits, and matters about which the Court may take judicial notice. See EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624-25 (D.C.Cir.1997). "A court should not dismiss a complaint pursuant to Rule 12(b)(6) for failure to state a claim `unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Abigail Alliance For Better Access to Developmental Drugs and Washington Legal Foundation v. von Eschenbach, 445 F.3d 470, 475 (D.C.Cir.2006) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)).
Notwithstanding the fact that the plaintiffs' complaint is substantially identical to those filed in numerous other pro se cases recently decided by other members of this Court or currently pending in the Court, see supra n. 3, the plaintiffs here are proceeding pro se, and their complaint must therefore be held to "less stringent standards than formal pleadings drafted by lawyers." Haines v. Kerner, 404 U.S. 519, 520, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972); see also Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113 n. 2 (D.C.Cir.2000). Courts of this Circuit have interpreted the Supreme Court's instruction in Haines as encompassing all filings submitted by pro se litigants, not just their pleadings. See, e.g. Richardson v. United States 193 F.3d 545, 548 (D.C.Cir.1999) (holding that "[c]ourts must construe pro se filings liberally") (citing Haines, 404 U.S. at 520, 92 S.Ct. 594); Voinche v. FBI, 412 F.Supp.2d 60, 70 (D.D.C.2006) (observing that "[t]his Court gives pro se parties the benefit of the doubt and may ignore some technical shortcomings of their filings" and applying the Haines rule to a plaintiff's summary judgment motion) (citing Haines, 404 U.S. at 520, 92 S.Ct. 594); Calloway v. Brownlee, 366 F.Supp.2d 43, 55 (D.D.C.2005) (Walton, J.) (holding that the Court "must
III. Legal Analysis
The defendant contends that the plaintiffs' complaint must be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(5) for insufficient service of process. Def.'s Mot. at 1. Relying on Rule 4(c)(2), which governs who may effect service of process, the defendant asserts that the summons and complaint can be served on the federal government defendant by "any person who is not a party," Fed. R.Civ.P. 4(c)(2). Def.'s Mem. at 1. Because one of the plaintiffs effected service by sending the summons and complaint to the Attorney General and United States Attorney by way of certified mail, the defendant argues that the service violates Rule 4(c)(2) and thus warrants dismissal. Id. at 1-2. In return, the plaintiffs argue that Rule 4(c)(2) "applies to personal service only," Pls.' Obj. ¶ 4, and contend that the controlling rule—Rule 4(i)(1)(b), which prescribes the method for serving the United States—"is silent as to who may sign the return of service," Pls.' Obj. ¶¶ 5-6.
The parties do not dispute that Federal Rule of Civil Procedure 4(i)(1) directs plaintiffs bringing suit against the United States to effect service in the following manner:
Fed.R.Civ.P. 4(i)(1) (emphasis added). Instead, they disagree with respect to who may effect the service that is required. Nothing in Rule 4(i) indicates who may or may not effect service under this subsection. See generally Fed.R.Civ.P. 4(i). By contrast, Rule 4(c)(2), the general provision
The plaintiffs contend, however, that Rule 4(c)(2) does not apply in the context of the circumstances before the Court. Pls.' Obj. ¶¶ 4-5. According to the plaintiffs, "Rule 4(c)(2) applies to personal service only," id. ¶ 4, while Rule 4(i)(1) exclusively governs service on the United States, id. ¶ 5. As Rule 4(i)(1) places no limitation on who may effect service, the plaintiffs argue that Rule 4 was not violated when they personally mailed the summons and complaint to the Attorney General and United States Attorney for the District of Columbia. Id. ¶¶ 2, 6, 8. The Court cannot agree with the plaintiffs' position.
First, nothing in the language of the current version of Rule 4(c)(2) indicates that the limitation it imposes on who may effect service applies only to personal service. See Fed.R.Civ.P. 4(c)(2). The plaintiffs cite no authority, and the Court can find none, that supports their interpretation of Rule 4(c)(2). Second, the plaintiffs' argument that Rules 4(c)(2) and 4(i)(1) are mutually exclusive misses the mark. The former describes who may make service upon any defendant, while the latter prescribes the method by which service upon the United States can be effected. Courts thus apply Rules 4(c)(2) and 4(i)(1) in conjunction with each other. See, e.g., Daniels v. G & M Towing, Civ. No. 05-2647, 2006 U.S. Dist. LEXIS 15027, at *3-4 (N.D.Ohio Mar. 31, 2006) (holding that requirement in Rule 4(c)(2) that service be effected by a non-party applies to service on the United States made pursuant to Rule 4(i)(1)).
Here, it is undisputed that one of the plaintiffs effected service himself by sending the summons and complaint by certified mail to the Attorney General and the United States Attorney for the District of Columbia. See Def.'s Mem. at 1; Pls.' Resp. at 2; Return of Service, dkt. no. 2 (Sept. 19, 2005) (bearing plaintiff Steven J. Lindsey's name and signature as the server of the complaint and summons upon the Attorney General); Return of Service, dkt. no. 3 (Sept. 19, 2005) (bearing plaintiff's name and signature as the server of the complaint and summons upon the United States Attorney). In doing so, the plaintiffs did not comply with the requirement of Rule 4(c)(2) that service be effected by a person not a party to the action.
While service of process on the Attorney General and the United States Attorney was therefore improper, the Court nevertheless concludes that the plaintiffs' complaint should not be dismissed because of this defect. Federal Rule of Civil Procedure 4(m) provides, in pertinent part, that "[f]ailure to comply with the requirements of this Rule shall result in the dismissal without prejudice of the complaint." Fed.R.Civ.P. 4(m). The defendant is therefore correct that courts generally dismiss cases where a plaintiff fails to effect proper service. See Fed.R.Civ.P. 4(j); see also Light, 816 F.2d at 750. However, "[p]ro se litigants are allowed more latitude than litigants represented by counsel to correct defects in service of process and pleadings," Moore v. Agency for Int'l Dev., 994 F.2d 874, 876 (D.C.Cir.1993). Although "[d]istrict courts do not need to provide
In Moore, the District of Columbia Circuit held that a pro se plaintiff who attempted to effect service promptly after filing his complaint should be permitted to perfect service where the defendants had notice of the suit and filed repeated requests for extensions of time to respond to it. Id. at 876-77. After the 120-day time for service prescribed by the version of Rule 4(j) in force at that time had elapsed, however, the defendant moved to dismiss the complaint on insufficient service of process grounds. Id. at 877. Noting that the plaintiff was "aware of the repeated appearances by [the United States Attorney on behalf of the defendant and] no doubt believed the defendants had been properly served," the Court "conclude[d] that two attempts to serve the defendants who had notice of the suit and were represented by counsel, coupled with the government's long delay in responding to the complaint, constitute good cause to satisfy Rule 4(j)." Id.
Here, the Court concludes that dismissing the plaintiffs' suit for insufficient service of process would be improper. Service was attempted on September 19, 2005, eighteen days after the plaintiffs filed their complaint. See Return of Service, dkt. no. 2; Return of Service, dkt. no. 3. The defendant acknowledges that the copies of the summons and complaint sent by plaintiff Steven Lindsey were received on September 26 and September 28, 2005. See United States' Opposition to Plaintiffs' Request for Entry of Default at 1 (Mar. 6, 2006). Similar to the situation in Moore, 994 F.2d at 876-77, the defendant filed with the Court on November 23, 2005, both a related case notice and a motion for an extension of time in which to respond to the plaintiffs' complaint, which the Court denied without prejudice on November 30, 2005.
The defendant then moved to dismiss this case for insufficient service on December 1, 2005. Although the plaintiffs did not perfect service after the defendant's motion was filed, the Court at that time provided them no instruction of the kind required by Moore, 994 F.2d at 876, making clear the consequences of failing to perfect service of process. Further, the Court notes that the particular defect in the service performed by the plaintiffs was not significant. While Rule 4(c)(2) does require service to be made by a person not a party to the action, the defendant cannot seriously contend that the identity of the person who sent the summons and complaint by certified mail prejudiced the defendant in any way. Whatever policies underlie Rule 4(c)(2)'s requirement that parties not effect service of process themselves would not be served by dismissing
The defendant's supplemental motion to dismiss challenges the Court's subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) over each of the four types of relief the plaintiffs seek. Specifically, the defendant argues that the Court categorically lacks the authority to grant two forms of the plaintiffs' requested forms of relief—an injunction, Def.'s Supp. Mem. at 3-5, and declaratory relief, id. at 1 n. 2. The defendant also contends that the plaintiffs have failed to exhaust their administrative remedies with respect to the other two forms of relief sought in the complaint—the plaintiffs' claim for a tax refund, Def.'s Supp. Mem. at 2-3, and their request for damages, id. at 5-7—and that the Court accordingly lacks subject matter jurisdiction over these requests for relief as well.
As a threshold matter, the plaintiffs appear to argue that the defendant, having already moved for dismissal for insufficiency of service, is barred by Federal Rules of Civil Procedure 12(g) and 12(h)(2) from seeking dismissal on other grounds.
First, with regard to the defendant's challenges to the Court's subject matter jurisdiction in its supplemental motion, the motion is undoubtedly timely. See Fed. R.Civ.P. 12(h)(3). Rule 12(h)(3) expressly permits the defendant to challenge the Court's subject matter jurisdiction at any time. See Fed.R.Civ.P. 12(h)(3) ("Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action."). For the reasons that follow, the Court concludes that the defendant's challenges to three of the four types of relief sought in the plaintiffs' complaint—an injunction, declaratory relief, and a tax refund—do concern this Court's subject matter jurisdiction, and therefore these challenges are timely.
Second, the defendant's objection to the plaintiffs' claim for damages—on the grounds that the plaintiffs failed to exhaust their administrative remedies—is also timely, even though it does not challenge
a. The Defendant's 12(b)(1) Challenges
The basis upon which the defendant seeks dismissal of the plaintiffs' apparent request for declaratory relief challenges this Court's jurisdiction and therefore is properly raised under Rule 12(b)(1). The Declaratory Judgment Act provides:
28 U.S.C. § 2201(a) (emphasis added). The authority conferred to the Court by § 2201(a) to provide declaratory relief clearly does not extend to federal taxation cases unless the case arises under 26 U.S.C. § 7428, an exception not implicated by the plaintiffs' complaint here.
Similarly, the defendant's assertion that the Court lacks the authority under the Anti-Injunction Act, 26 U.S.C. § 7421, to grant the injunctive relief requested by the plaintiffs presents a challenge to the Court's jurisdiction. Section 7421(a) of the Anti-Injunction Act states:
26 U.S.C. § 7421(a). The language of § 7421(a) could not be clearer, as it unquestionably bars a suit from being brought in federal court where the suit seeks to enjoin the government from assessing or collecting federal taxes. Consequently, the Court determines that to the degree the defendant seeks dismissal of the plaintiffs' claim for injunctive relief, it has challenged the Court's subject matter jurisdiction pursuant to Rule 12(b)(1). See Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 5, 82 S.Ct. 1125, 8 L.Ed.2d 292 (1962) (stating that "[t]he object of § 7421(a) is to withdraw jurisdiction from the state and federal courts to entertain suits seeking injunctions prohibiting the collection of federal taxes"); Nat'l Taxpayers Union, 68 F.3d at 1431-32; Debt Buyer's Ass'n v. Snow, Civ. No. 06-101(CKK), 2006 WL 598143, at *6 (D.D.C. Jan. 30, 2006).
The Court also concludes that the defendant's argument that the plaintiffs failed to exhaust their administrative remedies before filing suit challenges the Court's jurisdiction to entertain the plaintiffs' refund claim. The District of Columbia Circuit in Avocados Plus v. Veneman, 370 F.3d 1243, 1247-48 (D.C.Cir.2004), offered a straightforward approach to determining whether a specific exhaustion requirement is jurisdictional. Explicitly acknowledging the distinction between statutory exhaustion requirements that do impose jurisdictional barriers and those that do not, the Avocados Plus Court noted that distinguishing the former type of requirement from the latter "is purely a question of statutory interpretation," id. at 1248, and held that courts should infer a non-jurisdictional exhaustion requirement whenever Congress provides an administrative avenue for relief, id. (observing that "the existence of an administrative remedy automatically triggers a non-jurisdictional exhaustion inquiry"). Only where "a statute . . . contain[s] sweeping and direct statutory language indicating that there is no federal jurisdiction prior to exhaustion" may courts conclude that a particular exhaustion requirement is jurisdictional. Avocados Plus, 370 F.3d at 1248 (quoting Weinberger v. Salfi, 422 U.S. 749, 757, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975)) (internal quotation marks and treatise citation omitted). Thus, when faced with a statutory exhaustion requirement, the Court must "presume [that] exhaustion is non jurisdictional unless Congress states in clear, unequivocal terms that the judiciary is barred from hearing an action until the administrative agency has come to a decision." Id. (internal quotation marks and citations omitted).
The Supreme Court's unanimous decision in Arbaugh v. Y & H Corp., ___ U.S. ___, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006), confirms the correctness of the rule articulated in Avocados Plus. In Arbaugh, the Court distinguished prerequisites that are genuinely jurisdictional from those which are not jurisdictional barriers but constitute merely an "ingredient of . . . [the] claim for relief." Id. at ___, 126 S.Ct. at 1238. The Court acknowledged the propensity of some federal courts to blur the distinction between the two types of requirements, see id. at ___, 126 S.Ct. at 1242 (noting that "[s]ubject matter jurisdiction in federal-question cases is sometimes erroneously conflated with a plaintiff's need and ability to prove the defendant bound by the federal law asserted as the predicate for relief-a merits-related
In place of the cursory analysis offered by "such unrefined dispositions," id., which the .Court characterized as "drive-by jurisdictional rulings that should be accorded no precedential effect on the question whether the federal court had authority to adjudicate the claim in suit," id. at ___ 126 S.Ct. at 1242-43 (internal quotation marks and citations omitted), Arbaugh directs courts to look directly at the text of the statute to determine if the prerequisite it imposes is jurisdictional in character, see id. at ___, 126 S.Ct. at 1245. Thus, the Court held:
Id. (footnote and internal citation omitted). Applying this rule, the Court concluded that Congress did not intend the "employee-numerosity requirement" in Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e(b) (2000)—pursuant to which only employers with fifteen or more workers are subject to suit under Title VII—to constitute a jurisdictional barrier to suit but merely an element of the plaintiff's claim. See id. (contrasting § 2000e(b) with statutes in which Congress clearly created jurisdictional prerequisites to filing civil actions in federal court).
Here, the administrative exhaustion requirement pertaining to the plaintiffs' claim for a "[r]efund of all unassessed taxes, [the] return of all seized property, [and the] return of all levied funds," Compl. ¶ 33, is contained in 26 U.S.C. § 7422, which provides:
26 U.S.C. § 7422(a) (emphasis added). By its plain terms, the provision precludes a civil action from proceeding in federal court before the plaintiff files a refund claim with the Secretary of the Treasury and complies with the administrative procedures adopted by the Secretary. Under the rule expressed in Arbaugh, ___ U.S. at ___, 126 S.Ct. at 1245, and Avocados Plus, 370 F.3d at 1248, § 7422(a) thus creates a jurisdictional barrier to suits seeking a refund of taxes already collected. See Commissioner of Internal Revenue v. Lundy, 516 U.S. 235, 240, 116 S.Ct. 647, 133 L.Ed.2d 611 (1996) (recognizing that § 7422(a) "make[s] timely filing of a refund claim a jurisdictional prerequisite to bringing suit"); Mason v. United States, Civ. No. 00-272, 2001 WL 241799, at *1 (D.C.Cir. Feb.2, 2001). Because the defendant's
b. The Defendant's 12(b)(6) Challenge
The Court concludes that the defendant's argument that the plaintiffs failed to exhaust their administrative remedies prior to filing this action does not raise a question of the Court's jurisdiction as to the plaintiffs' damages claim. Therefore, the defendant's motion to dismiss the plaintiff's claim for damages, unlike the defendant's arguments regarding the plaintiffs' other three forms of requested relief, is not properly brought under the rubric of Rule 12(b)(1). Unlike the provision in 26 U.S.C. § 7422 which requires the exhaustion of administrative remedies prior to filing a civil suit seeking a refund of federal taxes, the section of the Internal Revenue Code governing claims for damages based on actions of the IRS, 26 U.S.C. § 7433, does not make the exhaustion of administrative remedies a jurisdictional prerequisite to bringing suit in federal court. This affirmative defense is thus properly brought through a motion to dismiss for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6). For the reasons discussed below, the Court concludes that the defendant has timely raised this defense.
Section 7433(d)(1) provides that "[a] judgment for damages shall not be awarded under [§ 7433(b)] unless the court determines that the plaintiff has exhausted the administrative remedies available to such plaintiff within the Internal Revenue Service." 26 U.S.C. § 7433(d)(1). Under the Circuit Court's decision in Avocados Plus, 370 F.3d at 1248, the Court must begin by "presum[ing] [that] exhaustion is non-jurisdictional," id., and it may depart from this presumption only if § 7433(d)(1)'s exhaustion prerequisite "states in clear, unequivocal terms that the judiciary is barred from hearing an action until the administrative agency has come to a decision," id. See also Arbaugh, ___ U.S. at ___, 126 S.Ct. at 1245 (noting that "when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as non-jurisdictional in character"). Nothing in the language of § 7433(d)(1) suggests that Congress intended to impose a jurisdictional barrier to taxpayer suits seeking damages for the conduct of the IRS. Indeed, nowhere in all of § 7433 is there "sweeping and direct statutory language indicating that there is no federal jurisdiction prior to exhaustion." Avocados Plus, 370 F.3d at 1248 (internal citation and quotation marks omitted).
In determining that § 7433(d)(1) does not create a jurisdictional barrier to suit, the Court is in agreement with the conclusion reached by several other members of this Court who have confronted this same question. Turner v. United States, 429 F.Supp.2d 149, 155 (D.D.C.2006) (Bates, J.); Cain v. United States, Civ. No. 06-132, 2006 WL 1890015, at *1 n. 2 (D.D.C. July 10, 2006) (Roberts, J.); Stephens v. United States, 437 F.Supp.2d 106, 109, 2006 WL 1744256, at *2 (D.D.C. June 23, 2006) (Huvelle, J.). At the same time, the Court is cognizant that its position departs from the conclusion reached by other members of this Court and by other Circuits. See, e.g., Lohmann v. United States, Civ. No. 05-1976, 2006 WL 1826770, at *1 (D.D.C. July 3, 2006) (Kennedy, J.); Scott v. United States, 416 F.Supp.2d 116, 118 (D.D.C.2006) (Huvelle, J.); Glass v. United States, 424 F.Supp.2d 224, 228 (D.D.C.2006) (Huvelle, J.) (holding that under the standard established in Avocados Plus, 370 F.3d at 1247, the exhaustion requirement in 26 U.S.C. § 7433(d)(1) is jurisdictional), recons. denied, 2006 WL 1582281 (D.D.C. June 5, 2006); McGuirl v. United States, 360 F.Supp.2d 125, 128 (D.D.C.2004) (Leon, J.) (holding that 26 U.S.C. § 7433(d)(1) "limits the [D]istrict [C]ourt's jurisdiction" and that the failure to file an administrative claim pursuant to 26 C.F.R. § 301.7433-1(e) deprives a court of subject matter jurisdiction.); see also Romp v. United States, 96 Fed.Appx. 978, 980 (6th Cir.2004) (holding that where complaint failed to allege that plaintiff had exhausted administrative remedies under 26 U.S.C. § 7433(d)(1), the District Court lacked subject matter jurisdiction and "should have dismissed it for that reason alone"); Fishburn v. Brown, 125 F.3d 979, 982 (6th Cir.1997) (holding that failure to exhaust administrative remedies under 26 U.S.C. § 7433(d)(1) deprives a Court of subject matter jurisdiction); Amwest
The Court finds it unnecessary to follow this second line of authority for several reasons. First, decisions issued by other members of the Court prior to the District of Columbia Circuit's holding in Avocados Plus, 370 F.3d at 1248, see, e.g., McGuirl, 360 F.Supp.2d at 128, and decisions issued after Avocados Plus that do not apply the rule set forth there, see, e.g., Lohmann, 2006 WL 1826770, at *1, have no persuasive value. Second, as to decisions of members of the Court issued after Avocados Plus and decisions of other Circuits, the Supreme Court directs the Court to "accord no precedential effect" to decisions which fail to examine specifically the jurisdictional character of a particular statutory requirement by referencing the language used by Congress in creating the requirement. Arbaugh, ___U.S. at ___, 126 S.Ct. at 1242-43 (internal quotation marks and citation omitted). Third, while one decision issued by another member of the Court expressly relied on the Circuit Court's decision in Avocados Plus in finding that § 7433 imposes a jurisdictional barrier to suit, see Glass, 424 F.Supp.2d at 228 (Huvelle, J.) (holding that under the standard established in Avocados Plus, 370 F.3d at 1247, the exhaustion requirement in 26 U.S.C. § 7433(d)(1) is jurisdictional), that member of the Court has since held that § 7433 is not jurisdictional, see Stephens, 437 F.Supp.2d at 106 (Huvelle, J.) (stating that "the Court finds that the exhaustion requirement in this case [under § 7433] is non-jurisdictional in nature").
Having concluded that the exhaustion requirement imposed by § 7433 is not jurisdictional, the Court accordingly finds that the defendant's motion to dismiss the plaintiffs' damages claim is not properly brought under Federal Rule of Civil Procedure 12(b)(1), but rather should be construed as raising a defense of failure to state a claim upon which relief can be granted under Rule 12(b)(6). See Jaeger v. United States, Civ. No. 06-625(JDB), 2006 WL 1518938, at *1 (D.D.C. May 26, 2006) (holding that dismissal for failure to satisfy § 7433's exhaustion requirement is properly raised under Rule 12(b)(6)). Moreover, because the defendant asserts that the plaintiffs have failed to state a claim upon which relief can be granted, the Court determines that the defendant, by filing its initial motion to dismiss on insufficient service of process grounds, has not waived its right to raise the plaintiffs' failure to exhaust their administrative remedies as to their damages claim as a defense. While Rule 12(g) requires most defenses raised under Rule 12 to be joined in one motion to preserve the ability to raise the defense, see Fed.R.Civ.P. 12(g), a defendant does not waive its right to assert that the plaintiff has failed to state a claim upon which relief can be granted simply by not including that defense in its initial Rule 12(b) motion to dismiss. This is so because Rule 12(g) expressly excludes from its waiver provision the defenses listed
It is not readily apparent from Rule 12, however, whether a defendant who has filed an earlier motion to dismiss pursuant to Rule 12(b) can subsequently submit an additional motion to dismiss pursuant to Rule 12(b)(6). On the one hand, the enumeration in Rule 12(h)(2) of three methods for raising the defense of failure to state a claim after a prior motion to dismiss has been filed suggests that these are the exclusive means for doing so. The weight of authority is in accord, see Stoffels ex rel. SBC Concession Plan v. SBC Commc'n, Inc., 430 F.Supp.2d 642, 647 (W.D.Tex. 2006) (reviewing treatises and cases and concluding that "review of the relevant authorities confirms that Rule 12(g) normally bars successive pre-answer motions to dismiss"), and several treatises indicate that the provision of Rule 12(g) which "normally bars successive pre-answer motions to dismiss. . . . extends to the three `substantial defenses' listed in 12(h)(2), including failure to state a claim upon which relief can be granted under Rule 12(b)(6)," id. (citing 5C Wright & Miller, Fed. Prac. & Proc. § 1385, and 2 James W. Moore, et al., Moore's Federal Practice § 12.23, at 12-29).
On the other hand, "despite the weight of the authority, allowing consideration of a second 12(b)(6) motion to dismiss is not an entirely uncommon practice." Id. at 648. As the Stoffels Court noted, "in a limited number of cases the district court has exercised its discretion to permit a second preliminary motion to present a Rule 12(b)(6) defense, although it was technically improper to do so." Id. (quoting 5C Wright & Miller, Fed. Prac. & Proc. § 1385) (internal quotation marks omitted); see also DSMC, Inc. v. Convera Corp., 273 F.Supp.2d 14, 23 (D.D.C.2002) (holding that a defendant's filing of multiple motions to dismiss under Rule 12(b)(6) was "harmless error" because the defense of failure to state a claim may be raised at any time in a motion for judgment on the pleadings).
Courts are most likely to allow defendants to bring a second Rule 12(b)(6) motion in cases where "the problem [Rule] 12(g) was designed to prevent—unnecessary delay—[is] not a concern." Stoffels, 430 F.Supp.2d at 648 (citing Donnelli v. Peters Securities Co., Civ. No. 02-691, 2002 WL 2003217 (N.D.Ill. Aug.29, 2002)).
Relying on Donnelli and several treatises, the Court in Stoffels similarly concluded that the defendant should not be barred from submitting a second Rule 12(b) motion to assert the plaintiffs' failure to state a claim upon which relief can be granted. Stoffels, 430 F.Supp.2d at 649. The Court found "no evidence that [the] Defendant intended delay," but rather that he merely "abandoned a bad argument for a better one." Id. at 648. Additionally, the Stoffels Court noted that "[t]he practical effect of considering Defendant's second 12(b)(6) motion would not be further delay, since [the] Defendant's original motion was still pending when the second motion was submitted." Id. (footnote omitted). Finally, along somewhat more pragmatic lines, the Court concluded that:
Id. at 648-49 (internal citation, emphases, and footnotes omitted). "[B]ecause the Rule 12(b)(6) defense is so basic that it cannot be waived," the Stoffels Court stated that "a more permissive approach to this problem, when intended to advance the central purpose of [Rule] 12(h)—the preservation of certain defenses—is appropriate when delay is not a concern," id. at 649, and thus "the [C]ourt might properly entertain a second motion if it were convinced it was not interposed for delay and that addressing it would expedite disposition of the case on the merits,'" id. (quoting 5C Wright & Miller, Fed. Prac. & Proc. § 1392 at 528). Accordingly, the
In this case, the Court concludes that the defendant should not be barred from moving to dismiss the plaintiffs' claim for damages despite having moved for dismissal previously on the basis of insufficient service of process. Here, as in Campbell-El, 881 F.Supp. at 43, Strandell, 648 F.Supp. at 129, Donnelli, 2002 WL 2003217, at *4, and Stoffels, 430 F.Supp.2d at 648, there is no indication that the defendant's supplemental motion to dismiss under Rule 12(b)(6) is intended to delay the proceedings. Indeed, as in Stoffels, the defendant here already had a motion to dismiss pending when it filed its supplemental motion. Therefore, permitting the second motion would not interrupt the efficient adjudication of the plaintiffs' case.
Were the Court to preclude the defendant from raising the defense of the plaintiffs' failure to exhaust their administrative remedies at this stage, the defendant would undoubtedly raise precisely the same defense in its answer, in a motion for judgment on the pleadings, or at trial. Thus, delaying resolution of this issue at this time would neither serve the interests of the parties—who have already briefed the issue, and who would bear the costs of further proceedings—nor promote judicial economy.
The defendant asserts that the plaintiffs are barred from claiming all four types of relief sought in their complaint. Def.'s Supp. Mem. at 2. Specifically, the defendant contends that (1) declaratory relief is barred by the Declaratory Judgment Act, 28 U.S.C. § 2201, Def.'s Supp. Mem. at 1 n. 2; (2) the Court lacks the authority to grant the plaintiffs' request for an injunction by the Anti-Injunction Act, 26 U.S.C. § 7421, Def.'s Supp. Mem. at 3-5; and (3) the plaintiffs failed to exhaust administrative remedies with respect to their claims for a refund, 26 U.S.C. § 7422, Def.'s Supp. Mem. at 2-3, and for damages, 26 U.S.C. § 7433, Def.'s Supp. Mem. at 5-7. For the reasons set forth below, the Court agrees with the defendant that the plaintiffs are precluded from seeking all four forms of relief.
a. The Request for Declaratory Relief
The complaint appears to seek, inter alia, a ruling declaring that the defendant has violated the Internal Revenue Code in one or more respects. Compl. ¶ 31. As the defendant correctly points out, however, the Court lacks the power to grant such relief under the Declaratory Judgment Act, 28 U.S.C. § 2201. While
b. The Request for Injunctive Relief
The plaintiffs also seek in their complaint an injunction barring the
Compl. ¶ 34. As discussed earlier, the Anti-Injunction Act, 26 U.S.C. § 7421, precludes the Court from granting such injunctive relief. Section 7421(a) provides:
26 U.S.C. § 7421(a). None of the statutory exceptions delineated in § 7421(a) is applicable here.
The plaintiffs, however, assert in their complaint that a judicially-created exception to the prohibition on injunctive relief imposed by § 7421(a) permits the Court to enjoin the defendant from the collection and assessment activity about which the plaintiffs complain. Compl. ¶ 30. The origin of this exception is the Supreme Court's decision in Enochs, 370 U.S. at 7, 82 S.Ct. 1125, in which the Court stated:
Id. (internal quotation marks, footnote, and citation omitted, emphasis added).
In the present case, the plaintiffs clearly have failed to meet their burden of showing that the Enochs exception applies. As to the first element of the Enochs test, the plaintiffs have offered nothing but a broad, factually unsupported statement that "[t]he United States has no possibility of rebutting the claims of [the] plaintiff(s)." Compl. ¶ 30. As the defendant notes, Def.'s Supp. Mem. at 4-5, the plaintiffs do not specify the tax years in which the alleged improper assessments were made, the categories of taxes at issue, or the amounts or dates of the improper tax assessments, see generally Compl. On what has been submitted to the Court, it certainly cannot conclude, even "under the most liberal view of the law and facts," Enochs, 370 U.S. at 7, 82 S.Ct. 1125, that "the Government [clearly] cannot prevail," Laing, 423 U.S. at 196, 96 S.Ct. 473 (Blackmun, J., dissenting). Likewise, the plaintiffs have also failed to demonstrate the second component of the Enochs exception, as they have offered no factual support whatsoever for their sweeping allegation
c. The Requests for Tax Refund and Return of Property
The plaintiffs' complaint also seeks a "refund of all unassessed taxes, [the] return of all seized property, [and the] return of all levied funds." Compl. ¶ 33.
The plaintiffs no longer contend that they filed the refund claim required by 26 U.S.C. § 7422(a) in the manner prescribed by 26 C.F.R. § 301.6402-2.
d. The Request for Damages
The plaintiffs seek an award of damages for the defendant's alleged violations of the IRC. Compl. ¶ 32. In response, the defendant contends that the plaintiffs' damages claim must be dismissed because they have not exhausted their administrative remedies as required by 26 U.S.C. § 7433(d)(1). This section of the IRC provides that "[a] judgment for damages shall not be awarded . . . unless the court determines that the plaintiff has exhausted the administrative remedies available to such plaintiff within the Internal Revenue Service." Id. The IRS has promulgated a regulation detailing the administrative procedures plaintiffs wishing to bring suit under § 7433 must complete before they may file a complaint in federal court. See 26 C.F.R. § 301.7433-1. While the Court concludes, for the reasons stated earlier, that § 301.7433-1 does not impose a jurisdictional prerequisite to filing a lawsuit, part (e) of this regulation establishes the administrative remedies called for by 26 U.S.C. § 7433(d)(1). Consequently, the Court may not award a judgment for damages to a plaintiff bringing an action under 26 U.S.C. § 7433 where that plaintiff has not first satisfied the administrative procedures set forth in 26 U.S.C. § 7433-1(e). See Turner, 429 F.Supp.2d at 153.
As in Turner, the plaintiffs here do not contest that they did not exhaust the administrative remedies promulgated in 26 C.F.R. § 301.7433-1, claiming instead that the regulation "was the source of the claimed wrong, not a possible avenue for its redress." Pls.' Resp. at 20 (quoting Pacific Tel. & Tel. Co. v. Pub. Util. Comm'n of California, 443 U.S. 1301, 1305, 100 S.Ct. 1, 61 L.Ed.2d 880 (Rehnquist, Circuit Justice 1979)). The Court is therefore precluded, under the express terms of 26 U.S.C. § 7433(d)(1), from entering a judgment awarding damages to the plaintiffs. Because it cannot grant this form of relief, the Court must dismiss this component of the plaintiffs' complaint. Accordingly, lacking any basis to excuse the plaintiffs' failure to exhaust those remedies, the Court concludes that the plaintiffs are barred from seeking damages under 26 U.S.C. § 7433, and it grants the defendant's motion to dismiss the plaintiffs' damages claim pursuant to Rule 12(b)(6).
In their response to the defendant's supplemental motion to dismiss, the plaintiffs appear to raise a facial challenge to 26 C.F.R. § 301.7433-1. See Pls.' Resp. at 12-15. Although they did not include it in their original complaint, see generally Compl., it is clear that the plaintiffs are entitled to add this new claim by way of amendment. Pursuant to Federal Rule of Civil Procedure 15(a), a plaintiff may amend his or her complaint "as a matter of course at any time before a responsive pleading is served." Fed.R.Civ.P. 15(a). Rule 15(a) "guarantee[s] a plaintiff an absolute right to amend [his or her] complaint once at any time before the defendant has filed a responsive pleading." James V. Hurson Assocs., Inc. v. Glickman, 229 F.3d 277, 282-83 (D.C.Cir.2000). The District of Columbia Circuit has "repeatedly clarified that a motion to dismiss is not a responsive pleading for the purposes of Rule 15." Id. at 283 (citations omitted). Thus, where a "defendant has filed a motion to dismiss and not a responsive pleading, the court grants the plaintiffs proposed amendment as of right." Adams v. Quattlebaum, 219 F.R.D. 195,
To complicate matters further, the plaintiffs have neither moved to amend their complaint nor provided the Court a copy of the proposed amended complaint, as required by Local Civil Rule 7(i). While ordinarily this would preclude the plaintiffs from adding a new claim to their complaint, the situation is different where, as here, the plaintiffs are proceeding pro se. See Richardson v. United States, 193 F.3d 545, 548 (D.C.Cir.1999). In Richardson,. the pro se plaintiff's initial complaint alleged negligence by the United States Air Force under the Federal Tort Claims Act ("FTCA"), 28 U.S.C. § 2680 et seq. (2000). Id. at 546. In response to the government's motion to dismiss for lack of subject matter jurisdiction on the grounds that the conduct about which the plaintiff complained fell within the FTCA's exception for discretionary government functions, id., the plaintiff filed an opposition "assert[ing] that he did not seek compensation for tortious acts or omissions of military personnel," id. at 547, but rather for negligent manufacturing of a vaccine by a government contractor, a claim he argued was not barred by the FTCA, id.
Reversing the district court's ruling dismissing the plaintiff's case based on what had been pled in his complaint, the District of Columbia Circuit held that "the District Court abused its discretion in failing to consider [the plaintiff s] complaint in light of his reply to the [defendant's] motion to dismiss." Id. at 548. The Richardson Court identified four factors which weighed in favor of permitting the plaintiff to effectively amend his complaint by alleging what amounted to a new claim that had been made in response to the defendant's motion to dismiss. Id. at 548-49. First, the Court emphasized that because the plaintiff was proceeding pro se, the district court should not only have considered the plaintiff's complaint but rather "should have read all of [the plaintiffs] filings together before dismissing [the] case." Id. at 548 (citations omitted). Second, the Circuit Court noted that "at the time [the plaintiff] tendered his reply to the defendant's motion to dismiss, he could have amended his claim as of right because the defendant had filed no responsive pleading." Id. Third, the plaintiff in Richardson "both recognized the need for and attempted to make a change to his original complaint," id. at 549, as reflected by the fact that after his complaint was dismissed he requested leave to file an amended complaint, id. at 547.
Applying the factors considered in Richardson, this Court concludes that the proper course to take in this case is to permit the plaintiffs leave to file an amended complaint. While the plaintiffs' complaint is virtually indistinguishable from those in more than a dozen other cases that have been filed in this Court, the plaintiffs here are proceeding pro se, and accordingly the Court "must construe [their] filings liberally," id. at 548 (citing Haines, 404 U.S. at 520-21, 92 S.Ct. 594),
Although the Court concludes that service of the summons and complaint upon the defendant was improper under Federal Rule of Civil Procedure 4(c)(2), the Court denies the defendant's motion to dismiss on insufficient service of process grounds under Federal Rule of Civil Procedure 12(b)(5) because the pro se plaintiffs were not provided advance notice of the necessity of complying with the precise terms of Rule 4. Moreover, dismissal on this ground would be inappropriate because the defect in the plaintiffs' service was not significant and has not caused the defendant any prejudice. However, the Court grants the defendant's supplemental motion to dismiss the claims for relief currently before the Court in the plaintiffs' complaint, because it lacks jurisdiction over three forms of relief sought by the plaintiffs and because the plaintiffs have failed to exhaust their administrative remedies with respect to the only other type of relief requested. Finally, because it appears that the pro se plaintiffs conceivably intended to amend their complaint to include a facial challenge to 26 C.F.R. § 301.7433-1, the Court will grant the plaintiffs limited leave to amend their complaint solely to include this new claim if they choose to do so.
SO ORDERED this 22nd day of August,
In accordance with the Memorandum Opinion that accompanies this Order, it is hereby
26 C.F.R. § 301.7433-1(d)(1).
While the language of these regulatory provisions would appear to deprive federal courts of jurisdiction over cases where the administrative remedies set forth in § 301.7433-1(e) have not been exhausted, the Court is not persuaded that the IRS's promulgation of § 301.7433-1(e) does, or even could, transform the exhaustion requirement of 26 U.S.C. § 7433—which, for the reasons discussed `supra, does not by its language impose a jurisdictional prerequisite to suit—into a jurisdictional barrier. Both the Supreme Court in Arbaugh, ___U.S. at ___, 126 S.Ct. at 1245, and the District of Columbia Circuit in Avocados Plus, 370 F.3d at 1248, direct the Court to turn to the language employed by Congress in creating an exhaustion requirement, not the provisions of regulations delineating the administrative procedures to be followed, when determining whether such a requirement is jurisdictional in character. Indeed, the Constitution vests the exclusive authority to expand or contract the jurisdiction of lower federal courts with Congress, not the executive branch. See Const. art. I § 1; Palmore v. United States, 411 U.S. 389, 400-01, 93 S.Ct. 1670, 36 L.Ed.2d 342 (1973) ("The decision with respect to inferior federal courts, as well as the task of defining their jurisdiction, was left to the discretion of Congress."). Moreover, because the language of 26 U.S.C. § 7433 is clear and unambiguous with respect to its imposition of a non jurisdictional exhaustion requirement, the Court need not accord 26 C.F.R. § 301.7433-1 formal Chevron deference in its interpretation of 26 U.S.C. § 7433. See Hornbeck Offshore Transp., LLC v. U.S. Coast Guard, 424 F.Supp.2d 37, 46 (D.D.C.2006) (holding that "[w]here the Court can easily discern Congressional intent from the statutes' plain language, the Court's APA review terminates at step one of the Chevron review and the Agency's construction is owed no deference"). Accordingly, 26 C.F.R. § 301.7433-1 cannot transform 26 U.S.C. § 7433's statutory non jurisdictional exhaustion requirement into a jurisdictional requirement.