The opinion of the court was delivered by: Honorable Janis L. Sammartino United States District Judge
ORDER GRANTING DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS (Doc. No. 69.)
Presently before the Court is the United States of America's ("Defendant" or "the government") motion for judgment on the pleadings dated July 26, 2010. (Doc. No. 69.) For the reasons stated below, the Court hereby GRANTS Defendant's motion for judgment on the pleadings.
This action arises out of a 2003 default judgment entered by this Court in United States v. Scharringhausen, 226 F.R.D. 406 (S.D. Cal. 2005). In that case, the United States commenced a tax assessment action against Robert Scharringhausen, the plaintiff in this action. Id. And that case concluded when the Court reduced certain federal tax assessments to judgment and entered a default judgment against Plaintiff. Id. at 407.
In the present case, Plaintiff alleges that the United States violated 26 U.S.C. § 7433 ("First Cause of Action") when it improperly pursued the 2003 action against him and submitted false declarations in that case. (Doc. No. 51.) The basis for the first cause of action were alleged violations of 26 U.S.C §§ 7122, 7401(c), 7602(c)(2), and 26 C.F.R. § 301.7602-1(c)(3)(ii). (Id. ¶¶ 32, 41--43.) Plaintiff also asserts a cause of action ("Second Cause of Action") against the IRS for withholding documents related to the 2003 cause of action. (Id. ¶ 47.)
This Court partially dismissed the first cause of action on July 12, 2010. (Doc. No. 67.) The Court dismissed with prejudice Plaintiff's first cause of action insofar as it was based on alleged violations of 26 U.S.C. § 7602(c)(2) and 26 C.F.R § 301.7602-1(c)(3)(ii). (Id. at 10.) The Court also dismissed the first cause of action as it related to 26 U.S.C. § 7122 for lack of subject matter jurisdiction. (Id. at 8.) The Court, however, did not deny Plaintiff's first cause of action insofar as it is based on a violation of 26 U.S.C. § 7491(c). Following the partial dismissal, Defendant filed the present motion for judgment on the pleadings. (Doc. No. 69.) Plaintiff opposed on September 16, 2010. (Doc. No. 80.)
"After the pleadings are closed, but within such time as not to delay the trial, any party may move for judgment on the pleadings." Fed. R. Civ. P. 12(c). A motion for judgment on the pleadings attacks the legal sufficiency of the claims alleged in the complaint. This Court must construe "all material allegations of the non-moving party as contained in the pleadings as true, and [construe] the pleadings in the light most favorable to the [non-moving] party." Doyle v. Raley's Inc., 158 F.3d 1012, 1014 (9th Cir. 1998). "Judgment on the pleadings is proper when the moving party clearly establishes on the face of the pleadings that no material issue of fact remains to be resolved and that it is entitled to judgment as a matter of law." Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1550 (9th Cir. 1989). "The standard for granting a Rule 12(c) motion for judgment on the pleadings is identical to that of a Rule 12(b)(6) motion for failure to state a claim." Patel v. Contemporary Classics of Beverly Hills, 259 F.3d 123, 126 (2d Cir. 2001); accord Spivey v. Ohio, 999 F. Supp. 987, 991 (N.D. Ohio 1998) (where motion for judgment on the pleadings raises a Rule 12(b)(6) defense, court properly applies the standard for a Rule 12(b)(6) motion).
I. The Law of the Case Doctrine
Plaintiff argues in its opposition to the motion for judgment on the pleadings that this Court is precluded from reexamining the applicability of 26 U.S.C. § 7491(c) to the facts of this case. Under the "law of the case" doctrine, "a court is generally precluded from reconsidering an issue that has already been decided by the same court." Thomas v. Bible, 983 F.2d 152, 154 (9th Cir. 1993). Plaintiff argues that § 7491(c)'s applicability had already been implicitly decided when the Court stated that the issue in this case was whether the government acted negligently or intentionally in submitting allegedly false declarations or documents in the 2003 case. (Doc. No. 67 at 6.) The Court made no finding regarding the effective date of the statute and does not believe that the law of the case doctrine applies.
Nonetheless, in the interest of avoiding clear error, the Court considers Plaintiff's argument. An exception to the "law of the case" doctrine is that the Court may depart from the doctrine when "the first decision was clearly erroneous." Thomas, 983 F.2d at 155. For the purposes of this order, the Court will assume its prior order was erroneous.
II. First Cause of Action
Plaintiff's theory of recovery is as follows. Plaintiff filed suit under 26 U.S.C. § 7433 for civil damages. Section 7433 allows plaintiffs to recover damages if the IRS recklessly, intentionally, or negligently, disregards any provision of Title 26. Plaintiff alleges that the IRS violated 26 U.S.C. § 7491(c) in the 2003 action when it submitted allegedly false declarations or documents in support of default judgment. This is a violation, Plaintiff alleges, because § 7491(c) states that the IRS has the "burden of production in any court proceeding with respect to the liability of any individual for any penalty, addition to tax, or additional ...