United States District Court, N.D. California, San Francisco Division
ORDER GRANTING MOTION TO DISMISS [ECF No.
BEELER UNITED STATES MAGISTRATE JUDGE
case involves a delinquent taxpayer suing the Internal
Revenue Service (“IRS”) for damages and
injunctive relief for alleged overreach and bad faith in its
efforts to collect a tax debt. The petitioner and taxpayer,
Mr. Jason, seeks damages for deprivation of due process,
deceptive business practices, fraud, perjury, and intentional
and negligent infliction of emotional distress.Mr. Jason also
seeks injunctive relief to stay forfeiture, institute a
payment plan, allow for leave to file bankruptcy, and allow
for leave to secure counsel. The IRS moves to dismiss the case
for lack of subject-matter jurisdiction on the grounds of
sovereign immunity and failure to exhaust administrative
remedies. The court decides this matter without oral
argument and vacates the hearing set for July 28, 2016.
See Civil L.R. 7-1(b). The court grants the
government's motion and dismisses Mr. Jason's claims
without prejudice because Mr. Jason has not exhausted his
administrative remedies under 26 C.F.R. § 301.7433-1(d).
Jason owes over $20, 000 in back taxes, and beginning in
March 2015, he attempted to set up a payment plan with the
Mr. Jason offered the IRS approximately $500 per month in
installment payments, but the IRS rejected that
offer. Mr. Jason alleges that the IRS acted in
bad faith in rejecting his offer to pay his delinquent tax
bill by installment payments.
August 2015, Mr. Jason received a notice of forfeiture from
the IRS, which he alleges did not include particular details
regarding what property was to be seized, when the forfeiture
would occur, or any opportunity for a hearing. Mr. Jason filed
an appeal; he states that he received letters thereafter from
the IRS that rejected his appeal. Mr. Jason states that his
next interaction with the IRS was a phone call with an IRS
employee he identifies as a “Settlement
Officer.” Mr. Jason claims that the Settlement
Officer, to his surprise, was actually conducting his appeal
on this phone call, despite his belief that the IRS had
already rejected his appeal. On the call, Mr. Jason asked
why his installment payments were rejected, requested a
continuance of the appeal hearing, and asked why he was
entitled to a hearing at all after receiving an
Jason states that he received a letter dated December 31,
2015, which denied his appeal. Mr. Jason alleges that the
letter misrepresented his testimony during the phone call,
including his ability to make payments, his employment
status, and his request for leave to file for bankruptcy
Jason claims that because of his treatment by the IRS, he has
suffered severe emotional distress, which has caused the
symptoms of “depression, lack of sleep, headaches, pain
associated or typically related to cardiac issues in the
chest, arms, neck, and head, lack of self-confidence,
thoughts of helplessness, and fear.”
remedy these afflictions, Mr. Jason makes a number of claims,
including violation of due-process rights, First Amendment
rights, deceptive and misleading business practices, fraud
and misrepresentation, perjury, intentional infliction of
emotional distress, and negligent infliction of emotional
distress. Mr. Jason requests damages, stay of forfeiture, an
injunction forcing the IRS to accept his payment plan, and
leave to file bankruptcy.
government moved to dismiss the case for lack of
subject-matter jurisdiction, citing sovereign immunity and
the Tax Anti-Injunction Act as bars to Mr. Jason's
suit. Mr. Jason responded to the motion to
dismiss, introducing a new argument regarding the
government's waiver of sovereign immunity under 26 U.S.C.
§ 7433. The government replied, arguing that Mr.
Jason waived his § 7433 claim by not addressing it in
his initial complaint.
complaint must contain a short and plain statement of the
ground for the court's jurisdiction. Fed.R.Civ.P.
8(a)(1). The plaintiff has the burden of establishing
jurisdiction. See Kokkonen v. Guardian Life Ins. Co. of
Am., 511 U.S. 375, 377 (1994); Farmers Ins. Exchange
v. Portage La Prairie Mut. Ins. Co., 907 F.2d 911, 912
(9th Cir. 1990). A defendant's Rule 12(b)(1)
jurisdictional attack can be either facial or factual.
White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000).
“A 'facial' attack asserts that a
complaint's allegations are themselves insufficient to
invoke jurisdiction, while a 'factual' attack asserts
that the complaint's allegations, though adequate on
their face to invoke jurisdiction, are untrue.”
Courthouse News Serv. v. Planet, 750 F.3d 776, 780
n.3 (9th Cir. 2014). This is a facial attack; the court thus
“accept[s] all allegations of fact in the complaint as
true and construe[s] them in the light most favorable to the
plaintiffs.” Warren v. Fox Family Worldwide,
Inc., 328 F.3d 1136, 1139 (9th Cir. 2003).
court dismisses a complaint, it should give leave to amend
unless the “the pleading could not possibly be cured by
the allegation of other facts.” Cook, Perkiss and
Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 F.2d
242, 247 (9th Cir. 1990).
is axiomatic that the United States may not be sued without
its consent and that the existence of consent is a
prerequisite for jurisdiction.” Jachetta v. United
States, 653 F.3d 898, 903 (9th Cir. 2011) (quoting
United States v. Mitchell, 463 U.S. 206, 212
(1983)). This is the doctrine of sovereign immunity. The
Ninth Circuit has explained: “Before we may exercise
jurisdiction over any suit against the government, we must
have 'a clear statement from the United States waiving
sovereign immunity, together with a claim falling within the
terms of the waiver.'” Id. (quoting in
part United States v. White Mountain Apache Tribe,
537 U.S. 465, 472 (2003)). “[L]imitations and
conditions upon which the Government consents to be sued must
be strictly observed and exceptions thereto are not to be
implied.” Mollison v. United States, 568 F.3d
1073, 1075 (9th Cir. 2009) (citing Soriano v. United
States, 352 U.S. 270, 276 (1957)) (internal quotations
omitted; alteration in original).
a waiver, “a court does not have authority to award
relief against the United States or a federal agency . . .
.” Isaacs v. United States, No.
13-cv-01394-WHO, 2013 WL 4067597, at *1 (N.D. Cal. Aug. 1,
2013). “As the party asserting a claim against the
United States, [the plaintiff] has the burden of
'demonstrating unequivocal waiver of
immunity.'” United States v. Park Place
Assocs., Ltd., 563 F.3d 907, 924 (9th Cir. 2009)
(quoting Cunningham v. United States, 786 F.2d 1445,
1446 (9th Cir. 1986)).
immunity should be decided on the merits and can be raised at
any time because it speaks to a court's jurisdiction.
Tobar v. United States, 639 F.3d 1191, 1195 (9th
Cir. 2011) (citing I.R.S. v. Fed. Labor Relations
Auth., 521 F.3d 1148, 1152 (9th Cir. 2008)).
Civil Damages ...