Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-02520/USCOURTS-casd-3_11-cv-02520-2/pdf.json

Nature of Suit Code: 870
Nature of Suit: Tax Suits
Cause of Action: 28:1442 Petition for Removal

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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

BRIAN KENNER, et aI., CASE NO. 11-CV-2520 BEN (BGS) 

vs. 

Plaintiffs, ORDER GRANTING UNITED 

STATES' MOTION TO DISMISS 

ERIN KELLY, et aI., [Docket No. 35] 

Defendants. 

Presently before the Court is Defendant United States ofAmerica's Motion to Dismiss. (Docket No. 

35.) For the reasons stated below, the Motion is GRANTED. 

BACKGROUND 

In October 20 1 0, Plaintiffs Brian Kenner and Kathleen Kenner (husband and wife) filed suit against 

individual Internal Revenue Service employees David Alito, Charlotte Becerra, Patricia Blizzard, C. John 

Crawford, Erin Kelly, Mindy Meigs, Mary Kay Pittner, Jennifer Plasky, Carol Rose, and Sylvia Shaughnessy 

("IRS Defendants"), as well as Barbara Dunn and Lacy Dunn and Do ("First RICO Action"). (Kenner v. 

Kelly, 1O-CV-2105 AJB (WVG), Docket No.1.) The complaint alleged that the IRS Defendants engaged 

in unauthorized collection actions by accepting payment ofsettlementfunds, by their offer in compromise, and 

by improperly collecting settlement funds, in violation ofthe Racketeer Influenced and Conupt Organizations 

Act ("RICO"), 18U.S.C. § 1961 etseq. 

When the First RICO Action was filed, it was assigned to Judge Barry T. Moskowitz. The district 

court later transferred the action to Judge Anthony J. Battaglia. (ld., Docket No. 61.) On May 27,2011, 

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Case 3:11-cv-02520-BEN-BGS Document 50 Filed 06/20/12 Page 1 of 4
1 Judge Battaglia granted the IRS Defendants' motion to dismiss, and entered judgment. (Id, Docket Nos. 

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64,65.) On June 21,2011, Plaintiffs filed a Notice ofAppeal challenging the order granting the motion to 

dismiss. (ld, DocketNo. 66.) The appeal is currently pending before the Ninth Circuit. (See Kenner v. 

Kelly, No. 11-56062 (9th Cir.).) 

On July 12, 2011, Plaintiffs filed a new action in district court, which is similar to the First RICO 

Action ("Second RICO Action"). (See Kennerv. Kelly, ll-CV-1538AJB (WVG),DocketNo.1.) On 

August 9,2011, this action was transferred to Judge Battaglia pursuant to the Court's low number rule. (Id, 

Docket No. 13.) On August 11 , 2011, this action was stayed pending resolution ofthe appeal ofthe First 

RICO Action. (Id, Docket No. 15.) 

lOOnOctober 14,2011, Plaintiffs filed the present action in the San Diego County Superior Court 

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against the IRS Defendants intheir individual capacities, Capital One, Judge Battaglia, and Judge Moskowitz. 

(Docket No. 1.) As to the IRS Defendants, Plaintiffs assert six causes ofaction: (1) conspiracy to violate 

the Bane Act, CAL. CIY. CODE §52.1; (2) violation ofthe Bane Act, CAL. CIV. CODE §52.1; (3) conspiracy 

to abuse process; (4) abuse ofprocess; (5) conspiracy for conversion; and (6) interference with economic 

relationships. The United States and the IRS Defendants removed this action on October 31, 2011. 

On January 13,2012, the Court granted the United States' Motion to Substitute Party, dismissing 

the IRS Defendants and substituting the United States as a proper party defendant. (Docket No. 28.) 

Presently before the Court is the United States' Motion to Dismiss. Being fully briefed, the Court finds the 

Motion suitable for determination onthe papers without oral argument, pursuant to Civil Local Rule 7.I.d.l. 

DISCUSSION 

Because the Court substituted the originalIRS Defendants with the United States on January 13, 

2012, the United States is now the proper party defendant before this Court. "The Federal Government 

cannot be sued without its consent." UnitedStatesv. Navajo Nation, 556 U.S. 287, 289(2009). Where 

the United States has not consented to suit, the Court lacks jurisdiction overthe subject matter ofthe action 

and dismissal is required. Gilbert v. DaGrossa, 756 F.2d 1455, 1458 (9th Cir. 1985). A court strictly 

construes waivers ofsovereign immunity, which must be unequivocally expressed in the statutory text; to 

show that the government is liable for awards ofmonetary damages, the waiver ofsovereign immunity must 

extend unambiguously to such monetary claims. OklevuehaNativeAm. Church ofHawaii, Inc. v. Holder, 

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676 F.3d 829,840 (9th Cir. 2012). 

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The Court detennined Plaintiffs' causes ofaction against the original IRS Defendents were common 

3 law tort claims against the United States in its decision to grant the motion to substitute party on January 13, 

4 2012. The Federal Tort Claims Act ("FTCA") is the exclusive remedy for a claim against the United States 

for money damages for injury or loss ofproperty or personal injury or death caused by the negligent or 

6 wrongful act or omission ofany employee of the Government while acting within the scope ofhis office or 

7 employment. 28 U.S.C. § 2679(b)(I). 

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Even though the FTCA provides certain remedies to sue the federal government and its employees, 

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it has limitations and exceptions. First, a prerequisite to the waiver ofsovereign immunity under the FTCA 

requires the claimant to present an administrative claim to the appropriate Federal agency first and to have 

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his claim finally denied by the agency. 28 U.S.C. §2675. If this is not done, a plaintiff s claim is premature. 

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Meridian Int'/ Logistics, Inc. v. United States, 939 F.2d 740,743 (9th Cir. 1991). In this case, there is 

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no record beforethe Courtthat indicates Plaintiffs filed such a claim, and the claim had been denied. Second, 

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the FTCA does not extend to any "claim arising in respect ofthe assessment or collection ofany tax ...." 

28 U.S.C. § 2680(c);Morrisv. UnitedStates, 521 F.2d 872, 874 (9th Cir. 1975). Here, Plaintiffs' claims 

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arise out ofthe IRS Defendants' seizure ofassets in the process ofcollection ofa tax, and thus, the FTCA 

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does not apply. In addition, Plaintiffs have failed to cite any other statutory authority that waives the United 

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States' sovereign immunity in this case. 

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Plaintiffs make three arguments in oppositionto the Motion to Dismiss. First, Plaintiffs argue that the 

21 fact that the FTCA cannot be used against IRS employees acting to collect taxes means that itwas improper 

for the United States to substitute itself as a defendant. The Court properly substituted the United States as 22 

23 adefendantin place ofthe IRS Defendants pursuantto 28 U.S.C. § 2679(d), as amended by the Federal 

24 Employees Liability Reform and Tort Compensation Act of1988 (Pub. Law 100-694). Second, Plaintiffs 

argue that the Certification ofScope ofEmployment and Substitutionofthe United States was improper and 

26 constituted a finaljudgment that Plaintiffs should have been allowed to appeal. However, the Ninth Circuit 

27 already ruled on March 12,2012 that it lackedjurisdictionto decide the issue because the order to grantthe 

28 motion to substitute party was not final and thus not appealable. (Docket No.3 8.) Third, Plaintiffs argue 

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that they were prejudiced because they did not receive timely notice ofthe substitution ofthe United States 

in this matter. Plaintiffs argue that the Certification ofScope ofEmployment, filed on January 5, 2012 and 

including a Certificate ofService stating that it was mailed the same day, was not postmarked until January 

17,2012. The Certificate ofService for the Certification ofScope ofEmployment is dated January 5, 2012. 

(DocketNo. 21.) Although Plaintiffs were mailed a court document on January 17, 20 12, this document was 

likely the United States' Reply in Support ofthe Motion to Dismiss filed on behalf ofthe IRS Defendants, 

which is dated January 13,2012. (Docket No. 27.) Thus Plaintiffs received timely notice ofthe substitution 

ofthe United States for the IRS Defendants. 

Accordingly, the Court does not havejurisdiction over Plaintiffs' claims against the United States. 

As this issue is dispositive, the Court will not address the Unites States' remaining arguments. 

CONCLUSION 

For the reasons stated above, United States' Motion to Dismiss is GRANTED. All ofPlaintiffs' 

claims against United States are DISMISSED WITH PREJUDICE. 

IT IS SO ORDERED. 

DATED: June(t, 2012
 7-1­

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