Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-02340/USCOURTS-casd-3_11-cv-02340-1/pdf.json

Nature of Suit Code: 550
Nature of Suit: Prisoner - Civil Rights (U.S. defendant)
Cause of Action: 26:7422 IRS: Refund Taxes

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

MARCO T. ORDONEZ, Civil

No.

11cv2340-CAB (NLS)

Plaintiff,

ORDER GRANTING MOTION TO

DISMISS WITH PREJUDICE

[Doc. No. 13]

v.

U.S. DEPARTMENT OF THE

TREASURY; and INTERNAL

REVENUE SERVICE,

Defendants.

Plaintiff, a state prisoner proceeding pro se, filed this action on October 6,

2011, then filed an Amended Complaint on February 6, 2012. [Doc. No. 7.] On April 18,

2012, defendant United States of America filed a motion to dismiss the Amended

Complaint. [Doc. No. 13.] On June 18, 2012, plaintiff filed an opposition to the motion.

[Doc. No. 17.] On June 25, 2012, defendant filed a reply to the opposition. [Doc. No.

18.] The Court deems the matter suitable for submission without oral argument pursuant

to Civil Local Rule 7.1(d)(1). After reviewing the submissions of the parties, the Court

hereby GRANTS WITH PREJUDICE the motion to dismiss.

I. Allegations of Amended Complaint

The Amended Complaint is entitled “Complaint for: Erroneously denied

tax refund.” [Doc. No. 7 at 1.] In it, plaintiff alleges that he is a prisoner at Calipatria

State Prison and works in the prison as a Program Services Clerk for $.032 per hour.

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[Doc. No. 7 at 2, 4.] Plaintiff alleges he received compensation in the amount of

$8,946.00 for tax year 2006, and reported this on a Form 1040EZ. [Doc. No. 7 at 1.]

Plaintiff also alleges that he provided a Form 4852 (a substitute for a form W-2) with the

Form 1040EX. Id. Plaintiff alleges that the State of California does not issue W-2s to

prison inmates. [Doc. No. 7 at 2.]

Plaintiff alleges that after he submitted his Form 1040Z, he received a

letter from the IRS requesting proof of wages. Id. Plaintiff claims that he responsed by

producing a copy of certain periodic pay statements. Id. On March 2, 2010, Plaintiff

alleges he received a letter from the IRS informing him that his claim for refund was

disallowed. Plaintiff alleges he appealed that decision by filing a Form 1040X on March

29, 2010. Plaintiff alleges the IRS denied his claim in August of 2010 and the IRS

denied his second appeal on November 2, 2010. Id.

Plaintiff requests a declaratory judgment that: (1) affirms his and other

similarly situated prisoners status as common law employees under I.R.C. § 3121(d)(2);

(2) declares that a person in his position is in compliance with the law and not

committing fraud by filing a tax return; (3) that services and property received by a

prisoner are part of gross income under I.R.C. § 61; and (4) to recognize the legitimacy

of his tax refunds and all other legitimate claims submitted by the incarcerated. [Doc.

No. 7 at 5-6.] Additionally, plaintiff seeks compensatory damages of $1,000,000.00 for

alleged emotional and psychological damage caused by the denial of his tax claims as

well as $1,000,000.00 in punitive damges for violations of his rights under the eighth

and fourteenth amendments to the constitution. [Doc. No. 7 at 6-7.] 

II. Discussion

1. Legal Standard.

The plaintiff bears the burden of establishing subject matter jurisdiction

and trial courts will presume a lack of jurisdiction until the plaintiff proves otherwise.

Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377 (1994); Ass'n of

American Medical Colleges v. U.S., 217 F.3d 770, 778 (9th Cir.2000); Sun Microsystems

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Inc. v. Hynix Semiconductor Inc., 2007 WL 1056783, *2 (N.D.Cal.2007). A

jurisdictional challenge under Rule 12(b)(1) may be made either on the face of the

pleadings or by presenting extrinsic evidence. Warren v. Fox Family Worldwide, Inc.,

328 F.3d 1136, 1139 (9th Cir.2003). “In a facial attack, the challenger asserts that the

allegations contained in a complaint are insufficient on their face to invoke federal

jurisdiction. By contrast, in a factual attack, the challenger disputes the truth of the

allegations that, by themselves, would otherwise invoke federal jurisdiction.” See Safe

Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir.2004) (noting that an attack

was factual where a defendant challenged plaintiff's contention that grass residue

constitutes solid waste under RCRA). Here, defendant asserts a facial attack [Doc. No.

13-1 at 3]. Therefore, the Court must accept the complaint’s allegations as true. Safe Air

for Everyone, 373 F.3d at 1039.

2. Claim for tax refund.

The gravamen of plaintiff’s complaint appears to be a claim for a tax

refund. The United States, as a sovereign entity, is immune from suit except when it

consents to be sued. United States v. Dalm, 494 U.S. 596, 608 (1990); United States v.

Mitchell, 445 U.S. 535, 538 (1980). It is the plaintiff's burden to establish the jurisdiction

of the court, and thus, plaintiff must show a waiver of sovereign immunity. See McNutt

v. General Motors Acceptance Corp., 298 U.S. 178, 188 (1936).

Plaintiff fails to show that the United States has waived immunity from

suit here. Section 7422(a) of the Internal Revenue Code provides that “[n]o suit or

proceeding can be maintained in any court for the recovery of any internal revenue tax

alleged to have been erroneously or illegally assessed or collected ... until a claim for

refund or credit has been duly filed with the Secretary.” 26 U.S.C. § 7422(a).

Furthermore, in order for a district court to have jurisdiction over a suit for the refund of

taxes, the taxpayer must first have paid the assessment, or a divisible portion thereof, for

which relief is sought. See 26 U.S.C. §§ 7422(a), 6532(a); Thomas v. United States, 755

F.2d 728, 729 (9th Cir.1985); Flora v. United States, 362 U.S. 145 (1960).

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Here, plaintiff fails to allege what amout of tax Plaintiff owed for the

2006 tax year or the amount of tax he was assessed for that year. [Doc. No. 7 at 2-5.] 

More importantly, plaintiff does not allege that he fully paid whatever amount of tax he

was assessed (if any). Full payment of the assessed amount of taxes is a legal

prerequisite to a suit for refund. See I.R.C. § 7422; Flora, 362 U.S. at 150-151. Without

an allegation of full payment, plaintiff’s Amended Complaint fails to establish that

subject matter jurisdiction exists for a suit for refund. See Del Elmer; Zachay v.

Metzger, 967 F.Supp. 398, 405 (S.D. Cal. 1997)(where plaintiff has failed to allege

jurisdictional prerequisites for a refund suit, the Court lacks subject matter jurisdiction). 

In his opposition, plaintiff admits that he does not, and apparently cannot, allege full

payment of the assessed tax. [Doc. No. 17 at 5.] Therefore, the defendant’s motion to

dismiss this claim is GRANTED without leave to amend.

3. Declaratory Relief Claims.

Plaintiff also seeks declaratory relief on behalf of himself and others

similarly situated with regard to federal taxes. However, declaratory relief with respect 1

to federal taxes is barred by 28 U.S.C. § 2201. Section 2201(a) states in relevant part:

In a case of actual controversy within its jurisdiction,

except with respect to Federal taxes ... any court of the

United States, upon the filing of an appropriate pleading,

may declare the rights and other legal relations of any

interested party seeking such declaration.....

28 U.S.C. § 2201 (emphasis added). 

The language of the Declaratory Judgment Act withdraws jurisdiction

from federal courts over any suit seeking a declaratory judgment with respect to federal

taxes, whether or not the suit would have the effect of restraining the assessment or

collection of federal taxes. Alexander v. “Americans United” Inc., 416 U.S. 752, 759 n.

 To the extent plaintiff purports to represent others “similarly situated,” such claims are also 1

barred. Although a non-attorney may appear in propria persona in his own behalf, that privilege is

personal to him. McShane v. United States, 366 F.2d 286, 288 (9th Cir.1966). He has no authority to

appear as an attorney for others than himself. Russell v. United States, 308 F.2d 78, 79 (9th Cir.1962);

Collins v. O'Brien, 208 F.2d 44, 45 (D.C.Cir.1953), cert. denied, 347 U.S. 944, 74 S.Ct. 640, 98 L.Ed.

1092 (1954). 

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10 (1974); Hutchinson v. United States, 677 F.2d 1322, 1326 (9th Cir.1982).

Accordingly, this Court lacks subject matter jurisdiction over plaintiff's

claim for a declaratory judgment with respect to his federal tax liabilities and the tax

collection activities taken against him. Therefore, the defendant’s motion to dismiss this

claim is GRANTED without leave to amend.

4. Claims for compensatory damages for emotional and psychological damage.

In addition to declaratory relief, plaintiff seeks damages for “the

emotional and psychological damage produced by the irreparable financial harm” caused

by the denial of his tax claims. [Doc. No. 7 at 6.] However, such claims are also barred

for lack of subject matter jurisdiction. “The Federal Government cannot be sued without

its consent.” United States v. Navajo Nation, 556 U.S. 287, 289 (2009). Where the

United States has not consented to suit, the Court lacks jurisdiction over the subject

matter of the action and dismissal is required. Gilbert v. DaGrossa, 756 F.2d 1455, 1458

(9th Cir.1985). A court strictly construes waivers of sovereign immunity, which must be

unequivocally expressed in the statutory text; to show that the government is liable for

awards of monetary damages, the waiver of sovereign immunity must extend

unambiguously to such monetary claims. Oklevueha Native Am. Church of Hawaii, Inc.

v. Holder, 676 F.3d 829, 840 (9th Cir.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 of property or

personal injury or death caused by the negligent or wrongful act or omission of any

employee of the Government while acting within the scope of his office or employment.

28 U.S.C. § 2679(b)(1). Even though the FTCA provides certain remedies to sue the

federal government and its employees, it has limitations and exceptions. First, a

prerequisite to the waiver of sovereign immunity under the FTCA requires the claimant

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

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

claim is premature. Meridian Int'l Logistics, Inc. v. United States, 939 F.2d 740, 743 (9th

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Cir.1991). In this case, there is no record before the Court that indicates plaintiff filed

such a claim, and the claim had been denied. Second, the FTCA does not extend to any

“claim arising in respect of the assessment or collection of any tax ....” 28 U.S.C. §

2680(c); Morris v. United States, 521 F.2d 872, 874 (9th Cir.1975). Here, plaintiff’s

claims arise out of an alleged failure to provide a tax refund, and thus, the FTCA does

not apply. In addition, Plaintiff has failed to cite any other statutory authority that waives

the United States' sovereign immunity in this case. Therefore, the defendant’s motion to

dismiss the claims for compensatory damages for emotional and psychological damages

is GRANTED without leave to amend.

5. Punitive damages.

Plaintiff also seeks punitive damages for the federal defendant’s

“malicious and deliberate indifference and callous disregard of federal tax regulations

and applicable law.” [Doc. No. 7 at 6.] In doing so, plaintiff does not allege any waiver

of sovereign immunity. The United States cannot be sued for punitive damages unless

Congress explicitly authorizes such liability. Missouri Pacific Railroad Co. v. Ault, 256

U.S. 554 (1921); Kasprik v. United States, 87 F.3d 462, 465 (11th Cir. 1996). Sovereign

immunity has not been waived with respect to punitive damages. Therefore, the motion

to dismiss the claim for punitive damages is GRANTED without leave to amend.

6. Constitutional claims.

Plaintiff alleges that he is entitled to damages based upon vague

allegations that his rights under the eighth and fourteenth amendments of the constitution

have been violated. [Doc. No. 7 at 7.] To the extent plaintiff is purporting to state a

claim under 42 U.S.C. § 1983, plaintiff has failed to establish a waiver of sovereign

immunity. The United States is a sovereign, and may not be sued for money damages

without its consent. United States v. Testan, 424 U.S. 392, 399 (1976). The United 2

 In his opposition, plaintiff requests leave to substitute the IRS and the Treasury Department for 2

the United States. [Doc. No. 17 at 1.] However, a suit for damages against a federal agency or federal

employees in their official capacity is essentially a suit against the United States and is also barred by

sovereign immunity absent statutory consent. Gilbert v. DaGrossa, 756 F.2d 1455, 1460 & n. 6 (9th

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States has not waived its sovereign immunity for actions seeking damages for

constitutional violations. See Holloman v. Watt, 708 F.2d 1399, 1401–02 (9th Cir.1983)

(rejecting claimant's argument that sovereign immunity did not apply to his due process

claim for damages when the federal defendants were being sued in their official capacity

only); Arnsberg v. United States, 757 F.2d 971, 980 (9th Cir.1984) (holding plaintiff's

damages claim for violation of his Fourth Amendment rights against the United States

was barred by sovereign immunity). “Where a suit has not been consented to by the

United States, dismissal of the action is required.” Gilbert, 756 F.2d at 1458. Therefore,

defendant’s motion to dismiss plaintiff’s claims for damages for alleged constitutional

violations is GRANTED without leave to amend.

III. Conclusion

For the foregoing reasons, Defendant’s motion to dismiss is GRANTED

WITH PREJUDICE. The Clerk of the Court shall TERMINATE the action.

DATED: June 24, 2013

CATHY ANN BENCIVENGO

United States District Judge

Cir.1985). 

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