Court Opinion

ID: 2662449
Source: CourtListenerOpinion
Date Created: 2014-04-03 12:20:52.440962+00
Date Added: 2024-06-11T12:59:13.666591
License: Public Domain

UNITED STATES DISTRICT COURT
                       FOR THE DISTRICT OF COLUMBIA
____________________________________
                                     )
GERALD STONE,                        )
                                     )
                  Plaintiff,        )
                                     )
      v.                            )   Civil Action No. 11-1992 (ABJ)
                                     )
DEPARTMENT OF THE TREASURY,         )
                                     )
                  Defendant.         )
____________________________________)

                                  MEMORANDUM OPINION

         Plaintiff Gerald Stone, proceeding pro se, has filed three separate complaints with this

Court. Stone v. Dep’t of the Treasury, No. 11-cv-1992; Stone v. HUD, No. 11-cv-02070; Stone

v. Holder, No. 12-cv-0010. 1 Defendants each move to dismiss under Federal Rules of Civil

Procedure 12(b)(1) for lack of subject matter jurisdiction and 12(b)(6) for failure to state a claim

upon which relief can be granted. Stone v. Dep’t of the Treasury, 11-1992, [Dkt. # 3]; Stone v.

HUD, 11-2070, [Dkt. # 4], Stone v. Holder, 12-0010, [Dkt. # 4]. Because the Court lacks subject

matter jurisdiction over these cases under the doctrine of sovereign immunity, the Court will

grant the motions to dismiss.

    I.       BACKGROUND

            A. Factual and Procedural Background

         All three cases before the Court relate to plaintiff’s criminal conviction in 2004 in the

U.S. District Court for the Northern District of Texas and the terms of his sentence pursuant to a

written plea agreement. That case has a long history. Plaintiff pled guilty to two counts of a

1        An identical memorandum opinion has been filed in all three cases.
thirty-six count indictment: conspiracy to commit theft from an organization receiving federal

assistance and tax evasion. See Stone v. United States, Nos. 3:09-cv-1862-N, 3:04-CR-318-

N(02), 2010 WL 2403720, at *1 (N.D. Tex. May 6, 2010). On February 1, 2007, the court

sentenced plaintiff to twenty-four months imprisonment on both counts to run concurrently, three

years of supervised release, restitution to be paid to HUD, and forfeiture of certain assets. Id.

Stone appealed his conviction to the U.S. Court of Appeals for the Fifth Circuit, arguing that

there were insufficient facts to support his guilty plea and conviction.           United States v.

Hildenbrand, 527 F.3d 466, 470 (5th Cir. 2008) (appealing conviction of plaintiff and his

wife/co-defendant Barbara Hildenbrand). The Fifth Circuit affirmed Stone’s conviction. Id. at

478–79.

       Plaintiff then filed a motion in the U.S. District Court for the Northern District of Texas

to vacate, set aside, or correct his sentence under 28 U.S.C. § 2225, arguing that the district court

lacked jurisdiction to convict and sentence him and that the restitution and forfeiture orders were

improper. See Stone, 2010 WL 2403720, at *1, 5. The magistrate judge denied plaintiff’s

section 2255 motion. Id. at *6. The district court adopted the magistrate judge’s findings,

conclusions, and recommendation. Stone v. United States, Nos. 3:09-cv-1862-N, 3:04-cr-318-

N(02), 2010 WL 2404281 (N.D. Tex. Jun. 15, 2010).

       Plaintiff filed another appeal, which challenged the forfeiture order. United States v.

Stone, 435 Fed. App’x 320 (5th Cir. 2011). The Fifth Circuit dismissed the appeal for lack of

jurisdiction on the grounds that plaintiff had no interest in the forfeited property when the district

court entered the forfeiture order. Id. at 322. Plaintiff then filed a civil complaint in this Court

against Secretary of HUD Shaun Donovan, seeking several declaratory judgments regarding the

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existence of the Single Family Affordable Housing Program and its operations.              Stone v.

Donovan, No. 11-cv-01282. Plaintiff voluntarily dismissed that case with prejudice.

              B. The Cases Currently Before the Court

           The first case pending in this Court is an action against the Department of the Treasury

seeking the return of property seized by the Department pursuant to a judicial forfeiture order.

Stone v. Dep’t of the Treasury, No. 11-1992. Plaintiff alleges that the Department of Treasury

had no jurisdiction to seize his property. Compl. (Treasury) ¶ 2.

           The second case is an action against HUD seeking return of restitution payments plaintiff

made to that agency pursuant to the plea agreement in his criminal case. Stone v. HUD, No. 11-

02070. Plaintiff alleges that HUD violated the Mandatory Victims Restitution Act of 1996 and

that it was “arbitrary and capricious” to accept restitution payments from him. Compl. (HUD)

¶¶ 2, 3.

           The third case is an action against Eric Holder, Jr., in his official capacity as United

States Attorney General. Stone v. Holder, No. 12-cv-0010. Plaintiff alleges that the Department

of Justice failed to establish that the federal court in Texas had subject matter jurisdiction to

sentence him. Compl. (Holder) ¶ 3.

II.        STANDARD OF REVIEW

           Under Rule 12(b)(1), the plaintiff bears the burden of establishing jurisdiction by a

preponderance of the evidence. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992);

Shekoyan v. Sibley Int’l Corp., 217 F. Supp. 2d 59, 63 (D.D.C. 2002). Federal courts are courts

of limited jurisdiction and the law presumes that “a cause lies outside this limited jurisdiction.”

Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); see also Gen. Motors

Corp. v. EPA, 363 F.3d 442, 448 (D.C. Cir. 2004) (“As a court of limited jurisdiction, we begin,

and end, with an examination of our jurisdiction.”) (citation omitted). Because “subject-matter

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jurisdiction is an ‘Art[icle] III as well as a statutory requirement . . . no action of the parties can

confer subject-matter jurisdiction upon a federal court.’” Akinseye v. District of Columbia, 339

F.3d 970, 971 (D.C. Cir. 2003), quoting Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de

Guinee, 456 U.S. 694, 702 (1982).          When considering a motion to dismiss for lack of

jurisdiction, unlike when deciding a motion to dismiss under Rule 12(b)(6), the court “is not

limited to the allegations of the complaint.” Hohri v. United States, 782 F.2d 227, 241 (D.C. Cir.

1986), vacated on other grounds, 482 U.S. 64 (1987). Rather, a court “may consider such

materials outside the pleadings as it deems appropriate to resolve the question whether it has

jurisdiction to hear the case.” Scolaro v. D.C. Bd. of Elections & Ethics, 104 F. Supp. 2d 18, 22

(D.D.C. 2000), citing Herbert v. Nat’l Acad. of Sciences, 974 F.2d 192, 197 (D.C. Cir. 1992); see

also Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005).

          Additionally, where a plaintiff proceeds pro se, “the Court must take particular care to

construe the plaintiff’s filings liberally, for such complaints are held ‘to less stringent standards

than formal pleadings drafted by lawyers.’” Cheeks v. Fort Myers Constr. Co., 722 F. Supp. 2d

93, 107 (D.D.C. 2010), quoting Haines v. Kerner, 404 U.S. 519, 520–21 (1972).

III.      ANALYSIS

       A. The Court Lacks Jurisdiction Under the Doctrine of Sovereign Immunity.

          Under the doctrine of sovereign immunity, the United States is immune to suit unless

Congress has expressly waived the defense of sovereign immunity by statute. United States v.

Mitchell, 463 U.S. 206, 212 (1983) (“It is axiomatic that the United States may not be sued

without its consent and that the existence of consent is a prerequisite for jurisdiction.”) This

immunity extends to federal agencies, including the Department of Justice, the Department of the

Treasury, and HUD. FDIC v. Meyer, 510 U.S. 471, 475 (1994) (“Absent a waiver, sovereign

                                                  4
immunity shields the Federal Government and its agencies from suit.”); see also Transohio Sav.

Bank v. Director, Office of Thrift Supervision, 967 F.2d 598, 607 (D.C. Cir. 1992). Sovereign

immunity also applies to a federal official sued in his official capacity. Jackson v. Donovan,

Civil Action No. 11-1213 (CKK), --- F. Supp. 2d ---, 2012 WL 574075, at *1 (D.D.C. Feb. 23,

2012), citing Kentucky v. Graham, 473 U.S. 159, 165–66 (1985). Plaintiff bears the burden of

establishing that sovereign immunity has been abrogated. “[A] plaintiff must overcome the

defense of sovereign immunity in order to establish the jurisdiction necessary to survive a Rule

12(b)(1) motion to dismiss.” Jackson v. Bush, 448 F. Supp. 2d 198, 200 (D.D.C. 2006), citing

Tri–State Hosp. Supply Corp. v. United States, 341 F.3d 571, 575 (D.C. Cir. 2003).

       Here, plaintiff fails to establish that sovereign immunity has been waived. With respect

to the complaint against the Department of the Treasury, plaintiff alleges that the agency did not

have jurisdiction to seize his property.     Compl. (Treasury)      ¶¶ 2, 13.    Plaintiff premises

jurisdiction on 28 U.S.C. § 1331, but that statute, which establishes this Court’s jurisdiction over

federal questions, does not provide a waiver of sovereign immunity. See Walton v. Fed. Bureau

of Prisons, 533 F. Supp. 2d 107, 114 (D.D.C. 2008).

       With respect to the complaint against HUD, plaintiff alleges that HUD violated the

Mandatory Victim Restitution Act of 1996 (“MVRA”), by accepting restitution in his criminal

case. Compl. (HUD) ¶¶ 1, 2. The MVRA requires courts to order restitution to the victims of

certain offenses. 18 U.S.C. §§ 3663A(a)(1), (c)(1)(A). The statute does not provide a waiver of

sovereign immunity.

       Plaintiff also claims it was arbitrary and capricious for the agency to accept the restitution

payments. Compl. (HUD) ¶ 2. The Court construes this claim as one brought under the

Administrative Procedure Act (“APA”), 5 U.S.C. § 701, et seq. The APA does provide a limited

                                                 5
waiver of sovereign immunity for final agency action in claims seeking relief other than money

damages. Id. § 702. However, the APA does not provide a basis for jurisdiction in this case

because plaintiff has failed to identify the existence of any final agency action. The restitution

payments resulted from a court order, not from any act of the agency. Moreover, the APA only

permits review of agency action “for which there is no other adequate remedy in a court[.]” Id. §

704. In this case, the habeas corpus statute, 28 U.S.C § 2255, provides the appropriate remedy

because it permits collateral attacks of federal convictions. 2

       With respect to the complaint against Eric Holder, plaintiff asserts that the Court has

jurisdiction under: (1) 28 U.S.C. § 1331; (2) the Declaratory Judgment Act, 28 U.S.C § 2201;

and (3) the APA. Compl. (Holder) ¶ 9. The Court has already determined that 28 U.S.C. § 1331

does not waive sovereign immunity. Likewise, the Declaratory Judgment Act does not provide a

waiver of sovereign immunity. See Walton, 533 F. Supp. 2d at 114 (determining that the

Declaratory Judgment Act does not waive the government’s sovereign immunity). And, as with

plaintiff’s case against HUD, the limited waiver of sovereign immunity found in the APA is

inapplicable here because there is no final agency action that is reviewable under the APA.

   B. Plaintiff’s Lawsuits are Improper Collateral Attacks.

       Even if the federal defendants were amenable to suit, it is clear that plaintiff’s lawsuits

are thinly veiled and improper attempts to collaterally attack his conviction in the U.S. District

Court for the Northern District of Texas. The relief that plaintiff seeks in all three cases would

overrule the judgment of that court. See 37 Associates, Tr. for the 37 Forrester St., SW Trust v.

2       The Court notes that plaintiff has unsuccessfully pursued relief under 28 U.S.C § 2255.
See Stone, 2010 WL 2404281, at *1. A second section 2255 motion can only be brought with
the certification of a “panel of the appropriate court of appeals,” 28 U.S.C. § 2255(h), which, in
this case, is the Fifth Circuit.

                                                  6
REO Const. Consultants, Inc., 409 F. Supp. 2d 10, 14 (D.D.C. 2006) (A “second action . . . is a

collateral attack if, in some fashion, it would overrule a previous judgment.”) (citation omitted). 3

“Unlike a direct appeal, a collateral attack questions the validity of a judgment or order in a

separate proceeding that is not intended to obtain relief from the judgment.” REO Const.

Consultants, Inc., 409 F. Supp. 2d at 14, quoting In re Am. Basketball League, Inc., 317 B.R. at

128.

       Plaintiff contends that the lawsuits are not collateral attacks on his criminal convictions

because “[t]he Government’s assertions are a transparent attempt to avoid proving that the court

had subject matter jurisdiction in the first place.” Pl.’s Opp. (Treasury) [Dkt. # 9] at 1; Pl.’s Opp.

(HUD) at 1 [Dkt. # 10]; Pl.’s Opp. (Holder) [Dkt. # 10] at 1. But defendants have no obligation

to establish that there was jurisdiction in federal court in Texas to adjudicate plaintiff’s prior

criminal proceeding. While plaintiff is correct that “[e]nsuring the existence of subject-matter

jurisdiction is the court’s first duty in every lawsuit,” id. at 2, citing McCready v. White, 417

3       Plaintiff’s complaint against Eric Holder alleges that the Texas court lacked subject
matter jurisdiction over his criminal case and seeks a declaratory judgment that a certain federal
program, the Single Family Affordable Housing Program (“SFAHP”), does not exist. Compl.
(Holder) at ¶¶ 2–4, 20. Granting plaintiff the relief he seeks would overrule the judgment of the
Northern District of Texas and the Fifth Circuit. See Stone, 2010 WL 2403720, at *2, report and
recommendation adopted, 2010 WL 2404281.
        Plaintiff’s case against the Department of the Treasury seeks the return of property seized
pursuant to a forfeiture order of the federal court in Texas. Compl. (Treasury) at ¶¶ 1, 18.
Granting plaintiff this relief would also overrule the judgment of the federal court in Texas and
the Fifth Circuit. See Stone, 435 Fed. App’x at 321–22 (“Stone’s interest in the forfeited
property was resolved by the preliminary order of forfeiture, which became final as to Stone at
his February 1, 2007, sentencing . . . . Consequently, Stone no longer had any interest in the
forfeited property when the district court entered the final order of forfeiture.”) (citation
omitted).
        Finally plaintiff’s complaint against HUD seeks return of the restitution payments he
made to that agency pursuant to a plea agreement in his criminal case and a declaratory judgment
that the housing program SFAHP does not exist. Compl. (HUD at ¶¶ 15–16). Granting this
relief would also overrule the judgments of the district court in Texas and the Fifth Circuit. See
Stone, 2010 WL 2403720, at *2, report and recommendation adopted, 2010 WL 2404281.
                                                  7
F.3d 700 (7th Cir. 2005), that duty refers to the subject matter jurisdiction of the court that

adjudicated his conviction. Plaintiff’s remedies, which the Court notes he has already pursued,

are found in 28 U.S.C. § 2255 or the appellate process. This Court has determined that it lacks

jurisdiction over the cases that are pending before it, and that conclusion ends the matter.

IV.    CONCLUSION

       Because it lacks subject matter jurisdiction, the Court will grant defendants’ motions to

dismiss under Federal Rule of Civil Procedure 12(b)(1). See Stone v. Dep’t of Treasury, No. 11-

cv-1992 [Dkt. # 3]; Stone v. HUD, No. 11-cv-2070, [Dkt. # 4]; Stone v. Holder, No. 12-cv-0010,

[Dkt. # 4]. The Court does not reach defendants’ arguments that the cases should be dismissed

under Rule 12(b)(6).

       Accordingly, the claims in all three cases will be dismissed with prejudice. A separate

order will issue.

                                              AMY BERMAN JACKSON
                                              United States District Judge

DATE: May 9, 2012

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