Court Opinion

ID: 4538523
Source: CourtListenerOpinion
Date Created: 2020-06-03 16:00:33.562222+00
Date Added: 2024-06-11T12:44:43.137622
License: Public Domain

Case: 20-1179   Document: 17     Page: 1   Filed: 06/03/2020

        NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

                  FAITH N. NELSON,
                   Plaintiff-Appellant

                            v.

                   UNITED STATES,
                   Defendant-Appellee
                 ______________________

                       2020-1179
                 ______________________

     Appeal from the United States Court of Federal Claims
 in No. 1:19-cv-00841-EDK, Judge Elaine Kaplan.
                  ______________________

                  Decided: June 3, 2020
                 ______________________

    FAITH N. NELSON, Kansas City, MO, pro se.

     ROBERT JOEL BRANMAN, Tax Division, United States
 Department of Justice, Washington, DC, for defendant-ap-
 pellee. Also represented by THOMAS J. CLARK, RICHARD E.
 ZUCKERMAN.
                  ______________________

    Before DYK, TARANTO, and HUGHES, Circuit Judges.
 PER CURIAM.
Case: 20-1179     Document: 17     Page: 2    Filed: 06/03/2020

 2                                   NELSON   v. UNITED STATES

     Faith N. Nelson appeals a decision by the United
 States Court of Federal Claims (“Claims Court”) dismiss-
 ing her complaint for lack of subject matter jurisdiction.
 We affirm the dismissal.
                        BACKGROUND
     This case involves 26 U.S.C. § 6402(d)(1)(A), part of a
 centralized Treasury Offset Program for debt collection.
 Ibrahim v. United States, 112 Fed. Cl. 333, 335 (2013). Sec-
 tion 6402(d)(1)(A) provides that “[u]pon receiving notice
 from any Federal agency that a named person owes a past-
 due legally enforceable debt . . . to such agency, the [IRS]
 shall reduce the amount of any [tax] overpayment payable
 to such person by the amount of such debt.” 26 U.S.C.
 § 6402(d)(1). “31 U.S.C. §§ 3711(g) and 3716(a) require[]
 [the Department of the Treasury] to make such offsets
 whenever an agency refers a debt to it and to pass the with-
 held funds to the agency to help satisfy the debt.” Dasisa
 v. Dep’t of Treasury, 951 F. Supp. 2d 45, 46 (D.D.C. 2013).
 Agencies that refer debts to the Department of the Treas-
 ury “certify that the debts are valid, delinquent, and legally
 enforceable.” Id. (citing 31 C.F.R. § 285.5(d)(6)).
     Here, the plaintiff, Ms. Nelson, signed promissory
 notes in 1982 and 1985 for student loans, each for $2,500
 with 9% interest. She allegedly defaulted on both loans.
 The first loan was purchased by the Missouri Department
 of Higher Education. This loan was assigned to the U.S.
 Department of Education (“DOE”) in 1986. The second
 loan was purchased by the Higher Education Foundation
 Program and assigned to the DOE in 1993. After these re-
 spective assignments, the DOE requested payments for
 both loans through the IRS as offsets against Ms. Nelson’s
 tax refunds.
     In January 2018, Ms. Nelson filed suit in Missouri
 state court against the DOE and the Missouri Department
 of Higher Education, alleging that the defendants had
Case: 20-1179     Document: 17      Page: 3    Filed: 06/03/2020

 NELSON   v. UNITED STATES                                    3

 incorrectly offset her federal refunds. 1 The case was re-
 moved to the United Stated District Court for the Western
 District of Missouri, where Ms. Nelson’s claims against the
 Missouri Department of Higher Education were dismissed
 because the action, among other reasons, was barred by the
 statute of limitations. The district court also granted the
 DOE’s motion for summary judgement, finding that Ms.
 Nelson “continue[d] to owe money to [the DOE], and that
 [the DOE’s] continued efforts to collect that debt [were] jus-
 tified.” U.S. Supp. App’x (“S.A.”) 2 (first and last alteration
 in original) (quoting Nelson v. Dep’t of Educ., No. 4:18-cv-
 00412, 2019 WL 1529383, at *3 (W.D. Mo. Feb. 26, 2019)).
 No appeal was taken from the final judgment.
     On June 5, 2019, Ms. Nelson filed a complaint against
 the DOE and the Missouri Department of Higher Educa-
 tion in the Claims Court, requesting that the Claims Court
 order the government to pay back her refund offset with
 interest for tax years 1988 to 2018, to stop any further off-
 sets to her tax refunds, to clear her credit history, and to
 pay punitive damages for violation of her Fourteenth
 Amendment rights. The government moved to dismiss for
 lack of subject matter jurisdiction.
     The Claims Court held that it lacked jurisdiction over
 Ms. Nelson’s challenge to the offset of her federal tax re-
 turn by the IRS because 26 U.S.C. § 6402(g) “explicitly bars
 judicial review of [such] action.” S.A. 3 (quoting Hicks v.
 United States, 130 Fed. Cl. 222, 230 (2017)). The Claims
 Court also held it lacked jurisdiction to hear Ms. Nelson’s

     1    Ms. Nelson later clarified before the U.S. District
 for the Western District of Missouri that she believed “that
 the [Missouri Department of Higher Education] is ‘IN-CA-
 HOOTS’ with the U.S. Department of Higher Education”
 in collecting her money. U.S. Supp. App’x 35 (quoting Ms.
 Nelson’s Response to the Court’s Order to Show Cause).
Case: 20-1179    Document: 17     Page: 4    Filed: 06/03/2020

 4                                  NELSON   v. UNITED STATES

 claim for illegal exaction 2 against the DOE because “she
 has already unsuccessfully pursued the issue of whether
 she was in default on her educational loans in district
 court.” S.A. 3. The Claims Court determined that this
 identical issue had been actually litigated and fully re-
 solved in district court and that issue preclusion barred
 this claim.
     The Claims Court concluded that it lacked jurisdiction
 under the Fourteenth Amendment to grant punitive dam-
 ages or to clear credit histories because the Fourteenth
 Amendment “do[es] not mandate payment by the govern-
 ment.” S.A. 4 (alteration in original) (quoting LeBlanc v.
 United States, 50 F.3d 1025, 1028 (Fed Cir. 1995)). The
 Claims Court also held it lacked jurisdiction over any
 claims against the Missouri Department of Higher Educa-
 tion because it was a state agency.
                        DISCUSSION
     The Tucker Act, 28 U.S.C. § 1491(a)(1), grants the
 Claims Court jurisdiction “[t]o render judgment upon any
 claim against the United States founded either upon the
 Constitution, or any Act of Congress or any regulation of
 an executive department, or upon any express or implied
 contract with the United States.” But as the Supreme
 Court explained, “[n]ot every claim invoking the Constitu-
 tion, a federal statute, or a regulation is cognizable under
 the Tucker Act.” United States v. Mitchell, 463 U.S. 206,
 216 (1983). “[A] court must inquire whether the source of
 substantive law can fairly be interpreted as mandating

     2   An illegal exaction “involves money that was im-
 properly paid, exacted, or taken from the claimant in con-
 travention of the Constitution, a statute, or a regulation.”
 Norman v. United States, 429 F.3d 1081, 1095 (Fed. Cir.
 2005) (internal quotation marks and citation omitted).
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 NELSON   v. UNITED STATES                                    5

 compensation by the Federal Government for the damages
 sustained.” Id. at 218.
      The Claims Court had no jurisdiction over claims
 against a state entity, namely, the Missouri Department of
 Higher Education. See United States v. Sherwood, 312 U.S.
584, 588 (1941) (holding that the Claims Court lacked ju-
 risdiction over claims that are not against United States).
 There is also no jurisdiction over this action as against the
 actions of the IRS in offsetting Ms. Nelson’s federal refunds
 based on the DOE claims. The IRS was required, under
 section 6402(d)(1), to offset her refund “[u]pon receiving no-
 tice . . . that [Ms. Nelson] owes a past-due legally enforcea-
 ble debt.” 26 U.S.C. § 6402(d)(1). Under section 6402(g),
 no federal court has jurisdiction “to hear any action,
 whether legal or equitable, brought to restrain or review a
 reduction authorized by subsection . . . (d).” Id. § 6402(g).
 Section 6402(g) “explicitly reserves plaintiff’s ability to sue
 agency-claimants directly, but it prohibits suits against
 [the Department of the Treasury] merely for carrying out
 its statutory obligation to collect debts that agencies refer
 to it.” Dasisa, 951 F. Supp. 2d at 46.
      The Claims Court also considered whether the actions
 of the DOE in requesting the offset, rather than the actions
 of the IRS in applying it, constituted an illegal exaction.
 We need not reach whether this was an available theory of
 recovery in view of the fact that the Claims Court properly
 held that this claim is barred by issue preclusion because
 of the prior district court adjudication finding that Ms. Nel-
 son continued to owe money to the DOE. As to this claim,
 we sustain the dismissal on the merits rather than the lack
 of jurisdiction. See Bank of Guam v. United States, 578
F.3d 1318, 1325 (Fed. Cir. 2009).
     Finally, the relief sought by Ms. Nelson under her
 Fourteenth Amendment claim (apart from the illegal exac-
 tion theory) was not within the jurisdiction of the Claims
 Court because the Due Process and Equal Protection
Case: 20-1179   Document: 17    Page: 6    Filed: 06/03/2020

 6                                NELSON   v. UNITED STATES

 Clauses generally “do not mandate payment of money by
 the government.” LeBlanc v. United States, 50 F.3d 1025,
 1028 (Fed. Cir. 1995).
     Because Ms. Nelson identifies no other basis for the
 Claims Court to exercise jurisdiction over her claim, the
 Claims Court’s dismissal of her complaint is
                       AFFIRMED