Opinion
Case No. C2-01-579
January 7, 2002
MEMORANDUM ORDER
Pro se plaintiff, James George, filed suit in state court against Internal Revenue Service employees Eric Schultz, Rebecca Chiaramida, and others, contesting the validity of certain federal tax lien notices and a notice of deficiency that he had received from them. The United States of America removed the case to this Court and moved to be substituted as the appropriate party defendant. This matter is currently before the Court on Plaintiff's objections to removal, which the Court will treat as a motion to remand (Record at 4), and the United States' unopposed motion to dismiss (Record at 6).
I. Background
On April 8, 1991, the Internal Revenue Service ("IRS") filed with the Fairfield County Recorder's Office a Notice of Federal Tax Lien. The notice concerned taxes owed by Plaintiff James George, and Betty George, for the years 1986-1988; the total amount of the lien was $7,746.99. This lien was released on August 25, 1995. (Ex. A to Mot. to Dismiss).
The Court notes that, for the years 1986-1988 there is a discrepancy between the notice attached to the motion to dismiss and the notices Plaintiff has attached to his complaint. Plaintiff's exhibits indicate that a Notice of Federal Tax Lien was filed on April 8, 1991 against James and Betty George for the years 1986-1988 in the amount of $20,277.26. A second Notice of Federal Tax Lien for that same time period was filed on October 6, 1992 against The James Curtis George and Betty Lou George Family Contract Organization. This second Notice is for a total of $28,801.79, which includes the original $20,277.26 plus an additional $8,524.53. The Court finds, however, that any discrepancy between these exhibits is immaterial for purposes of the pending motions.
On September 23, 1998, the IRS again filed a Notice of Federal Tax Lien against James George. The total amount of this lien was $14,134.46. On April 12, 1999, the IRS filed a Notice of Tax Lien against The James Curtis George Betty Lou George Family Contract Organization for $11,491.82. The September 23, 1998 and April 12, 1999 notices were both signed by Defendant IRS Revenue Officer Eric Schultz, concerning taxes owed for 1990-1994. Both of these liens were released on September 1, 2000. (Id.). On May 4, 2001, Defendant Rebecca Chiaramida, a Field Director for IRS Compliance Services, sent Mr. George three Notices of Deficiency. She alleged that he still owed $1,384.00 for 1997, $1,549.00 for 1998, and $1,616.00 for 1999. (Exs. to Compl.). The IRS has not yet assessed these taxes or filed any liens related to these deficiencies.
Plaintiff James George filed suit in the Fairfield County Court of Common Pleas on May 18, 2001, contesting the validity of the actions described above. He apparently contends that all of the Notices of Federal Tax Liens filed by Defendants are invalid and void from their inception. Plaintiff requests that the Court require Defendants to show cause why these tax liens should not be canceled, issue an order discharging the debt, and launch a criminal investigation against Defendants concerning possible fraud, extortion, and RICO violations. Defendants removed the case to this Court on June 15, 2001.
II. Proper Parties
When Defendants removed the case to federal court, they asked that the Court substitute the United States as the proper party defendant because suits against federal government employees acting in their official capacities are deemed to be suits against the government itself. See Gilbert v. DaGrossa, 756 F.2d 1455, 1460 (9th Cir. 1985) (concluding that suit against IRS agents in their official capacity was essentially a suit against the United States); Atkinson v. O'Neill, 867 F.2d 589, 590 (10th Cir. 1989) (same holding); DeLeeuw v. Internal Revenue Service, 681 F. Supp. 402, 403-04 (E.D. Mich. 1987) (same holding); Kentucky v. Graham, 473 U.S. 159, 165-66 (1985). "The general rule is that a suit is against the sovereign if 'the judgment sought would expend itself on the public treasury or domain, or interfere with the public administration,' or if the effect of the judgment would be "to restrain the Government from acting, or to compel it to act.'" Dugan v. Rank, 372 U.S. 609, 620 (1963) (internal citations omitted). See also Hawaii v. Gordon, 373 U.S. 57, 58 (1963).
The complaint contains no indication that the IRS agents are being sued in their individual capacities, and no allegations that they were acting outside the scope of their employment. Accordingly, the Court will assume that Plaintiff is suing Defendants in their official capacities only. See Wells v. Brown, 891 F.2d 591, 592 (6th Cir. 1989).
In this case, the United States is the proper party defendant because Plaintiff is seeking to restrain the United States government from collecting tax revenue from him. Eric Schultz, Rebecca Chiaramida, and other individual IRS employees are not proper parties to this suit. The Clerk is therefore directed to substitute the United States of America as the defendant in this case and dismiss the action against the individual defendants.
III. Motion to Remand
On June 20, 2001, Plaintiff filed Objections to Removal and asked that the Court remand this action to the Fairfield County Court of Common Pleas. Defendant United States did not respond to Plaintiff's objections, apparently believing that they were so frivolous no response was necessary. The Court agrees that Plaintiff's objections lack any merit whatsoever.
Plaintiff contends that removal is improper for two reasons. When Defendants removed this case to federal court, they cited 28 U.S.C. § 1441 (a), 1442(a)(1) and (3), and 1444 as grounds for removal. These statutes govern removal of civil actions brought in a State court to a United States District Court. In support of his position, Plaintiff cites 28 U.S.C. § 1451, the definition section for those removal statutes. Section 1451 states that the term "'State court' includes the Superior Court of the District of Columbia" and the term "'State' includes the District of Columbia." Plaintiff apparently believes that because Congress has specifically "included" only one "State" and one "State court" in the definition, all other States and State courts are excluded from the definition. He appears to argue that because the Court of Common Pleas of Fairfield County, Ohio is not a "State court" and Ohio is not a "State," as defined by 28 U.S.C. § 1451, this action could not be removed from that court and this Court therefore lacks jurisdiction.
Section 1441 permits a defendant to remove a case to a United States district court if that district court would have had original jurisdiction over the action. Section 1442 permits removal where the United States, its agencies, or officers are sued for certain acts, including those involving the collection of revenue. Section 1444 permits removal in cases of a foreclosure action against the United States.
Plaintiff has attached to his complaint a certificate from the Office of the Chief Financial Officer of the Office of Tax and Revenue for the District of Columbia, stating that, as of January 5, 1999, there were no United States tax liens on record against him in that office. (Ex. A to Compl.).
Under the principles of statutory construction, unless otherwise defined, words are to be given their ordinary meaning. See Perrin v. United States, 444 U.S. 37, 42 (1979). The word "State," particularly when capitalized as it is in the removal statutes, is "generally understood to mean one of the 50 constituent States of the Union." Morse v. Republican Party of Virginia, 517 U.S. 186, 254 (1996)(Thomas, J., dissenting). The only reason that Congress needed to specifically include the Superior Court of the District of Columbia as a "State court" and the District of Columbia as a "State" in 28 U.S.C. § 1451 is because the District of Columbia is not generally considered one of the fifty States.
Having concluded that the Court of Common Pleas of Fairfield County, Ohio is a "State court" and Ohio is a "State" within the definition of the removal statutes, the Court finds that Defendants properly removed this case to federal court based on 28 U.S.C. § 1442. That statute states, in pertinent part:
(a) A civil action . . . commenced in a State court against any of the following may be removed by them to the district court of the United States for the district and division embracing the place wherein it is pending:
(1) The United States or any agency thereof or any officer (or any person acting under that officer) of the United States or of any agency thereof, sued in an official or individual capacity for any act under color of such office or on account of any right, title or authority claimed under any Act of Congress for the . . . collection of the revenue.28 U.S.C. § 1442 (a)(1). Plaintiff's complaint cannot be construed as anything other than an action brought against federal IRS agents, in their official capacities, involving the collection of revenue.
Plaintiff also claims that mandatory judicial notice must be taken that this case cannot be removed to federal court because it involves an "in rem" action. He contends that: (1) state courts have exclusive original jurisdiction over the legality of a tax assessment and the right to possession of real property; (2) the state court is in possession of the paper upon which the "in rem" action operates; and (3) the persons filing the paper alleging a lien submitted to the state court's jurisdiction by such filing. (Ex. to Compl.).
Plaintiff is apparently referring to the Notices of Federal Tax Liens, which were filed with the Fairfield County Recorder's Officer.
The legal basis for Plaintiff's argument is unclear. However, the Court notes that this same argument has been advanced by other tax protestors and rejected by the courts. See, e.g., Miller v. McCullough, No. 1:01CV0984, 2001 WL 1203294 at *1 (N.D. Ohio June 8, 2001).
The Internal Revenue Service Code provides that when a person liable for a tax neglects or refuses to pay that tax, a lien in favor of the United States shall be placed upon all property, real or personal, belonging to that person. See 26 U.S.C. § 6321. While state law may require that a lien on real property be recorded with the county recorder where the property is located, this does not give state courts exclusive jurisdiction over disputes arising from the lien. In support of his argument that state courts have exclusive jurisdiction over actions of this kind, Plaintiff cites only to the Ohio Constitution, Article IV, Section 4(B). That section states, in its entirety, "[t]he courts of common pleas and divisions thereof shall haves such original jurisdiction all justiciable matters and such powers of review of proceedings of administrative officers and agencies as may be provided by law."
Plaintiff may be correct that the Fairfield County Court of Common Pleas has original jurisdiction over this type of action; however, that jurisdiction is not exclusive. In this case, Plaintiff filed suit against federal employees for actions taken within the scope of their employment, and involving the collection of revenue. 28 U.S.C. § 1442 (a)(1) clearly permits removal to the United States District Court in this situation. Plaintiff's objections to removal are therefore overruled and his motion to remand is denied.
IV. Motion to Dismiss
Defendant United States moves the Court to dismiss Plaintiff's complaint pursuant to Federal Rules of Civil Procedure 4(i), 12(b)(1) and 12(b)(6) for failure to effect proper service, lack of subject matter jurisdiction, and failure to state a claim upon which relief may be granted. Defendant sets forth numerous independent grounds for dismissal. Plaintiff has failed to respond to Defendant's motion within the time allotted by S.D. Ohio Civ. R. 7.2(a)(2).
Nevertheless, the Court notes that Plaintiff is proceeding pro se. Assuming that he failed to respond in a timely manner only because he was waiting for the Court to first rule on his motion to remand, the Court will now give him the opportunity to respond to the motion to dismiss. If Plaintiff desires to respond to the pending motion to dismiss and attempt to show cause why it should not be granted, he shall do so no later than January 31, 2002. Defendant may then file a reply no later than February 11, 2002. The Court will reserve ruling on the motion to dismiss until that time.
V. Conclusion
The Clerk is directed to substitute the United States of America as the proper party defendant in this action and dismiss the current defendants. For the reasons stated above, Plaintiff's motion to remand (Record at 4) is DENIED. The Court will RESERVE RULING on Defendant's motion to dismiss (Record at 6). If Plaintiff desires to file a response to that motion, he shall do so no later than January 31, 2002. Defendant may file a reply no later than February 11, 2002.