BLODGETT et al v. USA

Filing 16

Opinion and Order granting 9 Motion to Dismiss - Rule 12(b)(1) and (6); The Clerk is directed to enter judgment. Clerk is directed to accept no further filings or complaints related to the claims in the case at bar from Diane Blodgett or Tom Lingenfelter, without an order granting leave to file such filings from the Chief Judge. Signed by Senior Judge Loren A. Smith. (ew) Service on parties made.

CIRt'ffi8?'iAL
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No. l7-2000C
Filed: July 26, 2018

FILED
LIL

DIANE S. BLODGETT, et a/.,

26

2018

U.S. COURT OF

Plaintiffs,

FEDERAL CLAIMS

THE LTNITED STATES OF AMERICA,
Defendant.

OPINION AND ORDER
SMITH, Senior Judge
On December 18,2017 , plaintiffs, proceeding pro se, filed their Complaint with this
Court, seeking various forms ofrelief. Plaintiffs' Complaint asserts, inter alia, that the
government has violated the Bankruptcy Code, the Intemal Revenue Code, and the Employee
Retirement Income Security Act of 1974, and that that the government has committed a Fifth
Amendment Takings Claim and committed various torts against piaintiffs.

l.

Background

Pro se plaintiffs, Diane Blodgett and Tom Lingenfelter, raise claims slemming from an
action brought by the Federal Trade Commission ("FTC") in the early 1990's. Complaint
(hereinafter "Compl.") at 6. In August 1991, the F-TC brought suit against T.G. Morgan
("TGM") and its president for violations ofthe prohibitions against deceptive practices under the
Federal Trade Commission Act, l5 U.S.C. g a5(a) (2006). InreT.G. Morgan, Inc.,l75B.R.
702,703 (Bankr. D. Minn. 1994). The FTC charged and convicted Michael Blodgert, Diane
Blodgett's husband and rGM's president, offraud. Lingenfelter v. stoebner,20O5 wL 1225950,
at *1 (D. Minn. May 23,2005). Michael Blodgert, TGM, and TGM's principals agreed to place
TGM's assets into a "Settlement Estate" for the purpose of reimbursing its victims. 1d.
The Final Judgement, issued March 4, 1992, appointed a receiver to liquidate assets
within the Settlement Esrate. FfC v. T.G. Morgan, 1992 WL 88162, at *5 (D. Minn. Mar. 5,
1992). TGM and Mr. and Mrs. Blodgett irrevocably transferred all assets contained in the
Settlement Estate 10 the FTC. Id. ar*4. During these proceedings, TGM's creditors filed an

involuntary bankruptcy suit against TGM. Lingenfelter,2005 WL 1225950 at * 1. TGM was
subsequently forced into bankruptcy, and, despite protests from TGM's principals, the
Bankruptcy Court translerred the Settlement Estate assets to TGM's bankruptcy estate. Id. In its
Final Judgement, the Bankruptcy Court found that Mrs. Blodgett and Mr. Lingenfelter had no
claims against the estate. Id. ln the case at bar, plaintiffs appear to seek the assets that were
inevocably transferred to the FTC and then subsequently transferred to TGM's bankruptcy
estate. compl. at 14.
In the 25 years since the origin ofthe FTC matter in 1991, plaintiffs have filed numerous
lawsuits against many defendants in a variety of courts. One of the most recent and significant
iteralions was in Lingenfeller, where Tom Lingenfelter and other parties, including Diane
Blodgett, raised similar claims. Lingenfelter,2005 WL 1225950, at * l. That cause of action
was dismissed with prejudice by the presiding judge. Id.at*7.
On December 18,2017, plaintiffs filed the current Complaint with this Court. Compl. at
I . Plaintiffs seek relief through Rule 60(b)(6) of the Rules of the Court of Federal Claims
("RCFC') for priorjudgments that were allegedly entered wrongfully through various torts,
conspiracies, and schemes. Compl. at 57.
On March 13, 2018, the government filed a Motion to Dismiss for lack of subject-matter
jurisdiction and for failure to state a claim upon which reliefcan be granted, pursuant to RCFC

l2(b)(l) andl2(b)(6). Defendant's Motion to Dismiss (hereinafter "MTD') at 1, 4. First,

rhe

government argues that that this Court lacks jurisdiction over plaintiffs' contract, statutory, and
tort claims. Id. at 5-7. Next, the govemment asserts that plaintiffs fail to state a plausible Fifth
Amendment takings claim. Id. at8-9. Finally, the govemment asserts that plaintiffs' claims are
baned by the applicable statute of limitations. 1d. at 9-10.

Plaintiffs' filed their Response to defendant's Motion to Dismiss on April 18, 2018,
arguing that RCFC 60(bX6) allows this Court to overlook the govemment's arguments for
dismissal. Plaintiffs' Response to Motion to Dismiss (hereinafter "P's Resp.") at 7. Plaintiffs
believe that "IRCFC] 60(bX6) is triggered by either egregious affirmative schemes or new rules
of law." Id. at 1. Furthermore, plaintiffs believe that RCFC 60(b)(6), once triggered, will permit
this Court to overturn judgments, despite jurisdictional and statutory time limits, so long as a
justification lor relief exists. Id. at3. The govemment filed its reply in support of its Motion to
Dismiss on Apri|25,2018. This case is now fully briefed and ripe for review.

IL

Standard of Review

This Court's jurisdictional grant is primarily defined by the Tucker Act, which provides
this court the power "to render any judgment upon any claim against the united states founded
either upon the Constitution, or any Act of Congress or any regulation ofan executive
department, or upon any express or implied contract with the United States . . . in cases ,?ot
sounding in tort." 28 U.S.C. $ 1491(a)(1) (2012) (emphasis added). Although the Tucker Act
expressly waives the sovereign immunity ofthe United states against such claims, it "does not
create any substantive right enlorceable against the united stales for money d,amages." (lnited
States v. Testan,424 U.S. 392, 398 (1976). Rather, in order to fall within the scope of the

Tucker Act, "a plaintiff must identify a separate source of substantive law that creates the right to
money damages." Fisherv. Un edStates,402 F.3d 1167,1172 (Fed. Cir.2005)(enbancn
relevant part).
In determining whether subject-matter j urisdiction exists, the Court will treat factual
allegations in the complaint as true and will construe them in the light most favorable to the
plaintiff. Estes Express Linesv. United gtates,739F.3d689,692 (Fed. Cir.20l4). Further,
pleadings from pro se plaintiffs are held to more lenient standards than pleadings drafted by
lawyers. Hughes v. Rowe,449 U.S. 5, 9 (1980); see also Erickson v. Pardus,551 U.S. 89,94
(2007). This leniency, however, does not extend to saving a complaint that lies outside of this
Court's jurisdiction. "Despite this permissive standard, apro se plainliff must still satisfy the

court'sjurisdictionalrequirements;'Trevinov.UnitedStates,ll3Fed.C|.204,208(2013),
affd, 557 F. App'x 995 (Fed. Cir. 2014) (citations omitted). Pro se or not, the plaintiff still has
the burden of establishing by a preponderance ofthe evidence that this Coun has jurisdiction
over its claims. See Kokkonen v. Guardian Li/e Ins. Co. of Am.,511 U.S.375,377 (1994).

III.

Discussion

Plaintiffs claim that the FTC, upon accepting the December 1991 Settlement Agreement,
breached its contractual obligations. Compl. at 2. Plaintiffs' contract claim rests on the belief
that a contract was created between the FTC and the parties, which was breached when
plaintiffs' assets were transferred to the bankruptcy estate. Plaintiffs further assert that the FTC
owed a fiduciary duty related to the assets from the original FTC and bankruptcy matters, and
that the breach of that duty caused plaintiffs' to suffer losses. Compl. at 794. However, it should
be noted that plainlilfs surrendered all rights to the assets in question. T.G. Morgan, 1992WL
88162, at *4. Specifically, the Final Judgment and Order for Permanent Injunction stated the

following:
It Is Further Ordered that the Defendants and the non-party spouse of Defendant
[Diane Blodgett] . . . hereby transfer to the [FTC], irrevocably and without the
possibility of reversion to themselves or lo any entity owned or controlled by
them, a\y and all title, ownership, rights, interests, and options, present or future,
that they, or any entity owned or controlled by them . . . .
T.G. Morgan, 1992 WL 881 62, at *4-5 (emphasis added) (including a list of assets that have
been omitted). As such, no contract claim exists over which this Court has jurisdiction.
Plaintiff's allege that their assets were improperly seized and committed to the Bankruptcy
Estate. Compl. at267-68. This bankruptcy claim appears to focus on the fact that they did not
consent to the involuntary bankruptcy. P's Resp. at 10. Additionally, plaintiffs state that "the
involuntary bankruptcy filing was in bad faith under 11 U.S.C. $ 303 [(2016)]." Compl.at 120.
Alternatively, plaintiffs claim that a fiduciary duty was breached in the original bankruptcy
proceeding. Compl. at 794. Claims brought under I I U.S.C. g 303 are govemed by 28 U.S.C.
$$ 151and 1334. 28 U.S.C. $$ 151 (1984), 1334(2005). Bothsecrionsestablishthatdistrict
courts shall have original and exclusive jurisdiction over all cases arising under Title 1 1 . 1d. As
such, this Court has no iurisdiction over those claims.

Plaintiffs next contend that the United States violated the Intemal Revenue Code
can discern, plaintiffs' IRC claim is a civil action
against the FTC on the grounds ofallegedly unauthorized collection actions. Compl. at 161. tn
Ledford v. United States, the Court ofAppeals for the Federal Circuit held that claims for
damages arising out ofallegedly unlawful tax collection activities must be brought "exclusively
before a district court of the lJnited States." Ledford v. United States,297 F.3d 1378, 1382 (Fed.
Cir.2002). Moreover, the Court specified that, as it pertains to unlawful tax collection activities,
"[t]he Court ofFederal Claims is not a district court ofthe United States, and therefore it lacks
subject-matter Iurisdiction]." /d. Therefore, this Court is baned from considering plaintiffs'
IRC claims.

C'IRC'). Compl. at 12. As best as this Court

Additionally, plaintiffs argue that the FTC settlement violated their rights under the
Employee Retirement Income Security Acr of 1974,29 U.S.C.A. S 1001 (1978) (,,ERISA"), and
that the Final Judgement "violated multiple Supreme Court rulings . . . as to ERISA's antialienation clause and TGM ERISA g 13.04." Compl. at 7-8. The plain language of 28 U.S.C. g
1501 states, "[t]he [U.S.] Court ofFederal Claims shall not have jurisdiction [over] any claim for
a pension." Howellv. UnitedStates,127Fed.Cl.775,788 (2016)(referencing23 U.S.C. g l50l
(2012)). Claims asking the federal government "to intervene and compel private employers to
pay the pensions allegedly due to plaintiffs, or for the govemment to pay the pensions in place of
the private employers, lie outside the subject[-]matter j urisdiction ofthis [C]ourt and are
dismissed." /d.
Plaintiffs' final claims allege rhat the FTC, in the original 1991 TGM proceeding,
committed a Fifth Amendment taking "'without just compensation' of personal property."
compl. at 33. 'fhis court must evaluate a Fifth Amendment takings claim under a two-pan rest;
the first prong requires plaintiffto establish a property interest, and, if plaintiff fails, this Court
need not look further. Pucciariellov.unitedstates,116Fed.c1.390,414(2014). As plaintiffs
clearly transferred their interest in the assets at issue to the FTC "irrevocably and without the
possibility ofreversion to themselves or to any entity owned or controlled by them,,,no such
property interest exists.
Even if this Court did have jurisdiction over plaintiffs' claims, the complaint is barred by
the statute of limitations. Under the Tucker Act, Claims filed in this Court are subject to a strict
six-year statute of limitations, which begins when each claim first accrues. 28 u.S.c. $2501. As
plaintiffs' claims all stem from the 199l-1992 FTC matter, logically this court may infer that
plaintiffs were aware ofthe existence oftheir claims at the issuance ofthe Final Judsment. As
such, this Court lacks the requisite jurisdiction to examine plaintiffs' claims.

As a catch-all, plaintiffs seek reliefunder RCFC 60(bX6), asserting that the Rule expands
both the jurisdiction ofthis Court, as well as the mandatory six-year statute of limitations under
the Tucker Act. compl. at 6. Under RCFC 60(b), reliefmay be granted from a final judgment,
order, or proceeding for a "reason thatjusrifies relief." RCFC 60(b)(6). This court finds no
such reason here. Furthermore, "[t]he Supreme court has indicated that RCFC 60(b)(6) should
be applied only in 'extraordinary circumstan ces."' progressive Indus., Inc., v. unitecl states, ggg
F.3d 1 248, 1255 (Fed. cl. 201 8) (citing to Lif eberg v. Health servs. Acquisition Corp. , 486 rJ .s.

847, 863, 108 S.Ct. 2194,100 L.Ed.2d 855 (1988)). The Court will not endeavor to apply it
now.

ry.

Conclusion

For the reasons set forth above, defendant's MOTION to dismiss is GRANTED. The
Clerk is directed to enter Judgment in favor of defendant, consistent with this opinion.
Additionally, it is ORDERED that the Clerk is directed to accept no further filings or complaints
related to the claims in the case at bar from Diane Blodgett or Tom Lingenfelter, without an
order granting leave to file such filings from the ChiefJudge of the United States Court of
Federal Claims. In seeking leave to file any future documents, Mrs. Blodgett and Mr.
Lingenfelter must explain how their submission raises new matters properly before this Court.
See RCFC I 1 (b)-(c) (baning the filing of unwarranted or frivolous claims that have no
evidentiary support).

IT IS SO ORDERED.

oren

A. Smith