Hoover v. United States Government
Filing
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OPINION AND ORDER granting 19 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM . This case is DISMISSED WITH PREJUDICE. ***Civil Case Terminated. Signed by Judge Theresa L Springmann on 9/29/2014. (rmc)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HARVEY HOOVER,
Plaintiff,
v.
UNITED STATES GOVERNMENT, et al.
Defendants.
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CAUSE NO.: 3:13-CV-217-TLS
OPINION AND ORDER
This matter is before the Court on Defendant United States of America’s Motion to
Dismiss [ECF No. 19]. The Defendant’s Motion argues that the Plaintiff’s Second Amended
Complaint [ECF No. 11] should be dismissed in accordance with Federal Rule of Civil
Procedure 12(b)(6) because it fails to state a claim upon which relief can be granted. The Pro Se
Plaintiff, Harvey Hoover, filed what the Court construes as a Response [ECF No. 20] on June 19,
2014. He then filed another document titled as a “Motion for Non Dismissal” [ECF No. 23],
which the Court will construe as a Supplement to his Response rather than as a Motion. Because
it was filed as a Motion, however, the Defendant did file a Response [ECF No. 24]. Because the
Court considers pro se filings liberally, the Court will consider all these filings together in this
Opinion and Order, which resolves the pending Motion to Dismiss.
FACTUAL BACKGROUND
The history of the Plaintiff’s interactions with the court system and federal agencies is
lengthy and complex. The Court sets forth only the basic facts relevant to the pending Motion.1
The Plaintiff, Harvey Hoover, was convicted on three counts of filing false income tax
returns and one count of presenting a false statement on a college financial aid application. He
was sentenced on July 24, 1998, to 46 months imprisonment and was ordered to turn over
savings bonds as part of restitution. On September 18, 1998, the Court found the Plaintiff in
contempt of court for actions related to the transfer of the savings bonds to his sons and
sentenced him to an additional six months in prison. Hoover appealed his conviction. The Court
of Appeals upheld the conviction, but did determine that the Court lacked the authority to order
him to turn over the savings bonds to pay restitution and ordered his sentence modified
accordingly. United States v. Hoover, 175 F.3d 564 (7th Cir. 1999). Hoover later appealed the
district court’s finding of contempt, but the Court of Appeals upheld the district court’s contempt
order. United States v. Hoover, 240 F.3d 593 (7th Cir. 2001).
In 2003, the IRS determined that the Plaintiff was entitled to an informant reward in the
amount of $65,146.07. (Pl.’s Second Am. Compl., ECF No. 11 at 25.) In a letter dated October
27, 2003, the IRS informed the Plaintiff that it had applied the entire award to his outstanding tax
liabilities. (Id.) In December 2011, the Plaintiff filed a Federal Torts Claim Act (FTCA)
administrative claim with the IRS for damages and loss of the informant award. (Id. at 12–13.)
The Plaintiff made no claims regarding his conviction, prison sentence, or IRS collection
activities in his December 2011 letter. (Id.) On September 21, 2012, the IRS denied the
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A more detailed factual background can be found in the Seventh Circuit’s ruling on the
Plaintiff’s original appeal of his conviction. See United States v. Hoover, 175 F.3d 564, 566–67 (7th Cir.
1999).
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Plaintiff’s administrative claim on the grounds that is was untimely and barred under the FTCA.
(Id.) Subsequently, the Plaintiff filed his Pro Se Complaint, which was later amended on two
occasions.2
ANALYSIS
A.
Legal Standards
Federal Rule of Civil Procedure 12(b)(6) allows a defendant to file a motion to dismiss a
complaint for failure to state a claim upon which relief can be granted. When reviewing a
complaint attacked by a Rule 12(b)(6) motion, a court must accept all of the factual allegations
as true. Erickson v. Pardus, 551 U.S. 89, 93 (2007). Under the liberal notice pleading
requirements of the Federal Rules of Civil Procedure, the complaint need only contain “a short
and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P.
8(a)(2). The complaint need not contain detailed facts, but surviving a Rule 12(b)(6) motion
“requires more than labels and conclusions . . . . Factual allegations must be enough to raise a
right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
A complaint must contain sufficient factual matter to “state a claim that is plausible on its face.”
Id. at 570. “A claim has facial plausibility when the pleaded factual content allows the court to
2
The Court notes that Federal Rule of Civil Procedure 4(i) requires the Plaintiff to serve copies of
the summons and complaint to the United States attorney for the district where the action is brought. The
Plaintiff failed to serve his Complaint on the U.S. Attorney. After the Defendant pointed this out in its
Motion to Dismiss brief, the Plaintiff attempted to cure this deficiency [ECF No. 20]. That attempt at
service late in the process was stricken by the Court [ECF No. 21]. Because the Plaintiff is pro se and
because the matter has been fully and adequately briefed by counsel for the Defendant, the Court will
proceed to a ruling on the pending motion rather than wait for additional service to be completed. This
enhances judicial economy and, because the Court is ruling in favor of the Defendant, there is no risk of
prejudice to the Defendant with regard to the service issue.
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draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556).
The Plaintiff’s claims fall under the Federal Tort Claims Act (FTCA). The FTCA
“contains a threshold requirement that an administrative claim be ‘presented in writing to the
appropriate Federal agency.’” LeGrande v. United States, 687 F.3d 800, 812 (7th Cir. 2012)
(quoting 28 U.S.C. § 2401(b)). “Indeed, no lawsuit may be filed ‘unless the claimant shall have
first presented the claim to the appropriate Federal agency.’” Id. (quoting 28 U.S.C. § 2675). See
also Glade v. United States, 692 F.3d 718, 723 (7th Cir. 2012) (stating that failure to exhaust
administrative remedies bars a Federal Tort Claims Act suit); Bowers v. United States, 498 F.
App’x 623, 625 (7th Cir. 2012) (discussing failure to exhaust in the context of a taxpayer suit for
wrongful tax collection under 26 U.S.C. § 7433).
The administrative claim must contain “a statement of the essential facts underlying a
claim” sufficient to allow a “legally trained reader” to infer the legal cause of action. See Murrey
v. United States, 73 F.3d 1448, 1452–53 (7th Cir. 1996). Additionally, the claim must be
presented to the appropriate federal agency within two years of the accrual of the claim. 28
U.S.C. § 2401(b). A cause of action accrues when the claimant knows or has reason to know of
the fact of the injury that constitutes the basis of an action, and when a person in like
circumstances would have discovered that the injury was caused by a government actor.
Certain issues are exempt, however, from the above requirements. The FTCA does not
apply to claims relating to the assessment or collection of any tax. 28 U.S.C. § 2680(c); see also
Voelker v. Nolen, 365 F.3d 580, 581 (7th Cir. 2004) (finding that claims regarding assessment or
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collection of any tax are not covered by FTCA). Furthermore, the FTCA precludes suits against
the government on any claim arising out of false imprisonment. 28 U.S.C. § 2680(h).
B.
The Plaintiff’s Allegations
The Plaintiff’s Second Amended Complaint presents a great deal of information from
which it is somewhat difficult to discern specific claims. Although filed improperly, the
Plaintiff’s “Motion For Non Dismissal” [ECF No. 23] more clearly articulates his specific claims
and because the Plaintiff is pro se the Court will consider this filing. The Plaintiff’s restatement
of his claims are all addressed by the Defendant’s Memorandum in Support of its Motion to
Dismiss. The Court understands the Plaintiff’s filings as making the following claims: (1)
damages for the amount of his informant award; (2) false imprisonment for all the time he spent
in prison; (3) unauthorized collection of taxes; and (4) a 26 U.S.C. § 7433 claim for civil
damages for certain unauthorized collection actions. The Court will consider each claim
separately.
1.
Informant Award
The Plaintiff’s claim for damages totaling the amount of his informant reward is not a
claim upon which relief can be granted for two reasons. First, the Plaintiff’s FTCA
administrative claim was untimely. Under 28 U.S.C. § 2401(b), any FTCA administrative claim
must be filed within two years of the accrual of the claim. The IRS notified the Plaintiff on
October 27, 2003, that it had applied his informant reward against his outstanding tax liability,
but he did not file an FTCA administrative claim until December 2011. In his Response, the
Plaintiff invokes 26 U.S.C. § 6213, which states that if a petitioner files a petition with the Tax
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Court regarding a deficiency, no court proceedings for its collection can be brought until the
decision of the Tax Court is final. Therefore, he argues that his claim had not yet accrued and
thus the statute of limitations had not run when he filed his administrative claim in December
2011. The cited statutory provision seems to specifically prevent the Government from
instituting a court proceeding to assess a tax deficiency or to start a proceeding for the collection
of a deficiency while a petition is pending before the Tax Court. The Plaintiff’s Second
Amended Complaint does not explain how precisely this provision applies in his case. No court
proceeding was started regarding his informant award, and the deficiency to which the informant
award was applied was already on the books. The Plaintiff has not provided any evidence as to
why the application of his award to his outstanding tax liability was improper or why the statute
he cites should apply to his case.
But even if the Plaintiff had filed a timely administrative claim regarding his informant
reward, the claim would still be barred under 28 U.S.C. § 2680(c), which exempts from the
FTCA any claim “arising in respect of the assessment or collection of any tax. . . .” Thus, the
Plaintiff failed to comply with the general requirements for filing an FTCA claim, and even if he
had followed those requirements a clear exemption in the statute bars his claim.
2.
Prison Sentence–False Imprisonment
The Plaintiff also seeks damages for the time he spent in prison, which he argues was
false imprisonment. However, the FTCA expressly precludes from its waiver of sovereign
immunity any suits against the government for false imprisonment. 28 U.S.C. § 2680(h).
Notably, the Plaintiff repeatedly claims that the Government admitted that “the prison sentence
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was deleted after the seventh circuit ruling.” In fact the Seventh Circuit determined that only one
portion of the Plaintiff’s sentence with regard to restitution should be modified. The Court of
Appeals did nothing to modify or adjust his term of imprisonment.3 Ultimately, the Plaintiff is
incorrect in his claim that the modification of his sentence involved a modification to his term of
imprisonment. That is simply not the case. Regardless, his claim for false imprisonment is
specifically barred by 28 U.S.C. § 2680(h).
3.
Unauthorized Collection Claim
Again the Plaintiff’s filings make it difficult for the Court to ascertain the precise nature
of his claims. In his unauthorized collection claim, the Plaintiff seems to focus on the collection
of savings bonds in 1998 and an adjustment to the Plaintiff’s 1989 tax year made in 2007.
However, the Plaintiff has failed to exhaust his administrative remedies with regard to these
claims as required by 28 U.S.C. § 2401(b). The Plaintiff’s December 2011 administrative claim
only presents a claim regarding the informant award, which is discussed above. A reasonable
legally trained reader would not be able to discern or infer from the Plaintiff’s December 2011
letter any claim for these collection activities. See Murrey, 73 F.3d at 1452–53. Therefore, the
threshold requirement that an administrative claim be presented to the appropriate Federal
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The Plaintiff misunderstands the Seventh Circuit’s ruling. In his initial appeal, the Seventh
Circuit did hold that the district court lacked the authority to order him to surrender savings bonds that
were in his sons’ names to satisfy an order of restitution. Hoover, 175 F.3d at 568–69. In this decision the
Seventh Circuit ordered the portion of the Plaintiff’s sentence in that case to be modified, and the
provision regarding the savings bonds was ultimately deleted. Id. It was this part of the sentencing
determination that was deleted and not any part of his prison sentence as he suggests. The Plaintiff’s term
of imprisonment was upheld by the Court of Appeals. Id. Additionally, the Plaintiff later challenged the
district court’s imposition of six additional months imprisonment after the court found the Plaintiff in
contempt, but the Court of Appeals upheld the district court’s contempt order. Hoover, 240 F.3d 593.
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Agency prior to bringing a lawsuit has not been met and the Court cannot grant relief on this
claim. Furthermore, even if that requirement were met, the claim is still barred under 28 U.S.C.
§ 2680(c) because it arises out of the assessment and collection of taxes.
4.
Section 7433 Claim
In addition to the FTCA, there is a limited waiver of sovereign immunity under 26 U.S.C.
§ 7433. This provision allows taxpayers to recover damages for unauthorized tax collection. Like
the FTCA, exhaustion of administrative remedies is a condition of the government’s waiver.
“Congress has specified that a ‘judgment for damages shall not be awarded . . . unless the court
determines that the plaintiff has exhausted the administrative remedies available to such plaintiff
within the Internal Revenue Service.’” Gray v. United States, 723 F.3d 795, 798 (7th Cir. 2013)
(quoting 26 U.S.C. 7433(d)(1)). To exhaust administrative remedies, a taxpayer must send a
claim to the area director and must state the claim, the grounds for the claim, a description of the
harm incurred, and the dollar amount of the claim. See 26 C.F.R. § 301.7433-1 (e). Furthermore,
a civil action must be filed within two years of the date the cause of action accrues. 26 U.S.C. §
7433(d)(3). A cause of action under this section accrues when “the taxpayer has had a reasonable
opportunity to discover all essential elements of a possible cause of action.” 26 C.F.R. §
301.7433-1 (g).
Once again, the only administrative action the Plaintiff took was a December 2011 letter
that discussed his informant award. He made no other claims in that letter. There was no
information about the collection of savings bonds in 1998 or adjustments to his taxes made in
2007. Nor was there mention of any other potential claim. Because the Plaintiff has not provided
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any evidence that he filed a section 7433 administrative claim with the IRS regarding collection
activities, he has failed to show that section 7433 applies to his claims. Therefore, the Plaintiff
has failed to state a claim upon which relief can be granted.
CONCLUSION
For the foregoing reasons, the Defendant’s Motion to Dismiss [ECF No. 19] is
GRANTED and the case is DISMISSED WITH PREJUDICE.
SO ORDERED on September 29, 2014.
s/ Theresa L. Springmann
THERESA L. SPRINGMANN
UNITED STATES DISTRICT COURT
FORT WAYNE DIVISION
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