Haddix v. Internal Revenue Service et al

Filing 13

MEMORANDUM OPINION AND ORDER by Judge Greg N. Stivers on 8/9/2018 granting 7 Motion to Dismiss for Lack of Jurisdiction. Plaintiff's complaint is DISMISSED. The Clerk shall strike this matter from the active docket. cc: Counsel; Walton R. Haddix, pro se(JWM)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
BOWLING GREEN DIVISION
CIVIL ACTION NO. 1:17-CV-00202-GNS
WALTON R. HADDIX

PLAINTIFF

v.
INTERNAL REVENUE SERVICE, et al.

DEFENDANTS

MEMORANDUM OPINION AND ORDER
This matter is before the Court on Defendants’ Motion to Dismiss (DN 7). The motion is
ripe for adjudication. For the reasons outlined below, the motion is GRANTED.
I.

STATEMENT OF FACTS AND CLAIMS

Plaintiff Walton R. Haddix (“Haddix”) was a professional tax preparer who operated an
H&R Block tax office from 2008 to 2015. (Suppl. Compl. ¶ 4, DN 1-2). As alleged by Haddix,
the Internal Revenue Service (“IRS”) and others acting on its behalf audited his H&R Block office
on the mistaken belief that Haddix had improperly prepared tax returns on behalf of numerous
taxpayers. (Suppl. Compl. ¶¶ 14-17). Haddix alleges that the subsequent review of the challenged
returns by IRS Appeals Officer was flawed and challenges the collection of levies collected against
him. (Suppl. Compl. ¶¶ 17-18).
Haddix filed this action against Defendants alleging a violation of the Administrative
Procedure Act (“APA”), 5 U.S.C. §§ 701-706, and asserting that this Court has jurisdiction over
the matter pursuant to the APA and the Declaratory Judgment Act (“DJA”), 28 U.S.C. §§ 2201,
2202. (Suppl. Compl. ¶¶ 2, 19-21). Haddix requests that the Court order the IRS to, inter alia,
“repay and refund all amounts the Plaintiff paid by check, automatic withdrawal from Plaintiff’s
bank, social security account, and any amounts kept by the [IRS] . . . from Plaintiff’s 2015 and
2016 tax returns or any other tax returns plus interest on all amounts.” (Suppl. Compl. ¶ 22).
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II.

STANDARD OF REVIEW

Under Fed. R. Civ. P. 12(b)(1), a party may move for dismissal on the basis of lack of
subject matter jurisdiction. “Subject matter jurisdiction is always a threshold determination,” and
“may be raised at any stage in the proceedings . . . .” Am. Telecom Co., L.L.C. v. Republic of
Lebanon, 501 F.3d 534, 537 (6th Cir. 2007) (citing Steel Co. v. Citizens for a Better Env’t, 523
U.S. 83, 101 (1998)); Schultz v. Gen. R.V. Ctr., 512 F.3d 754, 756 (6th Cir. 2008). “A Rule
12(b)(1) motion can either attack the claim of jurisdiction on its face, in which case all allegations
of the plaintiff must be considered as true, or it can attack the factual basis for jurisdiction, in which
case the trial court must weigh the evidence and the plaintiff bears the burden of proving that
jurisdiction exists.” DLX, Inc. v. Kentucky, 381 F.3d 511, 516 (6th Cir. 2004). “A facial attack on
the subject-matter jurisdiction alleged in the complaint questions merely the sufficiency of the
pleading.” Gentek Bldg. Prod., Inc. v. Sherwin-Williams Co., 491 F.3d 320, 330 (6th Cir. 2007).
“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss
the action.” Fed. R. Civ. P. 12(h).
III.

DISCUSSION

Defendants move to dismiss Haddix’s claim on that basis that this Court lacks subject
matter jurisdiction to hear this dispute. (Defs.’ Br. Supp. Mot. Dismiss 1, DN 8). In particular,
Defendants contend that the APA does not contain a waiver of sovereign immunity to permit the
recovery of monetary damages against the United States and that neither the APA nor the DJA
confer jurisdiction on this Court.1 (Defs.’ Br. Supp. Mot. Dismiss 1).

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All of the individual Defendants named by Haddix as parties are sued in their official capacities.
(Suppl. Compl. ¶¶ 7-10). As a result, the United States of America is the real party in interest in
this action. See Mintz v. United States, No. 99-5980, 2000 WL 486609, at *1 (E.D. Pa. Apr. 25,
2000) (“Where a federal official is sued in his official capacity, the real party in interest in the
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The Court agrees. The Sixth Circuit has held that neither the DJA nor the APA create an
independent basis for subject matter jurisdiction in this forum. See Jama v. Dep’t of Homeland
Sec., 760 F.3d 490, 494 (6th Cir. 2014) (citations omitted); Heydon v. MediaOne of Se. Mich., Inc.,
327 F.3d 466, 470 (6th Cir. 2003).
From the face of the Complaint and its supplement, Haddix is requesting monetary
damages. As noted above, the United States is the real party in interest for all claims asserted in
this action, and “[i]t is axiomatic that the United States may not be sued without its consent and
that the existence of consent is a prerequisite for jurisdiction.” United States v. Mitchell, 463 U.S.
206, 212 (1983); see also Worldwide Equip. of Tenn., Inc. v. United States, 876 F.3d 172, 175-76
(6th Cir. 2017). Neither the APA nor the DJA constitute a waiver to the claims in this action. See
5 U.S.C. § 702 (providing a limited waiver for “[a]n action in a court of the United States seeking
relief other than money damages” under the APA); United States v. City of Detroit, 329 F.3d 515,
521 (6th Cir. 2003) (en banc) (noting that under the APA, “[t]he government has waived its
immunity with respect to non-monetary claims.” (citing 5 U.S.C. § 702)); Haines v. Fed. Motor
Carrier Safety Admin., 814 F.3d 417, 425 (6th Cir. 2016) (stating that “to the extent that Haines
seeks monetary damages under the APA, [federal courts] lack jurisdiction over his claim.” (citing
5 U.S.C. § 702)); 28 U.S.C. § 2201(a) (conferring subject matter jurisdiction upon federal courts
“[i]n [] case[s] of actual controversy within [their] jurisdiction, except with respect to Federal taxes
other than actions brought under section 7428 of the Internal Revenue Code of 1986 . . . .”);
Kryzske v. Comm’r, 548 F. Supp. 101, 103 (E.D. Mich. 1982), aff’d, 740 F.2d 968 (6th Cir. 1983)

United States.” (citing Kentucky v. Graham, 473 U.S. 159, 166 (1985); Aziz v. Buckwalter, No.
98-6047, 1999 WL 239035, at *1 (E.D. Pa. Apr. 9, 1999))).
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(“The Declaratory Judgments Act, 28 U.S.C. § 2201, also provides no basis for relief in a tax suit.”
(citations omitted)).
It is important to note that there is a process available to address Haddix’s grievance with
the IRS. However, Haddix has not satisfied the conditions precedent to pursue his claim in this
forum. As Defendants’ note in their reply:
[Haddix] is not without a remedy. If he seeks a refund of the civil penalties that the
Service assessed against him, he may bring a suit under 26 U.S.C. § 7422, after he
first pays the required amount and then files an administrative claim for refund with
the Service.
(Defs.’ Reply Mot. Dismiss 2, DN 12 (citing United States v. Clintwood Elkhorn Mining Co., 553
U.S. 1, 4 (2008); 26 U.S.C. § 7422(a))). If Haddix is unsuccessful with the outcome of his
administrative claim, then he could bring suit under 26 U.S.C. § 7422 if he so desires.
For the above reasons, this Court lacks subject matter jurisdiction over this action and will
therefore grant the motion dismissing this case.
IV.

CONCLUSION

For the reasons outlined above, IT IS HEREBY ORDERED that Defendants’ Motion to
Dismiss (DN 7) is GRANTED, and Plaintiff’s Complaint is DISMISSED. The Clerk shall strike
this matter from the active docket.

Greg N. Stivers, Judge
United States District Court
August 9, 2018

cc:

counsel of record
Walton R. Haddix, pro se

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