Harvey v. American Funds Service Company

Filing 21

ORDER & REASONS denying 17 Motion to Alter Judgment on 16 Order on Motion to Dismiss/Failure to State a Claim & 18 Motion to Vacate 16 Order on Motion to Dismiss/Failure to State a Claim and Objection to ex-parte Communications. Signed by Judge Martin L.C. Feldman on 1/27/2014. (caa, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CYRIL J. HARVEY., JR.

CIVIL ACTION

VERSUS

NO. 13-6045

AMERICAN FUNDS SERVICE CO.

SECTION: “F”

ORDER AND REASONS
Before the Court are plaintiff's motions to alter or amend and
to void this Court's November 27, 2013 Order and Reasons dismissing
plaintiff's case for failure to state a claim.

For the reasons

that follow, plaintiff's motions are DENIED.
Background
This action involved the allegedly unlawful backup withholding
of dividend payments from plaintiff's investment account.
On October 8, 2006, plaintiff and his wife opened a joint
investment

account

at

American

Funds.

Plaintiff

originally

deposited $80,000 into the account and invested in several mutual
funds.

On September 30, 2008, American Funds received a letter

from the Internal Revenue Service, entitled "Backup Withholding
Notification" (the "C-Notice"), directing American Funds to begin
backup withholding, at a rate of twenty-eight percent on the
dividend, interest and capital gains made to plaintiff.

The IRS

instructed American Funds to begin withholding within thirty days,
and to continue the withholding until the IRS officially notified
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American Funds in writing to stop.

The IRS also informed American

Funds that its failure to withhold as directed could result in
civil and criminal penalties under the Internal Revenue Code.
After

receiving

the

C-Notice,

American

Funds

notified

plaintiff in a letter that it would begin backup withholding as
directed. American Funds advised plaintiff that he could challenge
the withholding by seeking a determination from the IRS.

On March

16,

proposed

2012,

plaintiff

wrote

American

Funds

about

the

withholding, and on March 19, 2012, American Funds responded by
again explaining that plaintiff should seek a determination from
the IRS in order to resolve any dispute regarding his taxpayer
status and to stop the withholding.
On December 20, 2012, plaintiff sent American Funds a letter
entitled "Statement & Certification of Citizenship," in which he
asserted that he is a United States Citizen and therefore not
subject to backup withholding under 26 U.S.C. § 7701. In response,
American Funds again explained that it could not stop the backup
withholding without direction from the IRS.
On April 24, 2013, plaintiff filed a "Complaint for Unlawful
Conversion of Property and Violations of Constitutional Rights" in
Louisiana state court.
the suit to this Court.

On October 4, 2013, American Funds removed
On October 21, 2013, plaintiff moved to

remand, and on November 1, 2013, American Funds moved to dismiss
for failure to state a claim.

On November 27, 2013, the Court

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granted the motion to dismiss and denied the motion to remand.
Plaintiff now moves to alter or amend and to void the Court's order
granting defendant's motion to dismiss.
I.
Plaintiff first moves to alter or amend the Court's order.
Rule 59(e) of the Federal Rules of Civil Procedure provides that a
motion to alter or amend a judgment must be filed no later than 28
days after the entry of the judgment.

Fed. R. Civ. P. 59(e).

Because the Court entered its order on November 27, 2013, and the
plaintiff filed his motion to reconsider 8 days later, the motion
to amend is timely under Rule 59(e).
“A Rule 59(e) motion ‘calls into question the correctness of
a judgment.’”

Templet v. Hydrochem, Inc., 367 F.3d 473, 478 (5th

Cir. 2004) (quoting In re Transtexas Gas Corp., 303 F.3d 571, 581
(5th Cir. 2002)).

Because of the interest in finality, Rule 59(e)

motions may only be granted if the moving party shows there was a
mistake of law or fact or presents newly discovered evidence that
could

not

have

been

discovered

previously.

Id.

at

478-79.

Moreover, Rule 59 motions should not be used to relitigate old
matters, raise new arguments, or submit evidence that could have
been presented earlier in the proceedings.

See id. at 479;

Rosenblatt v. United Way of Greater Houston, 607 F.3d 413, 419 (5th
Cir. 2010)(“a motion to alter or amend the judgment under Rule
59(e) ‘must clearly establish either a manifest error of law or

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fact or must present newly discovered evidence’ and ‘cannot be used
to raise arguments which could, and should, have been made before
the judgment issued’”)(citing Rosenzweig v. Azurix Corp., 332 F.3d
854, 864 (5th Cir. 2003)(quoting Simon v. United States, 891 F.2d
1154, 1159 (5th Cir. 1990)).

The grant of such a motion is an

“extraordinary remedy that should be used sparingly.” Indep. CocaCola Employees’ Union of Lake Charles, No. 1060 v. Coca-Cola
Bottling Co. United, Inc., 114 F. App'x 137, 143 (5th Cir. Nov. 11,
2004) (citing Templet, 367 F.3d at 479).

The Court must balance

two important judicial imperatives in deciding whether to reopen a
case in response to a motion to alter or amend: “(1) the need to
bring the litigation to an end; and (2) the need to render just
decisions on the basis of all the facts.”

Templet, 367 F.3d at

479.
Plaintiff contends that the Court should correct its order
dismissing this case for failure to state a claim.

Plaintiff

maintains that the defendant's actions constitute an illegal taking
in

violation

Constitution.

of

the

Fifth

Amendment

The Court disagrees.

to

the

United

States

Plaintiff fails to show that

the Court's prior judgment should be altered or amended. Plaintiff
simply reiterates the same arguments already raised in his response
to defendant's motion to dismiss--arguments the Court has already
considered and rejected. Moreover, plaintiff fails to persuade the
Court that it has erred in its review of the facts, or in its

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application of the law to those facts.
II.
Plaintiff

has

also

filed

an

"Objection

to

ex-parte

Communications and Motion to Void the Order of the Court." Federal
Rule of Civil Procedure 60(b) allows a party to seek relief from a
final judgment, and request reopening of his case, under a limited
set of circumstances.

Although the decision to grant or withhold

relief under Rule 60(b) lies within the sound discretion of the
trial court, Helsing v. CSX Transp., Inc., 396 F.3d 632, 638 (5th
Cir. 2005), "the desirability of orderliness and predictability in
the judicial process speaks for caution in reopening judgments."
Fackelman v. Bell, 564 F.2d 734, 736 (5th Cir. 1977).

Rule

60(b)(4) authorizes the Court to provide relief from judgment if
"the judgment is void."

"Generally, a judgment is void under Rule

60(b)(4) if the court that rendered it lacked jurisdiction of the
subject

matter,

or

of

the

parties,

inconsistent with due process of law."

or

acted

in

a

manner

Burke v. Smith, 252 F.3d

1260, 1263 (11th Cir. 2001)(citation and internal quotation marks
omitted).
Plaintiff contends that the judgment in this case is void
because he was not given an opportunity to reply to defendant's
motion to dismiss before the Court ruled on that motion.

However,

the record plainly betrays the truth of plaintiff's contention.
Plaintiff responded to defendant's motion to dismiss on November

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12, 2013, and the Court fully considered plaintiff's response
before issuing its order some two weeks later.

To the extent

plaintiff argues that he should have been allowed to file a
surreply to defendant's November 20, 2013 reply brief, the Court
notes that plaintiff never moved for leave to file a surreply,
although he had a full week to do so.
Accordingly,

IT

IS

ORDERED

that

plaintiff's

motions

are

DENIED.
New Orleans, Louisiana, January 27, 2014

______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE

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