United States of America v. Conely
Filing
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OPINION and ORDER Granting Petitioner's 10 Motion to Dismiss Counter-Complaint. Signed by District Judge Linda V. Parker. (RLou)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
UNITED STATES OF AMERICA,
Petitioner,
Civil Case No. 15-mc-51209
Honorable Linda V. Parker
v.
PATRICK J. CONELY,
Respondent.
_____________________________/
OPINION AND ORDER GRANTING PETITIONER’S MOTION TO
DISMISS COUNTER-COMPLAINT
The United States of America filed this action to enforce two Internal
Revenue Service (“IRS”) summons directed to Respondent Patrick J. Conely
(“Conely”). The IRS is investigating Conely’s tax liability for calendar years
ending December 31, 2012 and December 31, 2013. On October 1, 2015, Conely
filed a Counter-Complaint against the United States alleging that the IRS’ seizure
of his property violated his constitutional rights. (ECF No. 6.) Conely also asserts
that the IRS’ actions caused him damages, including emotional distress. (Id.)
Presently before the Court is the government’s motion to dismiss the Counter-
Complaint. (ECF No. 10.) The deadline for Conely to respond to the motion has
long passed, with Conely filing no response.1
The government asserts several arguments in support of its motion to
dismiss. First, the government maintains that subject matter jurisdiction is lacking
because Conely fails to assert a waiver of sovereign immunity entitling the Court
to entertain his request for affirmative relief against the United States. (Id. at Pg
ID 46, citing McGinnis v. United States, 90 F.3d 143, 145 (6th Cir. 1996).) The
party bringing an action against the United States bears “ ‘[t]he burden of showing
an unequivocal waiver of sovereign immunity[.]’ ” (Id. at Pg ID 47, quoting West
v. FAA, 830 F.2d 1044, 1046 (9th Cir. 1987).) The Anti-Injunction Act also
generally prohibits a “ ‘suit for the purpose of restraining the assessment or
collection of any tax ….’ ” (Id., quoting 26 U.S.C. § 7421(a).) While recognizing
a limited waiver of sovereign immunity set forth in the Internal Revenue Code, 26
U.S.C. § 7426(a)(1), the United States argues the exception is inapplicable to
On August 31, 2015, this Court issued an order, requiring Conely to appear before
the Court to show cause why he should not be compelled to obey the IRS’
summonses. (ECF No. 2.) At a hearing held on November 3, 2015, Conely
claimed that he had not been personally served with the summonses. (See ECF
No. 13.) The Court issued an order on the same date, requiring the government to
hand-deliver the summonses to Conely immediately following the hearing. (Id.)
The Court indicated that if Conely failed to fully comply with the summonses by
December 3, 2015, the government could request another show cause hearing.
(Id.) Show cause hearings subsequently were scheduled, at which Conely failed to
appear. The Court therefore issued a bench warrant for his arrest on April 13,
2016. (ECF No. 24.) The warrant remains outstanding.
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Conely’s counterclaims as he is the one against whom the tax is assessed. (Id.,
citing 26 U.S.C. § 7426(a)(1); McGinness, 90 F.3d at 145.)
Alternatively, the United States seeks dismissal of Conely’s CounterComplaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state
a claim. (Id. at Pg ID 48.) The government argues that the only contention Conely
asserts as to why the IRS levy was wrongful is that the levy was issued without a
court order. The statute governing IRS levies, however, does not require a court
order. (Id., citing 26 U.SC. § 6331.)
Lastly, the United States contends that Conely’s Counter-Complaint must be
dismissed because counterclaims are not permitted in summons enforcement
proceedings. (Id., citing United States v. Rockwell Int’l, 897 F.2d 1255, 1261 (3d
Cir. 1990); United States v. Wheaton, 791 F. Supp. 103, 104 (D.N.J. 1992).)
The first two reasons asserted by the United States support dismissal of
Conely’s Counter-Complaint, although the government’s first argument is
dispositive as it establishes the Court’s lack of jurisdiction over this matter.2
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The cases cited by the government establish that “[s]ummons enforcement
proceedings are designed to be summary in nature, and their ‘sole purpose … is to
ensure that the IRS has issued the summons for a proper purpose and in good
faith.’ ” Rockwell Int’l, 897 F.2d at 1261 (quoting United States v. Barrett, 837
F.2d 1341, 1349 (5th Cir. 1988)); Wheaton, 791 F. Supp. at 104. Neither case
addresses, however, whether counterclaims are permitted in those proceedings and
this Court did not find in its own research a case in which the court stated such a
rule.
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Accordingly,
IT IS ORDERED, that the United States of America’s Motion to Dismiss is
GRANTED and Respondent Patrick J. Conely’s Counter-Complaint is
DISMISSED WITH PREJUDICE.
s/ Linda V. Parker
LINDA V. PARKER
U.S. DISTRICT JUDGE
Dated: October 11, 2016
I hereby certify that a copy of the foregoing document was mailed to counsel of
record and/or pro se parties on this date, October 11, 2016, by electronic and/or
U.S. First Class mail.
s/ Richard Loury
Case Manager
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