United States of America v. Mooney et al
ORDER denying 51 Motion to Dismiss/General; adopting 74 Report and Recommendation. (Written Opinion) Signed by Judge Susan Richard Nelson on 05/31/2017. (SMD)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
United States of America,
Case No. 16-cv-2547 (SRN/LIB)
William J. Mooney, Joni T. Mooney, and
Harbor Holdings, Mid-Atlantic Trustees
Michael R. Pahl, United States Department of Justice, Tax Division, P.O. Box 7238 Ben
Franklin Station, Washington, District of Columbia, for Plaintiff.
William J. Mooney and Joni T. Mooney, 409 Sixth Avenue Northwest, Little Falls,
Minnesota 56345, pro se.
SUSAN RICHARD NELSON, United States District Judge
This matter comes before the Court on the Objections [Doc. No. 75] of Defendants
William J. Mooney and Joni T. Mooney (together, the “Mooney Defendants”) to United
States Magistrate Judge Leo I. Brisbois’s Report and Recommendation (“R&R”), dated
May 1, 2017 [Doc. No. 76].
The magistrate judge recommended that the Mooney
Defendants’ Motion for Dismissal with Prejudice [Doc. No. 51] be denied.
Pursuant to statute, this Court reviews de novo any portion of the magistrate judge’s
opinion to which specific objections are made, and “may accept, reject, or modify, in whole
or in part, the findings or recommendations” contained in that opinion. 28 U.S.C. §
636(b)(1)(C); see also Fed. R. Civ. P. 72(b); D. Minn. LR 72.2(b)(3). For the reasons stated
herein, the Court overrules the Mooney Defendants’ objections and adopts the R&R in its
The facts underlying this case and the present motion have been thoroughly and
accurately stated in the R&R, the background section of which the Court incorporates by
reference here. Very briefly stated, Plaintiff, the United States of America, “brings this
action against the above defendants to reduce federal tax and penalty assessments to
judgment and enforce federal tax liens on property located in this district.” (Compl. [Doc.
No. 1] at 1.) Plaintiff alleges that for the period from 2002 to 2014, the Secretary of the
Treasury calculated tax assessments against the Mooney Defendants totaling $87,475.07,
and penalty assessments for the same period totaling $71,295.14. (See id. ¶¶ 6-8, 12-17.)
Plaintiff seeks to enforce tax liens on property occupied by the Mooney Defendants in Little
Falls, Minnesota. (See id. ¶ 5.)
The Complaint alleges that although the Mooney Defendants acquired the property
by deed in February 26, 1982, and have continuously occupied it since, they purported to
convey their interest in the property to Defendant Harbor Holdings, Mid-Atlantic Trustees
and Administrators, Trustee (“Harbor Holdings”) by a quit claim deed recorded on
November 1, 2004. (See id. ¶¶ 18, 25.) Plaintiff contends that “Mid-Atlantic Trustees and
Administrators” was the name used by certain promoters to “promote an abusive tax
scheme where customers used sham trusts to hide their income and assets from the IRS.”
(Id. ¶ 26.) Importantly, although Harbor Holdings was supposedly the title-holder to the
Little Falls property, the Mooney Defendants have “enjoyed the benefits of, and paid for all
costs associated with the property,” and “are the named insureds under the current
homeowners insurance on the property.” (Id. ¶¶ 31-33.) Ultimately, the Complaint asserts
that the “federal tax liens associated with the unpaid federal income tax and penalty
assessments against William J. and Joni T. Mooney (individually and jointly)” should
“attach to the [Little Falls] property” and be enforced by a court-ordered sale of the property
and distribution of the proceeds. (See id. ¶ 37.)
Between the filing of the Complaint on July 28, 2016 and the present date, the
Mooney Defendants have engaged in what may be described as an unconventional response
to litigation. A complete recounting of events is contained in the R&R, and for the sake of
brevity will not be repeated here. Of particular note, Defendant William J. Mooney,
although not a lawyer authorized to practice law in the State of Minnesota or to appear
before this Court, has attempted to represent not only himself but his wife and Harbor
Holdings. (See Jan. 30, 2017 Order [Doc. No. 47].) Defendants have also filed more than
two dozen affidavits, exhibits, motions, and notices with names such as “Lawful Notice of
Fault in Dishonor” and “Affidavit of ‘Friend of a Friend’ and “Constitutional Consul’.”
These documents have generally proven non-responsive to the Complaint and not in
keeping with the Federal Rules of Civil Procedure, and accordingly have been nearly
universally stricken from the record by the magistrate judge. (See Jan. 30, 2017 Order; Nov.
7, 2016 Order [Doc. No. 36].) Judge Brisbois has also repeatedly reminded the Mooney
Defendants that a non-lawyer may not represent a third-party in court. (See, e.g., Jan. 30,
Because Defendant Harbor Holdings had failed to plead or otherwise properly
defend the action—despite repeated orders of this Court to do so—Plaintiff moved for an
entry of default as to that defendant on February 2, 2017. (See Request for Entry of Default
[Doc. No. 48].) Pursuant to Federal Rule of Civil Procedure 55(b)(1), the Clerk of Court
duly entered default four days later. (See Clerk’s Entry of Default [Doc. No. 50].) On
February 15, 2017, the Mooney Defendants filed the present Motion for Dismissal with
Prejudice. They contend that dismissal is warranted on five separate grounds: (1) lack of
subject matter jurisdiction; (2) lack of personal jurisdiction; (3) insufficient process as to
Defendant Harbor Holdings; (4) insufficient service of process as to the same defendant;
and (5) failure to join Harbor Holdings. The magistrate judge filed the R&R as to the
Mooney Defendants’ motion on May 1, 2017, recommending that the motion be denied.
The Mooney Defendants have since filed timely objections to the R&R, triggering this de
Standard of Review
Upon issuance of an R&R, a party may “serve and file specific written objections to
the proposed findings and recommendations.” Fed. R. Civ. P. 72(b)(2) (emphasis added).
“The objections should specify the portion of the magistrate judge’s [R&R] to which
objections are made and provide a basis for those objections.” Mayer v. Walvatne, No. 07cv-1958 (JRT/RLE), 2008 WL 4527774, at *2 (D. Minn. Sept. 28, 2008). Objections which
are not specific but merely parrot arguments already presented to and considered by the
magistrate judge are not entitled to de novo review. Dunnigan v. Fed. Hom Loan Mortg.
Corp., No. 15-cv-2626 (SRN/JSM), 2017 WL 825200, at *3 (D. Minn. Mar. 2, 2017) (citing
Mashak v. Minnesota, No. 11-cv-473 (JRT/JSM), 2012 WL 928251, at *2 (D. Minn. Mar.
19, 2012)). Furthermore, when presenting arguments to a magistrate judge, parties must put
forth “not only their ‘best shot’ but all of their shots.” Ridenour v. Boehringer Ingelheim
Pharm., Inc., 679 F.3d 1062, 1067 (8th Cir. 2012) (quotations and citations omitted). Thus,
a party cannot, in his objections to an R&R, raise arguments that were not clearly presented
to the magistrate judge. Hammann v. 1-800 Ideas.com, Inc., 455 F. Supp. 2d 942, 947-48
(D. Minn. 2006).
As Judge Brisbois noted and discussed at length, the Mooney Defendants’
jurisdictional arguments are based on what is commonly termed a “sovereign citizen”
theory of law and history. (See R&R at 6-11.) They argue that Plaintiff has failed to
demonstrate that jurisdiction exists in this matter; that they themselves are not citizens of the
United States (as opposed to the “Republic of Minnesota”); that they are “flesh and blood”
persons who are not subject to this Court’s jurisdiction, unlike the fictitious, “corporate”
defendants named in the case; that this Court has territorial jurisdiction only in the District
of Columbia and a few other scattered places; that the federal income tax is voluntary; and
that neither the Court nor the Internal Revenue Service has authority to collect income taxes
“from a natural man/woman and human beings who are by definition outside the scope and
jurisdiction of THE INTERNAL REVENUE SERVICE.” (See Defs.’ Mem. in Supp. [Doc.
No. 52] at 1-10 (capitalization original).) In support, they cite to a random smattering of
case law, most of it ancient, obscure, out-of-context, and—in at least one instance—
apparently wholly made up.1 Cf. United States v. Mitchell, 405 F. Supp. 2d 602, 605 (D.
Md. 2005) (noting that sovereign citizens “all rely on snippets of 19th Century court
opinions taken out of context, definitions from obsolete legal dictionaries and treatises, and
misplaced interpretations of original intent”).
As the magistrate judge carefully demonstrated through ample case citation, such
arguments have been thoroughly and consistently rejected by courts throughout this country.
See, e.g., United States v. Benabe, 654 F.3d 753, 767 (7th Cir. 2011) (“Regardless of an
individual’s claimed status of descent, be it as a ‘sovereign citizen,’ a ‘secured-party
creditor,’ or a ‘flesh-and-blood human being,’ that person is not beyond the jurisdiction of
the courts. These theories should be rejected summarily, however they are presented.”) Of
note, the Eighth Circuit has described the Mooney Defendants’ arguments as “frivolous,”
and not deserving of “extended discussion.” United States v. Simonson, 563 F. App’x 514
The Mooney Defendants cite to Penhallow v. Doane’s Adm’rs, 3 U.S. (3 Dall.) 54
(1795) for the following proposition:
Inasmuch as every government is an artificial person, an abstraction, and a
creature of the mind only, a government can interface only with other
artificial persons. The imaginary, having neither actuality nor substance, is
foreclosed from creating and attaining parity with the tangible. The legal
manifestation of this is that no government, as well as any law, agency,
aspect, court, etc. can concern itself with anything other than corporate,
artificial persons and the contracts between them.
Having since carefully reviewed Penhallow, the Court can confidently say that this quote
appears nowhere in that case. See United States v. Heijnen, 375 F. Supp. 2d 1229, 1231
n.1 (D.N.M. 2005) (addressing same quote, and noting that it was not found in Penhallow
“or in any other source”). The Mooneys are admonished to be truthful, accurate, and
careful about citing precedent in future.
(8th Cir. 2014) (mem.).
Moving beyond the Mooney Defendants’ unavailing sovereign citizen arguments,
the fundamental fact is this: Plaintiff has asserted that this Court has subject matter
jurisdiction under 28 U.S.C. §§ 1331, 1340, and 1345, as well as I.R.C. §§ 7402 and 7403.
A quick review of these statutes is all that is necessary to determine—as a matter of law—
that this Court has subject matter jurisdiction over this action. See, e.g., 28 U.S.C. § 1331
(“The district courts shall have original jurisdiction of all civil actions arising under the
Constitution, laws, or treaties of the United States.”); id. at § 1340 (“The district court shall
have original jurisdiction of any civil action arising under any Act of Congress providing for
internal revenue . . . .”); id. at § 1345 (“[T]he district courts shall have original jurisdiction
of all civil actions, suits or proceedings commenced by the United States . . . .”); see also
Uland v. City of Winsted, 570 F. Supp. 2d 1114, 1117 (D. Minn. 2008) (noting that where a
defendant has made a facial attack against subject matter jurisdiction (as here), “then the
court only considers the allegations in the complaint, deciding whether jurisdiction exists as
a matter of law”) (emphasis added). Likewise, this Court’s authority to exercise personal
jurisdiction over the Mooney Defendants—both residents of this state—is unquestionable.
See Milliken v. Meyer, 311 U.S. 457 (1940); United States v. Olsen, No. 14-cv-3302
(WJM/KLM), 2016 WL 322554, at *2 (D. Colo. Jan. 27, 2016) (noting that a federal district
court has personal jurisdiction over individuals residing within the territorial boundaries of
the state within which the court resides). Accordingly, because the Mooney Defendants can
present no non-frivolous arguments in favor of their jurisdictional motions, the Court
overrules their objections and adopts the R&R on both matters.
Insufficient Process and Service of Process
The Mooney Defendants apparently also argued before the magistrate judge that the
entire action, against all defendants, must be dismissed because of insufficient process and
insufficient service of process upon Harbor Holdings. Judge Brisbois flatly rejected this
contention, noting, among other things, that the Mooney Defendants may not raise
arguments on behalf of Harbor Holdings, that process has been properly served on Harbor
Holdings, and that, in any event, failure to serve Harbor Holdings would not abate the action
as to the Mooney Defendants. (See R&R at 11-13.)
The Court agrees with the magistrate judge on all three bases. As non-lawyers, the
Mooney Defendants may only represent themselves in court—not other parties. See, e.g.,
Knoefler v. United Bank of Bismark, 20 F.3d 347, 348 (8th Cir. 1994) (“A nonlawyer . . .
has no right to represent another entity, i.e. a trust, in a court of the United States.”). Thus,
to the extent the Mooney Defendants seek to raise an argument on behalf of Harbor
Holdings, they are barred from doing so.
Second, the record amply demonstrates that Harbor Holdings was, in fact, properly
Plaintiff served that entity on August 22, 2016 by personally serving Kerry
Augustine, the trustee and agent for Harbor Holdings. (See Aff. Of Service [Doc. No. 14];
see also Augustine Aff. of Conditional Acceptance [Doc. No. 15] (showing
acknowledgment by Kerry Augustine of service).)
Although the Mooney Defendants
apparently argue, in their objections, that “Harbor Holdings” and “Mid-Atlantic Trustees
and Administrators” are different entities, they present no factual support for this contention.
In any event, as the magistrate judge properly noted, they cannot present argument on behalf
of any other defendants. (See R&R at 12 n.5.) Accordingly, the Court need not address that
Third, the magistrate judge is entirely correct that even if Harbor Holdings had been
improperly served, that fact would not result in dismissal of this action against the Mooney
Defendants—both of whom have, indisputably, been properly served. Were it correct that
Harbor Holdings was improperly served, the proper relief would be to dismiss only that
defendant from the case, not any others.
See, e.g., Hanks v. Hills, No. 15-cv-4275
(JNE/TNL), 2016 WL 7404680, at *1 (D. Minn. Dec. 21, 2016). Accordingly, the Court
rejects the Mooney Defendants’ objections as to insufficient process and insufficient service
Failure to Join a Party
Finally, the Mooney Defendants contend that dismissal is warranted pursuant to
Federal Rule of Civil Procedure 12(b)(7), for failure to join a necessary party. See also Fed.
R. Civ. P. 19. They base this argument, again, on the idea that Harbor Defendants and MidAtlantic Trustees and Administrators are somehow separate entities, and that the latter must
be joined or this action dismissed. However, the burden is on the Mooney Defendants, as
the moving party, to demonstrate that dismissal or joinder is appropriate. See Am. Gen. Life
and Accident Ins. Co. v. Wood, 429 F.3d 83, 92 (4th Cir. 2005). As the Court has noted
earlier, they have presented no evidence to support (or even suggest) a finding that MidAtlantic Trustees and Administrators is a separate entity from Harbor Holdings, or—more
pertinently—that its joinder is necessary. Having failed to meet the requisite burden under
Rule 12(b)(7), the Court must reject the Mooney Defendants’ argument as to this issue.
For the reasons stated, the Court concludes that the magistrate judge did not err in
concluding that the Mooney Defendants’ motion to dismiss must be denied. Accordingly,
the Court overrules all objections, and adopts the R&R.
THEREFORE, IT IS HEREBY ORDERED THAT:
1. Defendants’ Objections [Doc. No. 75] to the Magistrate Judge’s May 1,
2017 Report and Recommendation are OVERRULED;
2. The Court ADOPTS the Report and Recommendation [Doc. No. 74]; and
3. Defendants’ Motion to Dismiss [Doc. No. 51] is DENIED.
Dated: May 31, 2017
s/Susan Richard Nelson
SUSAN RICHARD NELSON
United States District Judge
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