Hackworth v. Kansas City Veterans Administration Medical Center et al

Filing 75

ORDER denying 70 motion for summary judgment; denying 71 motion to declare laws unconstitutional; granting 72 motion to dismiss for lack of jurisdiction and failure to state a claim. Plaintiff is granted one last opportunity to cure the def iciencies stated in his Complaint. If Plaintiff chooses to file a Third Amended Complaint, he must do so within fourteen (14) days of the date of this Order. Copy of order mailed to Plaintiff. Signed on 2/6/2015 by District Judge M. Douglas Harpool. (Hance, Breanna)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
SOUTHERN DIVISION

JEFFERY D. HACKWORTH,
Plaintiff,
vs.
KANSAS CITY VETERANS
ADMINISTRATION MEDICAL CENTER,
et al.
Defendants.

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Case No. 6:13-cv-03363-MDH

ORDER
Before the Court is the United States’ Motion to Dismiss Plaintiff’s Second Amended
Complaint (Doc. 72), Plaintiff’s Declaration and Demand for Summary Judgment (Doc. 70), and
Plaintiff’s Declaration and Demand to Rule Laws Unconstitutional (Doc. 71). The United States
argues pro se Plaintiff’s Second Amended Complaint fails to address the deficiencies of
Plaintiff’s Amended Complaint and therefore the Court should similarly dismiss Plaintiff’s
Second Amended Complaint for lack of subject matter jurisdiction and failure to state a claim.
Alternatively, the government moves to stay the case pending further agency investigation into
Plaintiff’s claims.

Plaintiff’s motions, conversely, ask the Court to rule “laws that allow

administrative government agencies to seize any property or money without a court order” are
unconstitutional and to enter summary judgment in favor of Plaintiff because “[e]xhibits in the
court record . . . shows proof that Plaintiff’s Constitutional Rights were violated.” The Court,
after careful consideration, GRANTS Defendants’ motion (Doc. 72) and DENIES Plaintiff’s
motions (Docs. 70-71). Plaintiff is permitted on last opportunity to cure the deficiencies stated
within this Order and file a Third Amended Complaint.

BACKGROUND
On November 1, 2013, the Court granted Plaintiff Jeffery D. Hackworth leave to proceed
with the present case in forma pauperis and Plaintiff filed his Complaint. After filing numerous
pre-service motions, Plaintiff submitted an Amended Complaint and obtained service upon
Defendants in September of 2014. In response to the Amended Complaint, Defendants filed a
motion to dismiss (Doc. 56), which the Court granted (Doc. 61). The Court held Plaintiff’s
Amended Complaint failed to allege how the federal government waived sovereign immunity
such that Court has subject matter jurisdiction over Plaintiff’s claims and further failed to
provide sufficient factual allegations to state a claim upon which relief could be granted. The
Court allowed Plaintiff the opportunity to file a Second Amended and ordered:
In drafting his Second Amended Complaint, the Court refers Plaintiff to Federal
Rules of Civil Procedure 8 and 10. If Plaintiff chooses to file an amended
complaint, it should address the deficiencies stated in this Order, including but not
limited to: the basis for the Court’s jurisdiction, the specific law(s) under which
the federal government waived sovereign immunity in this case, the factual
circumstances surrounding the alleged unlawful seizure of funds, how the seizure
violated due process, how the individual defendants were involved in the seizure,
and all forms of relief requested.
(Doc. 61 at 8).
Plaintiff filed a Second Amended Complaint. The Second Amended Complaint attempts
to state a claim against Kansas City Veterans Administration Medical Center (“KCVAMC”) and
the United States Department of Treasury,1 citing 28 U.S.C. § 1367 for the Court’s subject
matter jurisdiction.2

The Second Amended Complaint alleges that KCVAMC and the

Department of Treasury “unlawfully seized funds out of [Plaintiff’s] Social Security Disability

1

Plaintiff removed from his Second Amended Complaint the various individual defendants listed in his Amended
Complaint.
2

Plaintiff also quotes Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388, 396 (1971),
citing Bell v. Hood and providing that “where legal rights have been invaded, and a federal statute provides for a
general right to sue for such invasion, federal courts may use any available remedy to make good the wrong done.”

2

payment” on or about September 3, 2013, October 3, 2013, April 3, 2014, and October 3, 2014.
Plaintiff alleges that “Defendants use[d] an unconstitutional law 31 USC § 3716 to seize funds”
and that the seizures were “without due process” violating the Fourth, Fifth, and Seventh
Amendments of the United States Constitution.3 Plaintiff alleges that he disputed the seizure of
funds with KCVAMC and that the funds were seized “without telling plaintiff that arguments
were over,” without the opportunity to appeal, and without the opportunity to have the case heard
in a judicial court. Plaintiff prays for relief in the sum of ten million dollars.4
Prior to Defendants’ deadline for submitting a response to Plaintiff’s Second Amended
Complaint, the Court ordered Defendants to substantively respond to Plaintiff’s various motions
seeking preliminary relief (Doc. 65). Within Defendants’ suggestions in opposition (Doc. 66),
the government argued that Plaintiff’s funds were legally seized under the Treasury’s Offset
Program (“TOP”), see 31 U.S.C. § 3716, in order to collect upon a delinquent debt owed by
Plaintiff to the Department of Veterans Affairs (“VA”). Defendant attached an affidavit from a
Department of Treasury employee, swearing that on June 12, 2013, the VA referred a debt owed
by Jeffrey Hackworth to the Treasury; that the VA certified this debt was valid, delinquent, had
no bars to collection, and the debtor had been provided requite due process; that the four offsets
took place on September 3, 2013, October 3, 2013, April 3, 2014, and October 3, 2014 and
totaled $278.48; and that the balance on Plaintiff’s debt is currently zero and not subject to
offset. The Court therefore denied Plaintiff’s motions for preliminary relief (Doc. 73).

3

Plaintiff also alleges that Defendants acted “criminally under Title 18 USC § 242.”

4

Plaintiff states that the ten million dollars includes “actual monetary damages, Compensatory damages, General
damages, and Punitive damages.” Plaintiff further details his alleged loss to include “actual money unlawfully
seized; pain and suffering because of money seized; Plaintiff’s time and money to research and file complaint, cost
of mailing, fuel and other cost involved.[sic] Punitive damages against [Defendants] who are public servant agencies
whose responsibility is to protect ‘We the Peoples’ Constitutional rights, these agencies failed to protect
constitutional rights and chose to violate Plaintiff’s Constitutional rights.”  

3

Based on the government’s court-ordered response to Plaintiff’s motions, Plaintiff filed a
motion for summary judgment (Doc. 70) and a motion to declare law unconstitutional (Doc. 71).
Plaintiff requests summary judgment because “[e]xhibits in the court records provided by [the
government] shows proof that Plaintiff’s Constitutional Rights were violated” and Defendants
“present[] unconstitutional ‘law’, that violate Amendments 4, 5, and 7 of the U.S. Constitution
and are not law.”5 Plaintiff concurrently filed a motion asking the Court to declare “laws that
allow administrative government agencies to seize any property or money without a court order”
unconstitutional.

Plaintiff argues that such laws violate the Fourth, Fifth, and Seventh

Amendment. Defendants did not respond to Plaintiff’s motions.
However, in response to Plaintiff’s Second Amended Complaint, Defendants filed a
second motion to dismiss arguing lack of subject matter jurisdiction and failure to state a claim.
(Doc. 72). Defendants argue that (1) supplemental jurisdiction under 28 U.S.C. § 1367 does not
provide the Court subject matter jurisdiction in this case, (2) the Court lacks subject matter
jurisdiction over Plaintiff’s Bivens claim based on the doctrine of sovereign immunity,6 (3) the
Treasury’s collection by offset of debts owed by Plaintiff to the VA was lawful, (4) even if
Plaintiff did attempt to sue any VA or Treasury employees in this case, they are protected by
qualified immunity, and (5) if the proceeding is permitted to survive dismissal, or if the Court
allows Plaintiff to again amend his pleading, the action should be stayed pending further VA
investigation into Plaintiff’s debt referred for TOP collection. Plaintiff responded to Defendant’s
motion by reiterating the arguments made in his various motions (Docs. 70-71) and further

5

Plaintiff did not cite or attach any specific exhibit nor did Plaintiff cite what subsection of what statute is at issue.

6

Defendants also argue that if the Court were to liberally construe Plaintiff’s Second Amended Complaint to assert
a claim other than the Bivens claim asserted therein, it would not survive dismissal because it does not present a
cognizable claim under the FTCA (constitutional tort claims not cognizable), the APA (applies only to claims that
seek relief other than money damages), Big Tucker (not in Court of Federal Claims), or Little Tucker (in excess of
$10,000).

4

arguing that jurisdiction is proper under 28 U.S.C. § 1331; that sovereign immunity is
inapplicable to section 1983 claims and that the doctrine itself is unconstitutional; that the offset
was not proper because the underlying debt was based on a clerical error; that qualified
immunity is unconstitutional; and that the unconstitutional process by which Defendants seized
his funds remains an issue regardless of what the VA finds through its investigation.
ANALYSIS
Because the government argues that the Court lacks subject matter jurisdiction, the Court
must address that issue first. See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94-95
(1998).

The Court finds that Plaintiff failed to adequately plead a waiver to the federal

government’s sovereign immunity such that the Court has subject matter jurisdiction.
Nonetheless, liberally construing Plaintiff’s Second Amended Complaint and motions, the Court
finds that Plaintiff’s allegations may assert a claim under the APA for “relief other than money
damages.” Nevertheless, even assuming Plaintiff’s Second Amended Complaint provides a
potential basis for waiver of the government’s sovereign immunity, Plaintiff’s claims fail to state
a plausible claim for relief.
I. Subject Matter Jurisdiction
“Absent a waiver, sovereign immunity shields the Federal Government and its agencies
from suit.” F.D.I.C. v. Meyer, 510 U.S. 471, 475 (1994). Sovereign immunity is jurisdictional
in nature and, as a prerequisite to suing the federal government or its agencies, a plaintiff must
show that the government has consented to suit. See United States v. Mitchell, 463 U.S. 206, 212
(1983). The government’s waiver of sovereign immunity must be “unequivocally expressed”
and “strictly construed, in terms of its scope, in favor of the sovereign.” Lane v. Pena, 518 U.S.
187, 192 (1996).

5

In the Court’s previous order allowing Plaintiff to file an amended complaint (Doc. 61),
the Court specifically ordered Plaintiff to plead the basis for the Court’s subject matter
jurisdiction and the specific law(s) under which the federal government waived sovereign
immunity. Plaintiff’s Second Amended Complaint cites only supplemental jurisdiction under 28
U.S.C. § 1367 and references Bivens. After Defendant argued supplemental jurisdiction is
inapplicable, Plaintiff further cited 28 U.S.C. § 1331 for a jurisdictional basis. While Plaintiff
eventually cites the correct basis for the Court’s subject matter jurisdiction, section 1331,7
Plaintiff fails to plead any relevant ground under which the Court waived its sovereign
immunity. See Sabhari v. Reno, 197 F.3d 938, 943 (8th Cir. 1999) (“[I]f § 1331 is to be used to
secure relief against the United States, it must be tied to some additional authority which waives
the government’s sovereign immunity.”).
Plaintiff’s reference to Bivens is inadequate to show that the federal government waived
sovereign immunity in the case at hand. Here, Plaintiff brings suit against the Kansas City
Veterans Administration Medical Center and the United States Department of Treasury for
money damages in the amount of ten million dollars. As stated in the Court’s prior order, Bivens
does not waive sovereign immunity for suits against the United States or its agencies. See, e.g.,
Buford v. Runyon, 160 F.3d 1199, 1203 (8th Cir. 1998). The Supreme Court was presented with,
and explicitly denied, such a request in F.D.I.C. v. Meyer, 510 U.S. 471, 485-86 (1994).
Moreover, as the Eighth Circuit explained, “When Congress has created a comprehensive
regulatory regime, the existence of a right to judicial review under the Administrative Procedure
Act is sufficient to preclude a Bivens action.” Sinclair v. Hawke, 314 F.3d 934, 940 (8th Cir.

7

28 U.S.C. § 1367 is appropriate only in civil actions in which “the district courts have original jurisdiction” and
there are “other claims that are so related to claims in the action within such original jurisdiction that they form part
of the same case or controversy [.]” Thus, pleading supplemental jurisdiction without any basis for original
jurisdiction is insufficient.

6

2003). Accordingly, Plaintiff failed to establish subject matter jurisdiction in the case at bar
because Plaintiff failed to point to a specific, applicable waiver of the government’s sovereign
immunity. See V S Ltd. P'ship v. Dep't of Hous. & Urban Dev., 235 F.3d 1109, 1112 (8th Cir.
2000) (plaintiff bears burden of subject matter jurisdiction; in suits against the United States, this
includes showing both waiver of sovereign immunity and grant of subject matter jurisdiction).
Instead, Plaintiff argues that the doctrine of sovereign immunity is unconstitutional. Not
only did the Court previously reject this argument,8 but the doctrine itself pre-dates the
Constitution and has been consistently upheld by the Supreme Court of the United States. See,
e.g., United States v. Thompson, 98 U.S. 486, 489 (1878); United States v. Lee, 106 U.S. 196,
204 (1882); State of Kan. v. United States, 204 U.S. 331, 341 (1907); United States v. Shaw, 309
U.S. 495, 501 (1940); United States v. Sherwood, 312 U.S. 584, 586 (1941); United States v.
Mitchell, 463 U.S. 206, 212 (1983); F.D.I.C. v. Meyer, 510 U.S. 471, 475 (1994); see generally
Charles Alan Wright et al., 14 Fed. Prac. & Proc. § 3654 (3d ed.) (“The foregoing discussion
suggesting that there was a liberalizing trend in the judicial application of the sovereign
immunity doctrine for a number of years should not obscure the fact that there always has been a
requirement that there must be an express statutory waiver of the government’s immunity.”).
Plaintiff’s argument is futile.
Accordingly, Plaintiff fails to adequately plead the Court’s subject matter jurisdiction.
Due to Plaintiff’s pro se status, however, the Court finds it appropriate to consider whether
Plaintiff’s Second Amended Complaint provides any plausible basis upon which a waiver of
sovereign immunity exists. See Erickson v. Pardus, 551 U.S. 89, 94 (2007) (explaining pro se
documents are to be liberally construed and pro se complaints should be “held to less stringent
standards than formal pleadings drafted by lawyers”); see also Philippi v. Brellenthin, No. CIV.

8

See Doc. 61 at 3, n. 1.

7

11-2389 JRT/LIB, 2012 WL 947016, at *2 (D. Minn. Jan. 26, 2012); Harris v. Roloff Const.,
Co., No. 8:14CV199, 2014 WL 4656115, at *2 (D. Neb. Sept. 15, 2014); Newberry v. United
States, No. LR-C-86-13, 1986 WL 9460, at *2 (E.D. Ark. June 4, 1986).9
As stated in the Court’s prior order, and as echoed in Defendants’ motion to dismiss,
Plaintiff fails to assert a cognizable claim under the Federal Tort Claims Act, the Tucker Act, or
the Little Tucker Act such that those statutes provide a basis to waive the government’s
sovereign immunity. See F.D.I.C. v. Meyer, 510 U.S. 471, 478 (1994) (explaining constitutional
tort claims are not cognizable under FTCA); 28 U.S.C. § 1491 (must be pursued in Court of
Federal Claims); 28 U.S.C. § 1346 (must seek damages less than $10,000). Furthermore, while
the Administrative Procedure Act (“APA”) allows persons “suffering legal wrong because of
agency action, or adversely affected or aggrieved by agency action within the meaning of a
relevant statute,” to sue federal agencies, the plaintiff must be “seeking relief other than money
damages.” See 5 U.S.C. § 702. Here, the Court ordered Plaintiff to include in his Second
Amended Complaint “all forms of relief requested” and Plaintiff demanded only monetary relief
in the sum of ten million dollars. Thus, Plaintiff’s Second Amended Complaint fails to explicitly
plead a sufficient ground upon which the government waived its sovereign immunity. See also
Harrison v. U.S. Soc. Sec. Admin., No. 3:13-CV-435, 2014 WL 29042, at *1 (E.D. Va. Jan. 2,
2014).

9

Many courts agree with this approach. See, e.g., Manners v. U.S. Gov't Sec'y of Def., 242 F. App'x 723, 725 (2d
Cir. 2007); McMillan v. Dep't of Interior, 907 F. Supp. 322, 326 (D. Nev. 1995) aff'd sub nom. McMillan v. U.S.
Dep't of Interior, 87 F.3d 1320 (9th Cir. 1996); Miller v. Smith, 952 F. Supp. 2d 275, 284 (D.D.C. 2013); James v.
Jacksonville Bulk Mail Ctr., No. 3:06-CV-1120-J-34JRK, 2009 WL 2901197, at *3 (M.D. Fla. Sept. 4, 2009);
Schroeder v. Dep't of Veterans Affairs, No. 3:08CV351MRK, 2009 WL 1531953, at *1 (D. Conn. June 1, 2009);
Farag v. DTRA, No. 07 C 1688, 2007 WL 2404625, at *3 (N.D. Ill. Aug. 15, 2007). However, not all courts
liberally construe pro se complaints to find waivers of sovereign immunity not specifically plead. See Stebbins v.
United States, 105 Fed. Cl. 81, 83-84 (2012) (“Although complaints filed by pro se plaintiffs are generally held to
‘less stringent standards than formal pleadings drafted by lawyers,’ pro se plaintiffs nevertheless must meet
jurisdictional requirements.” (internal citations omitted)); see also Sanders v. U.S. Cong., 399 F. Supp. 2d 1021,
1025 (E.D. Mo. 2005); Sailer v. Dep't of U.S. Army, No. A1-04-53, 2004 WL 1490365, at *2 (D.N.D. July 1, 2004).

8

Nonetheless, liberally construing Plaintiff’s Second Amended Complaint and pending
motions, the Court finds that Plaintiff makes allegations that seek relief under the APA in two
potential ways. First, Plaintiff alleges that 31 U.S.C. § 3716 is unconstitutional and he filed with
the Court a motion seeking to declare the TOP unconstitutional under the Fourth, Fifth, and
Seventh Amendments. Based on these allegations and Plaintiff’s request for relief, it is plausible
to construe Plaintiff’s filings to assert a constitutional claim against the government agencies
seeking a declaratory judgment that the agencies’ actions violated the Fourth, Fifth, and Seventh
Amendments. Such allegations satisfy the government’s consent to suit under the APA. See,
e.g., Simmat v. U.S. Bureau of Prisons, 413 F.3d 1225, 1238-39 (10th Cir. 2005).
Second, Plaintiff alleges that the offset of his benefits was “unlawful” because he
disputed the seizure with KCVAMC and the offset occurred without him being advised “that
arguments were over,” without a hearing, and without an opportunity to appeal. Plaintiff’s
suggestions in opposition further allege that the underlying debt arose from a clerical error. The
Court finds that, based upon these allegations, that Plaintiff attempts to set out a claim alleging
Defendants failed to comply with statutory procedural requirements under 31 U.S.C. § 3716.
Although the Second Amended Complaint seeks only monetary relief, it seeks in part
compensation for the loss of “actual money unlawfully seized.” The Supreme Court indicated
that such monetary relief – in the form of reimbursement – can qualify as equitable relief rather
than “money damages” under the APA. Bowen v. Massachusetts, 487 U.S. 879, 893-94 (1988);
see also Dep't of Army v. Blue Fox, Inc., 525 U.S. 255, 262 (1999) (explaining “damages” are
given to plaintiff to substitute for a loss whereas “specific remedies” are attempting to give
plaintiff the very thing to which they are entitled). To the extent that Plaintiff sets out a claim
alleging Defendants failed to follow appropriate statutory procedures and Plaintiff seeks

9

reimbursement of the $278.48 in funds actually seized, the government has waived sovereign
immunity for such suits. See, e.g., Zellous v. Broadhead Associates, 906 F.2d 94 (3d Cir. 1990).
Even with the Court’s liberal construction of Plaintiff’s Second Amended Complaint to
find a potential basis for the Court’s subject matter jurisdiction, Plaintiff’s allegations
nonetheless fail to state a claim upon which relief can be granted.
II. Failure to State a Claim
“To survive a motion to dismiss [under 12(b)(6)], a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). A complaint is facially plausible where its factual content
“allows the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.”

Id.

The plaintiff must plead facts that show more than a mere speculation or

possibility that the defendant acted unlawfully. Id.; Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007). While the Court accepts the complaint’s factual allegations as true, it is not required
to accept the plaintiff’s legal conclusions. Ashcroft, 556 U.S. at 678. “Threadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id.
While “pro se complaints are to be construed liberally,” the Court “will not supply additional
facts, nor will [it] construct a legal theory for plaintiff that assumes facts that have not been
pleaded.” Stone v. Harry, 364 F.3d 912, 914 (8th Cir. 2004), quoting Dunn v. White, 880 F.2d
1188, 1197 (10th Cir. 1989).
Here, the Court has liberally construed Plaintiff’s claims to allege: (1) the TOP is
unconstitutional because it violates the Fourth, Fifth, and Seventh Amendments; and/or (2)
Plaintiff’s money was illegally seized by Defendants because Defendants failed to comply with
statutory procedures required under the TOP. The TOP statute allegedly used to seize Plaintiff’s

10

funds in this case is codified at 31 U.S.C. § 3716 and integrates federal regulations promulgated
by a variety of agencies, including the Department of Treasury, 31 C.F.R. § 901.3 et seq., and the
Department of Veteran’s Affairs, 38 C.F.R. § 1.912.
A. Claim that TOP is Unconstitutional
Plaintiff’s claim that the TOP violates the Constitution is unfounded and has no basis in
the law. In fact, one court described a similar claim as “insubstantial and frivolous” based on
Supreme Court precedent. See Champion v. U.S. Gov’t Dep’t of Treasury, No. 6:09-CV-574,
2010 WL 5600205, at *2 (E.D. Tex. Dec. 29, 2010) (adopted 2011 WL 167031 (E.D. Tex. Jan.
18, 2011)), aff'd sub nom. Champion v. U.S. Gov't, Treasury Dep't, 430 F. App'x 314 (5th Cir.
2011). In 2005, the Supreme Court upheld the use of the TOP program to offset Social Security
payments. See Lockhart v. United States, 546 U.S. 142, 145 (2005).
Based upon the TOP’s extensive regulatory framework and the procedural safeguards
provided by the statute and accompanying regulations,10 every decision reviewed by this Court
considering the issue presented has found that the TOP statute satisfies procedural due process
under the Fifth Amendment.11 Likewise, it is implausible to conclude that a “seizure” of certain

10

The statute mandates that the creditor agency provide to the debtor: written notice of the debt and the
government’s intent to collect, an opportunity to view and copy records, an opportunity to request a review of the
debt and in some cases an oral hearing, and an opportunity to enter into an agreement to re-pay the debt some other
way.

11

Omegbu v. U.S. Dep't of Treasury, 118 F. App'x 989, 991 (7th Cir. 2004); Shlikas v. U.S. Dep't of Educ., No. CIV.
WDQ-09-2806, 2013 WL 2149752, at *6 (D. Md. May 15, 2013) (“Compliance with TOP statutes and regulations
governing offsets satisfies procedural due process.”), aff'd sub nom. Shlikas v. SLM Corp., 546 F. App'x 290 (4th
Cir. 2013); United States v. Beulke, 892 F. Supp. 2d 1176, 1187 (D.S.D. 2012) (“The extensive regulatory
framework governing the TOP provide ample guidance for federal agencies to refer debtors to the TOP, protect a
debtor's due process, and offset their disbursements to satisfy their debt such that a court order is not required.“);
United States v. Lessard, No. 11-40020-02-JTM, 2013 WL 243651, at *2 (D. Kan. Jan. 22, 2013) (quoting United
States v. Mayer, No. 04-CR-100-1-SM, 2010 WL 4916561, at *1 (D.N.H. Dec. 3, 2010) (“The TOP is plainly an
administrative practice and procedure under federal law that, by its terms, is available as a means to collect debts
owed the United States. The procedure is established by statute and administered under implementing regulations,
which provide due process to debtors against whom offset is sought.”); see also Glinsey v. United States, No.
2:98CR010-GHD, 2011 WL 2963669, at *2 (N.D. Miss. July 20, 2011); Cahill v. United States, No. 1:CV-13-1129,
2014 WL 2471234, at *6 (M.D. Pa. May 29, 2014); Stover v. Illinois Student Assistance Comm'n, No. 04-1298,
2005 WL 3597743, at *9 (C.D. Ill. Apr. 21, 2005).

11

benefit disbursements pursuant to a federal statute providing due process prior to such “seizure”
would be considered “unreasonable” under the Fourth Amendment.12 Moreover, the Seventh
Amendment preserves only the right to a jury trial as it existed under the common law at the time
the amendment when enacted; it “does not apply where the proceeding is not in the nature of a
suit at common law.” N.L.R.B. v. Jones & Laughlin Steel Corp., 301 U.S. 1, 48 (1937). Courts
are clear that administrative proceedings are distinct from “the nature of suits as they existed at
common law” and Courts hold that entrusting enforcement of such actions to administrative
agencies does not violate the Seventh Amendment.13
B. Claim that Government Violated TOP

The Court notes that Due Process guaranteed by the Fifth Amendment requires notice and an opportunity to be
heard; an “opportunity to be heard” does not always include an oral hearing. See Mullane v. Cent. Hanover Bank &
Trust Co., 339 U.S. 306, 314 (1950); Mathews v. Eldridge, 424 U.S. 319 (1976).

12
Maryland v. King, 133 S. Ct. 1958, 1969 (2013) (“the ultimate measure of the constitutionality of a governmental
search is ‘reasonableness.’ ‘In some circumstances . . . the Court has found that certain general, or individual,
circumstances may render a warrantless search or seizure reasonable.’ . . . Those circumstances diminish the need
for a warrant, either because ‘the public interest is such that neither a warrant nor probable cause is required,’ or
because an individual is already on notice . . . .” (internal citations omitted)).
Here, based on substantial government need to have its debts repaid, the need to seize funds without a warrant in
order to effectuate the regulatory scheme, the limited amount of intrusion on the debtor, and the notice to plaintiff
and opportunity to contest the seizure prior to its occurrence, it is impossible to infer that “seizing” a debtor’s
“property” here without a court order constitutes wrongdoing. See New York v. Burger, 482 U.S. 691, 702 (1987);
see also United States v. Delgado, No. 06-CR-0636-H, 2007 WL 173890, at *2 (S.D. Cal. Jan. 5, 2007) aff'd, 545
F.3d 1195 (9th Cir. 2008) (“Persons engaging in pervasively regulated industries have a diminished expectation of
privacy. An administrative search or seizure made pursuant to a statute authorizing such searches and seizures will
be deemed reasonable for Fourth Amendment purposes . . . if the business is closely regulated and if three Burger
criteria are met.” (internal quotations and citations omitted)).

13
Atlas Roofing Co. v. Occupational Safety & Health Review Comm'n, 430 U.S. 442, 460-61 (1977) (“Thus, history
and our cases support the proposition that the right to a jury trial turns not solely on the nature of the issue to be
resolved but also on the forum in which it is to be resolved.”); Curtis v. Loether, 415 U.S. 189, 194 (1974) (“Jones
& Laughlin merely stands for the proposition that the Seventh Amendment is generally inapplicable in
administrative proceedings, where jury trials would be incompatible with the whole concept of administrative
adjudication8 and would substantially interfere with the NLRB's role in the statutory scheme.”); Myron v. Hauser,
673 F.2d 994, 1003 (8th Cir. 1982) (noting a distinction between “statutory or administrative proceedings and suits
at common law or proceedings in the nature of suits at common law” and holding a comprehensive statutory scheme
adopted by Congress and entrusting enforcement to administrative agency did not violate Seventh Amendment).

12

Plaintiff alleges that the underlying debt in this matter was based upon a clerical mistake
and that he disputed that debt with KCVAMC but the funds were seized “without telling Plaintiff
that arguments were over.” Based upon the statutory text of 31 U.S.C. § 3716, Plaintiff fails to
plead sufficient facts to allow the Court to draw a reasonable inference that Defendants are liable
for the misconduct alleged. See Salazar v. Omaha VA Med. Ctr., No. 8:14CV304, 2015 WL
224643, at *2 (D. Neb. Jan. 15, 2015).
For example, under the statute and relevant regulations, Plaintiff was required to dispute
the debt with KCVAMC within thirty days of the date that VA provided notice pursuant to 38
C.F.R. § 1.912(b). Here, Plaintiff failed to plead when or how he disputed the debt. As another
example, under the regulations, the creditor agency must await commencement of the offset until
any timely-filed dispute by the debtor has been reviewed and “a decision is rendered by VA
adverse to the debtor” and/or if the debtor appropriately requests a hearing, “a decision is
rendered by the VA on the issue which is the basis of the hearing.” 38 C.F.R. § 1.912(c).
Plaintiff did not indicate whether he received a response from KCVAMC or the VA concerning
his alleged dispute.

Moreover, Plaintiff failed to cite the specific part of the statute or

regulation(s) that he claims Defendants violated.
While “pro se complaints are to be construed liberally,” the Court “will not supply
additional facts, nor will [it] construct a legal theory for plaintiff that assumes facts that have not
been pleaded.” Stone v. Harry, 364 F.3d 912, 914 (8th Cir. 2004). Here, even assuming an
appropriate basis for waiver of sovereign immunity exists, Plaintiff’s claim that the TOP is
unconstitutional is fundamentally unsupported by the law, and his claim that Defendants violated
TOP procedures fails as unsupported by sufficient facts to infer wrongdoing.

13

DECISION
Based on the foregoing analysis, Defendant’s Motion to Dismiss (Doc. 72) is
GRANTED and Plaintiff’s motions (Docs. 70-71) are DENIED. Because Plaintiff is filing this
matter pro se and because the Court cannot conclude with clarity that “no relief could be granted
under any set of facts that could be proved consistent with the allegations,” see Swierkiewicz v.
Sorema N. A., 534 U.S. 506, 512 (2002), the Court will allow Plaintiff one last opportunity to file
a Third Amended Complaint in order to address the deficiencies stated herein. Plaintiff shall not
re-plead any claims rejected by the Court in this Order, nor shall Plaintiff re-plead claims
rejected by the Court’s previous orders.
If Plaintiff chooses to file a Third Amended Complaint, Plaintiff must do so within
fourteen (14) days of the date of this Order. Any Third Amended Complaint filed by Plaintiff
shall focus solely on Plaintiff’s allegations that Defendants violated the procedures provided in
the TOP and shall specifically state the factual basis for such claims with as much detail as
possible, including but not limited to: a description of the date and circumstances surrounding
the underlying debt, the date(s) and content(s) of all notices provided to Plaintiff by KCVAMC
or the VA, the date(s) and content(s) of all responses provided by Plaintiff to KCVAMC or the
VA, a description of the alleged clerical error, and the specific statutory procedure that Plaintiff
claims Defendants violated and how so. Additionally, Plaintiff shall incorporate the appropriate
jurisdictional basis for his claim, the appropriate waiver of sovereign immunity, and the
appropriate relief as stated herein. Any failure to comply with this Order will result in the Court
dismissing Plaintiff’s Third Amended Complaint.
Defendants shall respond to any Third Amended Complaint filed by Plaintiff within
twenty-one (21) days of service of the same. In the meantime, Defendant KCVAMC shall have

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the opportunity to further investigate Plaintiff’s claims. If Defendant requires additional time to
investigate, Defendant may move for an extension of time at the appropriate juncture.

IT IS SO ORDERED.
Dated: February 6, 2015

/s/ Douglas Harpool
DOUGLAS HARPOOL
UNITED STATES DISTRICT JUDGE

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