Brown v. United States Government et al
ORDER granting 13 Motion to Dismiss for Failure to State a Claim; denying as moot 14 Motion for Summary Judgment; OVERRULING 17 Objection to Magistrate Judge Order; striking 22 Plaintiffs Request for Admission. Signed by Judge Algenon L. Marbley on 6/1/2017. (cw)(This document has been sent by regular mail to the party(ies) listed in the NEF that did not receive electronic notification.)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
UNITED STATES GOVERNMENT, et al.,
Case No. 2:16-CV-0358
JUDGE ALGENON L. MARBLEY
Magistrate Judge Deavers
OPINION & ORDER
This matter is before the Court on: (a) Defendant United States’ Motion to Dismiss
Plaintiff Wayne Brown’s complaint (Doc. 13); (b) Plaintiff’s Motion for Summary Judgment
(Doc. 14); (c) Plaintiff’s Objection to Court Granting Extension to Defendant (Doc. 17); and
(d) Plaintiffs Request for Admission (second motion) (Docs. 21, 22.) For the reasons expressed
below, the Court GRANTS Defendant’s Motion to Dismiss (Doc. 13), DENIES as moot
Plaintiff’s Motion for Summary Judgment (Doc. 14), OVERRULES Plaintiff’s Objection to
Court Granting Extension to Defendant (Doc. 17), and STRIKES Plaintiffs Request for
Admission. (Docs. 21, 22.)
Plaintiff filed his complaint pro se against the United States, the Internal Revenue Service
(“IRS”), the District Court, and the Sixth Circuit, on April 21, 2016. (Doc. 1.) Plaintiff amended
his complaint on May 4, 2016. (Doc. 2.) But this litigation did not begin here.
A. Brown I
Brown sued the United States, Department of Treasury, and the IRS in August 2014
following a mix-up with his 2010 tax refund.
(“Brown I,” Case No. 14-cv-1142, Doc. 1
(Watson, J.).) In March 2011, the IRS had mistakenly issued him a tax refund that was $15,000
more than he was due. (Id. at 1.) In an attempt to correct the error, in July 2012, the IRS sent
Plaintiff an “Intent to Levy Notice” which stated that the IRS may levy Plaintiff’s state tax
refund if he did not call the IRS immediately or pay back the $15,000 plus interest. Brown
alleged that in sending this Intent to Levy Notice, the IRS improperly assessed the erroneous
refund as a “rebate category B overstated” payment rather than a “non-rebate category D
Brown called the IRS and offered to pay $50 per month, but the IRS insisted that Brown
pay $210 per month. Brown made payments from August 2012 until November 2013. In May
2013 and November 2013, he requested hearings with the IRS to challenge the levy, which the
Brown complained that the IRS’s actions in attempting to collect the erroneous refund via
levy violated the Internal Revenue Code (“IRC”), and sought damages under 26 U.S.C. § 7433,
which provides a remedy to taxpayers for certain IRS actions that violate the IRC.1 He also
Section 7433 provides, in relevant part:
(a) In general.--If, in connection with any collection of Federal tax with respect to a
taxpayer, any officer or employee of the Internal Revenue Service recklessly or
intentionally, or by reason of negligence, disregards any provision of this title, or any
regulation promulgated under this title, such taxpayer may bring a civil action for
damages against the United States in a district court of the United States.
(d)(3) Period for bringing action. --Notwithstanding any other provision of law, an action
to enforce liability created under this section may be brought without regard to the
amount in controversy and may be brought only within 2 years after the date the right of
action accrues. 26 U.S.C. § 7433.
sought damages for alleged violations of his Fifth Amendment rights when the IRS denied his
Unfortunately for Brown, in addition to granting a private right of action for certain
violations, 26 U.S.C. § 7433 also contained a statute of limitations. 26 U.S.C. § 7433(d)(3). The
government filed a motion for judgment on the pleadings on statute of limitations grounds,
which this Court granted. (Brown I, Doc. 39, at 9 (finding that “the actions of which plaintiff
complains all constitute the same alleged wrong—wrongful collection of the erroneous refund
The Court also found that Brown’s Fifth Amendment claim failed because
“collection via levy has been upheld as not in violation of the Due Process Clause so long as an
adequate opportunity exists for post-seizure review,” which “need not involve a hearing.” (Id. at
10 (internal quotation omitted).)
Brown appealed, and sought to proceed in forma pauperis, which motion Judge Watson
denied. (Id. at Doc. 43) The Sixth Circuit also declined to grant Brown’s motion to appeal in
forma pauperis because, “[f]or the reasons stated by the district court, Brown’s complaint lacks
an arguable basis in law and an appeal in this case would be frivolous.” (Id. at Doc. 44.) The
Sixth Circuit ordered Brown to pay the filing fee for his appeal. Brown failed to pay the fee, and
the Sixth Circuit dismissed his case for want of prosecution on May 6, 2016. (Id. at Doc. 45.)
B. Brown II
On April 21, 2016, Brown sued the IRS again, and added as defendants the Department
of Justice, the District Court and the Sixth Circuit. (Doc. 1.) He amended his complaint on May
4, 2016. (Doc. 2.) Construed liberally, the amended complaint seeks compensatory damages of
$2 million for the following actions of the IRS: (a) “intentionally chang[ing] [his] erroneous non2
Judge Watson summarized the alleged violations as follows: “(1) the improper assessment of his refund;
(2) the issuance of the Notice of Intent to Levy; (3) entering into an installment agreement; and (4) the
denial of his hearing requests.” (Brown I, Doc. 39, at 7.)
rebate misapplied estimated tax payment refund and ma[king] it a rebate-overstatement
estimated tax payment refund;” (b) failing to issue a notice of deficiency, which it should have
done had the IRS properly characterized his refund; and (c) declining to allow him a hearing
after he filed his administrative claims in May 2015, “based on a fraudulent statement.” (Id.)
These actions, according to Brown, constituted fraud, fraudulent concealment, false statements,
conspiracy to violate Brown’s due process rights, retaliation, threatening, and violations of
Brown’s First, Fifth, and Fourteenth Amendments to the United States Constitution.
As for the additional defendants, he does not appear to state any causes of action. Rather,
he criticizes this Court for dismissing his claims on statute of limitations grounds, and he
criticizes the Sixth Circuit for declining to allow him to proceed in forma pauperis because his
appeal had no basis in law or fact. (Doc. 2 at 3-4.)
The United States filed its Motion to Dismiss on September 26, 2016. (Doc. 13.) Brown
never filed a response. Instead, on October 7, 2016, Brown moved for summary judgment,
although his Motion for Summary Judgment appears to address some of the arguments made in
the government’s Motion to Dismiss. (Doc. 14.) The United States moved to extend its time to
respond to Plaintiff’s Motion for Summary Judgment, seeking first a ruling on its Motion to
Dismiss, (Doc. 15), which the Magistrate Judge granted in November 2016. (Doc. 16.) In
December, Brown objected to the Magistrate Judge’s Order granting the extension, (Doc. 17),
and in February, he filed for the Recusal of the Magistrate Judge and this Court (Doc. 20).3 The
government did not respond to either the objection or the motion for recusal, and the time for
responding has passed. In March, Brown filed a letter, (Doc. 21), which the Court will liberally
construe as a memorandum in support of his motion for request for admission (second motion)
(Doc. 22). The government did not respond to Brown’s motion, and the time for responding has
The Court and Magistrate Judge Deavers address the Motion for Recusal in a separate order.
passed. Therefore, all of the above motions, with the exception of Brown’s Motion for Summary
Judgment, are ripe for review.
UNITED STATES’ MOTION TO DISMISS
The government seeks to dismiss Brown’s complaint on the grounds of collateral
estoppel and res judicata because his claims were already adjudicated in Brown I. (Doc. 13-1 at
1.) While Brown did not file a formal response to the government’s motion, his Motion for
Summary Judgment argues against the government’s Motion to Dismiss. (Doc. 14.) In it, he
argues against the application of collateral estoppel and res judicata because Brown I focused on
the Intent to Levy Notice and what he terms “collection violations,” whereas Brown II focused
on the “deficiency violations claim.” (Doc. 14 at 1-3.)
A. Standard of Review
Although res judicata and collateral estoppel are typically raised as affirmative defenses
pursuant to Federal Rule of Civil Procedure 8(c), they may also be decided on motion. Donohue
ex rel. Estate of Donohue v. United States, No. 1:05-cv-175, 2006 WL 2990387, *3 (S.D. Ohio
Oct. 18, 2006) (citing Westwood Chemical Co., Inc. v. Kulick, 656 F.2d 1227, 1227 (6th Cir.
1981), Logan Farms v. HBH, Inc., 282 F. Supp. 2d 776, 785 (S.D. Ohio 2003)). Therefore, the
Court will assess the government’s res judicata and collateral estoppel arguments in the context
of Rule 12(b)(6). Id.
Under Federal Rule of Civil Procedure 12(b)(6), the Court may dismiss a cause of action
for “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). Such a
motion “is a test of the plaintiff’s cause of action as stated in the complaint, not a challenge to the
plaintiff’s factual allegations.” Golden v. City of Columbus, 404 F.3d 950, 958-59 (6th Cir.
2005). Thus, the Court “must construe the complaint in the light most favorable to the plaintiff”
and “accept all well-pled factual allegations as true[.]” Ouwinga v. Benistar 419 Plan Servs.,
Inc., 694 F.3d 783, 790 (6th Cir. 2012). If more than one inference may be drawn from an
allegation, the Court must resolve the conflict in favor of the plaintiff. Mayer v. Mylod, 988 F.2d
635, 638 (6th Cir. 1993). The Court cannot dismiss a complaint for failure to state a claim
“unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim
which would entitle him to relief.” Id.
A complaint’s factual allegations “must be enough to raise a right to relief above the
speculative level,” and must contain “enough facts to state a claim to relief that is plausible on its
face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007). A claim is plausible
when it contains “factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
The Court must afford a pro se litigant “liberal construction of [his] pleadings and
filings.” Yagley v. Occupational Safety & Health Admin., U.S. Dept. of Labor, 461 F. App’x
411, 414 (6th Cir. 2012). On the other hand, “this lenient treatment has limits,” and the Court
“should not have to guess at the nature of the claim asserted.” Frengler v. General Motors, 482
F. App’x 975, 977 (6th Cir. 2012) (internal quotations omitted). Even a pro se complaint must
meet minimum pleading standards. Williams v. Barksdale, No. 84-5349, 1985 WL 12905, at *1
(6th Cir. Jan. 25, 1985) (citing Haines v. Kerner, 404 U.S. 519 (1972)).
B. Applicable Law
The Court applies “federal law in determining the preclusive effect of a prior federal
judgment . . . where jurisdiction in the prior litigation was based on a federal question.” EBBran Productions v. Warner, 242 F. App’x 311, 312 (6th Cir. 2007).
The doctrine of res judicata, otherwise known as claim preclusion, “mandates that if an
action results in a judgment on the merits, that judgment operates as an absolute bar to any
subsequent action on the same cause between the same parties, with respect both to every matter
that was actually litigated in the first case, as well as to every ground of recovery that might have
been presented.” Logan Farms, 282 F. Supp. 2d at 786. The goal of res judicata “is to promote
the finality of judgments and thereby increase certainty, discourage multiple litigation, and
conserve judicial resources.” Westwood Chemical Co., 656 F.2d at 1227. For a claim to be
barred by res judicata, the government must establish the following elements: “(1) a final
decision on the merits by a court of competent jurisdiction; (2) a subsequent action between the
same parties or their ‘privies’; (3) an issue in the subsequent action which was litigated or which
should have been litigated in the prior action; and (4) an identity of the causes of action.”
Hobart Corp. v. Dayton Power & Light Co., 997 F. Supp. 2d 835, 846 (S.D. Ohio 2014). To
meet the third and fourth elements, there must be “an identity of the facts creating the right of
action and of the evidence necessary to sustain each action.” Wilson v. Strickland, 333 F. App’x
28, 30 (6th Cir. 2009) (internal quotations omitted). If the two cases “arise from the same
transaction or series of transactions, the plaintiff should have litigated both causes in the first
action and may not litigate the second issue later.” Id. at 30-31.
Collateral estoppel, or issue preclusion, “dictates that once an issue is actually and
necessarily determined by a court of competent jurisdiction, that determination is conclusive in
subsequent suits based on a different cause of action involving any party to the prior litigation.”
Id. Collateral estoppel bars relitigation of an issue when: “(1) the precise issue [was] raised and
litigated in the prior action; (2) the determination of the issue [was] necessary to the outcome of
the prior action; (3) the prior proceedings [ ] resulted in a final judgment on the merits; and
(4) the party against whom estoppel is sought [ ] had a full and fair opportunity to litigate the
issue in the prior proceeding.” Tenenbaum v. U.S. Dep’t of Defense, 407 F. App’x 4, 6 (6th Cir.
2010) (internal quotation omitted).
A dismissal based on the statute of limitations is a final judgment on the merits for the
purposes of res judicata and collateral estoppel. EB-Bran Productions, 242 F. App’x at 312;
Witkowski v. Welch, 173 F.3d 192, 200 (3d Cir. 1999).
C. Plaintiff’s Case Against the United States Government and the IRS is Barred by Res
Brown II meets all of the elements of res judicata, and, therefore, Brown’s suit against the
IRS and the United States government is barred.4
Regarding the first element, Brown I was a final decision on the merits by a court of
competent jurisdiction. Hobart Corp., 997 F. Supp. 2d at 846. This Court made a final decision
on the merits when it dismissed Brown I against the IRS and the United States government as
barred by the statute of limitations. EB-Bran Productions, 242 F. App’x at 312. This Court is a
court of competent jurisdiction.
As to the second element, Brown sued the IRS/United States government in both Brown I
and Brown II. Hobart Corp., 997 F. Supp. 2d at 846. The fact that Brown adds defendants to
Brown II (namely, the courts involved in Brown I) is not relevant as applied to the IRS and the
United States. Randles v. Gregart, 965 F.2d 90, 93 (6th Cir.1992) (affirming that claims against
defendants sued by plaintiff in prior litigation were barred in subsequent litigation naming the
same two defendants and additional parties); Zack v. Sova, No. 93-1989, 1994 WL 75898, at *2
(6th Cir. Mar. 8, 1994) (same); White v. Stotts, No. 2:11-cv-153, 2011 WL 6941700, at *4 (S.D.
Ohio Dec. 6, 2011) (“the instant action involves the same parties, i.e., plaintiff and the Bank, as
Because the Court has determined that the case against the United States government and the IRS is
barred by res judicata, it need not reach the issue of collateral estoppel.
did the state court action. That plaintiff added three other defendants in this action does not
change this fact.”) See also Ellison v. JP Morgan Chase Bank, No. 13-13121, 2013 WL
5913432, at *8 (E.D. Mich. Oct. 31, 2013) (“Third, and lastly, although Plaintiff has added
additional parties to the present action, Chase and Plaintiff were both parties in the prior action.
For the reasons discussed above, the Court holds that the claims asserted in Plaintiff's Complaint
are barred by res judicata against Chase.”); Shaffer v. White, No. 01-02931, 2006 WL 2336468,
at *3 (W.D. Tenn. Aug. 10, 2006) (“Shaffer argues that there are additional parties in this action.
. . . In the Court of Federal Claims, the United States was the only defendant. In this action, the
Secretary of the Army is named as the responsible party for both the BCMR and the Army
Discharge Review Board (“DRB”). (Id.) Both actions challenge the conduct of the United States
Army, and Secretary White is being sued in his official capacity as Secretary of the Army. Thus,
the addition of Secretary White is nugatory. The parties are substantially the same.”).
The third and fourth elements are also met: the causes of action share an identity, and
Brown II raises issues that were, or should have, been litigated in Brown I. Hobart Corp., 997 F.
Supp. 2d at 846. In other words, there is “an identity of the facts creating the right of action and
of the evidence necessary to sustain each action.”
Wilson, 333 F. App’x at 30 (internal
quotations omitted). Both Brown I and Brown II stem from the confrontation that began when
the IRS erroneously issued a $15,000 refund to Brown and then tried to re-collect it from him.
According to Brown, the IRS mischaracterized the refund in its system, failed to issue him a
notice of deficiency, issued a Notice of Intent to Levy instead, allowed him to enter into an
installment agreement, and denied his requests for hearings. Brown attempts to distinguish
Brown II by arguing that Brown I focuses on the erroneous Notice of Intent to Levy, while
Brown II focuses on the erroneous characterization of his refund. (Doc. 14 at 4.) But this
distinction does not change the outcome. The two cases “arise from the same transaction or
series of transactions;” therefore, “the plaintiff should have litigated both causes in the first
action and may not litigate the second issue later.” Wilson, 333 F. App’x at 30-31 (internal
quotations omitted) (affirming the district court’s dismissal of Plaintiff’s complaint on res
judicata grounds despite his attempt to recharacterize his second complaint as “challeng[ing] the
administration of the protocol rather than the protocol itself.”)
In sum, because all four elements of res judicata have been met, the Court GRANTS the
government’s Motion to Dismiss Brown’s complaint against the IRS and the United States.
D. Discovery Rule and Fraudulent Concealment
Brown argues that the concealment of the change from non-rebate to rebate should toll
the statute of limitations under the discovery rule. (Doc. 2 at 1-3.) Since Brown references
“concealment of a material fact,” the Court will liberally construe his complaint to allege
fraudulent concealment as well. (Doc. 2 at 1.) Neither doctrine applies to Brown.
Under Sixth Circuit precedent, “[t]he general rule is that we will not extend the statute of
limitations by even a single day.” Ruth v. Unifund CCR Partners, 604 F.3d 908, 910 (6th Cir.
2010) (internal quotation marks omitted).
The discovery rule and fraudulent concealment,
however, provide mechanisms for relief from the statute of limitations in certain limited cases.
The discovery rule “governs when a claim accrues,” while fraudulent concealment “toll[s] the
running of the applicable limitations period when the defendant takes steps beyond the
challenged conduct itself to conceal that conduct from the plaintiff.” Gabelli v. SEC, 133 S. Ct.
1216, 1220 n.2 (2013).
Brown’s case does not fall within the ambit of the discovery rule. Courts have applied
the discovery rule in cases where “the injury complained of may not manifest itself immediately
and, therefore, fairness necessitates allowing the assertion of a claim when discovery of the
injury occurs beyond the statute of limitations.” Lutz v. Chesapeake Appalachia, LLC, 717 F.3d
459, 470 (6th Cir. 2013) (internal quotations omitted); see also Gabelli, 133 S. Ct. at 1221
(“where a plaintiff has been injured by fraud and ‘remains in ignorance of it without any fault or
want of diligence or care on his part, the bar of the statute does not begin to run until the fraud is
discovered.’”) (internal quotations omitted). The discovery rule “provides that a cause of action
does not arise until the plaintiff knows, or by the exercise of reasonable diligence should know,
that he or she has been injured by the conduct of the defendant.” Lutz, 717 F.3d at 470 (internal
quotations omitted). As the Court determined in Brown I, Brown’s case accrued when he
received the Notice of Intent to Levy. (Brown I, Doc. 39, at 10.) At that time, Brown “had a
reasonable opportunity to discover the elements of a possible cause of action for undertaking the
improper method of collecting an erroneous rebate.” (Id.) He also, at that time, had a reasonable
opportunity to discover the mischaracterization of the refund, since, according to his Amended
Complaint, that mischaracterization led to the IRS sending him a Notice of Intent to Levy rather
than a notice of deficiency.
Brown has also failed to allege the elements of fraudulent concealment. Fraudulent
concealment “allows equitable tolling of the statute of limitations where 1) the defendant
concealed the underlying conduct. 2) the plaintiff was prevented from discovering the cause of
action by that concealment, and 3) the plaintiff exercised due diligence to discover the cause of
action.” Smith v. Lerner, Sampson & Rothfuss, L.P.A., 658 F. App’x 268, 274 (6th Cir. 2016)
(internal quotations omitted). While Brown alleges that the IRS engaged in “concealment of a
material fact,” (Doc. 2 at 1), he points to no fact “that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. To the
contrary, the Notice of Intent to Levy appears to have alerted Brown to the mischaracterization
problem. He simply did not sue within the two-year statute of limitations. The doctrine of
fraudulent concealment does not toll this statute of limitations.
Therefore, the government’s Motion to Dismiss is GRANTED as to Defendants IRS and
United States, and Brown’s complaint against these parties is DISMISSED.
E. Plaintiff’s Case Against the District Court and the Sixth Circuit is Barred by
The parties remaining in Brown’s lawsuit are the District Court for the Southern District
of Ohio, and the Sixth Circuit Court of Appeals. Brown complains that this Court dismissed his
claims on statute of limitations grounds rather than on the merits, and he criticizes the Sixth
Circuit for declining to allow him to proceed in forma pauperis because his appeal had no basis
in law or fact. (Doc. 2 at 3-4.)
Both Courts are protected by absolute immunity from suit. Mireles v. Waco, 502 U.S. 9,
11 (1991). This immunity may be “overcome in only two sets of circumstances. First, a judge is
not immune from liability for nonjudicial actions, i.e., actions not taken in the judge’s judicial
capacity. . . . Second, a judge is not immune for actions, though judicial in nature, taken in the
complete absence of all jurisdiction.” Id. (citations omitted). The actions of which Brown
complains, deciding his case in the government’s favor and declining to allow him a cost-free
appeal, were clearly taken in the judges’ judicial capacity, within their jurisdiction.
Therefore, the Court GRANTS the government’s Motion to Dismiss the remaining
Because there are no defendants remaining in this case, the Court DENIES as moot
Brown’s Motion for Summary Judgment (Doc. 14) and OVERRULES his Objection to Court
Granting Extension of the briefing schedule to Defendant (Doc. 17). For the same reasons stated
in the Court’s Order Striking Plaintiff’s Motion for Admission (Doc. 19), the Court, STRIKES
Brown’s Motion for Request for Admission (second motion) (Docs. 21, 22).
For the above reasons, the Court GRANTS the government’s Motion to Dismiss, (Doc.
13), DENIES as moot Brown’s Motion for Summary Judgment (Doc. 14), STRIKES Brown’s
Motion for Request for Admission (second motion) (Docs. 21, 22), and OVERRULES his
Objection to Court Granting Extension of the briefing schedule to Defendant (Doc. 17).
IT IS SO ORDERED.
/s/ Algenon L. Marbley___
ALGENON L. MARBLEY
UNITED STATES DISTRICT JUDGE
DATED: June 1, 2017
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