USA v. Scherer et al

Filing 168

ORDER denying 163 Motion for TRO. Signed by Chief Judge Algenon L. Marbley on 3/31/2021. (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
EASTERN DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
v.
RONALD E. SCHERER, et al.,
Defendants.

:
: Case No. 2:19-cv-03634
:
: CHIEF JUDGE ALGENON L. MARBLEY
:
: Magistrate Judge Kimberly A. Jolson
:
:
:
OPINION & ORDER
I. INTRODUCTION

Before the Court is a Motion for a Temporary Restraining Order by pro se Defendant Ronald
E. Scherer. (ECF No. 163). This Court held a hearing on the motion on Monday, March 22, 2021
at 1:00 p.m. (ECF No. 165). For the reasons that follow, the Court DENIES Mr. Scherer’s Motion.
II. BACKGROUND
On December 16, 2005, the United States Government made assessments of federal income
taxes against Defendant Ronald E. Scherer for unpaid amounts during tax years 1990, 1991, and
1992. (ECF No. 76 at 10). At the time, Mr. Scherer owned 100 percent of the stock of Maples
Health Care, Inc. (“Maples”) and West Virginia Health Care, Inc. (“WVHI”). (Id. at 10−11). Maples
is an operating company that runs an assisted living care and skilled nursing home business in a
facility that is owned by WVHI. Together, Maples and WVHI are Mr. Scherer’s most valuable
assets. (ECF No. 139 at 2). Under 26 U.S.C. § 6321, when an individual is liable for a tax and then
neglects or refuses to pay it after a demand, the amount owed becomes a lien in favor of the
Government upon the individual’s property and rights to property. Accordingly, federal liens in
favor of the Government attached to Mr. Scherer’s property, including stock in Maples and WVHI.
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On May 15, 2014, the Government initiated a civil action against Mr. Scherer in the
Southern District of Ohio, seeking to enforce federal tax liens on two properties (the “2014 Civil
Action”). (2:14-cv-00452, ECF No. 1). On September 5, 2014, during the pendency of 2014 Civil
Action, Mr. Scherer signed an agreement that gave his family trust, the Roger E. Scherer Trust
(“Trust”), of which Defendant Douglas Q. Holmes is the Trustee, the option to acquire Mr.
Scherer’s stock in WVHI. (Id., ECF No. 12 at 12). In exchange, the Trust was supposed to intervene
in the 2014 Civil Action, pay for Mr. Scherer’s litigation expenses, and treat a prior $6.2 million
probate court judgment against Mr. Scherer as satisfied. (Id. at 12). The Trust exercised its option
to acquire the WVHI stock on December 31, 2015. (Id.).
On July 26, 2017, this Court entered judgment in favor of the Government and against Mr.
Scherer in the 2014 Civil Action. (Id., ECF No. 193). In its Opinion and Order granting the
Government’s Motion for Summary Judgment, the Court concluded:
Judgment is granted in favor of the Plaintiff United States of America and against
Defendant Ronald E. Scherer for his liability for federal income taxes for 1990,
1991, and 1992 in the amount of $5,429,482.54, plus statutory accruals as allowed
by law from June 30, 2017, until fully paid.
(Id.).
Mr. Scherer never paid his outstanding balance, which is now nearly $6 million due to
statutory accruals that have attached. (2:19-cv-03634, ECF No. 139 at 1). As a result, the
Government brought the case sub judice to enforce its federal tax liens on Mr. Scherer’s stock in
Maples, Inc. and WVHI and to appoint a receiver to sell the two corporations. (ECF No. 1 at 1).
After initiating the litigation, the Government sought a preliminary injunction on August
20, 2019 (ECF Nos. 3, 10). The Court held a hearing on the Government’s motion on September
20, 2019, and entered the Preliminary Injunction, which primarily prohibited the Defendants,
including Mr. Scherer, from engaging in certain actions until the Court otherwise provided. (ECF
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No. 45). Notably, the Preliminary Injunction also reserved the Government’s right to move for the
appointment of a temporary receiver at any time. (Id.).
Since then, the Government and Mr. Scherer have both moved for summary judgment.
Specifically, Mr. Scherer asked the Court to invalidate the Government’s tax assessments (ECF No.
51), which the Court denied (ECF No. 104). The Government asked the Court to determine that the
federal tax liens against Mr. Scherer attach to the both the Maples, Inc. and WVHI stock. (ECF No.
74). The Court initially granted in part and denied in part this motion, holding that the lien attached
to the Maples, Inc. stock but that an open question of fact remained as to whether the lien attached
to the WVHI stock. (ECF No. 104). After the Government moved for reconsideration on May 29,
2020 (ECF No. 108), however, the Court held that the Government’s federal tax liens against Mr.
Scherer do in fact attach to both the Maples, Inc. stock and the WVHI stock (ECF No. 138).
On December 18, 2020, the Government submitted a Motion for Order Appointing Receiver
to Market for Sale the Stock and/or Assets of Maples, Inc. and WVHI. (ECF No. 139). Mr. Scherer
filed a response in opposition, and the Government submitted its reply on March 1, 2021. (ECF
Nos. 149, 161). In the meantime, Mr. Scherer submitted a Second Motion to Disqualify Judge
Algenon L. Marbley from presiding over this case. (ECF No. 147). The Court has not yet ruled on
either of these motions.
Finally, Mr. Scherer filed a Motion for Temporary Restraining Order (“TRO Motion”) on
March 9, 2021. (ECF No. 163). In the TRO Motion, Mr. Scherer asks the Court to grant: (1) an ex
parte meeting so that he can present evidence that he says will show the Government and its
attorneys have acted improperly regarding his tax liability; and (2) a temporary restraining order
preventing the United States from pursuing any proceedings in this Court, under the Preliminary
Injunction, until after he presents the evidence at the meeting. Alternatively, Mr. Scherer submits

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that he is willing to participate in a settlement conference to discuss these issues. The Government
filed a Response in Opposition on March 12, 2021. (ECF No. 164).
III. STANDARD OF REVIEW
A temporary restraining order (“TRO”) is an emergency measure. Hartman v. Axton, No.
2:20-CV-1952, 2020 U.S. Dist. LEXIS 72058, at *4 (S.D. Ohio Apr. 21, 2020) (citing McGirr v.
Rehme, No. 16-464, 2017 U.S. Dist. LEXIS 61151, at *10 (S.D. Ohio Apr. 21, 2017)). Federal Rule
of Civil Procedure 65(b) requires the Court to examine, on application for a temporary restraining
order, whether “specific facts in an affidavit or a verified complaint clearly show that immediate
and irreparable injury, loss, or damage will result to the movant.” Fed. R. Civ. P. 65(b)(1)(A). A
temporary restraining order is meant “to prevent immediate and irreparable harm to the complaining
party during the period necessary to conduct a hearing on a preliminary injunction.” Dow Chemical
Co. v. Blum, 469 F. Supp. 892, 901 (E.D. Mich. 1979).
To obtain temporary injunctive relief, it is of paramount importance that the party establish
immediacy and irreparability of injury. See, e.g., Women’s Med. Prof’l Corp. v. Baird, No. 03-CV162, 2008 WL 545015, at *1–2 (S.D. Ohio Feb. 27, 2008) (focusing on the irreparability and
immediacy of harm before ruling on motion for TRO). While a court is permitted to consider the
four factors required for issuance of a preliminary injunction, immediacy and irreparability of harm
are threshold considerations and “all that is required” for a TRO. ApplianceSmart, Inc. v. DeMatteo,
2018 WL 6727094, at *2 (S.D. Ohio Dec. 21, 2018). The “burden of proving that the circumstances
‘clearly demand’ such an extraordinary remedy is a heavy one” since “[t]he party seeking the
injunction must establish its case by clear and convincing evidence.” Marshall v. Ohio Univ., No.
2:15-CV-775, 2015 WL 1179955, at *4 (S.D. Ohio Mar. 13, 2015).

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IV. LAW & ANALYSIS
Mr. Scherer seeks to restrain the Government temporarily from any further use of the
proceedings of this Court until the Court holds an ex parte meeting to review confidential
information, which Mr. Scherer claims demonstrates improper actions by the Government. Mr.
Scherer alleges that the requested meeting “will also demonstrate the malfeasance course of action
of the government’s counsel continuing to not follow the proper laws under US 26 and moving
around Defendant Scherer’s tax status without explanation or notification of what where when or
why.” (Id.).
Mr. Scherer did not address the immediacy or irreparability of the harm he faces in his TRO
Motion. At the hearing, however, he explained that he faces harm due to the anticipated sale of his
businesses by the Government during what he describes as current poor market conditions. In other
words, Mr. Scherer opposes the Government’s motion for appointment of a receiver to satisfy the
taxes assessed against him.
A. Ex Parte Meeting
As an initial matter, the Court considers whether an ex parte meeting is warranted. Because
Mr. Scherer seeks a TRO until an ex parte meeting can occur, the TRO request will be moot if the
meeting request is denied. The Government opposes Mr. Scherer’s request for an ex parte meeting.
The Court finds that Mr. Scherer’s request for an ex parte meeting is an effort to relitigate
his tax liability. Mr. Scherer apparently intends to present evidence that he does not owe the taxes
assessed against him should the ex parte meeting be granted, despite the fact that the Court has
already entered judgment regarding his liability. He has attached several exhibits to his TRO
Motion, including a legal opinion about his tax liability; his tax records from 1990, 1991, and 1992;
and a trust agreement. Moreover, Mr. Scherer has argued multiple times in the past that he does not

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owe the taxes at issue here and that improper assessments against him have resulted from fraud and
malfeasance on the part of government agencies, banks, trustees, and lawyers. Since the Court has
previously ruled on these issues, further litigation of Mr. Scherer’s tax liability is barred by res
judicata and/or collateral estoppel. Because there is no procedural basis for granting the request for
an ex parte meeting, the Court DENIES Mr. Scherer’s ex parte meeting request.
B. Temporary Restraining Order
As the Court has denied the ex parte meeting, Mr. Scherer’s TRO request is now moot. Even
if the Court were willing to entertain Mr. Scherer’s ex parte meeting request, he would still fail to
establish that he faces an irreparable, immediate injury without an emergency injunctive relief. The
Court needs not prevent the Government from submitting briefs in this case because court
documents are not self-executing. Regardless of what type of motion the Government may file, the
Court will be able to determine whether to grant or deny the relief sought, or whether to postpone
its ruling under the circumstances. Mr. Scherer therefore has not shown immediacy or irreparability
of harm without a TRO.
V. CONCLUSION
For the reasons stated above, the Court DENIES Mr. Scherer’s TRO Motion, both as to the
request for an ex parte meeting and as to the TRO.
IT IS SO ORDERED.

ALGENON L. MARBLEY
CHIEF UNITED STATES DISTRICT JUDGE
DATED: March 31, 2021

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