Buckley et al v. United States of America

Filing 24

MEMORANDUM: the Court will GRANT IN PART and DENY IN PART Defendant's motion to dismiss for improper venue (Court File No. 8). Venue is improper in this case. However, the Court will TRANSFER rather than dismiss Plaintiffs' claims to the Northern District of Georgia for further consideration. Signed by District Judge Curtis L Collier on 5/17/2013. (BJL, )

UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF TENNESSEE
AT CHATTANOOGA
ALLEN BUCKLEY and
ALLEN BUCKLEY LLC,
Plaintiffs,
v.
UNITED STATES OF AMERICA,
Defendant.

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Case No. 1:13-CV-17
Judge Curtis L. Collier

MEMORANDUM
Before the Court is a motion to dismiss for improper venue filed by Defendant The United
States of America (“Defendant” or “United States”) (Court File No. 8). Plaintiffs Allen Buckley and
Allen Buckley LLC (collectively, “Plaintiffs”) filed a response (Court File No. 11) and Defendant
submitted a reply (Court File No. 15). Plaintiffs also filed a surreply with leave of the court (Court
File No. 19). After considering the relevant law and the parties’ arguments, the Court will GRANT
IN PART and DENY IN PART Defendant’s motion to dismiss (Court File No. 8). The Court
grants Defendant’s motion in part because the Court agrees venue is improper. However, the Court
will TRANSFER rather than dismiss Plaintiffs’ claims to the Northern District of Georgia for
further consideration.

I.

RELEVANT FACTUAL AND PROCEDURAL BACKGROUND
On January 25, 2013, Plaintiffs filed a complaint against Defendant seeking judicial review

under the Administrative Procedure Act (“APA”). See 5 U.S.C. §§ 101 et seq. (Court File No. 1
(“Compl.”)). Plaintiff Allen Buckley is “a resident of Smyrna, Cobb County, Georgia” and a
licensed attorney and accountant in Georgia (id. at 13). Plaintiff Allen Buckley LLC is a limited

liability company in Georgia (id.). Allen Buckley “has prepared tax returns for compensation,
including compensation received by Allen Buckley LLC” (id. at 14). Although the suit is brought
against the United States, Plaintiffs also indicate that the Secretary of the Treasury would be
responsible for compliance in this case in his official capacity (id.).
Plaintiffs allege, pursuant to regulations enacted in 2010 and 2011, the United States
Department of the Treasury “requires tax return preparers to file, pay, receive, and (thereafter)
annually renew and pay annual renewal fees, for a PTIN [preparer tax identification number] in
order to prepare tax returns for compensation” (Compl. at 2). They also allege Plaintiff Allen
Buckley had to pay the Department of the Treasury $64.25 as a PTIN issuance fee in 2010 and a
renewal fee of $63 in 2011 (id. at 3). Plaintiffs aver the issuance fee and annual renewal fees
imposed by the Department of the Treasury are “unlawful” and, alternatively, even if not unlawful,
“excessive” (id. at 10-13). Plaintiffs seek injunctive relief and “restitution” either in the form of a
refund of the total fees paid plus interest or the excessive amount paid plus interest (id. at 16-17).

II.

STANDARD OF REVIEW
Defendant moves to dismiss for improper venue under Federal Rule of Civil Procedure

12(b)(3). “On a motion to dismiss for improper venue, the plaintiff bears the burden of proving that
venue is proper. The Court may examine facts outside the complaint but must draw all reasonable
inferences and resolve factual conflicts in favor of the plaintiff.” Audi AG & Volkswagen of Am., Inc.
v. Izumi, 204 F. Supp. 2d 1014, 1017 (E.D. Mich. 2002) (citations omitted). “If a defendant prevails
on a Rule 12(b)(3) challenge, the Court has the discretion to decide whether the action should be
dismissed or transferred to an appropriate court [pursuant to 28 U.S.C. § 1406].” Id.

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III.

DISCUSSION
The parties do not dispute the appropriate venue statutes under which the Court should

analyze Plaintiffs’ claims are 28 U.S.C. § 1391(e) and 28 U.S.C. § 1402. They do, however, dispute
whether venue is proper under these statutes. According to Defendant, Plaintiffs fail to satisfy any
of the venue requirements of § 1391(e) for their claims for injunctive relief because the United
States does not reside in this district for venue purposes, Plaintiffs are not residents of this district,
and none of Plaintiffs’ causes of action occurred in this district. Moreover, with respect to Plaintiffs’
claims for a refund of $127.25 (or in the amount of excessive fees paid), Defendant contends venue
is improper because the requirements of 28 U.S.C. § 1402 have not been met. Finally, Defendant
argues the Court should dismiss Plaintiffs’ claims for improper venue rather than transfer them to
an appropriate district because Defendant believes Plaintiffs were forum shopping when they
brought suit here. Defendant notes Plaintiffs brought a nearly identical case in the Northern District
of Georgia that was dismissed, and the Eleventh Circuit affirmed the dismissal. Defendant believes
Plaintiffs only brought their case here to avoid unfavorable precedent now established in the
Eleventh Circuit.
Plaintiffs, on the other hand, argue venue is proper in the Eastern District of Tennessee.
According to Plaintiffs, venue can be established under § 1391(e) because the United States resides
in this district as well as all other districts in the United States. Moreover, with respect to 28 U.S.C.
§ 1402, Plaintiffs aver the Court should exercise pendant venue over their claims for monetary relief
even if venue is improper. Finally, in the event the Court determines venue is improper, Plaintiffs
ask the Court to transfer the case to the proper jurisdiction in the interest of justice.
The Court will address each issue in turn.

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A.

Venue under 28 U.S.C. § 1391(e)

Title 28, United States Code, Section 1391(e) is the appropriate venue statute for most of
Plaintiffs’ claims. Section 1391(e)(1), which is applicable when the defendant is an officer or
employee of the United States, an agency of the United States, or the United States provides as
follows:
A civil action in which a defendant is an officer or employee of the United States or
any agency thereof acting in his official capacity or under color of legal authority,
or an agency of the United States, or the United States, may, except as otherwise
provided by law, be brought in any judicial district in which
(A) a defendant in the action resides,
(B) a substantial part of the events or omissions giving rise to the claim occurred, or
a substantial part of property that is the subject of the action is situated, or
(C) the plaintiff resides if no real property is involved in the action. Additional
persons may be joined as parties to any such action in accordance with the Federal
Rules of Civil Procedure and with such other venue requirements as would be
applicable if the United States or one of its officers, employees, or agencies were not
a party.
28 U.S.C. § 1391(e)(1). Here, neither § 1391(e)(1)(B) or § 1391(e)(1)(C) are applicable. Plaintiffs
do not contend the events giving rise to their cause of action occurred in the Eastern District of
Tennessee. Moreover, the Northern District of Georgia, not the Eastern District of Tennessee, is
where Allen Buckley lives and where Allen Buckley LLC has its principal place of business. Thus,
the only provision that could possibly be applicable in this case is § 1391(e)(1)(A)--that is, “any
judicial district in which . . . a defendant in the action resides.”
Defendant contends venue is not proper in this district because § 1391(e) was not designed
for a plaintiff to sue the United States in every district around the country. Defendant relies primarily
upon Reuben H. Donnelley Corp. v. F.T.C., 580 F.2d 264 (7th Cir. 1978), for this proposition. In

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Donnelley, a publishing company sued the Federal Trade Commission (“FTC”) and various
individual commissioners to prevent the FTC from proceeding with an administrative action against
it. Id. at 265-66. The plaintiff could claim residence in Delaware or New York, yet it brought suit
in the Northern District of Illinois. Although the FTC had a regional office in Chicago, the United
States Court of Appeals for the Seventh Circuit concluded venue was improper in the Northern
District of Illinois. Id. at 266. Among other reasons, the Seventh Circuit observed allowing a federal
agency to be sued “Eo nomine wherever it maintains an office would, as a practical matter, render
subsections (2), (3), and (4) [of § 1691(e)] superfluous.” Id. at 267. Moreover, the court noted “such
an interpretation would mean that a plaintiff could file a suit in any district regardless of how remote
that district’s contact may be with the litigation. ‘The venue statute was not intended to permit
forum-shopping, by suing a federal official wherever he could be found, or permitting test cases far
from the site of the actual controversy.’” Id. (quoting Hartke v. Federal Aviation Administration,
369 F. Supp. 741, 746 (E.D.N.Y. 1973)).1

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In Misko v. U.S., 77 F.R.D. 425 (D.D.C. 1978), the court similarly opined § 1391(e) was
not intended to be viewed as broadly as Plaintiffs here contend.
Although not discussed in the legislative history, the amendment to 28 U.S.C. §
1391(e) which added “or the United States” to the first sentence of the section was
apparently designed to bring the applicable venue provision into conformity with the
other review of administrative action amendments. One of those amendments gave
plaintiffs the option of naming the United States as a party-defendant in an action
seeking review of administrative action. See Act of Oct. 21, 1976, Pub. L. No.
94-574, § 1, 90 Stat. 2721 (amending 5 U.S.C. § 703 (1970)). This certainly does not
mean that any action in which venue is grounded on section 1391(e) can
automatically be brought in the District of Columbia by naming the United States as
a defendant, or that such an action may be brought anywhere in the United States
because the United States is a resident of every judicial district. As a general matter,
the “residence” of the United States is simply not relevant for venue purposes.
Id. at 428 n.7 (emphasis added).
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Plaintiffs, however, dispute Defendant’s interpretation of § 1391(e). In what Plaintiffs
consider an analogous case to the instant matter, Plaintiffs cite Milliken & Co. v. F.T.C., 565 F.
Supp. 511 (D.S.C. 1983), in furtherance of their argument that venue is proper against the United
States in any district in the country under § 1391(e). In Milliken, a district court concluded venue
was proper in South Carolina in a suit against the Federal Trade Commission where the plaintiff’s
company had its principal place of business in South Carolina and the cause of action occurred in
South Carolina. In reaching this decision, the district court relied in part on United States Supreme
Court case Stafford v. Briggs, 444 U.S. 527 (1980). While Stafford addressed a totally different
matter--that is, whether the venue provisions in 28 U.S.C. § 1391(e) applied to claims seeking
monetary damages against federal officers in their individual capacities--the Supreme Court did note
§ 1391(e) expanded choices for venue and, citing a Congressional report, observed the provision was
“designated to permit an action which is essentially against the United States to be brought locally
rather than requiring it to be brought in the District of Columbia simply because Washington is the
official residence of the officer or agency sued.” Milliken, 565 F. Supp. at 514 (quoting Stafford, 444
U.S. at 540).2 Moreover, the district court observed another policy reason for a more expansive

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Plaintiffs also contend Stafford states venue can be brought against the United States in
every district. Putting this statement in context, Stafford states the following:
“[a]n officer of the Government while so employed may have numerous
mandamus-type suits naming him or her as a party. Without doubt, under § 1391(e),
venue lies in every one of the 95 federal districts, and suits may be pending in a
dozen or several dozen at any one time. . . . No personal cost or inconvenience is
incurred, either while in office or later. It was with this understanding that Congress
sought to ameliorate the inconvenience and expense to private plaintiffs seeking
relief from the action or inaction of their Government.”
Stafford, 444 U.S. at 543-44 (citing H.R. Rep. No. 536, at 3; S. Rep. No. 1992, at 3).
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interpretation of § 1391(e) was because
Section 1391(e) was intended to relieve plaintiffs of the burden of litigating far from
their residences, to relieve the courts in the District of Columbia of some of their
case load, and to take advantage of the expertise district judges acquire in problems
peculiar to their areas.
Id. (citing Pruess v. Udall, 359 F.2d 615, 618 (D.C. Cir.1965)). While the district court stated that
it “finds some restraint” in Donnelley, it concluded that to “hold that such governs in this case would
defeat the language of § 1391(e) and thwart the intent of Congress so ably spelled out in Stafford.”
Id. at 514-15 (emphasis added).
The issue before this Court, however, is distinguishable from the issue brought before the
Court in Milliken. Unlike in Milliken, the issue here is not that Defendant is insisting the case must
be litigated in Washington, D.C. or that Defendant is refusing to litigate the case “locally.” On the
contrary, to the extent Defendant believed another district would have been more appropriate to
establish venue, it essentially concedes that location would be the Northern District of Georgia,
which is where Plaintiffs reside and presumably the events giving rise to the cause of action
occurred. Plaintiffs are not being burdened to litigate their case “far from their residences” and
Defendant is not insisting that the case be brought in Washington, D.C. Accordingly, the policy
reasons cited above in Milliken, Stafford, and Pruess, are not implicated in this case.
Here, the Court is faced with a different scenario. Plaintiffs do not want to pursue their suit
“locally.” Although they reside in the Northern District of Georgia and the events giving rise to
Plaintiffs’ cause of action at least with respect to Plaintiffs occurred in the same district, Plaintiffs
seek to bring their suit in Tennessee. Moreover, as Plaintiffs admit in their brief, Allen Buckley
proceeding as counsel brought a similar though not identical suit against the United States in the
Northern District of Georgia. That suit was dismissed by the district court and the Eleventh Circuit
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affirmed the district court’s decision. Defendant alleges Plaintiffs have chosen to pursue their suit
here in an attempt to “forum shop” and avoid being bound by the adverse rulings in the Eleventh
Circuit. While the Court will not speculate upon Plaintiffs’ motives, the Court does believe
Plaintiffs’ reasons for seeking venue in the Eastern District of Tennessee are not supported by the
policy reasons articulated in the cases they cite. Instead, as noted in Donnelley, what Plaintiffs seek
to do here would make the entire venue provision under § 1391(e) “superfluous.” Donnelley, 580
F.2d at 267.3 Merely because a United States Attorney’s office is located in this district--as is the
case throughout the country--does not mean it is proper for Plaintiffs to file their suit here under the
circumstances.
This Court is not alone in its concerns about allowing such an expansive reading of § 1391(e)
when it pertains to a suit against the United States or its agencies. For example, in Davies Precision
Machining, Inc. v. Def. Logistics Agency, 825 F. Supp. 105, 107 (E.D. Pa. 1993), the plaintiff sought
to bring suit against a government agency in the Eastern District of Pennsylvania because, according
to the plaintiff, the agency maintained its offices in the district and therefore “resided” there. The
district court, however, disagreed, and after considering both Donnelley and Stafford concluded: “I
find no reason to contort the statutory language of 28 U.S.C. § 1391(e) to require that a federal
agency be deemed to reside in a judicial district with which it has no other contact other than the fact
that a regional office operates there.” Id. at 107. The court ultimately determined venue was
improper. Id. See Schwarz v. I.R.S., 998 F. Supp. 201, 202-03 (N.D. N.Y. 1998) (concluding venue
was improper in the district because--although the IRS had offices in the district--those offices were

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Presumably, under Plaintiffs’ logic there would be no limit to where they could bring their
claims against the United States in this particular matter--the Eastern District of Tennessee, the
Northern District of California, perhaps even the District Court of the Virgin Islands.
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“not alleged to have engaged in any substantial part of the activity complained of in plaintiff's
complaint”); see also High Sierra Hikers Ass’n v. U.S. Forest Serv., C 04-03478 SI, 2005 WL
886851, at *2 (N.D. Cal. Apr. 8, 2005) (rejecting the plaintiffs’ argument that the U.S. Forest
Service “resides” in the Northern District of California simply because it maintains an office in the
district).4
Accordingly, for all of the reasons explained above, the Court concludes venue is not proper
in this district for Plaintiffs’ claims for injunctive relief.
B.

Claims for Monetary Damages

Plaintiffs also seek relief in the form of either a refund of the total PTIN fees paid plus
interest or the excessive amount paid plus interest. The venue provision governing the monetary
damages sought in this case is 28 U.S.C. § 1402. Under § 1402, a civil action against the United
States may only be brought in the district where the plaintiff resides. 28 U.S.C. § 1402. Because
Plaintiff Allen Buckley resides in the Northern District of Georgia and Plaintiff Allen Buckley LLC
has its principal place of business in the Northern District of Georgia, the venue requirement has not
been satisfied. Thus, venue for these claims is also improper in this district.5
C.

Dismissal or Transfer

Defendant has requested that the Court dismiss Plaintiffs’ action rather than transfer it to an

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Plaintiffs attempt to argue cases involving suits against agencies are irrelevant. However,
Plaintiffs’ arguments are somewhat disingenuous. As Plaintiffs acknowledge even in their
complaint, while their suit was filed against the United States, the agency at issue is the U.S.
Department of the Treasury and the Secretary of the Treasury is responsible for compliance in his
official capacity.
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Because the Court concluded venue was also improper on the claims for injunctive relief,
Plaintiffs’ arguments regarding “pendant venue” are inapplicable.
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appropriate venue under 28 U.S.C. § 1406. Defendant contends the case should be dismissed
because Plaintiffs only filed this suit in an attempt to forum shop and get a “second bite at the
apple.” Plaintiffs, however, request that the Court transfer the action to an appropriate district in the
interests of justice.
Title 28, United States Code, Section 1406(a) provides that “[t]he district court of a district
in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the
interest of justice, transfer such case to any district or division in which it could have been brought.”
28 U.S.C. § 1406(a). While the Court is certainly concerned about Plaintiffs’ underlying reasons for
filing suit in this district, the Court also takes at face value Plaintiffs’ argument that they believed
§ 1391(e) permitted them to sue in this district. See Goldlawr v. Heiman, 369 U.S. 463, 466-67
(1962). The Court expresses no opinion on the merits of Plaintiffs’ claims nor can it promise
Plaintiffs that their claims will not be barred on other procedural or legal grounds. The Court will,
however, grant Plaintiffs’ request to transfer this action to a district where venue is proper. One such
district is the Northern District of Georgia.

IV.

CONCLUSION
For the foregoing reasons, the Court will GRANT IN PART and DENY IN PART

Defendant’s motion to dismiss for improper venue (Court File No. 8). Venue is improper in this
case. However, the Court will TRANSFER rather than dismiss Plaintiffs’ claims to the Northern
District of Georgia for further consideration.6

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The parties had previously agreed that the Court should decide Defendant’s motion to
dismiss for improper venue first. In the event the motion was denied, the Court would then consider
Plaintiffs’ motion for summary judgment, which is seeking an adjudication on the merits. Because
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/s/
CURTIS L. COLLIER
UNITED STATES DISTRICT JUDGE

the Court has determined venue is improper, the Court will leave to the discretion of the transferee
court the handling of Plaintiffs’ motion for summary judgment.
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