Wanken v. Wanken

Filing 42

MEMORANDUM OPINION: Defendant's 27 Motion to Dismiss for Failure to State a Claim is GRANTED IN PART. If Plaintiff wishes to file an amended complaint re-pleading his ERISA claim, he is DIRECTED to do so by 5/13/2013. (Ordered by Magistrate Judge Renee Harris Toliver on 5/1/2013) (mcrd)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
CHRIS WANKEN,
Plaintiff,
v.

Civil Action No. 3:12-CV-2107-BK

DWIGHT WANKEN,
Defendant.
MEMORANDUM OPINION
Pursuant to the parties’ consent to proceed before the undersigned Magistrate Judge, this
cause is now before the Court on Defendant’s Motion to Dismiss Pursuant to Rule 12(b)(6)or, in
the Alternative, for More Definite Statement. (Doc. 27). For the reasons that follow, the Motion
to Dismiss is GRANTED IN PART.
BACKGROUND
Plaintiff filed this pro se action in July 2012 against Defendant, his father, asserting
claims under the Fair Labor Standards Act (“FLSA”), the Employee Retirement Income Security
Act (“ERISA”), and the Internal Revenue Code. (Doc. 3 at 2, 9-13). Plaintiff alleges in his
complaint that he and Defendant verbally agreed to operate a financial services firm as partners,
but Defendant ultimately terminated Plaintiff’s financial services license in March 2008 for
personal reasons. Id. at 2-3, 5. Plaintiff states that he filed an action in state court against
Defendant for breach of contract, and Defendant moved to compel arbitration. The case was
arbitrated before the Financial Industry Regulatory Authority (“FINRA”) and ultimately resolved
unfavorably to Plaintiff when, according to Plaintiff, Defendant allegedly falsely testified that
Plaintiff was not his partner, but was merely a low-level administrative employee. Id. at 5-8.

In his FLSA claim, Plaintiff asserts that he regularly worked over 40 hours per week, but
Defendant did not pay him the overtime compensation which was required if Plaintiff was truly
his employee. Id. at 9-10. Plaintiff also alleges that Defendant violated multiple provisions of
ERISA with regard to how Defendant “classified” him, and Defendant never made mandatory
contributions to a qualified retirement plan for Plaintiff. Id. at 11. Finally, Plaintiff claims that
Defendant violated the Internal Revenue Code in order to evade paying employment taxes, and
he forced Plaintiff to pay self-employment taxes that Defendant should have paid. Id. at 11-13.
Defendant now moves to dismiss and, alternatively, requests that the Court order Plaintiff to file
a more definite statement. (Doc. 28 at 8).
APPLICABLE LAW
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a plaintiff
must allege enough facts to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal,
129 S.Ct. 1937, 1949 (2009). In ruling on a motion to dismiss, a court must accept all factual
allegations in the complaint as true. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 572 (2007).
In order to overcome a Rule 12(b)(6) motion, a plaintiff’s complaint should “contain either direct
allegations on every material point necessary to sustain a recovery … or contain allegations from
which an inference may fairly be drawn that evidence on these material points will be introduced
at trial.” Campbell v. City of San Antonio, 43 F.3d 973, 975 (5th Cir. 1995) (quotation omitted).
Moreover, the complaint should not simply contain conclusory allegations, but must be pled with
a certain level of factual specificity because the district court cannot “accept as true conclusory
allegations or unwarranted deductions of fact.” Collins v. Morgan Stanley Dean Witter, 224 F.3d
496, 498 (5th Cir. 2000) (quotation omitted).

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ARGUMENTS AND ANALYSIS
1. ERISA Claim
Defendant first urges that Plaintiff’s ERISA claim fails because no ERISA-related
employee benefit plan exists; thus, Plaintiff cannot prove that he had the right to enforce the
terms of any such plan. (Doc. 28 at 3-4). Defendant also asserts that Plaintiff has not alleged
that he exhausted ERISA’s required administrative procedures. Id. at 7-8.
Plaintiff responds that Defendant made regular contributions for himself to a Simplified
Employee Pension plan (“SEP”) and, as such, ERISA required Defendant to make similar
contributions for Plaintiff if Plaintiff was indeed Defendant’s “employee.” (Doc. 31 at 5-7).
Defendant replies that an SEP is simply an individual retirement account, which is not the type
of account that falls under ERISA. (Doc. 37 at 2-4). Defendant maintains that he established the
SEP on his own as a self-employed individual and as part of his own retirement plan, which
Plaintiff conceded by acknowledging that Defendant’s SEP was “his own retirement account.”
Id. at 3-4.
As an initial matter, the Court must consider the types of ERISA claims that Plaintiff is
raising before discussing whether any of those claims are viable. Plaintiff contends in his
complaint that Defendant’s actions violated three ERISA provisions, namely sections 1131,
1132, and 1134. (Doc. 3 at 10-11). Section 1131, however, sets forth the criminal penalties
available for willful violations of ERISA. In order for a private right of action to exist under a
criminal statute, there must be “a statutory basis for inferring that a civil cause of action of some
sort lay in favor of someone.” Cort v. Ash, 422 U.S. 66, 79 (1975). Nothing in section 1131
indicates that it is anything more than a “bare criminal statute,” demonstrating that no civil
enforcement of any kind is available. Id. at 79-80; see also Linda R.S. v. Richard D., 410 U.S.

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614, 619 (1973) (stating that a private citizen lacks a judicially cognizable interest in the
prosecution or non-prosecution of another). Accordingly, any claim that Plaintiff is attempting
to bring under section 1131 must fail. Section 1134 also does not provide a private cause of
action as it merely sets forth the powers of the Secretary of Labor to conduct administrative
investigations. 29 U.S.C. § 1134. Accordingly, Plaintiff’s purported claims under sections 1131
and 1134 are DISMISSED WITH PREJUDICE. McConathy v. Dr. Pepper/Seven Up Corp.,
131 F.3d 558, 561-62 (5th Cir. 1998) (noting that dismissal with prejudice is appropriate if it
appears that no relief can be granted under any set of facts that could be proven consistent with
the plaintiff’s allegations).
Section 1132 does, however, allow a private cause of action to be brought by an ERISA
plan participant or beneficiary to, inter alia, “recover benefits due to him under the terms of his
plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits
under the terms of the plan.” 29 U.S.C. § 1132(a). Thus, Plaintiff potentially may state a claim
under section 1132 if Defendant’s SEP qualified as an ERISA plan under which Defendant was
required to open a retirement account and make contributions thereto on Plaintiff’s behalf. (Doc.
3 at 10-11).
Nevertheless, the Court of Appeals for the Fifth Circuit requires that claimants seeking
ERISA plan benefits in court must first exhaust the administrative remedies that are available
under the plan. Bourgeois v. Pension Plan for Employees of Santa Fe Intern. Corp., 215 F.3d
475, 479 (5th Cir. 2000). Plaintiff did not allege in his complaint either that he exhausted such
remedies or that it would have been futile for him to do so under the circumstances. Id.
Accordingly, his ERISA claim under section 1132 fails, but the Court will allow him the

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opportunity to amend his complaint to restate his ERISA claim if he wishes to do so.1 See
Jacquez v. Procunier, 801 F.2d 789, 792 (5th Cir. 1986) (stating that dismissing an action with
prejudice after giving the plaintiff only one opportunity to state a claim is ordinarily unjustified).
2.

FLSA Claim

Defendant next urges that dismissal of Plaintiff’s overtime claim under the FLSA is
warranted because any such claim is barred by the statute of limitations. (Doc. 28 at 4).
Defendant acknowledges Plaintiff’s attempt to avoid the limitations bar by arguing that he did
not learn of his status as an “employee” until Defendant testified to such during the FINRA
proceeding in December 2009. Id. at 5. Nevertheless, Defendant argues that this Court should
reject that argument because Plaintiff (1) admitted in his December 2008 FINRA statement of
claim that he had seen a March 2008 email from defense counsel suggesting that Plaintiff was an
employee; and (2) noted in his statement of claim that Defendant said he wanted to reclassify
Plaintiff’s tax status to “employee.” Id. at 5-6 (citing Doc. 24-1, App. at 19, 20, 30).
On the merits, Defendant asserts that Plaintiff was an exempt employee under the FLSA
because Plaintiff alleged in his FINRA statement of claim that he was the “Vice President and
Chief Investment Strategist at Beacon Financial Advisors.” Id. at 6 (citing Doc. 24-1, App. at
30). Defendant notes that Plaintiff claimed he was an “executive employee” whose duties were
primarily those of management, he was involved in general business operations and exercised
independent judgment, and he analyzed financial information and advised clients regarding
financial products based on his advanced knowledge in that field. Id. at 6-7 (citing Doc. 10 App.

While the Court recognizes Defendant’s argument that no ERISA-based plan exists
because his SEP is not covered by ERISA, the undersigned will not address that issue at this
time. First, the SEP plan documents are not a part of the record since this case is before the
Court on summary judgment. Second, preliminary research indicates that the law is not clear cut
on whether SEPs are covered by ERISA.
1

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at 4). Lastly, Defendant contends that Plaintiff’s FLSA claim should be dismissed because it is
“incomprehensible” insofar as he fails to allege sufficiently specific facts. Id. at 7-8.
Plaintiff responds that Defendant has contradicted his prior FINRA testimony regarding
the nature of Plaintiff’s work because he previously averred that Plaintiff was an administrative
employee who had no investment responsibilities and engaged in no independent decisionmaking. (Doc. 31 at 3, 13). Plaintiff also denies that his claims are time-barred, noting that
Defendant testified in December 2009 that Plaintiff was his employee, which is the first time that
Defendant informed Plaintiff that he believed Plaintiff was his employee. Id. at 7, 25. Prior to
that time, Plaintiff asserts that Defendant repeatedly acknowledged him as a partner, even after
they had begun to litigate in advance of the arbitration. Id. at 8-11, 18-19. Plaintiff contends that
Defendant is suggesting that he should have predicted that Defendant was going to lie at the
FINRA arbitration and testify that Plaintiff was an employee. (Doc. 31 at 2, 5, 19-21, 23).
As for any inference in the March 2008 email from defense counsel that Plaintiff might
be viewed as an employee, Plaintiff states that he did not believe that to be true. Id. at 26-30.
Finally, Plaintiff asserts that, based on Defendant’s testimony before the FINRA about Plaintiff’s
low-level administrative role in the business, Plaintiff qualifies as a non-exempt employee under
the FLSA. Id. at 32-33. Defendant replies that Plaintiff has repeatedly argued and admitted that
he was a partner in Defendant’s business, so he has “pleaded himself out of an FLSA claim.”
(Doc. 37 at 5-7).
If a defendant’s violation of FLSA is not willful, a two year statute of limitations applies.
29 U.S.C. § 255. If the violation is found to be willful, a three year statute of limitations
governs, and as a result, employees can collect three years of unpaid wages and/or overtime
compensation. Singer v. City of Waco, Tex., 324 F.3d 813, 821 (5th Cir. 2003). Generally, a

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cause of action under the FLSA accrues on each regular payday immediately following the work
period during which the services were rendered for which the overtime pay is claimed. Halferty
v. Pulse Drug Co., Inc., 821 F.2d 261, 271 (5th Cir. 1987). The instant case is different from the
usual case, however, because here Plaintiff alleges in his complaint that he did not become aware
of his status as an employee who was eligible to file a FLSA claim until Defendant testified
regarding the nature of Plaintiff’s duties at the FINRA hearing in December 2009. (Doc. 3 at 5;
Doc. 31 at 7).
Equitable tolling of the statute of limitations can apply in FLSA cases. See Holmberg v.
Armbrecht, 327 U.S. 392, 397 (1946) (“This equitable doctrine is read into every federal statute
of limitation.”). If a plaintiff has been “actively misled” by the defendant about the cause of
action or “is prevented in some extraordinary way from asserting his rights,” then tolling may be
appropriate. Rashidi v. American President Lines, 96 F.3d 124, 128 (5th Cir. 1996). Equitable
tolling allows a plaintiff to pursue time-barred claims where the “strict application of the statute
of limitations would be inequitable.” Lambert v. United States, 44 F.3d 296, 298 (5th Cir. 1995)
(quotation omitted). The doctrine applies only in “rare and exceptional circumstances.” Teemac
v. Henderson, 298 F.3d 452, 457 (5th Cir. 2002). Additionally, the doctrine requires that the
plaintiff has diligently pursued his rights, Caldwell v. Dretke, 429 F.3d 521, 530 n.23 (5th Cir.
2005), but was unable through the exercise of due diligence “to discover essential information
bearing on the existence of his claim,” Pacheco v. Rice, 966 F.2d 904, 906-07 (5th Cir. 1992).
In an effort to demonstrate that Plaintiff knew more than three years ago that Defendant
considered him to be an “employee” rather than a partner, Defendant cites to several pages from
Plaintiff’s December 2008 FINRA statement of claim. See Doc. 24-1 at 2-44. As an initial
matter, this case is before the Court on a motion to dismiss where review generally is limited to

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the four corners of the plaintiff’s complaint. Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996).
Even if the undersigned were to consider the statements in question, however, they do not
demonstrate that Plaintiff knew he was an employee such that he was entitled to file a FLSA
claim at that time. Indeed, Plaintiff’s complaint makes clear that the issue of whether he was an
employee versus a partner was hotly contested during the FINRA arbitration. It was only after
Plaintiff’s claims were rejected by the FINRA that the nature of his business relationship with
Defendant was settled.2 In fact, if Plaintiff had attempted to file a FLSA claim asserting that he
was an employee while his arbitration case was pending, that would have been deleterious to his
FINRA claims, as he would have been taking a directly contradictory position in simultaneous
actions. Accordingly, the Court finds that strictly applying the statute of limitations would be
inequitable in this case. Patterson, 211 F.3d at 930. Plaintiff diligently pursued his rights, but
could not have learned of his status as an employee until, at the earliest, the FINRA rejected his
claim that he and Defendant were partners. Caldwell, 429 F.3d at 530 n.23.
The Court next considers Defendant’s argument that Plaintiff is exempt from FLSA
protection because he asserted in his FINRA statement of claim that he was the “Vice President
and Chief Investment Strategist at Beacon Financial Advisors.” The FLSA requires employers
to pay overtime compensation to employees who work more than 40 hours per regular
workweek. 29 U.S.C. § 207(a)(1). Exempt from the FLSA, however, are individuals “employed
in a bona fide executive, administrative, or professional capacity.” 29 U.S.C. § 213(a)(1).
The Court rejects Defendant’s argument that Plaintiff qualifies for one of these FLSA
exemptions. First, that is not the position that Plaintiff asserts in his complaint, which this Court
must take as true. Bell Atlantic, 550 U.S. at 572. In fact, the complaint alleges that while
2

Indeed, the question may not have been fully resolved until Plaintiff exhausted his
appeals in federal court, although the undersigned need not determine that issue at this juncture.
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Plaintiff believed he was a partner with Defendant for many years, based on Defendant’s FINRA
testimony and subsequent events, he actually was an employee. See Doc. 3 at 2, 4, 8-9, 11-13.
Moreover, in the FINRA proceedings, the issue of whether Plaintiff was Defendant’s business
partner or merely a low-level employee was highly contested, with Plaintiff arguing the former
and Defendant the latter. The matter was settled in Defendant’s favor. Defendant cannot now be
heard to argue the opposite -- that Plaintiff is exempt from FLSA protection because he occupied
an executive, administrative, or professional position.
“Judicial estoppel is an equitable doctrine designed to protect the integrity of judicial
proceedings by preventing litigants from asserting contradictory positions for tactical gain.”
Republic of Ecuador v. Connor, 708 F.3d 651, 654 (5th Cir. 2013). “[W]here a party assumes a
certain position in a legal proceeding, and succeeds in maintaining that position, he may not
thereafter, simply because his interests have changed, assume a contrary position, especially if it
be to the prejudice of the party who has acquiesced in the position formerly taken by him.” New
Hampshire v. Maine, 532 U.S. 742, 749 (2001) (quotation and citation omitted). Thus, a party
may be estopped from asserting a position in a judicial proceeding where it has previously
persuaded a court to adopt a clearly contrary position to the disadvantage of an opponent. Id.
The Supreme Court has set forth various factors that will often inform the decision of whether to
apply the judicial estoppel doctrine in a particular case. Id. at 751. However, the Court has
refused to “establish inflexible prerequisites or an exhaustive formula for determining the
applicability of judicial estoppel,” stating instead that different considerations “may inform the
doctrine’s application in specific factual contexts.” Id. Nevertheless, the three enumerated
factors that the Court set forth are a good starting point in this case.

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First, a party’s later position must be “clearly inconsistent” with its earlier position. Id. at
750; see also In re Coastal Plains, Inc., 179 F.3d 197, 206 (5th Cir. 1999). Second, the Court
will inquire whether the party actually succeeded in persuading a court to accept that party’s
earlier position, so that judicial acceptance of an inconsistent position in a later proceeding
would create “the perception that either the first or the second court was misled.” New
Hampshire, 532 U.S. at 750. The judicial acceptance requirement ensures that estoppel applies
only in situations where the integrity of the judiciary is threatened. In re Oparaji, 698 F.3d 231,
237 (5th Cir. 2012). In other words, the purpose of the requirement is to “minimize the danger
of a party contradicting a court’s determination based on the party’s prior position and, thus,
mitigate the corresponding threat to judicial integrity.” Hall v. GE Plastic Pacific PTE Ltd., 327
F.3d 391, 398 (5th Cir. 2003) (alterations and quotations omitted). A third consideration is
whether the party seeking to assert the inconsistent position would either gain an unfair
advantage or impose an unfair detriment on the opposing party if not estopped. New Hampshire,
532 U.S. at 751. “Because judicial estoppel is an equitable doctrine, courts may apply it flexibly
to achieve substantial justice.” Reed v. City of Arlington, 650 F.3d 571, 576 (5th Cir. 2011) (en
banc).
In the case at hand, each of the factors described by the Supreme Court in New
Hampshire weighs in Plaintiff’s favor. First, Defendant’s current position that Plaintiff is
exempt from the FLSA because of his status as an executive, professional or administrator is
directly contradictory to the statements Plaintiff alleges Defendant made at the FINRA hearing to
the effect that Plaintiff was a low-level employee. (Doc. 3 at 5-7). Second, Defendant
apparently succeeded in persuading the FINRA arbitration panel to accept his position because
Plaintiff alleges in his complaint that the panel ruled against Plaintiff. Id. at 7. Further, the

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arguments Defendant presented to the panel to this effect were intended to induce the panel’s
reliance. Hall, 327 F.3d at 398-99 (holding that the judicial estoppel doctrine may be applied
whenever a party makes an argument intending to induce a court’s reliance). Additionally,
judicial acceptance of Defendant’s new position would create the perception that one of the two
tribunals was misled. A finding by this Court that Plaintiff was a professional, executive, or
administrator would directly conflict with the arbitrators’ dismissal of Plaintiff’s claims in which
he asserted that position. Id. at 398. Third, if Defendant is not estopped from taking this
inconsistent position, he both gains an unfair advantage and imposes an unfair detriment on
Plaintiff’s ability to litigate his current claims, which are dependent on his status as an employee,
rather than a partner. New Hampshire, 532 U.S. at 751.
Defendant’s final argument is that Plaintiff’s FLSA claim should be dismissed because it
is “incomprehensible” and insufficient facts are alleged. (Doc. 28 at 7-8). Liberally construing
the pro se Plaintiff’s complaint, the Court disagrees. Haines v. Kerner, 404 U.S. 519, 520 (1972)
(providing that the courts should liberally construe pro se pleadings). The discovery process is
the appropriate forum for Defendant to further flesh out the substance of Plaintiff’s claims.
Defendant’s Motion to Dismiss Plaintiff’s FLSA claim is DENIED.
3. Internal Revenue Code Claims
Defendant next urges that Plaintiff’s attempt to sue him for failure to withhold income
taxes must be dismissed because there is no such private cause of action. (Doc. 28 at 8).
Plaintiff responds that he is unable to recover from the Internal Revenue Service (“IRS”) the
self-employment taxes that he paid for the last ten years because the IRS will not allow him to
amend his returns “as the statute has expired.” (Doc. 31 at 37).

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Plaintiff attempts to raise claims under the Internal Revenue Code’s employment tax
laws, namely (1) the Federal Insurance Contributions Act (“FICA”), 26 U.S.C. §§ 3101, 3102,
3121; (2) the Federal Unemployment Tax Act (“FUTA”), 26 U.S.C. §§ 3301, 3306; and (3) 26
U.S.C. § 3509. (Doc. 3 at 11-13). In order for the Court to find that a private right of action
exists under a statute that does not expressly confer such a right, there must be “a statutory basis
for inferring that a civil cause of action of some sort lay in favor of someone.” Cort, 422 U.S. at
79. Cort set forth a four-part test to determine if an implied private right of action exists: (1)
whether the plaintiff is one of the class for “whose especial benefit the statute was intended”; (2)
whether there is any indication of legislative intent to create such a remedy; (3) whether
implying a remedy is consistent with the underlying purpose of the legislative scheme; and (4)
whether the cause of action is one traditionally relegated to state law. Id. While the Fifth Circuit
has not yet addressed the question, two other courts of appeal have addressed the issue in the
Cort framework and concluded that FICA does not create a private right of action to remedy
purported employee misclassifications. See Umland v. PLANCO Fin. Servs., Inc., 542 F.3d 59,
67 (3d Cir. 2008); McDonald v. Southern Farm Bureau Life Ins. Co., 291 F.3d 718, 726 (11th
Cir. 2002); see also Marren v. Stout, -- F.Supp.2d --, 2013 WL 1117539, *11 (W.D. Tex. 2013).
Addressing the Cort factors in this case, a review of the FICA reveals that it is a taxassessing series of statutes enacted to raise revenue for the federal government. The FICA
statutes that Plaintiff lists concern taxation rates, deduction and collection procedures, and
explanations of what types of employment and wages are covered. See 26 U.S.C. §§ 3101-02,
3121; McDonald, 291 F.3d at 723. Thus, it cannot be said that the FICA was enacted for the
especial benefit of individuals such as Plaintiff. Cort, 422 U.S. at 79. Under factor (2), “the
legislative history is completely devoid” of any intention to create a private right of action under

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FICA, which is demonstrated by the verbiage of the statutes themselves. McDonald, 291 F.3d at
724. As to factor (3), allowing private lawsuits under FICA would undermine the extensive IRS
procedures that were expressly created to assist workers who felt that they were assessed
improper FICA taxes. Id. at 725-26. Because the question of legislative intent is the “central
inquiry” in this analysis, see Touche Ross & Co. v. Redington, 442 U.S. 560, 575 (1979), the
Court’s conclusion is unaffected by the fact that the fourth Cort factor supports implying a
private cause of action. See Glanville v. Dupar, 727 F.Supp.2d 596, 600 (S.D. Tex. 2010) (“This
court believes that if the Fifth Circuit were to consider this issue, it would follow the reasoning
of the Third and Eleventh Circuits to find no implied private right of action under FICA.”). In
sum, the undersigned finds that Plaintiff is not entitled to assert a private cause of action against
Defendant under FICA sections 3101, 3102, and 3121. Accordingly, his claims under those
sections are DISMISSED WITH PREJUDICE. McConathy, 131 F.3d at 561-62.
Next, the Court considers whether Plaintiff may bring a private cause of action under the
FUTA. The FUTA statutes that Plaintiff sues under (1) concern the tax the government requires
employers to pay based on the wages paid to their employees; and (2) contain definitions of
various statutory terms. See 26 U.S.C. §§ 3301, 3306. The existence of an implied private right
of action under FUTA does not appear to have been considered by any federal appellate court.
The analysis, however, follows the previous discussion of a private remedy under FICA.
Similar in nature to the FICA statutes, the FUTA taxes “clearly are intended to raise
revenue” for the government. Bob Jones University v. Simon, 416 U.S. 725, 741 n.12 (1974).
Further, there is no apparent legislative intent to create a private cause of action under the
statutory scheme. Additionally, as is the case with the FICA statutes, the existence of expansive
administrative remedies Congress established for tax-related disputes is inconsistent with an

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implied private right of action for employees to sue their employers for nonpayment of FUTA
taxes. See McDonald, 291 F.3d at 725-26. Moreover, the majority of federal district courts that
have addressed the issue have held that no private cause of action exists for an employer’s failure
to pay unemployment taxes under FUTA. See Glanville, 727 F.Supp.2d at 600; White v. White
Rose Food, 62 F.Supp.2d 878, 886-87 (E.D.N.Y. 1999) (“[A]s the [c]ourt finds that the tax
statutes at issue are not intended for the benefit of the plaintiffs [but for the government’s
benefit], the [c]ourt holds that a private cause of action cannot exist under the provisions of
FUTA.”); see also Gifford v. Meda, 2010 WL 1875096, *10 n.9 (E.D. Mich. 2010) (granting
defendant’s motion to dismiss plaintiff’s FUTA claims because that act does not create a private
cause of action); Bendsen v. George Weston Bakeries Dist., 2008 WL 4449435, *4 (E.D. Mo.
2008) (same); Spilky v. Helphand, 1993 WL 159944, *3-4 (S.D.N.Y. 1993) (same).
Accordingly, this Court finds that there is no implied private right of action under FUTA.
Plaintiff’s final cause of action is based on 26 U.S.C. § 3059. That section merely
establishes the percentage amounts to be charged to employers if they fail to withhold taxes from
their employees’ wages. Plaintiff’s claim under this statute fails for the same reasons his claims
under FICA and FUTA failed. See McDonald, 291 F.3d at 723-26. Thus, Plaintiff’s claims
based on 26 U.S.C. §§ 3301, 3306, and 3509 are DISMISSED WITH PREJUDICE.
McConathy, 131 F.3d at 561-62.
CONCLUSION
For the foregoing reasons, Defendant’s Motion to Dismiss (Doc. 27) is GRANTED IN
PART. If Plaintiff wishes to file an amended complaint re-pleading his ERISA claim, he is
DIRECTED to do so by May 13, 2013. Otherwise, the Court will dismiss that claim with
prejudice. If Plaintiff files an amended complaint, which by operation completely supersedes the

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previous one, he should not include the claims that the undersigned has dismissed in this
Memorandum Opinion.
SO ORDERED on May 1, 2013.

________________________________________
RENÉE HARRIS TOLIVER
UNITED STATES MAGISTRATE JUDGE

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