Nicholson v. Lew

Filing 17

MEMORANDUM DECISION AND ORDER granting 13 Motion to Amend/Correct 3 Complaint - Plaintiff must file an amended complaint on or before 2/23/18; Steven Mnuchin added to the case in place of Jacob J. Lew. Signed by Magistrate Judge Paul M. Warner on 1/30/18 (alt)

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION

JASON J. NICHOLSON,

MEMORANDUM DECISION
AND ORDER

Plaintiff,
v.

Case No. 1:14-cv-00178-DN-PMW

JACOB J. LEW, Secretary, Department of
the Treasury (Internal Revenue Service),

Chief District Judge David Nuffer

Defendant.

Chief Magistrate Judge Paul M. Warner

Chief District Judge David Nuffer referred this matter to Chief Magistrate Judge Paul M.
Warner pursuant to 28 U.S.C. § 636(b)(1)(B). 1 Before the court is Jason J. Nicholson’s
(“Plaintiff”) motion for leave to file an amended complaint. 2 Pursuant to civil rule 7-1(f) of the
Rules of Practice for the United States District Court for the District of Utah, the court elects to
determine the motion on the basis of Plaintiff’s written materials and finds that oral argument
would not be helpful or necessary. See DUCivR 7-1(f).
At the outset, the court recognizes that Plaintiff is proceeding pro se in this matter.
Consequently, the court will construe his pleadings liberally. See, e.g., Ledbetter v. City of
Topeka, 318 F.3d 1183, 1187 (10th Cir. 2003). The court also recognizes that Plaintiff has been
permitted to proceed in forma pauperis in this case pursuant to 28 U.S.C. § 1915 (“IFP

1

See docket no. 5.

2

See docket no. 13.

Statute”). 3 Accordingly, the court will also screen Plaintiff’s action as required under the IFP
Statute. See 28 U.S.C. § 1915(e)(2)(B).
BACKGROUND 4
Plaintiff filed a complaint against Jacob J. Lew, the former Secretary for the Department
of the Treasury, Internal Revenue Service (“Defendant”). Plaintiff alleges that he was
terminated from his position at the Internal Revenue Service (“IRS” or “Agency”) on the basis of
“disability discrimination.” 5 Plaintiff appealed his termination to the Merit Systems Protection
Board (“MSPB”). After a hearing, the MSPB Administrative Judge issued an order (“MSPB
Order”) concluding that the Agency met the requirements to sustain Plaintiff’s indefinite
suspension and finding that, although Plaintiff had established that he is disabled, the Agency did
not discriminate against him on that basis when it terminated him.
Plaintiff appealed the MSPB Order to the EEOC. Attached to Plaintiff’s one-page
complaint is a decision from the EEOC (“EEOC Decision”), which upheld the MSPB Order.
Because Plaintiff’s complaint alone is scant on facts, the court sets forth the following facts from
the EEOC Decision. Plaintiff was employed as a GS-6 Tax Examining Technician at the IRS.
On October 27, 2010, and again on March 31, 2011, Plaintiff allegedly sent anonymous letters to
the Treasury Inspector General for Tax Administration falsely claiming that three IRS employees
3

See docket no. 2.

4

The facts are taken from the Equal Employment Opportunity Commission’s (“EEOC”) decision
that was attached to Plaintiff’s complaint. See Fed. R. Civ. P. 10(c) (“A copy of a written
instrument that is an exhibit to a pleading is a part of the pleading for all purposes.”); see also
Hall v. Bellmon, 935 F.2d 1106, 1112 (10th Cir. 1991) (“A written document that is attached to
the complaint as an exhibit is considered part of the complaint and may be considered in a Rule
12(b)(6) dismissal.”).
5

Docket no. 3.

2

discussed assassinating the President of the United States of America. During an April 4, 2011
interview, Plaintiff admitted that he authored the letters. Plaintiff claimed he did so because he
believed that his coworkers had caused his performance evaluation to be lowered, which resulted
in the loss of a scheduled salary grade increase.
On October 6, 2011, the Agency notified Plaintiff that based on the letters containing the
false allegations, it was proposing to suspend him from duty and pay indefinitely. Then on
November 29, 2011, the Agency notified Plaintiff that it was sustaining his indefinite suspension
because Plaintiff’s actions had caused his supervisors to lose confidence in his trustworthiness to
protect taxpayer information and his ability to interact with the public in his position as a tax
examiner. As noted above, Plaintiff appealed his indefinite suspension, and after a hearing, the
MSPB Administrative Judge issued the MSPB Order finding that Plaintiff had failed to
demonstrate that the Agency’s proffered reasons for the indefinite suspension were not the actual
reasons and that discriminatory animus based on Plaintiff’s disability was the Agency’s true
reason.
Plaintiff appealed the MSPB Order to the EEOC. The EEOC concurred with the MSPB
Order and concluded that the Administrative Judge correctly interpreted the laws, rules,
regulations, and policies that govern this matter and that the MSPB Order is supported by
substantial evidence in the record as a whole. See 29 C.F.R. § 1614.305(c). The EEOC
determined that even assuming Plaintiff had demonstrated a prima facie case of discrimination,
Plaintiff failed to show that the Agency’s articulated legitimate, nondiscriminatory reasons for
his indefinite suspension were merely a pretext for discrimination.

3

Plaintiff then filed the instant case in this court asserting that (1) he was “falsely
indicted,” (2) the Agency “made false statements” to the MSPB and the EEOC, and (3) he was
suspended “due to disability discrimination.” 6 This court takes judicial notice 7 that Plaintiff was
indicted on three counts of making false statements under 18 U.S.C. § 1001. 8 Plaintiff entered
into a pretrial diversion agreement 9 and successfully completed the court’s RISE Program. 10
Pursuant to the diversion agreement, the government moved to dismiss the indictment and the
court did so with prejudice. 11
On March 22, 2017, Plaintiff filed a motion for leave to file an amended complaint. 12
Specifically, Plaintiff sought to substitute Defendant with his successor, current Treasury
Secretary, Steven Mnuchin. Plaintiff also provided some additional factual context to his
allegations.
STANDARD OF REVIEW
Plaintiff’s motion for leave to amend is governed by rule 15(a)(2) of the Federal Rules of
Civil Procedure. See Fed. R. Civ. P. 15(a)(2). Under that rule, courts “should freely give leave
when justice so requires.” Id.; see also Foman v. Davis, 371 U.S. 178, 182 (1962). The decision

6

Docket no. 3.

7

See Fed. R. Evid. 201(b)(2) (“The court may judicially notice a fact that is not subject to
reasonable dispute because it . . . can be accurately and readily determined from sources whose
accuracy cannot reasonably be questioned.”).
8

See United States v. Nicholson, Case No. 1:11-cr-00098-CW, at docket no. 1 (“Criminal
Case”).

9

See id. at docket no. 34.

10

See id. at docket no. 138.

11

See id. at docket nos. 139-141.

12

See docket no. 13.

4

regarding whether to provide a party leave to amend pleadings “is within the discretion of the
trial court.” Minter v. Prime Equip. Co., 451 F.3d 1196, 1204 (10th Cir. 2006) (quotations and
citation omitted). Furthermore,
[i]n the absence of any apparent or declared reason—such as undue delay, bad
faith or dilatory motive on the part of the movant, repeated failure to cure
deficiencies by amendments previously allowed, undue prejudice to the opposing
party by virtue of allowance of the amendment, futility of amendment, etc.—the
leave sought should, as the rules require, be freely given.
Foman, 371 U.S. at 182 (quotations and citation omitted). “The purpose of the Rule is to
provide litigants the maximum opportunity for each claim to be decided on its merits rather than
on procedural niceties.” Minter, 451 F.3d at 1204 (quotations and citation omitted).
That said, even under the liberal standard for amending pleadings, “the district court may
deny leave to amend where amendment would be futile. A proposed amendment is futile if the
complaint, as amended, would be subject to dismissal.” Bradley v. Val-Mejias, 379 F.3d 892,
901 (10th Cir. 2004) (quotations and citation omitted). A proposed amendment is futile only
where “it is patently obvious that the plaintiff could not prevail on the facts alleged, and allowing
him an opportunity to amend his complaint would be futile.” Cohen v. Longshore, 621 F.3d
1311, 1314-15 (10th Cir. 2010) (quotations and citation omitted).
Moreover, whenever the court authorizes a party to proceed without the prepayment of
fees under the IFP Statute, the court must screen the complaint and dismiss the case “if the court
determines that . . . the action . . . fails to state a claim on which relief may be granted.” 28
U.S.C. § 1915(e)(2)(B)(ii). In determining whether a complaint fails to state a claim for relief
under the IFP Statute, the court employs the same standard used for analyzing motions to dismiss
for failure to state a claim under rule 12(b)(6) of the Federal Rules of Civil Procedure. See Kay

5

v. Bemis, 500 F.3d 1214, 1217-18 (10th Cir. 2007). Under that standard, the court “look[s] for
plausibility in th[e] complaint.” Id. at 1218 (quotations and citations omitted) (second alteration
in original). More specifically, the court “look[s] to the specific allegations in the complaint to
determine whether they plausibly support a legal claim for relief. Rather than adjudging whether
a claim is ‘improbable,’ ‘[f]actual allegations [in a complaint] must be enough to raise a right to
relief above the speculative level.’” Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 55556 (2007)) (other quotations and citation omitted) (second and third alterations in original).
In undertaking that analysis, the court is mindful that Plaintiff is proceeding pro se and
that “[a] pro se litigant’s pleadings are to be construed liberally and held to a less stringent
standard than formal pleadings drafted by lawyers.” Bellmon, 935 F.2d at 1110; see also, e.g.,
Ledbetter, 318 F.3d at 1187. At the same time, however, it is not “the proper function of the
district court to assume the role of advocate for the pro se litigant,” Bellmon, 935 F.2d at 1110,
and the court “will not supply additional facts, nor will [it] construct a legal theory for [a pro se]
plaintiff that assumes facts that have not been pleaded.” Dunn v. White, 880 F.2d 1188, 1197
(10th Cir. 1989) (per curiam). Further,
[t]he broad reading of [a pro se] plaintiff’s complaint does not relieve the plaintiff
of the burden of alleging sufficient facts on which a recognized legal claim could
be based. . . . [C]onclusory allegations without supporting factual averments are
insufficient to state a claim on which relief can be based. This is so because a pro
se plaintiff requires no special legal training to recount the facts surrounding his
alleged injury, and he must provide such facts if the court is to determine whether
he makes out a claim on which relief can be granted. Moreover, in analyzing the
sufficiency of the plaintiff’s complaint, the court need accept as true only the
plaintiff’s well-pleaded factual contentions, not his conclusory allegations.

6

Bellmon, 935 F.2d at 1110 (citations omitted). With these standards in mind, the court now turns
to Plaintiff’s motion for leave to file an amended complaint, as well as the substance of
Plaintiff’s complaint and proposed amended complaint under the IFP Statute.
ANALYSIS
Plaintiff seeks to amend his complaint in order to modify the caption to reflect that the
current Secretary of the Treasury is Steven Mnuchin. However, a public officer who is a party in
an official capacity and who no longer holds office during the pendency of the action is
automatically replaced by his or her successor under rule 25 of the Federal Rules of Civil
Procedure. See Fed. R. Civ. P. 25(d). Accordingly, it was not necessary for Plaintiff to move to
amend his complaint to substitute Steven Mnuchin for Jacob Lew.
In his proposed amended complaint, Plaintiff also provides additional factual allegations
regarding Plaintiff’s claim that Defendant sought to have him indicted even though Defendant
knew Plaintiff was innocent. In particular, Plaintiff states that Defendant “had the Treasury
Inspector General for Tax Administration lie to cover up an assassination plot on former
President Obama . . . [and] said I confessed that the statements were false [but] I never did.” 13
Plaintiff further alleges that Defendant “only wanted the charges against me dropped once they
[sic] found out that I have Autism Spectrum Disorder.” 14 But in his criminal case, Plaintiff
essentially admitted that he sent the letters containing the false allegations about his coworkers.
Specifically, Plaintiff entered into a pretrial diversion agreement and, as part of the agreement,
he accepted responsibility for making “materially false and fictitious statements in letters mailed

13

Docket no. 13 at 2.

14

Docket no. 13 at 3.

7

to, among others, the Commissioner’s Correspondence Office of the [IRS].” 15 The agreement
also stated that “[u]pon your accepting responsibility for your behavior and by your signature on
this Agreement, it appearing, after an investigation of the offense and your background, that the
interest of the United States, your own interest, and the interest of justice will be served” by
entering into the agreement. 16
This court concludes that Plaintiff’s current complaint and proposed amended complaint
both fail to state any claims upon which relief can be granted. In particular, Plaintiff’s
allegations fall into that category of allegations that are facially frivolous or malicious under the
IFP Statute. See 28 U.S.C. § 1915(e)(2)(B)(i) (providing that whenever the court authorizes a
party to proceed without the prepayment of fees under the IFP Statute, the court is required to
“dismiss the case at any time if the court determines that . . . the action or appeal . . . is frivolous
or malicious”). The United States Supreme Court has construed the term “frivolous” within the
context of the IFP Statute by stating that
a complaint, containing as it does both factual allegations and legal conclusions, is
frivolous where it lacks an arguable basis either in law or in fact. . . . [The IFP
Statute]’s term “frivolous,” when applied to a complaint, embraces not only the
inarguable legal conclusion, but also the fanciful factual allegation.
Neitzke v. Williams, 490 U.S. 319, 325 (1989). The IFP Statute
accords judges not only the authority to dismiss a claim based on an indisputably
meritless legal theory, but also the unusual power to pierce the veil of the
complaint’s factual allegations and dismiss those claims whose factual
contentions are clearly baseless. Examples of the former class are claims against
which it is clear that the defendants are immune from suit . . . and claims of

15

Criminal Case, docket no. 34 at 1.

16

Id.

8

infringement of a legal interest which clearly does not exist . . . . Examples of the
latter class are claims describing fantastic or delusional scenarios . . . .
Id. at 327-28; see also Bellmon, 935 F.2d at 1108-10.
Plaintiff has failed to set forth any facts demonstrating that his indictment was based on
false statements by the Treasury Inspector General for Tax Administration and that he was
actually fired from his position at the IRS because of a disability. Plaintiff’s allegations are
conclusory in nature, appear to have little or no basis in fact, and do not support his claims. See
Bellmon, 935 F.2d at 1110 (providing that the “broad reading” accorded to a pro se plaintiff’s
complaint “does not relieve the plaintiff of the burden of alleging sufficient facts on which a
recognized legal claim could be based”).
The court concludes that Plaintiff’s complaint and his proposed amended complaint have
a self-serving quality that renders them patently unbelievable. Factual allegations are baseless
when the facts alleged depict “fantastic or delusional scenarios” that “rise to the level of the
irrational or the wholly incredible, whether or not there are judicially noticeable facts available to
contradict them.” Denton v. Hernandez, 504 U.S. 25, 33 (1992). The decision of what is
frivolous rests with the court considering the in forma pauperis petition. See id.
The court also notes that in Plaintiff’s criminal case, during a scheduled change of plea
hearing before the diversion agreement was offered, Plaintiff did not enter a plea but rather asked
“for a hearing to plead insanity.” 17 While this statement does not have any bearing on whether
Plaintiff has stated a claim in the instant case, it does give the court some pause regarding
Plaintiff’s allegations against Defendant.

17

Criminal Case, docket no. 21.

9

Plaintiff cannot prevail on the facts as alleged in his complaint and proposed amended
complaint. However, out of an abundance of caution and fairness to Plaintiff, this court grants
Plaintiff’s motion for leave to file an amended complaint. In his amended complaint, Plaintiff
must address the deficiencies discussed above. In other words, Plaintiff must set forth facts,
rather than conclusory allegations, demonstrating that his indictment was based on falsehoods
and explain the basis for his belief that he was fired because of his disability. Plaintiff shall file
an amended complaint that complies with the requirements set forth above on or before February
23, 2018. Failure to do so will result in a recommendation to Chief Judge Nuffer that this action
be dismissed.
CONCLUSION AND ORDER
Based on the foregoing, IT IS HEREBY ORDERED that Plaintiff’s motion for leave to
file an amended complaint 18 is GRANTED. Plaintiff must file an amended complaint on or
before February 23, 2018. Failure to do so will result in a recommendation to Chief Judge
Nuffer that this matter be dismissed. In addition, the Clerk’s Office shall update the docket in
this matter to reflect that the current Secretary of the Treasury is Steven Mnuchin.
IT IS SO ORDERED.
DATED this 30th day of January, 2018.
BY THE COURT:

________________________________
PAUL M. WARNER
Chief United States Magistrate Judge
18

See docket no. 13.

10