Catlett v. United States of America

Filing 11

DECISION AND ORDER signed by Magistrate Judge Patricia J Gorence on 3/15/2012. The petitioner's motion for leave to proceed in forma pauperis is granted as stated herein. (Docket #3). The respondent's motion to dismiss is denied. (Docket # 9). (cc: AG Eric H Holder, Jr. and US Atty James L. Santelle via certified mail; Warden at Devens Federal Medical Center and petitioner) (mlm) Modified on 3/15/2012 (mlm).

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
IRVIN HANNIS CATLETT, JR.,
Petitioner,
v.

Case No. 12-C-0004

UNITED STATES OF AMERICA,

Respondent.

DECISION AND ORDER
The petitioner, Irvin Hannis Catlett, Jr., is a federal prisoner. He has filed a petition
to quash an Internal Revenue Service (IRS) summons that was served on Guaranty Bank
on December 6, 2011. The court has jurisdiction over this action pursuant to 28 U.S.C.
§ 1331 because the matter arises under federal statutes. The case was assigned to the
court according to the random assignment of civil cases pursuant to 28 U.S.C.
§636(b)(1)(B) and General Local Rule 72 (E.D. Wis.), and the parties have consented to
United States magistrate judge jurisdiction pursuant to 28 U.S.C. § 636(c) and General
Local Rule 73 (E.D. Wis.).
This matter is now before the court on the petitioner’s motion for leave to proceed
in forma pauperis and for screening of his petition. Respondent United States of America
has also filed a motion to dismiss the plaintiff’s petition to quash.

IN FORMA PAUPERIS AND SCREENING
The petitioner is required to pay the statutory filing fee of $350.00 for this action.
See 28 U.S.C. § 1915(b)(1). If a prisoner does not have the money to pay the filing fee,
he can request leave to proceed in forma pauperis. The petitioner has filed a certified copy
of his prison trust account statement for the six-month period immediately preceding the
filing of his complaint, as required under 28 U.S.C. § 1915(a)(2), and has been assessed
and paid an initial partial filing fee of $60.27 and an additional partial filing fee of $10.52.
The petitioner’s motion for leave to proceed in forma pauperis will be granted.
The court is required to screen complaints brought by prisoners seeking relief
against a governmental entity or officer or employee of a governmental entity. 28 U.S.C.
§ 1915A(a). The court must dismiss a complaint or portion thereof if the prisoner has
raised claims that are legally "frivolous or malicious," that fail to state a claim upon which
relief may be granted, or that seek monetary relief from a defendant who is immune from
such relief. 28 U.S.C. § 1915A(b).
On October 31, 2011, the petitioner received a letter from an IRS agent named
Chaim Schor scheduling a phone interview for November 29, 2011, regarding five years
of the petitioner’s tax filings. In the letter, Mr. Schor asked for thousands of pages of
documents in anticipation of the phone interview. The petitioner called Mr. Schor on
November 2, 2011, and informed him that the IRS Task Force that worked on his criminal
case in the United States District Court for the District of Maryland (Case No. RWT 10-CR0101) and had many of the documents he requested. The petitioner also told Mr. Schor
that he had none of the requested documents with him in prison.

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On November 29, 2011, in an effort to cooperate with the investigation, the
petitioner spoke with Mr. Schor on the telephone for about fifty minutes. The petitioner
explained that he needed additional time to compile the records due to his incarceration.
He also told Mr. Schor that his judgment has been appealed and, as a result of the ongoing
criminal case, most of the documents Mr. Schor requested were either protected under the
Fifth Amendment to the United States Constitution, or time barred pursuant to IRS § 6501.
On December 6, 2011, Mr. Schor filed five summons that were served on
petitioner’s banks, including Guaranty Bank in Brown Deer, Wisconsin. The petitioner
seeks to quash the summons filed on Guaranty Bank pursuant to § 7609(b),
The petitioner contends that the summons Mr. Schor issued to Guaranty Bank is
barred by the tax code and the Fourth and Fifth Amendments. He argues that:
Summons must be issued only when it seeks information relevant to
legitimate investigatory purpose and is not meant to harass taxpayer or to
put pressure on him to settle collateral dispute, or for any other showing that
defendants issued the summons for an improper purpose, such as to harass
the taxpayers, to put pressure on them to settle a collateral dispute, or for
any other purpose reflecting on the good faith of the investigation.
(Petition to Quash at 4) (emphasis in original). The petitioner asks the court to quash the
underlying summons or, in the alternative, to hold an evidentiary hearing to determine
whether adequate cause exists or whether the IRS has acted in bad faith.
In order to withstand a petition to quash an IRS summons, the government must
establish a prima facie case that it issued the summons in good faith. 2121 Arlington
Heights Corp. v. IRS, 109 F.3d 1221, 1224 (7th Cir. 1997). To do this, the government
only must show that “the investigation underlying the summons has a legitimate purpose;
the information sought may be relevant to that purpose; and the IRS has followed the
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statutory steps for issuing a summons.” Id.

Typically, the government makes that

showing by means of an affidavit from the revenue agent conducting the audit. Id. Then
the burden shifts to the petitioner to show that the government’s issuance of the summons
was an abuse of process, which the petitioner can do “either by disproving the existence
of one of the Powell factors or pointing to specific facts suggesting that the IRS issued the
summons in bad faith.” Id. Given the government’s burden in an action such as this, it
follows that the court cannot dismiss the petition to quash at screening.
However, to the extent the petitioner seeks to assert claims under the Fourth and
Fifth Amendments, the “Fifth Amendment privilege against compelled self discriminating
testimony normally may only be asserted by the taxpayer himself.

It is therefore

inapplicable with regard to materials in the possession of third party recordkeepers. . .. “
Dennis v. United States, 660 F. Supp. 870, 874 (C.D. Ill.1987) (citing Fisher v. United
States, 425 U.S. 391 [1976], other citations omitted). “Furthermore, even if a third-party
recordkeeper could assert a taxpayer’s Fifth Amendment rights, the ‘taxpayer cannot avoid
compliance with the subpoena merely be asserting that the item of evidence which he is
required to produce contains incriminatory writing . . ..’” Id. (quoting Fisher v. United States,
524 U.S. 391, 410 n.11 (1976)).
Similarly, a taxpayer’s rights under the Fourth Amendment are not implicated by the
compelled production of documents because the taxpayer has no legitimate expectation
of privacy in the documents he knows must be disclosed in his tax returns. Dennis, 660
F. Supp. at 874 (citing United States v. Miller, 425 U.S. 435 [1976], other citations omitted).
Therefore, the petitioner will not be permitted to proceed on his Fourth and Fifth
Amendment claims. He may proceed on remaining grounds in his petition to quash.
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RESPONDENT’S MOTION TO DISMISS
The respondent’s motion to dismiss will be denied as premature. At the time the
motion was filed, the court had not yet screened the petitioner’s petition as required under
§1915(a) and granted his motion for leave to proceed in forma pauperis. Moreover, the
respondent had not been properly served, although the petitioner did mail a copy of his
petition to quash to the United States Attorney’s Office in this district with his petition.
Even if respondent had been properly served, the motion to dismiss filed is
procedurally inadequate. Federal Rule of Civil Procedure 7(b)(1)(B) provides that a
request for a court order must be made by motion and that the motion must “state with
particularity the grounds for seeking the order.” The respondent’s motion to dismiss does
not indicate the rule upon which the motion is predicated. Generally, motions to dismiss
are based on one of the grounds enumerated in Federal Rule of Civil Procedure 12(b). It
appears that the respondent’s motion is brought under Rule 12(b)(6). However, the
respondent relies in its motion on matters outside the pleadings, namely the Declaration
of Chaim Schor. “If, on a motion under Rule 12(b)(6) or 12(c), matters outside the
pleadings are presented to and not excluded by the court, the motion must be treated as
one for summary judgment under Rule 56.” Fed. R. Civ. P. 12(d).
Civil Local Rule 56 (E.D. Wis.) provides detailed instructions regarding the
procedures that must be followed in cases involving pro se litigants. Additionally, at the
outset of its motion, the respondent cites to an outdated local rule regarding briefing. The
Civil Local Rules (E.D. Wis.) were amended on November 19, 2010. For the foregoing
reasons, the motion to dismiss is denied.

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ORDER
NOW, THEREFORE, IT IS ORDERED that the petitioner’s motion for leave to
proceed in forma pauperis be and hereby is granted as stated herein. (Docket #3).
IT IS FURTHER ORDERED that respondent’s motion to dismiss be and hereby is
denied. (Docket # 9).
IT IS FURTHER ORDERED that the United States Marshal shall serve a copy of the
complaint, the summons, and this order upon the respondent pursuant to Federal Rule of
Civil Procedure 4. The petitioner is advised that Congress requires the U.S. Marshals
Service to charge for making or attempting such service. 28 U.S.C. § 1921(a). The current
fee for waiver-of-service packages is $8.00 per item mailed. The full fee schedule is
provided at 28 C.F.R. §§ 0.114(a)(2), (a)(3). Although Congress requires the court to order
service by the U.S. Marshals Service precisely because in forma pauperis petitioners are
indigent, it has not made any provision for these fees to be waived either by the court or
by the U.S. Marshals Service.
IT IS FURTHER ORDERED that the Bureau of Prisoners or its designee shall collect
from the petitioner’s prison trust account the $279.21 balance of the filing fee by collecting
monthly payments from the petitioner’s prison trust account in an amount equal to 20% of
the preceding month's income credited to the prisoner's trust account and forwarding
payments to the clerk of the court each time the amount in the account exceeds $10 in
accordance with 28 U.S.C. § 1915(b)(2). The payments shall be clearly identified by the
case name and number assigned to this action.

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IT IS ALSO ORDERED that a copy of this order be sent to the warden of the
institution where the inmate is confined.
IT IS FURTHER ORDERED that the petitioner shall submit all correspondence and
legal material to:
Honorable Patricia J. Gorence
% Office of the Clerk
United States District Court
Eastern District of Wisconsin
362 United States Courthouse
517 E. Wisconsin Avenue
Milwaukee, Wisconsin 53202

PLEASE DO NOT MAIL ANYTHING DIRECTLY TO THE COURT’S CHAMBERS. It will
only delay the processing of the matter.
The petitioner is notified that from now on, he is required under Federal Rule of Civil
Procedure 5(a) to send a copy of every paper or document with the court to the opposing
party or, if the opposing party is represented by counsel, to counsel for that party. Fed. R.
Civ. P. 5(b). The petitioner should also retain a personal copy of each document. If the
petitioner does not have access to a photocopy machine, he may send out identical
handwritten or typed copies of any documents. The court may disregard any papers or
documents which do not indicate that a copy has been sent to the opposing party or that
party’s attorney, if the party is represented by an attorney.
The petitioner also is advised that failure to make a timely submission may result
in the dismissal of this action for failure to prosecute.
In addition, the parties must notify the Clerk of Court of any change of address.
Failure to do so could result in orders or other information not being timely delivered, thus
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affecting the legal rights of the parties.
Dated at Milwaukee, Wisconsin this 15th day of March, 2012.
BY THE COURT:

s/Patricia J. Gorence
PATRICIA J. GORENCE
United States Magistrate Judge

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