Lavern KOERNER, Plaintiff, v. UNITED STATES, Defendant., United States District Court, District of Columbia., 424 F.Supp.2d 213, No. CIV.A. 06-0024ESH., March 31, 2006
Lavern KOERNER, Plaintiff, v. UNITED STATES, Defendant.
United States District Court, District of Columbia.
424 F.Supp.2d 213
No. CIV.A. 06-0024ESH.
March 31, 2006.
Lavern Koerner, Phoenix, AZ, Pro se.
MEMORANDUM OPINION AND ORDER
HUVELLE, District Judge.
Plaintiff Lavern Koerner filed a pro se complaint on January 6, 2006, alleging er╜rors by the Internal Revenue Service ("IRS") "in connection with the collection of [a] federal tax" (Compl.╤ 1), and seeking damages under 26 U.S.C. ╖ 7433. An amended complaint was filed on January 30, 2006 ("Am.Compl."). For the reasons explained below, the Court finds that it lacks subject matter jurisdiction over plaintiff's complaint and dismisses the case without prejudice.
Plaintiff's amended complaint alleges that "[b]eginning with ▒tax year' 1994 . . . officers, agents, and/or employees of the Internal Revenue Service, in connection with the collection of federal tax[,] reck╜lessly, intentionally or by reason of negli╜gence" violated myriad provisions of the Internal Revenue Code and its accompany╜ing regulations. (Am.Compl.╤ 7.) Plaintiff sought damages for the alleged violations under 26 U.S.C. ╖ 7433. (Am.Compl.╤ 32.) Plaintiff's case is one of dozens of virtually identical pro se complaints recently filed in the U.S. District Court for the District of Columbia. At least two of these cases have previously been dismissed by this Court for lack of subject matter jurisdiction owing to plaintiffs' failure to exhaust administrative remedies. See, e.g., Henry v. United States, 416 F.Supp.2d 130 (D.D.C.2006); Scott v. United States, 416 F.Supp.2d 116 (D.D.C.2006). Therefore, on February 27, 2006, the Court ordered plaintiff to show cause why jurisdiction over her claim was proper. Gaines v. United States, Order, 05-2326 (D.D.C. Feb. 27, 2006) ("Show Cause Order" or "Order"). As required for pro se litigants under Fox v. Strickland, 837 F.2d 507 (D.C.Cir.1988), the Court informed plaintiff that failure to respond could result in the Court dismissing the case. (Order at 2.) The Order instructed plaintiff to explain how she had " ▒exhausted all administrative remedies' " (Plaintiff's Affidavit ╤ 16), as required by 26 U.S.C. ╖ 7433(d)(1) and 26 C.F.R. ╖ 301.7433-1(a), (d), (e), and attach all documentation reflecting the filing of a claim as described in 26 C.F.R. ╖ 301.7433-1(e)(2). Plaintiff apparently delivered a response to the Show Cause Order (Response to Order to Show Cause ("Pl.'s Resp.")) to the IRS on March 29, 2006, to which the IRS filed an opposition the same day. 1 (United States' Opposition to Plaintiff's Response to the Court's Show-Cause Order ("Def.'s Opp.").) While this response was not properly filed with the Court, it is apparent that plaintiff s response is identical to those of several other pro se plaintiffs who did timely file. As a result, the government was able merely to incorporate its opposition to those filings in a supplemental opposition to Koerner's response. Thus, because there was no prejudice to defendant stemming from plaintiffs failure to comply with the Show Cause Order, the Court will respond to the issues raised in plaintiff's response. After reviewing the filings of both parties, the Court finds that it lacks jurisdiction because plaintiff has failed to demonstrate compliance with the exhaustion requirements of the Internal Revenue Code and regulations promulgat╜ed pursuant thereto.
1. ═ Plaintiff's response to the Show Cause Order was due on or before March 15 (Order at 2), and thus was more than two weeks late when it was delivered to the IRS.
Plaintiff argues that jurisdiction proper╜ly lies in this Court under 26 U.S.C. ╖ 7433, which provides:
If, in connection with any collection of Federal tax with respect to a taxpayer, any officer or employee of the Internal Revenue Service recklessly or intention╜ally, or by reason of negligence disre╜gards any provision of this title, or any regulation promulgated under this title, such taxpayer may bring a civil action for damages against the United States in a district court of the United States.
26 U.S.C. ╖ 7433(a). With respect to ex╜haustion, the statute states that a "judg╜ment for damages shall not be awarded under [╖ 7433] unless the court determines that the plaintiff has exhausted the admin╜istrative remedies available to such plain╜tiff within the Internal Revenue Service." Id . ╖ 7433(d)(1).
The IRS has established by regulation the procedure by which a taxpayer may pursue a claim under ╖ 7433. See 26 C.F.R. ╖ 301.7433-1. These regulations make clear that an "action for damages filed in federal district court may not be maintained unless the taxpayer has filed an administrative claim pursuant to . . . this section." Id. ╖ 301.7433 -1(a). In or╜der to properly file an administrative claim, a taxpayer must write to the "Area Director, Attn: Compliance Technical Sup╜port Manager of the area in which the taxpayer currently resides." Id. ╖ 301.7433-1(e)(1). The regulations spell out with specificity the information that must be provided to the Area Director, including, inter alia, the "grounds, in rea╜sonable detail, for the claim;" a "descrip╜tion of the injuries incurred;" and the "dol╜lar amount of the claim, including any damages that have not yet been incurred but which are reasonably foreseeable." Id . ╖ 301.7433-1(e)(2)(ii)-(iv). The tax╜payer is further required to provide any "substantiating documentation" supporting her claim. Id. A civil action in federal district court cannot be maintained until either the IRS rules on the claim, or six months pass without a decision by the IRS on a properly filed claim. Id. ╖ 301.7433-1(d)(i)-(ii). Failure to comply with the regulation deprives the federal district court of jurisdiction. See Venen v. United States, 38 F.3d 100, 103 (3d Cir.1994); McGuirl v. United States, 360 F.Supp.2d 125, 128 (D.D.C.2004).
In her complaint, plaintiff does no more than assert that she "may forego exhausting administrative remedies that are either futile or inadequate . . . or when agency action exceeds statutory authoriza╜tion." (Compl. ╤ 6.) Plaintiff fails, however, to allege any facts that demonstrate futili╜ty or that the agency has exceeded its statutory authorization. Cf. Cooper v. United States , No. 05-1192, 2005 WL 3707403, at *1, 2 n. 2 (D.D.C.2005) (recog╜nizing, in a virtually identical case ulti╜mately dismissed for lack of venue, that plaintiffs failure to allege sufficient facts in support or to establish exhaustion doomed his ╖ 7433 claim). Plaintiff alleg╜es that she has "exhausted administrative remedies in that [she wrote] numerous requests for documents and authorities which require responses from the IRS," and that the "IRS has failed and/or re╜fused to respond or has responded with frivolous responses." (Compl.╤ 9.) As the IRS notes in its opposition, however, plain╜tiff has "not shown any attempt to comply with 26 U.S.C. ╖ 7433's [exhaustion] re╜quirement." (Def.'s Opp. at 4 n. 1.)
Despite the Court's explicit di╜rective to plaintiff to explain how she ex╜hausted her administrative remedies and to provide "all documentation reflecting the filing of a claim as described" by the regulations (Show Cause Order at 2), plaintiff's response to defendant's motion provides no additional detail beyond that which had already been included in her complaint. Rather, plaintiff argues that the Court should exercise "equity" juris╜diction over her claim because "the admin╜istrative ▒remedies' purportedly provided for-as implemented by regulation-are at best unavailable, and at worst, wholly inad╜equate." (Pl.'s Resp. at 6.) Plaintiff's ar╜gument is without merit. Plaintiff is not seeking an equitable remedy; she is seek╜ing damages, which "remain today a reme╜dy at law." Sparrow v. Comm'r, 949 F.2d 434, 437 (D.C.Cir.1991) (citing Curtis v. Loether, 415 U.S. 189, 94 S.Ct. 1005, 39 L.Ed.2d 260 (1974)). As such, an exercise of discretionary equity jurisdiction would be inappropriate. 2
2. ═ Indeed, were plaintiff to seek an equitable remedy, she might then have to overcome the restrictions of the Anti-Injunction Act, which provides that "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court." 26 U.S.C. ╖ 7421(a).
Nor would it be appropriate for the court to waive the exhaustion require╜ment. The term "exhaustion" applies to "two distinct legal concepts." Avocados Plus Inc. v. Veneman, 370 F.3d 1243, 1247 (D.C.Cir.2004). The first, known as "non╜jurisdictional exhaustion," is a "judicially created doctrine" that the court may, un╜der certain circumstances and "in its dis╜cretion, excuse." Id. The second, called "jurisdictional exhaustion," is a statutory "predicate to judicial review . . . rooted, not in prudential principles, but in Congress' power to control the jurisdiction of the federal courts." Id. (citing E.E.O.C v. Lutheran Soc. Servs., 186 F.3d 959, 963-64 (D.C.Cir.1999)). "If the statute does man╜date exhaustion, a court cannot excuse it." Id. at 1247-48 (citing Shalala v. Ill. Coun╜cil on Long Term Care, Inc., 529 U.S. 1, 13, 120 S.Ct. 1084, 146 L.Ed.2d 1 (2000)). Because courts "presume exhaustion is non-jurisdictional," id. at 1248, there must be "[s]weeping and direct statutory lan╜guage indicating that there is no federal jurisdiction prior to exhaustion, or the ex╜haustion requirement is treated as an ele╜ment of the underlying claim." Wein╜berger v. Salfi, 422 U.S. 749, 757, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975). Here, the exhaustion requirement is jurisdictional. The relevant statute is unequivocal: a "judgment for damages shall not be awarded under [section 7433] unless the court determines that the plaintiff has ex╜hausted the administrative remedies avail╜able to such plaintiff within the Internal Revenue Service." 26 U.S.C. ╖ 7433(d)(1). Several courts have "interpreted the ex╜haustion requirement as jurisdictional" in nature. Bennett v. United States, 361 F.Supp.2d 510, 514 (W.D.Va.2005); see, e.g., Conforte v. United States, 979 F.2d 1375, 1377 (9th Cir.1992); Info. Res., Inc. v. United States, 950 F.2d 1122, 1125-27 (5th Cir.1992); Simmons v. United States, 875 F.Supp. 318, 319 (W.D.N.C.1994); Mus ic Deli & Groceries, Inc. v. I.R.S., 781 F.Supp. 992, 997 (S.D.N.Y.1991). There╜fore, plaintiff's failure to introduce any evi╜dence that she attempted to or did comply with the procedures for bringing an admin╜istrative claim, as provided for in 26 C.F.R. ╖ 301.7433-1, deprives the Court of jurisdiction.
Even if the exhaustion requirement in this case were "non-jurisdictional" in na╜ture, plaintiff would fare no better. A non-jurisdictional exhaustion requirement serves a variety of purposes. Among oth╜er things, "it preserves the autonomy of the administrative agency by allowing the agency to apply its expertise and to exer╜cise its discretion," Athlone Indus., Inc. v. Consumer Prod. Safety Comm'n, 707 F.2d 1485, 1488 (citing McKart v. United States, 395 U.S. 185, 194, 89 S.Ct. 1657, 23 L.Ed.2d 194 (1969)); it "promotes effective and efficient judicial review by ensuring that such review is of a fully developed factual record," Randolph-Sheppard Ven╜dors of Am. v. Weinberger, 795 F.2d 90, 105 (D.C.Cir.1986); see also Athlone Indus. , 707 F.2d at 1488; and it gives "agen╜cies the opportunity to correct their own errors." Marine Mammal Conservancy, Inc. v. U.S. Dep't of Agric., 134 F.3d 409, 414 (D.C.Cir.1998). Therefore, it is a "long settled rule of judicial administration that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted." Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50-51, 58 S.Ct. 459, 82 L.Ed. 638 (1938). While courts have excused exhaustion when such a requirement "would be futile because of the certainty of an adverse decision," 3 K. Davis, Administrative Law Treatise ╖ 20.07 (1958), this exception is limited to instances in which "the litigant's interests in immediate judicial review outweigh the government's interests in the efficiency or administrative autonomy that the exhaus╜tion doctrine is designed to further." Avo╜cados Plus, 370 F.3d at 1247 (quoting McCarthy v. Madigan, 503 U.S. 140, 146, 112 S.Ct. 1081, 117 L.Ed.2d 291 (1992)). Plaintiff has not demonstrated that she meets this high standard.
In the past, the exception has applied where "an administrative agency lacks, or believes itself to lack, jurisdiction to act [making] an adverse decision certain." Randolph-Sheppard, 795 F.2d at 105 (cit╜ing Weinberger v. Wiesenfeld, 420 U.S. 636, 641 n. 8, 95 S.Ct. 1225, 43 L.Ed.2d 514 (1975)). "An adverse decision can also be certain if an agency has articulated a very clear position on the issue which it has demonstrated it would be unwilling to re╜consider." Id. (citing Etelson v. Office of Pers. Mgmt., 684 F.2d 918, 925 (D.C.Cir. 1982)). The mere "probability of adminis╜trative denial" is insufficient to waive ex╜haustion. Id . at 106. Plaintiff has intro╜duced no evidence that the agency has a "preconceived position on, or lacks juris╜diction over," her claim. Id. at 107.
Nor has plaintiff provided any evidence to support her claim that the administrative remedy is "inadequate." (Pl.'s Resp. at 6.) "The administrative pro╜cess is inadequate where the agency has expressed a willingness to act, but the relief it will provide through its action will not be sufficient to right the wrong." Randolph-Sheppard, 795 F.2d at 107 (original emphasis omitted). Regulations promulgated by the IRS pursuant to 26 U.S.C. ╖ 7433 permit a taxpayer to recov╜er up to "$1,000,000 ($100,000 in the case of negligence)" in damages, fees and costs through the administrative process. 26 C.F.R. ╖ 301.7433-1(a). Such relief is pre╜cisely the remedy sought in federal court in the instant case. Therefore the Court finds plaintiff's arguments that her admin╜istrative remedies are inadequate to be without merit.
For the foregoing reasons, the Court finds that it lacks subject matter jurisdic╜tion over plaintiff's claims because plaintiff has failed to exhaust her administrative remedies as required by 26 U.S.C. ╖ 7433.
It is hereby ORDERED that the case be dismissed without prejudice.