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Brown v. United States Government

United States District Court, S.D. Ohio, Eastern Division

June 1, 2017

WAYNE BROWN, Plaintiff,
v.
UNITED STATES GOVERNMENT, at al., Defendants.

          Deavers Magistrate Judge.

          OPINION & ORDER

          ALGENON L. MARBLEY UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on: (a) Defendant United States' Motion to Dismiss Plaintiff Wayne Brown's complaint (Doc. 13); (b) Plaintiff's Motion for Summary Judgment (Doc. 14); (c) Plaintiff's Objection to Court Granting Extension to Defendant (Doc. 17); and (d) Plaintiffs Request for Admission (second motion) (Docs. 21, 22.) For the reasons expressed below, the Court GRANTS Defendant's Motion to Dismiss (Doc. 13), DENIES as moot Plaintiff's Motion for Summary Judgment (Doc. 14), OVERRULES Plaintiff's Objection to Court Granting Extension to Defendant (Doc. 17), and STRIKES Plaintiffs Request for Admission. (Docs. 21, 22.)

         I. BACKGROUND

         Plaintiff filed his complaint pro se against the United States, the Internal Revenue Service (“IRS”), the District Court, and the Sixth Circuit, on April 21, 2016. (Doc. 1.) Plaintiff amended his complaint on May 4, 2016. (Doc. 2.) But this litigation did not begin here.

         A. Brown I

         Brown sued the United States, Department of Treasury, and the IRS in August 2014 following a mix-up with his 2010 tax refund. (“Brown I, ” Case No. 14-cv-1142, Doc. 1 (Watson, J.).) In March 2011, the IRS had mistakenly issued him a tax refund that was $15, 000 more than he was due. (Id. at 1.) In an attempt to correct the error, in July 2012, the IRS sent Plaintiff an “Intent to Levy Notice” which stated that the IRS may levy Plaintiff's state tax refund if he did not call the IRS immediately or pay back the $15, 000 plus interest. Brown alleged that in sending this Intent to Levy Notice, the IRS improperly assessed the erroneous refund as a “rebate category B overstated” payment rather than a “non-rebate category D misapplied” payment.

         Brown called the IRS and offered to pay $50 per month, but the IRS insisted that Brown pay $210 per month. Brown made payments from August 2012 until November 2013. In May 2013 and November 2013, he requested hearings with the IRS to challenge the levy, which the IRS denied.

         Brown complained that the IRS's actions in attempting to collect the erroneous refund via levy violated the Internal Revenue Code (“IRC”), and sought damages under 26 U.S.C. § 7433, which provides a remedy to taxpayers for certain IRS actions that violate the IRC.[1] He also sought damages for alleged violations of his Fifth Amendment rights when the IRS denied his hearing requests.[2]

         Unfortunately for Brown, in addition to granting a private right of action for certain violations, 26 U.S.C. § 7433 also contained a statute of limitations. 26 U.S.C. § 7433(d)(3). The government filed a motion for judgment on the pleadings on statute of limitations grounds, which this Court granted. (Brown I, Doc. 39, at 9 (finding that “the actions of which plaintiff complains all constitute the same alleged wrong-wrongful collection of the erroneous refund via levy.”).) The Court also found that Brown's Fifth Amendment claim failed because “collection via levy has been upheld as not in violation of the Due Process Clause so long as an adequate opportunity exists for post-seizure review, ” which “need not involve a hearing.” (Id. at 10 (internal quotation omitted).)

         Brown appealed, and sought to proceed in forma pauperis, which motion Judge Watson denied. (Id. at Doc. 43) The Sixth Circuit also declined to grant Brown's motion to appeal in forma pauperis because, “[f]or the reasons stated by the district court, Brown's complaint lacks an arguable basis in law and an appeal in this case would be frivolous.” (Id. at Doc. 44.) The Sixth Circuit ordered Brown to pay the filing fee for his appeal. Brown failed to pay the fee, and the Sixth Circuit dismissed his case for want of prosecution on May 6, 2016. (Id. at Doc. 45.)

         B. Brown II

         On April 21, 2016, Brown sued the IRS again, and added as defendants the Department of Justice, the District Court and the Sixth Circuit. (Doc. 1.) He amended his complaint on May 4, 2016. (Doc. 2.) Construed liberally, the amended complaint seeks compensatory damages of $2 million for the following actions of the IRS: (a) “intentionally chang[ing] [his] erroneous non rebate misapplied estimated tax payment refund and ma[king] it a rebate-overstatement estimated tax payment refund;” (b) failing to issue a notice of deficiency, which it should have done had the IRS properly characterized his refund; and (c) declining to allow him a hearing after he filed his administrative claims in May 2015, “based on a fraudulent statement.” (Id.) These actions, according to Brown, constituted fraud, fraudulent concealment, false statements, conspiracy to violate Brown's due process rights, retaliation, threatening, and violations of Brown's First, Fifth, and Fourteenth Amendments to the United States Constitution.

         As for the additional defendants, he does not appear to state any causes of action. Rather, he criticizes this Court for dismissing his claims on statute of limitations grounds, and he criticizes the Sixth Circuit for declining to allow him to proceed in forma pauperis because his appeal had no basis in law or fact. (Doc. 2 at 3-4.)

         The United States filed its Motion to Dismiss on September 26, 2016. (Doc. 13.) Brown never filed a response. Instead, on October 7, 2016, Brown moved for summary judgment, although his Motion for Summary Judgment appears to address some of the arguments made in the government's Motion to Dismiss. (Doc. 14.) The United States moved to extend its time to respond to Plaintiff's Motion for Summary Judgment, seeking first a ruling on its Motion to Dismiss, (Doc. 15), which the Magistrate Judge granted in November 2016. (Doc. 16.) In December, Brown objected to the Magistrate Judge's Order granting the extension, (Doc. 17), and in February, he filed for the Recusal of the Magistrate Judge and this Court (Doc. 20).[3] The government did not respond to either the objection or the motion for recusal, and the time for responding has passed. In March, Brown filed a letter, (Doc. 21), which the Court will liberally construe as a memorandum in support of his motion for request for admission (second motion) (Doc. 22). The government did not respond to Brown's motion, and the time for responding has passed. Therefore, all of the above motions, with the exception of Brown's Motion for Summary Judgment, are ripe for review.

         II. UNITED STATES' MOTION TO DISMISS

         The government seeks to dismiss Brown's complaint on the grounds of collateral estoppel and res judicata because his claims were already adjudicated in Brown I. (Doc. 13-1 at 1.) While Brown did not file a formal response to the government's motion, his Motion for Summary Judgment argues against the government's Motion to Dismiss. (Doc. 14.) In it, he argues against the application of collateral estoppel and res judicata because Brown I focused on the Intent to Levy Notice and what ...


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