The opinion of the court was delivered by: Rosemary M. Collyer United States District Judge
Plaintiff Peter Lendway filed a pro se complaint on October 3, 2005, alleging that the Internal Revenue Service ("IRS"), "in connection with the collection of federal tax beginning with 'tax year' 1998[,] recklessly, intentionally or by reason of negligence disregarded" various provisions of Title 26 of the U.S. Code. Compl. ¶ 1. His complaint is among the scores of nearly identical pro se complaints filed in the U.S. District Court for the District of Columbia over the past year seeking a refund, damages, and injunctive relief against further collection of federal taxes. Id. ¶¶ 30-33; see, e.g., Gaines v. United States, 424 F. Supp. 2d 219, 221 (D.D.C. 2006) (collecting cases). On November 30, 2005, Mr. Lendway also applied for a preliminary injunction.
On February 13, 2006, the Court, having heard no response to the complaint or injunction application, ordered the Government to show cause why the requested relief should not be granted. The Court's deadline came and went and, on May 1, 2006, with the Government still silent, Mr. Lendway moved for entry of default and again for preliminary injunctive relief. Default was entered on May 3, 2006. On May 19, 2006, the Government moved to set aside the default, opposed the application for a preliminary injunction, and moved to dismiss the complaint on the grounds that (1) service was improper, thus explaining its delayed response; (2) Mr. Lendway's failure to exhaust his administrative remedies bars his refund and damages claims; and (3) the Anti-Injunction Act, 26 U.S.C. § 7421, bars his request for injunctive relief.
Advised by the Court of the consequences of failing to respond to a dispositive motion, Mr. Lendway filed an opposition, to which the Government has now replied. For the following reasons, the Court will set aside the Clerk's entry of default, grant Mr. Lendway leave to complete service of process, grant in part and deny without prejudice in part the Government's motion to dismiss, deny the application for a preliminary injunction, and direct Mr. Lendway to show cause why this matter should not be dismissed for failure to exhaust administrative remedies.
The Government moves to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1). Under Rule 12(b)(1), which governs motions to dismiss for lack of subject matter jurisdiction, a plaintiff bears the burden of establishing by a preponderance of the evidence that the Court possesses jurisdiction. See Shekoyan v. Sibley Int'l Corp., 217 F. Supp. 2d 59, 63 (D.D.C. 2002); Pitney Bowes Inc. v. U.S. Postal Serv., 27 F. Supp. 2d 15, 19 (D.D.C. 1998). It is well established that, in deciding a motion to dismiss for lack of subject matter jurisdiction, a court is not limited to the allegations set forth in the complaint, "but may also consider material outside of the pleadings in its effort to determine whether the court has jurisdiction in the case." Alliance for Democracy v. Fed. Election Comm'n, 362 F. Supp. 2d 138, 142 (D.D.C. 2005); see Lockamy v. Truesdale, 182 F. Supp. 2d 26, 30-31 (D.D.C. 2001).
In considering a request for preliminary injunctive relief, a court must examine whether "(1) there is a substantial likelihood plaintiff will succeed on the merits; (2) plaintiff will be irreparably injured if an injunction is not granted; (3) an injunction will substantially injure the other party; and (4) the public interest will be furthered by the injunction." Serono Labs. Inc. v. Shalala, 158 F.3d 1313, 1317-18 (D.C. Cir. 1998). "These factors interrelate on a sliding scale and must be balanced against each other." Davenport v. Int'l Bhd. of Teamsters, 166 F.3d 356, 360-61 (D.C. Cir. 1999). A particularly strong showing on one or more factors can mitigate a weaker showing on another. CityFed Fin. Corp. v. Office of Thrift Supervision, 58 F.3d 738, 747 (D.C. Cir. 1995); Wash. Metro. Area Transit Comm'n v. Holiday Tours, 559 F.2d 841, 843-45 (D.C. Cir. 1977). A preliminary injunction is "an extraordinary remedy that should be granted only when the party seeking the relief, by a clear showing, carries the burden of persuasion." Cobell v. Norton, 391 F.3d 251, 258 (D.C. Cir. 2004).
A. The Default Must be Set Aside
Default judgments are disfavored by modern courts. Jackson v. Beech, 636 F.2d 831, 835 (D.C. Cir. 1980). Accordingly, under Federal Rule of Civil Procedure 55(c), so long as judgment has not yet been entered, a default may be set aside for "good cause shown." Id. (quoting Fed. R. Civ. P. 55(c)). The Government neglected to respond to the complaint for more than six months, but excuses this delay by explaining that service of process was faulty in that Mr. Lendway personally served the Attorney General and U.S. Attorney, and failed to serve the IRS at all.
Proper service of process (or waiver of service) is a prerequisite to the Court's exercise of personal jurisdiction over a defendant. Murphy Bros. Inc. v. Michetti Pipe Stringing Inc., 526 U.S. 344, 350 (1999). Federal Rule of Civil Procedure 4(c)(2) provides that "[s]ervice may be effected by any person who is not a party and who is at least 18 years of age." Fed. R. Civ. P. 4(c)(2) (emphasis added). Here, Mr. Lendway filed returns of service indicating that he personally served the Attorney General and U.S. Attorney by certified mail. He argues that this is sufficient under Rule 4(i), which prescribes the manner for serving the United States and its agencies. But compliance with Rule 4(i), which deals with whom to serve when the federal government is a defendant, does not relieve a plaintiff from the independent burden to comply with Rule 4(c), which addresses who may accomplish that service. Otto v. United States, No. 05-2319, 2006 U.S. Dist. LEXIS 54494, at *4-5 (D.D.C. June 28, 2006); Perkel v. United States, No. 00-4288, 2001 U.S. Dist. LEXIS 465, at *2 (N.D. Cal. Jan. 9, 2001).
The Government argues that this error is sufficient to warrant dismissal of Mr. Lendway's complaint. Cognizant of its responsibility to afford wide latitude to pro se litigants to perfect service of process, however, the Court is disinclined to dismiss the complaint on this ground, finding that granting Mr. Lendway leave to properly serve the Government is a more appropriate course. See Moore v. Agency for Int'l Dev., 994 F.2d 874, 876-77 (D.C. Cir. 1993). But in view of the error in effecting service, the preference for resolving disputes on their merits, the absence of any indication that the Government's delay was willful or that setting aside the default would prejudice Mr. Lendway, and the apparent validity of the Government's defense, the Court finds good cause to set aside the Clerk's entry of default. See Jackson, 636 F.2d 831, 836 (D.C. Cir. 1980) (stating standard).
Mr. Lendway invokes the subject matter jurisdiction of the Court pursuant to 26 U.S.C. § 7433, which provides a cause of action for damages for certain violations of ...