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Ludvigson v. United States


November 27, 2007


The opinion of the court was delivered by: Rosemary M. Collyer United States District Judge


Plaintiff Joseph P. Ludvigson, proceeding pro se, is suing the United States under 26 U.S.C. § 7433 ("Section 7433"). He alleges that the Internal Revenue Service ("IRS") conducted an unauthorized collection of his personal property. Before the Court is Defendant's Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction. Specifically, the United States argues that Section 7433 does not provide Mr. Ludvigson with standing to sue. For the reasons that follow, the Court will grant the motion.


Mr. Ludvigson alleges that on May 6, 2005, he was visiting the home of an acquaintance when IRS agents arrived and seized the acquaintance's personal property to satisfy an outstanding tax liability. Complaint ("Compl.") ¶ 5. In the course of the seizure, two of those agents, Tanya Brewer and Elizabeth G. O'Brien, also collected personal property belonging to Mr. Ludvigson worth $2640. Id. ¶¶ 5, 10. Among the items seized were Mr. Ludvigson's external computer hard drive and thumb drive. Id. ¶ 5; Compl. Exh. B ("Search Warrant"). The IRS has not returned this property to Mr. Ludvigson, even though he claims that at no time from the date of the seizure and onward has he had an outstanding tax liability of his own. Compl. ¶ 3. Mr. Ludvigson is therefore seeking both damages and injunctive relief, i.e., the return of his physical property.*fn1


A. Fed. R. Civ. P. 12(b)(1)

Federal courts are courts of limited jurisdiction and the law presumes that "a cause lies outside this limited jurisdiction." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89 (1938). Because "subject-matter jurisdiction is an 'Art. III as well as a statutory requirement[,] no action of the parties can confer subject-matter jurisdiction upon a federal court.'" Akinseye v. District of Columbia, 339 F.3d 970, 971 (D.C. Cir. 2003) (quoting Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxite de Guinea, 456 U.S. 694, 702 (1982)). On a motion to dismiss for lack of subject-matter jurisdiction pursuant to Rule 12(b)(1), the plaintiff bears the burden of establishing that the court has subject-matter jurisdiction. Evans v. B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999); Rasul v. Bush, 215 F. Supp. 2d 55, 61 (D.D.C. 2002) (citing McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 182-83 (1936)). However, pro se complaints are held to a less stringent standard than complaints drafted by counsel. See Dye v. United States, 2007 U.S. Dist. LEXIS 71449, at *12 (D.D.C. September 27, 2007).

Because subject-matter jurisdiction focuses on the court's power to hear the claim, however, the court must give the plaintiff's factual allegations closer scrutiny when resolving a Rule 12(b)(1) motion than would be required for a Rule 12(b)(6) motion for failure to state a claim. Macharia v. United States, 334 F.3d 61, 64, 69 (D.C. Cir. 2003); Grand Lodge of Fraternal Order of Police v. Ashcroft, 185 F. Supp. 2d 9, 13 (D.D.C. 2001). Moreover, the court is not limited to the allegations contained in the complaint. Hohri v. United States, 782 F.2d 227, 241 (D.C. Cir. 1986), vacated on other grounds, 482 U.S. 64 (1987). Instead, to determine whether it has jurisdiction over the claim, the court may consider materials outside the pleadings. Herbert v. Nat'l Acad. of Scis., 974 F.2d 192, 197 (D.C. Cir. 1992).

B. 26 U.S.C. § 7433(a)

26 U.S.C. § 7433 is a limited waiver of the United States' sovereign immunity and allows aggrieved taxpayers to sue for unlawful collection practices. It provides that:

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 intentionally, or by reason of negligence, disregards 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) (emphasis added). The plain language of the statute authorizes an action only by the taxpayer whose taxes the IRS was attempting to collect. Ruiz-Rivera v. Internal Revenue Serv., 226 F. Supp. 2d 345, 348 (D.P.R. 2002) (dismissing Section 7433 claim for lack of standing); Ferrel v. Brown, 847 F. Supp. 1524, 1528 (W.D. Wash. 1993) (holding that Section 7433(a) requires that a plaintiff be "'such taxpayer' from whom the IRS collected the tax; that is, the direct taxpayer, not a third party") (internal citations omitted).


The United States focuses on the fact that nowhere in the Complaint does Mr. Ludvigson allege he was the taxpayer at issue during the IRS collection on May 6, 2005, and argues that he therefore lacks standing. Defendant's Memorandum in Support of Motion to Dismiss at 6. Mr. Ludvigson concedes as much in his opposition memorandum. Plaintiff's Opposition to Motion to Dismiss ("Pl.'s Opp.") at 1 ("Had Plaintiff been aware that cases such as this are routinely dismissed due to the Plaintiff not making plain that Plaintiff was the taxpayer undergoing a collection action, such would have also been alleged."). Mr. Ludvigson attempts to keep his case alive, however, by asserting new facts in that memorandum and requesting that he be allowed to amend his Complaint accordingly. Those facts, aimed at establishing that Mr. Ludvigson is a "taxpayer" for purposes of Section 7433, allegedly are: (1) that he was the subject of a collection action that was commenced concurrent with that of his acquaintance; and (2) subsequent to the seizure of property by the IRS agents, an audit was scheduled to determine if his items would cover the anticipated deficiency. See Pl.'s Opp. Supplemental Affidavit ¶ 5.*fn2

Assuming arguendo such alleged facts would clear the standing hurdle, the Court nonetheless will not permit Mr. Ludvigson to amend the Complaint because it would be futile. Denial of leave to amend based on futility is warranted if the proposed claim would not survive a motion to dismiss. Robinson v. Detroit News, Inc., 211 F. Supp. 2d 101, 114 (D.D.C. 2002); James Madison Ltd. v. Ludwig, 82 F.3d 1085, 1099 (D.C. Cir. 1996); Willoughby v. Potomac Elec. Power Co., 100 F.3d 999, 1003 (D.C. Cir. 1996) (affirming the district court's denial of leave to amend given the "little chance" that plaintiff would succeed on his claim).

Dismissal would be warranted even if the Complaint contained the additional facts because there is no evidence that Mr. Ludvigson exhausted his administrative remedies before initiating this suit as required by 26 U.S.C. § 7433(d)(1) ("A judgment for damages shall not be awarded under subsection (b) unless the court determines that the plaintiff has exhausted the administrative remedies available to such plaintiff within the Internal Revenue Service."); 26 C.F.R. § 301.7433-1 (laying out the administrative requirements with which an aggrieved taxpayer must comply before filing suit); see Koerner v. United States, 471 F. Supp. 2d 125, 127 (D.D.C. 2007) (failure to exhaust remedies is cause for dismissal under Fed. R. Civ. P. 12(b)(6)). Mr. Ludvigson's written requests to various officials for return of his property, see Pl.'s Opp. Exhs. D-H, simply do not suffice. 26 C.F.R. § 301.7433-1(d)-(e).


For the foregoing reasons, the Court will grant Defendant's Motion to Dismiss. A separate order will be issued with this Memorandum Opinion.

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