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Georges Marciano v. Douglas Shulman

July 1, 2011


The opinion of the court was delivered by: Henry H. Kennedy, Jr. United States District Judge


Plaintiff Georges Marciano brings this action against Douglas Shulman, in his official capacity as Commissioner of the Internal Revenue Service ("IRS"), seeking declaratory and injunctive relief and a writ of mandamus. Marciano alleges that the IRS has violated his rights by declining to investigate or audit his tax returns, and seeks to compel the IRS to provide him with an explanation and documentation of its understanding of his tax liability for certain years. Before the Court is the Commissioner's motion to dismiss [#21], which asserts that this Court lacks jurisdiction over certain of Marciano's claims and that the rest of his allegations fail to state a claim upon which relief may be granted. Upon consideration of the motion, the opposition thereto, and the record of this case, the Court concludes that the motion must be granted.


Marciano is the co-founder of the apparel company Guess?, Inc. and an investor in various companies and real estate ventures. Marciano alleges that in 2005 and 2006 he discovered numerous instances of fraud and embezzlement by his former employees that resulted in a loss of nearly $200,000,000 from accounts held by him or in which he had an interest. Am. Compl. ¶¶ 9--13. Believing these fraudulent transactions to have significant consequences for his tax liability, Marciano attempted to obtain copies of his recent tax returns from the IRS. The IRS, however, was initially unable to provide Marciano with tax returns for the years 2000, 2001, 2002, 2003, 2004 and 2006. Am. Compl. ¶ 17.

Despite indications that Marciano's taxes had not been properly filed as of at least the year 2000, Marciano received two refund checks from the IRS dated April 25, 2006, in the amounts of $233,706.27 and $647,290.90, ostensibly for taxes paid in the year 2000. Am. Compl. ¶ 21. He subsequently received more refund checks for the years between 2000 and 2006. Marciano returned all of these checks to the IRS, requesting an explanation for their issuance. The IRS initially replied only that Marciano's account for the year 2000 had been adjusted because he had "requested a tentative carryback or restricted interest claim," and eventually sent Marciano a letter in June 2009 informing him that "no tax issues exist." Am. Compl. ¶¶ 21--24.

While these events were unfolding, Marciano filed two lawsuits in the Superior Court of Los Angeles, California against his former accountants, bookkeepers and other employees: Marciano v. Fahs, et al. (BC 375824) (Cal. Super. Ct. 2009) and Marciano v. Iskowitz, et al. (BC 384493) (Cal. Super. Ct. 2009). The former employees asserted counterclaims against Marciano for libel and intentional infliction of emotional distress. In July 2009, the Superior Court entered judgments against Marciano in both lawsuits. Def.'s Opp'n to TRO & Prelim. Inj. Exs. F, G. In October 2009, Marciano's judgment creditors commenced an involuntary chapter 11 bankruptcy action against him in the U.S. Bankruptcy Court for the Central District of California, No. 09-39630 (Bankr. C.D. Cal. filed Oct. 27, 2009).

Marciano filed the present case on August 10, 2009, initially seeking a stay of the execution of the state court judgments against him, the attachment of the bank accounts he believes to have been fraudulently opened in his name, the placement of a tax lien on his property, an injunction of any further state court proceedings against him, a declaration that the IRS had violated his rights (including his due process rights under the Constitution), and both a writ of mandamus and an injunction requiring the IRS to furnish him with certain documents and to commence a thorough investigation or audit of his tax liability. On August 21, 2009, Marciano moved for a temporary restraining order and preliminary injunction providing these various forms of relief. Following a hearing, the Court denied that motion. The IRS subsequently moved to dismiss this action for failure to state a claim upon which relief may be granted and lack of subject-matter jurisdiction.*fn1


A. Lack of Subject-Matter Jurisdiction

Under Federal Rule of Civil Procedure 12(b)(1), a defendant may move to dismiss a complaint, or a claim therein, for lack of subject-matter jurisdiction. FED. R. CIV. P. 12(b)(1); see Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) ("Federal courts are courts of limited jurisdiction. . . . It is to be presumed that a cause lies outside this limited jurisdiction . . . ."). In response to such a motion, the plaintiff must establish that the court has subject-matter jurisdiction over the claims in the complaint. See Shuler v. United States, 531 F.3d 930, 932 (D.C. Cir. 2008). If the plaintiff is unable to do so, the Court must dismiss the action. Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94 (1998) (citing Ex parte McCardle, 7 Wall. 506, 514 (1868)). When resolving a motion made under Rule 12(b)(1), a court may consider material beyond the allegations in the plaintiff's complaint. Jerome Stevens Pharm., Inc. v. FDA, 402 F.3d 1249, 1253--54 (D.C. Cir. 2005).

B. Failure to State a Claim Upon Which Relief May Be Granted

On a motion to dismiss for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6), the Court will dismiss a complaint, or a portion thereof, that fails to plead "enough facts to state a claim for relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Thus, although a complaint need not contain detailed factual allegations, it must recite facts sufficient to at least "raise a right to relief above the speculative level . . . on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Id. at 555. A "pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'" Ashcroft v. Iqbal, -U.S.-, 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 555). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Id. (quoting Twombly, 550 U.S. at 557) (alterations in original). At bottom, a complaint must contain sufficient factual matter that, accepted as true, would allow the Court "to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.


Marciano identifies a host of statutes and one constitutional provision as creating both jurisdiction over his claims and a right to relief. The Court will address each in turn. Where the Court finds the provision in question to create a cause of action, ...

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