Brian Kenner v. E. Kelly , 529 F. App'x 870 ( 2013 )

FILED
NOT FOR PUBLICATION JUN 20 2013
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
BRIAN KENNER; KATHLEEN No. 11-56062
KENNER,
D.C. No. 3:10-cv-02105-AJB-
Plaintiffs - Appellants, WVG
v.
MEMORANDUM *
E. KELLY, an individual, IRS employee;
et al.,
Defendants - Appellees.
BRIAN KENNER; KATHLEEN No. 11-56252
KENNER,
D.C. No. 3:10-cv-02105-AJB-
Plaintiffs - Appellees, WVG
v.
E. KELLY, an individual, IRS employee;
et al.,
Defendants,
And
BARBARA DUNN, an individual;
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
LACEY DUNN & DO, PC ,
Defendants - Appellants.
Appeal from the United States District Court
for the Southern District of California
Anthony J. Battaglia, District Judge, Presiding
Submitted June 18, 2013 **
Before: TALLMAN, M. SMITH, and HURWITZ, Circuit Judges.
Brian and Kathleen Kenner appeal pro se from the district court’s judgment
dismissing their action alleging that defendants violated the Racketeer Influenced
and Corrupt Organizations Act (“RICO”) in connection with the collection of their
federal income tax liabilities. Barbara Dunn and Lacey Dunn & Do, PC (“Dunn
defendants”) cross appeal from the order denying their motion for sanctions under
Fed. R. Civ. P. 11. We have jurisdiction under 28 U.S.C. § 1291. We review de
novo a dismissal for failure to state a claim. Odom v. Microsoft Corp., 486 F.3d
541, 545 (9th Cir. 2007) (en banc). We review for an abuse of discretion the
district court’s Rule 11 determination. Retail Flooring Dealers of Am., Inc. v.
Beaulieu of Am., LLC, 339 F.3d 1146, 1150 (9th Cir. 2003). We affirm.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
2 11-56062
In No. 11-56062, the district court properly dismissed the Kenners’ RICO
claims against the Internal Revenue Service (“IRS”) defendants for failure to state
a claim because the Kenners’ allegations against the IRS defendants constitute
violations of the Internal Revenue Code (“IRC”) in connection with tax collection
activities, and the sole remedy for such claims is under 26 U.S.C. § 7433. See 26
U.S.C. § 7433 (providing that a civil action against the United States under § 7433
“shall be the exclusive remedy for recovering damages” resulting from IRS
employees’ negligent, reckless, or intentional disregard of any IRC provision or
treasury regulation in connection with any collection of federal tax). Accordingly,
the district court properly dismissed the conspiracy claim against the Dunn
defendants as well. See Howard v. Am. Online Inc., 208 F.3d 741, 751 (9th Cir.
2000) (RICO conspiracy claim fails to state a claim where underlying substantive
RICO claim fails).
The district court did not abuse its discretion in dismissing the complaint
without leave to amend because amendment would have been futile. See Albrecht
v. Lund, 845 F.2d 193, 195 (9th Cir. 1998) (reviewing for an abuse of discretion
and stating that leave to amend may be denied where amendment would be futile);
see also World Wide Rush, LLC v. City of Los Angeles, 606 F.3d 676, 690 (9th Cir.
2010) (discretion to deny leave to amend is “particularly broad” where plaintiff has
3 11-56062
previously filed an amended complaint).
In No. 11-56252, the district court did not abuse its discretion in denying the
Dunn defendants’ motion for sanctions under Rule 11 after determining that the
allegations in the operative complaint are not sufficiently frivolous. See Christian
v. Mattel, Inc., 286 F.3d 1118, 1127 (9th Cir. 2002) (listing factors that district
courts must consider in determining whether to impose Rule 11 sanctions); see
also Warren v. Guelker, 29 F.3d 1386, 1390 (9th Cir. 1994) (per curiam)
(“Although Rule 11 applies to pro se plaintiffs, the court must take into account a
plaintiff’s pro se status when it determines whether the filing was reasonable.”).
AFFIRMED.
4 11-56062