Bowman, Jr. v. Iddon ( 2015 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
JOHN J. BOWMAN,
Plaintiff
v. Civil Action No. 14-520 (CKK)
KIMBERLY IDDON, et al.,
Defendants
MEMORANDUM OPINION
(October 13, 2015)
Plaintiff John J. Bowman, proceeding pro se, brings this action against five current and
former employees of the Internal Revenue Service (“IRS”), claiming that those employees
violated his Constitutional due process rights in taking action to suspend him from practicing as
an “enrolled agent” before the IRS with defective notice because the notice of the suspension
proceedings was not sent to the correct address. Bowman also claims that the IRS had no
jurisdiction over him as a result of prior criminal proceedings in the United States District Court
for the Western District of Pennsylvania. Bowman seeks damages from the Defendants in their
individual capacities under the doctrine of Bivens v. Six Unknown Agents of Federal Bureau of
Narcotics, 403 U.S. 388 (1971). 1 Presently before this Court is Defendants’ [13] Motion to
Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6). Defendants argue
that Plaintiff has no standing to bring this action because Plaintiff cannot show that Defendants
1
Notwithstanding Defendants’ suggestion that the complaint “fails to specify the Federal
Defendants in their official capacities or personal capacities,” Defs.’ Mot. to Dismiss at 7, the
Complaint states clearly that Plaintiff is bringing claims against Defendants in their individual
capacities only. See Compl. at 1 (“Wherein, defendants in their individual capacity violated
Plaintiff’s Fifth Amendment right.”); id. at 17 (“This lawsuit is brought against 5 defendants in
their individual capacity, not their official capacity.”); see also Pl.’s Opp’n at 3 (confirming that
the suit is brought against Defendants only in their individual capacities).
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caused the injury that Plaintiff allegedly suffered. Defendants argue that the Complaint fails to
state a claim upon which relief may be granted and must be dismissed pursuant to Rule 12(b)(6)
because (a) the comprehensive remedial scheme pertaining to the challenged conduct precludes a
Bivens remedy; (b) the claims are barred by absolute immunity or qualified immunity2; (c) the
Complaint fails to allege a Constitutional injury because Bowman was never authorized to
practice as an “enrolled agent”; and (d) the Complaint fails to allege facts sufficient to state a
plausible claim for relief against any of the defendants. Upon consideration of the pleadings, 3 the
relevant legal authorities, and the record for purposes of this motion, the Court GRANTS
Defendants’ motion. The Court concludes that, although Plaintiff has standing to pursue this
action, the Complaint fails to state a claim because a Bivens remedy is unavailable as a result of
the comprehensive remediable scheme regarding the actions that are the basis of this action. The
Court, therefore, need not resolve Defendants other arguments for dismissal. This action is
dismissed in its entirety.
I. BACKGROUND
For the purposes of the motion before the Court, the Court accepts as true the well-
pleaded allegations in Plaintiff’ Complaint. The Court does “not accept as true, however, the
plaintiff’s legal conclusions or inferences that are unsupported by the facts alleged.” Ralls Corp.
2
Defendants also argue that, insofar as the Complaint includes claims against Defendants in their
official capacities, those claims are barred by sovereign immunity. Because the Complaint
includes no such claims, the Court has no occasion to consider that argument.
3
The Court’s consideration has focused on the following documents:
• Federal Defendants’ Mot. to Dismiss (“Defs.’ Mot. to Dismiss”), ECF No. 13;
• Pl.’s Answer to Defs.’ Mot. for Dismissal According to Fed. R. Civ. P. 12(b)(1) (“Pl.’s
Opp’n”), ECF No. 16; and
• Reply in Support of Federal Defs.’ Mot. to Dismiss (“Defs.’ Reply”), ECF No. 20.
In an exercise of its discretion, the Court finds that holding oral argument in this action would
not be of assistance in rendering a decision. See LCvR 7(f).
2
v. Comm. on Foreign Inv. in U.S., 758 F.3d 296, 315 (D.C. Cir. 2014). The Court recites the facts
pertaining to the issues raised in the pending motion, focusing on those facts relevant to the
inquiries in which the Court engages.
On September 9, 2003, Plaintiff was indicted in the United States District Court for the
Western District of Pennsylvania for multiple felonies, including mail fraud, wire fraud, and
money laundering. Compl., Facts ¶ 2. As a result, Plaintiff was incarcerated between August 10,
2005, and June 18, 2010. Id. ¶ 3. On January 9, 2006, the IRS Officer of Professional
Responsibility sent a notice of proceeding, Complaint No. XP-2006-067, to Plaintiff’s business
address (5031 Route 8 Gibsonia, PA 15044). Id. ¶ 12. Defendant did not receive the notice. See
id. ¶ 13. On March 3, 2006, the IRS sent to the same address notice of the suspension decision by
Defendant Cono Namorato, which stated that “effective this date, you are suspended from
eligibility to practice before the Internal Revenue Service. Your suspension prohibits you from
engaging in practice before the Internal Revenue Service as that term is defined in section
10.2(d) of Circular 230.” Id. ¶ 14. Defendant Karen Copeland notified other IRS employees and
affiliates of the suspension by e-mail on March 15, 2006. Id. ¶ 15. The suspension was
announced publicly through the Internal Revenue Bulletin 2006-18, dated May 1, 2006,
Announcement 2006-23, which publicized disciplinary actions regarding attorneys, certified
public accountants, enrolled agents, and enrolled actuaries. Id. ¶ 16. The Bulletin identified
Plaintiff as an “enrolled agent” and identified the date of his suspension as “indefinite from
March 9, 2006.” 4 Id.; see also Internal Revenue Bulletin, 2006-18 I.R.B. 855, 859 (May 1,
4
The Court notes that Plaintiff does not allege that he was an “enrolled agent.” He only alleges
that IRS identified him as an “enrolled agent.” Compl., Facts ¶ 1. In Plaintiff’s Opposition, he
explicitly disclaims ever being an enrolled agent. Pl.’s Opp’n at 2. Similarly, in Defendants’
briefing, Defendants argue that Plaintiff never was an enrolled agent. See Def.’s Mot. at 16-18
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2006), available at http://www.irs.gov/pub/irs-irbs/irb06-18.pdf, last visited October 2, 2015.
Plaintiff did not learn of the suspension until he was released from prison. Compl., Facts ¶¶ 18-
19.
II. LEGAL STANDARD
Pursuant to Article III of the Constitution, Defendant moves to dismiss this action on the
basis that this Court has no jurisdiction because Plaintiff lacks standing. “Article III of the
Constitution limits the jurisdiction of federal courts to ‘actual cases or controversies between
proper litigants.’” Mendoza v. Perez, 754 F.3d 1002, 1010 (D.C. Cir. 2014) (quoting Fla.
Audubon Soc’y v. Bentsen, 94 F.3d 658, 661 (D.C. Cir. 1996)). Because standing is a “threshold
jurisdictional requirement,” a court may not assume that Plaintiff has standing in order to
proceed to evaluate a case on the merits. Bauer v. Marmara, 774 F.3d 1026, 1031 (D.C. Cir.
2014). A plaintiff “bears the burden of showing that he has standing for each type of relief
sought.” Summers v. Earth Island Inst., 555 U.S. 488, 493 (2009). “To establish constitutional
standing, plaintiffs ‘must have suffered or be imminently threatened with a concrete and
particularized injury in fact that is fairly traceable to the challenged action of the defendant and
likely to be redressed by a favorable judicial decision.’” Mendoza, 754 F.3d at 1010 (quoting
Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377, 1386 (2014); see also
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).
Pursuant to Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss a
complaint on the grounds that it “fail[s] to state a claim upon which relief can be granted.” Fed.
R. Civ. P. 12(b)(6). “[A] complaint [does not] suffice if it tenders ‘naked assertion[s]’ devoid of
(citing Iddon Decl. ¶¶ 4-5,7; Rogers Decl. ¶¶ 2-5). However, the Court’s resolution of the
pending motion to dismiss does not turn on whether or not Bowman was, in fact, an enrolled
agent at the time of the suspension or at any other time.
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‘further factual enhancement.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 557 (2007)). Rather, a complaint must contain sufficient factual
allegations that, if accepted as true, “state a claim to relief that is plausible on its face.” Twombly,
550 U.S. at 570. “A claim has facial plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Iqbal, 556 U.S. at 678.
III. DISCUSSION
Defendants move to dismiss the Complaint because Plaintiffs lack standing to pursue this
action. Defendants also move to dismiss the Complaint for failure to state a claim. The Court
considers first, as it must, the threshold jurisdictional issue of standing.
A. Standing
“The ‘irreducible constitutional minimum of standing contains three elements’: injury in
fact, causation, and redressability.” Arpaio v. Obama, 797 F.3d 11, 19 (D.C. Cir. 2015) (quoting
Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)). “Injury in fact is the ‘invasion of a
legally protected interest which is (a) concrete and particularized ... and (b) actual or imminent,
not conjectural or hypothetical.” Id. (quoting Lujan, 504 U.S. at 560) (alterations in original).
“The ‘causal connection between the injury and the conduct complained of’ must be ‘fairly
traceable to the challenged action of the defendant, and not the result of the independent action
of some third party not before the court.’” Id. (quoting Lujan, 504 U.S. at 561). Finally, “it must
be ‘likely, as opposed to merely speculative, that the injury will be redressed by a favorable
decision.’” Id. (quoting Lujan, 504 U.S. at 561).
Defendants only challenge standing with respect to the second prong, arguing that there is
not a sufficient causal connection between the alleged deficiencies in the notice given to Plaintiff
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regarding the suspension and the harm that he suffered. 5 Defendants present two arguments
about why causation is lacking here, and the Court finds both arguments unavailing.
First, Defendants argue that Plaintiff’s felony convictions were grounds for suspending
him from practice before the IRS as a matter of law—and that therefore any deficiency in notice
was irrelevant. The Court disagrees. Pursuant to IRS Circular 230, with respect to practitioners
who have “been convicted of any crime under title 26 of the United States Code, any crime
involving dishonesty or breach of trust, or any felony for which the conduct involved renders the
practitioner unfit to practice before the Internal Revenue Service,” “the expedited procedures
described in this section may be used to suspend the practitioner from practice before the Internal
Revenue Service.” 31 C.F.R. § 10.82 (emphasis added). Contrary to Defendant’s suggestion,
Circular 230 does not mandate that someone in Plaintiff’s position would necessarily be
suspended from practice. It simply allows the use of expedited procedures to do so. But even
those expedited procedures involve sending notice to the person who would be subject to a
suspension—and Plaintiff’s claim revolves around allegedly defective notice. It is not a foregone
conclusion that Plaintiff would nonetheless have been suspended had Plaintiff received the notice
that he claims was constitutionally required. Therefore, Plaintiff’s status as a felon and the
availability of expedited procedures in these circumstances does not interrupt the chain of
5
The Court notes that Defendants’ argument that Plaintiff did not suffer a “Constitutional injury”
because Plaintiff was never authorized to practice as an “enrolled agent” is directed at the
question of whether Plaintiff has alleged an injury that could be the basis for a Bivens remedy
rather than whether Plaintiff has alleged an injury that would provide him standing to bring this
action in the first instance. See Def.’s Mot. at 16 (citing cases analyzing whether injuries would
suffice for the purposes of bring Bivens actions). In any event, the Court concludes that, whether
or not Plaintiff was ever actually an “enrolled agent,” the fact that he was publicly suspended
from practice before the IRS indefinitely, as if he were an “enrolled agent,” qualifies as an injury
for standing purposes.
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causation between the harm that Plaintiff allegedly suffered and the actions that he claims are
unconstitutional.
Second, Defendants argue that the allegedly unconstitutional actions of the IRS
employees did not cause the harm that Plaintiff suffered because any enrolled agent status would
have terminated after three years due to Plaintiff’s failure to comply with the applicable renewal
requirements. The Court disagrees. It appears that Plaintiff claims that he was harmed by
publication of the IRS bulletin indicating that he was suspended. The harm that he claims
accrued immediately when the Internal Revenue Bulletin 2006-18, which noted Plaintiff’s
suspension, was published on May 1, 2006. The fact that the status that Plaintiff may have had as
an enrolled agent would have expired due to Plaintiff’s failure to comply with renewal
requirements at a later point, therefore, does not eliminate causation for standing purposes.
Accordingly, the Court concludes that Plaintiff has standing to pursue the Bivens action
that he purports to bring. The Court next addresses whether it is possible to bring a Bivens action
in these circumstances.
B. Availability of a Bivens Remedy
Defendants argue that a Bivens remedy is unavailable in the circumstances of this case
because a comprehensive remedial scheme exists in the Internal Revenue Code and the
accompanying regulations. Plaintiff responds that “constitutional rights, if they are to be rights at
all, must have some discernible remedy.” Pl.’s Opp’n at 3. Plaintiff further responds that
“[l]eaving Plaintiff to pursue remedies without the Court’s assistance through the very agency for
which Defendant Iddon was the main actor on both sides of the investigation would be, in
essence[,] no remedy at all.” Id. The Court agrees with Defendants that Bivens remedy is
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precluded as a result of the comprehensive remedial scheme in the Internal Revenue Code and its
implementing regulations.
Pursuant to the Supreme Court’s decision in Bivens, Federal courts “have discretion in
some circumstances to create a remedy against federal officials for constitutional violations.”
Wilson v. Libby, 535 F.3d 697, 704-05 (D.C. Cir. 2008). As the D.C. Circuit has counseled,
however, courts “must decline to exercise that discretion where ‘special factors counsel[ ]
hesitation’ in doing so.” Id. “One [such] ‘special factor’ that precludes creation of a Bivens
remedy is the existence of a comprehensive remedial scheme.” Id. That is, when “Congress has
put in place a comprehensive system to administer public rights, has ‘not inadvertently’ omitted
damages remedies for certain claimants, and has not plainly expressed an intention that the
courts preserve Bivens remedies,” courts “must withhold their power to fashion damages
remedies” pursuant to Bivens. Spagnola v. Mathis, 859 F.2d 223, 228 (D.C. Cir. 1988) (per
curiam) (en banc), rev’d on other grounds, Hubbard v. EPA, 949 F.2d 453, 467 (1991); see also
Schweiker v. Chilicky, 487 U.S. 412, 429 (1988) (when “Congress has discharged that
responsibility [to create a complex government program] ... we see no legal basis that would
allow us to revise its decision”).
Defendants assert that the Internal Revenue Code is one such “comprehensive” remedial
scheme and that the Court therefore should decline to extend Bivens in this instance. The Court
agrees. In Kim v. United States, 632 F.3d 713 (D.C. Cir. 2011), the D.C. Circuit Court of Appeals
considered the situation of aggrieved taxpayers who challenged alleged IRS wrongdoing and
endorsed the conclusion of the district court that “no Bivens remedy was available in light of the
comprehensive remedial scheme set forth by the Internal Revenue Code.” Id. at 717. In Kim, the
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Court of Appeals also noted that this conclusion was in accordance with numerous other Circuit
Courts. Id. at 717-18 (citing cases).
For the same reasons that a Bivens remedy was unavailable in Kim with respect to the
claims of aggrieved taxpayers, such a remedy is unavailable in the circumstances of this case
with respect Plaintiff’s suspension from practice as an alleged enrolled agent. Congress has
authorized the Secretary of the Treasury to “regulate the practice of representatives of persons
before the Department of the Treasury.” 31 U.S.C. § 330(a)(1). In accordance with this
authorization, the Treasury Department has “created a detailed scheme to address accusations of
practitioner misconduct.” Kenny v. United States, 489 F. App’x 628, 632 (3d Cir. 2012). Those
regulations “contain twenty-two rules governing disciplinary proceedings,” including provisions
for an administrative appeal process within the agency. Id. (citing 31 C.F.R. §§ 10.60–10.82). “A
practitioner may then appeal an adverse determination to the federal district and circuit courts for
further review.” Id. (citing Harary v. Blumenthal, 555 F.2d 1113, 1115 n.1 (2d Cir. 1977); Lopez
v. United States, 129 F. Supp. 2d 1284, 1288 (D.N.M. 2000)). In light of these provisions, the
U.S. Court of Appeals for the Third Circuit considered a purported Bivens claim regarding
disciplinary proceedings before the IRS in Kenny and concluded that the “provisions governing
potential disbarment or suspension before the IRS create a comprehensive remedial scheme for
addressing allegations of practitioner misconduct, including any constitutional concerns raised
by practitioners.” Id. The Third Circuit therefore declined to infer a Bivens remedy regarding
claims about IRS disciplinary proceedings. The same conclusion is applicable in this case. In
light of the D.C. Circuit’s holding in Kim that the Internal Revenue Code establishes a
comprehensive remedial scheme, and given that this remedial scheme is applicable to
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practitioner misconduct, such as the conduct at issue in this case, the Court concludes that no
Bivens remedy is available to Plaintiff in this case.
As a final matter, the Court notes that the fact that Plaintiff may not, in fact, have ever
been an enrolled agent—either at the time of the suspension or at any other time—does not
change this conclusion. In light of the comprehensive remedial scheme, Plaintiff’s remedy is to
seek redress for his grievances through the scheme set up by Congress and by the regulations of
the Treasury Department. Plaintiff may not, by contrast, seek damages through a Bivens action in
this Court. Because this action is limited to the Bivens remedy that Plaintiff seeks, the Court
dismisses this action in its entirety because no Bivens remedy is available, and the Court has no
occasion to consider any of Defendants’ other arguments in favor of dismissal.
IV. CONCLUSION
For the foregoing reasons, the Court GRANTS Defendants’ [13] Motion to Dismiss. This
case is dismissed in its entirety.
An appropriate Order accompanies this Memorandum Opinion.
Dated: October 13, 2015
/s/
COLLEEN KOLLAR-KOTELLY
United States District Judge
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