Roland Graham v. Department of the Treasury IRS

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 22-1285
__________
ROLAND GRAHAM; CESAR SAEZ; CHARLES GREEN, Lieutenant; FERNANDO
MIRAYE; ANTWON RICHARD; DURWARD ALLEN; DOUG WEISER; ANDRE DAVIS;
NAFECE MARTIN; WYKEEM BAS
ROLAND GRAHAM,
Appellant
v.
DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE
____________________________________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil Action No. 2:21-cv-01411)
District Judge: Honorable Gerald J. Pappert
____________________________________
Submitted Pursuant to Third Circuit LAR 34.1(a)
March 21, 2023
Before: JORDAN, GREENAWAY, JR., and NYGAARD, Circuit Judges
(Opinion filed May 23, 2023)
___________
OPINION*
___________
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
PER CURIAM
Roland Graham, a Pennsylvania prisoner, appeals pro se from an order of the
United States District Court for the Eastern District of Pennsylvania dismissing, for lack
of standing, a complaint brought against the Internal Revenue Service (IRS) seeking
COVID-19 stimulus payments under the Coronavirus Aid, Relief, and Economic Security
Act of 2020 (the “CARES Act”). For the following reasons, we will affirm in part,
vacate in part, and remand the matter to the District Court for further proceedings.
In his complaint, Graham alleged that the IRS “cannot deny economic impact
payments” (EIPs) under the CARES Act to incarcerated individuals.1 (ECF 2, at 4.) He
sought an order directing the IRS “to immediately release 3 stimulus checks.” (Id. at 6.)
In support of his claim, Graham relied on Scholl v. Mnuchin, 494 F. Supp. 3d 661, 687
(N.D. Cal. 2020), where the district court, in a class action, concluded that the CARES
Act’s definition of “eligible individual” included incarcerated individuals. (ECF 2, at 1.)
The District Court assumed without deciding that the United States had waived its
sovereign immunity for claims under the CARES Act and that a person seeking payment
under that Act need not exhaust administrative remedies by first filing a claim with the
1
The complaint named additional prisoner-plaintiffs, but the District Court dismissed
those individuals without prejudice because they failed to pay the fees or submit
applications to proceed IFP. (ECF 36.) Any attempt by Graham to challenge the
dismissal of the other plaintiffs lacks merit. Those plaintiffs did not file notices of appeal
and it is well-settled that non-lawyers may not represent third parties in federal court.
Osei-Afriyie ex rel. Osei-Afriyie v. Med. Coll. of Pa., 937 F.2d 876, 882-83 (3d Cir.
1991).
2
IRS. (ECF 38, at 4-5.) Nevertheless, the District Court held that Graham lacked
standing: “Graham has not established that he has suffered an injury or will suffer an
injury if the Court does not address his claims because the CARES Act did not grant an
eligible individual a right to an immediate economic impact payment.” (Id. at 6.)
According to the District Court, Graham’s “claim to an economic impact payment would
not be infringed upon unless and until he files his 2020 tax return and is denied the
payment by the IRS.” (Id.) By order entered November 17, 2021, the District Court sua
sponte dismissed the complaint without prejudice for lack of standing.2 Graham
appealed.3 (ECF 45.) He also filed a motion for recusal of the District Court judge.
(ECF 45.) The District Court rejected that motion (ECF 46), as it had done with an
earlier-filed recusal motion.4 (ECF 18; 25.)
2
Although the District Court cited 28 U.S.C. § 1915(e)(2)(B)(ii), which pertains to
dismissals for failure to state a claim on which relief may be granted, it clearly concluded
that Graham’s lack of standing deprived it of jurisdiction. (ECF 38, at 6.)
3
Where, as here, a United States agency is a party to the case, a litigant generally must
file his notice of appeal within 60 days of the entry of the final order being appealed. See
Fed. R. App. P. 4(a)(1)(B). Graham did not file his notice of appeal within 60 days of the
entry of the District Court’s order of November 17, 2021. But this appeal is nevertheless
timely because the District Court reopened the time to appeal pursuant to Federal Rule of
Appellate Procedure 4(a)(6), and Graham filed a notice of appeal before the expiration of
the 14-day reopening period authorized by Rule 4(a)(6).
4
There was no abuse of discretion in the District Court’s denial of Graham’s recusal
motions, which primarily were based on allegedly unfavorable rulings. Securacomm
Consulting, Inc. v. Securacom Inc., 224 F.3d 273, 278 (3d Cir. 2000).
3
We have jurisdiction pursuant to 28 U.S.C. § 1291,5 and our review of a dismissal
for a lack of standing is plenary. See Goode v. City of Philadelphia, 539 F.3d 311, 316
(3d Cir. 2008).
In a non-precedential opinion, we vacated a district court’s dismissal order, like
the one here, that was based on a determination that the plaintiff lacked standing to
challenge the denial of EIPs under the CARES Act because he had not submitted a tax
return before filing suit. Morton v. United States Virgin Islands, No. 21-1292, 2021 WL
6137867, at *2-3 (3d Cir. Dec. 29, 2021) (not precedential). We explained that the
possibility that the plaintiff “did not file a tax return before suing … bear[s] on the merits
of [his] claims rather than whether he had standing to bring them.” Id. at *3. We
concluded that those “arguments [are] for a motion to dismiss for failure to state a claim,
not a motion to dismiss for lack of subject matter jurisdiction.” Id. Accordingly, we
remanded the matter for further proceedings. Id.
Based on the reasoning in Morton, we conclude that the District Court here erred
in sua sponte dismissing the complaint for lack of standing. The IRS maintains, however,
that “the District Court correctly dismissed the complaint, even if for different reasons
than the one it relied on.” Appellee’s Br., 22. In particular, the IRS asserts that
5
Although the District Court dismissed the complaint without prejudice, we conclude
that Graham has elected to stand on the complaint. See Borelli v. City of Reading, 532
F.2d 950, 951-52 (3d Cir. 1976) (per curiam).
4
Graham’s claims for monetary relief6 are “foreclosed because [he] has not alleged that he
filed a 2020 tax return (and in fact, he has not filed one) or an administrative claim for
refund or credit of the amounts allowed by the CARES Act.” Appellee’s Br., at 27-28.
We acknowledge, of course, that we may affirm on any basis supported by the record.
See Murray v. Bledsoe, 650 F.3d 246, 247 (3d Cir. 2011) (per curiam). But we disfavor
dismissing a complaint without giving a pro se litigant an opportunity to amend. See
Grayson v. Mayview State Hosp., 293 F.3d 103, 106 (3d Cir. 2002). Here, it is not clear
that leave to amend would be futile. Although the IRS asserts that Graham has not filed a
2020 tax return or an administrative claim for a refund or credit, see Appellee’s Br., 17,
the evaluation of those contentions, which are fact-contingent, must be made by the
District Court in the first instance.7 See Sewak v. I.N.S., 900 F.2d 667, 673 (3d Cir.
1990) (“As an appellate court we do not take testimony, hear evidence or determine
disputed facts in the first instance. Instead, we rely upon a record developed in those fora
that do take evidence and find facts.”).
6
We agree with the IRS that, to the extent that Graham sought a declaration that the IRS
may not withhold EIPs based solely on his incarcerated status, his claims were properly
dismissed because the relief he requested duplicated the relief granted by the class action
in Scholl. Appellee’s Br., at 27; see also Pride v. Correa, 719 F.3d 1130, 1133 (9th Cir.
2013) (recognizing that a district court may dismiss individual claims that duplicate a
class action’s allegations and prayer for relief).
7
The IRS also argues that “no more EIPs may now be issued” because the CARES Act
“imposed a deadline of December 31, 2020 for the IRS to issue advance payments of
refunds ….” Appellee’s Br., 17. But the IRS acknowledges that after December 31,
2020, the amount of the EIP is still “allowable as a recovery rebate credit against a
taxpayer’s 2020 income tax.” Id. at 24.
5
For the foregoing reasons, we will affirm in part, vacate in part, and remand to the
District Court for further proceedings consistent with this opinion.8
8
Graham’s numerous outstanding motions are denied.
6