Opinion
CIVIL ACTION NO. H-00-1255
January 9, 2001
MEMORANDUM AND RECOMMENDATION ON DEFENDANTS' MOTIONS TO DISMISS AND FOR INJUNCTIVE RELIEF
This case was referred by United States District Judge Vanessa D. Gilmore for full pretrial management, pursuant to 28 U.S.C. § 636(b)(1)(A) and (B). (Docket Entry #33). Pending before the court are motions to dismiss that were filed by Defendant Gary M. Doniger ("Doniger"); by Defendant A. N. Rusehe ("Rusche"); and by the true party-in-interest, United States of America ("USA")(collectively, "Defendants"). (Docket Entries #9, #15, and #20). Each motion points out that the present cause of action echoes two previous lawsuits filed by Plaintiffs Lowell L. Eaves and Jacqueline R. Eaves ("Eaves," "Plaintiffs") and that each of those earlier cases was dismissed. Based on an apprehension that Plaintiffs may file additional frivolous claims, Defendants also ask the court to permanently enjoin them from lodging successive complaints on this matter. (Docket Entries #15, #20). In response to these motions, Eaves requested that Defendants' requests be "quashed." (See Docket Entries #24 and #43). In addition, on August 3, 2000, Plaintiffs filed a pleading styled, "1st Amended Complaint." (Docket Entry #35). Defendant Rusche has moved to strike this "amended complaint," or in the alternative, to allow him additional time to respond to that pleading. (See Docket Entry #37). In his motion to strike, Rusche complains that the Eaves claimants neither sought, nor received, leave of court to file an amended pleading. Rusche also points out that the referenced document does not comport with the federal pleading requirements and does not, in fact, constitute an amended complaint. ( Id. at 3).
From a review of the pleadings, to date, the applicable law, and the public records related to the earlier filings in the district courts for the Southern District of Texas, this court concludes that Defendants' motions to dismiss have merit and it is RECOMMENDED that each be GRANTED. (Docket Entries #9, #15, and #20). Further, the court concludes that Plaintiffs have been earlier advised that sanctions could result if it was determined that this action merely duplicated earlier, unsuccessful efforts, and so it is RECOMMENDED that a permanent injunction be entered to preclude Plaintiffs from filing future lawsuits on these issues, without explicit leave of court to do so.
BACKGROUND
In the matter before this court (Civil Action No. 00-1255), Plaintiffs Lowell L. Eaves and Jacqueline R. Eaves complain, to the extent that the court can appreciate their claim, that the Internal Revenue Service ("IRS"), through its agent, Gary M. Doniger, unlawfully garnished Jacqueline Eaves' wages without granting her/them due process of law. This complaint appears to be founded on Plaintiffs' belief that they are not subject to income tax liability. (See Civil Action No. 00-1255, attachment to Docket Entry #1, Notice of Removal). The present action was originally filed as Cause Number 99-12898, in the 215th Judicial Court of Harris County, Texas. It was removed to this court by Defendant Rusche on April 12, 2000. ( Id.) In his Notice of Removal, Rusche asserts that he owns A. N. Rusche Distributing Company, and that Jacqueline Eaves was formerly employed with the company. During her employment, the IRS, through its employee Gary Doniger, issued tax levies to the company to satisfy Eaves' alleged tax liability. ( Id. at 2). To date, the Eaves' have filed two other lawsuits alleging a similar complaint that they were treated unlawfully by the named Defendants. Both of those earlier suits began in state court, were removed to federal court, and were ultimately dismissed; one dismissal was at Plaintiffs' request, and the other was dismissed, with prejudice, after a full review of the merits. Based on those prior dispositions, each Defendant is asking this court to likewise dismiss the pending suit for failure to state a claim, and because this complaint is barred by an earlier adverse ruling, under the doctrine of res judicata, or issue preclusion. (See Doniger's Motion to Dismiss, Docket Entry #9).
After reviewing the filings at issue, the court agrees that Plaintiffs have merely repeated the same unsuccessful complaint and a futile request that an injunction issue to prevent garnishment of Jacqueline Eaves' wages. The first lawsuit which made these allegations was filed before The Honorable Melinda Harmon, in Civil Action No. H-98-3525. In that case, Judge Harmon issued a six-page memorandum and order in which she concluded that Doniger, and the true party-in-interest, the United States of America, are immune from suit. Hawaii v. Gordon, 373 U.S. 57 (1963); Spalding v. Vilas, 161 U.S. 483 (1986); Ecclesiastical Order of the Ism of Am v. Chasm, 845 F.2d 113, 115 (6th Cir. 1988); Carelli v. Internal Revenue Service, 668 F.2d 902, 904 (6th Cir. 1982); Demery v. Kupperman, 735 F.2d 1139, 1145-46 (9th Cir. 1984); Hutchinson v. United States, 677 F.3d 1322, 1327 (9th Cir. 1982); Atkinson v. O'Neill, 867 F.2d 589, 590 (10th Cir. 1989). As no valid claim can be made against either of them, the Eaves' suit was dismissed, with prejudice, as to each of those defendants. (Civil Action No. 98-3525, Docket Entry #8, Memorandum and Order, p. 3). Judge Harmon concluded further that the Eaves' request for an injunction was frivolous because they had an established and adequate remedy at law available to them; that is, the right to file a suit for a refund, if they had a valid contention of an unlawful garnishment. ( Id. at 4). Finally, Judge Harmon found that, to the extent that Plaintiffs argued that the IRS has no proper authority to impose tax liability, that argument was frivolous. For each of those stated reasons, Judge Harmon found that the plaintiffs had failed to state a claim under Rule 12(b)(6), and that the complaint should be dismissed, with prejudice, to a re-filing. Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000). She entered a final judgment to that effect on January 5, 1999. (See Civil Action No. 98-3525, Docket Entry #9, Final Judgment).
Defendants have shown that, just months later, in 1999, Plaintiffs re-urged the same arguments that had been rejected by Judge Harmon, in a subsequent lawsuit filed before The Honorable Nancy F. Atlas, Civil Action No. H-99-0463. In that matter, Judge Atlas issued an order to the Plaintiffs to show cause why their complaints of an illegal garnishment by the IRS and Doniger were not "barred by res judicata and collateral estoppel" and, further, to show why the matter should not be dismissed for failure to state a claim upon which relief could be granted. (Civil Action No. 99-0463, Docket Entry #14, Order to Show Cause, p. 2). In her May 12, 1999 show cause order, Judge Atlas referenced Judge Harmon's prior judgment in Defendants' favor, and noted that Plaintiffs were seeking "substantially the same injunctive relief in this action as they sought in the 1998 action." ( Id.) Plaintiffs were ordered to respond, on or before May 24, 1999, to that order to show cause, and were advised, expressly, that they must "show cause why they should not be sanctioned under Rule 11 of the Federal Rules of Civil Procedure or 28 U.S.C. § 1927, for filing a frivolous, unreasonable and vexatious action containing claims that were or could have been brought in the dismissed case, Civil Action No. H-98-3525." ( Id. at 3). Apparently, rather than responding to the show cause order, Plaintiffs filed a "Notice of Non-Suit." (See Civil Action No. 99-0463, Docket Entries #15 and #16). Judge Atlas permitted that filing, granted the Eaves' request for a non-suit, and closed the case on May 28, 1999. (See Civil Action No. #99-0463, Docket Entry #16, Minute Entry, dated June 3, 1999). The pending claims were then lodged less than a year later, in March 2000.
DISCUSSION
Defendants here contend, and this court agrees, that Plaintiffs' current allegations echo the complaints lodged in the two previous actions, Civil Action No. H-98-3525, and Civil Action H-99-0463. On review of the pertinent pleadings, this court concludes that the allegations reviewed, and disposed of by Judge Harmon are, in essence, the same ones filed by the Eaves' in this cause number, Civil Action No. H-00-1255. The court concludes further that, under the same analytical reasoning, the present claim should likewise be dismissed. For the reasons discussed by Judge Harmon, this court finds as well that the claims against Defendants Rusche, USA, and Doniger should be dismissed for failure to state a claim under Rule 12(b)(6). Collins, 224 F.3d at 498. Further, each allegation is barred by the doctrine of claim preclusion. See Lytle v. Household Manufacturing, Inc., 494 U.S. 545, 552 (1990); Southmark Corporation v. Coopers Lybrand, 163 F.3d 925, 934 (5th Cir. 1999). It is, therefore, RECOMMENDED that this case be dismissed, with prejudice.
In addition, all Defendants have asked this court to enter an order which permanently enjoins Jacqueline and Lowell Eaves from filing any similarly futile lawsuits in the future. In that regard, the court notes that Plaintiffs have filed three different cases in state district court and that each one has been removed to federal district court. In Judge Harmon's ruling, which dismissed the original case, with prejudice, she stated clearly and succinctly that the claims had no merit. (Civil Action No. 98-3525, Docket Entry #8, Memorandum and Order). Following that dismissal, Plaintiffs were advised by Judge Atlas, in reference to their second lawsuit, that frivolous filings are subject to monetary or other sanctions. (Civil Action No. 99-0463, Docket Entry #14, Order to Show Cause). Finally, at the scheduling conference before this court, Plaintiffs were advised that, upon review of Defendants' dispositive motions, "sanctions can possibly [be] placed on Plaintiff if the court comes to the conclusion that this case is the same as all of the other filed cases." (See Civil Action No. 00-1255, Docket Entry #17, Minutes of Scheduling Conference, held June 16, 2000). Yet Plaintiffs have chosen to proceed without regard to these warnings. It is important to stress that Lowell Eaves conceded before Judge Gilmore that these claims were the same as those filed, and dismissed, on two earlier occasions. (Civil Action No. 00-1255, Docket Entry #22, Transcript of Hearing, held June 16, 2000, pp. 5-6). For that reason, and in light of the procedural history of this dispute, the court agrees that Defendants have a legitimate concern that subsequent suits will be filed if Plaintiffs are not enjoined from this activity. The United States Court of Appeals for the Fifth Circuit has held that sanctions are appropriate, under Rule 11 of the Federal Rules of Civil Procedure, when a party files "motion after motion . . . lacking in substance. . . ." Whittington v. Lynaugh, 842 F.2d 818 (5th Cir. 1988). Further, a court's equitable power to grant injunctive relief against vexatious litigation is well-established. In re Hartford Textile Corp., 681 F.2d 895, 897 (2nd Cir. 1982); Polur v. Raffe, 912 F.2d 52, 57 (2nd Cir. 1990).
In the matter before it, the court concludes that the Eaves' have routinely lodged unsupported allegations, substantially similar to those made in previous unsuccessful claims, and which have been consistently denied by the courts of this district. Moreover, the court concludes that each of those previous rulings, and/or orders, or admonitions, serve as adequate prior notice to Plaintiffs that they are subject to sanctions for filing frivolous pleadings. An appropriate sanction to stem such abusive litigation is an order requiring a litigant to "seek permission from the [c]ourt prior to filing any future suits." Johns v. Town of Los Gatos, 834 F. Supp. 1230, 1232 (N.D. Cal. 1993), citing DeLong v. Hennessey, 912 F.2d 1144, 1147 (9th Cir. 1990); see also Mayfield v. Collins, 918 F.2d 560 (5th Cir. 1990). For that reason, this court RECOMMENDS that the Eaves' be barred from filing any future court action against Doniger, Rusche, or the United States of America, in any federal forum, until, and unless, a judge of the United States authorizes such a filing, in writing. Absent a showing that the Eaves' have received such permission from a judicial officer of the courts of the United States, it is RECOMMENDED that the Clerk be directed to return, without filing, any action submitted. In the alternative, Plaintiffs should be ordered to pay all costs and fees incurred, to date, by Defendants in this cause, Civil Action No. 00-1255. If such monetary sanctions are imposed as an alternative to pre-filing approval, Defendants should file a supplement with the court detailing the costs and fees expended in this cause. Polur, 912 F.2d at 57. That supplement should be filed within ten (10) days of the court's order.
Finally, to the extent that Plaintiffs "1st amended complaint" may be seen as an attempt to amend the extant pleadings, Defendant Rusche's motion to strike is GRANTED. That ruling renders MOOT his alternative request for an extension of time to respond to the "amended pleading." (Civil Action No. 00-1255, Docket Entry #37).
The Clerk of the court shall send copies of this memorandum and recommendation to the respective parties who will then have ten (10) days from the receipt of it to file written objections thereto, pursuant to 28 U.S.C. § 636(b)(1)(c), General Order 80-5, S.D. Texas. Failure to file written objections within the time period provided will bar an aggrieved party from attacking the factual findings and legal conclusions on appeal.
The original of any written objections shall be filed with the United States District Clerk, P.O. 61010, Houston, Texas 77208; copies of any such objections shall be delivered to the chambers of Judge Vanessa D. Gilmore, Room 9513, and to the chambers of the undersigned, Room 7007.