Report and Recommendation

KEITH A. PESTO, Magistrate Judge.

Recommendation

The defendant's motion to dismiss, ECF no. 4, should be granted and the complaint dismissed for failure to state a claim, or dismissed sua sponte as barred by claim preclusion.

Report

Plaintiff does business in the Western District of Pennsylvania under the name Thermoall Remodeling. By 2012, the Internal Revenue Service had begun to investigate whether plaintiff's income taxes were correct. On April 4, 2017, a federal grand jury returned a two-count indictment against the plaintiff alleging that he filed false tax returns in violation of 26 U.S.C. § 7206(1) for calendar years 2010 and 2011. United States v. Masciantonio, Case No. 3:17-cv-15-KRG-KAP-1 (W.D.Pa.). The matter was vigorously contested both before and after the return of the indictment. See e.g. Masciantonio v. United States, 647 Fed Appx 108 (3d Cir.2016).

After a pretrial conference on October 10, 2017, the Court dismissed the indictment on plaintiff's motion, a dismissal the United States did not oppose. The following year, plaintiff filed a motion for reimbursement of attorneys fees on October 26, 2018, arguing that he was entitled to recover under the Hyde Amendment, Pub. L. No. 105-119, Title VI, § 617, 111 Stat. 2440, 2519 (1997), reprinted in Statutory Notes to 18 U.S.C. § 3006A because the government's prosecution was vexatious and in bad faith. See United States v. Manzo, 712 F.3d 805, 810 (3d Cir.2013) (elements of a claim under the Hyde Amendment). The Court denied the motion on January 29, 2019 and, after a motion to reconsider, again on April 24, 2019, finding that the motion was untimely and that plaintiff had not shown that the government's prosecution was vexatious or in bad faith. There was no appeal from that denial of fees.

Plaintiff, in a pro se civil complaint filed in November 2019, ECF no. 1, claims "the United States Government through its CID Agent David McKinzie" violated his constitutional rights. Complaint at Conclusion after ¶ 106. As injuries, he alleges that he suffered emotional distress for seven years, id., and that he incurred costs to defend himself, was arrested (plaintiff appeared before me in response to a summons on May 9, 2017) and subjected to pretrial restraints on his travel and privacy, and that in the course of the prosecution government agents made statements that constituted defamation (libel and slander of plaintiff personally, and commercial disparagement of his business, Thermoall Remodeling). Complaint at ¶ 57, Complaint at ¶ 5 between ¶ 66 and ¶ 67. Plaintiff also asserts that the issuance of a civil notice of deficiency to him and to his wife in September 2019 was delayed from 2015 to 2019 as part of what plaintiff calls a "retaliatory prosecution" Complaint at ¶ 86, ¶ 91. The whole multi-year process of investigating and prosecuting plaintiff is also alleged to be retaliation for plaintiff's criticism of "government officials" Complaint at ¶ 52, ¶ 92(1).

Despite the captioning of the complaint as against the United States "et al." and the making of a reference to Bivens v. Six Unknown Named Agents, 403 U.S. 388 (1971), the complaint is one solely under the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b), 2671-2680. It does not appear that the plaintiff seeks recovery from any individual government employee. Plaintiff asks for a round $1 million (although he does not specify that this should be paid by the United States in the complaint); the plaintiff attempted service only on the United States, and his motion for default judgment sought judgment only against the United States. The government's motion to dismiss treats the complaint as one solely under the FTCA, and the plaintiff's response does not assert otherwise.

Under the FTCA, as the Court of Appeals for the Third Circuit stated in Deutsch v. United States, 67 F.3d 1080, 1091 (3d Cir.1995):

Cognizable claims under the FTCA include those that are [1] against the United States, [2] for money damages, . . . [3] for injury or loss of property, . . . [4] caused by the negligent or wrongful act or omission of any employee of the Government [5] while acting within the scope of his office or employment, [6] under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred. 28 U.S.C. § 1346(b); Federal Deposit Ins. Corp. v. Meyer, 510 U.S. 471, ___, 114 S.Ct. 996, 1001, 127 L.Ed.2d 308 (1994) (claim against United States is cognizable under the FTCA if it alleges the six elements outlined above).

Cognizable claims are defined by statute because the baseline rule is that the government is immune from suit without its consent, but has in 28 U.S.C. § 1346(b) waived its immunity in limited circumstances, and then in 28 U.S.C. § 2680 "reclaimed" its immunity from suit for some specific negligent and intentional torts. Pellegrino v. United States of America Transportation Security Administration, Division of Department of Homeland Security, 937 F.3d 164, 169-70 (3d Cir.2019) (en banc).

Looking at that reclamation language, 28 U.S.C. § 2680(c) provides that the government's waiver of immunity does not apply to:

Any claim arising in respect of the assessment or collection of any tax or customs duty, or the detention of any goods, merchandise, or other property by any officer of customs or excise or any other law enforcement officer, except [for certain claims based on injury to or loss of goods in the possession of government employees.]

In 28 U.S.C. § 2680(h), the reclamation of immunity as to 11 intentional torts contains its own exceptions restoring the waiver as to 6 torts, including malicious prosecution by federal law enforcement:

[The FTCA's waiver of immunity shall not apply to a]ny claim arising out of assault, battery, false imprisonment, false arrest, malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights: Provided, That, with regard to acts or omissions of investigative or law enforcement officers of the United States Government, the provisions of this chapter and section 1346(b) of this title shall apply to any claim arising, on or after the date of the enactment of this proviso, out of assault, battery, false imprisonment, false arrest, abuse of process, or malicious prosecution. For the purpose of this subsection, "investigative or law enforcement officer" means any officer of the United States who is empowered by law to execute searches, to seize evidence, or to make arrests for violations of Federal law.

In the end, the FTCA does permit suits for malicious prosecution, including retaliatory prosecution, by a federal investigative or law enforcement officer, see Vanderklok v. United States, 868 F.3d 189, 202-03 n.13 (3d Cir.2017), which is the best way to characterize the complaint. If there are claims that would be considered defamation claims, they are not within the FTCA's waiver of immunity.

A Pennsylvania state law claim of malicious prosecution compensable under the FTCA requires allegations of fact that allow an inference that: (1) the defendant (or in an FTCA complaint a law enforcement officer acting within the scope of employment by the United States) initiated a criminal proceeding; (2) the criminal proceeding ended in plaintiff's favor; (3) the proceeding was initiated without probable cause; and (4) the defendant acted maliciously or for a purpose other than bringing the plaintiff to justice. See Donahue v. Gavin, 280 F.3d 371, 379 (3d Cir.2002). Applying the law to the complaint is difficult because plaintiff jumps around with partial descriptions of sources of law, abandons allegations of fact at the point where the identification of specific persons or acts would be expected, and generally substitutes his personal belief that he was wronged for allegations of fact.

I begin with the sections of the Complaint titled "Famacide" and "Bivens Action/Federal Tort Claims act 28 U.S.C. 2671," which together make two related claims of "retaliation" in the IRS's 2019 civil notice of a tax deficiency. It is of course black letter law that the government cannot punish a person "for exercising a protected statutory or constitutional right." United States v. Goodwin, 457 U.S. 368, 372 (1982). But it is also black letter law, as the Supreme Court held in Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009) that:

. . . the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Id., at 555, 127 S.Ct. 1955 (Although for the purposes of a motion to dismiss we must take all of the factual allegations in the complaint as true, we "are not bound to accept as true a legal conclusion couched as a factual allegation" (internal quotation marks omitted)). Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Id., at 556, 127 S.Ct. 1955. Determining whether a complaint states a plausible claim for relief will, as the Court of Appeals observed, be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. 490 F.3d, at 157-158. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not "show[n]"—"that the pleader is entitled to relief." Fed. Rule Civ. Proc. 8(a)(2). (my emphasis)

The problem is that plaintiff's "famacide" claim offers not one detail about his criticism of public officials, and therefore nothing from which a reasonable inference could be made that any government employee at any step of his interactions with the IRS since 2012 was aware of such criticism, much less was motivated by it to take any action affecting plaintiff.

Plaintiff's other retaliation claim does make the concrete allegation that by 2015 the IRS had all the facts necessary to send the notice of deficiency. Plaintiff concludes that the 2019 civil notice was retaliation for his successful defense of the criminal charges in 2017 solely because the IRS's civil division acted in 2019. Complaint at ¶ 91. The problem with this claim under the FTCA is that plaintiff cannot use the tort of malicious prosecution to obtain redress for a pending civil action because it is not a criminal prosecution and has not terminated in plaintiff's favor.

Also, the fact that one event follows another, standing alone, does not permit an inference of causation. See United States v. Ponder, 738 Fed.Appx. 114, 117 (3d Cir.2018) (no vindictive prosecution claim from filing of a superseding indictment nine months after rejection of plea offer). If it did, the reasonable inference would be that plaintiff rushed this complaint into court about a month after receiving the notice of deficiency, not that the IRS's civil enforcement was motivated by some person's desire to harass plaintiff for successfully defending himself a year earlier.

The theory that the defense of the criminal charges was itself the motivation for the civil notice of deficiency is not unreasonable. It is not uncommon to find cases asserting that a government official seeks to "win" in some fashion by hounding a person who had stood off a prosecution. See e.g. United States v. LaDeau, 734 F.3d 561, 564 (6th Cir.2013) (after trial court granted a motion to suppress that crippled a possession of child pornography prosecution, the government obtained a superseding one-count indictment charging defendant with a conspiracy to receive (with a harsher penalty) based on evidence in the government's possession before the first indictment.) But cases such as LaDeau and Ponder have specifically identified government officials whose actions can be scrutinized. Plaintiff, who (as seen in the next section) has no difficulty naming specific government employees as having taken allegedly wrongful actions, goes vague in the relevant paragraphs here. The "civil division," see Complaint at ¶ 86, is no more a person who can make decisions than is "the IRS." It is not even alleged whether the person who would have made the decision in 2015 not to send out the notice is the same person who decided to send out the notice in 2018, or is related in some way to that person or to anyone in the criminal division.

In the section of the complaint titled "Abondment of the Collection of Taxes" plaintiff alleges that Agent McKinzie, and after 2015 the "government" generally, prosecuted plaintiff because plaintiff is "of Italian decent." Complaint at ¶ 100, ¶ 101 (Spelling errors in original). This is a switch from plaintiff's position in the defense of the criminal prosecution that he was selected because he was close to the Monroeville office. More fatally, it is as conclusory as the claim held to be inadequate in Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009).

Even assuming that a plausible theory of malicious prosecution were alleged, plaintiff has already brought an FTCA claim against the United States based on the alleged actions of Agent McKinzie, and it was dismissed in an unappealed—from final judgment. See Masciantonio v. McKinzie, et al., Case No. 3:16-cv-76-KRG (W.D.Pa.). In that matter, ECF no. 17, filed in October 2016, is expressly labeled as an FTCA complaint with the United States as a defendant seeking relief for the abuse of plaintiff's rights by McKinzie, and the matter was dismissed by the court in ECF no, 20, in March 2017. It was error to dismiss the case without addressing a pending complaint (which was premature and could have been dismissed, inter alia, because there had been no favorable outcome in a criminal proceeding), but the forum for the remedy of such errors (if plaintiff had not called them to the court's attention under Fed.R.Civ.P. 59) was by a timely appeal to the Court of Appeals in the Spring of 2017. Plaintiff cannot simply take another bite at the apple two years later. See Gary v. Worker's Comp. Appeals Bd. of PA, 787 Fed.Appx. 62, 64 (3d Cir. 2019) ("If Gary believed that his claims had merit, his remedy was to appeal after the Eastern District Court dismissed his complaint, not to simply file another one with a different court.")

Claim preclusion bars a complaint when there is a final judgment on the merits in a prior suit involving the same parties or their privies and a subsequent complaint advances the same claim or a claim that could have been brought in the prior suit. Davis v. Wells Fargo, 824 F.3d 333, 341-42 (3d Cir.2016). If not all, at the least large parts of plaintiff's current complaint are barred by claim preclusion. Even taking into account the liberal reading one must give a pro se pleading, plaintiff does not state any claims that are within the FTCA's waiver of immunity that would not be barred by claim preclusion.

Plaintiff also cites a criminal statute in connection with his allegation that McKinzie committed perjury before the grand jury by testifying incorrectly about plaintiff's taxable income, but as plaintiff recognizes, Complaint at ¶ 105, plaintiff does not have standing to bring criminal charges against McKinzie.

Plaintiff has not alleged any facts about actions taken by McKinzie (or other law enforcement officers) that would constitute malicious prosecution after March 2017. Plaintiff's indictment in April 2017 and subsequent events in the prosecution are not within the limited waiver of immunity for malicious prosecution in the FTCA because the prosecution of a criminal case from indictment onwards is conducted not by a law enforcement officer, but by the United States Attorney or an assistant thereto. Congress provided the Hyde Amendment as the remedy for improper prosecution at that stage: there would be no reason for the Hyde Amendment if malicious prosecution claims could be brought under the FTCA based on the post-indictment conduct of litigation by an AUSA. Plaintiff has already sought redress under the Hyde Amendment and received a final unappealed—from denial of his motion for fees on the grounds that the prosecution was not vexatious. He cannot take a third bite at the apple here.

A district court can enter summary judgment sua sponte upon notice to the affected parties. Couden v. Duffy, 446 F.3d 483, 500 (3d Cir.2006); Fed.R.Civ.P. 56(f)(2). Dismissal on the grounds of claim preclusion is appropriate for any claims not already barred because they are not within the scope of the government's limited waiver of immunity. If there are any claims that are within the scope of plaintiff's present complaint that are not barred by the dismissal of his previous FTCA complaint or by the denial of his Hyde Amendment motion, he may point out where they are pleaded in the complaint in this matter. Pursuant to 28 U.S.C. § 636(b)(1), plaintiff is given fourteen days to make that response.

Pursuant to the same section, both parties are given notice that they have fourteen days to file written objections to this Report and Recommendation. The parties are advised that in the absence of timely and specific objections any appeal would be severely hampered or entirely defaulted. See EEOC v. City of Long Branch, 866 F.3d 93, 100 (3d Cir.2017) (describing standard of appellate review when no timely and specific objections are filed as limited to review for plain error).