The opinion
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4 UNITED STATES DISTRICT COURT
5 NORTHERN DISTRICT OF CALIFORNIA
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7 JAMES SKIP HULSEY, Case No. 21-cv-02280-PJH
8 Plaintiff,
ORDER OF DISMISSAL
v.
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10 STEVEN MNUCHIN,
Defendant.
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13 Plaintiff, a state prisoner in Texas, proceeds with a pro se civil action against a
14 governmental entity.1
15 DISCUSSION
16 STANDARD OF REVIEW
17 Federal courts must engage in a preliminary screening of cases in which prisoners
18 seek redress from a governmental entity or officer or employee of a governmental entity.
19 28 U.S.C. § 1915A(a). In its review the court must identify any cognizable claims, and
20 dismiss any claims which are frivolous, malicious, fail to state a claim upon which relief
21 may be granted, or seek monetary relief from a defendant who is immune from such
22 relief. Id. at 1915A(b)(1),(2). Pro se pleadings must be liberally construed. Balistreri v.
23 Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).
24 Federal Rule of Civil Procedure 8(a)(2) requires only "a short and plain statement
25 of the claim showing that the pleader is entitled to relief." "Specific facts are not
26 necessary; the statement need only '"give the defendant fair notice of what the . . . . claim
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1 is and the grounds upon which it rests."'" Erickson v. Pardus, 551 U.S. 89, 93 (2007)
2 (citations omitted). Although in order to state a claim a complaint “does not need detailed
3 factual allegations, . . . a plaintiff's obligation to provide the 'grounds’ of his 'entitle[ment]
4 to relief' requires more than labels and conclusions, and a formulaic recitation of the
5 elements of a cause of action will not do. . . . Factual allegations must be enough to
6 raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550
7 U.S. 544, 555 (2007) (citations omitted). A complaint must proffer "enough facts to state
8 a claim to relief that is plausible on its face." Id. at 570. The United States Supreme
9 Court has recently explained the “plausible on its face” standard of Twombly: “While legal
10 conclusions can provide the framework of a complaint, they must be supported by factual
11 allegations. When there are well-pleaded factual allegations, a court should assume their
12 veracity and then determine whether they plausibly give rise to an entitlement to relief.”
13 Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).
14 LEGAL CLAIMS
15 Plaintiff seeks court intervention regarding his economic impact payment (“EIP”)
16 pursuant to the Coronavirus Aid, Relief, and Economic Security Act (The “CARES Act”),
17 Pub. L. No. 116-136, 134 Stat. 281 (2020).
18 Background
19 In Scholl v. Mnuchin, No. 20-cv-5309 PJH, –––F.3d ––– 2020 WL 6065059 (N.D.
20 Cal. Oct. 14, 2020) (Scholl II), the court summarized the underlying issue that is central to
21 plaintiff’s complaint:
22 The CARES Act, codified in part at section 6428 of the Internal
Revenue Code, 26 U.S.C. § 6428, establishes a tax credit for
23 eligible individuals in the amount of $1,200 ($2,400 if filing a
joint return), plus $500 multiplied by the number of qualifying
24 children. 26 U.S.C. § 6428(a). For purposes of the Act, an
eligible individual is defined as “any individual” other than (1)
25 any nonresident alien individual, (2) any individual who is
allowed as a dependent deduction on another taxpayer's
26 return, and (3) an estate or trust. § 6428(d). The EIP is an
advance refund of the subsection (a) tax credit and subsection
27 (f) describes the mechanism for implementing the advance
first taxable year beginning in 2019 shall be treated as having
1 made a payment against the tax imposed by chapter 1 for such
taxable year in an amount equal to the advance refund amount
2 for such taxable year.” § 6428(f)(1).
3 Paragraph (3) of subsection (f) requires the IRS to “refund or
credit any overpayment attributable to this section as rapidly as
4 possible.” § 6428(f)(3). Additionally, Congress provided that
“[n]o refund or credit shall be made or allowed under this
5 subsection after December 31, 2020.” Id. The CARES Act also
has a reconciliation provision between the advance refund and
6 the tax credit such that if a taxpayer receives an advance refund
of the tax credit then the amount of the credit is reduced by the
7 aggregate amount of the refund. § 6428(e).
8 Three days after the President signed the CARES Act, the IRS
issued a news release explaining that the agency would
9 calculate and automatically issue an EIP to eligible individuals.
Declaration of Yaman Salahi (“Salahi Decl.”), Dkt. 55, Ex. 1 at
10 1. Though not required to do so by the Act, the IRS established
an online portal for individuals who are not typically required to
11 file federal income tax returns (e.g., because an individual's
income is less than $12,200), which allows those non-filers to
12 enter their information to receive an EIP. Id., Ex. 2. Individuals
who use the non-filer online portal have until October 15, 2020
13 to register in order to receive the EIP by the December 31, 2020
deadline imposed by the CARES Act. Id., Ex. 3.
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On May 6, 2020, the IRS published responses to “Frequently
15 Asked Questions” (“FAQ”) on the IRS.gov website. Id., Ex. 4.
Question 15 asked “Does someone who is incarcerated qualify
16 for the Payment [i.e., an EIP]?” The IRS responded:
17 A15. No. A Payment made to someone who is
incarcerated should be returned to the IRS by following
18 the instructions about repayments. A person is
incarcerated if he or she is described in one or more of
19 clauses (i) through (v) of Section 202(x)(1)(A) of the
Social Security Act (42 U.S.C. § 402 (x)(1)(A)(i) through
20 (v)). For a Payment made with respect to a joint return
where only one spouse is incarcerated, you only need to
21 return the portion of the Payment made on account of
the incarcerated spouse. This amount will be $1,200
22 unless adjusted gross income exceeded $150,000.
23 Id. at *1-2 (footnotes omitted).
24 In Scholl v. Mnuchin, No. 20-cv-5309 PJH, –––F.3d –––, 2020 WL 5702129 (N.D.
25 Cal. Sept. 24, 2020) (Scholl I), the court preliminary certified the following class:
26 All United States citizens and legal permanent residents who:
27 (a) are or were incarcerated (i.e., confined in a jail, prison, or
been held to have violated a condition of parole or probation
1 imposed under federal or state law, at any time from March 27,
2020 to the present;
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(b) filed a tax return in 2018 or 2019, or were exempt from a
3 filing obligation because they earned an income below $12,000
(or $24,400 if filing jointly) in the respective tax year;
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(c) were not claimed as a dependent on another person's tax
5 return; and
6 (d) filed their taxes with a valid Social Security Number, and, if
they claimed qualifying children or filed jointly with another
7 person, those individuals also held a valid Social Security
Number.
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Excluded from the class are estates and trusts; defendants; the
9 officers, directors, or employees of any defendant agency; and,
any judicial officer presiding over this action and his/her
10 immediate family and judicial staff.
11 Id. at *25. In Scholl II, the court granted final certification of this class and entered the
12 following declaratory relief:
13 [T]he court finds and declares that title 26 U.S.C. § 6428 does
not authorize defendants to withhold advance refunds or credits
14 from class members solely because they are or were
incarcerated. The court further finds and declares that
15 defendants’ policy that persons who are or were incarcerated
at any time in 2020 were ineligible for advance refunds under
16 the Act is both arbitrary and capricious and not in accordance
with law.
17
2020 WL 6065059, at *21. A permanent injunction was entered and defendants were to
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reconsider EIPs that were denied solely due to an individual’s incarcerated status. Id. at
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*22.
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With respect to specific payments the court stated:
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The court takes no position on whether plaintiffs or class
22 members are in fact owed advance refund payments or the
amount of those payments. Indeed, the court’s Rule 23(b)(2)
23 finding was premised on the “indivisible nature of the injunctive
or declaratory remedy warranted” but not “an individualized
24 award of monetary damages.” Dkt. 50 at 42 (quoting Wal-Mart
Stores, Inc. v. Dukes, 564 U.S. 338, 360-61, 131 S.Ct. 2541,
25 180 L.Ed. 2d 374 (2011)). The court’s determination in this
order is that the IRS’s action was “arbitrary, capricious, . . . or
26 otherwise not in accordance with law” and the appropriate
remedy is to “hold unlawful and set aside” that agency action.
27 5 U.S.C. § 706(2). It is incumbent on the IRS, as the agency
various criteria delineated in the Act.
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Id. at 20.
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Discussion
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Plaintiff is incarcerated and part of the Scholl class. He filed this case on February
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22, 2021. Plaintiff states that he has not received his EIP and seeks the court to compel
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the IRS to provide his EIP and to hold the IRS in contempt for failing to provide the
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payment. To the extent plaintiff argues that his EIP was denied due to his incarcerated
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status, he is already a member of the Scholl class; therefore, he is not entitled to
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separate individual relief. An individual suit for injunctive and equitable relief may be
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dismissed when it duplicates an existing class action's allegations and prayer for relief.
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See Pride v. Correa, 719 F.3d 1130, 1133 (9th Cir. 2013); Gillespie v. Crawford, 858 F.2d
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1101, 1103 (5th Cir. 1988) (en banc) ("Individual members of the class and other
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prisoners may assert any equitable or declaratory claims they have, but they must do so
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by urging further actions through the class representative and attorney, including
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contempt proceedings, or by intervention in the class action.").
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Nor is plaintiff entitled to relief to the extent he seeks the court to compel the IRS
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to provide his EIP pursuant to Scholl or the CARES Act and to hold the IRS in contempt.
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The court in Scholl found that the EIP could not be denied only because an individual
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was incarcerated. However, the court was clear that it took no position on whether
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individual incarcerated plaintiffs were owed the EIP, which is the relief sought in the
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instant case. That responsibility fell to the IRS to make an individual determination. The
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IRS is not in contempt simply for failing to send plaintiff the EIP. Plaintiff is also informed
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that funds cannot now be distributed pursuant to the CARES Act. As noted above, the
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CARES Act imposed a deadline of December 31, 2020, for EIPs to be made or allowed.
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That deadline has passed, and no more funds may be issued.2 Plaintiff cannot obtain the
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2 Prior to the deadline, 385,995 incarcerated individuals were issued the EIP after they
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were reconsidered despite previously being identified as incarcerated. Scholl v. Mnuchin,
1 relief he seeks in this case.
2 For all these reasons, plaintiff fails to state a claim for relief. The complaint will be
3 dismissed without leave to amend because it is clear that no amount of amendment
4 would cure the deficiencies noted above. See Lopez v. Smith, 203 F.3d 1122, 1129-30
5 (9th Cir. 2000).
6 CONCLUSION
7 The action is DISMISSED with prejudice. The clerk shall close this case.
8 IT IS SO ORDERED.
9 Dated: April 21, 2021
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11 /s/ Phyllis J. Hamilton
PHYLLIS J. HAMILTON
12 United States District Judge
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