Steele v. United States of America

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

JOHN K. STEELE, Case No. 1:19-cv-705

Plaintiff, McFarland, J.

Litkovitz, M.J.

vs.

UNITED STATES OF AMERICA, et al., REPORT AND

Defendants. RECOMMENDATION

Plaintiff John Steele, proceeding pro se, originally filed this action in the Hamilton

County, Ohio Court of Common Pleas on July 25, 2019. (Doc. 1-3; see also Doc. 4). He named

as defendants the United States, “assessment officer” Benjamin F. Ray, Department of Justice

(DOJ) witness Rebecca Pomatto, United States District Court Judge Gregory F. Van Tatenhove,

and United States Attorney General William P. Barr. The United States removed the action to

this Court pursuant to 28 U.S.C. § 1442.1 This matter is before the Court on defendants’ motion

to dismiss (Doc. 8), plaintiff’s response in opposition (Doc. 10), and defendants’ reply

memorandum (Doc. 11).

I. Allegations of the complaint

The undersigned summarized the allegations of plaintiff’s complaint in a Report and

Recommendation issued on December 10, 2019 as follows:

Plaintiff’s complaint alleges that defendants violated his federal constitutional and

other rights in the course of a prior civil suit which the United States brought

against him on behalf of the Internal Revenue Service (IRS) for failure to pay

federal income taxes. See United States v. Steele, No. 3:16-cv-00095, 2018 WL

1 Section 1442 authorizes the removal of a civil action against or directed to the United States, its agencies, and its

officers, in an official or individual capacity, and any officer of its courts, for any act under color of office. 28

U.S.C. § 1442(a). Plaintiff filed a motion to remand the matter to state court (Doc. 5), which the Court has denied

(Doc. 15).

298778 (E.D. Ky. Jan. 3, 2018) (the federal tax case). In support of a motion for

partial summary judgment filed in that case, the United States provided

Certificates of Assessment for ten tax years and a sworn statement by Pomatto, an

IRS Revenue Officer, setting forth Steele’s total indebtedness to the United

States. (Id. at *2). Judge Van Tatenhove granted the United States’ motion and

found that plaintiff was “indebted to the United States for unpaid federal income

taxes, penalties, and interest in the amount of $2,861,096.54 as of October 31,

2016.” (Id. at *3). Judge Van Tatenhove granted a consent motion for the

disbursement of funds (See Case No. 3:16-00095, Doc. 117) and dismissed the

lawsuit on September 3, 2019 (Id., Doc. 118). Plaintiff appealed the Court’s

Order on Motion for Disbursement of Funds to the United States Court of

Appeals for the Sixth Circuit on October 2, 2019. (Doc. 119).

Plaintiff asserts in this lawsuit that both the federal and state courts have

jurisdiction under the United States and Ohio Constitutions over the claims he

brings. (Doc. 4 at 6-8). Plaintiff brings his claims under the Ohio Constitution

and federal statutory and constitutional law. (Doc. 4 at 8-15). Plaintiff alleges

that his claims are based on various provisions of the United States Constitution

related to the power to tax; the “uniformity clause”; the Fourth Amendment’s

protection against unreasonable search and seizure; the right to due process; and

the right to trial by jury. (Id. at 9-12).

Plaintiff claims that defendants attempted to extort him “under color of law” and

“under color of office” by engaging in unconstitutional taxation practices in the

absence of legitimate subject matter jurisdiction or legal authority. (Id.). Plaintiff

alleges that defendants committed “unconstitutional acts” and violated 18 U.S.C.

§ 872, which criminalizes acts of extortion by federal officers or employees.

(Id.).

Plaintiff claims that defendant IRS agents and officers committed criminal

forgery, which voids the judgment against him in the federal tax case. (Doc. 4 at

14-15, 25-26). Plaintiff alleges that the revenue officers and IRS agents named as

defendants “forg[ed] the unauthorized signatures(s) of other persons” on the

“Notice(s) of Federal Tax Lien(s)” which formed the basis for the federal civil

judgment against him. He contends defendants did so “[b]y using, without

authorization, a facsimile image of signatures, instead of using their own

signature on the Notice of Federal tax Liens.” (Doc. 4 at 14-15, citing Exh. A).

Plaintiff alleges that in doing so, “the Agents and Officers have acted only under

color of law and color office [sic] (under IRC § 7608(a)).”2 (Id.). Plaintiff

alleges that the IRS employees violated both “federal and State law,” and they do

not have a legitimate defense available to them under IRC §§ 7608(a) and 63213

because forgery is not an authorized activity. (Id. at 15). Plaintiff argues that he

2 Section 7608 sets forth the authority of internal revenue enforcement officers. 26 U.S.C. § 7608.

3 Section 6321 creates a lien in favor of the United States on property of an individual who is liable to pay tax and

neglects or refuses to pay it after a demand. 26 U.S.C. § 6321.

will suffer great and irreparable injury if the forged documents that the district

court relied upon in the “previous, related litigation” to award judgment to the

United Sates can be enforced as legal claims in Kentucky “state land records,

offices, and courts.” (Id.).

Plaintiff claims that defendants have committed fraud in violation of numerous

provisions of the Internal Revenue Code and federal IRS regulations. (Id. at 10-

12, 24-25). He also contends that defendants have violated his constitutional

property rights, his rights to equal protection and due process of law, and his right

to be secure in his person and property. (Id. at 25). Plaintiff further claims that

defendants and the IRS have enforced and continue to enforce an “unauthorized

direct unapportioned tax under the 16th Amendment,” and they have attempted to

subject him to a “prohibited condition of peonage debt service” and involuntary

servitude in violation of the 13th Amendment and “both Constitutions, under

color of law and color of office.” (Doc. 4 at 22, 26-27). He claims defendants

violated his rights in the federal tax case by refusing to recognize his rights to a

jury trial and to produce evidence favorable to him during the proceedings. (Id. at

18-21).

Plaintiff sums up his allegations and claims as follows:

Defendants have extortionately committed unlawful threats of force; and are

attempting to enforce VOID judgments issued by a federal court lacking subject

matter jurisdiction under the 16th Amendment and Article 1, to enforce any direct

taxation claims made under alleged authority of the 16th Amendment, for lack of

granted enabling enforcement powers thereunder. Thus, unlawfully converting

private property in the states of Ohio and Kentucky, under both color of law and

color of office, in [sic] blatant multiple violations of the plaintiff’s numerous

constitutional rights as here-in-above enumerated and articulated under both

Constitutions. (Id. at 27).

Based on these allegations, plaintiff brings claims for “fraud, attempted extortion,

conversion, conspiracy, peonage, involuntary servitude, and for violations of due

process, private property, and the Right to a trial by jury” under the Ohio

Constitution and the Constitution and laws of the United States. (Id.). Plaintiff

requests a jury trial which will afford him due process and remedy the federal and

state constitutional and statutory violations defendants have allegedly committed;

compensatory and punitive damages; an order requiring defendants to comply

with the United States Constitution and the Internal Revenue Code; and all other

relief the Court deems proper to make plaintiff whole. (Id. at 27-28).

(Doc. 12 at 1-4).

II. Motion to dismiss

Defendants contend that plaintiff’s tax-related claims against the United States and its

officers are barred by the doctrine of sovereign immunity; plaintiff cannot pursue a Bivens4

action against the United States or the individual federal officers for alleged violations of his

constitutional rights while acting under color of federal law; plaintiff cannot bring a claim

against the United States under 26 U.S.C. § 7433 to recover damages in this matter; and plaintiff

is barred from seeking injunctive relief by the Anti-Injunction Act, 26 U.S.C. § 7421. (Doc. 8).

Defendants further assert that the Court lacks personal jurisdiction over Judge Van Tatenhove,

and he is entitled to judicial immunity from monetary damages. Finally, defendants argue that

plaintiff is barred from relitigating claims related to his federal tax liability for the years 2000

through 2010 under the doctrine of res judicata.

1. Standard of review

When deciding a Rule 12(b)(6) motion to dismiss, the Court must construe all factual

allegations as true and in the light most favorable to the non-moving party. Keys v. Humana,

Inc., 684 F.3d 605, 608 (6th Cir. 2012) (citing Harbin–Bey v. Rutter, 420 F.3d 571, 575 (6th Cir.

2005)). Fed. R. Civ. P. Rule 8(a)(2) requires only “a short and plain statement of the claim

showing that the pleader is entitled to relief.” Id. “[T]he statement need only give the defendant

fair notice of what the . . . claim is and the grounds upon which it rests.” Keys, 684 F.3d at 608

(quoting Erickson v. Pardus, 551 U.S. 89, 93 (2007) (internal quotation marks omitted)

(quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The “[f]actual allegations

4 See Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388 (1971). In Bivens the

Supreme Court “recognized a cause of action against federal officials for certain constitutional violations when no

alternative processes exist to protect the plaintiff’s interests and no special factors counsel against recognizing the

cause of action.” Zundel v. Holder, 687 F.3d 271, 279 (6th Cir. 2012) (citations omitted)).

must be enough to raise a right to relief above the speculative level” and to “state a claim to

relief that is plausible on its face.” Id. (quoting Twombly, 550 U.S. at 555, 570). The plaintiff

must “plead[] factual content that allows the court to draw the reasonable inference that the

defendant is liable for the misconduct alleged.” Id. (quoting Ashcroft v. Iqbal,556 U.S. 662, 678

(2009)).

A motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) for lack of subject matter

jurisdiction can present a facial or factual challenge to the court’s subject matter jurisdiction

under Rule 12(b)(1). DLX, Inc. v. Kentucky, 381 F.3d 511, 516 (6th Cir. 2004) (citations

omitted). A facial attack on the Court’s subject matter jurisdiction alleged in the complaint

“merely questions the sufficiency of the pleading.” Ohio Nat. Life Ins. Co. v. United States, 922

F.2d 320, 325 (6th Cir. 1990). When resolving a facial challenge, the Court accepts the factual

allegations of the complaint as true and construes the complaint in a light most favorable to the

non-moving party. United States v. A.D. Roe Co., Inc., 186 F.3d 717, 721-22 (6th Cir. 1999). If

the motion presents a factual challenge, the Court may consider evidence outside the pleadings to

determine if jurisdiction exists. See Nichols, 318 F.3d at 677. Further, there is no presumption

of truthfulness in favor of the non-moving party. A.D. Roe Co., Inc., 186 F.3d at 722. Plaintiff

has the burden of showing jurisdiction exists to survive a 12(b)(1) motion to dismiss. Nichols v.

Muskingum Coll., 318 F.3d 674, 677 (6th Cir. 2003) (citing Moir v. Greater Cleveland Reg'l

Transit Auth., 895 F.2d 266, 269 (6th Cir.1990)).

Documents filed by pro se plaintiffs are “to be liberally construed” and pro se complaints

“must be held to less stringent standards than formal pleadings drafted by lawyers[.]” Erikson,

551 U.S. at 94 (quoting Estelle v. Gamble, 429 U.S. 97, 106 (1976)). However, a pro se litigant

is required to meet “basic pleading essentials.” Wells v. Brown, 891 F.2d 591, 594 (6th Cir.

1989).

2. Defendants’ motion to dismiss should be granted

i. Claims against the United States and its agents

Defendants move to dismiss plaintiff’s claims related to his federal income tax debt and

liability. (Doc. 8). Defendants allege that because plaintiff sues the individual defendants in

their official capacities, all of plaintiff’s tax-related claims must be construed as claims against

the United States. (Id. at 6-7, citing Kentucky v. Graham, 473 U.S. 159, 166 (1985) (“[A]

plaintiff seeking to recover on a damages judgment in an official-capacity suit must look to the

government entity itself.”)). The United States alleges that plaintiff’s tax-related claims against

it are barred under the doctrine of sovereign immunity and therefore must be dismissed for lack

of subject matter jurisdiction. (Id. at 7-8). Defendants argue that although the United States has

waived its immunity from suit for certain damages actions under the Federal Tort Claims Act

(FTCA), 28 U.S.C. §§ 1346(b), 2671-2680, the United States has not waived its sovereign

immunity as to the damages claims plaintiff brings here.

The United States, as a sovereign, is immune from suit except where it has waived its

immunity. United States v. Mitchell, 463 U.S. 206 (1983). The doctrine of sovereign immunity

deprives the federal court of subject matter jurisdiction in a lawsuit against the United States

absent the government’s express consent to be sued. Haines v. Fed. Motor Carrier Safety

Admin., 814 F.3d 417, 425 (6th Cir. 2016); see also CareToLive v. von Eschenbach, 525 F. Supp.

2d 938, 950 (S.D. Ohio 2007). In a case such as this, where a federal officer is sued in his or her

official capacity, the federal officer may assert sovereign immunity. Lewis v. Clarke, -- U.S.--,

137 S. Ct. 1285, 1286-87 (2017) (citing Graham, 473 U.S. at 167). The party who brings a

claim against the United States has the burden “to allege an action of Congress that authorizes

the Court to entertain that specific claim.” Munaco v. U.S., 502 F. Supp. 2d 614, 616 (E.D. Mich.

2007), aff’d, 522 F.3d 651 (6th Cir. 2008) (quoting Malone v. Bowdoin, 369 U.S. 643, 645

(1962)).

Defendants the United States and its agents assert they have not waived their consent to

be sued on plaintiff’s tax-related claims under any potentially applicable statutes or laws. First,

defendants contend they have not waived their immunity against tax-related damages claims

under the FTCA. (Doc. 8 at 7). The FTCA, 28 U.S.C. §§ 1346(b)(1), 2671-2680, “was designed

primarily to remove the sovereign immunity of the United States from suits in tort.” Millbrook v.

U.S., 569 U.S. 50, 52 (2013) (quoting Levin v. United States, 568 U.S. 503, 506 (2013) (internal

quotation marks omitted)). The FTCA “gives federal district courts exclusive jurisdiction over

claims against the United States for ‘injury or loss of property . . . caused by the negligent or

wrongful act or omission’ of a federal employee ‘acting within the scope of his office or

employment.’” Id. (quoting 28 U.S.C. § 1346(b)(1)). 28 U.S.C. § 2680 sets forth exceptions to

the waiver of immunity. Id. Section 2680(c) makes an exception to the waiver of immunity for

“[a]ny claim arising in respect of the assessment or collection of any tax. . . .” 28 U.S.C. §

2680(c). Thus, § 2680(c) “specifically retains the government’s sovereign immunity” as to any

such tax claim. Munaco v. U.S., 502 F. Supp. 2d 614, 619 (E.D. Mich. 2007), aff’d, 522 F.3d

651 (6th Cir. 2008) (citing 28 U.S.C. § 2680(c)).

However, the United States has consented to be sued for the recovery of taxes under

certain circumstances. The United States has waived its immunity under 28 U.S.C. § 1346(a)(1)

for “[a]ny civil action against the United States for the recovery of any internal-revenue tax

alleged to have been erroneously or illegally assessed or collected, or any penalty claimed to

have been collected without authority or any sum alleged to have been excessive or in any

manner wrongfully collected under the internal-revenue laws.” Dunlap v. Lew, No. 16-3658,

2017 WL 9496075, at *2 (6th Cir. June 2, 2017) (quoting 28 U.S.C. § 1346(a)(1)). See also

E.W. Scripps Co. v. U.S., No. 1:01-cv-434, 2002 WL 31477137, at *2 (S.D. Ohio Sept. 16,

2002), aff’d sub nom. E.W. Scripps Co. and Subsidiaries v. U.S., 420 F.3d 589 (6th Cir. 2005)

(“section 1346(a)(1), together with 26 U.S.C. § 7422(a), waives sovereign immunity with respect

to refund suits by taxpayers to recover internal revenue taxes alleged to have been erroneously or

illegally assessed”) (citing Miller v. United States, 784 F.2d 728, 731 (6th Cir.1986)).

While § 1346(a)(1) provides recourse against the United States for a taxpayer who

alleges his taxes have been erroneously or illegally collected, the statute must be read in

conjunction with other “statutory provisions which qualify a taxpayer’s right to bring a refund

suit upon compliance with certain conditions.” Dunlap, 2017 WL 9496075, at *2 (quoting

United States v. Dalm, 494 U.S. 596, 601, 602 (1990)). Before filing suit under § 1346(a)(1), a

taxpayer must (1) file a claim for a refund or credit with the IRS (26 U.S.C. § 7422(a)); (2) file

suit within two years of the IRS’s disallowance of the claim (26 U.S.C. § 6532(a)(1)); and (3)

“generally pay his . . . full tax liability before filing suit in federal court” (Flora v. United States,

357 U.S. 63, 75-76 (1958), aff’d on reh’g, 362 U.S. 145 (1960)). Id.

Plaintiff cannot pursue a claim in this action under 28 U.S.C. § 1346(a)(1). Plaintiff does

not allege that he seeks a refund of taxes paid. Plaintiff instead requests compensatory,

prospective, and punitive damages which do not appear to correspond to tax amounts that have

been assessed against him. Plaintiff has not otherwise indicated in the complaint that he has paid

taxes which he seeks to recover in this lawsuit under § 1346(a)(1). Further, plaintiff cannot

pursue a claim under § 1346(a)(1) because he does not allege that he has satisfied the

administrative prerequisites by filing a claim with the IRS and paying his full tax liability before

filing this lawsuit. See Dunlap, 2017 WL 9496075, at *2. Finally, plaintiff has not alleged facts

which, if accepted as true, support a finding that the United States erroneously or illegally

assessed or collected a tax or penalty under the internal revenue laws. See 28 U.S.C. §

1346(a)(1). Plaintiff’s tax-related claims are essentially based on his belief that the imposition of

federal income taxes is unconstitutional and he should not be legally required to pay taxes, which

is insufficient to establish a claim under the statute. See Dunlap, 2017 WL 9496075. Thus,

plaintiff cannot pursue a claim for damages against the United States and its agents under §

1346(a)(1).

Defendants also contend that the United States has not waived its immunity from suit

under 26 U.S.C. § 7433, which defendants claim is the “exclusive remedy for recovering

damages [arising] from the unauthorized collection of taxes.” (Doc. 8 at 8). Section 7433 allows

a taxpayer to bring a civil action “for actual, direct economic damages proximately caused by an

IRS agent’s reckless or intentional [or negligent] disregard of the Internal Revenue Code.”

Munaco, 502 F. Supp. 2d at 617 (citing 26 U.S.C. § 7433). Section 7433 provides that the

statute shall be “the exclusive remedy for recovering damages resulting from such actions”

except as provided in § 7432. 26 U.S.C. § 7433. Section 7432(a) allows a taxpayer to bring an

action for damages against the IRS if “an officer or employee of the [IRS] knowingly, or by

reason of negligence, fails to release a lien under section 6325 on property of the taxpayer.” 26

U.S.C. § 7432(a). Sections 7432 and 7433 both require that the plaintiff “exhaust[] the

administrative remedies available to [him] with the [IRS]” before a judgment for damages can be

awarded. Munaco, 502 F. Supp. 2d at 617; 26 U.S.C. §§ 7432(d)(1), 7433(d)(1).

Plaintiff has not stated a claim for relief for damages against the United States under §

7433 or § 7432. Plaintiff does not allege that he has exhausted any available administrative

remedies with the IRS. Further, plaintiff has not alleged facts to support a finding that an IRS

officer or employee recklessly, intentionally, or negligently disregarded an IRS statute or

regulation in assessing a tax against plaintiff for the 2000 through 2010 tax years so as to state a

claim for relief under § 7433(a). Plaintiff also has not alleged facts to show that an IRS

employee or officer knowingly or negligently failed to release a lien under § 6325 on plaintiff’s

property so as to state a claim for relief under § 7432(a). Thus, plaintiff cannot pursue a claim

for damages against the United States under § 7433 or § 7432.

Defendants also contend that while plaintiff requests only damages as relief in this

lawsuit, his claims are barred by the Anti-Injunction Act, 26 U.S.C. § 7421, to the extent he

seeks to restrain the assessment or collection of any tax. (Doc. 8 at 9). The Act provides in

relevant part that “no suit for the purpose of restraining the assessment or collection of any tax

shall be maintained in any court by any person. . . .” 26 U.S.C. § 7421(a)(1)). See also Dunlap,

2017 WL 9496075, at *2. The Anti–Injunction Act “deprives the district court of its jurisdiction

to the extent it applies.” Id. (quoting Shifman v. I.R.S., No. 95-1910, 1996 WL 721787, at *1

(6th Cir. Dec. 13, 1996)). Thus, to the extent plaintiff seeks injunctive relief related to the

assessment or collection of his taxes, his claims are barred.

Finally, defendants argue that plaintiff cannot pursue claims for constitutional violations

and other “tort-like claims” based on acts the individual defendants committed in their official

capacities while enforcing federal tax laws. (Doc. 8 at 8, citing Bivens, 403 U.S. 388). Under

Bivens, an action for money damages may be brought against federal agents acting under the

color of their federal authority for injuries caused by their unconstitutional conduct. Mueller v.

Gallina, 137 F. App’x 847, 850 (6th Cir. 2005). For liability to lie, plaintiff must show causation

between the official’s conduct and the alleged injury. Beasley v. Poole, No. 1:11-cv-63, 2011

WL 2689347, at *6 (E.D. Tenn. July 11, 2011). However, claims against federal government

officials in their official capacities cannot be brought under Bivens; suing government officials in

their official capacities “is the same as bringing suit against the United States,” and “sovereign

immunity protects the United States government and its officers and employees acting in official

capacities from Bivens claims.”5 Id. at *6-7 (citing Hafer v. Melo, 502 U.S. 21 (1991); Will v.

Michigan Dept. of State Police, 491 U.S. 58, 71 (1989); Blakely v. United States, 276 F.3d 853,

870 (6th Cir. 2002)). Thus, to the extent plaintiff brings claims against the individual defendants

in their official capacities under Bivens, the United States has not waived its sovereign immunity

and those claims should be dismissed. Id. See also Grace v. Thomas, No. 92-cv-70253-DT,

2000 WL 206336, at *4 (E.D. Mich. Jan. 3, 2000) (citing Amsberg v. United States, 757 F.2d

971, 980 (1985)).

The United States retains sovereign immunity against plaintiff’s tax-related claims. Even

if the United States had waived sovereign immunity, plaintiff has failed to exhaust all available

administrative remedies as required to pursue his claims against the Government. Plaintiff’s tax-

related claims against the United States and its agents should therefore be dismissed. See

Munaco, 502 F. Supp. 2d at 619.

ii. Claims against Judge Van Tatenhove

Judge Van Tatenhove asserts that plaintiff’s claims against him must be dismissed

because the Court lacks personal jurisdiction over him, and he is entitled to judicial immunity.

5 Bivens actions are brought against a federal agent in his individual capacity and claims against a federal agent in

his official capacity are usually brought against the United States under the FTCA. Id. (citing FDIC v. Meyer, 510

U.S. 294 (1991)).

(Doc. 8 at 9-10). The Court finds the claim of judicial immunity is dispositive and that it is not

necessary to address the personal jurisdiction issue.

Judges are largely immune from liability for acts they commit while functioning within

their judicial capacity. Norfleet v. Renner, 924 F.3d 317, 319 (6th Cir. 2019) (citing Mireles v.

Waco, 502 U.S. 9, 9, 11-12 (1991)). A plaintiff can overcome a claim of judicial immunity only

where: 1) the judge’s acts were clearly non-judicial in nature and therefore outside the scope of

the judge’s judicial capacity; or 2) the judge’s actions were taken in the absence of all

jurisdiction. Mireles, 502 U.S. at 12. The factors that are relevant to whether an act is judicial in

nature are: 1) “the nature of the act itself, i.e., whether it is a function normally performed by a

judge”; and 2) “whether [the parties] dealt with the judge in his judicial capacity.” Id.

Judge Van Tatenhove is entitled to absolute judicial immunity based on the allegations of

the complaint. Presiding over the civil lawsuit against plaintiff in the federal district court, and

rendering a judgment in the lawsuit, are functions normally performed by a judge. Further, the

parties to the prior lawsuit dealt with the judge in his judicial capacity. Plaintiff does not allege

any facts to suggest that Judge Van Tatenhove acted outside his judicial capacity or in the

absence of all jurisdiction. Judge Van Tatenhove is therefore entitled to absolute judicial

immunity on plaintiff’s claims against him. These claims should be dismissed.

iii. Claims barred by the doctrine of res judicata

Defendants argue that to the extent plaintiff’s claims are not otherwise barred, plaintiff is

precluded from bringing his claims under the doctrine of res judicata, or claim preclusion. (Doc.

8 at 11-12). The doctrine precludes parties from bringing claims when 1) a court of competent

jurisdiction has issued a final decision on the merits; 2) the subsequent action is between the

same parties or their privies as the previous action; 3) an issue in the subsequent action should

have been or was litigated in the prior action; and 4) the causes of action in the prior and

subsequent lawsuit are identical. Golden v. Comm’r, 548 F.3d 487, 494 (6th Cir. 2008).

Here, plaintiff’s claims are barred by the doctrine of res judicata insofar as his claims

relate to the assessment of tax liability for the years 2000 through 2010. First, a court of

competent jurisdiction issued a decision on the merits of plaintiff’s tax liability and held that

plaintiff was “indebted to the United States for unpaid federal income taxes, penalties, and

interest in the amount of $2,861,096.54” for the 2000 through 2010 tax years. Steele, 2018 WL

298778, at *3.

Second, plaintiff’s tax-related claims involve the same parties. Plaintiff sues the United

States and its officers and agents, who were acting in their official capacity in enforcing federal

income tax laws. As discussed supra, plaintiff’s claims must therefore be treated as claims

against the United States, which was the plaintiff in the prior civil lawsuit against him.

Third, the tax-related claims plaintiff brings here are an attempt to relitigate issues of tax

liability that were decided in the prior lawsuit. Plaintiff argued in the prior suit that he does not

have an obligation to pay federal income taxes. Steele, 2018 WL 298778, at *2. Plaintiff makes

similar allegations here. The district court rejected plaintiff’s position in the prior lawsuit and

found plaintiff liable for the disputed tax obligations. Plaintiff cannot relitigate his tax

obligations and liability in a subsequent lawsuit.

Finally, plaintiff brings causes of action in both the prior lawsuit and this case related to

his tax liability and debt for the years 2000 through 2010. A judgment determining his tax

liability and debt for these years was rendered in the prior action. Plaintiff is barred from

pursuing causes of action related to his tax liability and debt in this action. See Grace, 2000 WL

206336, at *5.

IT IS THEREFORE RECOMMENDED THAT:

Defendants’ motion to dismiss the complaint (Doc. 8) be GRANTED.

Date:__April 9, 2020 Any bea x tteout

Karen L. Litkovitz

United States Magistrate Judge

14

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

JOHN K. STEELE, Case No. 1:19-cv-00705

Plaintiff, McFarland, J.

Litkovitz, M.J.

vs.

UNITED STATES OF AMERICA, et al.,

Defendants.

NOTICE

Pursuant to Fed. R. Civ. P. 72(b), WITHIN 14 DAYS after being served with a copy of

the recommended disposition, a party may serve and file specific written objections to the

proposed findings and recommendations. This period may be extended further by the Court on

timely motion for an extension. Such objections shall specify the portions of the Report objected

to and shall be accompanied by a memorandum of law in support of the objections. If the Report

and Recommendation is based in whole or in part upon matters occurring on the record at an oral

hearing, the objecting party shall promptly arrange for the transcription of the record, or such

portions of it as all parties may agree upon, or the Magistrate Judge deems sufficient, unless the

assigned District Judge otherwise directs. A party may respond to another party’s objections

WITHIN 14 DAYS after being served with a copy thereof. Failure to make objections in

accordance with this procedure may forfeit rights on appeal. See Thomas v. Arn, 474 U.S. 140

(1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981).