The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION AT DAYTON
CAMILIA TERRY,
Plaintiff,
Case No. 3:21-cv-33
v.
District Judge Thomas M. Rose
Magistrate Judge Michael R. Merz
JANET YELLEN, Sec’y, U.S.
Dep’t of Treasury, et al.,
Defendants.
DECISION AND ORDER
Plaintiff Camilia Terry, an inmate at Dayton Correctional Institution (“DCI”), who is
proceeding pro se, filed the instant action in the Eastern Division of this Court on January 19,
2021. (Complaint, ECF No. 1-1). It was transferred to the Western Division because it is properly
venued here (Order, ECF No. 2). Upon transfer, the undersigned ordered Terry to file an Amended
Complaint (ECF No. 7), which she did on April 6, 2021 (Am. Complt., ECF No. 8).
Having performed the initial screening of the Complaint pursuant to 28 U.S.C. § 1915A,
the undersigned ORDERS that the Complaint against Defendants Janet Yellen, Secretary of the
United States Department of Treasury; Annette Chambers-Smith, Director of the Ohio Department
of Rehabilitation and Corrections; and Charles P. Rettig1, Commissioner of Internal Revenue, all
in their respective official capacities, be ALLOWED TO PROCEED.
1 Terry erroneously lists a Samuel Jones as the Commissioner of Internal Revenue. As this is an official capacity
suit, Rettig is automatically substituted.
I. BACKGROUND
Although the Amended Complaint is not a model of clarity, Plaintiff as a pro se litigant is
entitled to a liberal consgtruction of her pleading. Haines v. Kerner, 404 U.S. 519 (1972); Urbina
v. Thoms, 270 F.3d 292, 295 (6th Cir. 2001). As the Magistrate Judge reads it, Terry alleges she
was incarcerated at DCI during the time when the Economic Impact Payments (“EIPs”) were
disbursed under the Coronavirus Aid Relief, and Economic Security Act (“CARES Act”), Pub. L.
116-136; the Consolidated Appropriations Act, 2021 (“CAA”), Pub. L. 116-260; and the American
Rescue Plan of 2021 (“ARPA”), Pub. L. 117-2 (Am. Compl., ECF No. 8, PageID 95, ¶ 1).
However, Terry never received the funds. She alleges that Yellen and Rettig refused to disburse
the funds as a result of her incarcerated status, despite a federal court order enjoining them from
doing so, or that Chambers-Smith or ODRC employees received the funds, but unlawfully refused
to disburse the funds to her. Id. at PageID 95-96, ¶¶ 1-3. Terry claims that these refusals violated
her right to due process under the Fifth and Fourteenth Amendments. Id.
Although not listed in her Amended Complaint, the case to which Terry refers is Scholl v.
Mnuchin, 494 F. Supp. 3d 661 (N.D. Cal. 2020) (“Scholl II”), appeal dismissed at No. 20-17077
(9th Cir. Dec. 11, 2020). In Scholl, a nationwide class of incarcerated individuals sued over the
Department of Treasury and Internal Revenue Service’s (“IRS”) withholding of CARES Act
payments to inmates, despite the IRS’s “issu[ing] a news release that the agency would calculate
and automatically issue an EIP to eligible individuals.” Scholl v. Mnuchin, 489 F. Supp. 3d 1008,
1021-22 (N.D. Cal. 2020), appeal dismissed at No. 20-16915, 2020 WL 9073361 (9th Cir. Nov.
20, 2020) (“Scholl I”). On September 24, 2020, Judge Patricia J. Hamilton concluded that the
Defendants had violated the Administrative Procedures Act and issued a preliminary injunction
requiring Defendants to “reconsider advance refund payments to those who are entitled to such
payment based on information available in the IRS's records (i.e., 2018 or 2019 tax returns), but
from whom benefits have thus far been withheld, intercepted, or returned on the sole basis of their
incarcerated status.” Id. at 1047.
On October 14, 2020, Judge Hamilton held that Defendants’ decision to prevent EIPs from
being disbursed to incarcerated individuals was arbitrary and capricious, in violation of the
Administrative Procedures Act, Scholl II, 494 F. Supp. 3d at 690, and permanently enjoined
Defendants “from withholding benefits pursuant to 26 U.S.C. § 6428 from plaintiffs or any class
member on the sole basis of their incarcerated status.” Id. at 693. On November 10, 2020,
Defendants informed that Court that they had begun to take away “markers” from the files of
otherwise eligible incarcerated individuals, and that the removal of those markers should enable
those individuals “will now automatically be included in payment files provided to the Bureau of
Fiscal Service (BFS), if they meet the eligibility criteria.” (Case No. 4-20-cv-5309-PJH, Status
Report, ECF No. 155, p. 2). On December 7, 2020, Defendants informed the California court that
352,166 inmates had received CARES Act payments as a result of Defendants’ “reconsideration”
(Status Report, ECF No. 161, pp. 2-3). Judge Hamilton entered final judgment on January 21,
2021, leaving the permanent injunction in place and maintaining jurisdiction over compliance
(ECF No. 184).
II. LEGAL STANDARD
Because Plaintiff is pro se and proceeding in forma pauperis, the Court must dismiss the
Complaint, or any portion of it, that “is frivolous or malicious; fails to state a claim upon which
relief can be granted; or seeks monetary relief from a defendant who is immune from such relief.”
28 U.S.C. § 1915(e)(2)(B). “A claim is frivolous if it lacks ‘an arguable basis either in law or in
fact.’” Flores v. U.S. Att’y Gen., No. 2:14-cv-84, 2014 WL 358460, at *2 (S.D. Ohio Jan. 31,
2014) (quoting Neitzke v. Williams, 490 U.S. 319, 325 (1989)). This occurs when “‘indisputably
meritless’” legal theories underlie the complaint, or when a complaint “relies on ‘fantastic or
delusional’ allegations.” Id. (quoting Neitzke, 490 U.S. at 327-28).
In reviewing a complaint, the Court must construe it in Plaintiff’s favor, accept all well-
pleaded factual allegations as true, and evaluate whether it contains “enough facts to state a claim
to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Still,
a court is not required to accept factual allegations set forth in a complaint as true when such
factual allegations are “clearly irrational or wholly incredible.” Ruiz v. Hofbauer, 325 F. App’x
427, 429-30 (6th Cir. 2009). “A claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at
556). Although pro se complaints are to be construed liberally, Haines, supra, “basic pleading
essentials” are still required. Wells v. Brown, 891 F. 2d 591, 594 (6th Cir. 1989).
III. ANALYSIS
At this stage of the case, the Court must accept as true Terry’s allegation that she has not
received payments from the CARES Act, CAA, or, ARPA (Am. Compl., ECF No. 8, PageID 95,
¶ 1). The nationwide injunction preventing the Department of Treasury or IRS from withholding
EIPs solely on the basis of incarcerated status remains in effect. Thus, unless there is some
additional reason (e.g., child support offset) that would render her ineligible to receive EIPs, the
failure to disburse is in violation of the injunction. Moreover, if the Department of Treasury or
IRS has disbursed the funds to ODRC, but Chambers-Smith or ODRC employees have failed to
deposit the funds in prisoner accounts, then that failure would also be unlawful. Thus, Terry has
pled a plausible claim for relief that is not foreclosed as a matter of law, and her complaint should
be allowed to proceed to issuance of process against Defendants.
IV. CONCLUSION
Having performed the initial screen pursuant to 28 U.S.C § 1915A, the undersigned
ORDERS that Plaintiff’s Complaint against Yellen, Chambers-Smith, and Rettig be ALLOWED
TO PROCEED.
Because Defendants Yellen and Rettig are officers or employees of the United States sued
only in their official capacities, Plaintiff must serve process on the United States pursuant to
Fed.R.Civ.P. 4(i) by (1) delivering a copy of the Summons and Amended Complaint to Acting
United States Attorney Vipal Patel at the Walter H. Rice. Federal Building and United States
Courthouse and (2) sending a copy of the Summons and Complaint by certified mail to Merrick
Garland, the Attorney General of the United States, at the Department of Justice in Washington
D.C. Summons and copies of the Amended Complaint for service shall be prepared by the Clerk.
The service ordered in this paragraph shall be accomplished by the United States Marshal who
shall make due return thereof and the Clerk shall prepare the required Marshal Service Form 285.
28 U.S.C. § 1915(d).
Because Defendant Chambers-Smith is sued in her official capacity only, she must be
served by delivering a Summons and a copy of the Amended Complaint to her by certified mail,
return receipt requested, issued by the Clerk of this Court. The process and the service copies of
the Amended Complaint shall be prepared by the Clerk. 28 U.S.C. § 1915(d).
The Clerk shall promptly note return of service of process on the docket of this case.
IT IS SO ORDERED.
June 24, 2021.
s/ Michael R. Merz
United States Magistrate Judge