Roland Graham v. Department of the Treasury IRS

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

___________

No. 22-1285

__________

ROLAND GRAHAM; CESAR SAEZ; CHARLES GREEN, Lieutenant; FERNANDO

MIRAYE; ANTWON RICHARD; DURWARD ALLEN; DOUG WEISER; ANDRE DAVIS;

NAFECE MARTIN; WYKEEM BAS

ROLAND GRAHAM,

Appellant

v.

DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE

____________________________________

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. Civil Action No. 2:21-cv-01411)

District Judge: Honorable Gerald J. Pappert

____________________________________

Submitted Pursuant to Third Circuit LAR 34.1(a)

March 21, 2023

Before: JORDAN, GREENAWAY, JR., and NYGAARD, Circuit Judges

(Opinion filed May 23, 2023)

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OPINION*

___________

*

This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not

constitute binding precedent.

PER CURIAM

Roland Graham, a Pennsylvania prisoner, appeals pro se from an order of the

United States District Court for the Eastern District of Pennsylvania dismissing, for lack

of standing, a complaint brought against the Internal Revenue Service (IRS) seeking

COVID-19 stimulus payments under the Coronavirus Aid, Relief, and Economic Security

Act of 2020 (the “CARES Act”). For the following reasons, we will affirm in part,

vacate in part, and remand the matter to the District Court for further proceedings.

In his complaint, Graham alleged that the IRS “cannot deny economic impact

payments” (EIPs) under the CARES Act to incarcerated individuals.1 (ECF 2, at 4.) He

sought an order directing the IRS “to immediately release 3 stimulus checks.” (Id. at 6.)

In support of his claim, Graham relied on Scholl v. Mnuchin, 494 F. Supp. 3d 661, 687

(N.D. Cal. 2020), where the district court, in a class action, concluded that the CARES

Act’s definition of “eligible individual” included incarcerated individuals. (ECF 2, at 1.)

The District Court assumed without deciding that the United States had waived its

sovereign immunity for claims under the CARES Act and that a person seeking payment

under that Act need not exhaust administrative remedies by first filing a claim with the

1

The complaint named additional prisoner-plaintiffs, but the District Court dismissed

those individuals without prejudice because they failed to pay the fees or submit

applications to proceed IFP. (ECF 36.) Any attempt by Graham to challenge the

dismissal of the other plaintiffs lacks merit. Those plaintiffs did not file notices of appeal

and it is well-settled that non-lawyers may not represent third parties in federal court.

Osei-Afriyie ex rel. Osei-Afriyie v. Med. Coll. of Pa., 937 F.2d 876, 882-83 (3d Cir.

1991).

2

IRS. (ECF 38, at 4-5.) Nevertheless, the District Court held that Graham lacked

standing: “Graham has not established that he has suffered an injury or will suffer an

injury if the Court does not address his claims because the CARES Act did not grant an

eligible individual a right to an immediate economic impact payment.” (Id. at 6.)

According to the District Court, Graham’s “claim to an economic impact payment would

not be infringed upon unless and until he files his 2020 tax return and is denied the

payment by the IRS.” (Id.) By order entered November 17, 2021, the District Court sua

sponte dismissed the complaint without prejudice for lack of standing.2 Graham

appealed.3 (ECF 45.) He also filed a motion for recusal of the District Court judge.

(ECF 45.) The District Court rejected that motion (ECF 46), as it had done with an

earlier-filed recusal motion.4 (ECF 18; 25.)

2

Although the District Court cited 28 U.S.C. § 1915(e)(2)(B)(ii), which pertains to

dismissals for failure to state a claim on which relief may be granted, it clearly concluded

that Graham’s lack of standing deprived it of jurisdiction. (ECF 38, at 6.)

3

Where, as here, a United States agency is a party to the case, a litigant generally must

file his notice of appeal within 60 days of the entry of the final order being appealed. See

Fed. R. App. P. 4(a)(1)(B). Graham did not file his notice of appeal within 60 days of the

entry of the District Court’s order of November 17, 2021. But this appeal is nevertheless

timely because the District Court reopened the time to appeal pursuant to Federal Rule of

Appellate Procedure 4(a)(6), and Graham filed a notice of appeal before the expiration of

the 14-day reopening period authorized by Rule 4(a)(6).

4

There was no abuse of discretion in the District Court’s denial of Graham’s recusal

motions, which primarily were based on allegedly unfavorable rulings. Securacomm

Consulting, Inc. v. Securacom Inc., 224 F.3d 273, 278 (3d Cir. 2000).

3

We have jurisdiction pursuant to 28 U.S.C. § 1291,5 and our review of a dismissal

for a lack of standing is plenary. See Goode v. City of Philadelphia, 539 F.3d 311, 316

(3d Cir. 2008).

In a non-precedential opinion, we vacated a district court’s dismissal order, like

the one here, that was based on a determination that the plaintiff lacked standing to

challenge the denial of EIPs under the CARES Act because he had not submitted a tax

return before filing suit. Morton v. United States Virgin Islands, No. 21-1292, 2021 WL

6137867, at *2-3 (3d Cir. Dec. 29, 2021) (not precedential). We explained that the

possibility that the plaintiff “did not file a tax return before suing … bear[s] on the merits

of [his] claims rather than whether he had standing to bring them.” Id. at *3. We

concluded that those “arguments [are] for a motion to dismiss for failure to state a claim,

not a motion to dismiss for lack of subject matter jurisdiction.” Id. Accordingly, we

remanded the matter for further proceedings. Id.

Based on the reasoning in Morton, we conclude that the District Court here erred

in sua sponte dismissing the complaint for lack of standing. The IRS maintains, however,

that “the District Court correctly dismissed the complaint, even if for different reasons

than the one it relied on.” Appellee’s Br., 22. In particular, the IRS asserts that

5

Although the District Court dismissed the complaint without prejudice, we conclude

that Graham has elected to stand on the complaint. See Borelli v. City of Reading, 532

F.2d 950, 951-52 (3d Cir. 1976) (per curiam).

4

Graham’s claims for monetary relief6 are “foreclosed because [he] has not alleged that he

filed a 2020 tax return (and in fact, he has not filed one) or an administrative claim for

refund or credit of the amounts allowed by the CARES Act.” Appellee’s Br., at 27-28.

We acknowledge, of course, that we may affirm on any basis supported by the record.

See Murray v. Bledsoe, 650 F.3d 246, 247 (3d Cir. 2011) (per curiam). But we disfavor

dismissing a complaint without giving a pro se litigant an opportunity to amend. See

Grayson v. Mayview State Hosp., 293 F.3d 103, 106 (3d Cir. 2002). Here, it is not clear

that leave to amend would be futile. Although the IRS asserts that Graham has not filed a

2020 tax return or an administrative claim for a refund or credit, see Appellee’s Br., 17,

the evaluation of those contentions, which are fact-contingent, must be made by the

District Court in the first instance.7 See Sewak v. I.N.S., 900 F.2d 667, 673 (3d Cir.

1990) (“As an appellate court we do not take testimony, hear evidence or determine

disputed facts in the first instance. Instead, we rely upon a record developed in those fora

that do take evidence and find facts.”).

6

We agree with the IRS that, to the extent that Graham sought a declaration that the IRS

may not withhold EIPs based solely on his incarcerated status, his claims were properly

dismissed because the relief he requested duplicated the relief granted by the class action

in Scholl. Appellee’s Br., at 27; see also Pride v. Correa, 719 F.3d 1130, 1133 (9th Cir.

2013) (recognizing that a district court may dismiss individual claims that duplicate a

class action’s allegations and prayer for relief).

7

The IRS also argues that “no more EIPs may now be issued” because the CARES Act

“imposed a deadline of December 31, 2020 for the IRS to issue advance payments of

refunds ….” Appellee’s Br., 17. But the IRS acknowledges that after December 31,

2020, the amount of the EIP is still “allowable as a recovery rebate credit against a

taxpayer’s 2020 income tax.” Id. at 24.

5

For the foregoing reasons, we will affirm in part, vacate in part, and remand to the

District Court for further proceedings consistent with this opinion.8

8

Graham’s numerous outstanding motions are denied.

6