Satterlee v. Commissioner of Internal Revenue
195 F. Supp. 3d 327
D.D.C.2016Background
- Satterlee, a pro se plaintiff, worked for Granite Services and claimed exemption from federal withholding on his W-4; the IRS later determined he was not exempt and assessed unpaid taxes for 1998–2008.
- The IRS issued wage and bank levies (including a Notice of Levy to Granite Services and a bank levy on First Home Bank), and funds were withheld from his wages and bank account.
- Satterlee sued the IRS, the California Franchise Tax Board, Granite Services, and First Home Bank alleging fraudulent security instruments and wrongful conversion by taxing/levying his property.
- The IRS, Granite Services, and First Home Bank moved to dismiss; the Tax Board did not respond.
- The court found Satterlee’s filings failed Rule 8’s short-and-plain-statement requirement and addressed jurisdictional, sovereign-immunity, statute-of-limitations, personal-jurisdiction, and merits issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Compliance with Rule 8 pleading requirements | Satterlee filed a long, detailed brief; claims asserted in complaint | Defendants: complaint is prolix and fails to give fair notice | Court: complaint fails Rule 8; dismissal appropriate |
| Sovereign immunity / applicability of 26 U.S.C. § 7433 | IRS levy was wrongful; Satterlee contends levies are fraudulent because his wages are not taxable | IRS: government has not waived sovereign immunity for challenges to tax assessments; § 7433 applies to collection, not assessment | Court: suit challenges assessment (no-tax-owed claim), so no waiver under § 7433; dismiss for lack of subject-matter jurisdiction |
| Statute of limitations for § 7433 claims | N/A — Satterlee did not rebut timeliness | IRS: § 7433(d)(3) two-year limit bars untimely claims; plaintiff received levy notices years earlier | Court: claims are time-barred (notice in 2009/2011; suit filed 2015); dismissal with prejudice |
| Personal jurisdiction over Granite Services and First Home Bank | Satterlee points to contacts with IRS, transfers, mailings, and interstate banking activity | Defendants: not D.C. residents; insufficient forum contacts; conduct occurred outside D.C. | Court: no basis under D.C. long-arm statute or Due Process; dismiss for lack of personal jurisdiction |
| Claims against Granite and First Home for complying with IRS levies | Satterlee alleges wrongful conversion/receipt of stolen property by complying with levies and dishonoring his W-4 exemption | Defendants: compliance with an IRS levy is statutorily privileged; employer/bank discharged from liability under 26 U.S.C. § 6332(e) | Court: compliance with levy shields them; also employer may honor IRS withholding direction despite W-4; dismissal for failure to state a claim |
| Supplemental jurisdiction over California Tax Board claims | Satterlee alleges state-law wrongful conversion and false instruments by Tax Board | Tax Board did not respond; defendants argue federal claims disposed | Court: federal claims dismissed; declines supplemental jurisdiction over state-law claims; dismisses remaining claims |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing and burden to establish jurisdiction)
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (federal courts are courts of limited jurisdiction)
- United States v. Nordic Village, Inc., 503 U.S. 30 (waiver of sovereign immunity must be unequivocal)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard — plausibility)
- Miller v. United States, 66 F.3d 220 (§ 7433 does not permit suits contesting tax assessments)
- Keohane v. United States, 669 F.3d 325 (statute of limitations for § 7433 begins at notice of levy)
- Int’l Shoe Co. v. Washington, 326 U.S. 310 (minimum contacts / due process for personal jurisdiction)