United States v. Askins & Miller Orthopaedics, P.A.
8:17-cv-00092
M.D. Fla.Sep 21, 2017Background
- The United States filed a motion for a preliminary injunction requiring Askins & Miller Orthopaedics, P.A. and individual defendants Roland V. Askins III and Philip H. Askins to comply with employment-tax obligations (collect employee withholding and employer FICA shares; segregate funds; refrain from transfers; provide affidavits; notify IRS of new businesses).
- The motion sought prospective relief and demanded payment and compliance going forward; the complaint referenced unpaid employment taxes exceeding $270,000 as of January 5, 2017.
- The government submitted an affidavit from IRS revenue officer Richard Paulsen in support; the court found the affidavit conclusory and deficient.
- The government argued injunctive relief was necessary and appropriate under 26 U.S.C. § 7402(a) and sought traditional preliminary-injunction relief factors to be met.
- Defendants opposed the motion; the court held a hearing on September 19, 2017.
- The court denied the motion without prejudice, finding the government had not shown § 7402(a) relief was necessary or demonstrated a substantial likelihood of success; it also expressed concerns about the enforceability of the requested "obey-the-law" injunction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a preliminary injunction under 26 U.S.C. § 7402(a) requiring payment and prospective compliance with employment-tax obligations is appropriate | Govt: § 7402(a) authorizes injunctions necessary to enforce internal revenue laws; preliminary-injunction factors met | Deft: Opposed (argued insufficiency of govt showing and challenged relief) | Denied without prejudice—government failed to show injunction necessary or likelihood of success |
| Sufficiency of the government's affidavit evidence to support preliminary relief | Govt: Revenue officer affidavit supports need for injunction | Deft: Affidavit is conclusory and insufficient | Court: Paulsen affidavit is conclusory and deficient |
| Whether the requested relief is an enforceable "obey-the-law" injunction | Govt: Seeks prospective compliance measures and enforcement | Deft: Relief is essentially an "obey-the-law" injunction and thus problematic | Court: Observed such injunctions are often unenforceable in the Eleventh Circuit and this weighed against relief |
| Appropriateness of requiring defendants to notify IRS of future business activities | Govt: Seeks notification as part of prospective oversight | Deft: Challenged necessity and scope | Court: Questioned justification; government failed to explain need in affidavit |
Key Cases Cited
- United States v. Ernst & Whinney, 735 F.2d 1296 (11th Cir. 1984) (traditional equitable factors apply to injunctions under § 7402(a))
- Keeton v. Anderson-Wiley, 664 F.3d 865 (11th Cir. 2011) (lists preliminary-injunction factors)
- Younger v. Harris, 401 U.S. 37 (1971) (equitable relief generally inappropriate when adequate legal remedies exist)
- O'Hair v. Hill, 641 F.2d 307 (5th Cir. 1981) (discussing limits on equitable relief when legal remedies suffice)
- S.E.C. v. Graham, 823 F.3d 1357 (11th Cir. 2016) (expressing skepticism about enforceability of "obey-the-law" injunctions)
- Fla. Ass'n of Rehab. Facilities v. Fla. Dep't of Health & Rehab. Servs., 225 F.3d 1208 (11th Cir. 2000) (citing cases holding "obey-the-law" injunctions unenforceable)
- S.E.C. v. Goble, 682 F.3d 934 (11th Cir. 2012) (recognizing circumstances where injunctions enjoining statutory violations may comply with Rule 65(d))