Erhard v. U.S. Civ. No. 93-0725 (1994)
United States District Court, District of Columbia.
Werner H. ERHARD, Plaintiff
UNITED STATES of America, Defendant.
Civ. No. 93-0725 (NHJ).
March 29, 1994.
- MEMORANDUM AND ORDER
- NORMA HOLLOWAY JOHNSON, District Judge
Plaintiff in this action seeks to recover for alleged unauthorized disclosures of tax return information to members of the news media by employees of the internal Revenue Service ("IRS"). The first count of the complaint alleges violation of 26 U.S.C. § 6103 (which forbids disclosure of return information except under limited circumstances) and seeks civil damages under 28 U.S.C. § 7431. The remaining four counts of the complaint seek damages pursuant to the Federal Tort Claims Act ("FTCA"), 28 U.S.C. §§ 2671-2680, under various common law tort theories. Defendant has moved to dismiss these last four counts on the ground that plaintiff has failed to exhaust his administrative remedies under the FTCA, and on the ground that venue is improper in this district under the FTCA.
The FTCA waives the government's sovereign immunity with respect to liability for money damages for certain tort claims asserted against the United States. Nelson v. United States, 838 F.2d 1280, 1282 (D.C.Cir.1988). However, the FTCA provides that a suit against the United States cannot be instituted "unless the claimant shall have first presented the claim to the appropriate Federal agency and his claim shall have been finally denied by the agency in writing." 28 U.S.C.A. § 2675(a) (West Supp.1993). This provision has been interpreted to require a claimant to file with the agency "(1) a written statement sufficiently describing the injury to enable the agency to begin its own investigation, and (2) a sum-certain damages claim." GAF Corp. v. United States, 818 F.2d 901, 919 (D.C.Cir.1987). The requirement that a claimant exhaust his or her administrative remedies in this fashion is jurisdictional and cannot be waived. Hohri v. United States, 782 F.2d 227, 245-46 (D.C.Cir.1986), rev'd on other grounds, 482 U.S. 64 (1987). If an agency does not deny a claim within six months after it is filed, a claimant may then treat the claim as if it had been denied and file suit. See 28 U.S.C.A. § 2675(a) (West Supp.1993).
Plaintiff filed the complaint in this action on April 8, 1993, seeking to recover for events that allegedly occurred between April 11 and April 15, 1991. The complaint alleges that plaintiff exhausted his administrative remedies under the FTCA because his counsel (1) sent two letters to the IRS on April 17, 1991 ("the 1991 letters"), and (2) submitted a "supplemental request for administrative relief" to the IRS on April 7, 1993 ("the 1993 letter"). See Compl. at 12. Defendant argues that the 1991 letters were deficient because they did not contain sum-certain damages claims. Plaintiff responds that the 1991 letters did contain sum-certain damages claims and argues further that even if the 1991 letters were defective, any defects were cured by the 1993 letter.
Before discussing the issues raised in defendant's motion to dismiss, the Court first notes that the passage of time has not rendered defendant's motion moot. Because defendant's motion to dismiss was filed some time ago, more than six months have now passed since plaintiff delivered the 1993 letter to the IRS. Because the parties agree that the 1993 letter is a valid administrative claim under the FTCA, see Decl. of Richard L. Schutz (appended to Def.'s Mot. to Dismiss) at 1-2, it might seem that the FTCA counts of the complaint need not be dismissed because plaintiff has now exhausted his administrative remedies. This is not the case. If a complaint is prematurely filed, a court cannot simply wait until the six-month period elapses and then assert jurisdiction; it may assert jurisdiction over a case only when the complaint is filed after the six-month period. McNeil v. United States, 113 S.Ct. 1980, 1983 (1993). If the Court concludes that the 1991 letters were not valid administrative claims, therefore, then it must dismiss plaintiff's suit under the FTCA despite his later submission of the 1993 letter. Because plaintiff filed his complaint less than six months after delivering the 1993 letter, the 1993 letter cannot provide the Court with independent grounds for jurisdiction over this action.
The Court thus proceeds to consideration of defendant's motion to dismiss. The Court must reject plaintiff's argument that the 1991 letters contained sum-certain damages claims. In the first place, neither of the letters was a "claim" at all. Instead, each letter described several alleged disclosures of information and then concluded with the following two paragraphs: [FN1]
As you know, pursuant to 26 USC § 6103, tax returns and return information are confidential and disclosure is strictly prohibited except as specifically authorized. Even if disclosure is authorized, the Internal Revenue Service and its employees are not authorized to release defamatory, incorrect, false and misleading information. Criminal penalties are imposed against officers or employees of the United States who intentionally make unauthorized disclosures of returns or return information and civil damages can be recovered from the United States. 26 USC §§ 7213, 7431(a); 5 USC §§ 552a(g)(1) and (i)(1).
The publication of unsubstantiated, erroneous and incomplete information about Werner Erhard is a serious matter which we intend to pursue on behalf of our client. The allegations emanating from the IRS have damaged Erhard's personal and business reputation and have caused him emotional distress. Accordingly, we ask that you immediately advise us if you were misquoted in any of the articles or if the information attributed to you was not in fact provided by you. Furthermore, we ask that you advise us of the legal basis upon which you relied in making the disclosures to the media.
See Ex. A. to Pl.'s Opp'n to Mot. to Dismiss at 2. Neither letter mentions the FTCA. Plaintiff nevertheless argues that the 1991 letters were "claims" because these two paragraphs "clearly stated that the plaintiff would pursue the matters described in the letter and that Section 7431 provided for civil damages against the IRS." Pl.'s Opp'n to Mot. to Dismiss at 4. The Court concludes otherwise. Nowhere in the letters did plaintiff demand payment from the IRS. The letters concluded with requests for information, not with requests for compensation. The letters therefore were not "claims," for under the FTCA "[i]t is plain that the required 'claim' is something more than mere notice of an accident and an injury. The term 'claim' contemplates, in general usage, a demand for payment or relief, and, unless it is a claim for something, is no claim at all." Avril v. United States, 461 F.2d 1090, 1091 (9th Cir.1972). Because the 1991 letters made no "claim for something," they were insufficient under the FTCA.
It makes no difference that plaintiff expressed an intention to "pursue the matters described in the letter" because the letters did not specify whom he intended to "pursue." The IRS could easily have concluded from the letters, for example, that plaintiff was contemplating a suit against the newspapers which published the allegedly confidential information. Indeed, plaintiff in his letters does not even explicitly accuse the IRS of making the disclosures. Instead, he speculates that the IRS employees might have been "misquoted" and asks them to inform him if the confidential information "was not in fact provided" by them. The letters thus do not fulfill the purpose of the exhaustion requirement, which exists in order to permit a federal agency "to investigate and ascertain the strength of a claim" and "to determine whether settlement or negotiations to that end are desirable." GAF Corp., 818 F.2d at 920. An agency would have no reason to begin an investigation after receiving letters such as these, which lay no blame and demand no redress.
The 1991 letters were also insufficient because they failed to make a "sum-certain damages claim." The complaint in the instant case seeks damages of $28,380,000, an amount which plaintiff alleges is equal to "$1,000 for each newspaper that published the articles ... and each recipient of the wire service story" containing allegedly confidential information. Compl. at 13. The 1991 letters, by contrast, contain no dollar figure whatsoever, and are therefore insufficient. See Montoya v. United States, 841 F.2d 102, 105 (5th Cir.1988) (claim that failed to suggest dollar sum was not valid notice); Adams v. United States Dep't of Hous. & Urban Dev., 807 F.2d 318, 321 (2d Cir.1986) ("[A] claimant's failure to state any dollar amount in his administrative claim would give the government no notice of the extent of his claim and would, under § 2675(b), deprive the court of jurisdiction to consider his subsequent suit."). The cases plaintiff cites, see Pl.'s Opp'n to Mot. to Dismiss at 7 n. 4, are inapposite. These cases do not stand for the proposition that a FTCA claim need not state a specific dollar figure. Instead, they merely hold that a damages claim is not wholly invalid simply because it adds improper qualifying language to a specific dollar figure. See, e.g., Corte-Real v. United States, 949 F.2d 484, 486-87 (1st Cir.1991) (claim for "$100,000 plus" treated as claim for $100,000); Martinez v. United States, 728 F.2d 694, 697 (5th Cir.1984) (claim for "in excess of $100,000" stated sum certain because "surplus verbiage" could be ignored). Plaintiff has cited no case holding that he need not state any dollar figure at all.
Plaintiff claims that the letters nevertheless "gave the IRS sufficient notice of the dollar amount involved in the claim by referring to a possible suit for civil damages under Section 7431. Section 7431 provides for liquidated damages equal to $1,000 for each disclosure." Pl.'s Opp'n to Mot. to Dismiss at 7. The implication is that the IRS could have multiplied the number of disclosures by $1,000 and determined the value of the claim. The Court rejects this argument, for to accept it would place an undue burden upon federal agencies. A letter does not contain a sum-certain damages claim simply because it cites a federal statute that contains a liquidated damages provision. Agencies should not be required to scrutinize every federal statute cited in letters from potential claimants to determine whether they contain liquidated damages provisions. Cf. Bembenista v. United States, 866 F.2d 493, 499 (D.C.Cir.1989) ("To ask an agency to contemplate the nuances of every sentence in [an 'unfocused' FTCA] submission would hold it to a standard that even a court would be pressed to match."). The Court also notes that nowhere in the 1991 letters does plaintiff mention the 28,380 alleged disclosures of return information which form the basis, in his complaint, for his claim to $28,380,000 in damages.
Plaintiff next argues that even if the 1991 letters did not contain a sum-certain damages claim, they were nevertheless "amended" by the 1993 letter to include one. "Since the date of the amended claim is retroactive to April 17, 1991," plaintiff argues, "jurisdiction lies in this Court for this action because more than six months has passed since the date of the claim." Pl.'s Opp'n to Mot. to Dismiss at 9. The Court must reject this argument as well. The Court acknowledges that regulations promulgated by the Department of Justice permit claimants to amend their administrative claims under certain circumstances. See 28 C.F.R. § 14.2(c) (1993). However, as explained above, the letters were not "claims" because they did not charge the IRS with wrongdoing and did not request relief. They were therefore insufficient to fulfill the purposes of the exhaustion requirement, which exists to encourage out-of-court settlement of claims. See GAF Corp., 818 F.2d at 920. Indeed, the Court notes that plaintiff delivered the 1993 letter to the IRS on April 7, 1993, only one day before filing the complaint in this action. See Compl. at 12. This period was obviously insufficient to permit the IRS to investigate plaintiff's claim or to determine whether settlement might be desirable. In short, the 1993 letter could not have amended plaintiff's claim because plaintiff had no claim to amend.
Because the Court concludes that it lacks jurisdiction to hear plaintiff's FTCA claims, it will not address defendant's arguments that venue under the FTCA is improper in this district. Accordingly, it is this 28th day of March, 1994,
ORDERED that defendant's Motion to Dismiss Counts 2, 3, 4, and 5 of the Complaint be, and hereby is, granted; and it is further
ORDERED that counts 2, 3, 4, and 5 of the complaint be, and hereby are, dismissed.
FN1. These portions of the two letters differ slightly.
Erhard v. U.S.