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Parsons v. North Carolina Department of Revenue

United States District Court, E.D. North Carolina, Western Division

May 20, 2019

KENNETH R. PARSONS, JR., Plaintiff,
v.
NORTH CAROLINA DEPARTMENT OF REVENUE, STATE OF NORTH CAROLINA, Defendants.

          ORDER

          Louise W. Flanagan United States District Judge.

         This matter is before the court on defendants' motion to dismiss for lack of subject matter jurisdiction, lack of personal jurisdiction, insufficient process, insufficient service of process, and failure to state a claim pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(2), 12(b)(4), 12(b)(5) and 12(b)(6) (DE 27). Also pending before the court are plaintiff's motion for reconsideration of the court's order denying preliminary injunctive relief (DE 35), defendants' motion to strike plaintiff's amended complaint or in the alternative second motion to dismiss pursuant to Rules 12(b)(1), 12(b)(2), and 12(b)(6) (DE 39), and plaintiff's motion for extension of time to respond to defendants' motion to strike and second motion to dismiss (DE 42). The court construes plaintiff's filing of his first amended complaint (DE 37) as a motion for leave to amend pursuant to Rule 15(a)(2). The issues raised have been fully briefed, and in this posture are ripe for disposition.

         For the reasons that follow, plaintiff's motion to amend is granted, and defendants' first motion to dismiss and motion to strike are denied as moot. Defendants' second motion to dismiss is granted for lack of subject matter jurisdiction, and plaintiff's motion for reconsideration is denied as moot. Plaintiff's motion for extension of time to respond to the motion to strike is denied as moot, and his motion for extension of time to respond to defendants' second motion to dismiss is denied.

         STATEMENT OF THE CASE

         Plaintiff, proceeding pro se, commenced this action in the United States District Court for the Northern District of Texas on June 11, 2018, alleging that defendants unlawfully levied taxes against him in violation of his federal constitutional rights because he is a “nontaxpayer.” Plaintiff's case was transferred to this district on September 12, 2018. On frivolity review, the court dismissed plaintiff's claims against defendant Bank of America, but allowed plaintiff's remaining claims to proceed. Following plaintiff's efforts to serve defendants, defendants filed their first motion to dismiss on March 4, 2019. Defendants contend that plaintiff is barred from pursuing his case in federal district court, that service was never perfected, and that plaintiff fails to allege facts sufficient to state a claim.

         Shortly after defendants filed their first motion to dismiss, the court denied motion from plaintiff seeking preliminary injunctive relief preventing defendants from collecting money from him. The court reasoned that the Tax Injunction Act deprived the court of jurisdiction to provide injunctive relief, in light of the plain, speedy, and efficient remedy under North Carolina law for challenging tax assessments. Plaintiff moved for reconsideration on March 28, 2019, arguing that the law only protects taxpayers, and he is not a taxpayer able to take advantage of the administrative remedies provided under state law.

         On April 8, 2019, plaintiff filed his first amended complaint. Defendants moved to strike the first amended complaint approximately one week later, arguing that the allegations contained therein are substantively the same, and that plaintiff seeks to delay adjudication of their motion to dismiss. In the alternative, defendants move to dismiss plaintiff's first amended complaint on the same grounds as his original complaint, incorporating their prior arguments by reference.

         STATEMENT OF FACTS

         The facts in the complaint[1] may be summarized as follows. On or about February 17, 2017, defendant North Carolina Department of Revenue (“NCDOR”) garnished plaintiff's bank account for an alleged tax debt for tax year 2010 in excess of $2, 800.00. (Compl. ¶ 7). Plaintiff challenged this alleged tax debt, requested a hearing, and mailed a cease and desist order to defendant NCDOR on June 27, 2017. (Id. ¶ 8). Plaintiff argued to defendant NCDOR that it “lacked legal standing” and “lacked jurisdiction” over plaintiff. (Cease and Desist Letter (DE 37-1) at 1-2). Plaintiff received no response. (Compl. ¶ 8). On or about December 6, 2017, defendant NCDOR again garnished plaintiff's checking account in the amount of $1, 260.60 for the same alleged 2010 tax debt. (Id. ¶ 10). Plaintiff mailed another notice to demand proof of his tax liability. (Id. ¶ 11). On or about January 25, 2018, plaintiff received another notice for an alleged tax debt for 2012 amounting to over $4, 700.00. (Id. ¶ 12). Plaintiff mailed another formal challenge to defendant NCDOR on or about February 1, 2018, demanding that they stop collection activity. (Id.). On or about June 1, 2018, plaintiff mailed defendants notice of intent to file a lawsuit. (Id. ¶ 14).

         COURT'S DISCUSSION

         A. Plaintiff's Motion to Amend (DE 37)

         Plaintiff filed his first amended complaint. Where plaintiff proceeds pro se, the court construes the filing as a motion to amend his complaint. When a party seeks leave to amend after a responsive pleading or Rule 12(b) motion has been filed, the party “may amend its pleading only with the opposing party's written consent or the court's leave.” Fed.R.Civ.P. 15(a)(2). “The court should freely give leave when justice so requires.” Id. “In the absence of any apparent or declared reason - such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. - the leave sought should, as the rules require, be ‘freely given.'” Foman v. Davis, 371 U.S. 178, 182 (1962).

         Plaintiff's first amended complaint does not change his factual allegations, but it does raise new legal arguments relevant to the other motions pending in the case. Defendants argue that the allegations of the complaint are not substantively different, that they would be prejudiced because amending the pleading would terminate their first motion to dismiss, and that the allegations are futile. Defendants have already raised a second motion to dismiss plaintiff's complaint on similar grounds as plaintiff's original complaint, therefore they are not prejudiced by granting plaintiff leave to amend. The court grants plaintiff's motion to amend, and denies as moot defendants' motion to strike and plaintiff's motion for extension of time to respond to defendants' motion to strike.

         As a general rule, “an amended pleading ordinarily supersedes the original and renders it of no legal effect.” Young v. City of Mount Ranier, 238 F.3d 567, 573 (4th Cir. 2001) (internal quotations omitted); see also 6 Charles Alan Wright, et al., Fed. Prac. & Proc. § 1476 (3d ed. 1998) (“A pleading that has been amended under Rule 15(a) supersedes the pleading it modifies and remains in effect throughout the action unless it subsequently is modified. . . . Once an amended pleading is interposed, the original pleading no longer performs any function in the case”). Where an amended complaint has been filed with leave of court, motions to dismiss earlier ...


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