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Inc. v. United States

United States District Court, N.D. Texas, Dallas Division

November 28, 2017

TONY AND MII'S, INC., TONY THANGSONGCHAROEN, and SOMNUEK THANGSONGCHAROEN Plaintiffs,
v.
THE UNITED STATES OF AMERICA Defendant.

          MEMORANDUM OPINION AND ORDER

          JANE J. BOYLE UNITED STATES DISTRICT JUDGE

         Before the Court is Defendant's Motion for Partial Dismissal. Doc. 14. For the reasons that follow, the Court GRANTS in part and DENIES in part Defendant's motion.

         I.

         BACKGROUND[1]

         This dispute arises from the Internal Revenue Service's (IRS) seizure and sale of assets to satisfy an alleged tax delinquency. Plaintiffs Tony and Somnuek Thangsongcharoen owned and operated a boutique bridal store called Tony and Mii's (Mii's). Doc. 1, Pls.' Compl., ¶ 17. Mii's is also a plaintiff in this case. In March 2015, IRS agents seized the store's inventory and sold it at auction because Mii's allegedly owed $31, 422.46 in back taxes. Id. ¶¶ 16, 19. According to Plaintiffs, the IRS agents intentionally erroneously classified the inventory as perishable goods in order to avoid the prescribed public notice and waiting period that accompanies the seizure and sale of other goods. Id. ¶¶ 19-20. Instead, Plaintiffs claim, Mii's inventory was sold at private auction for far less than market value only four hours after the assets were seized. Id. ¶ 28. Plaintiffs also allege that the IRS agents seized items besides those authorized to be seized. Id. ¶ 37. Allegedly, the IRS's actions resulted in economic damages so severe that Mii's was unable to recover and is no longer in operation. Id. ¶ 40.

         Plaintiffs filed suit under 26 U.S.C. §7433, which allows damages for unauthorized collection actions, and 26 U.S.C. §7426 (h), which allows damages for wrongful levy. Id. ¶¶ 15-65.[2] The United States then filed a motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Doc. 14, Def.'s Mot. to Dismiss. The United States moved to dismiss the Thangsongcharoens' §7433[3] and §7426 claims and Mii's' requests for health-related and reputation damages related to its §7433 claim. Id. The United States' motion is ripe for review.

         II.

         LEGAL STANDARD[4]

         Under Rule 8(a)(2) of the Federal Rules of Civil Procedure, a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Rule 12(b)(6) authorizes a court to dismiss a plaintiff's complaint for “failure to state a claim upon which relief can be granted.” Id. 12(b)(6). In considering a Rule 12(b)(6) motion to dismiss, “[t]he court accepts all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.” In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007). The court will “not look beyond the face of the pleadings to determine whether relief should be granted based on the alleged facts.” Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999).

         To survive a motion to dismiss, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “The plausibility standard is not akin to a ‘probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. When well-pleaded facts fail to achieve this plausibility standard, “the complaint has alleged - but it has not shown - that the pleader is entitled to relief.” Id. at 679 (internal quotation marks and alterations omitted).

         III.

         ANALYSIS

         A. The Thangsongcharoens' Claims Under §7426(h)

         The plaintiffs claim that they have “suffered economic damages in excess of $1, 000, 000 due to the IRS's intentional, reckless, or negligent collections and illegal sale of the seized goods, in which [they] had an interest.” Doc. 1, Pls.' Compl., ¶ 57; see also id. ¶ 62. The United States alleges that a plaintiff must state what interest he has in levied property in order to state a claim under §7426 (h) and that Plaintiffs have failed to adequately plead what interest they had in the assets seized from Mii's. Doc. 14, Def.'s Mot. to Dismiss, 7-9; Doc. 17, Def.'s Reply, 1-3. The Thangsongcharoens respond that they have adequately ...


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