Peter David Schiff v. Internal Revenue Service, et al.

Summary

The United States District Court for the District of Puerto Rico grants the United States’ motion to dismiss claims arising from the closure and liquidation of Peter David Schiff’s bank. The court adopts the magistrate judge’s recommendation, dismisses the official-capacity claims against the United States with prejudice based on sovereign immunity and FTCA-related deficiencies, and independently dismisses the Bivens claims against individual IRS defendants for failure to satisfy the plausibility standard. The court declines to permit further amendment and orders judgment accordingly.

Holdings

1. Claims against the IRS and federal officials in their official capacities are treated as claims against the United States and are barred by sovereign immunity absent an applicable waiver. Plaintiff did not identify or establish a waiver for his Section 1983, Section 1985(3), or official-capacity Bivens claims.
2. The defamation and tortious-interference claims against the United States are barred under the Federal Tort Claims Act, and Plaintiff's failure to file an administrative claim before suit provided an additional ground for dismissal.
3. The personal-capacity Bivens claims against Justin T. Cole, Matt Line, and Mike Batdorf fail to satisfy Federal Rule of Civil Procedure 8 because the complaint contains only threadbare and conclusory allegations and does not plausibly explain how each defendant unlawfully seized Plaintiff's property or violated his Fifth Amendment rights.
4. A civil-rights conspiracy claim under 42 U.S.C. § 1985(3) is inadequately pleaded where the complaint merely alleges that a conspiracy existed and does not plead in detail the conspiratorial purpose, an overt act, the resulting injury or deprivation, and the nature of the cooperation among the alleged conspirators.

Questions Presented

1. Whether the claims against the IRS and federal officials in their official capacities were barred by sovereign immunity because no applicable waiver was shown.
2. Whether the Federal Tort Claims Act claims for defamation and tortious interference were barred and independently subject to dismissal because Plaintiff failed to exhaust administrative remedies.
3. Whether the district court should accept Plaintiff's objections to the report and recommendation concerning the IRS, official-capacity claims, substitution of the United States, and the scope of dismissal.
4. Whether the personal-capacity Bivens claims against the individual defendants plausibly alleged Fourth or Fifth Amendment violations.
5. Whether the alleged conspiracy was pleaded with sufficient factual detail to support a civil-rights conspiracy claim.

Disposition

dismissed