LITIGATION UPDATE: CIRCUIT COURT OF VIRGINIA
As it turns out, the Court issued a written order the same day I sent in the Amended Complaint. I received the order on 3/19. Results are as follows:
1. Count I, 18 U.S.C. 1983 Civil Rights Act claims: demurrer (in layman's terms, much like a dismissal motion) sustained, with leave to amend (i.e. re-file), on the basis that the doctrine of respondeat superior has no place in 1983 cases, the Court stated that because I brought claims under that theory, the Court had no choice but to grant the demurrer. This doctrine means that under 1983 you can't sue someone only on the basis of their employee's conduct, they have to be directly responsible in some way, have participated in a Constitutional sense. (More on this below.)
2. Count II, Civil Conspiracy claims: demurrer sustained with prejudice, which means I cannot refile these claims. The basis was mainly given from the bench and I was expecting this: civil conspiracy claims in this instance will be more difficult to prove, and in some ways distract from the main point of this lawsuit: rights unlawfully stripped from me and the damage that caused.
3. Count III, Willful Misconduct claims: demurrer sustained with prejudice. So, the order bars me from amending this claim to bring claims for gross negligence.
4. Injunction to remove the liens: demurrer sustained without prejudice, i.e. if Defendants don't remove the liens and the assessment then I can come back to the Court for a "permanent injunction" forcing them by Court order to do it (more on this below).
As to Count I, leave to amend was granted in line with the Court's bench opinion that the Tax Commissioner and the Department of Taxation do not have immunity under the Civil Rights Act in this instance.
The doctrine of respondeat superior. I made a mistake there, now I believe corrected. The Defendants directly caused these damages, are legally responsible, for example this new text re the Tax Commissioner:
THE TAX COMMISSIONER OF THE COMMONWEALTH OF VIRGINIA is the chief officer of the Virginia Department of Taxation. The Tax Commissioner, exercising power possessed by virtue of Commonwealth law that was made possible only because he was clothed with the authority of Commonwealth law, in his personal capacity, deprived Plaintiff of his civil rights. The Tax Commissioner, the final policymaker in the Virginia Department of Taxation, formulated an unconstitutional policy when he: (i) failed to train his employees, when his failure to train amounted to deliberate indifference to an obvious need for such training, and when this failure to train was likely to result in his employees making wrong decisions; and/or, (ii) dictated to his subordinates, ordered, or, as an authorized policymaker, otherwise approved his subordinates’ unconstitutional decisions and the basis for them; and/or, (iii) did not merely go along with his subordinates’ decisions, but delegated to them the authority to formulate policy and to act against Plaintiff, and thereby directly participated in unlawful conduct that damaged Plaintiff.
There's an important issue here and it's the question of procedural due process in the form of notice and opportunity - and this could have far-reaching consequences if the Defendants decide to fight this to the very end, through a jury trial (for which I have been preparing, as with Berber et al). They claim they sent me a notice of assessment, which is required, because unless a citizen is given fair warning and a chance to challenge this kind of administrative order - especially in this case, now nearly $1.7 million in taxes at issue here - well without notice and opportunity, then there is no authority under the Constitution for say the state to launch further proceedings, such as for example issuing liens, getting judgments, destroying your credit record, etc. In some ways it's similar to a lawsuit: you have to have the person you're suing personally served, they are put on notice of the allegations/dispute and have a fair chance to respond. You can't just sue someone, never tell them about the lawsuit, and then go to the Court and say you know what they ignored my lawsuit now I want default judgment (total victory) and my total claims right now. Well, that's exactly what I'm alleging the Tax Commissioner and the Department of Taxation did: they never gave me any notice of any tax liability and then started sending out liens - and, in the face of my proving I had no income in state and federal court, they tried to enforce what here might be termed a version of "default" through the courts, for example in federal court saying I was too late challenging the tax liability (how could I do that when I didn't know about it because they never told me = no notice or opportunity), and then they tried their luck a second time in state court, saying well we should get sanctions against him, he has no right to be heard in court unless he pays a bond of $1.7 million first.
In my earlier post I related the 2/25 hearing. During that hearing, the Assistant Attorney General ("AAG") claimed that a Notice of Assessment was sent on 3/27/02. Fair question is whether or not they actually can prove that. Well, they can't. They've already admitted:
1. They have no copy of the Notice they supposedly sent - "because the Department does not maintain these records"
2. They don't know to which address the supposed Notice was sent - "because we updated his address as soon as he sued us"
The judge said that it will be impossible for me to prove that it was never sent, but in the Amended Complaint I stated that that burden is not mine - they have to prove that they gave me due notice. And here is an issue for trial: Is Constitutional due process shown when a state agency is authorized to collect more than $1 million in taxes without being required to maintain proof that notice and opportunity was given the target? I mean, should we just trust their word that they sent something when maybe they really didn't, and let them go right ahead and seize assets? There are two possibilities here: (1) AAG lied, and the Department does indeed record Notices of Assessment, conveniently didn't record mine only; or (2) AAG told the truth, and the Department does not keep records of Notices for anyone. If 1 is the case, well then not just Defendants but OAG are going to have problems, such as sanctions. If it's 2, then, if Defendants fight this through trial, then it's possible that the Department's policies are found unconstitutional and the Court orders the Department to completely overhaul procedures regarding notice and opportunity. Not just for me, but as a result of this case, for all residents of the Commonwealth of Virginia, because if this kind of garbage going after people for $1.7 million and not even proving you told them they owe the money is standard procedure, then it has to be stopped, or this will happen again. But, there is an indication that it's (1), they lied, and the unconstitutional policies and conduct were specifically created just for me.
On March 16, per the Court's bench order, I sent AAG a tax return, though I am not required to do so under Department regulations, no tax return required when you don't meet a minimum income threshold. Next thing I know, on March 22 I receive a Notice of Assessment for c. $1.7 million from the Department of Taxation. The assessment date is 3/21/05, but the problem here is they claimed they assessed me on 3/27/02 - and both assessments are referred to by the exact same number.
Next problem: they sent this Notice certified mail, return receipt requested, meaning I had to sign it, they could show I received it. So, looks like they have known all along they needed to prove I received a Notice - but they didn't do that before, no notice or opportunity, and think now after three years they can just turn back the clock, only after they finally fail in court to judicially enforce their denial of my right to an administrative appeal.
Final problem: $1.7 million here we go again when I've sent them mounds of documents showing I don't owe a cent.
So, in response to the Court's 3/17 order (and a call to the law clerk) I filed a new amended complaint with one count only:
COUNT I
VIOLATIONS OF 18 U.S.C. § 1983, CIVIL RIGHTS ACT
41. Plaintiff repeats and realleges each and every allegation set forth above, as if set forth fully herein.
42. Defendants have engaged in unlawful conduct and have thereby deprived Plaintiff of rights granted him by the Fourth and Fourteenth Amendments to the United States Constitution, respectively entitled “Unreasonable Search and Seizure” and “Due Process.” Without giving Plaintiff any opportunity to address or correct the information under their consideration, Defendants, according to Virginia Department of Taxation records, on March 27, 2002 secured an assessment against Plaintiff’s assets for a purported tax liability of nearly $1.3 million, on August 5, 2003 for some $1.4 million and on March 3, 2004 for some $1.6 million, for which there is no basis in fact whatsoever. Moreover, basing an income tax assessment on an unjustified amount of income that is unrelated to the amount of income reported is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law. Furthermore, Defendants have repeatedly attempted to enforce the unlawful assessments beyond the confines of their territorial jurisdiction, through their unlawful attempts to search and seize Plaintiff’s assets across this country, acts undertaken with neither the concurrence of the Attorney General, as required by Virginia law itself, nor a court order of any kind. On these grounds, Defendants’ conduct is unlawful and therefore ultra vires. As the tax liens Defendants placed with financial institutions are designed to seize assets of Plaintiff on deposit with those financial institutions, the liens have the effect of unlawfully restricting Plaintiff’s freedom protected by law to maintain deposits of his assets with those financial institutions as long as the liens remain in force.
Deprivation of Procedural Due Process
43. Having never sent Plaintiff the 2002 Notice of Assessment, having conceded in this Court that no 2002 Notice of Assessment exists, having conceded that they cannot demonstrate to which address the nonexistent 2002 Notice was sent, Defendants stripped Plaintiff of his procedural due process right to an administrative appeal of his assessed tax liability. Since then, Defendants have repeatedly and consistently sought to enforce their deprivation of Plaintiff’s right to an administrative appeal, for example when they in this Court on February 25, 2005 demanded that Plaintiff post a bond of $1.6 million, absent which, they claimed, he had no right to be heard. Earlier, they did so in federal court, by claiming that Plaintiff was not entitled to an administrative remedy because it was time-barred, when, through their own failure to duly serve Plaintiff with any Notice of Assessment before issuing the liens, they themselves made it absolutely impossible for Plaintiff to file an administrative appeal, let alone a timely one. Plaintiff had a legitimate claim or entitlement to an administrative appeal of the assessment; Defendants deprived him thereof.
44. Moreover, for three years, Defendants deprived Plaintiff of procedural due process when they initially failed to, and later refused to, provide Plaintiff with any notice or opportunity appropriate to a $1.6 million tax liability.
Deprivation of Substantive Due Process
45. Constitutional due process requires that a deprivation of life, liberty, or property be preceded by notice and opportunity for hearing appropriate to the nature of the case. As shown above, in direct violation of Amendment XIV of the Bill of Rights, Defendants deprived Plaintiff of not only his Constitutionally-protected liberty to maintain assets at numerous financial institutions across the country, including his own bank, but also of a credit record free from a $1.6 million lien or judgment – and in turn his good name. Further, Defendants violated Amendment IV, when they unreasonably searched and attempted to seize Plaintiff’s assets. As shown above, the numerous searches and attempted seizures by Defendants were not reasonable, as they had no justification for ordering the liens – most especially after Plaintiff sued them and proved the assessment wholly unjustified. Instead of correcting the assessment, now after three years they send Plaintiff a Notice of Assessment reiterating their demand to collect more than $1.6 million in taxes which Plaintiff has in state and federal court three times sworn under penalty of perjury, with substantial documentary evidence in support, he does not owe.
46. Defendants have in this Court claimed that computers calculated Plaintiff’s tax liability. A functioning computer should have reasonably assessed Plaintiff’s 1999 income and tax liability at, respectively, $75 million and $4.3 million, based on the electronic IRS records, not $14 million and $1.3 million. Moreover, assessing Plaintiff taxes at an income tax rate of nearly 10%, when the prevailing Commonwealth rate is 5.75%, is not only arbitrary and capricious, nor can it possibly be considered reasonable, but also directly violates Plaintiff’s right under section one of Amendment XIV to equal protection of the laws. Defendants had no authority whatsoever to single out Plaintiff for a higher tax rate than that governing the income of other residents of the Commonwealth.
47. Finally, in the event that a reasonable fact-finder would conclude that the conduct described above was not undertaken in a deliberate attempt to strip Plaintiff of his civil rights, and that the repeated and consistent trampling of Plaintiff’s civil rights for now nearly three years was all simply in error, then Defendants have demonstrated an astonishing failure to train Department officials and employees, which constitutes a deliberate and Constitutionally conscience-shocking indifference to Plaintiff’s right to substantive due process.
48. As a direct and proximate result of Defendants’ deprivation of Plaintiff’s civil rights, Plaintiff’s financial standing has been damaged, his claims against a number of the RICO defendants have been damaged and his reputation has been damaged. Defendants are therefore jointly and severally liable to redress the injuries suffered by Plaintiff as a result of their deprivation of Plaintiff’s civil rights. |
