Free MEMORANDUM in Support - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE RICKY DEAN HARDEE Petitioner, v. UNITED STATES OF AMERICA Respondent. ) ) ) ) ) ) ) ) )

Case No. 1:07-mc-00100-JFF

UNITED STATES' MEMORANDUM OF LAW IN SUPPORT OF ITS MOTION TO DISMISS BACKGROUND Petitioner, Ricky Dean Hardee, seeks to quash an IRS administrative summons issued to MBNA America Bank. On June 20, 2007, the IRS issued a letter to MBNA withdrawing the summons. See Declaration of Special Agent Robert Ripley ¶ 4. By letters dated June 25, 2007, and July 20, 2007, petitioner was notified that the summons was withdrawn. (See Gov't Exs. 1, 2, and Declaration of Robert E. Barnes, Ex. A filed in Hardee v. United States, Case No. 07-04080 (U.S.D.C. SD.)1

The United States notes that the Court, on it's own initiative, may direct petitioner to show cause why he should not be sanctioned for failing to dismiss this proceeding. In an identical proceeding involving an IRS summons issued the same day as that in this proceeding, petitioner agreed that the administrative summons had been withdrawn and the case was therefore moot. See Gov't Ex. 2, filed in Hardee v. United States, Case No. 07-04080 (U.S.D.C. SD); See also, Gov't Ex. 3, filed in Hardee v. United States, Case No. 07-0043 (U.S.D.C. AZ) (Referring to same July 20, 2007, letter, petitioner stated "...the case is moot and should be dismissed.") In addition, counsel for Hardee filed a declaration in the South Dakota case acknowledging that he received notice that the summons in this proceeding had been withdrawn. See Declaration of Robert E. Barnes, filed in Hardee v. United States, Case No. 07-04080 (continued...)
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DISCUSSION Petitioner bears the burden of proving that subject matter jurisdiction exists in this proceeding. Georgiades v. Martin-Trigona, 729 F.2d 831, 833 n.4 (D.C. Cir. 1984); Carter v. Washington Metropolitan Transit Authority, 451 F. Supp. 2d 150, 152 (D.D.C. 2006). In ruling on a motion to dismiss for lack of subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1), courts may consider affidavits and other evidence supporting or contradicting a petitioner's jurisdictional allegations. See Coalition for Underground Expansion v. Mineta, 333 F.3d 193, 198 (D.C. Cir. 2003); Carter, 451 F. Supp. 2d at 152. The jurisdiction of federal courts to decide cases is limited by the requirement set forth in Article III, § 2 of the Constitution that a case or controversy exist, and a case is moot if that requirement is not satisfied. See, e.g., Spencer v. Kemna, 523 U.S. 1, 7 (1998). Thus, "[t]o qualify as a case fit for federal-court adjudication, `an actual controversy must be extant at all stages of review, not merely at the time the complaint is filed.'" Arizonans for Official English v. Arizona, 520 U.S. 43, 67 (1997) (citation omitted). Mootness can arise at any stage of the litigation. Calderon v. Moore, 518 U.S. 149, 150 (1996). On June 20, 2007, the IRS formally withdrew the summons at issue. See Declaration of Special Agent Robert Ripley ¶ 4. Because the summons is no longer being

(...continued) (U.S.D.C. SD.) Therefore, despite knowing that the summons in this proceeding has been withdrawn and acknowledging that this renders the case moot, petitioner has failed to dismiss the proceeding. 2 2635047.1

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pursued by the IRS, this action is moot due to the lack of a case or controversy. See Thompson v. United States, 2007 U.S. Dist. LEXIS 29596, 99 A.F.T.R.2d (RIA) 3000 (N.D. Ga. 2007)("Because the IRS formally withdrew the summonses, this action is moot."); Dame v. United States, 643 F. Supp. 533, 534 (S.D.N.Y. 1986) (motion to quash denied as moot after summons were withdrawn.) CONCLUSION This proceeding must be dismissed as moot because the summons at issue has been withdrawn. Date: July 31, 2007. Respectfully Submitted COLM F. CONNOLLY United States Attorney By: /s/ Seth M. Beausang Seth M. Beausang (I.D. No. 4071) Assistant United States Attorney The Nemours Building 1007 Orange Street, Suite 700 Wilmington, DE 19801 (302) 573-6277 OF COUNSEL: JONATHAN D. CARROLL Trial Attorney, Tax Division U.S. Department of Justice Post Office Box 227 Washington, D.C. 20044 Telephone: (202) 307-6669

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CERTIFICATE OF SERVICE IT IS HEREBY CERTIFIED that service of the foregoing United States' Motion to Dismiss, Memorandum in Support, Proposed Order, and attached declarations and exhibits have been made this 31st day of July, 2007, by First Class Mail to: Robert E. Barnes Bernhoft Law Firm, S.C. 207 E. Buffalo St. Suite 600 Milwaukee, WI 53202

/s/ Seth M. Beausang SETH M. BEAUSANG (I.D. No. 4071)

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DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE WASHINGTON, D.C. 20224

Criminal Investigation

June 25, 2007

The Bernhoft Law Firm, S.C. 207 E. Buffalo St., Suite 600 Milwaukee. WI 53202 Attn: Brian Mahany

Mr. Mahany: Mr. Hardee was given proper notice, pursuant to I.R.C. 5 7609, of all summonses served on third-party recordkeepers, as that term is defined under I.R.C. § 7603(b)(2). We found Mr. Hardee's stated grounds for the petitions to quash to be without merit. A decision, independent of the petitions to quash, was made to withdraw the summonses served on the third-party recordkeepers. If you have any questions, you may contact me at 704-566-5199.

Sincerely,

William F. Culp Supervisory Special Agent

[ , I
; GOVERNMENT

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UNITED STATES DISTRICT COURT DISTRICT OF SOUTH DAKOTA SOUTHERN DIVISION

FILED

JUL 1 7 2002

RICKY DEAN HARDEE, Petitioner, Case No. CIV-07-4080 v. UNITED STATES O F AMERICA, Respondent.

F TIME s
COMES NOW THE PETITIONER, Rickey Dean Hardee. ("Hardee") by and through his attorneys, The Bernhoft Law Firm, S.C.. (Attorney Robert E. Barnes), and respectfully responds to the Order to Show Cause and moves this Court to extend time to obtain local counsel pending confirmation from the Government that the case is moor. On May 25,2007, the Hardee filed a Petition to Quash IRS Summons. With that Petition. Hardee filed a motion to be relieved the requirements of local counsel. (Doc. 3.) On June 7,2007, the motion was denied. (Doc. 9.) On June 19,2007, the Court issued an order to show cause why the case should not be dismissed for failure to comply with the pro hac vice requirements. (Doc. I I.) Hardee moved for an extension of time on June 28,2007. (Doc. 13.) The Court granted the motion on July 5,2007 extending time to July 16,2007. (Doc. 14.) Since Hardee filed his motion to extend time, (Doc. 13). Hardee's counsel received written confirmation that the Citicards subpoena at issue in this Petition was withdrawn. The letter is dated July 10,2007 and was received in Hardee's counsel's office on July 14,2007.

RESPONSE TO ORDER TO SHOW CAUSE

(See Exhibit A,)

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Robert E. Barnes, Esquire Pro Hac Vice application pending BERNHOFT LAW FIRM, S.C. 207 East Buffalo Street, Suite 600 Milwaukee, Wisconsin 53202 (414) 276-3333 telephone (414) 276-2822 facsimile

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA
RICKY DEAN HARDEE, Petitioner, v. UNITED STATES OF AMERICA, Respondent.
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Case No.

MC-07-0043-PHX

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NOTICE OF NON-OPPOSITION OF MOTION TO DISMISS
COMES NOW THE PETITIONER, Rickey Dean Hardee, ("Hardee") by and through his attorneys, The Bernhoft Law Firm, S.C.,(Attorney Robert E. Barnes), and respectfully responds to the Respondent's Motion to Dismiss with this Notice. Hardee does not oppose the dismissal of this case. Hardee agrees that when the Respondent withdrew the administrative summons, the controversy ceased and this case became moot.

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Respectfully submitted on this the 13th day of July, 2007

Bernhoft Law Firm, S.C. Attorneys for the Petitioner

1st Robert E. Barnes Robert E. Barnes, Esquire 207 East Buffalo Street, Suite 600 Milwaukee, Wisconsin 53202 (414) 276-3333 telephone (414) 276-2822 facsimile [email protected]

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE RlCKY DEAN HARDEE Petitioner, v. UNITED STATES OF AMERICA, Respondent.
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CASE NO. 1107-MC-00100

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DECLARATION OF SPECIAL AGENT ROBERT RIPLEY
I, Robert Ripley, do hereby declare and depose, pursuant to 28 U.S.C. 5 1746(2),

the following: 1. I am a duly commissioned Special Agent employed in the Criminal Investigation Division of the Internal Revenue Service, Southeast Region, Charlotte Field Office, with a post of duty located at 6635 Executive Circle Drive, Suite 180. Charlotte, North Carolina 28212. 2. In my capacity as a Special Agent, I am conducting an investigation of Ricky Dean Hardee. 3. In furtherance of the investigation and in accordance with 26 U.S.C. 5 7602, on May 14, 2007, 1 issued an administrative summons, Internal Revenue Service Form 2039, to MBNA America Bank NA to provide records as described therein.
4 . On June 20,2007, 1 sent a letter to MBNA America Bank NAwithdrawing

the summons. Attached hereto, as Exhibit A, is a true and correct copy of the letter with an attached copy of the summons, with tax identification numbers (e.g., social security numbers) redacted, that was sent.

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I declare under penalty of perjury that the foregoing is true and correct. Executed on June 22,2007

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Special Agent Criminal Investigation Internal Revenue Service Charlotte. NC 28212

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DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE WASHINGTON, D.C. 20224

Criminal Investigation

June 20. 2007

MBNA America Bank NA 11000 Samoset Drive Newark, DE 19713-2111

To Custodian of Records: Attached is a copy of a summons issued to MBNA America Bank NA on May 14, 2007. This correspondence serves as a withdrawal of this summons.

If you have any questions, please contact Robert Ripley, Special Agent at (704)566-5197. Sincerely,

Robert F. Ripley Special Agent Copy of Summons

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Summons
I n t h e matter of

Rich Dean H

a r k C h i n a 1 Investigation Charlotte Field Office

lnternal Revenue Service (Division): IndustrylArea ( n a m e

or number):

~ ~ ~ i ~ d ~ : ~ d income u a l for periods ending Dec. 31,2003, Dec. 3 1, 2004, Dec 3 1, 2005, and Dec. 31,2006 i v i d taxes

The Commissioner of Internal Revenue

To: M B N A America Bank NA
At: Ann: Custodian of Records, 11000 Samoset Drive Newark, D E 19713-21 11 you are herebysummonedand requiredto appear before Robefi F. Ripley, Criminal 1nvestigatorISpecial Agent an officer of the lnternal Revenue Service, to give testimony and to bring wilh you and to produce for examination the following books, records, papers, and otherdata relating to the tax liability or the collection of the tax liability or for the purpose of inquiring into any offense connected with the administration or enforcement of the internal revenue laws concerning the person identified above for the periods shown. See attached

Do not write

in this space

Business address and telephone number of I R S officer before whom you are to appear:
6635 Executive Circle Suite 180, Charlotte, N C 28212 Telephone (704) 566-5197

Place and time for appearance at 6635 Executive Circle Suite 180, Charlotte, NC 28212

Department of Lhe Treasuv Internal Revenue Servlce

o'clock

4 m,
2007 fveai)

www.irs.gov- Form 2039 (Rev. 12-2001) Catalog Number 2140%
signature of approving omcer (if applfcable)

Criminal InvestigatorISpecial Agent Title Title

Original

- to be kept by I R S

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ATTACHMENT TO SUMMONS ISSUED TO: MBNA America Bank NA FOR THE YEARS: 2003 - 2007 All records relative to financial transactions with:
Rick D. Hardee, SSN-fi 4531 Montibeilo Road, Charlotte, NC 28226
-ads I d a m e SSha453' Mow oe 0 Roac Cnar ore hC 28226

Hope Marsonry Contractors, LLC P O . Box 471306, Charlotte, NC 28247 RH Sliver Properties Such records to include but not limited to: CREDIT CARD RECORDS: Including customer's application, signature card, credit or background investigations conducted by the bank, correspondence, monthly billing statements, individual charge invoices, repayment records disclosing the dates, amounts and method (cash or check) of repayment, checks used to make repayments (front and back). RECORD FORMAT:
In addition to hard copies, records are requested in the form of magnetic media. Data may be provided in 3 112 inch diskenes or compact disks (CDs). ASCll fixed length files are preferred, however. ASCll delimited format is acceptable. A record layout for the data is also reauested.

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UNITED STATES DlSTRlCT COURT DlSTRlCT OF SOUTH DAKOTA

FILED
' U 1 7 2001

RlCKY DEAN HARDEE, Petitioner. v. UNITED STATES OF AMERICA, Respondent.

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Case No.

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DECLARATION OF ROBERT E. BARNES
I, Robert E. Barnes, declare that:
1.

I represent the Petitioner. Ricky Dean Hardee ("Hardee"), in the above-referenced

matter, and hereby execute this Declaration in support of his "Petition to Quash IRS Summonses."
2.

Except where explicitly noted to the contrary, l have personal knowledge of the

facts set forth in this Declaration and, if called upon to testify to said facts. could do so competently.

3.

Attached hereto as "Exhibit A" is a true and correct copy of a letter from Mr.

William F. Culp dated July 10,2007 and received in my office on July 14.2007, 4. William F. Culp is the supervising special agent to Robert Ripley

Pursuant to 28 U.S.C. 5 1746.1 declare under penalty of perjury that the foregoing is true and correct to the best of my informalion, knowledge, and belief. Executed on this the l61h day of July, 2007.

R o k r t E. Barnes, Esquire

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DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE
WASHINGTON. D.C. 20224

July 10, 2007

Brian H. Mahany Attomey and Counselor at Law Bernhoft Law Firm. S.C. 207 E. Buffalo Street. Ste. 600 Milwaukee. WI 53202

Dear Mr. Hahany,

I am responding to your email dated June 26.2007.
On June 20.2007, letters withdrawing summonses for records were sent to the following third-party recordkeepers:

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Cynthia Bryant 8000 Waterford Tide Loop, Apt 2928 Charlotte, NC 28226 Bank of America Bank Card Service 1825 East Buckeye Road Phoenix. AZ 85034 ABN Amro Mortgage Group 4242 North Harlem Avenue Norridge, IL 60706 Ford Motor Credit, C/O CT Corporation 350 N. St. Paul Street, Suite 2900 Dallas, TX 75201 lndy Mac Bank FSB 155 North Lake Avenue Pasadena, CA 91 101 Charles Schwab 10 1 Montgomery Street San Francisco, CA 94104

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Wachovia Bank 401 Market Street Philadelphia, PA I9106 First Charter 102M) David Taylor Drive Charlotte, NC 28262 BB&T Post Office Box 1489 Lumberton. NC 28359 RBC Centura Post Office Box 1220 Rocky Mount. NC 27802 Morgan Stanley-Discover Card 2500 Lake Cook Road Riverwoods. IL 600015 MBNA America Bank NA 11000 Samoset Drive Newark, DE 19713 Dillards 1600 Cantrell Road Little Rock, Arkansas 72201 Citicards Post Office Box 6034 Sioux Falls, SO 57117 Belks 2801 West Tyvola Road Charlotte. NC 28102 American Ex ress 1801 NW 66P Avenue, Ste. 103 Plantation. FL 33313 Republic Trading Group 1015 South Mays Street Round Rock. TX 78664 GE Money Bank - Summons not deliverable due to incorrect address

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Any and all packages received from third-party recordkeepers in response to a summons were not opened and the contents were not examined. Any and all packages received were returned, unopened, to the third-party recordkeepers with the letters of withdrawal. Because the matter involving the pending petitions to quash has been referred to the Department of Justice, Tax Division. I believe it is inappropriate for me to discuss this matter any further.

Sincerely.

William F. Culp Supervisory Special Agent, Group 905 cc: Robert Ripley, Special Agent