Rehan v. Department of Treasury Internal Revenue Service

Background

Wayne Bryan Rehan, identified as a state prisoner in Maryland, filed a civil action against the Department of Treasury, Internal Revenue Service. He proceeded without a lawyer and had permission to proceed without paying the filing fee. Rehan sought court intervention to obtain economic-impact payments under the Coronavirus Aid, Relief, and Economic Security Act, commonly called the CARES Act. He stated that he had not received his payments and asked the court to require the Internal Revenue Service to provide them.

Screening standard

Because Rehan was a prisoner suing a governmental entity, the court was required to conduct an initial screening under 28 U.S.C. § 1915A. At that stage, the court had to identify claims that could proceed and dismiss claims that were frivolous, malicious, failed to state a claim for relief, or sought money from an immune defendant. The court also explained that complaints filed without a lawyer are read liberally, but must still contain enough factual allegations to make a claim plausible rather than speculative.

Prior class action

The court discussed an earlier class action concerning economic-impact payments for people who were or had been incarcerated. In that case, the court declared that the CARES Act did not allow the Internal Revenue Service to withhold payments solely because a person was incarcerated. It also declared that the agency’s policy treating people incarcerated at any time in 2020 as ineligible was unlawful, and entered a permanent injunction requiring reconsideration of payments denied solely for that reason.

The earlier court did not decide whether any particular person was actually owed a payment or the amount of any payment. Those individual eligibility determinations were left to the Internal Revenue Service.

Reasons for dismissal

The court found that Rehan was part of the earlier class. To the extent he claimed that his payment was denied because he was incarcerated, the court held that he was not entitled to separate individual injunctive or equitable relief duplicating the class action. The court said class members seeking additional action had to pursue it through the class representatives and attorneys, including through contempt proceedings or intervention in the class action.

The court also rejected Rehan’s request for an order requiring payment under the earlier class action or the CARES Act. Although the earlier case prohibited denial based solely on incarceration, it did not establish that every incarcerated person was owed a payment. The court further noted that the CARES Act set December 31, 2020, as the deadline for payments to be made or allowed. Because that deadline had passed, the court stated that no more funds could be issued under the Act and that Rehan could not obtain the relief he requested.

Disposition

The court concluded that Rehan failed to state a claim for relief. It dismissed the complaint without leave to amend because it found that no amendment could correct the identified problems. The conclusion states that the action was dismissed with prejudice, and the clerk was ordered to close the case. Judge Phyllis J. Hamilton signed the order on July 6, 2021.