Moulder v. U.S. Dept. of Treasury, IRS

Background

Ricky Lee Moulder, a state prisoner in Texas, brought a civil action against the U.S. Dept. of Treasury, IRS. He proceeded without a lawyer and had permission to proceed without paying the filing fee. The court screened the complaint under the Prison Litigation Reform Act, which requires courts to review prisoner lawsuits against governmental entities and dismiss claims that are frivolous, fail to state a claim, or seek money from an immune defendant.

Moulder sought court intervention to obtain economic impact payments under the Coronavirus Aid, Relief, and Economic Security Act, commonly called the CARES Act. He said he had not received the payments. He also said the IRS sent him a letter requiring him to call and confirm his identity, but he could not make the call because he was incarcerated.

The Earlier Class Action

The opinion discussed an earlier related class action concerning economic impact payments for incarcerated people. That class action held that the CARES Act did not allow the government to withhold payments solely because a person was or had been incarcerated. It also held that the policy treating people incarcerated at any time in 2020 as ineligible was arbitrary, capricious, and unlawful, and ordered the IRS to reconsider payments denied solely on that basis.

The earlier court expressly did not decide whether particular individuals were actually owed payments or how much they were owed. Instead, the IRS was responsible for making individual eligibility determinations under the CARES Act.

Court's Reasoning

The court stated that Moulder was a member of the earlier class. To the extent he claimed that his payment was denied because of his incarceration, the court held that he was not entitled to separate individual relief because his requested injunction duplicated the existing class action. The court said class members could pursue further action through the class representatives and attorneys, including contempt proceedings or intervention in the class action.

The court separately rejected Moulder's request to compel the IRS to provide payments under the earlier class action or the CARES Act. The earlier class action established only that incarceration alone could not justify denying a payment; it did not establish that every incarcerated person was entitled to receive one. The court also relied on the CARES Act's December 31, 2020 deadline for making or allowing the payments. Because that deadline had passed, the court concluded that no additional funds could be issued under the Act and that Moulder could not obtain the relief he requested.

Disposition

The court held that Moulder failed to state a claim for relief. It dismissed the complaint without leave to amend because it found that no amendment could cure the identified problems. The action was dismissed with prejudice, and the clerk was ordered to close the case. Phyllis J. Hamilton signed the order as United States District Judge.