United States District Court, Northern District of Illinois, E.D
December 13, 1985
PATRICIA PAWLOWSKE, PLAINTIFF,
CHRYSLER CORPORATION, ET AL. DEFENDANTS.
The opinion of the court was delivered by: William T. Hart, District Judge.
MEMORANDUM OPINION AND ORDER
Plaintiff Pawlowske filed this pro se complaint alleging that
defendants "did unlawfully and without due process of law
remove $568.37 from Plaintiff Pawlowske's payroll check without
her permission" and seeking actual damages in the amount
withheld, punitive damages of $10,000, and her costs of
bringing this suit. Presently before the court are the parties'
cross-motions for summary judgment and defendants' motion for
There are only two facts pertinent to these motions and they
both are undisputed.*fn1 On June 28, 1984 the Internal Revenue
Service (IRS) served a Notice of Levy on Wages, Salary and
Other Income on defendant Chrysler Corporation demanding
payment of $568.37 from plaintiff's wages. On July 18, 1984
Chrysler sent the IRS a check in that amount.
Under 26 U.S.C. § 6331(a) the IRS (or more properly the
Secretary of the Treasury and that person's agents) has the
power to collect delinquent taxes "by levy upon all property
and rights to property." The term "levy" is defined in §
6331(b) as including "the power of distraint and seizure by any
means." Section 6332(a) obligated Chrysler to surrender that
portion of plaintiff's salary called for by the notice of levy.
Indeed, had Chrysler not complied with the levy it would have
become personally liable under § 6332(c) for the amount plus a
penalty equal to half the amount. Section 6332(d) of the
Internal Revenue Code states that one who complies with a levy
"shall be discharged from any obligation or liability to the
delinquent taxpayer with respect to such property or rights to
property arising from such [compliance with the levy]." Thus,
plaintiff has no right to recover anything from Chrysler (or
its employees) because of its compliance with the levy.*fn2
Despite this perfectly clear law, plaintiff argues that
Chrysler is not protected by § 6332(d) because the levy with
which it purportedly complied was defective for several
reasons. First and foremost, plaintiff argues the levy was
ineffective because it was not preceded by a Notice of Seizure
and a court order. However, numerous cases make clear that a
Notice of Levy is all that is required for the IRS to gain
possession of the property (or in plaintiff's phrasing, the
Notice of Levy "makes" a levy). See In re Chicago-land Ideel
Cleaners, Inc., 495 F.2d 1283, 1285 (7th Cir. 1974), aff'd sub
nom. Phelps v. United States, 421 U.S. 330, 335-37, 95 S.Ct.
1728, 1731-32, 44 L.Ed.2d 201 (1975)
("notice of levy and demand are equivalent to seizure");
United States v. Pittman, 449 F.2d 623, 627 (7th Cir. 1971);
Rosenblum v. United States, 300 F.2d 843, 844-45 (1st Cir.
1962); United States v. Eiland, 223 F.2d 118, 121 (4th Cir.
1955). The cases plaintiff relies upon to argue that more than
a notice of levy is required were decided under a version of
the statute that was replaced in 1954 with significantly
different language, and the cases just cited make clear that
plaintiff's cases are no longer good law. See 495 F.2d at 1285;
449 F.2d at 627 and n. 3; and 300 F.2d at 845.
Plaintiff's statutory argument for her idea that a Notice of
Seizure must precede a levy is based on § 6502(b), which states
"The date on which a levy on property or right to property is
made shall be the date on which the notice of seizure provided
in section 6335(a) is given." That means, argues plaintiff,
that a levy is not "made" (i.e., effective) until a notice of
seizure is given. Besides being inconsistent with the binding
and directly-on-point authority already cited, plaintiff's
argument is a distortion of the statute. Section 6502(b) does
not define what the IRS must do to make a valid levy; rather,
it simply chooses an event (the service of a notice of seizure)
from which it can easily be determined whether the IRS's
collection attempt falls within the six-year time limit on tax
collection stated in § 6502(a). Indeed, plaintiff's
interpretation is completely nonsensical because the event she
wants to precede a valid levy (the notice of seizure) always
comes after the levy. See § 6335(a), stating that "As soon as
practicable after seizure of property, notice in writing shall
be given by the Secretary or his delegate to the owner of the
property . . ." (emphasis added).
As her final argument on this point, plaintiff intimates that
judicial process is necessary before her salary can be levied
upon. That is simply not so, and the absence of judicial
process does not violate any constitutional provision. See
United States v. National Bank of Commerce, ___ U.S. ___, 105
S.Ct. 2919, 2924-25, 86 L.Ed.2d 565 (1985). Therefore, the
notice of levy was sufficient to require defendants to pay the
money demanded and to give them the protection of § 6332(d).
Plaintiff also argues that because § 6331 specifically states
a notice of levy is sufficient to "make" a levy on the salary
of a federal or District of Columbia employee, serving a notice
of levy is not sufficient to "make" a levy on the salary of a
private sector employee. That same argument was clearly
rejected in Sims v. United States, 359 U.S. 108, 112-13, 79
S.Ct. 641, 644-45, 3 L.Ed.2d 667 (1959), which explains that
federal and District of Columbia employees were specifically
mentioned to overcome authority treating them differently and
to make clear they were to be treated just like every other
Finally, plaintiff argues that her wages were not subject to
levy because only property "subject to forfeiture" under § 7321
can be seized, and only property that can be seized can be
levied upon. However, "it is quite clear, generally, that
accrued salaries are property and rights to property subject to
levy." Sims v. United States, 359 U.S. 108, 110-11, 79 S.Ct.
641, 644, 3 L.Ed.2d 667 (1959). Again, then, plaintiff's
argument is blocked by binding precedent she simply ignores.
And even on its own terms plaintiff's attempt to smuggle the
limitations on forfeiture proceedings into the section on levy
fails. Forfeiture and levy are two entirely distinct ways for
the IRS to gain possession of property. Neither depends on the
provisions respecting the other, and the things each procedure
can reach are separately and independently defined. Compare
26 U.S.C. § 5607, 5608, 5612, 5613, 5615, 5661, 5671, 5673, 5683,
7601-7604, 7321 (defining property subject to forfeiture) with
§ 6331(a) (defining property subject to levy). The only way
plaintiff has managed to tie the levy and forfeiture provisions
together is through the same argument (that notice of seizure
must precede a levy) rejected above. Therefore, plaintiff's
salary was a proper subject of the levy process.
Defendants request costs and attorney fees, arguing that this
action is frivolous. Fed.R.Civ.P. 11 requires that all
pleadings be signed by a party not represented by an attorney
and states that by signing her complaint and other filings
plaintiff certifies that she
has read the pleading, motion, or other paper;
that to the best of [her] knowledge, information,
and belief formed after reasonable inquiry it is
well grounded in fact and is warranted by existing
law or a good faith argument for the extension,
modification, or reversal of existing law, and
that it is not interposed for any improper
purpose, such as to harass or to cause unnecessary
delay or needless increase in the cost of
litigation. . . . If a pleading, motion, or other
paper is signed in violation of this rule, the
court, upon motion or upon its own initiative,
shall impose upon the person who signed it . . .
an appropriate sanction, which may include an
order to pay to the other party or parties the
amount of the reasonable expenses incurred because
of the filing of the pleading, motion, or other
paper, including a reasonable attorney's fee.
By using the words "shall impose" the rule makes imposition
of a sanction where Rule 11 has been violated mandatory.
Eastway Const. Corp. v. City of New York, 762 F.2d 243, 253-54
and n. 7 (2d Cir. 1985) (reversing district court's denial of
motion for fees).*fn3 Subjective bad faith is no longer a
prerequisite to Rule 11 sanctions; "[t]he standard is an
objective one." Frazier v. Cast, 771 F.2d 259, 263 (7th Cir.
1985).*fn4 And as the Rule and the cases make clear, pro se
litigants are subject to Rule 11, though the concerns of Haines
v. Kerner, 404 U.S. 519, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972),
must be taken into account in evaluating pro se papers. See,
e.g., Tarkowski v. County of Lake, 775 F.2d 173, 176 (7th Cir.
1985) (reversing and remanding for reconsideration refusal to
sanction pro se litigant and strongly implying sanctions are
required); Williams v. Duckworth, 617 F. Supp. 597, 601-02
(N.D.Ind. 1985) (awarding attorney's fee and fine payable to
court against pro se litigant); Richcreek v. Grecu, 612 F. Supp. 111,
117 (N.D.Ind. 1985) (awarding reasonable
attorney's fees against pro se tax litigant); Johnson v. United
States, 607 F. Supp. 347, 349-50 (E.D.Mo. 1985) (same); Miller
v. United States, 604 F. Supp. 804, 805-06 (E.D.Mo. 1985)
(same). Finally, the Seventh Circuit has repeatedly warned that
tax litigants who clog the courts with frivolous arguments will
be sanctioned. See Lovell v. United States, 755 F.2d 517,
519-20 (7th Cir. 1984), and cases cited therein.
Plaintiff claims her arguments have never been made before,
and the advisory committee notes to Rule 11 do say that
sanctions should not be used to chill creativity, but clearly
creativity is not enough by itself. The creativity must be in
service of a good faith application of the law or at least a
good faith request for a change in the law. Plaintiff has done
neither here. This is precisely the sort of "creativity" Rule
11 should chill. Cf. In re TCI Ltd., 769 F.2d 441, 447-48 (7th
Cir. 1985) (upholding sanctions under 28 U.S.C. § 1927 against
the same argument).
Plaintiff also claims that the dissent in United States v.
National Bank of Commerce, ___ U.S. ___, 105 S.Ct. 2919,
2931-39, 86 L.Ed.2d 565 (1985), shows "that interpretation of
the intent and application of the Internal Revenue Code is
still being questioned in 1985, and subject[ed] to review"
(brief opposing summary judgment at 10). However, the issue
that provoked dissent in the National Bank case is entirely
different from that involved here and to the extent it is
relevant here National Bank shows plaintiff's complaint has no
basis in law, so that case does nothing to show that the
actions plaintiff here challenges are open to question.
Each of plaintiff's arguments was precluded by precedent and
invalid on its merits. The court concludes plaintiff violated
Rule 11 and sanctions must be imposed. However, this court
lacks the information necessary to determine what sanction is
appropriate. Defendants are therefore directed to file not
later than December 31, 1985 a statement as to what their costs
and attorney's fees have been, properly supported by affidavit.
Plaintiff may file a response, including if she wishes a
statement concerning her financial ability, no later than
January 21, 1986.
If plaintiff wishes to appeal this court's decision denying
her motion for summary judgment and granting defendants' motion
for summary judgment and sanctions, she must do so by filing a
notice of appeal with this court no later than thirty days from
the date of this opinion. Her time for filing a notice of
appeal is not suspended while this court considers the issue of
an appropriate sanction. Exchange Nat. Bank of Chicago v.
Daniels, 763 F.2d 286, 291 (7th Cir. 1985). This court will not
lose jurisdiction of the sanctions question if plaintiff does
appeal. Patzer v. Board of Regents, 763 F.2d 851, 859 (7th Cir.
IT IS THEREFORE ORDERED that plaintiff's motion for summary
judgment is denied, defendants' motion for summary judgment and
sanctions is granted, and judgment is entered against plaintiff
and in favor of defendants. Defendant shall file a statement of
the fees and costs incurred in this action no later than
December 31, 1985 and plaintiff shall file any response no
later than January 21, 1986.