STATE OF SOUTH CAROLINA
COUNTY OF GREENVILLE
SC Dept of Revenue and D&D Motors, Inc.,
) IN THE COURT OF COMMON PLEAS
________________ JUDICIAL CIRCUIT
Case No.: ____________
COMPLAINT TO QUASH SUMMONS AND FOR INJUNCTION
1. This is an action to halt the above-named third-party record keeper from revealing Plaintiff’s private records to the SC Department of Revenue (DOR), to quash the summons and for an injunction to halt the turnover of his personal information to a state agency.
2. This court has jurisdiction over this action pursuant to SC Code §12-54-110, SC Constitution provisions in Article I, Sections 3, 10 & 12 and Fourth and Fifth Amendments to the US Constitution.
3. Plaintiff Chris Lawton (hereafter Lawton) is a citizen of this state, Greenville County. Respondent third-party record keeper D&D Motors is a resident of this district and the employer of Lawton. Respondent DOR is a State Agency and therefore a resident of this judicial district.
4. On or about February 16, 2009 Special Investigator Matt Wright, Criminal Investigations Department, SC DOR served on D&D Motors, the employer of Lawton, a “Summons to testify and /or produce records” Form CID-5. With this third party summons, DOR sought Lawton’s personal and private financial records.
PART I: FACTS AND LAW
5. The records sought by the summons relate to the Plaintiff and are his personal records.
6. This Court should quash said summons, for the following reasons:
A. The information sought by the Criminal Investigation Division (herinafter CID) is intended to be used in a criminal prosecution, which violates state law and well-settled case law. DOR has classified Plaintiff as a “Tax Protester,” has abandoned in an institutional sense the pursuit of a civil tax determination or collections purpose and has made an institutional commitment to make a referral to the Attorney General’s office for prosecution as it would merely like to gather evidence to aid a prosecution. US v. LaSalle Nat. Bank, 437 US 46 248, 98 S Ct 2357 (1978).
B. Under the Constitution and Common Law of this state, the Grand Jury has inquisitorial powers, not administrative agencies. The SC legislature in §12-54-110, the Summons authorization provision, does not authorize the revenue agents to use a summons in a criminal case. The code section specifically provides that a summons may demand information “relating to a tax”. Nowhere has our legislature authorized the tax collectors to use a civil summons in a criminal case. Beyond any doubt, the form use by the Criminal Investigator can only be used in civil cases relating to a tax, either assessment or collection.
C. CID-DOR, having abandoned the pursuit of Plaintiff’s civil tax liability, is attempting to use the summons for the impermissible purpose of gathering evidence solely for a criminal investigation, and is attempting to circumnavigate the traditional role of the grand jury as the principal tool of criminal investigation in our society, US v. LaSalle, supra.
D. CID has made a formal determination for prosecution of Plaintiff or has made an informal determination while withholding the formal recommendation in order to use this civil process to circumnavigate the traditional functions of the Grand Jury in this state.
E. DOR has made a preliminary investigation into Plaintiff’s financial condition since it has access to a tremendous amount of financial data on taxpayer and has thusly abandoned any hope of making any civil collection in this case, but is delaying in submitting a formal recommendation to the prosecutor in order to gather additional evidence, to expand its criminal discovery rights, and to serve as an information gathering agency for the prosecutor.
F. The Department only has the authority granted to it by the State Legislature. Our elected representatives have given the tax collectors the administrative summons powers in said code section to be used only in civil cases and have not yet given these administrative agency mandatory criminal investigative powers. Therefore, the Department simply does not have the authority to summons those particular third-party records that would be used in criminal prosecutions.
G. The information in the possession of the Respondent third party employer is of a private nature and was not intended to be given to parties not authorized by Plaintiff. Furnishing such personal and private information about Plaintiff to DOR or any other governmental body without Plaintiff’s consent is a violation of his person, his privacy, his Constitutional rights, and his natural rights, which must be protected by the government.
H. The DOR summons is not issued in good faith as the information sought by the individual summons will not be used by DOR to prove the actual existence of a valid civil tax determination or for a collection purpose. Actually, the items sought by the summons are only needed by the Prosecutor to aid in criminal prosecutions not related to taxes.
I. State law (§12-54-110), copy attatched, clearly provides that the summons must be “attested,” and this is mandatory. The summons in this case is not attested, as anyone can see by looking at the civil summons, attached.
J. DOR has failed to meet the procedural requirement of the summons authority; the summons is patently defective on its face because the summons is not attested as required by said code section in subsection (C). The agent has failed to comply with the mandatory procedures in the summons law.
K. The summons was not issued in good faith, not conducted pursuant to a legitimate purpose, and not relevant to any lawful purpose. The information is already within the commissioner’s possession; the summons is an abuse of the administrative process and issued for the improper purpose of harassing and pressuring the Plaintiff. US V. Powell, 379 US 78, 85 S Ct 248 (1964).
L. Plaintiff is classified by said agency as a “tax protester.” DOR procedures on persons similarly labeled as Plaintiff set forth a policy whereby the cases are totally criminal ab initio, to the extent that individual agents and the Agency itself have no discretion or authority to compromise whatsoever in these cases.
7. CID has placed in Plaintiffs’ permanent files and records a control form. This form is issued by CID to be placed in the file of one who is subject to an ongoing investigation. This notifies the revenue agents or civil investigators that an active criminal case is pending and that all civil liability cases or audits are to be suspended. Further, the civil revenue officers are not to have any contact with this taxpayer so as not to interfere with an active criminal case.
Since the auditors and collections people cannot be involved with this investigation then it cannot be for a proper purpose and failed the La Salle criteria.
8. The government may allege that one refuting the summons bears the burden of disproving the actual existence of a valid civil tax determination or collections purpose.
To meet said burden, Plaintiff needs adequate pre-hearing discovery. Plaintiff, given sufficient discovery, can prove:
A. No existence of a continuing civil purpose;
B. A pre-existing institutional commitment to prosecute;
C. The failure of the summons to advance a civil purpose;
D. Improper purpose, political harassment, etc.
9. In his affidavit filed herewith, Plaintiff enumerates actions of the government which will indicate, assuming actions speak louder than words, the true nature of this investigation, and will show the attempt of two agencies to circumnavigate the traditional role of the grand jury and the other Constitutional protections of the Plaintiff as guaranteed in Article I of our blessed State Constitution.
10. The SC Constitution provides very clearly and definitely that the administrative summons is restricted in many ways:
A. SECTION 3: “…nor shall any person be deprived of life, liberty, or property without due process of law…” In this case, taxpayer is entitled to due process, which means access to the courts in the event of any government action against his interest. The taxpayer has a property right interest in his personal and financial records.
B. SECTION 12: “…nor shall any person be compelled in any criminal case to be a witness against himself…” Taxpayer’s personal records will be used against him in a criminal case. This means he is witnessing against himself, and therefore he is entitled to the protections of self incrimination clause of our state’s Constitution. The case law is well settled that the summons of personal records is covered by the incrimination clause.
C. SECTION 10. Searches and seizures; invasions of privacy: “The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures and unreasonable invasions of privacy shall not be violated, and no warrants shall issue but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, the person or thing to be seized, and the information to be obtained.”
This provision in our highest law clearly provides that the civil summons cannot be used to seize Plaintiff’s “effects” which is his property in the hands of others, nor invade his privacy without judicial intervention and his day in court. Plaintiff simply request that the court’s in South Carolina make a determination on whether DOR can have access to his private records.
11. Westlaw reveals no cases on this subject by our Supreme Court. However this issue has been well litigated in federal courts, in particular in this state. The cases uniformly hold that the civil summons cannot be used in a criminal case, the summons must be attested and that the citizen is entitled to his day in court before his privacy is violated.
12. Schultz II Case: the Due Process clause of the 5th and 14th Amendments applies to third party summonses. In the earthshaking Schultz v. IRS, 413 F.3d 297(2d NY), 95 A.F.T.R.2d 2005-3007, 2005 WL 152090, the Second Circuit Court of Appeals on June 29, 2005 ruled that the Due Process Clause of the Constitution was now applied to the tax collectors in the same manner as it has always applied to all government agencies and parties. Now all tax agency actions against a citizen are subject to judicial scrutiny.
Under the modern Due Process Clause, the 2nd Circuit reasoned, the government can have no adverse action against a citizen without being subject to judicial scrutiny. Clearly independent judicial intervention to satisfy the DPC for taxpayers is warranted in this case.
13. No state precedent exists on the issue on Attestment of the summons as required by the code section. However the leading federal case on this issue is Henderson v. United States, 778 F. Supp. 274 (D.S.C. 1991), copy attached, where Judge Henry Herlong USDJ-DCSC ruled that the statute required attestment, but the summons form clearly did not have the attestment. Therefore the administrative seizure is in violation of statute and had to be quashed.
14. In the alternative, should this Court not quash the summons, Plaintiff requests that the Court provide in its order that the DOR not be allowed to use information gathered by the summons in a criminal case. The Government would not object to this provision in the final order because they will state that this civil summons will be used strictly for a civil tax liability case.
PART II: INJUNCTION
15. The Plaintiff incorporates by reference the allegations contained in paragraphs above. 16. Lawton requests that this court quash this summons and not allow CID-DOR to use this civil summons for an illegal purpose. This lawsuit has no effect on CID using the lawfully Grand Jury subpoena to collect the same information. This suit merely requests that a state agency obey the law and follow well established precedence. Or, if the personal, financial records of Plaintiff have already been surrendered, then they should be returned to the employer.
17. Injunctive relief is appropriate to prevent the turnover of private documents to a state agency in violation of state law. Or, order the return of private documents illegally gathered.
18. State law authorizes this Court to enjoin state agencies who have engaged in conduct in violation of statute and precedent from engaging in further such conduct if the Court finds that injunctive relief is appropriate to prevent continual violation of Plaintiff’s rights.
19. As described in paragraphs above, Defendant substantially interferes with Plaintiff’s right to privacy, property interest in his papers and effects, the protection against self-incrimination, etc. CID’s conduct results in irreparable harm to the Plaintiff for which Lawton has no adequate remedy at law. No lesser intrusive remedy exists. Collecting the documents or continually holding them does irreparable harm to Plaintiff that cannot be erased.
20. Unless enjoined by this Court, DOR is unlikely to release Plaintiff’s records. The Plaintiff is entitled to injunctive relief under the laws of this state.
WHEREFORE, plaintiff prays for the following relief:
A. That the Court find that Defendant has engaged in conduct not authorized by statute, and that injunctive relief is appropriate under common law of this state to prevent DOR and its representatives, agents, servants, employees, attorneys, and those persons in active concert or participation with it, from further such conduct; B. That the Court find that CID has engaged in conduct not authorized by SC Code §12-54-110 and also violates subsection (C) because the summons form was not attested, and that injunctive relief is appropriate to prevent DOR and anyone acting in concert with it, from further such conduct;
C. That the Court find that CID has engaged in conduct that violates taxpayer’s privacy, property interest, Constitutional protections and that injunctive relief against DOR and its representatives, agents, servants, employees, attorneys, and those persons in active concert or participation with him is appropriate to prevent the recurrence of that conduct and the power authorized under the Court’s equity powers.
D. That this Court enter an injunction requiring CID to obey the law by using Grand Jury subpoenas to compel the production of private information, and also return any documents seized by civil summons which is intended to use in a criminal case.
E. That this court issued its Rule to Show Cause ordering CID-DOR to show cause if cause therebe why permanent injunction should not issue requiring it to return all documents and records seized without authorization under state law.
F. That the Court award fees and costs to Plaintiff; grant the Plaintiff such other and further relief as the Court deems appropriate.
Chris Patriot, Plaintiff Pro Se
Greer, SC 29650
STATE OF SOUTH CAROLINA
COUNTY OF GREENVILLE
SC Dept of Revenue and D&D Motors, Inc.,
) ) IN THE COURT OF COMMON PLEAS
_______________ JUDICIAL CIRCUIT
Case No.: ___________
To the Defendant above-named:bsp; You are herby summoned and required to answer the Complaint in this action, a copy of which is herewith served upon you, and to serve a copy of your answer to the Complaint upon the subscriber at his address below within thirty days after service hereof. If you fail to answer the Complaint within that time, the Plaintiff will apply to the court for the relief demanded in the Complaint.
Date: February 24, 2009
Chris Patriot , Plaintiff, Pro Se
Greer, SC 29650ml>