Faith N. Nelson v. United States

NOTE: This disposition is nonprecedential.

United States Court of Appeals
for the Federal Circuit
______________________

FAITH N. NELSON,
Plaintiff-Appellant

v.

UNITED STATES,
Defendant-Appellee
______________________

2020-1179
______________________

Appeal from the United States Court of Federal Claims
in No. 1:19-cv-00841-EDK, Judge Elaine Kaplan.
______________________

Decided: June 3, 2020
______________________

F
AITH N. NELSON, Kansas City, MO, pro se.

ROBERT JOEL BRANMAN, Tax Division, United States
Department of Justice, Washington, DC, for defendant-ap-
pellee. Also represented by THOMAS J. CLARK, RICHARD E.
ZUCKERMAN.
______________________

Before D
YK, TARANTO, and HUGHES, Circuit Judges.
PER CURIAM.
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NELSON v. UNITED STATES
2
Faith N. Nelson appeals a decision by the United
States Court of Federal Claims (“Claims Court”) dismiss-
ing her complaint for lack of subject matter jurisdiction.
We affirm the dismissal.
BACKGROUND
This case involves 26 U.S.C. § 6402(d)(1)(A), part of a
centralized Treasury Offset Program for debt collection.
Ibrahim v. United States, 112 Fed. Cl. 333, 335 (2013). Sec-
tion 6402(d)(1)(A) provides that “[u]pon receiving notice
from any Federal agency that a named person owes a past-
due legally enforceable debt . . . to such agency, the [IRS]
shall reduce the amount of any [tax] overpayment payable
to such person by the amount of such debt.” 26 U.S.C.
§ 6402(d)(1). “31 U.S.C. §§ 3711(g) and 3716(a) require[]
[the Department of the Treasury] to make such offsets
whenever an agency refers a debt to it and to pass the with-
held funds to the agency to help satisfy the debt.” Dasisa
v. Dep’t of Treasury, 951 F. Supp. 2d 45, 46 (D.D.C. 2013).
Agencies that refer debts to the Department of the Treas-
ury “certify that the debts are valid, delinquent, and legally
enforceable.” Id. (citing 31 C.F.R. § 285.5(d)(6)).
Here, the plaintiff, Ms. Nelson, signed promissory
notes in 1982 and 1985 for student loans, each for $2,500
with 9% interest. She allegedly defaulted on both loans.
The first loan was purchased by the Missouri Department
of Higher Education. This loan was assigned to the U.S.
Department of Education (“DOE”) in 1986. The second
loan was purchased by the Higher Education Foundation
Program and assigned to the DOE in 1993. After these re-
spective assignments, the DOE requested payments for
both loans through the IRS as offsets against Ms. Nelson’s
tax refunds.
In January 2018, Ms. Nelson filed suit in Missouri
state court against the DOE and the Missouri Department
of Higher Education, alleging that the defendants had
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NELSON v. UNITED STATES
3
incorrectly offset her federal refunds.
1
The case was re-
moved to the United Stated District Court for the Western
District of Missouri, where Ms. Nelson’s claims against the
Missouri Department of Higher Education were dismissed
because the action, among other reasons, was barred by the
statute of limitations. The district court also granted the
DOE’s motion for summary judgement, finding that Ms.
Nelson “continue[d] to owe money to [the DOE], and that
[the DOE’s] continued efforts to collect that debt [were] jus-
tified.” U.S. Supp. App’x (“S.A.”) 2 (first and last alteration
in original) (quoting Nelson v. Dep’t of Educ., No. 4:18-cv-
00412, 2019 WL 1529383, at *3 (W.D. Mo. Feb. 26, 2019)).
No appeal was taken from the final judgment.
On June 5, 2019, Ms. Nelson filed a complaint against
the DOE and the Missouri Department of Higher Educa-
tion in the Claims Court, requesting that the Claims Court
order the government to pay back her refund offset with
interest for tax years 1988 to 2018, to stop any further off-
sets to her tax refunds, to clear her credit history, and to
pay punitive damages for violation of her Fourteenth
Amendment rights. The government moved to dismiss for
lack of subject matter jurisdiction.
The Claims Court held that it lacked jurisdiction over
Ms. Nelson’s challenge to the offset of her federal tax re-
turn by the IRS because 26 U.S.C. § 6402(g) “explicitly bars
judicial review of [such] action.” S.A. 3 (quoting Hicks v.
United States, 130 Fed. Cl. 222, 230 (2017)). The Claims
Court also held it lacked jurisdiction to hear Ms. Nelson’s

1
Ms. Nelson later clarified before the U.S. District
for the Western District of Missouri that she believed “that
the [Missouri Department of Higher Education] is ‘IN-CA-
HOOTS’ with the U.S. Department of Higher Education”
in collecting her money. U.S. Supp. App’x 35 (quoting Ms.
Nelson’s Response to the Court’s Order to Show Cause).
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NELSON v. UNITED STATES
4
claim for illegal exaction
2
against the DOE because “she
has already unsuccessfully pursued the issue of whether
she was in default on her educational loans in district
court.” S.A. 3. The Claims Court determined that this
identical issue had been actually litigated and fully re-
solved in district court and that issue preclusion barred
this claim.
The Claims Court concluded that it lacked jurisdiction
under the Fourteenth Amendment to grant punitive dam-
ages or to clear credit histories because the Fourteenth
Amendment “do[es] not mandate payment by the govern-
ment.” S.A. 4 (alteration in original) (quoting LeBlanc v.
United States, 50 F.3d 1025, 1028 (Fed Cir. 1995)). The
Claims Court also held it lacked jurisdiction over any
claims against the Missouri Department of Higher Educa-
tion because it was a state agency.
D
ISCUSSION
The Tucker Act, 28 U.S.C. § 1491(a)(1), grants the
Claims Court jurisdiction “[t]o render judgment upon any
claim against the United States founded either upon the
Constitution, or any Act of Congress or any regulation of
an executive department, or upon any express or implied
contract with the United States.” But as the Supreme
Court explained, “[n]ot every claim invoking the Constitu-
tion, a federal statute, or a regulation is cognizable under
the Tucker Act.” United States v. Mitchell, 463 U.S. 206,
216 (1983). “[A] court must inquire whether the source of
substantive law can fairly be interpreted as mandating

2
An illegal exaction “involves money that was im-
properly paid, exacted, or taken from the claimant in con-
travention of the Constitution, a statute, or a regulation.”
Norman v. United States, 429 F.3d 1081, 1095 (Fed. Cir.
2005) (internal quotation marks and citation omitted).
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NELSON v. UNITED STATES
5
compensation by the Federal Government for the damages
sustained.” Id. at 218.
The Claims Court had no jurisdiction over claims
against a state entity, namely, the Missouri Department of
Higher Education. See United States v. Sherwood, 312 U.S.
584, 588 (1941) (holding that the Claims Court lacked ju-
risdiction over claims that are not against United States).
There is also no jurisdiction over this action as against the
actions of the IRS in offsetting Ms. Nelson’s federal refunds
based on the DOE claims. The IRS was required, under
section 6402(d)(1), to offset her refund “[u]pon receiving no-
tice . . . that [Ms. Nelson] owes a past-due legally enforcea-
ble debt.” 26 U.S.C. § 6402(d)(1). Under section 6402(g),
no federal court has jurisdiction “to hear any action,
whether legal or equitable, brought to restrain or review a
reduction authorized by subsection . . . (d).” Id. § 6402(g).
Section 6402(g) “explicitly reserves plaintiff’s ability to sue
agency-claimants directly, but it prohibits suits against
[the Department of the Treasury] merely for carrying out
its statutory obligation to collect debts that agencies refer
to it.” Dasisa, 951 F. Supp. 2d at 46.
The Claims Court also considered whether the actions
of the DOE in requesting the offset, rather than the actions
of the IRS in applying it, constituted an illegal exaction.
We need not reach whether this was an available theory of
recovery in view of the fact that the Claims Court properly
held that this claim is barred by issue preclusion because
of the prior district court adjudication finding that Ms. Nel-
son continued to owe money to the DOE. As to this claim,
we sustain the dismissal on the merits rather than the lack
of jurisdiction. See Bank of Guam v. United States, 578
F.3d 1318, 1325 (Fed. Cir. 2009).
Finally, the relief sought by Ms. Nelson under her
Fourteenth Amendment claim (apart from the illegal exac-
tion theory) was not within the jurisdiction of the Claims
Court because the Due Process and Equal Protection
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NELSON v. UNITED STATES
6
Clauses generally “do not mandate payment of money by
the government.” LeBlanc v. United States, 50 F.3d 1025,
1028 (Fed. Cir. 1995).
Because Ms. Nelson identifies no other basis for the
Claims Court to exercise jurisdiction over her claim, the
Claims Court’s dismissal of her complaint is
AFFIRMED

Case: 20-1179 Document: 17 Page: 6 Filed: 06/03/2020