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Zherka v. Ryan

United States District Court, S.D. New York

September 30, 2014

ZHERKA, Plaintiff, --
-- RYAN, et al., Defendants

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For Selim Sam Zherka, Plaintiff: Jay Goldberg, Jay Goldberg, PC, New York, NY; Michael Howard Sussman, Sussman & Watkins, Goshen, NY.

For Agent Ryan, Of the Internal Revenue Service, Agent Ashcroft, Of the Federal Bureau of Investigation, Lois Lerner, Defendants: Alicia Marie Simmons, LEAD ATTORNEY, U.S. Attorney Office SDNY, New York, NY.


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Thomas P. Griesa, United States District Judge.

Plaintiff Selim Zherka filed this Bivens action claiming that employees of the Internal Revenue Service hindered his application for tax exempt status and initiated an investigation against him as part of a broader effort to penalize members of the Tea Party for their political activities. Defendants have filed motions to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1),(5), and (6). For the following reasons, defendant Lerner's motion to dismiss is granted. Defendants Ryan and Ashcroft's motion to dismiss is denied.

The Complaint

Beginning in 2009, plaintiff published newspaper articles and held rallies criticizing government officials for political corruption and " confiscatory tax policies." Plaintiff organized and supported the creation of the Tea Party, a political party that received extensive publicity in the

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news media. At some point, plaintiff sought tax-exempt status for an organization he and others used primarily for educational purposes. However, plaintiff claims that defendant Lois Lerner (" defendant Lerner" ), an IRS employee, subjected his application to an inordinately high level of scrutiny, forcing him to abandon his efforts to obtain tax-exempt status.

Plaintiff alleges that in 2011, agent Ryan of the Federal Bureau of Investigation[1] (" defendant Ryan" ) and agent Ashcroft (" defendant Ashcroft" ) of the IRS began an investigation into his commercial real estate dealings. Plaintiff claims these defendants issued over 75 subpoenas to his business associates, threatening them with criminal prosecution should they withhold information incriminating plaintiff. Plaintiff alleges that as a result, many of these business associates terminated their relationship with him out of a fear of " running asunder of federal agencies." He asserts that defendants' conduct was part of a broader government strategy to penalize Tea Party members for their political speech.

Plaintiff claims to have lost business as a result of the ongoing investigation. Moreover, he claims that defendants' actions have chilled his political activities, damaged his reputation, and caused emotional injuries. Plaintiff brings this Bivens action asserting five causes of action arising under the First Amendment, Fifth Amendment, and Fourteenth Amendment. Plaintiff served defendants Ryan and Ashcroft with a copy of the summons and complaint within the periods allowed bye the Federal Rules of Civil Procedure. However, he never served defendant Lerner with a copy of the summons and complaint.


A. Whether to Grant Defendant Lerner's Rule 12(b)(5) Motion to Dismiss for Insufficiency of Process.

Federal courts lack jurisdiction over a defendant unless the procedural requirement of service of summons has been satisfied. Omni Capital Int'l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 104, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987). " If a defendant is not served within 120 days after the complaint is filed, the court--on motion or on its own after notice to the plaintiff--must dismiss the action without prejudice against that defendant or order that service be made within a specified time." Fed.R.Civ.P. 4(m). The court may extend the time for service for good cause. Id. In determining whether good cause exists, the court will consider whether " the plaintiff was diligent in making reasonable efforts to effect service, including but not limited to whether plaintiff moved under FRCP 6(b) for an extension of time in which to serve the defendant." AIG Managed Mkt. Neutral Fund v. Askin Capital Mgmt., L.P., 197 F.R.D. 104, 108 (S.D.N.Y. 2000).

The court must look to matters outside the complaint in determining whether it has personal jurisdiction. Mende v. Milestone Tech., Inc., 269 F.Supp.2d 246, 251 (S.D.N.Y. 2003). It is the plaintiff's burden to prove that service was adequate. Burda Media, Inc. v. Viertel, 417 F.3d 292, 298-99 (2d Cir. 2005). A plaintiff satisfies this burden by making a prima facie showing, through specific allegations and supporting materials, that service ...

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