The opinion of the court was delivered by: Hon. Jerome B. Simandle
This matter is before the Court upon the motion to dismiss Plaintiffs' Second Amended Complaint under Rule 12(b)(1) and 12(b)(6), Fed. R. Civ. P. by defendant the U.S. Department of Justice ("DOJ"). [Docket Item 7.] Plaintiffs, Clifton Beale and Clifton Beale Consulting, LLC brought this action alleging numerous common law torts, a violation of Plaintiff's rights under the Equal Protection Clause of the Constitution of the United States and a cause of action under 42 U.S.C. § 1983. Plaintiffs' claims stem from certain press releases and web postings made by DOJ in connection with a lawsuit filed by the United States against Plaintiffs alleging that Plaintiffs were involved in unlawfully promoting sham trusts and other tax-fraud schemes. For the reasons set forth in this Opinion, the Court will grant DOJ's motion to dismiss in its entirety.
The allegations made in the second amended complaint stem from a 2003 suit filed by the United States against Plaintiffs (and several other affiliated entities) in which the United States alleged that Plaintiffs were unlawfully promoting sham trusts and other tax-fraud schemes (the "Underlying Action"). According to the complaint in the Underlying Action, Plaintiffs (and others) provided false advice to the customers that resulted in the understating of customers' true tax liability. See U.S. v. Clifton Beale, No. 03-3880 (D.N.J. 2003). In the civil action against Plaintiffs, the United States sought a permanent injunction under the Internal Revenue Code, 26 U.S.C. §§ 7402, 7407-08 barring Plaintiffs from continuing in this business.
In conjunction with filing the complaint in the Underlying Action, DOJ issued a press release (and posted the press release on its web site with a hyper-link to the complaint) summarizing the United States' claims against Mr. Beale. (Second Amended Compl., Ex. 4(e), 7.) The press release stated, in relevant part:
The Department of Justice today sued Clifton Beale of Pennsauken, New Jersey, alleging that he promotes sham trusts and other schemes to illegally reduce the federal tax liability of his customers. The civil injunction . . . is part of the Justice Department's continuing nationwide crackdown against promoters of illegal tax avoidance schemes.
The Complaint against Beale alleges that he promotes a scheme using sham trusts and limited liability companies that purport to enable customers to claim tax deductions for such personal expenses as lawn care, utilities, and house repairs.
Ultimately, Beale consented to the entry of an injunction, but would not admit any facts alleged in the complaint. On February 4, 2004, the Court entered the agreed permanent injunction in the Underlying Action which barred Beale from engaging in any activity prohibited by Sections 7402, 7407-08 of the Internal Revenue Code, including the organizing or selling of any partnership and or the making of any false statements regarding the applicability of any tax benefit in connection with any partnership or from preparing federal income tax returns for others. See Beale, No. 03-3880 (Docket Item No. 24.) On February 5, 2004, DOJ then issued and posted on its website another press release announcing the permanent injunction. (Second Amended Compl. Ex. 4(f), 7(a)). The press release stated, in pertinent part:
The Justice Department today announced that a federal judge . . . ordered Pennsauken, New Jersey resident Clifton Beale to stop selling trusts and other tax schemes that the Justice Department contends are fraudulent. The court order, to which Beale consented without admitting wrongdoing, permanently bars him from preparing tax returns for others. It also requires that the [Mr. Beale] post the court order on his website, as well as notify his customers of it in writing. In addition, Beale must provide the Justice Department [with] a complete list of his customers. The order applies to Beale, his affiliated businesses and anyone acting in concert with them.
On May 15, 2006, Plaintiffs filed suit against DOJ. DOJ moved to dismiss the complaint on June 8, 2006. [Docket Item No. 2.] On June 30, 2006, while DOJ's motion to dismiss was still pending and without leave of court, Plaintiffs filed an amended complaint. [Docket Item No. 4.] A few days later, again while DOJ's motion to dismiss was pending and without leave of court, Plaintiff filed a second amended complaint ("SAC") on July 10, 2006 which was included in a document Plaintiff captioned Response in Opposition to Defendant(s) Motion to Dismiss. [Docket Item No. 6.]
Included among the claims in Plaintiffs' self-styled five-count SAC, Plaintiffs bring three common law tort claims: "intentional infliction of financial distress and emotional distress" (Count I)(hereafter, "IIED"), libel and slander (Count II), and "loss of business and clientele" (Count III). Plaintiffs also bring a claim for violation of Plaintiffs' civil rights (presumably under 42 U.S.C. § 1983) including "deprivation of rights" (Count IV) and "conspiracy to interfere with civil rights" (under the Equal Protection Clause of the U.S. Constitution) (Count V). Although Plaintiffs claim to request no monetary ...