1 Michael A. Newdow (SBN: 220444) NEWDOW LAW
2 P.O. Box 233345 Sacramento, CA 95823
3 Phone: 916-427-6669 newdowlaw@gmail.com
4
Attorney for Plaintiffs
5

6

UNITED STATES DISTRICT COURT

7

EASTERN DISTRICT OF CALIFORNIA

8

SACRAMENTO DIVISION

9
FREEDOM FROM RELIGION 10 FOUNDATION, INC.; PAUL
STOREY; BILLY FERGUSON; 11 KAREN BUCHANAN; JOSEPH
MORROW; ANTHONY G. ARLEN; 12 ELISABETH STEADMAN;
CHARLES AND COLLETTE 13 CRANNELL; MIKE OSBORNE;
KRISTI CRAVEN; WILLIAM M. 14 SHOCKLEY; PAUL ELLCESSOR;
JOSEPH RITTELL; WENDY 15 CORBY; PAT KELLEY; CAREY
GOLDSTEIN; DEBORA SMITH; 16 KATHY FIELDS; RICHARD
MOORE; SUSAN ROBINSON; AND 17 KEN NAHIGIAN,

CASE NO.:
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

18

Plaintiffs,

19 v.

20 TIMOTHY GEITHNER, in his official capacity as Secretary of the
21 United States Department of the Treasury; DOUGLAS SHULMAN, in
22 his official capacity as Commissioner of the Internal Revenue Service; and
23 SELVI STANISLAUS, in her official capacity as Executive Officer of the
24 California Franchise Tax Board,

25

Defendants.

26

27

28

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
Page 1 of 13

1

The Plaintiffs, as their Complaint against the Defendants, allege as follows:

2

NATURE OF THE CLAIMS

3

1. The Plaintiffs seek a declaration under 28 U.S.C. § 2201 that 26 U.S.C.

4 §§107 and 265(a)(6), both on their face and as administered by the Internal Revenue

5 Service ("IRS") and the Department of the Treasury ("Treasury"), violate the

6 Establishment Clause of the First Amendment to the Constitution of the United States

7 by providing preferential tax benefits to ministers of the gospel. Plaintiffs request that

8 the Court enjoin any allowance or grant of tax benefits for ministers of the gospel under

9 §§107 and 265(a)(6).

10

JURISDICTION AND VENUE

11

2. This Court has federal question jurisdiction pursuant to 28 U.S.C. §1331

12 with respect to the relief sought against all defendants. In addition, this Court has

13 jurisdiction pursuant to 28 U.S.C. §§ 1343(a)(3) and 1367 with respect to the relief

14 sought against defendant Selvi Stanislaus. The Court also has the authority to issue a

15 declaratory judgment under 28 U.S.C. § 2201. The Court further has the authority to

16 award injunctive relief under 28 U.S.C. § 1343 and Fed. R. Civ. P. 65.

17

3. The challenged provisions of the Revenue Code were enacted pursuant to

18 the power granted to Congress by Article I, Section 8 of the United States Constitution.

19

4. The plaintiffs are federal taxpayers who object to the allowance of

20 preferential tax benefits under the Revenue Code, as enacted pursuant to Article I,

21 Section 8 of the United States Constitution.

22

5. Venue is appropriate in the District Court for the Eastern District of

23 California, pursuant to 28 U.S.C. §1391(e).

24

PARTIES

25

6. The plaintiff, Freedom From Religion Foundation, Inc. ("FFRF"), is a non-

26 profit membership organization that advocates for the separation of church and state and

27 educates on matters of non-theism. FFRF has more than 13,900 members, in every state

28 of the United States, including more than 2,200 members in the State of California.

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
Page 2 of 13

1

7. FFRF represents and advocates on behalf of its members throughout the

2 United States.

3

8. FFRF's membership includes individuals who are federal and California

4 taxpayers residing in the Eastern District of California, and who are opposed to

5 government endorsement of religion.

6

9. The plaintiff, Paul Storey, is an adult individual who is a member of FFRF

7 and a federal and California taxpayer who resides in the Eastern District of California;

8 he is opposed to government endorsement of religion, including preferential and

9 exclusive tax benefits for religious organizations and ministers of the gospel.

10

10. The plaintiff, Billy Ferguson, is an adult individual who is a member of

11 FFRF and a federal and California taxpayer who resides in the Eastern District of

12 California; he is opposed to government endorsement of religion, including preferential

13 and exclusive tax benefits for religious organizations and ministers of the gospel.

14

11. The plaintiff, Karen Buchanan, is an adult individual who is a member of

15 FFRF and a federal and California taxpayer who resides in the Eastern District of

16 California; she is opposed to government endorsement of religion, including preferential

17 and exclusive tax benefits for religious organizations and ministers of the gospel.

18

12. The plaintiff, Joseph Morrow, is an adult individual who is a member of

19 FFRF and a federal and California taxpayer who resides in the Eastern District of

20 California; he is opposed to government endorsement of religion, including preferential

21 and exclusive tax benefits for religious organizations and ministers of the gospel.

22

13. The plaintiff, Anthony G. Arlen, is an adult individual who is a member of

23 FFRF and a federal and California taxpayer who resides in the Eastern District of

24 California; he is opposed to government endorsement of religion, including preferential

25 and exclusive tax benefits for religious organizations and ministers of the gospel.

26

14. The plaintiff, Elisabeth Steadman, is an adult individual who is a member

27 of FFRF and a federal and California taxpayer who resides in the Eastern District of

28 California; she is opposed to government endorsement of religion, including preferential

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
Page 3 of 13

1 and exclusive tax benefits for religious organizations and ministers of the gospel.

2

15. The plaintiffs, Charles and Collette Crannell, are adult individuals who are

3 members of FFRF and federal and California taxpayers who reside in the Eastern District

4 of California; they are opposed to government endorsement of religion, including

5 preferential and exclusive tax benefits for religious organizations and ministers of the

6 gospel.

7

16. The plaintiff, Mike Osborne, is an adult individual who is a member of

8 FFRF and a federal and California taxpayer who resides in the Eastern District of

9 California; he is opposed to government endorsement of religion, including preferential

10 and exclusive tax benefits for religious organizations and ministers of the gospel.

11

17. The plaintiff, Kristi Craven, is an adult individual who is a member of FFRF

12 and a federal and California taxpayer who resides in the Eastern District of California;

13 she is opposed to government endorsement of religion, including preferential and

14 exclusive tax benefits for religious organizations and ministers of the gospel.

15

18. The plaintiff, William M. Shockley, is an adult individual who is a member

16 of FFRF and a federal and California taxpayer who resides in the Eastern District of

17 California; he is opposed to government endorsement of religion, including preferential

18 and exclusive tax benefits for religious organizations and ministers of the gospel.

19

19. The plaintiff, Paul Ellcessor, is an adult individual who is a member of

20 FFRF and a federal and California taxpayer who resides in the Eastern District of

21 California; he is opposed to government endorsement of religion, including preferential

22 and exclusive tax benefits for religious organizations and ministers of the gospel.

23

20. The plaintiff, Joseph Rittell, is an adult individual who is a member of FFRF

24 and a federal and California taxpayer who resides in the Eastern District of California;

25 he is opposed to government endorsement of religion, including preferential and

26 exclusive tax benefits for religious organizations and ministers of the gospel.

27

21. The plaintiff, Wendy Corby, is an adult individual who is a member of

28 FFRF and a federal and California taxpayer who resides in the Eastern District of

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
Page 4 of 13

1 California; she is opposed to government endorsement of religion, including preferential

2 and exclusive tax benefits for religious organizations and ministers of the gospel.

3

22. The plaintiff, Pat Kelley, is an adult individual who is a member of FFRF

4 and a federal and California taxpayer who resides in the Eastern District of California;

5 she is opposed to government endorsement of religion, including preferential and

6 exclusive tax benefits for religious organizations and ministers of the gospel.

7

23. The plaintiff, Carey Goldstein, is an adult individual who is a member of

8 FFRF and a federal and California taxpayer who resides in the Eastern District of

9 California; he is opposed to government endorsement of religion, including preferential

10 and exclusive tax benefits for religious organizations and ministers of the gospel.

11

24. The plaintiff, Debora Smith, is an adult individual who is a member of

12 FFRF and a federal and California taxpayer who resides in the Eastern District of

13 California; she is opposed to government endorsement of religion, including preferential

14 and exclusive tax benefits for religious organizations and ministers of the gospel.

15

25. The plaintiff, Kathy Fields, is an adult individual who is a member of FFRF

16 and a federal and California taxpayer who resides in the Eastern District of California;

17 she is opposed to government endorsement of religion, including preferential and

18 exclusive tax benefits for religious organizations and ministers of the gospel.

19

26. The plaintiff, Richard Moore, is an adult individual who is a member of

20 FFRF and a federal and California taxpayer who resides in the Eastern District of

21 California; he is opposed to government endorsement of religion, including preferential

22 and exclusive tax benefits for religious organizations and ministers of the gospel.

23

27. The plaintiff, Susan Robinson, is an adult individual who is a member of

24 FFRF and a federal and California taxpayer who resides in the Eastern District of

25 California; she is opposed to government endorsement of religion, including preferential

26 and exclusive tax benefits for religious organizations and ministers of the gospel.

27

28. The plaintiff, Ken Nahigian, is an adult individual who is a member of

28 FFRF and a federal and California taxpayer who resides in the Eastern District of

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
Page 5 of 13

1 California; he is opposed to government endorsement of religion, including preferential

2 and exclusive tax benefits for religious organizations and ministers of the gospel.

3

29. The defendant Timothy Geithner ("Geithner") is the Secretary of the United

4 States Department of the Treasury, with a principal address of 1500 Pennsylvania

5 Avenue N.W., Washington, D.C. 20220. The defendant Geithner is sued in his official

6 capacity.

7

30. The defendant Douglas Shulman ("Shulman") is the Commissioner of the

8 Internal Revenue Service, with a principal address of 1111 Constitution Avenue N.W.,

9 Washington, D.C. 20224. The defendant Shulman is sued in his official capacity.

10

31. The defendant Selvi Stanislaus ("Stanislaus") is the Executive Officer of the

11 California Franchise Tax Board, with a principal address of P.O. Box 1468, Sacramento,

12 CA 98512-1468. She is sued in her official capacity.

13

THE ESTABLISHMENT CLAUSE IS VIOLATED BY

14

EXCLUSIVE AND PREFERENTIAL TAX BENEFITS

15

32. The Establishment Clause of the First Amendment to the United States

16 Constitution provides that "Congress shall make no law respecting an establishment of

17 religion." Article 1, Sec. 4 of the California Constitution contains a similarly worded

18 Establishment Clause, and Article 16, Sec. 5 of the California Constitution prohibits aid

19 in support of "any religious sect, church, creed or sectarian purpose."

20

33. Sections 107 and 265(a)(6) of the Revenue Code, both on their face and as

21 administered by the defendants Geithner and Shulman, violate the Establishment Clause

22 of the First Amendment, in part, because they provide tax benefits only to "ministers of

23 the gospel,” rather than to a broad class of taxpayers.

24

34. Sections 107 and 265(a)(6) subsidize, promote, endorse, favor, and advance

25 churches, religious organizations, and "ministers of the gospel," and they discriminate

26 against secular organizations, including nonprofit organizations such as FFRF that

27 promote atheism, humanism, secularism, and other non-religious worldviews, as well as

28 their employees and members.

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
Page 6 of 13

1

35. In order to administer and apply §§ 107 and 265(a)(6), moreover, the IRS

2 and the Treasury must make sensitive, fact-intensive, intrusive, and subjective

3 determinations dependent on religious criteria and inquiries, such as whether certain

4 activities constitute "religious worship" or "sacerdotal functions;" whether a member of

5 the clergy is "duly ordained, commissioned, or licensed," or whether a Christian college

6 or other organization is "under the authority of" a church or denomination. These and

7 other determinations result in "excessive entanglement" between church and state

8 contrary to the Establishment Clause.

9

36. Sections 107 and 265(a)(6) are not permissible "accommodations" of

10 religion under the Establishment Clause, in part, because the income taxation of

11 ministers of the gospel under the general rules that apply to other individuals would not

12 interfere with the religious mission of churches or other organizations or the ministers

13 themselves.

14

37. Sections 17131.6 and 17280(d)(2) of the California Revenue and Taxation

15 Code, both on their face and as administered by the California Franchise Tax Board,

16 under the direction of the defendant Selvi Stanislaus, also violate the Establishment

17 Clause of the First Amendment to the United States Constitution and the Establishment

18 Clause of Article 1, Sec. 4, of the California Constitution, as well as Article 16, Sec. 5

19 of the California Constitution.

20

38. Sections 17131.6 and 17280(d)(2) of the California Revenue and Taxation

21 Code correspond to §§107 and 265(a)(6) of the Internal Revenue Code, and they have

22 the same constitutional defects and infirmities under the Establishment Clauses of the

23 California and United States Constitutions.

24

39. The defendant Stanislaus, in her official capacity as the Executive Officer

25 of the California Franchise Tax Board, is responsible for administering and

26 implementing §§ 17131.6 and 17280(d)(2).

27

28

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
Page 7 of 13

1

40. The defendant Stanislaus has acted under color of state law in allowing tax

2 benefits that violate the Establishment Clauses of the United States and California

3 Constitutions.

4
5
41.
6
follows:
7

APPLICABLE PROVISIONS OF THE INTERNAL REVENUE CODE AND TREASURY REGULATIONS
Section 107 of the Internal Revenue Code (26 U.S.C. § 107) provides as

In the case of a minister of the gospel, gross income does not
8
include -
9

10

(1) the rental value of a home furnished to him as part of his

compensation; or

11

12

(2) the rental allowance paid to him as part of his compensation, to

the extent used by him to rent or provide a home and to the extent

13

such allowance does not exceed the fair rental value of the home,

14

including furnishings and appurtenances such as a garage, plus the

cost of utilities.
15

16

42. Section 1.107-1(a) of the Income Tax Regulations (“regulations”) provides

17
as follows:
18

19

In order to qualify for the exclusion, the home or rental allowance

must be provided as remuneration for services which are “ordinarily
20
the duties of a minister of the gospel.” In general, the rules provided

21

in §1.1402(c)-5 will be applicable to such determination. Examples

22

of specific services the performance of which will be considered

duties of a minister for purposes of §107 include the performance of

23

sacerdotal functions, the conduct of religious worship, the

24

administration and maintenance of religious organizations and their

integral agencies, and the performance of teaching and

25

administrative functions at theological seminaries.

26
43. Although neither §107 of the Code, nor §1.107-1 of the Treasury regulations,
27

28 limits the tax benefits of §107 to ministers who are "duly ordained, commissioned, or

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

Page 8 of 13

1 licensed," the IRS apparently requires that a minister of the gospel be "duly ordained,
2
commissioned, or licensed" in order for the minister to be entitled to tax benefits.
3

4

44. The Treasury regulations do not clarify the meaning of "duly ordained,

5
commissioned, or licensed," and difficult determinations often must be made as to
6
7 whether this requirement is satisfied.

8

45. The §107 exclusion is available, according to the IRS, only when the

9
minister is given use of a home or receives a housing allowance as compensation for
10

11 service performed "in the exercise of" his or her ministry, a requirement borrowed from

12
26 U.S.C. §1402(c)(4).
13

14

46. The Treasury regulations under §1402(c)(4) contain detailed rules for

15 determining the circumstances under which services performed by a minister are "in the
16
exercise of" his or her ministry.
17

18

47. Section 1.1402(c)-5(b)(2) of the Treasury regulations provides that service

19
performed by a minister in the exercise of his ministry includes: 1) the ministration of
20
21 sacerdotal functions; 2) the conduct of religious worship; and 3) the control, conduct and

22 maintenance of religious organizations (including the religious boards, societies, and
23
other integral agencies of such organizations) under the authority of a religious body
24

25 constituting a church or church denomination.

26
48. Section 1.1402(c)-5(b)(2)(ii) of the Treasury regulations further provides that
27
28 service performed by a minister in the control, conduct and maintenance of a religious

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
Page 9 of 13

1 organization relates to directing, managing, or promoting the activities of such
2
organization. This section also provides that any religious organization is deemed to be
3

4 under the authority of a religious body constituting a church or church denomination if

5
it is organized and dedicated to carrying out the tenets and principles of a faith in
6
7 accordance with either the requirements or sanctions governing the creation of

8 institutions of the faith. The term "religious organization" has the same meaning and
9
application as is given to the term for income tax purposes.
10

11

49. Section 1.1402(c)-5(b)(2)(iv) of the Treasury regulations also provides in

12
relevant part that if a minister is performing service for an organization which is operated
13
14 as an integral agency of a religious organization under the authority of a religious body

15 constituting a church or church denomination, all service performed by the minister in
16
the control, conduct, and maintenance of such organization is in the exercise of his
17

18 ministry, including purely secular duties.

19
50. Section 265(a)(6) of the Internal Revenue Code further allows a minister of
20
21 the gospel to claim deductions under §§163 and 164 of the Revenue Code for residential

22 mortgage interest and property taxes, even though the money used to pay such amounts
23
was received from a church or other employer in the form of a tax-exempt §107
24

25 allowance. Such "double-dipping" is disallowed for non-clergy taxpayers.

26

THE FEDERAL AND STATE TAX BENEFITS

27

VIOLATE THE ESTABLISHMENT CLAUSE

28

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
Page 10 of 13

1

51. Sections 107 and 265(a)(6) of the Revenue Code provide economic benefits

2
for "ministers of the gospel" that are not provided to other taxpayers, including federal
3

4 taxpayers who are plaintiff members of FFRF in the Eastern District of California.

5
52. Sections 107 and 265(a)(6), both on their face and as administered by the
6
7 defendants Geithner and Shulman, violate the Establishment Clause of the First

8 Amendment, and the defendants should be enjoined from any further allowance of such
9
tax benefits to ministers of the gospel.
10

11

53. The defendant Stanislaus similarly should be enjoined from allowing or

12
granting tax benefits under §§17131.6 and 17280(d)(2) of the California Revenue and
13
14 Taxation Code that are available only to ministers of the gospel.

15

54. The actions of all the defendants have the effect each year of excluding

16
hundreds of millions of dollars from taxation, and this exclusion is available only to
17

18 ministers of the gospel.

19
55. The tax preferences granted to ministers of the gospel under the Internal
20
21 Revenue Code and the California Revenue and Taxation Code also enable churches and

22 other religious organizations to reduce their salaries and compensation costs.
23
56. The employees of secular organizations such as FFRF are not allowed these
24

25 tax preferences, and FFRF and other secular organizations incur comparatively greater

26
compensation costs than they would if their employees could be considered "ministers
27
28 of the gospel."

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
Page 11 of 13

1

57. The tax preferences afforded ministers of the gospel constitute a subsidy that

2
results in tangible and direct economic injury to FFRF, and to its members and
3

4 employees, who cannot claim these benefits.

5
58. FFRF, a non-profit organization, competes with churches and religious
6
7 organizations, but the competition is unfair. The tax subsidies available to churches,

8 religious organizations, and ministers of the gospel are not available to FFRF and its
9
employees. FFRF is thereby placed at a competitive disadvantage relative to churches
10

11 and other organizations whose employees receive tax subsidies.

12
WHEREFORE, the Plaintiffs demand relief as follows:
13

14

A. A declaration is sought that the actions of all defendants violate the

15 Establishment Clause of the First Amendment to the United States Constitution and that
16
the actions of defendant Stanislaus also violate the Establishment Clause of the
17

18 California Constitution and the no aid provision of the California Constitution;

19
B. A declaration is sought that §§107 and 265(a)(6) of the Internal Revenue
20
21 Code violate the Establishment Clause of the First Amendment to the United States

22 Constitution;
23
C. A declaration is sought that the provisions of the California Revenue and
24

25 Taxation Code that correspond to §§107 and 265(a)(6) of the Internal Revenue Code

26
violate the Establishment Clause of the First Amendment to the United States
27

28

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
Page 12 of 13

1 Constitution, the Establishment Clause of the California Constitution, and the no aid
2
provision of the California Constitution.
3

4

D. An order is sought enjoining the defendants from continuing to grant or

5
allow tax benefits under §§107 and 265(a)(6) of the Internal Revenue Code and the
6
7 corresponding sections of the California Revenue and Taxation Code;

8

E. A declaration is sought that the defendant Stanislaus in administering and

9
enforcing the provisions of the California Revenue and Taxation Code that correspond
10

11 to §§107 and 265(a)(6) of the Internal Revenue Code acted under color of law and the

12
plaintiffs are entitled to relief and remedies under 42 U.S.C. §1983;
13

14

F. An order is sought awarding the Plaintiffs their reasonable costs,

15 disbursements and attorneys fees, as allowed by law, including pursuant to 42 U.S.C.
16
§1988 and 28 U.S.C. §2412; and
17

18

G. Such further relief is sought that the Court deems just and equitable.

19
Dated this 14th day of October, 2009.
20

21

/s/ Michael A. Newdow

Michael A. Newdow (SBN 220444)

22

Attorney at Law

23

NEWDOW LAW

P.O. Box 233345
24
Sacramento, CA 95823

25

Phone: 916-427-6669

26

newdowlaw@gmail.com

27

Attorney for Plaintiffs

28

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
Page 13 of 13

 
 1 Kevin T. Snider, State Bar No. 170988

Counsel of Record

2 Matthew B. McReynolds, 234797

PACIFIC JUSTICE INSTITUTE

3 Post Office Box 276600 Sacramento, CA 95827

4

Tel. (916) 857-6900 Fax: (916) 857-6902

5

Email: kevinsnider@pacificjustice.org mattmcreynolds@pacificjustice.org

6 Attorneys for Intervenors/Defendants

7

8

UNITED STATES DISTRICT COURT

9

EASTERN DISTRICT OF CALIFORNIA

10 SACRAMENTO DIVISION
11

12

)

13

FREEDOM FROM RELIGION FOUNDATION, INC.; PAUL STOREY;

14 BILLY FERGUSON; KAREN BUCHANAN; JOSEPH MORROW;

15 ANTHONY G. ARLEN; ELISABETH

) Case No. 2:09-CV-02894-WBS-DAD ) ) ) ) MEMORANDUM OF POINTS AND ) AUTHORITIES IN SUPPORT OF

STEADMAN; CHARLES AND 16 COLLETTE CRANNELL; MIKE

) MOTION TO INTERVENE BY PASTOR ) MICHAEL RODGERS, ET AL.

17 18

OSBORNE; KRISTI CRAVEN; WILLIAM )

M. SHOCKLEY; PAUL ELLCESSOR; JOSEPH RITTELL; WENDY CORBY;

) ) )

PAT KELLEY; CAREY GOLDSTEIN; )

19 DEBORA SMITH; KATHY FIELDS;

)

20

RICHARD MOORE; SUSAN ROBINSON; ) HEARING: Nov. 23, 2009

AND KEN NAHIGIAN,

) TIME:

2:00 p.m.

) COURTROOM: 5

21 Plaintiffs,

) TRIAL DATE: TBD )

22

)

v.

)

23

)

TIMOTHY GEITHNER, in his official ) 24 capacity as Secretary of the United States )

25 Department of the Treasury; DOUGLAS SHULMAN, in his official capacity as
26 Commissioner of the Internal Revenue

) ) ) )

Service; and SELVI STANISLAUS, in her )

27 official capacity as Executive Officer of the )

_________________________________________________________________________________________________________

28

Memorandum of Points and Authorities in Support of Motion to Intervene by Pastor Michael Rodgers, et al.

-1-

1 California Franchise Tax Board,

)

)

2

Defendants,

) )

3

AND

) )

4

)

PASTOR MICHAEL RODGERS; DOES 1- )

5 100, Proposed Intervenors-Defendants. )

6

7

8 TABLE OF CONTENTS
9 TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
10 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
11 ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
12 I. Pastor Rodgers and Does 1-100 Are Entitled to Intervention as of Right. . . . . . . . . . . . . . 4
13 A. The Motion to Intervene is Timely. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
14 B. Proposed Intervenors Have Significantly Protectable Interests Relating to the Subject
15 of This Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
16 C. Proposed Intervenors Are So Situated that the Disposition of the Action May, as a
17 Practical Matter, Impair or Impede Their Ability to Protect Their Interests. . . . . . . . . . 9
18 D. Proposed Intervenors’ Interests are Inadequately Represented by the Parties Before
19 the Court. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
20 II. Pastor Rodgers and Does 1-100 Should, in the Alternative, be Granted Permissive
21 Intervention Under Rule 24(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
22 CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
23

24

25

26

27
_________________________________________________________________________________________________________
28
Memorandum of Points and Authorities in Support of Motion to Intervene by Pastor Michael Rodgers, et al.

-2-

1

TABLE OF AUTHORITIES

2 Cases 3 Calif. Dept. of Social Svcs. v. Thompson, 321 F.3d 835 (9th Cir. 2003) . . . . . . . . . . . . . . . . . . . 11

4 California ex rel. Lockyer v. U.S., 450 F.3d 436 (9th Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . 6, 9

5 Donnelly v. Glickman, 159 F.3d 405 (9th Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

6 Idaho Farm Bureau Feder'n v. Babbitt, 58 F.3d 1392 (9th Cir. 1995) . . . . . . . . . . . . . . . . . . . . 5, 7

7 Kootenai Tribe of Idaho v. Veneman, 313 F.3d 1094 (9th Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . 10
8

League of United Latin American Citizens (“LULAC”) v. Wilson, 131 F.3d 1297

9

(9th Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-6, 8-9

10 Michigan State AFL-CIO v. Miller, 103 F.3d 1240 (6th Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . 9-10
11 Natural Res. Def. Council v. U. S. Regulatory Comm’n, 578 F.2d 1341 (10th Cir. 1978) . . . . . 9-10
12
13 Pacific Gas and Elec. Co. v. Lynch, 216 F.Supp.2d 1016 (N.D. Cal. 2002) . . . . . . . . . . . . . . 10-12

14 Purnell v. City of Akron, 925 F.2d 941 (6th Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 12-13

15 Sagebrush Rebellion, Inc. v. Watt, 713 F.2d 525 (9th Cir. 1983) . . . . . . . . . . . . . . . . . . . . . . . . . 7-9

16 Sanguine, Ltd. v. U.S. Dept. of Interior, 736 F.2d 1416 (10th Cir. 1984). . . . . . . . . . . . . . . . . . . . 10

17 Sierra Club v. U.S. E.P.A., 995 F.2d 1478 (9th Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

18 Trbovich v. United Mine Workers, 404 U.S. 528 (1972) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
19

20

United States v. Oregon, 913 F.2d 576 (9th Cir. 1990), cert. denied sub nom., Makah Indian Tribe v. United States, 501 U.S. 1250 (1991) . . . . . . . . . . . . . . . . . . . . . . . . 5

21 Utah Ass’n of Counties v. Clinton, 255 F.3d 1246 (10th Cir. 2001). . . . . . . . . . . . . . . . . . . . . . 8-10

22

Washington State Bldg. and Constr. Trades Council v. Spellman, 684 F.2d 627 (9th Cir. 1982),

23

cert. denied sub nom., Don’t Waste Washington Legal Defense Foundation v. Washington,

24

461 U.S. 913 (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

25 Wetlands Action Network v. U.S. Army Corps of Eng., 222 F.3d 1105 (9th Cir. 2000) . . . . . . 12-13

26 Statutes
27 Fed. R. Civ. P. 24. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
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Memorandum of Points and Authorities in Support of Motion to Intervene by Pastor Michael Rodgers, et al.

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1

INTRODUCTION

2

Applicant for Intervention, Pastor Michael Rodgers, (sometimes hereinafter “Pastor

3 Rodgers,” “the pastor,” or “Applicant”), is a minister of the gospel in the Sacramento area who
4 utilizes the ministerial tax exemption housing allowance being challenged by Plaintiffs, Freedom 5
from Religion Foundation, et al. See accompanying Declaration of Pastor Michael Rodgers 6
(“Rodgers Decl.”), at ¶¶ 6-8. Applicants Does 1-100 are ministers within the jurisdiction of the 7
8 Eastern District who will be similarly affected by Plaintiffs’ action.

9

Applicants seek to intervene in this litigation because Plaintiff claims that 26 U.S.C. §§107

10 and 265(a)(6) administered by the Internal Revenue Service (“IRS”) and the Department of the

11 Treasury (“Treasury”) and the corresponding California Revenue and Taxation Code §§ 17131.6
12 and 17280(d)(2) (collectively, “Statutes”) administered by the California Franchise Tax Board
13 (“Tax Board”) violate the religion clauses of the federal and state constitutions. This litigation
14
15 would have a direct, negative, fiscal impact on Pastor Rodgers and Does 1-100.

16

The Applicants are entitled to intervention both as of right and permissively under FRCP

17 24. In the alternative, should the court deny these requests for any reason, Pastor Rodgers and

18 Does 1-100 request that they be granted amicus status in the pending litigation. 19

20 ARGUMENT
21

22

I. Pastor Rodgers and Does 1-100 Are Entitled to Intervention as of Right.

23

Applications for intervention as of right in federal court actions are governed by Federal

24 Rule of Civil Procedure 24(a), which provides in relevant part that:

25

[u]pon timely application anyone shall be permitted to intervene in an action...when the

26

applicant claims an interest relating to the property or transaction which is the subject of

27

the action and the applicant is so situated that the disposition of the action may as a

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Memorandum of Points and Authorities in Support of Motion to Intervene by Pastor Michael Rodgers, et al.

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1

practical matter impair or impede the applicant's ability to protect that interest, unless that

interest is adequately represented by existing parties. 2

The Ninth Circuit has subdivided Rule 24(a)(2) into four basic elements: 3

4

(1) [T]he application must be timely; (2) the applicant must have a ‘significantly

protectable interest’ relating to the transaction that is the subject of the litigation;

5

(3) the applicant must be so situated that the disposition of the action may, as a

6

practical matter, impair or impeded the applicant’s ability to protect its interest; and (4) the applicant’s interest must be inadequately represented by the parties before

7

the court.

8 League of United Latin American Citizens (“LULAC”) v. Wilson, 131 F.3d 1297 (9th Cir.

9 1997).

10

It is well-established that Rule 24 “is construed broadly in favor of the applicants.” Idaho

11 Farm Bureau Feder'n v. Babbitt, 58 F.3d 1392, 1397 (9th Cir. 1995) (citing United States v.
12 Oregon, 913 F.2d 576, 587 (9th Cir. 1990), cert. denied sub nom., Makah Indian Tribe v. United
13 States, 501 U.S. 1250 (1991)). Applicants, as will be discussed infra, meet each of the Ninth
14 Circuit’s four elements for obtaining intervention as of right. In short, the Motion is first of all
15 timely, having been filed within days of the initiation of the lawsuit. Second, Applicants have
16
17 significantly protectable interests in the subject of the litigation, namely the ability to claim the tax
18 benefits bestowed by the Statutes. Third, Pastor Rodgers has devoted substantial time, energy,

19 and resources into ministering to and serving the community and the availability of his resources
20 may be greatly affected by the ruling of the Court on this matter. Fourth, and finally, Applicants’ 21
interests are inadequately represented before the Court in that defendants, the Treasury, IRS, and 22
Franchise Tax Board, are large, cumbersome bureaucracies with complex economic and political 23
24 interests that clash with the interests of Pastor Rodgers and Does 1-100, ministers dedicated to
25 serving their local communities.

26

27
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Memorandum of Points and Authorities in Support of Motion to Intervene by Pastor Michael Rodgers, et al.

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1

A. The Motion to Intervene is Timely.

2

“Timeliness is ‘the threshold inquiry’ for intervention as of right.” LULAC, 131 F.3d at

3 1302. It is also easily met in the present case. The timeliness inquiry focuses on whether
4 intervention is too late as determined by the stage of the proceeding, prejudice to the parties, and 5
reasons for the length of the delay. Id. The LULAC court, for instance, denied intervention due to 6
untimeliness of applicants who sought it more than two years after the lawsuits were filed. At the 7
8 same time, the court indicated that other parties had been granted intervention nine months after

9 the original lawsuits commenced. By stark contrast, the present Motion is being filed within days

10 of the announcement that a lawsuit had been filed by Plaintiffs. Thus, it should not be seriously
11 disputed that the motion is timely. See, e.g., Sierra Club v. U.S. E.P.A., 995 F.2d 1478, 1481 (9th 12
Cir. 1993) (timeliness not at issue when motion to intervene was filed at outset of litigation, before 13
answer to complaint was even filed). 14

15

B. Proposed Intervenors Have Significantly Protectable Interests Relating to the

16

Subject of This Litigation.

17

An applicant has a “significant protectable interest” when “(1) it asserts an interest that is

18 protected under some law, and (2) there is a ‘relationship’ between its legally protected interest 19
and the plaintiff’s claims.” California ex rel. Lockyer v. U.S., 450 F.3d 436, 441 (9th Cir. 2006) 20
(quoting Donnelly v. Glickman, 159 F.3d 405, 409 (9th Cir. 1998)). In Lockyer, the plaintiffs 21 22 challenged the constitutionality of the Weldon Amendment which prevented federal, state, and
23 local governments from receiving federal funding if they discriminated against health care

24 providers that refused to provide, pay for, provide coverage of, or refer for abortions. Id. at 439.

25 Health care providers moved to intervene in the action and after denial by the District Court the
26 Ninth Circuit reversed. The Ninth Circuit held that if the Weldon Amendment was found to be
27
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Memorandum of Points and Authorities in Support of Motion to Intervene by Pastor Michael Rodgers, et al.

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1 unconstitutional, health care providers would “be forced to choose between adhering to their

2 beliefs and losing their professional licenses.” Id. at 441. The Ninth Circuit found that the

3 Weldon Amendment was passed “precisely to keep doctors who have moral qualms about
4 performing abortions from being put to the hard choice of acting in conformity with their beliefs,
5
or risking imprisonment or loss of professional livelihood.” Id. at 441. 6

7

Analogous protectable interests are at stake in the present action. As the Weldon

8 Amendment was enacted to directly apply to health care providers, the Statutes challenged by

9 Plaintiffs operate for the benefit of clergy and ministers. If this Court were to find those statutes
10 unconstitutional, such a ruling would directly affect the availability of resources to all clergy 11
within the Court’s jurisdiction. Thus, Pastor Rodgers can show a significant protectable interest in 12
that (1) his interest in retaining tax benefits are protected by statute and (2) the relationship 13 14 between his interest and the Plaintiff’s claim is the exact same interest created from the Statutes
15 which Plaintiffs wish to be struck down as unconstitutional.

16

The federal courts have found that a broad variety of interests satisfy the “significantly

17 protectable interests” inquiry. For example, in Idaho Farm Bureau Federation, environmental
18 groups were granted intervention in a lawsuit which clarified the Endangered Species Act as it
19 related to procedures for listing species (there, the Bureau Hot Springs Snail) as endangered. The
20
21 Idaho Farm Bureau Federation court reviewed previous Ninth Circuit decisions such as

22 Sagebrush Rebellion, Inc. v. Watt, 713 F.2d 525 (9th Cir. 1983) and Washington State Bldg. and

23 Constr. Trades Council v. Spellman, 684 F.2d 627 (9th Cir. 1982), cert. denied, Don’t Waste
24 Washington Legal Defense Foundation v. Washington, 461 U.S. 913 (1983), finding broad
25 interpretation of what constitutes a “significantly protectable interest.” In view of the
26 environmental groups’ active efforts to protect the snail at issue, the Ninth Circuit ruled,
27
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Memorandum of Points and Authorities in Support of Motion to Intervene by Pastor Michael Rodgers, et al.

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1

[W]e conclude that disposition in the present action would impair ICL/CIHD’s

ability to protect their interest in the Springs Snail and its habitat. The action could,

2

and did, lead to a decision to remove the Springs Snail from the list of endangered

3

species. Cf. Sagebrush Rebellion, 713 F.2d at 528 (granting intervention and stating that a decision to set aside agency action creating conservation area for birds

4

of prey would impair Audobon Society’s interest in preservation of birds and their

habitat).

5

58 F.3d at 1398. 6

Other circuit courts have joined the Ninth Circuit in favoring intervenors. For instance, in 7

8 Utah Ass’n of Counties v. Clinton, 255 F.3d 1246 (10th Cir. 2001), the Tenth Circuit reviewed

9 decisions from several circuits (including the Ninth Circuit’s Sagebrush Rebellion decision)

10 involving environmental activists and concluded, “[W]e find persuasive those opinions holding
11 that organizations whose purpose is the protection and conservation of wildlife and its habitat have 12
a protectable interest in litigation that threatens those goals.” Id. at 1252. And, while wildlife and 13
conservation groups have been among the most prodigious intervenors in federal courts over the 14 15 last two decades, producing a flood of court opinions on the subject, Rule 24 by no means limits
16 protectable interests to them.

17

Ministers with a direct financial stake in the instant litigation (see Rodgers Decl. ¶¶ 6-8,

18 13-14) should be given at least as much opportunity to be participate in a party capacity as
19 environmentalists in regulatory cases. The state and federal agency defendants are constitutionally
20 neutral entities relative to religious issues. The motion to intervene should be granted so that
21
22 clergy will have a voice in the Court on an issue that uniquely and directly affects them.

23 Applicants therefore fall well within the bounds of the “significantly protectable interest” as

24 articulated in LULAC. 25

26

27
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1

C. Proposed Intervenors are So Situated that the Disposition of the Action May, as a

Practical Matter, Impair or Impede Their Ability to Protect Their Interests. 2

Pastor Rodgers and the Doe applicants lack other effective means by which to protect their 3

4 interests and for that reason should be allowed to intervene as of right. If an intervenor lacks other

5 means by which to protect its interest, that intervenor’s interest would be impaired. Lockyer, 450

6 F.3d at 442. In Lockyer the Court found that the health care providers, if they were not allowed to
7 intervene, lacked any alternative forum in which they could “mount a robust defense of the
8 Weldon Amendment.” Id. Similarly, if the proposed clergy intervenors here are not allowed to
9 intervene, they lack any alternative forum in which they can properly defend the constitutionality
10 11 of the Statutes Plaintiffs are challenging. As a practical matter, separate litigation by the ministers
12 would waste judicial resources, and they would likely be deemed to lack a case or controversy

13 unless and until Plaintiffs succeed—by which time res judicata would foreclose further attempts to

14 defend the Statutes. It is therefore imperative that the ministers be allowed to fully participate as

15 parties in the case at bar.
16

17

The federal courts have been careful to note that, under the third element articulated by

18 LULAC, prospective intervenors need not show that an unfavorable disposition in the case would

19 necessarily impair their right, only that it "'may ... impair or impede [their] ability to protect [their]
20 interest.'" Purnell v. City of Akron, 925 F.2d 941, 948 (6th Cir. 1991) (quoting FRCP 24(a)(2) and
21 adding emphasis), that is, that impairment is "possible." Michigan State AFL-CIO v. Miller, 103
22 F.3d 1240, 1247 (6th Cir. 1997). See also Sagebrush Rebellion, Inc. v. Watt, 713 F.2d 525, 528
23 24 (9th Cir. 1983). Other federal courts have considered this requirement indistinct from the previous
25 one, declaring that “‘the question of impairment is not separate from the question of the existence

26 of an interest.’” Utah Ass’n of Counties, 255 F.3d at 1253 (quoting Natural Res. Def. Council v.
27 United States Regulatory Comm’n, 578 F.2d 1341, 1345 (10th Cir. 1978).
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1

As a practical matter, the disposition of this action in favor of the Plaintiffs would directly

2 impede the ministers’ interests and resources to minister to and serve the community. Pastor
3 Rodgers and the Doe applicants therefore meet the third element for obtaining intervention as of
4 right.
5

6

D. Proposed Intervenors’ Interests Are Inadequately Represented by the Parties

Before the Court. 7

8

With respect to the final requirement under Rule 24, inadequate representation, the federal

9 courts have noted, “The burden of making this showing is minimal.” Pacific Gas and Elec. Co. v.
10 Lynch, 216 F.Supp.2d 1016, 1025 (N.D. Cal. 2002). See also, e.g., Utah Ass’n of Counties v. 11
Clinton, 255 F.3d 1246, 1255 (10th Cir. 2001) (“‘burden is the “minimal” one of showing that 12
representation “may” be inadequate’”) (quoting Sanguine, Ltd. v. United States Dept. of Interior, 13 14 736 F.2d 1416, 1419 (10th Cir. 1984) and Trbovich v. United Mine Workers, 404 U.S. 528, 538
15 n.10 (1972).

16

Moreover, “[t]he possibility that the interests of the applicant and the parties may diverge

17 ‘need not be great’ in order to satisfy this minimal burden.” Id. (quoting Natural Res. Def.
18 Council v. United States Nuclear Reg. Comm’n, 578 F.2d 1341, 1346 (10th Cir. 1978). Accord,
19 Michigan State AFL-CIO v. Miller, 103 F.3d 1240 (6th Cir. 1997). This rule has been interpreted
20
21 to mean simply that an existing party may fail to make all the prospective intervenor's arguments.

22 Id. at 1247. The importance of this approach becomes evident in view of the fact that

23 governmental agencies may choose not to appeal adverse decisions, in view of the complex and
24 competing political interests which they must balance. Such decisions would have a seriously
25 detrimental effect on clergy if they were denied intervention in the litigation. See, e.g. Kootenai
26 Tribe of Idaho v. Veneman, 313 F.3d 1094, 1104 (9th Cir. 2002) (intervenors, environmental
27
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Memorandum of Points and Authorities in Support of Motion to Intervene by Pastor Michael Rodgers, et al.

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1 groups, appealed decision invalidating U.S. Forest Service’s “Roadless Rule” restricting potential
2 environmental impact after federal government chose not to appeal); Calif. Dept. of Social Svcs. v.
3 Thompson, 321 F.3d 835 (9th Cir. 2003) (allowing intervenor to appeal decision even though state 4
chose not to do so). 5
Pastor Rodgers is a minister currently serving as the Pastor of Faith Baptist Tabernacle in 6 7 North Highlands, California. Rodgers Decl. ¶ 3. As such, Pastor Rodgers has an interest of
8 ministering and serving the local community of North Highlands by using his time, energy, and
9 resources, all of which would be adversely affected if the court found for Plaintiffs. By contrast,
10 the government defendants named in the instant litigation have myriad complex and competing 11
interests which could easily clash with the ministers’ interests. For all of their beneficial and 12
perhaps even noble attributes, the Treasury, and for that matter, the Tax Board, are at bottom 13 14 politically-motivated bodies. As such, they can be expected to support enacted statutes in such
15 manner and to the extent that it is politically expedient to do so—and no more. Moreover, the
16 Treasury, IRS, and Franchise Tax Board face a conflict of interest, in that if the statutes are struck
17 down as unconstitutional there would be an increase in tax revenue from clergy who were 18
previously given the housing allowance. It is therefore necessary that clergy, who use their time, 19
energy, and resources in the furtherance of the ministry, be granted intervention to defend and, if 20 21 necessary, appeal on behalf of the Statutes enacted which grant tax benefits to clergy. See, e.g.,
22 State of California Dept. of Social Svcs. v. Thompson, 321 F.3d 835 (9th Cir. 2003) (allowing
23 intervenor to appeal decision even though state chose not to do so).
24 The potentially divergent interests of Applicants and the present Defendants thus presented
25 are more than sufficient to meet the “minimal” burden of showing inadequate representation.
26
27
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Memorandum of Points and Authorities in Support of Motion to Intervene by Pastor Michael Rodgers, et al.
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1 Pacific Gas and Elec. Co.,216 F.Supp.2d at 1025. Applicants therefore meet the fourth and final

2 requirement for intervention as of right.

3

II. Applicants Should, in the Alternative, be Granted Permissive Intervention

4

Under Rule 24(b).

5

The considerations outlined above which soundly support Applicants’ Motion to Intervene

6 as of right also suffice, a fortiori, to grant Applicants permissive intervention under Rule 24(b).
7 Rule 24(b) states in relevant part:
8

9

Upon timely application anyone may be permitted to intervene in an action . . . (2) when an applicant's claim or defense and the main action have a question of law or

10

fact in common. . . . In exercising its discretion the court shall consider whether the

intervention will unduly delay or prejudice the adjudication of the rights of the

11

original parties.

12

Rule 24(b) grants a district court the discretion to allow intervention if the application is

13 timely, see Purnell, 925 F.2d at 950, and if the "applicant's claim or defense and the main action
14 have a question of law or fact in common." Fed R. Civ. P. 24(b)(2). In exercising its discretion,
15 the district court should also consider whether "intervention will unduly delay or prejudice the
16
17 adjudication of the rights of the original parties." Purnell, 925 F.2d at 951. Unlike intervention

18 under Rule 24(a), the court need not determine the significance of the interests of the proposed

19 intervenors, nor the adequacy of representation. Overall, the courts have deftly avoided rigidity in
20 granting or denying intervention, opting instead to craft creative, case-specific solutions which 21
will ensure the most complete representation of all parties and disposition of the issues. 22
Courts have, for example, granted intervention as of right and, in the alternative, 23 24 permissive intervention. See, e.g., Pacific Gas & Electric v. Lynch, 216 F.Supp. 2d 1016, 1025
25 (N.D. Cal. 2002). Even in cases where the court has determined that federal law precludes

26 intervention as of right, intervention has been allowed on a more limited basis. For instance, in
27 Wetlands Action Network v. U.S. Army Corps of Engineers, 222 F.3d 1105 (9th Cir. 2000) the
_________________________________________________________________________________________________________
28
Memorandum of Points and Authorities in Support of Motion to Intervene by Pastor Michael Rodgers, et al.

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1 court held that the unique structure of the National Environmental Policy Act (NEPA) prevented

2 environmental groups from intervening as of right, because only the government could enforce or
3 be liable as a defendant under NEPA. Nevertheless, the Ninth Circuit still allowed the 4
environmental groups to intervene in the remedial phase of the litigation. Id. at 1114. See also, 5
Purnell v. City of Akron, 925 F.2d 941 (6th Cir. 1991) (even where intervention as of right was not 6
7 warranted, permissive intervention should have been granted). Applicants as members of the
8 clergy presents an even stronger interest in this litigation because the challenged statutes directly

9 apply to them and affect their financial and ministry interests.

10

The proposed intervenors-defendants seek to interpose defenses that share common factual

11 and legal questions with those raised in the main action. Applicants seek to protect not merely a
12 generalized, ethereal interest in preserving statutes granting tax benefits to clergy; rather, they seek
13

14 to protect their financial interests, as well as the time, energy, and resources made available to

15 them in order to serve the community. Further, as explained above, there is no tenable basis upon

16 which either party could claim that proposed intervenors' participation will cause prejudice or

17 delay: Applicants have sought intervention promptly after the filing of Plaintiffs’ Complaint, and
18 well before any significant progression of this suit. Thus, even if this Court should determine that
19 not all of the requirements of Rule 24(a) have been met, it should permit the requested
20
21 intervention under Rule 24(b).

22

CONCLUSION

23

For the foregoing reasons, Pastor Michael Rodgers and Does 1-100 are entitled to

24 participate in this action as Intervenors-Defendants either as a matter of right or with the Court's
25 permission. Fed. R. Civ. P. 24(a)-(b). In the alternative, Applicants request that, at the very least,
26 the Court allow them to participate in the litigation as amicus.
27
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Memorandum of Points and Authorities in Support of Motion to Intervene by Pastor Michael Rodgers, et al.

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1 Date: October 22, 2009. 2 3 4 5 6 7 8 9 10

PACIFIC JUSTICE INSTITUTE
By: _/s/_Matthew B. McReynolds____________ Kevin T. Snider Matthew B. McReynolds
Attorneys for Pastor Michael Rodgers and Does 1-100, Proposed Defendants-Intervenors

11 12 13 14 15

16 17 18 19 20 21 22 23 24 25 26 27
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28
Memorandum of Points and Authorities in Support of Motion to Intervene by Pastor Michael Rodgers, et al.

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 1 BENJAMIN B. WAGNER

United States Attorney

2 501 I Street, Suite 10-100

Sacramento, CA 95814

3

JEREMY N. HENDON

4 RICHARD A. SCHWARTZ

Trial Attorneys, Tax Division

5 U.S. Department of Justice

P.O. Box 683, Ben Franklin Station

6 Washington, D.C. 20044-0683

Telephone: (202) 353-2466

7 Facsimile: (202) 307-0054

Email: Jeremy.Hendon@usdoj.gov

8

Richard.A.Schwartz@usdoj.gov

Western.Taxcivil@usdoj.gov

9

Attorneys for the United States of America

10

IN THE UNITED STATES DISTRICT COURT FOR THE

11

EASTERN DISTRICT OF CALIFORNIA

12

FREEDOM FROM RELIGION

)

13 FOUNDATION, INC.; PAUL STOREY;

) Civil No. 2:09-CV-02894-WBS-DAD

BILLY FERGUSON; KAREN

)

14 BUCHANAN; JOSEPH MORROW;

)

ANTHONY G. ARLEN; ELISABETH

) ORDER ON

15 STEADMAN; CHARLES AND

) STIPULATION OF DISMISSAL

COLLETTE CRANNELL; MIKE

)

16 OSBORNE; KRISTI CRAVEN; WILLIAM

)

M. SHOCKLEY; PAUL ELLCESSOR;

)

17 JOSEPH RITTELL; WENDY CORBY;

)

PAT KELLEY; CAREY GOLDSTEIN;

)

18 DEBORA SMITH; KATHY FIELDS;

)

RICHARD MOORE; SUSAN

)

19 ROBINSON; AND KEN NAHIGIAN,

)

)

20

Plaintiffs,

)

)

21

v.

)

)

22 TIMOTHY GEITHNER, in his official

)

capacity as Secretary of the United States

)

23 Department of the Treasury; DOUGLAS

)

SHULMAN, in his official capacity as

)

24 Commissioner of the Internal Revenue

)

Service; and SELVI STANISLAUS, in her

)

25 official capacity as Executive Officer of the

)

California Franchise Tax Board,

)

26 Defendants,

)

)

27

Defendants.

)

28

[PROPOSED] ORDER ON STIPULATION OF DISMISSAL

1

1

On June 17, 2011, the parties jointly submitted a Stipulation of Dismissal to the Court.

2

3

Accordingly, the instant matter is dismissed without prejudice, and the parties will bear

4 their own respective costs, including attorney fees and other litigation expenses.

5

6

IT IS SO ORDERED.

7

8

Dated this 17th day of June, 2011.

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

[PROPOSED] ORDER ON STIPULATION OF DISMISSAL

2

1

CERTIFICATE OF SERVICE

2

IT IS HEREBY CERTIFIED that service of the foregoing [PROPOSED] ORDER ON

STIPULATION OF DISMISSAL has been made this 17th day of June, 2011 via the Court's

3 CM/ECF system to:

4

Michael Newdow

Richard L. Bolton

5

Counsel for Plaintiffs

NewdowLaw@gmail.com rbolton@boardmanlawfirm.com

6

Kevin Snider

Matthew McReynolds

7

Counsel for Amicus Curiae

kevinsnider@pacificjustice.org mattmcreynolds@pacificjustice.org

8

Jill Bowers

Counsel for Selvi Stanislaus

9

jill.bowers@doj.ca.gov

10

/s/ Richard A. Schwartz

11

RICHARD A. SCHWARTZ

Trial Attorney, Tax Division

12

U.S. Department of Justice

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

[PROPOSED] ORDER ON STIPULATION OF DISMISSAL

3

 
 Case: 09-17753 07/01/2011 Page: 1 of 1 ID: 7805377 DktEntry: 31 Case 2:09-cv-02894-WBS -DAD Document 89 Filed 07/05/11 Page 1 of 13
FILED UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JUL 01 2011

MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

FREEDOM FROM RELIGION FOUNDATION, INC.; et al.,
Plaintiffs - Appellees,
v.
TIMOTHY GEITHNER, Secretary, U.D. Dept. of the Treasury; et al.,
Defendants - Appellees,
MICHAEL RODGERS, Pastor,
Defendant-intervenor Appellant.

No. 09-17753
D.C. No. 2:09-cv-02894-WBS-DAD U.S. District Court for Eastern California, Sacramento
MANDATE

The judgment of this Court, entered May 09, 2011, takes effect this date.
This constitutes the formal mandate of this Court issued pursuant to Rule
41(a) of the Federal Rules of Appellate Procedure.
FOR THE COURT: Molly C. Dwyer Clerk of Court
Theresa Benitez Deputy Clerk

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FOR PUBLICATION
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

FREEDOM FROM RELIGION



FOUNDATION, INC.; PAUL STOREY;

BILLY FERGUSON; KAREN

BUCHANAN; JOSEPH MORROW;

ANTHONY ARLEN; ELISABETH

STEADMAN; WILLIAM M. S HOCKLEY;

CHARLES CRANNELL; COLLETTE

CRANNELL; MIKE OSBORNE; KRISTI

CRAVEN; PAUL ELLCESSOR; JOSEPH

RITTELL; WENDY CORBY; PAT

KELLEY; CAREY GOLDSTEIN; DEBORA

SMITH; KATHY FIELDS; RICHARD

MOORE; SUSAN ROBINSON; KEN NAHIGAN,



Plaintiffs-Appellees,

v.

TIMOTHY GEITHNER, Secretary, U.D. Dept. of the Treasury; D OUGLAS SHULMAN, Commissioner, IRS; SELVI STANISLAUS, Executive Officer of the California Franchise Tax Board; U NITED STATES OF AMERICA,
Defendants-Appellees,

MICHAEL RODGERS, Pastor,
 Defendant-intervenor-Appellant.

No. 09-17753 D.C. No.
2:09-cv-02894WBS-DAD OPINION

Appeal from the United States District Court for the Eastern District of California
William B. Shubb, Senior District Judge, Presiding

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6134

FREEDOM FROM RELIGION FOUNDATION v. R ODGERS
Argued and Submitted February 14, 2011—San Francisco, California

Filed May 9, 2011

Before: Diarmuid F. O’Scannlain and Stephen S. Trott, Circuit Judges, and Tena Campbell, District Judge.*

Opinion by Judge O’Scannlain

*The Honorable Tena Campbell, Senior United States District Judge for the District of Utah, sitting by designation.

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6136 FREEDOM FROM RELIGION FOUNDATION v. R ODGERS
COUNSEL Kevin T. Snider, Pacific Justice Institute, Sacramento, California, argued the cause and filed the briefs for the appellant. With him on the briefs was Matthew B. McReynolds, Sacramento, California. Ivan C. Dale, Department of Justice, Tax Division, Washington, D.C., argued the cause and filed a brief for the appellees. With him on the briefs were John A. DiCicco, Acting Assis-

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FREEDOM FROM RELIGION FOUNDATION v. R ODGERS 6137 tant Attorney General, Gilbert S. Rothenberg, Acting Deputy Assistant Attorney General, and Teresa E. McLaughlin, Department of Justice, Tax Division.
OPINION
O’SCANNLAIN, Circuit Judge:
We must decide whether an individual who claims certain federal and state tax exemptions may intervene in an unrelated action challenging the constitutionality of those exemptions.
I
The Freedom from Religion Foundation, Inc. ( “FFRF”) sued the Secretary of the Treasury and the Commissioner of the Internal Revenue Service in their official capacities under 28 U.S.C. § 2201, alleging that the so-called “parsonage exemption” violates the Establishment Clause of the United States Constitution.1 FFRF also sued the Executive Officer of
1The federal parsonage exemption is provided by sections 107 and 265(a)(6) of the Internal Revenue Code. Section 107 provides:
In the case of a minister of the gospel, gross income does not include— (1) the rental value of a home furnished to him as part of his compensation; or (2) the rental allowance paid to him as part of his compensation, to the extent used by him to rent or provide a home and to the extent such allowance does not exceed the fair rental value of the home, including furnishings and appurtenances such as a garage, plus the cost of utilities. 26 U.S.C. § 107. Section 265(a)(6) provides: No deduction shall be denied under this section for interest on a mortgage on, or real property taxes on, the home of the taxpayer by reason of the receipt of an amount as— . . . (B) a parsonage allowance excludable from gross income under section 107. 26 U.S.C. § 265(a)(6).

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6138 FREEDOM FROM RELIGION FOUNDATION v. R ODGERS
the California Franchise Tax Board ( “CFTB”) in his official capacity under 42 U.S.C. § 1983, alleging that California’s parsonage exemption violates the Establishment Clause of both the United States and California Constitutions. 2 The challenged statutes allow “minister[s] of the gospel ” to exclude their rental allowance, or the rental value of any home furnished to them as part of their compensation, from gross income. 26 U.S.C. § 107. FFRF seeks a declaration that the challenged statutes are unconstitutional and an injunction forbidding the defendants from “continuing to grant or allow tax benefits under sections 107 and 265(a)(6) of the Internal Revenue Code and the corresponding sections of the California Revenue and Taxation Code. ”
Six days after FFRF filed its complaint, Pastor Michael Rodgers, a minister of the gospel in the Sacramento area who regularly claims both the federal and state parsonage exemptions, moved to intervene as a defendant on behalf of himself and Does 1-100—ministers within the jurisdiction of the Eastern District of California. Rodgers sought to intervene both as of right, pursuant to Federal Rule of Civil Procedure 24(a)(2), and permissively, pursuant to Rule 24(b)(1)(B). The federal defendants opposed the motion, and the district court denied Rodgers’s motion both for intervention as of right and for permissive intervention.
Rodgers timely appeals.
II
We review a denial of a motion to intervene as of right de novo. Perry v. Prop. 8 Official Proponents, 587 F.3d 947, 950 (9th Cir. 2009).
2The California parsonage exemption is provided by sections 17131.6 and 17280(d)(2) of the California Revenue & Tax Code. These statutes largely mirror their federal counterparts.

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FREEDOM FROM RELIGION FOUNDATION v. R ODGERS Federal Rule of Civil Procedure 24(a)(2) provides:

6139

On timely motion, the court must permit anyone to intervene who . . . claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant’s ability to protect its interest, unless existing parties adequately represent that interest.

We have summarized the requirements of intervention as of right under Rule 24(a)(2) as follows:

(1) [T]he [applicant’s] motion must be timely; (2) the applicant must have a “significantly protectable” interest relating to the property or transaction which is the subject of the action; (3) the applicant must be so situated that the disposition of the action may as a practical matter impair or impede its ability to protect that interest; and (4) the applicant’s interest must be inadequately represented by the parties to the action.

California ex rel. Lockyer v. United States , 450 F.3d 436, 440 (9th Cir. 2006) (quoting Sierra Club v. EPA , 995 F.2d 1478, 1481 (9th Cir. 1993)). Although Rule 24(a)(2) is construed broadly in favor of intervenors, Wilderness Soc’y v. U.S. Forest Serv., 630 F.3d 1173, 1179 (9th Cir. 2011) (en banc), the applicant bears the burden of showing that each of the four elements is met, Prete v. Bradbury , 438 F.3d 949, 954 (9th Cir. 2006). “Failure to satisfy any one of the requirements is fatal to the application. ” Perry, 587 F.3d at 950. Because we agree with the district court’s conclusion that the government adequately represents Rodgers’s interests, we need not discuss the first three requirements. 3

3We note, however, our agreement with the district court’s conclusion that Rodgers’s motion was timely, that he has a “significantly protectable interest,” and that he is so situated that the disposition of the action may impair his ability to protect his interest.

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FREEDOM FROM RELIGION FOUNDATION v. R ODGERS A

[1] “Where the party and the proposed intervenor share the same ‘ultimate objective,’ a presumption of adequacy of representation applies.” Perry, 587 F.3d at 951 (quoting Arakaki v. Cayetano, 324 F.3d 1078, 1086 (9th Cir. 2003)). This presumption of adequacy is “nowhere more applicable than in a case where the Department of Justice deploys its formidable resources to defend the constitutionality of a congressional enactment.” Lockyer, 450 F.3d at 444. Here, the federal defendants have demonstrated that their ultimate objective is to uphold the constitutionality of the challenged statutes. In their motion to dismiss, the federal defendants argued, inter alia, that “[s]ections 107 and 265(a)(6) constitute constitutional accommodations of religious practice by eliminating discrimination between ministers and similarly situated taxpayers. Sections 107 and 265(a)(6) are part of a governmental policy of neutrality toward religion, and government neither advances nor inhibits religious practice through these provisions.” Rodgers has presented no evidence that would lead us to doubt that the federal defendants’ ultimate objective is to uphold the challenged statutes. Accordingly, we are satisfied that Rodgers and the federal defendants have the same ultimate objective and that the “presumption of adequate representation applies.” Perry, 587 F.3d at 951.

B

[2] Such presumption can be rebutted only by “a compelling showing to the contrary. ” Id. (internal quotation marks and citation omitted). Rodgers first attempts to rebut the presumption by arguing that the federal defendants might urge a narrow interpretation of the statute because the Solicitor General, when defending acts of Congress, “lean[s] heavily on the Ashwander principle of construing a statute so as to avoid constitutional doubt.” Lockyer, 450 F.3d at 444 (internal quotation marks and citation omitted). Rodgers fears that the federal defendants might, in an attempt to save the parsonage

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FREEDOM FROM RELIGION FOUNDATION v. R ODGERS 6141
exemption from being declared unconstitutional, urge the court to construe the statutes in a narrow way that would reduce the value of the exemption. But Rodgers has presented no evidence that the federal defendants actually have urged a narrow interpretation of the challenged statutes in the district court. And, in any event, it is unclear whether there is a narrow construction of sections 107 and 265(a)(6) that would be responsive to FFRF’s constitutional challenge. Furthermore, even if we agreed with Rodgers’s contention, we have previously held that “just because the government theoretically may offer a limiting construction of a statute that is narrower than that of a party proposing intervention does not mean that the party has overcome the presumption of adequacy of representation.” Lockyer, 450 F.3d at 444.
[3] Rodgers next argues that the presumption should be rebutted because the federal defendants are tasked both with upholding the constitutionality of the challenged statutes and with protecting the public treasury. He suggests that their interest in maximizing federal tax revenues might lead the federal defendants to abandon key arguments that could be marshaled in defense of the challenged statutes. Rodgers points to the IRS’s litigation behavior in Warren v. Commissioner to show that the IRS cannot be trusted to mount a robust defense of the parsonage exemption. 114 T.C. 343 (2000). In Warren, the IRS proffered an interpretation of a prior version of section 107 that would have reduced the value of the exemption to some ministers. Id. at 346-47. But the IRS’s position in Warren does not support Rodgers’s argument in favor of intervention because in Warren the IRS explicitly conceded the constitutionality of section 107. See Warren v. Comm’r (Warren I) , 282 F.3d 1119, 1123-24 (9th Cir. 2002) (Tallman, J., dissenting) (noting that both parties “clearly stated that . . . they believe the parsonage exclusion is constitutional”). Contrary to Rodgers’s assertions, the IRS’s behavior in Warren does not indicate that the federal defendants in this case will fail to “make all of [Rodgers’s] proposed arguments,” or that they are not “willing to make such

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6142 FREEDOM FROM RELIGION FOUNDATION v. R ODGERS
arguments.” Perry, 587 F.3d at 952 (internal quotation marks and citation omitted).
[4] Rodgers also argues that he should be allowed to intervene because the federal defendants might not appeal an adverse ruling. He correctly notes that the government may not appeal an adverse ruling by a district court without first obtaining the approval of the Solicitor General. See 28 C.F.R. § 0.20(b). But if the mere possibility that the federal defendants might decline to appeal were sufficient to rebut the presumption of adequacy, then nearly every case involving a federal defendant would be subject to intervention as of right. Moreover, the government typically appeals district court decisions ruling federal statutes unconstitutional. Cf. 28 U.S.C. § 530D(a)(1)(B)(ii) (requiring Attorney General to report to Congress a decision to refrain from defending the constitutionality of a federal statute or not to appeal an adverse determination thereof). In the absence of any evidence that the government is not willing and able to appeal, Rodgers fails to make a “compelling showing” that would rebut the presumption that the federal government will adequately represent his interests. Perry, 587 F.3d at 951.
Finally, Rodgers argues that the federal defendants will not adequately represent his interests in defending the constitutionality of the state statutes. This argument also fails. The state government, not the federal government, has the burden of defending state laws from constitutional challenges. In his original motion to intervene, Rodgers questioned whether the executive official of the CFTB would defend sections 17131.6 and 17280(d)(2) of the California Revenue and Tax Code. However, Rodgers filed his motion to intervene before the State of California had even been served with FFRF’s complaint. And because the district court issued its order denying Rodgers’s motion to intervene before the state had filed an answer, the district court concluded that any “determination that the State of California may not adequately represent the potential intervenor’s interests with respect to the California

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FREEDOM FROM RELIGION FOUNDATION v. R ODGERS 6143 statutes at issue [is] . . . premature. ”4 Because Rodgers did not present any arguments on appeal as to why California would not adequately represent his interest in upholding the state parsonage exemption, any claim to that effect is waived.
[5] In conclusion, because the federal defendants adequately represent Rodgers’s interests, he is not entitled to intervene as of right under Rule 24(a)(2).
III
We review the denial of a motion for permissive intervention for abuse of discretion. See League of United Latin American Citizens (“LULAC”) v. Wilson, 131 F.3d 1297, 1307 (9th Cir. 1997). A district court necessarily abuses its discretion if it commits a legal error. United States v. Hinkson , 585 F.3d 1247, 1261-62 (9th Cir. 2009) (en banc).
[6] Federal Rule of Civil Procedure 24(b)(1)(B) provides that “[o]n timely motion, the court may permit anyone to intervene who . . . has a claim or defense that shares with the main action a common question of law or fact. ” We have often stated that permissive intervention “requires (1) an independent ground for jurisdiction; (2) a timely motion; and (3) a common question of law and fact between the movant’s claim or defense and the main action. ” Beckman Indus., Inc. v. Int’l Ins. Co. , 966 F.2d 470, 473 (9th Cir. 1992); see, e.g., United States v. City of Los Angeles , 288 F.3d 391, 403 (9th Cir. 2002); LULAC, 131 F.3d at 1308; Northwest Forest Reserve Council v. Glickman , 82 F.3d 825, 839 (9th Cir. 1996).
The district court concluded that because Rodgers could not demonstrate constitutional standing he failed to satisfy the
4We note that since this appeal was filed, the state has filed a motion to dismiss FFRF’s complaint in which it argues that the challenged statutes “survive constitutional scrutiny under both federal and state law. ”

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independent jurisdictional grounds requirement. This requirement stems, however, from our concern that intervention might be used to enlarge inappropriately the jurisdiction of the district courts. See Fed. R. Civ. P. 82. This concern manifests itself most concretely in diversity cases where proposed intervenors seek to use permissive intervention to gain a federal forum for state-law claims over which the district court would not, otherwise, have jurisdiction. See, e.g., Blake v. Pallan, 554 F.2d 947, 956-57 (9th Cir. 1977) (dismissing an intervening plaintiff’s state-law claims for lack of independent jurisdictional grounds).
The jurisdictional requirement also prevents permissive intervention from being used to destroy complete diversity in state-law actions. See 28 U.S.C. § 1332; Cf. 28 U.S.C. § 1367(b) (providing that, in diversity actions, “the district courts shall not have supplemental jurisdiction . . . over claims by plaintiffs against persons made parties under Rule . . . 24 . . . or over claims by persons . . . seeking to intervene as plaintiffs under Rule 24 . . . when exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332. ”).
[7] But in federal-question cases, the identity of the parties is irrelevant and the district court’s jurisdiction is grounded in the federal question(s) raised by the plaintiff. See 28 U.S.C. § 1331. The jurisdictional requirement, therefore, prevents the enlargement of federal jurisdiction in such cases only where a proposed intervenor seeks to bring new state-law claims. See, e.g., Beckman Indus., Inc. , 966 F.2d at 473 (holding that “an independent jurisdictional basis is not required [in this case] because intervenors do not seek to litigate a claim on the merits”); Blake, 554 F.2d at 956-57. Where the proposed intervenor in a federal-question case brings no new claims, the jurisdictional concern drops away. See 7C Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure § 1917 (3d ed. 2010) (“In federal-question cases there should be no problem of jurisdiction with regard to an

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FREEDOM FROM RELIGION FOUNDATION v. R ODGERS 6145
intervening defendant nor is there any problem when one seeking to intervene as a plaintiff relies on the same federal statute as does the original plaintiff. ”). We therefore clarify that the independent jurisdictional grounds requirement does not apply to proposed intervenors in federal-question cases when the proposed intervenor is not raising new claims.
[8] Here, it is undisputed that the district court is exercising federal-question jurisdiction and that Rodgers does not seek to bring any counterclaims or cross-claims. Accordingly, Rodgers is not required to make any further showing that his intervention is supported by independent jurisdictional grounds. Because the district court did not apply the correct legal rule, its decision denying Rogers permissive intervention was not an appropriate exercise of discretion. See Hinkson, 585 F.3d at 1261-62. We accordingly vacate that portion of the district court’s order and remand so that the “district court may reassess the request for permissive intervention under the criteria established by Rule 24(b). ” City of Los Angeles , 288 F.3d at 404.
IV
For the foregoing reasons, the judgment of the district court is AFFIRMED IN PART, VACATED IN PART, AND REMANDED.
Each side shall bear its own costs.

 
 Freedom from Religion Foundation, Inc. v. Geithner, 262 F.R.D. 527 (2009)

262 F.R.D. 527 United States District Court,
E.D. California.
FREEDOM FROM RELIGION FOUNDATION, INC.; Paul Storey; Billy Ferguson; Karen
Buchanan; Joseph Morrow; Anthony G. Arlen; Elisabeth Steadman; Charles and Collette Crannell; Mike Osborne; Kristi Craven; William M. Shockley; Paul Ellcessor; Joseph Rittell; Wendy Corby; Pat
Kelley; Carey Goldstein; Deborah Smith; Kathy Fields; Richard Moore; Susan Robinson; and Ken
Nahigian, Plaintiffs, v.
Timothy GEITHNER, in his official capacity as Secretary of the United States Department of the Treasury; Douglas Shulman, in his official capacity as Commissioner of the Internal Revenue Service;
and Selvi Stanislaus, in her official capacity as Executive Officer of the California Franchise Tax
Board, Defendants, Pastor Michael Rodgers and Does 1–100,
proposed, Intervenors–Defendants.
No. CIV. 09–2894 WBS DAD. | Dec. 2, 2009.
Attorneys and Law Firms
*528 Michael Arthur Newdow, Michael Newdow, Esq., Sacramento, CA, Richard L. Bolton, Boardman, Suhr, Curry & Field, LLP, Madison, WI, for Plaintiffs.
Jeremy Nolan Hendon, Washington, DC, for Defendants.
Opinion
MEMORANDUM AND ORDER RE: MOTION TO INTERVENE
WILLIAM B. SHUBB, District Judge.
On October 16, 2009, the Freedom From Religion Foundation, Inc. (“FFRF”) and named plaintiffs filed a Complaint in this court seeking a declaration that 26 U.S.C. §§ 107 and 265(a)(6) violate the Establishment Clause of the United States Constitution *529 and injunctive relief. On October 22, 2009, Pastor Michael Rodgers moved to intervene as a defendant in this action.
I. Factual and Procedural Background On October 16, 2009, the Freedom From Religion Foundation, Inc. (“FFRF”) and named plaintiffs filed a

Complaint in this court seeking a declaration that 26 U.S.C. §§ 107 and 265(a)(6) violate the Establishment Clause of the United States Constitution and injunctive relief. (Docket No. 1.) Sections 107 and 265(a)(6) provide preferential tax benefits to “ministers of the gospel,” and are administered by the Internal Revenue Service (“IRS”) and the Department of the Treasury (“Treasury”).
Section 107 of the Internal Revenue Code (“IRC”) allows “ministers of the gospel” to exclude their rental allowance or rental value of any home furnished to them as part of their compensation from gross income for income tax purposes. 26 U.S.C. § 107. The plaintiffs allege that the IRS requires that a minister of the gospel be “duly ordained, commissioned, or licensed” in order to be entitled to the tax benefit. (Compl.¶ 43.) The plaintiffs further allege that the § 107 exclusion is available only when the minister is given use of the house or receives a housing allowance as compensation for services performed “in the exercise of” his ministry. Id. ¶ 45. Treasury regulations allegedly clarify the requirements to receive religious tax benefits. Id. ¶¶ 43–44, 46–49.
Section 265(a) (6) of the Internal Revenue Code allows a minister of the gospel to claim deductions under §§ 163 and 164 of the Internal Revenue Code for residential mortgage interest and property taxes. 26 U.S.C. § 265(a)(6). Plaintiffs allege that ministers of the gospel receive the deduction even though the money used to pay those expenses was received as a tax-exempt § 107 allowance, and that non-clergy taxpayers cannot make similar deductions. (Compl.¶ 50.)
The plaintiffs further allege that sections 17131.6 and 17280(d) (2) of the California Revenue and Taxation Code violate the Establishment Clause of the United States and California Constitutions. Id. ¶¶ 37–38. These provisions allegedly mirror §§ 170 and 265(a)(6) of the Internal Revenue Code. Id.
Plaintiffs allege that all of the above tax provisions violate the Establishment Clause of the United States Constitution, which provides that “Congress shall make no law respecting an establishment of religion.” U.S. Const. amend I. Plaintiffs further allege that the California Constitution contains a similarly worded Establishment Clause which is violated by the California Revenue and Taxation Code provisions. See Cal. Const. art. I § 4. Finally, plaintiffs allege that the above provisions of the California Revenue and Taxation Code violate Article 16, Section 5 of the California Constitution, which prohibits aid in support of “any religious sect, church, creed, or sectarian purpose.” Cal. Const. art. XVI § 5.
On October 22, 2009, Pastor Michael Rodgers moved to intervene as a defendant in this action. Pastor Rodgers is a minister of the gospel in the Sacramento area who
1

Freedom from Religion Foundation, Inc. v. Geithner, 262 F.R.D. 527 (2009)

currently uses the ministerial tax exemption housing allowance challenged by plaintiffs in this action. Pastor Rodgers moves to intervene on behalf of himself and Does 1–100 ministers within the jurisdiction of the Eastern District of California.
II. Discussion Pastor Rodgers seeks to intervene pursuant to Federal Rule of Civil Procedure 24(a)(2), or, alternatively, Rule 24(b)(1)(B). Rule 24 provides:
(a) Intervention of Right.
On timely motion, the court must permit anyone to intervene who:
...
(2) claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant’s ability to protect its interest, unless existing parties adequately represent that interest.
(b) Permissive Intervention.
(1) In General.
On timely motion, the court may permit anyone to intervene who:
*530 ...
(B) has a claim or defense that shares with the main action a common question of law or fact.
(3) Delay or Prejudice.
In exercising its discretion, the court must consider whether the intervention will unduly delay or prejudice the adjudication of the original parties’ rights.

protect that interest; and (4) the applicant’s interest must be inadequately represented by the parties to the action.
California ex rel Lockyer v. United States, 450 F.3d 436, 440–41 (9th Cir.2006) (citing Sierra Club v. EPA, 995 F.2d 1478 (9th Cir.1993)). The party seeking intervention bears the burden of showing that all of these four elements are met, Prete v. Bradbury, 438 F.3d 949, 954 (9th Cir.2006), but Rule 24(a) is “construed broadly in favor of applicants for intervention.” Greene v. United States, 996 F.2d 973, 976 (9th Cir.1993).
Because the government concedes that the proposed intervenors meet the first and second elements of the test for intervention as of right, (Response Mot. Intervene (“Response”) 3–4), the court addresses only the third and fourth elements of the test.
1. Applicant’s Ability To Protect His Interest May Be Impaired [3] To satisfy the third element of the test, the potential intervenor must show that his ability to protect his interest may be impaired if he is not allowed to intervene in the action. Fed.R.Civ.P. 24(a)(2). As stated above, the government concedes that the pastor’s1 financial interest in continuing to receive the income tax exemption likely qualifies as a “significantly protectable interest” that meets the second element of the test for intervention of right. The government and potential intervenor also agree that “[a] ruling on the constitutionality of the statutes at issue is a disposition that might affect Applicant’s interests.” (Response 4.) However, a potential intervenor’s interests “might not be ‘impaired’ if they have ‘other means’ to protect them.” Lockyer, 450 F.3d at 442. The government asserts that the proposed intervenor can adequately protect his interest in receiving the tax exemptions by filing an amicus brief with the court, and that therefore he does not qualify for intervention as of right.

A. Intervention of Right [1] [2] Rule 24(a)(2) is subdivided into four elements:
(1) [T]he applicant’s motion must be timely; (2) the 4 applicant must have a ‘significantly protectable’ interest relating to the property or transaction which is the subject of the action; (3) the applicant must be so situated that the disposition of the action may as a practical matter impair or impede its ability to

1

Potential intervenors include Pastor Rodgers and Does

1–100. Because no facts are alleged regarding the Does,

the motion to intervene must be construed only as to

Pastor Rodgers.

The government does not explain why filing an amicus brief should qualify as an “other means” by which potential intervenors can protect their interests, nor does it cite any cases in support of this interpretation. Indeed, cases finding that proposed intervenors had “other means” to protect their interests have done so when other avenues of legal process have been available. See, e.g., United
2

Freedom from Religion Foundation, Inc. v. Geithner, 262 F.R.D. 527 (2009)

States v. Alisal Water Corp., 370 F.3d 915 (9th Cir.2004) (separate district court process for approving claims against debtor sufficient to protect proposed intervenor/creditor interest); United States v. City of Los Angeles, 288 F.3d 391 (9th Cir.2002) (possibility of individual suits against police officers sufficient to protect interests of community groups seeking to protect members from unconstitutional police practices). The filing of an amicus brief to the court seems a meager substitute in comparison, and would deny the potential intervenors a voice in key junctures of this litigation.

substantially affected in a practical sense by the determination made in an action, as a general rule that absentee should be entitled to intervene. Sw. Ctr. for Biological Diversity v. Berg, 268 F.3d 810, 822 (9th Cir.2001) (discussing advisory committee note to Rule 24). The burden on proposed intervenors in showing inadequate representation is typically minimal and is satisfied by a showing that representation of their interests may be inadequate. Arakaki, 324 F.3d at 1086.

Additionally, the government and potential intervenor agree that it is likely that the intervenor lacks a separate legal forum in which to litigate the constitutionality of the income tax exemptions. In its argument against permissive intervention, the government asserts that the proposed intervenor lacks independent grounds for jurisdiction and would be unable to bring his own lawsuit *531 declaring the statute in question constitutional. (Response 7 (citing 28 U.S.C. § 2201(a) (empowering courts to “declare the rights and other legal relations of any interested party seeking such a declaration” in “a case of actual controversy within its jurisdiction, except with respect to Federal taxes other than actions brought under section 7428 of the Internal Revenue Code.”) (emphasis in Response)).)
The applicant cites Lockyer, which found that, if not allowed to intervene, healthcare providers who did not provide abortion had “no alternative forum” in which they could mount a robust defense of a statute forbidding states from discriminating against healthcare providers that did not provide abortions. Id. at 442. Because the statute at issue was a spending measure, the proposed intervenor in that case had no enforceable rights. Id. at 443. As a result, they could not bring a separate suit to argue for their interpretation of the statute. If the statute in that case was struck down or narrowed, the proposed intervenor would have no alternative forum in which to contest that decision. Id. The proposed intervenor here correctly notes that a “case or controversy” for purposes of establishing jurisdiction would not likely arise unless and until the plaintiffs in this action succeed at striking down the income tax exemptions.
Therefore, the proposed intervenor has shown that his ability to protect his interest in the continued enforcement and constitutionality of the income tax exemptions may be impaired if he is not allowed to intervene in this action, and the third element is met.
2. Adequacy of Representation [4] [5] The final element is that proposed intervenors’ interests are not being adequately represented by the current parties. Fed.R.Civ.P. 24(a). If an absentee will be

a. The Same “Ultimate Objective” in the Suit
[6] [7] [8] [9] The most important consideration in determining the adequacy of representation is how the proposed intervenor’s interests compare with the interests of the existing parties. Id. “When an applicant for intervention and an existing party have the same ultimate objective, a presumption of adequacy of representation arises.” Lockyer, 450 F.3d at 443 (quoting Arakaki v. Cayetano, 324 F.3d 1078, 1086 (9th Cir.2003)). When the parties share the same ultimate objective, differences in litigation strategy do not normally justify intervention. Id.; see also Perry v. Proposition 8 Official Proponents, 587 F.3d 947, 948 (9th Cir.2009) (denying intervention of right because “differences [between proposed intervenors and existing parties] are rooted in style and degree, not the ultimate bottom line. Divergence of tactics and litigation strategy is not tantamount to divergence over the ultimate objective of the suit.”). When this presumption of adequacy applies, the intervenor can rebut it “only with a ‘compelling showing’ to the contrary.” Perry, 587 F.3d at 950–51 (quoting Arakaki, 324 F.3d at 1086).
[10] [11] “There is also an assumption of adequacy when the government is acting on behalf of a constituency that it represents.” Lockyer, 450 F.3d at 443. (quoting Arakaki, 324 F.3d at 1086). When the government is involved in a lawsuit, it acts on behalf of the constituency that it represents. “In the absence of a very compelling showing to the contrary, it will be presumed that a state adequately represents its citizens when the applicant shares the same interest.” Id. (quoting Arakaki, 324 F.3d at 1086) (internal quotation marks and citation omitted, emphasis added). A very compelling showing of the government’s inadequacy exists where the intervenor demonstrates a likelihood that the government will abandon or concede a potentially meritorious reading of the statute. Lockyer, 450 F.3d at 444.
*532 [12] The proposed intervenor/defendant and the government here share the same interest and ultimate objective: upholding the constitutionality of the ministerial housing tax exemptions. As a minister who receives the housing allowance tax exemption, the applicant seeks to intervene as of right in order to litigate
3

Freedom from Religion Foundation, Inc. v. Geithner, 262 F.R.D. 527 (2009)

this action on the merits and defend against the plaintiffs’ facial constitutional attack. His ultimate objective is for the statutes at issue to be upheld. Likewise, the government has asserted that it intends to file a motion to dismiss in this action and fully defend the challenged provisions of the Internal Revenue Code. Its ultimate objective is that the laws of the United States-including the provisions of the IRC at issue here-are enforced and upheld.
Arguments made by the applicant, addressed fully below, reflect mere potential differences in degree or litigation strategy, and fail to allege any deviation in the ultimate objective of the United States as asserted at oral argument. Therefore, the applicant must make a “very compelling showing” that the government will inadequately represent his interests in order to intervene as of right. See Perry, 587 F.3d at 951–52.
b. Rebutting the Presumption of Adequate Representation
The applicant here generally makes vague and unsubstantiated claims that the defendants are “at bottom politically-motivated bodies” that will make litigation decisions, such as decisions to appeal adverse rulings, based on mere political expediency. (Mot. Intervene 10–11.) While it is true that the Solicitor General of the United States determines whether the United States will appeal adverse rulings made by lower courts, this fails to amount to a “very compelling showing” to overcome the presumption of adequate representation by the United States.
The applicant compares his situation to Lockyer, but the government in that case was advocating for a limiting construction of the federal statute that was much narrower than advocated-for by the proposed intervenors. Id. at 444; see also Tucson Women’s Health Center v. Ariz. Med. Bd., No. 09–1909 (D.Ariz. Nov. 24, 2009) (finding that defendants may not share the same ultimate objective as proposed intervenors because defendants argued for a limiting interpretation of statute to preserve its constitutionality).
The government in this case has yet to file a responsive pleading but has represented it intends to fully defend the statutes at issue. Indeed, in Warren v. Commissioner, 282 F.3d 1119 (9th Cir.2002), the court of appeals sua sponte asked the parties to brief the question of whether the ministerial housing exemption of IRC § 107 violated the Establishment Clause. There, the government filed a brief defending its constitutionality, Warren v. Comm’r, No. 00–71217, Supp. Brief for Appellant (Docket No. 50) (9th Cir. May 3, 2002), which is evidence that the government

will likewise defend the statute in this case.
The applicant argues that the mere fact that the IRS in Warren prosecuted Rev. Warren for what it believed to be excessive housing claims under the old IRC § 107 shows that the government has a different view of the scope of the exemption sufficient to warrant intervention as of right. In investigating Rev. Warren’s housing exemption claims, however, the IRS was merely enforcing IRC § 107 against potential abuse. Furthermore, the IRS later entered into a stipulation of dismissal with Rev. Warren, allowing him to claim the full amount of his housing allowance as exempt from federal income taxes. Warren, 302 F.3d 1012, 1014 n. 2 (9th Cir.2002) (denying Prof. Chemerinsky’s motion to intervene).
Finally, the Clergy Housing Allowance Clarification Act of 2002, Pub.L. No. 107–181, 116 Stat. 583 (codified at 26 U.S.C. § 107), adopted the interpretation of IRC § 107 put forward by the IRS in Warren, and modified § 107 to expressly limit the clergy housing allowance to the fair rental value of a minister’s housing. 26 U.S.C. § 107. Any difference in opinion regarding § 107’s scope that may be shown by the IRS’s conduct in Warren is therefore irrelevant today. Even if Warren could be seen as some evidence to support the proposition that the government may in the future take a narrower view of the ministerial housing exemption statutes *533 than the applicant would, the applicant has not shown that the government would concede any “necessary elements to the proceeding.” Perry, 587 F.3d at 954–55 (quoting Arakaki, 324 F.3d at 1086) (emphasis in Perry, internal quotations omitted).
In further support of his argument that the government cannot adequately represent his interests, the applicant asserts that it is possible that the government may not appeal an adverse ruling, whereas the applicant states that he would undoubtedly appeal if he were a party to this action. The court of appeals has allowed intervention of right post-judgment for the purpose of appealing. See Yniguez v. State of Ariz., 939 F.2d 727, 731–33 (9th Cir.1991) (granting intervention of right to principal sponsor of ballot initiative for purposes of appeal when state government decided not to appeal adverse district court ruling) (citing Legal Aid Soc’y of Alameda County v. Brennan, 608 F.2d 1319, 1328 (9th Cir.1979) (“Post-judgment intervention for purposes of appeal may be appropriate if the intervenors act promptly after judgment, and meet traditional standing criteria.”) (citations omitted)). Therefore, the applicant can move to intervene for purposes of appeal should the government fail to appeal an adverse ruling.
The applicant also asserts that the named defendants face an inherent conflict of interest and cannot possibly represent his interests adequately because the IRS and California Franchise Tax Board stand to gain “a staggering windfall” of tax revenues if the statutes are
4

Freedom from Religion Foundation, Inc. v. Geithner, 262 F.R.D. 527 (2009)

ultimately struck down. In essence, the applicant believes that the federal defendants have nothing to lose if the revenue statutes are overturned. This reasoning would allow intervenors as of right in any suit challenging a provision of the Internal Revenue Code, and possibly in any suit challenging any other spending statute.
Furthermore, this cynical view of the United States government ignores the fact that the United States has consistently enforced the revenue statutes at issue here and the inherent interest the United States has in seeing its statutes upheld and enforced. This speculation does not overcome the very strong presumption that the federal defendants will adequately represent the applicant’s interests. See Prete v. Bradbury, 438 F.3d 949, 957 (9th Cir.2006) (rejecting applicant’s argument that potential “budget constraints” of federal defendant establishes inadequate representation, and noting that “[v]irtually all governments face budget constraints generally, and if such a basis were sufficient to establish inadequate representation, it would eliminate the presumption of adequate representation when the government and intervenor-applicant share the same interest.”)
Finally, the applicant asserts that because the California Franchise Tax Board has not yet made an appearance in this action, there is no presumption that his interests as to the state statute being challenged in this action will be adequately represented. The applicant’s motion was filed six days following the Complaint, which was filed before this court only one month ago. According to the docket in this case, the state defendant has not yet been served in this action. Potential intervenors cannot go around the showing required by Rule 24(a)(2) that existing parties may not adequately represent their interest simply by moving to intervene before the parties to the suit have appeared. Any determination that the State of California may not adequately represent the potential intervenor’s interests with respect to the California statutes at issue are, therefore, premature.
B. Permissive Intervention [13] Federal Rule of Civil Procedure 24(b)(1)(B) provides that on timely motion, the court may permit anyone to intervene who has a claim or defense that shares with the main action a common question of law or fact. Fed.R.Civ.P. 24(b)(1)(B). In exercising its discretion, the court must consider whether the intervention will unduly delay or prejudice the adjudication of the original parties’ rights. Fed.R.Civ.P. 24(b)(3). Therefore, even if an applicant meets the requirements of Rule 24(b)(1)(B), the court “has discretion to deny permissive intervention.” So. Cal. Edison Co. v. Lynch, 307 F.3d 794, 803 (9th Cir.2002) (quoting Nw. Forest Res. *534 Council v. Glickman, 82 F.3d 825, 839 (9th Cir.1996)).

[14] [15] In the Ninth Circuit, an applicant who wishes to intervene to litigate a claim on the merits must show (1) independent grounds for jurisdiction; (2) the motion is timely; and (3) the applicant’s claim or defense, and the main action, have a question of law or a question of fact in common. So. Cal. Edison, 307 F.3d at 803 (quoting United States v. City of Los Angeles, 288 F.3d 391 (9th Cir.2002)). Contrary to the applicant’s assertions, permissive intervention “ordinarily requires independent jurisdictional grounds.” Beckman Indus. Inc. v. Int’l Ins. Co., 966 F.2d 470, 473 (9th Cir.1992). The cases that the applicant cites, namely Portland Audubon Soc’y v. Hodel, 866 F.2d 302, 308 n. 1 (9th Cir.1989), and the cases quoted by the applicant therein, addressed the requirements for intervention as of right and are therefore inapplicable to a permissive intervention analysis. Because the applicant seeks permissive intervention in order to litigate this action on its merits, he must show that independent grounds for jurisdiction over his claims exist.
The judicial power of the federal courts is limited to “Cases” and “Controversies.” U.S. Const. Art. III, § 1. Without this basic requirement met, a federal court lacks subject matter jurisdiction to hear a case. Lujan v. Defenders of Wildlife, 504 U.S. 555, 559, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992); see Fed.R.Civ.P. 12(b)(1). The doctrine of standing is an “essential and unchanging part of the case-or-controversy requirement of Article III.” Defenders of Wildlife, 504 U.S. at 560, 112 S.Ct. 2130 (citing Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984)). “In essence the question of standing is whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues.” Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). Article III standing requires that a plaintiff allege “a personal injury fairly traceable to the defendant’s allegedly unlawful conduct and likely to be redressed by the requested relief.” Allen v. Wright, 468 U.S. at 751, 104 S.Ct. 3315.
[16] While the applicant does not concede that he lacks standing to bring an independent suit, he admits in his motion that a court would likely find no “case or controversy” existed unless and until the plaintiffs in this lawsuit succeeded. (Mot. Intervene 9:11–15.) Furthermore, in his Reply, the applicant makes no effort to show that independent grounds for jurisdiction exist. Therefore, he does not meet the requirements for permissive intervention and his motion for permissive intervention must be denied.
The applicant requested in the alternative that he and Does 1–100 be granted amicus status in the pending litigation. The United States does not object. Therefore, court will grant the applicant’s motion for leave to file a brief as amicus curiae.

5

Freedom from Religion Foundation, Inc. v. Geithner, 262 F.R.D. 527 (2009)

IT IS THEREFORE ORDERED that the applicant’s motion to intervene be, and the same hereby is, DENIED.
IT IS FURTHER ORDERED that the applicant’s motion for leave to file a brief as amicus curiae be, and the same hereby is GRANTED.

Parallel Citations
105 A.F.T.R.2d 2010-2572
	  

6

 
 Case: 2:09-cv-2894 As of: 05/07/2013 11:27 AM PDT 1 of 12
CIVIL,CLOSED
U.S. District Court Eastern District of California − Live System (Sacramento) CIVIL DOCKET FOR CASE #: 2:09−cv−02894−WBS−DAD

Freedom from Religion Foundation et al v. Geithner et al Assigned to: Senior Judge William B. Shubb Referred to: Magistrate Judge Dale A. Drozd Case in other court: USCA, 09−17753 Cause: 28:1983 Civil Rights
Plaintiff

Date Filed: 10/16/2009 Date Terminated: 06/20/2011 Jury Demand: None Nature of Suit: 440 Civil Rights: Other Jurisdiction: Federal Question

Freedom from Religion Foundation, Inc.

represented by Michael Arthur Newdow Michael Newdow, Esq. P.O. Box 233345 Sacramento, CA 95823 (916) 427−6669 Email: NewdowLaw@gmail.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV Boardman, Suhr, Curry &Field, LLP 1 S. Pinckney St. 4th Floor P.O. Box 927 Madison, WI 53701−0927 308−283−1789 Fax: 608−283−1709 Email: rbolton@boardmanlawfirm.com LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED

Plaintiff Paul Storey

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV (See above for address)

Plaintiff Billy Ferguson

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV (See above for address)

Plaintiff Karen Buchanan

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV (See above for address)

Case: 2:09-cv-2894 As of: 05/07/2013 11:27 AM PDT 2 of 12

Plaintiff Joseph Morrow

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV (See above for address) ATTORNEY TO BE NOTICED

Plaintiff Anthony Arlen

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV (See above for address)

Plaintiff Elisabeth Steadman

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV (See above for address)

Plaintiff William M. Shockley

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV (See above for address)

Plaintiff Charles Crannell

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV (See above for address)

Plaintiff Collette Crannell

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV (See above for address)

Plaintiff Mike Osborne

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Case: 2:09-cv-2894 As of: 05/07/2013 11:27 AM PDT 3 of 12

Richard L. Bolton , PHV (See above for address)

Plaintiff Kristi Craven

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV (See above for address)

Plaintiff Paul Ellcessor

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV (See above for address)

Plaintiff Joseph Rittell

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV (See above for address)

Plaintiff Wendy Corby

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV (See above for address)

Plaintiff Pat Kelley

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV (See above for address)

Plaintiff Carey Goldstein

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV (See above for address)

Plaintiff Debora Smith

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY

Case: 2:09-cv-2894 As of: 05/07/2013 11:27 AM PDT 4 of 12

ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV (See above for address)

Plaintiff Kathy Fields

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV (See above for address)

Plaintiff Richard Moore

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV (See above for address)

Plaintiff Susan Robinson

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV (See above for address)

Plaintiff Ken Nahigian

represented by Michael Arthur Newdow (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard L. Bolton , PHV (See above for address)

V. Defendant Timothy Geithner Secretary, U.S. Dept. of the Treasury
Defendant Douglas Shulman Commissioner, IRS
Defendant Selvi Stanislaus Executive Officer of the California Franchise Tax Board

represented by Jill Bowers Attorney General Of California 1300 I Street, Suite 125 PO Box 944255 Sacramento, CA 94244 916−323−1948 Fax: 916−327−2247 Email: jill.bowers@doj.ca.gov

Case: 2:09-cv-2894 As of: 05/07/2013 11:27 AM PDT 5 of 12

LEAD ATTORNEY ATTORNEY TO BE NOTICED

Defendant United States of America

represented by Jeremy Nolan Hendon United States Department of Justice, Tax Division P.O. Box 683 Ben Franklin Station Washington, DC 20044 202353−2466 Fax: 202307−0054 Email: Jeremy.Hendon@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED

Richard Adam Schwartz , GOVT US Department Of Justice P. O. Box 683 Ben Franklin Station Washington, DC 20044 202−307−6322 Fax: 202−307−0054 Email: richard.a.schwartz@usdoj.gov ATTORNEY TO BE NOTICED

V. Intervenor Defendant Pastor Michael Rodgers

represented by Kevin Trent Snider Pacific Justice Institute PO Box 276600 Sacramento, CA 95827 (916) 857−6900 Fax: (916) 857−6902 Email: kevinsnider@pacificjustice.org LEAD ATTORNEY ATTORNEY TO BE NOTICED
Matthew Brown McReynolds Pacific Justice Institute PO Box 276600 Sacramento, CA 95827 916−857−6900 Fax: 916−857−6902 Email: mattmcreynolds@pji.org ATTORNEY TO BE NOTICED

Date Filed 10/16/2009 10/16/2009 10/16/2009
10/16/2009

# Docket Text
1 COMPLAINT against all defendants by all plfs.(Newdow, Michael) Modified on 10/16/2009 (Benson, A.). (Entered: 10/16/2009)
RECEIPT number #CAE200020815 $350.00 fbo Freedom from Religion Foundati by Michael Newdow on 10/16/2009. (Benson, A.) (Entered: 10/16/2009)
3 SUMMONS ISSUED as to *Timothy Geithner, Douglas Shulman* with answer to complaint due within *60* days. Attorney *Michael Arthur Newdow* *Michael Newdow, Esq.* *P.O. Box 233345* *Sacramento, CA 95823*. (Benson, A.) (Entered: 10/16/2009)
4 SUMMONS ISSUED as to *Selvi Stanislaus* with answer to complaint due within *20* days. Attorney *Michael Arthur Newdow* *Michael Newdow, Esq.* *P.O.

Case: 2:09-cv-2894 As of: 05/07/2013 11:27 AM PDT 6 of 12

10/16/2009 10/22/2009 10/22/2009 10/22/2009 10/22/2009 10/22/2009 10/22/2009 10/22/2009 10/23/2009 10/29/2009 11/05/2009
11/06/2009 11/13/2009 11/16/2009 11/23/2009

Box 233345* *Sacramento, CA 95823*. (Benson, A.) (Entered: 10/16/2009)
5 CIVIL NEW CASE DOCUMENTS ISSUED; Initial Scheduling Conference set for 03/22/10 at 02:00 PM in Courtroom 5 (WBS) before Judge William B. Shubb. (Attachments: # 1 Consent Forms, # 2 VDRP Forms) (Benson, A.) (Entered: 10/16/2009)
6 MOTION to INTERVENE by Michael Rodgers. Motion Hearing set for 11/23/09 at 02:00 PM in Courtroom 5 (WBS) before Judge William B. Shubb. (McReynolds, Matthew) (Entered: 10/22/2009)
7 MEMORANDUM by Michael Rodgers in support of 6 Motion to Intervene. (McReynolds, Matthew) Modified on 10/23/2009 (Benson, A.). (Entered: 10/22/2009)
8 DECLARATION of Pastor Michael Rodgers in support of 6 Motion to Intervene. (McReynolds, Matthew) Modified on 10/23/2009 (Benson, A.). (Entered: 10/22/2009)
9 DECLARATION of Matthew McReynolds in support of 6 Motion to Intervene. (McReynolds, Matthew) Modified on 10/23/2009 (Benson, A.). (Entered: 10/22/2009)
10 PROPOSED ORDER re 6 Motion to Intervene by Michael Rodgers. (McReynolds, Matthew) Modified on 10/23/2009 (Benson, A.). (Entered: 10/22/2009)
11 CERTIFICATE of SERVICE by Michael Rodgers 6 Motion to Intervene, 7 Memorandum in Support, 8 Declaration, 9 Declaration and 10 Proposed Order. (McReynolds, Matthew) Modified on 10/23/2009 (Benson, A.). (Entered: 10/22/2009)
12 CORRECTED 10 PROPOSED ORDER re 6 Motion to Intervene by Michael Rodgers. (McReynolds, Matthew) Modified on 10/23/2009 (Benson, A.). (Entered: 10/22/2009)
13 DECLARATION of MATTHEW MCREYNOLDS−−SUPPLEMENTAL WITH EXHIBIT in SUPPORT OF 6 Motion to Intervene. (McReynolds, Matthew) (Entered: 10/23/2009)
14 CERTIFICATE of SERVICE by Michael Rodgers re 8 Declaration, 9 Declaration, 12 Proposed Order, 11 Certificate of Service, 7 Memorandum in Support of Motion, 6 Motion to Intervene, 13 Declaration. (McReynolds, Matthew) (Entered: 10/29/2009)
15 PROPOSED ORDER re 8 Declaration, 9 Declaration, 12 Proposed Order, 11 Certificate of Service, 7 Memorandum in Support of Motion, 6 Motion to Intervene, 13 Declaration by Anthony Arlen, Elisabeth Steadman, William M. Shockley, Charles Crannell, Collette Crannell, Freedom from Religion Foundation, Inc., Mike Osborne, Kristi Craven, Paul Ellcessor, Joseph Rittell, Wendy Corby, Pat Kelley, Carey Goldstein, Debora Smith, Kathy Fields, Richard Moore, Paul Storey, Susan Robinson, Ken Nahigian, Billy Ferguson, Karen Buchanan, Joseph Morrow. (Newdow, Michael) (Entered: 11/05/2009)
16 OPPOSITION by United States of America to 6 Motion to Intervene. Attorney Hendon, Jeremy Nolan added. (Hendon, Jeremy) (Entered: 11/06/2009)
17 ORDER signed by Judge William B. Shubb on 11/13/09 ORDERING that pltfs' counsel may appear telephonically for the Motion Hearing set for 11/23/09 at 02:00 PM in Courtroom 5 (WBS) before Judge William B. Shubb; the CRD shall initiate the teleconference. (Manzer, C) (Entered: 11/13/2009)
18 REPLY by Michael Rodgers in SUPPORT of MOTION TO INTERVINE 6 . (McReynolds, Matthew) Modified on 11/19/2009 (Mena−Sanchez, L). (Entered: 11/16/2009)
19 MINUTES (Text Only) for proceedings held before Judge William B. Shubb: MOTION HEARING held on 11/23/2009 re 6 Intervenor Pastor Michael Rodgers' Motion to Intervene. Counsel argue. MOTION SUBMITTED. Court to issue separate order. Plaintiffs Counsel Michael Newdow, via phone present. Defendants

Case: 2:09-cv-2894 As of: 05/07/2013 11:27 AM PDT 7 of 12

11/25/2009 12/02/2009
12/07/2009
12/07/2009 12/09/2009 12/09/2009 12/09/2009
12/10/2009 12/11/2009 12/17/2009 12/17/2009 12/18/2009 02/01/2010 02/02/2010 02/16/2010 02/22/2010

Counsel Jeremy Hendon, Matthew McReynolds (intervenor) present. Court Reporter: Kathy Swinhart. (Kirksey Smith, K) (Entered: 11/23/2009)
20 EXHIBIT Supplemental Authority in Support of re 6 Motion to Intervene filed by Michael Rodgers. (McReynolds, Matthew) (Entered: 11/25/2009)
21 MEMORANDUM AND ORDER denying 6 Applicant's Motion to Intervene, signed by Judge William B. Shubb on 12/1/09. It is further ordered that the applicant's motion for leave to file a brief as amicus curiae be, is GRANTED. (Kastilahn, A) (Entered: 12/02/2009)
22 PRO HAC VICE APPLICATION and PROPOSED ORDER submitted for attorney Richard Bolton to appear Pro Hac Vice. (Attachments: # 1 Exhibit)(Newdow, Michael) Modified on 12/9/2009 (Benson, A.). (Entered: 12/07/2009)
RECEIPT number #CAE200022057 $180.00 fbo Richard L Bolton by Michael A Newdow on 12/7/2009. (Kastilahn, A) (Entered: 12/07/2009)
24 NOTICE of APPEAL by Michael Rodgers as to 21 Order on Motion to Intervene. (Attachments: # 1 Statement Issues)(Snider, Kevin) (Entered: 12/09/2009)
RECEIPT number #CAE200022136 $455.00 fbo Michael Rodgers by Kevin Trent Snider on 12/9/2009. (Mena−Sanchez, L) (Entered: 12/09/2009)
26 APPEAL PROCESSED to Ninth Circuit re 24 Notice of Appeal filed by Michael Rodgers. Filed dates for Notice of Appeal *12/09/09*, Complaint *10/16/09* and Appealed Order / Judgment *12/02/09*. Court Reporter: *Kathy Swinhart*. *Fee Status: Paid on 12/09/09 in the amount of $455.00* ** (Attachments: # 1 Appeal Notice) (Benson, A.) (Entered: 12/09/2009)
27 PRO HAC VICE ORDER signed by Judge William B. Shubb on 12/09/09. Added attorney Richard L. Bolton, PHV for Freedom from Religion Foundation, Inc. (Becknal, R) (Entered: 12/10/2009)
28 USCA CASE NUMBER 09−17753 for 24 Notice of Appeal filed by Michael Rodgers. (Engbretson, K.) (Entered: 12/11/2009)
29 STIPULATION for Order Extending Time for United States to File its Response to the Complaint by United States of America. (Hendon, Jeremy) (Entered: 12/17/2009)
30 PROPOSED ORDER re 29 Stipulation by United States of America. (Hendon, Jeremy) (Entered: 12/17/2009)
31 ORDER signed by Judge William B. Shubb on 12/17/09: The United States shall have up to, and including, February 26, 2010, within which to file a response to the Complaint. (Kaminski, H) (Entered: 12/18/2009)
32 STIPULATION and PROPOSED ORDER for Extension of time for defendant Selvi Stanislaus to Respond to Complaint for Declaratory and Injunctive Relief by Selvi Stanislaus. Attorney Bowers, Jill added. (Bowers, Jill) (Entered: 02/01/2010)
33 ORDER re 32 Stipulation signed by Judge William B. Shubb on 02/02/10 ORDERING that dft Selvi Stanislaus' time to respond to the complaint is EXTENDED to 02/26/10. (Benson, A.) (Entered: 02/02/2010)
34 DECLINE to PROCEED BEFORE US MAGISTRATE JUDGE by Selvi Stanislaus. (Bowers, Jill) (Entered: 02/16/2010)
35 DECLINE to PROCEED BEFORE US MAGISTRATE JUDGE by Anthony Arlen, Elisabeth Steadman, William M. Shockley, Charles Crannell, Collette Crannell, Freedom from Religion Foundation, Inc., Mike Osborne, Kristi Craven, Paul Ellcessor, Joseph Rittell, Wendy Corby, Pat Kelley, Carey Goldstein, Debora Smith, Kathy Fields, Richard Moore, Paul Storey, Susan Robinson, Ken Nahigian, Billy Ferguson, Karen Buchanan, Joseph Morrow. Attorney Bolton, Richard L. added. (Bolton, Richard) (Entered: 02/22/2010)

Case: 2:09-cv-2894 As of: 05/07/2013 11:27 AM PDT 8 of 12

02/25/2010 02/25/2010 02/26/2010
02/26/2010 02/26/2010 02/26/2010
03/12/2010
03/16/2010 03/16/2010 04/06/2010 04/08/2010 04/20/2010 04/20/2010 04/23/2010

36 NOTICE of APPEARANCE by Richard Adam Schwartz, GOVT on behalf of United States of America. Attorney Schwartz, Richard Adam added. (Schwartz, Richard) (Entered: 02/25/2010)
37 NOTICE of APPEARANCE by Richard Adam Schwartz, GOVT on behalf of United States of America. (Schwartz, Richard) (Entered: 02/25/2010)
38 MOTION to DISMISS, MOTION to DISMISS for LACK of JURISDICTION ( Motion Hearing set for 3/29/2010 at 02:00 PM in Courtroom 5 (WBS) before Judge William B. Shubb.) by United States of America. (Attachments: # 1 Memorandum Memorandum in Support of United States' Motion to Dismiss)(Schwartz, Richard) (Entered: 02/26/2010)
39 MOTION to DISMISS by Selvi Stanislaus. Motion Hearing set for 3/29/2010 at 02:00 PM in Courtroom 5 (WBS) before Judge William B. Shubb. (Bowers, Jill) (Entered: 02/26/2010)
40 MEMORANDUM by Selvi Stanislaus in SUPPORT of 39 MOTION to DISMISS. (Bowers, Jill) (Entered: 02/26/2010)
41 MINUTE ORDER (TEXT ONLY): The parties are hereby notified that the Scheduling Conference is continued from 3/22/2010 to 5/3/2010 at 02:00 PM in Courtroom 5 (WBS) before Judge William B. Shubb, pending hearing on Defendant United States' Motion to Dismiss and Defendant Selvi Stanislaus' Motion to Dismiss, now set for hearing 3/29/2010. A Joint Status Report shall be filed no later than 4/19/2010. (Kirksey Smith, K) (Entered: 02/26/2010)
42 STIPULATION for 42−DAY EXTENSION OF TIME for Change of Hearing Date re 39 MOTION to DISMISS by Anthony Arlen, Elisabeth Steadman, William M. Shockley, Charles Crannell, Collette Crannell, Freedom from Religion Foundation, Inc., Mike Osborne, Kristi Craven, Paul Ellcessor, Joseph Rittell, Wendy Corby, Pat Kelley, Carey Goldstein, Debora Smith, Kathy Fields, Richard Moore, Paul Storey, Susan Robinson, Ken Nahigian, Billy Ferguson, Karen Buchanan, Joseph Morrow. (Bolton, Richard) Modified on 3/12/2010 (Kirksey Smith, K). (Entered: 03/12/2010)
43 STIPULATION and ORDER 42 , signed by Judge William B. Shubb on 3/15/2010: The hearing date on dfts' Motion to Dismiss 38 , 39 is hereby RESET from 3/29/2010 to 5/10/2010 at 02:00 PM in Courtroom 5 (WBS) before Judge William B. Shubb. (Kastilahn, A) (Entered: 03/16/2010)
44 NOTICE of HEARING on MOTION to DISMISS 38 , 39 : Motion Hearing RESET from 3/29/2010 to 5/10/2010 at 02:00 PM in Courtroom 5 (WBS) before Judge William B. Shubb. (Kastilahn, A) (Entered: 03/16/2010)
45 STIPULATION and PROPOSED ORDER for Continuance of Joint Status Report and Pretrial Scheduling Conference by United States of America. (Attachments: # 1 Proposed Order)(Schwartz, Richard) (Entered: 04/06/2010)
46 STIPULATION and ORDER 45 , signed by Judge William B. Shubb on 4/6/10: The Scheduling Conference is CONT'D to 6/28/2010 at 02:00 PM in Courtroom 5 (WBS) before Judge William B. Shubb. The joint status report is DUE no later than 6/14/2010. (Kastilahn, A) (Entered: 04/08/2010)
47 OPPOSITION by plts to 38 US' MOTION to DISMISS . (Bolton, Richard) Modified on 4/21/2010 (Duong, D). (Entered: 04/20/2010)
48 AFFIDAVIT of Richard L. Bolton 47 Opposition to Motion to Dismiss . (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibits 4−8 # 5 Exhibits 9−15)(Bolton, Richard) Modified on 4/21/2010 (Duong, D). (Entered: 04/20/2010)
49 OPPOSITION by Anthony Arlen, Elisabeth Steadman, William M. Shockley, Charles Crannell, Collette Crannell, Freedom from Religion Foundation, Inc., Mike Osborne, Kristi Craven, Paul Ellcessor, Joseph Rittell, Wendy Corby, Pat Kelley, Carey Goldstein, Debora Smith, Kathy Fields, Richard Moore, Paul Storey, Susan Robinson, Ken Nahigian, Billy Ferguson, Karen Buchanan, Joseph Morrow to 39 MOTION to DISMISS. (Attachments: # 1 Certificate of Service)(Bolton, Richard)

Case: 2:09-cv-2894 As of: 05/07/2013 11:27 AM PDT 9 of 12

05/03/2010 05/03/2010 05/03/2010 05/04/2010 05/04/2010 05/04/2010 05/04/2010 05/05/2010 05/05/2010
05/10/2010
05/13/2010
05/17/2010 05/21/2010

(Entered: 04/23/2010)
50 REPLY by United States of America re 38 MOTION to DISMISS MOTION to DISMISS for LACK of JURISDICTION, 47 Memorandum, 1 Complaint. (Schwartz, Richard) (Entered: 05/03/2010)
51 [DISREGARD] REPLY by Selvi Stanislaus to RESPONSE to 39 MOTION to DISMISS. (Attachments: # 1 Exhibit A, B and C)(Bowers, Jill) Modified on 5/4/2010 (Becknal, R). (Entered: 05/03/2010)
52 OBJECTIONS by Defendant Selvi Stanislaus to 48 Affidavit. (Bowers, Jill) (Entered: 05/03/2010)
53 RESPONSE by plfs to 51 Reply to Response to Motion. (Attachments: # 1 Exhibit)(Bolton, Richard) Modified on 5/5/2010 (Benson, A.). (Entered: 05/04/2010)
54 CERTIFICATE of SERVICE of 53 Response,. (Bolton, Richard) Modified on 5/5/2010 (Benson, A.). (Entered: 05/04/2010)
55 REPLY by Selvi Stanislaus to Response to 39 Motion to Dismiss. (Bowers, Jill) (Entered: 05/04/2010)
56 [DISREGARD − COUNSEL TO REFILE WITH CAPTION PAGE] EXHIBIT A, B and C to Reply by Selvi Stanislaus re 55 Reply to Response to Motion. (Bowers, Jill) Modified on 5/5/2010 (Benson, A.). (Entered: 05/04/2010)
57 EXHIBITS A, B and C by Selvi Stanislaus re 55 Reply to Response to Motion. (Bowers, Jill) Modified on 5/5/2010 (Benson, A.). (Entered: 05/05/2010)
58 TRANSCRIPT of motion to intervene held on November 23, 2009, before Judge William B. Shubb, filed by Court Reporter Kathy Swinhart, Phone number 916−446−1347 E−mail kswinhart_csr@yahoo.com. Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may also be obtained through PACER. Any Notice of Intent to Request Redaction must be filed within 5 court days. Redaction Request due 5/26/2010. Redacted Transcript Deadline set for 6/7/2010. Release of Transcript Restriction set for 8/3/2010. (Swinhart, K) (Entered: 05/05/2010)
59 MINUTES (Text Only) for proceedings held before Judge William B. Shubb: MOTION HEARING held on 5/10/2010 re 38 United States' MOTION to DISMISS and 39 Defendant Selvi Stanislaus' MOTION to DISMISS. Counsel argue. MOTIONS SUBMITTED. Court shall prepare and issue a separate order. Plaintiffs Counsel Richard Bolton present. Defendants Counsel Jeremy Hendon, DOJ, Richard Schwartz, DOJ, Jill Bowers present. Court Reporter: Kathy Swinhart. (Kirksey Smith, K) (Entered: 05/10/2010)
60 REPLY by Anthony Arlen, Elisabeth Steadman, William M. Shockley, Charles Crannell, Collette Crannell, Freedom from Religion Foundation, Inc., Mike Osborne, Kristi Craven, Paul Ellcessor, Joseph Rittell, Wendy Corby, Pat Kelley, Carey Goldstein, Debora Smith, Kathy Fields, Richard Moore, Paul Storey, Susan Robinson, Ken Nahigian, Billy Ferguson, Karen Buchanan, Joseph Morrow re 53 Response. (Attachments: # 1 Exhibit, # 2 Exhibit)(Bolton, Richard) (Entered: 05/13/2010)
61 MOTION to STRIKE by United States of America. Motion Hearing set for 6/21/2010 at 02:00 PM in Courtroom 5 (WBS) before Judge William B. Shubb. (Attachments: # 1 Proposed Order)(Schwartz, Richard) Modified on 5/17/2010 (Kaminski, H). (Entered: 05/17/2010)
62 MEMORANDUM and ORDER signed by Judge William B. Shubb on 5/21/2010 ORDERING that defendant Stanislaus's 39 motion to dismiss be, and the same hereby is, GRANTED with respect to plaintiffs' claims under the California constitution and with respect to plaintiffs' claim challenging California Revenue and Taxation Code section 17280 (d) (2) and DENIED in all other respects. IT IS FURTHER ORDERED that the federal defendants' 38 motion to dismiss be DENIED with respect to plaintiffs' claim challenging IRC 107 and GRANTED

Case: 2:09-cv-2894 As of: 05/07/2013 11:27 AM PDT 10 of 12

06/04/2010 06/14/2010 06/15/2010 06/18/2010 06/21/2010
06/21/2010
06/21/2010 06/21/2010
06/24/2010

with respect to plaintiffs claim challenging IRC 265(a)(6). (Duong, D) (Entered: 05/21/2010)
63 JOINT MOTION for Order Extending Defendants' Time to Answer Complaint for Declaratory and Injunctive Relief by Selvi Stanislaus. (Attachments: # 1 Exhibit A, # 2 Proposed Order)(Bowers, Jill) Modified on 6/7/2010 (Kaminski, H). (Entered: 06/04/2010)
64 JOINT STATUS REPORT by plfs . Attorney Bolton, Richard L. added. (Bolton, Richard) Modified on 6/15/2010 (Benson, A.). (Entered: 06/14/2010)
65 ORDER signed by Judge William B. Shubb on 6/15/10: The Defendants shall have up to, and including, June 18, 2010, within which to file a response to the Complaint. (Kaminski, H) (Entered: 06/15/2010)
66 FIRST AMENDED COMPLAINT against all defendants by Anthony Arlen, Elisabeth Steadman, William M. Shockley, Charles Crannell, Collette Crannell, Freedom from Religion Foundation, Inc., Mike Osborne, Kristi Craven, Paul Ellcessor, Joseph Rittell, Wendy Corby, Pat Kelley, Carey Goldstein, Debora Smith, Kathy Fields, Richard Moore, Paul Storey, Susan Robinson, Ken Nahigian, Billy Ferguson, Karen Buchanan, Joseph Morrow.(Bolton, Richard) (Entered: 06/18/2010)
67 REQUEST for Permission to Appear Telephonically by United States of America re 64 Status Report filed by Pat Kelley, Carey Goldstein, Paul Storey, Freedom from Religion Foundation, Inc., Timothy Geithner, Ken Nahigian, Anthony Arlen, Wendy Corby, Karen Buchanan, Billy Ferguson, Richard Moore, Charles Crannell, Elisabeth Steadman, Selvi Stanislaus, Kathy Fields, Joseph Rittell, Mike Osborne, Susan Robinson, United States of America, William M. Shockley, Douglas Shulman, Kristi Craven, Paul Ellcessor, Collette Crannell, Joseph Morrow, Debora Smith. (Attachments: # 1 Proposed Order)(Schwartz, Richard) (Entered: 06/21/2010)
68 REQUEST for Leave to Appear by Telephone by Anthony Arlen, Elisabeth Steadman, William M. Shockley, Charles Crannell, Collette Crannell, Freedom from Religion Foundation, Inc., Mike Osborne, Kristi Craven, Paul Ellcessor, Joseph Rittell, Wendy Corby, Pat Kelley, Carey Goldstein, Debora Smith, Kathy Fields, Richard Moore, Paul Storey, Susan Robinson, Ken Nahigian, Billy Ferguson, Karen Buchanan, Joseph Morrow. (Attachments: # 1 Proposed Order Proposed Order to Allow Appearance by Telephone)(Bolton, Richard) (Entered: 06/21/2010)
69 SECOND AMENDED COMPLAINT against all defendants by Anthony Arlen, Elisabeth Steadman, William M. Shockley, Charles Crannell, Collette Crannell, Freedom from Religion Foundation, Inc., Mike Osborne, Kristi Craven, Paul Ellcessor, Joseph Rittell, Wendy Corby, Pat Kelley, Carey Goldstein, Debora Smith, Kathy Fields, Richard Moore, Paul Storey, Susan Robinson, Ken Nahigian, Billy Ferguson, Karen Buchanan, Joseph Morrow.(Bolton, Richard) (Entered: 06/21/2010)
70 REQUEST for non−appearance or, in the alternative, telephonic appearance by Anthony Arlen, Elisabeth Steadman, William M. Shockley, Charles Crannell, Collette Crannell, Freedom from Religion Foundation, Inc., Mike Osborne, Kristi Craven, Paul Ellcessor, Joseph Rittell, Wendy Corby, Pat Kelley, Carey Goldstein, Debora Smith, Kathy Fields, Richard Moore, Paul Storey, Susan Robinson, Ken Nahigian, Billy Ferguson, Karen Buchanan, Joseph Morrow. (Attachments: # 1 Proposed Order Proposed Order re−Newdow Appearance)(Newdow, Michael) (Entered: 06/21/2010)
71 SCHEDULING ORDER signed by Judge William B. Shubb on 06/22/10: Discovery due by 7/30/2010. Designation of Expert Witnesses due by 2/17/2011. Non−Dispositive Motions filed by 6/3/2011. Counsel shall file separate pretrial statements. Final Pretrial Conference set for 8/22/2011 at 02:00 PM in Courtroom 5 (WBS) before Judge William B. Shubb. Bench Trial set for 10/25/2011 at 09:00 AM in Courtroom 5 (WBS) before Judge William B. Shubb. (Williams, D) (Entered: 06/24/2010)

Case: 2:09-cv-2894 As of: 05/07/2013 11:27 AM PDT 11 of 12

06/30/2010 07/01/2010 07/14/2010 01/19/2011 01/19/2011
01/20/2011 02/02/2011 02/08/2011
02/11/2011 02/14/2011 04/08/2011 04/21/2011
05/09/2011 05/26/2011

72 [DISREGARD− SEE DOCUMENT 73 for Correct Image] ANSWER to AMENDED COMPLAINT for Declaratory and Injunctive Relief by Selvi Stanislaus.(Bowers, Jill) Modified on 7/2/2010 (Donati, J). (Entered: 06/30/2010)
73 ANSWER to CORRECTED AMENDED COMPLAINT by Selvi Stanislaus.(Bowers, Jill) Modified on 7/8/2010 (Zignago, K.). (Entered: 07/01/2010)
74 ANSWER to AMENDED COMPLAINT by United States of America.(Schwartz, Richard) (Entered: 07/14/2010)
75 JOINT MOTION to STAY by United States of America. Motion Hearing set for 2/14/2011 at 02:00 PM in Courtroom 5 (WBS) before Judge William B. Shubb. (Attachments: # 1 Proposed Order, # 2 Exhibit A)(Schwartz, Richard) Modified on 1/20/2011 (Kaminski, H). (Entered: 01/19/2011)
76 MINUTE ORDER (TEXT ONLY): The parties are hereby notified that the 75 Joint Motion for Stay of Proceedings has been improperly noticed pursuant to Local Rule 230(b). The motion shall be heard on 2/28/2011 at 02:00 PM in Courtroom 5 (WBS) before Judge William B. Shubb. Counsel are instructed to immediately file and serve an amended notice of motion setting forth the above−referenced date and time, or the motion will be stricken. (Kirksey Smith, K) (Entered: 01/19/2011)
77 AMENDED NOTICE to RESCHEDULE HEARING on 75 MOTION to STAY : Motion Hearing set for 2/28/2011 at 02:00 PM in Courtroom 5 (WBS) before Judge William B. Shubb. (Schwartz, Richard) Modified on 1/21/2011 (Kaminski, H). (Entered: 01/20/2011)
78 REQUEST for Permission to Appear Telephonically by United States of America re 75 MOTION to STAY filed by United States of America, 77 Notice to Reschedule Hearing on Motion. (Attachments: # 1 Proposed Order)(Schwartz, Richard) (Entered: 02/02/2011)
79 ORDER signed by Judge William B. Shubb on 2/7/11 re 78 ORDERING that the request for telephonic appearance of counsel for the US at the hearing on the joint motion for stay of proceedings is GRANTED. Attorney Jeremy N. Hendon and Richard A. Schwartz may appear by telephone, upon the condition that an attorney from the United States Attorney's Office also appear in person at the hearing. (Duong, D) Modified on 2/9/2011 (Duong, D). (Entered: 02/08/2011)
80 MINUTE ORDER (TEXT ONLY): On the Court's own motion, the parties are hereby notified that the 75 Joint Motion for Stay of Proceedings now set for 2/28/2011 is taken off calendar and under submission, no appearance is necessary. The Court shall issue a separate order. (Kirksey Smith, K) (Entered: 02/11/2011)
81 ORDER signed by Judge William B. Shubb on 2/11/11 GRANTING 75 Joint Motion to Stay; No later than 10 days following the issuance of the Supreme Court's decision in Arizona Christian School Tuition Organization v Winn, the parties shall file a joint status report with the court. Case stayed. (Matson, R) (Entered: 02/14/2011)
82 JOINT STATUS REPORT by United States of America. (Attachments: # 1 Exhibit A)(Schwartz, Richard) (Entered: 04/08/2011)
83 ORDER signed by Judge William B. Shubb on 4/21/11 ORDERING that Discovery is due by 4/22/2011; Pretrial Motions filed by 6/3/2011; Motions challenging pltfs' standing in light of Winn filed by 5/27/2011; Oppositions filed by 6/17/11 and replies filed by 7/1/11; the Court grants the parties' request to continue the stay of all other proceedings until the forthcoming motions are resolved. (Manzer, C) (Entered: 04/21/2011)
84 USCA OPINION #09−17753, the judgment of the district court is AFFIRMED in PART, VACATED in PART and REMANDED; each side shall bear its own costs. re 24 Notice of Appeal filed by Michael Rodgers (Reader, L) (Entered: 05/09/2011)
85 MOTION to DISMISS for LACK of JURISDICTION by United States of America. Motion Hearing set for 7/18/2011 at 02:00 PM in Courtroom 5 (WBS)

Case: 2:09-cv-2894 As of: 05/07/2013 11:27 AM PDT 12 of 12

05/27/2011 06/17/2011 06/20/2011 07/05/2011

before Judge William B. Shubb. (Attachments: # 1 Points and Authorities in Support of United States' Renewed Motion to Dismiss)(Hendon, Jeremy) (Entered: 05/26/2011)
86 MOTION for JUDGMENT on the Pleadings by Selvi Stanislaus. Motion Hearing set for 7/18/2011 at 02:00 PM in Courtroom 5 (WBS) before Judge William B. Shubb. (Attachments: # 1 Points and Authorities, # 2 Exhibit 1)(Bowers, Jill) (Entered: 05/27/2011)
87 STIPULATION and PROPOSED ORDER for Dismissal by United States of America. (Attachments: # 1 Proposed Order)(Schwartz, Richard) (Entered: 06/17/2011)
88 ORDER DISMISSING CASE without prejudice per 87 Stipulation of Dismissal, signed by Judge William B. Shubb on 6/17/11. The parties are to bear their own respective costs, including attorney fees and other litigation expenses. CASE CLOSED (Kastilahn, A) (Entered: 06/20/2011)
89 MANDATE of USCA as to 24 Notice of Appeal; the 5/9/11 judgment of this court takes effect this date. (Manzer, C) (Entered: 07/05/2011)

 
 Case: 09-17753 03/26/2010 Page: 1 of 49 ID: 7280186 DktEntry: 6
Docket No. 09-17753
In the
United States Court of Appeals
for the
Ninth Circuit

FREEDOM FROM RELIGION FOUNDATION, INC., et al., Plaintiffs-Appellees,
v.

TIMOTHY GEITHNER, Secretary, U.S. Department of the Treasury, et al.,
and

Defendants,

MICHAEL RODGERS, Pastor, Defendant-Intervenor/Appellant.
_______________________________________
Appeal from a Decision of the United States District Court for the Eastern District of California, No. 09-CV-02894 · Honorable William B. Shubb
BRIEF OF APPELLANT

KEVIN T. SNIDER, ESQ. MATTHEW B. MCREYNOLDS, ESQ. PACIFIC JUSTICE INSTITUTE Post Office Box 276600 Sacramento, California 95827-6600 (916) 857-6900 Telephone (916) 857-6902 Facsimile
Attorneys for Appellant, Michael Rodgers, Pastor

COUNSEL PRESS · (800) 3-APPEAL

PRINTED ON RECYCLED PAPER

Case: 09-17753 03/26/2010 Page: 2 of 49 ID: 7280186 DktEntry: 6
TABLE OF CONTENTS
TABLE OF AUTHORITIES ....................................................................................iv
INTRODUCTION .....................................................................................................1
STATEMENT OF JURISDICTION..........................................................................1
ISSUES PRESENTED FOR REVIEW .....................................................................2
STATEMENT OF THE CASE..................................................................................3
STATEMENT OF THE FACTS ...............................................................................4
SUMMARY OF THE ARGUMENT ........................................................................5
ARGUMENT .............................................................................................................8
I. The Standard of Review Is De Novo ....................................................8
II. The District Court Erroneously Denied Intervention As Of Right Because Pastor Rodgers Has No Other Forum By Which To Protect His Interests In The Challenged Statutes And He Has Rebutted Any Presumption Of Adequate Representation By The Federal Defendants...................................................................8
A. Pastor Rodgers meets the third element of intervention as of right because he lacks an alternative forum in which he can mount a constitutional defense of the challenged federal and state statutes .............................................................9
B. Pastor Rodgers meets the fourth element of intervention as of right because his interests in the federal and state statutes are inadequately represented by the federal defendants .................................................................................12
1. There is a rebuttable presumption that the federal government, as a party, will represent Pastor Rodgers’ interests in the federal statutes ........................12
i

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2. Pastor Rodgers has rebutted the presumption of adequate representation by the federal defendants.........13
i. The federal defendants have already proffered a narrow interpretation of the challenged statutes which conflicts with ministers’ interpretation, thereby rebutting the presumption of adequate representation .......................................................14
ii. The federal defendants can only claim to defend the federal statutes and therefore cannot adequately represent Pastor Rodgers’ interest in the state statutes...................................17
iii. Pastor Rodgers is able and willing to appeal an adverse ruling in contrast to the federal defendants who may not be allowed by the Solicitor General to appeal or even be willing to choose to appeal an adverse ruling ..................18
iv. The federal and state defendants face an inherent conflict of interest in representing not only the interests of ministers but also the general public .................................................21
III. The District Court Erred In Denying Pastor Rodgers Permissive Intervention Because He Shares A Common Question Of Law In The Federal And State Constitutionality Of The Challenged Statutes And As An Intervening-Defendant Is Submitting To The Personal And Subject Matter Jurisdiction Of The District Court .......25
A. Pastor Rodgers meets the requirement of Rule 24(b) because he shares the common question of law in the constitutionality of the federal and state statutes ......................26
B. Pastor Rodgers has submitted to the personal and subject matter jurisdiction of the district court ....................................27
ii

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1. An independent jurisdictional showing should not apply to Pastor Rodgers because he is seeking to intervene as a defendant and has not filed a counter-claim or a cross-claim .......................................27
2. Even if independent jurisdiction is required for an intervening defendant who has not filed a counterclaim or a cross-claim, Pastor Rodgers can claim supplemental jurisdiction under 28 U.S.C. § 1367.........30
C. Pastor Rodgers, as a minister, has the strongest interest in the outcome of the litigation and should not be denied permissive intervention under the guise of judicial economy ....................................................................................31
D. Pastor Rodgers should be granted permissive intervention because deference should be given to a party with the strongest interest in the outcome of the litigation.....................33
CONCLUSION ........................................................................................................35 CERTIFICATE OF COMPLIANCE.......................................................................36 STATEMENT OF RELATED CASES ...................................................................37 CERTIFICATE OF SERVICE ................................................................................38
iii

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TABLE OF AUTHORITIES
CASES
Arakaki v. Cayetano, 324 F.3d 1078 (9th Cir. 2003) ...........................................................12, 13, 15
Ashwander v. TVA, 297 U.S. 288 (1936).......................................................................................14
Bank of Am. v. M/V Executive, 797 F.2d 772 (9th Cir. 1986) .........................................................................20
Beckman Industries, Inc. v. International Ins. Co., 966 F.2d 470 (9th Cir. 1992) .........................................................................29
Calif. Dept. of Social Svcs. v. Thompson, 321 F.3d 835 (9th Cir. 2003) .........................................................................19
California ex rel Lockyer v. United States, 450 F.3d 436 (9th Cir. 2006) ..................................................................passim
City of Indianapolis v. Chase Nat. Bank of City of New York, 314 U.S. 63 (1941).........................................................................................30
City of Santa Clara v. Kleppe, 428 F.Supp. 315 (N.D. Cal. 1976).................................................................27
Conservation Law Foundation of New England, Inc. v. Mosbacher, 966 F.2d 39 (1st Cir. 1992)............................................................................24
County Sec. Agency v. Ohio Dept. of Commerce, 296 F.3d 477 (6th Cir. 2002) .........................................................................27
Crowell v. Benson, 285 U.S. 22 (1932).........................................................................................14
Dawson v. Columbia Ave. Sav. Fund, Safe Deposit, Title & Trust Co., 197 U.S. 178 (1905).......................................................................................30
iv

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Development Finance Corp. v. Alpha Housing and Health Care, Inc., 54 F.3d 156 (3rd Cir. 1995)...........................................................................31
Didrickson v. U.S. Dep’t of Interior, 982 F.2d 1332 (9th Cir. 1992) .......................................................................19
Dimond v. District of Columbia, 792 F.2d 179 (C.A.D.C. 1986) ......................................................................24
Donnelly v. Glickman, 159 F.3d 405 (9th Cir. 1998) .........................................................................28
Greene v. United States, 996 F.2d 973 (9th Cir. 1993) ...........................................................................8
Idaho Farm Bureau Fed’n v. Babbitt, 58 F.3d 1392 (9th Cir. 1995) .........................................................................19
In re Bayshore Ford Truck Sales, Inc., 471 F.3d 1233 (11th Cir. 2006) .....................................................................27
In re Benny, 791 F.2d 712 (9th Circ. 1986) .........................................................................2
Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694 (1982).......................................................................................30
Kootenai Tribe of Idaho v. Veneman, 313 F.3d 1094 (9th Cir. 2002) .......................................................................19
Michigan State AFL-CIO v. Miller, 103 F.3d 1240, 1247 (6th Cir. 1997) ...............................................................9
National Farm Lines v. I.C.C., 564 F.2d 381 (10th Cir. 1977) .................................................................23, 24
Natural Res. Def. Council v. United States Regulatory Comm’n, 578 F.2d 1341 (10th Cir. 1978) .....................................................................10
v

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Natural Resources Defense Council v. Kempthorne, 539 F.Supp.2d 1155 (E.D. Cal. 2008) ...........................................................22
Northwest Forest Resource Council v. Glickman, 82 F.3d 825 (9th Cir. 1996) ...........................................................................28
Orange County v. Air California, 799 F.2d 535 (9th Cir. 1986) .........................................................................25
Pacific Gas & Electric v. Lynch, 216 F.Supp. 2d 1016 (N.D. Cal. 2002)..........................................................33
PEST Committee v. Miller, 648 F.Supp.2d 1202 (D. Nev. 2009) .............................................................32
Pharm. Research & Mfrs. V. Thompson, 259 F.Supp.2d 39 (D.D.C. 2003)...................................................................27
Portland Audubon Soc. v. Hodel, 866 F.2d 302 (9th Cir. 1989) .........................................................................25
Prete v. Bradbury, 438 F.3d 949 (9th Cir. 2006) .............................................................13, 17, 18
Purnell v. City of Akron, 925 F.2d 941 (6th Cir. 1991) .....................................................................9, 33
Sagebrush Rebellion, Inc. v. Watt, 713 F.2d 525 (9th Cir. 1983) ...............................................................1, 10, 13
S.E.C. v. Ross, 504 F.3d 1130 (9th Cir. 2007) .......................................................................27
San Jose Mercury News, Inc. v. U.S. Dist. Court—Northern Dist. (San Jose), 187 F.3d 1096 (9th Cir. 1999) .........................................................................8
Sierra Club v. EPA, 995 F.2d 1478 (9th Cir. 1993) .........................................................................9
vi

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Smith v. Marsh, 194 F.3d 1045 (9th Cir. 1999) .......................................................................20
So. Cal. Edison v. Lynch, 307 F.3d 794 (9th Cir. 2002) .............................................................20, 25, 28
Sw. Ctr. For Biological Diversity v. Berg, 268 F.3d 810 (9th Cir. 2001) ...................................................................12, 35
Tibor Power Tool Co. v. C.I.R., 439 U.S. 522 (1979).................................................................................22, 23
Trbovich v. United Mine Workers of America, 404 U.S. 528 (1972).......................................................................................12
U.S. v. Alisal Water Corp., 370 F.3d 915 (9th Cir. 2004) .........................................................................11
U.S. v. City of Los Angeles, 288 F.3d 391 (9th Cir. 2002) .............................................................11, 29, 32
U.S. v. State of Wash., 86 F.3d 1499 (9th Cir. 1996) .........................................................................20
United States ex rel. McGough v. Covington Technologies Co., 967 F.2d 1391 (9th Cir. 1992) .......................................................................20
Utah Ass’n of Counties v. Clinton, 255 F.3d 1246 (10th Cir. 2001) .....................................................................10
Utahns for Better Transp. v. U.S. Dept. of Transp., 295 F.3d 1111 (10th Cir. 2002) .....................................................................24
Venegas v. Skaggs, 867 F.2d 527 (9th Cir. 1989) ...................................................................28, 29
Waller v. Financial Corp. of America, 828 F.2d 579 (9th Cir. 1987) ...........................................................................8
vii

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Warren v. C.I.R, 114 T.C. 343 (U.S. Tax Ct. 2000) ...........................................................15, 16
Warren v. C.I.R., 302 F.3d 1012 (9th Cir. 2002) .......................................................................16
Wetlands Action Network v. U.S. Army Corps of Engineers, 222 F.3d 1105 (9th Cir. 2000) .......................................................................33
Yniguez v. State of Ariz., 939 F.2d 727 (9th Cir. 1991) .........................................................................19
FEDERAL STATUTES, RULES AND REGULATIONS 9th Cir. R. 28-2.2 .......................................................................................................1 26 U.S.C. § 107..................................................................................................15, 16 26 U.S.C. § 265..........................................................................................................4 28 C.F.R. § 0.20(b) ..................................................................................................18 28 U.S.C. § 1291........................................................................................................2 28 U.S.C. § 1331............................................................................................1, 30, 31 28 U.S.C. § 1332............................................................................................1, 30, 31 28 U.S.C. §§ 1343(a)(3).............................................................................................1 28 U.S.C. § 1367................................................................................................30, 31 42 U.S.C. § 1983........................................................................................................1 California Revenue and Taxation Code § 17131.6........................................4, 17, 18 California Revenue and Taxation Code § 17280(d)(2) .................................4, 17, 18 Fed. R. App. P. 4(a) ...................................................................................................2 Fed. R. Civ. P. 24(a)...............................................................................1, 8, 9, 32, 34 Fed. R. Civ. P. 24(b) ................................................................................8, 26, 31, 34
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OTHER AUTHORITIES Wright, Miller & Kane, Federal Practice and Procedure,
Vol. 7C § 1920 (3d ed. 2007) ........................................................................27
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INTRODUCTION This appeal represents an inherent and irreconcilable conflict of interest between the defendants and Pastor Rodgers. It is self-evident that the state tax board and the federal department of the treasury has the goal of collecting taxes and treasure. In contrast, the minister in this case is seeking to lesson personal tax liability. There is therefore an existential conflict of interest between the proposed intervenor and defendants. Because of this, the lower court committed error in denying the motion to intervene.
STATEMENT OF JURISDICTION In accordance with 9th Cir. R. 28-2.2, the U.S. District Court for the Northern District of California has original jurisdiction over all defendants in this case under 28 U.S.C. § 1331, in that the Complaint alleges violations of the United States Constitution actionable under 42 U.S.C. § 1983. E.R. at 109, ¶ E Additionally, the district court has authority over the state defendant Selvi Stanislaus under 28 U.S.C. §§ 1343(a)(3) and 1367. E.R. at 98, ¶ 2. The judgment and order issued on December 2, 2009 denying Pastor Rodgers’ motion to interevene is a final appealable order because “[d]enial of a motion to intervene as of right under Rule 24(a)(2) is appealable as a final order.” E.R. at 1; Sagebrush Rebellion, Inc. v. Watt, 713 F.2d 525, 527 (9th Cir. 1983).
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For denials of permissive intervention, this Court has jurisdiction “as a practical matter because…the jurisdictional issue necessarily involves a consideration of the merits.” In re Benny, 791 F.2d 712 (9th Circ. 1986). This Court has jurisdiction pursuant to 28 U.S.C. § 1291.
The Notice of Appeal was filed December 9, 2009. E.R. at 25. The Notice was filed within thirty days of the Order being appealed, as required by Fed. R. App. P. 4(a).
ISSUES PRESENTED FOR REVIEW 1. Was intervention as of right properly denied to ministers in a case
challenging the constitutionality of a tax exemption for ministerial housing allowances when: a) The ministers stand to suffer a direct, adverse financial impact from a
negative decision; b) The defendants have an inherent financial interest in maximizing tax
revenue while the proposed intervenors have a pecuniary interest in maximizing their tax exemptions and decreasing their tax burdens; c) The federal defendants have previously sought a narrow construction, adverse to ministers, of the challenged statutes; and d) The plaintiffs affirmatively assented to intervention and the state defendants never responded to the motion to intervene.
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2. Under the same facts, was permissive intervention properly denied on the basis that the proposed Defendants-Intervenors, who have no counter-claims or cross-claims, lacked “independent grounds for jurisdiction”?
STATEMENT OF THE CASE The Freedom From Religion Foundation (“FFRF”) filed suit in the U.S. District Court for the Northern District of California on October 16, 2009. E.R. at 97. Pastor Rodgers filed a Motion to Intervene on October 22, 2009, which was served on all parties. E.R. at 94. On October 23, 2009 Pastor Rodgers filed the Supplemental Declaration of Matthew McReynolds in which plaintiff-appellee’s counsel Michael Newdow stated that he would affirmatively consent to Pastor Rodgers’ motion to intervene. E.R. at 64. Thereafter, plaintiff’s counsel filed his own request that Pastor Rodgers’ motion be granted. E.R. at 63.1. Defendant-s Timothy Geithner and Douglas Shulman, represented by the U.S. Department of Justice (“federal defendants), filed a response in opposition to Pastor Rodgers’ motion to intervene on November 6, 2009. E.R. at 54. Pastor Rodgers’ motion to intervene was denied by Judge William B. Shubb on December 2, 2009. E.R. at 1. Pastor Rodgers filed his Notice of Appeal to this Court on December 9, 2009. E.R. at 25. The state defendant, Selvi Stanislaus (“state defendant”), did not file a response in opposition or appear at the motion hearing, and in fact made its first
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appearance on February 1, 2010 by way of a proposed order requesting an extension of time. E.R. at 18.
STATEMENT OF THE FACTS The material facts are not in dispute. On October 16, 2009 the Freedom From Religion Foundation and several of its individually named members (collectively, “FFRF”) filed a complaint in the U.S. District Court for the Northern District of California seeking injunctive relief and a declaration that 26 U.S.C. §§ 107 and 265(a)(6) violate the Establishment Clause of the U.S. Constitution. Excerpts of Record (“E.R.”) at 108-109, ¶¶ B, D. Sections 107 and 265(a)(6) provide tax exemptions to “ministers of the gospel” and are administered by the Internal Revenue Service (“IRS”) and the Department of the Treasury (“Treasury”). Plaintiffs-appellees also sought a declaration that §§ 17131.6 and 17280(d)(2) of the California Revenue and Taxation Code violates the Establishment Clause of the U.S. Constitution as well as the California Constitution as administered by the California Franchise Tax Board (“Tax Board”). E.R. at 103, 109, ¶¶ 37-38, E. On October 22, 2009, Pastor Michael Rodgers (“Pastor Rodgers”) and Does 1-100 (“Pastor Rodgers”) moved to intervene as defendants in this action. E.R. at 94-96. Pastor Rodgers is a minister of the gospel in the Sacramento area who, from 1995 to the present, has claimed both the federal and state tax exemptions.
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E.R. at 78, ¶ 7. An adverse ruling in this case would have a “direct, immediate, negative financial impact” on Pastor Rodgers and his family. E.R. at79, ¶ 14.
SUMMARY OF THE ARGUMENT Motions to intervene are construed broadly to favor applicants for intervention. For intervention as of right, there are four elements that must be shown: (1) timeliness; (2) applicant must have a protectable interest; (3) applicant would be practically impaired as a result of the action; and, (4) the applicant’s interest is inadequately represented. After serving all parties with the motion to intervene, the FFRF filed a non-opposition motion, the federal defendants filed a response in opposition to intervention, and the state defendant filed no motions in response. The federal defendants conceded the timeliness and protectable interest elements, but challenged practical impairment by proposing Pastor Rodgers had other means to protect his interest by way of an amicus brief. Defendants further argued that there is no inadequate representation because both parties share the same ultimate objective of defending the constitutionality of the federal statutes. The trial court determined there was practical impairment that would not be solved my amicus status. This holding was correct under the law. The trial court also determined that Pastor Rodgers was adequately represented by the U.S. defendants as they both had the same ultimate objective of defending the constitutionality of the federal statutes and Pastor Rodgers did not rebut the presumption of adequate
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representation. This holding is in error because in order to show inadequate representation, intervenors need only show a mere likelihood that the government would abandon or concede a potentially meritorious reading of the statutes in question. This holding is also in error because Pastor Rodgers’ interest lay within both the federal and state statutes, and the federal defendants have only purported to defend the constitutionality of the federal statutes, hence creating an inadequacy of representation on state issues.
It is a cardinal principle that the government, when faced with a challenge of the constitutionality of a statute, must apply limiting construction of that statute to determine whether the question could be avoided altogether. Application of this principle proves more than a mere likelihood that the government, in defending the constitutionality of a statute, will either abandon or concede a potentially meritorious reading of the statute. Moreover, the IRS, one of the federal defendants, has already proffered a different construction of the federal statute than do ministers by way of litigation. Additionally, the district court ignored the fact that the state defendants had been served with Pastor Rodgers’ motion to intervene and opted not to oppose it. The district court relies on one case for the proposition that this Court has allowed intervention of right post-judgment for the purposes of appealing and ignores an entire body of case law in which this Court has denied post-judgment intervention because those motions were deemed untimely or the
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proposed intervenor lacked standing. Finally, the district court dismissed Pastor Rodgers’ contention that there is an inherent conflict of interest for both federal and state defendants as they have been asked to defend not only Pastor Rodgers’ interests in maintaining a tax-free housing allowance, but also the interests of the government in maximizing tax revenue. Pastor Rodgers rebutted the presumption of adequate representation by the federal defendants and should have been granted intervention as of right.
For permissive intervention, the district court held that an applicant must show (1) independent grounds for jurisdiction; (2) the motion is timely; and, (3) the applicant’s claim or defense, and the main action, have a question in law or a question of fact in common. The district court did not make a ruling on timeliness of the motion or whether there was a common question of law or fact, but did determine that Pastor Rodgers did not show independent grounds for jurisdiction and lacked Article III standing. This holding was also in error in that Pastor Rodgers was seeking to intervene as a defendant and did not file a counterclaim or cross-claim against any other parties. In cases where the district court has original jurisdiction concerning the constitutionality of statutes, intervening defendants need not show independent jurisdiction as they are submitting themselves to the personal and subject matter jurisdiction of the district court. If Pastor Rodgers was precluded from intervention as of right, he should have been
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granted permissive intervention as he has the strongest interest in the outcome of the litigation.
ARGUMENT I. The Standard of Review Is De Novo.
This Court reviews de novo the denial of a motion to intervene as of right under FRCP 24(a). Waller v. Financial Corp. of America, 828 F.2d 579, 582 (9th Cir. 1987). Although a motion for permissive intervention pursuant to FRCP 24(b) is directed to the discretion of the district court, if the district court’s decision “turns on a legal question…its underlying legal determination is subject to de novo review.” San Jose Mercury News, Inc. v. U.S. Dist. Court—Northern Dist. (San Jose), 187 F.3d 1096, 1100 (9th Cir. 1999). Here, the district court determined that the denial of permissive intervention came from the appellant’s supposed lack of independent jurisdiction, a purely legal question. Therefore, the motion for permissive intervention should also be reviewed de novo. II. The District Court Erroneously Denied Intervention As Of Right
Because Pastor Rodgers Has No Other Forum By Which To Protect His Interests In The Challenged Statutes And He Has Rebutted Any Presumption Of Adequate Representation By The Federal Defendants. Rule 24(a) is “construed broadly in favor of applicants for intervention.” Greene v. United States, 996 F.2d 973, 976 (9th Cir. 1993). This Court has divided Rule 24(a)(2) into four elements:
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“(1) the motion must be timely; (2) the applicant must claim a “significantly protectable” interest relating to the property or transaction which is the subject of the action; (3) the applicant must be so situated that the disposition of the action may as a practical matter impair or impede its ability to protect that interest; and (4) the applicant's interest must be inadequately represented by the parties to the action.”
California ex rel Lockyer v. United States, 450 F.3d 436, 440-41 (9th Cir. 2006) (citing Sierra Club v. EPA, 995 F.2d 1478 (9th Cir. 1993)). The federal defendants conceded the first two elements: Pastor Rodgers’ motion to intervene as of right was timely, being filed six days after service of the plaintiff’s complaint, and Pastor Rodgers had a significantly protectable interest by way of financial interest in the challenged federal and state statutes. E.R. at 56-57. Thus, only the third and fourth elements of FRCP 24(a) were contested.
A. Pastor Rodgers meets the third element of intervention as of right because he lacks an alternative forum in which he can mount a constitutional defense of the challenged federal and state statutes.
Federal courts have been careful to note that, under the third element of intervention as of right, prospective intervenors need only show that an unfavorable disposition in the case "'may ... impair or impede [their] ability to protect [their] interest.'" Purnell v. City of Akron, 925 F.2d 941, 948 (6th Cir. 1991) (quoting FRCP 24(a)(2) and adding emphasis), that is, that impairment is "possible." Michigan State AFL-CIO v. Miller, 103 F.3d 1240, 1247 (6th Cir.
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1997). See also, Sagebrush Rebellion, Inc. v. Watt, 713 F.2d 525, 528 (9th Cir. 1983). Other federal courts have considered this requirement indistinct from the previous element, declaring that “‘the question of impairment is not separate from the question of the existence of an interest.’” Utah Ass’n of Counties v. Clinton, 255 F.3d 1246, 1253 (10th Cir. 2001) (quoting Natural Res. Def. Council v. United States Regulatory Comm’n, 578 F.2d 1341, 1345 (10th Cir. 1978)).
A ruling in this case would practically impair Pastor Rodgers’ ability to protect his financial interest in both the federal and state statutes. Both Pastor Rodgers and the federal defendants agree that “[a] ruling on the constitutionality of the [federal and state] statutes at issue is a disposition that might affect [Pastor Rodgers’] interests.” E.R. at 57. However, the federal defendants contend that Pastor Rodgers has “other means” by which to protect his significantly protectable interests by way of “raising his arguments in an amicus brief.” E.R. 57. If an action “would affect the proposed intervenors’ interests, their interests might not be impaired if they have ‘other means’ to protect them.” Lockyer, 450 F.3d at 441.
Amicus is not an “other means” by which Pastor Rodgers can protect his interests in the statutes because it is not an alternative forum by which he can protect his interests. In Lockyer the court noted that if intervention was not allowed, the intervenors would “have no alternative forum where they can mount a robust defense of the Weldon Amendment.” Id. (emphasis added). See also, U.S.
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v. Alisal Water Corp., 370 F.3d 915 (9th Cir. 2004) (intervenors having a separate district court process for approving claims against debtors found sufficient to protect proposed intervenor/creditor interests); U.S. v. City of Los Angeles, 288 F.3d 391 (9th Cir. 2002) (possibility of individual suits against police officers found sufficient to protect interest of community groups seeking to protect members from unconstitutional police practices). In contrast, amicus status is not an “other means” by which Pastor Rodgers can protect his interests in that it is not an alternate forum.
The federal defendants have failed to show how amicus status should be considered “other means” by which Pastor Rodgers can protect his interests in both the federal and state statutes. Indeed, the federal defendants cite no cases for the novel proposition that filing a friend of the court brief can be considered as “other means” or as an “alternative forum” for Pastor Rodgers to protect his interest under Lockyer. Id. at 441. As a practical matter, in light of this Court’s favorability toward intervenors, as amicus, Pastor Rodgers could not realistically expect his arguments to be taken as seriously as party positions—even though Pastor Rodgers has much more to lose from an adverse decision than do the federal defendants. It is not subject to reasonable dispute that the defendants (Treasury and the Tax Board) would benefit by an adverse ruling which would result in increased tax revenues. By contrast, the construction offered by the federal defendants would
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render Rule 24 meaningless. If it is determined that Pastor Rodgers could simply become amicus to protect his significantly protectable interests, it is difficult to imagine any situation in which Rule 24 could not be similarly skirted. Thus, Pastor Rodgers should be allowed to intervene as of right because the federal defendants have not shown any “other means” by which Pastor Rodgers can protect his interests in the federal and state statutes.
B. Pastor Rodgers meets the fourth element of intervention as of right because his interests in the federal and state statutes are inadequately represented by the federal defendants. 1. There is a rebuttable presumption that the federal government, as a party, will represent Pastor Rodgers’ interests in the federal statutes.
If an absentee will be substantially affected in a practical sense by the determination made in an action, as a general rule that absentee should be entitled to intervene. Sw. Ctr. For Biological Diversity v. Berg, 268 F.3d 810, 822 (9th Cir. 2001) (discussing advisory committee note to Rule 24). A showing of inadequate representation is minimal and is satisfied if a proposed intervenor shows that representation of their interest may be inadequate. Arakaki v. Cayetano, 324 F.3d 1078, 1086 (9th Cir. 2003) (citing Trbovich v. United Mine Workers of America, 404 U.S. 528, 538 (1972)). Although there is a presumption of adequate representation when the government is acting on behalf of its constituency, the presumption is overcome where the intervenor shows there is a likelihood that the
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government will possibly abandon or concede a potentially meritorious reading of the statute. Arakaki, 324 F.3d at 1086; Lockyer, 450 F.3d at 444.
2. Pastor Rodgers has rebutted the presumption of adequate representation by the federal defendants.
In assessing whether the federal defendants can adequately represent Pastor Rodgers’ interests, this Court considers “whether [a present party] will undoubtedly make all of the intervenor’s arguments, whether [a present party] is capable of and willing to make such arguments, and whether the intervenor offers a necessary element to the proceedings that would be neglected.” Prete v. Bradbury, 438 F.3d 949, 956 (9th Cir. 2006) (citing Sagebrush Rebellion, Inc. v. Watt, 713 F.2d 525, 528 (9th Cir. 1983)) (bracketed text in original, emphasis added). Here, the federal defendants cannot adequately represent Pastor Rodgers. First, the federal defendants will not “undoubtedly” make all of Pastor Rodgers’ arguments because of the cardinal principle of limited construction. Indeed, the IRS has already proffered in litigation an interpretation of the statute that conflicts with the interests of ministers. Second, the federal defendants have not claimed that they will defend the state statutes, defeating any presumption that the federal defendants can and will make all the arguments made by Pastor Rodgers. Third, Pastor Rodgers would provide a necessary element to the litigation by way of an appealing party if the federal defendants cannot or will not appeal an adverse decision. Finally, Pastor Rodgers provides a necessary element by way of keeping
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in check the federal and state defendants’ financial conflict of interest and their duty to not only represent Pastor Rodgers but also the interests of the general public, including the individual members of the FFRF listed as plaintiffs-appellees.
i. The federal defendants have already proffered a narrow interpretation of the challenged statutes which conflicts with ministers’ interpretation, thereby rebutting the presumption of adequate representation.
It is well established that, when faced with a constitutional challenge to a statute, the courts will attempt to salvage the constitutionality of the statute by narrowly construing it. “Often, defending Acts of Congress leads the Solicitor General to lean heavily on the Ashwander principle of construing a statute so as to avoid constitutional doubt.” Lockyer, 450 F.3d at 444. The Ashwander principle, taken from the U.S. Supreme Court case Ashwander v. TVA, 297 U.S. 288 (1936), states that when a Congressional act is in question “it is a cardinal principle that this Court will first ascertain whether a construction of the statutes is fairly possible by which the question may be avoided.” Id. at 348 (quoting Crowell v. Benson, 285 U.S. 22, 62 (1932)).
This cardinal principle of the government adopting a limiting construction defense when a statute is challenged is illustrated in Lockyer, where the plaintiffs challenged the constitutionality of the Weldon Amendment which prevented federal, state, and local governments from receiving federal funding if they
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discriminated against health care providers that refused to provide, pay for, provide coverage of, or refer for abortions. Id. 450 F.3d at 439. Health care providers moved to intervene in the action, and were denied by the district court, but were granted intervention as of right by this Court after a finding of a significantly protectable interest and practical impairment. Id. at 441-43. This Court found that even if the proposed intervenors and the government had the same “ultimate objective” (defending the constitutionality of the Weldon Amendment) and that an “assumption of adequacy” arose “when the government is acting on behalf of a constituency,” the proposed intervenors rebutted any presumptions of adequacy because the government defendants had offered a limiting construction defense in defense relative to the Weldon Amendment. Id. at 443-44; Arakaki, 324 F.3d at 1086. The proposed intervenors made a compelling showing of inadequate representation by demonstrating that the government had taken a narrow interpretation of the challenged statutes which were in conflict with their broad interpretation. Lockyer, 450 F.3d at 444-45.
In this case the IRS, one of the federal defendants, has already made a showing of its differing view of the federal statute that conflicts with the interpretation of ministers in the case Warren v. C.I.R, 114 T.C. 343 (U.S. Tax Ct. 2000). In Warren, the IRS sought to narrowly construe the housing allowance under § 107(2) to deny Pastor Rick Warren of the Saddleback Valley Community
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Church the ability to exclude from his income any more than the fair market rental value of his home. Id. at 343. The IRS enforced § 107(2) under its interpretation that the language and legislative history implied that the income exclusion by ministers could not “exceed the lesser of the amount used to provide a home or the fair market rental value of the home.” Id. at 346. Pastor Warren appealed the IRS’ decision and the tax court reversed, finding that nothing supported the IRS’ narrow interpretation of § 107(2). The IRS then appealed to this Court where the parties filed stipulations to dismiss and the appeal was dismissed. Warren v. C.I.R., 302 F.3d 1012 (9th Cir. 2002).
Pastor Rodgers can make a very compelling showing of inadequate representation because the federal defendants, the IRS, have already proffered a narrow interpretation of the challenged statutes. Warren, 114 T.C. 343. Similar to Lockyer, where the government had already proffered a limiting construction of the challenged statutes that conflicted with the proposed intervenors’ broad interpretation of the statutes, here the IRS in Warren has already proffered a narrow construction of the challenged statutes that conflicts with ministers’ broad interpretation of the challenged statutes. Lockyer, 450 F.3d at 439; Warren, 114 T.C. at 346. Moreover, the IRS in Warren was willing to appeal their decision to this Court in order to have their narrow interpretation of § 107(2) recognized. Warren, 302 F.3d at 1012. The IRS’ zeal in pursuing their narrow interpretation of
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the challenged statutes demonstrates a likelihood that the government will possibly abandon or concede a potentially meritorious reading of the statute, thereby rebutting the presumption of adequate representation. Lockyer, 450 F.3d at 444. Therefore, Pastor Rodgers should be allowed to intervene as of right.
ii. The federal defendants can only claim to defend the federal statutes and therefore cannot adequately represent Pastor Rodgers’ interest in the state statutes.
The federal defendants claim that “the United States and [Pastor Rodgers] share the same ultimate objective: to uphold 26 I.R.C. §§ 107 and 265(a) against constitutional attack. E.R. at 58, Footnote 3. However, Pastor Rodgers has “significant interests in both the federal and state statutes being challenged.” E.R. at 48 (citing the Decl. of Pastor Rodgers, E.R. at 78). The federal defendants rightly make no claims that it can defend the federal and state constitutionality of §§ 17131.6 and 17280(d)(2) of the California Revenue and Taxation Code, which are at issue in this litigation. E.R. at 103, ¶¶ 37-38. Indeed, the federal defendants lack the legal capacity to defend the state statutes. Therefore, it cannot be shown, or much less assumed, that the federal defendants “will undoubtedly make all of the intervenor’s arguments, [or] whether [a present party] is capable of and willing to make such arguments.” Prete, 438 F.3d at 956.
State defendants Selvi Stanislaus and the Tax Board were served with Pastor Rodgers’ motion to intervene on October 26, 2009. E.R. at 71.1.. The state
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defendants filed no opposition to Pastor Rodgers’ motion to intervene, neither did the state defendants make any appearance at the motion for hearing Pastor Rodgers’ motion. The state defendant did not make an appearance in this case until February 2, 2010, requesting an extension of time to respond to the complaint. E.R. at 18. It could not be shown, or much less assumed, that the state defendants would “undoubtedly make all of [Pastor Rodgers’] arguments” or the state defendants would be “capable of and willing to make such arguments” in defending §§ 17131.6 and 17280(d)(2) against federal and state constitutional attack. Prete, 438 F.3d at 956.
iii. Pastor Rodgers is able and willing to appeal an adverse ruling in contrast to the federal defendants who may not be allowed by the Solicitor General to appeal or even be willing to choose to appeal an adverse ruling.
One of the important considerations in whether to grant intervention is whether an existing party would appeal an adverse decision. The government may not appeal an adverse ruling by a district court unless first obtaining approval by the Solicitor General, whose duties include “[d]etermining whether, and to what extent, appeals will be taken by the Government to all appellate courts.” 28 C.F.R. § 0.20(b). If Pastor Rodgers is denied intervention, he would not be able to appeal an adverse decision and has no guarantee that the federal defendants would be able or willing to appeal that decision. If allowed to intervene, Pastor Rodgers would be
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able to adequately defend his interest by being able to appeal an adverse decision should the government be unable or unwilling to appeal. See, e.g. Didrickson v. U.S. Dep’t of Interior, 982 F.2d 1332, 1338 (9th Cir. 1992) (intervenors, environmental group, appealed decision of district court which granted summary judgment to plaintiffs challenging a U.S. Fish and Wildlife Service regulation when government chose not to appeal); Idaho Farm Bureau Fed’n v. Babbitt, 58 F.3d 1392, 1398 (9th Cir. 1995) (intervening environmental group allowed to appeal an adverse ruling on listing a type of snail as an endangered species); Kootenai Tribe of Idaho v. Veneman, 313 F.3d 1094, 1104 (9th Cir. 2002) (intervenors, environmental groups, appealed decision invalidating U.S. Forest Service’s “Roadless Rule” restricting potential environmental impact after federal government chose not to appeal); Calif. Dept. of Social Svcs. v. Thompson, 321 F.3d 835 (9th Cir. 2003) (allowing intervenor to appeal decision even though state chose not to do so).
The district court erred in relying upon Yniguez v. State of Ariz., 939 F.2d 727 (9th Cir. 1991) for the proposition that this Court would allow Pastor Rodgers to appeal post-judgment because this Court generally denies post-judgment intervention as untimely or that the proposed intervenor lacks standing. E.R. at 1213. This Court specified three factors used in weighing whether a motion to intervene is timely: “(1) the stage of the proceeding at which an applicant seeks to
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intervene; (2) the prejudice to other parties; and (3) the reason for and length of the delay.” U.S. v. State of Wash., 86 F.3d 1499, 1503 (9th Cir. 1996) (quoting United States ex rel. McGough v. Covington Technologies Co., 967 F.2d 1391, 1394 (9th Cir. 1992)). In U.S. v. State of Wash. this Court denied intervention to fishing groups who filed motions to intervene for purposes of appeal after the district court issued its order because it was untimely. U.S. v. State of Wash., 86 F.3d at 1507. This was repeated in Smith v. Marsh, 194 F.3d 1045 (9th Cir. 1999) where this Court affirmed the district court’s denial of intervention to prospective students because their post-judgment motion to intervene was untimely. Id. at 1053.
If Pastor Rodgers in not allowed to intervene there is a strong possibility that his status as a nonparty would bar standing for appealing the district court’s decision. This Court has stated that a “nonparty has standing to appeal a district court’s decision ‘only in exceptional circumstances’” and that these appeals are allowed when “(1) the appellant, though not a party, participated in the district court proceedings, and (2) the equities of the case weigh in favor of hearing the appeal.” So. Cal., 307 F.3d at 804 (quoting Bank of Am. v. M/V Executive, 797 F.2d 772, 774 (9th Cir. 1986)). In So. Cal. this Court found that the proposed intervenors did not meet the first requirement because “[a]part from their applications for intervention, the Proposed Intervenors did not participate in the district court proceedings,” in contrast to Bank of Am. where the appellant had filed
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papers and presented oral arguments. Here, if Pastor Rodgers is not allowed to intervene and participate in the lawsuit, this Court could find that he lacks standing to appeal the district court’s order.
The federal defendants fail to address Pastor Rodgers’ concerns that the federal defendants would be willing to, or even able to, appeal an adverse ruling from the district court. As Pastor Rodgers has already pointed out, an adverse ruling declaring the federal and state statutes as unconstitutional would result in a “staggering windfall of new tax revenues” for both federal and state defendants. E.R. at 47. While Pastor Rodgers has everything to lose in this litigation, and the federal defendants stand to gain from an adverse ruling, it is important to consider whether Pastor Rodgers’ interests are truly adequately represented in light of such an inherent conflict of interest. Pastor Rodgers should be allowed to intervene as of right because the federal defendants may not choose to appeal an adverse decision and this Court has generally denied intervention for purposes of appeal due to timeliness and standing.
iv. The federal and state defendants face an inherent conflict of interest in representing not only the interests of ministers but also the general public.
If a conflict arises where a government agency, as a party, is charged with protecting not only the interests of the proposed intervenor and the interest of the public, that conflict satisfies the minimal burden of showing inadequate
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representation. Natural Res. Def. Council v. Kempthorne, 539 F.Supp.2d 1155, 1187-88 (E.D. Cal. 2008). In Kempthorne, the district court found that the federal defendant, the Secretary of the U.S. Department of the Interior, could not adequately represent the interests of intervening contractors because the federal Secretary of the Interior was “required to protect the interests of the [other defendants], and the public” while at the same time “would be required to protect the interest of [intervenors].” Id. at 1188. Such a conflict satisfied the minimal showing that the federal defendant could not adequately represent the intervenors’ interests. Id.
Pastor Rodgers should be granted intervention as of right because the federal and state defendants cannot adequately represent the interest of the public, which includes the interests of the individual members of the FFRF named as parties in this case, and the interests of Pastor Rodgers. It is the duty and function of the U.S. Department of the Treasury to guard the public moneys. As the Supreme Court has noted, “The primary goal of the income tax collection system, in contrast, is the equitable collection of revenue; the major responsibility of the Internal Revenue Service is to protect the public fisc…In view of the Treasury’s markedly different goals and responsibilities [than the taxpayer’s goals and responsibilities] understatement of income is not destined to be its guiding light.” Tibor Power Tool Co. v. C.I.R., 439 U.S. 522, 542 (1979) (explaining the
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difference between financial accounting principles and tax accounting) (bracketed text added).
Both federal and state defendants have a duty to protect and serve the public. Serving the public necessarily includes representing the interests of all 21 individually listed members of the FFRF who are “federal and California taxpayers.” E.R. at 99, ¶ 8. Moreover, as the Supreme Court said in Tibor, the federal and state defendants have the primary goal of collecting revenue, in contrast to Pastor Rodgers who seeks to minimize his tax liability. Id., 439 U.S. at 542. The federal and state defendants cannot adequately represent the interests of Pastor Rodgers because their duty to the public conflicts with their duty to represent the interests of Pastor Rodgers.
Other appellate circuits are in agreement. In National Farm Lines v. I.C.C., 564 F.2d 381 (10th Cir. 1977), in which an action was brought concerning the constitutionality of statutes and regulations promulgated by the Interstate Commerce Commission. A large number of common carriers who had certificates issued by the I.C.C. sought to intervene, and were denied by the district court. On appeal, the 10th Circuit reversed finding that even though there was an assumption of adequacy of representation, “the [I.C.C.] is seeking to protect not only the interest of the public but also the private interest of the petitioners in intervention, a task which is on its face impossible.” Id. at 384. The 10th Circuit continued by
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stating that “this kind of a conflict satisfies the minimal burden of showing inadequacy of representation.” Id. See also Utahns for Better Transp. v. U.S. Dept. of Transp., 295 F.3d 1111 (10th Cir. 2002) (reversing district court’s denial of intervention finding government’s conflict of protecting the interests of the public as well as proposed intervenors); Conservation Law Foundation of New England, Inc. v. Mosbacher, 966 F.2d 39 (1st Cir. 1992); Dimond v. District of Columbia, 792 F.2d 179 (D.C. Cir. 1986). While the district court wrote off Pastor Rodgers’ contentions of inadequate representation as “cynical”, other courts and appellate circuits have found these contentions to be very real and have acted upon them. E.R. at 13.
This Court should reverse the trial court’s denial of intervention because Pastor Rodgers has no alternative forum by which to defend the constitutionality of the federal and state statutes and he has rebutted any presumption of adequate representation by the federal defendants. The federal defendants cannot adequately represent Pastor Rodgers because the IRS has already demonstrated a likelihood of conceding a broad interpretation of the challenged statutes in Warren v. C.I.R. The federal defendants cannot adequately represent Pastor Rodgers’ interests in protecting the state statutes from federal and state constitutional attack. The federal defendants cannot adequately represent Pastor Rodgers’ interests because they may be unable or unwilling to appeal an adverse decision. Pastor Rodgers’
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interests conflict with the interests of the federal and state defendants in serving the general public, showing inadequate representation. Therefore, Pastor Rodgers should be granted intervention as of right. III. The District Court Erred In Denying Pastor Rodgers Permissive
Intervention Because He Shares A Common Question Of Law In The Federal And State Constitutionality Of The Challenged Statutes And As An Intervening-Defendant Is Submitting To The Personal And Subject Matter Jurisdiction Of The District Court. The federal defendants rely on So. Cal. Edison v. Lynch, 307 F.3d 794 (9th Cir. 2002) for the proposition that an intervenor “must, at a minimum, show ‘(1) independent grounds for jurisdiction; (2) the motion is timely; and (3) the applicant’s claim or defense, and the main action, have a question of law or a question of fact in common.” Id. at 803; E.R. at 59. The federal defendants conceded that Pastor Rodgers’ motion was timely. E.R. at 56. Concerning the element of jurisdiction the Ninth Circuit has “resolved intervention question without making reference to standing doctrine.” Portland Audubon Soc. v. Hodel, 866 F.2d 302, 308 n. 1 (9th Cir. 1989). This Court has further stated that “the standing requirement [of Rule 24] is at least implicitly addressed by our requirement that the applicant must “assert [ ] an interest relating to the property or transaction which is the subject of the action.” Portland, 866 F.2d at 308 n. 1 (quoting Orange County v. Air California, 799 F.2d 535, 537 (9th Cir. 1986)). Pastor Rodgers should be granted permissive intervention because he shares the
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common question of law in the constitutionality of the statutes, if required can show jurisdiction as an intervening defendant, and has the strongest interest in the outcome of the litigation.
A. Pastor Rodgers meets the requirement of Rule 24(b) because he shares the common question of law in the constitutionality of the federal and state statutes.
Rule 24(b)(2) allows a court to grant permissive intervention when “an applicant’s claim or defense and the main action have a question of law or fact in common.” In this case, Pastor Rodgers seeks to defend the constitutionality of the challenged federal and state statutes. As such, Pastor Rodgers defense of the statutes and the FFRF’s claim against the federal and state defendants have a common question of law: the constitutionality of the statutes.
The federal defendants conclude that because Pastor Rodgers “lacks distinct claims or defenses relating to the case” he has “failed to meet the threshold requirements for permissive intervention.” E.R. at 61 (emphasis added). The federal defendants also conclude that “[Pastor Rodgers] only shares a common question of law insofar as an identical question of law is ‘common’ and not merely redundant.” E.R. at 60. The federal defendants seek to override the plain language of the statute by claiming that Pastor Rodgers must have distinct and original defenses in order to meet the requirements for permissive intervention. Based on the plain language of the statute, Pastor Rodgers does meet the requirement
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because he shares the common question of law in defending the constitutionality of the statutes.
B. Pastor Rodgers has submitted to the personal and subject matter jurisdiction of the district court. 1. An independent jurisdictional showing should not apply to Pastor Rodgers because he is seeking to intervene as a defendant and has not filed a counter-claim or a cross-claim.
Pastor Rodgers has, both implicitly and explicitly, submitted himself to the personal jurisdiction of the district court by making a motion to intervene in the lawsuit. It is implicit in motions for intervention that the applicant is submitting to the personal jurisdiction of the court. See City of Santa Clara v. Kleppe, 428 F.Supp. 315, 317 (N.D. Cal. 1976); In re Bayshore Ford Truck Sales, Inc., 471 F.3d 1233, 1249 (11th Cir. 2006); County Sec. Agency v. Ohio Dept. of Commerce, 296 F.3d 477, 483 (6th Cir. 2002); Pharm. Research & Mfrs. V. Thompson, 259 F.Supp.2d 39, 59 (D.D.C. 2003); Wright, Miller & Kane, Federal Practice and Procedure, Vol. 7C § 1920 (3rd ed. 2007). Although this Court has stated that submission to the personal jurisdiction of the court is not automatic for intervention of right, it limited this ruling to apply to cases for intervention of right only, not cases concerning permissive intervention. S.E.C. v. Ross, 504 F.3d 1130, 1149-50, footnote 16 (9th Cir. 2007). Moreover, in Pastor Rodgers’ reply to the federal defendant’s response, Pastor Rodgers stated that he has moved “to intervene as Defendant[] in this case [and is] consenting to the court’s
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jurisdiction.” E.R. at 50. The district court had personal jurisdiction over Pastor Rodgers.
The federal defendants’ reliance on So. Cal. Edison v. Lynch, 307 F.3d 794 (9th Cir. 2002) for the proposition that an intervenor “must, at a minimum, show ‘(1) independent grounds for jurisdiction” is faulty because defendant-intervenors who do not cross-claim or counter-claim against an existing party do not need to show independent grounds for jurisdiction. Id. at 803; E.R. at 59. This understanding of the elements for permissive intervention is embodied in the line of cases leading from Venegas v. Skaggs, 867 F.2d 527 (9th Cir. 1989) (plaintiff’s attorney seeking permissive intervention on claim to confirm lien for attorneys fees) to the So. Cal. case. Id. 307 F.3d 794 (wholesale generators of electricity and trade association seeking permissive intervention on claim for money owed to them by plaintiff).1 Showing of independent jurisdiction is meant to enforce the policy that intervention is “not intended to allow the creation of whole new lawsuits by the intervenors.” Donnelly v. Glickman, 159 F.3d 405, 412 (9th Cir. 1998).
1 Within this line of cases is Northwest Forest Resource Council v. Glickman, 82 F.3d 825 (9th Cir. 1996). This Court denied environmental organization intervention as of right, finding no significantly protectable interest, and denied permissive intervention for lack of independent grounds for jurisdiction. However, the parties apparently assumed without addressing the rationale of applying a standard borrowed from plaintiff-intervenor cases to defendant-intervenors.
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This understanding of showing independent jurisdiction only where intervenors have a claim to litigate is found in Beckman Industries, Inc. v. International Ins. Co., 966 F.2d 470 (9th Cir. 1992) where this Court stated that the three elements enumerated in Venegas are required “to litigate a claim on the merits” (emphasis added) and yet this Court granted permissive intervention without a showing of independent jurisdiction. Beckman, at 473. In Beckman the intervenor-defendants were seeking to intervene to advocate for a modification of a protective order, not seeking to file their own claim against any existing parties. Id. at 473. This Court affirmed the granting of permissive intervention without a showing of independent jurisdiction because the “intervenors do not ask the district to rule on additional claims.” Id. Indeed, this case echoes the principle stated in U.S. v. City of Los Angeles, Cal.: “permissive intervention has been granted by the courts on a case-by-case basis, founded on analysis of the factors identified in Rule 24(b).” 288 F.3d 391 (9th Cir. 2002) (emphasis added).
Permissive intervention was designed to be decided on the circumstances of each case, not determined by hard and fast rules that do not apply to every situation. Pastor Rodgers is not seeking to circumvent or abuse permissive intervention. As an intervening defendant, Pastor Rodgers is not seeking to “create a whole new lawsuit,” but is only seeking to defend the constitutionality of the challenged federal and state statutes. Pastor Rodgers has not and does not seek to
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file counter-claims against the FFRF nor cross-claims against the federal or state defendants. The district court erred by requiring Pastor Rodgers to show independent jurisdiction, thereby holding Pastor Rodgers to a higher burden of proof than necessary for the disposition of this case. Pastor Rodgers requests that this Court consider the rationale of a showing of independent jurisdiction for permissive intervention in this case and why it is needed.
2. Even if independent jurisdiction is required for an intervening defendant who has not filed a counter-claim or a cross-claim, Pastor Rodgers can claim supplemental jurisdiction under 28 U.S.C. § 1367.
This Court can consider the issue of subject-matter jurisdiction because a federal appellate court can raise the issue of subject-matter jurisdiction on its own motion. Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 (1982). It is the duty of the federal courts when analyzing jurisdiction to “look beyond the pleadings, and arrange the parties according to their sides in the dispute.” City of Indianapolis v. Chase Nat. Bank of City of New York, 314 U.S. 63 (1941) (quoting Dawson v. Columbia Ave. Sav. Fund, Safe Deposit, Title & Trust Co., 197 U.S. 178, 180 (1905).
The district court has original jurisdiction over this claim under 28 U.S.C. § 1331 because the FFRF’s claim arises under the Constitution and laws of the United States. E.R. at 102-03, ¶¶ 33, 37-38. Pastor Rodgers can claim supplemental jurisdiction under § 1367(a) because his motion for intervention is
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“part of the same case or controversy”: the constitutionality of the challenged statutes. Section 1367(b) does not bar Pastor Rodgers from supplemental jurisdiction because the district court has original jurisdiction in a federal question under § 1331 and not under diversity under § 1332. Moreover, § 1367(b) only bars supplemental jurisdiction to those “seeking to intervene as plaintiffs under Rule 24” (emphasis added) and Pastor Rodgers is seeking to intervene as a defendant. See Development Finance Corp. v. Alpha Housing and Health Care, Inc., 54 F.3d 156, 160-61 (3rd Cir. 1995) (supplemental jurisdiction not barred by § 1367(b) for intervening defendant). Therefore, Pastor Rodgers can claim supplemental jurisdiction under § 1367 and meets the jurisdictional showing for permissive intervention.
C. Pastor Rodgers, as a minister, has the strongest interest in the outcome of the litigation and should not be denied permissive intervention under the guise of judicial economy.
A court may deny permissive intervention as discretionary only where “intervention will unduly delay or prejudice the adjudication of the rights of the original parties.” Fed. R. Civ. P. 24(b)(2). The federal defendants propose that “allowing intervention would provide a rationale for any other ‘minister of the gospel’…to intervene, thus undermining judicial economy and creating potential for undue delay or prejudice.” E.R. at 61. The federal defendants also state that allowing Pastor Rodgers to intervene is unnecessary because “any additional party
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‘would unnecessarily encumber the litigation’” (quoting PEST Committee v. Miller, 648 F.Supp.2d 1202, 1214 (D. Nev. 2009)). E.R. at 61. The federal defendants, under the guise of judicial economy, seek to deny Pastor Rodgers intervention on mere suspicion of delay, prejudice, and encumbrance without proof.
Justice is not unduly hindered by the ministers’ intervention because ministers have the strongest interest in the outcome of this litigation. In U.S. v. City of Los Angeles, Cal., 288 F.3d 391 (9th Cir. 2002) the defendants argued that allowing intervention would slow the legal process and delay justice. Id. at 404. This Court rejected that argument, stating that “the idea of ‘streamlining’ the litigation…should not be accomplished at the risk of marginalizing those [intervenors] who have some of the strongest interest in the outcome.” Id. As a minister, Pastor Rodgers has the strongest interest in the outcome of this litigation because he has the most to lose in an unfavorable outcome, in contrast with the federal defendants who has nothing to lose in a favorable ruling and everything to gain in an unfavorable one. Moreover, any subsequent ministers seeking to intervene would have the burden of proving anew all four elements of Rule 24(a), including how Pastor Rodgers does not adequately represent their interests as a minister.
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D. Pastor Rodgers should be granted permissive intervention because deference should be given to a party with the strongest interest in the outcome of the litigation.
Overall, the courts have deftly avoided rigidity in granting or denying intervention, opting instead to craft creative, case-specific solutions which will ensure the most complete representation of all parties and disposition of the issues. Courts have, for example, granted intervention as of right and, in the alternative, permissive intervention. See, e.g., Pacific Gas & Electric v. Lynch, 216 F.Supp. 2d 1016, 1025 (N.D. Cal. 2002). Even in cases where the court has determined that federal law precludes intervention as of right, intervention has been allowed on a more limited basis. For instance, in Wetlands Action Network v. U.S. Army Corps of Engineers, 222 F.3d 1105 (9th Cir. 2000) this Court held that the unique structure of the National Environmental Policy Act (NEPA) prevented environmental groups from intervening as of right, because only the government could enforce or be liable as a defendant under NEPA. Id. at 1114. Nevertheless, this Court still allowed the environmental groups to intervene in the remedial phase of the litigation. Id. See also, Purnell v. City of Akron, 925 F.2d 941 (6th Cir. 1991) (even where intervention as of right was not warranted, permissive intervention should have been granted).
Pastor Rodgers, as a members of the clergy, presents a strong interest in this litigation because the challenged statutes directly applies to him and affects his
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financial and ministry interests. Pastor Rodgers seeks to protect not merely a generalized, ethereal interest in preserving statutes granting tax benefits to clergy; rather, he seeks to protect his financial interests, as well as the time, energy, and resources made available to him in order to serve the community. Even if this Court should determine that not all of the requirements of Rule 24(a) have been met, it should permit the requested intervention under Rule 24(b).
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CONCLUSION
The advisory committee notes for Rule 24 state that “if an absentee would be substantially affected in a practical sense by the determination made in an action, he should, as a general rule, be entitled to intervene.” Southwest Center for Biological Diversity v. Berg, 268 F.3d 810, 822 (9th Cir. 2001). Pastor Rodgers’ ability to support his family on his modest salary will be at risk if his personal tax liability increases. In direct contrast, the state and federal defendants’ mission and goals are to collect as much tax revenue as possible. Hence there is an existential conflict of interest between Pastor Rodgers and the federal and state defendants. Because of that inherent conflict, and for the reasons discussed in this brief, the order denying the motion for intervention should be reversed and we request that this Court grant intervention.

Date: March 26, 2010

s/ Matthew B. McReynolds Kevin T. Snider Matthew B. McReynolds P.O .Box 276600 Sacramento, CA 95827 Phone: (916) 857-6900 Fax: (916) 857-6902 E-mail: kevinsnider@pacificjustice.org mattmcreynolds@pacificjustice.org
Attorneys for Defendant-Intervenor/Appellant, Michael Rodgers, Pastor

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CERTIFICATE OF COMPLIANCE I certify that this brief complies with the type-volume limitation set forth in Rule 32(a)(7)(B) of the Federal Rules of Appellate Procedure. This brief uses a proportional typeface and 14-point font, and contains 8,125 words.

Date: March 26, 2010

s/ Matthew B. McReynolds Kevin T. Snider Matthew B. McReynolds P.O .Box 276600 Sacramento, CA 95827 Phone: (916) 857-6900 Fax: (916) 857-6902 E-mail: kevinsnider@pacificjustice.org mattmcreynolds@pacificjustice.org
Attorneys for Defendant-Intervenor/Appellant, Michael Rodgers, Pastor

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STATEMENT OF RELATED CASES There are no related cases pending in this Court.
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CERTIFICATE OF SERVICE I hereby certify that on March 26, 2010, I electronically filed the foregoing with the Clerk of the Court for the United States Court of Appeals for the Ninth Circuit by using the appellate CM/ECF system. Participants in the case who are registered CM/ECF users will be served by the appellate CM/ECF system. I further certify that some of the participants in the case are not registered CM/ECF users. I have mailed the foregoing document by First-Class Mail, postage prepaid, or have dispatched it to a third party commercial carrier for delivery to the following non-CM/ECF participants: Richard L. Bolton, PHV Boardman, Suhr, Curry & Field, LLP 1 South Pinckney Street, 4th Floor Post Office Box 927 Madison, Wisconsin 53701-0927 Attorney in 2:09-cv-02894-WBS-DAD for Plaintiffs, Freedom from Religion Foundation, Inc., et al. Jill Bowers California Department of Justice 1300 I Street, Suite 1101 Post Office Box 944255 Sacramento, California 94244-2550 Attorney in 2:09-cv-02894-WBS-DAD for Defendant, Selvi Stanislaus, Executive Officer of the California Franchise Tax Board
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Jeremy Nolan Hendon Richard Adam Schwartz United States Department of Justice, Tax Division Post Office Box 683 Ben Franklin Station Washington, District of Columbia 20044
Attorneys in 2:09-cv-02894-WBS-DAD for Defendant, United States of America

s/

Stephen Moore

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No. 09-17753

IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
FREEDOM FROM RELIGION FOUNDATION, INC., et al.,
Plaintiffs-Appellees
v.
TIMOTHY GEITHNER, Secretary of the Treasury, DOUGLAS SHULMAN, Commissioner of Internal Revenue, and SELVI STANISLAUS, Executive Officer of the California Franchise Tax Board, in their official capacities,
Defendant-Appellees
MICHAEL RODGERS,
Intervenor-Appellant

ON APPEAL FROM THE ORDER OF THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF CALIFORNIA

BRIEF FOR THE FEDERAL APPELLEES

JOHN A. DICICCO Acting Assistant Attorney General

GILBERT S. ROTHENBERG Acting Deputy Assistant Attorney General

Of Counsel:

TERESA E. MCLAUGHLIN IVAN C. DALE
Attorneys Tax Division Department of Justice Post Office Box 502 Washington, D.C. 20044

(202) 514-4342 (202) 307-6615

BENJAMIN B. WAGNER United States Attorney

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- ii TABLE OF CONTENTS
Page Table of contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii Table of authorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v Glossary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix Statement of jurisdiction:
1. Jurisdiction in the District Court. . . . . . . . . . . . . . . . . . . . . . 1 i. Plaintiffs lack standing to sue because their abstract, generalized grievances are not judicially cognizable. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 ii. Plaintiffs lack “taxpayer” standing to sue.. . . . . . . . . . 5 iii. Nor do plaintiffs have “competitor” standing. . . . . . . . 6 iv. California’s position and the status of the case. . . . . . . 9
2. Jurisdiction in the Court of Appeals.. . . . . . . . . . . . . . . . . . 10 i. Timeliness of appeal. . . . . . . . . . . . . . . . . . . . . . . . . . 10 ii. Appealability of order. . . . . . . . . . . . . . . . . . . . . . . . . 10
Statement of the issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Statement of the case. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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- iii -

Page(s)

Statement of the facts:

A. The parsonage allowance and the Warren case. . . . . . . . . . 14

B. The nature of this suit and the proceedings on the motion to intervene. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

C. The District Court’s denial of the motion to intervene. . . . 19

D. Proceedings in the District Court after the denial of the motion to intervene.. . . . . . . . . . . . . . . . . . . . . . . . . . 21

Summary of argument. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Argument:

I. The district court correctly denied Rodgers intervention as of right because his interest in the constitutionality of the parsonage allowance will not be impaired and, in any event, it is adequately represented by the existing parties. . . . . . . . . . . . . . . . . . . . . . . . 27

Standard of Review. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

A. Introduction.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

B. Because Rodgers has other means of protecting his interest, his ability to protect that interest would not be impaired if he is not allowed to intervene . . . . . . . . . . . 29

C. The District Court correctly held that Rodgers failed to make the required “very compelling showing” that his interests are not adequately represented by existing parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

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- iv -

Page(s)

D. Because the government has vigorously defended, and continues to defend, the parsonage allowance, Rodgers’s attempt to show inadequacy of representation falls short. . . . . . . . . . . . . . . . . . . . . . . . . . . 38

II. The district court correctly exercised its discretion in denying Rodgers permissive intervention, in the absence of an independent basis for jurisdiction over his claims or defenses. . 45

Standard of Review. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Statement of related cases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Certificate of compliance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Certificate of service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

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- v TABLE OF AUTHORITIES

Cases:

Page(s)

Allen v. Wright, 468 U.S. 737 (1984).. . . . . . . . . . . . . . . . . . . . . . . . . . 4, 7 American Society of Travel Agents, Inc. v. Blumenthal,
566 F.2d 145 (D.C. Cir. 1977). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Arakaki v. Cayetano, 324 F.3d 1078 (9th Cir. 2003). . . . . . 28, 35, 37, 42 Ashwander v. TVA, 297 U.S. 288 (1936).. . . . . . . . . . . . . . . . . . . . . . . . 38 Association of Data Processing Service Organizations, Inc. v. Camp,
397 U.S. 150 (1970). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Beckman Industries, Inc. v. International Insurance Co.,
966 F.2d 470 (9th Cir. 1992). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Benavidez v. Eu, 34 F.3d 825 (9th Cir. 1994). . . . . . . . . . . . . . . . . . . . . 45 Bowen v. Kendrick, 487 U.S. 589 (1988).. . . . . . . . . . . . . . . . . . . . . . . . . 4 Brotherhood of R.R. Trainmen v. Baltimore & O. R. Co.,
331 U.S. 519 (1947). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 California ex rel. Lockyer v. United States, 450 F.3d 436
(9th Cir. 2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30, 35, 36 Donnelly v. Glickman, 159 F.3d 405 (9th Cir. 1998). . . . . . . . . . . . 44, 45 Dugan v. Rank, 372 U.S. 609 (1962).. . . . . . . . . . . . . . . . . . . . . . . . . . . 12 EEOC v. Nevada Resort Association, 792 F.2d 882 (9th Cir. 1986).. . . 47 Flast v. Cohen, 392 U.S. 83 (1968). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Flora v. United States, 357 U.S. 63 (1958), on rehearing,
362 U.S. 145 (1960). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Frothingham v. Mellon, 262 U.S. 447 (1923). . . . . . . . . . . . . . . . . . . . . . 5 Fulani v. Brady, 935 F.2d 1324 (D.C. Cir. 1991). . . . . . . . . . . . . . . . . . . 7 Fulani v. League of Women Voters Education Fund,
882 F.2d 621 (2d Cir. 1989). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91 (1979). . . . . . . . 3 Hutchinson v. United States, 677 F.2d 1322 (9th Cir. 1982). . . . . . . . . 12 League of United Latin America Citizens (LULAC) v. Wilson,
131 F.3d 1297 (9th Cir. 1997). . . . . . . . . . . . . . . . 10, 11, 34, 43, 50

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Cases (continued):

- vi -

Page(s)

Moosehead San. District v. S.G. Phillips Corp., 610 F.2d 49 (1st Cir. 1979). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Northwest Forest Resource Council v. Glickman, 82 F.3d 825 (9th Cir. 1996). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35, 37, 40
O’Shea v. Littleton, 414 U.S. 488 (1974). . . . . . . . . . . . . . . . . . . . . . . . . . 4 PLANS, Inc. v. Sacramento City Unified School District,
319 F.3d 504 (9th Cir. 2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Perry v. Proposition 8 Official Proponents, 587 F.3d 947
(9th Cir. 2009). . . . . . . . . . . . . . . . . . . . . . . . . . . . 27, 28, 36, 44, 47 Prete v. Bradbury, 438 F.3d 949 (9th Cir. 2006). . . . . . . . . 28, 37, 38, 42 Research Consulting Associates v. Electric Power Research Institute,
Inc., 626 F. Supp. 1310 (D. Mass. 1986). . . . . . . . . . . . . . . . . . . . . 8 Sagebrush Rebellion, Inc. v. Watt, 713 F.2d 525 (9th Cir. 1986). . . . . . 36 Schlesinger v. Reservists Committee to Stop the War,
418 U.S. 208 (1974). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Smith v. Marsh, 194 F.3d 1045 (9th Cir. 1999). . . . . . . . . . . . . . . . . . . 47 Smith v. Salish Kootenai College, 434 F.3d 1127 (9th Cir. 2006). . . . . 46 So. Cal. Edison v. Lynch, 307 F.3d 794 (9th Cir. 2002). . . . . . . . . . . . . 45 Southwest Ctr. for Biological Diversity v. Berg, 268 F.3d 810
(9th Cir. 2001). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Spangler v. Pasadena City Board of Education, 552 F.3d 1326
(9th Cir. 1977). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Stadin v. Union Electric Co., 309 F.2d 912 (8th Cir. 1962). . . . . . . . . . 35 Stringfellow v. Concerned Neighbors in Action, 380 U.S. 370 (1987). . 10 Texas Monthly v. Bullock, 489 U.S. 1 (1989). . . . . . . . . . . . . . . . . . . . . . 4 In re United States Catholic Conference, 885 F.2d 1020
(2d Cir. 1989). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 United States v. Alisal Water Corp., 370 F.3d 915
(9th Cir. 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30, 31 United States v. City of Los Angeles, 288 F.3d 391
(9th Cir. 2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31, 36, 44 Warren v. Commissioner, 114 T.C. 343 (2000). . . . . . . . . . . . . . . . . . . . 14

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Cases (continued):

- vii -

Page(s)

Warren v. Commissioner, 282 F.3d 1119 (9th Cir. 2002). . . . . . 14, 15, 40 Warren v. Commissioner, 302 F.3d 1012 (9th Cir. 2002). . . . . . . . . 16, 39

Statutes:

Internal Revenue Code (26 U.S.C.): § 107.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 8, 12 § 265(a)(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 12 § 265(a)(6)(B). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 § 6212.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 § 6213(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32, 48 § 6511(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 § 6532(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 § 7422(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32, 48 § 7442.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32, 48 § 7482(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

28 U.S.C.: § 530D(a)(1)(B)(ii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 § 1346(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32, 48 § 1367.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 § 1396.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 § 2107(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 § 2201(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

42 U.S.C.: § 1983.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49, 50

Rules and Regulations:

Federal Rules of Appellate Procedure: Rule 4(a)(1)(B). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

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- viii Rules and Regulations (continued):

Page(s)

Federal Rules of Civil Procedure: Rule 24.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Rule 24(a)(2). . . . . 9, 10, 11, 12, 17, 20, 22, 27, 28, 29, 30, 51 Rule 24(b). . . . . . . . . . . . . . . . . . . . . . . . 11, 13, 21, 25, 44, 48 Rule 24(b)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Treasury Regulations (28 C.F.R.): § 0.20(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Miscellaneous:

Clergy Housing Allowance Clarification Act of 2002, Pub. L. No. 107-181, 116 Stat. 583 (May 20, 2002). . . . . . . . . . . . . 15, 39

Rev. Rul. 71-280, 1971-2 C.B. 92. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Cal. Rev. & Tax Code § 17131.6 (West 2005). . . . . . . . . . 2, 12, 16, 41,42

Cal. Rev. & Tax Code § 17280(d)(2) (West 2005). . . . . . . 2, 12, 16, 41, 42

7C Wright, Miller & Kane, Federal Practice and Procedure § 1909 (3d ed. 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Seth P. Waxman, Defending Congress, 79 N.C. L. Rev. 1073 (2001). . . 38

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FFRF I.R.C. IRS

- ix GLOSSARY Freedom From Religion Foundation Internal Revenue Code Internal Revenue Service

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IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT No. 08-56479
FREEDOM FROM RELIGION FOUNDATION, INC., et al., Plaintiffs-Appellees
v. TIMOTHY GEITHNER, Secretary of the Treasury, DOUGLAS SHULMAN, Commissioner of Internal Revenue, and SELVI STANISLAUS, Executive Officer of the California Franchise Tax Board, in their official capacities,
Defendant-Appellees MICHAEL RODGERS,
Intervenor-Appellant
ON APPEAL FROM THE ORDER OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF CALIFORNIA
BRIEF FOR THE FEDERAL APPELLEES
STATEMENT OF JURISDICTION 1. Jurisdiction in the District Court Freedom from Religion Foundation, Inc. and 21 of its individual members (collectively, FFRF) brought this suit for declaratory and

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-2injunctive relief against Timothy Geithner, Secretary of the Treasury,
Douglas Shulman, Commissioner of Internal Revenue, and Selvi
Stanislaus, Executive Officer of the California Franchise Tax Board, in their official capacities. (ER 97-109.)1 The gravamen of the complaint
was that federal and California statutes extending certain income tax benefits to the clergy2 violate the Establishment Clause of the First
Amendment to the United States Constitution and a like clause in
Article 1, § 4 of the California Constitution, as well as the latter’s “no
preference” and “no aid” clauses. (ER 102-104.) FFRF sought a
declaration that these tax benefits are unconstitutional (ER 108) and
1 “ER” references are to the appellant’s excerpts of record. “SER” references are to the supplemental excerpts of record filed by the federal appellees concurrently with this brief. “CR” references are to the documents in the original record, as numbered by the Clerk of the District Court.
2 The challenged provisions are an exclusion for the rental value of a parsonage (or for an equivalent allowance used to rent or provide the parsonage), I.R.C. § 107 and Cal. Rev. & Tax Code § 17131.6 (West 2005), and the allowance of deductions for mortgage interest and real property taxes notwithstanding the receipt of an excludable parsonage allowance, I.R.C. § 265(a)(6)(B) and Cal. Rev. & Tax Code § 17280(d)(2) (West 2005).
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-3an injunction against “continuing to grant or allow tax benefits” under those laws (ER 109).
Appellant Michael Rodgers and “Does 1-100” moved to intervene as defendants, contending that they were entitled to intervene as of right under Rule 24(a)(2) of the Federal Rules of Civil Procedure or, alternatively, permissively under Rule 24(b). (ER 95.) At issue in this appeal is whether the District Court properly denied Rodgers’ intervention motion. Intervention, moreover, presupposes the pendency of an action in a court of competent jurisdiction. Since we think the District Court lacks jurisdiction over FFRF’s original action, a matter we discuss in the pages that follow, intervention is not permitted for that reason as well.
i. Plaintiffs lack standing to sue because their abstract, generalized grievances are not judicially cognizable
The District Court lacks subject matter jurisdiction over the underlying action because plaintiffs lack standing to maintain it. The “core component” of standing, derived directly from the “cases” or “controversies” requirement of Article III of the Constitution, requires
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-4the plaintiff to “allege personal injury fairly traceable to the defendant’s allegedly unlawful conduct and likely to be redressed by the requested relief.” Allen v. Wright, 468 U.S. 737, 750-751 (1984). That injury cannot be an “abstract” one (O’Shea v. Littleton, 414 U.S. 488, 494 (1974)); it must be “distinct and palpable” (Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 100 (1979)). “[S]tanding to sue may not be predicated upon an interest of the kind alleged * * * which is held in common by all members of the public, because of the necessarily abstract nature of the injury all citizens share.” Schlesinger v. Reservists Committee to Stop the War, 418 U.S. 208, 218 (1974). FFRF does not establish standing simply by alleging that it is a “non-profit * * * organization that advocates for the separation of church and state and educates on matters of non-theism.” (ER 98.) This allegation articulates no injury that is not shared by citizens in general. Apache Bend Apartments, Ltd. v. United States, 987 F.2d 1174, 1177 (5th Cir. 1993) (en banc) (denying standing on prudential grounds to plaintiffs challenging “unequal treatment” accorded to other taxpayers in transition rules). Nor have plaintiffs alleged that they personally have
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-5been denied the challenged tax benefits. Cf. Texas Monthly v. Bullock, 489 U.S. 1, 9 (1989).
ii. Plaintiffs lack “taxpayer” standing to sue To the extent plaintiffs base their claims on their status as taxpayers, they still fail to allege a cognizable injury in fact. Frothingham v. Mellon, 262 U.S. 447 (1923) (generally prohibiting taxpayer standing). To be sure, in Flast v. Cohen, 392 U.S. 83 (1968), the Supreme Court recognized the standing of taxpayers to mount an Establishment Clause challenge the expenditure of funds under a federal statute granting financial aid to religious schools. But the decision in Flast creates only a “narrow exception * * * to the general rule against taxpayer standing established in Frothingham v. Mellon, 262 U.S. 447 (1923).” Bowen v. Kendrick, 487 U.S. 589, 618 (1988). Standing under Flast depends upon a challenge to “the constitutionality of a spending program.” 392 U.S. at 102; see also id. at 104. Plaintiffs in this case have failed to identify any manner in which “tax money is being extracted and spent in violation of specific constitutional protections against such abuses of legislative power.” Id.
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-6at 106 (emphasis supplied); PLANS, Inc. v. Sacramento City Unified School Dist., 319 F.3d 504, 507 (9th Cir. 2003) (noting that taxpayer standing generally “requires an injury resulting from a government’s expenditure of tax revenues”). This case, unlike Flast, involves no appropriation of federal funds for an unconstitutional purpose. It does not involve a legislature’s power to spend tax monies for the general welfare. All that is at issue here is the legislature’s power to create classifications exempting certain taxpayers from the operation of specific taxing measures. As a result, plaintiffs have not established the requisite link between their status as taxpayers and the provisions they seek to challenge.
iii. Nor do plaintiffs have “competitor” standing Finally, FFRF and its members lack standing to sue under the theory that, although it “competes with churches and religious organizations, * * * the competition is unfair,” because it is assertedly “placed at a competitive disadvantage relative to churches and other employees whose employees receive tax subsidies.” (ER 108.) The Supreme Court has recognized that a competitive injury can confer
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-7standing on a plaintiff to challenge a government action. See, e.g., Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150 (1970). But the courts have otherwise rejected the notion that “Data Processing should be read to endorse standing for any private business, individual or corporate, which wishes to contest the tax treatment of a competitor.” American Society of Travel Agents, Inc. v. Blumenthal, 566 F.2d 145, 151 (D.C. Cir. 1977) (rejecting for-profit travel agents’ association “competitor standing” to challenge taxexempt status of nonprofits offering travel services). In a tax case, such an injury fails to satisfy Article III because the causal connection between a competitor’s fortunes and an injury to its competitor is too tenuous; the injury is not “fairly traceable” (Allen v. Wright, 468 U.S. at 751) to the challenged benefit.
In the wake of Travel Agents, the courts have generally rejected claims of “competitor standing” in tax cases. In In re United States Catholic Conference, 885 F.2d 1020 (2d Cir. 1989), for example, the Second Circuit held that “pro-choice” plaintiffs lacked standing to challenge the tax exemption of the Roman Catholic Church, because
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-8the Church’s alleged electioneering with the aid of tax-deductible contributions did not affect them in a direct and immediate way. Similarly, in Fulani v. Brady, 935 F.2d 1324 (D.C. Cir. 1991), the court held that an independent presidential candidate lacked standing to challenge the tax exemption of the Commission on Presidential Debates, for allegedly excluding her from participating in Presidential in the debates on the basis of her race and sex.3 And in Research Consulting Associates v. Electric Power Research Institute, Inc., 626 F. Supp. 1310 (D. Mass. 1986), the manufacturer of an electrical device lacked standing to challenge the tax-exempt status of a research institute that allegedly promoted the product of a competitor.
So, too, here, the tax benefits accorded members of the clergy by §§ 107 and 265(a)(6) of the Code could only result in an alleged injury to FFRF after the intervention of other causal factors, including the
3 Although in Fulani v. League of Women Voters Education Fund, 882 F.2d 621, 628 (2d Cir. 1989), the same plaintiff was found to have standing to challenge the tax exemption of a sponsor of Presidential primary debates on the same theory (that she was denied participation because of her race and sex) – a claim the court rejected on the merits – the court’s ruling on jurisdiction conflicts with fundamental limitations upon standing imposed by Article III.
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-9religious organizations’ actions and the behavior of individual ministers. It is purely speculative, therefore, what consequences might flow from holding §§ 107 and 265(a)(6) unconstitutional. Clergy might be willing to absorb the tax without any compensating increase. Alternatively, the occasion might serve to spur increased charitable giving by parishioners, aimed at compensating pastors for the resulting tax bill, without otherwise affecting church resources. In either event, FFRF would still be in the same position as it is now, making it clear that its alleged “injury” is not fairly traceable to the Government’s action nor redressable by the court.
iv. California’s position and the status of the case
Stanislaus has also argued that the District Court lacks jurisdiction, citing sovereign immunity and the Eleventh Amendment. (SER 28-33.) The defendants’ jurisdictional objections have been presented to the District Court in the form of motions to dismiss (SER 24-91) which, as of the time of this writing, are fully briefed and
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-10awaiting disposition. Oral argument on the motions to dismiss is scheduled to be heard by the District Court on May 10, 2010.
2. Jurisdiction in the Court of Appeals i. Timeliness of appeal
Rodgers’ motion to intervene in the underlying action was denied on December 2, 2009. (ER 1.) Rodgers filed a timely notice of appeal to this Court on December 9, 2009. (ER 25-26.) See 28 U.S.C. § 2107(b), Fed. R. App. P. 4(a)(1)(B).
ii. Appealability of order An order denying of intervention as of right under Rule 24(a)(2) is immediately appealable. Brotherhood of R.R. Trainmen v. Baltimore & O. R. Co., 331 U.S. 519, 524 (1947); League of United Latin Am. Citizens (LULAC) v. Wilson, 131 F.3d 1297, 1302 (9th Cir. 1997).4 This Court therefore has jurisdiction of Rodgers’s appeal from the denial of his bid for intervention as of right under Rule 24(a)(2).
4 If the putative intervenor is denied intervention as of right, but is granted permissive intervention, the denial of intervention as of right is not appealable. Stringfellow v. Concerned Neighbors in Action, 380 U.S. 370, 378 (1987). Since Rodgers was precluded from becoming a party in any respect, that rule does not apply here.
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-11An order denying a motion for permissive intervention under Rule 24(b) is appealable, however, only if the trial court has abused its discretion in denying the motion. Brotherhood of R.R. Trainmen, 331 U.S. at 523; LULAC, 131 F.3d at 1307. Determining whether this Court has jurisdiction over the appeal from the denial of Rodgers’ Rule 24(b) motion, then, necessarily involves a consideration of the merits, i.e., whether the District Court abused its discretion in denying the motion. As a result, this Court has said that it has practical (if not always actual) jurisdiction over appeals from the denial of Rule 24(b) motions. LULAC, 131 F.3d at 1308. Because the District Court did not abuse its discretion in denying Rodgers’s request for permissive intervention (see Argument II, infra), however, this Court technically lacks jurisdiction over that portion of the appeal.
STATEMENT OF THE ISSUES 1. Whether the District Court correctly denied Rodgers intervention as of right under Rule 24(a)(2), because his ability to protect his interest would not thereby be impaired and because, in any event, his interest is adequately represented by existing parties.
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-122. Whether the District Court correctly exercised its discretion in denying Rodgers permissive intervention under Rule 24(b), due to the absence of an independent basis for jurisdiction over the putative claim against him.
STATEMENT OF THE CASE FFRF brought this suit against the Secretary of the Treasury, the Commissioner of Internal Revenue, and the Executive Director of the California Franchise Tax Board, in their official capacities,5 seeking a declaration that federal and California statutes relating to the so-called “parsonage allowance” – §§ 107 and 265(a)(6) of the Code and Cal. Rev. & Tax Code §§ 17131.6 and 17280(d)(2) – are unconstitutional, as well as an injunction preventing those officials from “continuing to grant or allow tax benefits” under the statutes. (ER 108-109.) Before Stanislaus had even been served with the complaint, Michael Rodgers moved to intervene as a defendant to the action,
5 Because the officials have been sued solely in their official capacities, the suit is in reality one against the United States and California. Dugan v. Rank, 372 U.S. 609 (1962); Hutchinson v. United States, 677 F.2d 1322, 1327 (9th Cir. 1982). As a result, the proper defendants are the United States and California.
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-13purportedly to protect his interest as a minister who qualifies for the parsonage allowance. (ER 78, 95-96.) The United States opposed the motion. Regarding intervention as of right under Rule 24(a)(2), the United States argued that Rodgers failed to qualify for two reasons. First, it argued that, because he had other means of protecting his interest, he would not be “impaired” within the meaning of the rule if he were precluded from intervening. Second, the United States argued that, because it intended to defend the constitutionality of the statutes, Rodgers’s interest in the parsonage allowance was adequately protected by existing parties, which also precluded intervention as of right. Regarding permissive intervention under Rule 24(b), the Government contended that, because the District Court lacked independent jurisdiction to hear an action against Rodgers, he was not eligible to intervene on a permissive basis. (ER 54-62.) The District Court denied Rodgers’ motion to intervene, but it granted his alternative request to participate in the case as amicus. (ER 1-17.) This appeal followed. (ER 25-26.)
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-14STATEMENT OF THE FACTS A. The parsonage allowance and the Warren case In the case of a “minister of the gospel,” § 107 of the Code excludes from gross income the “rental value of a home furnished to him as part of his compensation” or a “rental allowance paid to him as part of his compensation, to the extent used by him to rent or provide a home.” Many years ago, the IRS took the position that the amount of the “rental allowance” a minister could exclude from his gross income was limited to the fair market rental value of his home. See Rev. Rul. 71-280, 1971-2 C.B. 92. In the 1990s, however, the Rev. Richard D. Warren of Saddleback Valley Community Church took the position that he could exclude his entire rental allowance, without regard to the fair market rental value of his home, so long as the allowance did not exceed his actual housing expenditures. He prevailed on that contention in the Tax Court. See Warren v. Commissioner, 114 T.C. 343 (2000). The Commissioner appealed to this Court. At oral argument in the Warren appeal, this Court asked counsel for both parties to address
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-15whether it must consider the constitutionality of the rental allowance under the Establishment Clause. See Warren v. Commissioner, 282 F.3d 1119, 1123 (9th Cir. 2002) (Warren I) (Tallman, J., dissenting). Both parties advised the Court that “they did not raise this issue in the Tax Court,” that “they do not wish to make a constitutional challenge,” and that they “believe the parsonage exclusion is constitutional.” Id. at 1124. After argument, the Court appointed Prof. Erwin Chemerinsky as an (additional) amicus curiae and requested Warren, the Commissioner and amici to brief the Establishment Clause issue. Id. at 1119-1120. In so doing, the Commissioner defended the constitutionality of the parsonage allowance. Warren v. Commissioner, No. 00-71217, Supp. Brief for Appellant (Docket No. 50) (9th Cir. May 3, 2002).
While the appeal in Warren was still under submission to this Court, Congress passed the Clergy Housing Allowance Clarification Act of 2002, Pub. L. No. 107-181, 116 Stat. 583 (May 20, 2002). The Act amended § 107 of the Code to provide generally that for tax years beginning after 2001, the exemption for the rental allowance in § 107(2)
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-16is limited to the fair market rental value of a minister’s home. Id., § 2(b)(1), 116 Stat. at 583. In general, a minister’s rental allowance in earlier years was not so limited. Id., § 2(b)(3), supra. Because the Act mooted the issue of statutory interpretation disputed by the parties in Warren, the parties stipulated to dismiss the appeal, and the Court accordingly dismissed it. Warren v. Commissioner, 302 F.3d 1012, 1014 (9th Cir. 2002) (Warren II).
B. The nature of this suit and the proceedings on the motion to intervene
On October 16, 2009, FFRF filed the complaint for declaratory and injunctive relief in this case. (ER 97-109.) FFRF sought a declaration that the exemption for the parsonage allowance and the deductions for mortgage interest and real property taxes paid with respect to such an allowance under §§ 107 and 265(a)(6) of the Code, respectively, as well as their respective analogs in Cal. Rev. & Tax Code §§ 17131.6 and 17280(d)(2), violated the Establishment Clause of the First Amendment to the United States Constitution and a like clause in Article 1, § 4 of the California Constitution, as well as the
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-17latter’s “no preference” and its “no aid” clauses. (ER 102-104.) FFRF sought to have the District Court enjoin the defendants “from continuing to grant or allow tax benefits” under the challenged statutes. (ER 109.)
Six days after the complaint was filed, and before any other party had appeared in the case, Rodgers and “Does 1-100” filed a motion “for an order granting intervention as defendants” to FFRF’s complaint. (ER 95.) Rodgers argued that, as someone who had claimed, and would continue to claim, the challenged federal and state tax benefits accorded parsonage allowances that were being challenged by FFRF (ER 78), the disposition of the action “would directly impede [his] interests and resources to minister and serve the community” (ER 89). He contended that his interests were not adequately represented by existing parties, on the theory that the Treasury and the California Franchise Tax Board were “at bottom politically-motivated bodies” who would defend the statutes only “to the extent that it is politically expedient to do so.” (ER 90.) He also argued that they were subject to an inherent “conflict of interest” in doing so, due to the “increase in tax
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-18revenue” that stood to be realized if the statutes were struck down. (Id.) Rodgers sought both intervention as of right (Fed. R. Civ. P. 24(a)(2)) and permissive intervention (Rule 24(b)). (ER 91.) In the alternative, Rodgers requested the District Court to permit him to participate in the litigation as amicus. (ER 92.)
FFRF and its plaintiff members did not oppose Rodgers’ motion to intervene. (CR 15.) The United States appeared in the case and opposed the motion. (ER 54.) For as long as the motion was pending, Stanislaus did not appear, because he was not served with the complaint until January 12, 2010. (CR 32, at 2.)
In its opposition, the United States argued that intervention as of right should be denied. Although the United States noted that Rodgers might have a “significantly protectable interest” in the litigation, it asserted that he could protect that interest by other means, such as by participating as an amicus. (ER 57.) The United States further contended that there is a presumption that Rodgers’s interest is adequately represented by existing parties in this case, and it asserted that his speculative assertions regarding the Treasury’s political
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-19motives and financial conflicts were insufficient to overcome that presumption. (ER 58-59.)
The United States also opposed Rodgers’s request for permissive intervention. It contended that, in the absence of an independent basis for jurisdiction over Rodgers’s claims or defenses, permissive intervention was not appropriate. It also contended that his intervention would encumber, rather than streamline, the judicial process. (ER 60-61.)
C. The District Court’s denial of the motion to intervene
On December 2, 2009, the District Court denied Rodgers’s motion to intervene. Before denying him intervention as of right, the court rejected the argument of the United States that the filing of an amicus brief is generally sufficient to protect an intervenor’s interest in litigation from impairment. (ER 6.) The court agreed with the United States, however, that Rodgers’s interest was adequately represented by existing parties to the case. (ER 8-14.) The court opined that Rodgers had not overcome the “very strong presumption” of adequate
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-20representation with his “cynical” speculation that the taxing authorities might be tempted to allow the statutes to be overturned in order to gain the “windfall” in new revenue that might result. (ER 13.) Instead, the Court pointed to “the fact that the United States has consistently enforced the revenue statutes at issue here and the inherent interest the United States has in seeing its statutes upheld and enforced.” (Id.)
The District Court went on to reject Rodgers’s further argument that the United States could not represent his interests because it would not be defending the analogous California statutes. Noting that “the state defendant has not yet been served,” the court concluded that Rodgers “cannot go around the showing required by Rule 24(a)(2) that existing parties may not adequately represent their interest simply by moving to intervene before the parties to the suit have appeared.” (ER 14.) This aspect of Rodgers motion, then, was “premature.” (Id.) The court was unpersuaded by the prospect that the Solicitor General might not authorize appeal of an adverse ruling that Rodgers’s interests
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-21would not be adequately represented. It reasoned that, in that event, he could “move to intervene for purposes of appeal.” (ER 13.)
Finally, the District Court declined to grant Rodgers permissive intervention under Rule 24(b). It noted that Rodgers “admits in his motion that a court would likely find no ‘case or controversy’ existed unless and until the plaintiffs in this lawsuit succeeded.” (ER 16.) Because he “makes no effort to show that independent grounds for jurisdiction exist,” the court concluded, the motion for permissive intervention must be denied. (Id.)
D. Proceedings in the District Court after the denial of the motion to intervene
Rodgers lodged this appeal from the denial of his motion to intervene on December 9, 2009. (ER 25-26.) On January 12, 2010, Stanislaus was served with the complaint. (CR 32, at 2.) On February 26, Stanislaus and the United States each filed motions to dismiss the complaint. (SER 24, 40.) In addition to contending that the District Court lacks subject matter jurisdiction to entertain the suit because the plaintiffs lack standing to sue, Stanislaus and the United States
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-22defended the constitutionality of the challenged state and federal tax provisions concerning parsonage allowances, respectively. Specifically, the United States and California moved to dismiss for failure to state a claim. The United States contended that the provisions of the Code concerning parsonage allowances do not violate the First Amendment’s Establishment Clause (SER 58-91), while Stanislaus argued that the like provisions of the California tax law do not violate the Establishment Clause of either the United States or California Constitutions, the latter’s “no preference” clause or its “no aid” clause (SER 33-39). These motions are fully briefed, and oral argument is scheduled to be heard by the District Court on May 10, 2010.
SUMMARY OF ARGUMENT 1. As relevant here, Rule 24(a)(2) permits intervention as of right only if the putative intervenor demonstrates that his interest would be impaired absent his participation and that his interest is not adequately represented by existing parties to the suit. Rodgers’s bid to intervene founders on each count.
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-23In order to be entitled to intervene as of right, the movant must demonstrate, under Rule 24(a)(2), that he “is so situated that disposing of the action may as a practical matter impair or impede the movant’s ability to protect [his] interest.” But even if the lawsuit might affect the movant’s interest, his interest might not be “impaired” if he has other means of protecting it. And Rodgers undeniably has “other means” of contesting his entitlement to tax benefits accorded to the parsonage allowance that preclude his intervention here. The District Court rejected the Government’s argument below that Rodgers could protect his interest simply by appearing as amicus. But it also bears noting that he has other statutory remedies for any future denial of the tax benefits under the challenged provisions of the Internal Revenue Code. If the Commissioner were to determine a deficiency based on the disallowance of those benefits, Rodgers could obtain prepayment review of that determination in the Tax Court. Alternatively, he could pay the tax, file a timely administrative claim for refund and, after that claim is denied or no action is taken on it for at least six months, sue for a refund in a district court or the Court of Federal Claims. Of course,
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-24FFRF’s success in the District Court or on appeal to this Court would complicate Rodgers’s chances of prevailing in his own deficiency or refund action, if he were still to live within this Circuit at the time he brings such a suit. But until such time as the Supreme Court actually strikes down the tax benefits long accorded to the parsonage allowance, Rodgers cannot be said to lack another remedy. And while he has such recourse, his bid to intervene is precluded.
In any event, the District Court was correct that Rodgers failed to make the required showing that his interest is not adequately represented by existing parties. Where, as here, the Government and the applicant are on the same side of the litigation, there is a presumption that the applicant’s interest is adequately represented, which presumption can only be overcome with a “very compelling showing” to the contrary. Because Rodgers has failed to make such a very compelling showing, the District Court’s denial of intervention as of right should be affirmed.
Specifically, it is beside the point that the Commissioner and the taxpayer in the Warren case differed on their construction of a bygone
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-25version of § 107. Congress has since amended the statute to obviate the dispute over whether the exclusion is limited to the fair rental value of the parsonage. Rodgers further contends that the Government is conflicted by its Treasury function to an extent that might lead it to acquiesce in the unconstitutionality of the parsonage allowance for pecuniary reasons. This argument is not only speculative, but it is also belied by the fact that the Government has represented that it will defend the constitutionality of the parsonage allowance in this case, and has consistently done so in this and every other case. Rodgers’s similar speculation that the Government might be tempted to avoid the constitutional question entirely it is completely undermined by the fact that that question is unavoidable in this case. Rodgers’s arguments that the State of California might not represent his interest, or that Solicitor General might not authorize appeal is premature, and with respect to the state claims, wrong. The Franchise Tax Board is, in fact, defending the California parsonage allowance from attack under the federal and state constitutions.
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-262. It is well settled that a court may permit intervention in the exercise of its discretion under Rule 24(b) only where the applicant demonstrates an independent basis for jurisdiction over the applicant’s claims or defenses. Rodgers’s situation does not fall within the only, narrow exception to that rule, which applies when a third party seeks to intervene for the limited purpose of obtaining access to documents protected by a confidentiality order. And, contrary to Rodgers’s assertions, his application for intervention does seek to have the District Court assert jurisdiction over a new claim: he seeks to intervene as a defendant to FFRF’s claims for declaratory and injunctive relief. But the District Court is without subject-matter jurisdiction over an action against Rodgers for declaratory and injunctive relief. Nor can Rodgers “consent” to subject-matter jurisdiction. There was, accordingly, no abuse of discretion in the District Court’s denial of permissive intervention, and this portion of the appeal should be dismissed for lack of appellate jurisdiction.
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-27ARGUMENT
I THE DISTRICT COURT CORRECTLY DENIED RODGERS INTERVENTION AS OF RIGHT BECAUSE HIS INTEREST IN THE CONSTITUTIONALITY OF THE PARSONAGE ALLOWANCE WILL NOT BE IMPAIRED AND, IN ANY EVENT, IT IS ADEQUATELY REPRESENTED BY THE EXISTING PARTIES
Standard of Review
The District Court’s denial of the motion to intervene as of right is
reviewed de novo. Perry v. Proposition 8 Official Proponents, 587 F.3d
947, 950 (9th Cir. 2009). A. Introduction Regarding intervention as of right, Fed. R. Civ. P. 24(a)(2)
provides in pertinent part as follows: Rule 24. Intervention (a) Intervention of Right. On timely motion, the
court must permit anyone to intervene who: ***** (2) claims an interest relating to the property or transaction that is the subject of the action, and is so
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-28situated that disposing of the action may as a practical matter impair or impede the movant’s ability to protect its interest, unless existing parties adequately represent that interest.
In keeping with the text of the rule, this Court has summarized
the requirements of intervention as of right under Rule 24(a)(2) as
follows:
* * * (1) the applicant must timely move to intervene; (2) the applicant must have a significantly protectable interest relating to the property or transaction that is the subject of the action; (3) the applicant must be situated such that the disposition of the action may impair or impede the party’s ability to protect that interest; and (4) the applicant’s interest must not be adequately represented by existing parties.
Perry, 587 F.3d at 950 (citing Arakaki v. Cayetano, 324 F.3d 1078, 1083
(9th Cir. 2003)). The applicant bears the burden of showing that each
of the four elements is met. Prete v. Bradbury, 438 F.3d 949, 954 (9th
Cir. 2006). Failure to satisfy any one of the four requirements is fatal
to the application. Perry, 587 F.3d at 950.
In this case, the United States did not dispute the timeliness of
Rodgers’s application to intervene, made only a matter of days after
suit was instituted. Nor did it dispute that Rodgers, a pastor who
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-29alleges that he has claimed the federal and state tax benefits accorded the parsonage allowance, has a “significantly protectable” interest in the subject matter of the suit for purposes of the rule. Instead, the United States contended (1) that disposition of the action would not as a practical matter impair or impede Rodgers’s ability to protect his interest and (2) that, in any event, Rodgers’s interest was adequately represented by the existing parties to the suit. The District Court concluded that Rodgers had shown that his ability to protect his interest might be impaired absent intervention (ER 5-8), but it agreed with the United States that Rodgers was not entitled to intervene because his interest was adequately represented (ER 8-14). As we demonstrate below, the District Court was correct in concluding that Rodgers did not meet the requirements for intervention as of right.
B. Because Rodgers has other means of protecting his interest, his ability to protect that interest would not be impaired if he is not allowed to intervene
In order to be entitled to intervene as of right under Rule 24(a)(2), the movant must demonstrate that he “is so situated that disposing of
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-30the action may as a practical matter impair or impede the movant’s ability to protect [his] interest.” Fed. R. Civ. P. 24(a)(2). The Advisory Committee Notes to the rule, the guidance of which this Court follows, see Southwest Ctr. for Biological Diversity v. Berg, 268 F.3d 810, 818 (9th Cir. 2001), explain in this regard that “[i]f an absentee would be substantially affected in a practical sense by the determination made in an action, he should, as a general rule, be entitled to intervene.” Advisory Committee Note to Fed. R. Civ. P. 24 (1966 Amendment).
Because Rodgers has a significant protectable interest in the litigation for purposes of the rule, it would seem to follow that the lawsuit will affect his bid to enjoy the tax benefits accorded to the parsonage allowance. But that is not sufficient. As this Court has explained, “[e]ven if this lawsuit would affect the proposed intervenors’ interests, their interests might not be impaired if they have ‘other means’ to protect them.” California ex rel. Lockyer v. United States, 450 F.3d 436 442 (9th Cir. 2006), quoting from United States v. Alisal Water Corp., 370 F.3d 915, 921 (9th Cir. 2004).
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-31In Alisal, for example, where the United States sought to place the defendant in receivership to remedy environmental violations the defendant had committed, this Court rejected an attempt by the defendant’s judgment creditor to intervene. It reasoned that the suit would not impair the creditor’s interest because the district court had established a separate process for making claims against the defendant that were sufficient to protect the creditor’s interest. Alisal, 370 F.3d at 921. So, too, in United States v. City of Los Angeles, 288 F.3d 391 (9th Cir. 2002), this Court rejected an attempt by community groups to intervene in a suit by the United States against Los Angeles to enjoin certain police practices, albeit on other grounds. But it also noted that, since anyone whose constitutional rights were violated by the police could sue the police, or even or the City, if it tolerated a pattern or practice of such violations, it was “doubtful” that the movants’ interests were “impaired” in the sense meant by the rule. Id. at 402. By the same token, Rodgers has “other means” of contesting the denial of benefits that preclude his intervention here. The District
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-32Court rejected the Government’s argument below (ER 57) that Rodgers could appear as amicus. But in a larger sense, it bears noting that Rodgers has other remedies for any future denial of the tax benefits accorded to parsonage allowances under the challenged provisions of the Code. If the Commissioner were to determine a deficiency against him based on his claim of such benefits, he could obtain prepayment review of that determination in the Tax Court following the issuance of a notice of deficiency. See I.R.C. §§ 6212, 6213(a), 7442. Alternatively, Rodgers could fully pay the tax, file a timely administrative claim for refund and, after that claim is denied or no action is taken on it for at least six months, sue for a refund in a district court or the Court of Federal Claims. I.R.C. §§ 6511(a), 6532(a)(1), 7422(a); 28 U.S.C. §§ 1346(a)(1), 1491; Flora v. United States, 357 U.S. 63 (1958), on rehearing, 362 U.S. 145 (1960). As the Fifth Circuit pointed out in Apache Bend Apartments, 987 F.2d at 1177:
* * * Congress has erected a complex structure to govern the administration and enforcement of the tax laws, and has established precise standards and procedures for judicial review of tax matters. Even if the plaintiffs succeeded in gaining the relief they seek–nullification of the transition
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-33rules–the affected taxpayers, who are not parties, would remain free to challenge any deficiencies asserted. To be sure, the possibility that FFRF might persuade the District Court, and perhaps even this Court in any appeal, that it has standing to sue and that the parsonage allowance violates the Establishment Clause, might complicate Rodgers’s chance of success in his own refund or deficiency action. But there is no assurance that Rodgers would still reside within this Circuit by the time he brings any such suit. See I.R.C. § 7482(a)(1) (laying appellate venue, in the case of a Tax Court appeal, in the Circuit where the taxpayer resides at the time he brings suit in the Tax Court); 28 U.S.C. § 1396 (laying venue for a refund suit in the district(s) where the liability for the tax accrues, where the taxpayer resides or where the return was filed); see Apache Bend Apartments, 987 F.2d at 1177 (noting that its decision, if it were to entertain and agree with the plaintiffs’ challenge to the transition rules accorded other taxpayers, “would constitute binding precedent only in this Circuit.”). Until such time as the Supreme Court were to consider the matter and agree with FFRF that the Establishment Clause forbids
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-34the tax benefits long accorded by the Code to the parsonage allowance, it cannot be said that Rodgers lacks a remedy, or “other means,” of protecting his interest. Because he has such a remedy, Rodgers’s request for intervention is subject to denial on the ground that his interest would not be “impaired” within the meaning of the rule.
C. The District Court correctly held that Rodgers failed to make the required “very compelling showing” that his interests are not adequately represented by existing parties
In any event, the District Court correctly denied Rodgers’ application for intervention for failure to meet the fourth requirement – that is, to show that his interest is not “adequately represented” by existing parties. (ER 8-14.) In assessing whether an applicant is not adequately represented by a present party, this Court considers “(1) whether the interest of a present party is such that it will undoubtedly make all the intervenor’s arguments; (2) whether the present party is capable and willing to make such arguments; and (3) whether the would-be intervenor would offer any necessary elements to the proceedings that other parties would neglect.”
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-35Northwest Forest Resource Council v. Glickman, 82 F.3d 825, 838 (9th Cir. 1996).
The “most important factor” in assessing the adequacy of representation is “how the [applicant’s] interest compares with the interests of existing parties.” Arakaki, 324 F.2d at 1086. When the applicant and a party have the same ultimate objective, a presumption of adequacy of representation arises. Id.; LULAC, 131 F.3d at 1305.
Moreover, when a governmental unit is acting on behalf of a constituency that it represents, there is a strong presumption that the government adequately represents its citizens sharing the same interest. California ex rel. Lockyer, 450 F.3d at 443-444. Nowhere is this presumption more applicable than in a case, such as this one, “where the Department of Justice deploys its formidable resources to defend the constitutionality of a congressional enactment.” Id. at 444. The presumption of adequacy of representation can only be overcome by a “very compelling showing” to the contrary. Id. at 443; Arakaki, 324 F.3d at 1086.
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-36It is a “rare” case in which a member of the public is allowed to intervene in an action in which the United States or its agencies represent the public interest. 7C Wright, Miller & Kane, Federal Practice and Procedure, § 1909 at 429 (3d ed. 2007). Intervention has generally been allowed in such cases only upon an affirmative showing of adversity of interest, collusion or nonfeasance. See Moosehead San. Dist. v. S.G. Phillips Corp., 610 F.2d 49, 54 (1st Cir. 1979); 7C Wright, Miller & Kane, § 1909, at 392, 427 (discussing these three circumstances as being those cited by then-Judge Blackmun, writing for the Eighth Circuit in Stadin v. Union Elec. Co., 309 F.2d 912, 919 (8th Cir. 1962), where representation is inadequate). For instance, this Court has found adversity of interest where the federal government’s position in the litigation actually diverged from that of the intervenors, Lockyer, 450 F.3d at 444, where the federal defendant previously ran the plaintiff’s organization, Sagebrush Rebellion, Inc. v. Watt, 713 F.2d 525, 528 (9th Cir. 1986), and where a city government was acting not on behalf of an intervenor, but as an employer and antagonist in collective bargaining, United States v. City
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-37of Los Angeles, 288 F.3d 391, 401-02 (9th Cir. 2002). But this Court has refused to find adversity of interest simply on the basis of “[c]ampaign rhetoric and perceived philosophic differences,” id. at 403, “dispute[s] over litigation strategy or tactics,” Perry, 587 F.3d at 954, or “minor differences of opinion” over the arguments to be raised in a case, Northwest Forest Resource Counsel, 82 F.3d at 838. Likewise, a showing that the applicant for intervention and the government have taken adverse positions, on other statutes, in the past, is insufficient to overcome the presumption of adequacy. Id. Also lacking is the mere contention that the government “may be inclined to give an unnecessarily narrow construction” of a statute, without proof that the government actually is, in the pending litigation, construing the statute more narrowly than the applicant. Prete, 438 F.3d at 958. Speculation will not suffice. Id.
In this case, the “ultimate objective” of both the government and Pastor Rodgers is the same – upholding the validity of §§ 107 and 265(a)(6) and their state analogs. As a result, it is undisputed that Rodgers and the government are “on the same side,” Arakaki, 324 F.3d
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-38at 1087, and that there is a presumption that the government will adequately represent Rodgers’ interests. (Br. 12-13.)
D. Because the government has vigorously defended, and continues to defend, the parsonage allowance, Rodgers’s attempt to show inadequacy of representation falls short
Rodgers presents four arguments on appeal why he has rebutted the presumption that the government will adequately represent his interests. None has any merit.
1. First, Rodgers argues (Br. 14-15) that a conflict may arise between his position and that of the United States because of what he calls the Ashwander principle, i.e., the “cardinal principle” that courts must “ascertain whether a construction of the statute [being challenged] is fairly possible by which [a constitutional] question may be avoided.” Ashwander v. TVA, 297 U.S. 288, 348 (1936) (Brandeis, J., concurring). As Rodgers describes this principle, however, it is apparently one that the courts must consider no matter what positions are taken by the parties to a case. And although at least one former Solicitor General has suggested, in commentary, that his office has
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-39often attempted to construe statutes to avoid constitutional questions when defending acts of Congress, see Seth P. Waxman, Defending Congress, 79 N.C. L. Rev. 1073, 1079-80 (2001), there is no indication that the United States has or will construe §§ 107 and 265(a)(6) of the Code more narrowly than Rodgers would to avoid a constitutional question in this case. Indeed, it is not clear, and Rodgers does not suggest, how a narrow construction might avoid FFRF’s constitutional challenge to §§ 107 and 265(a)(6). Rodgers’s speculation that the United States might construe these statutes more narrowly than he would is insufficient to overcome the presumption of adequacy. Prete, 438 F.3d at 958.
Moreover, it is beside the point for Rodgers to assert (Br. 15-17) that the Commissioner offered a more narrow construction of § 107, as then in effect, than did the taxpayer-pastor in Warren v. Commissioner, supra. Since 1971, the IRS interpreted § 107 to mean that the amount of the parsonage allowance is limited to the fair market rental value of the minister’s home. Rev. Rul. 71-280, 1971-2 C.B. 92. Although the taxpayer in Warren took the position that the parsonage allowance was
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-40not so limited, see Warren II, 302 F.3d at 1013-1014, any ambiguity, and therefore any dispute, about the meaning of § 107 in this regard has been completely eliminated by the Clergy Housing Allowance Clarification Act of 2002, Pub. L. No. 107-181. In that act, Congress amended the statute (albeit with generally prospective effect), to except the parsonage allowance from gross income only “to the extent such allowance does not exceed the fair rental value of the home,” as the Commissioner had maintained all along. Rodgers’s concern that the Commissioner took a different position, against another minister, on the prior version of the statute, in an unrelated case, falls far short of demonstrating that his interests are not adequately represented in this case. Northwest Forest Resource Counsel, 82 F.3d at 838.
Most importantly, however, Rodgers’s speculation that the United States might not defend the constitutionality of the parsonage allowance is wholly undermined by the events as they have actually unfolded. When the constitutionality of § 107 was raised in Warren, the Commissioner defended the statute, without limitation, even though he would have prevailed in the case in the event the statute had
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-41been struck down. Warren v. Commissioner, No. 00-71217, Supp. Brief for Appellant (Docket No. 50) (9th Cir. May 3, 2002). In Warren, the government’s interest in seeing its laws upheld clearly trumped any purported pecuniary interest in “collecting taxes and treasure” (Br. 1), and the Commissioner’s and the taxpayer’s positions were to that extent aligned. Warren I, 282 F.3d at 1123-1124 (Tallman, J., dissenting). And in this case, the United States not only represented that it would defend the constitutionality of the parsonage allowance, as Rodgers would, but it has consistently defended, and will continue to defend, those provisions. (SER 40-91.)
Indeed, Rodgers has not identified any difference between the position he would take and the actual position taken by the United States in this case. That failure is telling, because the United States filed its motion to dismiss – which argues specifically that FFRF fails to state a claim because §§ 107 and 265(a)(6) do not violate the Establishment Clause – one month before Rodgers filed his opening brief on appeal. (SER 40, 91.)
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-422. Second, Rodgers argues (Br. 17-18) that the United States cannot possibly represent his interest in the analogous California statutes (Cal. Rev. & Tax Code §§ 17131.6 and 17280(d)(2)) that FFRF challenges in the complaint. Rodgers further argues (Br. 18) that the District Court erred in assuming that Stanislaus, the state defendant, would defend the state statutes from constitutional attack, even though Stanislaus had yet to appear in the case. But Rodgers mischaracterizes the District Court’s decision. The District Court did not assume anything. Instead, it characterized as “premature” (ER 14) Rodgers’s request for a determination of the adequacy of the State of California’s representation of his interests. Rodgers made his request only six days after the complaint was filed, before the State of California had even been served with process. (CR 15, at 2.) In any event, it is by no means wrong to “assume” that a governmental body would represent the interest of a constituent attempting to intervene as co-defendant. Instead, that is the nature of the legal presumption that governs this case. Arakaki, 324 F.3d at
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-431087; Prete, 438 F.3d at 957. And Rodgers has not identified any basis for a contrary ruling on appeal.
On February 26, 2010, moreover, Stanislaus did appear, and he specifically argued in a motion to dismiss FFRF’s complaint that Cal. Rev. & Tax Code §§ 17131.6 and 17280(d)(2) do not violate the Establishment Clause, California’s “no preference” clause or its “no aid” clause. (SER 24-39.) So it appears that Rodgers’ concern that the State might not defend these statutes has been assuaged.
3. Third, Rodgers argues (at 18-21) that his interests are not represented in the pending litigation because, in the event of an adverse ruling, it would be up to the Solicitor General whether or not to authorize an appeal, and it is uncertain whether he would do so. This is true, of course, in every case in which the United States is a party. See 28 C.F.R. § 0.20(b). As a result, to hold that the uncertainty of appeal is grounds for intervention as of right would open up all Government litigation to a myriad of intervening parties. Moreover, there is no reason to believe that the Solicitor General would not appeal a decision that struck down a federal statute. To the contrary,
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-44Congress has imposed an affirmative obligation on the Attorney General to report to it any instance in which it is determined to refrain from defending the constitutionality of any federal statute, or not to pursue appeal or review of an adverse determination thereof. 28 U.S.C. § 530D(a)(1)(B)(ii). At bottom, Rodgers offers little more than “speculation of the purported inadequacy,” and such speculation is insufficient to justify intervention as of right. LULAC, 131 F.3d at 1307.
Finally, Rodgers’ argument that he should be permitted to intervene now in order to generate jurisdiction over a possible appeal falls of its own weight. Intervention is “not intended to allow the creation of whole new lawsuits by the intervenors.” Donnelly v. Glickman, 159 F.3d 405, 412 (9th Cir. 1998). As a result, the District Court did not err in deciding that Rodgers is not entitled to intervention as a matter of right.
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-45II THE DISTRICT COURT CORRECTLY EXERCISED ITS DISCRETION IN DENYING RODGERS PERMISSIVE INTERVENTION, IN THE ABSENCE OF AN INDEPENDENT BASIS FOR JURISDICTION OVER HIS CLAIMS OR DEFENSES Standard of Review The District Court’s denial of the motion for permissive intervention is reviewed for abuse of discretion. Perry, 587 F.3d at 955. _______________ Federal Rule of Civil Procedure 24(b) empowers a court to grant permissive intervention if the person applying for intervention demonstrates (1) that there are independent grounds for jurisdiction; (2) that the motion is timely; and (3) that the applicant’s claim or defense, and the main action, have a question of law or a question of fact in common. City of Los Angeles, 288 F.3d at 403 (9th Cir. 2002). “Even if an applicant satisfies those threshold requirements,” however, the District Court “has discretion to deny permissive intervention.” So. Cal. Edison v. Lynch, 307 F.3d 794, 803 (9th Cir. 2002) (citing Donnelly,
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-46159 F.3d at 412). Factors to consider in making this discretionary determination include “the nature and extent of the intervenors’ interest” and “whether the intervenors’ interests are adequately represented by other parties.” Spangler v. Pasadena City Bd. of Educ., 552 F.3d 1326, 1329 (9th Cir. 1977). Moreover, the Court must consider “whether the intervention will unduly delay or prejudice the adjudication of the original parties’ rights.” Fed. R. Civ. P. 24(b)(3). As this Court has observed, moreover, “[t]his discretionary procedure is properly utilized in a case in which it appears that the intervenor has a separate and independent basis for jurisdiction and in which failure to adjudicate the claim will result only in unnecessary delay.” See Benavidez v. Eu, 34 F.3d 825, 830 (9th Cir. 1994) (emphasis omitted).
In this case, as the District Court observed, Rodgers “admits in his motion that a court would likely find no ‘case or controversy’ existed until the plaintiffs in this lawsuit succeeded.” (ER 16.) Moreover, far from relying upon a separate and independent basis for jurisdiction (and demonstrating that failure to adjudicate his claim will result in only in unnecessary delay), as the court further noted, Rodgers “makes
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-47no effort to show that independent grounds for jurisdiction exist.” (Id.) As a result, Rodgers simply does not meet the requirements for permissive intervention.
Rodgers nevertheless argues that jurisdiction is established because he “is consenting to the court’s jurisdiction.” (Br. 27-28.) But the District Court cannot adjudicate any matter on personal jurisdiction alone. Rather, it is the independent subject-matter jurisdiction of the federal courts that an applicant must establish under Rule 24(b). And parties cannot establish subject-matter jurisdiction by consent. Smith v. Salish Kootenai College, 434 F.3d 1127, 1139 (9th Cir. 2006) (noting that there is no doctrine “that would allow a party who would not otherwise be subject to a federal court’s subject-matter jurisdiction to enter into a consensual relationship * * * that would confer subject matter jurisdiction on a federal court.”).
Rodgers also argues (Br. 30-31) that the supplemental jurisdiction statute, 28 U.S.C. § 1367, provides the grounds for jurisdiction over the putative claim against him. But Rodgers did not raise this argument before the District Court. (See ER 50-51, 91-92; SER 1-23.) Certainly,
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-48Rodgers cannot establish that the District Court abused its discretion in denying him permissive intervention by failing to consider an argument that he never raised. See, e.g., Smith v. Marsh, 194 F.3d 1045, 1052 (9th Cir. 1999) (“The district court did not abuse its discretion by failing to consider an argument that was never presented to it”). Moreover, supplemental jurisdiction is not the “independent grounds for jurisdiction” that this Court’s Rule 24(b) cases require. Perry, 587 F.3d at 955 (emphasis added); EEOC v. Nevada Resort Ass’n, 792 F.2d 882, 886 (9th Cir. 1986). And § 1367 – as well as the Declaratory Judgment Act, 28 U.S.C. § 2201(a), under which the plaintiffs proceed (ER 98) – are predicated on an actual controversy between the plaintiff (FFRF) and the putative defendant (Rodgers), a controversy that Rodgers himself concedes (ER 88) is not likely to arise
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-49“until and unless Plaintiffs succeed.”6 Consequently, Rodgers has not
established reversible error by pointing to § 1367.
Finally, Rodgers argues in the alternative (Br. 29-30) that he need
not establish an independent basis for jurisdiction. He relies, in this
regard, on a narrow exception to this requirement in Rule 24(b) cases.
His reliance is inapposite. This Court does recognize the “narrow
exception to the rule that permissive intervention generally requires an
independent jurisdictional basis,” 7C Wright, Miller & Kane § 1917, at
594, when a third party seeks to intervene for the limited purpose of
obtaining access to documents protected by a confidentiality order. See
Beckman Industries, Inc. v. International Ins. Co., 966 F.2d 470 (9th
Cir. 1992). But that exception does not apply to this case.
6 An “actual controversy” involving Rodgers’s parsonage allowance would only arise between Rodgers and the United States, and only if the IRS were to determine that the allowance should be included in gross income (or, alternatively, that his mortgage interest deduction should be disallowed). And in any event, Congress has generally confined litigation over such disputes to deficiency actions in the Tax Court or refund suits in a district court or the Court of Federal Claims. See I.R.C. §§ 6213(a), 7422(a), 7442; 28 U.S.C. § 1346(a)(1), 1491. This Court would therefore lack jurisdiction over any anticipatory attempt by Rodgers to establish his entitlement to the tax benefits in this suit.
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-50Nor is there any basis for creating a new exception to the requirement of independent jurisdiction as a predicate to permissive intervention under Rule 24(b). Rodgers is simply wrong when he asserts (Br. 29) that his case is like Beckman in that he does not ask the District Court to rule on additional claims. Rodgers is seeking to intervene as a defendant, presumably, to the claims of FFRF. These claims are, inter alia, for a “declaration that the actions of all defendants violate the Establishment Clause of the First Amendment to the United States Constitution” (ER 108), and an order “enjoining the defendants from continuing to grant or allow tax benefits” under the applicable statutes, as well as “relief and remedies” under 42 U.S.C. § 1983 (ER 109). Rodgers is effectively asking the Court to rule on new claims against him for declaratory and injunctive relief. But the District Court lacks jurisdiction over any such claim by FFRF against Rodgers. Of course, Rodgers’ desire to intervene as a defendant makes no sense. Rodgers is neither a state actor, nor is he acting under color of state law. That being so, so he can violate neither the Constitution nor
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-5142 U.S.C. § 1983. What he can do is argue in favor of the constitutionality of the parsonage allowance by way of filing an amicus brief, without being legally bound by the result or subject to discovery, costs or attorney’s fees.
The District Court did not abuse its discretion in limiting Rodgers’ participation in this regard. Absent an abuse of discretion, the order denying permissive intervention is not appealable. LULAC, 131 F.3d at 1305. As a result, this aspect of Rodgers’ appeal should be dismissed for lack of jurisdiction.
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-52CONCLUSION

For the reasons stated above, this Court should affirm the order

of the District Court to the extent that it denied Rodgers intervention

as of right under Rule 24(a)(2), and it should dismiss the appeal for lack

of jurisdiction to the extent that Rodgers seeks to contest the denial of

permissive intervention under Rule 24(b)(2).

Respectfully submitted,

JOHN A. DICICCO Acting Assistant Attorney General

GILBERT S. ROTHENBERG Acting Deputy Assistant Attorney General

/s/ Ivan C. Dale

Of Counsel:

TERESA E. MCLAUGHLIN IVAN C. DALE
Attorneys Tax Division Department of Justice Post Office Box 502 Washington, D.C. 20044

(202) 514-4342 (202) 307-6615

BENJAMIN B. WAGNER United States Attorney

MAY 2010

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-53STATEMENT OF RELATED CASES Counsel for the United States respectfully inform the Court that they are not aware of any related cases.
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-54-
CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMITATION, TYPEFACE REQUIREMENTS, AND TYPE STYLE REQUIREMENTS
1. This brief complies with the type-volume limitation of Fed. R. App. P. 32(a)(7)(B) because:
[X] this brief contains_9,464_ words, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii), or
[ ] this brief uses a monospaced typeface and contains [state the number of] lines of text, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii).
2. This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because:
[X] this brief has been prepared in a proportionally spaced typeface using WordPerfect for Windows version X3 in 14-point Century Schoolbook, or
[ ] this brief has been prepared in a monospaced typeface using [state name and version of word processing program] with [state number of characters per inch and name of type style].

Dated: May 10, 2010

/s/ Ivan C. Dale IVAN C. DALE Attorney for Appellee United States

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-55CERTIFICATE OF SERVICE It is hereby certified that, on this 10th day of May, 2010, this brief was electronically filed with the Clerk of the Court for the United States Court of Appeals for the Ninth Circuit by using the appellate CM/ECF system. Participants in the case who are registered CM/ECF users will be served by the appellate CM/ECF system. Some of the participants or other parties in the case are not registered CM/ECF users. I have mailed the foregoing by First-Class Mail, postage prepaid, to the following persons:
Michael A. Newdow, Esquire P.O. Box 233345 Sacramento, CA 95823 Edmund G. Brown, Jr., Esquire William L. Carter, Esquire Jill Bowers, Esquire P.O. Box 944255 Sacramento, CA 94244-2550
/s/ Ivan C. Dale IVAN C. DALE Attorney
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 Case: 09-17753 05/24/2010 Page: 1 of 24 ID: 7348640 DktEntry: 17
Docket No. 09-17753
In the
United States Court of Appeals
for the
Ninth Circuit

FREEDOM FROM RELIGION FOUNDATION, INC., et al., Plaintiffs-Appellees,
v.

TIMOTHY GEITHNER, Secretary, U.S. Department of the Treasury, et al.,
and

Defendants,

MICHAEL RODGERS, Pastor, Defendant-Intervenor/Appellant.
_______________________________________
Appeal from a Decision of the United States District Court for the Eastern District of California, No. 09-CV-02894 · Honorable William B. Shubb
REPLY BRIEF OF APPELLANT

KEVIN T. SNIDER, ESQ. MATTHEW B. MCREYNOLDS, ESQ. PACIFIC JUSTICE INSTITUTE Post Office Box 276600 Sacramento, California 95827-6600 (916) 857-6900 Telephone (916) 857-6902 Facsimile
Attorneys for Appellant, Michael Rodgers, Pastor

COUNSEL PRESS · (800) 3-APPEAL

PRINTED ON RECYCLED PAPER

Case: 09-17753 05/24/2010 Page: 2 of 24 ID: 7348640 DktEntry: 17
TABLE OF CONTENTS
TABLE OF AUTHORITIES ............................................................................... ii INTRODUCTION ................................................................................................1 ARGUMENT ........................................................................................................3 I. Intervention as of Right ..............................................................................3
A. The Federal Defendants’ “other means” argument is untenable .....3 B. The Federal Defendants' previous interpretation of the challenged
statutes adverse to minister's meets the Lockyer showing of inadequacy of representation and is inconsistent with the purposes of Rule 24(a).....................................................................................8 C. Adverse interests—not arguments—are the touchstone of intervention analysis....................................................................... 11 II. Permissive Intervention ............................................................................12 A. Requiring independent grounds for jurisdiction of Proposed Defendants-Intervenors does not comport with this Court's prior holdings ………………………………………………………….12
1. This Court does not require Article III standing for proposed Intervenors as of right….……………………13
2. The rationale for requiring independent grounds for jurisdiction for plaintiff-intervenors simply does not extend to defendant-intervenors……………………….15
CONCLUSION ................................................................................................... 17 CERTIFICATE OF TYPE SIZE AND STYLE .................................................18 CERTIFICATE OF COMPLIANCE..................................................................18
i

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CERTIFICATE OF SERVICE ...........................................................................19
TABLE OF AUTHORITIES
CASES Audobon v. Sutherland
2007 WL 130324 (W.D. Wash., January 16, 2007) ...........................................16
Beckman Industries , Inc. v. International Ins. Co., 996 F.2d 470 (9th Cir. 1992) ..............................................................................13
California ex rel Lockyer v. United States, 450 F.3d 436 (9th Cir. 2006). (Fed. Br. at 30.).................................4, 8, 9, 10, 16
Caterpillar v. Williams, 482 U.S. 386 (1987)............................................................................................ 15
Commodity Futures Trading Com’n v. Chilcott Portfolio Management, Inc., 725 F.2d 584 (10th Cir. 1984) ..........................................................................6, 7
Cook v. Boorstin, 763 F.2d 1462 (D.C.Cir.1985)............................................................................14
Cook v. Pan American World Airways, Inc., 636 F.Supp. 693 (S.D.N.Y 1986) .......................................................................15
Diamond v. Charles, 476 U.S. 54 (1986)..............................................................................................14
Donnelly v. Glickman, 159 F.3d 405 (9th Cir. 1998) ..............................................................................12
Edmondson v. State of Neb. Ex. Rel. Meyer, 383 F.2d 123 (8th Cir. 1967) ..............................................................................15
Greene v. U.S., 996 F.2d 973 (9th Cir. 1993) ..................................................................5, 7, 8, 15
James B. Beam Distilling Co., v. Georgia, 501 U.S. 529 (1991).............................................................................................. 5
ii

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Melton v. Moore, 964 F.2d 880 (9th Cir. 1992) ................................................................................5
Natural Res. Def. Council v. Kempthorne, 539 F.Supp.2d 1155 (E.D. Cal. 2008) ................................................................11
Natural Res. Def. Council v. United States Regulatory Comm’n, 578 F.2d 1341 (10th Cir. 1978) ............................................................................4
Newdow v. Congress of the U.S. 2006 WL 47307 (E.D. Cal., January 06, 2006) .................................................16
Perry v. Proposition 8 Official Proponents 587 F.3d 947 (9th Cir. 2009) ..............................................................................14
Portland Audubon Soc. v. Hodel, 866 F.2d 302 (9th Cir.1989) .........................................................................13, 14
Prete v. Bradbury 438 F.3d 949 (9th Cir 2006) ...............................................................................14
Purnell v. City of Akron, 925 F.2d 941 (6th Cir. 1991) ................................................................................3
Sagebrush Rebellion v. Watt Sagebrush Rebellion, Inc. v. Watt 713 F.2d 525 (9th Cir. 1983) ..................................................................10, 12, 14
Tiber Power Tool Co. v. C.I.R., 439 U.S. 522 (1979)............................................................................................ 12
U.S. v. City of Los Angeles, 288 F.3d 391 (9th Cir. 2002) ............................................................5, 7, 8, 12, 16
U.S. v. Oregon, 839 F.2d 635 (9th Cir. 1988) ................................................................................7
United States v. Alisal Water Corp., 370 F.3d 915 (9th Cir. 2004) ............................................................................6, 7
Utah Ass’n of Counties v. Clinton, 255 F.3d 1246 (10th Cir. 2001) ............................................................................4
iii

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Venegas v. Skaggs, 867 F.2d 527 (9th Cir. 1989) ..............................................................................15
Warren v. C.I.R., 302 F.3d 1012 (9th Cir. 2002) ............................................................................10
FEDERAL STATUTES AND RULES Fed. R. Civ. P. 24 ..............................................................................................passim Fed. R. Civ. P. 24(a).................................................................................2, 3, 4, 8, 14 Fed. R. Civ. P. 24(b) ................................................................................................14 26 U.S.C. (I.R.C. § 107) .........................................................................................17
iv

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INTRODUCTION The Federal Defendants-Appellees have constructed a dense forest of arguments that have m anaged to obscure, but not quite hide, th e central, nagging question in this case: If ministers receivi ng a tax exemption are not allowed to intervene when the statutes providing that exemption to them are att acked, has FRCP Rule 24 been robbed of its purpose? The Federal Defend ants, for the first time on appeal, offer illusory “other means” whereby mi nisters can protect their interests. Upon closer exam ination, these other means – that the Defendants ad mit are “complicated” – turn out to be wildly speculative and arguably precluded by basic principles of res judicata, offering no alternatives if the m inisters are not allowed to intervene in the pending action. Defendants further argue that their previous attempts to limit ministers’ tax exemptions under the same statute being challenged, are irrelevant because the statute has since been am ended. While the ministers might like to believe th e Defendants’ professions of solidarity, they cannot quite i gnore the ol d maxim, “Fool me once, shame on you; fool me tw ice, shame on me.” To say that the interests of a zealous tax collection agen cy and the ministers’ interests in maintaining their current tax exemp tions are divergent is perhaps an understatement.
1

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Defendants’ arguments as to permissive intervention are more plausible, but ultimately fail to pe rsuade. Defendants, like the c ourt below, rely reflexively on statements from this court requiring “ind ependent grounds of j urisdiction” as a condition for granting perm issive intervention, while divorcing an otherwise beneficial requirement from its proper c ontext. The independent jurisdiction rule, which has its genesis in cases involving plaintiff intervenors, sim ply does not make sense in cases such as the present, where a proposed defendant intervenor will not a dd any ne w claims or counter-cla ims to the suit. Moreover, the rule clashes with this Court’s reluctance to impose Article III standing requirem ents on intervenors as of right, as well as Rule 24(a)’s other m eans or alternative forum prong.
When the underbrush is cleared away, this becomes a fairly straightforward case. Proposed D efendants-Intervenors who stand to suffer a direct financial impact, in the event of an adverse decision, should be allowed to intervene either as of right, or permissively to defe nd their unique interests alongside the state government, which has never oppose d their intervention, and the federal government, which has everything to gain and not hing to lo se from an adverse decision.
2

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ARGUMENT I. Intervention as of Right.
A. The Federal Defendants' "other means" argument is untenable.
The Defendants1 assert for the first tim e additional “other means” which are both inconsistent with the purpose of Rule 24(a) and are highly speculative. Further, the Defendants’ arguments lack case law precedent to support their contentions. Although the Defendants in ject new arguments regarding the significant impairment of Pa stor Rogers’ interest, this brief will address these contentions nonetheless.
Despite Defendants’ cont entions attempting to provide another means for Pastor Rodgers to protect his interest, the reality is that he lacks an alternative forum to mount a constitutional defense of the challenged federal and state statutes. Federal courts have stated that the re quired showing for the thi rd element of intervention as of right is that the interv enors need only show that an unfavorabl e disposition in the case “ may…impair or im pede [their] ability to protect [their] interest.’” Purnell v. City of A kron, 925 F.2d 941, 948 (6t h Cir. 1991) (quoting
1 Federal Defendants will hereinafter sometimes be referred to simply as Defendants, since the State Defendants have chosen not to participate in any of the intervention proceedings, including this appeal.
3

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FRCP 24(a)2 and adding em phasis). Further, other federal courts have considered this element as indistinguisha ble from the previous elemen t, stating that “the question of im pairment is not separate from the question of the existence of an interest.” Utah Ass’n of Counties v. Clinton, 255 F.3d 1246, 1253 (10th Cir. 2001) (quoting Natural Res. Def. Council v. United States Regulatory Comm’n, 578 F.2d 1341, 1345 (10th Cir. 1978)).
The Defendants correctly cite the pro position from the Advisory Committee Notes to Rule 24(a)(2), which states that “if an absentee would be substantiall y affected in a practical sense by the determination made in an action, he should, as a general rule, be entitled to intervene.” Ad visory Committee Note to Fed. R. Civ. P. 24 (1966 Amendment). (Fed. Br. at 30.) Conceding th at Rodgers has a protectable interest, the Defendants assert that possessing an interest alone is insufficient based on the Lockyer supposition that if an action “would affect the proposed intervenors’ interests, th eir interest m ight not be impaired if they have ‘other means’ to protect them. California ex rel Locky er v. United States , 450 F.3d 436, 441 (9th Cir. 2006). (Fed. Br. at 30.)
The federal Defendants grossly understate the impact of an adverse ruling by stating that such a ruling “m ight complicate” Pastor Rodgers’ interest. (Fed. Br. at 33.) However, bound by princ iples of stare decisis, once a court “has applied a rule of law to the litigants in one case it m ust do so with respect to all others not
4

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barred by procedural requirements or res judicata.” Melton v. Moore, 964 F.2d 880 (9th Cir. 1992) (quot ing James B. Beam Distilling Co., v. Georgia 501 U.S. 529, 539 (1991)). In fact, intervention as of right “may be required when considerations of stare decisis indicate that applicant’s interest will be practically im paired.” Greene v. U.S., 996 F.2d 973, 977 (9th Cir. 1993).
The Federal Defendants’ “other means” assertions fail to alleviate the reality that Pastor Rodgers lacks any alternative forum to protect his current interest. (Fed. Br. at 32-34.) His interest would be significantly im paired if Freedom From Religion Foundation (FFRF) were to win on the merits of the case, as now appears probable, at least as to its challenge to I.R.C. § 1072. Any “other means” proffered by the Defendants fail to address the unde rlying fact that Pastor Rodgers’ tax exempt status woul d not onl y potentially be significantly im paired, but could possibly be co mpletely eviscerated. While the standard is not “whet her the suit will necessarily impair [their interests],” City of Los Angeles , 288 F.3d at 401 (emphasis added), the current trajectory of the underlying case in the District Court unmistakably imperils and impairs the ministers’ rights “as a practical matter.” Id.
2On May 21, 2010, the District Court in the underlying case, issued an Order granting in part and denying in part Motions to Dismiss filed by the Federal and State Defendants. Judge Shubb denied the motions as to I.R.C. § 107, indicating his opinion that the challenged statute is likely unconstitutional. See Appellant’s Further Excerpts of Record, Page 1.
5

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Thus, any of the offered alternative fo rums fall far short of provi ding an other means by which Pastor Rodgers coul d protect his i nterest. For example, the mere possibility that Pastor Rodgers may move outside the jurisdiction and be able to sue is fanciful and is not supported by any precedent as a sufficient alternative forum. (Fed. Br. at 33.) Sim ilarly, the contention that Pastor Rodgers would be able to obtain prepaym ent review to prot ecting this interest is irrelevant to protecting his current tax interests in li ght of the pot ential success of FFRF on the merits. (Fed. Brief at 32.) Lastly, the ability to file a successful tim ely administrative claim for a refund disregards the potential damage that would result from a ruling on the merits of this case, which already appears imminent.
Further, both cases cited by the Def endants fail to adequately address the underlying issue tha t an adverse ruling l eaves Pastor Rodge rs no real practical other means to protect his interest. First, in United States v. Alisal Water Corp., 370 F.3d 915 (9t h Cir. 2004), th is Court held, in a case involving an interveningcreditor, that a su mmary claims process, used by a receiver, and reviewed by the district court provided su fficient “other means.” Alisal, 370 F.3d at 921. This Court reasoned that the procedural safeguards in the summary claims process fully protect the creditors’ rights because the cr editors are given the opportunity to fully present their clai ms to the receiver maki ng the creditor a quasi-party to the suit. Id.; Commodity Futures Trading Com’n v. Chilcott Portfolio Management, Inc. ,
6

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725 F.2d 584, 586 (10th Cir. 1984). If the clai m is rejected in whole or in part, then the claimant may apply to the court for adjudication of the claim. Id.
However, Pastor Rodgers does not have the same pr ocedural safeguards as afforded in Alisal. Pastor R odgers does not ha ve a separate summary claim s process providing adequate protection of his interest. Further, if the claim for intervention is denied, the case is adj udicated independently of Past or Rodgers without any further ability to defend his rights prior to a court’s ruling whic h establishes binding precedent. See Alisal, 370 F. 3d 915 (citing to Commodity Futures Trading Com’n v. Chilcott Portfolio Management, Inc., 725 F.2d 584, 586 (10th Cir. 1984). Therefore, Alisal is unhelpful to the Defendants.
Second, in U.S. v. City of Los Angeles , 288 F.3d 402 (9t h Cir. 2002), t he court denied intervention by a comm unity group in a suit against Los Angeles by the United States to prevent an unlawful police practice. The court reasoned that the community members’ interest was not significantly impaired because they had a right to sue based on unc onstitutional police practices re gardless of this suit and they could continue to work on police reform . City of Los Angeles, 288 F.3d 402. The present case is sim ply not analogous. The likely FFRF victory on t he merits effectively prevents Pastor Rodgers from protecting his rights. See Greene v. U.S., 996 F.2d 973, 977 (9th Cir. 1993); U.S. v. Orego n, 839 F.2d 635, 638 (9t h Cir. 1988). Further, unlike the community groups ’ ability to lobby for re form at the
7

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local level, Pastor Rodgers would be powerless to c hange IRS pol icies implemented as the result of a Federal Court injunction.
B. The Federal Defendants' previous interpretation of the challenged statutes adverse to minister's meets the Lockyer showing of inadequacy of representation and is inconsistent with the purposes of Rule 24(a)
In determining whether Rule 24(a) requirements are met, “courts are gui ded primarily by practical and equitable considerations. U.S. v. City of Los Angeles , 288 F.3d 391, 401 (9th Cir. 2002). Courts generally construe a liberal policy in favor of intervention because it provides for the “efficient resolution of issues and [broadens] access to courts.” Green v. U.S., 996 F.2d 973, 980 (9th Cir. 1993). By allowing putative intervenors with a practical interest to interv ene, courts “often prevent or sim plify future litigation i nvolving related issues; at the same time…[allowing] an additional interested party to express its views before the court.” Id. Intervention is one of the rare ar eas that harmonize the usual conflicts of efficiency and access to the courts. Id. at 979-80.
To hear Defendants tell it, the stars m ust be nearly perfectly aligned in order for a proposed defendant intervenor to join the government to defend its significantly protectable interests alongside the governm ent. This Court’s precedence reveal, however, that the inquiry is designed not to discourage all but the most stout-hearted but rather to ensure that the parties litigating a case are those who will be most affected by the outcome. In California ex rel Lockyer v. United
8

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States, this court permitted a group of health care providers t o defend the Weldon amendment, alongside the federal governme nt, even though the Department of Justice had deploye d its “form idable resources” to defend the challen ged statute. Id. at 444.
Lockyer acknowledged that a presum ption of adequate representation e xists where the governm ent is defending one of its own statutes. However, the Court permitted intervention in that case because of the divergence in interests between the health care providers and the fe deral government, including di ffering interpretations of the statute at issue. Id.
The federal Defendants in the case at b ar read Lockyer as a narrow portal through which only another case nearly identical to Lockyer may be granted intervention. Of course, the pr esent case is not identical to Lockyer, but it does bear a striking resem blance in at least three important re spects. First, the challenged statute was enacted for the benefit of the m inisters, just as the Weldon Amendment was enact ed for the benefit of the health care provi ders, who were granted intervention. Id at 440. Second, as noted by th e district court i n this case, the ministers lack a realistic alternative forum in which to litigate their concerns. E.R. at 6:12 to 8:6. Third, narrow constr uction of the statute by the governm ent as in Lockyer is more than a theoretical possibilit y in the case at bar—it has already happened. Lockyer at 444.
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Defendants earnestly seek to dodge t he third point, by insi sting that their

attempts to narrowly construe the challenged statutes, as evidenced by Warren v.

C.I.R., 302 F.3d 1012 (9th Cir. 2002), are

irrelevant since the statute has

subsequently been amended. But Defendants’ arguments miss the point. The focus

of this inquiry, as with the overarching pur pose of Rule 24, is to ensure that all

interests are adequately represented before the court. Plainl y the interests of t he

IRS and the Treasu ry Department are irre vocably at odds with the ministers’

interests. In short, t he ministers cannot accept that the same parties who doggedl y

pursued one of their fellow ministers in a high profile manner under the challenged

statutes have now switched sides and will represent their interests.

The Defendants’ argum ents rest heavily on hair-spli tting and highly

technical distinctions, yet Lockyer emphasized that application of Rule 24 turns on

more than technical distinctions, Lockyer at 440; i t also i nvokes common sense.

By any measure, the ministers for whos e benefit the challenged statutes were

created, having once been burned by the IRS should not now be forced to depend

on the same entity to represent their interests. California ex rel Lockyer v. United

States, 450 F.3d 436 (9t h Cir. 2006). See Sagebrush Rebellion, Inc. v. Watt 713

F.2d 525, 528-529 (9th Cir. 1983) (propose d defendant wildlife group allowed to

intervene where fed eral defendant had pr eviously represented plaintiffs, even

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though Department of Justice lawyers act ed “professionally and diligently” in pending case).
C. Adverse interests—not arguments—are the touchstone of intervention analysis.
The conflict of interest between th e goals of the Defendants and Pastor Rodgers inherently makes this case about adverse i nterests. The Defendants try to distort the issue by stating Pastor Rodge rs has not identi fied “any difference between the posit ion he w ould take and the actual pos ition taken by the United States in this case.” (Fed. Br. at 41.) However, the two pa rties have adverse interests in the outcome of the suit, de spite any sim ilar or different argum ents either party would make.
While the Defendants claim they will defe nd the statute with “vigor,” in an analogous case involving the Secretary of th e U.S. Department of the Interior, the court found that the Secret ary could not adequately repr esent both the interests of the intervenors. (Fed. Br. at 38.) Natural Res. Def. Council v. Kempthorne , 539 F.Supp.2d 1155, 1188 (E.D. Cal. 2008). The Secretary was incapable of defending both interests becau se the Secretary was “required to protect the interests of the [other defendants] and t he public” while at the same tim e “would be required t o protect the interests of [intervenors].” Id. This situation poses the very sam e concerns. It is both the duty and the function of the U.S. Department of the Treasury to guard the public moneys. As the Supreme Court noted, “The prim ary
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goal of the income tax collection system…i s the equitable collection of revenue;

the major responsibility of the Internal Revenue Service is to protect the public

fisc…” Tiber Power Tool Co. v. C.I.R. , 439 U.S. 522, 542 (1979). However,

Pastor Rodgers seeks to m inimize his ta x liability. Thus, there is an inherent

conflict of interest which poses a bona fi de threat to Rodger’s interest. As in

Sagebrush, the competence of the Department of Justice Attorneys is not the issue.

Sagebrush Rebellion, Inc. v. Watt 713 F.2d 525, 528 (9th Ci r. 1983). Pastor

Rodgers does not question th e Federal attorney’s dil igence and professionalism in

representing their client, the U.S. Govern ment. Rather, the problem lies in the

insurmountable conflict of int erest posed by those same attorneys’ a ttempts to

represent the ministers, that the ministers have no intention of waiving.

II. Permissive Intervention

A. Requiring independent grounds for jurisdiction of Proposed Defendants-Intervenors does not comport with this Court's prior Holdings.

This Federal Defendant states that this Court requires t hat the propose d

Defendant-Intervenor show independe nt grounds for juri sdiction. City of Los

Angeles, 228 F.3d at 403; (Fed Br. at 45). However, the requirem

ent for

“independent grounds for j urisdiction” is meant to enforce the p olicy that

intervention is “not intende d to allow the creation of whole new lawsu its by the

intervenors.” Donnelly v. Glickman , 159 F.3d 405, 412 (9th Cir. 1998). In fact,

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permissive intervention was affirmed by this Court without a showing of independent jurisdiction because the “interve nors [did] not ask the district to rule on additional claims.” Beckman Industries , Inc. v. International Ins. Co., 996 F.2d 470, 473 (9th Cir. 1992).
As such, Pastor Rodgers is not seeking adjudication on addit ional claims or to “create a who le new lawsuit;” rather, he is seeking to defend the constitutionality of the challenged federa l and state statutes. Contrary to the Defendants’ assertions, this Court does not limit the exception to t he independent jurisdictional grounds for the very “l imited purpose of obtaining access to documents…” (Fed. Br. at 49); Beckman, 996 F. 2d at 473. Rather, this Court granted intervention because th e “[intervenors di d] not ask the district to rule on additional claims or seek to b ecome parties to the action. Beckman, 966 F.2d at 473. Thus, such a narrow reading of the exception by the Defendants is not tenable. Rather, because Pastor Rodgers is not seeking to create an entirely new lawsuit but is seeking to uphold the constitutionality of the statutes, the Beckman exception should apply. Id.
1. This Court does not require Article III standing for proposed intervenors as of right.
For more than twenty years, this Court has chosen not to add full-fledged Article III standing analysis to Rule 24 requirements. Portland Audubon Soc. v. Hodel, 866 F.2d 302, 308 n. 1 (9th Cir.1989).
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FN1. The plaintiffs urge us to find that a party seeking to intervene must have standing, as the D.C. Circuit has held. See Cook v. Boorstin, 763 F.2d 1462, 1470-71 (D.C.Cir.1985). However, we in the past have resolved intervention questions without making reference to standing doctrine. See, e.g., Sagebrush Rebellion, Inc. v. Watt, 713 F.2d 525, 527-29 (9th Cir.1983). The Supreme Court recently declined to decide “whether a party seeking to intervene before a district court must satisfy not only the requirements of Rule 24(a)(2), but also the requirements of Art. III.” Diamond v. Charles, 476 U.S. 54, 68-69 & n. 21 (1986) (observing that “[t]he Courts of Appeals have reached varying conclusions as to whether a party seeking to intervene as of right must himself possess standing”). Without an en banc review, we must follow the Sagebrush Rebellion analysis and decline to incorporate an independent standing inquiry into our circuit's intervention test. However, the standing requirement is at least implicitly addressed by our requirement that the applicant must “assert[ ] an interest relating to the property or transaction which is the subject of the action.” County of Orange, 799 F.2d at 537 (quoting Stringfellow, 783 F.2d at 826).
This court has most recently reiterated this position in Prete v. Bradbury
438 F.3d 949, 956 n.8 (9th Cir 2006), and Perry v. Proposition 8 Official
Proponents 587 F.3d 947, 950 n.2 (9th Cir. 2009).
In light of this Court’s approach for intervention as of right, it seems
anomalous that a higher standard – independent grounds for jurisdiction – would
be required of proposed defendants seeking permissive intervention. Pastor
Rodgers submits that the differing requirements that have been applied to him
under Rule 24(b) are illogical and out-of-step with this Court’s foregoing
pronouncements under Rule 24(a).
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2. The rationale for requiring independent grounds for jurisdiction for plaintiff-intervenors simply does not extend to defendant-intervenors.
This Court has required independent grounds for jurisdiction for permissiveintervenors relying on decisions outside this circuit. See Venegas v. Skaggs , 867 F.2d 527, 529 (9th Ci r. 1989) (citing to Cook v. Pan Americ an World Airways, Inc., 636 F.Supp. 693, 698 (S.D.N.Y 1986)). In absence of a clear rationale for this requirement, the courts have assu med that the independent jurisdictional requirement encompasses both perm issive plaintiff and defendant-intervenors. Greene v. U.S., 996 F.2d 973, 979 (9t h Cir. 1993). Presumably, part of the rationale for preventing plai ntiff-intervenors without independent grounds for jurisdiction would rely on the well pleaded -complaint rule which establishes t he plaintiff is the m aster of his suit. Caterpillar v. Williams , 482 U.S. 386, 392 (1987). Furthermore, requiring independent grounds for jurisdiction prevents sham interventions that m ay result in wi ndfall for putative intervenors. Edmondson v. State of Neb. Ex. Rel. Meyer, 383 F.2d 123, 128 (8th Cir. 1967) (the court held that when improper motives appear in seeking intervention, the trial court should be wary to grant the request).
While these considerations are valid, th ey should not extend to interve nordefendants as in this case because Pastor Rodgers is m otivated to protect his interest in the ongoi ng suit rather than ga in a windfall or ot her improper motives.
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Further, requiring independent grounds of jurisdic tion for permissive intervention almost assuredly deter mines that Pastor Rodgers is either able to satisfy intervention as of right or perm issive intervention, but not both. For exam ple, if for the sake of argument Defendants’ asse rtions that Pastor Rodgers has “ot her means” are correct, then Pa stor Rodgers would not sa tisfy the requirements for intervention as of right but still could satisfy permissive intervention. Lockyer, 450 F.3d at 440; City of Los Angel es, 288 F. 3d at 403. On t he other hand, if Pastor Rodgers lacks an alternative forum , he also lacks independent grounds for jurisdiction because he would not othe rwise be able to bring a lawsuit . Thus, he would not satisfy perm issive intervention. City of Los Angeles , 288 F.3d at 403.
Therefore, within this line of re asoning, one might logically conclude that it is incongruous to all ow both intervention as of right and perm issive intervention. Yet district courts in this Circuit have granted bot h intervention as of right a nd permissive intervention. See Newdow v. Congress of the U.S. , F.Supp.2d 2006 47307 (E.D. Cal., January 06, 2006) (District c ourt granted both intervention as of right and perm issive intervention); Audobon v. Sutherland , 2007 WL 130324 (W.D. Wash., January 16, 2007).
In sum, a well-intentioned and otherw ise useful criterion for evaluating new claimants who seek to join lawsuits as plaintiff-intervenors does not carry the same weight in relation to defendant-intervenors. In the present case, where independent
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grounds of juri sdiction have been used to contravene the otherwise liberal construction and core aim s of Rule 24. The original purpose s behind t his prong should be reexamined, and Proposed Defendants-Intervenors should be excepted.
CONCLUSION In light of the District Court’s order and imminent ruling that strikes down I.R.C. § 107, the window is quickly closing for Pastor Rodgers to protect his significant interest in the underlying litigation. By contrast, the State and Federal Defendants will face little more than mild bureaucratic inconvenience while ultimately benefitting from a ruling that strikes down I.R.C. § 107. Hence there is an inherent conflict of interest between Pastor Rodgers and the Federal and State Defendants. Because of the conflicting interests, and for the reasons discussed in this brief, the order denying the motion for intervention should be reversed. Date: May 24, 2010.
By: _/s/_Matthew B. McReynolds__ Kevin T. Snider Matthew B. McReynolds Attorneys for Appellants
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CERTIFICATE OF TYPE SIZE AND STYLE This brief is composed in 14-point Times New Roman type.

CERTIFICATE OF COMPLIANCE

I certify that pursuant to Fed. R. App. P. 32 (a)(7)(C) and Ninth Circuit Rule

32-1, the attach ed opening brief is propor tionately spaced, h as a typeface of 14

points or more and contains no m ore than 14,000 words. According t o Microsoft

Word’s “Statistics,” this document contains 3,910 words.

May 24, 2010

_/s/_Matthew B. McReynolds__

Kevin T. Snider

Matthew B. McReynolds

Attorneys for Plaintiffs/Appellants

P.O

.Box 276600

Sacrament

o, CA 95827

Phone:

(916) 857-6900

Fax:

(916) 857-6902

E-m

ail: kevinsnider@pacificjustice.org

mattmcreynolds@pacificjustice.org

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CERTIFICATE OF SERVICE I hereby certify that on May 24, 2010, I electronically filed the foregoing with the Clerk of the Court for the United States Court of Appeals for the Ninth Circuit by using the appellate CM/ECF system. I certify that all participants in the case are registered CM/ECF users and that service will be accomplished by the appellate CM/ECF system. s/ John Hur
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