N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
LUKE ADAM ; C HANDR A M AR IE ADAM , Plaintiffs - Appe lla nts,
v. UNITED STATES OF AM ER IC A; INTER NAL REVENUE SER

VIC E, De fe nda

nts - Appe lle e s. No. 12-55201 D.C . No. 8:05-c v-00987-ODW
R NB
M EM O R ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the C e ntra l Distric t of C a lifornia Otis D. W

right, Distric t Judge , Pre s iding Argue d a nd Subm itte d April 12, 2013 Pa sa de n a , C a l ifornia B e fore : M ILAN D. SM ITH, JR . a nd M AR Y H. M UR GUIA, C irc uit Judge s, a nd JAC K ZOUHAR

Y, Distric t Judge
. ** 

# FIL ED
JUL 02 2013 M OLLY C. DW Y ER, CLERK U
. S
. CO URT O F APPEALS

* This disposition is not a ppropria te for public a t ion a

nd is not pre c e de nt e xc e pt a s provide d

by 9th C ir. R . 36-3.

** The Honora

ble Ja c k Zouha

ry , Unite d State s Distric t Judge for the Northe rn Distric t of Ohio, sitting by de signa t ion.Pla intiffs–Appe l la nts Luke and C h andra

M arie Ada

m (the Ada m s) hold le ga l titleto a

pie c e of re a l prope rty

in Yorba Linda , C a lifornia

(the Prope rty ), upon whic h the Inte rna l R e ve nue Se rvic e (IR S) pla c e d lie ns to sa tisfy the tax obliga tions of theAda

m s ’ pa re nts, Dino a

nd Trina Ada m (the taxpa

y e rs). The IR S
e xe c ute d the lie ns unde r the the ory tha t the Ada m s own the Prope rty

a s the
nom ine e s of the taxpa

y e rs. The Ada m s brought suit unde

r 28 U.S.C . § 2410 to quiet titlein the Prope rty . The distric t c ourt c onc lude d tha t the Ada m s hold le ga l titleto the Prope rty a s nom i n e e s of the taxpa y e rs unde r C a lifornia

la w, a nd dismi sse d the Adam s’ c om

pla int for la c k of sta

nding. On a

ppe a l, the Ada

m s a rgue tha t the distric t c o urt e rre d in c onc luding tha t the y hold title to the Prope rty

a s nom ine e s of the t a xpa y e rs, a nd in furthe r holding tha

t the y la c k sta n ding to c h a l le nge the proc e d ura l va lidity

of the tax a sse ssm e n t giving rise to the lie ns on the Prope rty . B e c a use the pa rtie s a re fam i lia r with the fa c t

ua l a nd proc e dura l history

of this c a se , we re pe a t only those fa c ts ne c e s sa

ry to re solve the issue s ra i se d on a ppe a l. The distric t c ourt a c c urate ly c o nc lude d tha

t the Ada m s hold title

to the Prope rty a s nom i n e e s of the taxpa y e rs unde r C a lifornia

la w. As we re c e ntly

he ld in a publishe d opinion: “ C a l ifornia la w re c ogniz e s a

nom ine e the ory

of prope rty
owne rship,” and “ if the C a lifornia Supre m e C ourt ha d oc c a sion to e v a luate the 2fa c t ors re le va nt to de te rm i ning nomine e owne rship unde r C a lifornia la w, it would
a dopt theuniform

se t of fa c tors ge ne ra l ly re c ogniz e d by fe de ra l c ourts.” Fourth Inv e stme nt LP v
. Unite d State s , No. 11-56997, slip op. a t 20–21 (9th C ir. 2013). The distric t c ourt prope rly e va l uate d e a c h of the re le va nt fa c tors a

nd re a sona

bly de te rm i ne d tha

t the substa

ntia l we ight of the e vide nc e supports a finding tha

t the Adam s hold le ga l titleto the Prope rty a s the taxpa

y e rs’ nom ine e s. For insta nc e , the d istric t c o urt prope rly note d tha t m ultiplegrant de e ds a

tte st tha t the Ada m s pa id no c onside ra tion for thePrope rty , a nd tha t the taxpa

y e rs c ontinue to live the re .
The distric t c ourt e rre d, howe ve r, whe re it found tha t the Adam s do not ha

ve sta nding to c ha lle nge the proc e dura l va lidity of the IR S lie ns sole ly be c a use the y hold title a s nom ine e s. In orde r to de m onstra te Artic le III sta

nding, thepa

rty invoking the

fe de ra l c ourt’ s jurisdic tion m u st de m onstra

te an injury -in-fa c t tha

t is tra c e a ble to the c ha l le nge d c onduc t, a nd tha t is within the

c ourt’ s powe r to re dre ss. C lappe r v . Amne

sty Int’l USA , 133 S. C t. 1138, 1147 (2013). The re c ord shows that the Ada m s ha ve borrowe d a ga inst thePrope rty , a nd done so in the ir own
nam e s. In light of this borrowing, we a gre e with theAda

m s tha t, at a m inim um , the IR S lie ns a

re like ly to da m a ge the ir c re dit ra

tings— an injury -in-fa c t. Se e , e .g. , Lambe rt v . Hartman , 517 F.3d 433, 437 (6th C ir. 2008) (finding da m a ge to one ’ s
3“ fina

nc i a l se c urity

and c re dit ra

ting” a suffic ie nt injury

to c onfe r Artic le III sta nding). W e furthe r a gre e tha t a ny suc h injury

would be tra c e a

b le to the IR S a s the p arty who a sse rte d the lie n s , a nd tha t we re the distric t c ourt to find some proc e d ura l fla w in the im

position of the

lie ns, the Ada

m s’ injury

c o uld be
re dre sse d if the lie ns we re disc ha

rge d via § 2410. Thus, the

Ada m s m e e t the sta nding re quire m e n ts of Artic le III. W e are a l so c onvinc e d tha t the Ada m s ha ve prude n tia l sta

nding to sue

to re m ove a

c loud from

the ir own c re dit historie s. C onse que ntly , we re ve rse the distric t c ourt’ s orde r of dism issa l a nd re m and for
c onside ra tion of them e rits. Ea c h pa rty should bere sponsible for its own c osts on a ppe a l. AFFIRM E D IN PART , RE V E RSE D IN PART , and RE M ANDE D.

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