A ft erexami ni ng t he br i efs and appe l l at e r ecor d, t hi s panel has det erm i ned * unani m ous l yt o gr antt he part i es ’ r eques tfora dec i s i on on the br i efs w i thoutor al a rg u m e n t. See F ed . R . A p p . P . 3 4 (f); 10 th C ir . R . 3 4 . 1 (G ). T h e c ase is th ere fo re or der ed s ubm i t t ed w i t houtor al ar gum ent . T hi s or derand j udgm enti s notbi ndi ng pr ece dent , exce ptundert he doctr i nes of l aw of the ca s e, r es j udi cat a, and col l at er al es t oppel . T he courtgener al l ydi s favor s t he ci t at i on of or der s and j udgm ent s ; nevert hel es s , an or derand j udgm entm aybe ci t ed undert he t erm s and c o n d itio n s o f

1 0 th C ir . R . 3 6 .3 . 

## F I LED United States C ourt of Appeals Tenth Circuit 

### S e p t e m b e r28,2006 Elisab eth A. Shumaker C l erk of C ourt UNI TED S TATES CO URT O F AP PEALS F O R T H E T E N T H C IR C U IT BR I TTO N RA M SEY A N D G RA PY P. C . , form er l yknow as B r i t t on G r ay R a m s e ya n d M c C u tc h e o n P .C .,

P lain tiff-A p p e llan t, v. RO BE RT DE AN MCCU T CH E ON,

D efe ndant - A ppel l ee. N o. 05- 6021 ( D . C . N o . 0 4 - C V - 5 8 1 - M) (W .D . O k la .)

ORDE R AND J UDGM EN T * B efor e HA RTZ , AN DE RS ON , and TY M KOVI CH , C i rcui tJudg es.

B ritton R a m se ya n d G ra p yP .C . (th e F irm ) a p p e a ls f ro m th e d ism iss a l o f

its decl ar at or y -j udgm entact i on forl ack of s ubj ect - m at t erj ur i s di ct i on. O n de novo re v ie w , s ee Bearv. P at t on , 4 5 1 F . 3 d 6 3 9 , 6 4 1 ( 1 0 th Ci r . 2 0 0 6 ) , we a ffi r m.-2-

In its C o m p la in t th e F ir m a s s e rt e d fe d e ra l- q u e s tio n ju ri s d ic tio n , s ee 2 8 U . S . C . § 1 3 3 1 , o v er it s claim arisi n g fro m a d ispu te reg ard ing w h ethe r a paym entm ade t o defe ndantR obertD ean M cC ut cheon s houl d be cha r act er i zed a s or di naryi ncome orcapi t al gai n fort ax purpos es . T he C om pl ai ntal l eged: 7. M cC ut cheon be gan w or ki ng as an empl oy ee of the Fi rm dur i ng 2 0 0 1 , a n d wa s s u b s e q u e n t l yi s s u e d s t o c k i n th e F i r m. 8 . M c C u tch e o n re sig n e d . . . an d ter m in a ted h is e m p lo ym e n t w ith t he Fi r m , effect i ve D ece m ber31, 2003. 9. M cC ut cheon tr ans ferr ed hi s s t ock t o the Fi r m on N ovember7, 2003. 10. Pur s uantt o t he agr eement s i n pl ace betw een the s har ehol der s of t he Fi r m and M cC ut cheon a nd the norm al oper at i ng pr act i ce a nd p ro c e d u re s e sta b lish e d b yth e F irm , M c C u tch e o n w a s p a id o n a ll acc ount s r ece i vabl e forw hi ch he ha d bi l l i ngs . . . , an overr i de for pr oduct i on of bus i nes s r el at i ng t o bi l l i ngs byotheratt or ney s . . . , and th e p a r v a lu e o f

h is s to c k . . . . 1 1 . P u rsu a n t to th e F irm ’s p o licie s a n d p ro c e d u re s, th e p a ym e n t to M cC u tche o n w as treated as o rdin aryinco m e b ythe F irm , an d a W -2 form w as i s s ued w i t h appr opr i at e w i thhol di ngs fors t at e and feder al t axes , FI C A and medi car e. 1 2 . M cC u tche o n , thro u g h co u n sel, ad v ised the firm . . . that fa il u re to p ayh im the a m o u n t of all taxe s w ith h eld f

rom h is ord inary i ncome, bas ed on hi s as s er t i on thats uch paym ent s w er e capi t al gai ns and nots ubj ectt o t ax as or di naryi ncome butthe r educe d capi t al g a in s ta x , w o u ld re s u lt in M c C u tc h e o n filin g s u it. . . . The F i rm s eeks a det er m i nat i on of is s ues w hi ch conc er n a f eder altax ques t i on tha tthe F i rm prop erl

y w i thh eld taxes on McC utcheon ’s ordinary i ncom e, r atherthan tr eat i ng McC ut cheon’s i ncom e as a capi talgai n. A p lt. A p p e n d ix (A p p .) at 1 0 -1 1 (e m p h a sis a d d e d ). T h e F irm in c lu d e d a d d iti o n a l, nonfede r al al l egat i ons “s uppl ement al t o the pr i m aryt ax ques t i on. ” Id. at11.-3-

M r . M cC ut cheon moved t o di s m i s s forl ack of s ubj ect - m at t erj ur i s di ct i on, a rg u in g th a t th e c a se tu rn e d m e re lyo n c o n tra c t p rin c ip les u n d e r sta te la w a n d d id n o t im p lic a te fe d e ra l la w . See i d. at12- 24. T he Fi r m oppos ed the mot i on, r eaffi r m i ng t hati t s C om pl ai nt“s eeks a det erm i nat i on of the t axabi l i tyof M cC ut cheon’ s w ages , and the pr opr i etyof the Fi r m ’ s w i thhol di ngs fors t at e and fede r al t axes , FI C A and M edi car e, ” i d. at43, and ci t i ng author i tyr ecogni zi ng “fe der al ques t i on j ur i s di ct i on forcl ai m s conce rni ng w i thhol di ng of t axes and i nt erpr et at i on of the I nt ernal R evenue C ode, ” i d. at51. T he Fi r m al s o s ugges t ed th a t in a n ylaw su it b yM r. M c C u tch e o n o v e r th e w ith h o ld in g d isp u te it w o u ld have a defe ns e under26 U . S. C . § 3403, w hi ch gene r al l ypr ot ect s empl oy er s fr om lia b ility fo r p a ym e n ts m a d e to th e G o v e rn m e n t o u t o f w ith h o ld in g s . See i d. at44 n .3 , 5 0 -5 2 . T h e F irm d id n o t, ho w e v e r, ev e r a m e n d o r a ttem p t to a m e n d its C om pl ai ntt o i nvoke § 3403 and s eek a decl ar at i on thatthe s t atut e w oul d pr ovi de a d e fe n se to su c h a su it. R a th e r, th e C o m p lain t re m a in e d a n e ffo rt so lelyto s ecur e j udi ci al confi r m at i on of the Fi r m ’ s vi ew of the t ax i m pl i cat i ons of the p a ym e n t to M r. M c C u tc h e o n . N ot i ng an unaddr es s ed i m pl i cat i on of thi s r el i ef s oughtbythe Fi r m , the di s t r i ctcourtdi r ect ed the part i es t o br i ef w hetherthe fe der al t ax exc ept i on i n t he D ecl ar at or yJ udgm entA ct( D J A ) , 28 U . S. C . § 2201( a) , nul l i fi ed w hat fede r al - ques t i on j ur i s di ct i on, i f any , m i ghthave a r i s en fr om the t ax i s s ues r ai s ed b yth e c a s e . See A p p . at 1 0 0 . S e c tio n 2 2 0 1 (a ) e x c lu d e s (w ith c e rta in in a p p o site-4-

e x c e p tio n s ) a n ym a tte r “ w ith re s p e c t to F e d e ra l ta x e s ” f ro m th e s c o p e o f

th e D J A . W hi l e w or ded di ffe r ent l yand di r ect ed ata di s t i nctpr ocedur al r emedy , the excl us i on i s s ubs t ant i vel ycoext ens i ve w i th a pr ovi s i on i n the A nt i - I nj unct i on A ct ( A I A ) , 26 U . S. C . § 7421, barr i ng anyact i on “r es tr ai ni ng the as s es s m entor col l ect i on of anyt ax. ” W yo. Truc ki ng A s s ’ n, Inc. v. B ents en , 82 F. 3d 930, 933 ( 10t h C i r . 1996) ( fol l ow i ng B ob Jones Uni v. v. Si m on , 4 1 6 U .S . 7 2 5 , 7 3 3 n .7 ( 1974) , w hi ch cons t rued D J A as “r eaffi rm i ng the r es tr i ct i ons s etouti n the A n ti-Inju n c tio n A c t”) ; s ee als o In r e Lecki e Sm okeles s C oalC o. , 99 F. 3d 573, 583 (4 th C ir . 1 9 9 6 ). B o th p ro v is io n s a re fa ta l to th e c o u rt ’s ju ri s d ic tio n . See W yo. Truc ki ng A s s ’ n, Inc. , 82 F . 3d at93 2 (holdi ng cl ai m s “excl ud ed from [t he co urt ’s ] ju ri s d ic tio n b yth e te rm s o f b o th th e [ A IA ] a n d th e [ D J A ]” ). In re sp o n se to th e d istric t co u rt’s o rd e r, th e F irm re a ffirm e d th a t it s obj ect i ve i n t hi s act i on w as a det erm i nat i on thati thad “pr oper l yw i thhel d t axes on . . . [M r. ] M cC utcheon [’s ] . . . ordi naryi nco m e, rather than treat i ng [his ] in c o m e a s c a p ital g a in .” A p p . at 1 0 2 . (A lth o u g h th e F irm sta ted in p a ss in g th a t a su it b yM r. M c C u tch e o n o v e r th e w ith h e ld a m o u n t “w o u ld h a v e fo rc e d [ it] to vi ol at e 26 U . S. C . § 3403, w hi ch r equi r es empl oy er s t o w i thhol d w ages t o pay fede r al i ncome t axes , ” A pp. at103, i tdi d notm ent i on anydefe ns e t o s ui tunder § 3 4 0 3 , m u ch less see k to am en d it s p lead ing s to inc lud e a claim fo r de clarato ry re lie f to th a t e ffe c t, s ee i d. at102- 05. ) N ot i ng thatthe D J A / A I A t ax exc l us i on w a s in ten d e d to p re v e n t d isru p tio n o f th e tax -c o llec tio n p ro c e ss a n d n o t to lim it-5-

r evi ew of otherm at t er s s i m pl ybeca us e theycoul d have a bear i ng on a party ’ s t ax lia b ility, i d. at103- 05, t he Fi r m concl uded thati t s act i on s houl d notbe barr ed beca us e i t“does nots eek a nyr el i ef he r e thatw oul d i nt er fer e w i th the G overnm ent ’ s abi l i t yt o col l ectt ax r evenue . T he Fi r m does nots eek t o s t op the c o llec tio n o r a ss e ss m e n t o f a n yk in d o f

tax . In th e p re se n t ca se , the tax in ques t i on has al r eadybeen a s s es s ed and pa i d bythe Fi r m , ” i d. a t 1 0 5 . M r . M cC ut cheon a r gued thatthe t ax exc l us i on s houl d appl y , ci t i ng cas e l aw demonstr at i ng t hatdi s put es overthe pr opr i etyof a w i thhol di ng fr om w ages t r i ggert he exc l us i on even i n s ui t s betw een e m pl oy erand empl oy ee thatdo not p u rp o rt to e s to p d ir e c tly g o v e rn m e n t c o lle c tio n e ffo rt s . Id. a t 1 1 0 -1 1 ; s ee, e. g. , B r ightv. B echtelP etr ol eum , Inc. , 7 8 0 F .2 d 7 6 6 , 7 7 0 (9 th C ir. 1 9 8 6 ); E dgarv. Inl and St eelC o. , 7 4 4 F .2 d 1 2 7 6 , 1 2 7 7 n .1 (7 th C ir. 1 9 8 4 ); C handl erv. P er i ni P ow erC ons tr uct ors , Inc. , 5 2 0 F . S u p p . 1 1 5 2 , 1 1 5 5 (D . N .H . 1 9 8 1 ). M r . M cC ut cheon e m phas i zed “ t hatw hatthe [Fi r m ] i s as ki ng of thi s C our tbyw ay o f d e c l a r a t o r yj u d g me n two u l d b e a d e t e r mi n a t i o n o f h o w t h e mo n e yp a i d t o [ h i m] s houl d be tr eat ed fort ax purpos es . ” Id. a t 1 1 2 . T he di s t r i ctcour thel d t hatthe D J A t ax exc l us i on appl i ed and de pr i ved i tof ju risd ictio n . T h e c o u rt c ited th e e x c lu sio n ’s r e a c h o v e r m a tters “ th a t co u ld pot ent i al l yi m pede the G overnm ent ’ s expedi t i ous as s es s m entand col l ect i on of fede r al t axes , ” i d. a t 1 1 7 , an d c o n c lu d e d th a t a d e ter m in a tio n in M r. M cC u tche o n ’s fa v o r i n this case co u ld interfe re w ith the G o v ern m en t’ sT h e c o u rt in v o k e d th e p ri n c ip le o f re s ju d ic a ta , s ee A pp. at119, butt he 1 G overnm enti s nota part yt o t hi s act i on. T he courtal s o i nvoked the pr i nci pl e of s ta re d e c is is , h o w e v e r, s ee i d. , and i n thatr egar d w e not e thatnotonl yt he di s t r i ct cour t s butt he Tax C our tas w el l m us tfol l ow t he pr ece dentof the ci r cui ti n w hi ch th e ys it. See Gols e n v . C. I. R. , 5 4 T .C . 7 4 2 , 7 5 6 -5 7 (1 9 7 0 ), a ff’d , 445 F. 2d 985, 9 8 8 (1 0 th C ir. 1 9 7 1 ); see also C . I. R . v. P or t land C em entC o. , 450 U . S. 156, 164 & n .1 4 (1 9 8 1 ); Es ta t e o f Tr u e v . C. I. R. , 3 9 0 F . 3 d 1 2 1 0 , 1 2 2 5 -26 & n . 1 2 (10 th C ir . 20 04 ). T hu s, a m eri t s det erm i nati on favo rabl e t o M r. M cC utcheon i n thi s case coul d, i f affi r m ed on appe al , have i m peded the G overnm ent ’ s effor t s t o r et ai n t he c o llec ted a m o u n t in th e e v e n t o f su b se q u e n t tax re f

u n d o r d e ficie n c ylit ig a tio n in th e d istric t co u rt o r th e T a x C o u rt. -6- c o lle c tio n o f

in c o m e ta x e s o n th e d is p u te d p a ym e n t, i d. a t1 1 8 . M o r e s p e c i fi c a l l y, th e c o u rt c o n c lu d e d th a t alth o u g h th e a m o u n t in q u e stio n h a d a lre a d yb e e n p a id to the G o v ern m en t, a ru li n g fo r M r. M cC u tche o n co u ld resu ltin the G o v ern m en t’ s for fei tur e of t he t ax col l ect ed. Id. a t 1 1 8 -2 0 . T h e c o u rt th e re fo re h e ld th a t it 1 l acked j uri sdi ct i on ov er the F i rm ’s fede ral cl ai m and decli ned t o ex erci se s u p p le m e n ta l ju ri s d ic tio n o v e r t h e re s t o f th e c a s e . Id. a t 1 2 0 . O n ap p ea l th e F irm h as re ca st i ts po sit ion o n the ju ri sd ict ion al i ssu e. It now admi t s “thatt o t he ext enti ts oughtr el i ef r el at ed t o the ac tual det erm i nat i on o f th e tax a b ili ty[ o f

th e d isp u ted p a ym e n t to M r. M c C u tch e o n ], th e C o u rt is w i t houtj ur i s di ct i on. ” A pl t . R epl yB r . at3. W e ac ceptt hi s conce s s i on, w i thout r e s o l v i n g t h e i s s u e o u r s e l v e s . Al th o u g h we c a n n o ta c c e p ta c o n c e s s i o n t h a twe have j ur i s di ct i on, beca us e the part i es cannotgr anta courtj ur i s di ct i on thati tdoes n o t h a v e , s ee Ni codem us v. Uni on P ac. C or p. , 4 4 0 F . 3 d 1 2 2 7 , 1 2 3 1 n . 1 (10 th C ir . 2006) , t her e i s no s i m i l arbart o ouracc ept i ng a conc es s i on thatw e l ack-7-

j ur i s di ct i on. Such a conc es s i on amount s t o nothi ng m or e than aba ndonm entof a c la im ; w e n e e d n o t c o n c e rn o u rs e lv e s w ith th e m o tiv e fo r t h e a b a n d o n m e n t. T h e F irm d o e s n o t, ho w e v e r, ab a n d o n its a p p e a l. In ste a d , itin sis ts th a t “to t he ext ent[i t ] s oughtr el i ef t o pr ohi bi t[M r . M cC ut cheon] fr om pur s ui ng the threa tene d ac ti o n ag ains t [i t] fo r m ak ing tax w ith h o lding s, the D istri ct C o u rt cl ear l yhad j ur i s di ct i on. ” Id. T h e F irm re fe rs h e re to § 3 4 0 3 a n d th e d e fe n se it p ro v id e s fo r e m p lo y e rs s u e d fo r w ro n g f u l w ith h o ld in g o f

ta x e s . See i d. at2- 4. T he pr obl em w i t h t hi s t ack i s t hatthe Fi r m di d nots eek s uch r el i ef i n thi s cas e. T he s cope of

a D J A cas e i s l i m i t ed t o the i s s ues pr es ent ed bythe cl ai m s for d e c la ra to ry re lie f

in th e p le a d in g s . St . P aulF i r e & Mar i ne Ins . C o. v. Law s on B r os . Ir on Works , 4 2 8 F .2 d 9 2 9 , 9 3 0 -3 1 (1 0 th C ir . 1 9 7 0 ). A s w e n o te d a b o v e , a cl ai m as s ert i ng a § 3403 defe ns e w oul d be s ubs t ant i vel ydi s t i nctfr om the decl ar at i on t he Fi r m has s oughtthr oughoutthi s cas e t o confi r m i t s det erm i nat i on of the t ax s t atus of the paym entt o M r . M cC ut cheon. I ndeed, the s ucce s s ful as s er t i on of a § 3403 defe ns e w oul d el i m i nat e the Fi r m ’ s i nt er es ti n obt ai ni ng s u c h a d e c la ra tio n . In sh o rt, th e F irm h a s a b a n d o n e d th e fe d e ra l cla im it ac tu a llya ss e rte d in di s t r i ctcourtand att empt s t o r es cue i t s cas e byar gui ng the mer i t s of a c l ai m not p le a d e d b e lo w . B e c a u s e “ w e re v ie w th e c a s e a s it s to o d b e fo re th e d is tr ic t c o u rt ,” G rubb s v. B ailes, 445 F. 3d 1275, 1279 ( 10th C i r . 2006) , the Fi r m ’ s cour s e of act i on l eaves u s w i t h a p urel yacade m i c qu est i on un m oo red from the case-8-

p ro p e rlyu n d e r re v iew . “It is a n e lem e n tar ym a x im o f o u r le g a l sy ste m th a t a cour tdeci des onl yt he ca s e befor e i t , and ca n notr enderadvi s or yopi ni ons di s pos i ng of otheri s s ues notpr es ent ed fordeci s i on. ” In r e C hi cago, R ock I s land & Pac. R . C o. , 772 F. 2d 299, 303 ( 7th C i r . 1985) . W e dec l i ne t o offe ran a d v i s o r yo p i n i o n a s t o wh e t h e rt h e F i r m could have br oughtan ac t i on s eeki ng a d e c lar a tio n u n d e r § 3 4 0 3 th a t M r. M c C u tch e o n m a yn o t su e to re c o v e r f u n d s it w ith h e ld a n d p a id o v e r ( c o rr e c tly o r n o t) to th e G o v e rn m e n t. Fi nal l y , t he Fi r m cont ends thatthe di s tr i ctcourts houl d noti n anyevent have di s m i s s ed the ac t i on butr atherm er el ys t ay ed i t , underthe doctr i ne of p rim a ryju risd ictio n , u n til th e tax iss u e s ra ise d w e re re so lv e d in a n a p p ro p ria te forum . T hi s cont ent i on r es t s on a mi s under s t andi ng of the l aw . T he doctr i ne of pr i m aryj ur i s di ct i on appl i es t o cl ai m s “pr oper l ycogni zabl e i n court , ” perm i t t i ng ad m inistrati v e re fe rral of issue s w ith in sp ec ial ag en cyex p erti se w h il e the co u rt re ta in s ju ri s d ic tio n (o r d is m is s e s th e c a s e w ith o u t p reju d ic e ). R ei t erv. C ooper , 507 U . S. 258, 268 ( 1993) . T hus , the doctr i ne “pr es uppos es thatthe court. . . has j ur i s di ct i on overt he ca s e. ” B alt i m ore & O hio C hicago Term i na lR . R . C o. v. Wis. C ent . Ltd. , 1 5 4 F .3 d 4 0 4 , 4 1 1 (7 th C ir. 1 9 9 8 ); s ee Sunf l ow erE l ec. C o- op v. Kan. P ow er& Light , 6 0 3 F .2 d 7 9 1 , 7 9 5 (1 0 th C ir. 1 9 7 9 ) (e x p lain in g th a t d o c trin e is i m pl i cat ed “[ w ] hen a feder al courti s pr es ent ed w i th a ca s e w i thi n i t s j ur i s di ct i on b u t w h ich in v o lv e s a n iss u e w ith in th e c o m p e ten c e o f a n a d m in istra tiv e b o d yin an i ndepende ntpr ocee di ng[, and] comi tyand avoi dance of conf l i ctas w el l as-9-

p e rh a p s o th e r c o n sid e ra tio n s s u g g e st p ro p rie tyin re fe rrin g th e iss u e ” ). In sh o rt, ju ri s d ic tio n a l d e fic ie n c ie s p re c lu d e u s e o f th e d o c tr in e ; th e ya re n o t c u re d b yit. T h e j u d g me n to f

t h e d i s t r i c tc o u r ti s AF F I RMED . E n tered fo r th e C o u rt H a rris L H a rtz C i r cui tJ udge