United States Court of Appeals 

for the Fifth Circuit 

No. 20-30422 

Walter G. Goodrich, in his capacity as the Independent 

Executor on behalf of Henry Goodrich Succession; Walter 

G. Goodrich; Henry Goodrich, Jr.; Laura Goodrich 

Watts, 

Plaintiffs—Appellants, 

versus

United States of America, 

Defendant—Appellee. 

Appeal from the United States District Court 

for the Western District of Louisiana 

USDC No. 5:17-CV-610 

Before Higginbotham, Stewart, and Wilson, Circuit Judges.

Carl E. Stewart, Circuit Judge:

Plaintiffs-Appellants Walter G. “Gil” Goodrich (individually and in 

his capacity as the executor of his father—Henry Goodrich, Sr.’s—

succession), Henry Goodrich, Jr., and Laura Goodrich Watts brought suit 

against Defendant-Appellee United States of America. Henry Jr. and Laura 

are also Henry Sr.’s children. Plaintiffs claimed that, in an effort to discharge 

Henry Sr.’s tax liability, the Internal Revenue Service (“IRS”) has 

United States Court of Appeals 

Fifth Circuit 

FILED 

July 6, 2021 

Lyle W. Cayce 

Clerk 

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No. 20-30422 

2 

wrongfully levied their property, which they had inherited from their 

deceased mother, Tonia Goodrich, subject to Henry Sr.’s usufruct. Among 

other holdings not relevant to the disposition of this appeal, the magistrate 

judge1 determined that Plaintiffs were not the owners of money seized by the 

IRS and that represented the value of certain liquidated securities. This 

appeal followed. 

Whether Plaintiffs are in fact owners of the disputed funds is an issue 

governed by Louisiana law. For the reasons that follow, we conclude that the 

Louisiana Supreme Court should have the chance to resolve this issue in the 

first instance. 

I. FACTS & PROCEDURAL HISTORY

Henry Sr. and Tonia, Louisiana residents, owned community 

property during their marriage, including personal property, oil-and-gas 

rights, and shares of stock and stock options in Goodrich Petroleum 

Corporation (the “Goodrich securities”). Tonia died in 2006. Her 

succession, which was completed in 2015, left her interest in some of the 

community property, including the Goodrich securities, to her children 

subject to Henry Sr.’s usufruct. During his life, Henry Sr. sold $857,914 

worth of the Goodrich securities. One half of that amount—$428,957—

belonged to Henry Sr. given his community interest in the property, while 

the other half was attributable to Plaintiffs’ naked ownership subject to 

Henry Sr.’s usufruct. At issue on appeal is Plaintiffs’ claim to their share of 

those proceeds. 

Henry Sr. died in March 2014 having failed to pay $38,029 in assessed 

income tax for that year, in addition to $312,078 for 2013 and $214,806 for 

1

 Pursuant to 28 U.S.C. § 636 and Federal Rule of Civil Procedure 73, the 

magistrate judge presided over this case by consent of the parties. 

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3 

2012. A month after Henry Sr. passed away, his executor, Gil, opened a 

succession checking account.2 Notwithstanding the money placed in the 

savings account, “[a]ll estate funds and expenses have passed through [the 

checking] account.” In April 2017, the IRS placed a levy on the checking 

account in order to collect Henry Sr.’s unpaid taxes. In May 2017, the bank 

remitted all of the remaining funds within the checking account—

$239,927—to the IRS. The IRS applied that amount to Henry Sr.’s 2012 tax 

liability, which also included penalties and interest and totaled $238,922 as 

of the date Henry Sr. passed away. There remains a combined outstanding 

balance of $471,818 on Henry Sr.’s 2013 and 2014 tax liability.

The same month that the bank remitted the $239,927 payment to the 

IRS, Plaintiffs filed this lawsuit claiming under I.R.C. § 7426(a)(1)3 that the 

agency had wrongfully levied those funds. Relevant to this appeal, the 

operative complaint alleged that the IRS had taken money that in actuality 

belonged to Plaintiffs as owners of nearly half-a-million dollars’ worth of 

liquidated Goodrich securities. The parties filed cross-motions for summary 

judgment. As part of their motion, Plaintiffs attached a final accounting of 

Henry Sr.’s succession, which indicated that all of the cash remaining in the 

succession was needed to satisfy Plaintiffs’ property claims against it. 

Without considering whether he had subject-matter jurisdiction to 

entertain Plaintiffs’ claim, the magistrate judge partly granted and denied the 

Government’s and Plaintiffs’ motions and issued a final judgment. More 

2

 He also opened a succession savings account, but that account is not relevant to 

the disposition of this appeal. 

3

 This provision states: “If a levy has been made on property . . ., any person (other 

than the person against whom is assessed the tax out of which such levy arose) who claims 

an interest in or lien on such property and that such property was wrongfully levied upon 

may bring a civil action against the United States in a district court of the United States.” 

§ 7426(a)(1). 

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specifically, the magistrate judge ordered the IRS to return $86,774, which 

represented Plaintiffs’ share of proceeds from the sale of personal property 

and oil-and-gas revenues that had been deposited into the succession 

checking account. The magistrate judge, however, held that Plaintiffs were 

not entitled to any funds attributable to their portion of the liquidated 

Goodrich securities. Relying on a Louisiana appellate court decision and the 

Louisiana Civil Law Treatise, he reasoned that the IRS’s claim to that money 

took priority over that of Plaintiffs since they were “unsecured creditors” of 

Henry Sr.’s succession. 

Plaintiffs timely appealed, contending that they are owed the 

remaining amount levied from the succession checking account, i.e., 

$153,153, since it reflects (at least some of) their share of the liquidated 

Goodrich securities.

II. STANDARD OF REVIEW

“Jurisdiction cannot be waived, and it is the duty of a federal court 

first to decide, sua sponte if necessary, whether it has jurisdiction before the 

merits of the case can be addressed.” Filer v. Donley, 690 F.3d 643, 646 (5th 

Cir. 2012). “When courts lack subject matter jurisdiction over a case, they 

lack the power to adjudicate the case” and must dismiss it. Nat’l Football 

League Players Ass’n v. Nat’l Football League, 874 F.3d 222, 225 (5th Cir. 

2017). “Questions of subject-matter jurisdiction are reviewed de novo.” 

Zimmerman v. City of Austin, 969 F.3d 564, 567 (5th Cir. 2020). 

III. DISCUSSION

A. Overview of § 7426(a)(1) 

When an individual neglects or refuses to pay his or her taxes, a lien 

arises on “all property and rights to property” belonging to that person once 

the IRS assesses the tax liability. I.R.C. §§ 6321–22. The IRS may then 

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5 

collect the unpaid taxes through placing an administrative levy on the 

property. I.R.C. § 6331(a). Congress, however, has afforded third parties 

such as Plaintiffs the right to challenge the IRS’s levy when they have an 

“interest” in the property. See § 7426(a)(1). In a suit for wrongful levy, the 

plaintiff cannot challenge the tax assessment itself, but rather the IRS’s 

ability to collect the tax. Myers v. United States, 647 F.2d 591, 603 (5th Cir. 

Unit A 1981). “[T]o establish a wrongful levy claim a plaintiff must show (1) 

that the IRS filed a levy with respect to a taxpayer’s liability against property 

held by the non-taxpayer plaintiff, (2) the plaintiff had an interest in that 

property superior to that of the IRS and (3) the levy was wrongful.” Oxford 

Cap. Corp. v. United States, 211 F.3d 280, 283 (5th Cir. 2000). The last 

element requires the plaintiff to demonstrate “some interest in the property 

to establish standing.” Id. 

The Fifth Circuit has yet to clarify whether the standing requirement 

is jurisdictional or what satisfies this standard. As to the former, the parties’ 

appellate briefing does not provide the court any guidance, having assumed 

(like the magistrate judge) that the standing requirement is a merits issue.4

The question here is whether Plaintiffs have an interest in the levied funds 

sufficient for a court to conclude that their claim falls within the scope of 

§ 7426(a)(1). See § 7426(a)(1). Since that inquiry requires interpretation of a 

statute, it would seem to go to the merits of Plaintiffs’ claim. But § 7426(a)(1) 

operates as a waiver of the United States’s sovereign immunity from suit, 

Oxford, 211 F.3d at 283, and “[s]overeign immunity is jurisdictional,” Cozzo 

v. Tangipahoa Par. Council--President Gov’t, 279 F.3d 273, 280 (5th Cir. 

2002). Thus, if Plaintiffs lack standing for their wrongful levy claim, then 

sovereign immunity applies, see McGinness v. U.S., I.R.S., 90 F.3d 143, 145 

4

 The Government did argue in its summary judgment briefing that the standing 

requirement is jurisdictional. 

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6 

(6th Cir. 1996) (noting that standing is a “prerequisite[] for establishing a § 

7426 waiver of sovereign immunity”); Arford v. United States, 934 F.2d 229, 

232 (9th Cir. 1991) (same), and the magistrate judge lacked subject-matter 

jurisdiction over the claim, see Bodin v. Vagshenian, 462 F.3d 481, 484 (5th 

Cir. 2006) (holding that federal courts are “deprive[d]” of subject-matter 

jurisdiction when there is no waiver of sovereign immunity).5

With respect to what qualifies as an “interest” in property for the 

purposes of § 7426(a)(1), other circuits have held that “the right of a third 

party to challenge a wrongful levy is confined to persons who have a fee 

simple or equivalent interest, a possessory interest, or a security interest in 

the property levied upon.” Austin & Laurato, P.A. v. United States, 539 F. 

App’x 957, 960 (11th Cir. 2013) (per curiam) (quoting Frierdich v. United 

States, 985 F.2d 379, 383 (7th Cir. 1993) and citing additional cases from other 

circuits); Allied/Royal Parking L.P. v. United States, 166 F.3d 1000, 1005 (9th 

Cir. 1999) (same). The Frierdich court explained that its standard is grounded 

in a contextual reading of § 7426(a)(1); for, “[w]hen [the terms] interest and 

lien are conjoined, the inference arises that the legislature was referring to 

ownership or its near equivalents[.]” 985 F.2d at 381. It added that unsecured 

creditors cannot sue for wrongful levy. Id. at 383. “To hold otherwise,” as 

another decision upon which Frierdich relied observed, “would invite 

litigation from numerous parties only remotely aggrieved by IRS levies, with 

consequent disruptive effects on federal tax enforcement.” Valley Fin., Inc. 

5

 The operative complaint averred jurisdiction under both § 7426 and 28 U.S.C. 

§ 1346(e). Section 1346(e) provides district courts with original jurisdiction over specific 

civil actions against the United States, such as those for wrongful levy. It does not 

independently permit a plaintiff to sue the government when the United States has not 

otherwise waived its sovereign immunity. 

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v. United States, 629 F.2d 162, 168 (D.C. Cir. 1980); see Frierdich, 985 F.2d at 

381–83. We adopt Frierdich’s definition of “interest” as used in § 7426(a)(1). 

B. Intersection of Federal Tax Law with Louisiana Law 

The dispositive question here is whether Plaintiffs have demonstrated 

the requisite interest in the disputed funds. Indeed, Plaintiffs acknowledge 

that, the Government prevails if they are creditors rather than owners of the 

money. “[I]n the application of a federal revenue act,” including the Internal 

Revenue Code, “state law controls in determining the nature of the legal 

interest which the taxpayer had in the property sought to be reached by the 

statute.” Aquilino v. United States, 363 U.S. 509, 513 (1960) (citation and 

footnote omitted). Hence, to answer the question posed above, we must 

apply relevant state law, which in this case is the law of Louisiana. 

“To determine Louisiana law, we look to the final decisions of the 

Louisiana Supreme Court.” Chevron Oronite Co., L.L.C. v. Jacobs Field Servs. 

N. Am., Inc., 951 F.3d 219, 225 (5th Cir. 2020) (citation omitted). However, 

as Plaintiffs observe, “No Louisiana court[,]” let alone that state’s highest 

court, “has decided the precise issue of whether the naked owner of [money] 

occupies the status of owner or creditor.” Given this, we could make a guess 

as to how the Louisiana Supreme Court would address the issue per Erie R.R. 

Co. v. Tompkins, 304 U.S. 64, (1938). But we can avoid making such a guess 

by invoking Rule XII, § 1 of Louisiana’s high court, which states: 

When it appears to . . . any circuit court of appeal of the United 

States, that there are involved in any proceedings before it 

questions or propositions of law of this state which are 

determinative of said cause independently of any other 

questions involved in said case and that there are no clear 

controlling precedents in the decisions of the supreme court of 

this state, such federal court before rendering a decision may 

certify such questions or propositions of law of this state to the 

Supreme Court of Louisiana for rendition of a judgment or 

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opinion concerning such questions or propositions of Louisiana 

law. 

La. Sup. Ct. R. XII, § 1; accord La. Stat. Ann. § 13:72.1.A. While 

neither Plaintiffs nor the Government have “moved this court to certify [a] 

question to the Louisiana Supreme Court, . . . the Rule further provides that 

certification ‘may be invoked by . . . any circuit court of appeal of the United 

States upon its own motion[.]’” See Coleman v. OFS, Inc., 554 F. App’x 251, 

255 (5th Cir. 2013) (per curiam) (quoting La. Sup. Ct. R. XII, § 2). 

We consider several factors to assist us in deciding whether to certify 

a question since “[w]e are acutely aware that certification is not a panacea for 

resolution of those complex or difficult state law questions which have not 

been answered by the highest court of the state.” In re Katrina Canal Breaches 

Litig., 613 F.3d 504, 509 (5th Cir. 2010) (citation and internal quotation 

marks omitted). Those factors are: 

(1) the closeness of the question and the existence of sufficient 

sources of state law; (2) the degree to which considerations of 

comity are relevant in light of the particular issue and case to 

be decided; and (3) practical limitations of the certification 

process: significant delay and possible inability to frame the 

issue so as to produce a helpful response on the part of the state 

court. 

McMillan v. Amazon.com, Inc., 983 F.3d 194, 202 (5th Cir. 2020) (citation 

omitted). We conclude that each factor weighs in favor of certification here. 

Regarding the first factor, “[i]t is axiomatic that in Louisiana, courts 

must begin every legal analysis by examining primary sources of law: the 

State’s Constitution, codes, and statutes.” Shaw Constructors v. ICF Kaiser 

Eng’rs, Inc., 395 F.3d 533, 546 (5th Cir. 2004) (citations omitted). Relevant 

here is the Louisiana Civil Code, though it does not overtly answer the 

question posed by this case. The parties agree that Henry Sr. held a usufruct 

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of consumables over the money at issue. According to the Code, “[i]f the 

things subject to the usufruct are consumables, the usufructuary becomes 

owner of them. He may consume, alienate, or encumber them as he sees fit. 

At the termination of the usufruct he is bound to pay to the naked owner 

either the value that the things had at the commencement of the usufruct or 

deliver to him things of the same quantity and quality.” La. Civ. Code 

Ann. art. 538. Likewise, Article 629 states, “At the termination of a usufruct 

of consumables, the usufructuary is bound to deliver to the owner things of 

the same quantity and quality or the value they had at the commencement of 

the usufruct.” La. Civ. Code Ann. art. 629. Notably, the Code does not 

clarify the naked owner’s relationship to consumables at the conclusion of a 

usufruct. 

Nevertheless, several courts have attempted to discern the nature of 

that relationship. In Succession of Catching, upon which the magistrate judge 

relied in determining that the IRS need not return to Plaintiffs the funds at 

issue, an individual became the naked owner of $476,758 worth of 

consumables when his mother died, subject to his father’s usufruct. 35 So. 3d 

449, 450 (La. App. 2 Cir. 2010). During his lifetime, the father made a 

bequest to a church of $100,000. Id. When he passed away, his total assets 

were worth $330,307. Id. The church sought the $100,000 legacy gift from 

the father’s succession. Id. at 450–51. The appeal court, having applied 

Articles 5366 and 538 of the Code, denied the church’s request because the 

consumables held by a usufructuary “became a debt owed by the succession 

to the naked owner” at the termination of the usufruct and the succession 

6

 Article 536 defines consumables as “those that cannot be used without being 

expended or consumed, or without their substance being changed, such as money, 

harvested agricultural products, stocks of merchandise, foodstuffs, and beverages.” La. 

Civ. Code Ann. art. 536. 

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was worth less than the debt owed. Id. The son’s priority over the church was 

a function of his father’s will, which stated that “all administration debts be 

paid before any legacies were distributed.” Id. at 450. Consequently, even if 

the son did not own the funds in dispute, his claim to them still took priority 

over that of the church. Catching is therefore only so helpful to the resolution 

of the instant dispute. 

The same could be said for another decision cited by the parties, 

Stewart v. Usry, 399 F.2d 50 (5th Cir. 1968). In that case, this court observed 

that an “imperfect” usufructuary, i.e., one of consumables, becomes a 

“debtor” of the naked owner when the usufruct ends. Id. at 55 (quoting 

Burdin v. Burdin, 129 So. 651, 654 (La. 1930)). However, it clarified that the 

connection between the usufructuary and naked owner is more one of “quasi 

debtor-creditor.” Id. Quoting a French commentator’s—Marcel Planiol’s—

treatise of civil law, the court clarified “that something more than an ordinary 

debtor-creditor association is contemplated: ‘the relations between the 

usufructuary and the naked owner are not those of an ordinary debtor and 

creditor. What is involved here is not so much the return of a sum of money, 

as a restitution of the capital subject to usufruct, whose enjoyment cannot be 

extended beyond the duration of the usufruct[.]’” Id. at 55 n.10 (citation 

omitted). But the court left for another day what that “something more” may 

be. 

Even if Henry Sr. as a usufructuary of consumables was in debt to his 

children as naked owners, that does not necessarily mean Plaintiffs were 

unsecured creditors. Whatever the exact nature of his debt may be, we 

determine that “the only court that can adjudicate [the question] with 

finality”—the Louisiana Supreme Court—should have an opportunity to 

provide an answer. See McMillan, 983 F.3d at 196. 

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With respect to the second factor, this court has observed that 

“certification may be advisable where important state interests are at stake 

and the state courts have not provided clear guidance on how to proceed.” 

Katrina Canal Breaches, 613 F.3d at 509 (citation omitted). Such interests are 

involved here since a determination of the naked owner’s relationship to 

consumables will affect the rights of all individuals and entities, including the 

naked owners themselves, who have competing claims to a usufructuary’s 

assets. 

Finally, the third factor also weighs in favor of certification because 

we “perceive no hardship in certifying the question[s]” stated below. See 

Silguero v. CSL Plasma, Inc., 907 F.3d 323, 333 (5th Cir. 2018). The court 

“can formulate [a] discrete issue[] for consideration” and there is no 

indication that the Louisiana Supreme Court will be unable to respond 

promptly. See id. Additionally, there is no risk of the IRS losing the ability to 

refund the remaining portion levied from Henry Sr.’s succession checking 

account if certification will delay resolution of this appeal. 

* * * 

 We certify the following questions to the Louisiana Supreme Court: 

1. Does a usufructuary’s testamentary usufruct of consumables 

render naked owners unsecured creditors of the usufructuary’s 

succession? 

2. If not, what is the naked owner’s relationship to those 

consumables? 

 Should the Louisiana Supreme Court accept our request for answers 

to these questions, we disclaim any intention or desire that it confine its reply 

to the precise form or scope of the questions certified. Along with our 

certification, we transfer this case’s record and the briefs submitted by the 

parties. We will resolve this case in accordance with any opinion provided on 

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these questions by the Louisiana Supreme Court. Accordingly, the Clerk of 

this court is directed to transmit this certification and request to the 

Louisiana Supreme Court in conformity with the usual practice of this court. 

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