Source: https://m.openjurist.org/686/f2d/1320
Timestamp: 2020-02-26 01:05:03
Document Index: 767926957

Matched Legal Cases: ['§ 6335', '§ 1340', '§ 2680', '§ 6335', '§ 6337', '§ 1340', '§ 1356', '§ 1361', '§ 2410', '§ 1340', '§ 1346', '§ 7422', '§ 2410', '§ 7426', '§ 2410', '§ 2410', '§ 2410', '§ 2410']

686 F2d 1320 Murray v. United States | OpenJurist
686 F. 2d 1320 - Murray v. United States
686 F2d 1320 Murray v. United States
686 F.2d 1320
82-2 USTC P 9607
James A. MURRAY, Appellant,
No. 81-2178.
This appeal arises from the district court's1 dismissal of appellant James A. Murray's complaint for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b). Murray seeks $70,000.00 in civil damages, or, alternatively, an order compelling the United States to convey to him certain real property which he had attempted to redeem following its conveyance to the United States at a tax auction. The district court held that subject matter jurisdiction was lacking because the United States had not waived its sovereign immunity.
On April 18, 1979 the property was seized by the IRS for nonpayment of taxes. The property was later purchased by the United States at a tax auction for the amount of the statutory calculated bid, $301.84, pursuant to 26 U.S.C. § 6335(e)(1). Appellant did not bid at the auction nor does he challenge the validity of either the tax lien or the auction sale.
Appellant asserted jurisdiction under 28 U.S.C. §§ 1340 (civil action arising under Act of Congress providing for internal revenue), 1346 (Federal Tort Claims Act), 1356 (seizure under law of the United States), 1402 (venue statute applicable to suits under Federal Tort Claims Act), 2410 (quiet title action against United States), and 1361 (petition for mandamus). The government moved to dismiss the complaint on the ground that the suit was barred by the doctrine of sovereign immunity. The district court dismissed appellant's complaint on this ground while expressly declining to reach the question whether appellant's mortgage was valid. Murray v. United States, 520 F.Supp. 1207, 1208 n.1 (D.N.D.1981).
The weight of authority is to the contrary. E.g., United States v. Worley, 213 F.2d 509, 512 (6th Cir. 1954) (exception in § 2680(c) barred suit by taxpayer's wife), cert. denied, 348 U.S. 917, 918, 75 S.Ct. 301, 302, 99 L.Ed. 719, 720 (1955); Broadway Open Air Theatre, Inc. v. United States, 208 F.2d 257, 258-59 (4th Cir. 1953) (exception barred suit by preferred stockholders of corporation where taxpayers were principal officers, directors and shareholder); Home Indemnity Co. v. Brennan, 430 F.Supp. 828 (S.D.N.Y.1977) (exception barred suit by contractor's surety where taxpayer was the contractor). In a case closely on point, Pargament v. Fitzgerald, 272 F.Supp. 553, 556 (S.D.N.Y.1967), aff'd, 391 F.2d 934 (2d Cir. 1968), the court specifically noted that Section 2680(c) precluded suit by a chattel mortgagee who alleged that his rights had been impaired by tax collection proceedings against his mortgagor. The exception to FTCA jurisdiction clearly applies to taxpayers and third parties alike.
We also cannot agree that appellant's claim arises outside of "the assessment or collection of taxes" for purposes of the exception to FTCA jurisdiction. When at a tax sale property is adjudicated to the government at the statutory minimum price, see 26 U.S.C. § 6335(e)(1), the government in effect becomes the purchaser subject to the statutory right of redemption. 26 U.S.C. § 6337(b) (1). Capital Savings Association v. Runnels, 361 So.2d 458, 462 (La.Ct.App.1978). The right of redemption arises only in connection with the tax levy, and is an integral facet of such a levy. A claim founded on redemption rights is clearly a claim "arising in respect of the collection of a tax" within the meaning of Section 2680(c).5
The other statutes relied on by appellant as grants of jurisdiction for a damage action are equally of little avail. Appellant argues that his suit may be heard under 28 U.S.C. § 1340, which gives the federal district courts "original jurisdiction of any civil action arising under any Act of Congress providing for Internal Revenue." It is established, however, that this general grant of jurisdiction does not constitute a waiver of sovereign immunity. Aqua Bar & Lounge, Inc. v. United States Department of Treasury Internal Revenue Service, 539 F.2d 935, 937 (3d Cir. 1976); Essex v. Vinal, 499 F.2d 226, 231 (8th Cir. 1974), cert. denied, 419 U.S. 1107, 95 S.Ct. 779, 42 L.Ed.2d 803 (1975) (and cases cited therein); Geurkink Farms, Inc. v. United States, 452 F.2d 643, 644 (7th Cir. 1971); Falik v. United States, 343 F.2d 38, 40 (2d Cir. 1965). There is similarly no waiver of sovereign immunity to be found in 28 U.S.C. § 1356, which is merely another general provision vesting jurisdiction in the district courts over certain kinds of seizures.6 Van Buskirk v. United States, 206 F.Supp. 553, 555 (E.D.Tenn.1962).
Moreover, we cannot agree with appellant that a waiver of sovereign immunity must be implied where it is alleged that the IRS has failed to comply with seizure and sale provisions in the Internal Revenue Code. Appellant relies primarily on the reasoning of the dissent in Aqua Bar & Lounge, Inc. v. United States Department of Treasury Internal Revenue Service, 539 F.2d at 942-43. The dissent in this case was concerned that absent an implied waiver of immunity, the IRS would be free to violate Congressional mandates with impunity. Id. at 942. While we are similarly concerned that any injury which may here exist not be without a remedy, we cannot agree that a remedy should be provided through an implied waiver. A waiver of immunity "cannot be implied but must be unequivocally expressed." United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 1352, 63 L.Ed.2d 607 (1980), quoting United States v. King, 395 U.S. 1, 4, 89 S.Ct. 1501, 1502, 23 L.Ed.2d 52 (1969). Such a waiver, if it exists at all, should be sought in the statute giving rise to a cause of action. Doe v. Civiletti, 635 F.2d 88, 94 (2d Cir. 1980); May Department Stores Co. v. Smith, 572 F.2d 1275 (8th Cir.), cert. denied sub nom. May Department Stores Co. v. Veterans' Administration, 439 U.S. 837, 99 S.Ct. 122, 58 L.Ed.2d 134 (1978).
Moreover, even if sovereign immunity were waived by 28 U.S.C. § 1361, no federal officials are named as defendants in appellant's amended complaint. The Mandamus Act does not apply to the United States itself. Morpurgo v. Board of Higher Education, 423 F.Supp. 704, 714 (S.D.N.Y.1976).
Appellant's amended complaint did not expressly contain a prayer for quiet title relief. It is clear from the record, however, that the parties and the district court construed the suit as seeking such relief. 520 F.Supp. at 1209-10. The final question on appeal accordingly is whether this suit may properly be characterized as a quiet title action, and, if so, whether the district court had jurisdiction under 28 U.S.C. § 2410(a)(1)10 in combination with 28 U.S.C. § 1340.11
On the ground that the present action is not one to quiet title, we affirm the district court's ruling that jurisdiction does not exist under Section 2410. This conclusion renders it unnecessary for us to consider the district court's different rationale for dismissal, namely that the United States had sold its interest in the property at the time suit was brought.13 520 F.Supp. at 1210.
The Honorable Paul Benson, Chief Judge, United States District Court for the District of North Dakota. His decision is reported as Murray v. United States, 520 F.Supp. 1207 (D.N.D.1981)
We need not decide here the jurisdictional result that might obtain if appellant named individual agents of the Internal Revenue Service, rather than the Service or United States, as defendants in a count requesting damages for due process violations. However, we observe in passing that even if sovereign immunity did not necessarily bar such a cause of action, see Davis v. Passman, 442 U.S. 228, 239, 99 S.Ct. 2264, 2273, 60 L.Ed.2d 846 (1979), jurisdiction might still be defeated due to the existence of special factors or due to the existence of other remedies. Id. at 245-47, 99 S.Ct. at 2277-2278; Carlson v. Green, 446 U.S. 14, 18-19, 100 S.Ct. 1468, 1471-1472, 64 L.Ed.2d 15 (1980). Moreover, defenses of either absolute or qualified immunity likely would be placed at issue. E.g., Terrapin Leasing, Ltd. v. United States, 449 F.Supp. 7, 8 (W.D.Okla.1978)
Although appellant does not press on appeal his assertion of jurisdiction under the statute providing for tax refund suits, 28 U.S.C. § 1346(a)(1), we note that this provision also provides no jurisdiction. Although sovereign immunity is waived by this provision in conjunction with 26 U.S.C. § 7422, the present suit cannot fairly be said to fall within its ambit. Standing to sue under Section 1346(a)(1) extends only to the taxpayer from whom the tax was allegedly wrongfully collected. E.g., Hummell v. United States, 494 F.Supp. 1003, 1004 (S.D.Ia.1980) (and citations therein); First National Bank v. United States, 175 F.Supp. 192 (D.Minn.1959) (no standing for assignee of taxpayer), appeal dismissed with prejudice, 282 F.2d 568 (8th Cir. 1960). Appellant also does not seek relief of the kind provided for by Section 1346(a)(1), namely "recovery of (a) tax alleged to have been erroneously or illegally assessed or collected."
28 U.S.C. § 2410(a)(1) provides in pertinent part:
This section has been recognized to waive sovereign immunity in some circumstances. United Sand & Gravel Contractors, Inc. v. United States, 624 F.2d 733, 738 (5th Cir. 1980) (stating in dictum that Section 2410 may waive immunity as to suits disputing ownership to property possessed by United States when claimant has no more specific remedy); Hudson County Board of Chosen Freeholders v. Morales, 581 F.2d 379, 382-83 (3d Cir. 1978) (Section 2410 is basis for finding waiver of sovereign immunity); Aqua Bar & Lounge, Inc. v. United States Department of Treasury Internal Revenue Service, 539 F.2d 935, 938-40 (3d Cir. 1976) (Section 2410 constitutes waiver of sovereign immunity so long as plaintiff refrains from contesting merits of underlying tax assessment); Popp v. Eberlein, 409 F.2d 309, 312 (7th Cir.), cert. denied, 396 U.S. 909, 90 S.Ct. 222, 24 L.Ed.2d 185 (1969); United States v. Coson, 286 F.2d 453 (9th Cir. 1961); Yannicelli v. Nash, 354 F.Supp. 143, 150-51 (D.N.J.1972); Little River Farms, Inc. v. United States, 328 F.Supp. 476, 479 (N.D.Ga.1971). Compare United Sand & Gravel Contractors, Inc. v. United States, 624 F.2d at 738-40 (even if Section 2410 waives immunity, it may not be utilized to circumvent statute of limitations provided for third-party attacks on wrongful levy under 26 U.S.C. §§ 7426, 6532(c)); Falik v. United States, 343 F.2d 38 (2d Cir. 1965) (no waiver of immunity under § 2410 for suit which attacks merits of underlying lien); Quinn v. Hook, 231 F.Supp. 718 (E.D.Pa.1964), aff'd, 341 F.2d 920 (3d Cir. 1965) (Section 2410 does not waive immunity for collateral attack on validity of tax lien after adverse decision on issue by Tax Court).
But see Popp v. Eberlein, 409 F.2d at 312 (although issue was not argued and although court expressed doubts, court held that § 2410 granted jurisdiction for suit against United States where United States had sold its interest in property through distraint sale prior to plaintiffs' suit, and where effect of plaintiffs' successful suit would be to set aside distraint sale); Little River Farms, Inc. v. United States, 328 F.Supp. 476 (N.D.Ga.1971); compare Aqua Bar & Lounge, Inc. v. United States Department of Treasury Internal Revenue Service, 539 F.2d at 936, 937 (action could be characterized as action to quiet title within meaning of § 2410 where property rights in liquor license were sold by United States prior to plaintiff's suit, and where neither IRS nor third party purchaser had obtained physical possession of the license documents). But see also Aqua, 539 F.2d at 941-42, where Judge Garth, concurring, rejected an interpretation of § 2410 that would permit joinder of the United States after it had seized and sold subject property in order to satisfy its tax lien