Opinion ID: 1444730
Heading Depth: 2
Heading Rank: 1

Heading: O'Neill's Lack of Statutory Standing Under 28 U.S.C.  1346(a)(1)

Text: Statutory standing asks whether Congress has accorded this injured plaintiff the right to sue the defendant to redress his injury. Graden v. Conexant Sys., Inc., 496 F.3d 291, 295 (3d Cir.2007) (emphasis in original). The statute at issue here is 28 U.S.C.  1346(a)(1), by which the United States has waived sovereign immunity. It confers original jurisdiction on the district courts for civil actions against the United States for the recovery of allegedly erroneous or illegal tax assessments or collections. See United States v. Dalm, 494 U.S. 596, 601-02, 110 S.Ct. 1361, 108 L.Ed.2d 548 (1990). [3] The Supreme Court in United States v. Williams has cautioned that we must not enlarge this waiver beyond the purview of the statutory language, and that we must construe ambiguities in favor of immunity. 514 U.S. 527, 531, 115 S.Ct. 1611, 131 L.Ed.2d 608 (1995). The Court held that  1346(a)(1) authorizes a refund suit not only by a party directly assessed a tax, but also a party who, though not assessed a tax, paid the tax under protest to remove a federal tax lien from her property. Id. The Government had filed a lien against the plaintiff's house because the plaintiff's ex-husband was delinquent on his taxes. Id. at 529-30, 115 S.Ct. 1611. The plaintiff, protesting the lien because she herself was not delinquent on her taxes, nonetheless paid the Government to clear title to the house because she had contracted to sell it. Id. at 530, 115 S.Ct. 1611. The Court held that the plaintiff had standing to sue the Government for a refund under  1346(a)(1), reasoning that the lien was against the plaintiff's own property, id. at 539, 115 S.Ct. 1611; that the plaintiff paid the Government under protest ( i.e., she had insisted that her property was not a proper source from which to extract money to satisfy her ex-husband's tax liability), id. at 540, 115 S.Ct. 1611; and that no other available remedy existed, id. at 536-38, 115 S.Ct. 1611. But the Court essentially limited its holding in Williams to the case's facts. It clarified, for instance, that it did not decide the circumstances, if any, under which a party who volunteers to pay a tax assessed against someone else may seek a refund under  1346(a). Id. at 540, 115 S.Ct. 1611. Recognizing the narrowness of this holding, the Tenth Circuit Court of Appeals held in Dahn v. United States that a plaintiff lacked standing to challenge the Government's seizure of his property to satisfy his parents' debts. 127 F.3d 1249, 1251, 1254 (10th Cir.1997). The Court reasoned that, whereas the plaintiff in Williams deliberately and affirmatively proffer[ed] payment to the Government, the plaintiff in Dahn was simply a passive, collateral subject of IRS collection activities. Id. at 1254. We conclude that  1346(a)(1), as interpreted by the Supreme Court in Williams, does not give O'Neill a right to sue. It was not assessed the tax penalty. Moreover, O'Neill's involvement in the tax-penalty payment differs from that of the plaintiff in Williams. Unlike that person's property, O'Neill's own property was not encumbered by the Government. More importantly, O'Neill did not pay the tax penalty to the IRS. Rather, the Fund paid the IRS, and O'Neill merely decided to reimburse the Fund. Although O'Neill claims its reimbursement of the Fund was involuntary because O'Neill was partly at fault for the levy, and consequently the Fund would have sued O'Neill had it not made the Fund whole, Williams focused on whether the plaintiff's payment to the Government was voluntary. Given that we are required to construe ambiguities in favor of sovereign immunity, Williams, 514 U.S. at 531, 115 S.Ct. 1611, we deem these distinctions fatal to O'Neill's statutory standing.