Opinion ID: 734821
Heading Depth: 1
Heading Rank: 1

Heading: Dismissal of the Cross-Complaint

Text: 5 This court reviews de novo the district court's dismissal for lack of subject matter jurisdiction. Wilson v. A.H. Belo Corp., 87 F.3d 393, 396 (9th Cir.1996). The government claims that the district court lacked jurisdiction because of sovereign immunity, the Tax Anti-Injunction Act, I.R.C. § 7421, and the tax exception to the Declaratory Judgment Act, 28 U.S.C. § 2201. We agree. Sovereign immunity clearly bars the claims seeking declaratory judgments that a stipulation on the disclosure of grand jury material remains lawful and binding and that government agents have perpetrated a fraud on the court. On the stipulation claim, courts have held that Fed.R.Crim.P. 6(e)--on which appellants rely--does not waive sovereign immunity. See, e.g., McQueen v. Bullock, 907 F.2d 1544, 1550-51 (5th Cir.1990). If appellants believe there was a disclosure in violation of the stipulation or Rule 6(e), the proper remedy would have been to seek a contempt order. For the fraud on the court issue, appellants point to no statute waiving immunity. As a result, these claims were correctly dismissed. 6 Whether or not the remaining claims fall within the Bankruptcy Code's waiver of sovereign immunity, 11 U.S.C. § 106, they are barred by the Tax Anti-Injunction Act and the tax exception to the Declaratory Judgment Act. These provisions prohibit any suit in any court, other than a suit for refund or redetermination of deficiency, directed at activities that may culminate in the assessment or collection of taxes. See Blech v. United States, 595 F.2d 462, 466 (9th Cir.1979). 7 According to the cross-complaint, the requested injunctions and declarations about the seized files would enable the appellants to continue litigating or relitigate their Berg & Allen-related tax liabilities. They would therefore interfere with the IRS' ongoing efforts to investigate, assess, and collect taxes appellants may owe. It may be that appellants would be entitled to the relief they seek in the proper forum--a suit for redetermination in the tax court or for refund in the district court--although it appears that at least some of them have already had that opportunity. Outside those forums, however, the desired relief is unavailable. 8 Similarly, the tax exception to the Declaratory Judgment Act bars the claim for a declaration that Temporary Treas.Reg. § 1.163-9T(b)(2)(i) is invalid. Finding a regulation invalid might be proper as part of a suit for redetermination or refund or a proceeding under Section 505 of the Bankruptcy Code to determine the amount or legality of a particular tax. But the tax exception prohibits a stand-alone suit to invalidate a regulation.