Court Opinion

ID: 9462977
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:54:51.177893+00
Date Added: 2024-06-11T17:37:52.427129
License: Public Domain

GARTH, Circuit Judge
(concurring):
I agree that the judgment of the district court must be vacated and the case remanded for further proceedings. However, I believe the majority’s reliance upon 28 U.S.C. § 2410(a)(1) as a waiver of sovereign immunity is at odds with both the explicit provisions of the statute as well as its legislative history. Consequently, I would hold that the elaborate and detailed seizure and sale provisions of the Internal Revenue Code, 26 U.S.C. §§ 6331, 6335, of necessity provide an implied waiver of immunity where it is alleged that the Internal Revenue Service (IRS) has failed to comply with these Congressional mandated directives.
This Circuit has long recognized in the context of suits commenced under 28 U.S.C. § 1340,1 that without a waiver of sovereign immunity, “[i]t is, of course, clear and undisputed that [a] suit against the United States is not maintainable . . . .” First Nat’l Bank of Emlenton, Pa. v. United States, 265 F.2d 297, 299 (3d Cir. 1959). Although the United States has consented to be sued under 28 U.S.C. § 2410(a)(1), that statute in my opinion, does not apply to the facts presented here. Under § 2410(a)(1),
the United States may be named a party in any civil action or suit in any district court, or in any State court having jurisdiction of the subject matter—
(1) to quiet title to, . real or personal property on which the United States has or claims a mortgage or other lien. (Emphasis added.)
Aqua Bar & Lounge, Inc. (Aqua Bar) has sought a declaration that the seizure and sale of its liquor license by the defendant United States was unlawful under 26 U.S.C. §§ 6331, 6335.2 The uncontested allegations *941of the complaint indicate that at the time this suit commenced the IRS sale of the license to defendant Saltz had already been consummated. Thus, it is quite clear to me that where the United States has seized and then sold the plaintiff’s liquor license there can be property “on which the United States has or claims a mortgage or other lien.” (Emphasis added.) 28 U.S.C. § 2410(a)(1).
Moreover, the legislative history of § 2410(a)(1) indicates that it is inapplicable to the situation presented here. In Quinn v. Hook, 231 F.Supp. 718, 720 (E.D.Pa.1964), aff’d 341 F.2d 920 (3d Cir. 1965), District Judge Freedman, after examining the legislative history of § 2410, explained:
By this provision the Government has consented to be sued “in any civil action or suit in any district court, or in any State court having jurisdiction of the subject matter, to quiet title to or for the foreclosure of a mortgage or other lien upon real or personal property on which the United States has or claims a mortgage or other lien.” It was not until 1942 that the remedy of quieting title was added to the statute which theretofore had dealt only with the foreclosure of a mortgage or other lien on property on which the United States had or claimed a mortgage or other lien. The purpose of the amendment, as clearly stated in the House and Senate reports, “is to permit the United States to be made a party defendant in cases involving foreclosure of mortgages or liens on personal property and to provide a method to clear real estate titles of questionable or valueless Government liens.” Its passage was recommended by Attorney General Jackson in order to protect good faith purchasers of real estate and foreclosing mortgagees. (Footnotes omitted.)
See also United States v. Coson, 286 F.2d 453, 457 (9th Cir. 1961). Quinn involved an attack upon the merits of a tax assessment, and not upon the seizure and sale of any property. However, the discussion of the legislative history in Quinn conflicts with the conclusion reached by the majority here.3 Nothing in the words of the statute or the legislative history indicates that § 2410(a)(1), which only serves the purpose of providing a vehicle to quiet title of property where the United States has or claims a lien or mortgage, is applicable where an attack has been made upon the seizure and sale of property.
Nor are any of the cases cited by the majority convincing as to the availability of § 2410(a)(1) in the circumstances presented here. Popp v, Eberlain, 409 F.2d 309 (7th Cir.), cert. denied, 396 U.S. 909, 90 S.Ct. 222, 24 L.Ed.2d 185 (1969), involved a suit against certain individuals and the United *942States to set aside various tax sales of real property. The district court found a waiver of immunity as to the United States in 28 U.S.C. § 2410, “on the theory that the action was in the nature of an action to quiet title.” 409 F.2d at 312. The Seventh Circuit, “[although beset by serious doubt,” agreed that the district court had properly determined that immunity had been waived. However, it did not set forth any basis or analysis to support its conclusion. Id. Thereafter, in Little River Farms, Inc. v. United States, 328 F.Supp. 476 (N.D.Ga. 1971), the district court relying upon Popp, supra, found that the validity of a tax sale under 26 U.S.C. § 6335 could be challenged under 28 U.S.C. § 2410. The court explained its decision as follows:
As the Court views the situation, the taxpayer has a right under § 6335 but no remedy for enforcing it except § 2410.
328 F.Supp. at 479. Thus, neither Popp nor Little River Farms offers any reasoning in support of the conclusion reached.
While I sympathize with the majority’s efforts to fashion a remedy which would correct an otherwise outrageous result, I, nevertheless, cannot join the majority in artificially Bending and straining the unambiguous wprds and legislative history of § 2410(a)(1) so as to allow suits against the United States for seizures and sales of property in violation of the Code. At issue here are two fundamental rights: the inviolability of the private ownership of property and the government’s entitlement to ensure the collection of its taxes. Chief Justice Marshall, writing for the Supreme Court in 1821, stated with respect to government sale of private property:
That no individual or public officer can sell, and convey a good title to, the land of another, unless authorized so to do by express law, is one of those self-evident propositions to which the mind assents, without hesitation; and that the person invested with such a power must pursue with precision the course prescribed by law, or his act is invalid, is a principle which has been repeatedly recognized in this court.
Thatcher v. Powell, 19 U.S. (6 Wheat.) 54, 56, 5 L.Ed. 221 (1821), quoted in Reece v. Scoggins, 506 F.2d 967, 971 (5th Cir. 1975). Congress has mandated elaborate procedures to be followed by the IRS in the levy, distraint, and sale of property to satisfy a tax lien. These requirements serve to safeguard the value of property seized and “are designed to protect the taxpayer by giving him an opportunity to be present at the tax sale and bid on the property.” Reece v. Scoggins, supra at 971.
Since no sections of the Internal Revenue Code explicitly waive sovereign immunity where it is alleged that the IRS has violated the seizure and sale provisions, the United States contends that Aqua Bar’s suit must be dismissed. It would appear axiomatic that whenever Congress directs in an unambiguous, detailed manner prescribed, protective procedures to be taken by a government agency, but fails to provide either sanctions or a method of enforcement in the event its mandate is ignored, a waiver of sovereign immunity necessarily must be inferred in order to enforce the legislative will. If it were otherwise, Congressional mandates such as the provisions of §§ 6331, 6335 could be treated not as obligatory but rather as mere recommendations which the Internal Revenue Service could violate negligently or intentionally behind a shield of sovereign immunity. Neither logic nor reason should permit such a result. In light of the explicit provisions and mandatory terms of §§ 6331, 6335,1 would imply a waiver of sovereign immunity where a complaint, the allegations of which must be accepted as true,4 challenges only the validity of the seizure and sale under those statutes.
Similarly, I do not believe that 28 U.S.C. § 2201 prevents any declaratory judgment action against the United States. That section provides:
*943In a case of actúal controversy within its jurisdiction, except with respect to Federal taxes, any court of the United States . . . may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. (Emphasis added.)
At issue here is whether the Internal Revenue Service complied with the provisions of the Code in the seizure and sale of Aqua Bar’s license. No question is presented concerning the validity of the tax assessment. Thus I would conclude that this suit is not one “with respect to Federal taxes” under 28 U.S.C. § 2201.
Aqua Bar’s complaint also seeks injunctive relief against defendant Saltz, the purchaser of its license. The district court held that the Anti-Injunction Statute, 26 U.S.C. § 7421(a), divested it of power to enjoin Saltz’s application for a transfer of the liquor license to his name. Like the majority I do not agree with that conclusion.
Section 7421(a) provides, except in certain special circumstances that are not relevant here, that
. no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.
The Supreme Court has stated with respect to the Anti-Injunction Statute:
The manifest purpose of § 7421(a) is to permit the United States to assess and collect taxes alleged to be due without judicial intervention, and to require that the legal right to the disputed sums be determined in a suit for refund. In this manner the United States is assured of prompt collection of its lawful revenue. (Footnote omitted.)
Enochs v. Williams Packing Co., 370 U.S. 1, 7, 82 S.Ct. 1125, 1129, 8 L.Ed.2d 292 (1962). However, Aqua Bar does not dispute the tax assessment. Rather, Aqua Bar seeks to enjoin the transfer of the liquor license which allegedly was improperly seized and sold in violation of the Internal Revenue Code. Since such an injunction does not seek to attack the tax assessment itself, I would hold that this is not a suit “for the purpose of restraining the assessment or collection of any tax” but merely an action to enforce IRS compliance with Congressional mandates. Reece v. Scoggins, supra. See also Margiotta v. District Director of Internal Revenue, 214 F.2d 518 (2d Cir. 1954).
Consequently, even though I do so on different grounds, I concur in the majority’s decision to vacate the district court’s order and remand for further proceedings.

. 28 U.S.C. § 1340 provides in pertinent part:
The district courts shall have original jurisdiction of any civil action arising under any Act of Congress providing for internal revenue .

. Section 6331 provides for a levy and distraint to effect the collection of taxes. Section 6335 describes the manner in which the seizure and sale of such property is to be conducted. In pertinent part § 6335 requires:
(a) . . . As soon as practicable after seizure of property, notice in writing shall be given by the Secretary .... Such notice shall specify the sum demanded and shall contain, in the case of personal property, an account of the property seized
*941(b) . . . The Secretary . . . shall as soon as practicable after the seizure of the property give notice to the owner, . and shall cause a notification to be published in some newspaper published or generally circulated within the county wherein such seizure is made, or . post such notice at the post office nearest the place where the seizure is made, and in not less than two other public places. Such notice shall specify the property to be sold, and the time, place, manner, and conditions of the sale thereof.
* * * * * *
(d) . . . The time of sale shall not be less than 10 days nor more than 40 days from the time of giving public notice under subsection (b). . . .
(e) Manner and conditions of sale.—
(1) . . Before the sale the Secretary
shall determine a minimum price for which the property shall be sold, and if no person offers for such property at the sale the amount of the minimum price, the property shall be declared to be purchased at such price for the United States; .
(2) . . The Secretary shall by regulations prescribe the manner and other conditions of the sale of property seized by levy. . . . Such regulations shall provide:
(A) That the sale shall not be conducted in any manner other than—
(i) by public auction, or
(ii) by public sale under sealed bids.
(D) Whether payment in full shall be required at the time of acceptance of a bid

. This Court, in a per curiam opinion, affirmed the district court’s judgment in Quinn “for the reasons so well stated by Judge Freedman in his opinion reported at 231 F.Supp. 718 (E.D. Pa.1964).”

. The allegations of Aqua Bar’s complaint must be accepted as true for purposes of considering a motion to dismiss under Rule 12(b), Fed.R. Civ.P. Hochman v. Board of Education, 534 F.2d 1094 (3d Cir. 1976).