Johansen v. U.S.

• Decision Date: 29 October 2007
• Docket Number: No. 06-2037.,06-2037.
• Citation: 506 F.3d 65
• Parties: Marlene JOHANSEN, Plaintiff, Appellant, v. UNITED STATES, Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

506 F.3d 65

Marlene JOHANSEN, Plaintiff, Appellant, v. UNITED STATES, Defendant, Appellee.

No. 06-2037.

United States Court of Appeals, First Circuit.

Heard March 7, 2007.

Decided October 29, 2007.

Timothy J. Burke with whom Burke & Associates was on brief for appellant.

Kenneth W. Rosenberg, Attorney, Tax Division, with whom Michael J. Sullivan, United States Attorney, Eileen J. O'Connor, Assistant Attorney General, Bruce R. Ellisen and Laurie Snyder, Attorneys, Tax Division, Department of Justice, were on brief for appellee.

Before HOWARD, Circuit Judge, CAMPBELL, Senior Circuit Judge, and SARIS,^* District Judge.

CAMPBELL, Senior Circuit Judge.

Appellant Marlene Johansen appeals from the dismissal of her suit in the United States District Court for the District of Massachusetts to quiet title on her property. The suit was dismissed for lack of jurisdiction on mootness grounds, and Johansen argues that this was error because she has suffered damages that must be redressed by the government. After reviewing her arguments and the record, we affirm the dismissal of her suit.

Background

On August 17, 2004, Johansen filed a complaint to quiet her title to a residential property in Stoneham, Massachusetts. She contended that a tax lien the United States had asserted against her as nominee for her divorced ex-husband, Ralph Johansen, for his delinquent income tax liabilities created a cloud on her title, effected a detriment to her creditworthiness, and damaged her. She also requested attorneys' fees under the Internal Revenue Code, 26 U.S.C. § 7430, and the Equal Access to Justice Act, 28 U.S.C. § 2412(d). The government counterclaimed to foreclose the tax lien against the Stoneham property by sale.

The district court initially had jurisdiction over Marlene's action pursuant to 28 U.S.C. §§ 1331 and 1340 (general jurisdictional statutes) and 2410 (which provides in relevant part that "the United States may be named a party in any civil action or suit . . . having jurisdiction of the subject matter (1) to quiet title to; (2) to foreclose a mortgage or other lien upon; (3) to partition; (4) to condemn; or (5) of interpleader or in the nature of interpleader with respect to real or personal property on which the United States has or claims a mortgage or other lien"), and over the government's counterclaim under 28 U.S.C. §§ 1340, 1345 and IRC § 7403. During the course of the litigation, however, on August 22, 2005, Ralph Johansen paid in full his tax liabilities. As a result, on September 20, 2005, the government filed a motion to dismiss the action on the grounds that it no longer had any interest in the Stoneham property since full payment of its tax claim had been made. Thus, the government argued, the issue raised in Johansen's suit was moot, there no longer being any occasion to quiet title, and the court being without jurisdiction to decide anything more. Marlene Johansen opposed the motion to dismiss on the grounds that the government's lien on her property had been wrongfully imposed from the start,¹ that she had suffered damages, and that she was entitled to attorneys' fees.

On February 9, 2006, the magistrate judge recommended dismissing the case as moot. On the same day, the government filed with the court documents demonstrating that, on February 8, 2006, it had officially withdrawn notice of the lien on Ralph Johansen's tax liabilities. Marlene Johansen filed objections to the recommendation, arguing that she was nonetheless entitled to have the court find that the tax lien had been wrongly placed on her property, and that the government's release of the lien did not alter the fact that, from the time filed until its release, the lien was improper and had injured her by undermining her creditworthiness.

The district court endorsed the recommendation of the magistrate judge that because the government no longer had an interest in the property, the case was moot, and that Johansen's other allegations and her interest in attorneys' fees were insufficient to maintain a live controversy. This timely appeal followed.

Discussion

On appeal, Marlene Johansen argues that her claim is not moot, relying on the same cases which the district court's ruling properly distinguished. We will discuss her argument infra. As a preliminary matter, the government argues that the appellant failed to preserve the issues she raises here on appeal as she did not specifically indicate them in her objections below to the magistrate judge's report and recommendations. Johansen's objections were, indeed, vague, but as the points she now raises are clearly without merit, we need not go into the issue of their preservation. Instead, we address her appellate claims on the merits.

As we explain infra, when the government ceased to have an interest in the Stoneham property because the tax liabilities had been paid, Johansen's suit to quiet title to that property became moot. The only remedy to which she had been entitled under 28 U.S.C. § 2410, which was the statutory basis of her suit, was removal of the lien, and that removal was accomplished, leaving the court with nothing to do. While Johansen alleged in her complaint that the lien affected her creditworthiness and damaged her, these claims, standing alone, were outside the province of § 2410, hence beyond the subject matter jurisdiction of the court and leaving them barred by the government's sovereign immunity.

The district court's legal conclusion on the motion to dismiss for lack of jurisdiction is reviewed by us de novo. Gill v. United States, 471 F.3d 204, 205 (1st Cir.2006). When a defendant moves to dismiss for lack of federal subject matter jurisdiction, "`the party invoking the jurisdiction of a federal court carries the burden of proving its existence.'" Murphy v. United States, 45 F.3d 520, 522 (1st Cir.), cert. denied, 515 U.S. 1144, 115 S.Ct. 2581, 132 L.Ed.2d 831 (1995) (quoting Taber Partners, I. v. Merit Builders, Inc., 987 F.2d 57, 60 (1st Cir.), cert. denied, 510 U.S. 823, 114 S.Ct. 82, 126 L.Ed.2d 50 (1993)). We have held that the party advocating jurisdiction must make clear the grounds on which the court may exercise jurisdiction: "it is black-letter law that jurisdiction must be apparent from the face of the plaintiffs' pleading." PCS 2000 LP v. Romulus Telecomms., Inc., 148 F.3d 32, 35 (1st Cir.1998). If the party fails to demonstrate a basis for jurisdiction, the district court must grant the motion to dismiss. Though we take as true the well-pleaded facts of the complaint, Santa-Rosa v. Combo Records, 471 F.3d 224, 226 (1st Cir.2006), a plaintiff cannot rest a jurisdictional basis "merely on `unsupported conclusions or interpretations of law.'" Murphy, 45 F.3d at 522 (quoting Washington Legal Foundation v. Massachusetts Bar Foundation, 993 F.2d 962, 971 (1st Cir.1993)).

i. Availability of Damages

Johansen argues that the mere fact that the United States no longer claimed an interest in the property on which the lien had been placed did not make the controversy moot. She opposed the government's motion to dismiss below by arguing,

The United States' motion does not provide a basis for its conclusion that [the removal of the lien] adequately addressed the allegations and relief sought from the Court in [plaintiff's] complaint. The issue before the Court remains as to whether the United States had legal justification for the filing of the nominee lien, and if the Court finds none, the extent of damages caused to Ms. Johansen by its erroneous filing. . . . Ms. Johansen's Complaint properly alleges that her creditworthiness was damaged by the filing of the unlawful lien. Her matter addresses the injury she suffered. Her matter is not moot.

As already noted, Johansen asserted jurisdiction under general jurisdictional statutes, 28 U.S.C. §§ 1331 and 1340, and under 28 U.S.C. § 2410. As the magistrate judge found, any claim of jurisdiction for the purpose of enabling plaintiff to recover money damages for alleged detriment to the plaintiff's creditworthiness fails because § 2410 provides for federal court subject matter jurisdiction and for an implicit waiver of the United States' sovereign immunity only for the adjudication of an equitable action to quiet title, and not an action for money damages. Kulawy v. United States, 917 F.2d 729, 736 (2d Cir.1990) ("in a § 2410 action, only equitable relief affecting title, and not damages, may be awarded").

ii. Mootness

In finding mootness, the magistrate judge relied on Lewis v. Continental Bank Corporation, 494 U.S. 472, 477, 110 S.Ct. 1249, 108 L.Ed.2d 400 (1990), in which the Supreme Court set out the definition of a live controversy under Article III:

Under Article III of the Constitution, federal courts may adjudicate only actual, ongoing cases or controversies. To invoke the jurisdiction of a federal court, a litigant must have suffered, or be threatened with, an actual injury traceable to the defendant and likely to be redressed by a favorable judicial decision. Article III denies federal courts the power to decide questions that cannot affect the rights of litigants in the case before them, and confines them to resolving real and substantial controversies admitting of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical set of facts. This case-or-controversy requirement subsists through all stages of federal judicial proceedings, trial and appellate.

Id. (internal citations and quotations omitted).

Johansen argues that the question of whether the government was right to place a tax lien on her property amounts to a still valid ongoing controversy. She says she suffered actual injury as a result of the wrongful lien and seeks resolution of her challenge to the lien as a necessary condition to her becoming a prevailing party entitled to attorneys' fees under 26 U.S.C. § 7430. The magistrate judge...