990 F.2d 451 (9th Cir. 1993), 91-36317, Farr v. United States
|Citation:||990 F.2d 451|
|Party Name:||Patricia B. FARR, Plaintiff-Appellant, v. UNITED STATES of America; United Air Lines, Inc., Defendants-Appellees.|
|Case Date:||March 29, 1993|
|Court:||United States Courts of Appeals, Court of Appeals for the Ninth Circuit|
Submitted [*] Feb. 4, 1993.
Patricia B. Farr, Laclede, ID, pro se.
Gary R. Allen, Charles E. Brookhart, and Joel A. Rabinovitz, U.S. Dept. of Justice, Washington, DC, for defendant-appellee U.S.
Debra L. Boyd and Robert A. Siegel, O'Melveny & Myers, Los Angeles, CA, for defendant-appellee United Air Lines, Inc.
Appeal from the United States District Court for the District of Idaho.
Before TANG, KOZINSKI, and FERNANDEZ, Circuit Judges.
FERNANDEZ, Circuit Judge:
Patricia B. Farr brought this action against her employer, United Air Lines, Inc. (United) and against the United States after the Internal Revenue Service (IRS) levied upon her wages. The IRS claimed that Farr had unpaid federal income tax liabilities and United turned over certain monies that it was holding on her behalf. She asserts defects in the levy procedures and also asserts that United improperly turned over exempt funds. The district court dismissed her action. We affirm in part and reverse in part.
The IRS determined that Farr had not filed federal income tax returns for the years 1979 to 1982 and that she had tax deficiencies for those years. In due course, the IRS issued Notices of Levy which it served upon her employer, United. United duly sent funds it was holding on her behalf to the IRS, but her tax debt has not been fully discharged, so the levy on her wages remains.
Farr brought this action against the United States claiming, among other things, that the levies upon her wages were procedurally invalid and that the IRS had improperly disclosed taxpayer information. She also sued United. In that part of her action, she claimed that United had improperly turned over workmen's compensation benefits to which she was entitled in addition to her wages. She asserted, in effect, that United had converted those benefits. United has admitted for purposes of this appeal that it did, indeed, turn over workmen's compensation benefits.
The United States filed a motion to dismiss for lack of jurisdiction and for failure to state a claim. Fed.R.Civ.P. 12(b)(1) and 12(b)(6). In the alternative, it asked for summary judgment. Fed.R.Civ.P. 56. In support of its motions it submitted copies of the "Certificates of Assessment and Payments" (certificates). The district court granted the motion on grounds that Farr had not stated a claim upon which relief could be granted. While it relied upon the certificates, it did not grant the motion for summary judgment.
United also moved to dismiss on grounds that pursuant to 26 U.S.C. § 6332(e) it was immune from actions brought by disgruntled taxpayers like Farr, whose property had been turned over to the United States pursuant to a levy. The district court granted that motion also.
Farr then appealed the dismissal of her action.
"The existence of subject matter jurisdiction is a question of law reviewed de novo." Hughes v. United States, 953 F.2d 531, 535 (9th Cir.1992). However, "[t]he district court's factual findings on jurisdictional issues must be accepted unless clearly erroneous." Id.
From the record before us, it appears that the district court did have jurisdiction over the conversion action against United upon, at least, diversity grounds. 28 U.S.C. § 1332. We, however, do not intend to make that the law of the case if the district court, upon remand, shall determine that the facts are otherwise.
B. United States.
It is clear that the district court did not have jurisdiction to entertain Farr's action to the extent that she sought an injunction or declaratory relief against the IRS. See Hughes, 953 F.2d at 535-37. It is true that an injunction may sometimes issue where there are no circumstances under which the government could prevail on the merits and the taxpayer will suffer irreparable harm. Id. at 535. Nothing in the facts of this case even hints that those conditions could be fulfilled. Purely and simply, Farr did not pay her income taxes, or even file returns, despite the fact that she was earning significant amounts of income during the years in question.
We have held, however, that pursuant to 28 U.S.C. § 2410(a) there can be jurisdiction over an action to quiet title to personal property when the IRS has imposed a lien and the taxpayer seeks to contest the procedural validity of that lien. Hughes, 953 F.2d at 537-38. Farr has made just such an assertion. However, as to amounts that have already come into the hands of the IRS, no quiet title action will lie. Id. at 538. The United States argues that not even the continuing levy can support a quiet title action. We have held to the contrary. In Hughes we said that the taxpayer "can only use § 2410 to challenge the continued collection of taxes through the garnishment of ... wages." Id. at 538. See also James v. United States, 970 F.2d 750, 755-56 n. 11 (10th Cir.1992).
Fortunately for Farr, that slight opening may be enough to allow her to squeeze through the otherwise closed jurisdictional gate.
As the district court stated, in her complaint Farr merely made...
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