Amador v. Mnuchin

• Decision Date: 05 August 2020
• Docket Number: Civil Action No. ELH-20-1102
• Citation: 476 F.Supp.3d 125
• Parties: Ivania AMADOR et al., Plaintiffs, v. Steven MNUCHIN et al., Defendants.
• Court: U.S. District Court — District of Maryland

476 F.Supp.3d 125

Ivania AMADOR et al., Plaintiffs,

v.Steven MNUCHIN et al., Defendants.

Civil Action No. ELH-20-1102

United States District Court, D. Maryland.

Signed August 5, 2020

As Amended October 1, 2020

Robert P. Newman, Law Office of Robert P. Newman, PC, Silver Spring, MD, Andrea E. Senteno, Pro Hac Vice, Mexican American Legal Defense and Educational Fund, Washington, DC, Andres Holguin Flores, Pro Hac Vice, Belinda Escobosa Helzer, Pro Hac Vice, Mexican American Legal Defense and Education Fund, Los Angeles, CA, Fatima Menendez, Pro Hac Vice, Samantha T. Serna, Pro Hac Vice, Nina Perales, Pro Hac Vice, Mexican American Legal Defense and Educational Fund, San Antonio, TX, for Plaintiffs.

Christopher James Williamson, United States Department of Justice, Jordan A. Konig, Nishant Kumar, US Department of Justice, Washington, DC, for Defendants.

MEMORANDUM OPINION

Ellen L. Hollander, United States District Judge This case concerns a constitutional challenge to a provision of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), Pub. L. 116-136, 134 Stat. 281 (2020), codified at 26 U.S.C. § 6428(g)(1)(B). The provision excludes an otherwise eligible individual from receiving emergency cash assistance in the midst of the COVID-19 pandemic if his or her spouse is an undocumented immigrant.

The plaintiffs are sixteen United States citizens whose spouses lack legal status. ECF 31 ("Amended Complaint"), ¶¶ 4-19. They have sued defendants Steven T. Mnuchin, the Secretary of the U.S. Department of the Treasury; Charles Rettig, the Commissioner of the Internal Revenue Service (the "IRS"); the U.S. Department of the Treasury; and the IRS (collectively, the "Government"). Id. ¶¶ 20-23. Plaintiffs allege that 26 U.S.C. § 6428(g)(1)(B) violates the First and Fifth Amendments to the Constitution. Id. ¶¶ 75-96.¹ They seek a declaration that § 6428(g)(1)(B) is unconstitutional and an order enjoining its enforcement.

On May 15, 2020, the Court held a telephone conference with counsel. Counsel agreed to provide the Court with abbreviated submissions outlining the bases for a proposed motion to dismiss, the grounds in opposition, and a reply. ECF 30.² The truncated briefing was necessitated by the challenges resulting from the COVID-19 pandemic, as pertinent to this and many other cases. I advised the parties that, if the Court were to resolve any issues raised in the submissions without further briefing, those issues would be deemed preserved for appeal, as if they had been raised in a more detailed motion to dismiss under Fed. R. Civ. P. 12(b). See id. And, the parties may reassert and amplify their arguments in connection with a motion for summary judgment and the opposition to it.

Accordingly, I shall construe defendants’ submission as a motion to dismiss. ECF 32 (the "Motion"). Defendants assert that the suit is subject to dismissal based on sovereign immunity, standing, and failure to state a valid claim. Plaintiffs oppose the Motion (ECF 36) and the Government has replied. ECF 41. In addition, the Federation for American Immigration Reform ("FAIR") filed an amicus brief. ECF 38. The Government (ECF 40) and plaintiffs (ECF 42) have both submitted letters disputing FAIR's contentions.

No hearing is necessary to resolve the Motion. See Local Rule 105.6. For the reasons that follow, I shall deny the Motion.

I. Factual Background³

The COVID-19 virus has triggered the worst public health crisis the country has experienced since 1918.⁴ The novel coronavirus is a highly contagious and sometimes fatal respiratory illness.⁵ It first appeared in Wuhan, China in December 2019; in a matter of months, COVID-19 spread to every corner of the globe.⁶ On March 12, 2020, the World Health Organization declared COVID-19 a global pandemic. See WHO Director-General's opening remarks at the mission briefing on COVID-19, WORLD HEALTH ORG. (March 12, 2020), https://bit-ly.ezproxy.lib.ntust.edu.tw/2XWdodD. The next day, President Trump declared a national emergency. See The White House, Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak (Mar. 13, 2020), https://bit-ly.ezproxy.lib.ntust.edu.tw/3flFu8i.

Because there is currently no effective treatment for COVID-19, the Centers for Disease and Control has implored citizens to practice "social distancing" in order to abate the spread of the virus. See Coronavirus Disease 2019 (COVID-19), How to Protect Yourself & Others , CTRS. FOR DISEASE CONTROL & PREVENTION , https://bit-ly.ezproxy.lib.ntust.edu.tw/3dPA8Ba. To that end, in the spring of 2020 nearly every state in the country issued mandatory stay-at-home orders, directing residents to remain at home except to conduct essential activities. See Sarah Mervosh et al. , See Which States Are Reopening and Which Are Still Shut Down , N.Y. TIMES (May 15, 2020), https://nyti.ms/2Z6Fm7F. As a result, life as we know it came to a halt; schools, restaurants, bars, shopping malls, retail stores, and houses of worship all shuttered for a significant period of time.

Social distancing measures, although necessary to thwart the spread of the virus, had tremendous economic consequences. Personal consumption in March 2020 plummeted by a record 7.5 percent. See Personal Income and Outlays: March 2020 , U.S. BUREAU OF ECON. ANALYSIS (Apr. 30, 2020 8:30 a.m.), https://bit-ly.ezproxy.lib.ntust.edu.tw/3d8wUZ2. In the month of April 2020 alone, more than 20 million Americans lost their jobs, driving the unemployment rate to 14.7 percent, the largest single-month increase ever recorded. See Economic News Release , U.S. BUREAU OF LAB. STAT. (May 8, 2020 8:30 a.m. EST), https://bit-ly.ezproxy.lib.ntust.edu.tw/2UGiOYr.

These losses reached people from all stations of life: the leisure and hospitality industry lost 7.7 million jobs (nearly half the industry), while the education and health services industry, the professional and business services industry, and the retail trade industry each shed more than 2 million jobs. Id.

On March 27, 2020, Congress passed and President Trump signed the CARES Act, Pub. L. 116-136, 134 Stat. 281 (2020), a $2.2 trillion stimulus package designed to alleviate the incredible economic devastation wrought by the pandemic. Relevant here, § 2201(a) of the CARES Act, codified at 26 U.S.C. § 6428, harnessed the federal tax infrastructure to provide emergency financial assistance to Americans in the form of an advanced refundable tax credit. Defendants refer to the credit as an "economic impact payment." See Economic Impact Payment Information Center , INTERNAL REVENUE SERV. (July 15, 2020), https://bit-ly.ezproxy.lib.ntust.edu.tw/2WEtZBO; The CARES Act Provides Assistance to Workers and their Families , U.S. DEP'T OF THE TREASURY , https://bit-ly.ezproxy.lib.ntust.edu.tw/39gPGwE (last accessed July 20, 2020).

Specifically, § 6428(a) provides that an "eligible individual ... shall be allowed" a "credit against the tax imposed" for the 2020 tax year in the amount of $1,200, or $2,400 "in the case of eligible individuals filing a joint return." 26 U.S.C. § 6428(a)(1).⁷ An eligible individual also receives an additional $500 credit for each qualifying child under the age of seventeen. Id. § 6428(a)(2). Receipt of this money "shall be treated" as a refundable credit, id. § 6428(b), meaning that the impact payment is not taxed even if it exceeds the recipient's tax liability.

The CARES Act directs the Secretary of the Treasury to issue the credit "as rapidly as possibly" and specifies that no impact payment "shall be made or allowed" after December 31, 2020. Id. § 6428(f)(3)(A). As of April 24, 2020, the IRS reported that it had disbursed nearly $160 billion in impact payments to over 89.5 million Americans. See Treasury, IRS Deliver 89.5 Million Economic Impact Payments in First Three Weeks, Release State-By-State Economic Impact Payment Figures , INTERNAL REVENUE SERVS. (Apr. 28, 2020), https://bit-ly.ezproxy.lib.ntust.edu.tw/30LGAUO.

Receipt of the impact payment is contingent on the satisfaction of several prerequisites. First, the individual's income must fall below a statutory threshold. 26 U.S.C. § 6428(c). Second, in order to qualify as an "eligible individual," the recipient cannot be either a "nonresident alien individual" or a dependent child. Id. § 6428(d). An individual can demonstrate compliance with these requirements in the 2020 calendar year using either a 2018 or 2019 tax return or in the 2021 calendar year based on a 2020 tax return. See id. § 6428(a), (f).

Section 6428(g) contains additional limitations. Relevant here, § 6428(g)(1) provides:

(g) Identification number requirement

(1) In general —No credit shall be allowed under subsection (a) to an eligible individual who does not include on the return of tax for the taxable year—

(A) such individual's valid identification number,

(B) in the case of a joint return, the valid identification number of such individual's spouse ....

In turn, § 6428(g)(2) defines "valid identification number" as a Social Security Number ("SSN") issued to a citizen of the United States, a lawful permanent resident ("LPR"), or a noncitizen who is not a LPR but who has work authorization. See id. § 6428(g)(2) (defining SSN in reference to 26 U.S.C. 24(h)(7) ). This requirement is significant because undocumented immigrants are not eligible to obtain an SSN; they use an Individual Taxpayer Identification Number ("ITIN") issued to them by the IRS to file a tax return. See ECF 31, ¶ 39; see also 20 C.F.R. § 422.104(a) (delineating the eligibility requirements to obtain a SSN). Consequently, §§ 6428(g)(1)(B) and (g)(2) operate in tandem to exclude otherwise eligible individuals and their children from receipt of impact payments if they file a joint tax return and if their spouse is undocumented and therefore lacks a SSN.

According to plaintiffs, this result is no accident. ECF 31, ¶ 45. They point out that during the floor debates of the CARES Act,...