Enyeart v. Minnesota, No. Civ.05-1291 (MJD/AJB).
| Decision Date | 06 January 2006 |
| Docket Number | No. Civ.05-1291 (MJD/AJB). |
| Citation | 408 F.Supp.2d 797 |
| Parties | Randall W. ENYEART and Rodney A. Mattmiller, Plaintiffs, v. State of MINNESOTA; Michael A. Hatch; Dan Salomone; Donald H. Rumsfeld; Alberto Gonzales; and Norman Y. Mineta, Defendants. |
| Court | U.S. District Court — District of Minnesota |
Randall W. Enyeart and Rodney A. Mattmiller, Hastings, MN, Pro se.
John S. Garry, Assistant Attorney General, St. Paul, MN, for the State of Minnesota, Michael A. Hatch, and Dan Salomone.
Joan D. Humes, Assistant United States Attorney, Minneapolis, MN, for Donald H. Rumsfeld, Alberto Gonzales, and Norman Y. Mineta.
MEMORANDUM OF LAW AND ORDER
In this action, Plaintiffs seek declaratory judgments against both the State of Minnesota and the federal government. Plaintiffs seek a declaratory judgment under 42 U.S.C. § 1983 that the Minnesota Court of Appeals wrongly decided issues in affirming their state court convictions for tax evasion. Plaintiffs also seek a declaratory judgment as to how 49 U.S.C. § 40116 should be enforced by the federal government.
Currently before the Court are Defendants' motions to dismiss pursuant to Rules 12(b)(1) and 12(b)(6) of the Rules of Civil Procedure. Because the Court lacks subject matter jurisdiction and Plaintiffs have failed to state a claim upon which relief can be granted, Defendants' motions are granted.
Plaintiffs, Randall W. Enyeart ("Enyeart") and Rodney A. Mattmiller ("Mattmiller") are former commercial airline pilots with Northwest Airlines ("NWA"). The State of Minnesota charged Plaintiffs with filing fraudulent tax returns, tax evasion, and failure to pay motor vehicle taxes. Plaintiffs claimed that they were not domiciled in Minnesota and therefore were not subject to Minnesota state taxation.
In December 1997, Enyeart electronically changed his residency from Minnesota to Alaska on an NWA computer. Alaska does not have a state income tax. Enyeart did not file Minnesota income tax returns in 1999 and 2000 because he regarded Alaska as his domicile. Similarly, Mattmiller claimed Washington as his state of residence. Mattmiller's flight base was Minneapolis from 1992 until 2001. Washington also does not have a state income tax.
Plaintiffs were tried in separate jury trials. Both Plaintiffs brought pretrial motions claiming that they were not residents of Minnesota and that 49 U.S.C. § 40116 ("Section 40116") preempted the state's method for determining state tax liability. The state district court denied Plaintiffs' motions.
Plaintiffs were convicted and filed direct appeals. Plaintiffs again argued that Section 40116 preempts Minnesota's method for calculating days spent in Minnesota for cases involving airline employees. The statute provides that:
The pay of an air carrier having regularly assigned duties on aircraft in at least 2 States is subject to the income tax law of only the following:
(A) the State or political division of the State that is the residence of the employee.
(B) the State or political subdivision of the State in which the employee earns more than 50 percent of the pay received by the employee from the carrier.
49 U.S.C. § 40116(f)(2)(A), (B). Section 40116 does not define residence or domicile. Airline employees are deemed to have earned 50 percent of their pay in a State in which their scheduled flight time in the State is more than half of the total scheduled flight time during the calendar year. 49 U.S.C. § 40116(f)(1)(C).
Under Minnesota law, a "resident" is "any individual domiciled in Minnesota." Minn.Stat. § 290.01, subd. 7(a) (2002). A resident is also any individual "domiciled outside the state who maintains a place of abode in the state and spends the aggregate more than one-half of the tax year in Minnesota." Id. at subd. 7(b). Presence within Minnesota for any part of the calendar day constitutes a day spent in the state. Id. However, "a person in transit between two points outside Minnesota who is physically present in Minnesota less than 24 hours, will not be treated as present in Minnesota on any day during transit." Minn. R. 8001.0300, subd. 4 (2001) (emphasis added).
The Minnesota Court of Appeals found that the record in each case contained substantial evidence that Plaintiffs were Minnesota residents, and were therefore required to pay Minnesota taxes. Enyeart continued to live in his house located in Minnetonka, Minnesota until 1999. In April 1999, Enyeart purchased a town-house in Shorewood, Minnesota. Plaintiff Enyeart also made numerous declarations that he was the sole owner of the town-house and that the town-house was his principal residence. In September 1999, Enyeart's flight base moved from Minneapolis to Detroit, Michigan. Enyeart continued to claim Alaskan residency while he was based out of Detroit. During this time, Enyeart either listed his Minnetonka or Shorewood addresses as his current address on his checks, loan applications, medical certificates of fitness, and on school emergency cards for his children.
The Minnesota Court of Appeals also found that the number of days Enyeart spent in Alaska showed, that he was domiciled in Minnesota. Enyeart did keep a condominium in Alaska, but he kept no personal belongs there. In 1998, Enyeart spent 194 days in Minnesota and twelve days in Alaska. In 1999, he spent 144 days in Minnesota and two days in Alaska. And in 2000, Enyeart spent two partial days in Alaska and 186 days in Minnesota. Between 1998 and December 2000, Enyeart made 240 ATM transactions in Minnesota and three in Alaska. In December 2000, Enyeart told Hennepin County officials that he had been a Minnesota resident for the past ten years. The court concluded that these facts clearly reflected Enyeart's intention to remain in Minnesota.
Correspondingly, Mattmiller claimed Washington as his state of residency, but did not own or rent any real property in Washington. From 1991 until 2001, Mattmiller was based out of Minneapolis, Minnesota. The court found that Mattmiller owned a house in Hastings, Minnesota where he resided with his wife and children. Mattmiller and his wife shared a checking account but maintained separate checkbooks. Mattmiller's checks were printed with the Washington address, while his wife's checks were printed with the Hastings, Minnesota address.
The Minnesota Court of Appeals rejected Plaintiffs' argument that Section 40116 preempted Minnesota state law. The Minnesota Supreme Court and the United States Supreme Court denied hearing Enyeart's and Mattmiller's appeals. State v. Enyeart, 676 N.W.2d 311, 325 (Minn. App.2004), rev. denied , cert. denied, 543 U.S. 927, 125 S.Ct. 310, 160 L.Ed.2d 226 (2004), State v. Mattmiller, No. A03-472, 2004 WL 1244040, at *6 (Minn.App., June 8, 2004) (unpublished), rev. denied, (Minn. Aug 17, 2004), cert. denied 543 U.S. 1021, 125 S.Ct. 663, 160 L.Ed.2d 497 (2004).
Enyeart argues that state law conflicts with the federal statute by equating residency with physical presence in the state and thereby allowing taxation by more than the state of residency or the state where the employee earns more than fifty percent of his or her pay from the airline. But state law does not equate residency with mere physical presence. On the contrary, it precludes such an equation by requiring that in determining the number of days spent in the state, time spent by a taxpayer in transit not be counted as time spent in Minnesota. Contrary to Enyeart's argument, a person's mere presence in the state does not render him or her liable to state taxation. Instead, presence in the state counts only if the person subject to taxation remains in the state for more than twenty-four-hours.
Enyeart also argues that state law thwarts or stands as an obstacle to the federal statute's objective of limiting multistate taxation. But by providing that a person in transit between two points outside Minnesota who spends less than twenty-four hours in the state will not be treated as present within the state, the rule avoids taxing air-carrier employees with minimal or transitory contacts with the state and thereby furthers the federal goal of avoiding multistate taxation.
Enyeart urges this court to read the federal statute to preclude a state from considering any part of a day in which an air-carrier employee works in Minnesota as a day spent in the state, claiming that a different reading would allow the state to tax income generated from less than fifty percent of scheduled flight time. But the state's residency requirements are not based on a pilot's scheduled flight time within the state but on the pilot's physical presence in the state for at least twenty-four hours, enjoying the services and protections the state affords. A rule that would make residence contingent on flight time would unduly limit the state's legitimate interest in taxing state residents, an interest the federal statute expressly recognizes by permitting states to tax pilots who are residents.
Because is not in "irreconcilable conflict" with 49 U.S.C. § 40116, it is not preempted.
Enyeart, 676 N.W.2d at 324-25 (emphasis in the original) (citations omitted).
Now, in this action, Plaintiffs seek declaratory judgment against the State of Minnesota and the federal government. First, Plaintiffs seek declaratory relief under 42 U.S.C. § 1983, arguing that the Minnesota Court of Appeals wrongly decided issues in affirming their state court convictions. Plaintiffs also sue the Secretary of Defense, Secretary of Transportation, and the United States Attorney General for a declaratory judgment that one or more of these officials is responsible for promulgating regulations under 49 U.S.C. § 40116. For the reasons set forth below, the Court grants Plaintiffs' motions to dismiss.
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