Gordon v. United States

• Decision Date: 06 May 1981
• Docket Number: No. 310-79T.,310-79T.
• Parties: Keith GORDON v. The UNITED STATES.
• Court: U.S. Claims Court

649 F.2d 837

Keith GORDON v. The UNITED STATES.

No. 310-79T.

United States Court of Claims.

May 6, 1981.

Jacob Fishman, Miami, Fla., for plaintiff, Milton M. Ferrell, Jr., Miami, Fla., attorney of record.

David C. Hickman, Washington, D. C., with whom was Asst. Atty. Gen. M. Carr Ferguson, Washington, D. C., for defendant; Theodore D. Peyser, Washington, D. C., of counsel.

Before FRIEDMAN, Chief Judge, SKELTON, Senior Judge, and KASHIWA, Judge.

ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

KASHIWA, Judge.

This case is before the court on defendant's motion for summary judgment under Rule 101. We must decide whether a levy against a taxpayer's property to collect federal income taxes may be contested in the Court of Claims by a third party who claims the property as his. If suit in this court is proper, we must then decide the proper period of limitation for such a suit. After considering the written and oral submissions of the parties, we conclude that this case is one within our jurisdiction under the Tucker Act, 28 U.S.C. § 1491 (1976),¹ but that this suit is time barred.

The facts of this controversy are simple and not in dispute. Plaintiff Gordon is a Jamaican citizen and the spiritual leader of the Zion Coptic Church. In 1978, Gordon was arrested in Florida on state drug charges. He deposited $500,000 with the Accredited Surety and Casualty Company (Accredited) to obtain a pre-trial release bond. Thereafter, in March 1978, the Internal Revenue Service (IRS) levied on all property in the possession of Accredited belonging to the Zion Coptic Church or certain nominees, including Gordon. The levy was made to collect an asserted tax deficiency reflecting the Church's unreported drug traffic income. See 26 U.S.C. (Internal Revenue Code of 1954, hereafter I.R.C.) § 6851, I.R.C. § 6861; I.R.C. § 6331. Pursuant to that levy, the $500,000 Gordon deposited was apparently paid over to the IRS. In July 1979, 16 months after the levy, Gordon filed a petition in this court alleging that $500,000 belonging to him was improperly paid by Accredited to the IRS under the levy. The petition seeks recovery of that amount from defendant.

Subject Matter Jurisdiction

Gordon alleges jurisdiction in this court under the Tucker Act in that his claim is founded on a contract implied in fact to return moneys wrongfully paid to defendant. See Kirkendall v. United States, 90 Ct.Cl. 606, 613-614, 31 F.Supp. 766, 769-770 (1940). See also Bull v. United States, 295 U.S. 247, 261-262, 55 S.Ct. 695, 700, 79 L.Ed. 1421 (1935); United States v. State Bank, 96 U.S. 30, 35, 24 L.Ed. 647 (1877). Alternatively, Gordon alleges Tucker Act jurisdiction because his claim is one based on the just compensation clause of the Fifth Amendment.² Defendant, in its motion for summary judgment, argues that whatever jurisdiction, contract or constitutional, this court had prior to 1966, the enactment of I.R.C. § 7426³ as section 110(a) of the Federal Tax Lien Act of 1966, Pub.L.No.89-719, 80 Stat. 1125 (1966) (Tax Lien Act), ended this court's jurisdiction to hear contests of tax levies brought by one other than the taxpayer, i. e., a third party. Defendant contends that all such actions must now be brought under I.R.C. § 7426 and only in the district courts. Although not briefed by defendant, a corollary of its position is that if Tucker Act jurisdiction was not withdrawn by section 110(a) of the Tax Lien Act, section 110(b) (presently I.R.C. § 6532(c)) limits Tucker Act jurisdiction of third-party levy contests to those commenced within 9 months of the levy. The primary issue, therefore, is whether the Tax Lien Act provisions replace or augment pre-1966 law in this court.

The proper inquiry, of course, is not whether the Tax Lien Act expresses an affirmative congressional intent to permit recourse under the Tucker Act. Rather, it is whether Congress withdrew Tucker Act jurisdiction over such claims when the Tax Lien Act was passed. See Regional Rail Reorganization Act Cases, 419 U.S. 102, 126, 95 S.Ct. 335, 349, 42 L.Ed.2d 320 (1974); Hatzlachh Supply Co. v. United States, 444 U.S. 460, 463, 100 S.Ct. 647, 649, 62 L.Ed.2d 614 (1980). See also Brown v. General Services Administration, 425 U.S. 820, 824-825, 834, 96 S.Ct. 1961, 1963-1964, 1968, 48 L.Ed.2d 402 (1976), and cases cited; Matson Navigation Co. v. United States, 284 U.S. 352, 356-357, 52 S.Ct. 162, 164-165, 76 L.Ed. 336 (1932). Compare Brown, supra (the legislative history and structure of 42 U.S.C. § 2000e-16 indicate Congress intended amendment to Title VII to be the exclusive remedy for federal discrimination in employment) with Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 459, 95 S.Ct. 1716, 1719, 44 L.Ed.2d 295 (1975) (Title VII remedies for private discrimination do not supplant remedies under 42 U.S.C. § 1981). We have applied similar notions in a variety of contexts. See, e. g., Fiorentino v. United States, 221 Ct.Cl. ___, ___, 607 F.2d 963, 969-970 (1979), cert. denied, 444 U.S. 1083, 100 S.Ct. 1039, 62 L.Ed.2d 768 (1980) (Tucker Act jurisdiction of pay claim based on adverse file items withdrawn by Privacy Act of 1974, 5 U.S.C. § 552(a)); Whitecliff, Inc. v. United States, 210 Ct.Cl. 53, 57 nn.4 & 5, 58 & n.8, 536 F.2d 347, 350 nn.4 & 5, 351 & n.8 (1976), cert. denied, 430 U.S. 969 97 S.Ct. 1652, 52 L.Ed.2d 361 (1977) (Tucker Act jurisdiction over post-1972 Medicare provider claims withdrawn by 42 U.S.C. § 1395oo(f)); Butz Engineering Corp. v. United States, 204 Ct.Cl. 561, 566-577, 499 F.2d 619, 621-628 (1974) (Tucker Act jurisdiction over claims against Postal Service continues after Postal Reorganization Act, Title 39, U.S.C.); National State Bank of Newark v. United States, 174 Ct.Cl. 872, 885, 357 F.2d 704, 711-712 (1966) (Tucker Act jurisdiction of claims under Federal Housing Act not precluded by 12 U.S.C. § 1702).

Defendant concedes, as it must, that nowhere in the Tax Lien Act or its legislative history is there an express revocation of this court's Tucker Act jurisdiction to hear third-party levy actions.⁴ Congress might, for example, have included a provision specifically denying this court jurisdiction.⁵ It might have granted the district courts exclusive jurisdiction over any third-party levy contests when Congress amended 28 U.S.C. § 1346.⁶ Or it might have used mandatory ("shall") rather than permissive ("may") language in I.R.C. § 7426.⁷ Congress chose none of these methods to withdraw this court's jurisdiction. Indeed, Congress did not even term the grant of jurisdiction to the district courts over I.R.C. § 7426 actions as exclusive. See 28 U.S.C. § 1346(e).⁸

Instead, defendant argues that because neither the statute nor the accompanying committee reports mention the Court of Claims, Congress must have overlooked the jurisdiction exercised by this court in the Kirkendall line of cases. This being so, the argument goes, we must infer Congress assumed I.R.C. § 7426 would be the exclusive remedy. This inference, defendant continues, is supported by the completeness of the I.R.C. § 7426 remedy. Thus, concludes defendant, under Brown v. General Services Administration, supra, this court must provide the exclusivity Congress assumed, albeit in error. We find, however, that neither the legislative history nor the structure of I.R.C. § 7426 support defendant's assertions.

The passage of the Tax Lien Act culminated an extensive effort by the American Bar Association to remedy problems involved in collecting delinquent federal taxes. The ABA had first approved the Final Report of its Committee on Federal Tax Liens in 1959. The report⁹ contained a concise analysis of the statutory and decisional law and was accompanied by proposed legislation to correct the technical problems found. Over the next 7 years, the ABA worked for the passage of its legislation.

The ABA report included a recommendation for a new Code provision, section 7431, allowing third-party levy contests in the district courts. The explanation for proposed section 7431 indicated that while decisional law generally allowed third parties to contest levies in the district courts,¹⁰ there was some uncertainty whether the district courts had jurisdiction to grant injunctive and declaratory relief if the nominal defendant was the United States rather than the tax collector.¹¹ Decisional law, the report continued, was unclear whether a claim for refund by the third party (although not technically a taxpayer) was necessary prior to suit.¹² The ABA report termed litigation over such "technicalities" as "fruitless" and recommended proposed section 7431 as the solution. The report explained that proposed section 7431 generally confirmed existing district court remedies regardless of nominal defendant, removed the "technicalities," and also removed the existing $10,000 maximum otherwise applicable to actions brought against the United States in the district courts.¹³ Also noted was Tucker Act jurisdiction in the Court of Claims:

Present decisions also permit one whose money is wrongly seized for another's taxes to sue the United States for its recovery, but the suit must be in the Court of Claims if the amount exceeds $10,000 (although there are also decisions permitting such suit to be brought in the district court, without jurisdictional limit, if the Director is the nominal defendant). * * * ABA Final Report, Legislative History, supra at 168.

Thus, the ABA report indicated the focus of proposed section 7431 was to clarify uncertainties in the relief a district court might provide. The report also demonstrates that those who drafted proposed section 7431 were aware a third-party levy contest could be maintained in the Court of Claims. The drafters of proposed section 7431 apparently perceived no inconsistency between continued jurisdiction in this court and that under the proposal, for although a provision was included detailing the effect of proposed section 7431 on other existing actions, the...