Jacobs v. District Director of Internal Revenue

• Decision Date: 15 February 1963
• Citation: 217 F. Supp. 104
• Parties: David JACOBS, Plaintiff, v. DISTRICT DIRECTOR OF INTERNAL REVENUE, BOROUGH OF MANHATTAN, CITY OF NEW YORK, New York Credit Men's Adjustment Bureau, Inc. (Secretary of Creditors' Committee of Kolmer & Co., Inc.), Doris Kollmer, Richard Kolmer, Executor of the Estate of Max Kolmer, Deceased, Ben Levine, and Marshall, Bratter, Greene, Allison & Tucker, Attorneys, Defendants.
• Court: U.S. District Court — Southern District of New York

217 F. Supp. 104

David JACOBS, Plaintiff, v. DISTRICT DIRECTOR OF INTERNAL REVENUE, BOROUGH OF MANHATTAN, CITY OF NEW YORK, New York Credit Men's Adjustment Bureau, Inc. (Secretary of Creditors' Committee of Kolmer & Co., Inc.), Doris Kollmer, Richard Kolmer, Executor of the Estate of Max Kolmer, Deceased, Ben Levine, and Marshall, Bratter, Greene, Allison & Tucker, Attorneys, Defendants.

United States District Court S. D. New York.

February 15, 1963.

Louis Gruss, New York City, for plaintiff David Jacobs.

Vincent L. Broderick, U. S. Atty., New York City, for defendant District Director of Internal Revenue (Clarence M. Dunnaville, Asst. U. S. Atty., New York City, of counsel).

Hahn, Hessen, Margolis & Ryan, New York City, for defendant New York Credit Men's Adjustment Bureau, Inc. (J. Jacob Hahn and George A. Hahn, New York City, of counsel).

Phillips, Nizer, Benjamin, Krim & Ballon, New York City, for defendant Doris Kollmer.

Sandow Holman, New York City, for interpleaded defendants Marshall, Bratter, Greene, Allison and Tucker.

MacMAHON, District Judge.

This is an interpleader action which was commenced under Section 285, New York Civil Practice Act, in the Supreme Court of the State of New York. It was removed to this court pursuant to Title 28 United States Code, Sections 1444 and 1446, by a petition filed by the United States on August 1, 1962.

Defendant, New York Credit Men's Adjustment Bureau (Bureau), moves under Rule 12(b), Federal Rules of Civil Procedure, to dismiss the complaint on the grounds that the court lacks jurisdiction over the subject matter and that the complaint fails to state a claim upon which relief can be granted. The United States, not named as a defendant, moves to dismiss the complaint as against defendant District Director of Internal Revenue (District Director) on the grounds of sovereign immunity and improper joinder, and also for leave to intervene as plaintiff, pursuant to Rule 24, Federal Rules of Civil Procedure, on the ground that it will be adversely affected by disposition of the property which is the subject of this suit.

In addition to the above-stated motions, the United States, in its supplemental memorandum of law, requests leave of court to amend its removal petition to allege 28 U.S.C. §§ 1441 and 1442 (a) as additional grounds for removal. While a removal petition may be amended at any time to state more specifically a ground for removal already imperfectly stated, it is well settled that after the 20-day period allowed by 28 U.S.C. § 1446 for the filing of a removal petition has expired, an amendment which would add an entirely new ground for removal is not permissible. United Gas Pipe Line Co. v. Brown, 207 F.Supp. 139 (E.D. La.1962); Roseberry v. Fredell, 174 F. Supp. 937 (E.D.Ky.1959); Browne v. Hartford Fire Ins. Co., 168 F.Supp. 796 (N.D.Ill.1959). In the instant action, the above statutory period has long since expired. The amendment sought by the United States, asserting as it does grounds for removal which were entirely absent in the original petition is, therefore, not allowable.

As amendment of its petition is time barred, the United States must rely on 28 U.S.C. § 1444 as the sole basis for removal of the present suit to this court. Under that section, removal is proper only if the removed action is of the character delineated in 28 U.S.C. § 2410(a), that is, an action to quiet title to, or for the foreclosure of, a mortgage or other lien upon real or personal property on which the United States has or claims a mortgage or other lien.

Upon review of all the pertinent cases, the court is of the opinion that an interpleader action, such as the one now before it, cannot be fairly characterized as one within the scope of § 2410(a). Wildenstein & Co., Inc. v. Gilbert and Day & Meyer, Murray & Young Corp., 217 F.Supp. 816 (S.D.N.Y. November 8, 1962); Herter v. Helmsley-Spear, Inc., 149 F.Supp. 713 (S.D.N.Y.1957). It necessarily follows that the present action was improperly removed to this court.

Although the District Director has been named as an interpleaded defendant, he, clearly, is only a nominal party. His interest in the controversy is not personal but merely representative of that of the United States. The action is, in effect, one against the United States and, as such, it is maintainable against the latter only if it has waived its sovereign immunity. Laughlin v. Harrington, 103 U.S.App.D.C. 179, 256 F.2d 893 (1958), cert. denied 358 U.S. 945, 79 S.Ct. 352, 3 L.Ed.2d 351 (1959); Burkley v. United States, 185 F.2d 267 (7 Cir., 1950). However, as this action is neither within § 2410(a), nor any other waiver provision, it is a suit to which the United States has not consented. As a result, the state court never acquired valid jurisdiction over the subject matter in respect to the United States. Since the jurisdiction of the district court on removal is derived from that of the state court, this court also lacks such jurisdiction. State of...