Opinion
CV-S-01-0929-PMP (PAL).
February 14, 2002
ORDER
Presently before this Court is a Motion to Dismiss. Defendant United States of America ("Defendant") filed United States' Motion to Dismiss (Doc. #3) on September 12, 2001. Plaintiffs Paul L. Hickey and Nellida F. Hickey ("Plaintiffs") filed Plaintiffs [sic] Objection to Defendant's Motion to Dismiss (Doc. #6) on December 10, 2001. Defendant filed no Reply.
I. LEGAL STANDARD
In considering a motion to dismiss, this Court must presume all well-pleaded allegations of material fact and must draw all reasonable inferences in favor of the non-moving party. Knevelbaard Dairies v. Kraft Foods Inc., 232 F.3d 979, 984 (9th Cir. 2000). However, the Court is not "required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." Sprewell v. Golden State Warriors, 231 F.3d 520, 527-28 (9th Cir. 2000). There is a strong presumption against dismissing an action for failure to state a claim. Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 249 (9th Cir. 1997). The issue is not whether Plaintiff will ultimately prevail, but whether he may offer evidence in support of his claims. Davis v. Monroe County Bd. of Educ., 526 U.S. 629, 654 (1999) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). Consequently, the Court may not grant a Motion to Dismiss for failure to state a claim "unless it appears beyond doubt that the Plaintiff can prove no set of facts in support of his claim which would entitle him to relief" Conley v. Gibson, 355 U.S. 41, 45-46 (1957).
The liberal rules of notice pleading set forth in the Federal Rules of Civil Procedure do not require a plaintiff to set out in detail the facts supporting his claim. Yamaguchi v. United States Dep't of the Air Force, 109 F.3d 1475, 1481 (9th Cir. 1997) (quoting Conley, 355 U.S. at 47). All the Rules require is a "short and plain statement" that adequately gives the defendant "fair notice of what the plaintiffs claim is and the grounds upon which it rests." Yamaguchi, 109 F.3d at 1481. Therefore, a plaintiff merely must plead sufficiently to "establish a basis for judgment against the defendant." Id. at 1481. Further, a claim is sufficient if it shows that the plaintiff is entitled to any relief which the court can grant, even if the complaint asserts the wrong legal theory or asks for improper relief Haddock v. Board of Dental Exam'rs, 777 F.2d 462, 464 (9th Cir. 1985).
II. DISCUSSION
Plaintiffs contend that they received a Notice of Levy form issued in an attempt to collect income tax owed by the Plaintiffs for 1996 and 1997. (Compl. ¶ 2.) Plaintiffs allege that they requested a Collection Due Process ("CDP") hearing (Compl. ¶ 2), and that the resulting CDP hearing did not comply with the requirements imposed by law. (Compl. ¶ 4.)
Defendant has brought a motion to dismiss for lack of subject matter jurisdiction. Defendant argues that the United States has not waived its sovereign immunity, that the Tax Court properly has the power of judicial review, and that 26 U.S.C. § 6330 (d) establishes only a limited waiver of sovereign immunity. In response, Plaintiffs claim that the United States Tax Court does not have jurisdiction to hear their claim, that notice from the Secretary or his delegate of their right to a CDP hearing is a jurisdictional prerequisite for the CDP hearing, and that various legal issues bar the United States Tax Court from having jurisdiction.
Plaintiffs contend that several legal issues preclude the Tax Court from having jurisdiction. Specifically, Plaintiffs make four claims in support of their contention that the Tax Court does not have jurisdiction: (1) that the "notice inviting plaintiff to request the hearing was not sent by the Secretary of the Treasury or his delegate as required by 26 U.S.C. § 6330 (a)(1)"; (2) that the "appeals officer did not receive `verification from the Secretary that all the requirements of any applicable law and administrative procedures [were] met,'" in violation of 26 U.S.C. § 6330 (c)(1); (3) that Plaintiffs were denied representation at the hearing; and (4) "[w]hether or not there is such thing as an underlying income tax `liability' as a matter of law." (Pls.' Objection to Def.'s Mot. to Dismiss at 3.)
Of primary importance in the present case is whether or not this Court has jurisdiction to hear Plaintiffs' claims. The section of the United States Code at issue, 26 U.S.C. § 6330, specifies that "[n]o levy may be made on any property or right to property of any person unless the Secretary has notified such person in writing of their right to a hearing under this section before such levy is made." 26 U.S.C. § 6330 (1). The statute also provides for judicial review:
(1) Judicial review of determination. — The person may, within 30 days of a determination under this section, appeal such determination —
(A) To the Tax Court (and the Tax Court shall have jurisdiction with respect to such matter); or
(B) if the Tax Court does not have jurisdiction of the underlying tax liability, to a district court of the United States.26 U.S.C. § 6330 (d) (emphasis added). Thus, the Tax Court has the power to hear appeals from determinations pursuant to 26 U.S.C. § 6330. 26 U.S.C. § 6330 (1)(A). Only if the Tax Court does not have jurisdiction over the "underlying tax liability" does a United States District Court have jurisdiction. 26 U.S.C. § 6330 (1)(B). See also True v. Commissioner of the Internal Revenue Serv., 108 F. Supp.2d 1361 (M.D. Fla. 2000) ("A claimant is required to bring a § 6330 appeal in the Tax Court, so long as the Tax Court has jurisdiction of the underlying tax liability."). If the Tax Court has jurisdiction over the present claim, then, this Court cannot hear Plaintiffs' case.
The Tax Court is an Article I court and has limited jurisdiction to "rule on deficiencies assessed by the government on taxpayers." Crawford v. Commissioners of Internal Revenue, 266 F.3d 1120, 1122 (9th Cir. 2001). See also 26 U.S.C. § 7441; Freytag v. Commissioner of Internal Revenue, 501 U.S. 868, 891 (1991) ("The Tax Court's function and role in the federal judicial scheme closely resemble those of the federal district courts, which indisputably are "Courts of Law.' Furthermore, the Tax Court exercises its judicial power in much the same way as the federal district courts exercise theirs."). Despite the fact that the Tax Court's jurisdiction is ostensibly limited to hearing disputes about the government's assessment of deficiencies, however, the Tax Court also has the jurisdiction to hear constitutional claims. Rager v. Commissioner of Internal Revenue, 775 F.2d 1081, 1083 (9th Cir. 1985) ("[W]e have often upheld Tax Court decisions which were based on a constitutional inquiry.") (citing sources). See also Crawford, 266 F.3d at 1123 ("We have previously held that Tax Courts, which are Article I courts, have jurisdiction to consider constitutional questions in the context of deciding deficiencies.").
Even drawing all inferences in favor of Plaintiffs, as this Court must, this Court finds that the Tax Court has jurisdiction to hear Plaintiffs' claims. Knevelbaard Dairies, 232 F.3d at 984. The Plaintiffs' claims involve a dispute over a proposed levy by the Internal Revenue Service in response to an alleged income tax liability. This is precisely the kind of claim over which the Tax Court has jurisdiction. See Krugman v. Commissioner of Internal Revenue, 12 T.C. 230, 236 n. 6 (1999) ("[T]he Tax Court has jurisdiction to review determinations under § 6330 relating to proposed levies."). Further, the fact that Plaintiffs have alleged constitutional violations in the present case does not preclude the Tax Court from hearing all of their claims. Rager, 775 F.2d at 1083;Crawford, 266 F.3d at 1123. Because the Tax Court has jurisdiction over Plaintiffs' claims, this Court cannot hear those claims. 26 U.S.C. § 6330 (1)(B).
This Court's dismissal of Plaintiffs' claims on subject matter jurisdiction grounds will not be prejudicial to Plaintiffs. As the Defendant pointed out in its Motion to Dismiss, Plaintiffs have thirty days in which to bring their claim in the Tax Court. 26 U.S.C. § 6330 (d)(1). See also True v. Commissioner of the Internal Revenue, 108 F. Supp.2d 1361, 1364 (M.D. Fla. 2000) ("[Plaintiff] will not be materially prejudiced by this decision because 26 U.S.C. § 6330 (d)(1) allows [Plaintiff] to bring his claim in the appropriate court within thirty (30) days of dismissal of this action.").
III. CONCLUSION
IT IS THEREFORE ORDERED that Defendant United States of America's Motion to Dismiss (Doc. #3) is hereby GRANTED. Plaintiffs Paul L. Hickey and Nellida F. Hickey's Complaint is hereby DISMISSED in its entirety.