United States District Court, Northern District of Illinois, E.D
October 27, 1967
SOL NEHF ET AL., PLAINTIFFS,
UNITED STATES OF AMERICA AND E.C. COYLE, DISTRICT DIRECTOR, DEFENDANTS.
The opinion of the court was delivered by: Marovitz, District Judge.
Defendants' Motion for Summary Judgment.
Plaintiffs seek the enforcement of an alleged agreement entered
into on December 13, 1961 between themselves and Harold All, then
the District Director of the Internal Revenue Service, wherein
the Director agreed to pay $15,814.58 to the plaintiffs.*fn1 The
District Director apparently had received that amount pursuant to
a levy served upon the Chicago Land Clearance Commission.
The agreement apparently provided that if the government did
not prevail in the pending case of United States v. Crest Finance
Co., 291 F.2d 1 (7th Cir. 1961), plaintiffs would be entitled to
the money, since they would hold a lien position superior to the
above-mentioned levy. Although unrelated factually to this case,
Crest presumably presented a legal issue of lien priority
identical to the dispute between plaintiffs and the Government.
The Government lost the Crest case, and plaintiffs contend that
the rule of law enunciated therein supported the priority of
their liens on file with the Chicago Land Clearance Commission,
and required the Internal Revenue Service to pay over to them the
aforesaid sum, under the terms of their agreement. The defendants
named herein are the United States and E.C. Coyle, currently the
District Director of Internal Revenue.
The Government filed its answer, in which it denied any
liability, claimed that a portion of the alleged agreement was
the result of mutual mistake, and insisted that this Court lacks
subject matter jurisdiction herein. The Government then served
the instant motion for summary
judgment to test its contention that we are without jurisdiction
in this cause.
In the complaint, jurisdiction is hinged upon 28 U.S.C. §
1331*fn2, the general federal question jurisdictional statute.
However, under the doctrine of sovereign immunity, suits against
the United States may not be maintained without an express grant
of statutory authority. Land v. Dollar, 330 U.S. 731, 67 S.Ct.
1009, 91 L.Ed. 1209 (1947). Section 1331 does not confer such
The Government maintains that this is an action upon an express
contract, and is correct in its assertion that under
28 U.S.C. § 1346(a)(2), and 1491, the United States Court of Claims
has exclusive jurisdiction over contract actions against the
Government exceeding $10,000 in amount.*fn3 Since the complaint
herein seeks more than that amount, the Government contends that
this case properly belongs in the Court of Claims.
The plaintiffs apparently realize the validity of the
Government's position. In their brief opposing the instant
motion, they seek leave to add Sections 1340, 2410, and 2463 of
Title 28, as "additional and further bases for the jurisdiction
of this Court."*fn4 Section 1340 provides:
"The district courts shall have original jurisdiction
of any civil action arising under any Act of Congress
providing for internal revenue, or revenue from
imports or tonnage except matters within the
jurisdiction of the Customs Court."
Even assuming arguendo that this action arises under a federal
statute providing for internal revenue, Section 1340 is merely a
grant of general jurisdiction, and is not a waiver by the United
States of its immunity from suit. Jurisdiction against the United
States under Section 1340 must be supported by some other statute
which specifically waives the sovereign's immunity. Falik v.
United States, 343 F.2d 38, 40 (2d Cir. 1965); Cooper Agency,
Inc. v. McLeod, 235 F. Supp. 276 (D.C.S.C. 1964), affirmed
348 F.2d 919 (4th Cir. 1965); Quinn v. Hook, 341 F.2d 920 (3d Cir.
1965). To supply the necessary consent, plaintiffs evidently rely
on Section 2410(a), which states:
"Under the conditions prescribed in this section and
section 1444 of this title for the protection of the
United States, the United States my be named a party
in any civil action or suit in any district court, or
in any state court having jurisdiction of the subject
matter, 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."
Although it appears that a Government levy was seemingly
responsible for the Government's current possession of the monies
in dispute, we do not think that plaintiffs may rely upon Section
2410(a) to sustain jurisdiction, in view of the posture of the
At first blush, it may appear that the government's possession
constitutes a cloud upon plaintiff's title to the property.
However, in Remis v. United States, 172 F. Supp. 732, 733 (D.Mass.
1959), affirmed 273 F.2d 293 (1st Cir. 1959), Judge Aldrich
cogently put the quietus to the argument that Section 2410(a) is
to be literally interpreted without reference to its legislative
history. In Remis, the purchaser of real estate at a
mortgagee's sale sought to quiet his title as against the United
States which had asserted junior liens against the property.
Judge Aldrich pointed out that Sec. 2410(a) was designed to allow
parties to join the United States in a limited class of cases, as
provided in the statute, and stated: (at 733)
"Taking this history as a whole, I think it
reasonably apparent that what concerned Congress was
admitting the government into actions as an
additional party when necessary for complete relief,
and not the creation of new jurisdiction in the
federal courts for the special purpose of suing the
Subsequent cases have rejected various taxpayers' attempts to
use Section 2410(a) to question the amount of taxes due or to
enjoin the enforcement of tax liens. Falik v. United States,
343 F.2d 38
(2d Cir. 1965); Cooper Agency, Inc. v. McLeod,
235 F. Supp. 276 (E.D.S.C. 1964), affirmed 348 F.2d 919
1965); Quinn v. Hook, 231 F. Supp. 718 (E.D.Pa. 1964), affirmed
341 F.2d 920
(3d Cir. 1965); Seff v. Machiz, 246 F. Supp. 823
The instant plaintiff seemingly would have this court invoke
Section 2410(a) to compel enforcement of an alleged contract with
the Government which stems from the parties' respective positions
as lienors upon certain property once held by the Chicago Land
Clearance Commission. Although plaintiffs claim that the "case is
not founded upon contract but upon an interpretation of the
Internal Revenue Laws relative to priorities of liens," their own
complaint belies their argument. The following illustrative
excerpts from the complaint are indicative of the true nature of
"1. That on the 13th day of December, 1961, an
Agreement was entered into between Harold R. All,
the then District Director of Internal Revenue at
Chicago, Illinois, and the plaintiffs, wherein the
Director of Internal Revenue agreed to pay over to
the plaintiffs the sum of $15,814.58 * * *
"3. That the final disposition of the Crest case
supported the priority of the liens which the
plaintiffs had on file with the said CHICAGO LAND
CLEARANCE COMMISSION and, accordingly, required the
Office of the Director of Internal Revenue, under
the terms of said Agreement, to pay over to the
plaintiffs * * *
"5. * * * the attorney for the plaintiffs * * * made
demand * * for the payment to the plaintiffs of the
$15,814.58, which was due them under the terms of
said contract, as aforesaid * * *
"7. The defendants have refused to acknowledge the
terms of the contract entered into by them * * *"
(All emphasis added)
It becomes apparent that plaintiffs have attempted to restyle
their lawsuit so as to cast it in a stance cognizable by this
court. However, the very words of their complaint make it clear
that they are suing upon an express contract, which incidentally
arose from a lien priority dispute between themselves and the
In Remis v. United States, 273 F.2d 293 (1st Cir. 1960), cited
above for Judge Aldrich's opinion in the District Court, the
Court of Appeals dealt swiftly with the allegation that
jurisdiction was present under Sections 1340 and 2410(a) because
"there is inherent in the complaint a controversy as to the
validity of tax liens arising under the Internal Revenue Code."
The plaintiff therein complained
that the Government's junior liens were invalid as to him. The
"The short answer to this contention is that the
complaint contains no allegation contraverting the
fact that valid federal liens attached to the
property or that they were properly recorded, and
there is no question as to the priority of the
mortgage which the government admits. In sum, the
issue raised now clearly is concerned not with the
validity or priority of the liens, but with their
extinguishment in a manner not permitted by the
statutes, and Section 1340 is therefore not
The instant complaint, as in Remis, contains no allegation
that the Government's lien was invalid due to procedural
irregularity, Falik v. United States, 343 F.2d 38, 42 (2d Cir.
1965); cf. United States v. Coson, 286 F.2d 453, 463 (9th Cir.
1961), or was inferior to plaintiffs' lien. It merely seeks the
enforcement of a contract with the Government which was hinged
upon the outcome of a case having no factual relationship to the
liens held by the parties hereto.
Inasmuch as the complaint is based upon a contract claim, and
seeks damages in excess of $10,000, it cannot be pursued against
the Government in this Court since Section 1346(a)(2) vests
exclusive jurisdiction over such actions in the United States
Court of Claims. The Government's motion for summary judgment is
granted for the limited reason that this Court lacks subject
matter jurisdiction over the contract allegations of the instant
We must also dismiss the complaint as to defendant E.C. Coyle.
In substance, the suit against Coyle is an attempt to circumvent
the doctrine of sovereign immunity by suing an agent of the
government. However, where the agent is merely acting within his
official capacity, he is acting on behalf of the government and
the courts have treated suits against such agents as falling
within the sovereign immunity doctrine. Larson v. Domestic &
Foreign Commerce Corp., 337 U.S. 682, 69 S.Ct. 1457, 93 L.Ed.
1628 (1949); Malone v. Bowdoin, 369 U.S. 643, 82 S.Ct. 980, 8
L.Ed.2d 168 (1962); Reisman v. Caplin, 115 U.S.App.D.C. 59,
317 F.2d 123 (1963).
That this suit is governed by those cases is apparent from the
terms of the complaint. The District Director in 1961, Harold
All, is alleged to have entered into the disputed agreement on
behalf of the Government. There can be no doubt that Coyle has
been named a party defendant solely because of his official
capacity, since he had no personal contact with the disputed
contract. Indeed there is no allegation that he acted beyond the
scope of his official duty.
The motion for summary judgment is granted in favor of both