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United States District Court, Northern District of Illinois, E.D

October 27, 1967


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 authority.

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 pleadings herein.

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 (4th Cir. 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 (D.Md. 1965).

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 this action:

  "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 Government.

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 court held:

  "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 complaint.

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 defendants.

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