Opinion
Civil No. 02-573-JD
December 29, 2003
ORDER
The plaintiff, Charles N. Blossom, Jr., brought suit under the Employees Retirement Income Security Act, seeking a declaratory judgment to invalidate or revoke his assignment to the Bank of New Hampshire of retirement pension benefits paid from an annuity purchased by Blossom's former employer, Concord General Mutual Insurance Company. The Bank moved to join an additional party, the United States of America, as a necessary party after the Internal Revenue Service sent the Bank notice of a levy to attach future payments from the annuity to pay back taxes owed by Blossom. After the motion was granted, the government moved to dismiss the action against it for lack of subject matter jurisdiction. The Bank filed a response that it did not object to dismissal without prejudice, and Blossom did not respond to the government's motion.
The Declaratory Judgment Act, 28 U.S.C. § 2201 (a), provides that federal courts "may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought" but excepts suits "with respect to Federal taxes." Section 2201 "neither provides nor denies a jurisdictional basis for actions under federal law, but merely defines the scope of available declaratory relief." McCarthy v. Marshall, 723 F.2d 1034, 1037 (1st Cir. 1983).
The Anti-Injunction Act, 26 U.S.C. § 7421 (a), provides jurisdictional limits that are applicable to declaratory judgment actions and prohibits suits to restrain the assessment or collection of taxes.Id. Therefore, if the purpose of the claim against the government "is to prevent the Internal Revenue Service from assessing and collecting income taxes," then this court lacks jurisdiction to consider the claim. McCarthy/ 723 F.2d at 1038 (citing Bob Jones Univ, v. Simon, 416 U.S. 725, 738 (1974)); see also S.E.C. v. Credit Bancorp, LTD., 297 F.3d 127, 137-38 (2d Cir. 2002). An exception exists if "the government could, under no circumstances, prevail on the merits of the underlying dispute." Id.
In this case, Blossom asserts that he is entitled to the benefits paid from the annuity, which the Bank contends have been validly assigned to it, although the payments, apparently, are now subject to a tax levy for back taxes assessed against Blossom. Blossom does not bring any claim against the government, but instead seeks a declaration of rights to the payments as between himself and the Bank. If the rights of all three parties were to be addressed for purposes of a declaratory judgment, the court would necessarily consider the tax levy and the assessment of back taxes against Blossom. Blossom or the Bank would be entitled to the payments only to the extent the court determined that the government was not entitled to a tax levy. Blossom and the Bank have not suggested that the government could not prevail on the merits of the tax issue.
Therefore, the court lacks subject matter jurisdiction to consider the declaratory judgment action against the government.
Conclusion
For the foregoing reasons, the government's motion to dismiss (document no. 23) is granted. The United States of America is dismissed from the case, without prejudice, for lack of subject matter jurisdiction.
SO ORDERED.