The opinion of the court was delivered by: Oliver W. Wanger United States District Judge
MEMORANDUM DECISION GRANTING TAX BOARD AND CALIFORNIA DEFENDANT CALIFORNIA FRANCHISE DEPARTMENT'S MOTION TO DISMISS EMPLOYMENT DEVELOPMENT CABRAL'S FIRST AMENDED CROSS-CLAIMS AND GRANTING PLAINTIFF UNITED STATES'S MOTION TO DISMISS CABRAL'S
FIRST AMENDED COUNTERCLAIMS
Before the court for decision are motions to dismiss Defendant John L. Cabral's amended cross claims/counterclaims against Defendant California Franchise Tax Board ("FTB") and California Employment Development Department ("EDD") and Plaintiff United States for lack of subject matter jurisdiction. Oral argument was heard on November 10, 2008.
Cabral's counsel filed a separate motion to withdraw, (Doc. 60), which will be heard at the same time as the pending motions to dismiss and are treated in a separate memorandum decision.
A. United States' Complaint
The United States filed a complaint on November 30, 2007, pursuant to 26 U.S.C. §§ 7401, 7403, to reduce to judgment outstanding federal tax assessments against Defendants Cabral and Janet M. Cabral, and to foreclose federal tax liens arising from federal tax liabilities against two parcels of property owned by Cabral and Janet M. Cabral, located in Stanislaus County. (Doc. 1, Complaint, at ¶¶ 2, 3.) Cabral and Janet M. Cabral are husband and wife, jointly holding title to the two parcels of real property. (Id. at ¶6.)
The United States' alleges that it sent and made timely notice and demands of tax assessments to Defendant Cabral, which Defendant Cabral has neglected, failed, or refused to pay. (Id. at ¶¶ 14, 15.) In its first cause of action, the United States seeks to reduce to judgment the amount outstanding, the total balance which, including accrued interest and penalties through August 1, 2007, is $1,989,497.90. (Id. at ¶ 15.) Plaintiff seeks the same recovery from Defendant Janet M. Cabral in its second cause of action, for a total amount outstanding as of August 1, 2007, of $1,763,947.42. (Id. at ¶¶ 16-19.) In its third cause of action, the United States seeks to foreclose its alleged federal tax lien on the parcels of real property. (Id. at ¶23.)
FTB and EDD, among others, are named as Defendants in the suit because the United States' asserts they may claim an interest in the property against which the United States seeks to foreclose its tax liens. (Id. at ¶10.)
B. Defendant Cabral's Initial Counterclaims/Crossclaims
Defendant Cabral initially alleged two counterclaims/ cross claims against the United States and FTB/EDD for (1) wrongful lien under 28 U.S.C. § 2410, (Doc. 27 at ¶¶ 6-15); and (2) wrongful levy under 26 U.S.C. § 7426(a), (Id. at ¶¶ 16-19). The United States and FTB/EDD moved to dismiss Cabral's counterclaims/ cross claims. (Docs. 29 at 41.) Both motions were granted on August 14, 2008, although Cabral was permitted leave to amend. (Doc. 50 ("the August 14, 2008 Decision").)
C. Cabral's Amended Counterclaims/Cross Claims
Cabral filed an Amended Answer on August 26, 2008, which contained amended counterclaims/ cross claims against the United States and FTB/EDD for (1) wrongful lien under 28 U.S.C. § 2410, and (2) wrongful levy under 26 U.S.C. § 7426 . (Doc. 53.) The United States and FTB/EDD again move to dismiss. (Docs. 54 and 57.) Cabral opposes the United States' motion, (Doc. 66.), but filed no opposition to FTB/EDD's motion. The United States and FTB/EDD replied. (Docs. 67 and 68.)
III. STANDARDS OF DECISION
A. Motion to Dismiss for Lack of Subject Matter Jurisdiction
Rule 12(b)(1), Federal Rules of Civil Procedure, provides for dismissal of action for "lack of jurisdiction over the subject matter." Faced with a Rule 12(b)(1) motion, a plaintiff bears the burden of proving the existence of the court's subject matter jurisdiction. Thompson v. McCombe, 99 F.3d 352, 353 (9th Cir. 1996). A federal court is presumed to lack jurisdiction in a particular case unless the contrary affirmatively appears. General Atomic Co. v. United Nuclear Corp., 655 F.2d 968, 968-969 (9th Cir. 1981).
A challenge to subject matter jurisdiction may be facial or factual. White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). As explained in Safe Air for Everyone v. Meyer, 373 F.3d 1035 (9th Cir. 2004), cert. denied, 544 U.S. 1018 (2005):
In a facial attack, the challenger asserts are insufficient on their face to invoke that the allegations contained in a complaint factual attack, the challenger disputes the federal jurisdiction. By contrast, in a would otherwise invoke federal jurisdiction. truth of the allegations that, by themselves, 373 F.3d at 1038. "If the challenge to jurisdiction is a facial attack, i.e., the defendant contends that the allegations of jurisdiction contained in the complaint are insufficient on their face to demonstrate the existence of jurisdiction, the plaintiff is entitled to safeguards similar to those applicable when a Rule 12(b)(6) motion is made." Cervantez v. Sullivan, 719 F. Supp. 899, 903 (E.D. Cal. 1989), rev'd on other grounds, 963 F.2d 229 (9th Cir. 1992). "The factual allegations of the complaint are presumed to be true, and the motion is granted only if the plaintiff fails to allege an element necessary for subject matter jurisdiction." Id. In resolving a factual attack on jurisdiction, the district court may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment. Savage v. Glendale Union High School, 343 F.3d 1036, 1039 n.2 (9th Cir. 2003), cert. denied, 541 U.S. 1009 (2004); McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988), cert. denied, 489 U.S. 1052 (1989).
The United States, as a sovereign, is immune from suit unless it has waived its immunity. Department of Army v. Blue Fox, Inc., 525 U.S. 255, 260 (1999); United States v. Mitchell, 445 U.S. 535, 538 (1980). A court lacks subject matter jurisdiction over a claim against the United States if it has not consented to be sued on that claim. Consejo de Desarrollo Economico de Mexicali, A.C. v. United States, 482 F.3d 1157, 1173 (9th Cir. 2007). "When the United States consents to be sued, the terms of its waiver of sovereign immunity define the extent of the court's jurisdiction." United States v. Mottaz, 476 U.S. 834, 841 (1986). A waiver of sovereign immunity must be unequivocally expressed. Department of Army v. Blue Fox, Inc., 525 U.S. 255, 261 (1999). The Government's consent to be sued must be construed strictly, in favor of the sovereign. Id.
C. Eleventh Amendment Immunity
The Eleventh Amendment provides:
The Judicial power of the United States shall not be construed to extend to any such suit in law or equity, commenced or prosecuted against one of the ...