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Kersten v. State of California Franchise Tax Board

United States District Court, E.D. California

March 22, 2017

TIMOTHY A. KERSTEN, D.D.S., Plaintiff,



         At first glance, this case involves a dentist's constitutional challenge to California's tax system. But a closer look reveals salient procedural issues about federalism, proper service, and Eleventh Amendment immunity. Plaintiff Timothy A. Kersten, D.D.S. challenges California's statutory tax scheme. First Am. Compl. (“FAC”), ECF No. 12. Now before the Court are two motions to dismiss. ECF No. 15 (“Individual Defendants' MTD”); ECF No. 17 (“Dominicis's MTD”). Kersten offers no opposition to the substantive legal arguments raised in these motions. ECF No. 20. For the reasons set forth below both motions are granted and the FAC is dismissed in its entirety.[1]


         California has a statutory scheme for handling delinquent taxpayers. Section 19195 requires the California Franchise Tax Board (“FTB”) to biannually compile and publish a list of the 500 largest state income tax delinquencies. Cal. Rev. & Tax. Code § 19195 (West 2012).[2] And Section 494.5 requires the FTB to create a “certified list” of those taxpayers and mandates the Board of Dentistry (“Board”) (which is part of the Department of Consumer Affairs (“DCA”)) and the Department of Motor Vehicles (“DMV”) to revoke the licenses of taxpayers on the delinquency list unless they obtain a release. Cal. Bus. & Prof. Code § 494.5 (West 2013).

         Plaintiff Timothy A. Kersten's name appeared on the FTB list in October 2013. FAC ¶ 118. The Board and DCA suspended Kersten's dental license, and he could not renew it. Id. ¶¶ 70-72. He also could not renew his revoked driver's license. Id. ¶¶ 80-83. So Kersten challenged California's tax scheme in a § 1983 suit. He alleged that several California agencies and officials violated his procedural due process, substantive due process, and equal protection rights. See generally FAC. He also claimed California's statutory scheme violated the supremacy clause. Id. Kersten seeks monetary, declarative, and injunctive relief. Id. at 47-50.

         Kersten named all of the following defendants in the FAC: the FTB, the DCA, the Board, and the DMV (“State Agencies”); Betty T. Yee, Jerome Horton, Michael Cohen, Selvi Stanislaus, John Chiang, Awet Kidane, Alexis Podesta, Spencer L. Walker, Steven G. Morrow, Judith Forsythe, Steven Afriat, Fran Burton, Stephen Casagrande, Yvette Chappel-Ingram, Katie Dawson, Luis R. Dominicis, Kathleen King, Ross Lai, Huong Le, Meredith McKenzie, Thomas Stewart, Bruce L. Whitcher, Debra Woo, Karen Fischer, Dawn Dill, Jean Shiomoto, David P. Harris, and Fiona Ma (“Individual Defendants”) (collectively “Defendants”).

         Soon after filing his FAC, Kersten moved to voluntarily dismiss the FTB, the Board, and the DMV, leaving the DCA as the only remaining state agency. ECF No. 19. The Court granted his motion without prejudice. ECF No. 21.

         That leaves Defendants' motions to dismiss. All individual defendants-except Luis R. Dominicis and Dawn Dill-bring the first motion. See generally Individual Defendants' MTD. Dominicis brings the second motion. See generally Dominicis's MTD. Neither Dawn Dill nor the DCA is a party to either motion to dismiss. Kersten opposes only the Individual Defendants' motion. See Opp'n at 1. The Individual Defendants and Dominicis filed a joint reply. See Reply at 2 n.1.

         II. OPINION

         A. Judicial Notice

         The Individual Defendants and Dominicis separately request judicial notice for the same documents: (1) Kersten's Petition for Writ of Mandamus (attached to Request for Judicial Notice [“RJN”] as Exh. A); (2) Kersten's First Amended Petition for Writ of Mandamus (attached to RJN as Exh. B); and (3) the Shasta County Superior Court's Final Ruling on Motion for Judgment on the Pleadings (attached to RJN as Exh. C). See Individual Defendants' RJN, ECF No. 15-3, at 2. See also Dominicis's RJN, ECF No. 17-1, at 2. All documents arise from the state court case.

         A court may take judicial notice of a fact that is not reasonably disputed if it “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b)(2). On a motion to dismiss, courts may consider “matters of public record.” Northstar Fin. Advisors Inc. v. Schwab Inv., 779 F.3d 1036, 1042 (9th Cir. 2015) (internal citation omitted). “Matters of public record” include court filings. See Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006) (courts may take judicial notice of court filings and other matters of public record).

         The Court takes judicial notice of Kersten's Petition, his First Amended Petition, and the Superior Court's Final Ruling because they constitute matters ...

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