United States District Court, C.D. California
JOSE J. GONSALEZ, Plaintiff,
EMPLOYMENT DEVELOPMENT DEPARTMENT EDD, et al., Defendants.
ORDER ACCEPTING REPORT AND RECOMMENDATION OF UNITED
STATES MAGISTRATE JUDGE AND DISMISSING CASE
HONORABLE ANDRÉ BIROTTE JR. UNITED STATES DISTRICT
to 28 U.S.C. § 636, the Court has reviewed the pleadings
and all the records and files herein, including the Report
and Recommendation (“R&R”) dated December 26,
2018 [Dkt. No. 22], Plaintiff's Objections to the R&R
(“Objections”) [Dkt. No. 23], and the Declaration
in Support of Objections (“Declaration”) [Dkt.
No. 24], and has made a de novo determination of
those portions to which Plaintiff objected.
in the Objections refutes the Magistrate Judge's finding
that the Court lacks subject matter jurisdiction over the
Complaint in its entirety. See [Dkt. No. 22, p. 1');">p. 18');">p. 1');">p. 18].
As the R&R explained, the Tax Injunction Act
(“TIA”) prohibits Plaintiff's claims under 42
U.S.C. § 1983 and the Racketeer Influenced and Corrupt
Organizations Act (“RICO”) because the Complaint
seeks to restrain “the assessment, levy or collection
of [a] tax under State law.” [Dkt. No. 22, p. 1');">p. 12
(quoting 28 U.S.C. § 1341)].
Objections, Plaintiff argues that the TIA does not apply to
his claims because “there is no law, rule, or policy
that allows the multiplication of a tax
assessment.” [Dkt. No. 23, p. 1');">p. 1]. However, the R&R
addressed this argument, explaining that, “[t]he
gravamen of the Complaint, in fact all the factual
allegations, relate to Plaintiff's assertion that the
EDD, through its employees, improperly assessed and collected
taxes, ” that Plaintiff is seeking the return of the
paid portion of the assessed tax and to avoid paying the
remaining balance, and that “[f]or the Court to order
the return of the paid tax, or compensatory damages in the
same amount, the Court must declare that the taxes were
wrongfully assessed.” [Dkt. No. 22, pp. 1');">p. 11-12]. The
Magistrate Judge therefore found that the Complaint in its
entirety falls within the language of the TIA. [Id.,
p. 1');">p. 12].
Plaintiff argues that Franchise Tax Bd. v. Hyatt,
136 S.Ct. 1277 (2016) (“Hyatt II”) and
Franchise Tax Bd. v. Hyatt, 139 S.Ct. 1485 (2019)
(“Hyatt III”) support the proposition
that California “has not been accommodating to a
meaningful and expedient way of dealing with challenges to
tax assessments.” [Dkt. No. 23, pp. 3-4]. The Court
understands this as an argument that the TIA does not apply
because there is no “plain, speedy and efficient
remedy” available in California courts, as is required
by the TIA. See 28 U.S.C. § 1341. However,
neither of these cases stand for the asserted proposition,
and nothing within either case overturns the Supreme
Court's finding in California v. Grace Brethren
Church, 457 U.S. 393, 416-17 (1982), that the tax refund
procedures in California meet the “plain, speedy and
efficient” standard under the TIA. See Hyatt
II, 136 S.Ct. at 1283 (2016) (finding Nevada courts'
application of special damages rule violated Full Faith and
Credit Clause); Hyatt III, 139 S.Ct. at 1499
(holding states are immune from private suits brought in
courts of other states).
final arguments pertain to amendments he proposes to make in
a First Amended Complaint. [Dkt. No. 23, pp. 5-7]. The
R&R explained that leave to amend should not be granted
because amendment would be futile. [Dkt. No. 22, p. 1');">p. 18');">p. 1');">p. 18];
see also Cato v. United States, 70 F.3d 1103, 1106
(9th Cir. 1995) (affirming dismissal with prejudice where
amendment could not cure complaint). The Court has also
reviewed and considered Plaintiff's Motion for Leave to
File First Amended Civil Rights Complaint (“Motion to
File FAC”), which was filed after the issuance of the
R&R, Defendants' Opposition to Motion for Leave to
File First Amended Civil Rights Complaint, and
Plaintiff's Reply to Defendants' Opposition to Motion
for Leave to File First Amended Civil Rights Complaint. [Dkt.
Nos. 25, 26, 28]. Plaintiff's Motion to File FAC includes
similar arguments as the Objections and a proposed First
Amended Complaint (“FAC”). [Dkt. No. 25].
However, nothing in the Objections, Motion to File FAC, or
proposed FAC refute the findings in the R&R that
amendment would be futile.
Motion to File FAC, Plaintiff states, “The new
complaint maintains the counts and allegations against the
same defendants from the original complaint, ” and adds
facts and claims related to “developments that have
occurred since the original complaint was filed.” [Dkt.
No. 25, p. 1');">p. 1]. Indeed, the allegations and federal claims in
the proposed FAC all relate to Plaintiff's assertion that
the EDD, through its employees, improperly assessed and
collected taxes. See [Id., pp. 7-26].
Further, the relief Plaintiff seeks is to restrain “the
assessment, levy or collection of [a] tax under State law,
” depriving the Court of jurisdiction pursuant to 28
U.S.C. § 1341. See, e.g.,
[Id., p. 1');">p. 12 (seeking reimbursement for taxes levied
from bank account and client and punitive damages based on
amount of tax assessment)].
attempt to add state tort claims based on the EDD's
conduct while collecting taxes will not give rise to federal
jurisdiction. Without jurisdiction over the federal claims,
the Court lacks supplemental jurisdiction over
Plaintiff's state law tort claims. See Herman Family
Revocable Tr. v. Teddy Bear, 254 F.3d 802');">254 F.3d 802, 805 (9th Cir.
2001) (holding supplemental jurisdiction over state law
claims cannot exist without original jurisdiction over
IT IS HEREBY ORDERED:
1. The United States Magistrate Judge's Report and
Recommendation, [Dkt. No. 22], is accepted;
2. Defendants' Motion to Dismiss is granted;
3. The case is dismissed for lack of subject matter
jurisdiction without leave to amend;
4. Plaintiffs Motion to File FAC is denied; and 5. Judgment
is to be ...