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Van Vliet v. Van Vliet

United States District Court, E.D. Virginia, Newport News Division

February 11, 2015

JOHANNA VAN VLIET, Plaintiff,
v.
ARIANNE VAN VLIET, ET AL., Defendants.

OPINION AND ORDER

HENRY COKE MORGAN, Jr., Senior District Judge.

This matter is before the Court on Defendant United States of America, ex. rel. The Internal Revenue Service's ("United States") Motion to Dismiss, Doc. 3. The United States seeks to be dismissed from this case under Rule 12(b)(1) based upon the protection of sovereign immunity and under Rule 12(b)(6) for the failure to state a claim. See Doc. 4.

The Court held a hearing on this matter on February 5, 2015, and after considering the arguments of counsel, along with the supporting and opposing written memoranda, the Court ruled from the bench and GRANTED the United States' Motion to Dismiss under Rule 12(b)(1) and REMANDED the case to the Circuit Court for Williamsburg and James City County. Having found that the Court lacks subject matter jurisdiction due to sovereign immunity, the Court did not reach the United States' argument under Rule 12(b)(6).

I. BACKGROUND[1]

Plaintiff first filed this action in the Circuit Court for Williamsburg and James City County seeking rescission of a Disclaimer of Interest executed on July 16, 2012. Doc. 1 at 2.

Plaintiffs husband passed away in 2011, leaving behind an estate which included an Individualized Retirement Account ("IRA") listing Plaintiff as the primary beneficiary. Id.

After consultation with legal and financial advisors, Plaintiff and her family determined that Plaintiff would execute a Disclaimer of Interest allowing the IRA to pass to the secondary beneficiary, a revocable trust. Doc. 1 at Ex. 2 ¶ 27. Contrary to what she was allegedly told by her advisors, Plaintiff was soon thereafter informed that the mandatory distributions from her late-husband's IRA were significantly higher than projected. Id. at Ex. 2 ¶ 36. Consequently, Plaintiff filed the instant suit in state court, seeking rescission of the Disclaimer. Doc. 6 at 3.

On October 31, 2014, the United States filed its Notice of Removal, bringing this case before the Court on the grounds that any civil action commenced in a state court against the United States may be removed. Doc. 1 (citing 28 U.S.C. § 1442(a)(1)). The United States then filed the instant Motion to Dismiss on November 7, 2014, arguing to be dismissed from the case, and suggesting that the Court should then remand the remaining claims to the Circuit Court in which the case was originally filed. See Doc. 4; see also Doc. 5 at 5, n.1.

II. STANDARD OF REVIEW

Federal district courts are courts of limited subject matter jurisdiction. United States ex rel. Vuyyuru v. Jadhav, 555 F.3d 337, 347 (4th Cir. 2009) (citing Exxon Mobile Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005)). Accordingly, Nile objection that a federal court lacks subject-matter jurisdiction... may be raised by a party, or by a court on its own initiative, at any stage in the litigation...." Arbaugh v. Y & H Corp., 546 U.S. 500 (2006) (citing Fed.R.Civ.P. 12(b)(1)). "On a motion to dismiss pursuant to Rule 12(b)(1), the party asserting jurisdiction has the burden of proving subject matter jurisdiction." Balzer & Assoc., Inc. v. Union Bank & Trust, 3:09cv273, 2009 WL 1675707, at *2 (E.D. Va. June 15, 2009) (citing Richmond, Fredericksburg & Potomac R.R. v. United States, 945 F.2d 764, 768 (4th Cir. 1991)).

Sovereign immunity is "jurisdictional in nature." Bullock v. Napolitano, 666 F.3d 281, 284 (4th Cir. 2012) (citing FDIC v. Meyer, 510 U.S. 471, 475 (1994)). The United States is immune from suit unless it has consented to be sued. United States v. Testan, 424 U.S. 392, 399 (1976). Therefore, whenever a case arises in which the United States has not waived its sovereign immunity, the action must be dismissed for lack of subject matter jurisdiction. United States v. Mitchell, 445 U.S. 535, 538 (1980). Any such waiver of sovereign immunity "cannot be implied but must be unequivocally expressed" and is strictly construed in favor of the sovereign. Id.

III. DISCUSSION

Here, the burden of showing an unequivocal waiver of sovereign immunity by the United States is upon Plaintiff. See Balzer, 2009 WL 1675707, at *2. Accordingly, Plaintiff asserts that the waiver of sovereign immunity, and therefore the Court's basis for subject matter jurisdiction over this case, flows from "28 U.S.C. §§ 1331, 1340 and 1346." Doc. 6. The United States disagrees, however, stating that although "those statutes grant jurisdiction... they do not waive the United States' sovereign immunity." Doc. 7 at 2. The Court will examine each statute in turn to determine if Plaintiff has met her burden to establish waiver.

The first statute cited by Plaintiff is 28 U.S.C. § 1331, commonly known as the source of federal question jurisdiction. Although this statute defines one part of this Court's subject matter jurisdiction generally, it is not a "waiver of sovereign immunity." Randall v. United States, 95 F.3d 339, 345 (4th Cir. 1996) (quoting Coggeshall Dev. Corp. v. Diamond, 884 F.2d 1, 4 (1st Cir. 1989); Humphreys v. United States, 62 ...


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