Freedom From Religion Foundati, et al v. Michael Rodgers, et al
Filing
FILED OPINION (DIARMUID F. O'SCANNLAIN, STEPHEN S. TROTT and TENA CAMPBELL) AFFIRMED IN PART; VACATED IN PART; REMANDED. Each side shall bear its own costs. Judge: DFO Authoring, FILED AND ENTERED JUDGMENT. [7744146]
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FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
FREEDOM FROM RELIGION
FOUNDATION, INC.; PAUL STOREY;
BILLY FERGUSON; KAREN
BUCHANAN; JOSEPH MORROW;
ANTHONY ARLEN; ELISABETH
STEADMAN; WILLIAM M. SHOCKLEY;
CHARLES CRANNELL; COLLETTE
CRANNELL; MIKE OSBORNE; KRISTI
CRAVEN; PAUL ELLCESSOR; JOSEPH
RITTELL; WENDY CORBY; PAT
KELLEY; CAREY GOLDSTEIN; DEBORA
SMITH; KATHY FIELDS; RICHARD
MOORE; SUSAN ROBINSON; KEN
NAHIGAN,
Plaintiffs-Appellees,
v.
TIMOTHY GEITHNER, Secretary, U.D.
Dept. of the Treasury; DOUGLAS
SHULMAN, Commissioner, IRS;
SELVI STANISLAUS, Executive
Officer of the California Franchise
Tax Board; UNITED STATES OF
AMERICA,
Defendants-Appellees,
MICHAEL RODGERS, Pastor,
Defendant-intervenor-Appellant.
No. 09-17753
D.C. No.
2:09-cv-02894WBS-DAD
OPINION
Appeal from the United States District Court
for the Eastern District of California
William B. Shubb, Senior District Judge, Presiding
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FREEDOM FROM RELIGION FOUNDATION v. RODGERS
Argued and Submitted
February 14, 2011—San Francisco, California
Filed May 9, 2011
Before: Diarmuid F. O’Scannlain and Stephen S. Trott,
Circuit Judges, and Tena Campbell, District Judge.*
Opinion by Judge O’Scannlain
*The Honorable Tena Campbell, Senior United States District Judge for
the District of Utah, sitting by designation.
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FREEDOM FROM RELIGION FOUNDATION v. RODGERS
COUNSEL
Kevin T. Snider, Pacific Justice Institute, Sacramento, California, argued the cause and filed the briefs for the appellant.
With him on the briefs was Matthew B. McReynolds, Sacramento, California.
Ivan C. Dale, Department of Justice, Tax Division, Washington, D.C., argued the cause and filed a brief for the appellees.
With him on the briefs were John A. DiCicco, Acting Assis-
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tant Attorney General, Gilbert S. Rothenberg, Acting Deputy
Assistant Attorney General, and Teresa E. McLaughlin,
Department of Justice, Tax Division.
OPINION
O’SCANNLAIN, Circuit Judge:
We must decide whether an individual who claims certain
federal and state tax exemptions may intervene in an unrelated action challenging the constitutionality of those exemptions.
I
The Freedom from Religion Foundation, Inc. (“FFRF”)
sued the Secretary of the Treasury and the Commissioner of
the Internal Revenue Service in their official capacities under
28 U.S.C. § 2201, alleging that the so-called “parsonage
exemption” violates the Establishment Clause of the United
States Constitution.1 FFRF also sued the Executive Officer of
1
The federal parsonage exemption is provided by sections 107 and
265(a)(6) of the Internal Revenue Code. Section 107 provides:
In the case of a minister of the gospel, gross income does not
include— (1) the rental value of a home furnished to him as part
of his compensation; or (2) the rental allowance paid to him as
part of his compensation, to the extent used by him to rent or provide a home and to the extent such allowance does not exceed the
fair rental value of the home, including furnishings and appurtenances such as a garage, plus the cost of utilities.
26 U.S.C. § 107. Section 265(a)(6) provides:
No deduction shall be denied under this section for interest on a
mortgage on, or real property taxes on, the home of the taxpayer
by reason of the receipt of an amount as— . . . (B) a parsonage
allowance excludable from gross income under section 107.
26 U.S.C. § 265(a)(6).
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the California Franchise Tax Board (“CFTB”) in his official
capacity under 42 U.S.C. § 1983, alleging that California’s
parsonage exemption violates the Establishment Clause of
both the United States and California Constitutions.2 The
challenged statutes allow “minister[s] of the gospel” to
exclude their rental allowance, or the rental value of any
home furnished to them as part of their compensation, from
gross income. 26 U.S.C. § 107. FFRF seeks a declaration that
the challenged statutes are unconstitutional and an injunction
forbidding the defendants from “continuing to grant or allow
tax benefits under sections 107 and 265(a)(6) of the Internal
Revenue Code and the corresponding sections of the California Revenue and Taxation Code.”
Six days after FFRF filed its complaint, Pastor Michael
Rodgers, a minister of the gospel in the Sacramento area who
regularly claims both the federal and state parsonage exemptions, moved to intervene as a defendant on behalf of himself
and Does 1-100—ministers within the jurisdiction of the Eastern District of California. Rodgers sought to intervene both as
of right, pursuant to Federal Rule of Civil Procedure 24(a)(2),
and permissively, pursuant to Rule 24(b)(1)(B). The federal
defendants opposed the motion, and the district court denied
Rodgers’s motion both for intervention as of right and for permissive intervention.
Rodgers timely appeals.
II
We review a denial of a motion to intervene as of right de
novo. Perry v. Prop. 8 Official Proponents, 587 F.3d 947, 950
(9th Cir. 2009).
2
The California parsonage exemption is provided by sections 17131.6
and 17280(d)(2) of the California Revenue & Tax Code. These statutes
largely mirror their federal counterparts.
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Federal Rule of Civil Procedure 24(a)(2) provides:
On timely motion, the court must permit anyone to
intervene who . . . claims an interest relating to the
property or transaction that is the subject of the
action, and is so situated that disposing of the action
may as a practical matter impair or impede the
movant’s ability to protect its interest, unless existing parties adequately represent that interest.
We have summarized the requirements of intervention as of
right under Rule 24(a)(2) as follows:
(1) [T]he [applicant’s] motion must be timely; (2)
the applicant must have a “significantly protectable”
interest relating to the property or transaction which
is the subject of the action; (3) the applicant must be
so situated that the disposition of the action may as
a practical matter impair or impede its ability to protect that interest; and (4) the applicant’s interest must
be inadequately represented by the parties to the
action.
California ex rel. Lockyer v. United States, 450 F.3d 436, 440
(9th Cir. 2006) (quoting Sierra Club v. EPA, 995 F.2d 1478,
1481 (9th Cir. 1993)). Although Rule 24(a)(2) is construed
broadly in favor of intervenors, Wilderness Soc’y v. U.S. Forest Serv., 630 F.3d 1173, 1179 (9th Cir. 2011) (en banc), the
applicant bears the burden of showing that each of the four
elements is met, Prete v. Bradbury, 438 F.3d 949, 954 (9th
Cir. 2006). “Failure to satisfy any one of the requirements is
fatal to the application.” Perry, 587 F.3d at 950. Because we
agree with the district court’s conclusion that the government
adequately represents Rodgers’s interests, we need not discuss
the first three requirements.3
3
We note, however, our agreement with the district court’s conclusion
that Rodgers’s motion was timely, that he has a “significantly protectable
interest,” and that he is so situated that the disposition of the action may
impair his ability to protect his interest.
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A
[1] “Where the party and the proposed intervenor share the
same ‘ultimate objective,’ a presumption of adequacy of representation applies.” Perry, 587 F.3d at 951 (quoting Arakaki
v. Cayetano, 324 F.3d 1078, 1086 (9th Cir. 2003)). This presumption of adequacy is “nowhere more applicable than in a
case where the Department of Justice deploys its formidable
resources to defend the constitutionality of a congressional
enactment.” Lockyer, 450 F.3d at 444. Here, the federal
defendants have demonstrated that their ultimate objective is
to uphold the constitutionality of the challenged statutes. In
their motion to dismiss, the federal defendants argued, inter
alia, that “[s]ections 107 and 265(a)(6) constitute constitutional accommodations of religious practice by eliminating
discrimination between ministers and similarly situated taxpayers. Sections 107 and 265(a)(6) are part of a governmental
policy of neutrality toward religion, and government neither
advances nor inhibits religious practice through these provisions.” Rodgers has presented no evidence that would lead us
to doubt that the federal defendants’ ultimate objective is to
uphold the challenged statutes. Accordingly, we are satisfied
that Rodgers and the federal defendants have the same ultimate objective and that the “presumption of adequate representation applies.” Perry, 587 F.3d at 951.
B
[2] Such presumption can be rebutted only by “a compelling showing to the contrary.” Id. (internal quotation marks
and citation omitted). Rodgers first attempts to rebut the presumption by arguing that the federal defendants might urge a
narrow interpretation of the statute because the Solicitor General, when defending acts of Congress, “lean[s] heavily on the
Ashwander principle of construing a statute so as to avoid
constitutional doubt.” Lockyer, 450 F.3d at 444 (internal quotation marks and citation omitted). Rodgers fears that the federal defendants might, in an attempt to save the parsonage
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exemption from being declared unconstitutional, urge the
court to construe the statutes in a narrow way that would
reduce the value of the exemption. But Rodgers has presented
no evidence that the federal defendants actually have urged a
narrow interpretation of the challenged statutes in the district
court. And, in any event, it is unclear whether there is a narrow construction of sections 107 and 265(a)(6) that would be
responsive to FFRF’s constitutional challenge. Furthermore,
even if we agreed with Rodgers’s contention, we have previously held that “just because the government theoretically
may offer a limiting construction of a statute that is narrower
than that of a party proposing intervention does not mean that
the party has overcome the presumption of adequacy of representation.” Lockyer, 450 F.3d at 444.
[3] Rodgers next argues that the presumption should be
rebutted because the federal defendants are tasked both with
upholding the constitutionality of the challenged statutes and
with protecting the public treasury. He suggests that their
interest in maximizing federal tax revenues might lead the
federal defendants to abandon key arguments that could be
marshaled in defense of the challenged statutes. Rodgers
points to the IRS’s litigation behavior in Warren v. Commissioner to show that the IRS cannot be trusted to mount a
robust defense of the parsonage exemption. 114 T.C. 343
(2000). In Warren, the IRS proffered an interpretation of a
prior version of section 107 that would have reduced the value
of the exemption to some ministers. Id. at 346-47. But the
IRS’s position in Warren does not support Rodgers’s argument in favor of intervention because in Warren the IRS
explicitly conceded the constitutionality of section 107. See
Warren v. Comm’r (Warren I), 282 F.3d 1119, 1123-24 (9th
Cir. 2002) (Tallman, J., dissenting) (noting that both parties
“clearly stated that . . . they believe the parsonage exclusion
is constitutional”). Contrary to Rodgers’s assertions, the IRS’s
behavior in Warren does not indicate that the federal defendants in this case will fail to “make all of [Rodgers’s] proposed arguments,” or that they are not “willing to make such
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arguments.” Perry, 587 F.3d at 952 (internal quotation marks
and citation omitted).
[4] Rodgers also argues that he should be allowed to intervene because the federal defendants might not appeal an
adverse ruling. He correctly notes that the government may
not appeal an adverse ruling by a district court without first
obtaining the approval of the Solicitor General. See 28 C.F.R.
§ 0.20(b). But if the mere possibility that the federal defendants might decline to appeal were sufficient to rebut the presumption of adequacy, then nearly every case involving a
federal defendant would be subject to intervention as of right.
Moreover, the government typically appeals district court
decisions ruling federal statutes unconstitutional. Cf. 28
U.S.C. § 530D(a)(1)(B)(ii) (requiring Attorney General to
report to Congress a decision to refrain from defending the
constitutionality of a federal statute or not to appeal an
adverse determination thereof). In the absence of any evidence that the government is not willing and able to appeal,
Rodgers fails to make a “compelling showing” that would
rebut the presumption that the federal government will adequately represent his interests. Perry, 587 F.3d at 951.
Finally, Rodgers argues that the federal defendants will not
adequately represent his interests in defending the constitutionality of the state statutes. This argument also fails. The
state government, not the federal government, has the burden
of defending state laws from constitutional challenges. In his
original motion to intervene, Rodgers questioned whether the
executive official of the CFTB would defend sections 17131.6
and 17280(d)(2) of the California Revenue and Tax Code.
However, Rodgers filed his motion to intervene before the
State of California had even been served with FFRF’s complaint. And because the district court issued its order denying
Rodgers’s motion to intervene before the state had filed an
answer, the district court concluded that any “determination
that the State of California may not adequately represent the
potential intervenor’s interests with respect to the California
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statutes at issue [is] . . . premature.”4 Because Rodgers did not
present any arguments on appeal as to why California would
not adequately represent his interest in upholding the state
parsonage exemption, any claim to that effect is waived.
[5] In conclusion, because the federal defendants adequately represent Rodgers’s interests, he is not entitled to
intervene as of right under Rule 24(a)(2).
III
We review the denial of a motion for permissive intervention for abuse of discretion. See League of United Latin American Citizens (“LULAC”) v. Wilson, 131 F.3d 1297, 1307 (9th
Cir. 1997). A district court necessarily abuses its discretion if
it commits a legal error. United States v. Hinkson, 585 F.3d
1247, 1261-62 (9th Cir. 2009) (en banc).
[6] Federal Rule of Civil Procedure 24(b)(1)(B) provides
that “[o]n timely motion, the court may permit anyone to
intervene who . . . has a claim or defense that shares with the
main action a common question of law or fact.” We have
often stated that permissive intervention “requires (1) an independent ground for jurisdiction; (2) a timely motion; and (3)
a common question of law and fact between the movant’s
claim or defense and the main action.” Beckman Indus., Inc.
v. Int’l Ins. Co., 966 F.2d 470, 473 (9th Cir. 1992); see, e.g.,
United States v. City of Los Angeles, 288 F.3d 391, 403 (9th
Cir. 2002); LULAC, 131 F.3d at 1308; Northwest Forest
Reserve Council v. Glickman, 82 F.3d 825, 839 (9th Cir.
1996).
The district court concluded that because Rodgers could not
demonstrate constitutional standing he failed to satisfy the
4
We note that since this appeal was filed, the state has filed a motion
to dismiss FFRF’s complaint in which it argues that the challenged statutes “survive constitutional scrutiny under both federal and state law.”
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independent jurisdictional grounds requirement. This requirement stems, however, from our concern that intervention
might be used to enlarge inappropriately the jurisdiction of
the district courts. See Fed. R. Civ. P. 82. This concern manifests itself most concretely in diversity cases where proposed
intervenors seek to use permissive intervention to gain a federal forum for state-law claims over which the district court
would not, otherwise, have jurisdiction. See, e.g., Blake v.
Pallan, 554 F.2d 947, 956-57 (9th Cir. 1977) (dismissing an
intervening plaintiff’s state-law claims for lack of independent jurisdictional grounds).
The jurisdictional requirement also prevents permissive
intervention from being used to destroy complete diversity in
state-law actions. See 28 U.S.C. § 1332; Cf. 28 U.S.C.
§ 1367(b) (providing that, in diversity actions, “the district
courts shall not have supplemental jurisdiction . . . over
claims by plaintiffs against persons made parties under Rule
. . . 24 . . . or over claims by persons . . . seeking to intervene
as plaintiffs under Rule 24 . . . when exercising supplemental
jurisdiction over such claims would be inconsistent with the
jurisdictional requirements of section 1332.”).
[7] But in federal-question cases, the identity of the parties
is irrelevant and the district court’s jurisdiction is grounded in
the federal question(s) raised by the plaintiff. See 28 U.S.C.
§ 1331. The jurisdictional requirement, therefore, prevents the
enlargement of federal jurisdiction in such cases only where
a proposed intervenor seeks to bring new state-law claims.
See, e.g., Beckman Indus., Inc., 966 F.2d at 473 (holding that
“an independent jurisdictional basis is not required [in this
case] because intervenors do not seek to litigate a claim on the
merits”); Blake, 554 F.2d at 956-57. Where the proposed
intervenor in a federal-question case brings no new claims,
the jurisdictional concern drops away. See 7C Charles Alan
Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice
& Procedure § 1917 (3d ed. 2010) (“In federal-question cases
there should be no problem of jurisdiction with regard to an
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intervening defendant nor is there any problem when one
seeking to intervene as a plaintiff relies on the same federal
statute as does the original plaintiff.”). We therefore clarify
that the independent jurisdictional grounds requirement does
not apply to proposed intervenors in federal-question cases
when the proposed intervenor is not raising new claims.
[8] Here, it is undisputed that the district court is exercising federal-question jurisdiction and that Rodgers does not
seek to bring any counterclaims or cross-claims. Accordingly,
Rodgers is not required to make any further showing that his
intervention is supported by independent jurisdictional
grounds. Because the district court did not apply the correct
legal rule, its decision denying Rogers permissive intervention
was not an appropriate exercise of discretion. See Hinkson,
585 F.3d at 1261-62. We accordingly vacate that portion of
the district court’s order and remand so that the “district court
may reassess the request for permissive intervention under the
criteria established by Rule 24(b).” City of Los Angeles, 288
F.3d at 404.
IV
For the foregoing reasons, the judgment of the district court
is AFFIRMED IN PART, VACATED IN PART, AND
REMANDED.
Each side shall bear its own costs.
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