Alsheikh v. Lew et al

Filing 31

ORDER GRANTING MOTION TO DISMISS by Judge Jon S. Tigar granting 21 Motion to Dismiss. (wsn, COURT STAFF) (Filed on 4/7/2016)

Download PDF
1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ABDULLAH SALEH ALSHEIKH, Case No. 3:15-cv-03601-JST Plaintiff, 8 v. ORDER GRANTING MOTION TO DISMISS 9 10 JACOB LEW, ET AL., Re: ECF No. 21 Defendant. United States District Court Northern District of California 11 12 13 In this action for declaratory and injunctive relief, Plaintiff Abdullah Saleh Alsheikh 14 alleges that certain provisions of the Foreign Account Tax Compliance Act, 26 U.S.C. §§ 1471– 15 74, are unconstitutional. The government moves to dismiss Plaintiff’s Compliant on several 16 grounds, including standing. Because the Court concludes that Plaintiff lacks Article III standing, 17 the Court grants the government’s motion. 18 I. BACKGROUND “Congress passed the Foreign Accounts Tax Compliance Act ('FATCA') in 2010 to 19 20 improve compliance with tax laws by U.S. taxpayers holding foreign accounts.” Crawford v. 21 United States Dep’t of the Treasury, No. 15-cv-250, 2015 WL 5697552, at *1 (S.D. Ohio Sept. 29, 22 2015). “FATCA accomplishes this through two forms of reporting: (1) by foreign financial 23 institutions (FFIs) about financial accounts held by U.S. taxpayers or foreign entities in which 24 U.S. taxpayers hold a substantial ownership interest, 26 U.S.C. § 1471; and, (2) by U.S. taxpayers 25 about their interests in certain foreign financial accounts and offshore assets. 26 U.S.C. § 6038D.” 26 Id. 27 28 Plaintiff Abdullah Saleh Alsheikh is a U.S. citizen working abroad in the Kingdom of Saudi Arabia. ECF No. 1 at 2. Plaintiff, proceeding pro se, filed a Complaint on August 06, 2015, seeking to invalidate certain provisions of FATCA on five grounds. Id. at 4–13. According to 2 Plaintiff, FATCA “threatens the privacy rights of United States Citizens who own foreign bank 3 accounts, including American expats, by requiring banks to disclose priv[ate] information of the 4 account owner without any chance for the citizen to object, and without any suspicion of wrong 5 doing by the citizen.” Id. at 1. Claim one alleges that FATCA violates the Tenth Amendment of 6 the U.S. Constitution and cannot be justified under Congress’ commerce or tax powers. Id. at 4–5. 7 Claim two challenges FATCA on the basis that the information it requires foreign institutions to 8 provide to the U.S. government constitutes an unlawful search under the Fourth Amendment. Id. 9 at 7–8. Claims three through five seek to invalidate FATCA because the law allegedly violates 10 Plaintiff’s procedural due process, substantive due process, and equal protection rights. Id. at 8– 11 United States District Court Northern District of California 1 13. On November 3, 2015, the government moved the Court to dismiss this action under Rules 12 13 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. ECF No. 21. The government 14 argues the Court should dismiss Plaintiff’s suit for lack of subject matter jurisdiction because 15 Plaintiff has failed to establish Article III standing and the relief Plaintiff seeks is barred by the 16 Anti-Injunction Act, 26 U.S.C. § 7421(a). The government also asserts that the Complaint fails to 17 state a claim upon which relief can be granted. 18 II. 19 LEGAL STANDARDS “[T]he irreducible constitutional minimum of standing contains three elements. First, the 20 plaintiff must have suffered an injury in fact — an invasion of a legally protected interest which is 21 (a) concrete and particularized . . . and (b) actual or imminent, not conjectural or 22 hypothetical.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992) (internal citations 23 omitted) (internal quotation marks omitted). An injury is “actual or imminent” if it is “certainly 24 impending,” because “[a]llegations of possible future injury are not sufficient.” Clapper v. 25 Amnesty Int’l USA, 133 S. Ct. 1138, 1147 (2013) (internal citations omitted). “Second, there 26 must be a causal connection between the injury and the conduct complained of — the injury has to 27 be ‘fairly . . . trace[able] to the challenged action of the defendant, and not . . . the result [of] the 28 independent action of some third party not before the court.” Lujan, 504 U.S. at 560 (citing Simon 2 1 v. E. Ky. Welfare Rights Org., 426 U.S. 26, 41–42 (1976)) (alterations in original). “Third, it 2 must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable 3 decision.” Id. at 560–61 (internal citations omitted) (internal quotation marks omitted). 4 Each element of standing “must be supported in the same way as any other matter on 5 which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required 6 at the successive stages of the litigation.” Id. at 561. “At the pleading stage, general factual 7 allegations of injury resulting from the defendant’s conduct may suffice.” Id. A “court’s 8 obligation to take a plaintiff at its word at that stage in connection with Article III standing issues 9 is primarily directed at the injury in fact and causation issues, not redressability.” Levine v. Vilsack, 587 F.3d 986, 996–97 (9th Cir. 2009) (citing Lujan, 504 U.S. at 561). “[I]t is within the 11 United States District Court Northern District of California 10 trial court’s power to allow or to require the plaintiff to supply, by amendment to the complaint or 12 by affidavits, further particularized allegations of fact deemed supportive of plaintiff’s standing.” 13 Warth v. Seldin, 422 U.S. 490, 501–02 (1975). 14 III. 15 ANALYSIS The Government moves to dismiss Plaintiff’s Complaint on a number of grounds. The 16 Court concludes that it lacks subject matter jurisdiction over Plaintiff’s claims because Plaintiff 17 has not shown that he has Article III standing. The Court will therefore grant the government’s 18 motion on that basis and will decline to reach the government’s remaining arguments. 19 A. Article III Standing 20 The “injury in fact” element “requires more than an injury to a cognizable interest. It 21 requires that the party seeking review be himself among the injured.” Lujan, 504 U.S. at 563 22 (quoting Sierra Club v. Morton, 405 U.S. 727, 734 (1972)). The purpose of requiring direct injury 23 is the judicial system’s “rough attempt to put the decision as to whether review will be sought in 24 the hands of those who have a direct stake in the outcome.” Morton, 405 U.S. at 740. As a result, 25 “a plaintiff raising only a generally available grievance about government—claiming only harm to 26 his and every citizen’s interest in proper application of the Constitution and laws, and seeking 27 relief that no more directly and tangibly benefits him than it does the public at large—does not 28 state an Article III case or controversy. ” Lujan, 504 U.S. at 573–74. 3 1 Here, Plaintiff has not identified any particular injury that he has suffered. The Complaint 2 contains only two sentences specifying how FATCA has allegedly harmed Plaintiff. First, 3 Plaintiff alleges that he “is damaged since [FATCA] forces financial institutions in Saudi Arabia 4 to disclose constitutionally protected information.” ECF No. 1 at 2. Second, Plaintiff alleges that 5 he has been injured in that he “is an American expat who is affected by [FATCA] since he has 6 foreign bank accounts.” ECF No. 1 at 4. However, Plaintiff does not allege any facts detailing 7 whether any financial institution in Saudi Arabia, or otherwise, has, in fact, been required under 8 FATCA to provide Plaintiff’s financial information to the U.S. government. Moreover, as the 9 government notes, “Plaintiff does not allege that he has had any application for an account denied or any account closed.” ECF No. 21-1 at 9. As a result, Plaintiff has failed to allege that he 11 United States District Court Northern District of California 10 “himself [is] among the injured.” Lujan, 504 U.S. at 563 12 The remainder of Plaintiff’s complaint raises “a generally available grievance about the 13 government,” Lujan, 504 U.S. at 573. See, e.g., ECF No. 1 at 1 (“The act threatens the privacy 14 rights of United States Citizens who own foreign bank accounts, including American expats, by 15 requiring banks to disclose priv[ate] information of the account owner without any chance for the 16 citizen to object, and without any suspicion of wrong doing by the citizen. ”); ECF No. 1 at 2 17 (“The act violates the fourth amendment right of foreign financial institutions and account holders 18 by requiring American payers to withhold payments for the government.”); ECF No. 1 at 5 19 (“FATCA imposes penalties on foreign financial institutions and in some cases o[n] persons who 20 fail to comply with the act. The act also requires the closure of accounts of citizens who fail to 21 give a waiver of privacy wherever required by law. Closure of bank accounts causes a lot of 22 problems to such people. ”). Such “generally available grievance[s]” do not constitute injury-in- 23 fact. Lujan, 504 U.S. at 573. 24 In his Opposition Brief, Plaintiff offers no argument to support a finding that he “himself 25 [is] among the injured.” Lujan, 504 U.S. at 563; see ECF No. 27 at 11–14. Accordingly, the 26 Court concludes that Plaintiff lacks Article III standing because he has failed to sufficiently allege 27 28 4 1 injury-in-fact.1 2 IV. CONCLUSION Plaintiff has not established that he has Article III standing. Accordingly, the Court grants 3 4 the government’s motion to dismiss without prejudice. Plaintiff may file an amended complaint 5 within 30 days of the filing date of this order. IT IS SO ORDERED. 6 7 Dated: April 7, 2016 8 ______________________________________ JON S. TIGAR United States District Judge 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1 28 Because the Court concludes that Plaintiff does not meet the injury-in-fact requirement, the Court declines to address the causation and redressability requirements for Article III standing. 5

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.


Why Is My Information Online?