Alsheikh v. Lew et al

Filing 45

ORDER GRANTING MOTION TO DISMISS AMENDED COMPLAINT by Judge Jon S. Tigar granting 33 Motion to Dismiss. (wsn, COURT STAFF) (Filed on 8/22/2016)

Download PDF
1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ABDULLAH SALEH ALSHEIKH, Case No. 15-cv-03601-JST Plaintiff, 8 v. ORDER GRANTING MOTION TO DISMISS AMENDED COMPLAINT 9 10 JACOB LEW, et al., Re: ECF No. 33 Defendants. United States District Court Northern District of California 11 Plaintiff Abdullah Saleh Alsheikh alleges that certain provisions of the Foreign Account 12 13 Tax Compliance Act, 26 U.S.C. §§ 1471–74, are unconstitutional. The government moves to 14 dismiss Plaintiff’s Amended Compliant on several grounds, including standing. The Court 15 previously granted the government’s motion to dismiss Plaintiff’s original complaint based on a 16 lack of standing. Because the Court continues to conclude that Plaintiff lacks Article III standing, 17 the Court will grant the government’s motion and dismiss the Amended Complaint without leave 18 to amend. 19 I. BACKGROUND “Congress passed the Foreign Accounts Tax Compliance Act (‘FATCA’) in 2010 to 20 21 improve compliance with tax laws by U.S. taxpayers holding foreign accounts.” Crawford v. 22 United States Dep’t of the Treasury, No. 15-cv-250, 2015 WL 5697552, at *1 (S.D. Ohio Sept. 29, 23 2015). “FATCA accomplishes this through two forms of reporting: (1) by foreign financial 24 institutions (FFIs) about financial accounts held by U.S. taxpayers or foreign entities in which 25 U.S. taxpayers hold a substantial ownership interest, 26 U.S.C. § 1471; and, (2) by U.S. taxpayers 26 about their interests in certain foreign financial accounts and offshore assets. 26 U.S.C. § 6038D.” 27 Id. 28 Plaintiff Abdullah Saleh Alsheikh is a U.S. citizen working abroad in the Kingdom of 1 Saudi Arabia. ECF No. 33 at 2. Plaintiff, proceeding pro se, filed a Complaint on August 6, 2015, 2 seeking to invalidate certain provisions of FATCA on five grounds. ECF No. 1 at 4–13. 3 According to Plaintiff, FATCA “threatens the privacy rights of United States Citizens who own 4 foreign bank accounts, including American expats, by requiring banks to disclose priv[ate] 5 information of the account owner without any chance for the citizen to object, and without any 6 suspicion of wrong doing by the citizen.” Id. at 1. Claim one alleges that FATCA violates the 7 Tenth Amendment of the U.S. Constitution and cannot be justified under Congress’ commerce or 8 tax powers. Id. at 4–5. Claim two challenges FATCA on the basis that the information it requires 9 foreign institutions to provide to the U.S. government constitutes an unlawful search under the Fourth Amendment. Id. at 7–8. Claims three through five seek to invalidate FATCA because the 11 United States District Court Northern District of California 10 law allegedly violates Plaintiff’s procedural due process, substantive due process, and equal 12 protection rights. Id. at 8–13. On April 7, 2016, the Court granted the government’s motion to dismiss the original 13 14 complaint, concluding that “Plaintiff has not identified any particular injury that he has suffered.” 15 ECF No. 31 at 4. On May 7, 2016, Plaintiff filed an Amended Complaint, which is nearly 16 identical to the original complaint except for the addition of an approximately two page section 17 entitled “Article III Standing.” ECF No. 32 at 3–5. On May 24, 2016, the government moved to 18 dismiss the Amended Complaint on several grounds, including a lack of Article III standing. ECF 19 No. 33. 20 II. 21 LEGAL STANDARDS “[T]he irreducible constitutional minimum of standing contains three elements. First, the 22 plaintiff must have suffered an injury in fact — an invasion of a legally protected interest which is 23 (a) concrete and particularized . . . and (b) actual or imminent, not conjectural or 24 hypothetical.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992) (internal citations 25 omitted) (internal quotation marks omitted). An injury is “actual or imminent” if it is “certainly 26 impending,” because “[a]llegations of possible future injury are not sufficient.” Clapper v. 27 Amnesty Int’l USA, 133 S. Ct. 1138, 1147 (2013) (internal citations omitted). “Second, there 28 must be a causal connection between the injury and the conduct complained of — the injury has to 2 1 be ‘fairly . . . trace[able] to the challenged action of the defendant, and not . . . the result [of] the 2 independent action of some third party not before the court.” Lujan, 504 U.S. at 560 (citing Simon 3 v. E. Ky. Welfare Rights Org., 426 U.S. 26, 41–42 (1976)) (alterations in original). “Third, it 4 must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable 5 decision.” Id. at 560–61 (internal citations omitted) (internal quotation marks omitted). 6 Each element of standing “must be supported in the same way as any other matter on 7 which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required 8 at the successive stages of the litigation.” Id. at 561. “At the pleading stage, general factual 9 allegations of injury resulting from the defendant’s conduct may suffice.” Id. A “court’s obligation to take a plaintiff at its word at that stage in connection with Article III standing issues 11 United States District Court Northern District of California 10 is primarily directed at the injury in fact and causation issues, not redressability.” Levine v. 12 Vilsack, 587 F.3d 986, 996–97 (9th Cir. 2009) (citing Lujan, 504 U.S. at 561). “[I]t is within the 13 trial court’s power to allow or to require the plaintiff to supply, by amendment to the complaint or 14 by affidavits, further particularized allegations of fact deemed supportive of plaintiff’s standing.” 15 Warth v. Seldin, 422 U.S. 490, 501–02 (1975). 16 III. 17 ANALYSIS The government moves to dismiss Plaintiff’s Amended Complaint on a number of 18 grounds. ECF No. 33. Once again, the Court concludes that it lacks subject matter jurisdiction 19 over Plaintiff’s claims because Plaintiff has not shown that he has Article III standing. The Court 20 will therefore grant the government’s motion on that basis, without reaching the government’s 21 remaining arguments. 22 A. Article III Standing 23 The “injury in fact” element “requires more than an injury to a cognizable interest. It 24 requires that the party seeking review be himself among the injured.” Lujan, 504 U.S. at 563 25 (quoting Sierra Club v. Morton, 405 U.S. 727, 734 (1972)). The purpose of requiring direct injury 26 is the judicial system’s “rough attempt to put the decision as to whether review will be sought in 27 the hands of those who have a direct stake in the outcome.” Morton, 405 U.S. at 740. As a result, 28 “a plaintiff raising only a generally available grievance about government—claiming only harm to 3 1 his and every citizen’s interest in proper application of the Constitution and laws, and seeking 2 relief that no more directly and tangibly benefits him than it does the public at large—does not 3 state an Article III case or controversy. ” Lujan, 504 U.S. at 573–74. The Court previously dismissed the original Complaint, stating: 4 5 Plaintiff has not identified any particular injury that he has suffered. The Complaint contains only two sentences specifying how FATCA has allegedly harmed Plaintiff. First, Plaintiff alleges that he “is damaged since [FATCA] forces financial institutions in Saudi Arabia to disclose constitutionally protected information.” ECF No. 1 at 2. Second, Plaintiff alleges that he has been injured in that he “is an American expat who is affected by [FATCA] since he has foreign bank accounts.” ECF No. 1 at 4. However, Plaintiff does not allege any facts detailing whether any financial institution in Saudi Arabia, or otherwise, has, in fact, been required under FATCA to provide Plaintiff’s financial information to the U.S. government. Moreover, as the 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 “himself [is] among the injured.” Lujan, 504 U.S. at 563. 6 7 8 9 10 United States District Court Northern District of California 11 12 13 ECF No. 31 at 4. The government argues that the Amended Complaint still fails to allege standing 14 15 16 17 because “[t]here is still no allegation that any financial institution has been required to provide any of Plaintiff’s bank account information to the United States government.” ECF No. 33 at 3. Moreover, the government argues, “merely stating the he owns accounts that could be subject to reporting is insufficient.” Id. (emphasis added). 18 The Court agrees with the government in this respect. While the Amended Complaint does 19 add the allegation that “Mr. Alsheikh owns bank accounts that will be [the] subject of reporting,” 20 ECF No. 32 at 3 (emphasis added), Plaintiff does not allege that any financial institutions have 21 been required to divulge his bank account information to the U.S. government. See also ECF No. 22 23 35 at 11 (Opposition brief, stating: “while no information was reported yet, the danger of reporting is [im]minent.”). Indeed, Mr. Alsheikh provides no factual allegations regarding his bank 24 accounts at all, making it impossible for the Court to plausibly infer, for instance, that his bank 25 26 account could potentially be subject to reporting because the “account . . . exceed[s] $50,000,” as required by the statute. 26 U.S.C. § 1471(d)(1)(B); ECF No. 33 at 3.1 27 28 1 In this respect, Plaintiff’s Opposition brief admits that he does not know whether or not any of 4 1 Additionally, the Amended Complaint does not sufficiently allege that the threatened harm 2 is “imminent,” as opposed to “conjectural or hypothetical.” Lujan, 504 U.S. at 560–61. Although 3 the Amended Complaint alleges that “Saudi Arabia has reached an agreement on substance to an 4 Intergovernmental Agreement (IGA) to enforce FATCA,” the Amended Complaint itself admits 5 that the IGA has not yet been implemented, but rather that it “may be signed any time and will 6 endanger the privacy of the plaintiff.” ECF No. 32 at 4. Such allegations of “hypothetical” future 7 harms do not satisfy Article III standing. Lujan, 504 U.S. at 560–61. 8 CONCLUSION 9 Accordingly, the Court once again concludes that Plaintiff does not have Article III standing to pursue his claims. Because the Court previously gave Plaintiff an opportunity to 11 United States District Court Northern District of California 10 amend his complaint to allege standing, and Plaintiff failed entirely to do so, the Court concludes 12 that further amendment would be futile. As a result, the Court dismisses Plaintiff’s Amended 13 Complaint without leave to amend. Chaset v. Fleer/Skybox Int’l, LP, 300 F.3d 1083, 1088 (9th 14 Cir. 2002) (“Because any amendment would be futile, there is no need to prolong the litigation by 15 permitting further amendment.”). 16 17 18 19 IT IS SO ORDERED. Dated: August 22, 2016 ______________________________________ JON S. TIGAR United States District Judge 20 21 22 23 24 25 26 27 28 his bank accounts would be subject to reporting: “account values continue to change and a plaintiff, any plaintiff may reasonably not know whether at the time of reporting set by the regulation, his bank account will be or will not be under this requirement . . . .” ECF No. 35 at 12. 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?