DUGAS v. TURNER et al

Filing 44

DECISION AND ORDER ON THE UNITED STATES' MOTION TO DISMISS granting 40 Motion to Dismiss for Lack of Jurisdiction - By JUDGE D. BROCK HORNBY. (mnw)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
ALAN J. DUGAS,
PLAINTIFF
v.
WARREN TURNER,

ET AL.,

DEFENDANTS

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NO. 2:12-CV-06-DBH

DECISION AND ORDER ON THE UNITED STATES’
MOTION TO DISMISS
The United States removed this lawsuit to federal court because it is a
defendant.

The United States’ motion to dismiss is now granted and the

lawsuit will be remanded to state court because there is no remaining federal
jurisdiction without the United States as a defendant.
The Second Amended Complaint names the United States as a defendant
but seeks no particular relief against the United States. It says only that “[a]s
respects this matter, the United States has acted through the Internal Revenue
Service,” Second Am. Compl. ¶ 6 (ECF No. 36), that Turner, an individual
defendant, “has failed to file required tax documents for Ware [the corporate
defendant] with . . . the Internal Revenue Service,” id. ¶ 14, that Turner “has
allowed United States tax liens in excess of $12,000,000 to be placed on his
assets,” id. ¶ 15, and that “[t]he United States may claim an interest in Ware
[the corporate defendant] by virtue of its lien or liens against Turner.” Id. ¶ 18.

It asks the court to “[t]ake such action as respects the United States as is
appropriate.” Id. at 9. Otherwise the Second Amended Complaint is an effort
to dissolve the Ware corporation (of which the plaintiff and Turner, the
individual defendant, are the only two shareholders) and to seek an accounting
and damages from Turner.
I recognize that the plaintiff believes that eventually there will be a
dispute between him and the United States because the United States has tax
liens on property owned by Turner, the other shareholder, which extend to
Turner’s stock in the corporation.

(The United States says that it has no

claims against the plaintiff or the corporate defendant or any property of the
corporation, only against Turner. Mem. in Support of Def.’s Mot. to Dismiss 1
(ECF No. 40-1.)

Thus, if the plaintiff is successful in persuading the state

court, under Maine’s corporate dissolution statute, to order that some or all of
Turner’s stock eventually be sold or transferred to the plaintiff (discretionary
relief under 13-C M.R.S.A. § 1434(2)), the United States is likely then to
intervene to assert its tax liens as prior to any interest of the plaintiff in such a
transfer. But as of now, the Second Amended Complaint makes no claim for
Turner’s stock that would implicate the United States’ lien.
Under a purely pragmatic system of dispute resolution, we might proceed
more quickly to this part of the dispute because undoubtedly it affects the
underlying economics of this lawsuit. But federal jurisdiction is rule-bound as
a result of congressional enactments and appellate decisions. At the trial level
we must follow those rules for good or for ill. Here, the United States has not
waived its sovereign immunity from suit under 28 U.S.C. § 2410(a). Contrary
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to the plaintiff’s argument, this is not yet a suit to partition property in which
the United States claims a lien. Dissolution will give the plaintiff his own share
of the corporation, and as to that share the United States claims no interest.
Only when and if the plaintiff claims Turner’s stock will the United States’ lien
be implicated.
As a result the United States’ motion to dismiss is GRANTED and the
lawsuit is REMANDED to Maine Superior Court (Cumberland County).
SO ORDERED.
DATED THIS 12TH DAY OF SEPTEMBER, 2012
/S/D. BROCK HORNBY
D. BROCK HORNBY
UNITED STATES DISTRICT JUDGE

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