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Complaint Template.DOC Case 8:20-cv-00858-SVW-JEM Document 32 Filed 06/22/20 Page 1 of 32 Page ID #:385 1 BLAISE & NITSCHKE, P.C. HEATHER L. BLAISE, ESQ. (SBN 261619) 2 123 N. Wacker Drive, Suite 250 3 Chicago, IL 60606 Telephone: 312-448-6602 4 Email: [email protected] 5 Attorneys for Plaintiffs, 6 JANE DOE and JOHN DOE, individually and on behalf of others similarly situated 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION 10 11 JANE DOE and JOHN DOE, individually CASE NO: 8:20-cv-00858-SVW-JEM 12 and on behalf of others similarly situated, Assigned to the Hon. Stephen V. Wilson 13 Plaintiffs, PLAINTIFFS’ OPPOSITION TO 14 v. DEFENDANTS’ MOTION TO 15 DONALD J. TRUMP, in his individual DISMISS and official capacity as President of the 16 United States; MITCH MCCONNELL, in his individual and official capacity as a 17 Senator and Sponsor of S. 3548 CARES Hearing Date: July 13, 2020 18 Act; and STEVEN MNUCHIN, in his individual and official capacity as the Time: 1:30 p.m. 19 Acting Secretary of the U.S. Department Courtroom: 10A of Treasury; CHARLES RETTIG, in his Location: 350 W. 1st Street 20 individual and official capacity as U.S. Commissioner of Internal Revenue; U.S. Los Angeles, CA 21 DEPARTMENT OF THE TREASURY; 90012 the U.S. INTERNAL REVENUE 22 SERVICE; and the UNITED STATES OF Action Filed: May 6, 2020 AMERICA, 23 Defendants. 24 25 26 27 - i - 28 PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION TO DISMISS Case 8:20-cv-00858-SVW-JEM Document 32 Filed 06/22/20 Page 2 of 32 Page ID #:386 1 TABLE OF CONTENTS 2 TABLE OF CONTENTS ............................................................................................... ii TABLE OF AUTHORITIES ........................................................................................iii 3 PROCEDURAL HISTORY .......................................................................................... 1 4 INTRODUCTION ......................................................................................................... 1 5 ARGUMENT ................................................................................................................. 5 I. Sovereign Immunity is Waived by the APA Regardless of Whether a Claim 6 “Arises Under” the APA ................................................................................... 5 7 II. Plaintiffs’ Claims are not Barred by the Anti-Injunction Act or the 8 Declaratory Injunction Act ............................................................................... 8 9 A. Refundable Tax Credits are Not Taxes, and Do Not Implicate the AIA or the DJA. ................................................................................................................ 8 10 B. CARES Act Amendments to the Internal Revenue Code Expressly Providing 11 that the CARES Act Payments are Subject to Deficiency Procedures 12 Remove Any Doubt that the Credit is Not a Tax. ......................................... 12 III. In the Alternative, Plaintiffs’ Case Does “Arise Under” the APA ................. 13 13 A. The Agency Action at Issue is Final. ............................................................ 13 14 B. No Adequate Alternatives for Challenging the Agency Action Exist. .......... 14 15 IV. Plaintiffs Have Standing and their Claims are Ripe for Judicial Review Now ...................................................................................... 15 16 V. The FCA States a Claim for Relief ................................................................. 18 17 A. Section 6428(g) violates the First Amendment of the U.S. Constitution. .... 20 18 B. Section 6428(g) violates the Fifth Amendment of the U.S. Constitution. .... 21 19 C. Section 6428(g) violates the Fourteenth Amendment of the U.S. Constitution. ................................................................................................. 23 20 CONCLUSION ............................................................................................................ 25 21 22 23 24 25 26 27 - ii - 28 PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION TO DISMISS Case 8:20-cv-00858-SVW-JEM Document 32 Filed 06/22/20 Page 3 of 32 Page ID #:387 1 TABLE OF AUTHORITIES 2 Cases Adarand Constructors, Inc. v. Peña, 515 U.S. 200 (1995) ......................................... 24 3 Alcaraz v. Block, 746 F.2d. 593 (9th Cir. 1984) .......................................................... 24 4 Anti-Fascist Committee v. McGrath, 341 U.S., at 171-172 (Frankfurter, J., concurring) ............................................................................................................... 22 5 Blagojevich v. Gates, 519 F.3d 370 (7th Cir. 2008) .................................................. 6, 7 6 Bob Jones Univ. v. Simon, 416 U.S. 725 (1974) ........................................................... 9 7 Boddie v. Connecticut, 401 U.S. 371 (1971) ................................................... 20, 22, 24 Bolling v. Sharpe, 347 U.S. 497 (1954) ................................................................. 22, 24 8 Bowen v. Massachusetts, 487 U.S. 879 (1988) ............................................................. 7 9 Brown v. Board of Education of Topeka, 347 U.S. 483 (1954) .................................. 24 Carey v. Piphus, 435 U.S. 247 (1978) ......................................................................... 22 10 Church of Scientology of Celebrity Ctr., Los Angeles v. Egger, 11 539 F. Supp. 491 (D.D.C. 1982) .............................................................................. 11 CIC Services, LLC v. Internal Revenue Service, Docket No. 19-930 (Sup. Ct. 2020) 11 12 Cleveland Bd. of Ed. v. LaFleur, 414 U.S. 632 (1974) ............................................... 21 13 Cohen v. United States, 650 F.3d 717 (D.C. Cir. 2011) ................................................ 9 Delano Farms Co. v. California Table Grape Com’n, 14 655 F.3d 1337 (Fed. Cir. 2011) .................................................................................. 7 15 Department of Homeland Security et al. v. Regents of the University of California Wolf v. Vidal, No. 18-587, 2020 WL 3271746 (U.S. June 18, 2020) .................... 5, 6 16 Fla. Bankers Ass’n v. U.S. Dep’t of the Treasury, 17 799 F.3d 1065 (D.C. Cir. 2015) ........................................................................... 9, 10 Flo & Eddie, Inc. v. Sirius XM Radio, Inc., No. CV13-5693 PSG (GJSx), 2016 U.S. 18 Dist. LEXIS 185233 (C.D. Cal. Sep. 8, 2016) ......................................................... 23 19 Freedom from Religion Foundation v. Shulman, 961 F. Supp.2d 947 (W.D. Wis. 2013) .............................................................. passim 20 Graham v. Richardson, 403 U.S. 365 (1971) .............................................................. 24 21 Griffin v. Illinois, 351 U.S. 12 (1956).......................................................................... 24 Griswold v. Connecticut, 381 U.S. 479 (1965) ..................................................... 20, 21 22 Heckler v. Matthews, 465 U.S. 728 (1984) ................................................................. 17 23 In re First Alliance, 2003 U.S. Dist. LEXIS 25925, 2003 WL 21530096 .................. 23 In re Statham, 483 F.2d 436 (9th Cir. 1973) ............................................................... 21 24 In re Talmadge, 832 F.2d 1120 (9th Cir. 1987) .......................................................... 21 25 Latta v. Otter, 19 F. Supp. 3d 1054 (9th Cir. 2014) .................................................... 21 M. L. B. v. S. L. J., 519 U.S. 102 (1996) ...................................................................... 21 26 Meyer v. Nebraska, 262 U.S. 390 (1923) .................................................................... 21 27 Michigan v. United States Army Corps of Engineers, 667 F.3d 765 (7th Cir. 2011) 7, 8 - iii - 28 PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION TO DISMISS Case 8:20-cv-00858-SVW-JEM Document 32 Filed 06/22/20 Page 4 of 32 Page ID #:388 1 National Federation of Independent Business v. Sebelius, 567 U.S. 519 (2012) ......... 9 Nelson v. Regan, 731 F.2d 105 (2d Cir. 1984) ............................................................ 10 2 Quisenberry v. Compass Vision, Inc., 618 F. Supp.2d 1223 (S.D. Cal. 2007) ........... 23 3 Roberts v. United States Jaycees, 468 U.S. 609 (1984) .............................................. 20 San Antonio Indep. Sch. Dist. v. Rodriguez, 411 U.S. 1 (1973) .................................. 20 4 Schlesinger v. Ballard, 419 U.S. 498 (1975) ............................................................... 22 5 Schneider v. Rusk, 377 U.S. 163 (1964) ...................................................................... 22 Skinner v. Oklahoma ex rel. Williamson, 316 U.S. 535 (1942) ............................ 21, 24 6 Sorenson v. Sec’y of Treasury of U.S., 475 U.S. 851 (1986) ................................ 10, 11 7 Sorenson v. Sec’y of Treasury of U.S., 752 F.2d 1433 (9th Cir. 1985) ................. 10, 11 8 Sugarman v. Dougall, 413 U.S. 634 (1973) .......................................................... 21, 22 Takahashi v. Fish & Game Com., 334 U.S. 410 (1948) .............................................. 24 9 The Presbyterian Church (U.S.A.) v. United States, 870 F.2d 518 (9th Cir. 1989) ...... 7 10 Thunder Basin Coal Company v. Reich, 510 U.S. 200 (1994) .................................... 18 Trudeau v. Federal Trade Com’n, 456 F.3d 178 (D.C. Cir. 2006) ............................... 7 11 U.S. Army Corps of Engineers
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