United States District Court, D. Idaho
MEMORANDUM DECISION AND ORDER
Lynn Winmill U.S. District Court Judge
the Court is Defendants' Motion to Dismiss for lack of
subject matter jurisdiction based on Federal Rule of Civil
Procedure 12(b)(1). The motion is fully briefed and at issue.
For the reasons set forth below, the Court will grant the
move for dismissal on the grounds that plaintiff Bruce
Norvell's complaint fails to establish the subject matter
jurisdiction of this Court. Fed R. Civ. P 12(b)(1). Mr.
Norvell filed his Complaint on June 6, 2018, alleging the IRS
did not consider his February 2018 Form 211
“Application for Award for Original Information”
as required by the IRS whistleblower award statute, 26 U.S.C.
§ 7623(b). Plaintiff alleges the IRS's failure to
act on his Form 211 pursuant to § 7623(b) violates the
requirements of the Administrative Procedures Act (APA), 5
U.S.C. §§ 701 et seq.
7623 created the Whistleblower Office within the IRS to
administer the payment of awards to whistleblowers. 26 U.S.C.
§ 7623. Under this Section the IRS may proceed
with administrative or judicial action based on information
brought to light by a whistleblower's Form 211
application. 26 U.S.C. § 7623(b)(1). If the IRS proceeds
with the enforcement action, it may award a claimant at least
15 percent, but not more than 30 percent, of the collected
proceeds or from settlement with the taxpayer. Id.
Upon receiving a Form 211, the Whistleblower Office makes a
final decision regarding a claim under § 7623(b) and
must either communicate denial of the claim, including the
basis for the denial, or follow the procedures for granting
an award. See id; Treas. Reg. §
301.7623-3(c)(1)-(6). The claimant may appeal the
Whistleblower Office's final administrative decision to
the United States Tax Court within thirty days. See
26 U.S.C. § 7623(b)(4). A claimant can appeal any Tax
Court decision to the applicable United States Circuit Court
of Appeals. See 26 U.S.C. § 7482(a).
Norvell filed separate IRS Form 211s in 2017 and 2018,
asserting that the San Francisco Company Airbnb, Inc. had
failed to accurately report its taxes between 2009 and 2017.
Dkt. 1, at 7. First, on April 10, 2017, Mr. Norvell filed a
Form 211 claiming Airbnb had failed to report non-employee
compensation as required on Form 1099-MISC for the years
2009-2016. Dkt. 1-4, at 1-2. The IRS Whistleblower
Office rejected Mr. Norvell's 2017 Form 211 claim on
August 16, 2017. Dkt. 1-6, at 1. Mr. Norvell then filed a
second Form 211 on February 2, 2018, alleging the same
pattern of historical conduct. Dkt. 1, at 7; Dkt. 1-5, at
1-2. The February 2018 Form 211 also added allegations
related to Airbnb's 2017 tax filings and its failure to
report 2015 and 2016 payments to hosts on either Form
1099-MISC or 1099-K. Id. The IRS Whistleblower
Office rejected Mr. Norvell's February 2018 Form 211 on
March 13, 2018. Dkt. 1, at 7-8; Dkt. 1-6. The Whistleblower
Office's 2018 denial noted that “[the 2017 claim]
was previously rejected, ” and attached a copy of the
2017 denial to its notice. Dkt. 1-6.
alleges that he was injured by the IRS “refusing to
consider my 2/2/2018 claim.” Dkt. 1, at 8.
Specifically, Plaintiff asserts the IRS failed to consider
the February 2018 Form 211 at all, and instead treated it as
a request for reconsideration of his 2017 Form 211.
Id. The Parties agree that IRS regulations require
the Whistleblower Office to respond to each Form 211 in the
event of a denial. See Dkt. 1, at 8-9; Dkt. 5, at 5;
see also 26 U.S.C. § 7623(b). Mr. Norvell
asserts the alleged “refusal to consider” his
2018 Form 211 amounts to either “unlawfully withheld or
unreasonably delayed” agency action, or, in the
alternative, an “arbitrary, capricious,  abuse of
discretion, not in accordance with law, or without
observation of procedures as required by law” in
violation of the APA, 5 U.S.C. §§ 706(1), (2)(A-D).
Dkt. 1, at 9-10. At issue in the instant motion to dismiss is
whether this Court has jurisdiction to hear Plaintiff's
APA challenge to the IRS Whistleblower Office's alleged
inaction under 26 U.S.C. § 7623(b).
defendant may move to dismiss a complaint for lack of subject
matter jurisdiction under Rule 12(b)(1) in one of two ways.
See Leite v. Crane Co., 749 F.3d 1117, 1121 (9th
Cir. 2014). The first is known as a “facial”
attack, and it accepts the truth of the plaintiff's
allegations but asserts that they are insufficient on their
face to invoke federal jurisdiction. Id. The second
method is known as a “factual” attack, and it
does not assume the truth of plaintiff's allegations but
instead challenges them by introducing extrinsic evidence,
requiring the plaintiff to support his jurisdictional
allegations with “competent proof.” Id.
Here, Defendants bring a “facial” attack against
Plaintiff's Complaint for lack of subject matter
jurisdiction. See Dkt. 5. As such, the Court must
consider the factual allegations of the complaint to be true
and determine whether they establish subject matter
jurisdiction. Leite, 749 F.3d at 1121. In the case
of a facial attack, the motion to dismiss is granted only if
the nonmoving party fails to allege an element necessary for
subject matter jurisdiction. Id.
bringing a claim against a federal government agency, a
Plaintiff must show the government has waived sovereign
immunity with respect to that agency's action or inaction
to establish subject matter jurisdiction. See Lane v.
Pena, 518 U.S. 187, 192, (1996). The United States is
“immune from suit in state or federal court except to
the extent that Congress has expressly waived such sovereign
immunity.” Tritz v. U.S. Postal Serv., 721
F.3d 1133, 1136 (9th Cir. 2013). Any waiver of sovereign
immunity “will be strictly construed, in terms of
scope, in favor of the sovereign.” Lane, 518
at 192. The waiver must be “clearly discernable from
the statutory text in light of traditional interpretive
tools. If it is not, then we take the interpretation most
favorable to the Government.” F.A.A. v.
Cooper, 566 U.S. 284, 291 (2012). “A court lacks
subject matter jurisdiction over a claim against the United
States if it has not consented to be sued on that claim,
” and when the United States has consented to suit,
“the terms of its waiver of sovereign immunity define
the extent of the court's jurisdiction.” Balser
v. Dep't of Justice, Office of U.S. Tr., 327 F.3d
903, 907 (9th Cir. 2003) (internal citation and quotation
marks omitted). The burden of demonstrating a waiver of
sovereign immunity lies with the plaintiffs. Holloman v.
Watt, 708 F.2d 1399, 1401 (9th Cir. 1983).
alleges this Court has jurisdiction under 28 U.S.C. §
1331, 28 U.S.C. § 1346(a)(2) and 5 U.S.C. §§
701 et seq. Dkt. 1, at 2. As the Ninth Circuit has
held, § 1331 “cannot by itself be construed as
constituting a waiver of the government's defense of
sovereign immunity, ” and therefore does not
independently grant the Court jurisdiction to hear
Plaintiff's claim against the federal government.
Dunn & Black, P.S. v. United States, 492 F.3d
1084, 1088 n.3 (9th Cir. 2007); Black Dog Outfitters,
Inc. v. Idaho, No. 4:09-CV-00663-EJL, 2010 WL 11469219,
at *3 (D. Idaho 2010). Likewise, since Plaintiff seeks
“declaratory and injunctive relief” (Dkt. 1, at
9-10), and not monetary damages, his citation of 28 U.S.C.
§ 1346(a)(2) is misguided. United States v. Park
Place Assocs., Ltd., 563 F.3d 907, 927 (9th Cir. 2009)
(noting “[§ 1346(a)(2)]'s
“jurisdictional grant is limited to claims for money
damages not exceeding $10, 000 in amount.”). The Court
therefore must find the United States has waived sovereign
immunity under the APA, 5 U.S.C. § 701 et seq,
to exercise subject matter jurisdiction over Plaintiff's
claim regarding IRS inaction under 26 U.S.C. § 7623(b).
Court will grant Defendant's Motion to Dismiss for Lack
of Jurisdiction because Plaintiff has not established that
the APA's sovereign immunity waiver applies in this case.
The Court lacks jurisdiction under the APA because there is
another appropriate review proceeding under federal law.
See 5 U.S.C. § 704. Although Plaintiff
correctly notes that the APA waives sovereign immunity,
granting “a broad spectrum of judicial review of agency
action, ” his complaint does not show how the APA's
waiver of sovereign immunity applies to his claims.
See Dkt. 8, at 13 (citing Bowen v.
Massachusetts, 487 U.S. 879, 903 ...