Balice v. United States of America

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

RONALD OTTAVIANCE, TRUSTEE,

ROSEWATER TRUST, and MICHAEL

BALICE,

Plaintiffs,

Civ. No. 18-16429

v.

OPINION

AVS PROPERTIES, LLC

Defendant.

KEVIN MCNULTY, U.S.D.J.:

I. Introduction and Background!

Pro se plaintiff Michael Balice has an extensive litigation history with this

Court. In 2014, the United States government bought a federal tax collection

action against Balice and his former spouse. In an action filed in this court, the

United States reduced to judgment the overdue tax liability of Balice and his

former spouse. United States v. Balice et al., Civ. No. 14-3937 (D.N.J.). Plaintiff

Rosewater Trust, a nominal owner of the Metuchen property, was found to be

Balice’s nominee or alter ego, and set aside. United States v. Balice et al., Civ.

No, 14-3937 (D.N.J.) (DE 210).

I issued an order of sale allowing the Internal Revenue Service (“IRS”) to

sell the property and directing Balice to vacate the premises. Defendant AVS

Properties, LLC (“AVS”) submitted the winning bid for the property at a public

auction. The Court thereafter confirmed the sale and directed the clerk to

distribute the proceeds, applying a portion to Balice’s unpaid tax liabilities. The

Court also directed the Government to convey the real property to AVS by deed.

The action in this Court was characterized by repetitive, indeed abusive,

As used in this Opinion, “DE” refers to the docket entry number in this case.

“Compl.” refers to Balice’s state court complaint. (DE 1-1).

motion practice by Mr. Balice in which he continually refiled the same or

similar “tax protester” arguments to the effect that the income tax is

unconstitutional. Balice appealed fifteen decision entered by me and nine

decisions issued by the Magistrate Judge. The Third Circuit consolidated the

appeals and affirmed. See United States v. Balice et al., C.A. No. 17-3134 (3d

Cir.).

Mr. Balice also filed a series of parallel actions in an attempt to prevent

the sale of the home and enforcement of the federal court judgment. First, he

brought an action in the Superior Court of New Jersey, Middlesex County,

which was subsequently removed pursuant to 28 U.S.C. § 1442(a){1). See

Balice v. United States, Civ. No. 17-13601 (D.N.J.). The complaint was brought

against the United States, the Attorney General, and two agents of the IRS, as

well as myself. That case was assigned to Chief Judge Wolfson, who dismissed

the complaint with prejudice based on sovereign and judicial immunity. The

Third Circuit affirmed. Balice v. United States, 763 F. App’x 154 (3d Cir. 2019).

Thereafter, Balice filed a second complaint in state court, which was

substantively identical to the first state-court complaint. This complaint was

ultimately dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6).

Balice v. United States of America, Civ. No. 17-10291 (D.N.J.) (DE 11). He then

filed for bankruptcy and sought to discharge the tax debt by filing a series of

motions and an adversary proceeding. That case was dismissed without

discharge. In re Balice, No. 17-32967 (Bankr. D.N.J. Nov. 13, 2017) (DE 68).

On August 2, 2018, Mr. Balice filed a third state-court action, again

attacking the basis of the underlying tax action. Balice v. United States of

America, et. al., Civ. No. 18-13560. That action reasserted the same allegations

and claims which he pled in the first state-court complaint. It, too, was

dismissed. Balice v. United States of America, et. al., Civ. No. 18-13560 (DE 9}.

Balice and Ronald Ottavianno, as “Trustee” of the Rosewater Trust, now

sue AVS for “unlawful invasion of the plaintiff's property.” On October 23,

2018, Balice filed a complaint in the Superior Court of New Jersey, Middlesex

County. The present complaint alleges that the execution of the judgment

entered in the underlying tax collection action (which Balice refers to asa

“foreign judgment”) violated various New Jersey statues and the New Jersey

Constitution. Balice seeks declaratory and injunctive relief “from the unlawful

and violative invasion of plaintiff's private and personal property,” “from the

unlawful claims to the property being made by the defendant through an

unregistered foreign process,” and to prevent “any further or future claims” to

the Metuchen property.

Now before the Court are several motions: (1) the Government’s motion to

intervene and dismiss the now-removed complaint (DE 2); (2) Balice’s motion to

remand to New Jersey State Court (DE 4); and (3) Balice’s motion for default

against AVS (DE 12).

Balice also seeks to “strike” (1) the Government’s motion to intervene (DE

6); (2) the Government’s opposition to Balice’s motion to remand (DE 9); and (3)

the Government’s opposition to Balice’s motion to strike (DE 11).

For the foregoing reasons, Balice’s motion to remand is granted. The

remaining motions are administratively terminated as moot.

II, Balice’s Motion to Remand

I first address the propriety of the Government’s removal and this Court’s

jurisdiction. Balice seeks to remand this matter to state court for lack of

subject matter jurisdiction and because the Government does not have

“standing” to represent AVS. (DE 4). Balice argues that this matter does not

involve the collection of revenue, but “only involves the enforcement of a federal

court judgement.” (DE 4, at 2).2. Balice also provides general law on this

Court’s jurisdiction, the removal process, and dual sovereignty. (See generally

2 Balice spends a significant portion of his remand brief arguing the merits of his

case. In particular, he contends that federal judgments can only be enforced in state

courts, that only state courts have authority to settle disputes regarding property

rights, and that the Government's failure to file the underlying tax court judgment in

state court makes the judgment unenforceable. (DE 4, at 2-7). As a result of these

procedural errors, he claims a due process violation, in that the defendants engaged in

a conspiracy to deprive him of his private property. (DE 4, at 5-7, 13).

DE 4). He contends that this case is not about the collection of revenue, but

about the enforcement of a federal judgment, which he believes can only be

done in State court. (DE 4, at 13-17, 19). To the contrary, however, are Federal

Rule of Civil Procedure 70 (recognizing that federal court may enforce judgment

for real property by “enter[ing] a judgment divesting any party’s title and

vesting [real or personal property] in others.”), and Rule 64 (providing that

“every remedy” that is available “under the law of the state where the court is

located, .. . for seizing a person or property to secure satisfaction of the

potential judgment” is also available in federal court).

The Government contends that removal was proper under either 28

U.S.C. § 1442(a) or 1441 (a). (DE 5, at 4-5). The Government dedicates less than

two pages of its brief to removal under these provisions, providing little more

than a citation to the statutes. (See id.).

Balice’s response, which he has styled a “motion to strike” (DE 9}, points

out that the Government is not a named defendant in the state complaint, and

no longer has any interest in the property that has been sold and conveyed to

AVS. (He also attacks the validity of that conveyance, however.)

I address each basis for removal in turn.

A. Removal under §1441(a)

The more commonly invoked provision for removal to federal court, 28

U.S.C. § 1441(a), provides that a defendant in a state court civil action may

remove the case to federal court if the federal court would have original

jurisdiction to hear the case. See 28 U.S.C. § 1441(a) (“any civil action brought

in a State court of which the district courts of the United States have original

3 Balice’s motion to strike will be denied. Rule 12(f} authorizes a court “to strike

from a pleading an insufficient defendant or any redundant, immaterial, umpertinent,

or scandalous matter.” Fed. R. Civ. P. 12(f) (emphasis added). The “pleadings” in a

federal action consist of a complaint, an answer to a complaint, an answer to a

counterclaim, an answer to a crossclaim, a third-party complaint, an answer to a

third-party complaint, and, if the court so orders, a reply to an answer. Fed. R. Civ. P.

7(a). An opposition brief to a motion, however, is not a “pleading.” By far the better

course, and the one I follow here, is to simply consider the validity, or not, of the

arguments in the brief.

jurisdiction, may be removed by the defendant or the defendants, to the district

court of the United States for the district and division embracing the place

where such action is pending.” (emphasis added)); Caterpillar, Inc. v. Williams,

482 U.S. 386, 392 (1987).

Applying the plain and unambiguous language of 28 U.S.C. § 144]{a),

courts have held that only a named defendant may remove an action to federal

court under this provision. See Sheppard v. Sheppard, 481 F. Supp. 2d 345,

347-48 (D.N.J. 2007) (*The plain language of the statute clearly limits the right

of removal to ‘defendants.’ . . .To interpret ‘defendant’ to include non-parties

would produce an absurd result and would contravene more than 65 years of

jurisprudence that has only allowed removal by ‘defendants’ to claims asserted

by a plaintiff.”); Gross v. Deberardinis, 722 F. Supp. 2d 532, 534 (D. Del. 2010)

(“Even assuming Local 1545 Pension Plan is the real-party-in-interest, the

Court concludes that it is not a ‘defendant’ within the meaning of § 1441(a),

and therefore, is not entitled to remove this action.”); Smith v. St. Luke’s Hosp.,

480 F. Supp. 58, 61 (D.S.D. 1979) (“A holding that an intervenor-plaintiff can

rernove would be an unwarranted expansion of jurisdiction by use of [§

1441].”); Kane v. Republica De Cuba, 211 F. Supp. 855, 856-58 (D.P.R. 1962)

(holding that nonparty who did not intervene in state court action may not file

for removal); Dep’t of Fin. of Sussex Cnty. v. Polk Heirs, 2017 U.S. Dist. LEXIS

201176, at *4-5 (D. Del. Dec. 1, 2017) (finding removal improper under 1441

because removing party did “not have standing to remove this case. He is not a

defendant nor an intervenor in the State action.”); cf. Shamrock Oil & Gas Corp.

v. Sheets, 313 U.S. 100, 103 (1941) (affirming Fifth Circuit decision that “the

plaintiff in the state court was not a ‘defendant’ within the meaning of section

28 of the Judicial Code, and so was not entitled to remove the cause under that

section.”}.4

+ See also Juliano v. Citigroup, N.A., 626 F. Supp. 2d 317, 318 (E.D.N.Y. 2009) (‘It

is well settled that only a defendant in a state court action may remove that action

under 28 U.S.C. §§ 1441.”); Geiger v. Arctco Enters., 910 F. Supp. 130, 131 (S$.D.N.Y.

1996) (“It is clear beyond peradventure of a doubt that the right of removal is vested

Title 28, U.S. Code, Section 1446, which outlines the procedure for

removal under § 1441(a), confirms that the removing party must be a named

defendant. Even if the Government or some other party deems itself a “real

party in interest” in the underlying action, it still “may not remove or

participate in the removal of a case” under § 1441. Gross, 722 F. Supp. 2d at

534.5

Here, the Government is not a named defendant in the state complaint. It

therefore cannot seek removal under § 1441, even if it is the “real party in

interest.” Accordingly, removal under § 1441 is not authorized.

B. Removal under §1442(a)(1)

As to the alternative statutory basis for removal, 8 U.S.C. § 1442{a), the

entirety of the Government’s argument is as follows: First, removal under

§1442(a) was proper because the complaint “relates to” the collection of

revenue and “centers on alleged wrongful collection of taxes from Balice

[through] a foreclosure action.” (DE 5, at 4). Second, the state-court complaint

“is plainly ‘directed to’ the United States, since it seeks to invalidate an Order

of Sale issued in the United States’ favor.” (Id.}.

i. Statutory framework and standard

Section 1442(a) provides as follows:

exclusively in defendants.”); Adams v. Adminastar Defense Serus., Inc., 901 F. Supp.

78, 79 (D. Conn. 1995) (“It is axiomatic that in the usual case removal can be achieved

only by a defendant, who is by implication a party to the state-court action.”); People of

State of Cal. v. Bozarth, 356 F. Supp. 667, 669 (N.D. Cal. 1973) (“In the present case,

the United States was not a party to the Municipal Court proceeding; the affidavit of

the Assistant United States Attorney states that he formally withdrew and never

became a party. Obviously, Section 1441 cannot be relied upon as grounds for

removal.”).

5 Balice also points out that AVS did not consent to the removal. See 28 U.S.C. §

1446(b)(2){A) (*When a civil action is removed solely under section 1441 (a), all

defendants who have been properly joined and served must join in or consent to the

removal of the action.”), It is not clear from the docket whether defendant AVS has

been properly served, although AVS has filed an opposition to Balice’s motion for

default. AVS’s motion does not address service. (DE 16).

(a) A civil action ... that is commenced in a State court and that

is against or directed to any of the following may be removed by

them to the district court of the United States for the district and

division embracing the place wherein it is pending:

(1) The United States or any agency thereof... for or

relating to any act under color of such office or on account of

any right, title or authority claimed under any Act of

Congress for the . . . collection of the revenue.

(d) In this section, the following definitions apply:

(1) The terms “civil action” and “criminal prosecution”

include any proceeding (whether or not ancillary to another

proceeding) to the extent that in such proceeding a judicial

order, including a subpoena for testimony or documents, is

sought or issued. If removal is sought for a proceeding

described in the previous sentence, and there is no other

basis for removal, only that proceeding may be removed to

the district court.

28 U.S.C. § 1442.6

“Section 1442(a) is an exception to the well-pleaded complaint rule,

under which (absent diversity) a defendant may not remove a case to federal

court unless the plaintiffs complaint establishes that the case arises under

federal law.” In re Commonwealth’s Motion to Appoint Counsel Against or

Directed to Def. Ass’n of Phila., 790 F.3d at 466 (quotation and citation

omitted). Under this section, “a colorable federal defense is sufficient to confer

federal jurisdiction.” Id.

6 Section 1442, often referred to as the “federal officer removal statute,” has been

twice amended, first in 1996 and a second time in 2011. I note briefly that in 1996,

Congress amended § 1442{a)(1) to allow for removal by “the United States or any

agency thereof.” Federal Courts Improvement Act of 1996, Pub. L. No. 104-317, § 206,

110 Stat. 3847, 3850 (codified as amended at 28 U.S.C. § 1442). Before 1996, removal

was limited to “[a]ny officer of the United States or any agency thereof, or person

acting under him, for any act under color of such office.” The 1996 amendment

explicitly reversed International Primate Protection League v. Administrators of the

Tulane Education Fund, 500 U.S. 72, 79-87 (1991), wherein the Supreme Court held

that federal agencies were not entitled to removal under the statute.

The Third Circuit draws a distinction between removal under §1441,

which is “to be strictly construed against removal and all doubts should be

resolved in favor of remand,” Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111

(3d Cir. 1990) (quotation and citation omitted), and §1442(a), which is to be

“broadly construed.” Sun Buick, Inc. v. Saab Cars USA, Inc., 26 F.3d 1259,

1262 (3d Cir. 1994); see In re Commonwealth’s Motion to Appoint Counsel

Against or Directed to Def. Ass’n of Phila., 790 F.3d 457, 467 (3d Cir. 2015).

Still, while the Supreme Court “has made clear that [§ 1442] must be ‘liberally

construed[,]’. . . [that} broad language is not limitless. And a liberal

construction nonetheless can find limits in a text’s language, context, history,

and purposes.” Watson v. Philip Morris Cos., 551 U.S. 142, 147 (2007).

In order to establish a proper basis for removal under §1442, the

removing party must show that “(1) it is a ‘person’ within the meaning of the

statute; (2) the [plaintiff's] claims are based upon the [removing party’s]

conduct ‘acting under’ the United States, its agencies, or its officers; (3) the

[plaintiff's] claims against it are ‘for, or relating to’ an act under color of federal

office; and (4) it raises a colorable federal defense to the [plaintiff's] claims.” In

re Commonwealth’s Motion to Appoint Counsel Against or Directed to Def. Ass’n

of Phila., 790 F.3d at 467.

ii. Statutory meaning of “directed to”

Section 1442(a) provides, in effect, for removal of civil actions

commenced in state court that are either “against” or “directed to” a federal

agency acting under color of title. See Lindy v. Lynn, 395 F. Supp. 769, 771

(E.D. Pa. 1974), aff'd, 515 F.2d 507 (3d Cir. 1975). The first alternative does

not apply. Balice did not file his action “against” the United States; i.e., he did

not name the United States as a party. It follows that the only remaining option

for removal under §1442(a)(1) is that the civil action was “directed to” the

United States. Cf. Parsons v. Tex. Office of the AG, 2018 U.S. Dist. LEXIS

215806, at *11 (E.D. Tex. Aug. 8, 2018) (interpreting “against” and concluding

that “upon being named a defendant in a state court action, federal agencies, .

. . may remove such proceedings to federal court.”), adopted by, 2018 U.S.

Dist. LEXIS 215319, at *1 (E.D. Tex. Dec. 21, 2018). The “directed to” provision

of the statute does not require that the government be actually named as a

defendant. Still, its scope cannot be unlimited, and its scope has not been

significantly litigated since its enactment in 2011.

I therefore must address the “directed to” provision under applicable

principles of statutory interpretation. Primarily, the courts will look to the plain

language of a statute to determine its meaning. United States v. Gregg, 226

F.3d 253, 257 (3d Cir, 2000). “If the language of the statute expresses

Congress’s intent with sufficient precision, the inquiry ends there and the

statute is enforced according to its terms.” Jd. When the language is clear,

typically no further inquiry is required. Barrios v. Att’y Gen., 399 F.3d 272, 277

n.11 (3d Cir. 2005).

There is a narrow exception, however: the plain language may be set

aside in a particular case if its application would lead to an “absurd result.” Jd.

When the plain language is at odds with legislative intent, “a blind adherence

to the literal meaning of a statute [could] lead to a patently absurd result that

no rational legislature could have intended. Following the letter, rather than

the spirit, of the law in such cases would go against the court’s role of

construing statutes to effectuate the legislature’s intent.” Jd. Particularly in

such a case, the court may look for guidance to the legislative history. “[T]he

authoritative source for finding the Legislature’s intent lies in the Committee

Reports on the bill, which ‘represen|t] the considered and collective

understanding of those Congressmen involved in drafting and studying

proposed legislation.” Garcia v. United States, 469 U.S. 70, 76 (1984) (internal

citations omitted).

When interpreting statutes, courts work to “fit, if possible, all parts [of a

statute] into a harmonious whole.” Food & Drug Admin. v. Brown & Williamson

Tobacco Corp., 529 U.S. 120, 133, (2000) (quoting FTC v. Mandel Bros., Inc.,

359 U.S. 385, 389 (1959)}. “It is a cardinal principle of statutory construction

that the statute ought, upon the whole to be so construed that, if it can be

prevented, no clause, sentence or word shall be superfluous, void, or

insignificant.” TRW Inc. v. Andrews, 534 U.S. 19, 31 (2001); see also Conn.

Nat'l Bank v. Germain, 503 U.S. 249, 253 (1992) (“[C]ourts should disfavor

interpretations of statutes that render language superfluous.”).

With these principles in mind, I start with the plain text of the statute.

The ordinary definition of “directed” is “aim[ed] . . . in a particular direction or

at a particular person.” Guggenberger v,. Starkey Labs., Inc., 2016 U.S. Dist.

LEXIS 180403, at *17 (D. Minn. Dec. 29, 2016) (quoting New Oxford American

Dictionary 491 (3d ed. 2010)); see also Black’s Law Dictionary (iith ed. 2019)

(defining “direct” as “[t]o aim (something or someone)”}. “Directed to,” therefore,

has been interpreted “to require a party . . . to ‘aim’ the civil action at the

federal entity in order for the action to be removable under § 1442(a).”

Guggenberger, 2016 U.S. Dist. LEXIS 180403, at *17. A federal agency’s motion

to intervene in a state court action, standing alone, may not suffice to bring it

within the “directed to” requirement of §1442. Guggenberger, 2016 U.S. Dist.

LEXIS 180403, at *17-18 (“A court’s response to a federal entity’s motion for

permissive intervention does not suffice, since in such a situation, the federal

entity seeking removal ‘directed’ or ‘aimed’ the resulting judicial order at itself.”

(citing Stephen L. LaFrance Holdings, Inc. v. Sorensen, 278 F.R.D. 429, 440

(E.D. Ark. 2011) (rejecting the United States’ “novel argument that, because it

intervened, the civil action is now against the U.S. Government”)).”

I note that the Government has, however, raised strong arguments for

intervention. (DE 2); see Zito v. Tesoriero, 239 F. Supp. 354, 355 (E.D.N.Y. 1965)

(granting intervention to United States because “United States has claims for income

taxes due it... and, in fact, has asserted tax liens against the plaintiff... .

Distribution or disposition of the property in issue would, therefore, have an adverse

effect upon the claims and liens of the United States.”}.

The Government perhaps could have intervened in the state court proceeding as

a defendant and then sought removal as a named defendant under this statute or

§1441. See e.g., Peoples Nat'l Bank of Mora v. BWHC, LLC, 2008 U.S. Dist. LEXIS

125222 (D. Minn. Oct. 10, 2008) (remanding case where “a party seeks in state court

to compel the production from a third party of documents that belong to the federal

government, the state-court proceedings are removable by the federal government if it

10

Turning to the legislative history of §1442, the “basic purpose” of §

1442(a) has been described as follows:

[T]o protect the Federal Government from the interference with its

operations that would ensue were a State able, for example, to

arrest and bring to trial in a State court for an alleged offense

against the law of the State, officers and agents of the Federal

Government acting within the scope of their authority.

In re Commonwealth’s Motion to Appoint Counsel Against or Directed to Def.

Ass’n of Phila., 790 F.3d at 466 (quotation and citation omitted).

In 2011, Congress amended §1442 in several ways. First, the Removal

Clarification Act added the definition of “civil action” and “criminal

prosecution,” which now appear in §1442(d)}(1). Removal Clarification Act of

2011, Pub. L. No. 112-51, § 2, 125 Stat. 545, 545 (codified as amended at 28

U.S.C. §§ 1442, 1446, 1447 (2012)). “[T]he term ‘civil action’ includes ancillary

proceedings, so long as a ‘judicial order’ is sought or issued.” Jn re

Commonwealth’s Motion to Appoint Counsel Against or Directed to Def. Ass’n of

Phila., 790 F.3d at 467.

Second, the Act “added the words ‘or relating to’ after ‘for’ in § 1442{(a).”

Id.; see 28 U.S.C, §1442 (a) (“A civil action .. . that is commenced in a State

court and that is against or directed to any of the following|:}| The United States

or any agency thereof... for or relating to any act under color of such office.”

(emphasis and alteration added)). In effect, “before 2011, proponents of removal

jurisdiction under § 1442 were required to ‘demonstrate that the acts for which

they [we]re being sued’ occurred at least in part ‘because of what they were

asked to do by the Government.” In re Commonwealth’s Motion to Appoint

Counsel Against or Directed to Def. Ass’n of Phila., 790 F.3d at 471 (citation

omitted). With the 2011 amendments, “the statute was amended to encompass

suits ‘for or relating to any act under color of [federal] office.” Id. (quoting 28

U.S.C. § 1442(a)(1) (2011)).

has intervened in the state-court proceedings.”). Instead, however, the Government

preemptively removed a state court complaint to which it was not currently a party.

11

The Third Circuit has concluded that the ordinary meaning of the phrase

“related to” is broad and means “‘to stand in some relation; to have bearing or

concern; to pertain; refer; to bring into association with or connection with.”

Id. (quoting Morales v. Trans World Airlines, Inc., 504 U.S. 374, 383 (1992)). □□□□□

is sufficient for there to be a ‘connection’ or ‘association’ between the act in

question and the federal office.” id. In other words, the “for or related to”

portion of the statute considers the substance of the conduct charged in the

complaint and whether it is connected to federal action.

Finally, the 2011 amendments allowed for removal even when the

removing federal entity is not a named defendant, where a civil proceeding is

“directed to” a federal agency or officer. According to the House Report, the

2011 amendment “clarifies that a civil action ‘commenced’ in State court

includes those brought ‘against’ a Federal officer (which covers suits) as well as

those ‘directed to’ a Federal officer (which presumably covers discovery

proceedings).” H.R. REP. 112-17, 6, 2011 U.S.C.C.A.N. 420, 425. “This allows

any Federal officer subpoenaed pursuant to a State pre-suit discovery statute

to remove the civil action or criminal prosecution to U.S. district court under

28 U.S.C. S 1442.” Id.; see 28 U.S.C. § 1446(g) (providing that where removed

civil action under § 1442(a) “is a proceeding in which a judicial order for

testimony or documents is sought or issued or sought to be enforced, the 30-

day [notice of removal] requirement ... is satisfied if [notice of removal is filed]

not later than 30 days after receiving, through service, notice of any such

proceeding.”).

I do not believe that the phrase “directed to” authorizes the court to

determine on its own that a complaint, although not brought against the

federal government, is “really” a suit against the federal government. When

Congress added the phrase “directed to,” its narrow purpose was “to establish[]

that cases may be removed when federal documents are sought in state court

cases,” even when the federal entity is not a defendant. Rodgers v. Gilbert, 2012

U.S. Dist. LEXIS 59959, at *5 (W.D. Ky. Apr. 27, 2012); see Guggenberger,

12

2016 U.S. Dist. LEXIS 180403, at *19 (recognizing same and holding that

removal not proper because “[t]he United States has not demonstrated that any

discovery [sought] is the property of the federal government, such that those

discovery proceedings could be considered ‘against or directed to’ the United

States as a ‘real party in interest.”); see also Smith v. Hous. Auth. of Balt. City,

2011 U.S. Dist. LEXIS 6554, at *8 (D. Md. Jan. 21, 2011) (denying remand

garnishment action brought for HUD funds); Parsons, 2018 U.S. Dist. LEXIS

215806, at *15 (holding that “purpose of § 1442 is not served by permitting the

VA to remove state court proceedings where it was served with a petition

containing no claims against it, not naming it as a party and/or not seeking to

subpoena or otherwise compel any documents or other discovery materials

from the VA.”).

Moreover, “Ji]f removal is sought for a proceeding in which federal

documents are requested, ‘and there is no other basis for removal, only that

proceeding may be removed to the district court.” Rodgers, 2012 U.S. Dist.

LEXIS 59959, at *5 (holding removal proper for resolution of discovery dispute,

and “[u]pon resolution of this narrow issue, the case should be remanded.”).

iii. Analysis

The Court agrees with the Government that the complaint meets the

requirement of being “related to” the revenue collection functions of the IRS.

Although the complaint is brought against AVS, it actually says very little

about any supposedly wrongful conduct by that entity. Rather, the alleged

wrongdoing is attributed to the Government’s conduct in the underlying tax

action in connection with its efforts to collect on Balice’s unpaid income tax

liabilities. Cf Papp v. Fore-Kast Sales Co., 842 F.3d 805, 813 (3d Cir. 2016)

(holding “related to” element met where there was “indeed a connection or

association between the acts complained of by [plaintiff] and the federal

13

government.” (alteration added)).8 That a complaint “relates to” the activities of

a federal office, however, is not the end of the matter.

To be removable under section 1442(a)}, the suit must be “against” or

“directed to” the Government. Cf. In re Proceeding in Which Pa. Seeks to Compel

the Def. Ass’n of Phila. to Produce Testimony, 2013 U.S. Dist. LEXIS 115309, at

*2 {E.D. Pa. Aug. 15, 2013) (holding that state proceeding seeking to compel

testimony from the Federal Community Defender Organization “to determine

whether the FCDO used federal grant monies in its state court representation

of [Pennsylvania state prisoner facing death sentence], and, if it made sucha

finding, to disqualify the FCDO from the case” was properly removed under

§1442(a)), aff'd, 790 F.3d 457 (3d Cir. 2015). To hold that a complaint, simply

by virtue of satisfying the “related to” requirement, also satisfies the “against”/

“directed to” requirement, would render the latter provision superfluous. I

therefore must determine whether Balice’s state court complaint was “against”

or “directed to” the United States. I conclude that it was not.

The Government was not named as a defendant in Balice’s complaint;

thus the action was not brought “against” the Government. Now the United

States has moved to intervene; when it removed the case, however, it was nota

party. The appropriateness of removal is measured as of the time of removal.

Nor was the action “directed to” the Government in the sense outlined

above. That provision, I find, was intended only to cover actions which, while

not naming the United States as a party, seek discovery from the United

States. This action does not fit that description. ?

8 The Third Circuit in Papp did not address the “against” or “directed to” aspect of

the statute. In that case, the plaintiff filed a failure-to-warn suit against The Boeing

Company, a military contractor, for injuries to his wife that were caused by exposure

to asbestos. Boeing removed the action once it learned that the alleged injuries were

caused by the wife’s work on a military cargo plane for the U.S. Navy. The Third

Circuit affirmed the removal, concluding that (1) Boeing was a “person;” (2) Boeing was

“acting under” a federal agency; (3) the conduct “related to” acts done for a federal

agency; and (4) Boeing raised a colorable military-contractor defense.

9 Iam cognizant, of course, that the complaint here seeks to have it both ways.

The United States, says Mr. Balice, cannot participate because it has no more interest

in the case. At the same time, however, Mr. Balice in effect collaterally attacks the tax

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judgment and foreclosure sale. Almost nothing in the complaint, is directed to any

allegedly wrongful conduct of AVS, which merely submitted the winning bid in

foreclosure.

I note that neither AVS nor the Government has sought removal under

§1442(a)(2), which provides as follows:

(a} A civil action or criminal prosecution that is commenced in a State

court and that is against or directed to any of the following may be

removed by them to the district court of the United States for the district

and division embracing the place wherein it is pending:

(2) A property holder whose title is derived from any such officer,

where such action or prosecution affects the validity of any law of

the United States.

The apparent purpose of § 1442(a)(2) “was to insure a federal forum to persons

who took title to property from a revenue officer and faced a challenge to their

title from others, such as taxpayers, who claimed that the law under which the

revenue officer had seized their property was invalid.” Stratford v. Bridgeport,

434 F, Supp. 712, 714 (D, Conn, 1977).

Reliance upon this section “requires compliance with two prongs|.]”

Benitez-Bithorn v. Rossello-Gonzalez, 200 F.Supp.2d 26, 31 (D.P.R. 2002). First,

“the property in controversy must derive from an officer of the United States[.]”

Id. Second, “the controversy regarding the property must affect the validity of

any law of the United States.” Id.

AVS obtained the subject property though a sale by the United States,

and the Government conveyed the deed to the property to AVS, which meets the

first prong, See Monroe v, Gagan, 2008 U.S. Dist. LEXIS 83854, at *14 (D. Ariz.

Sep. 29, 2008) (finding first prong met where defendants obtained title to real

property through a United States Marshal’s deed.).

However, the second prong is arguably not met, as Mr. Balice seems to

have deleted his arguments directed to the validity of the federal tax laws

(although such arguments may be implied). See id. at *15 (“[Q]uestioning the

validity of a judgment and federal court orders does not transform this into a

controversy affecting the validity of any law of the United States.”) (citing

Stratford, 434 F. Supp. at 715 (“None of the provisions of federal law cited in

support of [defendant’s] removal petition meets the § 1442 standard, since

[plaintiff's] suit does not attack the validity of any of them.}). The complaint

does not challenge the validity of any federal law, and therefore, cannot be a

basis for removal.

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III, Conclusion

Accordingly, for the reasons stated above, Balice’s motion to remand is

granted. (DE 4). The remaining filed motions are administratively terminated.

(DE 2, 6, 9, 11, and 12).

Dated: July 15, 2019 As

Kevin McNulty SS

United States District Judge

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