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Gold Forever Music, Inc. v. United States

United States District Court, E.D. Michigan, Southern Division

July 11, 2018

GOLD FOREVER MUSIC, INC., Plaintiff,
v.
UNITED STATES OF AMERICA, Defendant.

          OPINION AND ORDER GRANTING DEFENDANT'S MOTION TO DISMISS (DOC. 8)

          GEORGE CARAM STEEH UNITED STATES DISTRICT JUDGE.

         Plaintiff Gold Forever Music, Inc. filed a wrongful levy action against defendant the United States of America on December 6, 2017. This matter is presently before the Court on defendant's motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6). Pursuant to Local Rule 7.1(f)(2), the Court shall rule without oral argument. For the reasons stated below, defendant's motion is GRANTED.

         I. Background

         Plaintiff is a music publishing company owned by Edward Holland, Jr. Holland owes the Government over $19 million in unpaid federal income tax liabilities. (Doc. 8-1 at PageID 58). The Internal Revenue Service (IRS) levied plaintiff's royalty payments and applied the funds to Holland's debt. See (Doc. 1 at PageID 2). Plaintiff alleges that the royalty payments were not owed to Holland, but rather, plaintiff's property. (Doc. 1 at PageID 1).

         The IRS served two notices of levy. (Doc. 8-2 at PageID 60, Doc 8-3 at PageID 61). The first was served upon Broadcast Music, Inc. (BMI) on August 27, 2012. (Doc. 8-2 at PageID 60). The second was served upon Universal Music Publishing (Universal) on the same date. (Doc. 8-3 at PageID 61). Plaintiff's complaint acknowledges that these notices were served in 2012. (Doc. 1 at PageID 2). Funds were paid in 2016 and 2017. (Doc. 1 at PageID 3). Plaintiff alleges that it requested refunds on June 23, 2017 and September 17, 2017. (Doc. 1 at PageID 4).

         II. Legal Standard

         Defendant moves to dismiss on the grounds that plaintiff's action is time barred under the statute of limitations codified at 26 U.S.C. § 6532(c).

Although, in general, statutes of limitations serve as affirmative defenses, in suits against the United States, compliance with the applicable statute serves also as a jurisdictional prerequisite. See Douglas v. United States, 562 F.Supp. 593 (S.D.Ga.1983). The consent by the United States to be sued is conditioned upon the action commencing within the statutory time period. See Dieckmann v. United States, 550 F.2d 622 (10th Cir.1977). These statutory waivers of sovereign immunity are construed strictly, and if the time limit has elapsed, the action may properly be dismissed for lack of subject matter jurisdiction. Id. at 623.

Miller v. United States, 838 F.Supp. 338, 339 (N.D. Ohio 1993). See also Ohio Nat. Life Ins. Co. v. United States, 922 F.2d 320, 324 (6th Cir. 1990) (stating that the statutory period of limitations codified at 26 U.S.C. § 6532 is “jurisdictional”).

         III. Analysis

         Plaintiff filed a cause of action under 26 U.S.C. § 7426. Subsection (i) of this statute states that 26 U.S.C. § 6532(c) governs a period of limitation for actions brought under § 7426. Title 26 U.S.C. § 6532(c) governs “suits by persons other than taxpayers.” It currently provides:

(1) General rule - Except as provided by paragraph (2), no suit or proceeding under section 7426 shall be begun after the expiration of 2 years from the date of the levy or agreement giving rise to such action.
(2) Period when claim is filed - If a request is made for the return of property described in section 6343(b), the 2-year period prescribed in paragraph (1) shall be extended for a period of 12 months from the date of filing of such request or for a period of 6 months from the date of mailing by registered or certified mail by the Secretary to the person making such request of a notice of ...

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