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Smith v. New York State Dep't of Taxation and Finance

August 2, 2007


The opinion of the court was delivered by: Chief Judge Curtis L. Collier


Before the Court is Defendant New York State Department of Taxation and Finance's ("Defendant") motion to dismiss as well as its supporting memorandum (Court File No. 7). Pro se Plaintiff Eric Smith ("Plaintiff") filed a response in opposition (Court File No. 9). For the following reasons, the Court will GRANT Defendant's motion to dismiss and will DISMISS Plaintiff's complaint WITHOUT PREJUDICE.


Plaintiff, proceeding pro se, commenced this action by filing his complaint in the federal district court for the Eastern District of Tennessee on October 2, 2006 (Court File No. 1). Plaintiff claims Defendant caused $12,672.16 to be removed from his bank account located in New York, New York in January 2005. Defendant's tax liability claim is based upon taxes Plaintiff allegedly owed in the sum of $300.00 or $400.00 which had grown into over $12,000.00 since 1988 (Court File Nos. 1 & 9).*fn1 Plaintiff alleges he was a resident of Chicago, Illinois from 1984 through 2005 (id.).*fn2 Plaintiff contends he did not receive a notice of a tax deficiency from Defendant until his bank was served with the tax compliance levy in 2005 (id.). Plaintiff further claims that, as a resident of Chicago, Illinois during the period of 1984-2005, he is not subject to any claim for tax liability in New York State(Court File No. 9).*fn3

Without citing legal support, Plaintiff argues he was not liable for the taxes exacted, and therefore, the money that was taken from his account was done so unlawfully (Court File Nos. 1 & 9). Plaintiff seeks monetary damages, and prays for recovery for the $12,672.16 removed from his account, plus interest and court costs (Court File No. 1).

On December 21, 2006, Defendant responded to Plaintiff's complaint by moving to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1), arguing the action was barred by the Eleventh Amendment (Court File No. 7). Plaintiff filed a response to Defendant's motion on February 20, 2007 (Court File No. 9). In his response, Plaintiff claims Defendant had no grounds to take the money from his account and Defendant's action rose to a "criminal taking" (id.).Plaintiff also reasserts his contention that he is not liable for taxes to the state of New York State since he had no connection with the State of New York during the relevant time period (id.).


Motions to dismiss premised on sovereign immunity are challenges to subject matter jurisdiction which fall under Federal Rule of Civil Procedure 12(b)(1). See, e.g., Hedgepeth v. Tennessee, 215 F.3d 608, 610 (6th Cir. 2000); Nair v. Oakland County Cmty. Mental Health Auth., 443 F.3d 469, 476 (6th Cir. 2006). A motion to dismiss for lack of subject matter jurisdiction may take the form of either a facial or a factual attack. United States v. Ritchie, 15 F.3d 592, 598 (6th Cir. 1994). Facial attacks challenge the sufficiency of the pleading itself. Factual attacks, on the other hand, challenge the factual existence of subject matter jurisdiction, irrespective of what is or might be alleged in the pleadings. Id. An assertion of Eleventh Amendment sovereign immunity constitutes an attack of the latter variety. In considering a factual attack upon the court's jurisdiction, no presumption of truth applies to the plaintiff's factual allegations and the court is free to weigh the evidence and resolve factual disputes so as to satisfy itself as to the existence of its power to hear the case. Id. (internal citations omitted). "[T]he entity asserting Eleventh Amendment immunity has the burden to show that it is entitled to immunity, i.e., that it is an arm of the state." Gragg v. Ky. Cabinet for Workforce Dev., 289 F.3d 958, 963 (6th Cir. 2002) (adopting rule from United States Courts of Appeal for the Third, Fifth, Seventh, and Ninth Circuits).


Defendant argues Plaintiff's complaint must be dismissed based on its immunity under the Eleventh Amendment, which provides:

The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.

U.S. Const. amend. XI. The driving force behind the Eleventh Amendment is the policy of protecting state sovereignty. Seminole Tribe of Florida v. Florida, 517 U.S. 44, 54 (1996) (stating Eleventh Amendment confirms the presupposition "each State is a sovereign entity in our federal system"); Hans v. Louisiana, 134 U.S. 1, 16-18 (1890) (invoking principle of sovereign immunity in holding Eleventh Amendment's jurisdictional bar extends beyond its literal words to also deprive federal courts of jurisdiction over causes of action brought against an unconsenting State by its own citizens). Inherent in the nature of sovereignty is a State's immunity from suits by individuals without its consent. See Seminole Tribe, 517 U.S. at 54. Thus, States have almost complete control over whether, to what extent, and where they may be sued. See Bd. of Trustees of Univ. of Alabama v. Garrett, 531 U.S. 356, 363 (2001) ("The ultimate guarantee of the Eleventh Amendment is that non-consenting States may not be sued by private individuals in federal court."). "Absent waiver, neither a State nor agencies acting under its control may be subject to suit in federal court." Puerto Rico Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 144 (1993) (quoting Welch v. Texas Dep't of Highways and Public Transp., 483 U.S. 468, 480 (1987)).

Defendant argues it is entitled to Eleventh Amendment immunity as an agency of the State of New York. Generally, Eleventh Amendment immunity only applies to suits seeking money damages against state governments and entities that can be considered arms of the state. Alkire v. Irving, 330 F.3d 802, 811-13 (6th Cir. 2003). Thus, the Eleventh Amendment affords no protection to local governments, municipalities, or counties. See, e.g., Brotherton v. Cleveland, 173 F.3d 552, 566-67 (6th Cir. 1999) (holding county coroner was not a state actor entitled to Eleventh Amendment immunity). Whether or not a governmental entity is an "arm of the state" is a question of federal law which turns on a consideration of the state law provisions defining the entity's character. Regents of Univ. of Calif. v. Doe, 519 U.S. 425, 430 n. 5 (1997). In resolving this question, the United States Court of Appeals for the Sixth Circuit ("Sixth Circuit") has approved a multi-factor analysis which includes inquiries into: (1) the definition and/or characterization of the entity in question under state law, (2) the degree of autonomy exercised by the entity or, conversely, the degree of control exercised by the State, (3) the entity's source of funding, and (4) the State's potential financial exposure in the event of a money judgment against the entity. Brotherton, 173 F.3d at 560-61 (citing specifically cases from Tenth and Eleventh Circuits). The Sixth Circuit has indicated the most salient issue is whether the State would ultimately be liable for any money judgment against the entity. Dubue v. Mich. Bd. of Law Examiners, 342 F.3d 610, 615 (6th Cir. 2003); Brotherton, 173 F.3d at 560-61. Additionally, the Supreme Court has placed heavy emphasis on the vulnerability of the State's purse in determining a governmental entity's Eleventh Amendment status, suggesting this factor is primary, if not dispositive. See Doe, 519 U.S. at 430-31 (citing Hess v. Port Auth. Trans-Hudson Corp., 513 U.S. 30, 45-53 (1994)).

The parties have not presented any arguments on whether any potential money judgment against Defendant would be paid out of the State of New York's treasury. In fact, the only factor Defendant broached at all is its state-law characterization.*fn4 Based upon this characterization, the Court agrees with Defendant's argument that it is an agency of the State of New York. See N.Y. Const. art. V, § 2 (indicating there shall be twenty civil departments in the state government); N.Y. Tax Law § 170 (McKinney 2007) (authorizing the continued existence of the New York Department of Taxation and Finance). Additionally, the United States Court of Appeals for the Second Circuit has held Defendant is an agency of the State of New York, which is immune from suit. See Johnson v. New York, 21 F. App'x 41, 42-43 (2d Cir. 2001) (summary order) (finding the district court correctly found the Eleventh Amendment bars suit against the State of New York and its agency, the New York State Department of Taxation and Finance); ...

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