A lawsuit filed by the children of undocumented immigrants alleging discrimination because of the denial of economic impact payments has survived a government motion to dismiss.
In a June 19 order, the U.S. District Court for the District of Maryland denied the government’s construed motion to dismiss, which challenged the suit on grounds of standing, jurisdiction, and failure to state a claim.
“The court's order allows our suit challenging the discriminatory denial of assistance to a vulnerable subset of U.S. citizens — children,” said plaintiffs' attorney Leslie Book of Villanova University Charles Widger School of Law. “Families with one or more undocumented parents pay taxes and are at the front of the line in providing services in these challenging times,” he said, adding that the Coronavirus Aid, Relief, and Economic Security (CARES) Act's (P.L. 116-136) denial of payments to U.S. citizens “is cruel and hurtful.”
The suit, filed by seven children for whom one or both parents are undocumented immigrants, alleges that the CARES Act provision intentionally discriminates against them because of their parents’ alienage, violating their Fifth Amendment rights. It also brings claims for money damages under section 6428 and 28 U.S.C. section 1346(a)(2). The suit seeks to certify nationwide classes of citizen children denied the payments in the wake of the COVID-19 pandemic.
Under the CARES Act, section 6428 provides payments of up to $1,200 for individuals and $500 for qualifying children. To receive the payments, an individual must have a Social Security number, a qualification that excludes undocumented immigrants who file taxes with an individual taxpayer identification number.
While the government argued that the citizen children were not injured because CARES Act payments are made to parents, citing cases on the child tax credit and state child support payments, Judge Paul W. Grimm wasn't convinced that the children lacked standing.
“Even if economic impact payments under the CARES Act were analogous to the Child Tax Credit, Additional Child Tax Credit, or child support payments under state law such that they are paid directly to parents and not to children, this still does not address whether children suffered an injury in fact based on the lost opportunity to benefit from the economic impact payments,” Grimm wrote. “The interests of the Citizen Children Plaintiffs, and the Parent Plaintiffs as their representatives, in the opportunity to enjoy the benefit of the economic impact payments for food, shelter, and supplies, are squarely within zone of interests of the statute.”
The government cited several cases to support its argument that the children lacked statutory standing, but the court found them unpersuasive as well. It held that one cited case, United States v. Williams, 514 U.S. 527 (1995), actually supported the plaintiffs’ position.
Williams involved a plaintiff paying a tax lien on her husband’s interest in property jointly owned before it was deeded to her on divorce. The Supreme Court rejected the argument that Williams couldn't bring suit because the tax was not assessed against her.
“While this involves a different provision of the tax code, it is instructive in that the Government’s reading of the CARES Act, taken to its logical conclusion, would limit anyone from challenging the alleged unlawful discrimination against the Citizen Children Plaintiffs based on their parents’ alienage,” the court wrote.
The Power of ‘Shall’
The court also found that it had jurisdiction to hear the plaintiffs’ case, including the damages claims, rejecting the government’s contention that it had not waived sovereign immunity, which would prevent it from being sued. The court wrote that the CARES Act contains “compulsory language for economic impact payments,” and emphasized that the act uses the word “shall” regarding the credit.
“The Act therefore requires the government to pay the fictional overpayment, and be quick about it. This indicates that 26 U.S. Code [section] 6428 is a money-mandating statute,” Grimm wrote.
In rejecting the government’s assertion that because the statute was a tax statute, it was not a money-mandating one, the court cited Pfizer Inc. v. United States, 939 F.3d 173 (2d Cir. 2019) to support its finding that money-mandating statutes and tax statutes “are not mutually exclusive.” In Pfizer, the Second Circuit held that the pharmaceutical giant’s claim for $8 million in overpayment interest belonged exclusively in the Court of Federal Claims.
Grimm examined jurisdiction for the damages claims under the so-called Little Tucker Act of 28 U.S.C. section 1346(a)(2). That section provides that district courts and the Court of Federal Claims have concurrent jurisdiction over claims against the United States that do not exceed $10,000.
“In finding that our clients had standing and that there was a waiver of sovereign immunity, the court rightly focused on the substance of the CARES Act,” Book said. “That Congress placed the economic impact payments in the tax code should not provide a free pass to insulate the law from equal protection principles. I hope this order is the first step in getting justice for some of our most vulnerable citizens.”
The court declined to decide whether rational basis or heightened scrutiny applied in determining if the plaintiffs had stated an equal protection claim based on impermissible alienage classification from the SSN requirement. It found that under either standard, the government’s rationale did not warrant dismissal.
The government argued that the SSN requirement is made to provide payments based on work authorization.
The suit is one of several pending against the government alleging that the CARES Act provision discriminates against undocumented immigrants. In John Doe v. Trump, No. 1:20-cv-02531 (N.D. Ill.), the plaintiffs filed a class action suit in April on behalf of citizens ineligible for the economic impact payments because their spouses do not have SSNs. The Mexican American Legal Defense and Educational Fund also filed suit in April on behalf of six plaintiffs, alleging that as many as 2 million taxpayers filing returns with an ITIN have been denied relief checks.
The case is R.V. v. Mnuchin, No. 8:20-cv-01148. Along with Book, the plaintiffs are represented by the Institute for Constitutional Advocacy and Protection based at Georgetown University Law Center.