NONBIDDER LACKS STANDING TO CHALLENGE TAX SALE.

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

I. INTRODUCTION

ORDER

[1] On July 6, 1998, Plaintiff filed his complaint against Defendants the United States of America, the Internal Revenue Service, Dianne Thomas and Don Taylor alleging violations of the Internal Revenue Code, specifically, 26 U.S.C. section 6335. Plaintiff's claims stem from the IRS' administrative sale of a single family home to Defendant Don Taylor. On September 25, 1998, Defendants the United States and the individual federal Defendants (hereinafter "the United States") filed a motion to dismiss. After having considered the issues raised by the United States in their Motion to Dismiss and Plaintiff's response thereto, the Court finds that Plaintiff lacks standing to assert the claims alleged in his complaint; therefore, the Court will grant the United States' Motion to Dismiss and dismiss Plaintiff's complaint.

II. BACKGROUND

[2] The relevant facts cited in the light most favorable to Plaintiff are as follows. On June 5, 1998, the Internal Revenue Service issued a notice of a sealed bid sale to be held on June 30, 1998 for a single family home located in Glendale, Arizona. On June 30, 1998, Revenue Officer Diane Thomas conducted the sealed bid sale. Plaintiff attended the June 30, 1998 sale but did not submit a sealed bid for the purchase of the Glendale property. After opening the bids, Officer Thomas announced that the highest bid was submitted by Gene R. Wooley for $115,500 and returned the bid deposits to the unsuccessful bidders. The following morning, Plaintiff called Officer Thomas to inquire whether Mr. Wooley had paid the balance due. Officer Thomas indicated to Plaintiff that Mr. Wooley had defaulted.

[3] Additionally, Plaintiff alleges that Officer Thomas informed him that she had contacted one of the unsuccessful bidders, Defendant Taylor, and offered to sell the property to him for $110,221.51, the amount he bid at the June 30, 1998 sale. Subsequently, Taylor paid the agreed purchase price and was delivered a certificate of sale from Officer Thomas. Thereafter, Plaintiff initiated this action.

III. DISCUSSION

[4] Plaintiff's complaint alleges that Officer Thomas violated provisions of the Internal Revenue Code, namely, 26 U.S.C. section 6335, by privately negotiating a sale of the Glendale property to Defendant Don Taylor, following Mr. Wooley's default, rather than holding another public sealed bid sale ¹ and requests that the Court order the IRS to hold another sealed bid sale in accordance with the provisions of 26 U.S.C. section 6335.

A. STANDING

[5] In its Motion to Dismiss, the United States contends that the Court must dismiss Plaintiff's complaint since he lacks standing to challenge the sale of the Glendale property. The Court agrees. Pursuant to Article III of the United States Constitution, federal courts do not have jurisdiction over a claim unless there is an "actual case or controversy." The requirement that a plaintiff have standing is one component of the case or controversy requirement.

[6] It appearing that his action is brought pursuant to the Administrative Procedures Act, 5 U.S.C. section 702, et seq. ("APA"), Plaintiff must satisfy the specific standing requirements set forth in the APA. ² "[I]n order to meet the standing requirement of section 702, the interest sought to be protected by the complainant [must] arguably [be] within the zone of interest to be protected or regulated by the statute or constitutional guarantee in question." Benally v. Hodel, 940 F.2d at 1198, 1194 (1989) quoting Inter-Tribal Council of Nevada, Inc. v. Hodel, 856 F.2d 1344, 1352 (1988) (internal quotations omitted). Moreover, the plaintiff must allege that the challenged action caused him injury in fact, economic or otherwise. Benally, 940 F.2d at 1198; Preston v. Heckler, 734 F.2d 1359, 1364 (9th Cir.1983). Lastly, the plaintiff's injury must be "redressable by the court." Benally, 940 F.2d at 1198; Preston, 734 F.2d at 1364.

[7] In their motion to dismiss, without addressing whether Plaintiff's alleged interest sought to be protected in his suit is arguably within the zone of interest to be protected or regulated by the statute, Defendants contend that because Plaintiff failed to submit a sealed bid at the public sale, he has suffered no injury in fact as a result of the Defendants' alleged failure to comply with provisions of the Internal Revenue Code.

[8] In his response to Defendants' motion to dismiss, citing Glacier Part [sic] Foundation v. Watt, 663 F.2d 882 (9th Cir.1981), Plaintiff alleges that despite the fact that he failed to submit a bid at the challenged sale, he has sufficient standing. In Glacier, the plaintiff, an unsuccessful applicant for concession contract, brought suit, pursuant to the APA, against the Secretary of the Department of Interior challenging its award of a concession contract to another bidder under the Concessions Policy Act, 16 U.S.C. s 20d. In Glacier, the court found that the plaintiff had suffered an injury in fact and thus, had standing since, because of the defendants' violations of the Concession Policy Act, the plaintiff was unable to compete on an equal basis for the concessions contract. However, the Court finds the facts of the Glacier case are distinguishable from the facts of the present case in that the plaintiff in the Glacier case sought to compete for the concessions contract by submitting an application. Here, Plaintiff did not submit a sealed bid at the public sale and, therefore, unlike the plaintiff in Glacier, cannot claim as an injury in fact that he was unable [to] compete on an equal basis for the purchase of the property at issue.

[9] In Preston v. Heckler, 734 F.2d 1359 (9th Cir.1983), also cited by Plaintiff in his response to Defendants' motion to dismiss, the plaintiff, an Indian employed by Indian Health Service, brought suit against the Secretary of Health and Human Services alleging that she was discriminated against when her job application was rejected. Addressing whether the plaintiff met the standing requirements under the APA, the court held that the plaintiff "need not demonstrate that she would have been hired if the Secretary had complied with the law." Id. at 1365. While the law does not require that Plaintiff demonstrate that he submitted the highest bid to challenge the sale at issue, the Court finds that Plaintiff must have, in fact, submitted a bid in order to claim that Officer Thomas' alleged violations of the Internal Revenue Code caused him injury.

[10] Without Plaintiff submitting a bid at the challenged sale, the Court finds that Plaintiff's action is merely attempting to assert a claim that the Government be administered accordingly to law. However, claims of standing predicated on "the right possessed by every citizen, to require that the Government be administered according to law, must be rejected. Valley Forge, Etc. v. American United, Etc., 102 S.Ct. 752, 764 (1982)(recognizing that "[t]his Court repeatedly has rejected claims of standing predicated on 'the right possessed by every citizen, to require that the Government be administered according to law'" and, further, that "such claims amount to little more than attempts to employ a federal court as a forum in which to air . . . generalized grievances about the conduct of government.) Accordingly, the Court finds that Plaintiff lacks standing to challenge the Defendants' conduct during its administrative sale of the Glendale property. Because the standing issue is jurisdictional, the Court will not address Defendants' remaining arguments supporting their motion to dismiss. Simon v. Eastern Kentucky Rights Org., 96 S.Ct. 1917, 1924 (1975).

[11] IT IS THEREFORE ORDERED granting Defendant the United States' Motion to Dismiss (doc. 16) and dismissing this action.

[12] IT IS FURTHER ORDERED denying as moot all other pending motions in this matter.

[13] DATED this 12th day of April 1999.

                                   Honorable Roger G. Strand

     If the conditions of the sale permit part of the payment to be