United States District Court, W.D. Washington, Tacoma
ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
BENJAMIN H. SETTLE, District Judge.
This matter comes before the Court on Plaintiff United States of America's ("Government") motion for summary judgment (Dkt. 20) and Defendant Puyallup Tribe of Indians' ("Tribe") motion for summary judgment (Dkt. 21). The Court has considered the pleadings filed in support of and in opposition to the motion and the remainder of the file and hereby grants the Tribe's motion and denies the Government's motion for the reasons stated herein.
I. PROCEDURAL HISTORY
On February 20, 2013, the Government filed a complaint against the Tribe asserting a claim for the alleged failure to honor an Internal Revenue Service ("IRS") Tax Levy. Dkt. 1.
On November 21, 2013, the parties filed a stipulated statement of facts. Dkt. 19. On November 22, 2013, the parties filed motions for summary judgment. Dkts. 20 & 21. On December 20, 2013, the parties filed responses. Dkts. 22 & 23.
II. FACTUAL BACKGROUND
The Court will only provide a brief summary of the facts because the stipulated statement of facts is in the record. See Dkt. 19. Joshua D. Turnipseed ("Turnipseed") is an enrolled member of the Tribe and owes back taxes to the Government. The Tribe, at the Tribal Council's discretion, distributes per capita payments each month to qualified members such as Turnipseed. The Government issued a levy to the Tribe for Turnipseed's wages, salary, or other income in an attempt to collect Turnipseed's liabilities. The Tribe issued per capita payments to Turnipseed despite the levy, and, eventually, the Government filed this action.
Summary judgment is proper only if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). In this case, the parties agree the Court may decide the narrow issues presented on the stipulated facts. See Dkt. 21 at 3.
The Supreme Court set forth the legal standard for determining whether an IRS levy notice applies to future payments:
We look initially to state law to determine what rights the taxpayer has in the property the Government seeks to reach, then to federal law to determine whether the taxpayer's state-delineated rights qualify as "property" or "rights to property" within the compass of the federal tax lien legislation.
Drye v. United States, 528 U.S. 49, 58 (1999). Accord, Fourth Inv. LP v. United States, 720 F.3d 1058, 1067 (9th Cir. 2013). The parties dispute whether the per capita payments are "property" or "rights to property" and whether the per capita payments are "fixed and determinable" under federal law. See Dkt. 22 at 2.
"In determining whether a federal taxpayer's state-law rights constitute property' or rights to property, ' [t]he important consideration is the breadth of the control the [taxpayer] could exercise over the property.'" Drye, 528 U.S. at ...