WWSM Investors v. United States

BRUNETTI, Circuit Judge,

dissenting:

I dissent. I beheve the majority opinion misreads United States v. Williams, — U.S. —, 115 S.Ct. 1611, 131 L.Ed.2d 608 (1995), and erroneously concludes that it conflicts with our decision in Winebrenner v. United States, 924 F.2d 851, 855 (9th Cir.1991).

The district court correctly denied WWSM’s request for leave to amend to allege a claim for refund under 28 U.S.C. § 1346, concluding that under Winebrenner, WWSM’s exclusive remedy was a claim for wrongful levy under 26 U.S.C. § 7426 and the statute of hmitations barred that claim. Winebrenner clearly shows that the exclusive remedy for a third party who claims an interest in property wrongfully levied on by the IRS is an action under § 7426. See 924 F.2d at 853-55.

In Williams, the Supreme Court recognized that Williams could not use the remedy of 26 U.S.C. § 7426 because there was no levy. See — U.S. at-, 115 S.Ct. at 1618. Williams involved an IRS assessment for certain tax liabilities. A lien, not a levy, was placed on the property. The taxpayer paid the tax liability to remove the lien so the property could be sold and sued the IRS for a refund.

The Supreme Court recognized Williams as a refund, not a wrongful levy, case, and analyzed the non-levy remedies available: quiet title (§ 2410(a)(1)); separate-fund (§ 6325(b)(3)); and refund (§ 1346(a)(1)). Id. — • U.S. at-, 115 S.Ct. at 1618-1620 (Parts IV and V of the opinion). The Supreme Court never mentioned Winebrenner or United Sand and Gravel v. United States, 624 F.2d 733 (5th Cir.1980), nor did it overrule or even hint that § 7426 was not the exclusive remedy for a claimed wrongful levy. Quite the contrary, the Supreme Court analyzed the various remedies for the various situations, — U.S. at-, 115 S.Ct. at 1619, and did not allow that a non-levy remedy under § 1346(a)(1) was available when the exclusive levy remedy *460under § 7426 was barred by the statute of limitations.

WWSM’s only remedy was under § 7426 because this case, like Winebrenner, involves a wrongful levy; Williams did not. Therefore, I would affirm the district court’s denial of the leave to amend.