retain jurisdiction pursuant to the All Writs Act, 28 U.S.C. section 1651(a)
C. Analysis under Section 2410
Section 2410 allows the United States to be named as a party in any civil action where the United States claims a mortgage or other lien on personal or real property. See 28 U.S.C. § 2410. The Mongellis contend that the United States has neither a mortgage nor a lien interest entitling it to remove the action. The United States, on the other hand, argues that the removal was proper because of its interest in defendant's sequestered assets.
By its own terms and as interpreted by the courts, section 2410 does not confer jurisdiction on this Court unless the United States has a lien interest in the property that is the subject matter of the divorce action. See 28 U.S.C. § 2410(a). See also Brewer v. United States, 764 F. Supp. 309, 314 (S.D.N.Y. 1991). The United States' interest in this action that motivated the intervention and ultimately the removal is a pecuniary interest in the funds and other personal property sequestered in the divorce action. None of the assets sequestered is real property. Therefore, the only interest that the United States has in this divorce action that may possibly confer jurisdiction on this Court is a potential lien on defendant's personal property.
The Mongellis first urge that state law governs the issue of whether the United States has a lien on which to base jurisdiction for removal. The Supreme Court has held that "if state law characterizes a lien as inchoate, that characterization is conclusive on the federal courts." United States v. Pearson, 258 F. Supp. 686, 690 (S.D.N.Y. 1966). See United States v. Security Trust & Savings Bank, 340 U.S. 47, 50, 95 L. Ed. 53, 71 S. Ct. 111 (1950). The Mongellis argue that under the applicable state law, the United States has no lien or cognizable mortgage against the property that is the subject matter of the action. Under New York law, a judgment creditor does not obtain a lien merely by obtaining a judgment. A judgment lien is created when a writ of execution is delivered to the sheriff. See Corwin Consultants, Inc. v. Interpublic Group of Cos., Inc., 375 F. Supp. 186, 194 (S.D.N.Y. 1974), reversed on other grounds, 512 F.2d 605 (2d Cir. 1975). See also Knapp v. McFarland, 462 F.2d 935, 938 (2d Cir. 1972) (to enforce a judgment as a lien on personal property, the judgment creditor must, after docketing the judgment, deliver a writ of execution to the sheriff for levy).
In this case, the United States has not attempted to collect on the civil contempt fines. Nor has it delivered an executed judgment to the sheriff. As a result, under New York law the United States does not possess a lien because it never delivered a writ of execution to the sheriff as required. Therefore, because there is no lien or mortgage as required by section 2410, the Mongellis argue that this Court lacks subject matter jurisdiction over the action, removal was therefore improper, and the case must be remanded under 28 U.S.C. section 1447(c). The United States proffers no contrary argument under New York law. This Court agrees with the Mongellis that, under New York law, the United States, as judgment creditor, has no lien interest in the property that is the subject matter of the action sufficient to confer jurisdiction under 28 U.S.C. section 2410.
The United States contends, on the other hand, that federal law applies and under federal law it does have a lien on the property that is the subject matter of the action. Specifically, the United States argues that it has a lien pursuant to the Federal Debt Collection Procedures Act, 28 U.S.C. section 3201, because it filed the civil contempt judgment in Orange County. 28 U.S.C. section 3201 provides that a "judgment in a civil action shall create a lien on all real property of a judgment debtor on filing a certified copy of the abstract of the judgment . . . " In addition, pursuant to the plea agreement, the government argues that it holds a security interest in certain bank and financial institution deposits, in real property, and in other tangible assets belonging to defendant.
The Mongellis urge that these arguments are also without merit. While the Mongellis adamantly contend that state law applies and that there is no lien under state law, the Mongellis also argue that even if federal law were to apply, the United States still would not possess a lien sufficient to create jurisdiction in this Court. Section 3201, on which the United States relies, applies to real property only. The Mongellis point out that none of the sequestered assets that are the subject matter of this action, out of which the United States intends to satisfy its judgment, is real property. Therefore, section 3201, even if it did apply, does not create jurisdiction in this Court because it applies to real property only. This Court agrees that section 3201 by its terms explicitly applies to real property only. None of the sequestered assets that motivated the United States to intervene and remove the action is real property. Therefore, section 3201 fails to confer jurisdiction on this Court. Moreover, the security interest created by the plea agreement is likewise insufficient under section 2410 to confer jurisdiction. A security interest is not the equivalent of a lien. Under both state and federal law arguments, this Court lacks subject matter jurisdiction over the action. Unless the All Writs Act, the United States' alternative argument, confers jurisdiction on this Court, this case must be remanded.
D. Analysis under the All Writs Act
The United States alternatively argues that the All Writs Act, 28 U.S.C. § 1651(a) ("All Writs Act"), creates jurisdiction within this Court. The All Writs Act provides in relevant part as follows:
The Supreme court and all the courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.
28 U.S.C. § 1651(a). The Supreme Court "has repeatedly recognized the power of a federal court to issue such commands under the All Writs Act as may be necessary or appropriate to effectuate and prevent the frustration of orders it has previously issued in the exercise of jurisdiction otherwise obtained." United States v. New York Telephone Co., 434 U.S. 159, 172, 54 L. Ed. 2d 376, 98 S. Ct. 364 (1977); accord United States v. International Brotherhood of Teamsters, 907 F.2d 277, 280 (2d Cir. 1990), aff'g 728 F. Supp. 1032, 1043-48 (S.D.N.Y.). The judicial power of the All Writs Act extends to persons who were not parties to the original action but are now in a position to frustrate the implementation of a court order. See New York Telephone, 434 U.S. at 174.
The Second Circuit has upheld district court All Writs Act orders. In Yonkers Racing Corp. v. Yonkers, 858 F.2d 855, 864 (2d Cir. 1988), the Second Circuit affirmed the District Court's direction to defendant to remove the case in order to protect a desegregation consent decree. See also International Brotherhood of Teamsters, 907 F.2d at 280; In re Baldwin-United Corp., 770 F.2d 328, 334-38 (2d Cir. 1985).
The United States contends that an All Writs Act order retaining jurisdiction in this Court is warranted to prevent further interference with Judge Broderick's contempt order and the plea agreement entered into in this case. The United States urges that the Mongellis are in a position to frustrate the contempt order of Judge Broderick and therefore this Court should retain jurisdiction so as to minimize possibly inconsistent rulings.
The Mongellis, on the other hand, vehemently oppose reliance on the All Writs Act to confer jurisdiction on this Court. The Mongellis point out that the All Writs Act must be invoked only as a last resort--it is not a "catch-all" statute granting jurisdiction when all else fails. See Yonkers Racing Corp., 858 F.2d at 861.
The Court agrees with the Mongellis that the limited circumstances in which the All Writs Act may be used are not present in this case. In the state action, Justice Saxe has made it clear that he is fully aware of the United States' pecuniary interest in this action. Justice Saxe granted the United States' motion to intervene to protect that very right. Justice Saxe has shown no inclination to ignore the contempt order of Judge Broderick. Thus, this Court declines to rely on the All Writs Act to confer jurisdiction on itself. As a result, this Court lacks subject matter jurisdiction over the divorce action. Because this Court has decided that jurisdiction is inappropriate under 28 U.S.C. section 2410 and under the All Writs Act, removal was likewise inappropriate under 28 U.S.C. section 1444. The motion to remand the action must therefore be granted pursuant to 28 U.S.C. section 1447(c). Section 1447(c) grants this Court discretion to award costs of removal when remand is ultimately required. The application for costs of removal is denied. The application for a stay is denied as moot.
E. The Preliminary Injunction
Because this Court has decided to remand this action for lack of subject matter jurisdiction, plaintiff's motion for a preliminary injunction must be denied as moot. This Court lacks jurisdiction over this action.
For the foregoing reasons, the motion to remand is granted. This case is hereby remanded to Supreme Court of the State of New York, County of New York. The Court directs the Clerk of Court to close this case and remove it from the active docket. The application for costs of removal is denied. The application for a stay of determination of the federal issues is denied as moot. The application for a preliminary injunction is also denied as moot.
Dated: New York, New York
March 30, 1994
JOHN F. KEENAN
United States District Judge
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