Absent any other statutory barrier, jurisdiction would be available under 28 USC 1331 and the Administrative Procedure Act. See Platsky v. CIA, 953 F.2d 26, 28 (2d Cir 1991); see also United States v. Mitchell, 463 U.S. 206, 77 L. Ed. 2d 580, 103 S. Ct. 2961 (1983).
The United States asks that the case be dismissed by virtue of the Tax Injunction Act, 26 USC 7421, which provides that "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed."
This Act has been applied to bar suits challenging denial of permits which would allow nonpayment of a tax. See United Petro/Energy Corp v. United States, Dkt No 93 - 6684-Civ, S.D. Fla March 9, 1994); Sears, Roebuck & Co v. Roddewig, 24 F. Supp. 321 (SD Ia 1938).
The Supreme Court has held the Act inapplicable to a preliminary injunction where it is virtually certain that a plaintiff will prevail on the merits, and plaintiff will suffer irreparable injury for which there is no adequate legal remedy. Bob Jones University v. Simon, 416 U.S. 725, 742-48, 40 L. Ed. 2d 496, 94 S. Ct. 2038 (1974); Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 8 L. Ed. 2d 292, 82 S. Ct. 1125 (1962).
Furthermore, the Supreme Court has found that the circumstances of the enactment of the Tax Injunction Act "strongly suggest that Congress intended the Act to bar a suit only in situations in which Congress had provided the aggrieved party with an alternative legal avenue by which to contest the legality of a particular tax." South Carolina v. Regan, 465 U.S. 367, 374, 79 L. Ed. 2d 372, 104 S. Ct. 1107 (1984).
The Court has also held that where a regulatory action extends beyond the scope of the authorizing statute, judicial review is available. Adamo Wrecking Co v. United States, 434 U.S. 275, 54 L. Ed. 2d 538, 98 S. Ct. 566 (1978); see also Leedom v. Kyne, 358 U.S. 184, 3 L. Ed. 2d 210, 79 S. Ct. 180 (1958).
Where constitutional questions are presented, the courts also interpret statutory language as permitting them to be considered. Webster v. Doe, 486 U.S. 592, 100 L. Ed. 2d 632, 108 S. Ct. 2047 (1988); Lindahl v. OPM, 470 U.S. 768, 84 L. Ed. 2d 674, 105 S. Ct. 1620 (1985); see also Philadelphia v. Stimson, 223 U.S. 605, 169-20, 56 L. Ed. 570, 32 S. Ct. 340 (1912); authorities cited, United States v. Local 6A, 832 F. Supp. 674 (SDNY 1993).
In applying these criteria it is important to remember that Pyramid has not filed an application for renewal of its registration as a wholesale dealer under the 1993 amendments, nor has the IRS ruled that the former reporting violation would lead to denial or to imposition of an otherwise inappropriate and prohibitively high bond requirement.
Failure to report required information may support substantial penalties if the requirement and penalties are set forth by statute. That is not the case here. But ignoring an administrative reporting requirement may, like other lapses in providing information it is in a party's interest to provide, support an adverse inference against the noncomplying party, provided the requirement for disclosure was clearly disclosed. Baxter v. Palmigiano, 425 U.S. 308, 316-20, 47 L. Ed. 2d 810, 96 S. Ct. 1551 (1976); Gray v. Gt. Amer. Recreation Ass'n, 970 F.2d 1081, 1082 (2d Cir 1992).
Such inferences, and other discovery-related violations are, however, ordinarily only fatal to one's case in extreme instances. Societe Internationale Pour Participations v. Rogers, 357 U.S. 197, 2 L. Ed. 2d 1255, 78 S. Ct. 1087 (1958).
There is no reason to assume that the IRS will treat Pyramid's disclosure lapse as fatal to a new application or attach unduly harsh consequences to it unless the agency concludes based on reasonable grounds that the lapse was intended to, or did, hide facts that would lead to denial of registration on the merits.
Were the contrary to be the case, it might be questioned whether the action taken would be reasonably considered "necessary to protect the revenue" under the applicable statute; such action might be vulnerable to attack under the authorities discussed in part II above.
Since, however, there is no indication at this time that the IRS will act contrary to the above assumptions, neither probability of success on the merits, irreparable injury, nor a decisive tilt of the equities toward Pyramid can be shown to support granting of a preliminary injunction at this time. See Paddington Corp v. Attiki Importers, 996 F.2d 577 (2d Cir 1993); Plaza Health Laboratories v. Perales, 878 F.2d 577, 580 (2d Cir 1989); Jackson Dairy v. HP Hood & Sons, 596 F.2d 70, 72 (2d Cir 1979).
Further, given the mootness of Pyramid's complaint concerning vacatur of its retail registration and absent denial of an application for a wholesaler registration under the 1993 amendments, Pyramid's claims are not yet ripe for adjudication. See Lujan v. Defenders of Wildlife, 112 S. Ct. 2130, 119 L. Ed. 2d 351 (1992) (necessity for actual injury); authorities cited, Ash Creek Mining Co v. Lujan, 969 F.2d 868 (10th Cir 1992); Rivervale Realty Co v. Town of Orangetown, 816 F. Supp. 937 (SDNY 1993).
For the reasons set forth above, the case is dismissed without prejudice to renewal should the assumptions made in part IV above prove erroneous; jurisdiction is retained to consider such an application if made. Except as indicated above, the motions of both parties are denied. The clerk is directed to close this case.
Dated: White Plains, New York
April 20, 1994
/a/ Gerard L. Goettel, USDJ
in the absence of
VINCENT L. BRODERICK, U.S.D.J.