upon defendants' alternative argument that the complaints should be dismissed pursuant to Rule 12(b)(6) because they fail to state a claim for which relief can be granted.
A complaint will be dismissed pursuant to Rule 12(b)(6) "only if it appears that [the plaintiff] can prove no set of facts, consistent with its complaint, that would entitle it to relief." Electronics Communications Corp. v. Toshiba America Consumer Products, Inc., 129 F.3d 240, 242-243 (2d Cir. 1997). "The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support his claims." Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974). "In ruling on defendant's motion, the court must accept as true all the factual allegations in the complaint and must draw all reasonable inferences in favor of the plaintiff." Hamilton Chapter of Alpha Delta Phi, Inc. v. Hamilton College, 128 F.3d 59, 63 (2d Cir. 1997).
II. 26 U.S.C. § 6104
Section 6104 provides, in pertinent part, that for a three-year period following the filing date for their annual tax returns, certain tax-exempt organizations must make the returns available "for inspection during regular business hours by any individual at the principal office of such organization . . ." and must provide copies of such returns without charge. 26 U.S.C. § 6104(e)(1)(A)(i), (ii). It is undisputed that both defendants failed to make their tax returns immediately available to Schuloff, as required by § 6104. However, "the fact that a federal statute has been violated and some person harmed does not automatically give rise to a private cause of action in favor of that person." Cannon v. Univ. of Chicago, 441 U.S. 677, 688, 60 L. Ed. 2d 560, 99 S. Ct. 1946 (1979). In Cort v. Ash, 422 U.S. 66, 78, 45 L. Ed. 2d 26, 95 S. Ct. 2080 (1975), the Supreme Court set forth the following four factors that should be considered in determining whether to imply a private right of action: (1) whether the plaintiff is part of the class for whose benefit the statute was enacted; (2) whether there is any indication of legislative intent, either explicit or implicit, that would either favor or oppose creation of a private remedy; (3) whether implication of a private remedy is consistent with the underlying purposes of the statute; and (4) whether the cause of action is one traditionally relegated to state law, such that it would be inappropriate to infer the existence of a federal cause of action.
Subsequent to its decision in Cort v. Ash, the Supreme Court held that the four factors described in Cort v. Ash, although all relevant, were not entitled to equal weight. See Touche Ross & Co. v. Redington, 442 U.S. 560, 575, 61 L. Ed. 2d 82, 99 S. Ct. 2479 (1979). Rather, "the central inquiry remains whether Congress intended to create, either expressly or by implication, a private cause of action." Id.; see also Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Curran, 456 U.S. 353, 377, 72 L. Ed. 2d 182, 102 S. Ct. 1825 (1982)("Our cases subsequent to Cort v. Ash have plainly stated that our focus must be on the intent of Congress") (internal quotation omitted); Feins v. American Stock Exchange, Inc., 81 F.3d 1215, 1220 (2d Cir. 1996); Asch v. Philips, Appel & Walden, Inc., 867 F.2d 776, 777 (2d Cir. 1989). The factors relevant to determining the intent of Congress when a statute fails to provide for a private right of action are "'the language of the statute itself, its legislative history, the underlying purpose and structure of the statutory scheme, and the likelihood that Congress intended to supersede or to supplement existing state remedies.'" Feins, 81 F.3d at 1220 (quoting Northwest Airlines, Inc. v. Transport Workers Union of America, 451 U.S. 77, 91, 67 L. Ed. 2d 750, 101 S. Ct. 1571 (1981)); see also Baba v. Japan Travel Bureau Intl., 111 F.3d 2, 6 (2d Cir. 1997).
The Court will first undertake the "central inquiry" into Congress' intent. Section 6104(e) was enacted as part of the Omnibus Budget Reconciliation Act of 1987, Pub. L. 100-203. There is no indication in either the language of the statute or the legislative history that the bill drafters intended to create a private remedy for violation of the statute. Indeed, the House Report accompanying the legislation specifically provided for a relatively nominal penalty of $ 10 per day, and a maximum penalty of $ 5,000, for violations of the statute. H.R. Conf. Rep. No. 100-495, reprinted in 1987 U.S. Code Cong. & Admin. News at 2313-1762. This penalty provision is codified at 26 U.S.C. § 6652(c)(1)(C).
The Code additionally provides for a $ 5,000 penalty for willful violations of § 6104(e). 26 U.S.C. § 6684. The fact that the Code already contains penalty provisions undermines Schuloff's position that a private right of action also exists since, as the Supreme Court has noted, "'it is an elemental canon of statutory construction that where a statute expressly provides a particular remedy or remedies, a court must be chary of reading others into it.'" Meghrig v. KFC Western, Inc., 516 U.S. 479, 487, 116 S. Ct. 1251, 1256, 134 L. Ed. 2d 121 (1996)(quoting Middlesex County Sewerage Auth. v. National Sea Clammers Assn., 453 U.S. 1, 14-15, 69 L. Ed. 2d 435, 101 S. Ct. 2615 (1981))(other internal quotations omitted).
The structure of the Code as a whole also argues against creation of a private right of action. First, because the IRS itself is required to make the annual returns at issue here available for public inspection, see 26 U.S.C. § 6104(b), litigants have means other than private lawsuits for obtaining access to such materials. Second, 26 U.S.C. § 7401 provides that "no civil action for the collection or recovery of taxes, or of any fine, penalty, or forfeiture, shall be commenced unless the Secretary [of the Treasury] authorizes or sanctions the proceedings and the Attorney General or [her] delegate directs that the action be commenced." Courts have held that § 7401 precludes the filing of private lawsuits against third parties based upon their alleged violations of the Code. See Hardin v. DuPont Scandinavia (ARA-JET), 731 F. Supp. 1202, 1204 (S.D.N.Y. 1990); United States ex rel. U.S.-Namibia (Southwest Africa) Trade & Cultural Council v. The Africa Fund, 588 F. Supp. 1350, 1351 (S.D.N.Y. 1984). The Court agrees. Implying an unrestricted private cause of action under § 6104 would be wholly inconsistent with the enforcement mechanism set forth in § 7401, which invests the executive branch with broad discretion to determine which civil actions should proceed. The Supreme Court has made it clear that when a statute already contains enforcement mechanisms for remedying violations, "'it cannot be assumed that Congress intended to authorize by implication additional judicial remedies for private citizens suing under' the statute." Meghrig, 516 U.S. at 487, 116 S. Ct. at 1256 (quoting Middlesex County Sewerage Auth., 453 U.S. at 14). Indeed, "'the presumption that a remedy was deliberately omitted from a statute is strongest when Congress has enacted a comprehensive legislative scheme including an integrated system of procedures for enforcement.'" Feins, 81 F.3d at 1221 (quoting Northwest Airlines, 451 U.S. at 97).
The remaining Cort v. Ash factors similarly fail to support the creation of a private remedy. In respect to the first factor, Schuloff is not a member of a class for whose special benefit the statute was enacted. Cort, 422 U.S. at 78. The Supreme Court "has been especially reluctant to imply causes of actions under statutes that create duties on the part of persons for the benefit of the public at large." Cannon, 441 U.S. at 693 ) n.13. In respect to the third factor, and as set forth more fully above, a private right of action would be inconsistent with the enforcement mechanism contained in the Code.
Accordingly, the Court concludes that the language and legislative history of § 6104 and the structure of the Code as a whole compel a determination that there is no private right of action under § 6104. Defendants' motions to dismiss Schuloff's claims under § 6104 are therefore granted.
III. 42 U.S.C. § 1983
The elements of a claim under § 1983 are: (1) that the conduct in question deprived a person of rights, privileges, or immunities secured by the Constitution or laws of the United States; and (2) that the conduct complained of was committed by a person acting under color of state law. See Gomez v. Toledo, 446 U.S. 635, 640, 64 L. Ed. 2d 572, 100 S. Ct. 1920 (1980); Adickes v. S.H. Kress & Co., 398 U.S. 144, 150, 26 L. Ed. 2d 142, 90 S. Ct. 1598 (1970). Because "section 1983 is not itself a source of substantive rights,' but merely provides 'a method for vindicating federal rights elsewhere conferred[,]' . . . the first step in any such claim is to identify the specific . . . right allegedly infringed." Albright v. Oliver, 510 U.S. 266, 271, 127 L. Ed. 2d 114, 114 S. Ct. 807 (1994)(quoting Baker v. McCollan, 443 U.S. 137, 144 n.3, 61 L. Ed. 2d 433, 99 S. Ct. 2689 (1979)); see also Graham v. Connor, 490 U.S. 386, 393-394, 104 L. Ed. 2d 443, 109 S. Ct. 1865 (1989). As the Court has already determined that § 6104 does not create a private right of action, Schuloff cannot look to § 1983 to enforce the provisions of § 6104. See Montauk-Caribbean Airways, Inc. v. Hope, 784 F.2d 91, 97-98 (2d Cir. 1986)(holding that comprehensive enforcement scheme set forth in Federal Aviation Act precludes both private right of action in favor of public at large and action under § 1983 to enforce statutory provisions). Schuloff's claims under 42 U.S.C. § 1983 are therefore dismissed.
For the foregoing reasons, Schuloff's claims under 26 U.S.C. § 6104 and 42 U.S.C. § 1983 are dismissed. Since federal jurisdiction over these cases rested entirely upon these statutory provisions, the Court declines to exercise supplemental jurisdiction over the remaining state law claims. 28 U.S.C. § 1367(c)(3) (district courts may decline supplemental jurisdiction where "the district court has dismissed all claims over which it has original jurisdiction"); see Choe v. Fordham Univ. School of Law, 81 F.3d 319 (2d Cir. 1996). Accordingly, the Court dismisses the complaints in the above-captioned actions in their entirety.
Dated: Brooklyn, New York
March 10, 1998
United States District Judge