The opinion of the court was delivered by: John T. Elfvin S.U.S.D.J.
This receivership action was commenced against St. Augustine Center, Inc. ("St. Augustine") in New York State Supreme Court, County of Erie, on or about February 14, 2006. It was removed to this Court on December 19, 2006 by the United States on behalf of the Internal Revenue Service ("IRS"). In its Notice of Removal, the IRS contends that - in light of the Receiver's November 26, 2006 Motion for Approval of Receiver's Report, Award of Fees and Costs, and Distribution of Funds to Claimants - the action is removable pursuant to 28 U.S.C. §1442(a)(1) as it is one "against" the United States.
St. Augustine was placed in receivership in February 2006. Thereafter, notice of the receivership was published and potential creditors were instructed to file claims in the receivership action. In response to such notice, the IRS filed a Proof of Claim on April 13, 2006 in the amount of $859,423.36 based on tax liens it had issued against St. Augustine from 2003 to 2006. The IRS was neither made a defendant, nor did it seek to intervene in the receivership action. Thereafter, the Receiver performed his duties, culminating on November 22, 2006 with a Report to the State Court proposing a distribution of St. Augustine's available assets. The Report suggested that $127,651.97 be distributed to numerous former employees for unpaid wages and that $8,745 be distributed to the IRS.*fn2 On November 26, 2006 the Receiver filed a Motion seeking to distribute the St. Augustine assets as outlined in his Report. As a claimant in the receivership action, the IRS was provided with copies of the Receiver's Report and the Motion on November 28, 2006 and was also provided notice that such Motion would be heard by the State Court on December 20, 2006. Despite such notice, the IRS did not seek to intervene in the receivership action, nor did it commence a separate action to foreclose its liens, but instead removed the receivership action to this Court on December 19, 2006.
On December 20, 2006 the Receiver applied to this Court for expeditious review of the removal petition. The Receiver contends that the action was improperly removed. In its petition, the IRS provided advanced objection to any remand motion, arguing that removal is appropriate because the actions contemplated in the Receiver's Motion - if granted - would be adverse to the IRS's tax liens and therefore the receivership action has become one "against" the United States. The Court heard oral argument on December 22, 2006.*fn3
The Court has jurisdiction to review a Notice of Removal to ensure that its jurisdiction has been properly invoked, and, if such removal is improper, the Court shall remand the matter. See 28 U.S.C. §1447(c). Accordingly, the Court will conduct such review.
In its Notice of Removal, the IRS relies on 28 U.S.C. §1442 for its removal authority. That section states in pertinent part:
"(a) A civil action %%% commenced in a State court against any of the following may be removed by them to the district court %%%:
(1) The United States or any agency thereof %%%."
28 U.S.C. §1442(a)(1). The IRS cites several cases which hold that the United States need not be a named defendant in an action in order for the action to be one "against" the United States. Those cases, however, involve the exercise of authority by a State Court over officers of the United States. For example, in Brown & Williamson Tobacco Corp. v. Williams, 62 F.3d 408 (D.C. Cir. 1995), at issue was a court-ordered subpoena directed to two Members of Congress. That court, while upholding the removal of the subpoena enforcement proceedings, stated:
"We do not believe Congress used the terms "civil action," "against," or "act" [to restrict removal only to named defendants], but rather meant to refer to any proceeding in which state judicial civil power was invoked against a federal official."
Id. at 415. Similarly, in Nationwide Investors v. Miller, 793 F.2d 1044 (9th Cir. 1986), removal of a garnishment action was held proper when a federal officer was ordered to appear in state court to testify as to details of the ...