6337 Annotations: Jurisdiction- Levy

Redemption of Properly: Jurisdiction

[84-2 USTC ¶9580]Joan M. Murray and Justin Murray, Plaintiffs v. United States of America and Gary O. Booth as the District Director for the Internal Revenue Service, Defendants

U. S. District Court, Dist. N. D., So. Div., Civ. No. A3-82-130, 5/14/84

[Code Secs. 6337 and 7421]

Suits by nontaxpayers: Redemption of property: Jurisdiction.--A refusal by the IRS to allow the plaintiff to redeem property could not be reviewed by a mandamus proceeding under 28 U. S. C. §1361. Although neither Code Sec. 7421 nor 28 U. S. C. §2201 divested the court of jurisdiction, the court could not provide the relief sought because the IRS's determination that the plaintiff did not have a valid mortgage was a discretionary one.

Armond G. Erickson, Tenneson, Serkland, Lundberg, Erickson & Marcil, LTD., 15 Broadway, Fargo, N. D. 58102, for plaintiff. Rodney S. Webb, United States Attorney, Fargo, N. D. 58108, Frank G. Gokey, Department of Justice, Washington, D. C. 20530, for defendant.

Memorandum and Order

BENSON, Chief Judge:

Plaintiffs filed this action seeking damages from the United States resulting from the failure of the Internal Revenue Service (IRS) to permit redemption of real property, or in the alternative for an order directing and compelling the District Director of the IRS to convey certain real property to Plaintiffs. The United States filed a motion to dismiss. The court dismissed Plaintiff's damage claims (Plaintiffs' first and second causes of action) for lack of subject matter jurisdiction but reserved ruling on Plaintiffs' claim for non-monetary relief (Plaintiffs' third cause of action).

Plaintiffs' claim for non-monetary relief seeks an order from this court pursuant to 28 U. S. C. §1361 compelling the United States to set aside all deeds it has given to the property previously owned by Fireside, Inc., and to convey the property to them. As stated in the court's December 29, 1983 order, the plaintiffs claim to hold valid mortgages to the property previously owned by Fireside, Inc. The Fireside property was seized by the IRS in April 1979 for nonpayment of taxes and sold to the United States at a tax auction for the amount of the statutory calculated bid. The Plaintiffs allege they hold a valid mortgage on the property. In August and December 1979 Plaintiffs attempted to redeem it under 26 U. S. C. §6337, by mailing letters to the IRS with checks enclosed. On both occasions, IRS refused to permit the redemption and returned the checks. In February 1980 the IRS sold its interest in the property to Casselton State Bank, a prior mortgagee. Plaintiffs claim that IRS, by refusing to convey to them, failed to comply with the requirements of the redemption statutes. They seek to have this alleged noncompliance reviewed by the court under the Administrative Procedure Act, 5 U. S. C. §701 et seq.

Section 702 of Title 5, United States Code, is not a grant of jurisdiction. See Califano v. Sanders, 430 U. S. 99, 107 (1977). It does provide, that sovereign immunity will not be a defense in an action against the United States if jurisdiction otherwise exists. 5 U. S. C. §702.

It is the opinion of the court that jurisdiction exists to adjudicate Plaintiffs' claim for non-monetary relief. However, for the reasons more fully stated below, the relief which Plaintiffs seek can not be provided under section 1361.

In ruling that this court lacked jurisdiction over the claims of James A. Murray, the court of appeals held that "[t]he existence of federal question jurisdiction . . . does not remove the barrier of sovereign immunity urged by the government against proceeding with this suit." Murray v. United States [82-2 USTC ¶9607], 686 F. 2d 1320, 1325 (8th Cir. 1982) (citations omitted), cert. denied, 103 S. Ct. 788 (1983). Plaintiff in that lawsuit, however, did not allege the Administrative Procedure Act to support jurisdiction.

It is clear Plaintiffs' claim arises under 26 U. S. C. §6337 and the due process clause of the United States Constitution. 28 U. S. C. §1331 thus affords a jurisdictional basis. If this is an action against the IRS to which it has not consented, it must be dismissed on the basis of sovereign immunity.

This suit is against the United States . The complaint names it as a defendant. Even if the complaint named only the District Director of the Internal Revenue Service, the suit would still have been against the United States . As stated by the United States Supreme Court in Dugan v. Rank, 372 U. S. 609 (1963), "a suit is against the sovereign if 'the judgment sought would expend itself on the public treasury or domain, or interfere with the public administration,' . . . or if the effect of the judgment would be 'to restrain the Government from acting, or compel it to act.'" Id. at 620 (citations omitted). Additionally, the two judicially recognized exceptions to this rule are inapplicable here, those being actions by an officer beyond his statutory defined powers, or where the powers or the manner of their execution are unconstitutional. See Larson v. Domestic & Foreign Corp., 337 U. S. 682, 689-91 (1949). Even if the IRS official acted arbitrarily or capriciously in not allowing the Murrays to redeem, the action would not lie beyond his power. Id. at 695. See also B. K. Instrument, Inc. v. United States, 715 F. 2d 713, 724 (2d Cir. 1983).

In considering whether the government has consented to being sued, it should be noted that 28 U. S. C. §1331 is not a general waiver of immunity. See Murray v. United States , 686 F. 2d at 1325; Beale v. Blount, 461 F. 2d 1133, 1138 (5th Cir. 1972). However, as numerous courts have held, the 1976 amendment to §702 of the Administrative Procedure Act does constitute such a waiver. See e.g. B. K. Instrument, Inc. v. United States, 715 F. 2d 713, 725 (2d Cir. 1983); Food Town Stores, Inc. v. E. E. O. C., 708 F. 2d 920; Warin v. Director, Department of Treasury, 672 F. 2d 590, 591-92 (6th Cir. 1982 (per curiam); Beller v. Middendorf, 632 F. 2d 788, 796-97 (9th Cir. 1980), cert. denied, 452 U. S. 905 (1981); Sheehan v. Army & Air Force Exchange Service, 619 F. 2d 1132, 1139 (5th Cir. 1980), rev'd on other grounds, 456 U. S. 728 (1982); Jaffe v. United States, 592 F. 2d 712, 718-19 (3rd Cir.), cert. denied, 441 U. S. 961 (1979).

Section 702 of Title 5, United States Code provides:

Nothing herein (1) affects other limitations on judicial review or the power or duty of the court to dismiss any action or deny relief on any other appropriate legal or equitable ground; or (2) confers authority to grant relief if any other statute that grants a consent to suit expressly or impliedly forbids the relief which is sought.

The court must therefore determine whether this action falls within the scope of amended §702.

Defendants argue that jurisdiction for non-monetary relief in federal tax cases is specifically withdrawn by 26 U. S. C. §7421 and 28 U. S. C. §2201. Section 7421, Title 26 of the United States Code, provides "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." The purpose of this lawsuit is not to restrain the assessment or collection of a tax. In the case of the Fireside, Inc. property, the tax has been paid, through the sale of the property to the IRS and subsequently to the bank. Plaintiffs by way of this lawsuit seek a conveyance of the property to them. By attempting to redeem the property and tendering a check to the IRS the plaintiffs were offering to pay the tax, not seeking to restrain it. Therefore 26 U. S. C. §7421 does not divest the court of jurisdiction in this case. See generally Bob Jones University v. Simon [74-1 USTC ¶9438], 416 U. S. 725 (1974); Commissioner v. "Americans United" Inc., 416 U. S. 752 (1974).

Additionally, 28 U. S. C. §2201 is not applicable in this case. Section 2201 provides:

In a case of actual controversy within its jurisdiction, except with respect to Federal taxes other than actions brought under section 7428 of the Internal Revenue Code of 1954 or a proceeding under section 505 or 1146 of title 11, any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.

Courts that have interpreted this statute with respect to federal tax cases have held that the statute's federal tax case exemption applies only in cases involving the imposition of a tax. See, e.g., Eastern Kentucky Welfare Rights Organization v. Simon [74-2 USTC ¶9746], 506 F. 2d 1278 (D. C. Cir. 1974), vacated on other grounds, 426 U. S. 26 (1976); Bullock v. Latham [62-2 USTC ¶9640], 306 F. 2d 45 (2d Cir. 1962). As stated by the Second Circuit Court of Appeals in Bullock, "[the] exception sufficiently serves its purpose if limited to controversies involving tax liabilities of parties qua taxpayers and if not construed as foreclosing declaratory judgment relief to persons claiming an interest in property levied upon to satisfy the tax obligations of another." Bullock v. Latham, 306 F. 2d at 48. In the instant case Plaintiffs are not questioning the validity of the IRS tax levy or the sale of the property but seek through mandamus a review of the decision by the IRS that they did not hold a valid mortgage to the Fireside, Inc. property. The court holds that section 2201 does not divest the court of jurisdiction.

Plaintiffs' third cause of action seeks a court order pursuant to the federal mandamus statute, 28 U. S. C. §1361. As noted by the Eighth Circuit in the earlier Murray case, "it is debatable whether 28 U. S. C. §1361 constitutes a waiver of sovereign immunity." Murray v. United States, 686 F. 2d at 1325 (footnotes and citations omitted). Even if the mandamus statute together with section 702 are interpreted as constituting a waiver of sovereign immunity, see Hill v. United States 571 F. 2d 1098, 1002 (9th Cir. 1978), mandamus relief is not appropriate in this action. "The appropriateness of mandamus relief turns on the existence of a clear right in the plaintiff to demand the performance by the defendant of a plainly defined, peremptory, and ministerial duty, and the lack of an adequate remedy other than mandamus." Vishnevsky v. United States [78-2 USTC ¶9640], 581 F. 2d 1249, 1253 (7th Cir. 1978). If there is a clear ministerial duty of the district director to permit the plaintiffs to redeem the property, they obviously have the right to demand performance of that duty.

Section 6337, Title 26 of the United States Code mandates that "the owner of any real property sold as provided in section 6335, their heirs, executors, or administrators, or any person having an interest therein, or a lien thereon . . ." be permitted to redeem the property within 120 days of sale. 26 U. S. C. §6337. A determination must be made by the District Director, or his agent, whether the person who is attempting to redeem is in fact a person entitled under the statute to redeem.

[Discretionary Determination]

This case arose because the District Director determined Plaintiffs did not have a valid interest in the property. Whether Plaintiffs did in fact have a valid interest is a justiciable question. It cannot be resolved through mandamus because it was not a right in the Plaintiffs sufficiently clear to support a demand that IRS Director Booth perform a ministerial duty. The determination by Booth that the mortgage was not valid was a discretionary determination. Plaintiffs now are not seeking the benefit of that determination, they are attacking it. Mandamus is not available for that purpose. See Vishnevsky v. United States , 581 F. 2d at 1254 (7th Cir. 1978).

IT IS ORDERED judgment be entered dismissing Plaintiffs' complaint for failure to state a claim upon which relief can be granted.

[85-1 USTC ¶9390]Roig Commercial Bank, Plaintiff v. Jose Torres Dueno, Internal Revenue Service, et al., Defendants v. Julio Rodriguez Gomez, et al., Co-defendants v. Luz E. Santana Peña, et al., Counter-claim defendants

U. S. District Court, Dist. P. R., Civil No. 82-2524 HL, 617 FSupp 913, 3/14/84

[Code Sec. 6337]

Suits by nontaxpayers: Redemption: Jurisdiction.--Sovereign immunity operated as a bar to a redemption action against the United States and its officers or agents who acted in their official capacity when selling property at a public auction. Leave to amend a complaint, however, was granted to a plaintiff so that it could pursue its rights against third parties under Code Sec. 6337.

Julio C. Rivera-Velazquez, P. O. Box H, Humacao, P. R. 00661, for plaintiff. Victor M. Agrait Defillo, P. O. Box 1953, Hato Rey, P. R. 00919, for defendants Jose R. Crespo and Gladys Rodriguez. Edward J. Snyder, Assistant United States Attorney, Paige E. Reffe, Department of Justice, Washington, D. C. 20530, for Internal Revenue Service.

Opinion and Order

LAFFITTE, District Judge:

The defendants, Internal Revenue Service, Jose Torres Dueno, and Ramón Rivera D'Ambrosse, have moved this Court to dismiss the complaint of Roig Commercial Bank (Roig Bank) on the grounds that the claim for relief is really one against the United States of American, and as such, is barred by the doctrine of sovereign immunity, and furthermore, that the complaint fails to state a specific statute giving this Court jurisdiction. The complaint against the United States is hereby dismissed, and for the reasons stated below, plaintiff will have fifteen days from notification of this order to amend its complaint.

The basis of Roig Bank's claim for relief is to assert its alleged right under 26 USC 6337 to redeem property sold by the IRS at public auction because of a federal tax debt. Roig Bank claims, among other things, that certain IRS officials misled it as to its right of redemption, and therefore, it was not able to exercise that right under the statute.

Roig Bank also has complained against Julio Rodríguez Gómez and his wife, Genoveva Cuadrado, and José R. Crespo and his wife, Gladys Rodríguez, who purchased the property at the public sale. Roig Bank is not challenging the underlying tax debt that gave rise to the lien.

It is clear that the United States of America may not be used, unless by a specific federal statute or the Constitution, it consents to suit. U. S. v. Sherwood, 312 US 584 (1941). Section 6337 alleged in the complaint does not specifically waive such sovereign immunity. Furthermore, a waiver of immunity "cannot be implied but must be unequivocable expressed." U. S. v. Mitchell, 445 US 535, 538 (1980), quoting U. S. v. King [69-1 USTC ¶9410], 395 US 1, 4 (1969).

All claims against the United States , or its officers or agents acting in their official capacity must therefore be dismissed. This means that not only the claims in plaintiff's complaint, but also any cross-claims alleged by codefendants, must also be dismissed.

However, the dismissal of the claims against the IRS officials does not end this action. The federal case clearly indicates that an asserted right to redeem under 26 USC 6337 can be vindicated in the federal district courts. See, Di Foggio v. U. S. [79-2 USTC ¶9448], 484 F. Supp. 233 (E. D. Ill. 1979); Johnson v. Gartlin [72-1 USTC ¶9370], 334 F. Supp. 438 (E. B. Va. 1971); Guthrie v. Curnutt [70-1 USTC ¶9168], 147 F. 2d 764 (10th Cir. 1969).

The issue of whether the requirements of 26 USC 6337 were properly applied can be decided without including the IRS or any federal employees as individuals in this suit. An action under this section can be said to create a right under federal law, and therefore, jurisdiction may be based on i8 USC 1331 (federal question), with the claim for relief based on section 6337, against the buyers, to quiet title to the property.

All claims against the United States , its agencies and employees are hereby dismissed.

Plaintiff is hereby granted fifteen days from notification of this order to amend its complaint to properly allege jurisdiction consistent with this order.

IT IS SO ORDERED.

[94-1 USTC ¶50,228] John A. Ayers et al., Plaintiffs v. United States of America et al., Defendants

U.S. District Court, West. Dist. Mo. , West. Div., 93-0213-CV-W-2, 2/7/94

[Code Secs. 6337 , 7402 and 7426 ]

District court: Jurisdiction: Wrongful levy: Sovereign immunity: Redemption of property.--A district court lacked jurisdiction over an action to quiet title to real property because the government did not waive its sovereign immunity. The individual's property was purchased by a creditor at a non-judicial foreclosure sale. The creditor also paid the government for a release of its right of redemption. The individual's claim of wrongful levy and unlawful sale of his right of redemption did not fall under the Code provision for civil actions by persons other than the taxpayer because the government did not issue a notice of levy and the individual was the person against whom the taxes were assessed. In addition, the individual's claims did not fall under the Code provision for redemption of property because the government did not issue a notice of levy and the right of redemption released was that of the government rather than the individual.

ORDER GRANTING DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT

GAITAN, Jr.; District Judge:

Plaintiffs filed this action to quiet title on certain real property located in Kansas City , Clay County, Missouri. Plaintiffs claim that defendant Internal Revenue Service ("IRS") wrongfully levied on their property and unlawfully sold plaintiffs' right of redemption to defendants Kenneth and Loberta Myers.

Pending before this Court are defendants motions for summary judgment. Plaintiffs did not file a response to the motions. On November 23, 1993 , the Court entered an order requiring plaintiffs to show cause why the motions for summary judgment should not be granted. As of this date, plaintiffs have failed to oppose the motions for summary judgment or otherwise defend against this action. Since plaintiffs did not file an opposition to the motions for summary judgment, all facts alleged by defendants in the motions for summary judgment are deemed admitted by plaintiffs. See Local Rule 13(g). ¹ Therefore, the Court will only address the issue of whether defendants are entitled to judgment as a matter of law. See Rule 56, Fed. R. Civ. P. Upon review of the motions for summary judgment, the Court finds that defendants are entitled to judgment as a matter of law.

In 1986, plaintiffs entered into a deed of trust with defendants Kenneth and Loberta Myers, where plaintiffs offered the property in question as collateral for a promissory note. The Internal Revenue Service recorded federal tax liens against the property in 1987, 1988 and 1992 for taxes owed by plaintiffs from 1980 through 1986. In 1992, the Myers held a non-judicial foreclosure sale and bought the property in question. Thereafter, the Myers paid the IRS $10,000 for release of the right of redemption held by the IRS.

Defendant IRS argues that it is entitled to summary judgment based upon the doctrine of sovereign immunity. Lehman v. Nakshian, 453 U.S. 156, 160 (1981) ( United States cannot be sued without its consent). The only statutes which expressly waive the United States' right to sovereign immunity in actions involving real property are 28 U.S.C. §2410 and §7426 of the Internal Revenue Code. Section 2410(a) provides:

[T]he United States may be named a party in any civil action or suit in any district court . . . to quiet title to . . . real or personal property on which the United States has or claims a mortgage or other lien . . .

28 U.S.C. §2410(a). This statute is not applicable to the present case because the IRS did not have a lien on the property at the time this action was filed. The IRS released its lien on the property after selling its right of redemption to the Myers. The IRS also states that section 7426 is inapplicable to the present case. Section 7426(a) states:

If a levy has been made on property or property has been sold pursuant to a levy, and any person (other than the person against whom is assessed the tax out of which such levy arose) who claims an interest in or lien on such property and that such property was wrongfully levied upon may bring a civil action against the United States

. . .

Internal Revenue Code §7426(a) (1993). The IRS claims that it never levied on the property in question. In order for there to be levy against plaintiffs' property, plaintiffs must have been served with a "Notice of Levy." Phelps v. United States [75-1 USTC ¶9467 ], 421 U.S. 330, 336-37 (1975). The IRS states that it never served plaintiffs with a "Notice of Levy." ² Furthermore, plaintiffs are ineligible to bring an action under §7426(a) because they are the persons against whom the tax was assessed. Consequently, plaintiffs have not met the jurisdictional requirements under §§2410 or 7426 , and have failed to show that the United States otherwise waived or consented to jurisdiction in this case. Defendant United States notion for summary judgment is granted.

The only remaining defendants are Kenneth and Loberta Myers. Plaintiffs allege that these defendants unlawfully bought plaintiffs' right of redemption from the IRS. Based upon the undisputed facts of this case, however, the IRS released its own right of redemption to the Myers, not that of the plaintiffs. Therefore, the Myers motion for summary judgment is also granted. ³

For the foregoing reasons, it is hereby

ORDERED that defendants' motions for summary judgment are granted. It is further

ORDERED that defendant United States ' motion for ruling on its summary judgment motion is moot.

¹ Local Rule 13(g) provides that "[a]ll facts set forth in the statement of facts of the movant shall be deemed admitted for the purpose of summary judgment unless specifically controverted by the opposing party."

² For this same reason, plaintiffs do not have a right of redemption against the United States under Internal Revenue Code §6337 . Section 6337 only applies to persons "whose property has been levied upon." As stated previously, plaintiffs have not shown that they ever received a "Notice of Levy" from the IRS.

³ To the extent that plaintiffs have any additional state law claims against the Myers, the Court declines jurisdiction to review those claims pursuant to 28 U.S.C. §1367(c)(3).

[87-1 USTC ¶9310] James A. Murray, Justin L. Murray and Joan M. Murray, Appellants v. The United States , Appellee

(CA-FC), U.S. Court of Appeals, Federal Circuit, 87-1063, 5/5/87 , 817 F2d 1580, Vacating and remanding the Claims Court, 86-2 USTC ¶9769

[Code Sec. 6337 --Result unchanged by the 1986 Tax Reform Act]

Tax sales: Redemption of property: Refusal to allow: Jurisdiction: Fifth Amendment.--The case was remanded so that the Claims Court could consider mortgagees' claims that the IRS had infringed their Fifth Amendment rights by refusing to allow them, as holders of a second mortgage on foreclosed property, to redeem the property after a tax sale. The Claims Court had jurisdiction because the "just compensation" required by that amendment confers upon aggrieved property owners the right to recover damages from the government. Moreover, the IRS had apparently extinguished the mortgagees' state law-created lien.

James A. Murray, Pueblo , Colo. , for appellants. Michael L. Paup, Roger M. Olsen, William S. Estabrook, Doris D. Coles, Department of Justice, Washington, D.C. 20530, for appellee.

Before NEWMAN and BISSELL, Circuit Judges, and RE, Chief Judge. ^*

BISSELL, Circuit Judge:

James A. Murray, Justin L. Murray, and Joan M. Murray (collectively Murray) appeal from the judgment of the United States Claims Court, 10 Cl. Ct. 696 (1986), dismissing their complaint for failure to state a claim upon which relief can be granted. We vacate and remand.

BACKGROUND

The Murrays were joint holders of a second mortgage on a parcel of land located in Cass County , North Dakota . In 1979, the Internal Revenue Service (IRS) foreclosed tax liens on the property. After notifying the Murrays, and the first mortgagee, Casselton State Bank, of the foreclosure sale, IRS sold the property on June 8, 1979 . The United States was the highest bidder and purchased the property for $301.84.

Pursuant to section 6337(b)(1) of the Internal Revenue Code, ^** the Murrays attempted to redeem the property on August 13, and again on September 9, 1979 . On both occasions the IRS refused to permit the Murrays to redeem the property. The reason for the IRS' refusal to allow the redemption was that the Murray mortgage was allegedly executed by an individual shareholder of the corporation that owned the property and was given to the Murrays to secure a personal debt of the shareholder. The first mortgagee apparently did not attempt to redeem the property, but instead purchased it from the United States on March 5, 1980 , for $301.84.

The Murrays were unable to obtain relief in federal district court. Two suits by the various plaintiffs in this case were dismissed based on sovereign immunity and lack of subject matter jurisdiction. Murray v. United States [84-2 USTC ¶9587 ], 585 F. Supp. 543 (N.D.N.D. 1984), aff'd, 751 F.2d 271 (8th Cir. 1984); Murray v. United States [81-2 USTC ¶9690 ], 520 F. Supp. 1207 (N.D.N.D. 1981), aff'd, [82-2 USTC ¶9607 ] 686 F.2d 1320 (8th Cir. 1982), cert. denied, 459 U.S. 1147 (1983).

The Murrays advanced three theories of recovery before the Claims Court . They claimed that the IRS' refusal to allow them to redeem the mortgaged property violated 26 U.S.C. §6337 by depriving them of their property rights, deprived them of property rights without due process of law in violation of the Fifth Amendment, and constituted a taking of their property rights without just compensation also in violation of the Fifth Amendment. The court reasoned that it lacked jurisdiction under 28 U.S.C. §1491(a)(1) (1982) to consider the claims based on 26 U.S.C. §6337 and the Fifth Amendment due process clause. The court also reasoned that the Murrays had not alleged the elements of a Fifth Amendment taking claim. The court then dismissed the complaint for failure to state a claim upon which relief could be granted.

ISSUES

1. Did the Claims Court err by holding that it lacked jurisdiction over the Murrays' claims that the United States violated 26 U.S.C. §6337 and the due process clause of the Fifth Amendment by refusing to allow the Murrays to redeem the mortgaged property?

2. Did the Claims Court err by holding that the Murrays ' complaint failed to state a claim that their property had been taken for public use without just compensation in violation of the Fifth Amendment?

OPINION

The Claims Court 's jurisdiction encompasses claims against the United States "founded either upon the Constitution, or any act of Congress." 28 U.S.C. §1491(a)(1) . The courts have consistently held, however, that the Claims Court 's jurisdiction is limited to such cases where the Constitution or a federal statute requires the payment of money damages as compensation for the violation. United States v. Mitchell, 463 U.S. 206, 218 (1983); United States v. Testan, 424 U.S. 392, 401-02 (1976). In determining whether the Claims Court has jurisdiction over the claims advanced by the Murrays , we must first consider whether the statutes or constitutional provisions allegedly violated, require the payment of money damages for the violation.

After reviewing 26 U.S.C. §6337 , we must agree with the Claims Court that there is no language in the statute requiring compensation by the government to a person who is not allowed to redeem property pursuant to the statute. The Murrays claim that they are entitled to money damages to compensate them for deprivation of their property without due process of law must fail for the same reason. Although the Fifth Amendment's due process clause provides that no person shall be deprived of property without due process of law, no language in the clause itself requires the payment of money damages for its violation. Inupiat Community of the Arctic Slope v. United States, 680 F.2d 122, 132 (Ct. Cl.), cert. denied, 459 U.S. 969 (1982). The Claims Court does have jurisdiction over the Murrays' claim that their property was taken without just compensation because the "just compensation" required by the Fifth Amendment has long been recognized to confer upon property owners whose property has been taken for public use the right to recover money damages from the government.

Although the Claims Court has jurisdiction over a taking claim, the more difficult question is whether the Murrays have stated such a claim in this case. The Murrays argue that the property at issue is not only an ownership interest in the real estate, but also their interest in the mortgage. As to the real estate, the Claims Court correctly reasoned that only one possessing an ownership interest in the real property at the time of the taking is entitled to receive the required compensation. United States v. Dow, 357 U.S. 17, 20-21 (1958). Because the Murrays had not foreclosed their mortgage prior to the time of the tax sale, they did not have the ownership interest required to claim compensation for the taking of the real estate itself. The Claims Court also reasoned that the United States did not take the Murrays ' mortgage interest because the government did not acquire their interest. We disagree.

A plaintiff seeking to recover under the taking clause must demonstrate that the government took his property and either failed to compensate him justly or failed to put the property to public use. The nature of a mortgagee's interest is determined by state law. Under the law of North Dakota , a mortgagee possesses a lien on the subject property. The lien is a separate contract right distinct from the title to the real estate itself. Aure v. Mackoff, 93 N.W.2d 807, 811 (N.D. 1985). A mortgagee's lien is a property interest within the meaning of the Fifth Amendment. Louisville Joint Stock Land Bank v. Radford, 295 U.S. 555, 602 (1935); see Armstrong v. United States, 364 U.S. 40, 48 (1960) (materialmen's liens constitute property within the meaning of the Fifth Amendment); Dames & Moore v. Regan, 453 U.S. 654, 689-90 (1981) (attachment liens considered property within the meaning of the Fifth Amendment taking clause).

The Murrays contend that because their mortgage was "destroyed" when the IRS refused to allow them to redeem the property, it was taken by the government. The Supreme Court has held that: "[t]he total destruction by the Government of all value of [materialmen's] liens, which constitute compensable property, has every possible element of a Fifth Amendment 'taking' and is not a mere 'consequential incidence' of a valid regulatory measure." Armstrong, 364 U.S. at 48. We see no difference, for Fifth Amendment purposes, between the Murrays ' mortgage lien and the materialmen's liens at issue in Armstrong. The IRS, by failing to allow the Murrays to redeem the mortgaged property, has extinguished their lien just as surely as the government extinguished the materialmen's liens in Armstrong. We also note that the Murrays have received no compensation, directly or indirectly, in satisfaction of their mortgage. Thus, we must conclude that the Murrays have stated all of the required elements of a taking claim. We, therefore, vacate the judgment of the Claims Court and remand with instructions to proceed with adjudication of the taking claim and to dismiss the remaining claims for lack of jurisdiction.

VACATED AND REMANDED

^* The Honorable Edward D. Re, Chief Judge , United States Court of International Trade, sitting by designation.

^** 26 U.S.C. §6337(b)(1) (1976) provides:

The owners of any real property sold as provided in section 6335 , their heirs, executors, or administrators, or any person having interest therein, or a lien thereon, or any person in their behalf, shall be permitted to redeem the property sold, or any particular tract of such property, at any time within 120 days after the sale thereof.