United States District Court, District of Columbia
BERYL A. HOWELL United States District Judge
The plaintiff, John Coon, proceeding pro se, brought a variety of state law claims arising from a 2010 real estate transaction for which the defendants acted as the plaintiff’s real estate agents. On September 18, 2014, this Court granted the defendants’ motion to dismiss all but one of these claims, pursuant to Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim for which relief may be granted. Coon v. Wood, 68 F.Supp. 3d 77, 79 (D.D.C. 2014). With discovery related to the plaintiff’s remaining claim now complete, pending before the Court are the parties’ cross-motions for summary judgment on the plaintiff’s claim that the defendants negligently misrepresented the potential tax consequences of the 2010 transaction. ECF Nos. 21, 24. For the reasons set forth below, because the plaintiff fails to demonstrate that he has standing to pursue his remaining claim, the Court lacks jurisdiction over this matter, which must be dismissed, and the parties’ cross-motions for summary judgment are therefore denied as moot.
The factual allegations underlying this dispute have been generally summarized in this Court’s prior decision dismissing three of the plaintiff’s claims against the defendants. See Coon, 68 F.Supp. 3d at 80-81. The facts pertinent to resolving the instant motions are briefly summarized below.
In 2010, the plaintiff became interested in selling property in the District of Columbia (“the D.C. Property”), with the intention of using the proceeds from this sale to purchase a new investment property consisting of farm land near Charles Town, West Virginia. Defs.’ Statement of Material Facts (“Defs.’ SMF”) ¶ 6, ECF No. 21-2. According to the plaintiff, after speaking with a tax professional regarding the potential tax ramifications of the proposed transaction, he sought the representation of Defendant Edward Wood, an “associate broker” at Defendant City Houses D.C., and inquired whether the sale “could be accomplished in a way to avoid any capital gains on the D.C. Property.” Id. ¶¶ 7-10; Compl. ¶¶ 1, 11. In response, the plaintiff alleges that Wood incorrectly advised him that, because the purchase of the D.C. Property was itself structured to avoid federal capital gains taxes, the sale of that property in 2010 could not also be structured in a similar manner. Defs.’ SMF ¶ 11. Thereafter, the plaintiff proceeded with the sale of the D.C. Property without structuring the transaction to avoid incurring a capital gains tax liability. Id. ¶ 16.
As a result, the plaintiff alleges that he currently owes in excess of $75, 000 in federal capital gains taxes as a result of the sale. Id. ¶ 17. On the advice of his tax preparer, however, the plaintiff did not claim any income associated with the sale on his 2010 federal tax return. Pl.’s Opp’n Defs.’ Mot. Summ. J. (“Pl.’s Opp’n”) ¶ 5, ECF No. 27. Instead, with these taxes unpaid, the plaintiff filed the instant action on September 19, 2013, seeking to recover damages and attorneys’ fees on claims of breach of contract, negligent misrepresentation, breach of fiduciary duty, and violations of D.C. Code §42-1701, et seq., relating to the sale of the D.C. Property. Coon, 68 F.Supp. 3d at 81. The plaintiff claims in his opposition to the defendants’ instant motion for summary judgment that he intends to amend his 2010 return at the conclusion of this action to include retroactively the capital gains associated with this sale. Pl.’s Opp’n ¶ 5.
Following the resolution of the defendants’ motion to dismiss, which left pending only the plaintiff’s negligent misrepresentation claim, the parties proceeded to discovery. See Minute Order, dated Oct. 2, 2014 (issuing a schedule to govern discovery and the filing of dispositive motions). During the course of discovery, the parties disputed certain issues related to the production of the plaintiff’s 2010 federal tax return, which the Court resolved during a telephone conference, see Minute Entry, dated April 1, 2015, by ordering the plaintiff to file regular reports to the Court regarding his efforts to produce this document to the defendants, Minute Order, dated April 1, 2015. Soon after the plaintiff’s production of his 2010 federal tax return, see Pl.’s Status Update of IRS Transcript, ECF No. 20, the defendants moved for summary judgment, Defs.’ Mot. Summ. J. (“Defs.’ Mot.”), ECF No. 21. The plaintiff subsequently filed a cross-motion also seeking summary judgment. Pl.’s Mot. Summ. J. (“Pl.’s Mot.”), ECF No. 24.
With discovery now completed, the parties contest various aspects of the defendants’ work for the plaintiff in connection with the plaintiff’s sale of the D.C. Property, as well as the plaintiff’s claim that the defendants negligently misadvised him regarding the potential tax consequences of that sale. Compare Defs.’ SMF, with Pl.’s Mem. Supp. Pl.’s Mot. Summ. J. (“Pl.’s Mem.”) at 4-5 (“Statement of Material Facts”), ECF No. 27. These disputes aside, the parties agree that the plaintiff reported no income from the sale on his 2010 federal tax return and, as yet, has not amended this return to include any such income, let alone pay any taxes on that sale. Defs.’ Mem. Supp. Mot. Summ. J. (“Defs.’ Mem.”) at 3, 7, ECF No. 21-1; Pl.’s Opp’n at 2. With this in mind, in seeking summary judgment, the defendants first argue that the plaintiff has yet to suffer any actual injury as a result of the defendants’ alleged misrepresentations and, as a result, lacks standing to pursue his claim in this Court. Defs.’ Mem. at 5-7.
Notably, this issue was neither raised nor considered in connection with the defendants’ motion to dismiss, since the plaintiff’s failure to pay any capital gains taxes associated with the sale of the D.C. Property only became clear during the course of discovery. Nonetheless, unlike other defenses, which are generally waived if not made in a defendant’s initial response to a complaint, Fed.R.Civ.P. 12(h)(1)-(2), a challenge to federal subject-matter jurisdiction is not waivable and may be raised at any point in the proceedings, see Fed. R. Civ. P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.” (emphasis added)); see also Mwani v. bin Laden, 417 F.3d 1, 11 (D.C. Cir. 2005). Instead, as discussed below, the question of the plaintiff’s standing to sue goes directly to the Court’s jurisdiction over this matter. Accordingly, before scrutinizing the merits of the parties’ respective summary judgment motions, the Court first must assure itself of its authority to adjudicate the plaintiff’s claim.
II. LEGAL STANDARD
“‘Federal courts are courts of limited jurisdiction, ’ possessing ‘only that power authorized by Constitution and statute.’” Gunn v. Minton, 133 S.Ct. 1059, 1064 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). Indeed, federal courts are “forbidden . . . from acting beyond our authority, ” NetworkIP, LLC v. FCC, 548 F.3d 116, 120 (D.C. Cir. 2008), and, therefore, have “an affirmative obligation ‘to consider whether the constitutional and statutory authority exist for us to hear each dispute, ’” James Madison Ltd. ex rel. Hecht v. Ludwig, 82 F.3d 1085, 1092 (D.C. Cir. 1996) (quoting Herbert v. Nat’l Acad. of Scis., 974 F.2d 192, 196 (D.C. Cir. 1992)). Absent subject-matter jurisdiction over a case, the court must dismiss it, Fed.R.Civ.P. 12(h)(3); Arbaugh v. Y & H Corp., 546 U.S. 500, 506-07 (2006), and the burden of establishing any jurisdictional facts to support the exercise of the subject matter jurisdiction rests on the plaintiff, see Hertz Corp. v. Friend, 559 U.S. 77, 96-97 (2010); Moms Against Mercury v. FDA, 483 F.3d 824, 828 (D.C. Cir. 2007).
With regard to standing, Article III of the Constitution restricts the power of federal courts to hear only “Cases” and “Controversies.” U.S. Const. art. III, § 2, cl. 1. “The doctrine of standing gives meaning to these constitutional limits by ‘identify[ing] those disputes which are appropriately resolved through the judicial process.’” Susan B. Anthony List v. Driehaus, 134 S.Ct. 2334, 2341 (2014) (alterations in original) (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992)); Clapper v. Amnesty Int’l USA, 133 S.Ct. 1138, 1146 (2013) (“’One element of the of the case-or-controversy requirement’ is that plaintiffs ‘must establish that they have standing to sue.’” (quoting Raines v. Byrd, 521 U.S. 811, 818 (1997))). As the Supreme Court has explained, “the irreducible constitutional minimum of standing contains three elements.” Defs. of Wildlife, 504 U.S. at 560. First, the plaintiff must have suffered an “injury in fact, ” i.e., “an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical.” Id. (citations and internal quotation marks omitted). Second, there must be “a causal connection between the injury and the conduct complained of, ” i.e., the injury alleged must be fairly traceable to the challenged action of the defendant. Id. Finally, it must be likely that the injury will be redressed by a favorable decision. Id. at 561.
With regard to the injury-in-fact requirement, the Supreme Court has “repeatedly reiterated that ‘threatened injury must be certainly impending to constitute injury in fact, ’ and that ‘[a]llegations of possible future injury’ are not sufficient” to establish standing. Clapper, 133 S.Ct. at 1147 (emphasis in original) (quoting Whitmore v. Arkansas, 495 U.S. 149, 158 (1990)). Thus, while a showing that an injury is “certainly impending” does not require a showing that the injury is certain to happen, allegations of a future injury resting on a “highly attenuated chain of possibilities” are insufficient to establish standing. Id. at 1147-48. This concern is particular acute where an asserted injury rests “on speculation about the decisions of independent actors.” Id. at 1150.
At the summary judgment stage, the plaintiff “can no longer rest on mere allegations, but must set forth by affidavit or other evidence specific facts, which for purposes of the summary judgment motion will be taken to be true.” Swanson Grp. Mfg. LLC v. Jewell, 790 F.3d 235, 240 (D.C. Cir. 2015) (internal quotations and alterations omitted) (quoting Defs. of Wildlife, 504 U.S. at 561). Thus, while “general factual allegations of injury resulting from the defendant’s conduct may suffice to show standing at the motion to dismiss stage, at summary ...