Carmela Rivero v. Fidelity Investments, Incorporated

The Anti-Injunction Act (“AIA”) 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 . . .” 26 U.S.C. § 7421(a). The Declaratory Judgment Act (“DJA”) provides that “[i]n a case of actual controversy within its jurisdiction, except with respect to Federal taxes . . . any court of the United States . . . may declare the rights and other legal relations of any interested party seeking such declaration.” 28 U.S.C. § 2201 (emphasis added). Federal courts have interpreted the AIA’s prohibition to be “coterminous” with the prohibition under the DJA’s tax exception. Accordingly, if a suit is not barred under the AIA, it is likewise not barred by the DJA. Cohen v. U.S., 650 F.3d 717, 730-31 (D.C. Cir. 2011) (en banc) (Kavanaugh, J.). To read the statutes otherwise—and to apply the DJA’s tax exception to bar a case that the AIA does not—would raise a “functional concern” that “defies common sense”: “[A] court would have jurisdiction to enjoin the parties appearing before it, but not to declare their rights.” Id. at 730. This case raises the following important issue: Is the DJA’s tax exception “jurisdictional”—and, if so, does it bar a case that is not barred by the AIA? That is, in a case between two private parties that does not involve the assessment or collection of any tax—and