The opinion of the court was delivered by: CHRISTOPHER CONNER, District Judge
Presently before the court in this interpleader action are
cross-motions for summary judgment by defendants, Patrick Kelley and the
Internal Revenue Service ("IRS"), seeking disbursement of payments owed
under a pension benefit plan administered by plaintiff, Asbestos Workers
Local No. 23 Pension Fund ("Fund"), and governed by the Employee
Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001-1401.
Patrick Kelley, named as designated beneficiary under the plan, became
entitled to a guaranteed amount of benefits following the death of his
father, Richard Kelley, the participant in the plan. The IRS contends
that tax liens against Richard Kelley's property attached to the term
benefits payable to Patrick Kelley. The Fund filed this interpleader
action to resolve the rights of the IRS and Patrick Kelley to the benefit
The question presented is whether guaranteed minimum benefits payable
to a designated beneficiary under a pension plan constitute "property" of
the participant to which a tax lien may attach.*fn1 For the reasons that
follow, the court finds that such benefits do not constitute property of
the participant and will grant Patrick Kelley's motion for summary
I. Statement of Facts*fn2
For a number of years, plaintiff's father, Richard Kelley, was employed
under a collective bargaining agreement that included a pension benefit
plan. (Doc. 27 ¶ 6; Doc. 29, Exs. 7-8). The plan offered several
payment options, one of which granted monthly benefits to the participant
throughout the participant's life and, if the participant died before
receiving 120 payments, "the remainder of said  payments" to a
designated beneficiary. (Doc. 29, Ex. 7 at 17a). Under this option,
deemed the "ten-year-guarantee pension," either the participant or the
beneficiary was guaranteed to receive at least 120 monthly benefit
payments from the Fund.
On May 20, 1996, Richard Kelley applied for benefits under the plan and
selected the ten-year-guarantee pension option. (Doc. 27 ¶ 7; Doc.
29, Ex. 8). He named his son, Patrick Kelley, as his designated
beneficiary. His retirement became effective on June 1, 1996, and on that
date he began receiving pension benefits of approximately $1100 per
month. (Doc. 27 ¶¶ 9-10; Doc. 29, Ex. 8).
In 1997, after Richard Kelley failed to satisfy IRS demands for
satisfaction of tax obligations from previous years, a lien in favor of
the United States attached by operation of law to all of his property,
including his interest in pension benefits under the plan. (Doc. 27 ¶
12; Doc. 29, Exs. 1-6). The IRS served notices of levy on the Fund,
demanding disbursement of a portion of the monthly pension benefits as
they became due. Consequently, starting in November 1997 the Fund reduced
Richard Kelley's benefit payments by approximately $500, remitting this
sum to the IRS each month. (Doc. 27 ¶¶ 13-15; Doc. 29, Exs. 9-10).
The payments continued until June 5, 2001, when Richard Kelley died. At
the time of his death, Richard Kelley had received sixty-one payments
under the plan. (Doc. 27 ¶ 18; Doc. 29, Ex. 11). Soon thereafter, the
IRS advised the Fund that the lien against Richard Kelley remained
attached to the minimum benefits payable to his designated beneficiary
and that the Fund should continue to honor the agency's levy. The Fund
notified Patrick Kelley that he was eligible under the plan to receive
fifty-nine benefit payments as designated beneficiary but that the
IRS had asserted a levy against the benefits. (Doc. 27 ¶¶ 19-21). The
Fund reduced Patrick Kelley's monthly benefits by the amount allegedly
subject to the IRS levy and placed that portion in a separate escrow
account pending resolution of the conflicting claims. (Doc. 29, Ex. 11).
On November 27, 2001, the Fund filed a complaint for interpleader,
naming the IRS and Patrick Kelley as defendants. The complaint sought
resolution of the competing claims of the two parties and a release from
liability in connection with the withheld pension payments. (Doc. 1). The
IRS filed a counterclaim against the Fund for immediate distribution of
the amounts withheld and a cross claim against Patrick Kelley for
foreclosure of the tax liens. (Doc. 8). Patrick Kelley filed a
counterclaim against the Fund for immediate disbursement of the amounts
withheld. (Doc. 10). The court ordered the amount held in escrow by the
Fund and all future payments owed under the plan to be deposited into the
registry of the court pending disposition of the controversy. (Doc. 14).
The claimants subsequently filed cross-motions for summary judgment.
II. Subject Matter Jurisdiction
Federal courts have an independent obligation to ensure the existence
of subject matter jurisdiction over claims before them, even when the
parties do not raise the issue. See Nesbit v. Gears Unlimited. Inc.,
347 F.3d 72, 76-77 (3d Cir. 2003); see also FED. R. Civ. P. 12(h)(3)
("Whenever it appears . . . that the court lacks jurisdiction of the
subject matter, the court shall dismiss the action."). In this case,
plaintiff's complaint premises jurisdiction on 28 U.S.C. § 1335, which
courts original jurisdiction over all actions "in the nature of
interpleader" involving "[t]wo or more adverse claimants, of diverse
citizenship as defined in section 1332 of this title."
28 U.S.C. § 1335. Under § 1332, however, diversity exists only
among citizens of different states and "foreign state[s]," not between a
citizen of a state and the federal government or an agency thereof. See
id. § 1332; Commercial Union Ins. Co. v. United States, 999 F.2d 581,
584 (D.C. Cir. 1993). Because the IRS is an agency of the federal
government, no diversity of citizenship exists between the claimants, and
the court cannot exercise jurisdiction over the action under § 1335.
See Texas v. ICC, 258 U.S. 158, 160 (1922): Commercial Union Ins., 999
F.2d at 584.
This conclusion, however, does not mandate dismissal. In addition to
§ 1335, interpleader actions may be brought under Federal Rule of
Civil Procedure 22, which, unlike its statutory counterpart, permits
actions to be premised on a jurisdictional basis other than diversity of
citizenship. See FED. R. CIV. P. 22; 7 CHARLES ALAN WRIGHTETAL., FEDERAL
PRACTICE AND PROCEDURE § 1710, at 590 (3d ed. 2001). Jurisdiction
exists over a Rule 22 interpleader action if the claimants' potential
causes of action against the stakeholder would be subject to the court's
jurisdiction under federal law. Bell & Beckwith v. United States.
766 F.2d 910, 912-13 (6th Cir. 1985) ("In interpleader actions as in
declaratory judgment actions, federal question jurisdiction exists if
such jurisdiction would have existed in a coercive action by the
defendant."); accord Commercial Nat'l Bank of Chi. v. Demos, 18 F.3d 485,
488-89 (7th Cir. 1994): Commercial Union. 999 F.2d at 585;
Morongo Band of Mission Indians v. Cal. State Bd., 858 F.2d 1376, 1384
(9th Cir. 1988); Home Corp. v. deLone. No. Civ. A. 96-7672, 1997 WL
214849, at *4 n.11 (E.D. Pa. Apr. 23, 1997). In this case, defendants'
potential causes of action against plaintiff actually asserted as
counterclaims arise under the Internal Revenue Code and ERISA.
See 26 U.S.C. § 7403; 29 U.S.C. § 1132(a)(1)(B). These claims are
subject to the district court's jurisdiction under 26 U.S.C. § 7402,
which grants jurisdiction over claims by the United States to enforce the
Internal Revenue Code, and 28 U.S.C. § 1331, which permits
jurisdiction over claims by beneficiaries to recover benefits under
ERISA. See 26 U.S.C. § 7402; 28 U.S.C. § 1331. Thus, the court
will construe this action as one arising under Federal Rule of Civil
Procedure 22 and exercise jurisdiction over plaintiff's claims. See St.
Louis Union Trust Co. v. Stone, 570 F.2d 833, 835-36 (8th Cir. 1978)
(holding that district court could exercise jurisdiction over Rule 22
interpleader action brought by trust company to resolve claims by
beneficiary of entitlement to benefits on which the IRS asserted a tax
lien); see also 28 U.S.C. § 2410 (" [T]he United States may be named
a party in any civil action or suit in any district court . . . of
interpleader or in the nature of interpleader with respect to . . .
property on which the United States has or claims a . . . lien.").