Scheafnocker v. Commissioner, 642 F.3d 428

Jointly held bank funds were levied by the IRS in 2003 despite Kate Scheafnocker being a non-taxpayer co-owner; she learned of the levy in 2004 and never received notice, and the levy affected a property interest.
Dispute centered on whether the wrongful levy claim is time-barred and whether the lack of notice cured due process concerns.
District Court had ruled the wrongful levy claim could be treated as a tax refund claim and later transferred venue; then it held the claim time-barred and dismissed.
Third Circuit held that the law-of-the-case did not require remand to the merits of the tolling issue, but found Scheafnocker pleaded a constitutional due process claim based on lack of notice.
Court concluded the district court has jurisdiction to address Scheafnocker’s purely procedural due process claim, and remanded to develop record on notice issues.
Judge Nygaard concurred, arguing for merits review rather than remand and urging direct resolution of the due process question on the existing record

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Scheafnocker’s due process claim has jurisdictional support.	Scheafnocker states lack of notice violated due process and merits review.	Government argues sovereign immunity limits relief; only damages would require Tucker Act.	District court has jurisdiction to hear purely procedural due process claim.
Whether equitable tolling applies to wrongful-levy claims.	Supermail tolling should apply; law-of-the-case prevents its rejection.	Becton controls; tolling not permitted.	No equitable tolling for wrongful levy claims; Becton governs.
Whether lack of notice to non-taxpayer co-owner violates due process.	Notice not provided; review merits should be allowed.	Notice not constitutionally required for co-owners under current regime.	Not enough record; remand to develop notice record.
Whether the district court should remand for merits or adjudicate on the law.	Merits should be reached; remand appropriate to develop record.	Proceedings should stay pending jurisdictional issues.	Remand to develop factual record on notice and merits.
Whether the Tucker Act provides jurisdiction for monetary relief or only procedural relief.	Purely procedural relief sought; monetary relief blocked by sovereign immunity.	Tucker Act covers constitutional claims; monetary relief may be barred.	Purely procedural remedy jurisdiction exists; monetary relief barred.

Becton Dickinson & Co. v. Wolckenhauer, 215 F.3d 340 (3d Cir.2000) (limits on equitable tolling in wrongful-levy claims; sovereignty considerations)
Supermail Cargo, Inc. v. United States, 68 F.3d 1204 (9th Cir.1995) (equitable tolling applied to wrongful-levy claims in some circuits)
Nu-Look Design, Inc. v. C.I.R., 356 F.3d 290 (3d Cir.2004) (due process notice requirements; Mullane framework)
Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1939) (notice must be reasonably calculated to apprise interested parties)
National Bank of Commerce v. United States, 472 U.S. 713 (1985) (notice and due process in levy procedures; provisional nature of levy)
Califano v. Sanders, 430 U.S. 99 (1977) (legislative modification to create jurisdiction to review agency action)