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Schoot v. United States - 664 F. Supp. 293 (N.D. Ill. 1987)


Rule 1: The Illinois long arm statute provides that if any person, in person or through an agent, does any of the acts enumerated in the statute, they submit to the jurisdiction of the Illinois courts.

Rule 2: In case of compulsory counterclaims, the venue statutes have been construed to apply only to the original claim, and not to the compulsory counterclaims.

Rule 3: Joinder is proper "if any question of law or fact common to all defendants will arise in the action."

Rule 4:  The court lacks subject matter jurisdiction to consider a state law claim for indemnification or contribution at the same time as the government's 28 U.S.C.S. § 6672 penalty enforcement action.


Plaintiff taxpayer, an employee, and counter-defendant, the company president, were assessed a 100 percent penalty, jointly and severally, pursuant to 26 U.S.C.S. § 6672, for a willful failure to collect, truthfully account for, and pay over withholding and other taxes due and owing from the company. Plaintiff filed a suit against defendant government for taxes and interest from the Internal Revenue Service (IRS). Defendant counterclaimed for the balance due on a penalty and named the company president as a defendant. Plaintiff cross-claimed against counter-defendant for contribution and indemnification. Counter-defendant sought to dismiss the counterclaim and cross-claim pursuant to Fed. R. Civ. P. 12. The court denied counter-defendant’s motion to dismiss defendant’s counterclaim but granted his motion to dismiss plaintiff’s cross-claim.


Issue 1: Should counter-defendant’s motion to dismiss defendant government’s counterclaim for lack of personal jurisdiction be granted?

Issue 2: Should counter-defendant’s motion to dismiss defendant’s counterclaim for improper venue be granted?

Issue 3: Should counter-defendant’s motion to dismiss defendant’s counterclaim for improper joinder be granted?

Issue 4: Should counter-defendant’s motion to dismiss plaintiff’s cross-claim for lack of subject matter jurisdiction be granted?


Answer 1: No.; Answer 2: No.; Answer 3: No.; Answer 4: Yes.


Conclusion 1: Defendant alleged that counter-defendant was president of an Illinois corporation and resided in Illinois at the time the acts, out of which this action arose, took place. The fact that counter-defendant had since moved out of state did not insulate him from the long arm jurisdiction of the state of Illinois for acts that took place while he lived and worked in the state. Therefore, the court had personal jurisdiction over counter-defendant.

Conclusion 2: Because a third party brought into the action under Fed.R.Civ.P. 13(h), counter-defendant cannot object to venue.

Conclusion 3: Defendant noted in its brief that there were numerous common questions of law or fact in the action. Therefore, defendant properly joined counter-defendant company president as an additional defendant to the counterclaim under Fed.R.Civ.P. 13(h) and 20.

Conclusion 4: Finding that Connecticut state law permitted contribution between responsible persons under § 6672 in no way inhibited the efficient collection of taxes owed to defendant, provided the claim of contribution was brought as an action separate from that brought by the IRS pursuant to § 6672. Therefore, although the court lacked subject matter jurisdiction to consider plaintiff’s cross-claim for indemnity or contribution, he might assert any state law claims, if any, in a separate proceeding subsequent to the present proceeding.

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