Andalex Resources, Inc. v. United States

54 Fed. Cl. 563, 25 I.T.R.D. (BNA) 1762, 2002 U.S. Claims LEXIS 315, 2002 WL 31598850
CourtUnited States Court of Federal Claims
DecidedNovember 19, 2002
DocketNos. 99-268T, 00-241T, 00-245T, 00-634T, 98-414T, 00-457T, 00-249T, 00-244T, 99-299T, 00-243T, 97-68T, 97-310T, 97-311T, 97-317T, 97-521T, 97-522T, 98-557T, 98-200T, 01-252T, 00-218T, 00-216T, 00-248T, 00-762T, 00-247T, 99-301T, 01-423T, 00-236T, 99-298T, 00-250T, 01-422T, 00-242T, 00-246T, 00-467T, 01-252T, 00-148T, 02-200T
StatusPublished
Cited by5 cases

This text of 54 Fed. Cl. 563 (Andalex Resources, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Andalex Resources, Inc. v. United States, 54 Fed. Cl. 563, 25 I.T.R.D. (BNA) 1762, 2002 U.S. Claims LEXIS 315, 2002 WL 31598850 (uscfc 2002).

Opinion

OPINION

HODGES, Judge.

The opinion that follows was issued on July 23, 2002, then withheld because the Federal Circuit’s opinion in United States Shoe Corporation, was distributed the same day. See United States Shoe Corp. v. United States, [564]*564296 F.3d 1378 (Fed.Cir.2002). We issued an Order on July 25 advising the parties of the opinion granting defendant’s motion for summary judgment, and asked how they wished to proceed in light of the U.S. Shoe decision.1

We held a hearing on August 29 to discuss the effect of the Federal Circuit’s opinion on this case, and the parties briefed the issue further in September. We have considered the parties’ arguments, and submit the opinion herewith as it was drafted.

INTRODUCTION

Plaintiff coal producers paid federal taxes on their shipments of coal pursuant to 26 U.S.C. § 4121. Some of the shipments included exports. A federal district court held that the coal tax was unconstitutional when applied to exports. Ranger Fuel Corp. v. United States, 33 F.Supp.2d 466 (E.D.Va. 1998). The Government did not appeal this holding. The Internal Revenue Service issued a notice of acquiescence to the Ranger Fuel ruling in May 2000. See Notice 2000-28, 2000-21 I.R.B. 1116 (May 22, 2000). Plaintiffs subsequently brought claims for refunds in this court under the Tucker Act and filed motions for summary judgment on the issue of interest on those claims. See Cyprus Amax Coal Co. v. United States, 205 F.3d 1369 (Fed.Cir.2000), cert. denied, 532 U.S. 1065, 121 S.Ct. 2214, 150 L.Ed.2d 208 (2001).

The Government filed a cross-motion for partial summary judgment on the interest issue. We grant defendant’s cross-motion for partial summary judgment.

BACKGROUND

The Federal Circuit reversed this court’s holding that the Court of Federal Claims lacked jurisdiction to entertain plaintiffs’ constitutionally-based tax claims because they had not observed administrative tax refund requirements. See Cyprus Amax, 205 F.3d at 1371. The Circuit explained that plaintiffs met the jurisdictional requirements of this court because “the Export Clause is self-executing.” Id. at 1374. Therefore, “a party can recover for payment of taxes under the Export Clause independent of the tax refund statute.” Id.

The appeals court explained that plaintiffs “had two alternate avenues through which to obtain relief — a tax refund action or a cause of action based on the Export Clause — and either one is sufficient to invoke the Court of Federal Claims’ jurisdiction under the Tucker Act.” Id. at 1375. The Export Clause provides plaintiffs with an alternate means to recover their tax overpayments under the Tucker Act. The Circuit’s Cyprus Amax decision permits plaintiffs to use the Tucker Act’s six-year statute of limitations without complying with the administrative tax refund requirements. Id. at 1372. Plaintiffs “can potentially recover an additional three years of taxes under the Tucker Act than under a tax refund claim.” Id. at 1372-73. Now plaintiffs seek awards of interest added to any judgments of tax overpayment that this court may allow.

DISCUSSION

Plaintiffs employ the alternate avenue of relief supplied by the Export Clause of the Constitution and by the ruling of the Federal Circuit in Cyprus Amax. By choosing this avenue, they can recover six years of tax overpayments instead of the three years that would have been permitted according to the administrative process of the tax code. Their claims for interest are predicated both upon the statutory provisions of 28 U.S.C. § 2411 and upon the Export Clause of the Constitution.

28 U.S.C. § 2411 Claims

“[T]he United States upon claims made against it, cannot, in the absence of a statute to that end, be subjected to the payment of interest.” United States v. Rogers, 255 U.S. 163, 169, 41 S.Ct. 281, 65 L.Ed. 566 (1921) [565]*565(citations omitted). According to plaintiffs, Congress provided the necessary waiver of sovereign immunity for us to award them interest, in 28 U.S.C. § 2411. Section 2411 of Title 28, United States Code, provides in pertinent part:

In any judgment of any court rendered (... against the United States ...) for any overpayment in respect of any internal-revenue tax, interest shall be allowed at the overpayment rate established under section 6621 of the Internal Revenue Code of 1986 upon the amount of the overpayment, from the date of the payment or collection thereof to a date preceding the date of the refund check by not more than thirty days, such date to be determined by the Commissioner of Internal Revenue.

28 U.S.C. § 2411. Plaintiffs assert that this court must award interest on their claims because they will receive: 1) a judgment rendered against the United States; 2) for an overpayment; 3) in respect of an internal revenue tax.

The Government contends that plaintiffs’ choice to pursue their claims under the Export Clause of the Constitution precludes their claims for pre-judgment interest under § 2411. Congress enacted § 2411 to aid in judicial enforcement of tax refunds; it is essentially a tax refund statute. Plaintiffs have chosen to pursue their claims independently of the tax refund system, so they may not use the § 2411 waiver of sovereign immunity for interest payments.

28 U.S.C. § 2411 Waiver of Immunity

The Tucker Act gives this court jurisdiction to hear tax refund actions. “The United States Court of Federal Claims shall have jurisdiction to render judgment upon any claim against the United States founded ... upon ... any Act of Congress____” 28 U.S.C. § 1491. The Tucker Act includes a six-year statute of limitations. See 28 U.S.C. § 2501. The Tucker Act is a jurisdictional statute and its statute of limitations is general.2 As a result, tax refund claims brought in the Court of Federal Claims under the Tucker Act generally retain the shorter limitations provided by the Internal Revenue Code, 26 U.S.C. § 6511 (2002).3 The IRC limitations apply in situations like plaintiffs’ where a statute is declared unconstitutional after the parties have paid taxes:

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54 Fed. Cl. 563, 25 I.T.R.D. (BNA) 1762, 2002 U.S. Claims LEXIS 315, 2002 WL 31598850, Counsel Stack Legal Research, https://law.counselstack.com/opinion/andalex-resources-inc-v-united-states-uscfc-2002.