Emerald International Corp. v. United States

54 Fed. Cl. 674, 90 A.F.T.R.2d (RIA) 7710, 2002 U.S. Claims LEXIS 344, 2002 WL 31817701
CourtUnited States Court of Federal Claims
DecidedDecember 13, 2002
DocketNo. 01-258T
StatusPublished
Cited by9 cases

This text of 54 Fed. Cl. 674 (Emerald International Corp. 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.

Bluebook
Emerald International Corp. v. United States, 54 Fed. Cl. 674, 90 A.F.T.R.2d (RIA) 7710, 2002 U.S. Claims LEXIS 344, 2002 WL 31817701 (uscfc 2002).

Opinion

OPINION

ALLEGRA, Judge.

Plaintiff is a domestic coal broker that purchased millions of tons of coals during the years in suit. The price it paid for that coal included the cost of the coal excise tax imposed on coal producers under 26 U.S.C. § 4121(a), often reflected as a separate line item on its bill. Much of this coal was to be resold to foreign purchasers at or near the time of these purchases. Plaintiff brings this suit to recover the amounts it paid on account of the excise tax, asserting that the imposition thereof on its coal violated the Export Clause of the Constitution, art. I, § 9, cl. 5. The case is before the court on defendant’s motion for summary judgment, in which defendant asserts, inter alia, that plaintiff lacks standing to sue. For the reasons that follow, the court GRANTS this motion.

I. Facts

Emerald International Corporation (Emerald or plaintiff), an Ohio corporation, is a seller and exporter of coal. From January 1, 1995, through March 31, 1998, Emerald purchased coal from vendors within the United States and then exported it to customers in Europe, South America, Asia, and Africa. According to plaintiff, ninety-five percent of this coal had a foreign customer identified at the time of its purchase: either there was a foreign buyer already contracted to buy the coal, Emerald was in contract negotiations with one or more foreign purchasers for the sale, or Emerald had identified potential purchasers among the coal companies with whom it had prior dealings. Plaintiff further alleges that, in many instances, the coal exported by it was shipped directly from barge to vessel without passing through an export staging area, and in the remaining instances, the purchased coal was shipped to a deep-water export terminal as part of an industry practice necessary for physically loading it onto an ocean vessel.1

[676]*676Plaintiff seeks to recover an amount corresponding to excise taxes it allegedly paid on the exported coal under the Black Lung Excise Tax, 26 U.S.C. § 4121 (the Coal Tax). Emerald did not itself produce any of the subject coal and never paid any Coal Tax thereon directly to the United States. Nonetheless, it alleges that it bore the economic burden of the tax when the domestic producers from which it purchased the coal included the Coal Tax in the sale price, often as a separate line item, and then remitted the amounts collected from Emerald to the IRS. For its part, Emerald asserts that it did not regularly pass this tax on to its consumers.

To declare and remit the Coal Tax, an excise tax return must be prepared and filed quarterly with respect to sales made during that period. Emerald did not file any such returns for any of the relevant periods. However, it filed two claims for refund with the IRS, seeking the return of Coal Taxes allegedly paid: The first claim was filed on or about January 31, 2001, for the fourth quarter of 1997 and in the amount of $334,849.10; this claim was denied by the IRS on or about April 9, 2001. The second was filed on or about April 30, 2001, for the first quarter of 1998, in the amount of $300,970.45; it was denied on or about July 12, 2001. Emerald apparently did not file refund claims for any of the other taxes at issue here.

On April 30, 2001, Emerald filed a complaint with this.court in which it avers that: (i) the Coal Tax imposed on the transactions in question violated the Export Clause; (ii) the imposition of the tax effectuated a taking under the Takings Clause of the Fifth Amendment; and (iii) the government’s retention of the taxes violates an implied contract to return funds collected unconstitutionally. Emerald requests the return of the tax payments collected on account of its export sales made between January 1, 1995, and March 31, 1998, together with interest. Additionally, plaintiff seeks recovery of its costs, expenses, and attorney’s fees, as well as a declaration that the Coal Tax is unconstitutional as applied to Emerald’s export sales.

On February 1, 2002, defendant filed a motion for summary judgment. Following briefing, oral argument on this motion was held August 22, 2002.

II. Discussion

Summary judgment is appropriate where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. RCFC 56; Hunt v. Cromartie, 526 U.S. 541, 549, 119 S.Ct. 1545, 143 L.Ed.2d 731 (1999); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The court must determine whether the evidence presents a disagreement sufficient to require submission to fact-finding, or whether the issues presented are so one-sided that one party must prevail as a matter of law. Anderson, 477 U.S. at 250-52, 106 S.Ct. 2505.

Plaintiff asserts four theories for recovery here: a damages claim based upon the money-mandating language of the Export Clause; a takings claim arising under the Fifth Amendment; an illegal exaction claim; and, finally, a claim based upon an implied contract. The court will review seriatim the viability of each of these potential paths to recovery.

A. Suit for Damages under the Tucker Act

Plaintiff first asserts that it is entitled to damages stemming from its payment of an excise tax whose imposition was unconstitutional under the Export Clause of the Constitution, art. I, § 9, cl. 5. In so arguing, plaintiff invokes 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), in which the Federal Circuit held that this court had jurisdiction under the Tucker Act, 28 U.S.C. § 1491 over such a suit.2 For its part, defendant agrees [677]*677that the Coal Tax is unconstitutional when imposed on exported coal,3 but disagrees that the coal at issue was in the stream of export at the time the tax was imposed, so as to render the Coal Tax, as imposed here, unconstitutional. More fundamentally, defendant asserts that plaintiff lacks standing to raise its damages claim and that, at all events, its assertions fail to state a claim under RCFC 12(b)(6).

Though its mere mention strikes trepidation in the stoutest judicial heart, “standing” is a threshold issue in every case, involving whether the court has the power to entertain the suit. “Fundamentally,” the Federal Circuit has stated, “the question of standing involves the determination of whether a particular litigant is entitled to invoke the jurisdiction of a federal court to decide the merits of a dispute or of particular issues.” McKinney v. U.S. Dept. of Treasury, 799 F.2d 1544, 1549 (Fed.Cir.1986); see also Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). This inquiry focuses not on the merits of the issue raised, but on the “qualifications and status of the party seeking to bring [its] complaint before a federal court.” McKinney, 799 F.2d at 1549; see also Simon v.

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54 Fed. Cl. 674, 90 A.F.T.R.2d (RIA) 7710, 2002 U.S. Claims LEXIS 344, 2002 WL 31817701, Counsel Stack Legal Research, https://law.counselstack.com/opinion/emerald-international-corp-v-united-states-uscfc-2002.