Hewlett-Packard Company, and Consolidated Subsidiaries v. United States of America

Filing 22

ORDER re 21 GRANTING MOTION TO CONTINUE STAY. THE STAY CURRENTLY IN EFFECT SHALL LAST THROUGH MARCH 18, 2011. A CASE MANAGEMENT CONFERENCE IS SCHEDULED FOR WEDNESDAY, MARCH 23, 2011 AT 2PM. Signed by Judge Koh on 10/13/2010. (lhklc3, COURT STAFF) (Filed on 10/13/2010)

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Hewlett-Packard Company, and Consolidated Subsidiaries v. United States of America Doc. 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Baker & McKenzie LLP 660 Hansen Way Palo Alto, CA 94304 +1 650 856 2400 SCOTT H. FREWING, State Bar No. 191311 BETH L. WILLIAMS, State Bar No. 243585 MARK T. ROCHE, State Bar No. 245773 BAKER & McKENZIE LLP 660 Hansen Way Palo Alto, CA 94304-1044 Telephone: +1 650 856 2400 Facsimile: +1 650 856 9299 scott.h.frewing@bakernet.com beth.l.williams@bakernet.com mark.t.roche@bakernet.com A. Duane Webber (Pro Hac Vice) BAKER & McKENZIE LLP 815 Connecticut Avenue, NW Washington, DC 20006-4078 Telephone: +1 202 452 7000 Facsimile: +1 202 452 7074 a.duane.webber@bakernet.com Attorneys for Plaintiff HEWLETT-PACKARD COMPANY Jason Bergmann, State Bar. No. 196812 U.S. Department of Justice, Tax Division Post Office Box 26 Washington, D.C. 20044 Telephone: (202) 616-3425 Facsimile: (202) 514-6440 jason.bergmann@usdoj.gov Attorneys for Defendant UNITED STATES OF AMERICA UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA HEWLETT-PACKARD COMPANY, AND CONSOLIDATED SUBSIDIARIES, Plaintiff, v. UNITED STATES OF AMERICA, Defendant. Case No. 09-02882 LHK JOINT MOTION TO CONTINUE STAY OF PROCEEDINGS; [PROPOSED] ORDER Plaintiff Hewlett-Packard Company ("HP") and Defendant United States of America, (collectively, "the Parties"), by and through their undersigned counsel, respectfully move the Court 1 Case No. C 09-02882 LHK Joint Motion to Continue Stay of Proceedings Dockets.Justia.com 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Baker & McKenzie LLP 660 Hansen Way Palo Alto, CA 94304 +1 650 856 2400 to continue the stay of the above-captioned case which currently expires on October 29, 2010, until March 18, 2011 to permit continuing related litigation in the United States Tax Court, as further described below, as well as to permit the Internal Revenue Service's Appeals function to prepare tax computations for subsequent tax years (including tax years at issue before the United States Tax Court), from which certain tax attributes will carryback to the years before this Court, and to secure review and approval of the Parties' settlements by the Joint Committee on Taxation of the U.S. Congress . In support of this motion, the Parties state the following: 1. Plaintiff HP filed a Complaint for Tax Refund ("Complaint") on June 26, 2009, seeking the recovery of at least $248,583,832 in Federal income taxes and interest for HP's taxable years ended October 31, 1994, October 31, 1995, and October 31, 1998 (the "1994, 1995 and 1998 tax years"), plus statutory interest thereon as provided by law. On October 23, 2009, Defendant United States of America filed its Answer. 2. Consistent with the Notice of Pendency of Other Action or Proceeding filed by HP on June 26, 2009, there are two related actions pending before the United States Tax Court: (i) HewlettPackard Company, and Consolidated Subsidiaries v. Commissioner of Internal Revenue, Docket No. 21976-07, and (ii) Hewlett-Packard Company, and Consolidated Subsidiaries v. Commissioner of Internal Revenue, Docket No. 10075-08. These two Tax Court matters involve issues for HP's tax years ended October 31, 1999, October 31, 2000, October 31, 2002, and October 31, 2003 (the "1999, 2000, 2002 and 2003 tax years," respectively), and have been consolidated for trial, briefing and opinion by the Tax Court. The resolution of the tax issues pending before the Tax Court in the consolidated Tax Court dockets will affect, and for certain issues directly control, the amount of refunds of federal income tax and interest that HP is entitled to receive under the action filed before this Court. 3. HP and the Internal Revenue Service have resolved many, but not all, of the issues in the Tax Court matters pursuant to Settlement Stipulations filed with the Tax Court, and Closing Agreements related to other affected years not pending before the Tax Court. The Parties' settlements, and any tax refunds for the 1994, 1995 and 1998 tax years before this Court resulting from those settlements, must be reported by the IRS to the Joint Committee on Taxation of the U.S. 2 Case No. C 09-02882 LHK Joint Motion to Continue Stay of Proceedings 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Baker & McKenzie LLP 660 Hansen Way Palo Alto, CA 94304 +1 650 856 2400 Congress ("JCT") pursuant to 26 U.S.C. § 6405(a) before payment of those refunds. The Parties are cooperating in preparing the income tax computations and settlement reports for the tax years 1994 through 2003, which the JCT will review. Additional issues pending in the consolidated Tax Court cases remain to be resolved by settlement or trial. 4. Subsequent to the filing of the Complaint herein, the U.S. Tax Court determined that it had jurisdiction to determine the amount of foreign tax credits that originate in the 1999 tax year that carryback to the 1998 tax year. A trial was held on September 13, 2010 through September 20, in consolidated U.S. Tax Court Docket Nos. 21976-07 and 10075-08, with respect to one disputed issue, the Foppingadreef foreign tax credit issue, which is related to the issue described in paragraphs 69 to 102 of the Complaint. The Tax Court has ordered HP and the Internal Revenue Service to submit simultaneous post-trial briefs on December 15, 2010 and on February 17, 2011. 5. On January 14, 2010 this Court stayed this case until October 29, 2010 to permit the Tax Court matters to proceed. 6. The Parties believe that resolution of the Tax Court matters will simplify and substantially reduce the number of issues before this Court, and that it is therefore in the best interests of judicial economy to further stay this case until March 18, 2011 to permit completion of post-trial briefs and resolution of additional issues in Tax Court consolidated Docket Nos. 21976-07 and 10075-08, as well as to allow the Internal Revenue Service Appeals function to finalize computations, and to obtain JCT review and approval of the settlements for subsequent tax years from which certain tax attributes will carry back to the years before this Court. 7. In connection with this Motion to Stay, the Parties jointly move this Court to order that the parties file a Joint Case Management Statement on March 16 2011 and schedule a Case 18, Management Conference for March 23 2011. 25, /// /// /// /// /// 3 Case No. C 09-02882 LHK Joint Motion to Continue Stay of Proceedings 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Baker & McKenzie LLP 660 Hansen Way Palo Alto, CA 94304 +1 650 856 2400 Respectfully submitted by: Dated: October 8, 2010 MELINDA HAAG United States Attorney By: /s/ Jason Bergmann__________________ Jason Bergmann U.S. Department of Justice, Tax Division Attorneys for Defendant UNITED STATES OF AMERICA Dated: October 8, 2010 BAKER & McKENZIE LLP By:/s/ Scott H. Frewing Scott H. Frewing Attorneys for Plaintiff HEWLETT-PACKARD COMPANY Pursuant to General Order No. 45, Section X(B), Scott H. Frewing hereby attests that the signatory's concurrence in the filing of this document has been obtained. [PROPOSED] ORDER It is so ORDERED. October 13, 2010 Dated: _______________________ _____________________________ LUCY H. KOH UNITED STATES DISTRICT JUDGE 4 Case No. C 09-02882 LHK Joint Motion to Continue Stay of Proceedings

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