Estate of Daniel B. Culver, Deceased ANB Bank, Executor v. USA
ORDER granting 22 Motion to Transfer Case. The Clerk of the Court is directed to transfer this case to the United States Court of Federal Claims. Entered by Judge Raymond P. Moore on 10/7/2019. (cpear)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Raymond P. Moore
Civil Action No. 1:19-cv-00462-RM-NRN
ESTATE OF DANIEL B. CULVER, and
UNITED STATES OF AMERICA,
This matter is before the Court on Defendant’s motion to dismiss or transfer this case for
lack of subject matter jurisdiction. (ECF No. 22.) The motion has been fully briefed. (ECF
Nos. 25, 26, 27.) For the reasons below, the Court is transferring the case to the United States
Court of Federal Claims.
Federal courts must have a statutory basis to exercise jurisdiction. Montoya v. Chao,
296 F.3d 952, 955. “The burden of establishing a federal court’s subject matter jurisdiction rests
upon the party asserting jurisdiction.” Safe Streets Alliance v. Hickenlooper, 859 F.3d 865, 878
(10th Cir. 2017) (quotations omitted). When a defendant asserts a facial attack on the
complaint’s allegations regarding subject matter jurisdiction, the Court accepts those allegations
as true. See Smith v. United States, 561 F.3d 1090, 1097 (10th Cir. 2009).
Plaintiffs bring this lawsuit against the government, seeking to recover interest based on
overpayment of taxes. But as a threshold matter, the Court must determine if it has subject
matter jurisdiction. Plaintiffs contend that jurisdiction for claims of overpayment interest exists
under 28 U.S.C. § 1346(a)(1). Defendant disagrees. The United States Court of Appeals for the
Tenth Circuit has not addressed this issue, and the Second and Sixth Circuits have reached
Section 1346(a)(1) provides that federal district courts and the Court of Federal Claims
shall have concurrent jurisdiction over
[a]ny civil action against the United States for the recovery of  any
internal-revenue tax alleged to have been erroneously or illegally assessed or
collected,  any penalty claimed to have been collected without authority, or
 any sum alleged to have been excessive or in any manner wrongfully collected
under the internal-revenue tax laws.
There is no dispute that overpayment interest is not a tax or penalty under the first two
categories; the issue presented is whether overpayment interest qualifies under the third category.
In E.W. Scripps Co. v. United States, 420 F.3d 589, 597 (6th Cir. 2005), the Sixth Circuit
concluded that overpayment interest is an “excessive sum” included within the third category. 1
In reaching its decision, the Sixth Circuit accepted at face value a statement from Flora v. United
States, 362 U.S. 145, 149 (1960), that a “sum” under the third category could include interest.
There, the Supreme Court reasoned that “any sum” must mean “amounts which are neither taxes
Although the district court had determined it had jurisdiction based on the first category, the Sixth Circuit affirmed
based on the third category. E.W. Scripps, 420 F.3d at 596.
nor penalties,” stating that “[o]ne example of such a ‘sum’ is interest.” Id. But the Flora court
was not addressing a claim for overpayment interest, nor did it acknowledge that different types
of interest are treated differently under tax law. See Alexander Proudfoot Co. v. United States,
454 F.2d 1379, 1385 (Ct. Cl. 1972) (“Congress has distinguished markedly between a refund of
that kind of interest paid by a taxpayer and statutory interest payable by the Government on an
overpayment . . . .”). Noting that taxpayers have a statutory right to compensation “for the lost
time-value of their when they make overpayments of tax,” the Sixth Circuit concluded that “[i]f
the Government does not compensate the taxpayer for the time-value of the tax overpayment, the
Government has retained more money than it is due, i.e., an ‘excessive sum.’” E.W. Scripps,
420 F.3d at 597 (citing 26 U.S.C. § 6611).
In Pfizer Inc. v. United States, No. 17-2307-cv, 2019 WL 4398425, at * (2d Cir. Sept. 16,
2019), the Second Circuit disagreed with the Sixth Circuit’s analysis, ruling that the district court
had erroneously relied on E.W. Scripps in determining that it had jurisdiction. First, the Second
Circuit concluded that Flora is inapplicable in the context of considering overpayment interest
because the interest at issue in that case was deficiency interest. Id. at *3. Noting that deficiency
interest (which is treated as part of the underlying tax) and overpayment interest (which is simply
a general debt of the government) are treated differently under tax law, the Second Circuit
concluded that “Flora’s passing statement” about interest did not require putting all interest,
including overpayment interest, into the third category of § 1346(a)(1). Id.
The Second Circuit then focused on the text of § 1346(a)(1) and concluded that the third
category, like the first two, must refer to “an amount previously paid to the IRA by the
taxpayer.” Id. at *4. Because “overpayment interest is not a sum that, at some point in the past,
was either excessive or wrongfully collected,” the court concluded that “[t]o find that
overpayment interest qualifies as the type of ‘sum’ encompassed by § 1346(a)(1) strains the plain
text of the statute beyond what it can bear.” Id. at *4. Instead, the Second Circuit held,
“overpayment interest is a straightforward claim against the federal government and is therefore
covered by the Tucker Act, which vests exclusive jurisdiction in the United States Court of
Federal Claims to hear any non-tort claim against the United States founded upon any Act of
Congress.” Id. at *5 (quotation omitted); see also 28 U.S.C. § 1491(a)(1).
The Court finds Second Circuit’s analysis to be more thorough, reasoned, and persuasive
than the Sixth Circuit’s on this issue. The Sixth Circuit’s analysis relies on a strained reading of
§ 1346(a)(1) and an overbroad reading of a dictum in Flora to permit a taxpayer to recover a sum
that it never paid to the government. The Second Circuit’s approach is rooted in the text of the
statute and appropriate considerations regarding the broader context of tax law. In the absence of
additional guidance from the Tenth Circuit, the Court will follow the Pfizer decision in this
Therefore, the motion to dismiss or transfer (ECF No. 22) is GRANTED. The Clerk is
directed to TRANSFER this case to the United States Court of Federal Claims.
DATED this 7th day of October, 2019.
BY THE COURT:
RAYMOND P. MOORE
United States District Judge
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