Pfizer Inc. v. United States Of America
OPINION AND ORDER: For the foregoing reasons, Defendant's motion to dismiss pursuant to Rules 12(b)(1) and 12(h)(3) for lack of subject matter jurisdiction is GRANTED. Plaintiff's request for a premotion conference to address its anticipa ted motion for summary judgment is DENIED as moot. The Clerk of Court is respectfully directed to close the motions at Dkt. Nos. 40 and 48, and close the case. Motions terminated: 40 MOTION to Dismiss for Lack of Jurisdiction, filed by United States Of America 48 LETTER MOTION for Conference re: 39 Case Management Plan, addressed to Judge Lorna G. Schofield from Robert S. Walton dated April 4, 2017, filed by Pfizer Inc. (Signed by Judge Lorna G. Schofield on 5/12/2017) (ap)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
UNITED STATES OF AMERICA,
16 Civ. 1870 (LGS)
OPINION AND ORDER
LORNA G. SCHOFIELD, District Judge:
Plaintiff Pfizer, Inc. brings this action against Defendant United States of America to
recover interest due with respect to Plaintiff’s taxable year ended December 31, 2008.
Defendant previously moved to dismiss the Complaint for lack of subject matter jurisdiction.
The Court denied that motion, holding that 28 U.S.C. § 1346(a)(1) grants subject matter
jurisdiction over this action because Plaintiff seeks “recovery of . . . [a] sum alleged to have been
excessive or in any manner wrongfully collected under the internal-revenue laws.” Pfizer, Inc. v.
United States, No. 16 Civ. 1870, 2016 WL 6902196, at *2 (S.D.N.Y. Oct. 31, 2016) (quoting §
1346(a)(1)). Defendant again moves to dismiss for lack of subject matter jurisdiction, this time
on the ground that the suit was filed outside the time limits set forth in 26 U.S.C. § 6532(a)(1).
For the following reasons, the motion is granted.
The following facts are taken from the Complaint and documents submitted on this
motion. The facts are construed in the light most favorable to Plaintiff. See McGowan v. United
States, 825 F.3d 118, 125 (2d Cir. 2016).
Plaintiff was the parent corporation of a group of affiliated U.S. corporate taxpayers
filing a consolidated federal income tax return for the year ended December 31, 2008. That tax
return was due on March 15, 2009. On March 3, 2009, Plaintiff filed a Form 7004 for its tax
year ended December 31, 2008, and extended the due date of its return until September 15, 2009.
On September 11, 2009, Plaintiff timely filed its 2008 federal income tax return, which showed
an overpayment of tax of $769,665,651. Plaintiff received an electronic return
acknowledgement showing the Internal Revenue Service (the “IRS”) accepted Plaintiff’s 2008
federal income tax return on September 11, 2009. On the return, Plaintiff requested that
$500,000,000 of the overpayment be refunded and the balance of $269,665,651 be applied to its
2009 estimated tax. The IRS processed the return, and six refund checks, totaling $499,528,499,
were scheduled to issue on October 19, 2009.
Plaintiff never received the refund checks. Plaintiff made numerous inquiries of the IRS
about the status of the refund between December 2009 and February 2010. In February 2010,
the IRS confirmed that the six checks had not been sent and canceled them. Plaintiff’s transcript
of account with the IRS states that the six refund checks were issued on October 19, 2009, and
canceled the same day.
On March 19, 2010, the IRS deposited the $499,528,499 tax refund directly in Plaintiff’s
bank account via electronic funds transfer. No interest was paid on the $499,528,499 tax refund.
Plaintiff subsequently filed a claim for refund on March 13, 2013, requesting allowable interest
on the $499,528,499 tax refund under 26 U.S.C. § 6611. The IRS disallowed Plaintiff’s claim
for interest. The notice of disallowance was sent by certified mail to Plaintiff in Madison, New
Jersey, and received there on May 10, 2013, according to a certified mail receipt that Defendant
submitted on this motion. In this action, Plaintiff seeks interest in the amount of $8,298,048 for
the period from March 15, 2009, when Plaintiff’s return was due, until March 19, 2010, when
Plaintiff received the tax refund.
In deciding motions to dismiss under Rule 12(b)(1), a court accepts as true all factual
allegations in the complaint and draws all reasonable inferences in favor of the plaintiff.
McGowan, 825 F.3d at 125. The plaintiff has the burden of showing by a preponderance of the
evidence that subject matter jurisdiction exists. Id. “When subject matter jurisdiction is
challenged, we are free to consider materials extrinsic to the complaint.” Moser v. Pollin, 294
F.3d 335, 339 (2d Cir. 2002); accord Devi v. Silva, 861 F. Supp. 2d 135, 143–44 (S.D.N.Y.
2012) (citing Moser).
Defendant’s motion to dismiss is granted because Plaintiff’s suit is time barred under 26
U.S.C. § 6532(a)(1).
The Court previously determined that 28 U.S.C. § 1346(a)(1) grants subject matter
jurisdiction over this action because the tax overpayment interest that Plaintiff seeks is
encompassed by the statutory language “any sum alleged to have been excessive or in any
manner wrongfully collected under the internal-revenue laws.” Pfizer, 2016 WL 6902196, at *2.
Plaintiff urged that interpretation in response to Defendant’s first motion to dismiss, and that
interpretation is now law of the case. See Aramony v. United Way of Am., 254 F.3d 403, 410 (2d
Cir. 2001) (“The doctrine of the law of the case posits that if a court decides a rule of law, that
decision should continue to govern in subsequent stages of the same case.”).
“Despite its spacious terms, § 1346(a)(1) must be read in conformity with other statutory
provisions which qualify a taxpayer’s right to bring a refund suit upon compliance with certain
conditions. The first is [26 U.S.C.] § 7422(a) . . . .” United States v. Dalm, 494 U.S. 596, 601
(1990). Section 7422(a) requires a taxpayer seeking to recover “any sum alleged to have been
excessive or in any manner wrongfully collected” to file a claim for refund with the IRS before
suit can be brought. Additionally, 26 U.S.C. § 6532(a)(1) states, “No suit or proceeding under
section 7422(a) for the recovery of any internal revenue tax, penalty, or other sum, shall be
begun . . . after the expiration of 2 years from the date of mailing” by the IRS to the taxpayer a
notice of disallowance of claim. This statutory scheme allows a taxpayer to bring a refund claim
in federal district court under § 1346(a)(1) “within two years after the IRS disallows the
taxpayer’s administrative refund claim.” EC Term of Years Trust v. United States, 550 U.S. 429,
431 n.2 (2007) (citing 26 U.S.C. §§ 6532(a)(1)–(2), 7422(a)).
Here, Plaintiff filed a pre-suit claim for refund with the IRS in accordance with §
7422(a). The IRS denied the claim in a letter sent by certified mail and received by Plaintiff on
May 10, 2013. Because Plaintiff commenced this action more than two years later -- on March
11, 2016 -- the action is time barred under § 6532(a)(1). This time bar is jurisdictional, because
“[a] statute of limitations requiring that a suit against the Government be brought within a certain
time period is one of [the] terms” that defines the scope of the Government’s waiver of sovereign
immunity. Dalm, 494 U.S. at 608. Accordingly, Defendant’s motion to dismiss pursuant to
Rules 12(b)(1) and 12(h)(3) for lack of subject matter jurisdiction is granted. See Wichita Ctr.
for Graduate Med. Educ. v. United States, No. 16 Civ. 1054, 2016 WL 7386454, at *2 (D. Kan.
Dec. 21, 2016) (denying motion for class certification because the court concluded that, while it
had jurisdiction to entertain claims for unpaid interest under § 1346, it lacked jurisdiction over
those proposed class members who had not satisfied the prerequisites of § 7422 and § 6532).
Plaintiff’s arguments for not applying the two-year limitations period derived from
§ 7422 and § 6532 to its claim are unpersuasive. The cases Plaintiff cites are inapposite because
they were not commenced in a district court pursuant to § 1346(a)(1). See, e.g., Exxon Mobil
Corp. & Affiliated Cos. v. C.I.R., 689 F.3d 191, 198 & n.9 (2d Cir. 2012) (implying in dicta that
a six-year limitations period applied to Exxon’s claim for “global interest netting” under
§ 7481(c)(1)); Gen. Elec. Co. & Subsidiaries v. United States, 384 F.3d 1307, 1308, 1312 (Fed.
Cir. 2004) (appeal from a decision of the Court of Federal Claims concerning GE’s claim for
interest on its overpayment of taxes under § 6611); Four Star Oil & Gas Co. v United States, 49
Fed. Cl. 755, 760 (Fed. Cl. 2001) (“Claims for unpaid overpayment interest under § 6611(a) are
governed by the six-year limitations period of §§ 2401 and 2501 . . . .” (citing Alexander
Proudfoot Co. v. United States, 454 F.2d 1379, 1384 (Ct. Cl. 1972))). Plaintiff cites no cases
that analyze, much less hold, that the six-year limitations period of 28 U.S.C. § 2401(a) applies
in cases, like this one, where the court’s subject matter jurisdiction is based on § 1346(a)(1).
Plaintiff also does not offer a convincing rationale as to why § 7422 and§ 6532 -- which
use the same “any sum” language as § 1346(a)(1) -- do not apply to a suit brought under
§ 1346(a)(1) for overpayment interest. Plaintiff characterizes § 7422 as a waiver of sovereign
immunity and argues that it “does not apply to this action because [26 U.S.C.] Section 6611
provides the waiver of sovereign immunity here.” Section 6611, which allows for interest to be
paid on overpayments of tax, may be one relevant waiver of sovereign immunity here, but it is
not the only one. See Ikelionwu v. United States, 150 F.3d 233, 239 (2d Cir. 1998) (“Absent
‘express [C]ongressional consent to the award of interest separate from a general waiver of
immunity to suit, the United States is immune from an interest award.’” (quoting Library of
Congress v. Shaw, 478 U.S. 310, 314 (1986))); Ford Motor Co. v. United States, 768 F.3d 580,
586 (6th Cir. 2014) (“Shaw . . . appears to require two waivers of sovereign immunity in the
context of a suit against the government to obtain interest -- one jurisdictional waiver
establishing the right to bring suit in an appropriate court, and a second substantive waiver
expressly authorizing an award of interest.”). Section 1346(a)(1) also acts as a waiver of
sovereign immunity here, see Pfizer, 2016 WL 6902196, at *3, and as explained above, is
qualified by the requirements of § 7422 and § 6532. Plaintiff has not explained why the
application of § 6611 as a waiver of sovereign immunity exempts this action from those
Having invoked the Court’s jurisdiction under § 1346(a)(1), Plaintiff is subject to the
requirements imposed on actions brought pursuant to that section. One of those requirements is
that a suit must be commenced within two years from when the IRS mails its notice of
disallowance of a taxpayer’s refund claim. 26 U.S.C. § 6532(a)(1). Because it is undisputed that
Plaintiff commenced this action outside of the two-year limitations period, Plaintiff’s claim is
time barred, and the Court lacks subject matter jurisdiction.
For the foregoing reasons, Defendant’s motion to dismiss pursuant to Rules 12(b)(1) and
12(h)(3) for lack of subject matter jurisdiction is GRANTED. Plaintiff’s request for a premotion conference to address its anticipated motion for summary judgment is DENIED as moot.
The Clerk of Court is respectfully directed to close the motions at Dkt. Nos. 40 and 48,
and close the case.
Dated: May 12, 2017
New York, New York
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