964 F.3d 1099
Fed. Cir.2020Background
- Bank of America acquired Merrill Lynch and, after merger, sued the United States in the Western District of North Carolina seeking overpayment interest under 26 U.S.C. § 6611 (including claims relating to Merrill Lynch).
- The Government moved to sever and transfer all "stand‑alone" overpayment‑interest claims exceeding $10,000 to the U.S. Court of Federal Claims (CFC), or alternatively to dismiss for lack of subject‑matter jurisdiction.
- A magistrate judge and then the district court denied the motion, relying on precedent (notably E.W. Scripps) and interpreting 28 U.S.C. § 1346(a)(1) to permit district‑court jurisdiction over such interest claims.
- The Government appealed to the Federal Circuit under 28 U.S.C. § 1292(d)(4)(A); the sole issue on appeal was whether § 1346(a)(1) grants district courts jurisdiction over "stand‑alone" overpayment interest claims exceeding $10,000.
- The Federal Circuit analyzed the statutory text, contextual canons (noscitur a sociis), the tax code’s separate treatment of underpayment vs. overpayment interest, and legislative history, and concluded the district court erred.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 28 U.S.C. § 1346(a)(1) gives district courts jurisdiction over stand‑alone overpayment interest claims > $10,000 | § 1346(a)(1)’s phrase "any sum" is broad and includes overpayment interest; district courts therefore have concurrent jurisdiction (relying on Scripps and campus of precedents) | "Any sum" means amounts previously paid or collected (taxes/penalties); overpayment interest is not a previously collected sum but a government debt, so such claims fall outside § 1346(a)(1) and belong in the Court of Federal Claims | § 1346(a)(1) does not cover stand‑alone overpayment interest claims; district court lacked jurisdiction over claims > $10,000—those claims must be severed and transferred to the Court of Federal Claims |
Key Cases Cited
- E.W. Scripps Co. v. United States, 420 F.3d 589 (6th Cir. 2005) (held district courts could hear interest‑on‑overpayment claims)
- Pfizer Inc. v. United States, 939 F.3d 173 (2d Cir. 2019) (interpreted "any sum" to refer to amounts previously collected and excluded overpayment interest)
- Flora v. United States, 362 U.S. 145 (1960) (discussed scope of "any sum" in tax refund context)
- Int'l Bus. Machines Corp. v. United States, 201 F.3d 1367 (Fed. Cir. 2000) (statutory text controls when clear)
- Gen. Elec. Co. v. United States, 384 F.3d 1307 (Fed. Cir. 2004) (overpayment interest treated as a general government debt governed by 6‑year limitations)