Energy East Corp. v. United States
645 F.3d 1358
| Fed. Cir. | 2011Background
- Energy East acquired CMP Group, Inc. and CMP in 2000; CMP’s subsidiary CMP became part of Energy East’s group.
- Energy East later acquired RG Energy Group, Inc. and its RG&E subsidiary in 2002, making CMP and RG&E sister subsidiaries under Energy East.
- CMP and RG&E had pre-acquisition overpayments (1995–97 for CMP; 1996–97 for RG&E) and Energy East had a pre-acquisition underpayment (1999).
- CMP and RG&E filed refunds for their overpayments; Energy East paid the 1999 underpayment and accrued interest.
- Consolidation for income tax purposes occurred after acquisitions, but CMP and RG&E maintained separate EINs and filed taxes separately for other purposes.
- Energy East sought to net interest under 6621(d) by treating Energy East and its pre-acquisition subsidiaries as the same taxpayer for the netting period, but the trial court and the Federal Circuit declined this interpretation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Energy East and its subsidiaries are the same taxpayer under § 6621(d) when the payments occurred. | Energy East argues a consolidated-file period allows netting. | Government contends same-taxpayer requirement attaches at time of over/underpayments, not at filing. | No; not the same taxpayer at time of payments. |
| How § 6621(d) should be read with respect to timing and the phrase 'by the same taxpayer'. | Energy East favors a broader, post-consolidation timing. | Court should apply plain language: same taxpayer must be the subject when payments were made. | Plain language controls; same taxpayer must exist when payments were made. |
| Whether legislative history supports Energy East’s interpretation. | Legislative history suggests potential equity with consolidated returns. | Legislative history cannot override plain statutory text. | Legislative history does not alter the plain meaning. |
Key Cases Cited
- Santa Fe Indus., Inc. v. Green, 430 U.S. 462 (U.S. 1977) (statutory interpretation starting point: language governs)
- Barnhart v. Thomas, 540 U.S. 20 (U.S. 2003) (last antecedent rule for modifying phrases)
- United States v. Locke, 471 U.S. 84 (U.S. 1985) (legislative purpose presumed from ordinary language)
- Jones v. Bock, 549 U.S. 199 (U.S. 2007) (exhaustion pleading requirements and statutory interpretation)
- St. Martin Evangelical Lutheran Church v. South Dakota, 451 U.S. 772 (U.S. 1981) (defers to plain statutory language over vague legislative intent)
- Leatherman v. Tarrant Cty. Narcotics Intelligence & Coordination Unit, 507 U.S. 163 (U.S. 1993) (exacting standards apply to rules governing litigation)
- Am. Tobacco Co. v. Patterson, 456 U.S. 63 (U.S. 1982) (defining limits of congressional expressions versus statutory text)
- Grapevine Imports Ltd. v. United States, 636 F.3d 1368 (Fed. Cir. 2011) (statutory interpretation de novo; timing of 'same taxpayer')