New York & Presbyterian Hospital v. United States, 881 F.3d 877

Background

NY & Presbyterian Hospital settled District Court litigation by paying $6,632,000 to former medical residents who alleged the Hospital failed to file protective FICA refund claims for certain pre-2005 periods.
The Hospital then sued the United States in the Court of Federal Claims seeking reimbursement under I.R.C. § 3102(b), which provides employers “shall be indemnified against the claims and demands of any person for the amount of any such payment made by such employer.”
The Government moved to dismiss for lack of Tucker Act jurisdiction, arguing § 3102(b) is an immunity provision (not money-mandating) and thus does not waive sovereign immunity to suit for money damages.
The Court of Federal Claims granted the motion, holding § 3102(b) is not a money-mandating source and dismissing the Hospital’s reimbursement claim.
On appeal, the Federal Circuit reversed and remanded, holding § 3102(b) is reasonably amenable to a money-mandating interpretation because (1) the contemporaneous ordinary meaning of “indemnified” includes reimbursement, (2) related Code provisions and legislative materials are consistent with a reimbursement reading, and (3) the statute’s use of mandatory “shall” supports an obligation to pay.
Judge O’Malley dissented, arguing Fisher requires selecting the single best interpretation and that, read in context with the tax refund scheme (e.g., § 7422) and related provisions, § 3102(b) is better read as an immunity provision and thus not money-mandating.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether § 3102(b)’s phrase “shall be indemnified” is money‑mandating	“Shall be indemnified” can fairly be interpreted to require Government reimbursement to employers for FICA payments	The phrase creates employer immunity from employee claims, not a Government reimbursement obligation	Held: § 3102(b) is reasonably amenable to a money‑mandating reading and thus can support Tucker Act jurisdiction
Plain meaning of “indemnified”	Contemporaneous dictionaries and common‑law usage include “compensate”/“reimburse” meanings	Dictionaries also list immunity/exemption senses; primary sense may be non‑monetary	Held: ordinary 1930s usage encompassed reimbursement, supporting a money‑mandating interpretation
Interaction with Internal Revenue refund scheme (e.g., § 7422)	§ 3102(b)’s text and legislative history independently support reimbursement despite refund procedures	Reading § 3102(b) as reimbursement would undermine § 7422’s administrative refund scheme and allow circumvention	Held: Court applies the plain/ordinary‑meaning test; potential tension with § 7422 does not foreclose a money‑mandating reading; policy concerns for Congress to address
Jurisdictional consequence under the Tucker Act	If § 3102(b) is money‑mandating, Court of Federal Claims has jurisdiction to award money damages	If § 3102(b) is only immunity language, no Tucker Act jurisdiction exists	Held: Reversed Court of Federal Claims; remanded because § 3102(b) can fairly be read as money‑mandating, enabling jurisdiction

Key Cases Cited

Mayo Found. for Med. Educ. & Research v. United States, 562 U.S. 44 (Supreme Court) (upholding IRS interpretation excluding residents from student exception)
United States v. Testan, 424 U.S. 392 (Supreme Court) (Tucker Act requires a separate money‑mandating source)
United States v. Mitchell, 463 U.S. 206 (Supreme Court) (substantive source may be express or implied; must mandate compensation)
White Mountain Apache Tribe v. United States, 537 U.S. 465 (Supreme Court) (statute is money‑mandating if it can fairly be interpreted to mandate compensation; reasonably amenable standard)
United States v. Clintwood Elkhorn Mining Co., 553 U.S. 1 (Supreme Court) (§ 7422 requires administrative refund claims before suit)
Fisher v. United States, 402 F.3d 1167 (Fed. Cir.) (court must determine at the outset whether a source is money‑mandating)
BedRoc Ltd. v. United States, 541 U.S. 176 (Supreme Court) (statutory interpretation begins with text)