Pfizer Inc. & Subsidiaries v. United States
939 F.3d 173
| 2d Cir. | 2019Background
- Pfizer filed its 2008 federal income tax return showing a $769,665,651 overpayment and requested a $500,000,000 refund; IRS prepared refund checks totaling $499,528,499 dated October 19, 2009.
- Pfizer never received the checks; after inquiries IRS canceled the checks and on March 19, 2010 deposited $499,528,499 into Pfizer’s bank account.
- About three years later Pfizer submitted an administrative claim for overpayment interest under 26 U.S.C. § 6611; the IRS disallowed the interest claim (record shows checks were issued Oct. 19, 2009).
- Pfizer sued in the Southern District of New York (Mar. 11, 2016), invoking district-court jurisdiction under 28 U.S.C. § 1346(a)(1), seeking $8,298,048 in interest.
- The district court dismissed under a statute-of-limitations theory; on appeal the Second Circuit vacated the district-court judgment for lack of subject-matter jurisdiction and transferred the case to the U.S. Court of Federal Claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court had jurisdiction under 28 U.S.C. § 1346(a)(1) over a suit for overpayment interest | § 1346(a)(1) provides concurrent jurisdiction with the Court of Federal Claims for refund-type suits, including interest | Overpayment interest is not a tax, penalty, or a previously paid "sum" under § 1346(a)(1); jurisdiction lies exclusively in the Court of Federal Claims under the Tucker Act | Held: District court lacked jurisdiction; exclusive jurisdiction is in the Court of Federal Claims — case transferred |
| Whether overpayment interest is an "internal-revenue tax" or a "penalty" under § 1346(a)(1) | Interest is related to the tax refund and thus falls within § 1346(a)(1) | Overpayment interest is not a tax or a penalty; it is a debt of the government, not an assessed tax | Held: Overpayment interest is neither a tax nor a penalty |
| Whether overpayment interest is "any sum alleged to have been excessive or in any manner wrongfully collected" under § 1346(a)(1) | "Any sum" should be read broadly to include interest because government retained more money than due if it fails to pay interest | "Any sum" must be read in context with "tax" and "penalty" (noscitur a sociis) to mean previously assessed/paid amounts; overpayment interest was not previously collected as an excessive sum | Held: Overpayment interest is not the type of "sum" covered by § 1346(a)(1); it falls outside that provision |
| If district-court jurisdiction existed, which limitations period applies | Six-year general statute of limitations (28 U.S.C. § 2401) applies to interest claims | Two-year limitations in 26 U.S.C. § 6532(a)(1) governs refund suits under § 1346(a)(1) (after administrative denial) | Held (Lohier, J., concurrence): If § 1346(a)(1) applied, Pfizer would be time-barred under the two-year rule; but court did not reach merits because jurisdiction was lacking |
Key Cases Cited
- Flora v. United States, 362 U.S. 145 (1960) (discussed scope of "any sum" in § 1346(a)(1) and distinguished types of assessments)
- United States v. Dalm, 494 U.S. 596 (1990) (explains statutory conditions that limit § 1346(a)(1) refund suits)
- EC Term of Years Trust v. United States, 550 U.S. 429 (2007) (reaffirms administrative-claim prerequisite and two-year suit period after denial)
- E.W. Scripps Co. v. United States, 420 F.3d 589 (6th Cir. 2005) (held overpayment interest could fit within § 1346(a)(1); Court of Appeals rejected that reasoning)
- General Elec. Co. & Subsidiaries v. United States, 384 F.3d 1307 (Fed. Cir. 2004) (treats overpayment interest as a government debt and addresses jurisdiction under the Tucker Act)
- Yates v. United States, 135 S. Ct. 1074 (2015) (noscitur a sociis canon cited for statutory interpretation)
- Lozano v. Montoya Alvarez, 572 U.S. 1 (2014) (sets standard for equitable tolling; cited regarding tolling in limitations context)