Paresky v. United States, 19-14589

995 F.3d 1281

David S. PARESKY, Linda K. Paresky, Plaintiffs - Appellants,

v.UNITED STATES of America, Defendant - Appellee.

No. 19-14589

United States Court of Appeals, Eleventh Circuit.

April 30, 2021

Philip Wade Savrin, Dana Kristin Maine, Freeman Mathis & Gary, LLP, ATLANTA, GA, Nancy M. Reimer, Melissa A. Santalone, Freeman Mathis & Gary, LLP, TAMPA, FL, for Plaintiffs - Appellants.

Norah Bringer, Ellen Page DelSole, U.S. Department of Justice, Appellate Section Tax Division, WASHINGTON, DC, for Defendant - Appellee.

Before LAGOA, HULL, and MARCUS, Circuit Judges.

LAGOA, Circuit Judge:

David Paresky and Linda Paresky appeal the district court's order dismissing their amended complaint for lack of subject matter jurisdiction over their standalone claim for overpayment interest allegedly owed to them by the government. This appeal presents a matter of first impression within our Circuit and asks this Court to determine whether 28 U.S.C. § 1346(a)(1) confers jurisdiction, concurrent with the United States Court of Federal Claims, over a taxpayer's civil action against the government solely for overpayment interest owed to the taxpayer. Because we find that the statutory language of § 1346(a)(1) does not confer such jurisdiction, we affirm the district court's dismissal of the Pareskys’ amended complaint.

I. FACTUAL AND PROCEDURAL BACKGROUND

As alleged in the amended complaint, the Pareskys are victims of Bernie Madoff's Ponzi scheme and "paid millions of dollars in taxes on income that they later learned was fictitious." In an attempt to partially recoup their losses, the Pareskys filed multiple claims with the Internal Revenue Service ("IRS") in late 2009 to recover taxes that were overpaid for the tax years of 2003, 2004, 2005, 2006, and 2007. Specifically, they filed amended returns for tax years 2005 through 2007, seeking refunds for taxes overpaid on income in those years, and they filed a Form 1045 seeking separate refunds arising from a carryback of the Madoff theft losses from 2008 to be applied to the tax years of 2003 through 2007. The IRS received the Form 1045 on January 4, 2010. On March 3, 2010, the IRS sent the Pareskys a letter rejecting their Form 1045. The Pareskys’ accountant then sent the IRS a response letter, which the IRS agreed with and accepted. On April 2, 2010, the IRS requested Forms 6251 for several of the Pareskys tax years, which their accountant supplied on the same date.

The Pareskys received tentative refunds of approximately ten million dollars for tax years 2003 through 2007 in April and May 2010. The Pareskys, however, asserted that they were also entitled to interest on the tax overpayments, claiming that the IRS had exceeded the statutory forty-five-day limitations period in Internal Revenue Code ("I.R.C.") § 6611(e)(2) to process and issue them tentative refunds for each tax year. They pursued their overpayment interest claim with the IRS, which issued the Pareskys a September 4, 2014, letter determining that they were not entitled to any additional interest. The Pareskys filed a formal claim against the IRS on September 10, 2014, and the IRS issued a formal claim denial letter on September 24, 2015. The denial letter stated that they could file suit within two years after the mailing of the denial letter.

Almost two years later, on September 15, 2017, the Pareskys filed a complaint in the Court of Federal Claims, asserting that the government owed them overpayment interest for the tax years at issue. On December 29, 2017, the government moved to dismiss the complaint for lack of subject matter jurisdiction. In its motion, the government argued that the Pareskys’ claim was governed by the Tucker Act, which provides that the Court of Federal Claims "shall have jurisdiction to render judgment upon any claim against the United States founded either upon the Constitution, or any Act of Congress," 28 U.S.C. § 1491, and that the Pareskys had failed to file their complaint within the six-year limitations period for claims under the Tucker Act, see id. § 2501 ("Every claim of which the United States Court of Federal Claims has jurisdiction shall be barred unless the petition thereon is filed within six years after such claim first accrues."), as they waited approximately seven years and four months to file their complaint.¹ The Pareskys opposed the motion to dismiss and, alternatively, moved to transfer the case.

The Court of Federal Claims denied the government's motion to dismiss as moot after finding that it lacked jurisdiction over the Pareskys’ claim because it was untimely under the Tucker Act. The Court of Federal Claims, however, transferred the case to the Southern District of Florida because it was not evident how the Southern District of Florida or this Court would address jurisdiction over a standalone claim for overpayment interest.

Following the transfer of the case, the Pareskys filed an amended complaint seeking $535,595.95 in overpayment interest from the government, alleging that the district court had jurisdiction over their overpayment interest claim pursuant to 28 U.S.C. §§ 1346 and 1491. The government moved to dismiss the amended complaint under Federal Rule of Civil Procedure 12(b)(1), arguing that the district court lacked jurisdiction over standalone overpayment interest claims of more than $10,000, or, alternatively, that even if the district court had jurisdiction, the Pareskys had failed to timely file administrative claims for all the tax years at issue except for 2007. The Pareskys opposed the motion, asserting that the district court had jurisdiction over standalone overpayment interest claims under § 1346(a)(1), that the government was equitably estopped from challenging the timeliness of their administrative claims, and that their claims were timely.

The district court referred the government's motion to dismiss to a magistrate judge, who issued a Report and Recommendation recommending that the government's motion be granted in part. The magistrate judge concluded that the district court had jurisdiction over a claim for overpayment interest pursuant to § 1346(a)(1), principally relying on the Sixth Circuit's decision in E.W. Scripps Co. & Subsidiaries v. United States , 420 F.3d 589, 593 (6th Cir. 2005), which determined that the statutory language of § 1346(a)(1) encompassed such standalone overpayment interest claims. Because the Pareskys had not timely filed administrative claims with the IRS for the tax years 2003 through 2006, however, the magistrate judge recommended the overpayment interest claim as to those tax years be dismissed for lack of subject matter jurisdiction.

After the parties filed separate objections to the magistrate judge's Report and Recommendation, the district court issued an order declining to adopt the Report and Recommendation and dismissing the amended complaint for lack of subject matter jurisdiction. In its order, the district court explained that, during the objections period, the Second Circuit issued its decision in Pfizer Inc. v. United States , 939 F.3d 173 (2d Cir. 2019), which disagreed with the Sixth Circuit's analysis in Scripps , including its reliance on Flora v. United States , 362 U.S. 145, 80 S.Ct. 630, 4 L.Ed.2d 623 (1960), and concluded that § 1346(a)(1) did not confer jurisdiction to district courts over standalone overpayment interest claims. The district court found Pfizer ’s analysis to be "more reasoned and persuasive," as Scripps relied on "an arguably strained reading of [§] 1346(a)(1) and an overbroad reading of dicta in Flora to permit a taxpayer to recover a sum that it never paid to the [g]overnment."

The Pareskys moved for reconsideration of the district court's order and also filed their notice of appeal with this Court. We held the notice of appeal in abeyance pending the district court's ruling on the Pareskys’ reconsideration motion. The district court subsequently denied the motion for reconsideration and entered final judgment for the government. This timely appeal ensued.

II. STANDARD OF REVIEW

"In reviewing a district court's dismissal of a complaint under Rule 12(b)(1) for lack of subject matter jurisdiction, we review the district court's legal conclusions de novo ." Houston v. Marod Supermarkets, Inc. , 733 F.3d 1323, 1328 (11th Cir. 2013).

III. ANALYSIS

On appeal, the Pareskys argue that the district court erred in dismissing their amended complaint for lack of subject matter jurisdiction. The Pareskys contend that the plain language of 28 U.S.C. § 1346(a)(1) confers jurisdiction to district courts over standalone overpayment interest claims and urge this Court to adopt the reasoning of the Sixth Circuit in Scripps . In response, the government asserts that the district court correctly relied on the Second Circuit's analysis in Pfizer , which was subsequently adopted by the Federal Circuit in Bank of America Corp. v. United States , 964 F.3d 1099 (Fed. Cir. 2020).

Because the issue before us involves a question of statutory interpretation, "we begin ‘where all such inquiries must begin: with the language of the statute itself,’ giving ‘effect to the plain terms of the statute.’ " United States v. Henco Holding Corp. , 985 F.3d 1290, 1297 (11th Cir. 2021) (quoting In re Valone , 784 F.3d 1398, 1402 (11th Cir. 2015) ). "[T]o determine ‘the plain meaning of the statute,’ " we consider "the ‘particular statutory language at issue’ " as well as "the language and design of the statute as a whole." Wachovia Bank, N.A. v. United States , 455 F.3d 1261, 1267–68 (11th Cir. 2006) (quoting Tello v. Dean Witter Reynolds, Inc. , 410 F.3d 1275, 1278 (11th Cir. 2005) ). Additionally, "[w]hen examining the plain and ordinary meaning of a statute, ‘one of the ways to figure out that meaning is by looking at dictionaries in existence around the time of enactment.’ " United States v. Chinchilla , 987 F.3d 1303, 1308 (11th Cir. 2021) (quoting Equal Emp. Opportunity Comm'n v. Catastrophe Mgmt. Sols. , 852...