RESPONDENT: Clintwood Elkhorn Mining Company, et al.
LOCATION: U.S. Court of Appeals Eleventh Circuit
DOCKET NO.: 07-308
DECIDED BY: Roberts Court (2006-2009)
LOWER COURT: United States Court of Appeals for the Federal Circuit
CITATION: 553 US 1 (2008)
GRANTED: Dec 03, 2007
ARGUED: Mar 24, 2008
DECIDED: Apr 15, 2008
Patricia A. Millett - on behalf of the Respondents
William M. Jay - on behalf of the Petitioner
Facts of the case
In 2000, the IRS announced it was admitting the unconstitutionality of a 1978 coal export tax. In response, Clintwood Elkhorn Mining brought suit to recover funds paid, plus interest, under the unconstitutional tax scheme between the years 1994 and 1999. Clintwood sought recovery under the Export Clause of the Tucker Act, 28 U.S.C Section 1491, which applies a six-year statute of limitations to claims and makes no mention of interest payments. The government argued that such claims must be brought under the Tax Code, which allows interest but applies a three-year statute of limitations.
Both the Court of Federal Claims and the U.S. Court of Appeals for the Federal Circuit allowed the Tucker Act claims, but the circuit court overruled the federal claims court's decision denying interest payments. In urging the Court to review both conclusions, the government contended that the Federal Circuit's ruling was at odds with other circuit decisions prohibiting Tucker Act claims under similar circumstances.
Whether the claims of taxpayers seeking refunds for unconstitutionally levied taxes under the Export Clause of the Tucker Act, which applies a six-year statute of limitations, are preempted by the United States Tax Code's three-year statute of limitations for such claims?
Media for United States v. Clintwood Elkhorn Mining Co.Audio Transcription for Oral Argument - March 24, 2008 in United States v. Clintwood Elkhorn Mining Co.
Audio Transcription for Opinion Announcement - April 15, 2008 in United States v. Clintwood Elkhorn Mining Co.
John G. Roberts, Jr.:
I have the opinion for the Court in the other tax case Number 07-308 United Stated versus Clintwood Elkhorn Mining Company.
Under the Internal Revenue Code, a tax payer seeking a refund of taxes unlawfully assessed must file a refund claim with the IRS before bringing suit.
This refund claim must be filed within three years of the filing of the tax return.
Read together, these provisions may clear that a tax payer cannot bring suit against the Government for a refund unless a claim has been filed with the IRS within the time limits that I just described.
The respondents in this case are three coal companies who were subject to a tax on coal exports.
In 1998, that tax was held to be unconstitutional under the Export Clause of the Constitution which states that "No tax or duty shall be laid on articles exported from any State."
Now, after the coal tax was invalidated, the companies sought refunds of the taxes they had paid.
For taxes paid between 1997 and 1999, the companies complied with the refund scheme just described and their taxes were refunded in full, with interest.
They could not, however, comply with the code's refund procedures for taxes paid between 1994 and 1996.
So for those, they went straight to Court under general provisions allowing suit against the Government.
Those provisions have a six-year statute of limitations more generous than the code provisions.
The Court of Appeals let them do that but we will not.
The outcome here is clear given the plain language of the relevant statutes Section 7422 of the code states that, "No suit shall be maintained in any court for the recovery of any internal revenue tax alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority or of any sum alleged to have been excessive, or in any banner wrongfully collected until a claim a for refund has been filed with the IRS.
What's more, the time limits for filing such a claim with the IRS apply to any tax imposed by the Internal Revenue Code.
Given that language, we don't think there can be any doubt that the statute covers the taxes that issue here and bars the company's suit.
Now the companies argue for a different result here, because the coal tax at issue was assessed in violation of the Export Clause, but it is well establish that constitutional claims can be time barred and that they can be subject to administrative exhaust in requirements.
We do not see anything special about the Export Clause or about the taxes that issue here that would justify overwriting the plain language of the statutes.
We reversed the judgment below, our opinion is unanimous.