American Bankers Ins. Group, Inc. v. U.S.

• Decision Date: 29 January 2004
• Docket Number: No. 03-21822HUCK/TURNOFF.,03-21822HUCK/TURNOFF.
• Citation: 308 F.Supp.2d 1360
• Court: U.S. District Court — Southern District of Florida
• Parties: AMERICAN BANKERS INSURANCE GROUP, INC., Plaintiff, v. UNITED STATES of America, Defendant.

308 F.Supp.2d 1360

AMERICAN BANKERS INSURANCE GROUP, INC., Plaintiff, v. UNITED STATES of America, Defendant.

No. 03-21822HUCK/TURNOFF.

United States District Court, S.D. Florida.

January 29, 2004.

COPYRIGHT MATERIAL OMITTED

Franklin G. Burt, Farrokh Jhabvala, Jorden Burt LLP, Miami, Henry D. Levine, Stephen J. Rosen, Levine Blaszak Block & Boothby, Washington, DC, for American Bankers Insurance Group, plaintiff.

Christopher Henry LaRosa, United States Department of Justice, Tax Division, Washington, DC, for United States, defendant.

ORDER ON MOTIONS FOR SUMMARY JUDGMENT

HUCK, District Judge.

THIS MATTER is before the Court on the Plaintiffs Motion for Summary Judgment, filed October 10, 2003 [DE # 13], and the Defendant's Cross-Motion for Summary Judgment, filed December 16, 2003 [DE # 26]. The Court has considered both parties' motions, responses, and replies, heard oral argument, and permitted additional briefing on one issue raised during oral argument. Being fully advised, and for the following reasons, the Court grants the Defendant's Cross-Motion and denies the Plaintiffs Motion.

Factual Background

American Bankers Insurance Group, Inc. ("ABIG"), a Florida corporation headquartered in Miami, purchased, from AT & T, interstate and international long-distance telephone service and intrastate long-distance telephone service in the states of Florida, Georgia, Michigan, Ohio, and Oklahoma during the period from October 1, 1998, through March 31, 2002. Under the relevant contracts, or tariffs, ABIG paid a uniform toll rate for all interstate calls made within the United States, uniform toll rates for all intrastate longdistance calls made within the five states noted above, and toll rates for international calls (except for calls to and from Mexico) that varied only according to which country the calls were being placed. AT & T collected federal excise taxes on all these services and remitted them to the Internal Revenue Service ("IRS"). On February 22, 2002, ABIG filed claims with the IRS for a refund of $288,496.10 for the federal excise taxes collected on services rendered from October 1, 1998, to September 30, 2001. On October 25, 2002, ABIG filed claims for a refund of an additional $73,267.14 for the taxes on phone calls placed during the period from October 1, 2001, to March 31, 2002. In support of its claims, ABIG contended that the applicable federal law does not impose an excise tax on long-distance telephone calls that do not vary in rate based on the distance of the telephone call. The IRS received both of these claims, but has not responded to either.¹ On July 8 2003, ABIG filed a complaint in this Court requesting a refund.²

Analysis

Summary judgment is appropriate if the pleadings, depositions, and affidavits show that there is no genuine issue of material fact, and that the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The parties agree that there are no material issues of fact in dispute in this case and `that this matter is, therefore, appropriate for resolution on summary judgment.

The critical question to be resolved by this Court is whether the telephone services purchased by ABIG fall within the statutory definition of toll telephone service under the relevant section of the Internal Revenue Code. That section defines toll telephone service as:

(1) a telephonic quality communication for which (A) there is a toll charge which varies in amount with the distance and elapsed transmission time of each individual communication and (B) the charge is paid with the United States, and

(2) a service which entitles the subscriber, upon payment of a periodic charge (determined as a flat amount or upon the basis of total elapsed transmission time), to the privilege of an unlimited number of telephonic communications to or from all or a substantial portion of the persons having telephone or radio telephone stations in a specified area which is outside the local telephone system area in which the station provided with the service is located.

26 U.S.C. § 4252(b). The Court must thus determine whether long-distance service based on a toll rate that is dependent only on elapsed time and which does not vary based on distance satisfies the definition of toll telephone service under this statute. Because the Court finds that the intent of § 4252(b)(1) was to impose an excise tax on commercial long-distance telephone service, regardless of whether the toll charge varies by both distance and time, the Court finds that ABIG is liable for the tax on its telephone service.³

I. Statutory Construction

The purpose of statutory construction is to determine the intent of the legislature in enacting the statute. In determining congressional intent, courts should give overriding deference to the unambiguous language of a statute. See, e.g., Napier v. Preslicka, 314 F.3d 528, 532 (11th Cir.2002), cert. denied, ___ U.S. ___, 124 S.Ct. 1038, 157 L.Ed.2d 901 (2004); In re Paschen, 296 F.3d 1203, 1207 (11th Cir.) ("When the language of a statute is unambiguous, we need go no further, because we must presume that Congress `said what it meant and meant what it said.'") (citation omitted), cert. denied, 537 U.S. 1097, 123 S.Ct. 696, 154 L.Ed.2d 648 (2002). A court may look at evidence of legislative intent other than the statutory language in only three circumstances:

We may look to evidence of Congressional intent outside the four corners of the statute if "(1) the statute's language is ambiguous; (2) applying it according to its plain meaning would lead to an absurd result; or (3) there is clear evidence of contrary legislative intent."

Moore v. Am. Fed'n of Television & Radio Artists, 216 F.3d 1236, 1244 (11th Cir.2000) (quoting United States v. DBB, Inc., 180 F.3d 1277, 1281 (11th Cir.1999)).

A. Ambiguity

The first question, then, is whether the statutory language is ambiguous. "When a statute is vague or ambiguous, other interpretive rules may be used, including an examination of the act's purpose and of its legislative history." United States v. Pringle, 350 F.3d 1172, 1180 n. 11 (11th Cir.2003). "Any ambiguity in the statutory language must result from the common usage of that language, not from the parties' dueling characterizations of what Congress really meant." CBS Inc. v. PrimeTime 24 Joint Venture, 245 F.3d 1217, 1225 (11th Cir.2001). The determination of whether language is plain and unambiguous should take into account the statutory language itself, the specific context in which that language is used, and the broader context of the statute as a whole. United States v. Drury, 344 F.3d 1089, 1097-98 (11th Cir.2003) (citing Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997)).

While Defendant suggests ambiguity in Congress's use of the singular to define "quality telephonic communication" and in the overall wording of that definition, the Court finds § 4252(b)(1) ambiguous for a simpler reason: its use of the word "and" in the phrase "a toll charge which varies in amount with the distance and elapsed transmission time of each individual communication." 26 U.S.C. § 4252(b)(1). Plaintiff contends that "and" is unambiguous and can only mean in this context that both time and distance must vary in order for the tax to be imposed. The Court disagrees.

It is a time-honored principle of statutory construction that "it is the duty of the court to ascertain the clear intention of the legislature. In order to do this, courts are often compelled to construe `or' as meaning 'and,' and again `and' as meaning `or.'" United States v. Fisk, 70 U.S. (3 Wall.) 445, 447, 18 L.Ed. 243 (1865) (further noting that "[a]s is often the case in statutes, though the intention is clear, the words used to express it may be ill chosen"); see also Peacock v. Lubbock Compress Co., 252 F.2d 892, 894 (5th Cir.1958) ("This whole case turns on one word. Does the word `and' mean and? Does it mean or? May it have been primarily used as a comma?"); United States v. Gomez-Hernandez, 300 F.3d 974, 978 (8th Cir.2002), cert. denied sub nom Alcaras-Navarro v. U.S., 537 U.S. 1138, 123 S.Ct. 929, 154 L.Ed.2d 831 (2003); Kelly v. Wauconda Park Dist., 801 F.2d 269, 270-71 (7th Cir.1986) (holding that the question of whether two sentences were intended to be written conjunctively or disjunctively created ambiguity in the meaning of the statute).

Further, the dictionary notes that "and" has many different meanings and usages, depending on its context. See Webster's Third New International Dictionary at 80 (1966). Among these definitions, the dictionary specifically states that "and" is a "function word" that can be used as a "reference to either or both of two alternatives ... esp[ecially] in legal language when also plainly intended to mean or [and] her bodily issue> state [and] county purposes>." Id.; see also Peacock, 252 F.2d at 894 ("But the word `and' is not a word with a single meaning, for, chameleon like, it takes its color from its surroundings."). "Ordinarily, the use of the term `or' in a statute signifies a disjunctive requirement, while `and' signifies a conjunctive one." United States v. Brennick, 908 F;Supp. 1004, 1015 (D.Mass.1995). However, it is equally clear that "a statute's use of disjunctive or conjunctive language is not always determinative. Rather, we must strive to give effect to the plain, common-sense meaning of the enactment without resorting to an interpretation that `def[ies] common sense.'" United States v. Bonilla-Montenegro, 331 F.3d 1047, 1051 (9th Cir.2003) (internal citation omitted); see also Brennick, 908 F.Supp. at 1014 ("[T]he ultimate meaning of these words depends on the context in which they, are used.") (citing United States v. One 1978 Rolls Royce, 43 F.3d 794, 814-16 (3rd Cir.1994)); United States v. Cumbee, 84 F.Supp. 390, 391 (D.Minn.1949) (...