Ontario Power Generation, Inc. v. U.S.

• Decision Date: 20 May 2004
• Docket Number: No. 03-5161.,03-5161.
• Parties: ONTARIO POWER GENERATION, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee, v. Mingo Logan Coal Co., Ashland Coal, Inc., and Arch Coal Sales, Inc., Third party Defendants-Appellees, and Alliance Coal LLC, Third party Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

369 F.3d 1298

ONTARIO POWER GENERATION, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee, v. Mingo Logan Coal Co., Ashland Coal, Inc., and Arch Coal Sales, Inc., Third party Defendants-Appellees, and Alliance Coal LLC, Third party Defendant-Appellee.

No. 03-5161.

United States Court of Appeals, Federal Circuit.

DECIDED: May 20, 2004.

Richard J. Gagnon, Jr., Shearman & Sterling LLP, of Washington, DC, argued for plaintiff-appellant. On the brief was Stephen J. Marzen.

Teresa E. McLaughlin, Attorney, Tax Division, Appellate Section, United States Department of Justice, of Washington, DC argued for defendant-appellee United States. With her on the brief were Eileen J. O'Connor, Assistant Attorney General; and Judith A. Hagley, Attorney.

B. Derek Rose, Bryan Cave LLP, of St. Louis, Missouri, argued for third-party defendants Mingo Logan Coal, Inc., et al. With him on the brief was Kenneth A. Kleban.

William L. Anderson, Crowell & Moring LLP, of Washington, DC, for third-party defendant-appellee Alliance Coal, LLC. With him on the brief was John W. Borchert.

Before MAYER, Chief Judge, SCHALL and DYK, Circuit Judges.

MAYER, Chief Judge.

Ontario Power Generation, Inc. ("Ontario") appeals the judgment of the United States Court of Federal Claims, which dismissed Ontario's claims for the refund of taxes and reclamation fees for lack of standing. Ontario Power Generation, Inc. v. United States, 54 Fed.Cl. 630 (2002). Because we hold that jurisdiction is lacking, the judgment of the Court of Federal Claims is affirmed.

Background

Ontario, a Canadian power company, has purchased, and consumed, several million tons of coal from U.S. suppliers. For each transaction, the U.S. suppliers paid coal excise taxes and reclamation fees to the United States government ("government") pursuant to 26 U.S.C. § 4121(a) and 30 U.S.C. § 1232, respectively. According to Ontario, the U.S. suppliers included an amount equal to these taxes and fees in the purchase price of the coal. As such, Ontario alleges that it, by way of its U.S. suppliers, effectively paid the relevant taxes and fees to the government. In an effort to obtain a refund, Ontario initiated this action in the Court of Federal Claims alleging that the taxes and fees violated the Export Clause of the United States Constitution, art. I, § 9, cl. 5. The government conceded that the coal excise tax and reclamation fees violated the Export Clause, but that Ontario lacked standing to obtain a refund because the U.S. suppliers paid the government. Therefore, according to the government, any harm to Ontario was caused by the U.S. suppliers' decision to pass the tax through, not by the government's once-removed decision to impose the tax. Several U.S. suppliers have been allowed to intervene, and claim that they are the appropriate parties to seek a refund because they paid the taxes and fees directly to the government.

The Court of Federal Claims held that Ontario lacked standing because any harm it suffered was not fairly traceable to (i.e., caused by) the government's imposition of the coal tax and reclamation fees. Ontario, 54 Fed.Cl. at 631-32. The court provided an alternate basis for its judgment, stating that Ontario was not within the zone of interest of the Export Clause and, therefore, failed to satisfy prudential standing requirements. Id. at 632-33. On appeal, Ontario claims that it has both constitutional and prudential standing. Ontario also argues that its claim was properly brought under the Tucker Act, the sole basis for jurisdiction alleged, because the government illegally exacted the taxes and fees.

Discussion

We exercise jurisdiction pursuant to 28 U.S.C. § 1295(a)(3). We review the judgment of the Court of Federal Claims to dismiss for lack of jurisdiction de novo. See James M. Ellett Constr. Co. v. United States, 93 F.3d 1537, 1541 (Fed.Cir.1996).

The jurisdiction of the Court of Federal Claims in this case lies exclusively under the Tucker Act, 28 U.S.C. § 1491, which states,

The United States 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 or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort.

The Tucker Act waives the sovereign immunity of the federal government. United States v. Mitchell, 463 U.S. 206, 216-17, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983). It does not, however, provide any substantive rights. Id. Therefore, in order to invoke the jurisdiction of the Court of Federal Claims under the Tucker Act, a plaintiff must also rely on a right to money damages found in the Constitution, a statute or a government regulation, or a contract. Id.

The underlying monetary claims are of three types. See United States v. Testan, 424 U.S. 392, 400, 96 S.Ct. 948, 47 L.Ed.2d 114 (1976); Martinez v. United States, 333 F.3d 1295, 1303-03 (Fed.Cir.2003); Eastport S.S. Corp. v. United States, 178 Ct.Cl. 599, 372 F.2d 1002, 1007-08 (1967). First, claims alleging the existence of a contract between the plaintiff and the government fall within the Tucker Act's waiver. See Fidelity & Cas. Co. v. United States, 203 Ct.Cl. 486, 490 F.2d 960, 967 (Ct.Cl.1974). Second, the Tucker Act's waiver encompasses claims where "the plaintiff has paid money over to the Government, directly or in effect, and seeks return of all or part of that sum." Eastport S.S., 372 F.2d at 1007-08 (describing illegal exaction claims as claims "in which `the Government has the citizen's money in its pocket'" (quoting Clapp v. United States, 127 Ct.Cl. 505, 117 F.Supp. 576, 580 (1954))); see also Aerolineas Argentinas v. United States, 77 F.3d 1564, 1573 (Fed.Cir.1996); City of Manassas Park v. United States, 224 Ct.Cl. 515, 633 F.2d 181, 183 (1980) (describing illegal exaction claims as claims for money "in Treasury coffers"). Third, the Court of Federal Claims has jurisdiction over those claims where "money has not been paid but the plaintiff asserts that he is nevertheless entitled to a payment from the treasury." Eastport S.S., 372 F.2d at 1007. Claims in this third category, where no payment has been made to the government, either directly or in effect, require that the "particular provision of law relied upon grants the claimant, expressly or by implication, a right to be paid a certain sum." Id.; see also Testan, 424 U.S. at 401-02, 96 S.Ct. 948 ("Where the United States is the defendant and the plaintiff is not suing for money improperly exacted or retained, the basis of the federal claim — whether it be the Constitution, a statute, or a regulation — does not create a cause of action for money damages unless, as the Court of Claims has stated, that basis `in itself ... can fairly be interpreted as mandating compensation by the Federal Government for the damage sustained.'" (quoting Eastport S.S., 372 F.2d at 1009)). This category is commonly referred to as claims brought under a "money-mandating" statute. See Martinez, 333 F.3d at 1302-03. As the source of its substantive rights, Ontario relies exclusively on the Export Clause, which states, "No Tax or Duty shall be laid on Articles exported from any State." U.S. Const. art. I, § 9, cl. 5.

Initially, it is apparent that there is no contractual relationship between Ontario and the government. See Perri v. United States, 340 F.3d 1337, 1343 (Fed.Cir.2003). Unlike most substantive rights asserted under Tucker Act jurisdiction, the Export Clause may form the basis for both the second and third categories of claims. First, a claim under the Export Clause is essentially a tax refund case — the plaintiff claims that the government has levied a tax in violation of the Constitution which entitles the plaintiff to a refund of the sum illegally exacted. See City of Alexandria v. United States, 737 F.2d 1022, 1028 (Fed.Cir.1984) (describing a claim for a tax refund as a claim for money illegally exacted); Manassas Park, 633 F.2d at 183; Eastport S.S., 372 F.2d at 1007-08; S. Puerto Rico Sugar Co. Trading Corp. v. United States, 167 Ct.Cl. 236, 334 F.2d 622, 626 (1964). Second, Cyprus Amax Coal Co. v. United States, 205 F.3d 1369, 1373 (Fed.Cir.2000), held that the Export Clause is money-mandating. In that case, the Court of Federal Claims dismissed Cyprus Amax's claims because it failed to comply with the administrative procedures for obtaining a tax refund. Id. at 1370. The Court of Federal Claims reasoned that this failure precluded Cyprus Amax from seeking a refund under either the Internal Revenue Code or the Export Clause. Id. This court reversed, holding that a plaintiff was not required to comply with the administrative procedures for obtaining a refund under the Internal Revenue Code in order to claim an entitlement to taxes collected in violation of the Export Clause. Id. at 1373. In so doing, the court held that the Export Clause was money-mandating because its restriction on the "taxing power requires Congress to refund money obtained in contravention" of it. Id.

While reliance on the Export Clause may establish jurisdiction, the government argues that Ontario's position one-step removed from any government action negates such a finding. We agree. While there are some circumstances under which jurisdiction exists even though the plaintiff did not pay money directly to the government, we do not believe that Ontario's position is analogous. In Aerolineas Argentinas, 77 F.3d 1564, an airline sought reimbursement of costs borne by it for transporting aliens who sought political asylum in the United States. Relying on the fact that the government had not required the airline to pay money directly to it, the Court of Federal Claims dismissed. Id. at 1568. We reversed because the money exacted from the airline was paid "at the direction of the government to meet a governmental...