Roberts v. U.S.

• Decision Date: 13 March 2001
• Docket Number: No. 00-1265,00-1265
• Parties: (Fed. Cir. 2001) MICHAEL J. ROBERTS, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee
• Court: U.S. Court of Appeals — Federal Circuit

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242 F.3d 1065 (Fed. Cir. 2001) MICHAEL J. ROBERTS, Plaintiff-Appellant,
v.
UNITED STATES, Defendant-Appellee. No. 00-1265 UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT March 13, 2001.

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J. Joseph Raymond III, of St. Louis, Missouri, argued for plaintiff-appellant.

A. Wray Muoio, Attorney, Tax Division, Department of Justice, argued for defendant-appellee. With her on the brief was Paula M. Junghans. Acting Assistant Attorney General. Of counsel was Gilbert S. Rothenberg.

Before LOURIE, CLEVENGER, and RADER, Circuit Judges.

CLEVENGER, Circuit Judge.

Michael J. Roberts appeals from the order of the United States District Court for the Eastern District of Missouri granting the government's motion to transfer his case to the Court of Federal Claims pursuant to 28 U.S.C. 1631. Roberts v. United States, No. 4:99CV0489 (E.D. Mo. Oct. 29, 1999). Section 1292 of title 28 of the United States Code grants this court jurisdiction to review such an interlocutory order. 28 U.S.C. 1292(d)(4)(A) (1994). Because we hold that concurrent jurisdiction exists in both the district court and the Court of Federal Claims pursuant to 28 U.S.C. 1346 (a)(1), we reverse the transfer order and remand to the district court.

I

Roberts's case involves an Offer in Compromise ("OIC") between himself and the Internal Revenue Service ("IRS"). Roberts originally negotiated an OIC with the IRS to satisfy his unpaid federal tax liability for the years 1989-1993. Although Roberts's tax liability for the years in question totaled approximately $ 124,000, the OIC stipulated that he would pay $ 30,000. The IRS accepted the OIC in

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September 1994, subject to certain provisions, including the requirement that Roberts file and pay all taxes due for the next five years, and agree to forfeit any refunds for tax periods ending on or before the end of the 1994 calendar year.

In January 1997, the IRS accused Roberts of violating the terms of the OIC. Eventually, the IRS terminated the OIC entirely, thereby again making Roberts liable for his unpaid federal tax liability for the 1989-1993 timeframe. Roberts asserts, and the government at oral argument did not contest, that Roberts paid all or a substantial portion of his back tax liability, totaling approximately $ 150,000. Roberts then filed administrative claims for a refund for each of the years in question, attaching a letter to each claim stating that a refund was due because he had substantially complied with the original OIC. The letter also asserted various contractual claims against the IRS, including breach of contract, abuse of discretion, the doctrine of substantial performance, and the doctrine of waiver. Roberts contends that because he substantially complied with the OIC, the OIC contract should not have been terminated, and therefore he is entitled to a refund of the taxes paid beyond the $ 30,000 stipulated in the OIC.

II

The United States, as a sovereign, may not be sued without its consent. FDIC v. Meyer, 510 U.S. 471, 475, 127 L. Ed. 2d 308, 114 S. Ct. 996 (1994); United States v. Testan, 424 U.S. 392, 399, 47 L. Ed. 2d 114, 96 S. Ct. 948 (1976). Thus, in order to maintain a claim against the government, an explicit waiver of sovereign immunity is required. Testan, 424 U.S. at 399. Roberts claims that the government's alleged breach of the OIC agreement led to an erroneous or illegal collection of taxes. Therefore, Roberts filed suit in district court alleging jurisdiction under 28 U.S.C. 1346 (a)(1), which provides a waiver of sovereign immunity in a civil action for the recovery of taxes erroneously or illegally collected:

(a) The district courts shall have original jurisdiction, concurrent with the United States Court of Federal Claims, of:

(1) Any civil action against the United States for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected, or any penalty claimed to have been collected without authority or any sum alleged to have been excessive or in any manner wrongfully collected under the internal-revenue laws;

28 U.S.C. 1346(a)(1)(1994). Section 1346(a)(1) provides concurrent jurisdiction for tax recovery suits in both U.S. district courts and the Court of Federal Claims.

There are three additional jurisdictional prerequisites to filing a tax refund suit in a United States district court. First, the taxpayer must fully pay the tax in question. Flora v. United States, 362 U.S. 145, 177, 4 L. Ed. 2d 623, 80 S. Ct. 630 (1960). Second, the taxpayer must file a proper and timely administrative claim for a refund with the IRS. 26 U.S.C. 7422 (a) (1994). Third, the administrative claim must be either disallowed or not acted upon within six months after it was filed with the IRS. 26 U.S.C. 6532(a)(1) (1994). Roberts alleges, and the government does not contest, that he has satisfied these jurisdictional prerequisites.

However, the government argues that because all of Roberts's claims allege various contractual theories, this suit is more properly characterized as a contractual claim against the government. Section 1491 of title 28 of the U.S. Code ("the Tucker Act") grants jurisdiction to the Court of...