Court of Federal Claims Transfers to Tax Court Case Failing Flora Full Payment Rule (1/18/14)

Caution: the decision discussion immediately below has been reversed; the revised decision is discussed toward the end of this blog.

In Clark v. United States, 2014 U.S. Claims LEXIS 3 (Fed. Cl. 2014), here, the Court of Federal Claims, Chief Judge Campbell-Smith, found that the pro-se complaint the taxpayer filed failed to meet the Flora requirement for full payment but, since the complaint had been filed during the 90 days that the plaintiff could have petitioned the Tax Court, the case was ordered transferred to the Tax Court.

I had never seen this disposition before and just thought I would call it to readers' attention in case they ever needed it for their bag of tricks.

Plaintiff has not alleged that she has paid the tax at issue in her tax refund suit. This court does not have jurisdiction to entertain her claim unless the tax has been paid in full. See Flora, 357 U.S. at 75. Plaintiff recognizes that her claim should have been brought before the Tax Court. 

The court next considers whether the claim merits transfer. Plaintiff attached to the complaint the Notice of Deficiency letter from the  [*5] IRS, which contained instructions to file a petition with the Tax Court if plaintiff wished to contest the IRS determination before making any payment. See Notice of Deficiency Letter 1. Plaintiff's deadline to petition the tax court was November 4, 2013. See id. Plaintiff filed suit in this court on October 29, 2013. See generally Compl. According to plaintiff's letter from the IRS, plaintiff's attempt to protest the Notice of Deficiency would have been brought properly in the Tax Court on the date she filed here. The court therefore determines that the transfer of plaintiff's complaint to the United States Tax Court is "in the interest of justice." 28 U.S.C. § 1631. 

III. Conclusion 

For the foregoing reasons, the court finds that it lacks jurisdiction over plaintiff's claim. Plaintiff's motion to transfer is GRANTED. Pursuant to 28 U.S.C. § 1631, the complaint is TRANSFERRED to the United States Tax Court.

The authority cited, 28 USC, 1631 is here.   It short, so I cut and paste it:

28 U.S. CODE § 1631 - TRANSFER TO CURE WANT OF JURISDICTION
Whenever a civil action is filed in a court as defined in section 610 of this title or an appeal, including a petition for review of administrative action, is noticed for or filed with such a court and that court finds that there is a want of jurisdiction, the court shall, if it is in the interest of justice, transfer such action or appeal to any other such court in which the action or appeal could have been brought at the time it was filed or noticed, and the action or appeal shall proceed as if it had been filed in or noticed for the court to which it is transferred on the date upon which it was actually filed in or noticed for the court from which it is transferred.

CAUTION:



The opinion referenced above was reversed by Clark v. United States, 2014 U.S. Claims LEXIS 56 (Fed. Cl. 2014), here, on the basis that Section 1631 does not permit transfers to the Tax Court  The reasoning:

The courts that may transfer a case under § 1631 are those listed in § 610. Only the federal district courts of the United States and certain territories, the Court of Federal Claims, and the Court of International Trade can transfer a case upon a finding that jurisdiction is lacking according to the plain language of the statute. 

The courts to which those courts may transfer—"any other such court in which the action . . . could have been brought"—are not so clearly defined by the plain language of the statute. "[A]ny other such court" is not expressly limited by the enumerated list found in § 610 as is the reference to the transferring courts. 

The Court of Appeals for the Federal Circuit has not spoken directly on the question of whether the Tax Court is an acceptable transferee court under the Transfer Statute. However, in an analogous circumstance, the appeals court has construed narrowly the phrase "any other such court in which the action or appeal could have been brought." This narrow construction strongly suggests that the transfer of cases to courts not enumerated in § 610 is not permissible. 

In Schafer v. Department of the Interior, the court determined that it lacked jurisdiction and considered whether it should transfer the case to the Federal Labor Relations Authority. 88 F.3d 981, 987 (Fed. Cir. 1996). The court ruled that it could not transfer to the FLRA under § 1631 because the language of the statute permitted transfer only to "courts." Id. The court went on to explain that administrative bodies such as the FLRA are not included within the definition of courts under § 610. Id. 

While the Tax Court is not an administrative body like the FLRA, it is nevertheless absent from the enumerated list of courts found in § 610. The appeals court implied in its ruling that any entity, court or administrative tribunal, not found in § 610 would be an impermissible recipient of a transferred case. Language from an unpublished appeals court opinion further supports such a conclusion. See Felder v. Shinseki, 401 Fed. Appx. 551, 2010 WL 4745644 (Fed. Cir. 2010) ("[W]e cannot transfer this appeal to the Court of Appeals for Veterans Claims pursuant to 28 U.S.C. § 1631 because it is not a court as defined by 28 U.S.C. § 610 . . . .").
Moreover, other judges of this court have ruled specifically that the Tax Court is not a permissible destination for a transferred case under the Transfer Statute. See, e.g., DaCosta v. United States, 82 Fed. Cl. 549, 557 (2008) ("The Court concludes that it 'cannot transfer plaintiff[s'] claim to the Tax Court because the Tax Court is not one of the courts to which transfer is permitted by 28 U.S.C. § 610.'" (quoting Russell v. United States, 78 Fed. Cl. 281, 290 (2007))); see also Skillo v. United States, 68 Fed. Cl. 734, 743-47 (2005).
While a transfer of the instant claim may otherwise be in the interest of justice," and plaintiff's challenge to the Notice of Deficiency she received "could have been brought" in the Tax Court at the time it was filed here, 28 U.S.C. § 1631; see Notice of Deficiency Letter, Aug. 6, 2013, Dkt. No. 1-7, the court concludes that it lacks statutory authority to transfer plaintiff's complaint to the United States Tax Court. The Tax Court is not an enumerated "court" under § 610. See 28 U.S.C. § 610. Reconsideration must be granted to provide relief from the mistake of law on which the transfer order was based. See RCFC 59(a), 60.