Federal Circuit Holds that Refund Suit for Overpayment Interest is in the Federal Circuit.(7/4/20; 7/6/20)

In Bank of America v. United States, ___ F.3d ___ (Fed. Cir. 7/2/20), here,  the Federal Circuit rejected the District Court for the Western District of North Carolina’s claim of jurisdiction over the taxpayer’s claim for refund of overpayment interest.  OK, you might ask, what was the trajectory from the W.D. N.C. to the Federal Circuit?  There is a story there but I am not going to dive into it.  Those wanting to know my previous ruminations on that trajectory can read the opinion and might review:  Pfizer Suit for Overpayment Interest Transferred to CFC for Tucker Act Jurisdiction (Federal Tax Procedure Blog 9/12/19; 9/25/19), here.  Added 7/6/20 12:00 pm:  For an excellent discussion on the merits, see Bob Probasco, The Tide Keeps Going Out, Carrying Overpayment Interest Suits Away from District Courts (Procedurally Taxing Blog 7/6/20), here.

Just to summarize the holding, the Court of Appeals for the Federal Circuit held that jurisdiction was properly in the Court of Federal Claims at the trial level rather that some taxpayer preferred forum choice of the district court in North Carolina (to avoid unfavorable precedent in the Federal Circuit).  In many cases involving tax issues, forum choices work in the favor of the taxpayer, but not this one.  The opinion is short, so I recommend that readers actually read it and even savor it.

I do note for those who are fans of the litigation and appeals process, the opinion does offer some lessons about what not to do.  Most importantly, what not to do is to irritate the Court of Appeals (or, really, any court for that matter).  I infer that Counsel for Bank of America did not avoid irritating the Court of Appeals.  A key excerpt is:

[*6]
Thus, the District Court concluded, with minimal additional analysis, that it had jurisdiction over the Merrill Lynch overpayment interest claims, including those exceeding $10,000. See id. at *4. n3
   n3 Although asked repeatedly to explain the lack of analysis in the District Court’s Order, counsel for Bank of America failed to provide any explanation. See Oral Arg. at 18:43–21:05, http://oralarguments.cafc.uscourts.gov/default.aspx?fl=2019-2357.mp3.

Appellate advocacy 101 which I learned while with DOJ Tax Appellate Section back in the old days was to answer the Court’s questions even when the answer may not be good for the client (in my case then, the United States/IRS).

Also, I just note briefly the Court’s excursion into legislative history.  Consider the Court’s introduction into that subject at p. 11 n6 (a footnote to the heading dealing with legislative history) which, in effect, pays homage to the notion that legislative history may not be relevant where the statutory text is not ambiguous.  Who knows what ambiguous means and, in any event, why would any rational court reject relevant and potentially persuasive legislative history as to either ambiguity or what the statutory text means?  But courts nowadays are driven by ideology rather than the persuasiveness for what statutory text means, so the courts have to make a passing and generally negative reference to legislative history.  Shame on them.