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Maine Medical Center v. United States

March 30, 2012



The opinion of the court was delivered by: Stahl, Circuit Judge.

Before Lynch, Chief Judge, Souter, Associate Justice,*fn1 and Stahl, Circuit Judge.

Maine Medical Center's (MMC) tax refund suit stalled when the district court found that jurisdictional discovery was not warranted and that without such discovery, MMC could not meet its burden of demonstrating jurisdiction. MMC appealed the district court's judgment for the government, arguing that it had offered sufficient evidence to merit jurisdictional discovery. Ultimately, MMC did not make an adequate threshold showing that its refund claim was timely filed, and thus the district court ruled that it did not have jurisdiction to hear the case. After careful review, we affirm.

I. Facts & Background

The facts of this case are largely undisputed. As early as August 23, 2004, Maine Medical Center began to look into filing a tax refund claim for reimbursement of taxes paid under the Federal Insurance Contributions Act (FICA) on behalf of its medical residents in 2001.*fn2 On that date, Kevin Montminy, MMC's Acting Director of Audit and Compliance Services, discussed the potential refund claim with Al Swallow, MMC's Associate Vice President of Finance. Over the following months, Montminy continued to monitor and consider the possibility of filing a refund claim for the 2001 FICA taxes.

During a March 16, 2005, conference call, Montminy discussed the FICA refund claim with two accountants from Ernst & Young, Maggie O'Brien and Jeanne Schuster. Then, in early April 2005, Montminy faxed a draft copy of the refund claim to Schuster and Joceyln Bishop, another accountant, noting that the refund request was due on April 15, 2005. On April 6 and 7, Montminy and Schuster emailed each other regarding the specific information needed to complete the refund claim. Ernst & Young's invoice later referenced "professional tax services rendered through April 15, 2005," with a specific line-item devoted to researching the 2001 FICA refund claim.

On April 12, 2005, Montminy, Swallow, and two other MMC employees, John Heye, the Vice President of Finance and Treasurer, and Gene Joyner, the Assistant Director of Financial Planning, met to discuss the status of the 2001 FICA refund claim. At the meeting, they decided to file the claim form on April 15. After the meeting, Montminy initiated a series of emails with Jeff Winchenbach, MMC's Director of Financial Services, in order to obtain necessary details for the refund filing; the email exchange continued until after the close of business on April 14.

At 2:30 PM on April 15, 2005, the day the claim was due, Montminy met with Heye to get the final draft of the claim form approved. Heye signed the form, and Montminy took it back to his office to have his assistant, Debbie Raspiller, prepare it for certified mailing. At 3:22 PM, Raspiller faxed the completed signature page back to Heye for his file.

Montminy's standard practice then would have been to drive to the main United States Post Office on Forest Avenue in Portland, Maine, and mail the claim via certified mail, return receipt requested. Montminy believes this practice was followed; however, neither he nor anyone else at MMC has a specific memory of completing the mailing, and no one at MMC is aware of the identity of the postal service employee who would have dealt with the mailing of the claim.*fn3 No one can locate the certified mail receipt or the return receipt.*fn4 MMC admits that the claim was not mailed for same-day delivery. The Internal Revenue Service (IRS) asserts that it has no record of ever receiving the claim.

On December 30, 2009, MMC filed a refund suit against the government in the United States District Court for the District of Maine regarding its 2001, 2002, and 2003 refund claims. The government conceded that the 2002 and 2003 claims were timely filed.*fn5 However, the government refused to answer interrogatories or provide documents in response to MMC's discovery requests as they pertained to the 2001 claim,*fn6 arguing that the claim was not timely filed, and that because timely filing is a jurisdictional prerequisite to a refund suit, the court did not have jurisdiction over the claim. The district court referred the discovery dispute to a magistrate judge. On February 10, 2011, the magistrate issued an order finding that MMC lacked any basis to compel discovery from the IRS, and that without further discovery, MMC could not prove the jurisdictional prerequisite of timely filing of the 2001 claim.*fn7 See Me. Med. Ctr. v. United States, 766 F. Supp. 2d 253, 262-63 (D. Me. 2011). MMC objected to the order, but the district court denied the objections. On March 22, 2011, the parties filed a joint stipulation pursuant to Federal Rule of Civil Procedure 41(a)(1), voluntarily dismissing the 2002 and 2003 tax refund claims without prejudice and granting MMC the right to reinstate the claims within two years of the date of the stipulation. Within the joint stipulation, the parties further requested that the district judge enter final judgment as to the 2001 refund, stipulating to the facts and conclusions of law contained in the magistrate's order. The district judge construed this request as a "Motion for Final Judgment for the Defendant," and entered judgment for the United States as to the 2001 refund claim. MMC then appealed that judgment to this court.*fn8

II. Discussion

We review legal questions, including those in the tax context, de novo. Muskat v. United States, 554 F.3d 183, 188 (1st Cir. 2009). We thus review the district court's interpretation of 26 U.S.C. § 7502 de novo, while we review its factual findings for clear error. State Police Ass'n of Mass. v. Comm'r, 125 F.3d 1, 5 (1st Cir. 1997).

No suit for a tax refund may be maintained in a United States district court "until a claim for a refund . . . has been duly filed." 26 U.S.C. § 7422(a). Thus, timely filing of a refund claim is a jurisdictional prerequisite to a tax refund suit. Phila. Marine Trade Ass'n v. Comm'r, 523 F.3d 140, 146 (3d Cir. 2008). Sovereign immunity is waived only when claims are filed within the statute of limitations, in this case, three years from the time the return was filed. See 26 U.S.C. § 6511; Sorrentino v. IRS, 383 F.3d 1187, 1188 (10th Cir. 2004) (opinion of Baldock, J.). Here, the parties agree that MMC had until April 15, 2005 to timely file its 2001 refund claim. The burden is thus on MMC, as the taxpayer, to establish that the jurisdictional prerequisite of timely filing was met. Miller v. United States, 784 F.2d 728, 729 (6th Cir. 1986).

Originally, only proof of actual, physical delivery could satisfy a "timely filed" requirement. See Phila. Marine, 523 F.3d at 147 (citing United States v. Lombardo, 241 U.S. 73, 76, 78 (1916)). As the IRS claims that it did not receive MMC's return, this method of proving timely filing is clearly not available to MMC. However, over time, courts developed what came to be known as the common law mailbox rule, "[t]o help courts determine when the pertinent document was physically delivered," allowing for the presumption that "physical delivery occurred in the ordinary time after mailing." Id. (emphasis added). While permitting a fact-finder to presume that "properly mailed documents would actually be received in due course by the addressee, . . . unless same-day delivery was in fact the norm, receipt by the addressee was not deemed to have occurred on the same day as the mailing." Me. Med. Ctr., 766 F. Supp. 2d at 258 (quoting Carroll v. Comm'r, 71 F.3d 1228, 1230 (6th Cir. 1995)) (internal quotation mark omitted); accord Phila. Marine, 523 F.3d at 148 (noting that a taxpayer could not rely on the common law mailbox rule to prove timely filing "because it mailed the document before the deadline, but too late for that document to arrive on time in the ordinary course of post office business"). Because MMC alleges that it mailed its return on the afternoon of April 15, 2005, and admits that ...

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