POND v. United States

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

STEPHEN K. POND, )

)

Plaintiff, )

)

v. ) 1:21CV83

)

UNITED STATES OF AMERICA, )

)

Defendant. )

)

)

MEMORANDUM OPINION AND ORDER

LORETTA C. BIGGS, Senior District Judge.

Before the Court is a document captioned as a “Renewed Motion to Dismiss” filed by

the Government. (ECF No. 30.) For the reasons stated herein, the Government’s motion

will be denied.

I. BACKGROUND

On January 29, 2021, Plaintiff filed his initial complaint in this Court, seeking to recover

a tax refund for the 2013 tax year. (ECF No. 1 ¶¶ 42–48.) In lieu of answering Plaintiff’s

initial complaint, the Government filed its first Motion to Dismiss, arguing that this Court did

not have subject matter jurisdiction to hear Plaintiff’s suit because the United States did not

waive sovereign immunity. (ECF No. 6 at 1.) Rather than respond to the Motion to Dismiss,

on April 20, 2021, Plaintiff filed his first amended complaint as of right against the

Government (hereinafter “the Complaint”). (ECF No. 8.) Plaintiff alleged the same cause of

action as he did in his initial complaint and added more detail to his factual allegations.

(Compare ECF No. 1 with id.) The Government did not answer the Complaint but instead filed

a second motion to dismiss, again arguing that this Court lacked subject matter jurisdiction

over plaintiff’s suit because the United States had not waived sovereign immunity. (ECF No.

10 at 1.)

In its brief in support of its second motion to dismiss, the Government argued that the

Complaint failed to allege facts to show that Plaintiff’s 2013 amended return was timely filed

by the terms of 26 U.S.C. § 7422 and its applicable regulations. (See ECF No. 11 at 11.)

Further, the Government argued that the facts alleged by Pond “reveal[ed] that the amended

return was not delivered to or received by the Service on or before October 26, 2017,” which

prevented Plaintiff from relying on the physical delivery rule for timely filing. (Id. at 12.) Thus,

the Government argued, Plaintiff did not meet his burden to establish a waiver of sovereign

immunity, and this Court should therefore dismiss Plaintiff’s Complaint for lack of subject

matter jurisdiction. (Id. at 2.)

This Court, after considering the parties’ briefing, granted the Government’s second

motion to dismiss, concluding that Plaintiff had not shown timely delivery of his 2013

amended tax return by the terms of and exceptions to 26 U.S.C. § 7502 nor its applicable

regulations. (ECF No. 16 at 12.) This Court further held that Plaintiff did not plausibly allege

facts for this Court to infer the physical delivery of Plaintiff’s 2013 tax return. (Id. at 15.)

Thus, this Court found that the United States had not waived its sovereign immunity, and it

did not have subject matter jurisdiction to hear Plaintiff’s suit. (Id.) Plaintiff appealed this

Court’s dismissal of his action, (id.), to the Fourth Circuit. (ECF No. 17 at 1.)

On appeal, the Fourth Circuit affirmed in part and vacated in part this Court’s order

granting the Government’s second motion to dismiss. Pond v. United States, 69 F.4th 155, 159,

165, 168 (4th Cir. 2023). The Fourth Circuit affirmed this Court’s determination that

Plaintiff’s 2013 return was not timely filed according to the applicable statutory rule of delivery,

its exceptions, or its interpretive regulations. Id. at 159, 165. The Fourth Circuit, however,

vacated that portion of this Court’s Order that determined that Plaintiff did not plausibly allege

that his 2013 tax amended return was physically delivered to the IRS before the statutory

deadline. Id. at 159, 168. The Fourth Circuit then remanded the case to this Court for further

proceedings consistent with its ruling. Id. at 168.

Upon remand, having determined that neither party requested supplemental briefing,

this Court entered an Order, (ECF No. 28), concluding that “in accordance with the decision

of the Fourth Circuit that “‘[a]ffording the complaint all reasonable inferences, Pond

adequately alleged physical delivery;”’ thus, Plaintiff’s “claim survive[d] the government’s

motion to dismiss.” (ECF No. 28 at 2 (first alteration in original) (citing Pond, 69 F.4th at

166).) The Court then ordered that “Defendant’s Motion to Dismiss for lack of subject matter

jurisdiction, pursuant to Rule 12(b)(1), (ECF No. 10), [was] DENIED, and this matter shall

proceed to discovery or otherwise as directed by the Clerk’s Office.” (Id.) This Court also

ordered the Government to file its answer to the Complaint within 14 days of its Order. (Id.)

In its Answer, the Government raised lack of subject matter jurisdiction as an affirmative

defense to Plaintiff’s allegations. (ECF No. 29 at 1.) On the day it filed its Answer, the

Government also filed a Renewed Motion to Dismiss the Complaint for lack of subject matter

jurisdiction. (ECF No. 30 at 1.)1 Plaintiff filed its Response in Opposition to the

Government’s Renewed Motion to Dismiss, (ECF No. 35), and the Government submitted

its Reply brief, (ECF No. 37). The Court will address the arguments in the parties’ motion

briefing in turn.

II. THE GOVERNMENT MISCHARACTERIZES THE RELEVANT

ORDERS

In his Opposition brief, Plaintiff contends that the Government’s Renewed Motion to

Dismiss for lack of subject matter jurisdiction is inappropriate following the Fourth Circuit’s

decision on the issue in Pond. (ECF No. 35 at 3–4, 5.) In its Reply brief, the Government

contends that Plaintiff’s argument misrepresents the Fourth Circuit’s opinion in Pond. (ECF

No. 37 at 1 (citing Pond, 69 F.4th at 166–67) (additional citation omitted).) The Government

argues that the Fourth Circuit in Pond only found that the Complaint survived a “facial

challenge”2 to subject matter jurisdiction, because a court could reasonably infer that the IRS

may have received his amended 2013 return by physical delivery. (See id. (citing Pond, 69 F.4th

at 166–67).) The Government then argues that the Fourth Circuit allowed it on remand to

“produce evidence supporting their argument” that the IRS mistakenly marked that they

timely received Plaintiff’s 2013 amended tax return. (Id. (citing Pond, 69 F.4th at 167)

1 Because the Government filed another motion, this matter was not referred to the Clerk of Court

for further proceedings.

2 A defendant may present a motion to dismiss for lack of subject matter jurisdiction either by

contending that a complaint fails to allege facts upon which to subject matter jurisdiction can be

granted, or by contending that the jurisdictional allegations in a complaint are not true. Adams v. Bain,

697 F.2d 1213, 1219 (4th Cir. 1982). Under the first method, a facial challenge, a court takes the facts

as true and “in effect, . . . afford[s] the same procedural protection as [the plaintiff] would receive

under a Rule 12(b)(6) consideration.” Kerns v. United States, 585 F.3d 187, 192 (4th Cir. 2009) (quoting

id.).

(additional citation omitted).) Thus, the Government argues that the Fourth Circuit opened

the door for it to file a “factual challenge”3 to the Complaint. (See id. at 1, 2.) The Government

further argues that this Court, in its Order denying the Government’s previous motion to

dismiss, (ECF No. 28), stated that this case should proceed to “discovery or otherwise,” thus

opening the door to a renewed motion to dismiss rather than discovery. (See ECF No. 37 at

2 (citing id. at 2) (internal quotation marks omitted).)

Plaintiff, on the other hand, argues in his Opposition brief that because the

Government has already brought a motion on these grounds, the pending motion to dismiss

is “procedurally improper.” (ECF No. 35 at 3, 3–4.) Plaintiff contends that the Government

offered no explanation of how it could renew its motion to dismiss after the Fourth Circuit

concluded that there were sufficient facts to grant this Court subject matter jurisdiction. (Id.

at 3.) Further, Plaintiff argues that the facts of this case do not present a circumstance where

another motion to dismiss for lack of subject matter jurisdiction would be proper. (Id. at 4.)

To that end, Plaintiff contends that this Court did not deny the Government’s previous

motion to dismiss without prejudice, nor did it invite the Government to file a renewed motion

after supplemental briefing or filings. (Id.) Plaintiff also argues that the Government cannot

point to a new legal theory or developments in the litigation that would provide a basis for a

3 When making a factual challenge to subject matter jurisdiction, the party questions the factual basis

for the complaint’s allegation of subject matter jurisdiction, meaning a factual challenge asserts “that

the jurisdictional allegations of the complaint [are] not true.” Adams, 697 F.2d at 1219. Thus “the

presumption of truthfulness normally accorded a complaint’s allegations does not apply, and the

district court is entitled to decide disputed issues of fact with respect to subject matter

jurisdiction.” Kerns, 585 F.3d at 192.

new motion. (Id.) Accordingly, Plaintiff asks this Court to deny the Government’s Renewed

Motion to Dismiss outright. (Id. at 3, 5.)

After considering the arguments of the parties, this Court finds that it is the

Government that misrepresents both this Court’s Order, (ECF No. 28), and the Fourth

Circuit’s holding in Pond. 69 F.4th at 168. There is nothing in either that “invites” the

Government’s filing of yet another motion to dismiss.

Because the analysis of this Court’s Order, (ECF No. 28), requires less discussion, the

Court will address it first. After acknowledging that neither party had requested supplemental

briefing, this Court affirmatively disposed of the Government’s motion, as directed by the

Fourth Circuit, and advanced this proceeding to the next stage of litigation—discovery. (Id.

at 2.) This Court stated explicitly that “consistent with the ruling of the Fourth Circuit”—

upon vacatur and remand of this Court’s Order dismissing Plaintiff’s action—this Court was

denying the Government’s previous motion to dismiss, (ECF No. 10), and further ordered

that “this matter shall proceed to discovery or otherwise as directed by the Clerk’s office.” (Id.

at 2.) As stated above,4 it was the Government’s decision to file another motion to dismiss,

following the Fourth Circuit’s decision and this Court’s dismissal of its previous motion to

dismiss, that prevented this case from advancing to discovery. Thus, the Government’s

reading of this Court’s Order, (ECF No. 28), as an invitation from this Court to file a third

motion to dismiss is, at best, erroneous.

Moreover, the Government’s interpretation of the Fourth Circuit’s opinion appears to

be an exercise in cherry picking to advance its own position. According to the Government,

4 See supra note 1.

the Fourth Circuit opened the door for it to file a factual challenge to the Complaint. (See

ECF No. 37 at 1, 2.) This Court disagrees. The Fourth Circuit does not in its opinion make

a distinction between a facial challenge and a factual challenge, nor does it limit its holding to

such distinction. Pond, 69 F.4th at 167–68. The Fourth Circuit’s holding on the instant issue

before this Court was as follows:

A court should grant a Rule 12(b)(1) motion to dismiss “only if the material

jurisdictional facts are not in dispute and the moving party is entitled to prevail

as a matter of law.” Here, the jurisdictional facts are in dispute. Pond plausibly

alleges that he sent his 2012 and 2013 claims in a single envelope postmarked

July 18, 2017. The IRS paid the 2012 claim, so there is a reasonable inference

[that] the envelope was physically delivered. True, there are other scenarios

explaining why the 2012—and not the 2013—claim was paid. And while one

scenario gives the court jurisdiction, others don’t. But we shouldn’t be picking

among them at this stage. Instead, we must draw all reasonable inferences in

the light most favorable to Pond. After doing so, we find that Pond plausibly

alleged in his complaint that his 2013 claim was physically delivered to the IRS

before the statutory deadline. That is enough to show that the district court has

jurisdiction within the United States’s sovereign-immunity waiver under §

1364(a) to hear his claim. So, Pond’s complaint should not have been dismissed

under Rule 12(b)(1).

Id. (quoting Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th

Cir. 1991)) (citing Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982)).

Further, this Court finds the Government’s argument that its previous and instant

motions are distinct—because its previous motion was a facial challenge, and the instant

motion is a factual challenge—to be unavailing. (See ECF Nos. 31 at 7; 37 at 1–2.) The

purpose of a factual challenge to subject matter jurisdiction is to contend that the jurisdictional

allegations of the complaint are not true. Kerns v. United States, 585 F.3d 187, 192 (4th Cir. 2009)

(quoting Adams, 697 F.2d at 1219). Thus, a defendant, in making a factual challenge, casts

doubt on the factual predicate of the allegation of subject matter jurisdiction in a complaint,

which allows this Court to decide disputed issues of fact in order to determine jurisdiction

without converting the motion to dismiss into a motion for summary judgment. Id.

However, in making its so called “factual challenge”, the Government has pointed to

no evidence to convince this Court that the Government questions the veracity of the

allegations in the Complaint. The Government points to IRS filings and a declaration from

an IRS staff member to reflect that the IRS cannot find proof of Plaintiff’s 2013 return being

received as timely filed in 2017. (ECF No. 31 at 12–13 (citing ECF Nos. 29-1; 29-2; 29-3).)

These documents reflect that the IRS has a record of its receipt of Plaintiff’s 2013 amended

tax return in 2019. First, this evidence is no different than the facts the Government relied

on in its previous motion to dismiss. (See ECF No. 11 at 12.) Second, the Government’s

challenge here only supports that the jurisdictional facts, which are central to the merits of the

case, are hotly disputed. (ECF No. 31 at 12–13 (citing ECF Nos. 8; 8-4; 29-1–29-3) (additional

citations omitted) (comparing Pond’s allegations with its arguments and supplemental

documentation).) In Pond, the Fourth Circuit admonished district courts from granting a

motion to dismiss in such scenarios and thus preventing plaintiffs from accessing procedural

safeguards, such as discovery, that would allow them to respond to a direct attack on the merits

of their claims. Pond, 69 F.4th at 168. Accordingly, this Court finds the Government’s instant

motion to dismiss does not amount to a factual challenge and that it is not analytically distinct

from its previous motion to dismiss.

Nevertheless, because a challenge to subject matter jurisdiction can be raised at any

time by a party or by the Court, sua sponte, this Court will now examine the Government’s

Renewed Motion to Dismiss to determine if it may proceed on the merits or if it is otherwise

barred. Arbaugh v. Y & H Corp., 546 U.S. 500, 506 (2006).

III. THE LAW-OF-THE-CASE DOCTRINE BARS THE GOVERNMENT’S

MOTION

Plaintiff argues that the Government did not justify its renewed motion by basing it

“upon a new legal theory or new developments that occur[ed] during the pendency of the

lawsuit.” (ECF No. 35 at 4 (citations omitted).) Plaintiff’s argument evokes the “law-of-the-

case” doctrine. (See id. at 3–5.) “The law-of-the-case doctrine recognizes that ‘when a court

decides upon a rule of law, that decision should continue to govern the same issues in

subsequent stages in the same case.’” Graves v. Lioi, 930 F.3d 307, 318 (4th Cir. 2019) (quoting

Arizona v. California, 460 U.S. 605, 618 (1983)). The doctrine “applies both to questions actually

decided as well as to those decided by necessary implication.” Sejman v. Warner-Lambert Co.,

845 F.2d 66, 69 (4th Cir. 1988) (internal quotation marks and citation omitted). If the law-of-

the-case doctrine applies, a party is barred from those issues that have been decided or decided

by implication. United States v. Lentz, 524 F.3d 501, 528 (4th Cir. 2008) (quoting id.).

However, the law-of-the-case doctrine “poses no bar to the assessment of past

holdings based on a different procedural posture[,] [which] expands the court’s inquiry based

on development of actual facts underlying a plaintiff’s claims.” Graves, 930 F.3d at 318 (citation

omitted). Indeed, the doctrine recognizes that “different facts will lead to a different legal

analysis to which the doctrine cannot apply.” Id. (citing Sejman, 845 F.2d at 69). It is when

“a court is presented with a different record at a new stage of the case, [that] the law-of-the-

case doctrine will no longer constrain the court’s review.” Id. (citing TFWS, Inc. v. Franchot,

572 F.3d 186, 191 (4th Cir. 2009)). To that end, the Fourth Circuit has recognized three

exceptions to the law-of-the-case doctrine: (1) when a subsequent trial produces substantially

different evidence, (2) when controlling authority has since made a contrary decision of law

applicable to the issue, and (3) when the prior decision was clearly erroneous and would work

manifest injustice. Franchot, 572 F.3d at 191 (citations omitted).

This Court finds substantial similarity in the arguments made by the Government in its

briefs for its previous motion to dismiss, (ECF No. 11), and its briefs for its instant motion to

dismiss, (ECF Nos. 31; 37). In both motions to dismiss the Government argues that the

Plaintiff did not allege sufficient facts to grant this Court subject matter jurisdiction, which the

Fourth Circuit specifically addressed in its holding. (ECF Nos. 11 at 2; 31 at 1.) In both

motions the Government argues that Plaintiff could not show timely filing by the delivery

rules and exceptions from the governing statutes. (ECF No. 11 at 13–17; 31 at 1, 10.) The

Government further argued in both motions that there were insufficient facts to infer that the

IRS “actually received” Plaintiff’s 2013 amended return and refund request, which the Fourth

Circuit likewise addressed. (ECF Nos. 11 at 12–13; 31 at 10–11, 12–13); Pond, 69 F.4th at

167–68. Thus, both motions argue that the Complaint fails to prove that the United States

has waived sovereign immunity, and that this Court, without that waiver, does not have subject

matter jurisdiction over Plaintiff’s claims. (ECF Nos. 11 at 2, 17–18; 31 at 1, 15.)

To make its so called factual challenge, which the Government argues is distinct from

its previous motion, the Government directs this Court’s attention to the Complaint and the

attachments to its Answer to argue that Plaintiff admits, and the IRS records confirm, that the

IRS claims it did not receive his 2013 tax refund until 2019, which was outside the statutory

timeliness period. (ECF No. 31 at 10, 11, 12–13 (citing ECF Nos. 29-1; 29-2; 29-3).) The

Government mischaracterizes Plaintiff’s allegations in the Complaint. Plaintiff alleges that

2019 is when the IRS first acknowledges his claim for his adjusted 2013 tax refund, not that this

is the first time he claims to have sent it to them. (ECF No. 8 ¶¶ 20–21, 25, 28, 31–38.) Across

the briefings for the Government’s motions to dismiss, Plaintiff never concedes that this is

the first or only time he made a claim for a refund on his 2013 tax return. (ECF No. 14 at 2,

2–3, 3–4, 5–6; see ECF No. 35 at 6, 7.) As this Court found above, the Government also fails

to make arguments in its instant motion that amount to a factual challenge. Kerns, 585 F.3d at

192 (citing Adams, 697 F.2d at 1219) (alteration in original). Rather, the Government

continues to argue that the Complaint’s allegations do not support this Court’s subject matter

jurisdiction, which is definitionally a facial challenge, not a factual challenge as argued by the

Government. (ECF No. 31 at 10, 11, 12–13 (citing ECF Nos. 29-1–29-3)); see id. (citing

Adams, 697 F.2d at 1219). Thus, this Court finds that the Government’s instant motion to

dismiss for lack of subject matter jurisdiction was made on substantially similar grounds as its

previous motion.

Accordingly, because the Fourth Circuit conclusively found that there were sufficient

allegations in the Complaint to support subject matter jurisdiction in this case, Pond, at 168,

which is what mandated this Court’s denial of the Government’s previous motion following

vacatur, (ECF No. 28), the Government’s instant motion to dismiss is barred by the law-of-

the-case doctrine, unless it falls within one of the doctrine’s three exceptions. Franchot, 572

F.3d at 191 (citations omitted).

The Government’s arguments do not fall under the first exception—when a

subsequent trial produces substantially different evidence—because this case has not

progressed to a trial posture. Id. (citations omitted). Relatedly, as both parties note, this case

has also not proceeded to discovery, so there are no “substantially different facts” from such

evidence collection that would allow this Court to not be constrained by the law-of-the-case

doctrine. (ECF Nos. 35 at 7; 37 at 3); Graves, 930 F.3d at 318 (citation omitted). Nor is this

Court convinced that the Government’s attachments to its Answer, (ECF Nos. 29-1–29-3),

trigger this first exception. The Government’s arguments also have not triggered the second

exception—when controlling authority has since made a contrary decision of law applicable

to the relevant issue. Franchot, 572 F.3d at 191 (citations omitted). There are no controlling

decisions that would cause this Court to grant the Government’s instant motion to dismiss for

lack of subject matter jurisdiction, nor did the Government suggest there was such a decision.

Finally, the Government’s arguments do not fall under the third exception—when the

prior decision was clearly erroneous and would work manifest injustice. Id. (citations omitted).

The Fourth Circuit has made clear that “[a] prior decision does not qualify for this third

exception by being just maybe or probably wrong; it must . . . strike us as wrong with the force

of a five-week-old, unrefrigerated dead fish.” Id. at 194 (internal quotation marks and citations

omitted). In the Pond decision, the Fourth Circuit was explicit in its mandate that Plaintiff had

plausibly alleged that there was physical delivery of his 2013 amended tax return to the IRS.

69 F.4th at 168. The Government cannot suggest that the Fourth Circuit’s decision was clearly

erroneous and would work manifest injustice if followed by this Court, nor does the

declaration submitted by the Government change this result. (ECF No. 29-1 ¶¶ 7–10 (citing

ECF Nos. 29-2–29-3)). Accordingly, this Court cannot, and will not, take the leap the

Government suggests that this Court to take, by concluding that the Fourth Circuit’s subject

matter jurisdiction analysis is not controlling on the Government’s instant motion and find

that Plaintiff did not plausibly allege the physical delivery of his 2013 amended tax return.

Therefore, the Government’s Renewed Motion to Dismiss Plaintiff’s Complaint for

lack of subject matter jurisdiction is denied as barred under the law-of-the-case doctrine

following the Fourth Circuit’s decision in Pond and this Court’s subsequent Order adopting

the Fourth Circuit’s analysis and denying the Government’s previous motion to dismiss.5 69

F.4th at 168; (ECF No. 28 at 2.)

For the reasons stated herein, the Court enters the following:

ORDER

IT IS THEREFORE ORDERED that the Government’s Renewed Motion to

Dismiss for Lack of Subject Matter Jurisdiction, (ECF No. 30), is DENIED.

IT IS FURTHER ORDERED that this case shall be referred to the Magistrate Judge

to set an initial pre-conference.

This, the 29th day of July 2025.

/s/ Loretta C. Biggs

Senior United States District Judge

5 In his Response in Opposition to the Government’s instant motion to dismiss, (ECF No. 35),

Plaintiff also requested attorney’s fees for the costs associated with responding to the Government’s

motion. (Id. at 7–8.) The Court denies Plaintiff’s request.