Appendix — International Business MacHines Corp. v. United States

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INTERNATIONAL

BUSINESS MACHINES

CORPORATION, Plaintiff-

Appellant,

v.

UNITED STATES,

Defendant-Appellee.

02-1356

UNITED STATES COURT

OF APPEALS FOR THE

FEDERAL CIRCUIT

2003 U.S. App. LEXIS

5396

March 19, 2003, Decided

NOTICE:

THIS DECISION WAS ISSUED AS

UNPUBLISHED OR NONPRECEDENTIAL

AND MAY NOT BE CITED AS PRECEDENT.

PLEASE REFER TO THE RULES OF THE

FEDERAL CIRCUIT COURT OF APPEALS

FOR RULES GOVERNING CITATION TO

UNPUBLISHED OR NONPRECEDENTIAL

OPINIONS OR ORDERS.

PRIOR HISTORY:

IBM v. United States, 2002 Ct. Intl. Trade

LEXIS 16 (Feb. 21, 2002)

DISPOSITION:

Affirmed.

JUDGES:

Before NEWMAN, SCHALL, and DYK, Circuit

Judges.

~ OPINION BY:

DYK

OPINION:

DYK, Circuit Judge.

International Business Machines ("IBM")

appeals the Court of International Trade's

decision holding that it is not entitled to interest

on the Harbor Maintenance Tax on exports

("HMT") it paid. Int'l Bus. Machs. Corp. v.

United States, 2002 Ct. Intl. Trade LEXIS 16,

No. 94-10-00625, slip op. at 3 (Ct. It'l Trade Feb.

21, 2002) ("Final Order"). We affirm.

I

On October 24, 1994, IBM filed a complaint in

the Court of International Trade for a refund of

the HMT it had paid up to that point. Another

HMT payer, United States Shoe Corporation,

filed a substantively identical complaint in the

Court of International Trade on November 23,

1994, and its suit was designated as a test case,

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while other suits, including IBM's, were stayed.

The Court of International Trade held that the

HMT violated the Export Clause and awarded

interest on the judgment. United States Shoe

Corp. v. United States, 924 F. Supp. 1191, 19 Ct.

Int'l Trade 1413 (1995). The government

appealed to this court solely on _ the

constitutionality of the HMT, not on the

entitlement to interest. This court affirmed.

United States Shoe Corp. v. United States, 114

F.3d 1564, 1577 (Fed. Cir. 1997). The Supreme

Court subsequently agreed that the HMT

violated the Export Clause. United States uv.

United States Shoe Corp., 523 U.S. 360, 370, 140

L. Ed. 2d 453, 118 S. Ct. 1290 (1998).

The government then sought a test case for

the Court of International Trade to determine

whether interest was due on such judgment for

refund of the HMT. IBM's suit was chosen. The

Court of International Trade held IBM was

entitled to recover interest on the refund of the

HMT pursuant to a tax statute, 28 U.S.C. §

2411. IBM v. United States, 22 Ct. Int'l Trade

519 (1998). The court did not specifically address

whether IBM was entitled to interest pursuant

to the Takings Clause of the Fifth Amendment or

under equitable restitution. The government

appealed to this court, and we reversed, holding

that 28 U.S.C. § 2411 was not applicable

because the HMT was an excise duty rather than

a tax. Int'l Bus. Machs. Corp. v. United States,

201 F.3d 1367, 1374 (Fed. Cir. 2000). At the end

4a

of the opinion, the ordering clause stated that

"the judgment of the Court of International

Trade must be, and is, REVERSED." Jd. IBM

petitioned for panel rehearing and rehearing en

banc, inter alia, on the ground that IBM was

entitled to interest under the Takings Clause of

the Fifth Amendment. The petition was denied

on May 31, 2000. IBM v. United States, 2000

U.S. App. LEXIS 15299, No. 98-1590 (Fed. Cir.

May 31, 2000) (Order denying rehearing and

rehearing en banc). |

On June 6, 2000, IBM moved to amend the

opinion and judgment (1) to state that this court

had not reversed the portion of the Court of

International Trade's judgment awarding the

refund of the HMT, only the portion awarding

interest on the refund, and (2) to vacate and

remand the case to the Court of International

Trade. On June 9, 2000, the panel issued an

Errata Sheet which contained the following

amendment of its judgment:

At page 14, under CONCLUSION, replace "The

judgment of the Court of International Trade"

_with -- The portion of the judgment of the Court

of International Trade ordering interest

pursuant to 28 U.S.C. § 2411 as owing on the

principal amount adjudged --.

On June 12, 2000, we denied IBM's motion to

amend the opinion and judgment. The Supreme

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Court denied certiorari. IBM v. United States,

531 U.S. 1183 (2001).

IBM returned to the Court of International

Trade, asserting a claim to interest under the

Takings Clause or equitable restitution and

moving for summary judgment on its interest

claim. The Court of International Trade denied

the motion, stating: "The Court of Appeals did

not remand this matter for the court to consider

constitutional issues after plaintiff's [sic] sought

reconsideration in the appellate court on such

grounds. The appellate court simply reversed the

interest award aspect of the judgment." Final

Order 2002 Ct. Intl. Trade LEXIS 16, [slip op. ]

at 2. "It is up to [the Court of Appeals] to recall

the mandate in this matter, if possible. This

court may not amend the judgment of the

appellate court." 2002 Ct. Intl. Trade LEXIS 16,

[slip op.] at 3.

IBM timely appealed to this court. After both

IBM and the government had filed their initial

briefs, we decided two cases involving HMT

payers' entitlement to interest: United States

Shoe Corp. v. United States, 296 F.3d 1378 (Fed.

Cir. 2002); and Hohenberg Eros. Co., A.C. v.

United States, 301 F.3d 1299 (Fed. Cir. 2002).

United States Shoe held that the HMT was not a

taking, so that interest was not due, 296 F.3d at

1383, and that the equitabie doctrine of

restitution did not apply, id. at 1886. Hohenberg

applied the rule from United States Shoe and

6a

denied interest to other HMT payers. 301 F.3d at

1306.

In its reply brief in this case, IBM .

acknowledged that these cases made "IBM's

initial request for further proceedings before the

[Court of International Trade] ... moot" because

"the panel considering the instant appeal will be

obligated to follow the ... decisions to deny IBM's

constitutional and equitable claims for interest."

(Appellant's Reply Br. at 4.) It thus asked only

that we "vacate the [Court of International

Trade]'s Final Order in this case" to clear the

way for its petition for certiorari. Id.

We then asked the parties for additional

submissions. Letter to Counsel dated Jan. 24,

2003. We noted that "this case appears to be ©

resolved by" United States Shoe and Hohenberg,

as well as Arbon Steel Serv. Co., Inc. v. United

States, 315 F.3d 1332 (Fed. Cir. 2003), which

also applied the rule from United States Shoe,

id. at 1334-35, so that "the court need not reach

the question whether consideration of the merits

is foreclosed by this court's earlier decision." Id.

We therefore asked the parties to provide

additional submissions addressing “whether

there are any issues in this case that are not

resolved by the aforementioned decisions." Id. In

its response, IBM admitted that "the panel will

be bound to the substantive precedent

established in United States Shoe Corp." Letter

from Counsel dated Jan. 29, 2003. However, IBM

continued to urge that we "vacate the February

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21, 2002, order of the United States Court of

International Trade" so that "the record will be

absolutely clear that there are no impediments

to IBM's filing of a petition for a writ of

certiorari." Id. at 1-2. In its response, the

government also "agreed that these decisions

foreclose consideration of the substantive issues

raised in this appeal." Letter from Dep't of

Justice dated Jan. 23, 2003. However, the

government opposed vacating the Court of

International Trade's judgment because the

Court of International Trade "committed [no]

procedural error." Id. at 2.

We have jurisdiction over this appeal

pursuant to 28 U.S.C. § 1295(a)(5).

IT

Both parties agree that our decisions in

United States Shoe, Hohenberg, and Arbon Steel

resolve the underlying issues adversely to IBM,

although the plaintiffs in United States Shoe

and Hohenberg have petitioned for certiorari to

the Supreme Court. Hohenberg, petition for cert.

filed, (U.S. Feb 27, 2003) (No. 02-1286); United

States Shoe, petition for cert. filed, 71 U.S.L.W.

3567 (U.S. Feb 19, 2003) (No. 02-1221). IBM

nonetheless urges us to decide a procedural

issue: whether this court's mandate in

International Business Machines Corp. v. United

States, 201 F.3d 1367 (Fed. Cir. 2000), foreclosed

consideration of the merits of IBM's

8a

constitutional and equitable claims, as the Court

of International Trade held here.

We decline IBM's invitation to issue an

advisory opinion on this question.’ We are

bound by our earlier decisions holding that there

is no constitutional or equitable entitlement to

interest on HMT payments. Therefore, we need

not and do not decide whether the constitutional

and equitable theories of recovery were open on

the remand.

Iil

For the foregoing reasons, we affirm.

i Determination of the scope of our mandate is

not a jurisdictional issue. As we noted in Exxon

Chemical Patents v. Lubrizol Corp., 137 F.3d 1475

(Fed. Cir. 1998), "every appellate court judgment

vests jurisdiction in the district court to carry out

some further proceedings." Id. at 1483.

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INTERNATIONAL BUSINESS MACHINES,

CORP.,

Plaintiff,

Vv.

UNITED STATES,

Defendant.

Court No. 94-10-00625

UNITED STATES COURT

OF INTERNATIONAL

TRADE

2002 Ct. Intl. Trade

LEXIS 16; SLIP OP. 2002-17

February 21, 2002, Dated

PRIOR HISTORY:

IBM v. United States, 201 F.3d 1367, 2000 U.S.

App. LEXIS 681 (Fed. Cir., 2000)

DISPOSITION:

Plaintiff's motion to lift stay and enter judgment

granted in part. Plaintiff's motion for summary

judgment for award of interest denied and

matter terminated.

COUNSEL:

10a

Baker & McKenzie (Susan G. Braden, William

D. Outman, II, Kevin M. O'Brien, Teresa A.

Gleason and Michael E. Murphy) for plaintiff.

Robert D. McCallum, Jr., Assistant Attorney

General, David M. Cohen, Director, Jeanne E.

Davidson, Deputy Director, Todd M. Hughes,

Assistant Director, Jeffrey A. Belkin, Trial

Attorney, Commercial Litigation Branch, Civil

Division United States Department of Justice,

for defendant.

JUDGES:

HONORABLE JANE A. RESTANI, JUDGE.

OPINION BY:

JANE A. RESTANI

OPINION:

FINAL ORDER

This matter was the original test case

regarding interest on Harbor Maintenance Tax

refunds. Before the court is plaintiffs motion of

February 4, 2001 to lift stay and enter judgment.

After the court's original judgment in favor of

plaintiff herein, the Court of Appeals reversed

-the part of the judgment finding interest owing

under the applicable statute. See IBM v. United

States, 201 F.3d 1367 (Fed.Cir. 2000), rev'g 22

C.LT. 519 (Ct. Int'l Trade 1998), amended by

Errata dated June 9, 2000 (partial reversal

lla

substituted for remand). Plaintiff did not raise

its constitutional arguments (which this court

did not reach) in its response brief in the appeal.

After mandate issued, plaintiff attempted to

raise such issues here and defendant opposed the

attempt. See Pl.'s Mem. Supp. Summ. J. at 3;

Def.'s Resp. at 4-7; Pl.'s Reply at 12-16. The court

stayed this case pending resolution of the

constitutional issues in other cases. See Order

dated June 4, 2001. i

No party with a judgment for refund of

Harbor Maintenance Taxes pursuant to 28

U.S.C. § 1581() jurisdiction, and whose interest .

award depended on a favorable resolution of this

action, asked the court to amend such judgment

to reference a different test case prior to partial

reversal in this matter, even though

constitutional issues had not been placed

squarely before the appellate court. Thus, this

remains the test case for all such judgments, and

the court finds that this matter should be

completed at the earliest time possible.

The Court of Appeals did not remand this

matter for the court to consider constitutional

issues after plaintiff's sought reconsideration in

the appellate court on such grounds. The

appellate court simply reversed the interest

award aspect of the judgment. See JBM, 201

F.3d at 1374-75 (subsequent errata amending

conclusion to reverse "the portion of the

judgment of the Court of International Trade

ordering interest pursuant to 28 U.S.C. § 2411

12a

as owing on the principal amount adjudged.").

Therefore, the court will not consider plaintiff's

March, 2001 motion for summary judgment

further. If the appellate court intended this court

to consider the issue, the court would deny any

award of interest for the reasons stated in

Swisher Int'l, Inc. v. United States, 2001 Ct. Intl.

Trade LEXIS, (2001).

If the Court of Appeals reverses Swisher or

any other HMT interest case addressing

constitutional claims, it is up to it to recall the

mandate in this matter, if possible. This court

may not amend the judgment of the appellate

court.

Accordingly, plaintiffs motion of February 4,

2002, to lift stay and enter judgment is granted

in part, plaintiffs motion for summary judgment

for award of interest is denied and this matter is

terminated.

13a

INTERNATIONAL BUSINESS MACHINES

CORPORATION v. UNITED STATES

00-482

SUPREME COURT OF

THE UNITED STATES

531 U.S. 1183; 121 S. Ct.

1167; 148 L. Ed. 2d 1025

February 20, 2001, Decided

PRIOR HISTORY:

IBM v. United States, 201 F.3d 1367, 2000 U.S.

App. LEXIS 681 (Fed. Cir. 2000)

JUDGES:

Rehnquist, Stevens, O'Connor, Scalia, Kennedy,

Souter, Thomas, Ginsburg, Breyer.

OPINION:

Petition for writ of certiorari to the United

States Court of Appeals for the Federal Circuit

denied. Justice Stevens took no part in the

consideration or decision of this petition.

14a

INTERNATIONAL BUSINESS MACHINES

CORPORATION, Plaintiff-Appellee,

v.

UNITED STATES,

Defendant-Appellant.

98-1590

UNITED STATES COURT

OF APPEALS FOR THE

FEDERAL CIRCUIT

2000 U.S. App. LEXIS

15299

May 31, 2000, Decided

15a

NOTICE:

DECISION WITHOUT PUBLISHED OPINION

PRIOR HISTORY:

Original Opinion of January 19, 2000. JBM ov.

United States, 201 F.3d 1367, 2000 U.S. App.

LEXIS 681 (Fed. Cir., 2000)

OPINION:

ORDER

A combined petition for panel rehearing and

rehearing en banc having been filed by the

APPELLEE, and a response thereto having been

invited by the court and filed by the

APPELLANT,! and the petition for rehearing

been referred to the panel that heard the appeal,

and thereafter the petition for rehearing en banc

and response having been referred to the circuit

judges who are in regular active service,

UPON CONSIDERATION THEREOF, it is

ORDERED that the petition for rehearing be,

and the same hereby is, DENIED and it is

further

ORDERED that the petition for rehearing en

banc be, and the same hereby is, DENIED.

/ Two amici curiae briefs and the Appellant's

supplemental response were also filed.

l6a

The mandate of the court will issue on June 7,

2000.

INTERNATIONAL

BUSINESS MACHINES

CORPORATION,

Plaintiff-Appellee,

v.

UNITED STATES,

Defendant-Appellant.

98-1590

UNITED STATES COURT

OF APPEALS FOR THE

FEDERAL CIRCUIT

201 F.3d 1367; 2000 U.S.

App. LEXIS 681; 2000-1 U.S.

Tax Cas. (CCH) P70,134; 85

A.F.T.R.2d (RIA) 518

January 19, 2000, Decided

PRIOR HISTORY:

Appealed from: U.S. Court of International

Trade. Judge Jane A. Restani. IBM v. United

States, 22 Ct. Int'l Trade 519, 1998 Ct. Intl.

Trade LEXIS 73 (1998)

DISPOSITION:

REVERSED.

18a

JUDGES:

Before PLAGER, CLEVENGER, and RADER,

Circuit Judges.

OPINION:

PLAGER, Circuit Judge. —

The United States ("the Government”)

appeals a judgment of the United States Court of

International Trade, which awarded interest on

refunds of the Harbor Maintenance Tax

("HMT"). The Supreme Court had earlier held

that the HMT, as applied to exports, violates the

Export Clause of the United States Constitution,

and cannot be lawfully collected.2 This case was

filed to test whether the Government is obligated

by law to pay interest on these refunds.

The Court of International Trade held that

appellee may recover interest on refunds of HMT

payments resulting from the Supreme Court's

decision.2 The trial court adjudged that 28

U.S.C. § 2411, which provides for post-payment

interest on tax refunds, applies. We conclude

that neither § 2411 nor any other statutory

2 United States v. United Siates Shoe Corp., 523

U.S. 360, 118 S. Ct. 1290, 140 L. Ed. 2d 453 (1998).

3 IBM v. United States, 1998 Ct. Intl. Trade

LEXIS 73, No. 94-10-00625, 1998 WL 325156 (Ct.

Int'l Trade June 17, 1998).

4 All references to the United States Code are to

the 1994 edition unless otherwise indicated.

19a

provision provides the necessary authorization

for an award of interest to appellee on its HMT

refunds. The judgment of the trial court is

reversed.

BACKGROUND

The HMT, enacted by Congress as part of the

Water Resources Development Act of 1986, 26

U.S.C. § 4461-62 (1994), is an ad valorem tax

imposed on shipments of commercial cargo which

pass through the country's ports. Several

thousand exporters challenged the

constitutionality of the HMT as applied to

exporters. In a test case, a three-judge panel of

the Court of International Trade held that the

HMT violates the Export Clause of the United

States Constitution. See United States Shoe

Corp. v. United States, 19 C.I.T. 1284, 907 F.

Supp. 408 (1995). This decision was affirmed by

a five-judge panel of this court, see United States

Shoe Corp. v. United States, 114 F.3d 1564 (Fed.

Cir. 1997), which decision was affirmed by the

Supreme Court, see United States v. United

States Shoe Corp., 523 U.S. 360, 118 S. Ct. 1290,

140 L. Ed. 2d 453 (1998).

In the course of the initial litigation before the

Court of International Trade, that court issued

an Order declaring that the plaintiff was entitled

to a refund "together with interest and costs as

provided by law." United States Shoe Corp. v.

United States, 19 C.1.T. 1413, 924 F. Supp. 1191,

1191 (Ct. Int'l Trade 1995). Subsequently the

20a

court determined that the question of interest on

the refund judgment "is not a matter without

controversy and it cannot be resolved as a simple

clerical matter." U.S. Shoe, 20 Ct. Int'l Trade

206, 207 (1996). The Court of International

Trade called for briefing on the issue of whether

the exporters may recover interest. However,

before the court issued its decision on the

question of plaintiff's entitlement to interest, the

Government filed a notice of appeal from the

court's earlier decision on the constitutional

issue. Thus, the interest issue was not addressed

during the appellate proceedings that followed.

While the appeal of the constitutional issue

was proceeding, the Court of International Trade

decided the question of whether the exporters

were entitled to interest on their refunds. The

court acknowledged that the United States is

immune from paying interest absent express

congressional consent, citing Library of Congress

v. Shaw, 478 U.S. 310, 314, 92 L. Ed. 2d 250, 106

S. Ct. 2957 (1986). See U.S. Shoe, 20 Ct. Int'l

Trade at 207. The court found the necessary

express authorization with regard to HMT

refunds in 28 U.S.C. § 2411, which provides that

"in any judgment of any court rendered ( ...

against the United States .. ) for any

overpayment in respect of any internal-revenue

tax, interest shall be allowed at the overpayment

rate established under [26 U.S.C. § 6621] upon

the amount of the overpayment ...." U.S. Shoe, 20

Ct. Int'l Trade at 207-08.

2la

After the Supreme Court affirmed the

unconstitutionality of the HMT as applied to

exports, the Court of International Trade

designated this case as a companion test case to

U.S. Shoe to give the Government the

opportunity to appeal the award of interest. See

IBM, 1998 WL 325156, at *1. The Court of

International Trade deemed filed in this case the

briefs concerning the issue of interest filed in the

U.S. Shoe proceedings as well as its 1996 U/S.

Shoe opinion awarding interest. See id. This

appeal followed. |

DISCUSSION

The issue of whether Congress has expressly

authorized interest on HMT refunds is one of

statutory interpretation, a question of law that

we review independently and without deference

to the trial court. See Medline Indus., Inc. v.

United States, 62 F.3d 1407, 1409 (Fed. Cir.

1995) (questions of law subject to full and

independent review). The oft-repeated general

principle is that the United States is immune to

claims for interest unless Congress has waived

immunity by expressly consenting to an award of

interest. See Shaw, 478 US. at 314.

Congressional consent must be unambiguous.

See id. at 318.

The HMT statutory provisions are relatively

brief, and are codified in two sections, numbered

4461 and 4462, as "Subchapter A--Harbor

Maintenance Tax" in Chapter 36-Certain Other

22a

Excise Taxes, as part of Title 26-Internal

Revenue Code. Section 4461 imposes the tax,

and section 4462 provides definitions and special

rules. Nothing in Subchapter A _ expressly

addresses the question of whether in a refund of

taxes paid thereunder, the payor is entitled to

interest on the refund. The only provisions of

Subchapter A that bear on the question are

found in two paragraphs in subsection 4462(f),

entitled "Extension of provisions of law

applicable to customs duty."

Paragraph (1) of subsection (f) states: "Except

to the extent otherwise provided in regulations,

all administrative and enforcement provisions of

customs laws and regulations shall apply in

respect of the tax imposed by this subchapter ...."

Paragraph (3) states: "The tax imposed by this

subchapter shall not be treated as a tax for

purposes of subtitle F or any other provision of

law relating to the administration and

enforcement of internal revenue taxes." (Subtitle

F of Title 26 deals with the procedure and

administration of the internal revenue system.)

It appears abundantly clear from these

provisions that, even though the HMT is codified

as an excise tax and is part of the Internal

Revenue Code ("IRC"), Congress intended the

administration and enforcement of the tax to be

treated as if the tax was a customs duty, and not

a tax under the IRC.

yf

Because the statutory provisions which

established the HMT do not explicitly authorize

interest payments on refunds of the tax, if

Congress authorized such payments the

authorizing statute must be found elsewhere.

And if such a statute is found, we must

determine whether Congress by the provisions of

subsection (f) quoted above has precluded its

application to an HMT refund. We have been

urged to look at several possible sources for the

authorization; we shall examine each in turn.

1. Subtitle F of Title 26, the Internal Revenue

Code, in § 6611(a), states that "interest shall be

allowed and paid upon any overpayment in

respect of any internal revenue tax at the

Overpayment rate established under section

6621." This provision of the Code cannot apply

because the HMT statute, § 4462(f)(3),

specifically exempts the HMT from all provisions

in subtitle F of Title 26: "the [HMT tax] shall not

be treated as a tax for purposes of subtitle F or

any other provision of law relating to the

administration and enforcement of internal

revenue’ taxes." Thus, any Congressional

authorization of interest payments on HMT

refunds must be found outside of subtitle F.

The Court of International Trade found the

necessary express authorization for interest

payments in another Title of the United States

Code, namely Title 28, which is entitled

"Judiciary and Judicial Procedure." 28 U.S.C. §

2411 provides, in relevant part, that "in any

24a .

judgment of any court rendered ( ... against the

United States ...) for any overpayment in respect

of any internal-revenue tax, interest shall be

allowed at the overpayment rate established

under [26 U.S. C. § sit upon the amount of the

overpayment ..

In its iii of § 2411, the Court of

International Trade first determined that the

HMT is an internal revenue tax within the

meaning of § 2411. See U.S. Shoe, 20 Ct. Int'l

Trade at 208. The court then considered whether

the two paragraphs of the HMT statute quoted

above precluded application of § 2411 to HMT

refunds. The court concluded that the HMT

refund process would not constitute either

"administration" or "enforcement" of the HMT,

and that the HMT statute did not exempt HMT

refunds from application of § 2411. See U.S.

Shoe, 20 Ct. Int'l Trade at 208-09.

For purposes of analysis, we accept the

argument of appellee and the holding of the

Court of International Trade that payment of the

HMT by exporters is an "internal revenue tax"

within the meaning of § 2411. Because Congress

codified the HMT as part of Title 26 of the

United States Code, entitled "Internal Revenue

Code," we may reasonably conclude that

Congress considered the HMT to be an internal

revenue tax. Furthermore, while it may be true

that the constitutionality of the HMT was

challenged because the HMT taxed goods

exported out of the United States, the HMT is

25a

clearly derived from internal sources--the U.S.

exporter--rather than external sources--the

foreign recipient; HMT revenues were collected

in the United States from domestic companies

based on their use of ports and harbors in this

country. Thus both the structure and the content

of the HMT point toward it being an internal

revenue tax, and thus entitled on refund to the

interest award provided under § 2411.

Furthermore, we accept appellee's contention

that the language of § 2411 is broad enough, and

has been so construed, as to cover the case before

us. The question, then, is whether the express

provisions of the HMT statute preclude

application of § 2411 to refunds of the tax. As

previously noted, the HMT statute in subsection

(f) of § 4462 directs that "the [HMT] shall not be

treated as a tax for purposes of subtitle F or any

other provision of law relating to the

administration and enforcement of internal

revenue taxes." 26 U.S.C. § 4462(f)(3) (emphasis

added). If the refund process for the

unconstitutionally-levied HMT is not related to

the "administration and enforcement" of an

internal revenue tax, then § 2411 of Title 28

would appear to be ample authorization for

interest to be paid on the refund. If, however, the

refund process for this internal revenue tax

relates to its administration and enforcement,

the plain language of the HMT statute would bar

the use of § 2411 as a statutory basis for an

award of interest on HMT refunds.

26a

This is a question of statutory interpretation.

We begin with the language of the statute itself.

If that language is clear and unambiguous, then

it controls, and we need not--indeed we may not--

go further. See Robinson v. Shell Oil Co., 519

U.S. 337, 340 (1997) ("Our first step in

interpreting a statute is to determine whether

the language at issue has a plain and

unambiguous meaning with regard to the

particular dispute in the case. Our inquiry must

cease if the statutory language is unambiguous

and ‘the statutory scheme is coherent and

consistent." (quoting United States v. Ron Pair

Enters., Inc., 489 U.S. 235, 240, (1989));

Muwwakkil v. Office of Personnel Management,

18 F.8d 921, 924 (Fed. Cir. 1994) ("When

statutory interpretation is at issue, the plain and

unambiguous meaning of a statute prevails.").

To determine whether the statutory language is

plain and unambiguous, we look at "the

language itself, the specific context in which that

language is used, and the broader context of the

statute as a whole." Robinson, 519 U.S. at 341.

‘Because the HMT statute does not define

"administration and enforcement," we assume

that the terms have their ordinary meaning, for

which we may consult a dictionary. See Best

Power Tech. Sales Corp. v. Austin, 984 F.2d

1172, 1177 (Fed. Cir. 1993) ("It is a basic

principle of statutory interpretation ... that

undefined terms in a statute are deemed to have

their ordinarily understood meaning. For that

27a

meaning, we look to the dictionary.") (citations

omitted). Black's Law Dictionary defines

"administer" as "to manage or conduct." Black's

Law Dictionary 44 (6th ed. 1990). "Enforce" is

defined as "to put into execution; to cause to take

effect; to make effective; as, to enforce a

particular law, a writ, a judgment, or the

collection of a debt or fine; to compel obedience

to." Id. at 528.

_ Applying these definitions to the HMT

statute, we read "administration and

enforcement of internal revenue taxes" broadly

to encompass not only management of the tax

system, including the assessment and collection

of tax payments and issuance of refunds and

interest on those refunds by the agency

responsible, but also enforcement of the tax laws,

including the obtaining and enforcement of

judgments against both taxpayers and the

United States. Nothing in the language of the

statute limits "administration and enforcement"

to the narrow interpretation applied by the

Court of International Trade, i.e., "matters of

routine administration and enforcement by an

agency." U.S. Shoe, 20 Ct. Int'l Trade at 208.

Examination of the phrase "administration

and enforcement" in the context of 26 U.S.C. §

4462(f)(3) supports this broader interpretation.

Again, that paragraph of the statute exempts

the HMT from "subtitle F or any other provision

of law relating to the administration and

enforcement of internal revenue taxes." Subtitle

28a

F of the Internal Revenue Code is entitled

"Procedure and Administration." In addition to

chapters addressing agency responsibilities such

as "Assessment" (chapter 63), "Collection"

(chapter 64), and "Abatements, credits, and

refunds" (chapter 65), subtitle F includes a

chapter on "Judicial proceedings" (chapter 76).

That chapter includes provisions regarding civil

actions by the United States (subchapter A),

proceedings by taxpayers and third parties

(subchapter B), the Tax Court (subchapter (),

and court review of Tax Court decisions

(subchapter D).

A fair reading of the phrase "subtitle F or any

other provision of law" as used by Congress in

the HMT statute would thus include both the

administrative and judicial processes as

activities that relate to the "administration and

enforcement" of taxes. Furthermore, interest on

a tax refund would seem to be expressly included

in those activities, since subtitle F itself contains

a provision for interest on tax refunds, 26 U.S.C.

§ 6611(a). Accordingly, we are forced to conclude

that Congress intended the phrase

"administration and enforcement" to encompass

not only agency action, but also judicial

enforcement of the tax laws, including a judicial

award of interest on tax refunds.

This interpretation is consistent with the

other paragraph of subsection (f) of the HMT

statute, § 4462(f)(1), quoted above, which

provides that "all administrative and

29a

enforcement provisions of customs laws and

regulations shall apply in respect of the [HMT]

as if such tax were a customs duty." The Tariff

Act of 1930, codified in the United States Code in

Chapter 4 of Title 19, entitled "Customs Duties,"

provides for the administration and enforcement

of customs duties in Subtitle III, entitled

"Administrative Provisions." As discussed below,

that subtitle includes a provision for interest on

refunds of customs duties. See 19 U.S.C. § 1505.

Section 4462(f)(3) is complementary to §

4462(f)(1), ie, the administration and

enforcement provisions relating to tax laws

cannot apply to the HMT, see § 4462(£)(3),

because the administration and enforcement

provisions of the customs laws do apply to the

HMT, see § 4462(f)(1). Accordingly, because an

interest provision such as 19 U.S.C. § 1505(c) is

an administrative and enforcement provision of

the customs laws, the section of Title 28, § 2411,

which provides for interest on tax refunds, is a

"provision of law relating to the administration

and enforcement of internal revenue taxes"

within the meaning of 26 U.S.C. § 4462(f)(3) and

cannot apply to the HMT.

Although it is unnecessary to consider the

legislative history because the statutory

language is clear from the language itself and its

context, we note that the legislative history does

not contradict the plain meaning of the HMT

statute. The Senate Finance Committee report,

cited by the Court of International Trade, states

30a

that it is more appropriate for the Customs

Service, rather than the Internal Revenue

Service, to collect and administer the HMT

because the Customs Service has a strong

presence at ports of entry and experience at

appraising merchandise. See S. Rep. No. 99-228,

reprinted in 1986 U.S.C.C.A.N. 6705, 6714. In

order to facilitate the administration of the HMT

by Customs, the report explains, the statute

provides that all administrative and enforcement

provisions of the customs law and regulations

apply to the HMT as if it were a customs duty.

See id. at 6714-15.

Though nothing in the legislative history

defines the phrase "administration and

enforcement," and the report is silent on the

issue of whether a provision for interest on

refunds’ relates to administration and

enforcement, the legislative history confirms

that § 4462(f)(3) was enacted as a counterpart to

§ 4462({(1) so that the administrative and

enforcement provisions of only the customs

statutes, and not the tax laws, would apply to

the HMT. See id. at 6715. As noted above, the

administrative provisions of the customs laws

include interest provisions. Because Congress

did not specifically exclude interest provisions

from "administrative and enforcement

provisions" with respect to § 4462(f)(1), we must

conclude that the interest provisions of the

customs laws, and not the tax laws, apply to the

HMT.

3la

2. Having concluded that the HMT is to be

treated as a customs duty for administrative and

enforcement purposes, we look to the customs

statutes for an express authorization of interest.

Two provisions, 28 U.S.C. § 2644 and 19 U.S.C.

§ 1505(c), were raised before the Court of

International Trade and by amici on appeal. We

agree with the Court of International Trade that

these customs provisions do not provide for

interest on HMT refunds on the facts of this

case. See U.S. Shoe, 20 Ct. Int'l Trade at 208-09.

28 U.S.C. § 2644 permits a judicial award of

interest upon a judgment in a civil action

brought pursuant to 19 U.S.C. § 1515 to contest

the denial of an administrative protest. Appellee,

however, did not pursue a refund of HMT

payments through a customs protest. Indeed, in

the earlier test case, the Court of International

Trade had jurisdiction over the constitutional

challenge to the HMT under 28 U.S.C. § 1581(i),

the residual jurisdiction provision, and not under

28 U.S.C. § 1581(a), the provision that gives the

Court of International Trade jurisdiction over

actions filed under 19 U.S.C. § 1515. See US.

Shoe, 523 U.S. at 366. Because appellee did not

file an administrative protest and did not contest

the denial of such a protest, appellee is not

entitled to interest under 28 U.S.C. § 2644.

The customs laws also provide for pre-

judgment interest on certain excess duties paid

to Customs. Specifically, "interest on excess

moneys deposited shall accrue ... from the date

32a

the importer of record deposits estimated duties,

fees and interest ... to the date of liquidation or

reliquidation of the applicable entry or

reconciliation." 19 U.S.C. § 1505(c) (emphasis

added); see also 19 U.S.C. § 1520(d) (1988)

(repealed 1993) (authorizing interest "if a

determination is made to reliquidate an entry").

On its face, the statute contemplates an entirely

different factual scenario from the one before us.

However, amici suggest that by substituting the

exporter for the "importer of record," the HMT

quarterly report for the "entry," and Customs'

acceptance of the HMT payment for

"liquidation," we can apply § 1505(c) to provide

interest on HMT refunds. We are without power

to rewrite a Congressional enactment to make it

fit a case for which it was clearly not intended,

no matter how compelling the case, particularly

in light of the Supreme Court's mandate that

Congress must expressly consent to an award of

interest. See Shaw, 478 U.S. at 314. Accordingly,

§ 1505(c) does not authorize interest on HMT

refunds.

In sum, we are bound by the rule that the

United States is liable for interest only if

Congress has waived sovereign immunity by

expressly consenting to an award of interest.

Section 4462(f) provides that the HMT is to be

treated as a customs duty, and not as a tax, for

purposes of statutory provisions relating to

administration and enforcement. Because §

2411, the provision on which appellee and the

33a

trial court relied, is a provision of law relating to

the administration and enforcement of taxes, the

HMT statute precludes the application of § 2411

to provide interest on refunds of the HMT.

Furthermore, the statutory provisions of the

customs laws dealing with interest on refunds do

not entitle this appellee, on these facts, to

interest on HMT refunds.

Congress has waived sovereign immunity in

both the tax code and the customs laws to permit

interest to be paid on certain refunds to allow for

the time value of money when the Government

has had the use for a period of time of money to

which it is not lawfully entitled. Congress has

considered this to be only fair and proper. In the

case before us, appellee makes a case for equal

treatment. After thorough consideration,

however, we are unable to find in the existing

statutory framework, nor has any been cited to

us, the necessary Congressional purpose to

provide for interest on these particular refunds

under the HMT. If relief for these taxpayers is to

be granted, Congress must grant it.

CONCLUSION

The judgment of the Court of International

Trade must be, and is,

REVERSED.

34a

INTERNATIONAL

BUSINESS MACHINES

CORP.,

Plaintiff,

v.

THE UNITED STATES,

Defendant,

Court No. 94-10-00625

UNITED STATES COURT

OF INTERNATIONAL

TRADE

22 C.I.T. 519; 1998 Ct.

Intl. Trade LEXIS 73; SLIP

OP. 98-78

June 17, 1998, Dated

JUDGE:

Jane A. Restani, Judge.

JUDGMENT:

WHEREAS the parties consent to entry of

judgment with interest in this case for the

purpose of permitting the Government an

35a

opportunity to appeal the award of interest, it is

hereby:

1. ORDERED that all briefs on the issue of

interest and the opinion relating to the same,

1996 Ct. Intl. Trade LEXIS 45, Slip Op. 96-032,

filed in United States v. United States Shoe Co.,

Court No. 94-11-00668 be deemed filed herein.

2. ORDERED that a money judgment is

awarded to plaintiff in the amount of §$

330,689.00, to be paid by the defendant to the

plaintiff within 90 days of the date of this

Judgment; and

3. ORDERED that interest pursuant to 28

U.S.C. § 2411 is owing on the aforesaid principal

amount. The payment obligation as to interest is

stayed until the time for appeal expires or the

appeal is finally resolved.

Jane A. Restani

Judge of the United States Court of

International Trade

36a

Relevant Constitutional, Statutory, and

Regulatory Provisions

U.S. Const. art. I, § 9, cl. 5

No Tax or Duty shall be laid on articles

exported from any State.

U.S. CONST. amend. 5

No person shall . . . be deprived of life, liberty,

or property, without due process of law; nor

shall private property be taken for public use,

without just compensation.

19 U.S.C. 1505(b)

llection or refund of duties. fees. and

interest due upon liquidation or reliquidation.

The Customs Service shall . . . refund any

excess moneys deposited, together with

interest thereon, as determined on a

liquidation or reliquidation.

19 U.S.C. 1505(c)

Interest. Interest on excess moneys deposited

shall accrue . . . from the date the importer of

record deposits estimated dues, fees, and

interest . . . to the date of liquidation or

reliquidation of the applicable entry or

reconciliation.

26 U.S.C. 4462(f)(1)

Except to the extent otherwise provided in

regulations, all administrative and

enforcement provisions of customs laws and

37a

regulations shall apply in respect of the [HMT]

(and in respect of persons liable therefor) as if

such tax were a customs duty.

26 U.S.C. 4462(f)(3)

The tax imposed by this subchapter shall not

be treated as a tax for purposes of subtitle F or

any other provision of law relating to the

administration and enforcement of internal

revenue taxes.

28 U.S.C. 1581

(a) The Court of International Trade Shall

have exclusive jurisdiction of any civil action

commenced to contest the denial of a protest,

in whole or in part, under section 515 of the

Tariff Act of 1930.

x***

(i) In addition to the jurisdiction conferred

upon the Court of International Trade by

subsections (a)-(h) of this section and subject

to the exception set forth in subsection (j) of

this section, the Court of International Trade

shall have exclusive jurisdiction of any civil

action commenced against the United States.

its agencies, or its officers, that arises out of

any law of the United States providing for —

(1) revenue from imports or tonnage:

(2) tariffs, duties, fees, or other taxes on the

importation of merchandise for reasons

other than the raising of revenue:

38a

(3) embargoes or other quantitative

restrictions on the importation of

merchandise for reasons other than the

protection of the public health or safety; or

(4) administration and enforcement with

respect to the matters referred to in

paragraphs (1)-(3) of this subsection and

subsections (a)-(h) of this section.

28 U.S.C. 2411

In any judgment of any court rendered ... for

any overpayment in respect of any internal-

revenue tax, interest shall be allowed.