Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_08-cv-01994/USCOURTS-azd-2_08-cv-01994-0/pdf.json

Nature of Suit Code: 870
Nature of Suit: Tax Suits
Cause of Action: 26:7422 IRS: Refund Taxes

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Although Plaintiff requested oral argument on the Motion, because both the parties

submitted memoranda discussing the law and evidence in support of their positions and oral

argument would not have aided the Court’s decisional process, the Court will not set oral

argument. See e.g., Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998); Lake at Las Vegas

Investors Group, Inc. v. Pacific. Dev. Malibu Corp., 933 F.2d 724, 729 (9th Cir. 1991). 

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Allied Waste Industries, Inc.,

Plaintiff, 

vs.

United States of America,

Defendant. 

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No. CV 08-1994-PHX-JAT

ORDER

Pending before the Court is Defendant’s Motion for Stay (Doc. #20).1

 Defendant asks

the Court to stay this case indefinitely pending the outcome of Browning-Ferris Indus. v.

United States, No. 05-738T (Ct. Fed. Cl.). Although the Court of Federal Claims case and

the case pending here involve different tax years, they undisputedly involve the same

substantive issue – the treatment of a tax shelter transaction. Defendant therefore argues that

in the interests of comity and judicial economy, the Court should not take any action in this

case until the Court of Federal Claims determines how to treat the tax shelter at transaction.

Case 2:08-cv-01994-JAT Document 26 Filed 04/14/09 Page 1 of 3
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The plaintiff in the Court of Federal Claims case was a corporate predecessor of the

Plaintiff here. For ease of reference, the Court will collectively refer to the two plaintiffs as

“Plaintiff.” 

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Although Plaintiff lost its bid to voluntarily dismiss the Browning-Ferris case

without prejudice, its pleadings in this case indicate that it intended to dismiss that case

regardless of the ruling on its motion. If Plaintiff does indeed dismiss the Browning-Ferris

case, then Defendant’s concerns regarding duplicative litigation are no longer as relevant.

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Defendant argues that Plaintiff2

 originally filed its tax refund suit with the Court of

Federal Claims because another taxpayer had recently won a refund suit involving the same

type of tax shelter at issue in Plaintiff’s case. The Federal Circuit, however, later reversed

that decision. Defendant alleges that Plaintiff sought to dismiss the Court of Federal Claims

case after that reversal in order to avoid unfavorable binding precedent. Defendant asserts

that Plaintiff filed the pending suit with this Court in an effort to possibly gain a more

favorable decision. 

Plaintiff has twice attempted to voluntarily dismiss without prejudice the BrowningFerris case. The first time, Plaintiff moved to dismiss on jurisdictional grounds. The trial

court agreed with Plaintiff and dismissed the suit. (Declaration of Mr. Hankla, Doc. #21, Ex.

B). The Federal Circuit reversed and remanded for further proceedings. (Doc. #21, Ex. C).

Most recently, Plaintiff filed a voluntary motion to dismiss pursuant to Federal Rule of Civil

Procedure 41. (Doc. #21, Ex. D). Plaintiff planned to voluntarily dismiss its claims

regarding the 1997 and 1998 tax years, then move to amend the pleading in this case to

include its claims for those two years. The Court of Federal Claims denied Plaintiff’s motion

for voluntary dismissal without prejudice on March 18, 2009. (Doc. #25, Ex. A).

The Court recognizes that it has the inherent authority to stay this case. Rohan ex rel.

Gates v. Woodford, 334 F.3d 803, 817 (9th Cir. 2003). The Court further recognizes that,

at times, under principles of comity, courts have attempted avoid duplication. See e.g.

Pacesetter Sys. Inc. v. Medtronic, Inc., 678 F.2d 93, 96 (9th Cir. 1982).3

 Finally, the Court

acknowledges that Plaintiff has engaged in some serious gamesmenship in choosing the

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venues for its respective lawsuits. 

Nonetheless, in the interest of case management, the Court cannot allow this action

to languish on its docket for the years it could possibly take to finally resolve the BrowningFerris case. The Court therefore will not grant a motion to stay all proceedings in this case

for an indefinite period of time. The Court’s ruling on the Motion to Stay (Doc. #20),

however, does not in any way dispose of Defendant’s collateral estoppel argument.

Defendant may bring the appropriate motion on that issue at the appropriate time. If Plaintiff

dismisses the Browning-Ferris case with prejudice as it indicated it would in its pleadings,

then that time may come sooner rather than later.

Accordingly,

IT IS ORDERED DENYING Defendant’s Motion for Stay (Doc. #20). Defendant

shall file its responsive pleading within ten days of the date of this Order.

DATED this 14th day of April, 2009.

Case 2:08-cv-01994-JAT Document 26 Filed 04/14/09 Page 3 of 3