Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-05046/USCOURTS-cand-3_07-cv-05046-0/pdf.json

Parties Involved:
Fletcher H. Hyler
Plaintiff
United States of America
Defendant

Document Text:

United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

FLETCHER H. HYLER,

Plaintiff,

 v.

UNITED STATES OF AMERICA,

Defendant. /

No. C 07-05046 CRB

ORDER GRANTING MOTION TO

DISMISS

Now pending before the Court is a motion to dismiss filed by Defendant United States

of America pursuant to Federal Rule of Civil Procedure 12(b)(1). Defendant requests that

the Court dismiss Plaintiff Hyler’s suit to recover payment of past taxes and penalties on the

ground that this Court lacks jurisdiction under 26 U.S.C. § 6532. Defendant argues that

Hyler filed this suit after the two-year period for such filing had expired. Circuit law leads

this Court to find that although the limitations period set forth in § 6532 can be equitably

tolled, this case does not merit such a remedy. Accordingly, the motion to dismiss is

GRANTED and the hearing scheduled for Friday, January 25, 2008, is VACATED.

BACKGROUND

Hyler filed his complaint on October 1, 2007, suing for refund of tax and penalty

payments made pursuant to a Trust Fund Recovery Penalty assessed against him. Compl. ¶1. 

According to the complaint, Hyler paid the existing taxes and penalties, totaling over

$300,000, on or about February 27, 2004. Stier Declaration at exhibits 1-5; Compl. ¶3. 

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Hyler subsequently filed for bankruptcy in October of 2004. Stier at ex. 6. He then filed for

a refund of the taxes and penalties; the IRS later denied this request in certified letters sent to

Hyler, dated June 7, 2005. Compl. ¶4. These letters included instructions that if Hyler

wished to contest the denial of his claim, he should file suit in Federal District Court within

two years of the date of the letters. Stier at exs. 8-11. On June 6, 2007, Hyler filed suit in the

United States Tax Court, which later dismissed his suit for lack of jurisdiction. Compl. ¶¶ 5,

8.

Hyler’s complaint includes two prayers for relief. Id. ¶16. The only prayer for relief

squarely before the Court is a request for a refund of the taxes and penalties at issue. 

Defendant has moved for dismissal of the complaint on the ground that § 6532(a) requires a

taxpayer to file such a suit within two years of the mailing of a claim denial notice. United

States Motion at 4-5. Hyler asserts that he filed an action in Tax Court prior to the expiration

of the limitations period under § 6532(a) and thus his filing in this Court should also be

considered timely. Id. ¶¶ 6-8. This appears to be an implicit request for equitable tolling of

the statute of limitations in § 6532(a).

DISCUSSION

Defendant argues that although Hyler paid the assessed taxes and penalties, filed a

timely refund claim, and received a certified denial of said claim, this Court lacks jurisdiction

to hear the case because Hyler filed suit after the expiration of the period of limitations set

forth in § 6532(a) of the Internal Revenue Code. United States Motion at 4-5. Defendant

additionally argues that Hyler lacks standing to file this suit because his interest in a claim for

a refund became property of the bankruptcy estate once he filed for protection under the

bankruptcy laws. The Court does not reach this latter argument as the time limitation in 

§ 6532(a) bars the Court’s jurisdiction.

A. Limitations on Filing Suit Under § 6532(a)

Hyler filed this suit more than two years after the government sent him letters

rejecting his refund claim. Section 6532(a) states that any suit for “the recovery of any

internal revenue tax, penalty, or other sum . . . [must be filed within] 2 years from the date of

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Though the plaintiff’s complaint does not expressly suggest equitable tolling and, in fact,

denies requesting any equitable remedy, this is the most logical reading of the original

complaint. See Hyler Response to Motion to Dismiss, at 3. 

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mailing . . . a notice of the disallowance of the part of the claim to which the suit or

proceeding relates.” Hyler’s complaint suggests that this limitation should be waived,

presumably through equitable tolling.1

 Equitable tolling can be “read into every federal

statute of limitation.” Holmberg v. Armbrecht, 327 U.S. 392, 397 (1947); see Fed. Election

Comm’n v. Williams, 104 F.3d 237, 240 (9thCir. 1996). The doctrine is further presumed to

apply in suits against the United States. See Irwin v. Dep’t of Veterans Affairs, 498 U.S. 89,

95-96 (1990). One important exception to this presumption is when a statute uses especially

detailed, technical language, which indicates that Congress did not intend for courts to read

equitable exceptions into the statute of limitations. See United States v. Brockamp, 519 U.S.

347, 350-52 (1997). 

Defendant argues that the Brockamp exception precludes the application of equitable

tolling to § 6532. United States Motion at 5. The Court disagrees with this position. The

statute at issue in Brockamp – 26 U.S.C. § 6511 – is far more technical in detail than § 6532. 

Moreover, § 6511 contains multiple iterations of the limitation on filing and gives a list of

explicit exceptions to the limitation. In contrast, § 6532(a) merely sets forth the limitations

period and provides one exception, § 6532(b). Most importantly, circuit law holds that

equitable tolling applies to suits constrained by the limitations of § 6532. Supermail Cargo,

Inc. v. United States, 68 F.3d 1204, 1207 (9th Cir. 1995) (“[E]quitable tolling may be applied

to extend the period for bringing a wrongful levy claim against the government . . . .”); see

also Mallard Auto. Group, Ltd. v. United States, 343 F. Supp. 2d 949, 954 (D. Nev. 2004)

(“[W]hile Brockamp may have changed the general principles of equitable tolling as defined

by Irwin, this court cannot say that Brockamp has eroded the validity of [the] Supermail

decision.”). Though the court in Supermail was concerned specifically with § 6532(c) –

regarding suits brought by “persons other than taxpayers” – its holding is no less applicable

to § 6532(a). Both subsections deal with a relatively straightforward statute of limitations

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and both allow for only a narrow exception to the filing date. Thus, following Supermail,

equitable tolling can be applied to the limitations set forth in § 6532(a).

B. Application of Equitable Tolling

Hyler’s complaint suggests that his filing of a suit in Federal Tax Court, within the

period permitted under § 6532, serves to permit this Court to hear his case. To invoke

equitable tolling, the plaintiff must, at minimum, have pursued the claim with due diligence. 

See Pace v. DiGuglielmo, 544 U.S. 408, 418 (2005) (“[A] litigant seeking equitable tolling

bears the burden of establishing two elements: (1) that he has been pursuing his rights

diligently, and (2) that some extraordinary circumstance stood in his way.”); Williams, 104

F.3d at 240 (“To establish that equitable tolling applies, a plaintiff must prove . . . [among

other things] due diligence . . . [in] discovery of [operative] facts.”). Here, Hyler neither

faced “extraordinary circumstances” nor proceeded with due diligence when he chose to file

his case in Tax Court the day before the statute of limitations in § 6532(a) expired. Indeed,

the letter Hyler received from the IRS in 2005 denying his refund claim clearly instructed

him to “fil[e his] suit with the United States District Court having jurisdiction” and went on

to explain the time limitations such a suit would face under § 6532(a). Stier at exs. 8-11. In

sum, though equitable tolling is available under § 6532(a), the plaintiff has failed to meet the

standard for granting such a remedy. The Court will therefore GRANT the defendant’s

motion to dismiss with prejudice.

IT IS SO ORDERED.

Dated: January 22, 2008

 

CHARLES R. BREYER

UNITED STATES DISTRICT JUDGE

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