FI L ED U.S. COURT OF A P P E A LS E LE V EN T H C IR C U IT MAY 10, 2005 THOMAS K. KAH

N CL ERK [PUBLISH] IN THE UN ITED STATES COURT OF APPEALS FO R T HE EL EV EN TH CIRC UI T

N o. 04- 1072 0 D. C. Docket N o. 03-21822 CV -PCH AME RICA

N B AN KE RS INS URA

NCE GR OU P, Pl ai nti ff

-Appe llant, ve rs us UNITED STAT ES OF AMERIC A, De fendant-Appellee.

Appeal f rom the United State s District Court fo r the S outhe rnD istri ct

of F lor ida (M ay 10, 200 5) Be fo re A N D E RS O N , D U BIN Aand B L A CK , Ci rc uit Jud ge s. DU BIN A, Circuit Judge:26 U. S.C. § 4 25 2( a ) p ro vid e s: 1 (a) L ocal tele p h o n e s er vice. F or purpose s of this subchapter , the term “ local te le ph on e se rv ic e ” me ans - (1 ) t he a c c e ss to a lo c a l te le ph on e sy ste m, a nd the pr ivi le g e of

te le ph on ic qu a lity communication wi t h substantially all persons having te lephone or radio tele phone stations constitut ing a

part of suc h local telephone sy stem and (2 ) a ny fa c ili ty or se rv ic e pr ov ide d in

c onne c tio n w itha

ser vi ce des c ri be d in para g raph ( 1). Th e te rm “ loc a l te le ph on e ser vi ce” d oe s n ot i nc lud e any se rv ic e wh ic h is a

“ tol l telephone service ” or a “private communication service ” as definedi n s ub sections (b) a nd (d). 26 U. S.C. § 4 25 2( b) pr ov ide s: 2 (b) Toll telephone service . For purposes of this subcha

pter, the te rm “toll telephone se rv ic e ” me ans - (1) a telephonic qua lity

communication for which (A) there is a toll charg e which varie s in amount with the distance and elapse d transmission time of eac h individual communication and ( B) the cha rg e is paid within the United States, and (2 ) as erv i ce w h i c h en t i t l es th e s u b s cr i b er , u

p o np ay m en to f ap er i o d i c c h ar ge (d e te rm ine d a s a fl at amou nt or up on the ba sis of

tot a l e la ps e d tr ans mis sio n ti me ), to the privileg e of a

n unlimit ed number

of telephonic communications to or from a ll or a su bs tanti a l po rt ion

of the pe rs on s h avin g te le ph on e or ra dio te le ph on e statio ns in a spec ified ar ea which is outside the local telephone sy stem are a in which the station provided with this service is located. 2 Am erican Bankers Insurance G roup, Inc. (“ ABI G” ) appeals the district court’ s grant of summ ary j udgm ent to the United States, finding th e long dis tance telephone services ABI G purchased f rom AT &T subject to an excise ta x und er In te rn al Re ve nue Co de § 42 52( b) (1 ). F or the r ea sons that f

oll ow , w e re ve rs e the dis tr ic t c ourt’ s j udgm en t and h old that the lon g di stanc e te le phon e se rv ic es a t i ssu e ar e not sub j ec t t o taxa tio n un de r § 42 52( b) (1 ) or § 42 52( b) (2 ) . 1 2 I. BACKG ROUND A. F ac ts3

Betw een O ctober 1, 1998, and Mar ch 31, 2002, taxpay er, AB IG , purchased int er state , int er

na tio na l, and ( in f

ive state s) intra state lon g di stanc e se rv ic e fr om A T &T . A BI G pa id a

uni fo rm tol l r at e fo r al l i nte rs ta te c al ls m ad e w ith in the U nit ed S ta te s, uni fo rm

tol l r at es f

or a ll intra state lon g di stanc e ca lls m ad e w ith in the f ive state s inw hic h it

pur ch as ed

se rv ic e, and t oll r at es f

or int er na tio na l c al ls (other than calls to and from Mexico) that varied only accor ding to which country the c al ls w er e be ing pla ce d. A T &T c oll ec te d f ed er al e xc ise ta xe s f

ro m A BI G on the se rv ic es pur suant t o § 4 252( b) (1 ) of the I nte rn al Re ve nue Co de ( “ I. R. C. ”) , and rem it te d t he tax es co ll ect edto th e In te rn al Rev en ue Serv ic e (“ IRS” ). Su bse que ntl y , A BI G f

ile d c la im s w iththe I RS f or ar ef und of $28 8, 496. 10, represe nting the feder al excise taxes collecte d on services rendered betw een Oc tober 1, 1998, and Septem ber 30, 2001. A BIGlater f iled claim s for an ad dit ion al r ef

und in the a m ount

of $73 , 267. 14 f

or the ta xe s onte le phon e ca lls pla ce d be tw ee n O ct obe r 1, 200 1, and M ar ch31, 200 2. A BI G sou ght the r ef unds , co nte ndi ng tha t the f

ed er al e xc ise ta x onlon g di stanc e te le phon e ca lls doe s no t ap pl y to cal ls forwhi ch th e rat e d oe s n otva ry ba se d upo n t he di st an ce o f th e cal l. B. Proc ed

ural H istory T he I RS did

not r es pond to ei the r of

A BI G ’ s r ef

und cl ai m s. A BI G the n4

br ough t su it in the S outhe rnD istri ct of F lor ida se ek ing ar ef

und in the a m ount

of $361 , 763. 24 i n c om

m uni catio ns e xc ise ta xe s and i nte re st. T he part ie s f ile d c ro ssm oti ons fo r sum

m ar y j udgm en t, and the dis tr ic t c ourt r ule d inf av or of the gove rn m en t f

ind ing that the w or d “ an d” a s us ed in § 42 52( b) (1 ) is am

big uous and in the c ont ex t of

the statut e m eans “ or . ” A cc or din g to the dis tr ic t c ourt, the e xc ise tax at issue applies to toll telepho ne service var y ing bydistance or

elapsed tr an sm iss ionti m e. A BI G the n pe rf ec te d th is a

ppe al . II . ISSUE Whe the r In te rn al Re ve nue Co de § 42 52( b) (1 ), de fi nin g “ tol l t el ep hone se rv ic e” a s ase rv ic e fo r w hic h th er e is a “ tol l c harg e w hic h vari es in am ount w ith the dis tanc e an d e la

pse d tr an sm iss ionti m e” of e ac h c al l, is ap pli ca

ble to a tol l ch arg e v arying wit h e laps edtra ns m is si on ti m e, bu t n otdi st an ce.

III. STA ND AR

D O F REVIE W T his c ourt r ev ie w s th e dis tr ic t c ourt’ s di spos iti on o f cr oss -m oti ons fo r sum m ar y j udgm en t de novo , a

pply ing th e sam e legal standards used by the district co urt, vie w ing the e vid en ce and a ll fa ct ua l i nf er en ce s th er ef

ro m in the li ght

m ost favor ab le to the non -m ovant, and r es olv ing a ll re as ona ble doubts about

the f ac ts i n fav orof t he no n- m ov in g p art y . Ge rling Global Reinsurance Corp. of Am erica v. Gallagher , 267 F . 3d 1 228, 123 3- 34 ( 11th C ir . 200 1) . S ta tut or y int er pr et at ionis a5

qu es ti on of l aw th atwe als o re vi ew de novo . Smith v. Be llsou th Telecom m. , I nc. , 27 3 F .3d13 03 , 13 05 (11 th Cir . 20 01 ). IV. D ISCU SSION A. The plain meaning o

f § 425 2(b)(1)’s requireme nt tha t rates vary by “distanc e and elapse d transm iss ion ti m e”uses “ and”c onj unc tiv el y 1. T he phr as e is unam

big uous The I RS collects taxes f

or toll telephon e service, defined as “ (1) a te le phon ic qua lity

c om m uni catio n f

or w hic h ( A ) the re is a tol l c harg e w hic h varies in amount with the distan ce and elapsed tra nsmission time of eac h indi vidu al co m m uni catio n. ” 26 U . S. C. § 42 52( b) (1 )( A ) (e m pha sis a dde d) . A BI G c ont en ds that the statuto ry

language quo ted above is un am bigu ous, requiring the word

“ and” in the phrase “ distance and elapsed transm issio n tim e” to be interprete d ac co rd ing to its or din ar

y , na tur al m eanin g. A cc or din gly , A BI G a sse rt s “ an d” is used conjunctively . ABI G urges that to be taxable toll telephone service under thi s pr ovi sio n, the tol l se rv ic e m ust vary by both di stanc e an d e la

pse d tr an sm iss ion tim e. T he gov er

nm en t c ont en ds tha t the statue is am big uous and d oe s no t pl ai nly require variation b y

both ti m e and distance. Contendin g that the word “ and” can be rea d conjunctively

or disjunctively , the governm ent argues that the district6

co urt w as c or

re ct in de te rm ini ng tha t C ongr es s di d no t i nte nd t o us e the co nj unc tiv e m eanin g of

“ an d” in re qui ri ng unde r § 42 52( b) (1 ) that t ax ab le tol l te le phon e se rv ic e “ var[ y ] in am ount w iththe dis tanc e an d e la pse d tr an sm iss ion tim e. ” Inc onstru ing astatut e, “ [t ] he pr ee m ine nt c an on o f statut or y int er pr et at ion re qui re s us to ‘ pr es um e that [ the ] le gis latur e say s inastatut e w ha t i t m eans and m eans in a statute what it say s there. ’ ” Be dRoc Ltd. , L LC v. United States , 541 U . S. 176 , 183 , 124 S . Ct . 158 7, 159 3, 158 L . E d. 2d 3 38 ( 2004 ) (s ec ond al te ratio n in o ri gin al ) (quot ing Co nne ct ic ut N at’ l B ank v . G erm ain , 503 U . S. 249 , 253 -5 4, 112 S. Ct. 1146 , 1149, 117 L. Ed. 2d 391 (1992)). This inquiry requires the court to “be gin [] w iththe statut or y te xt, and e nd[ ] the re a s w el l i f the te xt i s unam bigu ous.” Id . F urthe rm or e, w or ds are giv enthe ir or din ar y , pla in m eanin g un le ss de fin edot he rwis e. Id . a t 18 3, 124 S . Ct . a t 15 93- 94; se e als o I n re Paschen , 296 F . 3d 1 203, 120 7 ( 11th C ir . 200 2) . Mo re spe ci fi ca lly , unl es s th e context dictates oth erw ise, the w ord “ and” is presum ed to be used in its ordinary se ns e, th atis , con

jun ct iv el y . Cr ook

s v . H arr el son , 282 U . S. 55, 58, 51 S . Ct . 49, 50, 75 L . E d. 156 ( 1930 ) (c onstru ing ta xin g st at ute and c onc lud ing that “ nothin g in the context o r in other provisio ns of the statute . . . warrants the conclusion th at the w or d ‘ an d’ w as use d othe rw ise than init s or din ar y se nse [ , co nj unc tiv el y ] ; and7

to c onstru e the c lause [ dis j unc tiv el y , ] w oul d be to ad d am at er ia l e le m en t . . . , and the re by to cr eate , not

to expoun d, apr ovi sio n of law ”) ; se e als o B ruc e v. F irs t Fe d. Sav. and Loan Ass’n of Co nr oe I nc . , 837 F . 2d 7 12, 715 ( 5thCi r. 198 8) ( “ T he word ‘ and’ is therefore to be acce pted for its conjunctive connotatio n rather than as aw or d in te rc hange ab le w ith‘ or ’ e xc ep t whe re str ic t gr am m at ic al c onstru ct ion wil l frus tra te cle ar l eg is la ti ve in te nt .”) (ci ti ng , inter ali a , Pe acock v. Lubbock Co m press C o. , 252 F . 2d 8 92, 893 -9 5 ( 5thCi r. 195 8) ( co nstru ing “ an d” in the phrase “ an em

ploy er e ngaged in . . . the ginning andcom pressing of cotto n” as m eanin g “ or ” be ca

use “ it is an a cknow le dge d un dis put ed f ac t . . . that c om

pr es sin g is an operation entirely

rem oved from

ginni ng and th at the two ar e never carried on tog ether .” ) (e m

phasis add ed)). He re, there is nothing in the statuto ry context to su ggest that “ and” is used in the pr ovi sio n a s m eanin g “ or . ” T he phr as e is unam big uous . T he pla in m eanin g is cle ar– “ an d” is us edco nju nc ti ve ly. See also Am erica Online, Inc. v. United States , __ F ed . Cl . __, 200 5 W L 741 847, N o. 03- 2383 -T , a t *5 ( Marc h 30 , 200 5) (“ Se ct ion425 2( b) (1 ) unam big uous ly r equir es that a

tol l c harg e vary

in am ount ac co rd ing to both th e dis tanc e an d duratio n of c al ls. ”) ; ac co rd H

one yw el l I nt’ l, Inc. v. United States , 64 F ed . Cl . 188 , 199 ( Fe d. Cl . 200 5) ; Office Max, Inc. v. United States , 309 F . S upp. 2d 9 84, 993 (N . D . O hio 200 4) ; Nat’l R. R. Passenger8

Corp. v. United States , 338 F . S upp. 2d 2 2, 27 ( D . D . C. 200 4) ; Fortis, I nc. v . United States , No. 0 3 C iv . 51 37 (J GK), 20 04 W L 20 85 52 8, at*6 (S.D.N.Y. Sept ., 16, 200 4) ; Re ese B ros., I

nc. v . U nited Sta tes , N o. 03- CV -7 45, 200 4 W L 290 1579 ; at *7 (W .D . P a. Novem

ber 30, 2004). T he district court stated that even if it wer e to f ind the statut e unam

big uous , “ thi s is one of

the r ar e ca se s whe re the le gis lativ e int en t i s su ff

ic ie ntl y c le ar that . . . the [ c] ourt w oul d st ill be e nti tle d to r el y on extrinsic evidence of Congressional in tent.” Am erican Bankers Ins. Group , I nc. v . United States , 308 F . Su

pp. 2d 1 360, 136 7 n. 7 ( S. D . F la . 200 4) . W e re spe ct fu lly dis ag re e w iththe dis tr ic t c ourt’ s ana ly sis . Whe re the statut or y te xt i s un am bi gu ou s t he in qu iry end s. Be dRoc Ltd. , L LC , 541 U. S. at 183, 124 S. C t. at 1593 . I n f

ac t, the statut or

y c ont ex t su

ppor ts the c onj unc tiv e use of

“ an d” in § 4252 (b)(1)’ s requirem ent that the rate m ust vary “by distance and elapsed tra ns m is si on ti m e.” Tho ug h re so rt t o t he leg is la ti ve hi st ory is un ne ces sa ry , as we co nc lud e the statut e is unam big uous , w e not e the le gis la tiv e his tor y sup ports o ur co nc lu si on . In defining taxable “ toll telepho ne service, ” both parties agree that Co ng res s, t hr ou gh th e Exc is e Tax Reduc ti on Act o f 19 65 , Pub . L. No. 89 -4 4, § 302, 79 S ta t. 136 ( “ 1965 A ct ”) , sou ght to de fi ne the m ethod of

se rv ic e pr ovi de d by A T &T , the c om

pany , a t the ti m e of

e na ctm en t, hol din g am onop oly on a ll lon g-9

distance telephon e services. Prior to the 196 5 Act, “ toll telepho ne service” wa s de fi ne d a s “ a te le phon e or r ad io t el ep hone m es sa ge or c onve rs at ionf

or w hic h ( 1) th ere i s a t ol l ch arg e, an d (2 ) th e ch arg e is pa idwit hi n t he Uni te d S ta te s.” Pu b. L. N o. 85- 859, § 13 3( a) , 72 S ta t. 127 5, 129 0 ( 1958 ). I n 19 65, it appe ar s C ongr es s am en de d th e de fi nit ionto its c ur re nt l an gua ge in ane ff

ort t o m odi fy

and u pdate it

“ in o rd er to re fl ec t and t o m ee t the c hangi ng t ec hnol ogy and m ar ke t c ondi tio ns o f the indu stry .” Trans-Lux Corp. v. United States , 696 F. 2d 96 3, 967 (Fed. Cir. 1982 ). A T &T ’ s lo ng d ist an ce se rv ic e at that t im e ch ar ge d lo ng d ist an ce te le phon e s e rv i c e s o nth e b a s i s o f

th e e l ap s e dt i me o f

e a c h i n d i v i du a l c a l l , mu l t i p l i e db y a rate dete rm ined throug h the use of distance m ileage bands or for “ W ide Ar ea T el ep hone S er

vic e, ” co m

m onl y r ef er re d to a s WA T S, w ithape ri odi c ch ar ge f or u n l i mi t e da c c e s s w i th i nas p e c i f i e dar e ao u t s i d e o f

l o c a l s e rv i c e . T h u s , a tth e t i me of the 196 5 A ct , A T &T ’ s se rv ic e, w hic h C ongr es s so ught to de fi ne a s taxable tol l s e rv i c e , d i di nf

a c tu t i l i z e r a t e s th a tv ar i e db y both e la pse d tr an sm iss ionti m e an d distance. More over, at the tim e of the 1965 Act, it wa s likely inconceivable that ch arg es wou ldbe m ad e wit ho utrefe ren ce t o d is ta nc e as no w exi st s. Ina ddi tio n, Co ngr es s w as se ek ing to m odi fy and n ar ro wthe de fi nit ionand to ph as e th is ex ci se tax ou t en ti rel y by 196 9. Se e A m er ic a O nli ne , 2 0 0 5 WL 7418 47, a t *6 ( ci tin g Trans- Lu x Co rp . , 696 F . 2d at 96 6) . C ongr es s c oul d have10

am en de d th e langua ge in 1965 to inc lud e br oa d te rm s a ble to ad ap t t o te ch nol ogi ca l c hange s; i nst ea d, Co ngr es s sp ec if ic al ly de fi ne d “ tol l t el ep hone se rv ic e” wi th an ey e to wardth e ta x e xp iri ng fou r y ears lat er. Se e id . Co nse que ntl y , now , f

orty y ears late r, ‘ if

the statut or

y langua ge no lon ge r fi ts the inf

ra str uc tur e of the ind ustry , the I RS ne ed s to a sk f or congression al action to bring th e statute in line with today ’ s reality . It cannot c re at e ana m

big uity that do es not

e xis t or m isi nte rp re t the plain m eaning of statuto ry language to bendan old law tow ard a new di rect io n.’ A m er ic a O nli ne , 200 5 W L 741 847, a t *6 ( quot ing Na t’l R.R. , 338 F. Supp. 2d at 27 -2 8) . Ba se d onthe f

or eg oin g, w e ag re e w iththe num er ous co urts tha t have co nc lu de d t he lan gu ag e in th e p hr as e atis su e is cle ar an d u na m bi gu ou s. See A m er ic a O nli ne , 200 5 W L 741 847, a t *5 ( “ Se ct ion425 2( b) (1 ) unam big uous ly re qui re s th at

atol l c harg e vary

in am ount

a cc or din g to both th e dis tanc e an d duration of calls.”) ; H

oneywell Int’l, Inc. v. United States , 64 F ed . Cl . a t 19 9 (finding § 4 252(b)(1)’ s phrase “ distance and elapsed transm issio n tim e” unam big uous and n oti ng tha t “ an d” c anbe c onstru ed in ce rt ai n c ont ex ts cum ulatively , but finding th e clearly conjunctive use in § 425 2(b)(1) “ ‘ supp orted by the f ac t tha t bo th d ist an ce and t im e w er e . . . f ac tor s inde te rm ini ng c harg es f or tol l t el ep hone se rv ic e at

the ti m e of

the 196 5 am en dm en ts[ ;] in thi s c ont ex t, it is11

onl y log ic al to co nc lud e that whe n C ongr es s wro te the phr as e, . . . it m eant f or the w or d ‘ an d’ to be r ea d c onj unc tiv el y . ’ ”) ( quot ing O ffi ceM ax , 309 F. Supp. 2d at); Na t’ l R . R . P ass en ge r C

orp. , 338 F . S upp. 2d at 27 -2 8 ( fi ndi ng p hr as e unam big uous ; “ an d” int en de d c onj unc tiv el y ); Fortis, I nc. 2004 W L 2085528 , at *6 (sa m e), Re ese B ros., I nc. v . U nited Sta tes , 200 4 W L 290 1579 , sli p op . a t *7 (s am e) . A lth ough“ an d” m ay be use d c um

ulativ el y in som e co nte xts , he re , the s t a tu t o ry l an g u a g e i s p l a i nan du n a mb i g u o u s –th e p r o v i s i o nr e qu i r e s th a tt o c o me w i th i nth e d e f

i n i t i o no f “ t o l l t e l e p h o n e s e rv i c e ” th e r a t e mu s tv ary b y both

“ distance and elapsed transm issio n tim e. ” Whil e tr ue that the pla in m eanin g r ule is not to be bli ndl y

appl ie d if ap pl ic at io n l ead s t o a n abs ur d o r fu ti le res ul t, H ughe y v. J M S D ev elopm en t C

orp. , 78 F . 3d 1 523, 152 9 ( 11th C ir . 199 6) , he re the pla in m eanin g of the statut e doe s no t le adto su ch a res ul t. Se e A m er ic a O nli ne , 2 0 0 5 WL 7 4 1 8 4 7 , a t* 7 . “ [ T] o ju s t i f y a de part ur e fr om the le tte r of

the lawupo n th at

gr ound , the absur dity

m ust be so gross as to sh ock the general m oral or com m on sense.” Crooks , 282 U . S. a t 60 , 51 S. Ct . a t 50 . H er e, no g ro ss a bsur dity r es ult s f ro m apla in m eanin g in te rp re ta tio n of the pr ovi sio n. T he pla in m eanin g is not an “unr ea sona

ble [ int er pr et at ion ] plainlyat variance with the policy of the legislation as a whole.” See U nited States v. A me rican Trucking Assoc. , 310 U . S. 534 , 543 , 60 S . Ct . 105 9, 106 3, 8412

L . E d. 134 5 ( 1940 ) (i nte rn al quo ta tio n m ar ks o m itt ed ). I nst ea d, usi ng the pla in m eaning furthers the Congression al intent at the tim e it w as adopted. Moreover, we note “ that in statut es levy ing taxes the literal m eaning of the words em ploy ed is m ost im portant f or suc h st at ute s are not

to be e xte nde d by

im pli catio n be y ond the clear im port of the language used.” Crooks , 282 U . S. a t 61 , 51 S . Ct . a t 51 (in te rn al qu ot at io n o m it te d) . “ The C ourt m

ust presum e that Congress m eant what it said when it tailored th e d e f i n i t i o no f t a x ab l e ‘t o l l t e l e p h o n e s e rv i c e ’ t o i n c l u d e d i s t an c e an dt i me re qui re m en ts, part ic ularl y in lig ht o f the ove ra ll goa l of the A ct to re duc e an d restrict the a

pplication of feder al excise taxes. ” O ffi ceM ax , 309 F. Supp. 2d at 1000 ; see also Honeywell I nt’l, I nc. , 64 F ed . Cl . a t 19 9- 200; A m er ic a O nli ne , __ Fe d. Cl . __, 200 5 W L 741 847, a t *6 . “ Whil e it m ay have be ensho rt -s igh te d of Co ngr es s to de fi ne ‘ tol l t el ep hone se rv ic e’ to spe ci fi ca lly a ddr es s th e ch ar gin g sc he m e use d by

A T &T in 1965 , . . . ‘ [i ] t i s be y ond [the c ourt’ s] pr ovi nc e to r es cu e Congress from

its drafting errors. ” Honeywe ll Int’l, I nc. , 64 F ed . Cl . a t 19 9 ( fi rs t al te ratio n inor igi na l) ( quot ing La m ie v . U nited Sta tes T r. , 540 U . S. 526 , 542 , 124 S. Ct . 102 3, 103 4, 157 L . E d. 2d 1 024 (2 004) ( int er na l m ar ks and c itatio n om it te d) .13

2. R ev enue Ru lin g 79 -4 04 d oe s no t pr ovi de sup port f or abandon ing § 4252 (b )( 1) ’ s pl ai n m eanin g The governm ent also argues that in int erpreting § 4252 (b)(1) the district co urt pr ope rl y

a ttr ibu te d “ gr eat w ei ght ” to R ev enue Ru lin g 79 -4 04. R ev enue Ruling 7 9-404 deals with whether com m unication s services betwe en onsho re fa ci lit ie s and o ff

shor e shi ps f

al l w ith in § 425 2( b) (1 )’ s de fi nit ionof “ tol l t el ep hone se rv ic e. ” Whil e ac know le dgi ng tha t “ [l ] ite ra lly , the se rv ic e pr ovi de d in[ the ] c as e doe s no t c om e w ith in the de fi nit ionof . . . tol l t el ep hone se rv ic e be ca use the ch ar ge f or suc h se rv ic es does not

vary with distan ce and therefore does n ot meet there qui re m en t of

se ct ion 425 2(

b) (1 ) , ” Re v. Ru l. 79- 404, 197 9- 2 C . B. 382 ( 1979 ) (em phasis add ed), the IRS nonetheless con cluded that “ a statute m ay be given an interpretation other than that which follows from its literal language wher e such interpretation is required in order to com port with the legislative int ent.” Id . ; see e. g. A m er ic a O nli ne , 200 5 W L 741 847, a t *8 . T he gov er

nm en t arg ue s th at

the c ourt sh oul d gi ve Re ve nue Ru lin g 79 -4 04 Ch ev ron defere nce . See Chevron U. S.A ., Inc. v. Natural Res. D ef. Council, Inc. , 467 U.S . 837, 104 S. Ct. 2278 , 81 L . E d. 2d 694 (198 4). Under Ch ev ron , the c ourt m us t fi rs t d et erm in e whe th er t he co ng res si on al in te ntis cle ar. Ch evr on U.S.A., Inc. , 467 U. S. at 843-44, 104 S. Ct. at 2781-82 . If the intent is clear , the inquiry14

ends; the court and agency “ m ust giv e ef

fect to the unam

bigu ouslyexpressed intent of Cong ress.” Ch ev ron , 467 U . S. a t 84 3- 44, 104 S . Ct . a t 27 81- 82; se e als o A la. P ow er

Co . v . U nited Sta tes D ep ’t

of E ne rgy , 307 F . 3d 1 300, 131 2- 13 ( 11th Ci r. 200 2) ( hol din g a ge nc y int er pr et at iondid

not ove rc om e cl ear int en t of statut e ev enif giv en Ch ev ron de fere nc e). A cc or din gly , be ca

use w e hol d th at

§ 42 52( b) (1 ) is c le ar

and d ir ec tly an sw er s th e que sti on h er e, the inquir y e nds; w e ne ed

not giv e de fe re nc e to Re ve nue Ru lin g 79 -4 04. Mo re ove r, w e ne ed not de te rm ine the pr ope r le ve l of de fere nc e to be gi ve n R ev en ue Ru li ng 79 -4 04 . Se e W ild erness W atc h v . M ain el la , 375 F. 3d 1 085, 109 1 n. 7 ( 11th C ir . 200 4) ( not ing “ [b ] ec au se [ the c ourt] hol d[ s] that the W ild er

ne ss A ct spe ak s di re ct ly

to the que sti on at i ssu e, w e ne ed not resolve the questio n of the precise level of defere nce due the agency action under the second prong of Ch ev ron ”). 3. R e- en ac tm en t D oc tr ine is not appl ic ab le T he gov er

nm en t c ont en ds tha t e ve n if Re ve nue Ru lin g 79 -4 04 i s no t entitled to d efer ence, under the re-e nactm ent doctrine, Congress shouldbe deem ed to h av e ap pr ove d th e Re ve nue Ru lin g be ca use the f ed er al c om

m uni catio ns e xc ise ta x im pose d un de r § 42 51 h as be ena m en de d and r e- en ac te d si nc e the pub lic at ion of Re ve nue Ru lin g 79 -4 04. H ow ev er , the r e- en ac tm en t do ctri ne w ill se rv e to g iveUnlike Cottage Savings Association v. Commissioner , 499 U.S. 554, 111 S. Ct. 1503, 113 3 L . Ed. 2d 589 (1991), in which t h e d efendant re lied on Trea sury Depa rtment regulations and the prec ise issue was not addr essed by the statute, her e the g overnme n tseeks to use a s determinative Revenue Rulings wher e the statute a nd its contex t addre ss the is s u e bef ore the court. In addition, the trea sury

regulations at issue in Cot tageSa v ing s we re “ c on sis te nt with [th e Sup re me Court ’s ] p r e c e d e n ts . . . [p r e c e d in ge n a c tm e n t an d th e ] d e c is io n s w e r e p art o f th e c o n te mp o r ar

y le g a l c o n te xt in which Cong ress e nacte d [t he statute at issue] ” Id ., 499 U.S. at 562, 111 S. Ct . at 1508 (interna l quotation omitt ed). 15 we ight o r approval to an agency interpretation only“ [w ] here an agency ’ s statuto ry co nstru ct ionha s be enf

ull y br ough t t o th e atte nti on o f the pub lic and the Co ngr es s, an d th e latte r ha s no t so ught to al te r that i nte rp re ta tio n a lth oughit ha s am en de d th e statute in oth er r espects, then presum ably the legislative intent has been discerned.” No rth H

av en B d. of E

duc . v . B el l , 456 U . S. 512 , 535 , 102 S . Ct . 191 2, 19 25 , 72 L. Ed. 2d29 9 (1 98 2) (qu ot at io ns om it te d) . He re, not on ly

is the statuto ry

language clear under § 4252(b)(1), but there is n oth ing to ind ic at e that C ongr es s w as aw ar e of Re ve nue Ru lin g 79 -4 04 whe n it subs equently

am ended and re-enac ted this taxin g statute. T he legislative his tory reveals no m ention o f Re venue Ruling 79-404 n or does the record re veal co ns id erat io n o f th e is su e rai se d i n t he Ru li ng . Se e, e . g. , O ffi ceM ax , 309 F . S upp. 2d at 10 04- 1005 . T hus, the re is nothin g to ind ic at e Co ngr es s w as aw ar e of Rev en ue Ru li ng 79 -4 04 when th e ta xi ng pro vi si on s wer e re- en act ed . Se e id . 3

“ When the ‘ congression al discussio n preceding re-e nactm ent m akes no refer ence to the . . . regulation, and there is no other evidence to sugg est that Congress was16

ev enaw ar e of

the . . . int er

pr et ive pos iti on[ , ] ‘ w e co nsi de r the . . . r ee na ctm en t t o be without sign ificance. ’ ” A m er ic a O nli ne , 200 5 W L 741 847, a t *9 ( quot ing Brown v. Gardner , 513 U . S 115, a t 12 1, 115 S . Ct . 552 , 556 , 113 0 L . E d. 2d 4 62 (1 994) ( quot ing U

nited Sta tes v . Ca lam aro , 35 4 U.S. 3 51 , 35 9, 7 7 S . Ct. 1 13 8, 1 L. Ed. 2d 139 4 (1957)). A ccordingly , C ongressio nal approval cannot be inferred fro m re-e na ct m en t o f th is st atut e. Se e A m er ic a O nli ne , 200 5 W L 741 847, a t * 9; Honeywe ll Int’l, I

nc. , 64 F ed . Cl . a t 20 1; O

ffi ceM ax , 309 F . S upp. 2d at 10 04- 1005 ; F ort is , 200 4 W L 208 5528 , a t *1 2; R eese , 20 04 W L 29 01 57 9, at*1 2. B. Th e se rv ic es at iss ue arenot wi thi n th e sta tute 1. S ervices at issue do not vary by “ distance” T he r at es a t i ssu e vary

a cc or din g to w he the r the c al l i s in tr as ta te , int er state or international. T he governm ent argues that “ distance” as used in § 42 52(b)(1), inc lud es the se rv ic es a t i ssu e be ca use the tol l bands use d ( intra state , int er state and int er na tio na l) are ba se d ondis tanc e. A BI G c ont en ds tha t the tol l bands ar e not ba se d ondis tanc e, but

are ba se d onpol iti ca l un its , i. e. the gov er nm en ta l e nti ty havin g r eg ulator

y auth or ity ove r the se rv ic es .As argued by AB I G counsel at oral a rgument, simil arly , there is some corre lation betwee n 4 weight and belt size, however , weight does not nec es s arily coincide w ith belt siz e. See A merica Online , 2005 WL741847, at *9 (“Acall fr om Dulles, Virg inia to Toronto cover s a shorter distance than a c all from Dulles to Sea ttle, a nd a call from Dulles to Philadelphia w ould be shorter than both, y e t th e rate fo r c a lls to S e attl e a nd Phi la de lph ia

wo uld be the same , whil e the rate to T or onto w ou ld be diffe rent.” ). 17 While there m ay

be some correlation b etwe en distance and the geopo litical subd ivi sio ns, the r at es the m se lve s do not vary by dis tanc e pe r se . T he 4 j ur isd ic tio na l bo undari es –in te rs ta te , intra state , and i nte rn at ion al –are div isi ons of re gul at or y auth or ity be tw ee n th e Fe de ra l C om m uni catio ns C om

m iss ionand s tate reg ul at or s. See Louisiana Pub. Serv. Comm ’n v. FC C , 476 U. S. 355, 360, 106 S. Ct . 189 0, 189 4, 90 L . E d 2d 369 ( 1986 ). I n H

one yw el l I nte rnat ion al , the go ve rn m en t m ad e th e sa m e arg um en t i t m ak es he re. See 64 Fed. Cl. at 201, at *14. The H

one yw el l co urt, r el y ing on the se ve ra l othe r co urts f ac ed w iththi s iss ue , aptl y

r ea sone d th at

the r at es a t i ssu e, sim ilar to those a t i ssu e he re , do n ot vary by “ distance” within the m eaning of § 425 2(b)(1).

‘ Section 4252 (b)(1) pr esum es a for m ula wher e the char ge corre lates to b oththe e la

pse d ti m e of

the c al l and the dis tanc e–that i s, the m i l ea g e– th atth e c al l tra v el s .’ F ort is , 20 04 W L 20 85 52 8 a t * 13 . ‘ [T ] el ep hone c al ls are de sig na te d a cc or din g to ge opol iti ca l un its due to the f ed er al ist r eg ulator y sc he m e an d th e de m ar catio n of j ur isd ic tio n be tw ee n th e Fe de ra l C om m uni catio ns C om

m iss ionand s ta te re g u l at o ry ag en ci es .’ Id . ; se e O ffi ceM ax , 30 9 F . Sup p. 2 d a t 9 95 . ‘ T he dis tin ct ion s be tw ee n in tr as tate and i nte rs ta te do n ot n ec es sari ly co rr el at e to d ist an ce be ca use , f or e xam ple , an in tr as ta te c al l m ay w el l travel a longer distance than certain interstate or even international ca l l s .’ F ort is , 200 4 W L 208 5528 a t *1 3; se e O ffi ceM ax , 309 F.18

Su pp. 2d at 99 6; R eese , 200 4 W L 290 1579 a t *1 2. . . . ‘ [T ] he j urisdictio nal classifications em ploy ed in the long distance service at iss ue doe s no t am ount

to se rv ic e w he re c harg es vary in am ount

w ith d i s t an ce an dth u s d o n o tp l ac e t h e s erv i ce wi th i n§ 4 2 5 2 (b )( 1 )’s d ef i n i t i o no f t o l l t el ep h o n e s erv i ce .’ F ort is , 2004 W L 2085528 at *13; se e R eese , 20 04 W L 29 01 57 9 a t * 13 . Honeywe ll Int’l, I

nc. , 64 F ed . Cl . a t 20 1; se e als o A m er ic a O nli ne , 2 0 0 5 WL 7418 47, a t *8 . W e ag re e w iththe above r ea soni ng. A cc or din gly , w e co nc lud e th atth e se rv ic es at i ss ue do no t v ary by “ di st an ce” a s re qu ire d u nd er § 42 52 (b )(1 ). 2. S er vic es a t i ssu e do n ot f

al l w ith in § 425 2( b) (2 ) The governm ent argues that even if the service s at issue are not taxable unde r § 42 52( b) (1 ), the se rv ic es f al l w ith in § 425 2( b) (2 ) an d are ta xable und er thi s pr ovi sio n. T he gov er

nm en t ur ge s th at

und er apla in r ea din g of

thi s pr ovi sio n, the services ar e taxable beca

use the charge for

the services at issue is “periodic.” Se ct ion425 2( b) (2 ) ap pli es to WA T S se rv ic e an d pr ovi de s: [A ] se rv ic e w hic h e nti tle s th e subs cr ibe r, upo n paym en t of ape ri odi c charge ( determ ined as a flat am ountor upon th e basis of total elapsed tr an sm iss ionti m e) , to the pr ivi le ge of an un lim ite d num

be r of te le phon ic c om

m uni catio ns t o or

f ro m a ll or asub stanti al portio n of the pe rs ons havin g te le phon e or r ad io t el ep hone statio ns i n a spe ci fi ed are a w hic h is out sid e the loc al te le phon e sy ste m are a in w hic h th e statio n pr ovi de d w iththi s se rv ic e is l oc at ed .19

26 U . S. C. § 42 52( b) (2 ). A ga in, the gov er nm en t ha s m ad e the ve ry sam e ar gum en t i tm ak es h er e t o s ev er al co u rt s p re v i o u s l y fa ce dwi th th i s p ar t i cu l ari s s u e. We ag re e w iththe r ea soni ng o f tho se e ar lie r de ci sio ns. In ste ad of pay ing f or the “ tot al e la

pse d tr an sm iss ionti m e” of the c al l, the dur at ionof

e ac h c al l i s r ound ed

up t o th e ne xt h igh es t bi lli ng i nc re m en t and m ult ipl ie d by

apos ta liz ed

r at e to p ro duc e a pe r ca ll ch ar ge . B as ed upo n th e fo re g o i n g , t h e s erv i ce s ati s s u e a re n o ts ub je ctt o a “pe ri o d i c c h ar g e. ” A BI G’s long distance services do not fall within the m eaning of “ toll telepho ne service” as pr ov id edin § 4 25 2( b) (2 ). 3. S ervices at issue ar e not “ local” telephone service under § 4252(a) Finally , the governm ent contends , a lternatively , that the ser vices AT &T pr ov id edto ABIG are t ax ab le as l oc al tel ep ho ne servi ces pu rs ua ntto § 4 25 2( a). Se ct ion425 2( a) de fi ne s “ loc al te le phon e se rv ic e” a s:

(1 ) the a cc es s to aloc al te le phon e sy ste m , and the pr ivi le ge of te le phon ic qua lity

c om m uni catio n w ithsub stanti al ly a ll pe rs ons havin g te le phon e or

r ad io t el ep hone statio ns c onst itutin g apart of suc h lo ca l t el ep hone sy ste m , and (2) any fac ility or service providedin connection with a ser vice described in paragraph (1). The te rm “ local telephone service” does not inclu de any service w hic h is a“ tol l t el ep hone se rv ic e” or a“pr ivate c om

m uni catio n service” a s defined in sub section (b) and (d).20

While conceding th at “ local” is not defined bythe I. R.C ., the governm ent argues that the le gis la tiv e his tor

y de m onstrate s th at

the te rm is br oa d e noug h to c ove r the services at issue. The governm ent asserts that Congress used th e term “ local te le phon e se rv ic e” a s ac at ch al l i n r earr an gin g th e te le phon e ta x pr ovi sio n inthe 1954 I nte rn al Re ve nue Co de de fi nin g “ loc al te le phon e se rv ic e” a s te le phon e se rv ic e n ottax ab le un de r § 4 25 2. See 1954 I . R. C. § 42 52( a) . T hus, the gove rn m en t arg ue s th at

a ll se rv ic es not

spe ci fi ca lly

e xe m pte d un de r § 42 53 are to be ta xe d. I n a ddi tio n, the gov er nm en t c ont en ds tha t the 195 8 r ed es ign at ionof local telephone service as “ general telephone service” did no t rem ove local te le ph on e se rv ic e fro m

th e ta x b as e. T he gov er

nm en t’ s in te rp re ta tio n of “ loc al te le phon e se rv ic e” w oul d m ak e the statut e a nul lity . “ It

is hard ly apla in o r na tur al r ea din g of the statut e to c la im that the entire U nited States is part of one ‘ local telephone sy stem .’ ” H one yw el l Int’l, Inc. , 64 F ed . Cl . a t 20 3 ( quot ing F ort is , 200 4 W L 208 5528 a t *1 5) ; se e als o O ffi ceM ax , 309 F . S upp. 2d at 10 07 ( fi ndi ng the gov er nm en t’ s arg um en t tha t the se rv ic es sho uld

be de em ed

loc al te le phon e se rv ic e be ca use Co ngr es s ha d to int en d to t ax the se rv ic e at

iss ue , “ en tir el y

unp er sua siv e” and h old ing “ [t ] he re is ab sol ute ly

no b as is u

pon w hic h to f

ind that the lon g- dis tanc e se rv ic e at iss ue herein falls w ithin the statutory definition o f ‘ local telephone service’ ). Moreover,21

“ [t]he go ve rn m en t’s ar gu m en t m is ch arac te riz es th e st ru ctur e o f th e st atut e[.] Se ct ion425 1 se ts o ut whic h it em s w ill be ta xe d, . . . S ec tio n 42 52 d ef ine s th ose term s[, and] Sec tion 4 253 g rants exem ption s to certain services . . . . The fact that ce rt ai n e xe m

pti ons ar e spe ci fi ed

doe s no t m ean th at

anythi ng n ot e xpr es sly exem pted is taxed.” A m er ic a O nli ne , 20 05 W L 74 18 47 , at * 11 . Accor di ng ly, we conclude that the services at issue are not taxable as “ local” telephone service un de r § 4 25 2( a). V. C ONC LUS ION Fo r the f or eg oin g r ea sons , w e re ve rs e the dis tr ic t c ourt’ s gr an t of the gove rn m en t’ s c ro ss- m oti on f or sum m ar y j udgm en t and r em an d th is c as e w ith in st ru ct io ns th atth e d is tri ctco ur t en te r jud gm en t i n fa vo r of ABIG. REVERSED a nd REMANDED.22