Document: 507 U.S. 746 113 S.Ct. 1784 123 L.Ed.2d 528 UNITED STATES, Petitionerv.CALIFORNIA and California State Board of Equalization. No. 91-2003. Argued Feb. 23, 1993. Decided April 26, Syllabus * After issued sales use tax deficiency notices to federal contractor Williams Brothers Engineering Company (WBEC) in 1978 1982, the assessed approximately $14 million such taxes against WBEC for years 1975 through 1981. Under its contract with United States, received an annual fixed fee plus reimbursement costs, including state taxes. At Government's direction, applied Equalization redetermination assessments, but each claim was denied, minor exceptions. then paid assessments under protest, using funds Government provided, filed timely actions court. In January 1988, stipulated a $3 refund dismissal without prejudice. May suit Federal District Court, seeking declaratory judgment that had classified taxed erroneously law $11 interest. granting summary judgment, Court rejected argument it entitled recovery based on common cause action money received. The Appeals affirmed. Held: may not recover claims were wrongfully WBEC. Pp. ____. (a) Shouldering entire economic burden levy indemnification does give challenge state-law grounds simply because is Government. here all relevant respects identical ones discussed States v. New Mexico, 455 720, 102 1373, 71 580, which held, inter alia, contractors are immune from reimburses contractors' expenditures, see id., at 734-735, S.Ct., 1382-1383. Moreover, voluntary agreement reimburse (or even fund advance) make payments direct disbursements State. Cf. Brady Roosevelt Steamship Co., 317 575, 63 425, 87 L.Ed. 471. Thus, cannot existence obligation indemnify create asserted action. Bayne 93 642, 23 997, Gaines Miller, 111 395, 4 426, 28 466, share two features this case lacks therefore inapposite. Because (1) did steal or otherwise unlawfully take issue Government, (2) have relationship would liable WBEC's actions, imply between Without implied contract, will lie See Bayne, supra, 643. (b) indemnified WBEC, has right be subrogated traditional principles subrogation, however, subrogee takes no more rights than subrogor had. case, dismissed statute limitations run it. argues statutes do apply it, Guaranty Trust Co. 304 126, 58 785, 82 1224, held if true, principle when acquired by assignment after assignor. Id., 141-142, 793. Although taxes, those until proceeding By then, run; thus, "a free pre-existing infirmity." 142, 932 F.2d 1346 (C.A.9 1991), O'CONNOR, J., delivered opinion unanimous Court. Kent L. Jones, Washington, DC, petitioner. Robert D. Milam, Sacramento, CA, respondents. Justice O'CONNOR 1 This another long line cases, beginning McCulloch Maryland, (Wheat.) 316, 579 (1819), asks relief what considers illegal Unlike typical immunity we presented unconstitutional; instead, question whether one private contractors. 2 established three Naval Petroleum Reserves Wyoming, Reserve 1, located Kern County, California. 10 U.S.C. § 7420. First Department Navy later Energy, contracted manage oil drilling operations 1985. defined include 3 pursuant Cal.Rev. & Tax.Code Ann. 6384 (West 1987), imfrormed deficiencies notices, July other December 1982/ direction administrative 6932 1987). argued misapplied own law, taxing property outside scope 6384. denied claim, Thereafter, provided. It refund, erroneous purchased personnel installed, both remaining resulted subcontractors, managed installed. Eastern California, actually exempt. sought course suit, granted 5 Ninth Circuit (1991). court began noting either constitutionally tax, 580 (1982). F.2d, 1347-1348. lacked colorable constitutional challenge," 1349, looked might provide declined accept simple act disbursing "constitutional function" created interest conflict law. done pay law; rise level requiring application Ibid. could maintain quasi-contract facts support unjust enrichment. Among things, "WBEC, backed throughout fair chance argue validity proceedings." 1350. Finally, relied fact "posited upon interpretation state-created exemption state[-]created tax." found State's filing requirements, within 90 days denial, conditions precedent refund. 1350-1351. failed satisfy conditions; therefore, "Since become determinative only government acquires action, since never action," reasoned, six-year "28 2415 apply." 1351. 6 acknowledged Eleventh Circuit, factually similar recently reached opposite conclusion. 1351-1352. Broward 901 1005 (1990), "federal received." 1008-1009. We certiorari resolve conflict. 506 ----, 50, 121 20 (1992). II 7 concedes intervened proceedings. Tr. Oral Arg. 17. But complied procedural requirements irrelevant, (also known as indebitatus assumpsit ). Prior creation statutory remedies taxpayer bring illegally City Philadelphia Collector, 72 (5 Wall.) 18 614 (1867), stated: 8 "[The] [a]ppropriate remedy back [to collectors] protest account duties assessed, Where party voluntarily pays money, he remedy; compulsion notice intends test back, assessment illegal, 731-732 (citing Elliott Swartout, 35 (10 Pet.) 137, 150, 9 373 (1836)). reasons used Since 643, 997 (1876), further governed 6-year 2415(a), 90-day limitation period Code. taxpayers relies, attempting they collector settlement made them. contrast, taxpayer—WBEC —has day gone home. attempts contractor, though already challenged accepted resolution claims. contends that, involved advanced funding arrangement, disbursement involved, asserts, appropriate. Even assuming courts entertain conclude inappropriate better position 11 management contracts There, here, imposed managing Energy sites. Like costs fee. 723-724, 1377. contracts, provided title tangible personal passed directly vendor 724, "Finally, most importantly, use[d] so-called 'advanced funding' procedure meet costs." 725, 1378. creditors employees drafts drawn special bank deposited funds, so expended purchases. 726, Compare App. 142-143 (Declaration Kenneth Meeks Support States' Motion Summary Judgment, describing WBEC). 12 brought arguing out fees, taxation. noted doctrine taxation "one been marked inconsistent decisions excessively delicate distinctions." U.S., 730, 1380-1381. surveying our "confusing" precedents, concluded time return underlying immunity: A lay " 'directly States.' 733, 1382 (quoting Mayo 319 441, 447, 1137, 1140, 1504 (1943)). whereas absolutely merely "effect" "even shoulders levy." 734, 1382. fact, "constitutionally irrelevant reimburse[s] contractor's going Alabama King Boozer, 314 62 43, 86 (1941)). Tax "appropriate circumstance: falls itself, agency instrumentality closely connected realistically viewed separate entities." 735, 1383. 13 beyond peradventure tax—indeed, taxed—the case. And addressed analogous 471 (1943). corporation operate Maritime Commission vessel. Customs Inspector suffered injuries vessel led his death, widow maritime tort corporation. defense, respondent contended "that [it] stands, ultimately reason provisions [Maritime] Commission. urged real interest." 582, 429. respondent's petitioner deprived her contract. "Immunity creates readily obtained." 583, Absent congressional allow "concessions contracting officers government" "basic alteration" 584, 430. 14 Mexico any indemnity defeat recovery. Brady, Farid Smith, 850 917, 923 (CA2 1988) (a decision public servants confer Amendment officials sued their capacity). 15 cite cases suggest lesson According (1877), 466 (1884), stand proposition "be employed third who misappropriated agent." Brief 14. find these Army paymaster withdrew paymaster's account, endorsed checks blank, sent them Merchant's Bank instructions credit affirmed Gaines, agent estate's executors sold estate kept portion money. 396, 426. Many later, died, legatee first estate, equity administrator agent's estate. lower court's because, among reasons, she adequate law: 397-398, 427. 16 lacks. each, rightful owner lost way theft. That is, second unlawfully. 643; feature least purposes, legally responsible took satisfied transactions paymaster, banks, "the result fraudulent purpose secure full knowledge belonged manifest violation Congress." words, accomplices, acts other. 2. paying debts See, e.g., J. Perkins, Executors Administrators 988-990 (6th Am. ed. 1877). 17 contend stole not. Nor actions. They adverse relationship: creditor debtor. California's demand believed lawful debt circumstances, proceed received, discussion suggests recourse: W. Jaeger, Williston Contracts 1265 (3d 1967); Respondents (conceding same). When "stands place whose paid." Munsey 332 234, 242, 67 1599, 1603, 91 2022 (1947). Here lapsed barred. subrogation also subrogee, subrogor, usually "cannot acquire have." Equalization's decisions, prejudice terminates "concludes parties particular action." Gagnon Nevada Desert Inn, 45 Cal.2d 448, 455, 289 P.2d 472 (1955). proceeded new state-court time, do. 19 rules necessarily cf. Standard Oil 301, 309, 1604, 1609, 2067 (1947) (suggesting controls "where substituted itself others successor law"). strenuously very least, bind cites position. Summerlin, 310 414, 416, 60 1019, 1020, 84 1283 (1940); Jackson County Commrs. 308 343, 351, 285, 288, 313 (1939); John Hancock Mutual Life Ins. 364 308, 81 5, (1960). cites, obtained through, by, statute, 1020 (United suing Act June 27, 1934, 48 Stat. 1246); Commrs., 349-350, 287-288 Indian trustee statute); limitations, Hancock, redeeming mortgage foreclosure 2410(c)). sovereign capacity. As rightly notes, "When becomes acting governmental capacity, asserts right, deemed abdicated authority subject putting limit enforcement." 417, 1020. 21 became indemnifying debt. can assert equitable courts. Summerlin clearly distinguishable. 22 Whether general difficult question. need today, 1224 (1938), provides guidance There assignee Soviet collect run, asserted, defenses, bound limitations. circumstances "admit[ted] appeal policy." 141, facts. "[F]or proof demonstrate[d] infirmity, running assignor, policy forbid." Here, although payment judicial proceeding. Supreme '[A] surety ipso facto creditor, . before substitution must actively thereto. substantive nature character seized enjoyed independently proceeding.' Offer Superior San Francisco, 194 Cal. 114, 117, 228 P. 11, (1924) 25 Ruling Case Law 1391 (1929)). Accord, 1265, 848, n. cases). waited Trust, strengthens conclusion proceed: ten issued, eight almost six ran suit. 24 affirming often leave "without effective contest improperly exacted contractor" "vagaries" 50 tax-law procedures. 26-27. laws States. Nothing prevents requirement believes term likely remove disinterest toward litigating If today results intolerable drain fisc, Congress, into concerns well address situation. 737-738, 1384. III directly. holding, hoped "forestall, degree, some manipulation wooden formalism occasionally litigation—and proper determining allocation power coexisting sovereignties." 737, Today hold shouldering "entire levy," 1382, To "manipulation formalism" put aside Mexico. 26 Affirmed. syllabus constitutes part prepared Reporter Decisions convenience reader. Detroit Lumber 200 321, 337, 282, 287, 499.

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