Court Opinion

ID: 4665965
Source: CourtListenerOpinion
Date Created: 2021-03-09 16:01:15.934346+00
Date Added: 2024-06-11T08:02:46.209691
License: Public Domain

Case: 20-1518   Document: 24     Page: 1   Filed: 03/08/2021

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

                  ROY J. MEIDINGER,
                   Plaintiff-Appellant

                            v.

                   UNITED STATES,
                   Defendant-Appellee
                 ______________________

                       2020-1518
                 ______________________

     Appeal from the United States Court of Federal Claims
 in No. 1:19-cv-01521-CFL, Senior Judge Charles F. Lettow.
                   ______________________

                 Decided: March 8, 2021
                 ______________________

    ROY J. MEIDINGER, Fort Myers, FL, pro se.

     ANTONIA RAMOS SOARES, Commercial Litigation
 Branch, Civil Division, United States Department of Jus-
 tice, Washington, DC, for defendant-appellee. Also repre-
 sented by JEFFREY B. CLARK, ROBERT EDWARD KIRSCHMAN,
 JR., PATRICIA M. MCCARTHY.
                  ______________________

  Before NEWMAN, LOURIE, and O’MALLEY, Circuit Judges.
Case: 20-1518    Document: 24      Page: 2    Filed: 03/08/2021

2                                 MEIDINGER   v. UNITED STATES

 PER CURIAM.
     Roy J. Meidinger filed suit in the United States Court
 of Federal Claims, seeking damages for breach of an as-
 serted contract with the United States based on his sub-
 mission of whistleblower information to the Internal
 Revenue Service (IRS) in accordance with 26 U.S.C.
 § 7623. He states that “the submission of the whistle-
 blower claim [identifying tax evaders] is the formation of a
 contract” and “the IRS breached its contractual duties and
 responsibilities to collect the taxes [and] do any investiga-
 tions.” Meidinger Compl., S.Appx. 12. 1 He seeks damages
 for breach of contract.
     The Court of Federal Claims held that the submission
 of whistleblower information did not create a contract with
 the IRS, and dismissed the complaint. 2 We affirm the dis-
 missal.
                        BACKGROUND
     In 2009 Mr. Meidinger submitted whistleblower infor-
 mation to the IRS pursuant to 26 U.S.C. § 7623. He states
 that he provided “detailed information and expert support
 documentation” concerning “one million taxpayers in the
 healthcare industry that are involved in a kickback
 scheme.” CFC Op. at 493. Relevant statutory provisions
 include:

     1   “S.Appx” refers to the Supplemental Appendix filed
 by the government. “Appx” refers to the Appendix filed by
 Mr. Meidinger.
     2  Meidinger v. United States, 146 Fed. Cl. 491 (2020)
 (“CFC Op.”).
Case: 20-1518     Document: 24   Page: 3    Filed: 03/08/2021

 MEIDINGER   v. UNITED STATES                              3

    26 U.S.C. § 7623. Expenses of detection of under-
    payments and fraud, etc.
    (a) In general.
    The Secretary, under regulations prescribed by the
    Secretary, is authorized to pay such sums as he deems
    necessary for—
        (1) detecting underpayments of tax, or
        (2) detecting and bringing to trial and punish-
            ment persons guilty of violating the inter-
            nal revenue laws or conniving at the same,
    in cases where such expenses are not otherwise pro-
    vided for by law. Any amount payable under the pre-
    ceding sentence shall be paid from the proceeds of
    amounts collected by reason of the information pro-
    vided, and any amount so collected shall be available
    for such payments.
    (b) Awards to whistleblowers.
        (1) In general.
        If the Secretary proceeds with any administra-
        tive or judicial action described in subsection
        (a) based on information brought to the Secre-
        tary’s attention by an individual, such individ-
        ual shall, subject to paragraph (2), receive as
        an award at least 15 percent but not more than
        30 percent of the proceeds collected as a result
        of the action (including any related actions) or
        from any settlement in response to such action
        (determined without regard to whether such
        proceeds are available to the Secretary). The
        determination of the amount of such award by
        the Whistleblower Office shall depend upon the
        extent to which the individual substantially
        contributed to such action.
Case: 20-1518    Document: 24     Page: 4     Filed: 03/08/2021

4                                 MEIDINGER   v. UNITED STATES

 IRS Form 211, entitled “Application for Award for Original
 Information,” starts the procedure by which a whistle-
 blower obtains an award under § 7623. “A claimant must
 file a formal claim for award by completing and sending
 Form 211 … to be considered for the Whistleblower Pro-
 gram.” Internal Revenue Service, Cat. No. 16571S, In-
 structions for Form 211, Application for Award for Original
 Information (2018).
     Section 7623 provides for appeal of IRS determinations
 concerning whistleblower awards. Until 2006 the Court of
 Federal Claims decided such appeals. In 2006 the appeal
 path was changed to the Tax Court. Statutory provisions,
 as here relevant, include:
    26 U.S.C. § 7623(b)
                            ***
    (4) Appeal of award determination.
    Any determination regarding an award under par-
    agraph (1), (2), or (3) may, within 30 days of such
    determination, be appealed to the Tax Court (and
    the Tax Court shall have jurisdiction with respect
    to such matter).
                            ***
    (6) Additional rules.
        (A) No contract necessary.
        No contract with the Internal Revenue Service
        is necessary for any individual to receive an
        award under this subsection.
 Mr. Meidinger, in 2009, filed a Form 211 Application. The
 IRS acknowledged receipt of the information, but did not
 take administrative or judicial action against the accused
 persons. The IRS notified Mr. Meidinger of that determi-
 nation, as provided by IRS Manual § 3.08.
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 MEIDINGER   v. UNITED STATES                               5

     Mr. Meidinger appealed in the Tax Court, in accord-
 ance with § 7623(b)(4). He alleged abuse of discretion by
 the IRS in denying his whistleblower award, and failure of
 the IRS to adequately explain its determination not to in-
 vestigate his information. He stated that the IRS created
 a contract when it confirmed receipt of his Form 211 Appli-
 cation, thus obligating the IRS to investigate the infor-
 mation and to pay the statutory award. The IRS responded
 that an award was not appropriate because the IRS had
 not taken administrative or judicial action or collected any
 tax or penalty based on the information he provided.
     The Tax Court held that it lacked authority to order the
 IRS to investigate or conduct an administrative proceeding
 or initiate judicial action. The court granted summary
 judgment in favor of the IRS. Meidinger v. Comm’r of
 I.R.S., No. 16513-12W (U.S.T.C. 2013).
     Mr. Meidinger appealed the Tax Court’s decision to the
 Court of Appeals for the District of Columbia Circuit. That
 court affirmed that Mr. Meidinger was not eligible for a
 whistleblower award “because the information appellant
 provided did not result in initiation of an administrative or
 judicial action or collection of tax proceeds.” Meidinger v.
 Comm’r of I.R.S., 559 F. App’x. 5, 6 (D.C. Cir. 2014) (quo-
 tation marks omitted). The court stated that neither the
 Tax Court nor the D.C. Circuit has authority to order the
 IRS to act on a whistleblower’s submission of information.
 Id.
     In May 2018, Mr. Meidinger filed another Form 211
 Application, with the same information as his previous
 submission. The IRS acknowledged receipt, but again did
 not act on the information, advising Mr. Meidinger that the
 information was “speculative” and “did not provide specific
 or credible information regarding tax underpayments or vi-
 olations of internal revenue laws.” Meidinger v. Comm’r of
 I.R.S., No. 16585-18W, at 1 (U.S.T.C. 2018).
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6                                MEIDINGER   v. UNITED STATES

     Mr. Meidinger again appealed to the Tax Court. The
 Tax Court granted the IRS’s motion to dismiss for failure
 to state a claim, stating that no award obligation arose be-
 cause the disclosure did not lead to any administrative or
 judicial proceeding or collection of any tax. Id. at 2.
     Mr. Meidinger again appealed to the District of Colum-
 bia Circuit. He stated that his interactions with the IRS
 created an implied-in-fact contract that had been breached
 by the IRS. The D.C. Circuit affirmed the decision of the
 Tax Court. In its opinion the Circuit stated that “[i]nsofar
 as [Mr. Meidinger] seeks to pursue a breach of contract
 claim against the Internal Revenue Service, such a claim
 is properly filed in the U.S. Court of Federal Claims.”
 Meidinger v. Comm’r of I.R.S., 771 F. App’x. 11, 12 (D.C.
 Cir. 2019). The court recited the Tucker Act:
    28 U.S.C. § 1491(a)(1)-- The United States Court
    of Federal Claims shall have jurisdiction to render
    judgment upon any claim against the United
    States founded either upon the Constitution or any
    Act of Congress or any regulation of an executive
    department, or upon any express or implied con-
    tract with the United States, or for liquidated or
    unliquidated damages in cases not sounding in
    tort.
 Id. (quoting 28 U.S.C. § 1491(a)(1)). Mr. Meidinger then
 filed suit in the Court of Federal Claims. That court
 granted the government’s motion to dismiss, leading to this
 appeal.
                        DISCUSSION
     Questions of jurisdiction receive plenary review on ap-
 peal. Petro-Hunt, LLC v. United States, 862 F.3d 1370,
 1378 (Fed. Cir. 2017). Questions of statutory interpreta-
 tion also receive plenary review. Adair v United States, 497
 F.3d 1244, 1250 (Fed. Cir. 2007). In deciding a motion to
 dismiss, a court is “obligated to assume all factual
Case: 20-1518     Document: 24     Page: 7    Filed: 03/08/2021

 MEIDINGER   v. UNITED STATES                                7

 allegations to be true and to draw all reasonable inferences
 in plaintiff’s favor.” Henke v. United States, 60 F.3d 795,
 797 (Fed. Cir. 1995).
     The Court of Federal Claims dismissed Mr. Meidinger’s
 complaint on the ground of lack of subject matter jurisdic-
 tion, stating that appeals concerning whistleblower awards
 under 26 U.S.C. § 7623(b) are assigned exclusively to the
 Tax Court. The Court of Federal Claims alternatively dis-
 missed the complaint under Rule 12(b)(6) for failure to
 state a claim for breach of contract, finding that no contract
 existed between the IRS and Mr. Meidinger.
     On appeal, it is unclear whether Mr. Meidinger argues
 that the Court of Federal Claims had jurisdiction to make
 an initial award under § 7623 or asserts the existence of a
 contract even when no award would be recoverable under
 § 7623. As we discuss below, if it is the former, jurisdiction
 over that claim lies solely within the purview of the Tax
 Court. If it is the latter, as it appears more clearly to be,
 he has failed to state a claim for the reasons set out in Mer-
 rick v. United States, 846 F.2d 725, 726 (Fed. Cir. 1988).
     Enacted in 2006, 26 U.S.C. § 7623(b)(4) authorizes the
 Tax Court to receive appeals of claims arising from the
 whistleblower award provision of the Tax Code. In Da-
 Costa v. United States, 82 Fed. Cl. 549 (2008), the Court of
 Federal Claims addressed, for the first time, the question
 whether, under the new scheme, the Tax Court had exclu-
 sive jurisdiction over § 7623 appeals. Reasoning by anal-
 ogy to the Supreme Court’s decision in Hinck v. United
 States, 550 U.S. 501 (2007), concerning the Tax Court’s ex-
 clusive jurisdiction over IRS actions on interest abatement,
 the court held that “claims based upon subsection
 7623(b)(1) are within the exclusive jurisdiction of the Tax
 Court.” DaCosta, 82 Fed. Cl. at 555. This conclusion was
 reiterated in Capelouto v. United States, 99 Fed. Cl. 682,
 691 (2011) (“Because Congress has vested the United
 States Tax Court with subject matter jurisdiction over
Case: 20-1518    Document: 24      Page: 8    Filed: 03/08/2021

8                                 MEIDINGER   v. UNITED STATES

 suits to recover an award under section 7623(b), such suits
 are beyond the jurisdiction of this court.”). We agree with
 the Court of Federal Claims’ analysis and hold that the Tax
 Court has exclusive jurisdiction over claims based on
 § 7623. Thus, to the extent that Mr. Meidinger asserts a
 claim under § 7623, dismissal of those claims for lack of ju-
 risdiction was appropriate.
     Mr. Meidinger further argues that he had a contract
 with the IRS. He states he is seeking damages for breach
 of that contract. Mr. Meidinger argues that a contract
 arose because § 7623(b)(1) is an offer of payment for infor-
 mation about tax evaders, which he accepted by providing
 the Form 211 information. He states that the Court of Fed-
 eral Claims erred in holding that neither an express con-
 tract nor an implied-in-fact contract arose.
      Mr. Meidinger’s contract claim fails. In Merrick v.
 United States, 846 F.2d 725 (Fed. Cir. 1988) this court held
 that an enforceable contract under § 7623 arises “only after
 the informant and the government negotiate and fix a spe-
 cific amount as the reward.” Id. at 726. No such negotia-
 tion and agreement occurred on Mr. Meidinger’s
 information.
     Mr. Meidinger argues that the legislative purpose of 26
 U.S.C. § 7623 is that the whistleblower payment obligation
 arises upon submission of the whistleblower disclosure, as
 demonstrated in the new version of § 7623(b)(6)(A) making
 clear that no contract is needed to support an award. This
 provision supports jurisdiction in the Tax Court to grant an
 award absent a contract; it does not enlarge the jurisdiction
 of the Court of Federal Claims. The Court of Federal
 Claims correctly held that the submission of a whistle-
 blower Application Form 211 does not create a contract-
 based obligation enforceable in that court.
     Finally Mr. Meidinger argues that the D.C. Circuit
 sent him to the Court of Federal Claims. The D.C. Circuit
 indeed informed Mr. Meidinger that the Court of Federal
Case: 20-1518     Document: 24    Page: 9    Filed: 03/08/2021

 MEIDINGER   v. UNITED STATES                              9

 Claims has jurisdiction over claims founded on a contract
 with the United States. The D.C. Circuit did not find that
 such a contract existed, however.
                         CONCLUSION
     The Court of Federal Claims correctly held that it lacks
 jurisdiction over § 7623 whistleblower claims and that Mr.
 Meidinger did not otherwise plausibly plead the existence
 of a contract with the government. The dismissal of the
 complaint is affirmed.
                        AFFIRMED