In the United States Court of Federal Claims

 WILLIAM KOOPMANN, et al.,

                      Plaintiffs,
                                                           No. 09-cv-333 T
                          v.
                                                           Filed: November 24, 2020
 THE UNITED STATES,

                      Defendant.


For Plaintiffs: Walter A. Bates and Sandra J. Bates, pro se, Winter Haven, FL

For Defendant: Jason Bergmann, United States Department of Justice, Tax Division, Court of
Federal Claims Section, Washington, D.C.

                                    MEMORANDUM AND ORDER

          On April 10, 2020, the Honorable Victor J. Wolksi, the prior judge overseeing this case,

entered an order granting Defendant’s motion to dismiss Plaintiffs Walter and Sandra Bates (the

Bates Plaintiffs) from this action. Koopmann v. United States, No. 09-333T, 

,

at *1 (Fed. Cl. Apr. 10, 2020). On April 27, 2020, the Bates Plaintiffs, proceeding pro se,

submitted a letter requesting this Court “reconsider [its] decision in removing [Plaintiffs] from the

plaintiff list of Koopmann Case #09-333T.” Bates Plaintiffs’ Motion for Reconsideration (ECF

No. 145) (Mot. for Reconsideration) at 1. The Court liberally construed this letter as a motion for

reconsideration of Judge Wolski’s April 10, 2020 Order. See Deficiency Memorandum (ECF No.

144-1).     Defendant timely opposed the Motion for Reconsideration, arguing that the Bates

Plaintiffs have not stated a valid reason upon which this Court could consider or grant their

reconsideration request. See Defendant’s Response (ECF No. 247) (Def. Opp.) at 2. For the

reasons set forth below, the Bates Plaintiffs’ Motion for Reconsideration is DENIED.

                                                                                                   1
                                         BACKGROUND

       This case has a long litigation history. The background of this case as related to the Bates

Plaintiffs is discussed at length in Koopmann v. United States, No. 09-333T, 

,

at *1 (Fed. Cl. Apr. 10, 2020) and United States v. Bates, No. 8:12-cv-833-T-36TBM, 

(M.D. Fla. Nov. 23, 2015). See also Balestra v. United States, 

(Fed. Cir.

2015). In sum, the Bates Plaintiffs allege that they are due a refund of FICA taxes paid on the

portion of Mr. Bates’s deferred compensation benefits that had vested, but he will never receive

due to his former employer’s bankruptcy. See Koopmann, 

, at *1-2. Although

neither party contests the factual findings of either decision, the Court provides a brief summary

of the background of this action for ease of reference.

         The Federal Insurance Contributions Act (FICA), I.R.C. §§ 3101–3128, establishes a tax

that is assessed by the Government based on wages paid to workers, and the money collected from

the FICA tax is used to fund the Social Security and Hospital Insurance (HI) program. Generally,

for purposes of collecting FICA tax, wages are considered received when paid by the employer to

the employee, and wages are paid by the employer when actually or constructively paid. See Treas.

Reg. § 31.3121(v)(2)–1(a)(1). However, some wages are treated differently under the special

timing rule for FICA tax purposes. See Treas. Reg. § 31.3121(v)(2)–1(a)(2). “This tax treatment,

where benefits are taxed although deferred, is referred to as the ‘special timing rule.’” Balestra v.

United States, 

, 110 (2014) (Balestra CFC), aff’d 

(Fed. Cir. 2015).

The “special timing rule only applies to wages under [I.R.C.] § 3121(a) if those wages are from a

‘nonqualified deferred compensation plan’ as described in [Treas. Reg.] § 31.3121(v)(2)–1(b).”

(internal citations and quotations omitted). Under the special timing

rule, FICA tax is assessed only once, at the “later of (i) when the services are performed, or (ii)


                                                                                                   2
when there is no substantial risk of forfeiture of the rights to such amount.” Treas. Reg. §

31.3121(v)(2)–1(a)(2)(ii) (tracking I.R.C. § 3121(v)(2)(A)). There is “no substantial risk of

forfeiture,” if

        an amount deferred is considered reasonably ascertainable on the first date on
        which the amount, form, and commencement date of the benefit payments
        attributable to the amount deferred are known, and the only actuarial or other
        assumptions regarding future events or circumstances needed to determine the
        amount deferred are interest and mortality.

Treas. Reg. § 31.3121(v)(2)–1(e)(4)(i)(B). The deferred benefits are taxed at their present value,

which is computed with reference to reasonable actuarial projections concerning life expectancy

and a discount rate that accounts for the time value of money but does not account for the risk of

employer default. See Treas. Reg. § 31.3121(v)(2)-1(c)(2)(ii); 

.

        Walter A. Bates was an employee of United Airlines (United). Bates, 

,

at *1. As part of his retirement compensation, he was entitled to receive benefits under a

nonqualified deferred compensation plan.

on December 1, 2003, and

subsequently paid FICA taxes on the present value of his nonqualified deferred compensation plan

benefits, estimated to be $1,023,373.03.      See id.; Koopmann, 

, at *2.

Specifically, United paid $14,838.91 in FICA taxes on Mr. Bates’s behalf and subsequently

recouped the amount by deducting it from Mr. Bates’s nonqualified plan benefits. See Bates, 

, at *1-2; Koopmann, 

, at *2. At the time of Mr. Bates’s retirement,

United was reorganizing under Chapter 11 of the Bankruptcy Code. See

plan was ultimately approved, United’s obligation to pay Mr. Bates’s nonqualified

deferred compensation plan benefits was discharged, and consequently Mr. Bates did not receive

a substantial portion of his expected benefits. See id.; see Koopmann, 

, at *2

(noting Mr. Bates received $131,217.02).



                                                                                                3
       In January 2008, Mr. and Mrs. Bates filed a refund claim with the IRS to recover FICA

taxes paid on benefits that Mr. Bates never received due to United’s bankruptcy.

They

sought a refund of FICA taxes in the amount of $12,936.26, which they calculated by applying the

HI tax rate to the benefits Mr. Bates actually received and subtracting this amount from the taxes

that were paid based on the present value of his nonqualified deferred compensation plan benefits.

Koopmann, 

, at *2 (internal citation omitted). The IRS denied their claim in

May 2008.

2009, another retired United pilot acting pro se, William Koopmann, filed a

lawsuit in the United States Court of Federal Claims against the United States seeking, inter alia,

a refund of a portion of the FICA taxes paid relating to his nonqualified deferred compensation

plan benefits. See Complaint, Koopmann v. United States, 09-cv-333 (ECF No. 1) (Compl.). Mr.

Koopmann purported to represent over 160 other retired United pilots, including Mr. Bates, all

acting pro se. See

Mr. and Mrs. Bates also filed with the IRS Office of Appeals an

administrative appeal of the denial of their refund claim; on May 17, 2010, the Bates Plaintiffs

received a refund from the IRS of $17,742.33. Bates, 

, at *2; see also

Koopmann, 

, at *2 (internal citation omitted).

       In a January 27, 2011 letter, the IRS requested that Mr. and Mrs. Bates return the

$17,742.33 refund on the grounds that the IRS did not have authority to grant the refund while


1
  The Bates Plaintiffs, along with forty-seven (47) other pro se plaintiffs, filed a second action on
March 12, 2010, advancing the same claim and seeking the same refund. See Complaint, Sofman
v. United States, No. 10-157T, at 1, (ECF No. 1); see also Plaintiff Information Sheet (ECF No.
61) at 13. The Bates Plaintiffs’ claim in Sofman was not subject to Judge Wolski’s April 10, 2020
decision in Koopmann and is therefore not subject to this Order. However, the Court notes that
the Bates Plaintiffs’ refund claim in Sofman are identical to their claim in Koopmann. The Court
had expected that the Bates Plaintiffs would file a consent motion to withdraw from Sofman by
July 16, 2020, since the claims are seemingly duplicative. See Order, Sofman v. United States, No.
10-157T (May 11, 2020) (ECF No. 133). The parties did not make such a filing. The Court will
address the Bates Plaintiffs’ duplicative complaint in Sofman by separate order.
                                                                                                   4
litigation was pending in Koopman because Mr. and Mrs. Bates were still plaintiffs in that case.

Bates, 

, at *2. On February 14, 2011, Mr. Bates sent a short letter to the IRS

stating:

           I have received your letter dated Jan 27, 2011. As you noted, I am a plaintiff in an
           ongoing lawsuit in the Court of Federal Claims against the IRS, for refund of these
           excess FICA taxes. Therefore, I intend to wait for the conclusion of that litigation
           before taking further action. If you should win I will return the refunded amount
           and interest, as the Court orders.

Bates, 

, at *2.

           Subsequently, the United States sued Mr. and Mrs. Bates in the U.S. District Court for

Middle District of Florida (District Court), seeking to recover the refund, plus interest, under the

erroneous refund provision of the tax code, 26 U.S.C. § 7405. Koopmann, 

, at

*2 (internal citation omitted). Following a bench trial, the government obtained a judgment against

Mr. and Mrs. Bates on the ground that they filed their refund request after the expiry of the statute

of limitations period established by 26 U.S.C. § 6511. Koopmann, 

, at *2 (citing

Bates, 

, at *4-5).

           On April 10, 2020, Judge Wolski dismissed the Bates Plaintiffs’ complaint because the

District Court had already decided that Mr. and Mrs. Bates were not entitled to the same tax refund

at issue in Koopmann; thus, their claim in this Court was barred by the doctrine of collateral

estoppel. Koopmann, 

, at *5.

           On April 10, 2020, this case was transferred to the undersigned judge. See Order (ECF

No. 135). On April 27, 2020, the Bates Plaintiffs timely moved for reconsideration of Judge

Wolski’s decision dismissing their complaint. See Mot. for Reconsideration at 1. The Bates

Plaintiffs make two main arguments in their Motion.                First, the Bates Plaintiffs urge

reconsideration, stating that they were unaware that the United States District Court’s decision in



                                                                                                   5
Bates would preclude them from seeking relief in this Court. See

further

contend that they did not appeal the United States District Court’s decision in Bates because of

alleged representations made by a government attorney that they could address their arguments

before the United States Court of Federal Claims.

second argument

concerns the statute of limitations period established by 26 U.S.C. § 6511(a). The Bates Plaintiffs

allege that the District Court failed to consider their argument that the IRS improperly interpreted

26 U.S.C. § 6511(a) because “[Mr. Bates’s] employer was required to file the FICA tax return,”

not Mr. Bates himself.

Mrs. Bates allege that the District Court refused

to hear their argument that the IRS improperly interpreted 26 U.S.C. § 6511(a) as barring a refund

request where the event triggering the purported eligibility for that refund –United’s bankruptcy

and discharge of obligations to pay Mr. Bates’s benefits– did not occur until after the statute of

limitations had lapsed.

Bates are sympathetic plaintiffs and the Court sincerely understands their

frustration. However, this Court is bound by laws enacted by Congress, precedent of the United

States Court of Appeals for the Federal Circuit, and by the Rules of the United States Court of

Federal Claims, which in this instance do not permit the Court to reconsider the same arguments

that the Bates Plaintiffs previously advanced and that Judge Wolski thoroughly addressed.



                                          DISCUSSION

       Motions for reconsideration are governed by Rule 59(a)(1) of the Rules of the United States

Court of Federal Claims (Rules). Pursuant to Rule 59(a)(1), a court, in its discretion, “may grant

a motion for reconsideration when there has been an intervening change in the controlling law,

newly discovered evidence, or a need to correct clear factual or legal error or prevent manifest


                                                                                                  6
injustice.” Biery v. United States, 

, 711 (Fed. Cir. 2016) (internal citation and

quotation omitted). A motion for reconsideration must also be supported “by a showing of

extraordinary circumstances which justify relief.”

United States, 

, 1235 (Fed. Cir. 2004)). Such a motion “may not be used to relitigate old matters, or to raise

arguments or present evidence that could have been raised prior to the entry of judgment.” Exxon

Shipping Co. v. Baker, 

, 485 n.5 (2008) (quotation omitted). “The decision whether

to grant reconsideration lies largely within the discretion of the [trial] court.” Yuba Natural Res.,

Inc. v. United States, 

, 1583 (Fed. Cir. 1990).

       Here, it is undisputed that the Bates Plaintiffs’ arguments on reconsideration are not based

on a change of law or newly discovered evidence. Additionally, there is not a clear factual or legal

error for the Court to correct. The Motion for Reconsideration clearly makes arguments that the

Bates Plaintiffs either made before Judge Wolski or could have made to him previously. See Four

Rivers Invs., Inc. v. United States, 

, 664 (2007) (motions for reconsideration are

not opportunities for parties to reassert arguments that the court has already heard) (citations

omitted).

       First, the Bates Plaintiffs allege again on reconsideration that they were unaware that the

United States District Court’s decision in Bates would preclude them from seeking relief in this

Court. Mot. for Reconsideration at 1. However, Judge Wolski fully considered and rejected this

identical argument. See Koopmann, 

, at *5 (“Although it appears that Mr. and

Mrs. Bates, representing themselves in the district court as well as in this court, chose not to appeal

the district court’s decision because they believed that their refund could be litigated in this court,

this is unfortunately not the case.”) (citations omitted).




                                                                                                     7
       Second, the Bates Plaintiffs are incorrect in their assertion that either the District Court or

Judge Wolski failed to consider their arguments related to the IRS’s interpretation of 26 U.S.C. §

6511(a). See Mot. for Reconsideration at 1. Both Judge Wolski and the District Court in Bates

have already considered and rejected the Bates Plaintiffs’ arguments related to the time bar

established by 26 U.S.C. § 6511(a). See Koopmann, 

, at *5 (holding district

court determined that 26 U.S.C. § 6511(a) barred plaintiffs’ refund request and accordingly the

court is precluded from permitting re-litigation of claim); see also Bates, 

at *5

(holding that Mr. and Mrs. Bates filed their refund request “outside the statutory limitations period

provided by 26 U.S.C. § 6511”). In considering and rejecting these identical arguments, the

District Court recognized, and this Court agrees, 2 that the “circumstances here are unusual and that

the result . . . seems harsh” but “[u]nfortunately this Court has no authority to equitably toll the

limitations period in this case.” Bates, 

, at *4-5; see also Koopmann, 

, at *4-5. As the Bates Plaintiffs have not identified an “intervening change in the

controlling law, newly discovered evidence, or a need to correct clear factual or legal error or

prevent manifest injustice,” required by Rule 59, this Court must deny their Motion for

Reconsideration.




2
   This Court has analyzed the District Court’s reasoning in subsequent decisions, including in
Koopmann v. United States, No. 09-cv-333 T, 

, at *6 (Fed. Cl. Sept. 30, 2020)
(dismissing plaintiff Mr. Brashear’s claim for a tax refund as untimely) and Koopmann v. United
States, No. 09-cv-333 T, 

, at *5 (Fed. Cl. Sept. 30, 2020) (dismissing plaintiff
Mr. Koopmann’s claim for a tax refund as untimely). Though those decisions did not directly
address the Bates Plaintiffs’ Motion for Reconsideration, they addressed statute of limitations
arguments the Bates Plaintiffs advance here.
                                                                                                    8
                                    CONCLUSION

      For the reasons set forth above, this Court DENIES the Bates Plaintiffs’ Motion for

Reconsideration (ECF No. 145).

       IT IS SO ORDERED.


                                                           s/Eleni M. Roumel
                                                          ELENI M. ROUMEL
                                                              Chief Judge




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