Free Joint Preliminary Status Report - District Court of Federal Claims - federal

Case 1:07-cv-00887-LJB

Document 12

Filed 07/24/2008

Page 1 of 4

IN THE UNITED STATES COURT OF FEDERAL CLAIMS No. 07-887 T (Judge Lynn J. Bush) ___________________________________ JAMES BOSTWICK and MARTI PHILLIPS, Plaintiffs, v. THE UNITED STATES, Defendant.

______________________________________________ JOINT PRELIMINARY STATUS REPORT ______________________________________________

Pursuant to Appendix A, paragraph 4, of the Rules of the U.S. Court of Federal Claims ("RCFC") the parties submit the following Joint Preliminary Status Report: (a) Jurisdiction. The parties disagree about the extent to which this Court has jurisdiction over this refund suit. Plaintiffs believe this to be a refund suit over which this Court has jurisdiction under 28 U.S.C. § 1491. Defendant believes that a portion of this suit is barred by 26 U.S.C. §§ 6511(a) and 7422(a) because the administrative refund claim for the 2000 and 2001 was untimely. (b) Consolidation or transfer. The parties are unaware at the present time of any basis for consolidation or transfer of this case. (c) Bifurcation of trial. In the event of a trial in this case, the parties believe that the trial should not be bifurcated, and that evidence concerning both liability and damages should be presented at one trial. The parties request that the Court would

-1-

Case 1:07-cv-00887-LJB

Document 12

Filed 07/24/2008

Page 2 of 4

initially determine the question of liability only, and afterwards, depending upon the Court's ruling on the merits of the dispute, permit the parties a reasonable period to perform and agree upon any necessary computation of the amount due, so that the parties can submit a stipulation as to the amount of any judgment. This would avoid devoting unnecessary attention to computations at trial. (d) Deferral. The parties know of no reason for deferral of proceedings at this time. (e) Remand or suspension. The parties do not believe that remand or suspension is appropriate at this time. (f) Additional parties. The parties are unaware of any additional parties to be joined. (g) Dispositive motions. Defendant believes that this case may be susceptible to resolution through a dispositive motion. Once discovery is completed, the parties will be in a better position to determine whether this is so. (h) Issues. Apart from the government's challenge to the timeliness of the administrative claims for 2000 and 2001, the substantive issues in this tax refund case are (1) whether plaintiffs' failure to pay their income taxes for the years at issue was "due to reasonable cause and not due to willful neglect," I.R.C. § 6651(a)(1), and (2) whether an addition to tax attributable to the plaintiffs' underpayment of estimated taxes for the years at issue would "by reason of casualty, disaster, or other unusual circumstances . . . be against equity and good conscience." I.R.C. § 6654(e)(3)(A). (i) Settlement. At the present time, the parties are unable to determine whether this case can be settled. The parties submit that additional information must be obtained

-2-

Case 1:07-cv-00887-LJB

Document 12

Filed 07/24/2008

Page 3 of 4

in discovery before such a determination can be made. The parties are open to the possibility of alternative dispute resolution, including early neutral evaluation. (j) Trial. If the Court determines it has jurisdiction over this case, the parties believe trial may be necessary. The parties propose that within 45 days of the completion of discovery, they will submit to the Court a status report proposing further proceedings needed to resolve this case. (k) Special issues regarding electronic case management needs. The parties are unaware of any issues regarding electronic case management needs at this time. (l) Other information. The parties understand that there is a criminal case pending in a California state court charging the former controller of plaintiffs' corporation with embezzlement. After fact discovery, the parties will evaluate whether expert testimony may be necessary and, if so, then the parties will make recommendations as to expert witness discovery timeline. The parties are unaware of any other matters of which this Court should be advised at this time. PROPOSED DISCOVERY PLAN. Pursuant to RCFC, Appendix A, ¶ 5, the parties propose the following: a. That the initial period for discovery run through January 26, 2009. b. That on or before January 12, 2009, the parties submit to the Court a joint status report discussing the progress of discovery and recommending further proceedings.

-3-

Case 1:07-cv-00887-LJB

Document 12

Filed 07/24/2008

Page 4 of 4

Respectfully submitted, Counsel for Plaintiff July 24, 2008

s/ Mark A. Krasner MARK A. KRASNER Blanchard Krasner & French 800 Silverado Street, Second Floor La Jolla, CA 92037 (v) 858-551-2440 (f) 858-551-2434

Counsel for Defendant July 24, 2008

s/ Richard H. Bowles RICHARD H. BOWLES Attorney of Record U.S. Department of Justice, Tax Division Court of Federal Claims Section P.O. Box 26 Washington, D.C. 20044 (v) 202-307-6500 (f) 202-514-9440

NATHAN J. HOCHMAN Assistant Attorney General DAVID D. GUSTAFSON Chief, Court of Federal Claims Section G. ROBSON STEWART Reviewer

July 24, 2008

s/ G. Robson Stewart Of Counsel

-4-