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

Case 1:07-cv-00812-MCW

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Filed 05/15/2008

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS No. 07-812 T (Judge Mary Ellen Coster Williams) ____________________________________________ ENERGY EAST CORPORATION Plaintiff, v. THE UNITED STATES Defendant. ____________________________________________ JOINT PRELIMINARY STATUS REPORT ____________________________________________ Pursuant to Section III of Appendix A to the Rules of the United States Court of Federal Claims ("RCFC"), the parties submit the following information: a. Jurisdiction. The parties agree that the Court has jurisdiction over this case pursuant to 28 U.S.C. § 1491. b. Consolidation. The parties are unaware of any other case with which this case should be consolidated. c. Bifurcation of Trial. The parties are of the view that no trial will be required in this proceeding. d. Deferral of Proceedings. The parties know of no case pending before this Court that would justify deferral of proceedings in this case. e. Remand or Suspension. Neither remand nor suspension will be sought. f. Additional Parties. The parties know of no additional parties that should be joined to this case.

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Case 1:07-cv-00812-MCW

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g. Dispositive Motions. Plaintiff filed its complaint to prevent the statute of limitations established by 28 U.S.C. §§ 2401 and 2501 from expiring prior to the Internal Revenue Service reaching a determination with respect to plaintiff's claim. The parties have yet to engage in discovery. At present, the parties are not aware of any factual disputes, and are of the view that the legal issues in connection with plaintiff's claim are amenable to resolution through cross-motions for summary judgment. h. Issues. This is a suit for additional overpayment interest and/or a refund of deficiency interest pursuant to 26 U.S.C. §§ 6601, 6611 and 6621(d). Plaintiff's complaint presents two issues to the Court: 1. Plaintiff's request under § 6621(d) for a net zero interest rate on overlapping periods of overpayment and underpayment of federal income tax, includes some periods of time for which the companies involved were separate companies. Subsequently, within the overlapping periods of overpayment and underpayment the companies became part of a single consolidated group of companies. The legal issue before the Court is whether plaintiff is entitled to a zero net interest rate for overlapping periods of overpayments attributable to two entities, and underpayments attributable to a third entity, where the entities were related for portions of the overlapping periods, but not the entire overlapping periods. 2. If plaintiff is entitled to a net zero interest rate for overlapping periods of overpayment and underpayment between companies that were part of the same consolidated group for only a portion of the overlapping periods, a second issue arises, which is broadly stated as whether interest is properly owing to plaintiff, and if so, what amount.

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i. Settlement. It is too early in the proceeding to preclude resolution by settlement. However, if settlement is not possible, counsel believe that the legal issue presented by plaintiff's complaint is amenable to resolution through cross-motions for summary judgment. If the Court's ruling on the summary judgment issue requires the parties to address the second issue, the parties believe that they will be capable of settling the amount in controversy. j. Trial. As noted above, the parties are of the view that no trial will be required in this proceeding. k. Special ECM Issues. This case does not currently present any special issues regarding electronic case management. l. Other Information. The parties are unaware of any other information to which the Court should be made aware at this time. m. Proposed Discovery Plan. The parties propose a 120 day discovery period for the purpose of discovering facts relevant to the summary judgment issue. Pending the outcome of the primary issue, the parties may propose additional discovery if additional facts, relevant to the amount in controversy, are needed to resolve the case.

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Respectfully submitted, May 15, 2008 /s/ Joseph M. Persinger . JOSEPH M. PERSINGER Milbank, Tweed, Hadley & McCloy LLP 1 Chase Manhattan Plaza New York, NY 10005 Tel: (212) 530-5072 Fax: (212) 822-5072 Email: [email protected] Attorney for Plaintiff /s/ Jeffrey R. Malo JEFFREY R. MALO Attorney of Record United States Department of Justice Tax Division Court of Federal Claims Section P.O. Box 26 Ben Franklin Post Office Washington, DC 20044 Tel: (202) 305-7539 Fax: (202) 514-9440 Email: [email protected] NATHAN J. HOCHMAN Assistant Attorney General DAVID GUSTAFSON Chief, Court of Federal Claims Section May 15, 2008 /s/ W.C. Rapp W.C. RAPP Senior Trial Attorney Court of Federal Claims Section Of Counsel Attorneys for Defendant . .

May 15, 2008

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