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    This document summarizes a court case between Mesa Oil, Inc. and the United States regarding Mesa's request for penalty abatement and an alternative payment plan. The district court upheld the IRS's denial of penalty abatement but remanded the payment plan issue for further consideration. Mesa appealed the penalty abatement ruling. The appeals court found it did not have jurisdiction over the appeal as the district court's order was not final, and the collateral order doctrine did not apply to make the order appealable as Mesa's claims could still be reviewed after the remand issue was decided. The court dismissed the appeal for lack of jurisdiction.

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    Publish United States Court of Appeals Tenth Circuit: Filed

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    This document summarizes a court case between Mesa Oil, Inc. and the United States regarding Mesa's request for penalty abatement and an alternative payment plan. The district court upheld the IRS's denial of penalty abatement but remanded the payment plan issue for further consideration. Mesa appealed the penalty abatement ruling. The appeals court found it did not have jurisdiction over the appeal as the district court's order was not final, and the collateral order doctrine did not apply to make the order appealable as Mesa's claims could still be reviewed after the remand issue was decided. The court dismissed the appeal for lack of jurisdiction.

    Original Description:

    Filed: 2006-10-31 Precedential Status: Precedential Docket: 05-1107

    Original Title

    Mesa Oil, Inc. v. United States, 10th Cir. (2006)

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    This document summarizes a court case between Mesa Oil, Inc. and the United States regarding Mesa's request for penalty abatement and an alternative payment plan. The district court upheld the IRS's denial of penalty abatement but remanded the payment plan issue for further consideration. Mesa appealed the penalty abatement ruling. The appeals court found it did not have jurisdiction over the appeal as the district court's order was not final, and the collateral order doctrine did not apply to make the order appealable as Mesa's claims could still be reviewed after the remand issue was decided. The court dismissed the appeal for lack of jurisdiction.

    Copyright:

    Public Domain
    Download as PDF or read online from Scribd
    Download as pdf
    21 views9 pages

    Publish United States Court of Appeals Tenth Circuit: Filed

    Uploaded by

    Scribd Government Docs
    This document summarizes a court case between Mesa Oil, Inc. and the United States regarding Mesa's request for penalty abatement and an alternative payment plan. The district court upheld the IRS's denial of penalty abatement but remanded the payment plan issue for further consideration. Mesa appealed the penalty abatement ruling. The appeals court found it did not have jurisdiction over the appeal as the district court's order was not final, and the collateral order doctrine did not apply to make the order appealable as Mesa's claims could still be reviewed after the remand issue was decided. The court dismissed the appeal for lack of jurisdiction.

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    of 9

    F I L E D

    United States Court of Appeals


    Tenth Circuit

    October 31, 2006


    Elisabeth A. Shumaker
    Clerk of Court

    PUBLISH

    UNITED STATES COURT OF APPEALS


    TENTH CIRCUIT

    M ESA OIL, IN C.,


    Plaintiff-Appellant,
    v.

    No. 05-1107

    U N ITED STA TES O F A M ER ICA,


    Defendant-Appellee.

    Appeal from the United States District Court


    for the District of Colorado
    (D.C. No. 03-F-1677 (PAC))

    Theodore H. M erriam (Kevin A. Planegger with him on the briefs), M erriam Law
    Firm, P.C., Denver, Colorado, for Plaintiff-Appellant.
    Teresa E. M cLaughlin, Attorney, Tax Division (Eileen J. OConnor, Assistant
    Attorney General; and John A. Nolet, Attorney, Tax Division, with her on the
    brief), Department of Justice, W ashington, D.C., for Defendant-Appellee.

    Before L UC ER O, SE YM OU R, and OBRIEN, Circuit Judges.

    SE YM O UR, Circuit Judge.

    M esa Oil, Inc. (M esa) appeals from the partial judgment of the district
    court upholding the Internal Revenue Service (IRS) Appeals Offices denial of
    M esas request for abatement of financial penalties. The district court also
    ordered a remand to the Appeals Officer for reconsideration of M esas request for
    an alternative payment plan to repay its delinquent taxes and penalties. W e
    dismiss the appeal for lack of jurisdiction.

    I
    M esa failed to pay federal employment taxes for three fiscal quarters in
    2002 and corporate income taxes for the year 2001. After the IRS expressed its
    intent to satisfy unpaid taxes and penalties via a levy on its corporate assets, M esa
    initiated a collection due process (CDP) hearing with the Rocky M ountain
    Appeals O ffice of the IRS. At the CDP hearing, M esa asserted it was entitled to
    penalty abatement for reasonable cause. It also argued it should be permitted to
    pay in installments or be afforded additional time to arrange financing sufficient
    to satisfy its tax liabilities. The Appeals Officer concluded M esa was not entitled
    to penalty abatement and rejected its request for an alternative payment plan.
    M esa appealed the A ppeal Officers decision to the district court. On
    cross-motions for summary judgment, the district court issued a judgment and
    remand order on January 31, 2005 affirming the Appeals Officers denial of
    M esas request for penalty abatement and reversing and remanding to the
    -2-

    Appeals Officer for further consideration of M esas alternative collection


    request. M esa filed a notice of appeal to this court seeking review of the district
    courts decision upholding the Appeals Officers denial of a penalty abatement.
    M esa does not, of course, seek review of the district courts order in its favor
    remanding payment issues to the Appeals Officer.

    II
    This court has jurisdiction to entertain appeals from final decisions of the
    district courts. 28 U.S.C. 1291. To be final, a decision ordinarily ends the
    litigation on the merits and leaves nothing for the court to do but execute the
    judgment. Cunningham v. Hamilton Cty., Ohio, 527 U.S. 198, 204 (1999)
    (quotations and citations omitted). The finality requirement in 1291 evinces a
    legislative judgment that restricting appellate review to final decisions prevents
    the debilitating effect on judicial administration caused by piecemeal appeal
    disposition of what is, in practical consequences, but a single controversy.
    Coopers & Lybrand v. Livesay, 437 U.S. 463, 471 (1968) (quotations and
    citations omitted).
    In general, a decision to remand is not a resolution of the controversy on
    its merits, and is not a final decision. Loffland Bros., Co. v. Rougeau, 655 F.2d
    1031, 1032 (10th Cir. 1981). The district courts bifurcated order here,
    determining one issue but remanding M esas alternative payment request, is
    -3-

    clearly not a final decision ending the litigation on the merits and it therefore
    does not fall within the ordinary application of the jurisdictional grant of 28
    U.S.C. 1291.
    Neither party disputes the interlocutory nature of this appeal. Instead, both
    assert we have jurisdiction under the collateral order doctrine, claiming the
    penalty abatement issue may become effectively unreviewable if we do not
    consider it at this time. In a small class of cases, we have jurisdiction over
    interlocutory appeals from non-final orders that finally determine claims of right
    separable from, and collateral to, rights asserted in the action, too important to be
    denied review and too independent of the cause itself to require that appellate
    consideration be deferred until the whole case is adjudicated. Cohen v.
    Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949). A case fits within this
    discrete subset of interlocutory orders when the appeal meets the three
    requirements of the collateral order doctrine. First, the order must conclusively
    determine the disputed question; second, it must resolve an important issue
    completely separate from the merits of the action; and third, it must be
    effectively unreviewable on appeal from a final judgment. Coopers & Lybrand,
    437 U .S. at 468 (footnote omitted). The conditions are stringent, and unless
    they are kept so, the underlying doctrine will overpower the substantial finality
    interests 1291 is meant to further . . . . Will v. Hallock, 126 S. Ct. 952, 957
    (2006). A district court order that fails to satisfy any one of [the Cohen]
    -4-

    requirements is not reviewable under the collateral order doctrine. Gulfstream


    Aerospace Corp. v. M ayacamas Corp., 485 U.S. 271, 276 (1988).
    Because we conclude M esa does not meet the third requirement of the
    Cohen doctrine, we bypass an analysis of the first tw o prongs. See Lauro Lines
    S.R.L. v. Chasser, 490 U.S. 495, 498 (1989) ([W]e need not decide whether an
    order [meets the first two requirements,] for the District Courts orders fail to
    satisfy the third requirement of the collateral order test.) . The collateral order
    doctrines third prong requires that the district court order be effectively
    unreviewable in order to trigger the extension of appellate jurisdiction to an
    interlocutory appeal. The Supreme Court has consistently reiterated the general
    rule that an order is effectively unreviewable only where the order at issue
    involves an asserted right the legal and practical value of which would be
    destroyed if it were not vindicated before trial. Id. at 498-99 (quotations and
    citations omitted). The costs of unnecessary litigation caused by what eventually
    turns out to be an error by the district court is insufficient to warrant an
    interlocutory appeal. Id. at 499. Rather, the Court has insisted that the right
    asserted be one that is essentially destroyed if its vindication must be postponed
    until trial is completed. Id.
    The unreviewability requirement promotes judicial efficiency by restricting
    the application of the collateral order doctrine and limiting our acceptance of
    cases where future, successive appeals are possible. In adherence to the broader
    -5-

    finality requirement and the stringent nature of the collateral order doctrine, we
    are required to abstain from review of an individual issue until the entire case is
    complete in order to prevent piecemeal appeals. Coopers & Lybrand, 437 U.S. at
    468 n.8 (quoting Cobbledick v. United States, 309 U.S. 323, 325 (1940)).
    The determinative question for finding jurisdiction in this case is whether
    the district courts ruling on penalties will be effectively unreviewable following
    the Appeal Officers resolution of the manner of payment. W ithout citing any
    authority, both parties express concern that if M esa prevails on remand on the
    payment matter, it will be precluded from obtaining review of the penalty
    abatement decision. This is clearly not the case. See State Bank of Spring Hill v.
    Anderson (In re Bucyrus Grain Co., Inc.), 905 F.2d 1362 (10th Cir. 1990). In
    Bucyrus, the district court reversed a determination by the bankruptcy court that a
    secured creditor had priority over customers of the debtor, and remanded for a
    determination of the value of the customers claims. Following the bankruptcy
    courts valuation decision on remand, the secured creditor attempted to bypass the
    district court by appealing that courts earlier adverse priority determination
    directly to this court. W e held that the district courts partial remand order was
    not a final order because the court remanded to the bankruptcy court for
    significant further proceedings. See id. at 1366. W e further held that the
    proper procedural course for the [secured creditor] is to appeal the bankruptcy
    court's decision on remand to the district court first. Then, if the district court
    -6-

    rules unfavorably, the [secured creditor] could appeal to this court. Id. at 1367.
    The creditor in Bucyrus was thus instructed to first raise in district court any
    outstanding issues after the remand and then, if needed, in a later appeal to this
    court. As Bycyrus suggests, a decision generated coincident to a remand decision
    retains a viable path of review following a ruling on remand. See also Lakes
    Pilots Assn,, Inc. v. United States Coast Guard, 359 F.3d 624, 625 (D.C. Cir.
    2004) ([Appellants] will still be aggrieved by the outcome [after the decision on
    remand] . . . and thus will be able again to seek judicial review, including review
    in the court of appeals, raising not only new issues but all those on which it got
    no satisfaction in its original challenge.); Howell v. Schweiker, 699 F.2d 524,
    526 (11th Cir. 1983) (Appeal dismissed for lack of jurisdiction, the court stating
    [a]ny legal ruling made in the present order can be reviewed effectively after the
    remand.).
    Both parties cite Sullivan v. Finkelstein, 496 U.S. 617 (1990), to support
    our exercise of jurisdiction over this appeal. Although the Supreme Court in
    Finkelstein found appellate jurisdiction over a partial remand order was proper,
    the Courts legal support for finality and appellate review derived from specific
    statutory language in 42 U.S.C. 405(g) of the Social Security Act. See
    Finkelstein, 496 U.S. at 625 (such a remand order is a judgment in the
    terminology of 405(g)). See also Forney v. Apfel, 524 U.S. 266, 270 (1998)
    ([Finkelstein] reasoned primarily from the language of 405(g), that a district
    -7-

    court judgment remanding a Social Security disability benefit case was


    appealable.). In this case, we are reviewing a district court judgment that
    received its jurisdictional grant from 26 U.S.C. 6330(d)(1)(B) of the Internal
    Revenue Code, not from 405 of the Social Security Act. Because Finkelsteins
    justification for review was grounded in the statutory language of 405(g), and
    405(g) has no relevance to the present case, the Courts holding in Finkelstein
    does not support a present exercise of jurisdiction.
    The availability of review after remand also distinguishes this case from
    the more common application of the collateral order doctrine to appeals in
    administrative actions by the government. As we noted in Bender v. Clark, 744
    F.2d 1424, 1428 (10th Cir. 1984), for example, because the government in such a
    case has no avenue for obtaining judicial review of its own administrative
    decisions, it may well be foreclosed from again appealing the district court's
    determination at any later stage of this proceeding. See also Occidental
    Petroleum C orp., v. SEC, 873 F.2d 325, 332 (D.C. Cir. 1989) (finding jurisdiction
    where after remand SEC will not be able to appeal its own decision); Stone v.
    Heckler, 722 F.2d 464, 467 (9th Cir. 1983) (finding jurisdiction because Secretary
    of Health and Human Services would not be able to appeal following a decision
    on remand).
    The district courts affirmation of penalties and remand on payment issues
    was in this case does not similarly satisfy the requirements of the collateral order
    -8-

    doctrine. Consequently, M esa must follow the procedural course outlined in


    Bucyrus and await the appeal on its penalty decision until completion of the
    remanded proceedings. By forgoing review until the Appeals Officer resolves the
    payment issue, we avoid the undesirable possibility of multiple, piecemeal
    appeals. Because the penalty decision is reviewable upon conclusion of the
    remanded proceedings irrespective of who prevails upon the payment issue, the
    collateral order doctrine does not shelter M esas interlocutory appeal from the
    finality requirement.
    Accordingly, this appeal is DISM ISSED for a lack of jurisdiction.

    -9-

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