FEDERAL CIRCUIT DENIES REHEARING ON INTEREST SUSPENSION CLAIM.

United States Court of Appeals for the Federal Circuit

John S. Brown, Bingham McCutchen LLP, of Boston, Massachusetts, argued for plaintiff-appellant. With him on the brief were George P. Mair, Donald-Bruce Abrams and Matthew D. Schnall.

Bruce R. Ellisen, Attorney, Tax Division, United States Department of Justice, of Washington, DC, argued for defendant- appellee. With him on the brief were Eileen J. O'Connor, Assistant Attorney General; Richard T. Morrison, Deputy Assistant Attorney General; and Gilbert S. Rothenberg and Francesca U. Tamami, Attorneys.

Appealed from: United States Court of Federal Claims

Judge Marian Blank Horn

PER CURIAM.

Computervision Corporation ("Computervision") petitions for rehearing en banc. The government by letter requests that we correct an error in our original opinion. We reaffirm our earlier decision affirming the decision of the United States Court of Federal Claims, in which we denied Computervision's claims for interest suspension and interest netting. Computervision Corp. v. United States, 445 F.3d 1355 (Fed. Cir. 2006).

In its petition for rehearing, Computervision challenges our denial of its interest suspension claim on several grounds, but does not seek rehearing on the interest netting issue. However, in a May 25, 2006, letter, the government informed us that the interest netting portion of our opinion contained an apparent error, due largely to an error in the government's brief.

In our original decision, we held that Computervision failed to satisfy the requirement for retroactive application of the interest netting statute because under our decision in Federal National Mortgage Association v. United States, 379 F.3d 1303, 1311 (Fed. Cir. 2004) ("FNMA"), the statute applies retroactively only if the statute of limitations is open with respect to both the underpayment and overpayment.

With respect to the underpayment interest limitations period based on representations contained in the government's brief, our opinion stated:

In a June 9, 2006, letter, we invited Computervision to respond to the government's proposed revision. In response, Computervision urged that the government's proposed revision was based on "unsupported factual assumptions," because the record does not contain the documents necessary to ascertain "the date on which the IRS authorized the scheduling of an overassessment." Computervision's Response at 1 (June 14, 2006).

We need not resolve the question of when the overpayment limitations periods expired, because under our decision in FNMA, both the overpayment and underpayment limitations period must remain open on July 22, 1998, in order for the interest netting statute to apply retroactively. See FNMA, 379 F.3d at 1311. Our earlier opinion concluded that the limitations period on Computervision's claim for underpayment interest expired on April 28, 1991, long before the July 22, 1998, critical date specified in section 3301(c)(2).¹ Nothing in the government's letter calls that conclusion into question.

However, Computervision also contends that the applicable statute of limitations as to both overpayments and underpayments remains open within the meaning of the statute while a lawsuit is pending before the Tax Court or the Court of Federal Claims. Computervision's Response at 2 (June 14, 2006). This issue was not raised in Computervision's petition for rehearing. In any event, we rejected this argument in our original decision, and we see no reason to revisit it. See Computervision, 445 F.3d at 1374.

Computervision's other contentions with respect to our decision on the interest suspension claim are without merit. Accordingly, Computervision's petition for rehearing is denied.