SOL and the 1603 Cash Grant – File Now or Forever Hold Your Peace

by McDermott Will & Emery
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McDermott Will & Emery

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Taxpayers are running out of time to file refund claims against the government. If the government reduced or denied your Section 1603 cash grant, you can file suit in the Court of Federal Claims against the government to reclaim your lost grant money. Don’t worry, you will not be alone. There are numerous taxpayers lining up actions against the government and seeking refunds from this mismanaged renewable energy incentive program. Indeed, the government lost in round one of Alta Wind I Owner-Lessor C. v. United States, 128 Fed. Cl. 702 (2016). In that case, the trial court awarded the plaintiffs more than $206 million in damages ruling that the government unreasonably reduced their Section 1603 cash grants.

In Alta Wind, the trial court held that the Treasury Department had incorrectly reduced the plaintiffs’ eligible cost basis in their windfarm projects for purposes of claiming the Section 1603 cash grant. The trial court agreed with the plaintiffs’ argument that the purchase price of the projects was a reasonable starting place for calculating their basis in the renewable energy projects. The court also determined that power purchase agreements (PPAs) are correctly included as part of the eligible property of a project.

After the defeat, the government immediately appealed the decision. The Circuit Court for the Federal Circuit heard oral argument on January 12, 2018. We were there, and the issues were hotly debated during oral argument. We will continue to track the case.

You must file your refund claim law suit before the statute of limitations (SOL) has expired. After the SOL has expired, the court loses jurisdiction to hear your claim, and it will be lost forever! Refund claims based on the denial or reduction of a Section 1603 cash grant are subject to a six year statute of limitations period. See 28 USC § 2501; Reoforce, Inc. v. United States, 853 F.3d 1249, 1264 (Fed. Cir. 2017). There is no “equitable tolling” of the SOL, so regardless of the reason for your failure to file within the six year SOL period, your refund claim will be lost forever.

The clock begins to run on the six year SOL period when the claim “accrues”; that is, when “all the events have occurred that fix the alleged liability of the government and entitle the claimant to institute an action.” Ingrum v. United States, 560 F.3d 1311, 1314 (Fed. Cir. 2009). In the context of a Section 1603 cash grant refund claim, that period likely began on the date that the Treasury Department paid to you a cash grant lower than what you sought in the application.

Act now, or forever hold your peace! If you received a Section 1603 cash grant for an amount less than you applied, seriously consider filing a refund suit in the Court of Federal Claims immediately.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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