IN RE: KINGDOM OF BELGIUM, FEDERAL PUBLIC SERVICE FINANCE PENSION PLAN…

Background

The Kingdom of Belgium, acting through its Federal Public Service Finance, sued several purported pension plans and associated individuals. Belgium alleged that the defendants fraudulently induced it to pay tax refunds based on falsified ownership of Belgian corporate dividends.

The defendants moved to dismiss for lack of subject-matter jurisdiction and failure to state a claim. They primarily argued that the “revenue rule”—a rule limiting foreign governments’ efforts to enforce their tax laws in U.S. courts—barred Belgium’s claims because the lawsuit was effectively an effort to collect Belgian taxes.

In an earlier order, the court denied the motions to dismiss. It concluded that Belgium was alleging ordinary fraud and was not seeking to recover lost tax revenue, calculate Belgian taxes, or collect taxes from the defendants. The court also concluded that the revenue rule did not bar the claims.

Motion for Interlocutory Appeal

The defendants asked the court to certify its earlier order for an interlocutory appeal under 28 U.S.C. § 1292(b). Such certification requires a controlling legal question, a substantial ground for disagreement about that question, and a determination that an immediate appeal could materially advance the end of the litigation. The court explained that this procedure is reserved for exceptional circumstances and that certification is discretionary.

The court acknowledged that applying the revenue rule presented a controlling question and that an appeal could materially advance the litigation. However, it found no substantial ground for disagreement. The court noted that it had identified no conflicting authority from the Second Circuit or another federal court of appeals. It also rejected the defendants’ reliance on a United Kingdom decision because that decision had been reversed by the English Court of Appeal. The court further stated that an unrelated tax treaty between the United States and Japan did not affect this case because there was no similar treaty between the United States and Belgium.

Ruling

Judge John G. Koeltl denied the defendants’ motion to certify the prior order for interlocutory appeal. The court also denied the defendants’ request for a stay pending that appeal as moot. The clerk was directed to close the docket entry concerning the certification motion.