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Paychex Business Solutions, LLC v. United States

United States District Court, M.D. Florida, Tampa Division

April 3, 2018

PAYCHEX BUSINESS SOLUTIONS, LLC, ET AL., Plaintiffs,
v.
UNITED STATES OF AMERICA, Defendant.

          ORDER

          SUSAN C. BUCKLEW, United District Judge

         This cause comes before the Court on Defendant's Motion for Reconsideration. (Doc. No. 69). Specifically, Defendant moves the Court to reconsider its June 22, 2017 order denying Defendant's motion to dismiss or for summary judgment and granting Plaintiffs' motion for partial summary judgment. (Doc. No. 48). Plaintiffs oppose the motion (Doc. No. 72), and Defendant has filed a reply brief (Doc. No. 75). As explained below, the motion is denied.

         I. Background

         This is a tax refund case for overpayments made by Plaintiffs during several quarters of 2009-2012. Plaintiffs seek a refund of the overpayment of the employer portion of the FICA taxes they paid during that time; more specifically, the employer's portion of the Social Security tax. The FICA taxes at issue were paid to the IRS by Plaintiffs and relate to wages earned by Plaintiffs' clients' worksite employees. The obligation on Plaintiffs to pay the FICA taxes arose from agreements between Plaintiffs and their clients, wherein Plaintiffs agreed to handle payroll for their clients. Plaintiffs specifically assumed responsibility for the payment of wages to the worksite employees without regard to whether the client companies first paid such amounts to Plaintiffs. Additionally, Plaintiffs assumed full responsibility for the reporting, collection, and payment of payroll taxes to the IRS.

         The parties do not dispute that overpayments were made by Plaintiffs totaling over $4 million due to Plaintiffs' miscalculation of the amount of Social Security taxes owed. However, Defendant disputes that Plaintiffs have standing to seek a refund for the overpayments.

         Defendant moved to dismiss or for summary judgment, arguing that Plaintiffs voluntarily paid over $4 million towards the employer's portion of the Social Security taxes at issue and that Plaintiffs lack standing to sue for a refund. Plaintiffs responded and moved for partial summary judgment, arguing that they were the statutory employers of the worksite employees, as defined under 26 U.S.C. § 3401(d)(1), because they had control over the payment of wages to the worksite employees.

         The Court agreed with Plaintiffs in its June 22, 2017 order and found that Plaintiffs had standing to sue for the refunds at issue. (Doc. No. 48). The Court found that Plaintiffs had control over the payment of wages to the worksite employees, and thus were the statutory employers under § 3401(d)(1), based on the recent case law and the following pertinent facts: (1) Plaintiffs specifically assumed responsibility for the payment of wages to the worksite employees without regard to whether the client companies first paid such amounts to Plaintiffs; (2) Plaintiffs assumed full responsibility for the reporting, collection, and payment of payroll taxes to the IRS; (3) Plaintiffs initiated wage payments to the worksite employees on the same date that Plaintiffs initiated a debit to the client companies' bank accounts for the wages and taxes, so wage payments were initiated (and could not be reversed) prior to Plaintiffs receiving the clients' funds; (4) Plaintiffs used their own bank accounts to make the wage payments to the worksite employees, as well as to pay the payroll taxes to the IRS; the client companies had no authority over, or access to, these bank accounts; and (5) Plaintiffs reported their payments of the employer portion of the Social Security tax on Forms 941 using their own names, addresses, and employer identification numbers.

         In the instant motion, Defendant moves this Court to reconsider its June 22, 2017. The Court, however, finds that reconsideration is not warranted and denies Defendant's motion.

         II. Standard of Review

         There are three major grounds justifying reconsideration: (1) an intervening change in controlling law; (2) the availability of new evidence; and (3) the need to correct clear error or to prevent manifest injustice. Sussman v. Salem, Saxon & Nielsen, P.A., 153 F.R.D. 689, 694 (M.D. Fla. 1994)(citations omitted). The Court notes that reconsideration of a previous order is an extraordinary remedy to be employed sparingly. See id. (citations omitted).

         III. Motion for Reconsideration

         Defendant argues that its motion is based on the need to correct clear error or to prevent manifest injustice. Upon review of Defendant's motion, the Court finds that it should be denied, as Defendant has not shown that there is a need to correct clear error or to prevent manifest injustice. Instead, Defendant is merely attempting to refute the basis for the Court's earlier decision, mostly making the same arguments that were previously considered and rejected by this Court. See Allaben v. Howanitz, 579 Fed.Appx. 716, 719 (11th Cir. 2014)(stating that a motion for reconsideration should not be used to simply rehash arguments that were previously made).

         Defendant also raises a new argument in a footnote in its motion. (Doc. No. 69, p. 7, n.6). However, this argument should have been raised in the original motion, and a motion for reconsideration is not an appropriate vehicle for raising arguments that could have been raised earlier. See Lamar Advertising of Mobile, Inc. v. City of Lakeland, 189 F.R.D. 480, 490 (M.D. Fla. 1999); see also Johnson v. U.S., 1999 WL 691871, at *1 (N.D.Ga. July 14, 1999)(stating that “it is not appropriate to raise new arguments in a motion for reconsideration that could have been raised when the matter was initially before the court”). As such, the Court finds that reconsideration is not warranted.[1]

         IV. ...


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