Today, Judge Bruggnick of the Court of Federal Claims denied the Department of Justice’s (DOJ) motion to dismiss the complaint filed by two special purpose entities affiliated with SolarCity regarding the Treasury’s calculation of the 1603 cash grant awards for solar projects. The judge’s order is available here. Unfortunately, the order is quite short and does not contain any legal discussion but rather references reasons stated during oral argument.
Although, surviving a motion to dismiss is a far cry from winning the case, the judge’s determination is a positive indication for this case and for similarly situated Cash Grant applicants that are considering bringing actions to contest how Treasury has administered the 1603 Cash Grant program. The outcome of this litigation has implication both for 1603 Cash Grant applicants and for the tone of future IRS audits of investment tax credit transactions because Treasury was supposed to be following the investment tax credit rules for calculating the amount of the Cash Grant award. Thus, principles decided in this litigation in theory will also apply to investment tax credit transactions.