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After the Board of Equalization rejected WBEC\u0027s claim that those taxes were invalid, the company paid its deficit, and, according to WBEC\u0027s contract, was subsequently reimbursed by the United States Government. In January of 1988, WBEC continued to challenge the taxes by filing an action in state court. This action concluded with an agreement between the state of California and WBEC that the company receive a $3 million refund. The Federal Government filed a suit in the Eastern District of California in May of 1988, arguing that the remaining state taxes totaling $11 million were also illegitimate. 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