Justia Civil Procedure Opinion Summaries

RFM-TREI Jefferson Apartments, LLC; RFM-TREI Lincoln Apartments, LLC; Dickinson Homestay, LLC; and Lodgepros Dickinson, LLC (together “the Taxpayers”) appealed district court judgments affirming the Stark County Board of Commissioners’ (“the Board”) denials of their applications for tax abatements or refunds. The Taxpayers collectively owned two apartment complexes and two hotels located in the City of Dickinson. The Taxpayers filed applications for abatement or refund of their 2016 property taxes. The Taxpayers’ opinions of value for each property differed from the City’s valuations by a range of roughly $1.8 million to $20.3 million. After holding a hearing, the City recommended the Board deny each application. The Board indeed denied the abatement applications in four separate written decisions. Using the same language in each, the Board concluded the assessor’s valuations were not “in error, invalid, inequitable, unjust, or arrived at in an arbitrary, capricious, or unreasonable manner.” The decisions also explained the Board did not believe the Taxpayers provided “sufficient enough information relating to the subject properties, or the local market for competing properties, to lead us to the same value conclusions requested by the applicant.” The district court affirmed each denial in separate, written orders and judgments. After review, the North Dakota Supreme Court concluded the Board acted arbitrarily and unreasonably in adopting assessments exceeding the true and full value of the property. The Court reversed the district court judgments and the Board’s decisions denying the Taxpayers’ abatement applications. The matters were remanded for a new hearing to determine the “true and full value” of the properties and reconsideration of the abatement applications. View "RFM-TREI Jefferson Apartments v. Stark County Board of Comm'rs" on Justia Law

The Appellants objected to the IRS’s attempts to collect and audit information about their marijuana-related business practices, arguing: (1) the IRS investigation was quasi-criminal, exceeded the Agency’s authority, and was being conducted for an illegitimate purpose; (2) even if the investigation had a legitimate purpose, the information sought was irrelevant; and (3) the investigation was in bad faith and constituted an abuse of process because (a) the IRS may share the information collected with federal law enforcement agents, (b) the IRS summonses are overly broad and require the creation of new reports, (c) the dispensaries had a reasonable expectation of privacy in the data they tender to state regulatory authorities, and (d) those state authorities could not provide the requested information without violating Colorado law. The Appellants further contended the district court applied the wrong standard of review when it denied motions to quash and granted motions to enforce the summonses. Relying on the reasoning outlined in Standing Akimbo, LLC v. United States, 955 F.3d 1146, 1150–69 (10th Cir. 2020), the Tenth Circuit rejected Appellants' arguments and affirmed the district court's rulings in favor of the IRS. View "Speidell v. United States" on Justia Law

Freed owed $735.43 in taxes ($1,109.06 with penalties) on his property valued at about $97,000. Freed claims he did not know about the debt because he cannot read well. Gratiot County’s treasurer filed an in-rem action under Michigan's General Property Tax Act (GPTA), In a court-ordered foreclosure, the treasurer sold the property to a third party for $42,000. Freed lost his home and all its equity. Freed sued, 42 U.S.C. 1983, citing the Takings Clause and the Eighth Amendment.The district court first held that Michigan’s inverse condemnation process did not provide “reasonable, certain, and adequate” remedies and declined to dismiss the suit under the Tax Injunction Act, which tells district courts not to “enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had" in state court, 28 U.S.C. 1341. The court reasoned that the TIA did not apply to claims seeking to enjoin defendants from keeping the surplus equity and that Freed was not challenging his tax liability nor trying to stop the state from collecting. The TIA applied to claims seeking to enjoin enforcement of the GPTA and declare it unconstitutional but no adequate state court remedy existed. The court used the same reasoning to reject arguments that comity principles compelled dismissal. After discovery, the district court sua sponte dismissed Freed’s case for lack of subject matter jurisdiction, despite recognizing that it was “doubtful” Freed could win in state court. The Supreme Court subsequently overturned the "exhaustion of state remedies" requirement for takings claims.The Sixth Circuit reversed without addressing the merits of Freed’s claims. Neither the TIA nor comity principles forestall Freed’s suit from proceeding in federal court. View "Freed v. Thomas" on Justia Law

Jay Campbell, on behalf of himself and a certified class of "other persons similarly situated," appealed the grant of summary judgment on claims challenging the constitutionality of two municipal taxes adopted in 2013 by the City of Gardendale in connection with Gardendale's planned creation of a municipal school system. After review, the Alabama Supreme Court concluded Campbell did not demonstrate that the Gardendale school taxes were rendered invalid by operation of Local Amendment 14. The Court therefore pretermitted discussion of the alternate arguments for affirmance presented by Jefferson County and Smallwood. The judgment of the trial court was affirmed. View "Campbell v. City of Gardendale" on Justia Law

Appellant Don Weaver brought a declaratory judgment action to challenge the constitutionality of S.C. Code Ann. section 6-11-271 (2004), which addressed the millage levied in certain special purpose districts. Appellant owned property and was a taxpayer in the Recreation District, a special purpose district created to fund the operation and maintenance of parks and other recreational facilities in the unincorporated areas of Richland County, South Carolina. Appellant first argued section 6-11-271 was unconstitutional because it violated the South Carolina Constitution's prohibition on taxation without representation. Appellant next contended section 6-11-271 did not affect all counties equally and was, therefore, special legislation that was prohibited by the South Carolina Constitution. Appellant lastly argued section 6-11-271 was void because it violated Home Rule as set forth in the state constitution and the Home Rule Act. The circuit court found Appellant failed to meet his burden of establishing any constitutional infirmity. To this, the South Carolina Supreme Court concurred and affirmed judgment. View "Weaver v. Recreation District" on Justia Law

In 2009, Bank of America acquired Merrill Lynch. In 2013, Merrill Lynch “merged with and into” Bank of America. In 2017, Bank of America filed a complaint, seeking to recover overpaid interest on federal tax underpayments and additional interest on federal tax overpayments arising under 26 U.S.C. 6601 and 6611. The claimed overpayment interest arose from overpayments made by Merrill Lynch. The government moved to sever the Merrill Lynch overpayment interest claims exceeding $10,000 and requested that the district court transfer them to the Court of Federal Claims or, alternatively, dismiss them for lack of subject matter jurisdiction. The Magistrate Judge concluded and the district court affirmed that district courts have “subject matter jurisdiction over overpayment interest claims pursuant to 28 U.S.C. 1346(a)(1).The Federal Circuit vacated. The plain language of section 1346(a)(1) dictates that the term “any sum” refers to amounts that have been previously paid to, or collected by, the IRS, which, overpayment interest “[b]y its nature, . . . is not.” The conclusion that section 1346(a)(1) does not cover overpayment interest claims is consistent with the tax code’s broader statutory scheme; the legislative history does not contradict that conclusion. View "Bank of America Corp. v. United States" on Justia Law

Technica makes high-end audio equipment and claimed tax credits for increasing research activities under 26 U.S.C. 41 for several tax years. The R&D tax credit is available when taxpayers increase certain research expenses over time, with the increase measured in part against research costs from the five-year period from 1984-1988, taken as a percentage of the company’s gross receipts during those years (the fixed-base percentage). For the 2002–2005 and 2011 tax years, the IRS issued a notice of deficiency. Rather than litigate, Technica and the government reached settlement agreements, which were approved by the Tax Court. The settlements did not address the details but simply listed the dollar amounts of the agreed-upon deficiencies. According to Technica, these amounts were determined by a “specific agreement” as to the fixed-base percentage.With respect to the 2006–2010 tax years, Technica paid the amount requested by the IRS then sued for a refund, arguing that the government was judicially estopped from claiming that the .92% fixed-base percentage did not apply. The district court agreed, finding that because the government had entered into settlements for the other tax years using that same fixed-base percentage, it was judicially estopped from now arguing that the percentage was incorrect.The Sixth Circuit reversed. A court order memorializing a settlement agreement generally does not constitute judicial acceptance of the facts underpinning that agreement, and the orders approved by the Tax Court did not actually include the .92% rate. View "Audio Technica U.S., Inc. v. United States" on Justia Law

Alabama imposed a license or privilege tax on tobacco products stored or received for distribution within the State ("the tobacco tax"). Under Alabama law, the Department of Revenue could confiscate tobacco products on which the tobacco tax had not been paid. Panama City Wholesale, Inc. ("PCW") was a wholesale tobacco-products distributor located in Panama City, Florida, and owned by Ehad Ahmed. One of PCW's customers, Yafa Wholesale, LLC ("Yafa"), was an Alabama tobacco distributor owned by Sayeneddin Thiab ("Thiab"). On October 10, 2018, Hurricane Michael destroyed the roof on PCW's warehouse. Department surveillance agents observed observed one of Thiab's vehicles being unloaded at two of the recently rented storage units. The day after that, agents observed one of Thiab's delivery vehicles being loaded with tobacco products from a recently rented unit following the storm. On October 23, 2018, the Department confiscated 1,431,819 cigars from four storage units leased by persons connected to Yafa and Thiab. It is undisputed that the tobacco tax had not been paid on the cigars. Ahmed filed an action against Vernon Barnett, as Commissioner of the Department, seeking a judgment declaring that the cigars were Ahmed's and that they were not subject to confiscation. The case was transferred to the Jefferson Circuit Court, PCW was substituted for Ahmed, and the parties were realigned to make the Commissioner of the Department the plaintiff and PCW the defendant in a civil forfeiture action. On PCW's motion, the circuit court entered a summary judgment in PCW's favor, ruling that the Commissioner failed to present substantial evidence that the cigars were in the possession of a retailer or semijobber, as the court believed was required by the confiscation statute. The Commissioner appealed. A divided Alabama Supreme Court reversed, concluding the circuit court erred in interpreting the confiscation statute to apply only to untaxed tobacco products in the possession of retailers and semijobbers, and because the Commissioner presented substantial evidence that the cigars were subject to confiscation under a correct interpretation of the statute, the Court reversed summary judgment and remanded for further proceedings. View "Alabama Department of Revenue v. Panama City Wholesale, Inc." on Justia Law

Eighteen petitioners appealed a New Hampshire Board of Tax and Land Appeals (BTLA) decision to dismiss their respective appeals of denials of applications for abatements of real estate taxes issued by respondent Town of Bartlett. he BTLA dismissed the appeals because the petitioners’ abatement applications failed to comply with the signature and certification requirement of New Hampshire Administrative Rules, Tax 203.02, and because the BTLA found that the petitioners did not demonstrate that these failures were “due to reasonable cause and not willful neglect.” There was no dispute in this case that petitioners did not personally sign or certify their abatement applications. Instead, petitioners contested the BTLA’s ruling that they did not demonstrate that the lack of signatures and certifications was due to reasonable cause and not willful neglect. "Although the question of whether reasonable cause or willful neglect exists in a particular case is one of fact for the BTLA, the questions of what elements constitute reasonable cause or willful neglect under Tax 203.02 are ones of law." Because the BTLA did not have the benefit of the construction of Tax 203.02(d) that the New Hampshire announced in its opinion of this case, BTLA's decisions were vacated, and each matter remanded for further consideration. View "Appeal of Keith R. Mader 2000 Revocable Trust et al." on Justia Law

HWCC-Tunica, LLC, and BSLO, LLC, had casino members’ rewards programs that allowed members to earn entries into random computerized drawings to win prizes. In 2014, after recalculating their gross revenue and deducting the costs of prizes from their rewards programs’ drawings, HWCC and BSLO filed individual refund claims for the tax period of October 1, 2011, through August 31, 2014. The Mississippi Department of Revenue (MDOR) denied the refund claims in 2015. HWCC and BSLO appealed, and MDOR and the Mississippi Gaming Commission (MGC) filed a joint motion for summary judgment, arguing the plain language of Mississippi Code Section 75-76-193 (Rev. 2016) does not allow a casino to deduct the cost of prizes purchased for a rewards program’s drawings because “these promotional giveaways are not the result of ‘a legitimate wager’ as used in [Mississippi Code Section] 75-76-193.” After a hearing on the motion, the chancellor determined that Section 75-76-193 does not allow HWCC and BSLO to deduct the cost of the prizes and that there were no genuine issues of material fact. After review, the Mississippi Supreme Court found the chancellor erred by giving deference to the MDOR’s and the MGC’s interpretations of Code Section 75-76-193. That error notwithstanding, the Supreme Court found the chancellor reached the right conclusion: that no genuine issues of material fact existed. Accordingly, the Supreme Court affirmed the chancellor’s grant of summary judgment. View "HWCC-Tunica, Inc. v. Mississippi Dept. of Revenue" on Justia Law