PHILADELPHIA - A panel of the Third Circuit U.S. Court of Appeals on May 21 vacated and remanded a ruling that a debtor could not treat its parent company's change in corporate tax status, which changed the debtor's tax obligation, as a fraudulent transfer (The Majestic Star LLC v. Barden Development Inc., et al. $(In Re: The Majestic Star Casinio LLC$), No. 12-3201, Chapter 11, 3rd Cir.; 2013 U.S. App. LEXIS 10186).
SAN DIEGO - The Federal Deposit Insurance Corp., as the receiver for the failed Imperial Capital Bank, is not entitled to $30 million in tax refunds, a federal judge in California ruled May 16, finding that the funds instead belong to the bank's holding company (Imperial Capital Bancorp Inc. v. Federal Deposit Insurance Corp., No. 10-1991, N.D. Calif.).
SACRAMENTO, Calif. - A California federal judge has granted remand of tobacco excise tax evasion and unfair business practice claims to state court, saying in an opinion filed May 15 that the state's complaint raised no federal question (People of the State of California, et al v. Darren Paul Rose, No. 2:13-cv-00675, E.D. Calif.; 2013 U.S. Dist. LEXIS 69382).
BOWLING GREEN, Ky. - A Kentucky federal judge refused to dismiss contraband cigarette possession charges against a cigarette dealer, saying in a May 15 opinion that a defendant need not be the entity liable for payment of tobacco taxes to be charged with possession of contraband (United States of America v. David B. Cooper, No. 1:12-cr-00029, W.D. Ky., Bowling Green Div.; 2013 U.S. Dist. LEXIS 69003).
SCRANTON, Pa. - A Pennsylvania federal judge on May 14 gave the plaintiffs in a lawsuit accusing a tax preparation company of committing errors that delayed more than 600,000 returns a second chance to demonstrate that diversity jurisdiction exists (Cameron Cox, et al. v. H&R Block, Inc., et al., No. 13-1101, M.D. Pa.; 2013 U.S. Dist. LEXIS 68177).
DETROIT - A Michigan federal judge on May 14 partially certified a class of individuals and businesses subjected to search and/or seizure of their property by the Michigan Department of Treasury to satisfy an alleged tax debt who allege that their constitutional rights were violated because the searches and seizures occurred without a judicially authorized warrant (Adhid Miri, et al. v. Andy Dillon, et al., No. 11015248, E.D. Mich.; 2013 U.S. Dist. LEXIS 68211).
LOUISVILLE, Ky. - A Kentucky federal judge refused to dismiss criminal charges against three people who allegedly used falsified invoices to avoid paying more than $2 million in Kentucky excise taxes on $12.5 million worth of cigarettes sold throughout the country, saying May 13 that the federal government properly alleged the elements of wire fraud and that a defendant failed to demonstrate selective or vindictive prosecution (USA v. Pedro Bello, et al., No. 3:11-cr-127, W.D. Ky.; 2013 U.S. Dist. LEXIS 67624).
HARTFORD, Conn. - A title insurer acted within the provisions of its policy when it sought documentation and examinations under oath from its insured in its quest to resolve a tax lien issue, the Connecticut Appellate Court ruled May 7 (Chicago Title Insurance Co. v. Bristol Heights Associates LLC, et al., No. AC 34040, Conn. App.; 2013 Conn. App. LEXIS 236).
ST. LOUIS - A general liability insurer has no duty to defend its city insured against a school board's claims that the insured wrongfully withheld tax revenues, an Illinois federal magistrate judge ruled April 30, granting the insurer's motion for summary judgment (City of Marion, Ill. v. U.S. Specialty Ins. Co., No. 12-cv-0999-SCW, S.D. Ill.; 2013 U.S. Dist. LEXIS 61900).
HOUSTON - A Texas appellate panel on April 18 affirmed summary judgment for the defendant in a personal injury action involving an exploding beer bottle, concluding that the plaintiff failed to establish that the defendant caused his injury "above mere conjecture, guess, or speculation" (Antonio Garcia Tax v. Houston Distributing Company Inc., No. 01-12-00616-CV, Texas App., 1st Dist.; 2013 Tex. App. LEXIS 4819).
WASHINGTON, D.C. - The U.S. Supreme Court on April 15 declined to review a Third Circuit U.S. Court of Appeals ruling that a nonfiduciary financial planner who marketed a tax avoidance scheme as a multiple-employer welfare arrangement (MEWA) to several employers is liable under Employee Retirement Income Security Act Section 502(a)(3) for knowingly participating in a prohibited transaction in connection with the MEWA (James W. Barrett v. Universal Mailing Service, Inc., et al., No. 12-975, U.S. Sup.).
ALBANY, N.Y. - A challenge to New York's "Internet tax law" by two leading online retailers was rejected March 28 by a New York State Court of Appeals majority, which found the law to be constitutional on its face and not in violation of either the due process or commerce clauses (Overstock.com Inc. v. New York State Department of Taxation and Finance, et al., No. 33, and Amazon.com LLC, et al. v. New York State Department of Taxation and Finance, et al., N.Y. App.; 2013 N.Y. LEXIS 542).
DENVER - A panel of the 10th Circuit U.S. Court of Appeals on March 28 ruled that a tax court properly upheld tax deficiency rulings against a debtor and said that doing so did not violate the automatic stay (John H. Schoppe v. Commissioner of Internal Revenue, No. 12-9010, Chapter 13, 10th Cir.; 2013 U.S. App. LEXIS 6266).
RIVERSIDE, Calif. - The bankrupt city of San Bernardino, Calif., on March 26 sued the State of California, contending that the state is violating the automatic stay by demanding payment from the city for services. The city also argues that the state cannot withhold revenue it owes the city from sales tax collected from various agencies (In Re: City of San Bernardino, Calif., No. 12-28006, Chapter 9, C.D. Calif. Bkcy.).
CLEVELAND - Bankrupt holding company AmFin Financial Corp. (AFC) can keep a $195 million tax refund that the Federal Deposit Insurance Corp. argued belongs to an affiliate bank in the FDIC's receivership, a federal judge in Ohio ruled March 26, granting AFC's motion for judgment on the pleadings (Federal Deposit Insurance Corp. v. AmFin Financial Corporation, et al., No. 11-2574, N.D. Ohio; 2013 U.S. Dist. LEXIS 42488).
ATLANTA - A split 11th Circuit U.S. Court of Appeals on March 6 upheld a verdict for unpaid overtime wages for two workers despite their failure to properly report their wages to the federal government and the illegal status of one of the workers (Reinaldo Ramon Lamonica, et al. v. Safe Hurricane Shutters, Inc., et al., No. 11-15743, 11th Cir.; 2013 U.S. App. LEXIS 4599).
SPOKANE, Wash. - A reservation-based Native American tobacco manufacturer is not exempt from paying the tobacco excise tax, a Washington federal judge said in a Feb. 11 opinion (King Mountain Tobacco Company, Inc., et al. v. Alcohol and Tobacco Tax and Trade Bureau, et al., No: CV-11-3038, E.D. Wash.; 2013 U.S. Dist. LEXIS 18227).
WILMINGTON, Del. - A federal bankruptcy judge in Delaware on Dec. 11 approved requests by W.R. Grace & Co. to enter into a cash-settled collar agreement that will guarantee between $375 million and $490 million in funding for an asbestos trust and to establish a qualified settlement fund of up to $100 million so the Chapter 11 debtor can receive a tax deduction for 2012 (In re: W.R. Grace & Co., et al., No. 01-01139, D. Del. Bkcy.).
SAN FRANCISCO - A patent infringement plaintiff whose $147.2 million jury award was later tossed for being "against the clear weight of the evidence" must instead pay costs of $206,363.28, a California federal judge ruled Dec. 4 (Mformation Techs Inc. v. Research in Motion Ltd., No. 08-4990, N.D. Calif.).
PHILADELPHIA - The Third Circuit U.S. Court of Appeals on Nov. 29 ruled that a debtor owed taxes to the U.S. government because the statute of limitations had been suspended during the time she filed two bankruptcies (United States of America v. Marion Balice, No. 12-2765, Chapter 13, 3rd. Cir.; 2012 U.S. App. LEXIS 24567).
GREENVILLE, S.C. - A federal judge in South Carolina on Nov. 29 dismissed a suit in which a student loan debtor sought review of the Department of Education's (DOE) decision to offset her income tax refunds and Social Security benefits in order to collect on her defaulted Direct Parent Loan for Undergraduate Students (PLUS) loan, finding that the loan is not eligible for a teacher loan forgiveness program (Reina Chavez-Romero v. U.S. Department of Education, No. 11-01639, D. S.C.; 2012 U.S. Dist. LEXIS 169258).
SEATTLE - Antitrust laws do not preempt and a cigarette tax collection agreement between a Native American tribe and the State of Washington does not waive the tribe's sovereign immunity, the Ninth Circuit U.S. Court of Appeals held Nov. 13, affirming a lower federal court and two native courts (Daniel T. Miller, et al. V. Chad Wright, et al., No. 11-35850, 9th Cir.).
PHILADELPHIA - A nonfiduciary financial planner who marketed a tax avoidance scheme as a multiple employer welfare arrangement (MEWA) to several employers is liable under Employee Retirement Income Security Act (ERISA), 29 U.S.C.S. § 1001 et seq. Section 502(a)(3) for knowingly participating in a prohibited transaction in connection with the MEWA, the Third Circuit U.S. Court of Appeals ruled Nov. 8 (National Security Systems, Inc., et al. v. Robert L. Iola, Jr., et al., Nos. 10-4154, 10-4155, 3rd Cir.; 2012 U.S. App. LEXIS 23063).
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on Oct. 26 reversed and vacated a Louisiana federal court's decision to certify a class of governmental entities suing over cellular phone billing after finding that "it effectively certified an 'opt in' class, which is impermissible under [Federal] Rule [of Civil Procedure] 23" (Louis Ackal, Sheriff and Ex Officio Tax Collector of Iberia Parish, et al. v. Centennial Beauregard Cellular L.L.C, et al., No. 12-30084, 5th Cir.; 2012 U.S. App. LEXIS 22254).
WILMINGTON, Del. - Bankrupt solar energy company Solyndra LLC on Oct. 15 filed a brief in the U.S. Bankruptcy Court for the District of Delaware supporting the confirmation of its Chapter 11 plan contending that the U.S. Department of Energy (DOE) lacks claims for diminution and the IRS cannot show that the plan's purpose is tax avoidance (In Re: Solyndra LLC, No. 11-12799, Chapter 11, D. Del. Bkcy.).