LexisNexis® Legal Newsroom
Mealey's IP/Tech - Split High Court Clears Way For South Dakota Internet Sales Tax Law

WASHINGTON, D.C. - Existing case law requiring a retailer to have a physical presence in a state before sales tax can be collected "is unsound and incorrect," the U.S. Supreme Court ruled June 21, overturning two long-standing high court rulings that had prevented South Dakota from enforcing a new law levying sales tax on certain online retailers with no physical presence in the state (South Dakota v. Wayfair Inc., et al., No. 17-494, U.S. Sup., 2018 U.S. LEXIS 3835).

Mealey's Insurance - Tax Judge: Company Did Not Issue Insurance, Reinsurance Contracts

WASHINGTON, D.C. - Because a company did not issue insurance or reinsurance contracts during the tax years at issue, a U.S. tax judge ruled June 18 that it did not receive more than 50 percent of its gross receipts from insurance premiums (Reserve Mechanical Corp. v. Commissioner of Internal Revenue, No. 14545-16, U.S. Tax).

Mealey's Toxic Tort/Environmental - New York High Court OKs Pre-Collection Of Cigarette Taxes On Tribal Land

ALBANY, N.Y. - In a June 7 ruling, the New York Court of Appeals found that enforcement of a law that requires retailers on reservation land to prepay taxes on cigarette sales to patrons who are not members of the Seneca Nation of Indians does not run afoul of Indian Law Section 6 or the Buffalo Creek Treaty of 1842 (Eric White, et al. v. Eric Schneiderman, et al., No. 59, N.Y. App., 2018 N.Y. LEXIS 1353).

Mealey's Labor & Employment - U.S. High Court Will Decide Railroad Worker's Dispute Over Taxes On Lost Wages

WASHINGTON, D.C. - The U.S. Supreme Court on May 14 agreed to hear an appeal over the payment of employment taxes under the Railroad Retirement Tax Act (RRTA) on a railroad's payment to a worker for time lost from work due to work-related injuries (BNSF Railway Company v. Michael D. Loos, No. 17-1042, U.S. Sup.).

Mealey's Insurance - California Panel Affirms No Coverage For Suit Over Alleged Tax Avoidance Scheme

RIVERSIDE, Calif. - A California appeals panel on May 8 found that an underlying complaint failed to allege a claim against an insured arising from a wrongful act in its rendering of professional services that are "solely related" to a covered product, affirming a lower court's ruling that an errors and omissions insurer has no duty to defend or indemnify against the underlying suit (Lindsey Financial, Inc. et al. v. American Automobile Insurance Company, No. E067037, Calif., App., 4th Dist., Div. 2, 2018 Cal. App. Unpub. LEXIS 3164).

Mealey's Toxic Tort/Environmental - Tax-Sale Purchaser Still Liable For Cleanup Costs, 9th Circuit Says

PASADENA, Calif. - A Ninth Circuit U.S. Court of Appeals panel ruled April 27 that a company that purchased a contaminated site through a tax sale cannot shield itself from third-party liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) because it had a contractual relationship with the company that formerly owned the site (California Department of Toxic Substances Control v. Westside Delivery LLC, No. 16-56558, 9th Cir., 2018 U.S. App. LEXIS 10763).

Mealey's Antitrust/Unfair Competition - Consumer Sufficiently Alleges Direct Fraud Against Tax Prep Franchisor, Subsidiary

LOS ANGELES - A California federal judge on Feb. 20 held that a consumer who claims that a tax preparation company, its franchisee and other entities manipulated tax returns and submitted them to the Internal Revenue Service without tax payers' consent has sufficiently alleged a theory of direct fraud by the franchisor and its subsidiary (Luis Lomeli v. Jackson Hewitt, Inc., et al., No 17-02899, C.D. Calif., 2018 U.S. Dist. LEXIS 27087).

Mealey's Litigation Procedure - Consumer Sufficiently Alleges Direct Fraud Against Tax Prep Franchisor, Subsidiary

LOS ANGELES - A California federal judge on Feb. 20 held that a consumer who claims that a tax preparation company, its franchisee and other entities manipulated tax returns and submitted them to the Internal Revenue Service without tax payers' consent has sufficiently alleged a theory of direct fraud by the franchisor and its subsidiary (Luis Lomeli v. Jackson Hewitt, Inc., et al., No 17-02899, C.D. Calif., 2018 U.S. Dist. LEXIS 27087).

Mealey's Litigation Procedure - Interlocutory Appeal Denied In Stolen Data Suit Against Intuit

SAN JOSE, Calif. - Plaintiffs alleging negligence by Intuit Inc. related to incidents of fraudulent tax return filings were denied the opportunity to pursue an interlocutory appeal of an order compelling arbitration on Feb. 16, when a California federal judge concluded that an appeal would not serve to advance resolution of the case (In re Intuit Data Litigation, No. 5:15-cv-01778, N.D. Calif.).

Mealey's Litigation Procedure - Final Hearing In Treaty Dispute Over Indian Tax Assessment Scheduled

EDINBURGH, Scotland - A U.K. energy firm on Jan. 23 gave an update on its pending arbitration with the Indian Income Tax Department, announcing that a final hearing is scheduled for later this year.

Mealey's IP/Tech - Supreme Court Will Consider Enforceability Of South Dakota Internet Sales Tax Law

WASHINGTON, D.C. - In its Jan. 12 order list, the U.S. Supreme Court granted certiorari to South Dakota in its challenge of the continued applicability of a 25-year-old case that bars the state's ability to enforce a new law requiring certain out-of-state internet retailers to collect and remit sales tax on sales to South Dakota residents (South Dakota v. Wayfair Inc., et al., No. 17-494, U.S. Sup.).

Mealey's Litigation Procedure - Intuit Seeks Partial Dismissal Of Suit Over Fraudulent Filings

SAN JOSE, Calif. - In a Dec. 15 motion, Intuit Inc. asks a California federal court to again dismiss negligence and aiding and abetting claims brought against it related to incidents of fraudulent tax return filings, arguing that the plaintiffs did not establish any liability for the criminal activities of third parties (In re Intuit Data Litigation, No. 5:15-cv-01778, N.D. Calif.).

Mealey's Litigation Procedure - With Bench Trial Slated For Tribe's Tax Claims, Judge Allows 7 Experts To Testify

SEATTLE - A Washington federal judge on Nov. 27 denied seven motions to exclude expert testimony in an Indian tribe's efforts to avoid state and county taxes for the town it developed, saying that with a bench trial scheduled rather than a jury trial, he will be able to determine at trial whether the experts' testimony is proper (The Tulalip Tribes, et al. v. The State of Washington, et al., No. 2:15-cv-00940, W.D. Wash., 2017 U.S. Dist. LEXIS 194404).

Mealey's Antitrust/Unfair Competition - Amended Class Complaint Filed Over Fraudulent TurboTax Filings

SAN JOSE, Calif. - In the wake of orders partly dismissing their claims and compelling arbitration of some parties' claims, the plaintiffs in a putative class action against Intuit Inc. filed an amended complaint in California federal court Nov. 17, restating negligence and unfair competition claims related to the filing of fraudulent tax returns by criminals that exploited purported lax security in Intuit's TurboTax software (In re Intuit Data Litigation, No. 5:15-cv-01778, N.D. Calif.).

Mealey's Litigation Procedure - Amended Class Complaint Filed Over Fraudulent TurboTax Filings

SAN JOSE, Calif. - In the wake of orders partly dismissing their claims and compelling arbitration of some parties' claims, the plaintiffs in a putative class action against Intuit Inc. filed an amended complaint in California federal court Nov. 17, restating negligence and unfair competition claims related to the filing of fraudulent tax returns by criminals that exploited purported lax security in Intuit's TurboTax software (In re Intuit Data Litigation, No. 5:15-cv-01778, N.D. Calif.).

Mealey's Bankruptcy - Interest Rate Ruling Boosts IRS Refund To W.R. Grace Debtors By $1.6 Million

WILMINGTON, Del. - Reorganized chemical conglomerate W.R. Grace & Co. will receive an additional $1.6 million tax refund from the U.S. government after a Delaware federal bankruptcy judge found Oct. 23 that the Internal Revenue Service used the wrong percentage rate when figuring the refund (In re: W.R. Grace & Co., et al., No. 01-01139, D. Del. Bkcy, 2017 Bankr. LEXIS 3679).

Mealey's Labor & Employment - Oregon Panel Affirms $138,029.26 Levied Against Franchisor For Unemployment Taxes

SALEM, Ore. - The Oregon Court of Appeals on Oct. 18 upheld an administrative law judge's affirmation of the Oregon Employment Department's finding that Oregon franchisees were not independent contractors but were employees of a Washington-based franchisor that was responsible for $138,029.26 in unemployment insurance taxes (National Maintenance Contractors, LLC v. Employment Department, No. A158760, Ore. App., 2017 Ore. App. LEXIS 1271).

Mealey's Labor & Employment - Judge Rejects Breach Of Fiduciary Claims Based On Freezing Of Retirement Plan

SANTA ANA, Calif. - A California federal judge on Oct. 13 held that there are no genuine issues of material fact regarding whether the record keeper of a retirement plan breached a fiduciary duty when it followed a retirement committee's instruction to freeze the assets in a tax savings retirement plan account, granting the record keeper's motion for summary judgment (Dr. Sujata Vyas v. Bhaskar Vyas, et al., No. 15-02152, C.D. Calif., 2017 U.S. Dist. LEXIS 170029).

Mealey's Toxic Tort/Environmental - Michigan Appeals Panel Affirms Summary Disposition In Cigarette Taxes Suit

LANSING, Mich. - A Michigan Court of Appeals panel on Sept. 26 affirmed a decision by the Michigan Tax Tribunal to grant summary disposition to the Michigan Department of Treasury after finding that a man who purchased a large quantity of cigarettes and later shipped them to a friend to be resold was personally liable for paying taxes on those cigarettes under Michigan's Tobacco Products Tax Act (TPTA) (Davor Vulic v. Department of Treasury, No. 333255, Mich. App., 2017 Mich. App. LEXIS 1513).

Mealey's Toxic Tort/Environmental - 5th Circuit Finds Tax Credit Company Ineligible To Receive BP Settlement Money

NEW ORLEANS - A Fifth Circuit U.S. Court of Appeals panel on Sept. 22 found that a film tax credit company is ineligible to receive funds from the Deepwater Horizon Economic and Property Damages Class Action Settlement because it qualifies as a financial services business that is not included in the settlement agreement (Claimant ID 100153748 v. BP Exploration & Production Inc., et al., No. 16-31079, 5th Cir.).

Mealey's Toxic Tort/Environmental - Attorney: Chevron Offers 'No Credible Argument' For Cost Tax In Lago Agrio Case

NEW YORK - The attorney representing a group of Ecuadorian residents who won an $18.5 billion judgment against Chevron Corp. for injuries, only to have it reversed, on Sept. 12 filed a letter with the presiding judge in the U.S. District Court for the Southern District of New York, arguing that the company offers "no credible argument" for its contention that the company is entitled to the taxation of costs in the litigation (Chevron Corporation v. Donziger, et al., Case No. 11 Civ. 691, S.D. N.Y.).

Mealey's Antitrust/Unfair Competition - Judge Dismisses RICO Claims, Finds Lenders Did Not Defraud Company

SAN DIEGO - After finding that lenders did not intentionally defraud a company in relation to payments for insurance and taxes that were not made into an escrow account, California federal judge on Aug. 30 dismissed the company's claims for violation of the Racketeer Influenced and Corrupt Organizations Act (RICO) (Crescenzo 1, L.P. v. Deutsche Bank National Trust, et al., No. 3:17-CV-1018, S.D. Calif., 2017 U.S. Dist. LEXIS 140186.)

Mealey's Banking & Finance - Judge Dismisses RICO Claims, Finds Lenders Did Not Defraud Company

SAN DIEGO - After finding that lenders did not intentionally defraud a company in relation to payments for insurance and taxes that were not made into an escrow account, California federal judge on Aug. 30 dismissed the company's claims for violation of the Racketeer Influenced and Corrupt Organizations Act (RICO) (Crescenzo 1, L.P. v. Deutsche Bank National Trust, et al., No. 3:17-CV-1018, S.D. Calif., 2017 U.S. Dist. LEXIS 140186.)

Mealey's Litigation Procedure - U.S. Government Urges Review Of Email Warrant Denial Despite 11th Circuit Ruling

MONTGOMERY, Ala. - In an Aug. 28 filing in Alabama federal court, the U.S. government states that it "persists in its request" from a July 18 motion to review and vacate a magistrate's order denying warrants for the production of emails related to a tax fraud investigation, arguing that a subsequent 11th Circuit U.S. Court of Appeals ruling on the search of email accounts has no bearing on the present case (In re Search of Information Associated with 15 Email Addresses Stored at Premises Owned, Maintained, Controlled or Operated by 1&1 Media, Inc., et al., No. 2:17-cm-03152, M.D. Ala.).

Mealey's Toxic Tort/Environmental - 9th Circuit Panel Affirms Dismissal Of Counterclaims In Tobacco Taxes Suit

SAN FRANCISCO - A panel of the Ninth Circuit U.S. Court of Appeals on Aug. 29 upheld a district court decision to dismiss counterclaims against an Indian tribe in a tobacco tax lawsuit after finding that the counterclaims are barred by sovereign immunity (Quinault Indian Nation v. Mary Linda Pearson, No. 15-35263, 9th Cir., 2017 U.S. App. LEXIS 16510).