Department of Justice Once Again Proves Its Loyalty to the President, Not the Rule of Law

AUSTIN SARAT

Austin Sarat—Associate Provost, Associate Dean of the Faculty, and William Nelson Cromwell Professor of Jurisprudence and Political Science at Amherst College—comments on the recent news that the Justice Department will seek dismissal of charges against Michael Flynn. Sarat suggests that because the decision does not seem to advance the fair administration of justice in this case, the court should take the unusual step of refusing to grant the prosecutor’s motion to dismiss.

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California Department of Tax and Fee Administration v. Superior Court

Court: California Courts of Appeal

Docket: B294400(Second Appellate District)

Opinion Date: May 7, 2020

Judge: Brian M. Hoffstadt

Areas of Law: Tax Law

A taxpayer cannot avoid Article XIII, section 32 of the California Constitution's "pay first" rule by alleging, in a claim for declaratory relief invoking Government Code section 11350, that the tax regulation giving rise to his unpaid tax assessment is invalid. The Court of Appeal held that this is the result dictated by the canons of statutory construction; the purpose underlying section 11350 does not justify exempting declaratory relief otherwise subject to section 32's "pay first" rule from its auspices; and the California Supreme Court has already strongly suggested that section 11350 must not be read as an exemption from section 32's "pay first" rule. To the extent language in Pacific Motor Transport Co. v. State Bd. of Equalization (1972) 28 Cal.App.3d 230 can be read to suggest a contrary answer, the court respectfully disagreed with Pacific Motor. Accordingly, the court granted the writ petition challenging the trial court's order overruling the demurrer in this case, and directed the trial court to enter a new and different order sustaining the demurrer without leave to amend.

Caesars Entertainment, Inc. v. Mississippi Department of Revenue

Court: Supreme Court of Mississippi

Citation: 2019-CA-00155-SCT

Opinion Date: May 7, 2020

Judge: James W. Kitchens

Areas of Law: Civil Procedure, Government & Administrative Law, Tax Law

In 2007, the Mississippi Department of Revenue (the Department) notified Caesars Entertainment, Inc. (Caesars), that an examination concerning its past tax returns, including its 2005 tax return, had been initiated and that the statutes of limitation in Mississippi Code Sections 27-7-49 and 27-13-49 were arrested. The Department concluded its examination on in early 2013, finding no overpayment or underpayment by Caesars. In February 2014, the Mississippi Supreme Court issued a decision that concerned a casino’s ability to use gaming license credits to offset its income tax liability. In response, Caesars filed an amended tax return seeking a refund for the period January 1 to June 13, 2005. The Department denied Caesars’ refund claim on the basis that the time to ask for a refund had expired. Both the Board of Review and Board of Tax Appeals affirmed the Department’s denial. Under Mississippi Code Section 27-77-7 (Rev. 2017), Caesars appealed the Department’s denial to the Chancery Court of the First Judicial District of Hinds County. Both parties moved for summary judgment. The chancellor granted the Department’s motion for summary judgment, finding that Caesars’ refund claim was untimely. On appeal to the Mississippi Supreme Court, Caesars argued Section 27-7-49(2) (Rev. 2017) extended the statute of limitations found in Section 27-7-313 (Rev. 2017), which gave a taxpayer additional time to file a refund claim after an audit and gave the Department additional time to determine a taxpayer’s correct tax liability and to issue a refund regardless of when a refund claim was submitted. The Department argued Section 27-7-49(2) applied only to the Department and its time frame to examine and issue an assessment. After review, the Supreme Court found Caesars' time to file an amended tax refund claim was not tolled or extended, and that the Department had three years to examine a taxpayer's tax liability, absent exceptions under Section 27-7-49. Therefore, the Court affirmed the chancellor's grant of summary judgment to the Department.

Trask v. Meade County Commission

Court: South Dakota Supreme Court

Citation: 2020 S.D. 25

Opinion Date: May 6, 2020

Judge: Salter

Areas of Law: Constitutional Law, Government & Administrative Law, Real Estate & Property Law, Tax Law

The Supreme Court affirmed the decision of the circuit court affirming the assessed value of Appellants' agricultural land by the Meade County Commission sitting as a board of equalization (the Board), holding that the circuit court did not err. Before the Board, Appellants argued that the director of equalization incorrectly applied statutory provisions to determine their land's production value. The Board further adjusted the assessment from an average of $519 per acre down to an average of $512 per acre. Appellants appealed the Board's decision to circuit court. After a trial de novo, the circuit court affirmed the Board's tax assessment of the property. The Supreme Court affirmed, holding that the circuit court did not err when it determined that (1) the Board complied with the statutory provisions for evaluating agricultural land in their assessment of Appellants' property; and (2) the Board's tax assessment of the property did not violate provisions of the South Dakota Constitution that require uniform taxation at no more than its actual value.

Lockheed Martin Corp. v. Hegar

Court: Supreme Court of Texas

Docket: 18-0566

Opinion Date: May 1, 2020

Judge: Debra Lehrmann

Areas of Law: Government Contracts, Tax Law

The Supreme Court held that Lockheed Martin Corporation's receipts from the sales of F-16 fighter jets to the U.S. government were improperly sourced to Texas for purposes of calculating its Texas franchise tax, holding that Lockheed Martin demonstrated its entitlement to a refund of franchise taxes. The fighter jets at issue were manufactured in Fort Worth and destined for foreign-government buyers. In accordance with federal law, the foreign buyers contracted with the U.S. government to purchase the jets, and the U.S. government contracted with Lockheed Martin. Lockheed Martin filed for a refund of the portion of its franchise taxes for the tax years 2005 through 2007 attributable to the sales of the F-16 aircraft. The Comptroller denied the claim, and Lockheed Martin brought this suit. The trial court rendered judgment for the Comptroller, and the court of appeals affirmed. The Supreme Court reversed, holding (1) Lockheed Martin's "sale" of each F-16 was to the respective foreign-government "buyer" for whom the aircraft was manufactured, and the government's involvement had no bearing on whether to apportion the receipts from that sale to Texas; and (2) the F-16s were delivered to the "buyers" outside of Texas, and therefore, the receipts from the sales of those aircraft were not properly sourced to Texas.