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The Fourth Circuit affirmed the district court's dismissal of plaintiffs' constitutional and statutory challenges to Metropolitan Washington Airport Authority's (MWAA) ability to use toll revenues to fund projects enhancing access to Dulles airport. The court applied the standard from Lebron v. National Railroad Passenger Corporation, 513 U.S. 374 (1995), and held that MWAA was not a federal entity. The court held that MWAA's structure did not violate the non-delegation principle because MWAA exercises no power assigned elsewhere by the Constitution; MWAA did not violate the Guarantee Clause because it did not deny any state a republican form of government; and the court rejected plaintiff's claim that MWAA's use of toll road funds to build metro service to Dulles violates the command that funds only be spent on "capital and operating costs of the Metropolitan Washington Airports" and agreed with the Secretary of Transportation's interpretation of the Lease and Transfer Act. View "Kerpen v. Metropolitan Washington Airports Authority" on Justia Law

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Plaintiff Omega Forex Group LC (Omega), appearing by and through partner Robert Flath (Flath), appealed a district court decision affirming two Notices of Final Partnership Administrative Adjustment (FPAA) issued by the Internal Revenue Service to Omega. The two FPAAs, on the basis of fraud at the partnership level, eliminated large losses reported by Omega on its tax returns for years 1998 and 1999, and imposed penalties on Omega. Flath was an endodontist in private practice in Utah. At some point in 1997 or 1998, one of the endodontists in Flath’s practice suggested that Flath meet with Dennis Evanson, an “expert in options trading and general business organization and planning, tax planning and asset protection.” Evanston was Omega’s managing partner. Through their business arrangement, Flath would make contributions or investments in Omega or other entities controlled by Evanston. Evanson, in exchange for Flath’s agreed payments, “manufactured fictitious transactions to conceal income [for Flath] and create apparent [tax] deductions [for Flath].” For the years at issue here, Flath or his endodontist practice would claim pass-through losses from Omega. Flath was not completely forthcoming with his tax accountant. In 2005, a grand jury indicted Evanson and other individuals related to Omega. In February 2008, Evanson was convicted of conspiracy to commit mail and wire fraud, tax evasion, and assisting in the filing of false tax returns. Omega’s FPAAs were upheld. Flath, on behalf of Omega, raised three issues on appeal: (1) whether the district court erred in holding that the FPAAs issued by the IRS to Omega were not barred by the applicable statute of limitations; (2) even assuming the district court applied the proper statute of limitations, whether it incorrectly applied the legal standards for determining whether Flath had fraudulent intent as to his personal tax returns; and (3) whether the district court erred in determining the asserted fraud penalty at the partnership level. The Tenth Circuit rejected all of these arguments and affirmed the district court’s decision. View "Omega Forex Group v. United States" on Justia Law

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The Town of North Hero appealed the Property Valuation and Review (PVR) Division hearing officer’s decision to impose a $2000 discovery sanction against the Town in a property-tax-reappraisal appeal brought by the Williams Living Trust. The hearing officer imposed the sanction as a result of a claimed discovery violation by the Town concerning disclosure of an electronic Excel spreadsheet file requested by the Trust. The Trust disagreed with the reappraisal of its property and challenged it through the statutory appeals process. In the notice of appeal, the Trust requested that the Town’s listers provide the Trust with a specific Excel spreadsheet file in “native format” and “unprotected.” The Town had provided the Excel spreadsheet in PDF format, not in the electronic format later requested. The Trust sent additional email requests to the Town asking for the Excel file. The Trust ultimately moved to compel production of the file in the requested format; the Town responded it did not have the file and could not produce “what does not exist.” The PVR hearing officer issued a decision on the Trust’s motion to compel, ordering the Town to make one last effort to obtain a copy of the file requested and giving the Town ten days to comply. In compliance with the hearing officer’s order, the Town conducted another search and located the file and produced it in the format originally requested. The Trust filed a motion describing the Town’s conduct concerning the file request as “blatant misconduct during discovery” and seeking monetary sanctions of $2500 and other sanctions as the hearing officer deemed proper for the Town’s failure to produce the file earlier. The hearing officer imposed a monetary sanction against the Town of $2000 for false statements made by Town officials and the “expenses, effort, and time” the Trust spent as a result of the Town’s failure to produce the file until ordered to do so. No evidence was provided concerning how much time, effort, and expense was incurred by the Trust, and there was no way to determine how the hearing officer determined $2000 to be the appropriate sanction amount. The Vermont Supreme Court reversed the sanction, finding the Town had fully complied with the order compelling discovery, making imposition of a monetary sanction against the Town an abuse of discretion. View "Williams v. Town of North Hero" on Justia Law

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In 2016, the California Legislature created two new statutes to address a financial crisis plaguing the workers’ compensation system, however, the remedy came at a significant cost to all participating medical providers and related entities. Specifically, the new anti-fraud scheme cast a very broad net to halt all proceedings relating to any workers’ compensation liens filed by criminally charged medical providers, as well as any entities “controlled” by the charged provider (noncharged entities). The Legislature created this new scheme because existing laws permitted charged providers to collect on liens while defending their criminal cases, allowing continued funding of fraudulent practices. Pursuant to these two new statutes, the Government gained authority to automatically stay liens filed by charged providers and noncharged entities, without considering if the liens were actually tainted by the alleged illegal misconduct. Michael Barri, Tristar Medical Group (Tristar), and Coalition for Sensible Workers’ Compensation Reform (CSWCR) petitioned the Court of Appeal seeking a peremptory or alternative writ of mandate, prohibition, or other appropriate relief directing the Workers’ Compensation Appeals Board (WCAB) to perform its duties and adjudicate Tristar’s lien claims and not enforce certain unconstitutional provisions contained in newly enacted anti-fraud legislation. The Court of Appeal declined petitioner’s request to issue a peremptory or alternative writ of mandate, prohibition, or other relief directing the WCAB to adjudicate the stayed liens and not enforce the newly enacted anti-fraud legislation. The Court rejected Barri’s assertion the suspension and special lien hearing were really criminal proceedings hidden under a “civil label.” The Legislature clearly stated its intention was to enact a civil regulatory scheme and remedy; the Court determined the Legislature exerted its plenary power to create a civil regulatory scheme designed to prevent the unnecessary processing and payment on liens tainted by fraud and other misconduct. “[T]he anti-fraud legislation at issue may have some punitive aspects, but it primarily serves important nonpunitive goals.” View "Barri v. WCAB" on Justia Law

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Kevin Patterson has been incarcerated since 2013, having been convicted after a bench trial of seven counts of possession of child pornography. In May 2015 Patterson filed a 121-page civil complaint in superior court in Juneau. The complaint named as defendants the governor and his predecessor, the Alaska Legislature, a state senator, the then-current and two former attorneys general, an assistant attorney general, an attorney with the Office of Public Advocacy, and the State of Alaska. The complaint alleged that these state officials and entities had “directly harmed . . . Patterson in numerous ways and [had] violated his Constitutional Rights over and over.” It sought damages for Patterson’s incarceration, violence and emotional distress he allegedly suffered while in prison, and the alleged denial of medical care. The Alaska Supreme Court affirmed dismissal of Patterson’s complaint, holding a civil suit for damages allegedly caused by a criminal conviction or sentence may not be maintained if judgment for the plaintiff would necessarily imply the invalidity of the conviction or sentence, unless the conviction or sentence has first been set aside in the course of the criminal proceedings. The Court also rejected Patterson’s claim that the superior court demonstrated an unfair bias against him. View "Patterson v. Walker" on Justia Law

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A certified class of minor children in the Permanent Managing Conservatorship (PMC) of DFPS filed suit under 42 U.S.C. 1983, seeking injunctive relief and alleging that Texas' maintenance of its foster care system exposes them to a serious risk of abuse, neglect, and harm to their physical and psychological well-being. The district court granted plaintiffs a permanent injunction requiring sweeping changes to the state's foster care system. The Fifth Circuit held that facts in the record adequately supported the finding that a policy or practice of maintaining overburdened caseworkers directly causes all PMC children to be exposed to a serious risk of physical and psychological harm; the district court correctly found that the State was deliberately indifferent to a substantial risk of serious harm to the Licensed Foster Care (LFC) subclass as a result of its insufficient monitoring and oversight, and that these deficiencies were a direct cause of the constitutional harm; the district court erred in concluding that inadequate placement array causes constitutionally cognizable harm to the LFC subclass and that the State was deliberately indifferent to a substantial risk of serious harm; and to the extent that the lack of awake-night supervision may have sustained a constitutional claim under the circumstances, the remaining policies and their effects did not cause foster group homes (FGH) children an amplified risk of harm sufficient to overcome the threshold hurdle. The court also held that Rule 23-specific arguments were waived. While the district court entered an expansive injunction mandating dozens of specific remedial measures and it was entitled to grant plaintiffs injunctive relief, the court held that the injunction was significantly overbroad. Accordingly, the court vacated the injunction and remanded with instructions to remove the remedial provisions related to placement array and FGHs, and to strike provisions that were not necessary to achieve constitutional compliance. View "M.D. v. Abbott" on Justia Law

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BTH Quitman Hickory, LLC, challenged the amount of the ad valorem taxes assessed by the Clarke County Board of Supervisors by appealing the assessments to circuit court. However, BTH Quitman did not submit a bond with its appeals; therefore, the Board of Supervisors moved to dismiss the appeals. The circuit court found in favor of BTH Quitman, and the Board filed this interlocutory appeal. Because the Mississippi Supreme Court addressed a similar issue in its opinion in Natchez Hospital Co., LLC v. Adams County Board of Supervisors, 238 So. 3d 1162 (Miss. 2018), it reversed the circuit court’s judgment and remanded the case for the circuit court to dismiss BTH Quitman’s case for lack of subject matter jurisdiction. View "Board of Supervisors of Clarke County, Mississippi v. BTH Quitman Hickory, LLC" on Justia Law

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In this challenge to certain regulations promulgated by the Department of Health (DOH) on separation of powers grounds, the Court of Appeals affirmed the order of the Appellate Division holding that two of the challenged regulations fell within the agency’s regulatory authority but that a third was promulgated in excess of the agency’s delegated powers. The regulations at issue limited executive compensation and administrative expenditures by certain healthcare providers receiving state funds. Supreme Court declared that two regulations did not violate the separation of powers doctrine and were not arbitrary and capricious but that the third regulation was invalid. The Appellate Division affirmed. The Court of Appeals affirmed, holding that the third regulation was promulgated in excess of DOH’s administrative authority but that Petitioners’ challenges to the other two regulations were properly rejected. View "LeadingAge N.Y., Inc. v. Shah" on Justia Law

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In this case concerning the interpretation of New York’s constitutional prevailing wage requirement, the Court of Appeals upheld the New York State Department of Labor’s statute-based policy limiting the payment of apprentice wages on public work projects to apprentices who are performing tasks within the respective trade classifications of the approved apprenticeship programs in which they are enrolled, holding that the Department’s interpretation of the relevant statute was rational. Plaintiffs brought this declaratory judgment action asserting that the Department’s interpretation of N.Y. Labor Law 220(3-3) violates the plain meaning of the law and that the statute permits contractors on public works to pay apprentices the posted apprentice rates provided that they are registered in any Department-certified apprenticeship program. Supreme Court granted summary judgment for Defendants, concluding that the Department’s analysis was an arbitrary and irrational interpretation of the statute. The Appellate Division reversed. The Court of Appeals reversed, holding that the Department’s interpretation of the statute was eminently reasonable. View "International Union of Painters & Allied Trades, District Council No. 4 v. New York State Department of Labor" on Justia Law

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The Supreme Court of Illinois reversed the circuit court's decision granting landowners' motion to dismiss based on section 8-406.1 of the Public Utilities Act, holding that the circuit court lacked the necessary jurisdiction to review the legality and constitutionality of the Commission's administrative proceedings. In this case, the circuit court's sole rationale for granting those motions was its conclusion that the Commission's proceedings were in violation of due process. Because the legality and constitutionality of the Commission's proceeding was beyond the circuit court's power to decide, its answer to that question could not form the basis for dismissing the complaints here. View "Ameren Transmission Co. of Illinois v. Hutchings" on Justia Law