Justia Government & Administrative Law Opinion Summaries

The trial court granted the request of a wholesaler of veterinary prescription drugs to set aside a final order of the Oklahoma Board of Veterinary Medical Examiners (“Vet Board”) wherein the Board ordered the wholesaler to produce certain requested documents and fined it $25,000 for failure to do so. The Supreme Court found nothing in the Vet Act made wholesale distributors of veterinary prescription drugs, who are licensed and regulated by the Pharmacy Board through the Pharmacy Act, subject to the Vet Act and its investigative power. As such, the Vet Board was without statutory authority to investigate or sanction wholesalers who fell under the regulation of the Pharmacy Board, let alone fine a wholesaler $25,000 for failure to produce records that the Vet Board could have inspected in the regular course of the wholesaler's business. View "Farmacy, LLC v. Kirkpatrick" on Justia Law

The principal issue in this case was whether taxpayers could bring federal or state tort claims to challenge tax assessments, or instead must rely on the normal state tax appeals process. The taxpayers here are trucking companies that were assessed unemployment taxes after the Washington State Employment Security Department audited and reclassified their employment relationship with owner-operators who owned and leased out their own trucking equipment. The trucking companies, joined by their trade organization, Washington Trucking Associations, brought this suit asserting a civil rights claim under 42 U.S.C. 1983 and a state common law claim for tortious interference with business expectancies. The superior court dismissed the suit, holding that the trucking companies must challenge the tax assessments through the state tax appeals process. The Court of Appeals reversed in part, holding that the comity principle precluded the section 1983 claim only "to the extent that [Washington Trucking Associations] and the [trucking companies] seek damages based on the amounts of the assessments, but not to the extent that they seek damages independent of the assessment amounts." The Supreme Court reversed the Court of Appeals and reinstated the superior court's dismissal of both the federal and state claims. View "Wash. Trucking Ass'ns v. Emp't Sec. Dep't" on Justia Law

Rocky Mountain Retail Management, LLC, d/b/a Rocky Mountain High, filed an application for a license to operate a medical marijuana center in the City of Northglenn. The Northglenn City Council, acting as the City’s medical marijuana local licensing authority, denied Rocky Mountain’s application after receiving evidence at two public hearings. Rocky Mountain sought judicial review of the City’s decision in the district court, arguing that the denial was not based on substantial evidence in the record and was therefore arbitrary and capricious and an abuse of discretion. Rocky Mountain also asked the district court to declare certain licensing provisions of the Northglenn City Code unconstitutionally vague, including section 18-14-7(h), which sets forth factors a local licensing authority may consider before approving or denying a medical marijuana center license. The district court ruled that section 18-14-7(h) was unconstitutionally vague, and that the City’s denial of the license in reliance on that invalid provision was arbitrary and capricious. The City appealed. Because the phrase “number, type, and availability” in section 18-14-7(h) provided sufficient notice to applicants and reasonably constrained the exercise of the City’s discretion, the Colorado Supreme Court held section 18-14-7(h) was not void for vagueness. Furthermore, the Court held that the City’s decision to deny Rocky Mountain’s license application was supported by substantial evidence in the record, and therefore was not arbitrary and capricious. View "Rocky MountaIn Retail Mgmt. v. City of Northglenn" on Justia Law

In July 2010, the City and County of Denver issued nine Notices of Final Determination, Assessment and Demand for Payment against various online travel companies: Expedia, Inc.; Hotels.com LP; Hotwire, Inc.; Orbitz, LLC; Trip Network, Inc.; Priceline.com Incorporated; Travelweb, LLC; Site59.com, LLC; and Travelocity.com LP. The Notices claimed unpaid taxes, penalties, and interest due according to the city lodger’s tax article, for the period from January 2001 through April 2010, totaling over $40 million. These online companies filed nearly identical protests, requesting hearings before a Denver Department of Finance hearing officer, and the protests were consolidated by stipulation. Denver petitioned for review of the court of appeals opinion reversing the judgment of the district court and remanding with directions to vacate the subject tax assessments against respondent online travel companies (“OTCs”). The district court had largely upheld the hearing officer’s denial of protests. Unlike the hearing officer and district court, the court of appeals concluded that the city lodger’s tax article was at least ambiguous with regard to both the purchase price paid or charged for lodging, upon which the tax is to be levied, and the status of the OTCs as vendors, upon which the ordinance imposes the responsibility to collect the tax and remit it to the city; and the intermediate appellate court considered itself obligated to resolve all ambiguities in the lodger’s tax article, being a tax statute, in favor of the OTCs. The Colorado Supreme Court found the “fair and reasonable interpretation” of Denver’s lodger’s tax article was that it imposed a duty on the OTCs to collect and remit the prescribed tax on the purchase price of any lodging they sell, to include not only the amount they have contracted with the hotel to charge and return but also the amount of their markup. The judgment of the court of appeals was therefore reversed, and the matter was remanded for consideration of the remaining issues raised on appeal by the parties. View "City & Cty. of Denver v. Expedia, Inc." on Justia Law

Appellant Retail Services owned and operated three separate liquor store locations in Charleston, Greenville, and Columbia, South Carolina. SCDOR was charged with the administration of South Carolina's statutes concerning the manufacturing, sale, and retail of alcoholic liquors. Retail Services petitioned SCDOR to open a fourth store in Aiken, however, SCDOR refused to grant Retail Services a fourth liquor license under sections 61-6-140 and -150 of the South Carolina Code, which limited a liquor-selling entity to three retail liquor licenses. Additionally, ABC Stores lobbied the General Assembly on behalf of its members who are owners and holders of retail dealer licenses. Therefore, Retail Services brought this action against SCDOR and ABC Stores seeking a declaratory judgment that these provisions of the South Carolina Code were unconstitutional. The trial court found the provisions constitutional because: (1) they were within the scope of the State's police power; and (2) they satisfied the rational basis test, which, because they did not infringe on a fundamental right or implicate a suspect class, was all that was required. Therefore, the circuit court granted Respondents' motions for summary judgment. Appellant appealed the circuit court's decision. The Supreme Court reversed. "Not only is there no indication in this record that these provisions exist for any other reason than economic protectionism, the provisions themselves and statutory scheme to which they belong lend further support to Appellant's position. As Appellant points out, the provisions do not limit the number of liquor stores that can be licensed in a certain area-only the number than can be owned by one person or entity. Another provision governs the specific placement of retail establishments away from churches, schools and playgrounds. Therefore, Respondents' contention that the provisions advance the safety and moral interests of the State, no doubt a legitimate State interest, is unavailing with respect to sections 61-6-140 and -150." View "Retail Services & Systems, Inc. v. SDCOR" on Justia Law

Roger Garling, Sheryl Garling, and their business, R and D Enterprises, Inc. sued the United States for damages arising from an Environmental Protection Agency (EPA) raid and investigation of their laboratory. The district court held the Garlings’ action was time-barred under the Federal Tort Claims Act (FTCA). The Garlings appealed, arguing the EPA’s conduct was a continuing tort or, alternatively, that they were entitled to equitable tolling. After review, the Tenth Circuit concluded that sovereign immunity barred the Garlings’ claims and the district court thus lacked subject matter jurisdiction. The Court therefore reversed the district court’s judgment and remanded with directions to dismiss this action for lack of jurisdiction. View "Garling v. EPA" on Justia Law

The Department of Alcoholic Beverage Control (Department) issued a 15-day suspension of an off-sale general license held by the Garfield Beach CVS LLC Longs Drug Stores California LLC, doing business as CVS Pharmacy Store 9174 (CVS) after an administrative law judge found the store clerk sold alcohol to a minor decoy. The Alcohol Beverage Control Appeals Board (Appeals Board) reversed the suspension based on California Code of Regulations, title 4, section 141 (Rule 141) that allowed a law enforcement agency to use an underage decoy only "in a 'fashion that promotes fairness.'" In the Appeals Board's view, the suspension was unfair because the minor decoy did not respond about his age when the store clerk looked at his driver license and remarked, "I would never have guessed it, you must get asked a lot." The Department challenged the reversal of the license suspension, contending it correctly interpreted Rule 141 to require minor decoys to answer only questions about their ages. Based on the administrative law judge's finding in this case that the store clerk's remark constituted a statement rather than a question, the Department argued its decision was legally correct and supported by substantial evidence. The Appeals Board countered Rule 141 was ambiguous and resulted "in confusion and manifest unfairness." And CVS argued the Department's interpretation of Rule 141 unfairly allowed decoys to remain silent in the face of mistaken statements about age. According to CVS, affirming the license suspension would allow deceptive and misleading silence in the face of a store clerk's explicit mistake about the minor decoy's age. The Court of Appeal concluded Rule 141 was not ambiguous in requiring minor decoys to answer truthfully only questions about their ages. Because substantial evidence supported the administrative law judge's factual finding the decoy in this case was not questioned about his age, the Court determined as a matter of law that Rule 141 did not provide CVS with a defense to the accusation it sold an alcoholic beverage to an underage buyer. Accordingly, the Court reversed the Appeals Board's decision. View "Dept. of Alcoholic Bev. Control v. Alcoholic Bev. Control App. Bd." on Justia Law

Avnet Inc. was a New York corporation, headquartered in Arizona, and a major distributor of electronic components and computer technology worldwide. Avnet sold products through its headquarters in Arizona and through its many regional sales offices, including one in Redmond, Washington. Following an audit, the Washington State Department of Revenue (Department) determined that from 2003 to 2005, Avnet underreported its business and operations (B&O) tax liabilities by failing to include its national and drop-shipped sales in its tax filings. At issue in this appeal was whether national and drop-shipped sales were subject to Washington's B&O tax under the dormant commerce clause and the Department former "Rule 193." The Washington Supreme Court concluded that neither the dormant commerce clause nor Rule 193 barred the imposition of a B&O tax to Avnet's national and drop-shipped sales delivered in Washington. View "Avnet, Inc. v. Dep't of Revenue" on Justia Law

Darren's parents began operating S&N Fireworks in the 1970s and obtained a Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) license (18 U.S.C. 842(f)) to import explosives. Darren founded DCV in 2004, intending to eventually buy out S&N. DCV shared S&N’s Lincoln, Illinois place of business and obtained its own ATF import license. From 2004-2011, S&N ordered fireworks from DCV, which imported them from China and immediately transferred them to S&N, which packaged and sold fireworks for shows. Darren was employed by S&N and was listed as a “responsible person” on S&N’s license. DCV was not storing any explosives during this period and had no ATF violations. S&N, however, was cited for numerous violations in a 2006 inspection, relating to records and storage of fireworks. A 2009 inspection revealed multiple violations. Darren attended a meeting and signed a report acknowledging the violations. ATF notified S&N that its license would not be renewed. S&N voluntarily surrendered its license. DCV bought out S&N’s inventory, equipment, and contracts Darren delegated substantial responsibility to his brother, who had been responsible for many of S&N’s problems. ATF inspected in 2013, found multiple violations, and notified Darren that it did not intend to renew DCV’s license. DCV argued that its violations should not be deemed willful given its perfect compliance record before 2013. The agency responded that S&N and DCV were essentially the same operation and equated the S&N violations with DCV. After a hearing, the license was not renewed. The Seventh Circuit upheld the decision as supported by substantial evidence. View "D.C.V. Imports, L.L.C. v. Bureau of Alcohol, Tobacco, Firearms & Explosives" on Justia Law

Rothe filed suit alleging that the statutory basis of the Small Business Administration’s (SBA) 8(a) business development program, Amendments to the Small Business Act, 15 U.S.C. 637, violates its right to equal protection under the Due Process Clause of the Fifth Amendment. Rothe is a small business that bids on Defense Department contracts, including the types of subcontracts that the SBA awards to economically and socially disadvantaged businesses through the 8(a) program. The court rejected Rothe's claim that the statute contains an unconstitutional racial classification that prevents Rothe from competing for Department of Defense contracts on an equal footing with minority-owned businesses. The court concluded that the provisions of the Small Business Act that Rothe challenges do not on their face classify individuals by race. In contrast to the statute, the SBA’s regulation implementing the 8(a) program does contain a racial classification in the form of a presumption that an individual who is a member of one of five designated racial groups (and within them, 37 subgroups) is socially disadvantaged. Because the statute lacks a racial classification, and because Rothe has not alleged that the statute is otherwise subject to strict scrutiny, the court applied rational-basis review. Under rational-basis review, the court concluded that the statutory scheme is rationally related to the legitimate, and in some instances compelling, interest of counteracting discrimination. Finally, Rothe's evidentiary and nondelegation challenges failed. Accordingly, the court affirmed the district court's judgment granting summary judgment to the SBA and DOD. View "Rothe Development v. DOD" on Justia Law