Justia Government & Administrative Law Opinion Summaries

In consolidated appeals, the issue before the Supreme Court concerned the attorney’s fees and costs awarded in the 2006 Trans-Alaska Pipeline System tax assessment case. The superior court decided that the Fairbanks North Star Borough, the City of Valdez, and the North Slope Borough were prevailing parties for purposes of attorney’s fees and costs because they had prevailed on the main issues of the case. The superior court also applied the enhancement factors to raise the presumptive award from 30 percent to 45 percent of the prevailing parties’ reasonable attorney’s fees. The owners of the Trans-Alaska Pipeline System appealed, arguing the superior court should have applied Alaska Appellate Rule 508 instead of Civil Rules 79 and 82. In the alternative, they contended: (1) that the three municipalities did not prevail as against the owners; (2) that fees should have been allocated between separate appeals; (3) that none of the prevailing parties were entitled to enhanced attorney’s fees; and (4) that the Fairbanks North Star Borough’s award should have been reduced as recommended by a special master. The Fairbanks North Star Borough and the City of Valdez cross-appealed, arguing that the superior court should have viewed this case as one involving a money judgment for purposes of an attorney’s fees award under Rule 82(b)(1) and, in the alternative, that they were entitled to a greater enhancement of their fees. Finding no reversible error, the Supreme Court affirmed. View "BP Pipelines (Alaska) Inc. v. Alaska, Dept. of Revenue" on Justia Law

This case arose from a contract between Roanoke Healthcare Authority (doing business as Randolph Medical Center) and Batson-Cook Company, a general contractor, to renovate the medical center, located in Roanoke. Batson-Cook received written notice from Roanoke Healthcare that work on the renovation project had been suspended. Batson-Cook notified one of its subcontractors, Hardy, of the suspension and stated that "[t]he contract has been suspended by [Roanoke Healthcare] through no fault of Batson-Cook ... or its subcontractors. [Roanoke Healthcare] is currently out of funding and has subsequently closed the facility while seeking a buyer." Liberty Mutual, the project's insurer, alleged in its answer that Roanoke Healthcare failed to pay Batson-Cook $241,940.51 for work performed pursuant to the contract. Batson-Cook sent Hardy a change order the change order deducted from the subcontract the $147,000 in equipment and materials another subcontractor Hardy hired, Johnson Controls, Inc. (JCI), had furnished for the renovation project and for which it has not received payment. JCI notified Liberty Mutual, Roanoke Healthcare, Batson-Cook, and Hardy by certified letters of its claim on a payment bond. The letters identified Batson-Cook as the general contractor and Hardy as the debtor. Liberty Mutual denied the claim. JCI sued Liberty Mutual, alleging JCI was entitled to payment on the payment bond Liberty Mutual had issued to Batson-Cook. Upon review, the Supreme Court concluded JCI was a proper claimant on the payment bond. Therefore, the circuit court erred in entering a summary judgment in favor of Liberty Mutual and denying JCI's summary judgment motion. View "Johnson Controls, Inc. v. Liberty Mutual Insurance Company " on Justia Law

RB Entertainment is one of a complicated web of at least seventeen different companies that Appellant Jeffrey Cohen allegedly owns and controls. Central to this appeal was one issue: whether the delinquency proceedings for Indemnity Insurance Corporation, RRG violated the constitutional due process rights of Cohen or Co-Appellant RB Entertainment Ventures. Co-Appellant IDG Companies, LLC (Indemnity's managing general agent), was also one of the Cohen-affiliated entities. After uncovering evidence that Cohen had committed fraud in his capacity as Indemnity's CEO and that Indemnity might be insolvent, the Delaware Insurance Commissioner petitioned the Court of Chancery for a seizure order. The Delaware Uniform Insurers Liquidation Act. Based on the detailed allegations and supporting evidence presented by the Commissioner, the Court of Chancery granted that seizure order, which, among other things, prohibited anyone with notice of the proceedings from transacting the business of Indemnity, selling or destroying Indemnity’s assets, or asserting claims against Indemnity in other venues without permission from the Commissioner. The seizure order also prohibited anyone with notice of the proceedings from interfering with the Commissioner in the discharge of her duties. Cohen, who founded Indemnity and had served as its President, Chairman, and CEO, resigned from Indemnity's board during the ensuing investigation and the board removed him from his managerial positions. After his resignation, Cohen interfered with the Commissioner's efforts to operate Indemnity in various ways. The Commissioner returned to the Court of Chancery several times, first seeking an amendment to the seizure order to address Cohen's behavior and then seeking sanctions against him. The Court of Chancery entered a series of orders that increased the restrictions on Cohen's behavior and imposed stiffer sanctions upon him. Cohen argued that he was denied due process at several junctures during the Court of Chancery proceedings. Because Cohen's claims alleged violations of his right to due process, the focus of the Supreme Court's opinion was on whether Cohen was given notice of the allegations against him and a fair opportunity to present his side of the dispute. Having carefully examined the record in this case, the Court concluded that he was given that opportunity: no violation of Cohen's or the affiliated entities' due process rights occurred. View "Cohen, et al. v. State of Delaware, et al." on Justia Law

Former GM and Chrysler dealers, whose franchises were terminated in the 2009 bankruptcies of those companies, sued, alleging that the terminations constituted a taking because the government required them as a condition of its providing financial assistance to the companies. The Bankruptcy Code, 11 U.S.C. 363, 365, authorizes certain sales of a debtor’s assets and provides that a bankruptcy trustee “may assume or reject any executory contract or unexpired lease of the debtor.” Debtors-in-possession in chapter 11 bankruptcies, like GM and Chrysler, generally have a trustee’s powers. The Claims Court denied motions to dismiss. In interlocutory appeals, the Federal Circuit remanded for consideration of the issues of the “regulatory” impact of the government’s “coercion” and of economic impact. While the allegations of economic loss are deficient in not sufficiently alleging that the economic value of the franchises was reduced or eliminated as a result of the government’s actions, the proper remedy is to grant to leave to amend the complaints to include the necessary allegations. View "A&D Auto Sales, Inc. v. United States" on Justia Law

Barley Mill, LLC appealed a Court of Chancery judgment invalidating a vote of the New Castle County Council on a rezoning ordinance. Barley Mill planned to develop a piece of property to house office space and a regional shopping mall. The increase in traffic associated with the development was of considerable concern to both the public and members of the Council itself. But the Council was advised that: (1) it could not obtain the traffic information and analysis that Barley Mill was required to provide to the Delaware Department of Transportation as part of the overall rezoning process before the Council exercised its discretionary authority to vote on the rezoning ordinance; and (2) that the traffic information was not legally relevant to the Council's analysis. That advice was incorrect and there were no legal barriers that prevented the Council from obtaining the information or considering it before casting its discretionary vote on the rezoning ordinance. After the rezoning ordinance was approved, nearby resident homeowners and Save Our County, Inc. challenged the zoning ordinance, arguing that not only was the Council allowed to consider the traffic information, but the New Castle County Unified Development Code required it to consider that information before its vote. They also argued that, even if the Council was not required to consider the information before the vote, the vote on the rezoning ordinance was arbitrary and capricious because the Council had received erroneous legal advice that the information was both unavailable and irrelevant at the time the Council cast its vote. The Court of Chancery held that the mistake of law caused the Council to vote without first obtaining the information, rendering the vote arbitrary and capricious. On appeal, Barley Mill argued that the Court of Chancery erred when it invalidated the Council's vote. Save Our County and New Castle County cross-appealed, arguing that the Court of Chancery erred in holding that neither 9 Del C. Sec. 2662 nor the UDC required the Council to consider a traffic analysis before casting its discretionary vote on the rezoning ordinance. Finding no reversible error, the Supreme Court affirmed the Court of Chancery's decision. View "Barley Mill, LLC v. Save Our County, Inc." on Justia Law

The Internal Revenue Service and several oil companies agreed to settle a tax dispute over a jointly-developed pipeline system in a closing agreement. After entering the agreement, Phillips Petroleum Company (now ConocoPhillips Company) acquired Arco Transportation (one of the original signatories to the agreement). In 2000 and 2001, Conoco revisited the tax implications of its acquisition and claimed "going-forward" and "basis-increase" deductions on its amended consolidated tax returns. The IRS refunded Conoco's 2000 going-forward deductions, but disputed the remaining deductions. The parties took the dispute to federal district court, where the district court decided the issue on cross-motions for summary judgment. The court rejected Conoco's position and granted summary judgment to the IRS. Conoco appealed. After its review, the Tenth Circuit concluded that "going-forward" deductions were impermissible for interests that Arco Transportation did not own as of July 1, 1977, and "basis-increase" deductions were impermissible because the Closing Agreement did not fix the amount of a liability or exempt that liability from section 461(h) of the Internal Revenue Code. Thus, the Court held that Conoco was not entitled to the going-forward or basis-increase deductions. View "United States v. ConocoPhillips Company" on Justia Law

The Illinois Department of Labor sent Jack’s Roofing a notice of investigation of possible violation of the Employee Classification Act, 820 ILCS 185/3.25 by misclassifying employees as independent contractors. Jack’s provided the Department with requested information. Preliminary determination found misclassification of 10 individuals for eight to 160 days and calculated a potential penalty of $1,683,000. The Department requested a response within 30 days for consideration before final determination. Less than a month later, the Department sent notice of a second investigation Jack's sought injunctive relief and a declaratory judgment that the Act is unconstitutional as violating: the special legislation clause of the Illinois Constitution because it subjects the construction industry to more stringent employment standards than other industries; the due process clauses of the U.S. and Illinois Constitutions because it does not provide an opportunity to be heard and is impermissibly vague; the U.S. Constitution's prohibition against bills of attainder because it is a legislative act that inflicts punishment without a judicial trial; and the equal protection clauses of both constitutions because no other industry is subjected to the same standards when seeking to hire independent contractors. On remand, the court denied relief, finding the Act valid and enforceable. The appellate court affirmed. The Illinois Supreme Court affirmed in part, rejecting facial constitutional challenges. A procedural due process challenge to enforcement provisions has been rendered moot by the recent amendments to the Act, which must be applied to plaintiffs in the future. The court also affirmed that section 10 of the Act is not unconstitutionally vague. Remaining constitutional challenges to the Act were forfeited. View "Bartlow v. Costigan" on Justia Law

The Mississippi Department of Revenue assessed taxes, penalties, and interest against Isle of Capri Casino, Inc. and its affiliated entities for tax years 2004, 2005, 2006, and 2007. The Department based the assessment on the application of the license fees as a credit, claiming that only the tax liability of four Isle of Capri entities that actually held the licenses were eligible for offset, and could not benefit the affiliated group as a whole. Isle of Capri appealed the Department's assessment first to the Board of Review and then to the Board of Tax Appeals; both affirmed the assessment with minor changes. Isle of Capri appealed again, and the chancery court granted summary judgment in its favor. The Department subsequently appealed. Finding no error in the chancery court's decision, the Supreme Court affirmed. View "Mississippi Department of Revenue v. Isle of Capri Casino, Inc." on Justia Law

Starr, AIG's former principal shareholder, filed suit against the FRBNY for breach of fiduciary duty in its rescue of AIG during the fall 2008 financial crisis. The district court dismissed Starr's claims and Starr appealed. The suit challenged the extraordinary measures taken by FRBNY to rescue AIG from bankruptcy at the height of the direst financial crisis in modern times. In light of the direct conflict these measures created between the private duties imposed by Delaware fiduciary duty law and the public duties imposed by FRBNY's governing statutes and regulations, the court held that, in this suit, state fiduciary duty law was preempted by federal common law. Accordingly, the court affirmed the judgment of the district court. View "Starr Int'l Co. v. Federal Reserve Bank of New York" on Justia Law

Harman-Bergstedt, Inc. appealed the appellate court's decision to reverse an Industrial Claim Appeals Office decision disallowing respondent Elaine Loofbourrow's award of temporary disability benefits. The ICAO concluded that once respondent's treating physician placed her at maximum medical improvement, temporary total disability benefits could not be awarded for the injury for which she was initially treated. The appellate court concluded that under the circumstances of this case, such an independent medical exam was not a prerequisite to temporary total disability benefits. After its review of this case, the Supreme Court concluded the appellate court was correct in its decision: because a determination of maximum medical improvement has no statutory significance with regard to injuries resulting in loss of no more than three days (or shifts) of work time, respondent's award of temporary total disability benefits was not barred by her failure to first seek a division-sponsored independent medical examination. View "Harman-Bergstedt, Inc. v. Loofbourrow" on Justia Law