Justia Government & Administrative Law Opinion Summaries
Articles Posted in Business Law
New Albany Main Street Props. v. Watco Co., LLC
In 1965, the predecessors of the Louisville and Jefferson County Metropolitan Government established the Riverport Authority, which constructed and owns a 300-acre Ohio River port facility. In 2009, the Authority leased the facility to “Port of Louisville.” In 2016, the parties extended the lease, potentially until 2035. According to Port, in 2018, Bouvette, the Authority’s director, started secret negotiations with its competitor, Watco. Port alleges that Bouvette and Watco needed a pretext to terminate the existing agreement and hired outside advisors to inspect the facility. These allegedly biased advisors found the facility “mismanaged, unsafe, and in disrepair.” The Authority asserted that Port had breached the lease and filed suits to remove it from the facility while conducting public bidding and awarding a lease to Watco, contingent on Port’s removal from the site. In one suit, Kentucky courts upheld a decision in favor of Port.In another suit, Port alleged tortious interference with contractual and business relationships, civil conspiracy, and defamation against Watco and Bouvette. The district court rejected Bouvette’s defenses under state-law sovereign immunity, governmental immunity, and Kentucky’s Claims Against Local Governments Act, noting the Authority’s status as a corporation and that it performed a proprietary (not governmental) function. The Sixth Circuit reversed. Under Kentucky law, a “state agency” cannot receive “automatic” immunity but the Authority is under the substantial control of an immune “parent.” The development of “transportation infrastructure” is a government task; the Authority does not act with a “profit” motive and alleviates a statewide concern. View "New Albany Main Street Props. v. Watco Co., LLC" on Justia Law
Barber Group, Inc. v. New Motor Vehicle Bd.
Barber Group, Inc., doing business as Barber Honda (Barber)—a car dealer in Bakersfield, California—brought an establishment protest to the California New Motor Vehicle Board (Board), challenging a decision by American Honda Motor Co., Inc. (Honda) to open a new dealership about nine miles away. The Board overruled Barber’s protest, and the trial court denied Barber’s petition for administrative mandate challenging the Board’s decision. On appeal, Barber argued the Board prejudicially erred when it: (1) relied on Honda’s dealer performance standards at the protest hearing without first deciding whether those standards were reasonable; (2) permitted the proposed new dealership to exercise a peremptory challenge to an administrative law judge initially assigned to the protest hearing, contrary to notions of fairness and the Board’s own order in the matter; and (3) denied Barber’s request that it take official notice of the effects of the COVID-19 pandemic. Finding no reversible error, the Court of Appeal affirmed. View "Barber Group, Inc. v. New Motor Vehicle Bd." on Justia Law
Thai v. International Business Machines Corp.
Thai was an IBM employee. To accomplish his duties, he required, among other things, internet access, telephone service, a telephone headset, and a computer and accessories. On March 19, 2020, Governor Newsom signed the COVID-19 “stay home” order. IBM directed Thai and thousands of his coworkers to continue performing their regular job duties from home. Thai and his coworkers personally paid for the services and equipment necessary to do their jobs while working from home. IBM never reimbursed its employees for these expenses.The court of appeal reversed the dismissal of a complaint under California’s Private Attorneys General Act (PAGA; Labor Code 2699). Section 2802(a)) requires an employer to reimburse an employee “for all necessary expenditures . . . incurred by the employee in direct consequence of the discharge of his or her duties.” The trial court’s conclusion that the Governor’s order was an intervening cause of the work-from-home expenses that absolved IBM of liability under section 2802 is inconsistent with the statutory language. The work-from-home expenses were inherent to IBM’s business and the work performed was for the benefit of IBM. View "Thai v. International Business Machines Corp." on Justia Law
OnPath Fed Crdt Un v. US Dept of Trea
The Treasury Department administers the Community Development Financial Institutions Fund. The Fund supports financial institutions that serve low-income clients and communities. To be eligible for funding, a financial institution must apply for and receive certification. As part of its certification application, the institution must show that it serves either (1) an Investment Area or (2) a Targeted Population. OnPath Federal Credit Union submitted a certification application. Its application stated that OnPath did not serve an Investment Area but that it did serve a Targeted Population. The Inspector General of the Treasury Department subsequently started an audit of OnPath. Based on the Inspector General’s report, the Fund determined that “as a result of [OnPath] submitting invalid information in its . . . Certification Application, the . . . awards made to [OnPath] constitute improper payments.” OnPath brought an action to challenge the agency’s findings and its demand for repayment. The district court denied OnPath’s motion to supplement the administrative record. The district court then granted summary judgment to the agency, rejecting OnPath’s arbitrariness challenge under the Administrative Procedure Act. OnPath appealed.
The Fifth Circuit affirmed the district court and held that the agency here did not abuse its discretion by requiring repayment under these circumstances. The court explained that when n application for federal funding contains materially false information, it’s reasonable for the federal agency to want the money back. And that is so even if it turns out that the recipient might’ve been eligible to receive the funds on some other basis not presented in the application. View "OnPath Fed Crdt Un v. US Dept of Trea" on Justia Law
Magellan Technology, Inc. v. United States Food and Drug Administration
Magellan, a manufacturer of electronic nicotine delivery systems (“ENDS”) products, sought authorization from the FDA to market ENDS under the Family Smoking Prevention and Tobacco Control Act (the “TCA”). The FDA denied Magellan's application related to the company's flavored ENDS products, finding insufficient evidence showing that marketing the pods would be appropriate for the protection of public health, a finding that requires denial of an application under the TCA. Magellan petitioned for review, arguing the FDA action was arbitrary and capricious. Magellan also argues that the FDA exceeded its statutory authority by requiring applicants to demonstrate that their flavored ENDS products are more effective than tobacco-flavored products at promoting cessation or switching from combustible cigarettes to ENDS products.The Second Circuit affirmed. The FDA did not impose a new evidentiary standard on Magellan; therefore, the FDA did not need to provide notice or consider its reliance interests. Thus, the court concluded that the FDA did not act arbitrarily or capriciously. View "Magellan Technology, Inc. v. United States Food and Drug Administration" on Justia Law
Michelle Calderon v. Carrington Mortgage Services, LLC
Plaintiff sued Carrington Mortgage Services on behalf of the United States for alleged violations of the False Claims Act. Calderon is a former employee of Carrington. She alleged that Carrington made false representations to the U.S. Department of Housing and Urban Development (HUD) in the course of certifying residential mortgage loans for insurance coverage from the Federal Housing Administration (FHA). Carrington moved for summary judgment on the basis that Plaintiff did not meet her evidentiary burden on two elements of False Claims Act liability. The district court sided with Carrington on both elements and granted summary judgment, disposing of Plaintiff’s lawsuit.
The Seventh Circuit affirmed. The court concluded that Plaintiff does have sufficient proof of materiality. However, the court agreed that she has not met her burden of proof on the element of causation. The court explained that on the present record, it is not clear how a factfinder would even spot the alleged false statement in each loan file, let alone evaluate its seriousness and scope. And though Plaintiff asserted that the misrepresentations, in this case, are of the type identified in Spicer, the court did not see much in the record to support that point other than Plaintiff’s assertions. Without more evidence from which a jury could conclude that Carrington’s alleged misrepresentations in each loan caused the subsequent defaults, the nature of those misrepresentations is not enough to get past summary judgment. View "Michelle Calderon v. Carrington Mortgage Services, LLC" on Justia Law
TOCH, LLC v. City of Tulsa, et al.
TOCH, LLC, the owner and operator of Aloft Hotel, alleged that the Tulsa Tourism Improvement District No. 1 was allegedly improperly created because fifty percent or more of the affected hotel owners protested in writing prior to its creation. City of Tulsa and Tulsa Hotel Partners sought summary judgment on this issue and disputed this material fact by submitting affidavits to disprove TOCH's allegation. The trial court granted summary judgment to the City, but the Oklahoma Supreme Court found the trial court erred when it made a factual determination on this controverted fact. "Weighing disputed evidence is not proper on summary judgment." The trial court's decision was therefore reversed. View "TOCH, LLC v. City of Tulsa, et al." on Justia Law
Elliott v. Natrona County Bd. of Commissioners
The Supreme Court dismissed for lack of jurisdiction this appeal from the order of the district court dismissing Appellant's appeal of the Natrona County Board of Commissioners' decision denying Appellant's application to transfer a liquor license to him, holding that the district court did not have subject matter jurisdiction.In a separate lawsuit, the district court ordered the CC Cowboys, Inc.'s (CCCI) liquor license be transferred to Appellant. Appellant applied to the Board for the transfer of CCCI's liquor license, but the Board denied the transfer on the grounds that the "transfer will adversely affect the welfare of the people residing in the vicinity of the proposed license address." Appellant appealed to the district court, which found that it lacked jurisdiction to review the proceedings. The Supreme Court affirmed, holding that the district court correctly determined that it was without jurisdiction. View "Elliott v. Natrona County Bd. of Commissioners" on Justia Law
Saltwater Sportsman Outfitters, LLC v. Mississippi Dept. of Revenue
The taxpayer, Saltwater Sportsman Outfitters, LLC (SSO), was a one-man operation that sold clothing online and at trade shows, conventions, and other events. SSO kept few records of what it had sold or where, though its sole member testified that most of its sales occurred out of state. After an audit, the Mississippi Department of Revenue (MDOR) assessed additional sales tax liability, ultimately settling on about $80,000 based on the disparity between SSO’s wholesale purchases and the sales taxes it had paid in Mississippi and other states. MDOR’s assessment was appealed to the circuit court, which granted summary judgment in favor of MDOR. SSO appealed. The Mississippi Supreme Court concluded that SSO’s failure to keep adequate records rendered MDOR’s assessment presumptively correct. The Court found no merit to SSO’s various arguments on appeal, including that the promoters of the events at which SSO sold were the true parties liable for the taxable sales. The Court therefore affirmed the circuit court’s grant of summary judgment. View "Saltwater Sportsman Outfitters, LLC v. Mississippi Dept. of Revenue" on Justia Law
Tesla Inc. v. Delaware Division of Motor Vehicles
Tesla Inc. appealed a Delaware superior court judgment upholding a Division of Motor Vehicles’ (“DMV”) decision denying Tesla’s application for a new dealer license. The superior court agreed with the DMV Director that the Delaware Motor Vehicle Franchising Practices Act (“Franchise Act”) prohibited Tesla, as a new motor vehicle manufacturer, from selling its electric cars directly to customers in Delaware. The Delaware Supreme Court reversed, finding the Franchise Act excluded Tesla's direct sales model, where new electric cars were not sold through franchised dealers in Delaware. View "Tesla Inc. v. Delaware Division of Motor Vehicles" on Justia Law