Justia Government & Administrative Law Opinion Summaries

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

Hartney, a fuel oil retailer with a home office in Forest View, in Cook County, accepted purchase orders in the Village of Mark, in Putnam County, through a business with which it contracted. No Hartney employees were involved there. By so structuring sales, Hartney avoided liability for retail occupation taxes of Cook County, Forest View, and the Regional Transportation Authority. Hartney’s interpretation of the law was consistent with regulations published at the time. However, The Illinois Department of Revenue determined, through audit, that Hartney’s sales were attributable to the company’s Forest View office, rather than the Mark location reported by the company, and issued a notice of tax liability. Hartney paid penalties of $23,111,939 under protest and filed suit. The court agreed that the bright-line test for the situs of sale is where purchase orders are accepted. The appellate court affirmed. The Illinois Supreme Court, court disagreed. The court found the “Jurisdictional Questions” regulations of the Administrative Code inconsistent with the statutes and case law. The legislature has not adopted a single-factor test for the situs of retail activity. The court’s own precedent calls for fact-intensive inquiry where there is a composite of many activities, and the legislature, by consistently employing the “business of selling” language, has effectively invoked that precedent. The Department of Revenue must abate Hartney’s penalties and tax liability for the relevant period because Hartney’s actions were consistent with its regulations in effect at the time.View "Hartney Fuel Oil Co. v. Village of Forest View" on Justia Law

Itochu asked the U.S. Department of Commerce to act under 19 U.S.C. 1675(b) to revoke part of an antidumping-duty order applicable to imported steel nails. Before Commerce issued its preliminary determination, Itochu submitted comments and provided legal authority to urge that the requested partial revocation take effect at an early specified date. Commerce rejected that position in its preliminary ruling and generally invited interested parties to comment. Itochu did not avail itself of that opportunity. In its final ruling, Commerce adopted the partial revocation, which the domestic industry did not oppose, but with the later effective date. When Itochu challenged the effective-date determination, the U.S.s Court of International Trade declined to address the merits, citing failure to exhaust administrative remedies, 28 U.S.C. 2637(d), because Itochu had failed to resubmit, after the preliminary ruling, the comments it had submitted earlier. The Federal Circuit reversed, stating that in these circumstances, requiring exhaustion served no discernible practical purpose and resulting delay would have risked harm to Itochu. View "Itochu Bldg. Prods. v. United States" on Justia Law

A commercial website operator filed this declaratory judgment action seeking a determination of the reasonableness of the fee charged by the Rogers County Clerk for electronic copies of records and for a determination that the corporation was entitled to an electronic copy of the official tract index of county land records. Plaintiff County Records, Inc. is in the business of operating a website that provides land records to on-line subscribers, including the county clerk records for all 77 counties in Oklahoma. In April 2009, Plaintiff requested electronic copies of land records from the County Clerk's office including an electronic copy of the official tract index. The request for an electronic copy of the official tract index was denied based on Defendant's belief that she is legally prohibited from providing it to Plaintiff for its intended commercial sale of the information. The trial court granted summary judgment to the corporation and directed the Clerk to provide all the requested electronic copies at a "reasonable fee." Upon review, the Supreme Court reversed, finding that Plaintiff was not legally entitled to the tract index information in electronic form and the county clerk is prohibited by a specific provision in the Open Records Act from providing information from the land records for resale.

In 2009 the fire protection district adopted an ordinance requiring commercial buildings and multi-family residences to have fire alarms equipped with wireless radio technology to send alarm signals directly to the district's central monitoring board. The ordinance provided that the district would contract with one private alarm company to provide and service signaling equipment, displacing several private fire alarm companies that have competed for these customers. The alarm companies sued on claims under the U.S. Constitution, federal antitrust law, and state law. The district court granted summary judgment for the alarm companies on the basis of state law and enjoined the district from implementing the ordinance. The Seventh Circuit affirmed in part, holding that the district has statutory authority to require that commercial and multi-family buildings connect directly to its monitoring board through wireless radio technology. The district does not, however, have authority to displace the entire private market by requiring all customers to buy services and equipment from itself or just one private company.

Verizon Maryland, a telecommunications company, and the staff of the Public Service Commission (PSC) obtained PSC approval of a global settlement of six pending cases. Verizon employed an alternative form of regulation (AFOR) under Md. Code Ann. Pub. Util. Co. (PUC) 4-301 that included up to $6,000,000 in bill credits to customers with out-of-service complaints that were not resolved in compliance with specified standards. PSC approved the AFOR pursuant to PUC 4-301. A technicians union objected, contending that the service quality aspects of the AFOR did not ensure the quality, availability, and reliability of service required by PUC 4-301. The circuit court affirmed PSC's approval of the AFOR. The Court of Appeals affirmed, holding that PSC acted within its discretion in approving the AFOR, as PUC 4-301's use of the term "ensuring" did not require that PSC be completely certain that Verizon's incentive strategy would result in compliance with standards.

The Arkansas Health Services Permit Commission awarded Hospitality Care Center a permit of approval (POA) for a nursing facility. Gracewood Nursing and Rehabilitation Center subsequently requested approval from the Commission to transfer the POA to it from Hospitality. Twin Rivers Health and Rehab opposed the transfer. The Commission ultimately granted the transfer of the POA. Twin Rivers sought judicial review of the Commission's decision and declaratory relief, naming as defendants the Commission, the Arkansas Health Services Permit Agnecy (AHSPA), Gracewood, and Hospitality. The circuit court granted the summary judgment motion of the Commission and the AHSPA and affirmed the Commission's decision. The Supreme Court (1) reversed and remanded the matter with directions to enter findings of fact and conclusions of law because the Commission did not set forth any findings of fact or conclusions of law to support its decision to grant the transfer of the POA; and (2) dismissed without prejudice that portion of the appeal relating to Twin Rivers's request for summary judgment, as the Court does not hear appeals piecemeal.

The company, which issues preprinted travelers' checks, challenged 2010 N.J. Laws Chapter 25, amending New Jersey's unclaimed property statute, N.J. Stat. 46:30B, to retroactively reduce the period after which travelers checks are presumed abandoned from 15 years to three years, after which the funds must be turned over to the state. The district court denied an injunction. The Third Circuit affirmed, rejecting arguments under the Due Process Clause, the Contract Clause, the Takings Clause, and the Commerce Clause. The law has a rational basis. It does not substantially impairment contractual relationships; while the company has the right to use and invest TC funds until the date the TC is cashed or sold, the duration of use is further subject to the lawful abandonment period set by unclaimed property laws. The company has no investment-backed expectation with respect to the longer period of investment.The law does not directly regulate sales in other states.

Merchants challenged 2010 N.J. Laws Chapter 25, amending the unclaimed property statute, N.J. Stat. 46:30B, to provide for escheat of stored value cards (gift cards). Chapter 25 presumes cards to be abandoned after two years of inactivity and requires issuers to transfer remaining value to the state. Issuers must obtain name and address of the purchaser or owner of each card. If the issuer's state exempts cards from its unclaimed property statute, unredeemed balances of cards previously-issued in New Jersey, where information was not recorded, must be reported to New Jersey. The address where the card issued or sold is presumed to be the owner's domicile. The district court enjoined retroactive application of Chapter 25 and prospective enforcement of the place-of-purchase presumption, but declined to enjoin data collection and two-year abandonment provisions. The Third Circuit affirmed. Chapter 25 substantially impaired contractual relationships by imposing unexpected obligations and did not reasonably accommodate the rights of the parties in light of the public purpose. The abandonment period is not preempted by the Credit CARD Act, 15 U.S.C. 1693l-1(c). The place-of-purchase presumption is preempted by federal common law, under which the first opportunity to escheat belongs to the state of the last known address of the creditor, shown by the debtor's records. If the primary rule does not apply, the right to escheat is with the state in which the debtor is incorporated.

When Neighborhood Health Plan of Rhode Island (NHP), a not-for-profit corporation that operated a licensed health maintenance organization that provided health insurance coverage to its enrollees, began reimbursing ophthalmologists at a higher rate than the rate paid to optometrists for performing the same services, two optometrists brought an action on behalf of all optometrists who had entered into participating provider agreements with NHP during the period that the differential reimbursement policy was in effect, contending that this differential reimbursement violated state law. The superior court granted summary judgment in favor of NHP, reasoning that the antidiscrimination provision in R.I. Gen. Laws 5-35-21.1(b) applied only to expenditures of public funds and that NHP did not violate the statute because NHP paid for the ophthalmologists' services using private money. The Supreme Court affirmed, holding (1) the statute at issue was not ambiguous; and (2) the motion justice did not err in concluding that NHP is not an agency or department of the state and cannot otherwise be considered a state actor.