Justia Government & Administrative Law Opinion Summaries

Great Oaks Water Company, a private water retailer, sued the Santa Clara Valley Water District, alleging that the district’s groundwater pumping charges were unlawful taxes levied without voter approval, violating Proposition 26. Great Oaks argued that the charges exceeded the reasonable costs of the governmental activity and were unfairly allocated, benefiting other water users to which Great Oaks had no access. Additionally, Great Oaks contended that the district’s use of ad valorem property taxes to subsidize agricultural groundwater pumping charges was unconstitutional.The trial court ruled in favor of the water district, finding that the groundwater charges did not exceed the costs of the district’s overall water management program. The court held that it was reasonable to use these charges to pay for the program because non-agricultural groundwater pumpers, like Great Oaks, received significant benefits from it. The charges were deemed reasonably allocated on a volumetric basis, and the agricultural discount was found constitutionally valid as it was funded by ad valorem property taxes, not by non-agricultural pumpers.The California Court of Appeal for the Sixth Appellate District affirmed the trial court’s decision. The appellate court concluded that the groundwater charges were not “taxes” under Proposition 26 because they fell under exceptions for specific benefits conferred or government services provided directly to the payor. The court found that the water district proved by a preponderance of the evidence that the charges were no more than necessary to cover the reasonable costs of the governmental activity and that the costs were fairly allocated to Great Oaks. The court also upheld the use of ad valorem taxes to fund the agricultural discount, finding no violation of the California Constitution or the Water Code. View "Great Oaks Water Co. v. Santa Clara Valley Water Dist." on Justia Law

Praxis Packaging Solutions, operating a manufacturing facility, applied for a tax exemption for its manufacturing equipment under Michigan law. The Township of Byron's assessor denied the application, stating the equipment did not meet the statutory definition of eligible manufacturing personal property (EMPP). The denial notice informed Praxis of its right to appeal to the March Board of Review but did not provide specific deadlines or meeting dates. Praxis's agents contacted the assessor for appeal details but were not informed of the deadlines. Praxis submitted an appeal letter after the Board had adjourned, and the Board did not consider the appeal.The Michigan Tax Tribunal dismissed Praxis's petition for lack of jurisdiction, as Praxis had not first appealed to the Board. The Court of Appeals reversed, holding that the Township's notice did not meet statutory requirements and deprived Praxis of due process, thus vesting the Tribunal with jurisdiction.The Michigan Supreme Court reviewed the case and held that the Township's notice did not violate due process. The Court found that the notice, combined with the separate notice of assessment, provided sufficient information about the appeal process. The Court emphasized that due process requires notice reasonably calculated to inform the taxpayer and provide an opportunity to be heard. Since Praxis received actual notice of the Board's meeting dates and the appeal process, the Court concluded that there was no due process violation.The Supreme Court reversed the Court of Appeals judgment and reinstated the Tax Tribunal's dismissal of Praxis's petition for lack of jurisdiction, as Praxis failed to timely protest the exemption denial before the Board. View "Sixarp LLC v. Township Of Byron" on Justia Law

A Utah-based transportation business, All Resort Group, became insolvent in 2013 due to poor management and financial malfeasance. Two shareholders misappropriated $145,000 in company funds to pay their personal federal tax liabilities. In 2017, the company filed for bankruptcy, and the trustee sought to recover the misappropriated funds under §544(b) of the Bankruptcy Code, invoking Utah’s fraudulent-transfer statute as the applicable law.The Bankruptcy Court ruled in favor of the trustee, holding that §106(a) of the Bankruptcy Code waived the Government’s sovereign immunity for the state-law cause of action nested within the §544(b) claim. The District Court adopted this decision, and the Tenth Circuit affirmed, concluding that §106(a) abolished the Government’s sovereign immunity in an avoidance proceeding under §544(b)(1).The Supreme Court of the United States reviewed the case and reversed the Tenth Circuit’s decision. The Court held that §106(a)’s sovereign-immunity waiver applies only to the §544(b) claim itself and not to the state-law claims nested within that federal claim. The Court emphasized that waivers of sovereign immunity are jurisdictional and do not create new substantive rights or alter pre-existing ones. The Court concluded that §106(a) does not modify the substantive requirements of §544(b) and that the trustee must still identify an actual creditor who could have voided the transaction under applicable law outside of bankruptcy proceedings. View "United States v. Miller" on Justia Law

Two companies, Dine Brands Global, Inc. and The Walt Disney Company, filed separate lawsuits against the Michigan State Treasurer, Rachael Eubanks, seeking declaratory and injunctive relief under the Uniform Unclaimed Property Act (UUPA). The Treasurer had initiated multistate examinations of the companies' records to check compliance with the UUPA's reporting and remittance requirements. The examinations, conducted by Kelmar Associates, LLC, identified unclaimed property dating back to 2002. The companies disputed the findings and argued that the statute of limitations barred the Treasurer from collecting the identified property.The Oakland Circuit Court granted summary disposition in favor of the companies, ruling that the examinations were not "actions or proceedings" under the UUPA and did not toll the statute of limitations. The court enjoined the Treasurer from enforcing the collection of the disputed property. The Michigan Court of Appeals affirmed the circuit court's judgments, agreeing that the examinations did not toll the statute of limitations.The Michigan Supreme Court reviewed the case and held that the phrase "action or proceeding" in the UUPA includes both formal lawsuits and administrative procedures like examinations. However, the Court also held that the commencement of an examination does not toll the statute of limitations. The Court noted that the statute of limitations continues to run during an examination and that the Treasurer must initiate an examination within the applicable time frame.The Supreme Court reversed the Court of Appeals' decisions that excluded examinations from the definition of "action or proceeding." The Court remanded the cases to the Court of Appeals to determine whether a holder's duty to comply with the results of an examination is distinct from the annual duty to report and remit unclaimed property, which would affect the statute of limitations for post-examination enforcement actions. View "Dine Brands Global Inc v. Eubanks" on Justia Law

A private, for-profit corporation, The GEO Group, Inc., which operates correctional facilities under contracts with federal and state government entities, was assessed a deficiency in sales and use taxes by the Texas Comptroller. GEO Group challenged the deficiency, arguing that the purchases made for operating the facilities were tax-exempt as they were made on behalf of government clients. The Comptroller denied the claim, and GEO Group paid the additional taxes and sued for a refund in district court.The trial court conducted a bench trial and ruled against GEO Group, finding that it failed to prove by clear and convincing evidence that it was an "agent" or "instrumentality" of the government, thus not qualifying for the tax exemption. The court of appeals affirmed the trial court's judgment, holding that GEO Group's relationship with its government clients was too attenuated to warrant a tax exemption and that the trial court did not err in applying a heightened standard of proof.The Supreme Court of Texas reviewed the case and concluded that the correct standard of proof for GEO Group to prove its entitlement to a tax exemption is by a preponderance of the evidence, not clear and convincing evidence. However, the court agreed with the lower courts that GEO Group is not an "agent" or "instrumentality" of the federal or state government under the relevant statutes and rules. Therefore, GEO Group is not entitled to a tax refund. The Supreme Court of Texas affirmed the judgment of the court of appeals. View "The GEO Group, Inc. v. Hegar" on Justia Law

The taxpayer, 480 McClellan LLC, leased property from the Massachusetts Port Authority (Massport) to construct and operate a cargo facility. The property, located in East Boston, was previously taxable before Massport acquired it in 1990. In 2017, the City of Boston began taxing the property, and the taxpayer sought abatements for the tax years 2017 through 2020, which were denied by the city's board of assessors.The taxpayer appealed to the Appellate Tax Board, arguing that section 53 of the 1993 supplemental appropriations bill exempted it from taxation because the property was used for "air transportation purposes." The board invited the parties to address whether section 53 had amended section 17 of the Massport enabling act, which governs the taxation of Massport lessees. The board concluded that section 53 was not enacted because the Senate did not finalize its reconsideration of the Governor's veto before the end of the 1993 legislative session. The board also determined that the property was leased for "business purposes" under section 17, making the taxpayer subject to taxation.The Supreme Judicial Court of Massachusetts reviewed the case and affirmed the board's decision. The court held that the Senate's initial vote to override the Governor's veto of section 53 was not final due to a timely motion to reconsider, which was not resolved before the legislative session ended. Therefore, section 53 did not amend section 17. The court also upheld the board's interpretation that "business purposes" under section 17 includes commercial, for-profit activities, and found that the taxpayer leased the property for such purposes. Consequently, the taxpayer was subject to taxation under section 17. View "480 McClellan LLC v. Board of Assessors of Boston" on Justia Law

The City of East Lansing entered into an agreement with the Lansing Board of Water and Light (LBWL) in 2016, which included a franchise fee to be charged to LBWL consumers residing within the City. The fee was collected by LBWL and remitted to the City. Plaintiff James Heos, representing a class of LBWL consumers, filed a complaint against the City, alleging that the franchise fee was an illegal tax under the Michigan Constitution's Headlee Amendment and other state laws.The trial court granted summary disposition in favor of the plaintiff on most counts, ruling that the franchise fee was an illegal tax. The Michigan Court of Appeals reversed this decision, directing the trial court to grant summary disposition in favor of the City, concluding that the plaintiff was not a taxpayer and thus his claim was time-barred.The Michigan Supreme Court reviewed the case and held that the franchise fee was indeed a tax because it was used for general revenue-raising purposes, was not proportionate to any costs incurred by the City, and was not voluntary. The Court further held that the plaintiff was a taxpayer because the legal incidence of the fee fell on the LBWL consumers, not LBWL itself. The Court reversed the Court of Appeals' decision and remanded the case to the trial court for further proceedings, allowing the plaintiff to pursue his Headlee Amendment claim. View "Heos v. City Of East Lansing" on Justia Law

The case involves Russell County and its officials (collectively, the County parties) appealing a summary judgment from the Russell Circuit Court in favor of the City of Phenix City and the Town of Hurtsboro (collectively, the municipalities). The dispute centers on whether the Alabama Terminal Excise Tax Act (ATETA), effective October 1, 2012, repealed a local law (Act No. 859, Ala. Acts 1969) that required Russell County to distribute 10% of its share of state gasoline excise tax proceeds to the municipalities.The Russell Circuit Court ruled in favor of the municipalities, declaring that the ATETA did not repeal the local law, despite the ATETA repealing Act No. 224, which the local law referenced. The court found that the ATETA's provisions, which stated that local legislation governing the distribution of gasoline excise tax proceeds remained in force, supported this conclusion.The Supreme Court of Alabama reviewed the case de novo. The County parties argued that the local law was void because it specifically referenced Act No. 224, which the ATETA repealed, and that the ATETA was not a continuation of Act No. 224. They also contended that the ATETA implicitly repealed the local law. The Supreme Court found that the local law's reference to the "state gasoline excise tax" was a general reference, incorporating subsequent amendments, including the ATETA. The court also determined that the ATETA was a continuation of Act No. 224, as it did not substantially alter the distribution scheme. Additionally, the court held that the ATETA did not repeal the local law by implication, as it contemplated local variation in the distribution of tax proceeds.The Supreme Court of Alabama affirmed the circuit court's judgment, holding that the ATETA did not repeal the local law and that the local law remained in force, requiring Russell County to distribute 10% of its share of gasoline excise tax proceeds to the municipalities. View "Russell County, Alabama v. City of Phenix City, Alabama" on Justia Law

Several homeowners sued an irrigation district, claiming that the district's refusal to remove over twenty-year-old charges from the tax rolls was an ultra vires act, violating the Tax Code's twenty-year limitations period. The district argued that the charges were Water Code assessments, not taxes, and thus not subject to the limitations period.The trial court granted the district officials' jurisdictional plea without permitting discovery, dismissing the homeowners' claims for lack of jurisdiction. The Court of Appeals for the Thirteenth District of Texas affirmed in part, concluding that the pleadings did not support an ultra vires claim under the Tax Code because the homeowners had not sought a refund from the tax assessor and the district had clarified that the charges were assessments under the Water Code.The Supreme Court of Texas reviewed the case and determined that the homeowners had sufficiently pleaded facts to demonstrate the trial court's jurisdiction over their ultra vires claim. The court held that the homeowners' pleadings, viewed liberally, alleged that the charges were taxes, had been delinquent for more than twenty years, and that no related litigation was pending at the time of the request to remove the charges. The court concluded that these allegations were sufficient to establish subject matter jurisdiction and did not implicate the district's governmental immunity.The Supreme Court of Texas reversed the Court of Appeals' judgment regarding the Tax Code ultra vires claim and remanded the case to the trial court for further proceedings consistent with its opinion. View "Herrera v. Mata" on Justia Law

The City of Obetz initiated a mandamus and prohibition action against Franklin County Auditor Michael Stinziano and Franklin County Treasurer Cheryl Brooks Sullivan. The dispute arose from a tax-increment-financing (TIF) arrangement established by Obetz in 1997. Obetz erroneously received TIF proceeds in 2015, 2016, and 2017. To correct this, Obetz returned some funds to the county, but the county also withheld Obetz's real-property-tax distribution for the first half of 2022 and reallocated it to other taxing jurisdictions.The Franklin County Court of Common Pleas initially reviewed the case, where Obetz sought to compel the county to return the funds it had tendered and to pay future settlement distributions without setoff. The lower court's decision led to the current appeal.The Supreme Court of Ohio reviewed the case. The court held that Obetz was not entitled to the return of the $212,963.01 it had voluntarily paid to the county. Additionally, the court denied Obetz's request for the county to pay $194,944.32, which had been withheld and reallocated to other jurisdictions. However, the court granted a limited writ of mandamus, compelling the county to pay future settlement distributions to Obetz without setoff. The court found that the county did not have the authority under R.C. 319.44, R.C. 323.133(B), R.C. 5713.08, or R.C. 5715.22 to withhold future settlement funds from Obetz. The court also denied Obetz's request for a writ of prohibition, as the county's actions did not constitute the exercise of judicial power. View "State ex rel. Obetz v. Stinziano" on Justia Law