Case Summaries 04/2009
(plaintiff's challenge to adequacy of study behind defendant's decision to grant dredge and fill permit under CWA so that developer could fill ephemeral washes upheld; washes were dispersed throughout project area in manner such that no large-scale development could take place without filling the washes; thus COE's analysis had to include effects of entire development).
(payment an individual received under a settlement agreement with his former employer for emotional distress and legal fees was not excludible from gross income under I.R.C. Sec. 104(a)(2) because it was not received on account of personal physical injury or physical sickness).
(money an individual received under settlement agreement with former employer was for emotional distress and, thus, not excludible from gross income under I.R.C. Sec. 104(a)(2)).
(the fact that dogs were permitted to run loose on defendant's 100-acre farm insufficient to raise triable issue of fact whether defendants had prior knowledge that dogs had propensity to interfere with traffic; defendant not liable for plaintiff's injuries sustained from fall from bicycle upon colliding with dogs).
(1937 deed's description of property subsequently conveyed at tax sale ambiguous, and use of extrinsic evidence appropriate to determine intent of parties at time of conveyance; if defendant determined to be owner of subject property, state Marketable Record Title Act cannot divest defendant of ownership rights).
(defendant not required to include groundwater monitoring as part of requirements to obtain operational permit for dairy and other livestock operations, and permit does not violate CWA's requirement for public participation in the continuing protection of groundwater).
(passive loss rules not impermissible retroactive and did not constitute a Fifth Amendment taking; certiorari denied).
(individual members of a multimember LLC are not personally liable for taxes owed by the LLC based on Rev. Rul. 2004-41 (if, under state law, LLC members are not liable for LLC debts, then absent fraudulent transfers or other special circumstances, IRS is barred from collecting LLC's employment tax liability directly from the members).
(defendant's regulation which does not include post-harvesting processing facilities within the definition of "agricultural operations" under 29 C.F.R. Sec. 1928.21(b) upheld as reasonable, and "agriculture employment" must be read as co-extensive with "agricultural operations"; thus, employment activities occurring at place where agricultural activities not occurring are not agricultural employment).
(defendant properly convicted of several violations of state cruelty-to-animals statute; issue of constitutionality of statute not reached).
(adverse possession case; plaintiff met statutory requirements for adverse possession claim).
(passive losses from LLC not deductible against non-passive income; activities did not constitute "appropriate economic unit" eligible to be treated as single activity for purposes of assessing gains and losses under I.R.C. Sec. 469).
(employer-paid premiums not included in employees' gross income under I.R.C. Sec. 106, but disability benefits received under settlement agreement included in employees' gross income under I.R.C. Sec. 105(a)).
(both federal and state interpretation of the "cause or contribute to" standard tolerates insignificant level of contribution to a downwind national ambient air quality standards ozone exeedance; application for air quality permit necessary for building of pulverized coal power plant proper).
(Treas. Reg. §1.6015-5(b)(1), which imposes a two-year statute of limitations from the beginning of IRS collection action in innocent spouse cases, is an invalid interpretation of I.R.C. §6015; thus, plaintiff is not barred from receiving innocent spouse relief under I.R.C. §6015(f)).
(right of first refusal contained in lease agreement which would take effect on sale of subject property not triggered by quit claim deed of property which was executed as gift by family members in favor of specific members of the family; defendant had also acquired portion of tract via adverse possession).
(eminent domain case).
(defendant’s designation of waters around Pacific Island as a wildlife refuge did not violate constitutional rights of commercial fishing companies; plaintiffs’ fishing licenses did not include the right to use submerged land).
(adverse possession case).
(production of biodiesel by a farmer on farm premises for agricultural purposes is not a bona fide farm use and, thus is not exempt from county zoning; such use is a non-farm independent commercial enterprise and, when added to existing large-scale industrial farming operation does not involve the production of or an activity incidental to the production of crops, fruits, vegetables, ornamental and flowering plants, dairy, livestock, poultry, and all other forms of agricultural products as defined by state law that have a domestic or foreign market).
(plaintiff did not breach any fiduciary duty in connection with alleged failure to promptly approve a royalty rate increase under a 1964 coal lease; such a duty is not imposed by the Indian Mineral Leasing Act of 1938).
(plaintiff had no economic outlay and lacked sufficient basis in S corporation indebtedness to claim its passthrough losses because taxpayer loaned money to the S corporation that taxpayer had received from a partnership owned by the taxpayer to which the taxpayer also owed money which was then paid back to the partnership by the S corporation as rent).
(the mandatory administrative exhaustion requirement of 7 U.S.C. Sec. 608c(15)(A) does not apply to constitutional challenges to the Agricultural Marketing Agreement Act (AMAA); AMAA did not create a jurisdictional exhaustion requirement for challenges to the AMAA itself).
(defendant's decision to close private railroad crossing utilized for movement of farm equipment across tracks upheld; defendant followed public safety standard in making determination (limited sight distance and steep grade) and defendant's action exempt from requirement of performing environmental review).
(state regulation of labeling of dairy products prohibiting claims regarding the composition of milk with respect to hormones upheld; no First Amendment infringement of free speech; regulation reasonably related to state's interest of preventing consumer confusion; but, summary judgment denied to all parties on formatting issue concerning disclaimer; no dormant Commerce Clause violation; regulation not pre-empted by Organic Foods Production Act and not void for vagueness).
(ad valorem tax assessment of oil and gas interests received in royalties on property that taxpayer inherited upheld; taxpayer's appraiser failed to establish that assessment was inaccurate).
(plaintiff not entitled to bad debt sales tax deduction because bad debt not carried on plaintiff's books; plaintiff's financial partner carried the debt and was entitled to refund of sales tax upon credit card purchaser's default; statute required that "amount of debt must be charged off as uncollectible on the books of the debtor").
(Clean Water Act is silent concerning whether EPA can weigh costs against benefits and choose a lower-cost option; accordingly, federal environmental regulators may let more than 500 electric power plants use less-costly devices to take water for cooling out of the nation's waterway, even if that does less than could be done to protect fish and tiny forms of aquatic life; Second Circuit opinion is reversed and case remanded).