Case Summaries 02/2010

(USDA's motion for summary judgment granted on its promulgation of county-of-origin rule as required by 2008 Farm Bill; Farm Bill statutory language explicitly requires that only beef that is exclusively born, raised and slaughtered in the U.S. is eligible for a U.S. product designation and not beef from cattle that are imported for slaughter in the U.S.; defendant's regulation contained in 7 C.F.R. Sec. 65.260(a) mirrors verbatim language contained in 7 U.S.C. Sec. 1638(a)(2)(A) and is not arbitrary or capricious; plaintiff's beef products must be labeled "products of U.S. and Canada"; Farm Bill COOL provision and NAFTA marketing rule promulgated under pre-existing Treasury regulations can co-exist because COOL provision only applies to a few "covered commodities"; an exception to the COOL requirement for NAFTA products would run counter to plain language of Farm Bill and would likely violate the Administrative Procedures Act). 


(plaintiff failed to offer sufficient admissible evidence that defendant was owner of cow that was struck on roadway and caused injuries to plaintiff). 


(farmer's purchase of a soil scraper exempt from sales and use tax under MO Rev. Stat. 144.030.2 (22) and 12 CSR 10-110.900 because scraper to be used exclusively for agricultural purposes - moving dirt to construct drainging and terraces on farmer's farm). 


(defendant granted no-evidence motion for summary judgment against plaintiff; defendant did not owe plaintiff any duty to plaintiff concerning plaintiff's injuries from striking bull on roadway; defendant owned pasture that was leased to tenant, but did not own the bull - defendant did not exercise sufficient control over the bull to restrict it to the pasture on the date of the collision). 


(case involves plaintiffs' claim to real property involving strip of land 40 feet wide near lake shore formerly used as railbed and 40-foot strip to access plaintiffs' properties). 


(amount received on account of wrongful death action via enactment of state legislation is largely excluded from income under I.R.C. Sec. 104(a)(2); amounts attributable to medical expenses that were deducted on prior year's federal return not excludible). 


(assets transferred to family limited partnership not included in decedent's gross estate; transfer was bona fide sale and had a legitimate business purpose). 


(creditor brought adversary proceeding seeking to enforce agister's lien for care and feeding of cattle against sales proceeds of debtor's cattle; issue involved amount of lien and creditor's motion for partial summary judgment denied because factual issues remained).


(expense deductions disallowed for travel to job; job not temporary). 


(distributions from retirement account did not qualify as "substantially equal periodic payments"; distributions subject to early withdrawal penalty and accuracy-related penalty applied because petitioner did not have reasonable cause to not report the distributions). 


(IRS announces its plans to publish regulations on its position that transfers made during 2010 to a grantor trust that are not treated as completely owned by the transferor or the transferor's spouse are to be treated as a transfer by gift of the entire property interest under I.R.C. Sec. 2511(c); IRS notes that the federal gift tax still applies in 2010). 


(proposal would provide $5,000 for each new hire a business makes in 2010 and provide for refunds on Social Security taxes if a business increases wages or expands hours for existing workers, capped at $500,000 per business; mirrors similar credit from 1970s that failed; White House projects that credit could create between 165,000 and 297,000 jobs in 2010, and also projects that measure will reduce tax revenue by $33 billion for a cost of $111,000 to $200,000 per job created). 


(losses non-deductible under passive loss rules and cannot offset passive income; petitioners (married couple) failed to participate in the business for sufficient number of hours to satisfy passive loss rules under I.R.C. Sec. 469 (which state follows)). 


(petitioner's medical expenses associated with psychological discomfort deductible medical expenses under I.R.C. Sec. 213; hormone therapy and sex reassignment surgery were expenses associated with curing petitioner's psychological disorder and were not non-deductible cosmetic surgery; but breast augmentation surgery was directed at improving petitioner's appearance and not associated with petitioner's psychological disorder; no mention of whether such expenses, if incurred by parents of newborn baby on behalf of baby, would be deductible medical expenses).


(amount received from wrongful death action as a result of action of state legislature excludible from gross income under I.R.C. Sec. 104(a)(2); amount attributable to medical expenses that were deducted in prior year must be included in income). 


(on plaintiffs' claim that defendant violated FLSA by failing to pay them for donning and doffing required work uniforms, boots, hard hats and safety glasses, before and after clocking-in, court rules that such items are "clothes" for which FLSA excludes required compensation; but, FLSA does not bar plaintiffs from receiving compensation for post-donning and pre-doffing activities (traveling to and from work-site after donning and before doffing work "clothes"); time spent washing and sanitizing work boots is compensable if it is integral and indispensable to the work at issue). 


(state regulation of water quality at Confined Animal Feeding Operations (CAFOs) did not pre-empt defendant's ordinance which prohibits CAFOs from being located within a mile of the rim of either the Snake River Canyon or the Malad River Canyon and from being located within 2,640 feet of a Zone A flood plain - state legislature did not intend to occupy the field of regulating water quality at CAFOs and has not comprehensively regulated water quality at CAFOs; subject matter being regulated does not require a uniform regulatory scheme - court recognizes differences exist in climate, landscape, weather patterns and population density in various areas of the state and that local regulation of CAFOs merely complements state and federal regulation and does not conflict therewith; parties stipulated that ordinance provision does not prohibit CAFO operators from lawfully disposing of animal waste outside county and state and, thus, does not violate Dormant Commerce Clause; ordinance provision limiting maximum density of animal units per tillable, irrigated acre the CAFO owns does not violate plaintiffs' substantive due process rights - provision does not require CAFO operators to own land used to dispose of animal waste and ordinance provides for variance if certain conditions satisfied and provision reasonably related to ordinance's objective of encouraging retention of agricultural lands and the protection of aquifer through solid waste management plans). 


(petitioner not engaged in trade or business of farming for tax years at issue and, therefore, cannot claim depreciation and expenses as Schedule F deductions; even though petitioner actively engaged in farming for purposes of USDA farm program payment eligibility, different test used to determine existence of trade or business activity for purposes of I.R.C. Sec. 162(a); under lease agreement with tenant, petitioner did not bear risk of loss from farming activity, petitioner lived 150 miles from farm and never met tenant; petitioner also not engaged in trade or business of loan acquisition and, thus, could not claim Schedule C loss deductions for years at issue).   


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