Annotations 03/2010

(plaintiff subject to California laws prohibiting slaughter-for consumption of animals that cannot stand or walk; CA laws are not pre-empted by federal law; all such animals must be immediately euthanized; CA and other states not simply limited to excluding animals from slaughter on a species-wide basis - trial court's ruling that state may ban slaughter of certain species, but that once a state allows a species to be slaughtered, it cannot impose further restrictions is "hogwash").

(factual dispute remains concerning parties' intent with respect to "excepting" clause in deed concerning reservation and/or conveyance of mineral interests). 

(defendant complied with requirements of NEPA, APA and CWA in issuing CWA Sec. 404 permit granted to company to build coal-to-liquid fuel plant). 

(cost of herb that is prescribed by physician to treat migraines can qualify as medical expense under I.R.C. Sec. 213 for purposes of flexible spending account; taxpayer must be able to substantiate the medical condition, that the herb alleviates the condition, and that the herb wouldn't have been purchased but for the condition). 

(with no analysis of the statute, IRS says that purchases from certain relatives do not qualify for the first-time homebuyer tax credit). 

(IRS entitled to summary judgment; tax liens against debtor for unpaid income taxes, employment taxes and penalties determined to be valid; liens attached to proceeds held by bankruptcy trustee and had priority over other claim). 

(federal law controls for purposes of regulating hydroelectric dams operating under a federal license). 

(case involves claim that county violated CWA in its application of anti-mosquito pesticides and dredging of mosquito ditches; county's maintenance activity of ditches did not violate CWA because CWA has permit exemption for maintenance of drainage ditches and ditches had as primary purpose the drainage of surface waters, and record supported conclusion that county's activities did not bring an area of navigable waters into a use to which it was not previously subject so CWAs recapture provision not triggered; trial court did not adequately explain its basis for finding that county fully complied with pesticide's label instructions and trial court's conclusion that pesticides were not discharged from point source was in error). 

(plaintiff's facial challenge to defendant's (U.S. Army Corps of Engineers) issuance of NWP 46 arguing that Corps does not have jurisdiction over non-tidal upland ditches fails; Corps has authority to regulate ditches generally, and plaintiff failed to establish that there is no set of circumstances under which NWP 46 would be valid; case did not involve challenge to CWA jurisdiction as applied to specific ditches).

(plaintiff, wholesale generator of electricity, challenged award of summary judgment to defendant; trial court determined that defendant owned three riverbeds and was, thus, entitled to damages for plaintiff's use of riverbeds from 2000-2007 at hydroelectric power sites; on appeal, court affirmed on basis that rivers at issue were navigable when defendant became state in 1889 under navigability for title test).  

(taxpayers, married couple, not entitled to deductions for losses from business and related expense deductions from husband's boxing activity; taxpayers failed to establish that boxing activity engaged in for profit; sufficient records not kept).

(married couple failed to substantiate virtually all of the business deductions that they claimed for the tax year at issue; advertising expense allowed).

(widow entitled to innocent spouse relief for joint tax liability with deceased spouse because she didn't significantly benefit from unpaid tax liability and husband forced her to sign return). 

(isolated human genes (isolated DNA) and the comparison of their sequences are not patentable subject matter under general utility patent law). 

(plaintiff challenges as invalid 15 claims contained in seven patents relating to two human breast cancer susceptibility genes that isolated DNA containing all or portions of a human breast cancer susceptibility genes and methods for comparing or analyzing the gene sequences to identify a predisposition to breast or ovarian cancer; "isolated DNA" referred to a segment of DNA nucleotides existing separate from other cellular components normally associated with native DNA, and included both DNA originating from a cell and synthesized DNA; court did not consider novelty or non-obviousness under 35 U.S.C. Secs. 102-103 and concluded that DNA's existence in isolated form did not alter fundamental quality of DNA in human body; patents at issue that were directed to isolated DNA containing sequences found in nature not sustainable as matter of law and unpatentable under 35 U.S.C. Sec. 101; mere purification of isolation did not transform DNA that was found in nature into patentable subject matter, and claimed comparisons of DNA sequences were non-patentable mental processes; on the "isolated DNA claims and argument, judge (88 year-old Carter appointee) fails to cite even a single U.S. Federal Circuit Court of Appeals opinion, and cites eight cases decided before the 1952 Patent Act which are completely inapplicable to the present issue at hand - indeed, the court in In Re Bergy, 596 F.2d 952 (C.C.P.A. 1979)warned that pre-1952 cases had to be "handled with care lest the terms used in their reasoning clash with the reformed technology of the present statute; lack of meticulous care may lead to distorted legal conclusions"; part of court's decision involving "isolated DNA" claims, even if upheld on appeal, unlikely to have broad application on patenting biopharmaceutical products and careful drafting may completely avoid court's "product of nature" concerns; court's decision to be appealed to Federal Circuit). 

(case involves operation of private shooting range in close proximity to subdivision and elementary school; plaintiffs claim that range constitutes public and private nuisance, was an attractive nuisance, violated the Montana constitution and that court had authority to close range because it was a "clear and provable safety hazard"; public nuisance claim improperly dismissed by trial court; trial court improperly dismissed private nuisance claims; trial court improperly dismissed trespass claims and attractive nuisance claim; constitutional issue need not be decided). 

(taxpayer's, a married couple, entitled to alimony deduction for entire amount of mortgage payments attributable to residence that husband's former spouse owned and occupied during tax year; mortgage payments satisfied requirements of I.R.C. Sec. 71(b)(1)(A)). 

(will construction case; unambiguous language of will excluded specifically devised real estate from the control of personal representative; real estate not subject to control of estate pending administration). 

(home purchased before Nov. 7, 2009 doesn't qualify taxpayer for first-time homebuyer tax credit). 

(estate executor liable for decedent's unpaid federal income taxes resulting from decedent' pre-death sale of farm; sale income placed in joint bank account with decedent's son and was not income in respect of decedent; accordingly, sale income properly reported on decedent's final Form 1040 and estate liable for tax).

(IDOR admits error in denying capital gains deduction claimed on taxpayer's 2006 Iowa return; business assets that are held by the business for more than one year are eligible for the capital gain deduction if the business was held for at least 10 years and the taxpayer satisfied the material participation requirement for those 10 years). 

(activities of police officers in donning and doffing uniforms and associated gear are not compensable activities under the Fair Labor Standards Act and the Portal-to-Portal Act; officers had the option of donning and doffing their uniforms and gear at home). 

(defendant was bona fide purchaser of real estate at foreclosure sale because plaintiff failed to prove that defendant was on inquiry notice of any irregularity in prior conveyances of the real estate via power of attorney that allegedly did not give transferor authority to convey the property; but, trial court erred in striking affidavits that plaintiff submitted in support of plaintiff's forgery claim and material factual issue remained concerning whether forgery impacted chain of title and case remanded for trial on forgery issue).

(defendant's insurance policy that covered theft of cattle; while "theft of cattle" a covered loss under policy, plaintiff argued for non-coverage because cattle were either wrongfully converted or embezzled by defendant's employees who sold them without authorization and pocketed the sale proceeds; ordinary person of usual understanding would not comprehend that all employee "thefts" are "embezzlements"; exclusionary language not clear and policy to be construed in favor of insured; insufficient factual evidence present to determine whether separate deductible should be applied to each separate theft).

(IRS takes the position, without analysis of I.R.C. Sec. 36(c)(3), that taxpayer does not qualify for first-time homebuyer tax credit upon purchase of home from father's estate, unless the sale is in satisfaction of a pecuniary bequest). 

(while estate not required by statute to file an appraisal with estate's tax return with respect to farmland of decedent, value of farm for inheritance tax purposes if farm's fair market value rather than life estate value; decedent died holding a retained life estate in the property and transferred full value of farm to children at death). 

(couple's purchase of home for daughter for daughter not qualified for long-term homeowner credit; purchase occurred before effective date of credit). 

(for charitable contributions made by credit card, contributions are deductible in the year that the charge is made regardless of when creditor paid; contributions must be substantiated). 

(debtor objects to proof of claim filed by creditor on basis that certain items were not covered by Ag Supply Dealer's lien which must be filed within 120 days after ag supplies are furnished and provide the lien was effective from date supplies were furnished; hay and straw are items covered by the lien; claim allowed in part and denied in part). 

(multiple state attorney generals, as plaintiffs, file suit claiming that the individual mandate provision contained in the Patient Protection and Affordable Care Act is an unconstitutional violation of Article I and the Tenth Amendment, and that the uninsured person tax penalty is an unlawful tax in violation of Article I, sections 2 and 9 of the U.S. Constitution). 

(state law does not provide a private right of action against a public entity and, thus, plaintiff not entitled to attorney fees for action against defendant for damages caused by defendant's delay in issuing certificate of occupancy for solar energy system for plaintiff's farm even though delay violated state law). 

(defendant landowners' winery violates township zoning regulations; winery located in residential zoning district and does not qualify for "agricultural exemption" from local zoning; making and marketing of wine and foods were primary uses, and agriculture and "viticulture" was secondary use; value of items did not impact ruling; winery was importing more grapes and grape juice for its wine that it was growing on the property, thus processing and marketing of wine was primary use of property). 

(defendant has valid ag supplier's lien under state law and had superior priority interest in proceeds of sale of turkeys; "poults" supplied by defendant are "supplies" under state agricultural supplier's lien statute (N.D.C.C. Sec. 35-31-01) and defendant, therefore, had super-priority status as holder of such lien in livestock).

(case involves fire to house insured by defendant's policy; fire occurred three months after policyholder died and over five years since policyholder last lived in the house (elderly homeowner who went to nursing home until time of death); defendant denied coverage because defendant not notified of change in use or occupancy of residence, increase in hazard to premises and loss due to vandalism; trial court determined that defendant entitled to judgment based on hazard clause of policy (house had become unoccupied); trial court decision reversed and case remanded - plaintiff entitled to hearing on whether hazard exclusion applies and defendant entitled to hearing on vandalism exception). 

(plaintiff's tort claim for damages arising from airplane crash due to ice build-up on wings dismissed under Idaho's economic loss rule; defendant did not self-certify that its de-icing system complied with FAA regulations - defendant stated that its product was certified, but did not claim it was a certification expert). 

(plaintiff, insurance company, not entitled to business expense deduction for amounts paid to settle lawsuits and related legal and professional expenses related to cases brought by various state attorney generals after plaintiff had acquired other insurance companies; such amounts were attributable to resolving title to assets and are properly characterized as capital expenditures; Tax Court's decision entitled to deference). 

(statistics for 2010 filing season show that average refund has increased over 2009 amount by 9.6 percent to an average of $3,036 as a result of taxpayers losing jobs for which withholding has already occurred and new refundable credits for primarily lower income persons as a result of the 2009 spending bill).

(passed both House and Senate and expected to be signed into law; bill fails to eliminate various state tax credits as recommended by investigatory panel, and merely reduces certain credits and suspends for two years the state film tax credit which was riddled with fraud and spawned criminal investigations and related charges; certain caps placed on some credits and oversight board within the legislature created to review credits for their "effectiveness"). 

(under Colorado's rules for property valuation in condemnation cases, all evidence relevant to determining present market value of condemned property is admissible, including evidence of most advantageous potential future use of entire property; trial court did not err in admitting evidence regarding tract's highest and best use based on property's potential for development).

(debtor was incarcerated at time of Chapter 12 filing and was determined to be ineligible for Chapter 12 because debtor did not own or operate a farm or receive income from farming at time of filing; farm had been ordered to be sold in a divorce proceeding; debtor claimed that he would include challenge to divorce proceedings as part of bankruptcy case; court held that even if debtor's attempt successful, he still would not have farm income due to his incarceration). 

(taxpayer's personal guarantee of S corporation's credit line did not give taxpayer basis so that taxpayer could claim loss; accuracy-related penalty imposed).

(professional gambler subject to the limitations of I.R.C. Sec. 165(d) and cannot deduct net gambling losses; U.S. Supreme Court's opinion in Groetzinger defining the phrase "trade or business" only defined in context of I.R.C. Sec. 56(a) and Sec. 165(d) applies regardless of whether petitioner is in the business of wagering).

(petitioner's lump-sum payments made to former spouse not deductible alimony; petitioner's obligation to repay did not survive ex-spouse's death).

(Energy Star appliance rebates will be treated as purchase price reductions which requires purchasers to reduce the adjusted basis of purchased property by the amount of the rebate; rebate cannot be treated as an expenditure when determining tax deductions or credits). 

(canine and horse massage and pet sitting and taxi services are not subject to sales tax, but taxable services include grooming, haircuts and bathing). 

(plaintiff's case opposing defendant's trademark application denied; defendant's mark sufficiently dissimiliar to plaintiff's mark).

(defendant must disclose details of discount window loans and other emergency lending programs utilized during post-2006 economic crisis; list of borrowing banks, amount of loans, origination and maturity dates and collateral information not exempt from disclosure under any exemption to the Freedom of Information Act). 

(plaintiff failed to prove existence of public road by prescription and failed to establish an easement by estoppel). 

(court reverses the Tax Court and allows taxpayer, manufacturer of kitchen items, to currently deduct royalties paid it to put "Pyrex" and "Oneida" trademarks on taxpayer's kitchen tools; sales-based royalty payments are currently deductible because they are not allocable to property that the taxpayer produces which would require capitalization under I.R.C. Sec. 263A; appellate court focused solely on fact that royalty payments calculated on items that were sold rather than items that were produced and were, therefore, more properly characterized as marketing expenses rather than production expenses).

(United Methodist Church that pays monthly fee to satellite television provider for satellite television (including HBO) on behalf of its pastor as part of his compensation, where account is in name of pastor and separately states amount charged for satellite television access and amount charged for satellite receiver, must pay sales tax on monthly rental fee for satellite receiver; pastor is not an exempt entity).