Case Summaries

(thermal oxidizer provided to debtor under an "Agreement"; "Agreement" determined to be true lease that bankruptcy trustee could assume or reject under 11 U.S.C. Sec. 365). 

(concerns tax issues involved in proposed corporate reorganization and whether business purpose requirement of Treas. Reg. Sec. 1.355-2(b) is satisfied).

(milk sold as "Organic" alleged to not actually be organic because dairy allegedly failed to satisfy federal production requirements and plaintiff claimed damages related to paying higher price for "Organic" milk; allegations preempted because dairy in compliance with federal law).  

("black liquor" (byproduct of paper milling process in kraft mills) is a liquid fuel derived from biomass and, when combined with diesel fuel, creates an alternative fuel mixture for purposes of the alternative fuel credit under I.R.C. Sec. 6425(e) and may also qualify for the cellulosic biofuel producer credit under I.R.C. Sec. 40(b)(6), but not both). Download Memo

(court lacked subject matter jurisdiction over case and granted plaintiff's motion to remand case to state court; at issue was alleged violations of state Unfair Trade Practices Act and Uniform Commercial Code arising from defendant's refusal to pass along to plaintiff (gasoline retailer) the 5.1 cent per gallon tax credit applicable to gasoline blended with 10 percent alcohol; case did not involve any question concerning interpretation of federal tax statute).

(defendant's dogs determined to be "dangerous dogs" in accordance with state law; dogs ordered to be neutered and microchipped and confined at all times in the interior of defendant's home or in secured pen, but cannot be destroyed because of lack of proof that a person sustained "serious personal injury" as required by statute). 

(type of debts defined in 11 U.S.C. Sec. 523(a) excludible in Chapter 12 proceeding regardless of whether debtor a corporation or individual; even though Sec. 523(a) could not be harmonized with Sec. 1228, Sec. 1228 controlling because it was more specific, applicable only in Chapter 12, than Sec. 523(a) which applies regardless of chapter). 

(petitioner not entitled to claim girlfriend's son as a qualifying child for purposes of child tax credit and earned income tax credit; relationship test of I.R.C. Sec. 152(c) not satisfied).

(chicken farm improperly denied right to present evidence that one of its poultry suppliers fraudulently inflated the number of chickens that were dead on arrival).

(some assets transferred to FLP not included in transferors gross estate because transfer was bona fide sale for full and adequate consideration with a business purpose).

(damage award petitioner received in settlement of sexual harassment claim against petitioner's employer was taxable income and not excludible under I.R.C. Sec. 104(a)(2); payment not received for physical injury or sickness).

(petitioner, a truck driver, was entitled to a deduction for meals and incidental expenses at the per diem rate for employees in the transportation industry; IRS disallowance of other unreimbursed employee expense deductions and determination of filing status upheld).

(court denied defendant's motion for judgment on the pleading concerning state attorney general's claim that defendant violated state law by adopting and enforcing a local ordinance that prohibited or limited normal agricultural operations; ordinance failed to provide any guidance as to how the defendant determined when activities associated with normal agricultural operations intensified to the level that transformed into an intensive agricultural activity; in addition, factual dispute remained over the term "commercial composting" which was undefined in the ordinance).

(court denied defendant's motion to strike plaintiff's request for stigma damages related to defendant's operation of sewage treatment plants that discharged pollutants into water which impacted plaintiff's irrigation activities and contaminated ground water and soil).

(planned improvements to road will interfere with plaintiff's gas pipeline easements, but such interference held not to be unreasonable; defendant may require plaintiff to remove or reinforce its pipelines at plaintiff's expense in order to accommodate the improvements to the road).

(a cooperative group purchasing organization that had gain as a result of the sale of real property that it owned was patronage-sourced and, thus, eligible for the patronage dividend deduction).

(modification of trust will not result in gift tax to grantor or beneficiaries, or estate tax to the grantor).

(evidence does not resolve whether plaintiff's officers knowingly falsified information in furtherance of a multiple entity crop insurance scheme based on the defendant's advice; defendant's motion for summary judgment denied).

(plaintiff complained that defendant's zoning laws were unconstitutional as applied to their proposed composting facility; court held that there was no equal protection violation when law enforced against plaintiff and not against competing composting facility; other facility in existence before zoning law became effective and was non-conforming use; substantive due process claim also failed because no evidence existed that defendant's request for revisions to plaintiff's site plan were arbitrary and capricious; plaintiff did not have protected property interest in using their land for composting because approval of composting activity was matter within discretion of township's planning commission).

(2007 law banning cockfighting is constitutional; law prevents bird owners from staging fights, but doesn't prevent them from owning or breeding birds; cockfighting not a Mexican culturally-protected use of fowl (under the Treaty of Guadalupe Hidalgo)).

($3,100,000 claimed charitable contribution deduction for grant of conservation easement to Colorado land trust reduced by $1,107,625; amount of contribution limited to basis at time of contribution reduced by percentage decrease in entire property's fair market value as a result of the easement because taxpayer held property for less than one year before grant of easement; respondent's valuation expert report more accurate).

(BLM did not violate Administrative Procedures Act by not providing livestock grazing permittees a hearing on the record before implementing a decision that modifies the terms and conditions of the permittees' grazing permits; Taylor Grazing Act does not direct Secretary of Interior to provide a hearing each time the BLM issues a decision modifying the terms and conditions of a grazing permit, but only when those decisions are appealed administratively and only in connection with appeals; grazing permits are not licenses; provisions contained in federal appropriation bills from 1979-1992 did not permanently amend the TGA and, thus, did not apply at time BLM issued its Final Decision in 2005; BLM not required to bear burden of proof when appellant requests stay of final decision and cases cited by plaintiff inapplicable on the issue).Annotation

(value of rural residential and agricultural property affirmed; owner failed to present sufficient evidence that valuations were grossly excessive or the result of systematic exercise of intentional will or failure of plain legal duty).

(blanket farm premises loss/liability insurance policy which included theft as a covered peril did not cover loss for stolen heifers because plaintiff held heifers only under bailment arrangement, and policy excluded coverage for a bailee; plaintiff did not have ownership interest in heifers, but only a possessory interest).

(arranger liability under CERCLA narrowed such that joint and several liability not applicable when reasonable basis for apportionment of liability exists).

(plaintiffs acquitted of illegally taking an albino deer in violation of state (IL) law, but then filed Bivens action against investigating/arresting Conservation officers; defendants had probably cause for arrest and entitled to summary judgment on false arrest and unlawful detention claims; defendants entitled to qualified immunity on unlawful interrogation claims; defendants also entitled to summary judgment on false arrest and false imprisonment claims under state law; defendants also entitled to summary judgment on malicious prosecution claim under state law due to lack of malice). 

(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; certioriari 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).

(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).

(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).