Justia U.S. 10th Circuit Court of Appeals Opinion Summaries

John and Deanne Roth appealed a Tax Court decision that imposed a 40% penalty for the Roths’ “gross misstatement” of the value of a conservation easement they donated to a land trust in Colorado. On appeal, the Roths largely argued that, before imposing the penalty, the IRS failed to obtain written, supervisory approval for its “initial determination” of a penalty assessment as required by I.R.C. 6751(b). The Roths also sought a deduction in 2007 for repayments they made on the proceeds from their sale of tax credits generated by their donation of a separate conservation easement in 2006. The Tenth Circuit disagreed as to both counts and therefore affirmed the Tax Court. View "Roth v. CIR" on Justia Law

WildEarth Guardians appealed after the United States Forest Service published a 2014 environmental assessment (“EA”) to the Tennessee Creek Project, and subsequently issued a Decision Notice and Finding of No Significant Impact. The Service undertook the project for a stated purpose of protecting from insects, disease, fire, improvement of wildlife habitat and to maintain watershed conditions. One of the conclusions in the EA determined none of these actions would adversely impact the Canadian lynx. WildEarth Guardians alleged the EA failed to adequately assess the Project’s effects on lynx and by failing to prepare an environmental impact statement (EIS). The district court upheld the agency action. The Tenth Circuit affirmed the Agency’s actions, finding the Service satisfied its National Environmental Policy Act (NEPA) obligations when it reasonably concluded in its EA that under a worst-case scenario the lynx would not be adversely affected by the Project and reasonably concluded that an EIS was not necessary. View "WildEarth Guardians v. Conner" on Justia Law

With issues common to three appeals consolidated for review, the Government filed suit to collect unpaid taxes. In Appeal No. 17-4083, the Government appealed a district court’s determination that its state-law contract claim was time-barred because it was subject to a Utah state six-year state statute of limitations. The Tenth Circuit concluded the state-law claim was governed by the ten-year statute of limitations set out in 26 U.S.C. 6502(a) because the Government was proceeding in its sovereign capacity. Appeal No. 17-4093 was a cross-appeal of the district court’s ruling that the Government’s transferee-liability claim, brought pursuant to 16 U.S.C. 6324(a)(2), was timely. Here, the Tenth Circuit concluded the transferee-liability claim was timely filed because the limitations period applicable to the 6324(a)(2) transferees was the same as the limitations period applicable to the estate. In Appeal No. 18-4036, the Government appealed the district court’s order awarding attorney’s fees to Appellees. The Tenth Circuit concluded Appellees were not entitled to attorney’s fees because the Government’s position in this litigation was substantially justified. View "United States v. Johnson" on Justia Law

Blue Valley Hospital, Inc., (“BVH”) appealed a district court’s dismissal of its action for lack of subject matter jurisdiction. The Department of Health and Human Services (“HHS”) and the Centers for Medicare and Medicaid Services (“CMS”) terminated BVH’s Medicare certification. The next day, BVH sought an administrative appeal before the HHS Departmental Appeals Board and brought this action. In this action, BVH sought an injunction to stay the termination of its Medicare certification and provider contracts pending its administrative appeal. The district court dismissed, holding the Medicare Act required BVH exhaust its administrative appeals before subject matter jurisdiction vested in the district court. BVH acknowledged that it did not exhaust administrative appeals with the Secretary of HHS prior to bringing this action, but argued: (1) the district court had federal question jurisdiction arising from BVH’s constitutional due process claim; (2) BVH’s due process claim presents a colorable and collateral constitutional claim for which jurisdictional exhaustion requirements are waived under Mathews v. Eldridge, 424 U.S. 319 (1976); and (3) the exhaustion requirements foreclosed the possibility of any judicial review and thus cannot deny jurisdiction under Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667 (1986). The Tenth Circuit disagreed and affirmed dismissal. View "Blue Valley Hospital v. Azar" on Justia Law

Kyle Lindsey and Zayne Mann were seriously injured when Lindsey lost control of his utility vehicle on a gravel road after a brief police pursuit. They claimed the accident was caused by an overzealous officer who should not have initiated a chase over a minor traffic infraction, alleging violations of both their Fourth and Fourteenth Amendment rights by Officer Brandon Hyler, the City of Webbers Falls, and several other municipal officials, based on Officer Hyler’s conduct during the pursuit as well as his previous training. Lindsey and Mann also sought relief under Oklahoma law. The district court granted the defendants’ motion for summary judgment on all federal claims and concluded that Officer Hyler was entitled to qualified immunity. Because the record could not credibly sustain plaintiffs’ allegations, the Tenth Circuit concluded the district court appropriately dismissed their claims. View "Lindsey v. Hyler" on Justia Law

In 2010, the Internal Revenue Service issued a refund to the Wichita Center of Graduate Medical Education (a federally qualified charitable organization) on overpaid taxes along with incorrectly calculated interest on the refund. The IRS then sought repayment of part of the interest. Under the Internal Revenue Code, corporate taxpayers received a lower refund interest rate than other taxpayers such as individuals or partnerships. The Center claimed it was not a corporation for purposes of this section and was be entitled to the higher interest rate applicable to non-corporations. The Tenth Circuit affirmed the district court’s finding that the Center was a corporation and subject to the lower interest rate: the statutory text compelled the conclusion that the Center, even though it did not issue stock or generate profit, had to be treated as an ordinary corporation for purposes of the refund statute. View "Wichita Ctr for Grad Med. Ed. v. United States" on Justia Law

This case arose out of the efforts the IRS made to investigate the tax liability of High Desert Relief, Inc. (“HDR”), a medical marijuana dispensary in New Mexico. The IRS began an investigation into whether HDR had improperly paid its taxes, and specifically whether it had improperly taken deductions for business expenses that arose from a “trade or business” that “consists of trafficking in controlled substances.” Because HDR refused to furnish the IRS with requested audit information, the IRS issued four summonses to third parties in an attempt to obtain the relevant materials by other means. HDR filed separate petitions to quash these third-party summonses in federal district court in the District of New Mexico, and the government filed corresponding counterclaims seeking enforcement of the summonses. HDR argued that the summonses were issued for an improper purpose—specifically, that the IRS, in seeking to determine the applicability of 26 U.S.C. 280E, was mounting a de facto criminal investigation pursuant to the Controlled Substances Act. HDR also asserted that enforcement of section 280E was improper because an "official [federal] policy of non-enforcement” of the CSA against medical marijuana dispensaries had rendered that statute’s proscription on marijuana trafficking a “dead letter” incapable of engendering adverse tax consequences for HDR. The petitions were resolved in proceedings before two different district court judges; both judges ruled in favor of the United States on the petitions to quash, and separately granted the United States’ motions to enforce the summonses. HDR challenged these rulings on appeal. The Tenth Circuit determined HDR was unable to overcome the government’s demonstration of good faith under United States v. Powell, 379 U.S. 48 (1964), and its alternative “dead letter” argument was without merit. View "High Desert Relief v. United States" on Justia Law

Tony Kourianos worked as a coal miner for more than 27 years before filing a claim for benefits under the Black Lung Benefits Act (“BLBA”). His claim was reviewed through a three-tiered administrative process. Ultimately, the Benefits Review Board (“BRB”) found that he was entitled to benefits. The BRB also found that Kourianos’s last employer, Hidden Splendor Resources, Inc., was the “responsible operator” liable for paying those benefits. Hidden Splendor’s insurer, Rockwood Casualty Insurance Company, petitioned the Tent Circuit Court of Appeal for review of the BRB’s decision: (1) challenging the administrative law judge’s (“ALJ”) decision prohibiting Hidden Splendor from withdrawing its responsible operator stipulation; and (2) contending the BRB incorrectly found that Kourianos was totally disabled and entitled to benefits. Finding no abuse of discretion in the BRB decision, the Tenth Circuit denied Rockwood's petition. View "Rockwood Casualty Insurance v. Director, OWCP" on Justia Law

Taxpayers Neil Feinberg, Andrea Feinberg, and Kellie McDonald were shareholders in Total Health Concepts, LLC (THC), a Colorado company allegedly engaged in selling medical marijuana. After the Taxpayers claimed THC’s income and losses on their tax returns, the IRS conducted an audit and disallowed certain deductions under 26 U.S.C. 280E, which prohibited deductions for businesses engaged in unlawful trafficking of controlled substances. The IRS then recalculated the Taxpayers’ tax liability and issued a notice of deficiency for the unpaid balance. The Taxpayers challenged that determination in tax court, which affirmed on the basis that the Taxpayers had failed to substantiate the business expenses. Both parties agreed the tax court erred by injecting a substantiation issue into this case not raised in the notice of deficiency, and then placed the burden for refuting that claim on the Taxpayers. But the Commissioner argued the Tenth Circuit should affirm on the alternative ground that the Taxpayers did not meet their burden of proving the IRS’s determination that THC was unlawfully trafficking in a controlled substance was erroneous. The Taxpayers disagreed and contended placing the burden on them would violate their Fifth Amendment privilege. Because the Tenth Circuit concluded allocation of the burden of proof did not constitute “compulsion” under the Fifth Amendment, and because the Taxpayers made no attempt to meet their evidentiary burden, the Court affirmed the tax court on the alternative ground that section 280E prohibited the deductions. View "Feinberg v. CIR" on Justia Law

The city of Fort Collins, Colorado, enacted a public-nudity ordinance that imposed no restrictions on male toplessness but prohibited women from baring their breasts below the areola. In response, Free the Nipple, an unincorporated association, and two individuals, Brittiany Hoagland and Samantha Six (collectively, Plaintiffs ), sued the City in federal district court, alleging (among other things) the ordinance violated the Equal Protection Clause, U.S. Const. amend. XIV, sec. 1, and they asked for a preliminary injunction to halt enforcement of the ordinance. The district court agreed and enjoined the City, pending the resolution of the case s merits, from implementing the ordinance to the extent that it prohibits women, but not men, from knowingly exposing their breasts in public. The City then brought this interlocutory appeal to challenge the injunction. The narrow issue presented for the Tenth Circuit's review asked whether the district court reversibly erred in issuing the preliminary injunction. The Court found the trial court did not, affirmed the district court's judgment and remanded the case for further proceedings. View "Free the Nipple v. City of Fort Collins" on Justia Law