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Neighboring States Take Colorado's Pot Law to Supreme Court

Cornell law professor Michael C. Dorf, writing in a column in Justia, notes how Nebraska and Oklahoma, two of Colorado's neighboring states, are challenging Colorado's law legalizing marijuana in the U.S. Supreme Court. The basis for the Supreme Court's jurisdiction is the part of the federal constitution covering cases in "which a state shall be a party," Dorf notes.

Nebraska and Oklahoma's attorneys general argue that Colorado's pot legalization undermines their ability to "maintain their own prohibitions of marijuana because Colorado takes inadequate measures to prevent legal intrastate marijuana from crossing state borders, where it enters the illegal market." They also argue that Colorado's law violates the federal Controlled Substances Act. But Dorf finds a hole in the two states' argument about the CSA, reasoning that there is no federal preemption of states choosing not to criminalize marijuana.

Instead, he suggests that Nebraska and Oklahoma should sue the federal government for failing to enforce the CSA against third parties.

Violence Against Women Act 'Putting Justice Back' in American Indian Hands

MintPress News' Christine Graef reports on how a revised Violence Against Women Act is putting tribal authorities in charge of cases of abuse and violence against American Indian women: "The reauthorized act extends tribal jurisdiction to non-Native Americans who commit acts of violence or sexual assault against their Native American spouse or partner. While such incidents often go unreported, the amount that are reported reflect a disproportionate number of Native American women will be raped, stalked or physically assaulted compared to their non-Native American peers." According to the Indian Law Research Center, more than 88 percent of violent crimes committed against American Indian women are committed by non-American Indians over which tribal governments lack jurisdiction.

The amendment goes into effect next March.

There are limitations to the amended law. Tribes must have a criminal justice system that provides legal counsel to defendants, provide non-American Indians in a jury pool and inform defendants of their right to file federal habeas corups petitions, Graef writes. Federal prosecutors will continue to prosecute crimes for tribes that don't have their own justice systems. And jurisdiction only applies to cases in which the perpetrator and the victim were in a relationship.

Court Questions Authority to Review Defendant's Access to FISA Orders

Politico's Josh Gerstein reports that the 7th Circuit is questioning its authority to review an "unprecedented order giving defense attorneys access to the paperwork supporting secret Foreign Intelligence Surveillance Act orders used to build a criminal case." The 7th Circuit issued a one-page order expressing doubt that it has the jurisdiction to consider the pre-trial ruling. Responses to the jurisdictional question have to be filed next week, Politico further reports.

Law Offers More Protection to American Indian Women

While American Indian reservations are sovereign nations, tribes have not had the legal authority to arrest non-Indian women who assault or rape Indian women on reservations, The Washington Post reports. But the Violence Against Women Act, signed in March, will for the first time give Indian tribes jurisdiction over some crimes of domestic violence committed by "non-Indians in Indian Country," The Post further reports (The law won't cover assaults committed by non-Indians against native women and it doesn't cover native women in Alaska).

The level of violence against American Indian women is startling: "An estimated one in three Native American women are assaulted or raped in their lifetimes, and three out of five experience domestic violence," The Post also reports.

CT Law Firm Faces Malpractice Suit in AZ for Tax Shelter Opinion Letter

Submitted by Amaris Elliott-Engel on Sun, 02/02/2014 - 18:49

The Arizona Supreme Court has ruled that it doesn't violate due process for a Connecticut law firm to face a legal malpractice lawsuit in that state even though none of the firm's lawyers are licensed to practice in Arizona. Legal experts, however, said there is little chance that facing a lawsuit in another state will lead law firms to stop the practice of issuing opinion letters to out-of-state clients on tax shelters.

I covered the case in a piece for the Connecticut Law Tribune. Here's an excerpt: 

The Arizona Supreme Court has ruled that a Connecticut law firm with no lawyers licensed to practice in Arizona can nevertheless be the target of a malpractice claim from two Grand Canyon State residents. But the ruling is not likely to curtail the practice of law firms writing opinion letters for out-of-state clients in tax matters, according to legal experts.

In exchange for a $50,000 fee, Bridgeport-based Pullman & Comley and partner D. Robert Morris prepared an opinion letter for Arizona plaintiffs Bill and Sue Beverage some 13 years ago. The letter opined that it would be legitimate under federal tax law for the Beverages to take advantage of a tax shelter known as a custom adjustable rate debt structure.

However, the Internal Revenue Service rejected the couple's tax return and their declaration of substantial losses related to the tax shelter. They ended up being assessed $3 million.

In a two-page opinion, Chief Justice Rebecca White Berch affirmed that the Connecticut defendants are subject to Arizona's specific jurisdiction—even though the firm does not have an office in Arizona and does not have any attorneys licensed to practice law there. Pullman & Comley now have to face claims of civil racketeering, fraud, breach of fiduciary duty, conspiracy, professional malpractice and negligent misrepresentation in Arizona.

Adam Chodorow, a professor who teaches tax law at Arizona State University Sandra Day O'Connor College of Law, said the Arizona Supreme Court decision won't cause firms to step away from issuing opinion letters on tax matters. Instead, he thinks firms are going to insert choice-of-forum clauses—which stipulate the court or jurisdiction in which any subsequent legal actions will take place—when they advise out-of-state clients about tax shelters.

"Any firm that wants to can insert a choice-of-forum clause in any contract with a client," Chodorow said, adding that such clauses are typically upheld by the courts. In this case, such a clause might have prevented Pullman from "getting stuck in court in Arizona."

Chodorow also said law firms that issue opinion letters are going to weigh the costs of potentially being sued by an unhappy clients in a far-off state against the benefits of the business they get from issuing opinion letters.

"I guarantee you, if the money is there, and the client base is there, they'll either accept the risk or assert the forum clauses," he said.

Stephen Utz, a professor at the University of Connecticut School of Law who teaches federal tax law and policy, said the case of Beverage v. Pullman & Comley highlights the risks involved in opinion letters.

As far as the IRS is concerned, taxpayers are still subject to tax penalties even if they have an opinion letter from a law firm stating that a certain investment, deduction or other financial maneuver is legal, Utz said.

"Some law firms don't do letters of this kind in order not to disappoint clients and not mislead them that something is going to be great" when it won't, he said.

Other law firms, however, not only give opinions on tax shelters but design them and market shelters, Utz said.

The IRS has made it more difficult for tax lawyers to give advice on tax shelters, Utz said. The agency has specific penalties for "material advisors," which may include lawyers, who don't report to the IRS when clients have consulted them about certain tax shelters, he said.

The penalties were "intended to be intimidating and to persuade some tax practitioners not to do this," Utz said.

Facing lawsuits in out-of-state jurisdictions over tax-shelter legal advice gone wrong is not what will dissuade law firms from doing this kind of legal work, Utz said. But, he added, penalties from the IRS will.

If Patent Cases Go to One Circuit Court, Why Shouldn't American Indian Law Cases?

The greater level of child abuse, domestic violence, and violence against women on American Indian reservations is horrifying. One of the recommendations of the nine-member Indian Law and Order Commission in "A Roadmap to Making Native America Safer" to improve that situation is to allow tribes to opt of currently existing law enforcement systems in favor of their own--along with the establishment of a "U.S. Court of Indian Appeals to which a defendant could appeal on the grounds that his 4th, 5th, 6th or 8th amendment rights under the U.S. Constitution had been violated," Indian Country Today Media Network reports. The report argues for an American Indian law-centric circuit court '"because it would establish a more consistent, uniform, and predictable body of case law dealing with civil rights issues and matters of Federal law interpretation arising in Indian country."'

The localism of such a system reflects the strand in American polity that favors smaller government and also would promote the sovereignty of tribes at the same time. Commission Chairman Troy Eid, a former U.S. Attorney for the District of Colorado, told Indian Country Media Network,  the commision's report '"is not to tell anyone what to do, but it's also to say, 'Local government works best; it's the American way.' It's emphatically a better way to prevent crime…. It's clear that many Native governments, even those with not a lot of means, want to and will sacrifice in order to put sovereignty into action through enforcing their own criminal laws."'

Texas Supreme Court Considers Outing Anonymous Blogger

The Texas Supreme Court heard oral argument on whether a blogger who has criticized an Ohio-based company should be unmasked by court order, the Associated Press reported. The blogger's attorney argued that Texas courts don't have personal jurisdiction over the blogger, while the company's attorney argues that Texas does have jurisdiction because its CEO owns a home in Houston and the company has its largest Texas office in Houston. During oral argument, Chief Justice Nathan Hecht questioned if Texas should "be concerned that its courts can be used to investigate any cause of action that could be brought anywhere in the United States. Why should Texas courts just be sort of the State Bureau of Investigation?" according to the AP.

Fighting For Same-Sex Divorce To Avoid Legal Limbos

The flip side of the national movement to establish same-sex marriage in the United States is the right to dissolve same-sex unions. The Associated Press reports on how estranged couples in "nonrecognition states would have to move back to the state where they were married and establish residency in order to get divorced — an option that can be unworkable in many cases."

James Esseks, director of the Lesbian, Gay, Bisexual and Transgender Project at the American Civil Liberties Union, told the AP that the right to end marriage is just as important as the right to enter them. '"Part of that system is creating a predictable, regularized way of dealing with the reality that relationships sometimes end,' [Esseks] said. 'Those are the times people are the worst to each other, and that's why we have divorce courts. There's got to be an adult in the room."'

The AP further profiles a Mississippi case in which that state's Attorney General's office filed a motion to intervene because a same-sex couple married in California is seeking to have a divorce recognized by Mississippi's family courts.

Louisiana Same-Sex Marriage Suit Dismissed On Jurisdictional Grounds

A federal judge rejected a same-sex couple's lawsuit seeking to establish the right to marry in Louisiana on the grounds that the court does not have jurisdiction over the case, The Washington Blade reports. Only Louisiana Attorney General James Caldwell was named as a defendant and his office has not denied plaintiffs the recognition of their marriage, The Blade reports. The plaintiffs intend to refile their case.

"Suzanne Goldberg, a lesbian and co-director of Columbia University’s Center for Gender & Sexuality Law, said the plaintiffs would be in a stronger position in the case if they sought recognition and then alleged in their amended complaint that the recognition was denied," The Blade further reports.

Case Sets Up Conflict Between American Indian Sovereignty and Fair Lending

A federal judge in New York has ruled the state's banking regulator can control the lending done to New York consumers by online lenders associated with sovereign American Indian tribes, the Washington Post reports. Loans are made by the lenders that violate state law, including on maximum interest rates. "Once states began introducing interest rate caps, some ... lenders began forging relationships with Native American groups to take advantage of their sovereign-nation status," the Post reports. The tribal plaintiffs argued the ruling undermines their sovereignty and their ability to be economically self-sufficient, the Post also reports.


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