Refunds of Republican River taxes (property and occupation) imposed under LB 701

We’ve been hearing this question a lot lately, “So your law firm won that tax challenge, how do I get my tax money back?”

 

Statutes and court decisions on obtaining refunds of unconstitutional taxes are complicated, inconsistent and confusing, and the way to obtain refunds of unconstitutional property or occupational taxes is not perfectly clear.  Our best advice is as follows:

 

Property tax:

1. Write “LB 701 property tax paid under protest” on the memo of your tax payment check.
2. Within 30 days after payment, send a written request for refund to the county treasurer where the taxes are paid.  Forms available upon request to jlust@knudsenlaw.com or rconfer@knudsenlaw.com .
3. The treasurer is supposed to forward the request to the County Board and if the refund is not approved by the County Board the taxpayer may sue for a refund.
4. There is no specific statute of limitations for a suit to recover a tax paid under protest, but the general statute of limitations for actions for which no limitations period is specified is four years.
5. There is also a statute providing that when an action is stayed by statute, the plaintiff has one year after the stay is removed to bring an action, or the time specified by the statute of limitations, whichever is longer. Since the judgment in Garey v. DNR  (holding the property tax unconstitutional) is superseded pending appeal, this statute might extend the statute of limitations for a year after the appeal is decided.

 

Occupation tax:

1. The statute for paying taxes under protest (Neb. Rev. Stat. § 77-1735) by its terms applies only to “property tax”. If the occupation tax is held to be a property tax, that statute might nevertheless apply to LB 701’s occupation tax.
2. Although § 77-1735 says it applies only to property tax, a case decided in 1886 held it also applied to an excise tax, which would include an occupation tax. It is difficult to predict whether this case is still good law.
3. Because of the uncertainty concerning the applicability of § 77-1735, we recommend paying the occupation tax under protest and filing a written demand for refund, just like with the property tax. In other words:
1. Write “LB 701 occupation tax paid under protest” on the memo portion of the tax payment check, and
2. Send a written request for refund of the occupation tax to the county treasurer within 30 days after payment.

 

4. There is a specific statute of limitations for an occupation tax (by its express terms this statute does not apply to property tax), requiring suit to be brought within one year of the tax being declared unconstitutional. The Supreme Court has decided this means the suit for refund of an occupation tax has to be brought within one year after paying the tax.
5. The one year period for bringing a suit for refund could be extended if there is a stay of a judgment finding the occupation tax to be unconstitutional, until a year after the stay is lifted.
6. If the occupation tax is held to be a property tax the courts could find § 77-1735 procedures apply instead of the occupation tax statute of limitations.
7. If § 77-1735 does not apply, taxpayers may have to sue for refund or they will not receive a refund.
8. We recommend bringing suit for refund within a year of paying the occupation tax.

 

 

 

 

For more information on joining a lawsuit challenging the occupation tax imposed on Republican River Basin taxpayers, please go to www.knudsenlaw.com and click the information links.

 

Also email Jeanelle Lust jlust@knudsenlaw.com or Rod Confer rconfer@knudsenlaw.com for forms you can submit to request a refund.

Bridge v. Phoenix Bond$ Indemnity Co. No 07-210

On June 9, 2008, the United States Supreme Court decided Bridge v. Phoenix Bond & Indemnity Co. in which the court determined that reliance was not an element of proof in a Civil RICO case.  In Bridge, the Defendants had argued that the mailings which constituted the “mail fraud” predicate act for a Civil RICO violation required direct reliance by the Plaintiffs on the mailing.  The Defendants had allegedly mailed false affidavits concerning the separate and distinct requirements of a tax foreclosure bidding process to the County Government.  There were no false mailings directly to the Plaintiffs.  The Supreme Court held that the fact that the Plaintiffs neither received nor relied on the mailings was irrelevant.  The court held that a Civil RICO case is proven by proving the elements of mail fraud only, and reliance is not required under the mail fraud statutes, just damages as a result of the fraudulent scheme.  The Supreme Court also refused to read reliance into the statute through the proximate cause elements of RICO.  The Supreme Court also refused to give credence to the Defendants’ arguments that RICO should be restricted to only those causes of action not otherwise actionable under state law.

 

 

Jeanelle R. Lust

www.knudsenlaw.com

jlust@knudsenlaw.com

 

Republican River Occupation Tax challenge

  In Garey v. Department of Natural Resources, Knudsen Law Firm represented Plaintiffs in the District Court of Lancaster County in challenging the property tax in LB 701. On May 19, 2008, District Judge Merritt entered judgment for Plaintiffs in that suit, finding the property tax unconstitutional as special legislation. The Defendants have appealed that decision to the Nebraska Supreme Court.

  Beginning with the initial discussions of challenging LB 701’s property tax provisions, Knudsen Law Firm has also considered the advisability of challenging LB 701’s occupation tax. Based on our legal advice our clients in Garey v. Department of Natural Resources chose not to challenge the occupation tax because at the outset of the litigation we regarded the case for unconstitutionality of the property tax as stronger. 

  At the same time, however, we recognized that if we succeeded on certain arguments we were raising in Garey v. Department of Natural Resources it could greatly improve the chances of a later attack on the occupation tax. Fortunately, that is exactly what has occurred with Judge Merritt’s decision overturning the property tax provisions of LB 701.

  Because Garey v. Department of Natural Resources holds that LB 701’s property tax is unconstitutional special legislation as a taxing power given to a closed class of the three Republican Basin NRDs, it follows that the occupation tax, which also may only be imposed by the three NRDs is unconstitutional for the same reason—it is special legislation giving the authority to impose the occupation tax only to the three NRDs.

  On the strength of Judge Merritt’s opinion in Garey v. Department of Natural Resources Knudsen Law Firm is now recommending that irrigators who pay LB 701’s occupation tax bring a lawsuit challenging the bill’s occupation tax.

Grounds and procedure for challenging the occupation tax

  Knudsen Law Firm recommends raising the same three grounds we relied on to attack the property tax in Garey v. Department of Natural Resources as arguments for declaring the occupation tax unconstitutional. These grounds are based on three separate provisions of the Nebraska Constitution:

· the occupation tax is a tax on irrigated property to pay for compliance with the Republican River Compact and is therefore a property tax for state purposes

· the occupation tax results in commutation of taxes, meaning it taxes Republican basin irrigated property to benefit the rest of the State

· the occupation tax is special legislation that gives the privilege of taxation to a closed class consisting only of the Upper, Middle and Lower Republican NRD’s.

  We would also contend that the finding in Garey v. Department of Natural Resources that LB 701 creates a closed class is entitled to binding effect, known as “collateral estoppel.” This would require a holding in the second lawsuit that the occupation tax is also unconstitutional special legislation.

  It is our recommendation that the occupation tax challenge be filed in the Nebraska Supreme Court as an original action. Consideration of the case as an original action is discretionary with the high court, but our hope is that when the Supreme Court realizes that the issues in the occupation tax suit are substantially the same as in Garey v. Department of Natural Resources, which they will be reviewing on appeal, they may take jurisdiction of the occupation tax lawsuit, considering it at the same time as their review of the property tax suit.

Why now?

          Knudsen Law Firm’s preference is to mount a challenge to the occupation tax sooner rather than later. One reason is because if we delay another law firm may decide to bring a suit challenging LB 701’s occupation tax to piggy-back on Garey v. Department of Natural Resources, which has been successfully handled by Knudsen Law Firm. That could result in a “stay” preventing subsequently-brought challenges to the occupation tax—including any suit that we would bring on behalf of our clients.  Besides our desire to follow through on the considerable time and effort we have put into this matter so far, this concerns us because there is no assurance that another law firm would have the expertise and knowledge required to capitalize on the work Knudsen Law Firm has done and mount an effective challenge that would have the best chance of knocking out the occupation tax. We would hate to see the effort fail if it were taken over by ineffective counsel. Our success in Garey v. Department of Natural Resources is the best indication of Knudsen Law Firm’s ability and proficiency to carry out a challenge to LB 701’s occupation tax. done and mount an effective challenge that would have the best chance of knocking out the occupation tax. We would hate to see the effort fail if it were taken over by ineffective counsel. Our success in Garey v. Department of Natural Resources is the best indication of Knudsen Law Firm’s ability and proficiency to carry out a challenge to LB 701’s occupation tax.

  Another reason to bring a lawsuit now is to capitalize on favorable press coverage that has already resulted from our success in Garey v. Department of Natural Resources. We believe there is significant benefit in continuing to focus statewide attention on the issue of how Nebraska is going to face the problem of complying with the Republican River Compact. The lawsuit should provide an additional forum for sending out the message that the whole State should be responsible for sharing this burden—not just the Republican River Basin.

Disclaimer

          Our success to date in Garey v. Department of Natural Resources does not guarantee that an occupation tax lawsuit—or the property tax lawsuit—will ultimately be successful. Judge Merritt’s decision overturning the property tax has been appealed to the Nebraska Supreme Court. If Garey v. Department of Natural Resources is reversed and the property tax is held to be constitutional on appeal, that will probably result in finding the occupation tax is also constitutional. We are optimistic about the chances of the lower court’s decision on the property tax being affirmed but we cannot discount the possibility that Garey v. Department of Natural Resources may be reversed, or promise that we will be successful in challenging the occupation tax.  Please go to our website www.knudsenlaw.com and click the link to send a request for more information if you are interested in challenging the LB-701 occupation tax.

 

 

 Rodney M. Confer, LeRoy Sievers and Jeanelle Lust

rmc@knudsenlaw.com

www.knudsenlaw.com

 

 

 

Carol Skare sued her former employer, Extendicare under the Minnesota whistleblower statute claiming she was retaliated against for reporting various

alleged violations of laws, regulations, and company policies. Extendicare operates nursing homes in several states. Skare was originally a nursing director

and was appointed a regional nurse consultant several years into her employment. Four years later, she was appointed an interim nursing director at one

particular Extendicare facility after that facility’s director of nursing was terminated.

Her Complaints

After she was appointed as an interim nursing director, Skare complained about her responsibilities and informed her supervisors that the facility did not

have a legally required full-time nursing director and a licensed administrator. She also denied admission to a potential resident, because she believed the

facility could not accommodate and care for a 900 pound person. While she was on vacation, however, the company approved the resident’s admission without

her knowledge. When she complained, Skare claimed she was ridiculed and afterwards that her supervisor requested “hugs” from her on three separate occasions. She also complained about company policy which expedited the admissions process for new residents if they had certain enumerated diagnoses.

Subsequently, she was made the full-time nursing director at that facility. During that time she raised concerns about the lack of physician certifications

and re-certifications, discrimination in favor of Medicare patients, and concern that the facility was holding beds open for such patients while unlawfully

denying beds to others. She was also cited by the State Board of Nursing due to allegations of facility neglect during her tenure as the nursing director. Subsequently, her employer allegedly did not provide her with an attorney for the defense of her license that she believed had been promised, although she suffered no discipline as a result of the license inquiry. During her employment, she never filed any complaints with any government agencies or the

company’s compliance hotline that the employees were encouraged to use for reporting violations of law.

In Court

Skare alleged that her reassignment as a nursing director was a demotion from her nursing consultant position, in retaliation of a report she had made

regarding the company’s violations of the law. She also claimed that her employer had created an unbearable work environment with the intent to

force her to resign. The trial court dismissed the case. On appeal, the 8th Circuit Court of Appeals held Skare had not established her case as a

whistleblower because her job duties as nursing director and regional nurse consultant required her to ensure compliance with applicable laws and to expose

unlawful behavior internally. Consequently, she did not become a whistleblower by “merely exercising her duties to report compliance problems at

her facilities

 

Kevin McManaman

www.knudsenlaw.com

krm@knudsenlaw.com

 

 

 

Inhale and lose your financial aid

On 04/29/2008, the United States Court of Appeals for the 8^th Circuit held that restrictions on student loan eligibility for convictions of a drug crime were not unconstitutional in a challenge brought by Students for Sensible Drug Policy.  The court determined that a Federal Statute that limited eligibility for student loans if a student was convicted of a drug crime did not violate either the 8^th Amendment or the 5^th Amendment to the United State Constitution.  Although the act was passed as part of a drug enforcement policy scheme the 8^th Circuit held that the statute did not amount to the imposition of double jeopardy, but was merely a civil penalty.

 

 

Jeanelle R. Lust

Your full-service law firm   Managing Partner   Office: 402-475-7011   Fax: 402-475-8912   Mobile: 402-440-3731   jlust@knudsenlaw.com Knudsen, Berkheimer, Richardson & Endacott, LLP 3800 VerMaas Place, Suite 200 Lincoln, NE 68502 http://www.knudsenlaw.com

 

 

 

 

 

 

 

Challenge to LB 126 in Federal Court fails

Today the 8th Circuit Court of Appeals issued its decision in Trudy Nolles  v.  The State Committee,  U.S. Court of Appeals Case No:  06-4093 (Appeal from  District of Nebraska – Omaha) In Nolles,  Nebraska voters had brought a civil rights action challenging the “the State Committee’s” and others implementation of Legislative Bill 126 concerning the merger of certain school districts in Nebraska (i.e. the elimination of the smallest classification of schools in Nebraska).  The 8th Circuit affirmed the dismissal by the District Court in Omaha finding that the plaintiffs failed to allege a personalized injury and thus they lacked standing to assert a substantive due process claim; that the plaintiffs also failed to alleged a particularized injury and lacked standing to bring a procedural due process claim; and that plaintiffs were in privity with other plaintiffs who brought a state court challenge to the school consolidation bill and that therefore the district court properly applied the doctrine of res judicata to preclude the Nolles’ plaintiffs right-to-vote claims.  

 

 

 

Jeanelle R. Lust

Your full-service law firm   Managing Partner   Office: 402-475-7011   Fax: 402-475-8912   Mobile: 402-440-3731   jlust@knudsenlaw.com Knudsen, Berkheimer, Richardson & Endacott, LLP 3800 VerMaas Place, Suite 200 Lincoln, NE 68502 http://www.knudsenlaw.com

 

 

 

 

 

 

Trends in Resident Arbitration Contracts

 

Trends in Nursing Home Arbitration:  New Federal Legislation

 

Residents increasingly sign arbitration agreements upon admission to long-term care facilities, requiring them to submit future disputes to private binding arbitration, rather than to a court of law.  Arbitration has become an appealing option because it is thought to be faster and less expensive than traditional litigation.  New federal legislation may soon end this trend. 

 

The Centers for Medicare & Medicaid Services (CMS) weighed in on the question several years ago saying that so long as quality of the care was not compromised, the issue was a matter between resident and nursing homes.  As a result, enforcement is left to the courts who are instructed by the Supreme Court to enforce arbitration agreements as they would any other contract.  Courts typically enforce arbitration agreements in the long-term care setting, when well drafted and properly executed. 

 

On April 9, 2008, U.S. Senators Mel Martinez (R-FL) and Herb Kohl (D-WI) introduced the Fairness in Nursing Home Arbitration Act, seeking to prohibit enforcement of these agreements under federal law.  Attorneys at the Knudsen Law Firm are carefully monitoring the developments in this area of law.  Please call if you want an update.

 

 

 

Kevin R. McManaman

www.knudsenlaw.com

800 714 3439