Supreme Court

In Tennessee Wine and Spirits Retailers Association v. Thomas the Supreme Court held 7-2 that Tennessee’s law requiring alcohol retailers to live in the state for two years to receive a license is unconstitutional. The State and Local Legal Center (SLLC) filed an amicus brief in this case arguing the law was constitutional.  

Two constitutional provisions are at issue in this case. The dormant Commerce Clause prohibits state laws that unduly restrict interstate commerce. Both parties agree that if Tennessee’s durational-residency requirement applied to anyone wishing to sell anything other than alcohol it would violate the dormant Commerce Clause.

Auer deference, courts deferring to agencies’ reasonable interpretations of their ambiguous regulations, is alive following the Supreme Court’s decision in Kisor v. Wilkie. But, in the opinion of a few Justices, it is only on life support.

The State and Local Legal Center (SLLC) filed an amicus brief in this case asking the Supreme Court to overturn Auer v. Robbins (1997). In that case the Supreme Court reaffirmed its holding in Bowles v. Seminole Rock & Sand Co. (1945), that courts must defer to an agency’s interpretation of its own regulations.

As discussed in the SLLC amicus brief, states and local governments object to Auer deference because it gives agencies a lot of power. They both write regulations and may interpret them as they like without significant court scrutiny. Agencies aren’t required to receive notice-and-comment related to their interpretations of regulations. New administrations may change the interpretations at their whim. And agencies may purposely write ambiguous regulations knowing courts will defer to their interpretations of them. If Auer deference wasn’t available, courts would interpret regulations without deferring to agency interpretations of them.     

In Moda Health Plan v. United States the Supreme Court will decide whether Congress may enact appropriations riders restricting the sources of funding available to pay health insurers for losses incurred that were supposed to be paid per federal law.

The Affordable Care Act’s (ACA) risk corridor program provided that if a health insurance plan participating in the exchange lost money between 2014-2016 it would receive a payment from the federal government based on a formula defined in the statute. If it made money the plan had to pay the federal government based on a formula. The purpose of the program was to induce health insurance companies to offer plans on the exchange despite the fact they didn’t have reliable data to price the plans.

The Government Accountability Office (GAO) identified a particular funding source the federal government could use to make payments. Congress passed appropriations riders for all three years disallowing that funding source to be used to make risk corridor payments.

Rarely does a Supreme Court case implicate the work of state legislatures like Georgia v. Public.Resource.org. In this case the Court will decide whether a state may copyright statutory annotations.

Georgia, through a Code Revision Commission, made up of the Lieutenant Governor, the Speaker of the House, members of the Senate and House, and others, contracts with Lexis to draft the statutory annotations published in the Official Code of Georgia Annotated (OCGA).

Annotations include “history lines, repeal lines, cross references, commentaries, case notations, editor’s notes, excerpts from law review articles, summaries of opinions of the Attorney General of Georgia, summaries of advisory opinions of the State Bar, and other research references.”

The Supreme Court’s holding in North Carolina Department of Revenue v. Kimberley Rice Kaestner 1992 Family Trust is narrow, precise, and unanimous. The presence of in-state beneficiaries alone does not allow a state to tax undistributed trust income where the beneficiaries have no right to demand that income and may never receive it.

The Kimberley Rice Kaestner trust is governed by New York law and its trustee is a New York resident who has “absolute discretion” to distribute the trust. When the trustees, Kimberley Rice Kaestner and her children, lived in North Carolina the state taxed the income of the trust even though no funds were distributed during the time period. The trust sued North Carolina seeking the $1.3 million it paid in taxes. The trust argued that the tax violated the Due Process Clause of the Fourteenth Amendment.  

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