Today was a prime example of why the Supreme Court is only in the news when issues of abortion, gay rights, or Obamacare come up. For those who aren’t really into the law of reversionary interests, what is and what is not taxable income, and the technical nuances and Constitutional separation of powers between Article I Courts and Article III Courts, prepared to get bored. For those of you who are into that sort of thing, stay with me.
First, the High Court heard oral argument on Marvin M. Brandt Revocable Trust v. United States. SCOTUSBlog described the entire process as one of “Justice Stephen G. Breyer attempting repeatedly to remember what he had been taught in property class in law school.” Here’s a simple breakdown:
In 1908, the Laramie and Hahn’s Peak and Pacific Railroad Company obtained a right-of-way from the U.S. Government to build a railroad. In May of 2001, probably because the railroad business has been replaced by the truck, the successor to Laramie, WYCO (another railroad company) filed a notice of an intent to abandon this tract.
The United States of America argues that the land reverts back to them, essentially since the government is the one that granted the right-of-way and because of specific code provisions that support the notion of a reversionary interest in the Government. A group of folks with the last name Brandt that own property adjacent to where this Railroad Right-of-Way was/is are conglomerated into the Marvin M. Brandt Revocable Trust ,arguing there is good law to support that the adjacent landowners should get that property.
In the end, both parties are arguing over a terrible parcel of land in the desert. Hence the reason why you’ve probably never heard of it. Also, everyone hates property law. Especially lawyers and law students.
Second, the Supreme Court heard oral argument in the case of United States v. Quality Stores, Inc. Essentially, Quality Stores is trying to call severance pay that it paid to employees it fired tax-deductible. The Government is trying to get that tax money, so to speak.
It’s hard to tell which way this one will go; however, a good rule of thumb with tax courts and the Supreme Court on taxes: the taxpayer always loses.
Finally, there was oral argument today on very technical issues of the Bankruptcy Code, which essentially turn on the separation of powers between Article I Courts (Courts created by Congress under its authority of Article I of the Constitution to handle tasks like bankruptcy or tax collection) and Article III Courts, in the case of Executive Benefits Insurance Agency v. Arkison.
The nuances are only relevant to bankruptcy attorneys practicing Chapter 11 work, so, I won’t bore you. But, know this: the whole issue of what is and what is not a “core” proceeding and subject to an Article I Court’s jurisdiction instead of an Article III Court, is one of the only times that bankruptcy is allegedly sexy. The Anna Nicole Smith bankruptcy case defines a “core” proceeding, and seriously curtails the authority that a bankruptcy court has in making decisions on complex issues that relate to, but are not wholly a part of, the bankruptcy case. Arkison is more than likely merely going to clarify some of those Anna Nicole Smith issues.
Note: I do not think Anna Nicole Smith ever was sexy.
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