Legal News for Tues 4/2 - Trump Posts bond, Walgreens Faces $2.7B Tax Claim, NY Disability Advocacy Court Rule Sparks Concern, and Busting Crypto Tax Cheats with Existing Policies

Minimum Competence

This Day in Legal History: Massachusetts Stands Against Vietnam War

On April 2, 1970, Massachusetts took a stand against the Vietnam War in a unique legal manner by enacting a bill that directly challenged the federal government's authority to deploy state residents to fight in an undeclared war. This legislation declared that no individual from Massachusetts inducted into or serving in the armed forces could be required to serve overseas in an armed conflict that had not received formal war declaration by Congress, as stipulated by the United States Constitution, Article I, Section 8, clause 11. The move was not merely a political statement but a legal strategy aimed at forcing a Supreme Court review of the Vietnam War's constitutionality by highlighting the tension between state and federal statutes.

The supporters of this bill were banking on the idea that the Supreme Court would take up the issue, given the clear conflict it presented between state and federal powers. They believed that by pushing this issue into the judicial system, there might finally be a definitive ruling on the legality of the Vietnam War, a subject of intense debate and protest across the country. However, the Supreme Court opted not to exercise its original jurisdiction in this matter, a decision that shifted the battleground to the lower federal courts.

This legal maneuver by Massachusetts underscores the complexities of the American federal system, especially in matters of war and peace, and the lengths to which states have gone to assert their rights and protect their citizens from what they viewed as unconstitutional federal actions. Despite the Supreme Court's refusal to engage directly with the conflict presented by the Massachusetts bill, the legislation remains a significant example of state-level opposition to national military policy, reflecting the deep divisions and legal challenges posed by the Vietnam War. The episode is a reminder of the powerful role states can play in national debates, particularly in challenging federal policies on moral and legal grounds.

Donald Trump, facing a civil fraud case in New York, successfully posted a $175 million bond on April 1, thus preventing the seizure of his assets by state authorities. This action comes as part of the proceedings where Trump was found to have exaggerated his net worth by billions to obtain more favorable terms on loans and insurance. Initially, a bond of $454 million was set, but an appellate court reduced this amount with the condition that Trump pays within 10 days, staying the enforcement of Justice Arthur Engoron's judgment. This development halts any immediate action by New York Attorney General Letitia James against key properties in Trump's real estate portfolio, including Trump Tower and Mar-a-Lago estate.

Trump's posting of the bond is a critical move as he prepares to contest the upcoming U.S. election against Joe Biden. He has consistently denied any wrongdoing in the fraud case, dismissing it as politically motivated by James, a Democrat. The case, filed in 2022, detailed how Trump allegedly manipulated the valuation of his assets to inflate his net worth significantly before his political career began.

This legal battle is among several that Trump is currently entangled in, including a criminal trial in New York concerning alleged hush money payments and charges related to efforts to overturn the 2020 election results and mishandling classified documents. Despite these challenges, Trump has pleaded not guilty to all charges, amidst concerns that ongoing legal issues may not be resolved before the November elections.

Trump posts $175 million bond in civil fraud case, averting asset seizures | Reuters

The Internal Revenue Service (IRS) has targeted Walgreens Boots Alliance with a tax claim of $2.7 billion for unpaid taxes, attributing the discrepancy to transfer pricing irregularities discovered during audits of the company's tax filings from 2014 to 2017. Transfer pricing involves the pricing of transactions between related entities within a corporation, and the IRS alleges that Walgreens Boots Alliance, which operates prominent retail pharmacy chains in both the U.S. (Walgreens) and the U.K. (Boots), improperly handled these transactions. Despite the substantial claim, which also includes penalties and interest, Walgreens Boots Alliance is contesting the IRS's findings. The company has announced its intention to defend its transfer pricing practices vigorously, both through the IRS's administrative appeals process and, if necessary, in court, expressing confidence in the strength of its position.

Walgreens Boots Alliance maintains that its valuation methods for certain purchase options, which have been contested by the IRS, were consistent across both U.S. Generally Accepted Accounting Principles (GAAP) and federal income tax purposes, with external expert reviews supporting their approach. The resolution of this audit, according to a company spokesperson, could take anywhere from two to seven years. This case places Walgreens Boots Alliance among several multinational corporations, including tech giants like Meta, Apple, and Microsoft, which have also faced scrutiny from the IRS over transfer pricing issues. While the IRS has historically struggled to secure victories in transfer pricing cases, especially against technology companies, it has achieved some notable successes in recent years, as seen in decisions against Coca-Cola Co. and 3M.

Walgreens Boots Alliance Hit With IRS $2.7 Billion Tax Claim (1)

The New York court system's new rule, which allows parties in a case to request disability accommodations without informing the opposing party, has sparked concerns among lawyers and disability rights advocates. While the rule aims to enhance access to justice for individuals with invisible disabilities by maintaining their privacy, critics argue it may not fully achieve its objectives and could inadvertently foster exclusion and stigma. The rule, adopted on February 16, focuses on aiding those with invisible disabilities, ensuring judges adhere to ethical standards regarding communications. However, some suggest a more impartial process, advocating for decisions on accommodations to be made by judges not involved in the case to prevent bias.

Critics worry that the rule may allow for implicit biases to influence judicial decisions and that requiring judges to decide on accommodation requests could deter litigants from disclosing necessary information due to fear of prejudice. The rule mandates disclosure of the nature of the disability, which exceeds the requirements of the Americans With Disabilities Act (ADA), raising additional privacy and discrimination concerns. Legal and advocacy groups have expressed fears that this disclosure could lead to adverse judgments or treatment within the court system.

Despite these criticisms, there's acknowledgment that the rule represents a step toward better access for disabled individuals and the potential for future improvements. Suggestions for refining the rule include simplifying the accommodation request process for lawyers, keeping records of requested accommodations, and advocating for universal design principles in court procedures. Advocates also call for additional training and resources for judges to better handle accommodation requests and for more inclusive consultations with disability groups in any future revisions of the rule, highlighting the ongoing need for adjustments to ensure the rule fulfills its aim of equitable access to justice for all parties.

NY Court Rule Poses Privacy, Bias Concerns for Disabled Parties

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