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As Amended June 9, 1928. [277 U.S. 389, 390] Messrs. Owen J. Roberts, of Philadelphia, Pa., and Douglas D. Story, of Jersey City, N. J., for plaintiff in error.
[277 U.S. 389, 394] Messrs. John Robert Jones and George W. Woodruff, both of Philadelphia, Pa., for defendant in error.
Judgment was entered in the court of common pleas of Dauphin county, Pa., in favor of the commonwealth for 'gross receipts taxes for the six months ending the 31st day of December, 1923,' amounting, with interest and commission, to $6,049.94. The tax is claimed under section 23 of an Act of June 1, 1889, P. L. 420, 431. [277 U.S. 389, 399] The provisions here material are printed in the margin. 1 The gross receipts taxed were derived by plaintiff in error from the use of its motor vehicles for the transportation within Pennsylvania of persons and their luggage. Plaintiff in error contended that, if applied to such receipts, the section violates the equal protection clause of the Fourteenth Amendment. The highest court of the state upheld the act, and affirmed the judgment. 287 Pa. 161, 134 A. 404.
Plaintiff in error was subject to competition in its business by individuals and partnerships operating taxicabs. The act does not apply to them, and no tax is imposed on their receipts. Corporations operating taxicabs are not exempted from any of the taxes imposed on [277 U.S. 389, 400] natural persons carrying on that business. And every such corporation, whether domestic or foreign, pays a capital stock tax of 5 mills on the actual value of its capital stock and a bonus of one-third of 1 per cent. on the par value of all stock issued if it be a domestic corporation, and a like rate on its capital employed in Pennsylvania if it be a foreign corporation. Act of July 22, 1913, P. L. 903 (Pa. St. 1920, 20366-20368 ); section 1, Act of May 3, 1899, P. L. 189 (Pa. St. 1920, 5686); section 1, Act of May 8, 1901, P. L. 150 (Pa. St. 1920, 5691). The Supreme Court said that it is immaterial whether individuals engaged in a like taxicab business are subject to the tax here involved, and that corporations may be placed in a class separate from individuals and so taxed.
The equal protection clause extends to foreign corporations within the jurisdiction of the state, and safeguards to them protection of laws applied equally to all in the same situation. Plaintiff in error is entitled in Pennsylvania to the same protection of equal laws that natural persons within its jurisdiction have a right to demand under like circumstances. Kentucky v. Paramount Exch., 262 U.S. 544, 550 , 43 S. Ct. 636. The equal protection clause does not detract from the right of the state justly to exert its taxing power or prevent it from adjusting its legislation to differences in situation or forbid classification in that connection, 'but it does require that the classification be not arbitrary, but based on a real and substantial difference having a reasonable relation to the subject of the particular legislation.' Power Co. v. Saunders, 274 U.S. 490, 493 , 47 S. Ct. 678, 679 (71 L. Ed. 1165). It is established that a corporation, by seeking and obtaining permission to do business in a state, does not thereby become bound to comply with, or estopped from objecting to, the enforcement of its enactments that conflict with the Constitution of the United States. The right to withhold from a foreign corporation permission to do local business therein does not enable the state to require such a corporation [277 U.S. 389, 401] to surrender the protection of the federal Constitution. Power Co. v. Saunders, supra, 497 (47 S. Ct. 680); Hanover Insurance Co. v. Harding, 272 U.S. 494, 507 , 47 S. Ct. 179, 49 A. L. R. 713; Frost v. Railroad Commission, 271 U.S. 583 , 593 et seq., 46 S. Ct. 605, 47 A. L. R. 457; Fidelity & Deposit Co. v. Tafoya, 270 U.S. 426, 434 , 46 S. Ct. 331; Western Union Tel. Co. v. Foster, 247 U.S. 105, 114 , 38 S. Ct. 438, 1 A. L. R. 1278; Looney v. Crane Co., 245 U.S. 178, 188 , 38 S. Ct. 85; Sioux Remedy Co. v. Cope, 235 U.S. 197, 203 , 35 S. Ct. 57.
That statement is not affected by a later expression referring to the tax as a 'state tax on business or income' in contrast with a 'local tax on property,' such as hacks, cabs, and other vehicles. The variation of language used by the court evidently is intended to be, and is, without significance. The words of the section are too plain to require explanation. They could not reasonably be given any other meaning. But, in any event, a characterization of the tax by the state court is not binding here. Louisville Gas & Electric Co. v. Coleman, 277 U.S. 32 , 48 S. Ct. 423; St. Louis Compress Co. v. Arkansas, 260 U.S. 346, 348 , 43 S. Ct. 125. There is no controversy as to the application of the tax. Plaintiff in error assumes that the section covers its gross receipts, as held by the state court, but insists that the section is invalid because it does not extend to like receipts of natural persons and partnerships. No doubt there are situations in which, as appears in Cudahy Packing Co. v. Minnesota, 246 U.S. 450 , 38 S. Ct. 373, and other cases, a percentage of gross earnings may be taken as a tax on property used in the business and properly may be deemed not to be a tax or burden on such earnings. But the practical operation of the section is to be regarded, and it is to be dealt with according to its effect. Frick v. Pennsylvania, 268 U.S. 473 , 45 S. Ct. 603, 42 A. L. R. 316; Panhandle Oil Co. v. Mississippi, 277 U. S. [277 U.S. 389, 402] 218, 48 S. Ct. 451. Here the tax is one that can be laid upon receipts belonging to a natural person quite as conveniently as upon those of a corporation. It is not peculiarly applicable to corporations, as are taxes on their capital stock or franchises. It is not taken in lieu of any other Pa. 83, 22 A. 240; Commonwealth v. National Oil fall elsewhere. It is laid upon and is to be considered and tested as a tax on gross receipts; it is specifically that and nothing else.
In effect section 23 divides those operating taxicabs into two classes. The gross receipts of incorporated operators are taxed, while those of natural persons and partnerships carrying on the same business are not. The character of the owner is the sole fact on which the distinction and discrimination are made to depend. The tax is imposed merely because the owner is a corporation. The discrimination is not justified by any difference in the source of the receipts or in the situation or character of the property employed. It follows that the section fails to meet the requirement that a classification, to be consistent with the equal protection clause, must be based on a real and substantial difference having reasonable relation to the subject of the legislation. Power Co. v. Saunders, supra. No decision of this court gives support to such a classification. And the Supreme Court of Pennsylvania has condemned such a classification. Schoyer v. Comet Oil & Refining Co., 284 Pa. 189, 196, 197, 130 A. 413. In no view can it be held to have more than an arbitrary basis As construed and applied by the state court in this case, the section violates the equal protection clause of the Fourteenth Amendment. See The Railroad Tax Cases (C. C.) 13 F. 722; County of Santa Clara v. Southern Pacific R. R. Co. (C. C.) 18 F. 385; Northern Pacific R. Co. v. Walker (C. C.) 47 F. 681. The tax cannot be sustained.
I think that the judgment should be affirmed. The principle that I think should govern is the same that I stated in Louisville Gas & Electric Co. v. Coleman, April 30, 1928, 277 U.S. 32 , 48 S. Ct. 423. Although this principle was not applied in that case I do not suppose it to have been denied that taking acts like other rules of law may be determined by differences of degree, and that to some extent States may have a domestic policy that they constitutionally may enforce. Quong Wing v. Kirkendall, 223 U.S. 59 , 32 S. Ct. 192. If usually there is an important difference of degree between the business done by corporations and that done by individuals, I see no reason why the larger businesses may not be taxed and the small ones disregarded, and I think it would be immaterial if here and there exceptions were found to the general rule. Flint v. Stone Tracy Co., 220 U.S. 107 , 158, et seq., 31 S. Ct. 342, Ann. Cas. 1912B, 1312; Citizens' Telephone Co. v. Fuller, 229 U.S. 322 , 33 S. Ct. 833; Amoskeag Savings Bank v. Purdy, 231 U.S. 373, 393 , 34 S. Ct. 114; Miller v. Wilson, 236 U.S. 373, 384 , 35 S. Ct. 342, L. R. A. 1915F, 829; Armour & Co. v. North Dakota, 240 U.S. 510, 517 , 36 S. Ct. 440. Furthermore if the State desired to discourage this form of activity in corporate form and expressed its desire by a special tax I think that there is nothing in the Fourteenth Amendment to prevent it.
It has been the consistent policy of Pennsylvania since 1840 to subject businesses conducted by corporations to heavier taxation than like businesses conducted by individuals. 1 It has likewise been the consistent policy of [277 U.S. 389, 404] the state since 1864 to subject some kinds of businesses conducted by corporations to heavier taxation than other businesses conducted by corporations. 2 Pursuant to this policy, the Legislature of Pennsylvania laid, in 1889, upon public service corporations furnishing transportation for hire, a gross receipts tax of eight mills on each dollar of gross receipts earned wholly within the state. Act of June 1, 1889, P. L. 1889, pp. 420, 431 (Pa. Stat. 1920, 20388). That statute has remained unchanged so far as affects the question here involved. 3 It applies equally to every corporation engaged in the same kind of business, and makes no discrimination between foreign and domestic corporations. But neither this specific tax, nor any equivalent tax, is laid upon individuals or partnerships engaged in the same business. Nor it this tax or an equivalent laid upon corporations which supply certain other public services.
As the statute applies equally to domestic and to foreign corporations, cases like Southern Ry. Co. v. Greene, 216 U.S. 400 , 30 S. Ct. 287, 17 Ann. Cas. 1247, Kentucky Finance Corporation v. Paramount Auto Exchange, 262 U.S. 544 , 43 S. Ct. 636, Hanover Fire Insurance Co. v. Harding, 272 U.S. 494 , 47 S. Ct. 179, 49 A. L. R. 713, and Power Manufacturing Co. v. Saunders, 274 U.S. 490 , 47 S. Ct. 678, have no application. And no claim is made that the Federal Constitution prevents a state from taxing corporations engaged in one class of business more heavily than those engaged in another. Southwestern Oil Co. v. Texas, 217 U.S. 114 , 30 S. Ct. 496; Brown-Forman Co. v. Kentucky, 217 U.S. 563 , 30 S. Ct. 578; Heisler v. Thomas Colliery Co., 260 U.S. 245 , 43 S. Ct. 83; Oliver Iron Mining Co. v. Lord, 262 U.S. 172 , 43 S. Ct. 526. The fundamental question requiring decision is a general one. Does the equality clause prevent a state from imposing a heavier burden of taxation upon corporations engaged exclusively in intrastate commerce, than upon individuals engaged under like circumstances in the same kind of business? The narrower question presented is whether this heavier burden may be imposed by a form of tax 'not peculiarly applicable to corporations'; that is, by a tax of such a character that it might have been extended to individuals if the Legislature had seen fit to do so.
The equality clause does not forbid a state to classify for purposes of taxation. Discrimination through classification is said to violate that clause only where it is such as to preclude the assumption that it was made 'in the exercise of legislative judgment and discretion.' Stebbins [277 U.S. 389, 406] v. Riley, 268 U.S. 137, 143 , 45 S. Ct. 424, 426 (69 L. Ed. 884, 44 A. L. R. 1454). In other words, the equality clause requires merely that the classification shall be reasonable. We call that action reasonable which an informed, intelligent, justminded, civilized man could rationally favor. In passing upon legislation assailed under the equality clause we have declared that the classification must rest upon a difference which is real, as distinguished from one which is seeming, specious, or fanciful, so that all actually situated similarly will be treated alike, that the object of the classification must be the accomplishment of a purpose or the promotion of a policy, which is within the permissible functions of the state, and that the difference must bear a relation to the object of the legislation which is substantial, as distinguished from one which is speculative, remote, or negligible. 4 Subject to this limitation of reasonableness, the equality clause has left unimpaired, both in range and in flexibility, the state's power to classify for purposes of taxation. Can it be said that the classification here in question is unreasonable?
'The continuity of the business, without interruption by death or dissolution, the transfer of property interests by the disposition of shares of stock, the advantages of business controlled and managed by corporate directors, the general absence of individual liability, these and other things inhere in the advantages of business thus conducted, which do not exist when the same business is conducted by private individuals or partnerships.' 6 [277 U.S. 389, 410] In Pennsylvania the practice of imposing heavier burdens upon corporations dates from a time when there,7 as elsewhere in America, the fear of growing corporate power was common. The present heavier imposition may be a survival of an early effort to discourage the resort to that form of organization. The apprehension is now less common. But there are still intelligent, informed, just-minded, and civilized persons who believe that the rapidly growing aggregation of capital through corporations constitutes an insidious menace to the liberty of the citizen; that it tends to increase the subjection of labor to capital; that, because of the guidance and control necessarily exercised by great corporations upon those engaged in business, individual initiative is being impaired and creative power will be lessened; that the absorption of capital by corporations, and their perpetual life, may bring evils similar to those which attended mortmain; that the evils incident to the accelerating absorption of business by corporations outweigh the benefits thereby secured; and that [277 U.S. 389, 411] the process of absorption should be retarded. The court may think such views unsound. But obviously the requirement that a classification must be reasonable does not imply that the policy embodied in the classification made by the Legislature of a state shall seem to this court a wise one. It is sufficient for us that there is nothing in the Federal Constitution which prohibits a state from imposing a heavier tax burden upon corporations organized for the purpose of engaging exclusively in intrastate commerce, and that there is nothing inherently objectionable in the instrument which Pennsylvania selected for imposing the heavier burden- the gross receipts tax.
For these reasons, I should have no doubt that the statute of Pennsylvania was well within its power, if the question were an open one. But it seems to me that the validity of such legislation has been established by a decision of this court, rendered after much consideration. The contention here sustained differs in no essential respect from that made and overruled in Flint v. Stone-Tracy Co., 220 U.S. 107, 161 , 31 S. Ct. 342, Ann. Cas. 1912B, 1312. There, as here, the tax was imposed merely because the owner of the business was a corporation, as distinguished from an individual or a partnership. There, as here, the character of the owner was the sole fact on which the distinction was made to depend. There, as here, the discrimination was not based on any other difference in the source of the income or in the character of the property employed. The cases differ in but two respects, neither of them material. In the Flint Case the tax was on net income, while here it is on gross receipts; and the Flint Case arose under the Fifth Amendment, while the present case arises under the Fourteenth. But a tax on net income is no more 'peculiarly applicable to corporations' than is a tax on gross receipts; and in the Flint Case it was distinctly ruled that, 'even if the principles of the Fourteenth Amendment were ap- [277 U.S. 389, 412] plicable to the present case,' the tax must be upheld. More recently in Ft. Smith Lumber Co. v. Arkansas, 251 U.S. 532, 534 , 40 S. Ct. 304, 64 L. 396 ), the validity of a state statute discriminating against corporations was sustained, and it was said that 'a state may have a policy in taxation,' and that 'a discrimination between corporations and individuals with regard to a tax like this cannot be pronounced arbitrary, although we may not know the precise ground of policy that led the state to insert the distinction in the law.' Compare Southwestern Oil Co. v. Texas, 217 U.S. 114, 126 , 30 S. Ct. 496. In my opinion, the judgment of the Supreme Court of Pennsylvania should be affirmed.
That businesses carried on in corporate form may be taxed, while those carried on by individuals or partnerships are left untaxed, was the rule broadly applied under the Fifth Amendment in Flint v. Stone-Tracy Company, 220 U.S. 107 , 31 S. Ct. 342, Ann. Cas. 1912B, 1312, and I can see no reason for not applying it here under the Fourteenth Amendment as well. It is no objection to a taxing statute that the classification is based on two distinct elements-here the doing of business in a corporate form, upheld in Flint v. Stone-Tracy Co., supra ( and see Home Insurance Co. v. New York, 134 U.S. 594 , 10 S. Ct. 593; Ft. Smith Lumber Co. v. Arkansas, 251 U.S. 532 , 40 S. Ct. 304), and the character of the business done as distinguished from other classes of business, upheld in Southwestern Oil Co. v. Texas, 217 U.S. 114 , 30 S. Ct. 496; Brown-Forman Co. v. Kentucky, 217 U.S. 563 , 30 S. Ct. 578; Heisler v. Thomas Colliery Co ., 260 U.S. 245 , 43 S. Ct. 83. For it was decided in Stebbins v. Riley, 268 U.S. 137 , 45 S. Ct. 424, 44 A. L. R. 1454, that such a combination of two permissible bases of classification may itself be made the basis of a classification.
[ Footnote 1 ] That every ... transportation company, ... now or hereafter incorporated or organized by or under any law of this commonwealth, or now or hereafter organized or incorporated by any other state or by the United States or any foreign government, and doing business in this commonwealth, and owning, (or) operating ... any railroad ... or other device for the transportation of freight or passengers or oil ... shall pay to the state treasurer a tax of eight mills upon the dollar upon the gross receipts of said corporation ... received from passengers and freight traffic transported wholly within this state. ... Pa. St. 1920, 20388.
[ Footnote 1 ] Pennsylvania was the first state to adopt a general corporation tax. P. L. 1839-40, p. 612. In 1868 the tax was extended to foreign corporations. P. L. 1868, p. 108. The courts of Pennsylvania have regularly upheld the power of the Legislature, under the state and the Federal Constitution, to place heavier tax burdens on corporations than on individuals. See Kittanning Coal Co. v. Commonwealth, 79 Pa. 100; Commonwealth v. Delaware Division Coal Co., 123 Pa. 594, 16 A. 584, 2 L. R. A. 798; Commonwealth v. Germania Brewing Co., 145 Pa., 83, 22 A. 240; Commonwealth v, National Oil Co., 157 Pa. 516, 27 A. 374; Commonwealth v. Sharon Coal Co., 164 Pa. 284, 304, 30 A. 127, 128.
[ Footnote 2 ] P. L. 1864, p. 218; P. L. 1866, p. 82; P. L. 1867, p. 1363; P. L. 1877, p. 6; P. L. 1879, p. 112; P. L. 1889, p. 420; P. L. 1925, pp. 702, 706 (Pa. St. Supp. 1928, 20388 note).
[ Footnote 3 ] So far as is material to the present case, the tax goes back to the Act of March 20, 1877, P. L. 6. It was that act, as amended by the Act of June 7, 1879, P. L. 112, which was before this court in Philadelphia & Southern Mail S. S. Co. v. Pennsylvania, 122 U.S. 326 , 7 S. Ct. 1118. The Act of June 1, 1889, P. L. 420, 431, amended the earlier legislation so as to remove its repugnance to the commerce clause.
[ Footnote 4 ] See Missouri Pacific Ry. Co. v. Mackey, 127 U.S. 205, 209 , 210 S., 8 S. Ct. 1161; Bell's Gap R. R. Co. v. Pennsylvania, 134 U.S. 232, 237 , 10 S. Ct. 533; Pacific Express Co. v. Seibert, 142 U.S. 339 , 350-355, 12 S. Ct. 250; Gulf, Colorado & Santa Fe Ry. Co. v. Ellis, 165 U.S. 150 , 155-160, 17 S. Ct. 255; Magoun v. Illinois Trust & Savings Bank, 170 U.S. 283 , 293-296, 18 S. Ct. 594; Orient Insurance Co. v. Daggs, 172 U.S. 557 , 562- 564, 19 S. Ct. 281; Atchison, Topeka & Santa fe R. R. Co. v. Matthews, 174 U.S. 96 , 104-110, 19 S. Ct. 609; Muller v. Oregon, 208 U.S. 412 , 421-423, 28 S. Ct. 324, 13 Ann. Cas. 957; Southwestern Oil Co. v. Texas, 217 U.S. 114 , 125-127, 30 S. Ct. 496; Quong Wing v. Kirkendall, 223 U.S. 59, 62 , 63 S., 32 S. Ct. 192; Ft. Smith Lumber Co. v. Arkansas, 251 U.S. 532, 533 , 534 S., 40 S. Ct. 304; Watson v. State Comptroller, 254 U.S. 122, 124 , 125 S., 41 S. Ct. 43; Heisler v. Thomas Colliery Co., 260 U.S. 245 , 254-258, 43 S. Ct. 83.
[ Footnote 5 ] Under the War Revenue Act of October 3, 1917, c. 63, 1, 4, 40 Stat. 300, 301, 302 (Comp. St. 6336aa, 6336jj), the normal tax on individuals was 4 per cent. while that on corporations was 6 per cent. The Revenue Act of 1918, c. 18, 210, 230, 40 Stat. 1057, 1062, 1075 (Comp. St. 6336 1/8 e, 6336 1/8 nn), imposed on individuals a normal tax of 12 per cent. for 1918 and 8 per cent. thereafter, with subnormal rates of 6 per cent. and 4 per cent., respectively; the rate on corporations was 12 per cent. for 1918, 10 per cent. thereafter; the excess profits tax imposed by section 301 of the same act, 40 Stat. 1057, 1088 (Comp. St. 6336 7/16 aa), applied only to corporations. Under the Act of 1921, c. 136 , 210, 230, 42 Stat. 227, 223 (Comp. St. 6336 1/8 e, 6336 1/8 nn), 252, the rate on individuals was 8 per cent. with a subnormal rate of 4 per cent, whereas the rate on corporations was to be 10 per cent. for 1921, and 12 1/2 per cent. for following years. The Act of June 2, 1924, c. 234 , 210, 230, 43 Stat. 253, 264, 282 (Comp. St. 6336 1/6 e, 6336 1/6 n ), lowered the normal rate on individuals to 6 per cent. with subnormal rates of 2 per cent. and 4 per cent., but made no change in the rate to be paid by corporations. The Act of February 26, 1926, c. 27, 210, 230, 44 Stat. 6, 21, 39 (Comp. St. 6336 1/3 e, 6336 1/3 n), further lowered the rate on individuals to 5 per cent. with subnormals of 1 1/2 per cent. and 3 per cent., but raised the rate of the corporation income tax to 13 per cent. for 1925 and 13 1/2 per cent. thereafter.
[ Footnote 6 ] This reason for heavier taxation of corporations was stressed in Congress both in the debate on the proposed amendment to the War Revenue Bill of 1898 taxing corporations on their gross receipts, and in the debate on the corporation tax amendment to the Tariff Bill of 1909. See 31 Cong. Rec. 4964, 5092, 5101; 44 Cong. Rec. 4237. Senator Root stated: 'My own state has for many years grouped all corporations within its borders, with certain specific exceptions, in a class upon the revenues of which it imposes a tax imposed on no other members of the community. And it is a late day for us to be told that there is no right in the United States to adopt this old, familiar, general basis of classification for the purpose of imposing an excise tax. It is founded upon reason, sir, and not alone upon authority.' 44 Cong. Rec. 4005, 4006.
In proposing the enactment of a tax of one shilling in the pound on the profits and income of concerns with limited liability, April 19, 1920, the Chancellor of the Exchequer said: 'I justify it on much broader grounds. Companies incorporated with a limited liability enjoy privileges and conveniences by virtue of the law for which they may well be asked to pay some acknowledgment.' The statement is quoted in Report of the Secretary of the Treasury for 1920, p. 42.
[ Footnote 7 ] A commission appointed pursuant to joint resolution of the Legislature of Pennsylvania reported in 1862: 'Corporations in this state are very numerous and very powerful. They have not only drawn within their control an immense amount of capital, but that have drawn within their power the entire commerce of the state. ... The franchises of corporations are property, and the legitimate subject of taxation; in fixing a tax upon corporations these extraordinary privileges, their franchises, constitute the first grounds of the commonwealth's claim to contribution, and in that consists her right to discriminate in favor of the public.' Shortly after this report, the Legislature passed the Act of April 30, 1864, P. L. 218, the first of the special taxes on corporations which have since formed an integral part of the revenue system of the state.

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Ellis Stuart Rubin, Miami, Fla., for appellant.
Fred Botts, Asst. U. S. Atty., Miami, Fla., Herbert S. Phillips, U. S. Atty., Tampa, Fla., for appellee.
Before HUTCHESON, Chief Judge, and RUSSELL and STRUM, Circuit Judges.
Appellant was indicted, tried and convicted on a single count charging him with violating 18 U.S.C. § 2314,1 in that he transported certain specifically designated and described articles of jewelry having a value of more than $5,000 from Miami, Florida to Havana, Cuba, on April 18, 1952, and that he knew that the jewelry "had therefore (sic) been stolen, converted or taken by fraud." Since there is no contention that the evidence was not sufficient to sustain the verdict, we do not recite it in detail. For present purposes it is sufficient to say that the jury was justified in finding that appellant acquired possession of the jewelry from Daniel Richter by means of a scheme designed to lead the latter to believe that his, Richter's, son had been kidnapped. The jewelry was placed in a locker-box at the local bus terminal by Richter, as he was directed to do by appellant, to secure the release and safe return of the Richter child. After removing the jewelry from the locker-box appellant transported it from Miami to Havana. He was there arrested by the Cuban authorities two days after his arrival and was subsequently deported to the United States as an undesirable alien. He was induced to deliver the jewelry to the Cuban Secret Police by promises that they would divide its proceeds with him. After he delivered it to them, they arrested him and incarcerated him in the local jail. He was returned to Miami accompanied by members of the Cuban Secret Police and upon his arrival was placed under arrest by the Chief of Detectives of the Miami Police Department. The jewelry was delivered to the detective by the Cuban police. Appellant was acquitted after trial in the State court on the charge of kidnapping. Thereafter, the present trial was had and a sentence of nine years was imposed. Appellant has elected to commence service of the sentence pending this appeal.
Prior to trial appellant filed a motion to dismiss the indictment upon stated grounds. The grounds upon which he now relies are that the indictment failed to apprise him of the offense with which he was charged and to sufficiently protect him from a future indictment on the same charge. Formal parts omitted, the indictment is set forth in the margin.2 The indictment did not charge appellant with stealing, converting or taking the jewelry by fraud. The manner in which the property was unlawfully taken from its possessor is a subsidiary element of the offense. By enacting the statute which appellant stands convicted of violating, Congress intended to prohibit the channels of interstate and foreign commerce from being employed to evade and escape State detection and prosecution of certain criminal offenses committed within its boundaries. Appellant was charged with transporting the jewelry in foreign commerce with knowledge that it had been "stolen, converted or taken by fraud." The quoted words relate to the quality of the property he transported and not to the manner in which he acquired it. For this reason the cases cited and relied upon by appellant in support of his contention that the court erred in overruling his motion to dismiss the indictment are inapposite. Those cases3 hold generally that if a statute denounces several things as crime, or creates only one offense but states more than one way in which it may be committed, an indictment may, in a single count, charge violation of the statute in any or all of the ways stated therein, provided that the various ways by which the offense may be committed are alleged conjunctively rather than disjunctively, or alternatively. This rule, however, is not applicable to the present case, although it would not have been fatal to the indictment if the elements had been alleged conjunctively.
The gravamen of the offense prohibited by 18 U.S.C. § 2314 is the transportation in interstate or foreign commerce of goods with knowledge that they have been secured by the unlawful means referred to in the statute. It is immaterial whether the accused is guilty of any offense in connection with the primary wrongful taking of the goods, nor is it significant how the accused acquired possession of the goods, except that this may be shown in order to prove his knowledge of their character as being stolen, converted or taken by fraud. To sustain a conviction under this statute it is necessary to prove that the accused transported the goods in interstate or foreign commerce, that the value of the goods so transported was $5,000 or more and that he knew they had either been stolen, converted or taken by fraud. These are the essential elements of the crime. The indictment charged these elements with particularity.
"The true test of the sufficiency of an indictment is not whether it could have been made more definite and certain, but whether it contains the elements of the offense intended to be charged, `and sufficiently apprises the defendant of what he must be prepared to meet, and, in case any other proceedings are taken against him for a similar offense, whether the record shows with accuracy to what extent he may plead a former acquittal or conviction.'"
Appellant's primary argument is predicated upon the contention that his defense was embarrassed by the use of the disjunctive "or" rather than the conjunctive "and" which he claims necessitated his preparing three different defenses to the single count of the indictment. Obviously, he would have been in no different position if the conjunctive had been used, since proof of his knowledge that the jewelry had either been stolen, converted or taken by fraud at the time he transported it would sustain a conviction. There can be no valid contention that appellant's defense was embarrassed or that he was surprised by the evidence offered against him at the trial merely because the indictment alleged the prohibitive character of the goods in the disjunctive rather than in the conjunctive. The indictment did not charge appellant in the alternative with having committed one or another of several offenses. He was charged with only one offense. This evidences our rejection of his contention that the court erred in overruling his motion to compel the Government to elect upon which allegation of the indictment it would proceed to trial. We think the indictment alleged the essential ingredients of the offense charged with sufficient certainty and did not infringe upon appellant's right to be informed of the crime charged against him.5 Likewise, it is sufficiently definite so that either a conviction or an acquittal could be pleaded in bar to a subsequent prosecution for the same cause.
Appellant timely filed a motion for a bill of particulars requesting, among other things, that he be informed of the "details which compose the vital elements of fraud" alleged in the indictment. The overruling of this motion is assigned as error. The Government should not be compelled by a bill of particulars to give a detailed disclosure of its evidence, as would have been required by compliance with the motion. Pines v. United States, 8 Cir., 123 F.2d 825, 828. Furthermore, there is nothing in the record to indicate that appellant was surprised or prejudiced by the action of the court in overruling the motion. The granting or denial of a bill of particulars rests within the sound discretion of the trial court, and in the absence of abuse or prejudice, its ruling will not be disturbed on appeal. No abuse is shown in this case. Wong Tai v. United States, 273 U.S. 77, 47 S.Ct. 300, 71 L.Ed. 545.
Before the trial a motion to suppress evidence was made and was denied by the court with leave to renew. It was renewed at the trial and again denied. Appellant complains of this and of the admission in evidence of the various items of jewelry which were taken from him by the Cuban police. This claim of error is based upon the contentions that: (1) the Cuban police acquired possession of the jewelry by means of an unlawful search and seizure; (2) they offered appellant promise of reward and hope of escape if he would deliver the jewelry to them, and (3) the Cuban officer who delivered the jewelry to the Miami police was not called as a witness.
One of the Cuban police testified that at the time he entered appellant's hotel room and arrested him a warrant for his arrest and a search warrant had been issued. He further stated that he knew appellant was wanted by the Miami police on a kidnapping charge. A search of the room was made but the jewelry was not found. After conversing with the officers, appellant removed a ring from his mouth and gave it to one of them. Upon being promised by the officers that all would go well with him if he would produce the rest of the jewelry and that the officers would sell it and divide the proceeds with him, appellant led them to another hotel. There he secured the jewelry and delivered it to the officers. If it be conceded that the search of appellant's room was unlawful, which we do not decide, since it did not result in the disclosure and seizure of the jewelry, it does not establish a basis for the suppression of the evidence.
Moreover, and controlling here, all of the alleged unlawful conduct utilized to induce appellant to produce the jewelry and to deliver it to his captors was initiated and accomplished by the Cuban police, apparently in an effort to assist the Miami police in recovering the jewelry and bringing about appellant's capture on the State charge. There is no evidence that federal officers participated in any way in the activities complained of, that they were working in concert with the Miami or the local officers, or that they even knew of the alleged "seizure", or acquisition of the jewelry, by the Cuban officers until after it transpired. It follows that whether the conduct of the Cuban officers was lawful or not the evidence was admissible against appellant. Evidence secured through unlawful conduct on the part of State or local officers is admissible in a federal prosecution, provided such officers were not acting directly or indirectly for the United States. This rule is applicable to the present case. Burdeau v. McDowell, 256 U.S. 465, 41 S.Ct. 574, 65 L.Ed. 1048; Bryant v. United States, 5 Cir., 120 F.2d 483; Wheatley v. United States, 4 Cir., 159 F. 2d 599; United States v. Butler, 10 Cir., 156 F.2d 897, 898, and cases cited.
There was no serious dispute as to the identity of the jewelry or as to whether the jewelry offered in evidence was the same jewelry which was unlawfully transported. A witness for the Government testified that the jewelry was delivered to him by the Chief of the Secret Police of Cuba at the police station in Miami. It was identified by the several witnesses who had seen it in appellant's possession, including the Cuban officers who arrested him. Thus, there is no merit to the contention that the Government should have been required to prove the identity of the jewelry by the officer who delivered it to the Miami police.
It is further asserted that the court erred in permitting the Government to recall the defendant, who tesified as a witness in his own behalf, for further cross-examination after the defense had rested and "in allowing the Government to misrepresent testimony to be elicited from a surprise witness who subsequently refused to testify." The "surprise" witness referred to, Antoine Felise, by whose testimony the Government intended to impeach that of the defendant, refused to testify on the grounds that his testimony might tend to incriminate him. The court instructed the jury to disregard all that had transpired with respect to this witness and offered to strike from the record the cross-examination of the defendant having reference to Felise. This offer was rejected. When the defendant took the witness stand he became subject to cross-examination in the same manner and to the same extent as any other witness and, within the discretion of the trial court, was subject to being recalled for further cross-examination after he had rested his case. The order in which evidence is to be received, the recalling of witnesses to the witness stand under circumstances present here and the acceptance or rejection of rebuttal testimony are matters which are necessarily committed to the broad discretion of the trial court, the exercise of which will not be disturbed upon appeal in the absence of a clear showing of abuse. Under the facts disclosed by the record, we are unable to say that the court abused its discretion in the matters complained of.
Richter testified that while he was taking the jewelry to the bus terminal he thought he heard footsteps behind him. He glanced to his left toward a shop window and there saw the reflection of a man who resembled the defendant walking behind him. Counsel for appellant moved the court to permit the jury to view the scene in question. After all the evidence had been received, counsel for the Government made a similar motion. The motion was granted and the jury was taken to the scene testified to by Richter. Counsel were permitted to accompany the jury.
While the jury was at the scene one of the Government witnesses, whose presence there is not explained by the record, was asked to, and did, purchase a package of cigarettes for one of the jurors. Also, according to his testimony, he said to one of the jurors, "those are diagonal windows", or, according to defendant's counsel, "Notice how these windows face?" He was immediately admonished to desist from saying anything further. Based upon this incident, appellant moved for a mistrial. He now insists that the court abused its discretion in overruling the motion.
When the incident was brought to the attention of the trial court a thorough inquiry was made by it to determine exactly what had occurred. Testimony of the offending witness was heard and counsel were given an opportunity to give their respective versions of what had happened in their presence. After hearing the testimony, the court overruled the motion for a mistrial, but carefully instructed the jury to dismiss the incident from their minds.
We recognize the rule that private communications between jurors and third persons, or witnesses, relative to the case on trial are absolutely forbidden and are presumed to be prejudicial.9 However, this is a rebuttable presumption which may be overcome by a showing that such communications were harmless and did not in fact prejudice the rights of the defendant. The jury was present at the scene for the specific purpose of viewing the windows which had been referred to in the testimony. There was absolutely no dispute as to where they were located or as to their physical characteristics. The witness did no more than call the attention of a juror to something which was readily apparent to him; something which he had journeyed to the scene to observe. Although we do not approve of the presence of the witness at the scene or of his conduct while there, we think it was harmless and in no way affected or prejudiced the right of the defendant to a fair and impartial consideration of his case by the jury.
We find no reversible error in the record. The judgment appealed from is affirmed.
1. "Whoever transports in interstate or foreign commerce any goods, wares, merchandise, securities or money, of the value of $5,000 or more, knowing the same to have been stolen, converted or taken by fraud; or * * * Shall be fined not more than $10,000 or imprisoned not more than ten years, or both."
"On, to-wit: April 18, 1952, at Miami, Dade County, Florida, in the Southern District of Florida.
"1. One ladies' diamond solitaire finger ring containing one diamond about 3.99 carats in size and 6 small diamonds, all in platinum mounting.
"2. One ladies' platinum diamond finger ring containing one diamond about 2.97 carats in size, one diamond about 3 carats in size and 10 small diamonds, all in platinum mounting.
"3. One mens' diamond finger ring about 3.98 carats in size, mounted in plain 14 karat white gold mounting.
"4. One diamond and onyx bar pin containing about 27 small diamonds and about 52 small onyx.
a further description of said merchandise being to the grand jurors unknown, which said merchandise was of a value of more than Five Thousand ($5,000.00) Dollars, to-wit: of a value of Twenty Thousand ($20,000.00) Dollars, which said property had therefore been stolen, converted or taken by fraud as he, the said defendant at the time of transporting said merchandise as aforesaid, well knew."
3. O'Neill v. United States, 8 Cir., 19 F.2d 322; Poffenbarger v. United States, 8 Cir., 20 F.2d 42; Troutman v. United States, 10 Cir., 100 F.2d 628; Pines v. United States, 8 Cir., 123 F.2d 825; Price v. United States, 5 Cir., 150 F. 2d 283; District of Columbia v. Hunt, 82 U.S.App.D.C. 159, 163 F.2d 833.
4. Rule 7(c), Federal Rules of Criminal Procedure, 18 U.S.C.A.
5. Cf. Millard v. United States, 5 Cir., 148 F.2d 154; Norris v. United States, 5 Cir., 152 F.2d 808; Myles v. United States, 5 Cir., 170 F.2d 443.
7. See 62 Stat. 683, 806.
8. Johnson v. United States, 5 Cir., 124 F. 2d 101; United States v. Krepper, 3 Cir., 159 F.2d 958, 970; Williams v. United States, 5 Cir., 179 F.2d 656, 659; Edgerton v. United States, 9 Cir., 143 F.2d 697, 700.
9. Mattox v. United States, 146 U.S. 140, 150, 13 S.Ct. 50, 36 L.Ed. 917; Wheaton v. United States, 8 Cir., 133 F.2d 522; Ryan v. United States, 89 U.S.App.D.C. 328, 191 F.2d 779, and cases cited.
Of the clear opinion; that appellant's motion to dismiss the indictment because it alleged disjunctively instead of conjunctively that the property in question "had been stolen, converted or taken by fraud" was well taken; and that the indictment should have been dismissed on that ground I dissent from the judgment of affirmance.
The majority opinion concedes that if appellant had been charged with stealing, converting or taking the jewelry the motion to dismiss should, under the authorities cited in note three, have been sustained. The majority, by a process of reasoning however which seems fallacious to me, reaches the conclusion that the rule which would admittedly apply if appellant had been indicted as the taker does not apply here because he is charged with transportation of the property after it had been taken and what was an essential element in the offense if he had been the taker, the manner in which it was taken, becomes to quote from the majority opinion "a subsidiary element of the offense."
Because I am unfamiliar with this use of the term subsidiary in connection with the elements of an offense, I am not sure that I understand the meaning and significance of the word when so used. I suppose though it is used in contradistinction to essential to mean that it is an unessential element of the offense charged.
If I am correct in this we are presented with what seems to me to be quite an anomaly in the law of criminal pleading that what would be an essential element of the offense if the taker had been charged with the offense of taking ceases to be an essential element when the taker is not charged but only the transporter is.
With the greatest deference to the contrary opinion of my brothers the conclusion on which it rests seems to be a triumph of form over substance, of technicality over sound reason.
To recapitulate, to my brothers the offense denounced by the statute, transporting in foreign commerce property which had theretofore been stolen, converted or taken by fraud as he at the time of transporting said merchandise as aforesaid well knew consists of two elements, one the transportation, and two, the unlawful taking of the property, these two elements stand in the order of principal and subsidiary and only the principal element transportation need be alleged and proven.
To me both elements are essential. Both must be properly alleged and proven.
For the failure to properly allege the element of unlawful taking, I think that the motion to dismiss should have been sustained and that because it was not the judgment should be reversed. I, therefore, dissent from the opinion and judgment of affirmance.


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September 11, 2017 May 21, 2018 Joanna V.
June 12, 2017 September 11, 2017 Joanna V.
Last Friday, my publisher (50/50 Press) hosted an online cover reveal party and I got to be part of it, releasing the cover of Threadwalkers out into the wild for the first time. WOOT!
I really love the cover, and it fits very well with the story, though of course you won’t get to find out exactly how until it comes out this fall… but trust me when I say it’s pretty much perfect.
As part of the event, I took questions from social media, and will leave them here, in case you wondered any of the same things.
Did you get to design it?
I did not get to design this cover, but the publisher was very generous in taking my preferences into account. (I specifically requested no headless female torsos, which has been a bizarre trend in YA covers for years now.) I was sent some mock-ups to look through and my favorite was the one that eventually developed into the final cover. It was the publisher’s favorite, too, so that worked out well.
What was the hardest part of this whole process?
Honestly, every stage has been hard in its own way. Plotting time travel stuff? Hard. Editing and getting good feedback from beta readers? Hard. Querying agents/publishers? HARD. But it’s also hard in a satisfying way, like how I imagine people who enjoy working out feel after a really good workout. I am not one of those people, but I can imagine it’s similar.
Finding people who were excited about the story, too. It’s easy to write for yourself, but finding someone else who likes it, and who wants to make it into a real, physical Thing? That’s something else entirely.
When can I pre-order it?
Not just yet…. but I should know soonish (meaning, by end of the summer). It’s currently set for a mid-autumn release, so I imagine it’ll turn up online a little before then. I’ll keep you posted. Promise.
Is it going to be available in my country?
This one’s important to me because I know so many folks around the world, and I can tell you that YES it will be available internationally. I get to have some input on that, which I really appreciate. Will be it everywhere? No…. but it’ll be on Amazon in a lot of places, which is fantastic. Again, I’ll keep you posted.
So there you go. If you’ve got any other questions, just ask and I’ll do my best to answer.
Do you want to know my favorite thing about the cover? It’s got my name on it.
Save the Date: Cover Reveal Party!
May 16, 2017 Joanna V.
Hey, all! I’ve got a small bit of NEWS related to my book!
NEXT MONTH, my publisher will be having a cover reveal party and my book is one of the covers they’re showcasing! YAY!
Where: I’ll post here, and on social medias including my Facebook page!
In the meantime, have you read chapter one yet? You can check it out over on the book page!
Book news and website updates PLUS a sneak peak of chapter one!
April 27, 2017 June 12, 2017 Joanna V.
Yesterday was a little busy for me online! If you didn’t notice, I launched a Facebook page where you can follow news updates as I post them, and maybe events and things. I’m not sure yet. It just seemed like a good way to connect with folks who don’t follow me here. Regardless, you can mosey on over here if you like and give me a follow, or maybe share the page. That would be nice.
In the meantime, you may have noticed a few changes to this site in the last two days. It’s nothing huge in terms of design, but you’ll notice some tweaks to the tabs up at the top, including a new one with information about the book. AND if you click on it, you’ll find that there’s a link to a SNEAK PREVIEW. You can read chapter one as well as the summary of what it’s about. Yay!
I can’t post much more than that right now, but I’ll keep updating it with info as I have it, including dates and the cover reveal and all. Stay tuned!
So there’s all the news I’ve got for now! Enjoy the sneak peak!
December 1, 2013 February 3, 2014 Joanna V.
NaNoWriMo is over. I am slightly exhausted but mostly really satisfied. I finished the month with over 75,000 words, which brings my grand total to over 120,000 words. Woot! I’m giving myself at least the next week off to let my poor brain recuperate, then it’s into rewrite-landia.
I think I’m going to change the format of this blog a little bit. Same topics will still be covered, but I’m thinking less of my day-to-day life and more of my thoughts and opinions on things. Maybe I’ll even make you laugh. We shall see.
None of the old posts will go away, but the site itself will probably get a bit of a facelift. Just as a warning.
I hope everyone has had a good November, and here we go, careening into the holiday season. Geronimo!
August 26, 2011 July 18, 2014 Joanna V.
a thing which gave me a small fright.
as it scurried all around.
the action that would be the best.
and seemingly had the last laugh.
for keeping cockroaches at bay.
the giant roach on any count.
for dead he lay upon the floor.
and return my house to status quo!
The End of NaNo 2009… welcome to December.
November 30, 2009 March 14, 2017 Joanna V.
Well, it’s over. NaNoWriMo 2009 is officially a wrap, and I am beyond grateful at the moment. I had fun this year, and I wrote in a genre I’ve never attempted before (Chick Lit) and wound up playing with some definite comedic elements (see the book cover below…), but I’m ready to be finished, to put it down and take a nice, long writing-nap. Of course, I still have to coordinate the TGIO (Thank Goodness It’s Over) Party on Saturday, but there are enough people interested that I think we’ll be all right on that front. These things sort of run themselves, especially if you bring a couple of games, like Apples to Apples. I just have to make sure I have enough stuff to occupy 20+ people, just in case.
November 24, 2009 March 14, 2017 Joanna V.
I’m going to keep writing for the rest of the month, though; the story is interesting enough now, and I kind of like my characters, but there’s still a huge gulf in the middle that is supposed to be The Road Trip. I might save myself from this problem by going back and just giving my characters a pair of plane tickets so I don’t have to deal with charting a course. Or maybe they start to road trip, decide it’s not what they want, and go back to get tickets… or maybe they’ll pack their camping gear and rent a car at the Portland airport, since their ultimate destination is northern Oregon. Yes, I think we can just get rid of the Middle of the current story and it will do just fine. Who needs a road trip, anyway? Not these two.
Today I didn’t find something good about Hawai’i (which is my goal every day), so I will count the fact that the kitties are now adjusted enough that they’re both hanging out downstairs with me; they’re both sitting on the table at the moment so they can keep an eye on me, I think. I’ve given up trying to keep them off of it, so as long as they don’t get up there when we eat and I wipe it down before I use it, I think I’m okay with this. After all, sometimes you have to pick your battles.
Before I sign off, I would like to issue a general apology: I have been terrible at getting in touch this month, I know. And I’m usually short and slightly irritable when I do talk to people. For that, I apologize. Please chalk it up to nearly 60,000 words before Thanksgiving and lots of time in front of the computer to do it. I promise I’ll be back to normal in December. No, really, I will!

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The claimant was represented by Mark Merrow, Esq., 769 Saybrook Road, Middletown, CT 06457.
This Petition for Review from the February 9, 2000 Finding and Order of the Commissioner acting for the First District was heard October 27, 2000 before a Compensation Review Board panel consisting of the Commission Chairman John A. Mastropietro and Commissioners Robin L. Wilson and Leonard S. Paoletta.
JOHN A. MASTROPIETRO, CHAIRMAN. The respondents have petitioned for review from the February 9, 2000 Finding and Order of the Commissioner acting for the First District, as corrected by the trial commissioner on February 20, 2000.1 They contend on appeal that the trier erroneously calculated the claimant’s temporary partial disability compensation rate pursuant to § 31-308(a) C.G.S. by failing to apply the maximum compensation rate in the proper manner. We find no error in the method adopted by the trial commissioner, and affirm his decision.
The claimant sustained compensable injuries to his lower back and right leg on October 7, 1998. As a direct result of those injuries, he remains restricted to light-duty work. His employer has since provided such work for the regular 40-hour workweek. Also, during some weeks, overtime has been made available to other, full-duty employees, but not to the claimant. Prior to his injury, the claimant worked all overtime offered. This board has held that a claimant’s § 31-308(a) [or § 31-308a] partial disability benefits may take into account such overtime pay in this type of situation. Goodwin v. Stop & Shop, 13 Conn. Workers’ Comp. Rev. Op. 301, 1830 CRB-3-93-9 (April 21, 1995). Thus, the trial commissioner chose to include overtime in the wage calculation. That aspect of his ruling has not been challenged on appeal.
Indeed, the issue before us is quite limited. It concerns the correct technique that one uses in calculating benefits under § 31-308(a), which entitles a partially incapacitated claimant to seventy-five percent of the difference between the after-tax wages currently earned by an employee in a position comparable to the position held by the injured employee before his injury, and the after-tax amount the claimant is able to earn after the injury. Section 31-308(a) also limits compensation to “one hundred per cent, raised to the next even dollar, of the average weekly earnings of production and related workers in manufacturing in the state, as determined in accordance with the provisions of section 31-309 . . . .” The sole question before us on review is, at what stage of the calculation is this maximum compensation rate introduced into the financial equation?
The trial commissioner adopted the following approach to calculating the claimant’s wage differential benefits. First, he noted the number of hours of lost overtime in a given week and the relevant hourly pay rate. For example, in the first week, the claimant lost 16 hours of overtime at $20.60 per hour. Next, the trier listed the amount the claimant was able to earn—$824.00 in week one—and the compensation rate that would apply based on that figure—in week one, $514.95. Following that, he noted the amount of wages earned by an employee in a position comparable to that held by the claimant before his injury—for week one, $1153.60, including overtime pay—and the compensation rate that would be derived from that amount under § 31-308(a)—for week one, $688.33. He then listed two proposed compensation rates: the claimant’s proposal ($173.38 for week one), and the respondent’s proposal ($113.05). The claimant’s amount simply reflects the difference between $688.33 and $514.95, while the respondent took the position that the § 31-309 maximum weekly wage of $628.00 should have been invoked as a cap on the $688.33 figure that was used as the minuend2 in the last step of the claimant’s equation. The trier ruled that the claimant’s calculation method was correct, and that his benefit rate should be 75% of the difference between the two adjusted gross income figures, provided that said difference did not exceed the maximum compensation rate of $628.00. The respondent has appealed that ruling to this board.
Taken alone, § 31-308(a) is unambiguous regarding the application of the maximum compensation rate to a temporarily partially disabled claimant. The law states that such an employee’s weekly compensation shall be equal to 75% of the difference between (a) “the wages currently earned by an employee in a position comparable to the position held by the claimant before his injury, after such wages have been reduced by and deduction for federal or state taxes, or both, and for the federal Insurance Contributions Act in accordance with section 31-310,” and (b) the similarly tax-adjusted amount that the claimant is able to earn following his injury. Later, the statute adds a caveat that “compensation paid under this subsection shall not be more than one hundred per cent, raised to the next even dollar, of the average weekly earnings of production and related workers in manufacturing in the state, as determined in accordance with the provisions of section 31-309 . . . .” It would appear difficult to argue that the maximum rate set by § 31-309 should somehow factor into the process of determining the weekly wage before 75% of the actual wage difference has been figured by completing the mathematics in § 31-308(a)’s formula. As the Workers’ Compensation Act is remedial legislation, and “is to be broadly construed to effectuate the purpose of providing compensation for an injury arising out of and in the course of the employment;” Mingachos v. CBS, Inc., 196 Conn. 91, 97 (1985); we are quite reluctant to ignore such clear language in order to apply a more restrictive approach to calculating benefits.
(b) Each August fifteenth, the chairman of the Workers’ Compensation Commission, in consultation with the advisory board, shall publish tables of the average weekly wage and seventy-five per cent of the average weekly wage after being reduced by any deduction for federal or state taxes, or both, and for the federal Insurance Contributions Act, to be effective the following October first . . . . Such tables shall be conclusive for the purpose of determining seventy-five percent of the average weekly earnings of an injured employee after such earnings have been reduced by any deduction for federal or state taxes, or both, and for the federal Insurance Contributions Act made from such employee’s total wages received during the period of calculation of the employee’s average weekly wage for purposes of sections 31-306, 31-307 and 31-308.
According to the respondent, the conclusive nature of these weekly benefit tables makes it mandatory for the trial commissioner to apply them whenever § 31-308(a) benefits are being calculated. These tables allegedly do not permit temporary partial disability calculations using figures that exceed the maximum compensation rate of $628.
Further, the respondent notes that the first paragraph of the instructions on page two of the tables directs the reader to “[c]alculate the employee’s average gross weekly wage” pursuant to § 31-310, and then to locate it in the appropriate column of the tables. The respondent objects that the claimant is attempting to inject a figure other than the average weekly wage into the tables by employing his advocated method of benefit calculation. Respondent’s Brief, p. 5. “[T]he policy behind maximum compensation rates [serves] to phase out loss of earning capacity benefits for a worker who approaches wages in excess of that which the legislature required as sufficient and certain compensation during incapacity.” Id., 5-6.
These arguments are not persuasive. The weekly benefit tables designed by this Commission are conclusive where applicable, but the tables also contain instructions that may be used to calculate taxable weekly wages, federal and state deductions, and weekly workers’ compensation benefits in the event that the tables themselves are insufficient. We have held that the tables do not apply to employees who do not have FICA deductions withheld from their wages; Donahue v. Southington, 4136 CRB-6-99-10 (Nov. 30, 2000); and have cited the legislative history of § 31-310(b) showing that the legislature rejected a bill that would have made use of the tables mandatory for all employees, including those who did not have deductions withheld from their wages. Id., citing 36 H.R. Proc., Pt. 18, 1993 Sess., p. 254-55. The legislature’s rejection of that bill (H.B. 6939) is indicative of its appreciation that some situations might not be covered by the tables, and its recognition that this Commission would devise appropriate calculation methods when such incidences arose. Indeed, this agency issued a memorandum on November 22, 1996, setting forth manual formulas for calculating compensation rates for weekly wages that are not modified by FICA deductions.
There is little reason to suspect that an opposite approach should be adopted here in the case of temporary partial disability calculations that happen to involve numbers exceeding $628 per week. Section 31-308(a) concerns itself with the differences between the amount an employee is able to earn before and after an injury. See, e.g., Heene v. Professional Ambulance Service, Inc., 3743 CRB-6-97-12 (Jan. 8, 1999). A wage-loss differential may present a real-life problem for any worker. Many people live at or near the edge of their means, and a long-term reduction in income can have a profound effect whether someone is earning $500 per week following his injury, or $2000 per week. It is not our place to infer that the legislature did not care about higher-income individuals because it created maximum compensation rates; § 31-309 functions primarily to protect employers from having to pay more than the maximum weekly wage to any given employee. The protection that it affords the respondent is not lost in this case, as the claimant would be unable to collect more than $628 per week regardless of the amount of wages that he lost because of his injury. Vincent v. New Milford, 8 Conn. Workers’ Comp. Rev. Op. 27, 30, 761 CRD-7-88-8 (Feb. 5, 1990). Therefore, we see no reason to overturn the trial commissioner’s use of the claimant’s benefit calculation method.
The trier’s decision is affirmed. Insofar as any benefits due have remained unpaid pending the outcome of this appeal, interest is awarded as required by § 31-301c(b).


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Rohan v. Chater, 98 F.3d 966, 970 (7th Cir. 1996) teaches that ALJs “must not succumb to the temptation to play doctor and make their own medical findings,” a teaching that cases such as Blakes ex rel. Wolfe v. Barnhart, 331 F.3d 565, 570 (7th Cir. 2003) reframe as precluding ALJs from substituting their own opinions to fill gaps in the record.
Recently, in Moreno v. Berryhill, 882 F.3d 722 (7th Cir. 2018), the Seventh Circuit noted that many social security appeals raise two principles that can be in tension with one another. First, Social Security Administrative Law Judges (ALJs) are significantly overburdened with massive caseloads and insufficient resources. Second, ALJs are not doctors.
For many years, the Seventh Circuit has held that an ALJ should not rely on an outdated assessment if later evidence containing new, significant medical diagnoses reasonably could have changed the reviewing physician’s opinion. See Stage v. Colvin, 812 F.3d 1121, 1125 (7th Cir. 2016) (remanding where a later diagnostic report “changed the picture so much that the ALJ erred by continuing to rely on an outdated assessment”); Goins v. Colvin, 764 F.3d 677, 680 (7th Cir. 2014) (remanding after ALJ failed to submit new MRI to medical scrutiny).
In Moreno v. Berryhill, the Court noted that We cannot accept the agency’s argument that the newer mental-health records would not have made a difference because they showed improvement. This argument is based on the ALJ’s own assessment of the more recent records. We have made clear, however, that ALJs are not qualified to evaluate medical records themselves, but must rely on expert opinions. Meuser v. Colvin, 838 F.3d 905, 911 (7th Cir. 2016) (remanding because the ALJ improperly “played doctor”); Goins, 764 F.3d at 680 (prohibiting ALJs from “playing doctor” by summarizing the results of a medical exam without input from an expert).
Subsequently, the Agency filed a petition for panel rehearing, requesting that the panel delete one sentence of the opinion. 2018 WL 1787221. The Agency requested that the panel delete the sentence: “We have made clear, however, that ALJs are not qualified to evaluate medical records themselves, but must rely on expert opinions.” Id. The Agency argued that when “severed from the factual context” the holding could be misinterpreted. Id.
On April 13, 2018, the Court granted the Agency’s request, and substituted a more tailored language: “That assessment was not justified under the circumstances of this case.” Id.

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§ 1302. Area of service.
§ 1303. Purpose of Authority.
§ 1304. Board of Directors.
§ 1305. Powers of the Authority.
§ 1306. Suits and Legal Representation.
§ 1310. Budget and Finance Officer.
§ 1311. Accounts and records.
§ 1312. Taxation of the Authority.
§ 1314. Notification to Municipal Governments regarding projects.
§ 1315. Land acquisition and relocation assistance.
The Inner Faichuk Social and Economic Development Authority is hereby established as a public corporation under the laws of the State of Truk Chuuk and the Federated States of Micronesia. The principal office of the Authority shall be at a location determined by the Board.
Source: TSL 5-67, § 1.
Editor's note: TSL 5-67 that created this chapter was signed into law by the Governor on August 18, 1983.
Source: TSL 5-67, § 2.
The Authority shall identify the development needs of its area of services; and shall promote, by its own activity and that of others, economic development in coordination and cooperation with state and national governments, and private and cooperative enterprises.
Source: TSL 5-67, § 3.
(1) Establishment. There shall be a Board of Directors of the Inner Faichuk Social and Economic Development Authority which shall have general management and control over the Authority.
(2) Composition. The Board shall be composed of seven members. One member from each of the municipalities named in Section 1302, to be appointed by each of the municipal councils thereof, and the two state senators and the national congressman representing the area.
(3) Terms of Office. Terms of office of municipal representatives shall be for a period of three years, except that initial terms of office and filling of vacancies shall be as provided in this Act Chapter. The terms of office shall commence on the day of the first meeting of the Board.
(c) Two for three years.
The first meeting of the Board shall be called by the National Congressman, who shall preside at such meeting until the officers named in Subsection (7) of this Section have been selected.
(5) Vacancies. Each vacancy on the Board shall be filled for the unexpired portion of the term in the same manner as originally filled. Upon a determination that a vacancy exists, the Chairman, or in his absence, the presiding officer of the Board shall issue a notice of vacancy to all members of the Board and to the municipal government responsible for filling the vacancy.
(a) Members of the Board may be removed from the Board, for failure to attend three consecutive meetings of the Board, or for incompetence, neglect of duty, or malfeasance in office.
(b) Removal of a member shall be by a three-fourths (3/4) vote of the other members of the Board. Notification of intent to call for removal pursuant to this Section shall be made at least 30 thirty days in advance, by means which shall be described in the bylaws of the Authority, and shall include a summary of the basis of the charges against the member and identification of the witnesses to be called and evidence to be used.
(c) The Chuuk State Supreme Court of the State of Truk shall have jurisdiction to hear claims of wrongful removal. Upon establishment of the State Court of the State of Truk it shall assume jurisdiction to hear such claim.
(7) Officers. The Board shall elect from among its members a Chairman, Vice-Chairman, and Secretary-Treasurer. The Chairman shall ordinarily preside at Board meetings. In his absence the Vice-Chairman shall preside. The bylaws shall designate the presiding officer in the absence of these officers.
(8) Regular Meetings. Regular meetings shall be held not less than once per calendar quarter, at such time and place as shall from time to time be determined by the Chairman upon notice as shall be provided in the bylaws.
(9) Special Meetings. Special meetings shall be called by the Chairman on his own initiative, or by petition by one-third of the members, pursuant to notice as shall be provided in the bylaws.
(10) Quorum. A quorum of all regular and special meetings and business of the Board shall be six members.
(11) Executive Committee. The Board may, pursuant to its bylaws, establish an Executive Committee, determine the membership thereof, and assign it responsibilities.
(12) Record of Meetings. All meetings of the Board and the Executive Committee shall be public except when confidential matters relating to personnel are discussed. The Secretary-Treasurer or in his absence another member designated by the bylaws shall keep full and accurate minutes of all meetings which, except for confidential matters relating to personnel, shall be available for public inspection at reasonable times and places, as provided by law.
Source: TSL 5-67, § 4, modified.
(13) To approve bylaws, policies, and procedures, for the guidance and operation of the Authority.
Source: TSL 5-67, § 5.
(2) The Chuuk State Attorney General of Truk shall represent and assist the Authority in legal matters, except in cases of conflict of interest.
Source: TSL 5-67, § 6.
(2) The Authority may purchase supplies, equipment, and materials through its own purchasing procedures or governmental purchasing procedures as it may deem appropriate.
Source: TSL 5-67, § 7.
The Board shall prepare and submit a budget for the Authority for each governmental fiscal year, in the manner provided by law for the preparation and submission of budgets of departments and offices in the State Government of Truk Chuuk. Over-obligation and over-expenditure of funds are prohibited, and shall be punishable in the same manner as provided for the State Government of Truk Chuuk.
Source: TSL 5-67, § 8.
There shall be an Executive Director of the Authority, who shall be appointed by the Board to serve at its pleasure. The Board shall establish the salary of the Executive Director. The Executive Director shall be responsible for the management of the programs, projects, and other activities of the Authority, and shall employ, supervise, and terminate the employees of the Authority in accordance with general terms and rules of employment by the Board, except as provided in Section 1310 of this Chapter thereof.
Source: TSL 5-67, § 9, modified.
The Executive Director shall appoint, with the concurrence of the Board, a Budget and Finance Officer, for such term as shall be provided in the bylaws. The Budget and Finance Officer shall receive and disburse all funds of the Authority. Before entering into his duties, he shall execute, at the expense of the Authority, a good and sufficient bond in the sum of not less than $10,000.00, or such greater sum as may be established by the Board. Said bond shall be made with one or more sufficient sureties authorized to do business in the Federated States of Micronesia; and shall be approved as to form by the Attorney General of the State of Truk Chuuk. The Budget and Finance Officer shall serve at all times under the direct supervision of the Executive Director.
Source: TSL 5-67, § 10.
The Board and the Executive Director shall be jointly responsible to ensure that the Budget and Finance Officer prepares proper and complete books of accounts reflecting all income, expenditures, assets, and liabilities of the Authority, including appropriations, grants, and property. The Board, not later than 60 sixty days after the close of each governmental fiscal year, shall submit to the Governor and the President and Speaker of the Legislature a complete report showing the activities of the Authority during the fiscal year, the present condition of the Authority, and such other matters as the Board shall deem appropriate. The Auditor, or if there be no such officer, a licensed accountant appointed by the Board, shall inspect and audit all accounts of the Authority at least annually, and report thereon to the Governor and President and Speaker of the Truk Chuuk State Legislature.
Source: TSL 5-67, § 11, modified.
To the extent that the legislative capacity of the State of Truk Chuuk can prescribe, the Authority shall be treated as a governmental entity and shall be exempted from taxation in the same manner as a governmental entity with regard to its functions that are governmental in character. With respect to functions that the Authority may undertake that are commercial in character, the Authority shall be treated as a non-profit commercial enterprise.
Source: TSL 5-67, § 12.
(4) The Truk Chuuk State Government shall provide to all former employees of the Authority, who shall have terminated their employment in good standing, such rights of employment and seniority as their service to the Authority, as well as prior government service, would entitle them as if all such service were with the Truk Chuuk State Government, the Government of the Federated States of Micronesia or the Trust Territory Government.
Source: TSL 5-67, § 13, modified.
The Authority shall endeavor to inform affected municipal governments of any projects planned for their communities at the earliest practical opportunity and shall continue to inform the municipal governments and members of the public of the nature of the projects and any substantial changes in their plans.
Source: TSL 5-67, § 14.
(2) The Authority shall promptly notify the State Government whenever it requires use or acquisition of private real property of the State or the Public Lands Authority. The notification shall describe with specificity the property to be used or acquired, the reasons for its need, the extent and duration of possession required, alternative possibilities that have been considered and rejected and the reasons therefor, and the date by which such acquisition or use is in expected to commence. Any rights in private property acquired for the benefit or use of the Authority shall be held by the State Government, except as otherwise specifically provided by the law.
Source: TSL 5-67, § 15.


Susan (“Sue”) Armour is a highly experienced paralegal at Dietze and Davis, P.C., and currently works with our Domestic Relations and Family Law group. Sue began her career as a paralegal in 1979, working for eight years at a firm in Nebraska before moving to Colorado. She also has experience working in the area of civil and general litigation. Married to Tom Armour for almost 40 years, Sue is the proud mother of two daughters, Amy and Andrea, and four granddaughters, Melissa, Mila, Sloan and Bryn. When away from work, Sue enjoys knitting, scrapbooking, reading, and the occasional trip to the casino.
On June 27, 2016, the Colorado Supreme Court decided Warne v. Hall, 353 P.3d 588, and in so doing adopted the “plausibility” standard for state district court pleadings, bringing the pleading standard under C.R.C.P. 8 in line with its federal counterpart. Originally, Hall brought a claim for intentional interference with contract against Warne in Colorado district court. Warne moved to have the claim dismissed for failure to state a claim upon which relief could be granted pursuant to C.R.C.P. 12(b)(5). The district court granted Hall’s motion and dismissed the case. The Court of Appeals reversed, finding that Hall’s complaint was sufficient under the “no set of facts” pleading standard that has long been applied by Colorado courts. The Colorado Supreme Court reversed the Court of Appeals and adopted the “plausibility” standard applied in federal courts.
The “no set of facts” standard states that a complaint should not be dismissed for failure to state a claim unless it appeared beyond a doubt that a plaintiff could prove no set of facts in support of his claim that would entitle him or her to relief. As noted, the Court of Appeals felt bound by this standard in Warne v. Hall because it has been the standard in Colorado for more than 50 years.
The “plausibility” standard requires that in order to survive a motion to dismiss, the factual allegations of a complaint must raise a right to relief above the speculative level, and provide plausible grounds that the complainant is entitled to relief. This standard has been the standard for pleadings in federal court since the U.S. Supreme Court decisions Bell Atlantic Corp. v. Twombly (2007) and Ashcroft v. Iqbal (2009).
In discussing whether to expressly adopt this standard, the Colorado Supreme Court noted that it had always considered it preferable to interpret the Colorado Rules of Civil Procedure harmoniously with its understanding of the similarly-worded federal rules. The Court explained several benefits of this philosophy, including the desire to promote confidence in the judicial process and the objective interpretation of codified law, making the transition between practicing in state and federal court easier for practitioners, and preventing forum-shopping that results from different forums using different rules.
In addition, the Court found that adopting the “plausibility” standard would not be a meaningful departure from the “no set of facts” standard because, even if the no set of facts standard had been met in some cases, courts had been known to still dismiss allegations that were too conclusory, or when the court simply found that a claim was insufficient because it merely asserted a theory without alleging facts which, if proved, would satisfy the elements of the claim.
Perhaps most importantly, the Court noted that adopting higher standard for initial pleading would likely assist in weeding out groundless complaints in the early stages of litigation. By holding complainants to this higher standard, courts would achieve the very desirable goal of expediting litigation and avoiding unnecessary expenses. A problem with the “no set of facts” standard was that a complainant could often resist a motion to dismiss by merely alleging unsupported or conclusory facts that, if assumed to be true, would entitle them to relief. Then, the complainant could utilize the slow, costly discovery process to determine whether a factual basis actually existed for the claim.
So what does the Warne decision mean for practitioners in Colorado and their clients? Clearly, the standard has been changed, but what effect does it actually have on the litigation process?
The distinction, as the Court put it, is that the “no set of facts” standard permitted the complainant to rely on the compulsory process available to civil actions to discover whether grounds for the action exist, and the “plausibility” standard bars such reliance without being able to first allege plausible grounds for relief. In other words, complainants will not be permitted to simply state facts that, if true, would entitle them to relief and then rely on the discovery process to prove up their claims. Rather, they must now not only allege facts that, if true, would entitle them to relief, but also ensure that the facts as pled show that it’s actually plausible that they’re entitled to relief.
In practice, this means practitioners should, as much as possible, avoid making conclusory allegations disguised as facts and ensure to provide a specific factual basis that entitles their client to relief. In Warne, for example, the Supreme Court found that Hall’s claims were insufficiently pled because he relied on conclusory allegations and allegations that if true, would not be considered improper conduct (a necessary element for an interference with contract claim). Since conclusory allegations are not entitled to a presumption of truth, and because Warne’s conduct as alleged did not rise to the level of impropriety, the Court concluded that Hall’s claims, as pled, did not allege plausible grounds for relief—even if they would have satisfied the “no set of facts” standard. Practitioners should avoid pleading conclusory and unsupported allegations anyway, but it is now clear that Colorado courts will be reviewing claims with greater scrutiny and placing a greater burden on the complaining party. Practitioners seeking to dismiss insufficiently-pled claims should, conversely, look forward to facing less resistance in seeking to have those claims thrown out. Finally, practitioners can hopefully look forward to avoiding the time, cost, and frustration of litigating unsupported and groundless claims.
House Bill 16-1165 will usher in some changes to Colorado’s child support statutes, C.R.S. §14-10-115 and C.R.S. §14-10-122 effective January 1, 2017.
The bill expands child support enforcement agencies’ ability to lien and attach assets to collect past due child support. Specifically, C.R.S. §14-10-122(1.5)(c) and C.R.S. §26-13-122 permit child support enforcement agencies to issue a notice of administrative lien and attach any insurance claim payments, awards, or settlements due to an obligor who is responsible for past due child support.
H.B. 16-1165 also expands the enumerated factors a Court can consider in determining whether a deviation from the child support guidelines is appropriate. Effective January 1, 2017, the court can consider whether one parent spends substantially more time with a child than is reflected by a straight calculation of overnights, in determining whether the application of the child support guidelines would be inequitable, unjust or inappropriate.
Changes to C.R.S. §14-10-115(14) will require parties to exchange information relevant to child support calculations at least once per year, for the purpose of updating and modifying child support, unless the Court orders otherwise. The change to this section makes an annual exchange of financial information to review child support orders information mandatory, absent an order of the Court.
One other substantive change that will be effective January 1, 2017 relates to retroactive child support. Specifically, the court’s ability to retroactively modify child support, based on a mutually agreed upon change of physical custody, will be limited to five years prior to the filing of a motion to modify child support. The court does retain the power to disregard the five year prohibition on retroactive child support if the court finds that doing so would be inequitable, unjust or inappropriate.


Taxpayers wishing to contest adverse determinations of the Tax Appeals Tribunal generally have only one choice: an Article 78 proceeding to review the determination of a “state body” (i.e., the Tax Appeals Tribunal), pursuant to CPLR §7804. Article 78 review must be commenced within 4 months following an adverse decision by the Tax Appeals Tribunal. A CPLR Article 78 proceeding is the “dotted line” in the flowchart that brings the tax dispute out of administrative tribunal system and into the New York judicial court system. From a tax petitioner’s standpoint, Article 78 is far from perfect: it possesses treacherous statutes of limitations, it is inherently capable of providing only narrowly circumscribed relief, and it imposes onerous bonding requirements. Still, like the Spirit of St. Louis, Article 78 will at least take the taxpayer into the courtroom of the Appellate Division, where counsel may be able to convince the Court of reversible error below.
An Article 78 petition is returnable to the Appellate Division, 3rd Department, in Albany. If corporate sales tax is in issue, the taxpayer must deposit the tax or post an undertaking. No undertaking is required to seek review of personal income and corporate tax determinations, including responsible person determinations; however, assessment and collection of these taxes may proceed during the pendency of an Article 78 proceeding.
The actual Article 78 proceeding is commenced by service of a Notice of Petition and Petition upon the parties described above made returnable to the Appellate Division, 3rd Department, on at least 20 days’ notice. At least five days before the return date of the Petition, the Commissioner must appear by serving an answer, or otherwise moving to dismiss. (A motion to dismiss could be based upon a lack of jurisdiction for failing to properly serve all parties or for failing to obtain the required bond, or dismissal could result from failing to state a cause of action.)Judicial review is limited to the record before the agency — no new evidence may be submitted. The stipulated record and a brief must be filed within 9 months after the date of commencement of the proceeding.
CPLR § 217 provides that “a proceeding against a body . . . must be commenced within four months after the determination to be reviewed becomes final and binding.” Tax Law §2016 provides that the four-month period commences after notice of the Tax Appeals Tribunal is served. The statute then provides that “service by certified mail shall be complete upon deposit of such notice . . . in a post office.” Therefore, the taxpayer actually has less than four months from receipt of the notice in which to commence an Article 78 proceeding. The Department of Taxation keeps meticulous records, including affidavits by clerks, concerning the manner in which certified copies of decisions are mailed.
Therefore, the Department of Taxation, the Tax Appeals Tribunal and the Attorney General must all be served in an Article 78 proceeding. One might also assume that since the taxpayer may be served with notice of the Tax Appeals Tribunal decision by certified mail, the taxpayer could, similarly, commence an Article 78 proceeding by serving the three required recipients by certified mail. This is not the case: Although CPLR §307(2) does provide that personal service may be effected upon a state agency (i.e., Department of Taxation and Tax Appeals Tribunal) by certified mail, § 307(1) appears to require personal delivery by a process server upon the Attorney General.
Additionally, one more trap awaits the unwary regarding service of process by certified mail: CPLR §307(2) provides that such service is not effective unless “the front of the envelope bears the legend “URGENT LEGAL MAIL.” Given the tangle of statutory provisions governing service, it would appear far preferable to serve all parties personally by process server, rather than to serve by certified mail and hope that all statutory requirements have been met. Although the taxpayer may have contested the deficiency to the Tax Appeals Tribunal without paying any disputed tax, this courtesy of the New York Legislature ends at the filing of the Article 78 petition, at least with respect to some types of tax.
Thus, a jurisdictional prerequisite to instituting an Article 78 proceeding involving, inter alia, sales tax or real property transfer gains tax, is the filing of a bond to cover contested amounts and court costs. Although a bond is not required in order to initiate an Article 78 proceeding based upon deficiency relating to income tax, the Department may nevertheless assess and collect a deficiency during the pendency of such an Article 78 proceeding. If the Department decides to assess tax during the proceeding, the taxpayer must either pay the deficiency or file a bond (a letter of credit may also be acceptable to the Department) pending ultimate disposition of the case.
Although it may seem unjust for the Appellate Division to dismiss meritorious cases on procedural grounds such as the failure to serve the Article 78 petition in the proper manner — and perhaps it is unjust — a body of case law has evolved which makes it virtually impossible for a court to entertain a petition which suffers from jurisdictional defects. The petition must be verified (CPLR §7804) and must comply with all provisions of the CPLR which govern pleadings.
Thus, it must make factual allegations in separately numbered paragraphs and must state a legally cognizable cause of action, or the action will be susceptible to a motion to dismiss. The Court of Appeals held in Spodek v. New York State Com’r. of Taxation and Finance, 628 N.Y.S.2d 256 (1995), that the commencement-by-filing provisions in CPLR §304 apply to proceedings originating in the Appellate Division. Thus, before service of the Article 78 petition on the required recipients, the Petition must be filed (and an index number purchased) from the Clerk of the Appellate Division.
After purchasing the index number, personal service (preferably by a process server) must be made on the recipients. After such service is complete, proof of such service must be filed with the Appellate Division “not later than 15 days after the date on which the [four-month] statute of limitations expires.” CPLR § 306(b) Pursuant to Tax Law § 2016, the taxpayer must include as part of the petition (1) the determination of the Administrative Law Judge (ALJ), (2) the decision of the Tax Appeals Tribunal, (3) the transcript of the hearing (if any) before the ALJ, and (4) any exhibit or document submitted into evidence at any stage in the proceeding. Judicial review of the agency determination will be limited to a review of the record.
After issue has been joined (i.e., the Department has served an answer or moved to dismiss), and within nine months of the date of the Notice of Petition, the taxpayer must file with the Appellate Division an original and nine copies of a reproduced full record, as well as ten copies of the taxpayer’s brief. In reviewing the determination of the Tax Appeal Tribunal, CPLR §7803 provides that the determination will be upheld if it is supported by “substantial evidence.” In addition, the burden of proof is generally on the taxpayer to show that the agency determination was arbitrary or capricious, or not supported by the evidence. This includes responsible person determinations made under the income and sales tax laws for corporate officers and employees.
After submission of the record and brief, oral argument is scheduled. Taxpayer’’s counsel is generally allowed 15 minutes for oral argument. Approximately six weeks later, the Court will render a full opinion or memorandum decision. The prevailing party will then draft a proposed order for execution by the Appellate Division Clerk. After service of this order with Notice of Entry, the nonprevailing party will then have 30 days in which to seek leave (permission) to appeal to the Court of Appeals. The Court of Appeals seldom grants leave to appeal in tax cases.