which, in case of loss from sales, is limited by §§ 111 and 23(r) of the Act; T.R. 77, Art. 282. P. 305 U. S. 81.
2. Treasury regulations and interpretations long continued without substantial change, applying to unamended or substantially reenacted statutes, are deemed to have received congressional approval, and have the effect of law. P. 305 U. S. 82.
3. The general provision of T.R. 77, Art. 121, that "[a]mong the items included in business expenses are . . . commissions," is limited by the special provision of id., Art. 282, designating security purchase commissions as a "part of the cost price of such securities." P. 305 U. S. 83.
4. The addition of § 23(r) of the Revenue Act of 1932 did not indicate a purpose to alter or repeal the administrative interpretation under which brokers' commissions have uniformly been construed as a part of the cost of the securities purchased, and not as current business expenses. P. 305 U. S. 84.
5. Congress has power to limit or deny deductions from gross income in the computation of income taxes. P. 305 U. S. 84.
Certiorari, 303 U.S. 633, to review a judgment which reversed a decision of the Board of Tax Appeals, 35 B.T.A. 804, sustaining an income tax assessment.
"All the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including a reasonable allowance for salaries or other compensation for personal services actually rendered. . . ."
engaged in the "business" of buying and selling securities, and that the brokerage commissions amounted to "compensation for personal services actually rendered" within the meaning of Section 23(a).
was engaged in the "business" of buying and selling securities, and the brokers' commissions were not a "part of the cost" of the securities purchased, but were ordinary business expenses (as defined in § 23(a)), respondent was justified in deducting the brokers' commissions from his gross income for the taxable year. However, if these commissions represent a part of the cost of the securities, respondent's right to deduct is limited by § 23(r).
Article 282, Treasury Regulation 77, issued under the 1932 Act, provides that "Commissions paid in purchasing securities are a part of the cost price of such securities." If this regulation governs, the respondent's contention cannot be sustained.
substantially retained the original taxing provisions on which these regulations have rested.
"It has long been a settled rule of the Treasury Department that commissions paid in purchasing securities are a capital expenditure as part of the cost price of the securities."
". . . commissions [paid for marketing bonds] do not differ from brokerage commissions paid upon the purchase or sale of property. The regulations have consistently treated such commissions not as items of current expense, but as additions to the cost of the property or deductions from the proceeds of sale in arriving at net capital profit or loss for purposes of computing the tax. [Footnote 8]"
Nor can it be inferred that the addition of § 23(r) to the 1932 Act indicated any congressional purpose to alter or repeal the long-existing administrative interpretation of nondeductible capital expenditures under which brokers' purchase commissions have been uniformly considered as a part of the cost of securities, and not as current business expenses. This new statutory restriction of the allowance for losses from sales of stock bears no such relationship to the definition of cost price of securities as to lead to the conclusion that Congress intended to overthrow and abandon a settled practice of determining the elements of cost.
The brokers' purchase commissions here constituted a part of the acquisition cost of the securities involved, and are not allowable to the taxpayer as a deduction from gross income under § 23(a) of the Revenue Act of 1932. Congress, in the exercise of its power to deny or limit deductions from gross income, [Footnote 10] has -- by § 23(r) -- limited this taxpayer's allowable deduction. He has a right to a deduction "only to the extent of . . . gains from . . . sales or exchanges of stocks and bonds" as therein provided. The fact -- if it be a fact -- that respondent was engaged in the business of buying and selling securities does not entitle him to take a deduction contrary to this provision.
The cause is reversed and remanded to the Circuit Court of Appeals for action in harmony with this opinion.
"Sec. 111. Determination of amount of gain or loss."
"(a) Computation of gain or loss. Except as hereinafter provided in this section, the gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the adjusted basis provided in section 113(b), and the loss shall be the excess of such basis over the amount realized."
"Sec. 113. Adjusted basis for determining gain or loss."
"(b) Adjusted basis. The adjusted basis for determining the gain or loss from the sale or other disposition of property, whenever acquired, shall be the basis determined under subsection (a), adjusted as hereinafter provided."
"(1) General rule. Proper adjustment in respect of the property shall in all cases be made --"
"(A) for expenditures, receipts, losses, or other items, properly chargeable to capital account, including taxes and other carrying charges on unimproved and unproductive real property, but no such adjustment shall be made for taxes or other carrying charges for which deductions have been taken by the taxpayer in determining net income for the taxable year or prior taxable years. . . ."
"Sec. 23. Deductions from gross income. In computing net income, there shall be allowed as deductions:"
"(r) Limitation on Stock Losses."
"(1) Losses from sales or exchanges of stocks and bonds (as defined in subsection (t) of this section) which are not capital assets (as defined in section 101) shall be allowed only to the extent of the gains from such sales or exchanges (including gains which may be derived by a taxpayer from the retirement of his own obligations)."
See Art. 8, Paragraph 108, T.R. 33 (Revised 1918).
Art. 293 of T.R. 45 (1918), 62 (1921); Art. 292 of T.R. 65 (1924), 69 (1926); Art. 282 of T.R. 74 (1928), 77 (1932); Art. 24-2 of T.R. 86 (1934), 94 (1936).
United States v. Dakota-Montana Oil Co., 288 U. S. 459, 288 U. S. 466; Old Mission Portland Cement Co. v. Helvering, 293 U. S. 289, 293 U. S. 293-294.
Helvering v. Union Pacific R. Co., 293 U. S. 282, 293 U. S. 286.
Similarly, if the specific provisions of Article 282 are valid and have the present effect of law, respondent's contention that the commissions are uncompensated losses within the meaning of the general provisions of § 23(e)(1) of the 1932 Act is unavailing.
See Helvering v. Independent Life Ins. Co., 292 U. S. 371, 292 U. S. 381.


In Save Lafayette Trees v. City of Lafayette (2018) 28 Cal. App. 5th 622, the First District Court of Appeal held that a letter of agreement for removal of protected trees was the equivalent of a permit under the municipal code and, therefore, challenges to its approval were subject to the filing and service limitations of Government Code section 65009(c)(1)(E) (Section 65009). However, CEQA claims related to the approval were subject to the more specific filing and service limitations in Public Resources Code sections 21167 and 21167.6.
On March 27, 2017, the City of Lafayette (City) approved a letter of agreement for removal of up to 272 trees in the local natural gas pipeline right-of-way by Real Party in Interest PG&E. On June 26, 2017 petitioners Save Lafayette Trees, Michael Dawson, and David Kosters (collectively Save Lafayette) filed a petition challenging the City’s action. The petition was served on the City on the next day.
The petition alleged that the City (1) failed to comply with CEQA; (2) violated the substantive and procedural requirements of the planning and zoning law, the city’s general plan, and the City’s tree ordinances; (3) violated the due process rights of the individual petitioners by failing to provide sufficient notice of the agreement review hearing; and (4) proceeded in excess of its authority and abused its discretion in completing each action.
PG&E filed a demurrer to the petition on the grounds that it was barred by Section 65009, which requires that an action regarding a zoning permit be filed and served within 90 days of the decision. Save Lafayette failed to meet this requirement by serving the City on the 91st day. The trial court sustained the demurrer without leave to amend and dismissed the petition. Save Lafayette timely appealed.
Save Lafayette claimed that Section 65009 was only intended to apply to permits and variances related to relieving the state housing crisis and, thus, did not apply. The Court disagreed because courts have applied the statute to challenges in a broad range of local zoning and planning decisions.
The Court also dismissed Save Lafayette’s claim that the City was not the proper reviewing body for the statute. Save Lafayette claimed that the City was not explicitly listed as a legislative body whose actions were subject to Section 65009. Citing relevant precedent, the Court held that it is “the underlying decision being reviewed [that] determines the applicability of Section 65009,” not the body deciding it.
Save Lafayette also argued that it should be excused from compliance with Section 65009 as the City failed to provide written notice of the approval prior to the meeting, as required by Government Code section 65905 and the due process clause of the Constitution. The Court held that the City complied with the Brown Act and provided adequate notice as Save Lafayette failed to present any facts to support a conclusion that they were entitled to personal service.
Finally, the Court held that the CEQA cause of action was timely filed and served and therefore reversed and remanded as to the CEQA cause of action. Relying on Royalty Carpet Mills, Inc. v. City of Irvine (2005) 125 Cal.App.4th 1110, the Court held “when two statutes relate to the same subject, the more specific one will control unless they can be reconciled.” Section 65009 and Public Resources Code sections 21167 and 21167.6 relate to the same subject, the time period for service. In Royalty Carpet, the court held that the shorter statute of limitation and service requirement set forth in Public Resources Code sections 21167(b) and 21167.6(a) do not require automatic dismissal and, therefore, can be harmonized with the 90-day service requirement set forth in Section 65009(c)(1)(E). Here, however, the Court concluded the longer 180-day requirement set forth in Public Resources Code section 21167(a) applied and that requirement could not be reconciled with Section 65009(c)(1)(E)’s shorter 90-day service requirement. As a result, unlike in Royalty Carpet, the two applicable statutory provisions could not be reconciled. Because the applicable statutory provisions could not be reconciled, the more specific Public Resources Code provisions set forth in Public Resources Code sections 21167(b) and 21167.6(a) prevailed. Therefore, the Court concluded that Save Lafayette’s CEQA claims were timely.
The Court affirmed the trial court ruling in part, sustaining the demurrer as to the second, third, and fourth causes of action, and reversed in part, finding the demurrer improper as the CEQA cause of action.
The more-specific filing and service timing requirements of the Public Resources Code apply to CEQA claims rather than the service and timing requirements in the Government Code.
In Communities for a Better Environment v. Bay Area Air Quality Management District, 2016 Cal. App. LEXIS 596, Petitioners challenged Bay Area Air Quality Management District’s (BAAQMD) July 2013 determination that the approval of the Richmond rail-to-truck facility to transload crude oil instead of ethanol was ministerial and therefore not subject to CEQA. BAAQMD did not provide the public with notice of its determination and Petitioners did not learn of the decision until January 31, 2014, when one of Communities for a Better Environment’s staff members received an email disclosing the change from ethanol to crude oil.
Petitioners filed their petition in March 2014 and it was subsequently dismissed by the trial court as untimely. Petitioners appealed, arguing that the so called “discovery rule” applied. In the typical case, the discovery rule postpones the accrual of an action from the date an injury occurs until the date the plaintiff has actual or constructive notice of the facts constituting the injury. Petitioners argued that the discovery rule should apply in this case because there was no way to discover that the approval had taken place—they claimed that the transloading operation is entirely enclosed, making any changes invisible to the public.
The appellate court held that the discovery rule did not extend the statute of limitations in this case because the legislature created the applicable triggering dates when drafting the statute and those dates, providing constructive notice to Petitioners, had occurred. Specifically, an action to challenge a determination that a project is not subject to CEQA accrues on one of three alternative dates set forth in Public Resources Code section 21167, subdivision (d): (1) filing of a notice that the project is not subject to CEQA, which triggers a 35 day statute of limitations; (2) if no notice is filed, then within 180 days of the agency’s formal decision to carry out or approve the project; or (3) if there is no formal determination, then within 180 days from the commencement of the project.
The court distinguished the situation from Concerned Citizens of Costa Mesa, Inc. v. 32nd District Agricultural Association (1986) 42 Cal.3d 929, where the Supreme Court held that an action accrues on the date a plaintiff knew or reasonably should have known of the project only if no statutory triggering date has occurred. Here, the court held that the triggering dates had occurred, even if they were not apparent to Petitioners.
While the court acknowledged that public participation may be served by applying the discovery rule in cases such as this, where no notice is given and there is virtually no indication to the public that the project has been approved and commenced, it concluded that it could not read such an exception into the statutory text, such a change would have to be initiated by the Legislature.
A proposal to pump fresh groundwater from an underground aquifer located in the Mojave Desert (“Project”) resulted in six related cases. On May 10, 2016, the Fourth Appellate District upheld the Project in all six cases: Delaware Tetra Technologies, Inc. v. County of San Bernardino, 2016 Cal. App. Lexis 380, 2016 Cal. App. Unpub. LEXIS 3434, 2016 Cal. App. Unpub. LEXIS 3438, 2016 Cal. App. Unpub. LEXIS 3439, and Center for Biological Diversity v. County of San Bernardino, 2016 Cal. App. Lexis 382 and 2016 Cal. App. Unpub. LEXIS 3441.
The proposed Project is a public/private partnership designed to prevent water waste caused by brine and evaporation, and to ultimately transport water to customers in Los Angeles, Orange, Riverside, San Bernardino, and Ventura Counties. Once in operation, the Project would appropriate an average of 50,000 acre feet of groundwater over a period of 50 years. The groundwater extraction would be subject to the County’s 2002 Groundwater Ordinance, which was designed to ensure that groundwater extractions maintain safe yield of affected aquifers.
In March 2011, the Santa Margarita Water District (“Santa Margarita”) posted a notice of preparation of a draft Environmental Impact Report (“EIR”) for the Project. Under a June 2011 agreement, Santa Margarita agreed to act as the lead agency and San Bernardino County (“County”) agreed to act as a responsible agency. The Draft EIR was released for public review and comment in December 2012. During the EIR process, Santa Margarita, the County, the landowner, and Fenner Valley executed a memorandum of understanding (“MOU”) in which the parties agreed that a groundwater management, monitoring and mitigation plan would be developed in connection with the finalization of the EIR. The Final EIR was certified in July 2012.
In the first published case, Delaware Tetra Technologies, Inc. challenged the County’s resolution authorizing the execution of the 2012 MOU, arguing that the County should have completed an environmental review under CEQA prior to approving the MOU.
Applying the de novo standard of review, the Court concluded that environmental review was not required because establishing a groundwater management, monitoring and mitigation plan under the MOU would not cause a direct, or a reasonably foreseeable indirect, physical change in the environment. Moreover, the MOU did not foreclose alternatives or mitigation measures, nor commit the County to a particular course of action that would cause an environmental impact. Rather, the MOU established that the County still retained full discretion.
In the second published case, the Center for Biological Diversity, the San Bernardino Valley Audubon Society, Sierra Club, and National Parks Conservation Association (collectively, “CBD”) filed a petition for writ of mandate challenging the approval of the Project under CEQA. The Court concluded that Santa Margarita did not abuse its direction when it approved the Project and certified the EIR.
The court first held that Santa Margarita was properly designated as a lead agency because it was jointly undertaking the Project with the landowner and because it was the agency with the principal authority to approve and supervise the Project. Next, the Court held that the Project description, which characterized the Project as “a means of conserving water,” was not misleading because the Project would conserve water otherwise lost to brine and evaporation.
Finally, the Court rejected CBD’s contentions that the EIR did not provide an accurate duration for pumping by the Project and would result in more water being withdrawn than was contemplated and discussed by the EIR. Although the EIR recognized that the parties may choose to extend pumping for an additional term after the stated completion date of the Project, the Court found that the additional term was not reasonably foreseeable and noted that any additional term would require additional environmental review. The court further noted that the EIR did not permit withdrawal of water in excess of the amounts identified.
In holding that the MOU was not a “project,” the Court reaffirmed the principles of Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116 regarding when an activity constitutes a “project” subject to environmental review. Memoranda of Understanding will not require environmental review under CEQA where they do not commit a lead agency to a particular course of action, foreclose alternatives or mitigation measures, or result in environmental impacts.
In addition, the Court reaffirmed in several different contexts that a court’s role is not to “pass upon the correctness of the EIR’s environmental conclusions, but only upon its sufficiency as an informative document.” Petitioners bear the burden of describing the lead agency’s supporting evidence and showing how it is lacking.
In an unpublished opinion, Save Sunnyvale Parks & Schools v. City of Sunnyvale, 2016 Cal. App. Unpub. LEXIS 1146, the Sixth Appellate District affirmed the trial court’s ruling and rejected challenges to the City’s approval of the sale of the Raynor Activity Center (“RAC”) to Stratford Schools, a private school.
The City had previously declared that the RAC was a surplus property and had begun a competitive bidding process for its sale. Negotiations with Stratford resulted in a proposed agreement to sell the property for $14,050,000, with a joint use agreement that gave Stratford priority use of certain areas in the adjacent, City-owned Raynor Park. The proposed sale agreement required the City to conduct an environmental analysis under CEQA as part of the permitting process. Petitioner Save Sunnyvale Parks (“Petitioner”) sought a writ of mandate to compel the City to rescind the sale and joint use agreements, arguing that the City approved the agreements without first complying with CEQA and that the agreements violated the Public Park Preservation Act of 1971 (“Park Act”).
First, the court held the City did not violate the Park Act, which requires that all the funds received by a local government from the sale of park land be used to obtain or provide substitute park land and facilities. The court held that under the “home rule” doctrine, the Park Act did not apply to a charter city like Sunnyvale because the preservation of public parks is not a matter of statewide concern.
Next, the court rejected Petitioner’s claim that the City approved the sale and joint use agreements before conducting CEQA review in violation of the principles articulated in Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116. The court found that Petitioner’s Save Tara claim was barred because it had not satisfied the “issue exhaustion requirement” of Public Resources Code section 21177(a), which prohibits a legal action from being commenced unless the grounds for noncompliance were presented to the public agency during the administrative process. The court found that the public comments submitted were far too general to satisfy the issue exhaustion requirement, and that the notices or staff reports prepared by the City sufficiently notified the public of the City’s conclusions regarding the timing of CEQA review and the proposed agreements.
Finally, the court rejected Petitioner’s claim that the issue exhaustion requirement impermissibly infringed its rights to petition the government for redress of grievances as guaranteed in California Constitution Article I, § 3. The court held that the right to petition does not excuse compliance with the issue exhaustion requirement and noted that Petitioner was not denied access to the courts in this case––its claims were considered by both the superior and appellate court.
On September 17, 2015, the California First District Court of Appeal struck another blow to the beleaguered 8 Washington Street Project in Defend Our Waterfront v. California State Lands Commission, 2015 Cal. App. LEXIS 817, when it upheld the trial court’s ruling that a necessary land transfer between the State Lands Commission and the City of San Francisco did not qualify for an obscure CEQA exemption.
Developers San Francisco Waterfront Partners II, LLC and Pacific Waterfront Properties LLC have been attempting to build luxury condominiums on waterfront land near the San Francisco Ferry Building for almost a decade. In 2012, the project seemed to be on track. The Planning Commission certified the project’s FEIR, the Board of Supervisors affirmed the certification, and the developers were issued a conditional use authorization. At that point, only one hurdle remained—removing the public trust restrictions from the waterfront land.
The site for the project includes a parcel of property commonly referred to as “Seawall Lot 351,” which includes a public trust restriction due to the fact that the area was previously submerged land under the San Francisco Bay. To allow the development to proceed on Seawall Lot 351, the developer and the City devised a plan to transfer the lot out of the public trust and replace it with a different parcel of property pursuant to a land exchange agreement with the State Lands Commission. In August 2012, the State Lands Commission approved the land exchange agreement and found that the agreement is a statutorily exempt activity under CEQA pursuant to Public Resource Code section 21080.11.
Defend Our Waterfront (DOW) challenged the State Lands Commission’s reliance on the exemption. In early 2014, the trial court held the exemption was inapplicable and invalidated the land transfer.
On appeal, the First District upheld the lower court’s ruling. The Court began by rejecting State Lands Commission’s argument that DOW failed to exhaust their administrative remedies. DOW formed after the State Land Commission’s decision to approve the land swap. The State Lands Commission argued that Public Resources Code section 21177, subdivision (c), requires that a member of the after-formed organization must have raised the CEQA issue during the agency proceeding. The Court did not reach the merits of this argument because it determined that the State Lands Commission had provided inadequate notice of the meeting in violation of section 21177, subdivision (e), excusing DOW from the exhaustion requirement.
Specifically, the Court held that a meeting agenda posted on the State Lands Commission’s website stating that the land exchange agreement would be discussed, with no mention of CEQA, was insufficient to give the required notice that the project would be approved based on a statutory exemption. A hyperlink to a staff report that mentioned the CEQA exemption was added prior to the meeting; however, the Court found the extra step of clicking on the hyperlink to be inadequate notice and regardless, the link to the staff report was not added at least 10-days’ prior to the meeting as required under Government Code section 11125, subdivision (a). The Court further held that actual notice of the meeting/staff report did not satisfy CEQA’s notice requirement, nor was the notice requirement waived when one of DOW’s members’ failed to object to the exemption at the meeting.
On the merits of the challenge, the Court held that the Public Resource Code section 21080.11’s exemption for “settlements of title and boundary problems by the State Lands Commission and to exchanges or leases in connection with those settlements” applied only to instances where the State Lands Commission exercised its authority to settle land disputes. The Court rejected the State Lands Commission’s argument that it applied to title “problems” generally, finding that it was not required to defer to the State Lands Commission’s interpretation of the exemption because construing the scope of the CEQA exemption was a matter of “statutory interpretation” subject to de novo review.
The public must have sufficient notice under section 21177, subdivision (e), to trigger the exhaustion requirements. The notice must clearly state if any CEQA determinations will be discussed at the meeting and that statement must be in the notice itself, not in a hyperlinked document. This case also made clear that actual notice or waiver is no substitute for those notice requirements.
Supplement to 16 year old EIR is Acceptable, Project Proponents Need Not Address Every Comment Following Public Review.
In City of Irvine v. County of Orange, (July 6, 2015, G049527)__Cal.App.4th__, the Fourth District Court of Appeal affirmed the adequacy of a Supplemental Environmental Impact Report (SEIR) prepared approximately 16 years after the original EIR was adopted. The court granted publication on July 7, 2015.
The dispute began in 1996 when the City of Irvine (Irvine) challenged the County of Orange’s (County’s) certification of an Environmental Impact Report (EIR) involving the expansion of the Musick Facility (Musick). The Musick facility is a 1,200 inmate jail, and the proposed expansion would make it a 7,584 inmate jail. In Musick I, the court held that the 1996 EIR was adequate, but the project fell through for financial reasons.
In 2011, newly available state funding revived the Musick project. Irvine immediately challenged the County’s application for state funding, alleging that the application for funding itself required an EIR. In Musick II, the court held that there was no need for a new EIR just to apply for state funds.
The County then prepared an SEIR to the 1996 EIR. The SEIR reflects major changes that have taken place in the area surrounding Musick over the 16 years separating the two documents. First, a proposed airport that was supposed to be built next to the facility was scrapped in favor of a large park. Second, agricultural land around the facility and in the County almost entirely disappeared. Following the County’s certification of the SEIR, Irvine immediately sued, seeking a writ of mandate to invalidate the SEIR, but the trial court denied Irvine’s petition.
On appeal, Irvine raised four arguments: (1) the changes since the 1996 EIR warranted a new EIR, (2) the EIR’s traffic study was inadequate, (3) the mitigation measures for the loss of agricultural land were inadequate, and (4) the County’s responses to comments on SEIR were inadequate. The court of appeal disagreed with Irvine on all its arguments and held for the County.
Irvine argued that the significant changes between the 1996 EIR and SEIR warranted a new EIR altogether. The court disagreed. While the CEQA Guidelines state that a lead agency “may” prepare a supplemental EIR where “[o]nly minor additions or changes would be necessary to make the previous EIR adequate to apply to the project in the changed situation” (CEQA Guidelines, § 15163), the court noted that a “subsequent” EIR and a “supplemental” EIR are statutorily similar in their requirements. Moreover, the court explained that the appropriate judicial approach is to look to the substance of the EIR, not its nominal title.
Irvine also alleged that the mitigation measures for the loss of agricultural land were inadequate. But, the court noted that the price of land in the County had far outgrown any feasible level for agriculture to remain profitable. The court noted that a land price of $60,000 per acre is approximately the break-even point for agricultural profitability, and land in the County was averaging $2 million per acre in 2012.
When a comment raises a “significant” environmental issue, there must be some genuine confrontation with the issue; it can’t be swept under the rug. Responses that leave big gaps in the analysis of environmental impact are obviously inadequate. By the same token comments that bring some new issue to the table need genuine confrontation. And comments that are only objections to the merits of the project itself may be addressed with cursory responses.
The court held that many of Irvine’s comments were “objections to the merits of the project” that the County adequately addressed with cursory responses. For the remaining comments, the court found the County’s responses to be adequate. The court noted further that the case was “drowning in ‘paperwork’” and Irvine failed to demonstrate any prejudice resulting from the alleged inadequate responses.
Age does not automatically render an EIR invalid. Additionally, the appropriate judicial approach to evaluating an EIR is to look to its substance, not its nominal title. Furthermore, CEQA Guidelines only require responses to “significant environmental issues raised.” Comments that do nothing but object to the project’s merits may be addressed with cursory responses.
In an unpublished opinion in CREED-21 v. City of San Diego, the California Fourth District Court of Appeal reversed in large part the trial court decision granting an injunction and other relief for violation of the California Environmental Quality Act (CEQA) relating to emergency repair and subsequent revegetation of a hillside and storm drain in La Jolla.
The City of San Diego (City) initially proposed a project that included replacing a damaged storm drain pipe and revegetating of the surrounding hillside. Before the environmental review was complete, the storm drain failed, causing significant erosion of the hillside. Due to public health and safety concerns and the need for immediate repairs, the City issued an emergency determination of environmental exemption.
The emergency repair of the storm drain did not include revegetation of the steep hillside. The City concluded the revegetation project would result in no significant environmental impacts and therefore qualified for the common sense exemption from CEQA. CREED filed a writ petition alleging the project was not exempt from CEQA, and the trial court granted an injunction stopping the revegetation project pending further environmental review.
The appellate court held that baseline conditions existed at the point in time after the emergency repair, not at the time the City initially proposed the storm drain repair project. The court reasoned the emergency repair was an “intervening and superseding event” and the existing environment under CEQA is comprised of the physical conditions that “will be affected by the proposed project.” Because the emergency repair project was exempt from CEQA, any future work on the site was required to consider the environment the project would actually affect, which in this case was the post-repair hillside.
After holding CREED only had standing to challenge the CEQA exemption for the revegetation project and not the storm drain repair project, the court held substantial evidence supported the City’s determination that the common sense CEQA exemption applied to the revegetation project. The revegetation project consisted of planting native plants on an otherwise bare hillside. As a result, there was no possibility the revegetation project would have a significant adverse effect on the environment. The court also held CREED did not meet its burden of showing the unusual circumstances exception applied to the CEQA exemption in this case.
In the final portions of the court’s opinion, the court held the City did not violate CREED’s due process right when responding to its California Public Records Act request. The court upheld the trial court’s denial of the City’s untimely and incomplete request for judicial notice of a City ordinance authorizing an appeal fee and required the City refund CREED’s $100 appeal fee. The court also declined to impose sanctions on the City.


D.C. Law Library - § 26–551.03. Administration of the District of Columbia Banking Code.
↪ Subchapter II. Abolishment of Department of Banking and Financial Institutions; Commissioner of the Department of Banking and Financial Institutions.
↪ § 26–551.03. Administration of the District of Columbia Banking Code.
Subchapter II. Abolishment of Department of Banking and Financial Institutions; Commissioner of the Department of Banking and Financial Institutions.
§ 26–551.03. Administration of the District of Columbia Banking Code.
(b) The Department shall administer the provisions of the District of Columbia Banking Code on behalf of the Mayor.
(c) The Department of Banking and Financial Institutions and the position of the Commissioner of the Department of Banking and Financial Institutions are abolished.
(g) References in any statute, regulation, or rule of the District to the Superintendent of the Office of Banking and Financial Institutions or the Office of Banking and Financial Institutions shall mean the Commissioner [of the Department of Insurance, Securities, and Banking] and the Department [of Insurance, Securities, and Banking], respectively.
This section is referenced in § 31-103 and § 31-105.
D.C. Law 14-213, in subsec. (c), validated a previously made technical correction.
For temporary (90 day) amendment of section, see § 802 of Fiscal Year 2002 Budget Support Emergency Act of 2001 (D.C. Act 14-124, August 3, 2001, 48 DCR 7861).
For temporary (90 day) amendment of section, see § 2(b) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).
Section 802 of D.C. Law 14-28 provided: “Sec. 802. (a) All positions, personnel, property, records, and unexpended balances of appropriations, allocations, and other funds available or to be made available to the Department of Consumer and Regulatory Affairs for the operation and implementation of An Act To regulate the business of loaning money on security of any kind by persons, firms, and corporations other than national banks, licensed bankers, trust companies, savings banks, building and loan associations, and real estate brokers in the District of Columbia, approved February 4, 1913 (37 Stat. 657; D.C. Official Code 26-901 et seq.), Chapter 46 of Title 28 of the District of Columbia Official Code, and Chapter 1 of Title 16 of the District of Columbia Municipal Regulations ( 16 DCMR 100 et seq.), are hereby transferred to the Department of Banking and Financial Institutions, established by section 103 of the 21st Century Financial Modernization Act of 2000, signed by the Mayor on January 26, 2001 (D.C. Act 13-597; 48 DCR 3244).
Delegation of Authority to Administer the Junior Super $avers Club Program, see Mayor’s Order 2001-157, October 12, 2001 ( 48 DCR 9888); Mayor’s Order 2001-158, October 12, 2001 ( 48 DCR 9890).


estate. The grounds for this motion are as follows.
The Boston Redevelopment Authority, the Commissioner of the Massachusetts Department of Revenue, and the City of Boston, (hereinafter the governmental entities) which are interested parties and creditors ofV&M Management, Inc. (Debtor), hereby move the Court for the appointment of a trustee for cause pursuant to §1104(a)(l) of the Bankruptcy Code on the grounds that the Debtor has grossly mismanaged its affairs, and has acted with dishonesty and/or incompetence which has resulted in the instant bankruptcy and , in the alternative pursuant to §1104 (a) (2) because such appointment is in the best interests of the Debtor's creditors and estate. The grounds for this motion are as follows.
as the Westminster and Willard projects, and which have been renamed Mandela by the Debtor, are located in Roxbury, Mass. Mandela is a ch. 121 A urban renewal project, which was built and is operated pursuant to the provisions of Massachusetts General Laws Chapter 121 A. Alphonse Mourad is the sole shareholder, director and officer ofV&M Management, Inc.
For the purposes of this motion, the following aspects of ch. 121 A urban renewal projects are relevant. A ch. 121 A project is exempt from ordinary real estate taxes, however the owner of the project must pay 121 A "excise" taxes in lieu thereof. Mass.Gen.L. ch. 121 A §10. The excise taxes are collected by the Department of Revenue of the Commonwealth of Massachusetts. They in turn, are passed on, after collection, to the city or town in which the project is located. In the case of Mandela, the excise taxes are to be turned over, after collection, to the city of Boston. The governmental entity which is charged by statute with the administration of ch. 121 A urban renewal projects in the City of Boston is the Boston Redevelopment Authority (BRA). Its powers include the right to initially approve the adoption of a 121 A project. It also has the obligation to review and to approve where appropriate the sales of, refinancing of, and changes to a ch. 121 A urban renewal project. The BRA has statutory authority to bring suits in law and in equity to enforce the provisions of ch. 121 A. See Mass. Gen.L. ch. 121 B §46.
must operate the project in the public interest, and in a manner consistent with the provisions of the ch. 121 A urban renewal plan.
There are presently pending in the Suffolk Superior Court two consolidated actions between the governmental entities and the Debtor, V & M Management. Inc. V. Boston Redevelopment Authority, et al. Civil Action No. 89-6500-E and Commonwealth of Massachusetts v. V & M Management. Inc. et al 90-5433 -D. The first suit was initiated by V&M Management, Inc. against the BRA, the City of Boston Assessing Department and the Massachusetts Department of Revenue wherein the Debtor claims that for various reasons Mass.Gen.L. ch. 121A did not apply to it. Summary Judgement has entered against the Debtor on all of the claims. During discovery in this case the BRA ascertained, inter alia, that the owner had mismanaged and exploited the project in violation of Mass.Gen.L. ch.l21A, and had not paid any of its taxes on the project. The BRA filed a counterclaim alleging that the Debtor has misappropriated project funds for personal use by its sole shareholder, director and officer in violation of the provisions of ch.l21A; has failed to pay any real estate or excise taxes due for at least the past ten years1; has failed to keep the property up to code, and has failed to pay the projects legitimate bills, including water and sewer and electric bills all in violation of the requirements of Mass.Gen.L. ch. 121A. The DOR and the City are also seeking payment of past due ch. 121A excise taxes. The Court has also granted Summary Judgment stating that these taxes are due, and have not been paid for over ten years. All that remains is the calculation of the total amount due. See 11 U.S.C. 505(a)(2)(A).
'The only ch. 121A excise taxes that have been paid were three monthly installments of approximately $18,000.00 each, which were paid after the DOR levied on its liens and the Debtor procured some limited relief from the levy in the Middlesex Superior Court on condition it make these payments.
In the second suit, the Commonwealth of Massachusetts, through the Attorney General, has asserted that the Debtor has failed to keep the project up to the standard of repair required by law; has failed to segregate and/or has misappropriated tenant security deposits; has interfered with the rights of the tenants to join and form tenants unions and has intimidated individual tenants; and has otherwise violated the provisions ofMass.Gen.L. ch.93A, the Consumer Protection Act.
In the process of pre-trial discovery in the above cases the Debtor submitted financial statements for the project from 1981 through 1993. The initial report states that the owner purchased the property in 1981 for $1,450,000.00 of which $150,000.00 was advanced by the owner and the balance was a purchase money mortgage from the United States Department of Housing and Urban Development (HUD). In the first year of operation Mr. Mourad withdrew from the project $157,000.00 and there were $240,000.00 of expenses incurred that could not be documented. According to its financial reports, in 1984, the Debtor took out new mortgages on the project in the amount of $2,800,000.00, paid off the HUD mortgage,, and distributed to its shareholder approximately $950,000.00 from the proceeds of the refinancing, and loaned the shareholder an additional $300,000.00. In addition Mr. Mourad was paid $30,000.00 for "consulting" in that year. According to the same report, the project lost $562,812.00 in 1984, and owed ch.l21A taxes in the amount of $196,859 for 1982 and 1983, as well taxes for 1984.
and its shareholder, in each and every year the project suffered losses from operations and has lost hundreds of thousands of dollars, and no payments have been made for taxes in any year. Nevertheless, in virtually every year, additional funds have been "advanced" to the owner and/or its sole shareholder Mr. Mourad. By the end of 1989 Alphonse Mourad was reported to owe the Debtor corporation $2,369,391.00. According to the 1993 financial statement, the last one produced by the Debtor in the litigation, the project lost $489,231,00 in 1993; had accumulated losses from operations of $6,071,810.00; and had accumulated "advances" to the owner of $2,457,657.00. In addition, the Debtor owed $3,002,255.00 in ch.l21A taxes and had other accounts payable (excluding past due interest and mortgages payable) of $1,716,347.00. This was all despite the fact that in 1993, the Debtor received $2,253,428.00 in rent from HUD.
In a related case Mourad v. Dreier. Middlesex Superior Court No. 92-6665, Alphonse Mourad was deposed. During the course of the deposition, he admitted that V & M Management, Inc. had no books of its own, and he had no reason to contradict the contents of the various financial statements referred to above. Moreover, no books or records of the income and expenses of the Debtor have ever been produced in the course of the litigation with the governmental entities, although some disorganized and limited bills and checks have been produced after the Debtor was ordered to produce its records by the Court..
Nor has there been any evidence that the debtor has rehabilitated the property which is subject to the suit of the Attorney General. There remain outstanding bills to the water and sewer commission as well as to Boston Edison. The present Chapter 11 filing has been instituted because of the pendency of a foreclosure sale by the second mortgagee.
I. The Pre-Petition Acts ofV&M Management. Inc. and its Shareholder. Alfonse Mourad. Provide Cause to Require the Appointment of a Trustee Pursuant to 11 U.S.C. S 1104faVn.
For the reasons set forth below, any one of which would justify the appointment of a trustee, the governmental entities involved in this case request that a trustee should be appointed.
(A) Mr. Mourad, the sole shareholder, officer and director of V&M Management, Inc. owes it in excess of two million dollars. There is no basis for believing that he will be willing to take the necessary steps to collect this debt from himself.
According to his own financial records produced in the pre-trial discover in pending cases against the governmental entities, Mr. Mourad has taken substantial "advances" from the debtor corporation, in excess of two million dollars, despite the fact that the project has consistently lost money. He has failed and/or refused to repay the "advances" even though some of them are incorporated in a demand note or notes he has issued to the corporation. As sole shareholder of the corporation, he cannot realistically be counted upon to obtain the repayment of his personal debt to satisfy the creditors.
the fact that debtor suffered net losses exceeding one million dollars during a two year period of time. Id. at 179. The court also noted that the manner in which debtor's management directed that the debtor "lend" them substantial sums of money was indicative of their gross mismanagement.
In the present situation, Mr. Mourad is the sole shareholder, officer and director of the Debtor corporation. He has "advanced" to himself more than two million dollars over the years, even though the Debtor has suffered serious losses each year it owned the project. Mr. Mourad has made no effort on behalf of the Debtor to collect the money he himself owes. Under these circumstances the appointment of a trustee is warranted. See. In re Oklahoma. Refining Co.. 838 F.2d 1133, 1135 (10th Cir. 1988) in which the appointment of a trustee was deemed proper where debtor's manager was making no effort to collect the debt from affiliated companies, and debtor was in the uncomfortable position of having to decide whether or not to sue itself.
(B) A Trustee Should Be Appointed Because of the Debtors Continual Failure and Refusal to Pay His Chapter 121 A Excise Taxes Which Now Exceed Three Million Dollars.
Section 1104(a)(l) of the Bankruptcy Code provides that this Court should appoint a trustee in a Chapter 11 case upon a showing of cause. The term "cause" is defined to include "fraud, dishonesty, incompetence, or gross mismanagement of the affairs of the debtor by current management, either before or after the commencement of the case." 11 U.S.C. §1104(a)(l).
acts as failure to pay real estate taxes. In In re Great Northeaster Lumber and Mill-work Corp.. 20 B.R. 610 (Bankr. E.D. Pa. 1982), the Commonwealth of Pennsylvania offered evidence that the debtor had a history of failure to file returns and pay sales taxes. The taxes which the Commonwealth asserted were due totaled approximately $507,000.00 including interest, penalties and fees. The Court determined that the failure of the debtor to file and pay its sales taxes for six years constituted such "gross mismanagement of the affairs of the debtor by current management" as to constitute "cause" for the appointment of a trustee under § 1104(a)(l) of the Code. The court reached this conclusion despite the fact that the debtor was contesting the tax assessments made by the Department of Revenue. Id. at 611.
In the present case, the Debtor has failed to pay excise taxes (which are comparable to real estate taxes for Chapter 121 A Urban Renewal Projects) to the Department of Revenue for at least the past ten years. Excise taxes owed to the Commonwealth of Massachusetts currently total approximately $3,800,000.00 including interest and penalties.
(C) A Trustee should be appointed because the debtor has demonstrated his inability to manage the housing project over the fifteen years it has owned and operated it.
Incompetence and gross mismanagement are the most common grounds for appointment of a trustee under § 1104(a)(l). In re North American Communications. Inc.. 138 B.R. 175, 178 (Bankr. W.D. Pa. 1992); In re Sharon Steel Corp.. 86 B.R. 455, 458 (Bankr. W.D. Pa. 1988), aff'd, 871 F.2d at 1217 (3d Cir. 1990). In In re La Sherene. Inc.. 3 B.R. 169 (Bankr. N.D. Ga. 1980) the bankruptcy court held that the appointment of a trustee was justified based on the demonstrated incompetence of the debtor's management evidenced by his gross mismanagement of the debtor's business from the outset. 3 B.R. at 175. Although recognizing the rehabilitative potential of the business, the court reasoned that the debtor's current management was not up to the task of reorganizing the company based on his fiscal and operation abuses through overspending, lack of fiscal control, failure to institute an adequate system of record-keeping and financial controls, pattern of monetary favor and extravagance to himself, and commingling. See id. at 175, 176. Thus, the court concluded that just cause existed to mandate the appointment of a trustee under §1104(a). Id. at 176.
As described above, the Debtor's gross mismanagement includes but is not limited to (i) the fact that since December 1981 when V&M Management, Inc. purchased the property, the Debtor has lost substantial amounts in each and every year, total losses from operations over this period accumulate to more than six million dollars (ii) the fact that the Debtor maintains no general ledger or books (iii) the fact that excessive "advances" have been made to Mr. Mourad despite the financial difficulties of the project (iv) the fact that the Debtor has failed to pay its taxes and utility bills when due (v) the fact that the Debtor is currently being sued by the Boston Redevelopment Authority ("BRA"), the agency responsible for supervision of urban renewal projects, for, among other things, payment of income to Mr. Mourad out of the project in amounts larger than allowed under the urban renewal laws and placement of excess debt on the project without receipt of the required permission from the urban renewal authority and (vi) the fact that the Debtor is being sued by the Attorney General's office for violation of the Consumer Protection Act for, among other things, intimidating tenants, misuse of security deposits, and substandard living conditions on the premises. All of the foregoing evidences a serious lack of fiscal control on the part of the Mr. Mourad, similar to the exorbitant expenses, waste and commingling sanctioned by the management in In re La Sherene. Inc.. 3 B.R. at 176, and perhaps even amounting to fraud.
The debtor is heavily in debt and has consistently exercised poor business judgment. If the conduct of the Debtor's current management is not fraudulent and dishonest, it is at bare minimum a clear example of incompetence and gross mismanagement.2 Because there is clear and convincing evidence that under Mr. Mourad's leadership V & M Management, Inc., is not competent to successfully rehabilitate the business, §1104(a)(l) warrants that this Court appoint a trustee. In re Paolino. 53 B.R. at 401. (Bankr. E.D. Pa. 1985), affd. 60 B.R. 828 (Bankr. E.D. Pa. 1986). Mr. Mourad's lack of fiscal control and responsibility has seriously impaired and continues to seriously impair the interests of the creditors and the bankruptcy estate in general.
(D) The Failure of the Debtor to Maintain Books and Records of its Operations Mandates That a Trustee Be Appointed.
The courts have held that incompetence and gross mismanagement are evidenced by a debtor's failure to impose proper financial controls or maintain accurate books and records prior to or after commencement of the case. See. e.g.. In re St. Louis Globe-Democrat. Inc.. 63 B.R. 131, 139 (Bankr. E.D. Mo. 1985) where the court held that holding debtor's inability to project income with some certainty and failure to maintain books and records represents incompetence and gross mismanagement; In re Paolino. 53 B.R. 399, 400 where it was found that "cause" for appointment of trustee was demonstrated by management's failure to keep accurate financial records; In re La Sherene. Inc.. 3 B.R. 169, 175 (Bankr. N.D. Ga. 1980) where the court held that the absence of financial controls or planning is "cause" for appointment of trustee; In re Philadelphia Athletic Club. 15 B.R. 60, 63 (Bankr. E.D. Pa. 1981) where it was concluded that failure of the debtor to keep adequate books and records justified the appointment of a trustee.
Movants respectfully reserve the right to assert that Mr. Mourad's conduct was fraudulent and dishonest, but for purposes of this motion such a showing is not required. See In re St. Louis Globe-Democrat. Inc.. 63 B.R. 131, 138 (Bankr. E.D. Mo. 1985). That there may be more than mere mismanagement is indicated by the fact that Mr. Mourad consistently refused to answer questions relating to his financial affairs citing his Fifth Amendment Privilege during a deposition taken by the Attorney General in Commonwealth v. V&M Management. Inc.
In the case at bar, the debtor has no general ledger and no "books" as that term is commonly used. Since at least 1984 various accountants of the Debtor in notes to the Financial Statements have reported the lack of corporate books and recommended that they be kept. Nevertheless, there still are no such corporate records to the knowledge of the governmental entities. As late as 1995, Mr. Mourad admitted in a deposition in the Dreier case that the Debtor has no corporate books or ledgers. When ordered to produce financial records by the Court, all the Debtor could produce were disorganized and incomplete materials consisting almost entirely of bills and checks, moreover, were simply payments of monies to Mr. Mourad.
II. Alternatively the Court Should Appoint a Trustee Because the Benefits to Creditors' Interest Outweigh the Costs of a Trustee.
"Section 1104(a)(2) embodies a more flexible standard under which the court may engage in a cost benefit analysis to determine whether the appointment of a trustee would be in the best interests of creditors, other equity holders, and other interests of the estate." In re Brown. 31 B.R. 583, 585 (Bankr. D.C. 1983); In re Philadelphia Athletic Club. 15 B.R. 60, 62. "Factors which justify appointment of a trustee under this subsection are highly diverse and in essence reflect the practical reality that a trustee is needed to manage the debtor's affairs." In re North American Communications. Inc.. 138 B.R. 175, 178-179. Under §1104(a)(2) a court may use its broad equity powers to examine the prior and current conduct of a debtor-in-possession and the prospects for the debtor's rehabilitation to determine whether the appointment of a trustee will more efficiently and effectively accomplish a reorganization plan. "In equity, as no where else, courts eschew rigid absolutes and look to the practical realities and necessities inescapably involved in reconciling competing interests." In re Royster Co.. 145 B.R. 88, 90 (Bankr. M.D. Fla. 1992): In re lonoshpere Clubs. Inc.. 113 B.R. 164, 169 (1990). In re Parker Grande Development. Inc.. 64 B.R. 557, 561 (Bankr. S.D. Ind. 1986); In re Hotel Assoc.. Inc.. 3 B.R. 343, 345 (Bankr. E.D. Pa. 1980).
As was the case in In re Hotel Assoc.. 3 B.R. at 345, the benefits inherent in the appointment of a trustee for the Debtor significantly outweigh the costs associated with a trustee. In Hotel Associates, the Debtor's failure to keep adequate books and records coupled with its failure to maintain proper operating standards on its property made appointment of trustee necessary and outweighed its considerable costs. Not only has Mr. Mourad failed to develop a general ledger or books, he is being sued by the Attorney General's Office for failure to keep the property up to code in violation of the Consumer Protection Act. In addition, the Boston Redevelopment Authority has also sued the Debtor for failure to comply with various provisions of the Urban Renewal Laws, including failure to keep the property up to code. Not only does the above clearly and convincingly show gross mismanagement on the part of Mr. Mourad, it also establishes that appointment of a trustee would be in the best interest of creditors and of the bankruptcy estate in general.
(c) Granting the Movants such other relief as is necessary and proper.
Kenneth W. Gurge, Esq., BBO^.jr-'/^W?
V & M MANAGEMENT, INC.
TRANSCRIPT OF EVIDENTIARY HEARING ON MOTION OF BOSTON REDEVELOPMENT AUTHORITY, THE COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF REVENUE, AND THE CITY OF BOSTON FOR APPOINTMENT OF A CHAPTER 11 TRUSTEE; AFFIDAVIT OF ARTHUR CHIPOURAS, KERRY LYNN EADIE, AND SAUL A. SCHAPIRO, ESQ. BEFORE THE HONORABLE CAROL J. KENNER, J.U.S.B.C.
HARRY MURPHY, ESQ. DONALD FARRELL, ESQ.
Page 24 1 tenants. And there's going to have to be somebody who's going to sit down on each of those sides and figure out what they can bring to the table and how this project can be saved.
even start that ball rolling.
THE COURT: But -- okay. Thank you. Let me -- let me ask your two colleagues as moving parties whether Mr.Schapiro's statements this morning reflect your position as 17 || well.
question. Your Honor. Thank you.
was started in the first place.
will the appointment of a Trustee help you accomplish that goal?
MR. MURPHY: They won't talk to the debtor.
Your Honor. Mr. Mourad is not the debtor.
MR. MURPHY: I do not represent Mr. Mourad.
clear to counsel at the table. I represent the interest of the debtor.
negotiate with Mr. Mourad. What did you say, Mr. Gurge?
in that context. Your Honor.
with Mr. Murphy who represents the debtor?
MR. MURPHY: Well, I like to think there is.
THE COURT: I'd like to think there is, as well. There had better be, and in my experience, Mr. Murphy has always been cognizant of that difference.
think there was a misstatement or something respecting what should this Court do and what do you believe may be appropriate here.


Immigration attorneys can use the California Public Records Act (“CPRA”) to help clients access the contents of their police reports. Police reports can be important tools in immigration cases, from demonstrating eligibility for U visas to defending clients in removal proceedings. However, attorneys are not always familiar with their clients’ rights to these reports or the best way to obtain them. This blog contains information on how to obtain the records clients are entitled to under the CPRA. Cal. Gov’t Code §§ 6250 et seq.
The situations in which immigration attorneys need access to clients’ police reports are numerous. Perhaps most common, clients regularly utilize police reports when applying for U visas. Police reports detail the crime of which the client was a victim and verify the client’s helpfulness in the subsequent criminal investigation. But the situations in which immigration attorneys can benefit from access to police reports reach much further than just the U visa context.
For example, when submitting applications to USCIS—such as applications for I-601A waivers or adjustment of status—clients with arrest histories often receive Requests for Evidence requiring them to submit police reports from their past arrests before the agency will grant relief. In removal proceedings, DHS counsel often attempts to submit police reports from clients’ arrests that may include prejudicial details. Although immigration attorneys often object to the admission of police reports, having the information contained within a report in advance helps attorneys know what to expect and to prepare their clients for attempts by DHS counsel to impeach them with the report. Moreover, police reports can be vital in determining the risk of a client facing grounds of removability or bars to relief that don’t require a conviction, such as controlled substance trafficking.
Given the myriad ways in which police reports can be useful in immigration cases, what rights do clients’ have to access those records? The CPRA allows any member of the public to access records that are prepared, owned, used, or retained by public agencies. Cal. Gov’t Code § 6252(e). Requestors are not required to be U.S. citizens or to hold lawful immigration status to access public records. Cal. Gov’t Code § 6252(b). In fact, most CPRA requests can be submitted anonymously, only requiring the requestor to provide contact information where the records can be sent. CPRA requests can be sent to any state or local public agency, including agencies like police departments, county sheriffs, and even private immigration detention centers that contract with cities or counties. Cal. Gov’t Code § 6252(d).
When a requestor asks for a police report, agencies are permitted to withhold the report itself. Cal. Gov’t Code § 6254(f). Importantly, however, agencies are required to provide large portions of the information contained within the report. Cal. Gov’t Code § 6254(f)(1)-(2). Such information includes the factual circumstances surrounding the arrest; a description of any injuries, property, or weapons involved in the incident; the full name and physical description of the arrested individual; the time, date, and location of the arrest; all charges the individual was held on; and other details. In essence, the majority of a police report’s substance must be produced by the agency upon request. Because some agencies refuse to provide this information despite their legal obligation to do so, it often helps to explicitly reference Government Code sections 6254(f)(1)-(2) in communications with the agency.
In limited circumstances, some police reports may only be made available to certain requestors—often due to laws designed to protect defendants. For example, police reports involving juvenile arrestees are available only to specific individuals, including the juvenile and her legal guardians. Even if the agency can legally provide the report to the juvenile and her guardians, she is arguably required to obtain a superior court order before providing the report to USCIS or other immigration authorities. Cal. WIC §§ 827, 831. These situations can be complex and may warrant consultation with a public records attorney.
Public records attorneys may also be able to assist where agencies unlawfully withhold or delay access to public information contained in police reports. The CPRA contains a provision for mandatory attorney’s fees in public records lawsuits, allowing public records attorneys to take cases on contingency in certain circumstances. Cal. Gov’t Code § 6259(d). This can allow immigration attorneys and their clients to enforce their right to public records without incurring any out-of-pocket cost.
Particularly in today’s hostile political climate, immigration attorneys need every tool available to advocate for our clients. The CPRA can be a great tool to add to our arsenal.
Anna von Herrmann is an immigration attorney with experience filing suits to enforce the California Public Records Act. For more information, contact anna@vonherrmannlegal.com.


The Office of the Medicaid Inspector General (OMIG) may withhold payments to recover from Petitioner, the operator of a methadone clinic and provider of Medicaid-covered services, the full $1,857,401 in overpayments assessed following an audit.
OMIG notified Petitioner than it had been overpaid $1,857,401 in claims from 2003 through 2007. OMIG informed Petitioner that it had twenty days to agree to settle these claims for a lower amount or OMIG would begin to withhold a percentage of Petitioner’s payments. When Petitioner did not agree to settle after twenty days and failed timely to commence an administrative appeal to challenge the audit findings, OMIG commenced withholding. Petitioner commenced this article 78 proceeding seeking to prohibit OMIG from liquidating the full amount in overpayments and a declaration that OMIG can collect only $1,460,914, the amount for which Petitioner declined to settle. The Court of Appeals held that OMIG was not precluded from seeking to withhold the full $1,857,401 amount.
West Midtown Mgt. Group, Inc. v State of New York 2018 NY Slip Op 04666 Decided on June 26, 2018 Court of Appeals Feinman, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the Official Reports.
State of New York, & c., Appellant.
Caroline A. Olsen, for appellant.
Jonathan M. Goidel, for respondent.
The Office of the Medicaid Inspector General (OMIG) notified petitioner, the operator of a methadone clinic and provider of Medicaid-covered services, that it had been overpaid an estimated $1,857,401 in claims from 2003 through 2007. This number was extrapolated after auditing a random sample of claims paid to petitioner. OMIG informed petitioner that it had 20 days to agree to settle these claims for a lower amount—$1,460,914—or OMIG would begin to withhold a percentage of petitioner's payments. Petitioner was also informed that OMIG was prepared to defend its full $1,857,401 estimate at any hearing. Twenty days elapsed without petitioner agreeing to settle, and OMIG commenced withholding. Petitioner also failed to timely commence an administrative appeal in order to challenge the audit findings. Petitioner now seeks to prohibit OMIG from liquidating the full $1,857,401 in overpayments and a declaration that OMIG can collect only $1,460,914 —the amount for which petitioner declined to settle. We hold that OMIG may withhold payments to recover the full $1,857,401 assessed following the audit.
The Department of Health (DOH) administers the Medicaid program in New York (see Social Services Law § 363-a; Public Health Law § 201 [i] [v]). OMIG was created as an independent office within the Department of Health in 2006 to be the sole state agency focusing on "prevention, detection and investigation of fraud and abuse within the [Medicaid] program," with the power to refer "appropriate cases for criminal prosecution," and to recover improperly expended Medicaid funds "through a variety of administrative and civil mechanisms" (NY Senate Introducer's Mem in Support, Bill Jacket, L 2006 ch 442 at 09). OMIG implements the DOH rules and regulations intended to recover unjustified Medicaid payments (see Public Health Law § 32 ). One method of recovery is through on-site audits of providers' records based on statistical samplings (see 18 NYCRR Part 517; § 519.18 [g]). An extrapolation of findings based on an audit using a certified valid statistical sampling method is presumed to be an accurate determination of the total overpayments made, "in the absence of expert testimony" or other evidence submitted by the provider at a hearing (id. § 519.18 [g]). Where an audit finds overpayments, OMIG issues a draft audit report identifying those items (id. § 517.5). The draft audit report contains the amount of the overpayment "[w]hen feasible," the proposed action and its legal basis, and provides an opportunity for the provider to object (id. § 517.5 [a], [b]). The failure by the provider to timely object "to the proposed action" may result in "the adoption of the proposed action as the final agency action" (id. § 517.5 [b]).
After consideration of the provider's objections, if any, and any supporting documents and materials, or after passage of 40 days from mailing the draft audit report without receiving objections, OMIG may issue a final audit report (id. § 517.6 [a]). The final audit report "and/or the cover letter accompanying it" must "clearly" advise the provider of: (1) the nature and amount of the audit findings, the basis for the agency's action and its legal authority; (2) the action which will be taken; (3) the effective date of the intended action, which will be not less than 20 days from the date of the final audit report; (4) the right to appeal in an administrative proceeding, and (5) the scope of the hearing which is limited to "issues relating to determinations contained in the final audit report" (id. § 517.6 [b]). A provider has 60 days to request an administrative hearing to challenge the final audit report (see Social Services Law § 145-a ; 18 NYCRR § 519.7). The request must be in writing (see 18 NYCRR § 519.7[b]). If a hearing is held, the decision becomes "the final agency action and is binding upon the parties" (18 NYCRR § 519.22 [c]). If no hearing is requested within the 60-day time period, the final audit report may be docketed with the County Clerk, whereupon it takes on "the full force and effect of a judgment" (Social Services Law § 145-a ).
Twenty days after the issuance of the final audit report, and upon five days' prior notice, OMIG may "commence recoupment of overpayments" by withholding all or part of a provider's payments that are otherwise payable (18 NYCRR §§ 518.7 [b]; 518.8 [a]). Importantly, OMIG may begin withholding payments even before the expiration of the 60-day period for the provider to request an administrative hearing, and before the final audit report has become a final administrative determination. Under these circumstances, the withholding may be extended "until an amount reasonably calculated to satisfy the overpayment is withheld, pending a final determination on the matter" (id. § 518.7 [d] ).
Petitioner operates two methadone clinics in Manhattan. It is authorized by the State of New York, Department of Health, Office of Alcohol and Substance Abuse Services to provide outpatient services to chemically dependent patients and to receive payment for those services from Medicaid. By virtue of its enrollment in the Medicaid program as a services provider, its records are subject to audit by OMIG (see 18 NYCRR § 504.3 [i]).
In January 2010, after auditing a random sample of claims covering the years 2003 through 2007, OMIG issued a draft audit report concluding that petitioner had received more than $6 million in unjustified Medicaid payments. Petitioner challenged the draft audit report. On June 16, 2010, OMIG issued its final audit report (FAR) and, on the same date, delivered it to petitioner with a cover letter.
The cover letter and accompanying FAR informed petitioner that the "extrapolated point estimate" of its overpayments was $1,857,401. Because OMIG estimates overpayments based on sampling, it cannot determine with certainty how much it is owed across the entire pool of claims. The "extrapolated point estimate" represents just that—an estimate—based on the subset of claims that were audited. Nevertheless, by regulation, OMIG's [*2]extrapolated point estimate would be presumed to be an accurate determination of the total overpayments at any hearing in the absence of expert testimony or evidence to the contrary (see id. § 519.18 [g]).
The cover letter and FAR also informed petitioner that the "lower confidence limit estimate" of overpayments was $1,460,914. As explained in the letter, this meant that there was a 95% chance that the true amount of overpayments across the entire pool of claims was greater than $1,460,914.
The FAR contained a section, entitled "Provider Rights," that explained that petitioner could settle the audit within 20 days from the date of the FAR by "repay[ing] the lower confidence limit amount," i.e. $1,460,914, as a lump sum, or by contacting OMIG to enter into a repayment agreement. Should petitioner fail either to repay the $1,460,914 or timely contact OMIG regarding a repayment plan within 20 days, OMIG would commence withholding payments equal to 50% of petitioner's Medicaid billings to "liquidate the lower confidence limit amount, . . . not barring any other remedy allowed by law" (emphasis added). Notice of withholding would be provided "no later than 5 days after" withholding commenced. The same section also indicated that if petitioner chose "not to settle [the] audit through repayment of the adjusted lower confidence limit," it could challenge OMIG's findings through an administrative hearing "where the OMIG would seek and defend the point estimate of $ 1,857,401" (emphasis added). Petitioner was advised that it had 60 days from the date of the FAR to request a hearing. The cover letter reiterated that OMIG reserved the right to take additional actions in addition to recovering the overpayments set forth in the report.
With the delivery of the FAR, the 20-day and 60-day limitations periods both began to run. The 20-day period expired on July 6, 2010 without petitioner selecting a settlement option. Accordingly, on July 12, 2010, OMIG issued a "Notice of Withholding" to petitioner indicating that the agency had begun withholding 50% from each of petitioner's payments for current and future claims. The notice stated that petitioner had been "previously informed that an overpayment totaling $1,460,914 was identified as a result of the above-referenced audit." The notice further indicated that the withholding was "temporary," and would "continue until such time as the balance due is recovered."
The 60-day deadline to request an administrative hearing expired on August 15, 2010 without petitioner making a written request [FN1]. Thereafter, on December 9, 2010, OMIG issued a second Notice of Withholding, reflecting that, going forward, a 5% withholding rate would be assessed based on petitioner's request for a hardship reduction. This second notice, like the first notice from July 2010, stated that petitioner had been "previously informed that an overpayment totaling $1,460,914 was identified as a result of the above-referenced audit," and otherwise contained the same information as in the first notice.
Petitioner alleges that it first learned in September 2013, through a telephone call, that OMIG would seek reimbursement of the entire $1,857,401 identified as the point estimate in the FAR. Its representative protested in an email to OMIG on September 12, 2013, that "it has always been our understanding that the collection of overpayments was based on the lower $1.4 amount," pointing to the December 2010 Notice of Withholding identifying the "overpayment amount as $1,460,914." Petitioner claimed it had "no record of any correspondence to the contrary."
Petitioner commenced the instant article 78 proceeding seeking to prohibit the agency from withholding more than the lower confidence amount referenced in the December 2010 withholding notice. Supreme Court found no merit to the argument that the withholding notices, which referenced the FAR identification number, established that OMIG had agreed that petitioner's ultimate liability was limited to the lower confidence limit, pointing to the FAR statement that OMIG would seek, by withholding, to recover the balance "not barring any other remedy allowed by law." It found that petitioner was "well aware of its ultimate liability for $1.8 million," as this amount was referenced multiple times in connection with the CPLR article 78 proceeding.
The Appellate Division reversed, with two justices dissenting (see West Midtown Mgmt. Group, Inc. v State of New York, 142 AD3d 843 [1st Dept 2016]). The majority reasoned that the December 9, 2010 Notice of Withholding served as the notice of the duration of withholding as required by 18 NYCRR § 518.7 (c) (2), and because it plainly referred to "an overpayment totaling $1,460,914.00" and stated that withholding would continue until "the balance due is recovered." OMIG was not authorized to collect more than that amount (id. at 844-845). We now reverse.
Petitioner argues that it never received proper notice that OMIG planned to withhold a total of $1,857,401, contending that the FAR failed to "clearly advise" petitioner of OMIG's intent to withhold payments beyond the lower confidence limit estimate of $1,460,914 if petitioner failed to request a hearing (18 NYCRR § 517.6 [b]). In addition, because the two Notices of Withholding delivered in 2010 referenced a "balance due" of $1,460,914, petitioner effectively argues that OMIG "acquiesced" to this lower amount and failed to provide proper notice that it would seek to withhold a greater amount in accordance with Section 518.7 (c). For the reasons that follow, we find these arguments unpersuasive.
Petitioner ignores the clear statements in the June 16, 2010 cover letter to the FAR and in the FAR's Executive Summary that petitioner's estimated overpayment liability was $1,857,401. The pertinent regulations provide that, if an audit report is challenged, "[a]n extrapolation based upon an audit utilizing a statistical sampling method certified as valid will be presumed, in the absence of expert testimony and evidence to the contrary, to be an accurate determination of the total overpayments made or the penalty to be imposed" (id. § 519.18 [g]). By contrast, the $1,460,914 figure, as explained in the FAR and the cover letter, merely represented, with 95% accuracy, a lower bound on the true amount overpaid. The FAR and cover letter sufficiently notified petitioner, in accordance with Section 517.6 (b), of OMIG's $1,857,401 overpayment assessment which OMIG would be entitled to withhold in accordance with Section 518.7.
Our conclusion is supported by the language contained in the FAR Provider Rights section. That section stated that, should petitioner fail to settle, OMIG will commence withholding and "liquidate this lower confidence limit amount . . . not barring any other remedy allowed by law" (emphasis added). Likewise, the cover letter stated that "OMIG reserves the right to take additional actions" and indicated that the "audit may be settled through repayment of the lower confidence limit of $1,460,914" (emphasis added). The only logical reading of the Provider Rights section is as a settlement offer, pursuant to which petitioner had 20 days to either repay the lower confidence limit estimate or agree to a repayment plan. Under petitioner's reading of this section, the 20-day clock for petitioner to accept OMIG's settlement offer would be rendered meaningless, as petitioner could simply allow the 20-day period to elapse without incurring any additional liability. Indeed, under petitioner's reading, the only way for OMIG to recover the full $1,857,401 that it said it was owed would be for petitioner to request, and then lose, an administrative hearing.
Contrary to petitioner's contentions, it was reasonable for OMIG to indicate that, should petitioner fail to settle, OMIG would "liquidate [the] lower confidence limit amount." Because petitioner still had time to challenge the FAR in a hearing even after withholding commenced, OMIG reasonably adopted a conservative approach, pursuant to which withholding would—initially—be based on the $1,460,914 figure. This did not preclude OMIG from subsequently seeking to withhold the full $1,857,401 amount. As noted previously, the FAR and cover letter both clearly indicated that the agency reserved its rights to pursue all available remedies.
Petitioner's argument that the subsequent Notices of Withholding in 2010 were inadequate under Section 518.7 (c) of the regulations is without merit. The regulations do not require the notices to state the total amount that OMIG seeks to withhold (see 18 NYCRR § 518.7 [c]). To the extent that OMIG was precluded from withholding more than the lower confidence limit amount because the notices specifically indicated a "balance due" of $1,460,914, petitioner does not dispute that, at the time the petition was filed, OMIG had not yet even liquidated this lower amount. Therefore, at the time the petition was filed, OMIG was not required to provide notice of its intent to withhold more than $1,460,914. OMIG may continue to withhold payments even after it has liquidated the lower confidence limit amount, so long as a new Notice of Withholding is given before it does so (see id.).
Finally, to the extent that petitioner suggests that OMIG should be estopped from seeking the full $1,857,401 because the FAR and the withholding notices referred to the lower confidence amount, the argument is both legally and factually devoid of merit. It is well established that, with rare exceptions, estoppel is not available as a remedy to prevent a governmental agency from discharging its statutory duties (see Matter of Schorr v NYC Dept. of Hous. Pres. & Dev., 10 NY3d 776, 779 ; Parkview Assocs. v New York, 71 NY2d 274, 282 ). We have recognized that estoppel "may be warranted in unusual factual situations' to prevent injustice" (Matter of E.F.S. Ventures Corp. v Foster, 71 NY2d 359, 369-370 ), but we have limited its use against government agencies to all "but the rarest cases" (Matter of New York State Med. Transporters Assn. v Parales, 77 NY2d 126, 130 ). The facts in this case do not call for making an exception to our general rule. It is not one of those rare cases where we have suggested that estoppel would be warranted to prevent an injustice (see E.F.S. Ventures, 71 NY2d at 369-370; Parkview Assocs., 71 NY2d at 282). In any event, petitioner was clearly aware of the audit's findings and referred to the $1,857,401 figure in communications with OMIG and the DOH Board of Adjudication, and in its first article 78 proceeding. Even here, in its article 78 petition, petitioner conceded that OMIG "determined, subject to appeal," that petitioner "had been overpaid $1,857,401.00 for outpatient services." In sum, petitioner was on notice from the outset that OMIG was seeking, and entitled to, the full point estimate. While petitioner seizes on references to the lower confidence limit amount in the FAR Provider Rights section and subsequent Notices of Withholding, "those who deal with the government are expected to know the law, and cannot rely on the conduct of government agents' to excuse legal obligations" (Matter of New York State Med. Transporters Assn., 77 NY2d at 131).
For the reasons discussed, the order of the Appellate Division should be reversed, with costs, and the judgment of Supreme Court reinstated.
Order reversed, without costs, and judgment of Supreme Court, New York County, reinstated. Opinion by Judge Feinman. Chief Judge DiFiore and Judges Rivera, Stein, Fahey, Garcia and Wilson concur.
Footnote 1: In October 2010, petitioner belatedly sought an administrative hearing. In November 2010, the administrative law judge determined that petitioner's request came too late and that it was without jurisdiction to hold a hearing. Petitioner then brought a CPLR article 78 petition in Supreme Court, New York County to compel a hearing, which was denied for the reasons articulated in the administrative law judge's decision. Significantly, in petitioner's request for a hearing, petitioner acknowledged that it "was the subject of a Final Audit Report that alleges an overpayment in excess of $1.8 million" and that it was being "held to at least a $1.4 million repayment (the low point)" (emphasis added). Likewise, the administrative law judge's written decision specifically noted that OMIG "sought to recover" $1,857,401. Petitioner did not appeal the decision.
Footnote 2: Petitioner's related contention, raised for the first time on this appeal, that the Notices of Withholding themselves constituted "final determinations" within the meaning of Part 519 of the regulations was not preserved for our review.


D.C. Law Library - § 22–3305. Placing explosives with intent to destroy or injure property.
↪ § 22–3305. Placing explosives with intent to destroy or injure property.
§ 22–3306. Defacing books, manuscripts, publications, or works of art.
§ 22–3305. Placing explosives with intent to destroy or injure property.
Whoever places, or causes to be placed, in, upon, under, against, or near to any building, car, vessel, monument, statue, or structure, gunpowder or any explosive substance of any kind whatsoever, with intent to destroy, throw down, or injure the whole or any part thereof, although no damage is done, shall be punished by a fine not more than the amount set forth in § 22-3571.01 and by imprisonment for not less than 2 years or more than 10 years.
For temporary (90 days) amendment of this section, see § 201(i) of the Criminal Fine Proportionality Emergency Act of 2013 (D.C. Act 20-45, April 1, 2013, 60 DCR 5400, 20 DCSTAT 1300).


It is a commonly held belief that Florida public policy forbids insurance coverage for punitive or exemplary damages, regardless of the policy language. However, a review of cases addressing the issue reveals that the public policy prohibition on coverage for punitive damages applies only to insureds who engage in active wrongdoing. It is clear that Florida’s public policy does not prohibit insurance coverage for punitive damages based on vicarious liability. The Florida Supreme Court has succinctly set forth the policy, and the reasoning behind it.
“Florida public policy prohibits liability insurance coverage for punitive damages assessed against a person because of his own wrongful conduct.” U.S. Concrete Pipe Co. v. Bould, 437 So. 2d 1061 (Fla. 1983). “The Florida policy of allowing punitive damages to punish and deter those guilty of aggravated misconduct would be frustrated if such damages were covered by liability insurance.” Id.
“However, it is generally held that there is a distinction between the actual tortfeasor and one only vicariously liable and that therefore public policy is not violated by construing a liability policy to include punitive damages recovered by an injured person where the insured did not participate in or authorize the act.” See Id., citing Sterling Insurance Co. v. Hughes, 187 So. 2d 898 (Fla. 3d DCA 1966). Common scenarios wherein an insured could face punitive damages based on vicarious liability include companies answering for the conduct of employees, and contractor-subcontractor relationships where the subcontractor’s actions provide the basis for a cause of action which supports punitive damages.
In cases where punitive damages are awarded based on vicarious liability, an analysis of the relevant policy language is necessary. Simply because public policy would allow for punitive damages based on vicarious liability does not mean that the language of the insurance policy actually provides coverage. For example, in First Specialty Ins. Co. v. Caliber One Indem. Co., 988 So. 2d 708 (Fla 2nd DCA 2008) the Second District Court of Appeal, held that while public policy did not forbid coverage of punitive damages based on vicarious liability, the language of the policy, which defined damages as “any compensatory amount”, did not provide coverage for punitive damages because punitive damages are not compensatory. In addition, the 2nd District held that the policy did not provide coverage, because it specifically excluded coverage for “penalties or fines” rendered against the insured. See Id. at 713. However, even a clause specifically excluding punitive damages was held to be insufficient justification for dismissing a complaint against an insurance company. See Schwab v. First Appalachian Ins. Co., 58 F.R.D. 615, 622 (Fla. 1973).
Additionally, the Florida Supreme Court has held that there must be some independent wrongdoing by the vicariously liable party to allow for punitive damages. See Mercury Motors Express, Inc. v. Smith, 393 So.2d 545, 549 (Fla. 1981). This appears to require negligence on the part of the vicariously liable party, or some other wrongful conduct- however, if the wrongful conduct of the vicariously liable party is itself the basis of a portion of the punitive damages, this would prevent recovery from insurance, at least as to the punitive damages based directly on the wrongful conduct, based on the public policy previously discussed.
While there are several legal impediments, in some cases, insurance policies may indeed cover punitive damage, despite popular belief to the contrary. As always, the facts and the policy language will control the analysis, but when vicarious liability is alleged, insurance coverage for punitive damages becomes a possibility to be carefully evaluated.
In Florida, communications between a lawyer and a client are “confidential” and, barring exception, not subject to disclosure. See Fla. Stat. § 90.502. One exception is the “joint client” exception to attorney-client privilege. See Fla. Stat. § 90.502(4)(e). The exception applies only when an attorney represents two parties “in common” who later are opponents in a civil action.
An attorney may represent clients jointly, so long as the joint representation does not entail a conflict of interest and the clients request or agree to the joint representation. This often comes into play in the insurance context, when a liability insurer hires an attorney to defend a policyholder; this relationship is called a “tripartite relationship” (insurer, insured and insured’s counsel). Despite having three parties to this relationship, parties to this relationship can assert attorney-client privilege and work-product.
However, when an insurer denies coverage, asserts a defense to coverage, or issues a reservation of rights under an insurance policy, the interests of the insurer and insured are in direct conflict. Univ. of Miami v. Great Am. Assur. Co., 112 So. 3d 504, 507 (Fla. 3d DCA 2013). Under such circumstances, both parties need their own counsel and an attorney generally may not represent both the insurer and the insured.Id. Thus, the tripartite relationship is broken.
However, the United States District Court for the Southern District in Maplewood Partners, L.P. v. Indian Harbor Ins. Co., 2011 WL 3918597 *1 (S.D. Fla. Sept. 6, 2011), held that an insurer was entitled to discovery of otherwise protected attorney client communications and attorney work product from the underlying case because of the existence of a common interest between the insurer and the insured and because the insured put defense counsel work product “at issue” by challenging the insurer’s allocation assessment.
The insured initiated coverage litigation against the insurer for breach of a D&O policy, disputing the insurer’s allocation between covered and uncovered amounts with respect to the defense and settlement of four separate lawsuits. Id. at *1. The insurer sought discovery of all communications between the insured and its defense counsel concerning the underlying matters and assessments made by the insured or defense counsel concerning the insured’s liability and the settlement value of the litigation. Id. The insured objected to this discovery, arguing that the information sought was protected by Florida’s attorney client privilege and federal law’s attorney work product doctrine. Id.
The Southern District rejected the insured’s argument after a hearing on a motion to compel, finding that the applicability of the work product doctrine in this case turned on federal law notwithstanding that the documents at issue were prepared in connection with state court litigation. Id. at *2. Thus under federal law, the court determined that the insured waived the protection afforded by the doctrine with respect to defense counsel’s assessment of liability and damages in the underlying litigation by putting that assessment “at issue.” Id. at *5. The court held that because the insured brought suit against the insurer, the insured could not preclude the discovery of information that was vital to the insurer’s defense that its allocation method was appropriate as compared to the allocation method pressed by the insured. Id.
Next, the court held that the insurer was entitled to the discovery of information that otherwise would be protected from disclosure by the privilege afforded attorney-client communications under Florida law. Id. at *5. According to the court, the insured could not claim this privilege as to the insurer because of the existence of a common interest between the insured and insurer with respect to the underlying litigation.Id. Specifically, the court found that the insured and insurer “shared a common interest in defeating liability in the underlying proceedings.”Id. Specifically, the court rejected the insured’s arguments that there was no common interest here because the insurer did not have a duty to defend under the policy and because the insurer had issued a reservation of rights letter. Id. at *6.


text:
Rowan B. v. Alaska Dept. of Health & Social Svcs.
In Re Necessity for the Hospitalization of Reid K.
Erica G. v. Taylor Taxi, Inc.
Hope P. v. Flynn G.
Alaska Dept. of Revenue v. BP Pipelines (Alaska) Inc.
In Re Necessity for the Hospitalization of Dakota K.
Jennifer L. v. Alaska Dept. of Health & Social Svcs.
Caroline J. v. Theodore J.
Matthew P. v. Gail S.
Pacifica Marine, Inc. v. Solomon Gold, Inc.
Duenas-Rendon v. Wells Fargo Bank, N.A.
Remy M. v. Alaska Dept. of Health & Soc. Svcs.
Andrea C., v. Marcus K.
Theresa L., v. Alaska Dept. of Health & Soc. Svcs.
Sarah D. v. John D.
Faye H. v. James B.
Shirley M. v. Alaska Dept. of Health & Social Svcs.

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