Wasserman's Appellate Summaries
October 2, 2000
By Lawrence Wasserman, Esq.
Netlaw Libraries welcomes back attorney Lawrence Wasserman as a new website contributor. We are pleased to announce that his guest column, which synopsizes the recent decisions from the Ninth Circuit Court of Appeals, the California Supreme Court, the six California appellate districts, as well as some of the recent and interesting decisions from the U.S. Supreme Court, will be appearing as a regular feature for members and guests visiting the Netlaw Libraries website. We hope that you will find it to be a good way to start your legal research day and welcome your comments and criticisms regarding the column.
Citicorp North America v. Franchise Tax Board
Case No. A086925
California Court of Appeal, First District, Division One
TAXATION-UNITARY BUSINESS-FORMULA ALLOCATING COMBINED INCOME TO A STATE-BURDEN OF PROOF OF ARBITRARY AND UNREASONABLE METHOD OF ALLOCATION
Citicorp is a Delaware corporation, with its principal place of business in New York. Citicorp and its affiliate corporations provide worldwide financial services. Citicorp and its affiliates filed separate company franchise tax returns in California. In 1992 and 1993, the Citicorp group filed amended returns requesting refunds for certain challenged years, taking the position that the combined franchise tax must be computed on a unitary basis. The South Dakota affiliate handles VISA and MasterCard credit card business, was a member of the unitary group for the years in question. In calculating its California sales, Citicorp excluded South Dakota's California sales. The Franchise Tax Board recalculated the refund under a 1990 decision changing the way an out-of-state affiliate’s sales are apportioned to determine the income of the unitary business, Citibank sued for a refund. Judgment was for the FTB.
HELD: A unitary business is one that receives income from or attributable to sources both within and without the state. If a unitary business exists, taxes are apportioned by formula to allocate to California for taxation, its fair share of the taxable values of the taxpayer. In determining the proportion of the combined income in California, the new method used by the FTB treats all affiliates as a unitary taxpayer and includes income generated in California from affiliate corporations located outside the state, if any member of the group is taxable in the state, even though the affiliate itself is not taxable. When a unitary business is established, a taxpayer challenging the FTB’s apportionment method must show the formula allocation method was arbitrary and unreasonable. The Court concluded the FTB properly included the California sales of Citicorp’s Citibank (South Dakota), a member of the unitary corporate group, in calculating the amount of income apportionable to California operations under the rule in effect at the time Citicorp filed its amended returns. It also rejected Citicorp’s contention that the gain on sales of real property, including its corporate headquarters, was not business income. Affirmed.
People v. Tye/Greene
Case Nos. A085437/A086610
California Court of Appeal, First District, Division Five
(The FACTS and parts I, II and III of this opinion are not certified for publication.)
CRIMINAL-IMPOSITION OF PAROLE REVOCATION FINE WHEN DEFENDANT GRANTED PROBATION
Tye and Greene were tried together. Greene was convicted of attempted murder, false imprisonment, and cruelty to an animal. The jury found Tye guilty only of false imprisonment, acquitting him of attempted murder and animal cruelty. Execution of sentence was suspended, and Tye was placed on probation for five years. The court ordered Tye to pay victim restitution, a restitution fine payable to the State Restitution Fund, and additional parole revocation restitution fine. Tye challenges the parole revocation restitution fine of $800, arguing that Penal Code section not apply because he was granted probation.
HELD: The applicable Penal Code section provides that: In every case where a person is convicted of a crime and whose sentence includes a period of parole, the court shall at the time of imposing the restitution fine, assess an additional restitution fine in the same amount. This additional restitution fine shall be suspended unless the person’s parole is revoked. When, as here, a prison sentence, including a period of parole, has been imposed and only the execution has been suspended, we conclude that Penal Code section applies and the restitution fine may properly be imposed. Affirmed.
Shewfelt v. State Of Alaska
Case No. 99-35647
U.S. Court of Appeals for the Ninth Circuit
CRIMINAL-PLAYBACK OF TRIAL TESTIMONY WITHOUT PRESENCE OF DEFENDANT-HARMLESS ERROR
Shewfelt was tried by jury for sexual assault in the first degree. During deliberations, the jury asked to rehear the entire testimony of the victim and Shewfelt. Shewfelt's attorney and the prosecutor agreed to the playback. Shewfelt was not informed and was not present during the playback. The clerk of the court was permitted to play the requested tapes for the jury. The replay request proceedings were not placed on the record. Shewfelt was convicted. When he learned of the playback procedure he filed a motion for a new trial, which was granted, and reversed on appeal. Shewfelt's petition for federal habeas corpus was denied, on harmless error grounds.
HELD: The court's failure to provide a defendant with the opportunity to be present at the playback of trial testimony violates the defendant's Sixth Amendment rights and also violates Alaska state law. This was a "trial error," as opposed to a structural error. Trial error affects the presentation of the case to the jury and must be quantitatively assessed to determine whether it had an effect on the outcome of the trial. The burden of persuasion to demonstrate the harmlessness of constitutional trial error in the context of collateral review lies with the government. If there is grave doubt' about whether the error had substantial and injurious effect on the jury's verdict the court should not treat the error as harmless. In this case the government met its burden of persuasion to demonstrate the error was harmless beyond a reasonable doubt. Affirmed.
Cole v. Oroville Union High School
Case No. 99-16550
U.S. Court of Appeals for the Ninth Circuit
CONSTITUTIONAL-ESTABLISHMENT CLAUSE-SECTARIAN SPEECH AT HIGH SCHOOL GRADUATION-STANDING-MOOTNESS
Cole and Niemeyer were students at Oroville High School who graduated in 1998. They claim the Oroville Union High School District violated their freedom of speech by refusing to allow Niemeyer to give a sectarian, proselytizing valedictory speech and Cole to give a sectarian invocation at their graduation. Their suit was dismissed on motion of the School.
HELD: Both standing and mootness are jurisdictional issues deriving from the requirement of a case or controversy The students' equitable claims are moot because Niemeyer and Cole have graduated, and their damage claims fail because the District officials' actions were reasonably taken to avoid violating the Establishment Clause of the First Amendment. Niemeyer's brother and various Oroville students, parents and others, who were added to the lawsuit lack standing, either because they, too, have graduated or because the likelihood of their being selected to speak at a graduation or their attending a future graduation where some student speaker will attempt to offer a sectarian speech or invocation is too speculative to satisfy an injury-in-fact requirement for standing. The District officials did not violate the students' freedom of speech. Even assuming the Oroville graduation ceremony was a public or limited public forum, the District's refusal to allow the students to deliver a sectarian speech or prayer as part of the graduation was necessary to avoid violating the Establishment Clause. Affirmed.
United States v. Upshaw
Case No. 99-10381
U.S. Court of Appeals for the Ninth Circuit
CRIMINAL-SENTENCING-UPWARD ADJUSTMENT FOR SERIOUS BODILY INJURY
Upshaw, an Indian, shot his victim in the ankle, causing a puncture wound with some tenderness and minimal bleeding. Upshaw pleaded guilty to one count of assault resulting in serious bodily injury and one count of possession of a firearm with an obliterated serial number. The district court made a four-level upward adjustment for serious bodily injury.
HELD: The code defines serious bodily injury" as an injury which involves: (A) a substantial risk of death; (B) extreme physical pain; (C) protracted and obvious disfigurement; or, (D) protracted loss or impairment of the function of a bodily member, organ, or mental faculty. Upshaw's conviction established that the assault he committed was an assault that resulted in serious bodily injury. The federal sentencing guidelines requires the court to impose a four-level upward adjustment for an assault resulting in serious bodily injury. That is what the district court did. Affirmed.
*United States v. Maggio
Case No. 99-55040
U.S. Court of Appeals for the Ninth Circuit
CRIMINAL-FOURTH AMENDMENT-SEARCH AND SEIZURE-SCOPE OF TERRY STOP FOR INVESTIGATION
After Robert Kalatschan was ordered to leave the motel room he occupied for five days a pound of cocaine was discovered in the room. When police arrived they found Kalatschan in another room of the motel. He was under the influence of cocaine and arrested. While in the room the officers received incoming telephone calls from males who said they would "pick up." Two individuals later arrived at the room and were arrested for being under the influence of cocaine. The officers also received a call that a man involved in the narcotics activity was on his way to the room Kalatschan had previously occupied. An officer encountered the person, who identified himself as Maggio, knocking on the door. Maggio was ordered to place his hands on his head and taken to the other motel room. He was patted down and a group of keys was taken from his pocket. An officer used the key to determine which car was Maggio's. The officer observed, from outside the car, that there was a camera bag with money hanging out. Maggio admitted that the car contained money and cocaine. After waiving his Miranda rights, Maggio consented to the search of his Porsche. The search revealed $3,979 in currency, one-half kilo of marijuana, two and one-half kilos of cocaine, a loaded handgun, drug paraphernalia, and two locked briefcases. Maggio denied ownership of the briefcases. Officers obtained a search warrant for the two briefcases and found one-half kilo of cocaine and $105,200 inside. The federal government sought forfeiture. The court held that the search there was no violation of Maggio's Fourth Amendment rights, and even if Maggio's rights had been violated, the evidence obtained by the warrant would not be suppressed because of a good faith exception.
HELD: With the information the police officer had a reasonable suspicion to believe that Maggio was involved in a narcotics operation, and that he might be armed. Requesting that Maggio place his hands on his head was less intrusive than handcuffing him; the officer never pointed his gun at Maggio and he moved Maggio only a short distance down the hall. These actions were reasonable to ensure his own safety and that of others. This was a reasonable Terry investigative stop and the pat down for weapons was within the scope of the stop. The insertion of the key in the Porsche was within the purpose of identification of Maggio. Maggio had a minimal expectation of privacy in the lock of his car door and the officer's action was not an unreasonable search under the fourth amendment. Affirmed.
*Change in law, interesting case, or just watch out!
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