Justia Washington Supreme Court Opinion Summaries

Historically, sovereigns were not subject to statutes of limitations without their explicit consent. Washington State consented to some statutes of limitations but not to others. The issue this case presented for the Washington Supreme Court's review in this case was whether Washington consented to a statute of limitations that would bar this antitrust suit filed by the Washington State attorney general on behalf of the State against more than 20 foreign electronics manufacturing companies. The State alleged that between at least March 1, 1995, through at least November 25, 2007, the defendants violated RCW 19.86.030, which prohibited any "contract, combination ... or conspiracy in restraint of trade or commerce," by agreeing to raise prices and agreeing on production levels in the market for CRTs (cathode ray tubes) used in televisions and computer monitors before the advent of LCD (liquid crystal display) panels and plasma display technologies. Due to this unlawful conspiracy, the State alleges, Washington consumers and the State of Washington itself paid supracompetitive prices for CRT products. Ten of the defendants filed a motion to dismiss, arguing the claims were time barred because Washington's Consumer Protection Act (CPA) must be brought within four years. The State responded that RCW 19.86.120's statute of limitations did not apply to its claims under RCW 19.86.080. After review, the Supreme Court concluded the State's action for injunctive relief and restitution was exempt from the statute of limitations in RCW 19.86.120 and from the general statutes of limitations in chapter 4.16 RCW. View "Washington v. LG Elecs., Inc." on Justia Law

New Cingular Wireless PCS LLC, an affiliate of AT&T Mobility LLC, provides both wireless voice telephone services and data services to customers in the city of Clyde Hill. Clyde Hill imposes a local utility tax on wireless telephone services, which applies to both voice and data services. New Cingular had for years collected utility taxes from Clyde Hill's residents on all charges for wireless and telephone voice and data services, and paid the tax to the city. In this case, the issue presented for the Supreme Court's review was whether the cellular service provider could challenge a city fine through an action for declaratory judgment in superior court. The trial court dismissed, holding that a declaratory judgment action was improper and judicial review should have been sought by way of a statutory writ of review under RCW 7 .16.040. The Court of Appeals reversed, reinstating the declaratory action and remanding for a decision on the merits. Finding no reversible error in the Court of Appeals' judgment, the Supreme Court affirmed. View "New Cingular Wireless PCS, LLC v. City of Clyde Hill" on Justia Law

The issue this case presented for the Supreme Court's review centered on whether the legislature's amendment to a business and occupation (B&O) tax exemption, applied retroactively, violated a taxpayer's rights under the due process clause of the Fourteenth Amendment, collateral estoppel, or separation of powers principles. Taxpayer Dot Foods contended that it should have remained eligible for a B&O tax exemption pursuant to the Washington Supreme Court's decision in "Dot Foods, Inc. v. Department of Revenue," (215 P.3d 185 (2009) (Dot Foods I)), despite an intervening, contrary amendment to the applicable law. Because Dot Foods I did not encompass the tax periods at issue in this case, the Supreme Court held that retroactive application of the legislative amendment to Dot Foods did not violate due process, collateral estoppel, or separation of powers principles. View "Dot Foods, Inc. v. Dep't of Revenue" on Justia Law

Klein Honda was a Honda dealership. From time to time, Honda (the manufacturer) offered a "dealer cash" incentive program for its dealerships whereby dealerships can earn a specific amount of extra money if they sold specific Honda models during specific times and comply with other terms and conditions. At issue in this case was whether Klein Honda's dealer cash earnings were taxable. "Klein Honda received additional, separate income beyond its ordinary retail sales. That constitutes an additional taxable business activity under the [B&O] catchall provision. Although dealer cash would not be taxable under one of the Washington State Department of Revenue's regulations if it represented a 'bona fide discount' on Klein Honda's wholesale purchase of vehicles, dealer cash is not a bona fide discount because Klein Honda does not purchase vehicles from Honda subject to a dealer cash discount. Dealer cash payments are not necessarily quantified or even knowable at the time that Klein Honda purchases vehicles from Honda. Thus, Klein Honda's dealer cash is taxable." View "Steven Klein, Inc. v. Dep't of Revenue" on Justia Law

Several Indian tribes successfully challenged the imposition of state fuel taxes on tribal retailers. Since then, the State and various tribes signed agreements under which the tribes agreed to buy taxed fuel, and the State agreed to refund a portion of the fuel tax receipts to the tribes. An industry group unsuccessfully challenged the lawfulness of these agreements. The issue this case presented for the Washington Supreme Court's review reduced to whether those agreements violated article II, section 40 of the State Constitution. "Without passing judgment on whether the legislature successfully moved the legal incidence of the tax away from tribal retailers," the Supreme Court affirmed dismissal of the industry group's challenge. View "Auto. United Trades Org. v. Washington" on Justia Law

In 2013, the legislature amended the Estate and Transfer Tax Act in response to the Washington Supreme Court's decision in "In re Estate of Bracken," 290 P.3d 99 (2012), in which the Court narrowly construed the term "transfer." The amendment allowed the Department of Revenue (DOR) to tax qualified terminable interest property (QTIP) as part of a surviving spouse's estate. A QTIP trust is created by a deceased spouse and gives the surviving spouse a life interest in the income or use of trust property. In consolidated cases, the estates of Hambleton and Macbride challenged the amendment on a variety of grounds. The Supreme Court rejected the Estates' challenges, reversed summary judgment in In re Estate of Hambleton, and affirmed the summary judgment in In re Estate of Macbride. View "In re Estate of Hambleton" on Justia Law

This case centered on the interpretation of a state tax deduction statute. Former RCW 82.04.4292 (1980) provided that in computing their business and occupation (B&O) tax, banks and financial institutions could deduct from their income "amounts derived from interest received on investments or loans primarily secured by first mortgages or trust deeds on nontransient residential properties." Between 2004 and 2007, petitioner Cashmere Valley Bank invested in mortgage-backed securities known as real estate mortgage investment conduits (REMICs) and collateralized mortgage obligations (CMOs). Cashmere claimed that interest earned on these investments was deductible under RCW 82.04.4292. Upon further review, the Supreme Court concluded Cashmere could not claim the deduction because its investments in REMICs and CMOs were not "primarily secured" by first mortgages or trust deeds. The ultimate source of cash flow was mortgage payments. However, Cashmere's investments were not backed by any encumbrance on property nor did Cashmere have any legal recourse to the underlying trust assets in the event of default. Thus, Cashmere's investments were not "primarily secured" by mortgages or trust deeds. View "Cashmere Valley Bank v. Dep't of Revenue" on Justia Law

Expedia (and several other hotel booking websites, collectively, "Petitioners") has been subject to approximately 80 underlying lawsuits by states, counties, and municipalities (collectively, taxing authorities) for purportedly failing to collect the right amount of local occupancy taxes from its hotel customers. Expedia tendered most of the suits to its insurer, Zurich, although some were tendered late. Zurich refused to defend Expedia on a number of grounds, including late tender and that the underlying suits may be excluded from the policies' coverage. The trial court declined to make a determination of Zurich's duty to defend Expedia, instead ordering discovery that Expedia claimed was prejudicial to the underlying actions. Petitioners sought adjudication of their summary judgment motion concerning their respective insurers' duty to defend them in cases brought by local taxing authorities. They further requested a stay of discovery in the coverage action that could prejudice them in the underlying litigation. Upon review of the matter, the Washington Supreme Court held that the trial court erred by delaying adjudication of Zurich's duty to defend Expedia. Accordingly, the Court vacated the trial court's order. The case was remanded to the trial court to determine Zurich's duty to defend Expedia in each of the 54 underlying cases subject to Expedia's motion. The trial court was furthermore ordered to stay discovery in the coverage action until it could make a factual determination as to which parts of discovery are potentially prejudicial to Expedia in the underlying actions. View "Expedia, Inc. v. Steadfast Ins. Co." on Justia Law

In late 2008, Cost Management Services Inc. (CMS) reviewed its years of tax payments made to the City of Lakewood. In examining the relevant regulations, CMS decided that it did not in fact owe the tax that it had been paying. In November 2008, it stopped paying the tax and it submitted a claim to Lakewood for a refund of taxes it had previously paid from 2004 to September 2008. Lakewood did not respond to the request for a refund of the 2004-2008 tax payments. But six months later, in May 2009, it issued a notice and order to CMS demanding payment of past due taxes for a different time period-October 2008 to May 2009. CMS did not respond to the notice and order from Lakewood. Instead, CMS sued Lakewood in superior court on its refund claim, asserting a state common law claim of money had and received. The trial court held a bench trial and found in favor of CMS, ruling that CMS did not owe the taxes it had paid to Lakewood. In addition (in a separate action), the trial court granted CMS 's petition for a writ of mandamus ordering Lakewood to respond to the refund claim. The Court of Appeals affirmed, reasoning that since Lakewood had never actually responded to the refund claim, CMS had no further administrative steps available to it on the refund claim, and thus exhaustion was not required. The appellate court also ruled that the trial court had properly issued the writ of mandamus. Lakewood sought review of the Court of Appeals' decisions on the exhaustion and the mandamus issues. After careful consideration, the Supreme Court affirmed the Court of Appeals as to the exhaustion issue, but reversed the Court of Appeals as to the mandamus issue. View "Cost Mgmt. Servs. v. City of Lakewood" on Justia Law

The issue before the Supreme Court in this case was a challenge to two provisions of the voter-enacted RCW 43.135.034 (2011) (Initiative 1053). The first provision required that any bill containing tax increases be passed by a two-thirds majority vote of the legislature, and the second provision required that any tax bill increasing state spending above a prescribed limit be approved by the voters. The Court addressed only whether the challenges to the provisions were justiciable and whether they violated the Washington Constitution. A superior court found both provisions justiciable but that the supermajority requirement and referendum requirement both violated the Constitution. The State appealed. Upon review, the Supreme Court affirmed in part, and reversed in part. The Court affirmed the superior court's holding that one provisions were justiciable, and that justiciable provision, the supermajority requirement, violated Article II, section 22 of the state Constitution. However, the Court reversed the superior court's decision that the referendum provision was justiciable. Accordingly, the Court made no determination as to its constitutionality. View "League of Educ. Voters v. Washington" on Justia Law