The Lawletter Vol 38 No 7

Brad Pettit, Senior Attorney, National Legal Research Group

     The courts of the various states are quite busy addressing issues that arise in the context of same-sex marriage.  This activity will certainly increase, given the U.S. Supreme Court's recent ruling in United States v. Windsor, 133 S. Ct. 2675 (2013).

     A recent decision by a New York State appellate court, while not relying on Windsor, is illustrative of the kinds of issues that can arise in administering the estate of a decedent who was involved in a same-sex marriage that was recognized in some states but not in others.  In the case of In re Ranftle, 969 N.Y.S.2d 48 (App. Div. 2013), the court held that for purposes of probating the will of a deceased married person, the decedent's surviving same-sex spouse had met his burden of proof in showing that the deceased testator had changed his domicile from Florida (does not recognize same-sex marriages) to New York (recognizes same-sex marriages) in the months prior to his death.

     In reaching its decision, the Ranftle appellate court stated that "[w]e see no basis for disturbing the Surrogate's Court's finding that Ranftle changed his domicile to New York in the months before his death," id. at 51, even though the decedent's will contained a statement declaring that he was a resident of Florida.  Rather than focusing solely on what the decedent's will said about the testator's residence, the probate and appellate courts in the Ranftle case both relied on New York's rules for determining the domicile of a decedent at the time of his or her death.  The Ranftle court's ruling reads as follows:

     The Surrogate's Court Procedure Act defines domicile as "[a] fixed, permanent and principal home to which a person wherever temporarily located always intends to return" (SCPA 103[15]). "The determination of an individual's domicile is ordinarily based on conduct manifesting an intent to establish a permanent home with permanent associations in a given location" (Matter of Clute v. Chu, 106 A.D.2d 841, 843, 484 N.Y.S.2d 239 [3d Dept 1984]). A person's domicile is generally a mixed question of fact and law, which the court must determine after reviewing the pertinent evidence (see Matter of Brunner, 41 N.Y.2d 917, 918 [1977]).   No single factor is dispositive (Matter of Kartiganer v. Koenig, 194 A.D.2d 879, 881, 599 N.Y.S.2d 312 [3d Dept 1993]), and the unique facts and circumstances of each case must be considered (Ruderman v. Ruderman, 193 Misc. 85, 87, 82 N.Y.S.2d 479 [Sup Ct, N.Y. County 1948], affd, 275 A.D. 834, 89 N.Y.S.2d 894 [1st Dept 1949]). A party alleging a change of domicile has the burden of proving that change by clear and convincing evidence (Gletzer v. Harris, 51 A.D.3d 196, 199, 854 N.Y.S.2d 10 [1st Dept 2008], affd, 12 N.Y.3d 468 [2009]).

     We agree with the Surrogate that Leiby met his burden of proof as to the change of domicile. As noted, petitioner's scattered evidence that Ranftle remained a Florida domiciliary is overwhelmed by the large and consistent body of evidence showing that Ranftle moved back into the New York City apartment he shared with his husband with the intent of permanently remaining there, and that his change of domicile was motivated both by his grave illness and New York's recognition of same‑sex marriages.

The Lawletter Vol 38 No 6

Brad Pettit, Senior Attorney, National Legal Research Group

The so-called "innocent spouse relief" provisions of the Internal Revenue Code provide that if, upon

taking into account all the facts and circumstances, it is inequitable to hold the other individual liable for the deficiency in tax for such taxable year attributable to [the] understatement [of one of the joint filers], . . . then the other individual shall be relieved of liability for tax (including interest, penalties, and other amounts) for such taxable year to the extent such liability is attributable to such understatement.

26 U.S.C. § 6015(b)(1)(D) (Westlaw current through P.L. 113‑13 approved 6‑3‑13) (paragraphing omitted).  Section 6015 goes on to say that if relief is not available to the other individual under subsection (b) (or (c)), "the Secretary may relieve such individual of such liability."  Id. § 6015(f).

Currently, there is some confusion as to which of two administrative rulings by the Internal Revenue Service ("IRS") should be applied when evaluating whether a taxpayer qualifies for equitable innocent spouse relief under § 6015(f):  IRS Notice 2012‑8, 2012‑4 I.R.B. 309; or Rev. Proc. 2003‑61, 2003‑2 C.B. 296.  Both of these rulings by the IRS describe in detail the procedures that must be followed and the standards that are to be applied in a case in which a taxpayer petitions the IRS for innocent spouse relief.  However, according to at least three decisions by the U.S. Tax Court, the guidelines of Revenue Procedure 2003‑61 must be followed unless and until the recommended changes in the procedures and standards set forth in IRS Notice 2012‑8 are "finalized" via the issuance of a formal Revenue Procedure.  Hudgins
v. Comm'r, T.C. Memo. 2012‑260, T.C.M. (RIA) ¶ 2012‑260, 2012 WL 3964890; Deihl v. Comm'r, T.C. Memo. 2012‑176, T.C.M. (RIA) ¶ 2012‑176, 2012 WL 2361518; Sriram v. Comm'r, T.C. Memo. 2012‑91, T.C.M. (RIA) ¶ 2012‑091, 2012 WL 1021315.  Therefore, although IRS Notice 2012‑8 purportedly "superseded" Revenue Procedure 2003‑61, an attorney or accountant representing a taxpayer seeking innocent spouse relief under § 6015
is advised to consult with the IRS to make sure that both the client and the IRS are following the same guidelines and rules for determining whether the client is entitled to relief from joint and several liability under a jointly filed federal tax return.

A recent Chief Counsel Notice issued by the IRS provides insight as to what to expect when litigating a case involving a married taxpayer's claim for so-called "innocent spouse" relief from joint and several liability on a joint federal income tax return.  In IRS Chief Counsel Notice
("C.C.N.") CC‑2013‑011 (June 7, 2013), the IRS provided Chief Counsel attorneys with guidance regarding the standard and scope of review that the Tax Court applies when reviewing requests for relief from joint and several liability under § 6015(f) and litigation guidance for cases that involve claims for relief under § 6015.  C.C.N. CC‑2013‑011 points out to all IRS attorneys that a de novo standard of review is applied in innocent spouse relief cases that are argued before the Tax Court:

The Lawletter Vol 38 No 6

Fred Shackelford, Senior Attorney, National Legal Research Group

A "golden rule" argument asks jurors to place themselves in the position of a party. For example, an attorney may ask jurors how much the loss of the use of their legs would mean to them or ask them to "do unto others as you would have them do unto you."  Virtually all courts have considered such arguments to be improper if made in regard to damages.  However, courts appear to be split as to whether such arguments are permissible with reference to liability.

The U.S. Court of Appeals for the District of Columbia recently addressed this issue in Caudle v. District of Columbia, 707 F.3d 354 (D.C. Cir. 2013). In Caudle, several employees sued their employer for retaliation under the Civil Rights Act of 1964.  During closing argument, their attorney made four statements to the jury that were challenged on appeal.

First, counsel instructed the jury to "ask yourself, would you hesitate to speak up if you knew that speaking up would mean that your boss would call a meeting with your entire office[?]"  Id. at 358 (emphasis omitted).  Second, counsel argued, "Ask yourself this:  Wouldn't you think twice about complaining about workplace discrimination[?]"  Id. (emphasis omitted).  Third, counsel asked the jurors "to put yourselves in the plaintiffs' shoes. What would it do to you to have your complaint broadcast to your entire office, to be the only one excluded[?]"  Id. (emphasis omitted).  Finally, counsel argued:

By protecting plaintiffs' right to complain about unlawful conduct without reprisal, you preserve the rights not just of plaintiffs but of everyone. By ensuring that plaintiffs are made whole for what they have endured, you ensure that others will be free to exercise their rights without fear. Yours is an important job and we trust that you will [do what] is right and ensure that justice is done.

Id. (emphasis omitted).

The Caudle court noted that at least four circuits have held that golden rule arguments are proper when they relate to liability, while the Third Circuit found no distinction between golden rule arguments relating to damages versus liability.  The Caudle court decided that a golden rule argument is improper regardless of whether it relates to liability or to damages and that such an argument may require a new trial.  The court concluded that the rationale for prohibiting a golden rule argument as to damages—preventing a verdict based on inappropriate considerations such as emotion—applies equally to liability arguments.

Turning to the specific arguments by plaintiffs' counsel, the Caudle court found that all four were inappropriate.  The first three arguments were improper because they asked the jurors to decide how each of them—not how a reasonable person—would feel in the plaintiffs' situation. The fourth argument was not a golden rule argument, but the court found it to be inappropriate as well.  It was a "send a message" argument which, like the golden rule arguments, diverted the jury's attention from its duty to decide the case based on the facts and law as opposed to emotion, personal bias, or interest.  Id. at 361.

The Lawletter Vol 38 No 6

John Buckley, Senior Attorney, National Legal Research Group

The increasingly complex statutory and regulatory requirements imposed upon employers require that written policies be promulgated and maintained in order to avoid fines for noncompliance, exposure to liability from lawsuits, and punitive damages.  Many federal laws, and an increasing number of state laws, require that employers promulgate and maintain written policies.  Furthermore, it is no longer sufficient to simply pass out cookie‑cutter policies; to be effective, workplace policies must be precisely tailored and contain specific provisions required by the location of the workplace, the type of business involved, the number of individuals employed, and a host of other considerations. 

A properly drafted and implemented written policy can be a valuable tool for employers.  For
example, in EEOC v. AutoZone, Inc., 707 F.3d 824 (7th Cir. 2013), the court noted the rule that an employer may avoid liability for punitive damages based on the actions of managerial employees by simply showing that it had implemented an antidiscrimination policy.  Because the employer in that case had not made the modest investment in an adequate antidiscrimination policy, the court upheld an award of $200,000 in punitive damages. See also Dunlap v. Spec Pro, Inc., No. 11‑cv‑02451‑PAB‑MJW, 2013 WL 1397294 (D. Colo. Apr. 5, 2013) (to avail itself of the good‑faith compliance standard, and avoid vicarious liability for punitive damages in a Title VII action, an employer must (1) adopt antidiscrimination policies; (2) make a good-faith effort to educate its employees about these policies and the statutory prohibitions; and (3) make good-faith efforts to enforce an antidiscrimination policy).  

In addition to insulating employers from potentially devastating punitive damages, properly drafted policies can help employers avoid liability entirely.  In the following cases, employers were able to avoid liability for discrimination claims:  Zakrzewska v. New School, 598 F. Supp. 2d 426 (S.D.N.Y. 2009); Chaloult v. Interstate Brands Corp., 540 F.3d 64, 74 (1st Cir. 2008); McPherson v. City of Waukegan, 379 F.3d 430 (7th Cir. 2004); Salazar v. U.S. Dep't of Justice, 98 F. App'x 623 (9th Cir. 2004); Talamantes v. Berkeley County Sch. Dist., 340 F. Supp. 2d 684 (D.S.C. 2004).  In each of these cases, the employers had properly drafted, written policies prohibiting discrimination and setting out grievance procedures for resolving discrimination claims.  Although a properly drafted policy can enable an employer, in many cases, to obtain summary judgment in its favor, a deficient policy may negate certain defenses and enable a plaintiff to survive summary judgment.  Smith v. First Union Nat'l Bank, 202 F.3d 234, 245 (4th Cir. 2000).

In addition to policies prohibiting discrimination and harassment, employers should have written policies that include provisions covering wages and hours, benefits, leave, workplace safety, workplace conduct, and discipline.  Most employers should also consider policies covering Internet and email use, recordkeeping, drug and alcohol use, and immigration law compliance.

The Lawletter Vol 38 No 5

Sandra Thomas, Senior Attorney, National Legal Research Group

Yet another ground for conflict in U.S. state court custody disputes arises from the fact that a number of foreign countries have not signed the Hague Convention on the Civil Aspects of International Child Abduction. That treaty provides a civil remedy if a parent, in violation of the
custody rights of the other parent, absconds with a child to a foreign country.  Under the Hague Convention, courts are required to return the child to the United States if he or she has been wrongfully removed from the United States or wrongfully retained in the foreign country.  The courts of countries that have not signed the treaty are not bound by it and are not obligated to
return a child who was wrongfully removed or retained and not allowed to return to the United States.  (Information about the status of particular countries is available at http://travel.state.gov/abduction/country/country_3781.html.) 

This state of affairs has led some parents in U.S. custody disputes to ask for an order prohibiting the other parent from traveling outside the United States with the children or to ask that the children's passports be held by the domestic parent or by a third party. 

The Lawletter Vol 38 No 5

Paul Ferrer, Senior Attorney, National Legal Research Group

"Remittitur" is defined as "[a]n order awarding a new trial, or a damages amount lower than that awarded by the jury, and requiring the plaintiff to choose between those alternatives."  Black's Law Dictionary "remittitur" (9th ed. 2009).  In essence, if the trial court determines that the jury's award is grossly excessive, then it "may condition a denial of the motion for a new trial upon the filing by the plaintiff of a remittitur in a stated amount," thereby giving the plaintiff "the option of either submitting to a new trial or of accepting the amount of damages that the court considers justified."  11 Charles A. Wright, Federal Practice and Procedure § 2815 (3d ed. & Westlaw database updated Apr. 2013).

In federal court, this practice goes all the way back to 1822, when Justice Story, sitting at circuit, decided that if the jury committed a "gross error" in awarding excessive damages, the trial court, in an "exercise of discretion full of delicacy and difficulty," could either grant a new trial or remit the award.  Blunt v. Little, 3 F. Cas. 760, 761‑62 (C.C.D. Mass. 1822) (Story, C.J.).  If the plaintiff were to accept the remittitur, then "the court ought not to interfere farther."  Id. at 762.  The practice was thereafter accepted by the full Court and applied in the lower federal courts.  See, e.g., N. Pac. R.R. v. Herbert, 116 U.S. 642, 646‑47 (1886); 11 Wright, supra, § 2815 (collecting representative cases).