In Uncategorized on 03/19/2021 at 15:47

The words of the great Smokey Robinson’s most-covered 1962 smash echo through the ranks of the conservation dodgers, as Oakbrook and Hewitt advance through the appellate ranks. Dave Hewitt, he who saved Daddy’s farmstead from the mobile homesters and spawned a new industry, is up for 11 Cir review, and Oakbrook heads for 6 Cir.

Various regs and “very contestable readings of what it means for an easement to be perpetual” are in the mix. Backstory on Hewitt is in my blogpost “‘Gude Faith, He Maunna’ Fa’ That’ – Part Deux,” 6/17/20, and Oakbrook in my blogpost “They Always Must Be With Us,” 5/12/20.

So today I’m picking just one of a number of cases that Judge Elizabeth Crewson Paris is pulling off the Glasshouse conveyor belt and putting aside until one or another Circuit illuminates us all.

Here’s North By Northwest, III, LLC, Bryan Kelley, Tax Matters Partner, Docket No. 12105-19, filed 3/19/21. The Northers have land in WV, but their homeport is in GA (coincidence, huh?). And while “the property subject to the conservation easement is located wholly in the state of West Virginia and significant state property law questions may exist,” the GA homeport plants the Northers next to Dave Hewitt. Order, at p. 1.

As for the holdup, Judge Paris has the usual copious citation of precedent, all of which I’ll omit, but you might want for your next memo of law.

“‘[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.’ There is a good reason for staying a case when a controlling question of law is pending on appeal. The Tax Court has discretion to stay civil proceedings when the interests of justice seem to require such action.” Order, at p. 2.

And while the 11 Cir resolution will not dispose of everything in this case, it doesn’t have to. “…the Eleventh Circuit is likely to examine the issues central to the motion for partial summary judgment. Therefore, the Court agrees with petitioner that the outcome of the Hewitt appeal before the Eleventh Circuit will likely be insightful to the disposition of the current case and more specifically respondent’s motion for partial summary judgment.” Order, at p. 2.

And even though IRS agrees to the stay here, Judge Paris says waiting can’t hurt.

“As respondent is also a party in Hewitt before the Eleventh Circuit, a stay would also potentially benefit respondent since he will be able to avoid parallel litigation in multiple cases.” Order, at p. 2.

Note the parties don’t agree to be bound by whatever 11 Cir decides, despite the GA connection and Golsen.

As for Oakbrook, “(I)n challenging respondent’s determination, petitioner attacked both the substance of the regulation and the procedure the Treasury used in promulgating the 170A regulations.” Order, at p. 2, footnote 1.

So maybe in 6 Cir, with Reg. 1.170A-14(g)(6)(ii) being smitten both root and branch, we’ll get learning that will put an end to the debate.

Cain’t hardly wait.








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