Recent Court Rulings
Direct Marketing Association v. Brohl (cert denied)
The SLLC filed an amicus brief encouraging the Supreme Court to not hear a case arguing that a Colorado law requiring remote sellers to inform Colorado purchasers annually of their purchases and send the same information to the Colorado Department of Revenue is unconstitutional.
In Quill Corp. v. North Dakota, decided in 1992, the Supreme Court held that states cannot require retailers with no in-state physical presence to collect sales tax. In 2010 the Colorado legislature passed the law described above to improve sales tax collection. The Direct Marketing Association sued Colorado claiming the law unconstitutionally discriminates against interstate commerce and is unconstitutional under Quill.
In February 2016 in Direct Marketing Association v. Brohl, the Tenth Circuit concluded the Colorado law doesn’t discriminate against interstate commerce. DMA was unable to point to any evidence that the notice and reporting requirements imposed on out-of-state retailers are more burdensome than the sales tax collection and administration requirements imposed on in-state retailers. Quill does not apply to the law, the Tenth Circuit reasoned, because it “applies narrowly to sales and use tax collection.”
DMA filed a petition for certiorari asking the Supreme Court to review the Tenth Circuit’s ruling that Colorado’s law discriminates against interstate commerce.
The SLLC amicus brief argues that the Tenth Circuit ruled correctly on the interstate commerce question and that the only “interesting and important” question lurking in this case is whether the Supreme Court should overrule Quill.
In March 2015 the Supreme Court held unanimously that the Tax Injunction Act did not bar the Tenth Circuit (instead of a state court) from deciding whether Colorado’s law was unconstitutional. Justice Kennedy wrote a concurring opinion, which appeared to rely on the SLLC’s amicus brief, stating that the “legal system should find an appropriate case for this Court to reexamine Quill.”
DMA’s cert petition doesn’t raise the question of whether Quill should be overturned. However, the SLLC amicusbrief points out that if the Court is interesting in taking on this question it will be before the Court in no time. “Three States have already taken affirmative steps to challenge Quill head on, passing carefully tailored legislation or administrative rules that precisely frame the question whether [Quill’s] ‘physical presence’ standard should be replaced with an ‘economic nexus’ rule under which sellers can be required to collect state sales tax if they transact a large amount of business in a given state.”
The SLLC urges the Supreme Court to wait and accept one of these cases when they are ready for Supreme Court review and overrule Quill.
Eric Citron, Goldstein & Russell and Ron Parsons, Johnson Janklow Abdallah Zeiter & Parsons wrote the SLLC brief which the following organizations joined: the National Governors Association, the National Conference of State Legislatures, the Council of State Governments, the National Association of Counties, the National League of Cities, the United States Conference of Mayors, the International City/County Management Association,the International Municipal Lawyers Association, and the Government Finance Officers Association.
Ivy v. Morath (dismissed as moot)
In Ivy v. Morath the Supreme Court will decide when state and local governments are responsible for ensuring that a private actor complies with the Americans with Disabilities Act (ADA). The State and Local Legal Center (SLLC) argues they should be responsible when the private actor may fairly be said to be implementing a service, program, or activity of the public entity itself.
In Texas, state law requires most people under age 25 to attend a state-licensed private driver education school to obtain a driver’s license. None of the schools would accommodate deaf students. So a number of deaf students sued the Texas Education Agency (TEA) arguing it was required to bring the driver education schools into compliance with the ADA.
The ADA states that no qualified individual with a disability may be excluded from participation in or be denied the benefits of public entity “services, programs, or activities” because of a disability. The Fifth Circuit concluded that the ADA does not apply to the TEA because it does not provide “services, programs, or activities.” “Here, the TEA itself does not teach driver education, contract with driver education schools, or issue driver education certificates to individual students.”
A dissenting judge concluded the TEA was responsible for enforcing the ADA in this case because “even though the driving schools perform the actual day-to-day instruction, instruction is but one component of the broader program of driver education that is continually overseen and regulated in discrete detail by TEA.”
The SLLC amicus brief was filed on the side of neither party. It argues that the test shouldn’t be whether the state or local government is providing the service but instead whether a private actor may fairly be said to be implementing a service, program, or activity of the public entity. Agreeing with the majority opinion (and disagreeing with the dissenting opinion) in this case, the SLLC brief also argues that no amount of regulation or licensing of a private actor requires a state or local government to enforce the ADA against a private actor.
Finally, the SLLC brief concedes that under its test the TEA would be required to ensure that the driver education schools comply with the ADA. But it notes that “the Texas driver education program at issue here presents a highly unusual, and perhaps unique, example of a situation where a public entity’s licensing requirements for private persons may fairly be said to represent implementation of the public entity’s services, programs or activities.”
Richard A. Simpson, Tara Ward, and Emily Hart, Wiley Rein, wrote the SLLC amicus brief which was joined by the Council of State Governments, National Association of Counties, National League of Cities, United States Conference of Mayors, International City/County Management Association, and the International Municipal Lawyers Association.