Decisions Roundup: Satellite TV Providers Lose Challenge to Tax Scheme

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Decisions Roundup: Satellite TV Providers Lose Challenge to Tax Scheme

Tue Jan 15, 2008 @ 10:49AM PST

Posted by Matthew Heller

Gavel_celeb_20061127 Case: DIRECTV, Inc. v. Tolson

Court: 4th Circuit

Date: Jan. 10, 2008

Facts: As a result of laws enacted in 2006, North Carolina eliminated the franchise authority of local governments and required multi-channel television providers to pay 7 percent of gross receipts in sales taxes to the state, which in turn distributes a portion of the proceeds to counties and cities. Satellite providers DIRECTV and Echostar alleged the taxation scheme created an unconstitutional subsidy because "[c]able providers no longer have to pay franchise fees, but continue to receive the valuable right of access to publicly owned rights-of-way they formerly obtained through the payment of such fees." A trial judge dismissed the case, finding the new laws provide no subsidy to cable operators.

Holding: The principle of tax comity -- which bars taxpayers from challenging state tax systems in federal courts as long as "plain, adequate, and complete" remedies are available in the state courts -- precludes relief for the plaintiffs. "[W]hat Plaintiffs ask for here is a federal court-ordered redistribution of intra-state taxation authority. This relief would be heavyhanded indeed, and would be a particularly inappropriate intrusion by the federal courts into North Carolina’s tax laws."

Attorneys of record: Pantelis Michalopoulos of Steptoe & Johnson in Washington, D.C., for DIRECTV and Echostar; Assistant Attorney General Michael David Youth for the state.

To read the full opinion, click here or

Case: Hall v. Time Inc.

Court: California 4th District Court of Appeal

Date: Jan. 7, 2008

Facts: Time Inc. offered a “free preview period” during which a consumer had 21 days in which to review a book and return it with no obligation to buy. After plaintiff Jeffrey Hall responded to the offer, he received a book along with an invoice that prominent displayed “a non-contingent obligation which is immediately payable." Time, he alleged, engaged in an “ongoing, unfair and/or fraudulent and/or unlawful business practice” by sending invoices before the end of the free trial period in order to induce consumers to pay on receipt of the book.

Holding: Plaintiff has no standing to sue under California's Unfair Competition Law because he cannot allege an injury in fact or financial loss as a result of accepting Time's offer. "Hall did not allege he did not want the book or Time’s alleged acts of unfair competition induced him to keep a book he otherwise would have returned during the free trial period."

To read the full opinion, click here or

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