Monthly Archives: November 2015

Five Pennsylvania insurance companies recoup $16 million in tax payments after Tennessee Supreme Court holds that retaliatory taxes were improperly assessed

By Daniel A. Horwitz

The American insurance industry is unique in many ways.[1]  Included among its quirks is an interlocking, state-by-state “retaliatory tax” framework that ensures that equally low taxes will be levied on insurance companies across the country no matter where they do business.  The gist of this “retaliatory tax” system is that if one state decides to impose a comparatively more onerous tax on insurance companies, then every other state will punish that state’s insurance companies by imposing a retaliatory tax against them in response.  With the sole exception of Hawaii, every state has enacted a retaliatory insurance tax statute for this purpose.[2]

To illustrate the practical effect of this framework by way of example, suppose that Alabama and Tennessee each tax insurance companies in exactly the same way, and further, that some number of Alabama insurance companies do business in Tennessee (and vice versa).  To close a budget deficit, however, Alabama decides to raise taxes on insurance companies that do business in Alabama.  Thereafter, in response, Tennessee’s “retaliatory tax” statute authorizes Tennessee’s insurance commissioner to levy a punitive tax on all of the Alabama insurance companies that do business in Tennessee.[3]  Additionally, every other state (except Hawaii) would punish Alabama’s insurance companies in exactly the same way.[4]  Considered broadly, this practice has been described as “holding hostages to coerce another sovereign to change its policies.”[5] Continue reading Five Pennsylvania insurance companies recoup $16 million in tax payments after Tennessee Supreme Court holds that retaliatory taxes were improperly assessed

In 4-1 ruling, Tennessee Supreme Court holds that procedural obstacles keep Clarksville man’s claim out of court

By Daniel A. Horwitz

Case Background

On the evening of December 24, 2009, Richard Moreno was driving his car across the Neal Tarpley Bridge in Clarksville when a massive tree suddenly slammed on top of his car, seriously injuring him.  The tree had been planted on property owned by the State of Tennessee.  As a result, in accordance with the Tennessee Claims Commission Act,[1] Mr. Moreno filed a claim with the Claims Administration describing his injuries and providing an accounting of his medical expenses.

After filing his claim, Mr. Moreno received an order from the Claims Commissioner directing him to file a formal complaint against the State of Tennessee.  Mr. Moreno promptly complied by filing a complaint alleging that the State had negligently maintained both the bridge and the tree that fell on him.  Thereafter, the State filed an answer to Mr. Moreno’s complaint denying liability.

Notably, the State’s initial answer to Mr. Moreno’s complaint never mentioned that someone else might be responsible for the accident.  However, sixteen months later, the State amended its answer and alleged for the first time that the City of Clarksville was responsible for Mr. Moreno’s injuries because water run-off from a city storm drain had eroded the soil around the bridge, rendering the tree that fell on him unstable.

Continue reading In 4-1 ruling, Tennessee Supreme Court holds that procedural obstacles keep Clarksville man’s claim out of court

In controversial 3-2 decision, Tennessee Supreme Court affirms death penalty conviction that is virtually certain to be subsequently overturned

By Daniel A. Horwitz

Like all capital cases, the circumstances of Starr Harris’s death were horrific.  On June 1, 2010, Ms. Harris was brutally murdered in the woods outside her home.  The cause of her death was “strangulation associated with blunt force injuries,” and her body exhibited signs of “extensive trauma to [her] neck and [her] upper torso.”  Ms. Harris also had a “gaping” laceration on the right side of her head with a skull fracture beneath it.  There was blood under two of Ms. Harris’s fingernails, providing evidence of a struggle.  Additionally, the front of Ms. Harris’s shirt had been ripped open while her bra had been pulled down to her waist—possibly suggesting evidence of rape.  It goes without saying that the senseless brutality of Ms. Harris’s murder defies explanation.

Based on a combination of Ms. Harris’s phone records and the testimony of a FedEx employee who had unsuccessfully attempted to deliver a package to her on the afternoon of her death, the time of Ms. Harris’s murder was pegged sometime between 1:30 p.m. and 2:16 p.m.  Unfortunately, there were no witnesses to Ms. Harris’s murder, and no direct evidence indicated who might have committed it.  As is common in murder cases, however, Ms. Harris’s husband – Thomas Harris – was immediately investigated as a suspect.

The investigation that followed quickly gave rise to substantial suspicious evidence.  First, the special agent investigating Ms. Harris’s murder noticed visible scratches on Mr. Harris’s hand and left forearm that could have been consistent with a struggle.  Further, several gray hairs that were collected from Ms. Harris’s left hand were believed to be her husband’s.  Mr. Harris’s DNA was also found in samples obtained from Ms. Harris’s rape kit.  Even more strangely, phone records reflected that Mr. Harris’s cellphone had been “inactive” from 1:32 p.m. to 2:19 p.m. on June 1, 2010—which was precisely the time period when Ms. Harris was believed to have been killed.  Moreover, it soon became clear that Mr. Harris had been having an extramarital affair with another woman at the time of Ms. Harris’s death.  In fact, it turned out that Mr. Harris had lied to Ms. Harris on the day that she was killed while simultaneously planning a tryst with his ex-wife that evening.  Significantly, Mr. Harris also failed to mention any of this in multiple written statements that he gave to police.

The death penalty trial that followed – and the Tennessee Supreme Court’s controversial 3-2 decision to affirm it – paints a vivid picture of America’s catastrophically broken system of capital punishment.  Continue reading In controversial 3-2 decision, Tennessee Supreme Court affirms death penalty conviction that is virtually certain to be subsequently overturned

Tennessee Public Protection Act claims do not include a right to a jury trial, holds Tennessee Supreme Court.

By Daniel A. Horwitz

After being accused of sexually harassing a city clerk, Mr. David Young – then the city administrator for the City of LaFollette – was fired by a majority vote of the LaFollette City Council.  Thereafter, Mr. Young sued the City in Circuit Court for retaliatory discharge under the Tennessee Public Protection Act.[1]  In his complaint, Mr. Young requested a jury trial, which the City opposed.  Ultimately, the dispute over whether Mr. Young was entitled to a jury trial was appealed to the Tennessee Supreme Court.  After considering several disparate constitutional and statutory provisions, the court concluded that Mr. Young had neither a constitutional nor a statutory right to have his case tried by a jury, and thus, his request for a trial by jury was denied.

Initially, the City argued that the Government Tort Liability Act (GTLA) expressly precluded a right to trial by jury.  The GTLA specifically states that claims brought under its provisions shall be tried “without the intervention of a jury.”[2]  According to the court, however, the Tennessee Public Protection Act is “an independent statute which establishes its own rights and remedies apart from the procedures that apply under the GTLA.”[3]  Thus, the GTLA’s prohibition against jury trials did not apply.

Separately, the Tennessee Constitution expressly includes a right to trial by jury.  Specifically, Tenn. Const. art. I, § 6 provides that “the right of trial by jury shall remain inviolate[.]”  Notwithstanding this apparent clarity, however, the Tennessee Supreme Court has held repeatedly that art. I, § 6 only provides a narrow right to trial by jury for claims that “existed at common law.”[4]  Incongruously, in practical terms, this means that the Tennessee Constitution only guarantees a right to trial by jury for claims that existed “under the laws and constitution of North Carolina at the time of the adoption of the Tennessee Constitution of 1796.”[5]  In this particular case, because the Tennessee Public Protection Act “was enacted by the Tennessee Legislature in 1990, almost two hundred years after the adoption of the first Tennessee Constitution,” the court explained that art. I, § 6 did not apply to Mr. Young’s retaliatory discharge claim, either.[6]

Continue reading Tennessee Public Protection Act claims do not include a right to a jury trial, holds Tennessee Supreme Court.