TAKINGS CLAUSE
Kelo et al. v. City of New London et al.
Docket No. 04-108
Affirmed: The Supreme Court of Connecticut

Argued: February 22, 2005
Decided: June 23, 2005
For Case Analysis: See ABA Preview 274

Does the "public use" restriction in the Fifth Amendment's Takings Clause bar a city from using the power of eminent domain to acquire homeowners' property and transfer it to a private development corporation?

No. The city's proposed disposition of petitioners' property qualifies as a "public use" within the meaning of the Takings Clause.

From the opinion by Justice Stevens (joined by Justices Kennedy, Souter, Ginsburg, and Breyer):

Those who govern the City were not confronted with the need to remove blight in the Fort Trumbull area, but their determination that the area was sufficiently distressed to justify a program of economic rejuvenation is entitled to our deference. The City has carefully formulated an economic development plan that it believes will provide appreciable benefits to the community, including—but by no means limited to—new jobs and increased tax revenue. As with other exercises in urban planning and development, the City is endeavoring to coordinate a variety of commercial, residential, and recreational uses of land, with the hope that they will form a whole greater than the sum of its parts. To effectuate this plan, the City has invoked a state statute that specifically authorizes the use of eminent domain to promote economic development. Given the comprehensive character of the plan, the thorough deliberation that preceded its adoption, and the limited scope of our review, it is appropriate for us, as it was in [ Berman v. Parker, 348 U. S. 26 (1954)], to resolve the challenges of the individual owners, not on a piecemeal basis, but rather in light of the entire plan. Because that plan unquestionably serves a public purpose, the takings challenged here satisfy the public use requirement of the Fifth Amendment.

Concurring: Justice Kennedy
Dissenting: Justice O'Connor (joined by Chief Justice Rehnquist and Justices Scalia and Thomas)
Dissenting: Justice Thomas

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TAKINGS CLAUSE
Lingle et al. v. Chevron U.S.A., Inc.
Docket No. 04-163
Reversed: The Ninth Circuit

Argued: February 22, 2005
Decided: May 23, 2005
For Case Analysis: See ABA Preview 270

When a court is seeking to determine whether a state-imposed rent restriction constitutes a "taking" of property under the Fifth Amendment, should the court apply the test established in Agins v. City of Tiburon, which declares that government regulation of private property "effects a taking if [it] does not substantially advance state interests"?

No. The "substantially advances" formula is not an appropriate test for determining whether a regulation effects a Fifth Amendment taking.

From the opinion by Justice O'Connor (for a unanimous Court):

Twenty-five years ago, the Court posited that a regulation of private property "effects a taking if [it] does not substantially advance [a] legitimate state interes[t]." The lower courts in this case took that statement to its logical conclusion, and in so doing, revealed its imprecision. Today we correct course. We hold that the "substantially advances" formula is not a valid takings test, and indeed conclude that it has no proper place in our takings jurisprudence. In so doing, we reaffirm that a plaintiff seeking to challenge a government regulation as an uncompensated taking of private property may proceed under one of the other theories discussed above—by alleging a "physical" taking, a Lucas-type "total regulatory taking," a Penn Central taking, or a land-use exaction violating the standards set forth in Nollan and Dolan. Because Chevron argued only a "substantially advances" theory in support of its takings claim, it was not entitled to summary judgment on that claim.

Concurring: Justice Kennedy

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TAKINGS CLAUSE
San Remo Hotel et al. v. City and County of San Francisco
Docket No. 04-5286
Affirmed: The Ninth Circuit

Argued: March 28, 2005
Decided: June 20, 2005
For Case Analysis: See ABA Preview 346

May federal courts craft an exception to the full faith and credit statute for claims brought under the Takings Clause of the Fifth Amendment?

No. The Court will not create an exception to the full faith and credit statute in order to provide a federal forum for litigants seeking to advance federal takings claims.

From the opinion by Justice Stevens (joined by Justices Scalia, Souter, Ginsberg, and Breyer):

At base, petitioners' claim amounts to little more than the concern that it is unfair to give preclusive effect to state-court proceedings that are not chosen, but are instead required in order to ripen federal takings claims. Whatever the merits of that concern may be, we are not free to disregard the full faith and credit statute solely to preserve the availability of a federal forum. The Court of Appeals was correct to decline petitioners' invitation to ignore the requirements of 28 U. S. C. §1738.

Concurring in the judgment: Chief Justice Rehnquist (joined by Justices O'Connor, Kennedy, and Thomas)

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TAXATION
Commissioner of Internal Revenue v. Banks
and
Commissioner of Internal Revenue v. Banaitis
Docket Nos. 03-892 and 03-907
Reversed: The Sixth Circuit in No. 03-892 and the Ninth Circuit in 03-907

Argued: November 1, 2004
Decided: January 24, 2005
For Case Analysis: See ABA Preview 73

Is the portion of a money judgment or settlement paid to a plaintiff's attorney under a contingent-fee agreement income to the plaintiff under the Internal Revenue Code, 26 U.S.C. §1 et seq. (2000 ed. and Supp. I)?

Yes. As a general rule, when a litigant's recovery constitutes income, the litigant's income includes the portion of the recovery paid to the attorney as a contingent fee.

From the opinion by Justice Kennedy (joined by all other members of the Court except Chief Justice Rehnquist, who took no part in the decision of the cases):

The attorney is an agent who is duty bound to act only in the interests of the principal, and so it is appropriate to treat the full amount of the recovery as income to the principal. In this respect Judge Posner's observation is apt: "[T]he contingent-fee lawyer [is not] a joint owner of his client's claim in the legal sense any more than the commission salesman is a joint owner of his employer's accounts receivable." … In both cases a principal relies on an agent to realize an economic gain, and the gain realized by the agent's efforts is income to the principal. The portion paid to the agent may be deductible, but absent some other provision of law it is not excludable from the principal's gross income.

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TAX LITIGATION
Ballard et ux. v. Commissioner of Internal Revenue
and
Estate of Kanter et al. v. Commissioner of Internal Revenue
Docket Nos. 03-184 and 03-1034
Reversed: The Eleventh Circuit in 03-184 and the Seventh Circuit in 03-1034

Argued: December 7, 2004
Decided: March 7, 2005
For Case Analysis: See ABA Preview 131

May the Tax Court exclude from the record on appeal special trial judges' reports made and submitted under Tax Court Rule 183(b)?

No. The Court decided that the reports of special trial judges, who hear cases and make reports (which include findings of fact and opinion) to the Tax Court, may not be excluded from the record.

From the opinion by Justice Ginsburg (joined by Justices Stevens, O'Connor, Scalia, Kennedy, Souter, and Breyer):

Tax Court Rule 183 governs the two-tiered proceedings in which a special trial judge hears the case, but the Tax Court itself renders the final decision. The Rule directs that, after trial and submission of briefs, the special trial judge "shall submit a report, including findings of fact and opinion, to the Chief Judge, and the Chief Judge will assign the case to a Judge… of the Court." … Since… January 16, 1984… the post-trial report submitted to the Chief Judge, then transmitted to the Tax Court judge assigned to make the final decision, has been both withheld from the public and excluded from the record on appeal. Further, since that time, Tax Court judges have refrained from disclosing, in any case, whether the final decision in fact "modi[fies]" or "reject[s] [the special trial judge's initial report] in whole or in part."… The Tax Court's practice… impedes fully informed appellate review of the Tax Court's decision. In directing the Tax Court judge to give "due regard" to the special trial judge's credibility determinations and to "presum[e]… correct" the special trial judge's factfindings, Rule 183(c) recognizes a well-founded, commonly accepted understanding: The officer who hears witnesses and sifts through evidence in the first instance will have a comprehensive view of the case that cannot be conveyed full strength by a paper record… In comparison to the nearly universal practice of transparency in forums in which one official conducts the trial (and thus sees and hears the witnesses), and another official subsequently renders the final decision, the Tax Court's practice is anomalous.

Concurring: Justice Kennedy (joined by Justice Scalia)
Dissenting: Chief Justice Rehnquist (joined by Justice Thomas)

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TITLE IX
Jackson v. Birmingham Board of Education
Docket No. 02-1672
Reversed: The Eleventh Circuit

Argued: November 30, 2004
Decided: March 29, 2005
For Case Analysis: See ABA Preview 136

Does Title IX allow a private individual to sue for retaliation suffered as a result of complaining about sex discrimination?

Yes. A high school teacher who received negative work evaluations and was ultimately removed from his position as coach after making complaints that the girls' basketball team did not receive equal funding and access to athletic facilities was entitled to bring a private cause of action for retaliation.

From the opinion by Justice O'Connor (joined by Justices Stevens, Souter, Ginsburg and Breyer):

[T]he text of Title IX prohibits a funding recipient from retaliating against a person who speaks out against sex discrimination, because such retaliation is intentional "discrimination" "on the basis of sex." We reach this result based on the statute's text. In step with [ Alexander v. Sandoval, 532 U.S. 275 (2001)], we hold that Title IX's private right of action encompasses suits for retaliation, because retaliation falls within the statute's prohibition of intentional discrimination on the basis of sex.

Dissenting: Justice Thomas (joined by Chief Justice Rehnquist, and Justices Scalia and Kennedy)

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TRADEMARK LAW
KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc. et al.
Docket No. 03-409
Vacated: The Ninth Circuit

Argued: October 5, 2004
Decided: December 8, 2004
For Case Analysis: See ABA Preview 52

Does a party raising the statutory affirmative defense of fair use to a claim of trademark infringement have a burden to negate any likelihood that the practice complained of will confuse consumers about the origin of the goods or services affected?

No. A plaintiff claiming infringement of an incontestable mark must show likelihood of consumer confusion as part of the prima facie case, while the defendant has no independent burden to negate the likelihood of any confusion in raising the affirmative defense that a term is used descriptively, not as a mark, fairly, and in good faith.

From the opinion by Justice Souter (Joined by Chief Justice Rehnquist and Justices Stevens, O'Connor, Kennedy, Thomas, and Ginsburg, and by Justice Scalia as to all but footnotes 4 and 5, and by Justice Breyer as to all but footnote 6) :

Since the burden of proving likelihood of confusion rests with the plaintiff, and the fair use defendant has no freestanding need to show confusion unlikely, it follows (contrary to the Court of Appeals's view) that some possibility of consumer confusion must be compatible with fair use, and so it is. The common law's tolerance of a certain degree of confusion on the part of consumers followed from the very fact that in cases like this one an originally descriptive term was selected to be used as a mark, not to mention the undesirability of allowing anyone to obtain a complete monopoly on use of a descriptive term simply by grabbing it first.