Justia Corporate Compliance Opinion Summaries

The Montana Department of Revenue ("Department") appealed a judgment reversing the State Tax Appeal Board's ("STAB") conclusion that the Department had applied a "commonly accepted" method to assess the value of PacificCorp's Montana properties. At issue was whether substantial evidence demonstrated common acceptance of the Department's direct capitalization method that derived earnings-to-price ratios from an industry-wide analysis. Also at issue was whether substantial evidence supported STAB's conclusion that additional obsolescence did not exist to warrant consideration of further adjustments to PacifiCorp's taxable value. The court held that substantial evidence supported the Department's use of earnings-to-price ratios in its direct capitalization approach; that additional depreciation deductions were not warranted; and that the Department did not overvalue PacifiCorp's property. The court also held that MCA 15-8-111(2)(b) did not require the Department to conduct a separate, additional obsolescence study when no evidence suggested that obsolescence existed that has not been accounted for in the taxpayer's Federal Energy Regulatory Commission ("FERC") Form 1 filing. The court further held that STAB correctly determined that the actual $9.4 billion sales price of PacifiCorp verified that the Department's $7.1 billion assessment had not overvalued PacifiCorp's properties.

Plaintiffs, working as auditors in The Boeing Company's ("Boeing") IT Sarbanes-Oxley ("SOX") Audit group, filed SOX whistleblower complaints under the Sarbanes-Oxley Act, U.S.C. 1514(a)(1), with the Occupation Safety and Health Administration after they were terminated by Boeing when they spoke with a reporter from the Seattle Post-Intelligencer ("Post-Intelligencer") about Boeing's compliance with SOX. At issue was whether plaintiffs' disclosures to the Post-Intelligencer were protected under section 1514(a)(1), which protected employees of publicly-traded companies who disclose certain types of information. The court held that section 1514(a)(1) did not protect employees of publicly-held companies from retaliation when they disclosed information regarding designated types of fraud or securities violations to members of the media.

Plaintiff sued a former employee after a number of the former employee's clients left plaintiff's wealth management and investment advisory firm for the firm that the former employee currently works at. The United States Court of Appeals for the Second Circuit certified the following question for the court: "What degree of participation in a new employer's solicitation of a former employer's client by a voluntary seller of that client's good will constitutes improper solicitation?" In answering the certified question, the court continued to apply its precedents in Von Breman v. MacMonnies and Mohawk Maintenance Co. v. Kessler and held that the "implied covenant" barred a seller of "good will" from improperly soliciting his former clients. The court also held that, while a seller may not contact his former clients directly, he may, "in response to inquiries" made on a former client's own initiative, answer factual questions. The court further held that the circumstances where a client exercising due diligence requested further information, a seller may assist his new employer in the "active development... of a plan" to respond to that client's inquires. Should that plan result in meeting with a client, a seller's "largely passive" role at such a meeting did not constitute improper solicitation in violation of the "implied covenant." As such, a seller or his new employer may then accept the trade of a former client.