The Clients’ Waiver of Their Rights Under Regulation BI of the Securities and Exchange Commission

TAMAR FRANKEL

BU Law emerita professor Tamar Frankel discusses the Securities and Exchange Commission (SEC)’s Regulation Best Interest (BI), which imposes on broker-dealers a commitment to act in the best interests of their clients. Specifically, Frankel addresses the SEC’s treatment of client waivers of the Regulation BI, which goes even further than general fiduciary law to prohibit any waiver of the broker-dealer’s conflicting interests.

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Canada, Jr. v. United States (Internal Revenue Service)

Court: US Court of Appeals for the Fifth Circuit

Docket: 18-11398

Opinion Date: February 20, 2020

Judge: Hanen

Areas of Law: Government & Administrative Law, Legal Ethics, Tax Law

After plaintiff successfully challenged in bankruptcy court a tax penalty assessed against him by the IRS that exceeded $40 million, plaintiff filed suit against the IRS and three IRS agents, in their individual capacities, pleading a claim for damages against the individual defendants under Bivens v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388 (1971), for allegedly violating his Fifth Amendment right to procedural due process. Plaintiff also sought attorney's fees he incurred litigating the penalty issue in his Chapter 11 bankruptcy case under 26 U.S.C. 7430 and the Equal Access to Justice Act. The Fifth Circuit affirmed the district court's grant of defendants' Federal Rule of Civil Procedure 12(b)(6) motion and dismissal of the action with prejudice. The court held that the district court properly concluded that this case was a new Bivens context and that special factors existed under Ziglar v. Abbasi, 137 S. Ct. 1843 (2017). The court also held that plaintiff was not entitled to recover attorney's fees because his request was untimely under 28 U.S.C. 2412(d)(1)(B) and he was not a "prevailing party" under 26 U.S.C. 7430(c)(4)(A)(ii).

Mook v. Bd. of Cty. Comm’rs

Court: Colorado Supreme Court

Citation: 2020 CO 12

Opinion Date: February 18, 2020

Judge: William W. Hood, III

Areas of Law: Real Estate & Property Law, Tax Law, Zoning, Planning & Land Use

The common issue from three property tax cases presented to the Colorado Supreme Court for review centered on what constituted "residential land" under 39-1-102(14.4)(a), C.R.S. (2019). In Colorado, residential land was taxed as a lower rate than vacant land. The Mooks owned two parcels of land in Summit County, Colorado. One parcel contained the Mooks’ house, classified as residential land. The other parcel was undeveloped, and it was classified as vacant land (“the subject parcel”). The parties agreed that these two parcels didn't physically touch. The Homeowners’ Association (“HOA”) owned an approximately seventeen-foot-wide strip of land that completely separated the two properties (that strip provided other members of the HOA access to adjacent public land). The Mooks petitioned the Board of County Commissioners of Summit County (“BCC”) to reclassify the subject parcel from vacant land to residential land. The BCC denied their petition, and the Mooks appealed to the Board of Assessment Appeals (“BAA”). The BAA upheld the BCC’s decision. Notably, the BAA determined that contiguous parcels are those that are “physically connected.” Here, the residential and subject parcels didn't physically touch, and the BAA “was not persuaded that the use of the subject lot in conjunction with the residential lot was sufficient to defeat the plain meaning of contiguity.” Thus, the BAA concluded that the two parcels aren’t contiguous, and it denied the Mooks’ appeal. Taking the three appeals together, the Colorado Supreme Court concluded: (1) only parcels of land that physically touch qualify as “contiguous parcels of land;” (2) a residential improvement isn’t needed on each contiguous and commonly owned parcel of land and a landowner can satisfy the “used as a unit” requirement by using multiple parcels of land together as a collective unit of residential property; and (3) county records dictate whether parcels are held under “common ownership.”

Ziegler v. Park Cty. Bd. of Cty. Comm'rs

Court: Colorado Supreme Court

Citation: 2020 CO 13

Opinion Date: February 18, 2020

Judge: William W. Hood, III

Areas of Law: Real Estate & Property Law, Tax Law, Zoning, Planning & Land Use

This case asked the Colorado Supreme Court to construe the definition of residential land in section 39-1-102(14.4)(a), C.R.S. (2019). Stephen Ziegler (through the Stephen J. Ziegler Revocable Trust Dated July 17, 2008) owned four parcels of land in Park County, Colorado. One parcel was classified as “residential land” under section 39-1-102(14.4)(a) and taxed accordingly. However, the other three parcels remained “vacant land” and are thus taxed at a higher rate. Ziegler sought to reclassify those vacant parcels as residential land to receive a corresponding tax abatement. As it concluded in Mook v. Summit Cty. Bd. of Cty. Comm'rs, 2020 CO 12 (2020): (1) a residential improvement isn’t needed on each contiguous and commonly owned parcel of land for that parcel to be “used as a unit;” and (2) a landowner can satisfy the “used as a unit” requirement by using multiple parcels of land together as a collective unit of residential property. The BAA here applied the same legal standards that the Court expressly disavowed in Mook. Thus, it reversed the BAA’s order and remanded for the BAA to apply the standards articulated in this case to determine whether the vacant parcels qualified as “residential land.”

Eisele v. Town of Pine Bluffs

Court: Wyoming Supreme Court

Citation: 2020 WY 22

Opinion Date: February 19, 2020

Judge: Michael K. Davis

Areas of Law: Government & Administrative Law, Tax Law

The Supreme Court reversed the decision of the district court reversing the decision of the State Board of Equalization affirming the ruling of the County Board of Equalization against the Town of Pine Bluffs in its appeal from the Laramie County Assessor's denial of a request for exemption from taxation for a daycare facility operated by the Town, holding that the County Board's order was in accordance with law, was not arbitrary, capricious or an abuse of discretion, and was supported by substantial evidence in the record. In 201y, the Town filed requests for exemption from the assessment of its daycare facility. The County Assessor denied the requests, and the County Board and State Board affirmed. The district court ruled in favor of the Town and reversed the decision of the State Board. The Supreme Court reversed and reinstated the order of the County Board, holding that the County Board's decision did not constitute reversible error.