All posts by Admin BoweDigital

Nancy Ortmeyer Kuhn on the latest development regarding charitable conservation easements

Is the Supreme Court likely to take up a tax case regarding a clear split between the 6th and 11th Circuits regarding conservation easements?

Read an analysis in this Bloomberg article written by our own attorney, Nancy O. Kuhn.

Conservation Easements: A Circuit Split on the Validity of a Treasury Regulation Adds to Uncertainty for Donors

 

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DC Council Extends Foreclosure Moratorium, Shortens TOPA Tolling Period

In October 2021, D.C. Council provided Mayor Bowser, under Act 24-178 1 , the power to extend the foreclosure moratorium from November 5, 2021, to February 4, 2022. 2 The purpose of this extension was to allow the Housing Assistance Funds (‘HAF”) Program to be implemented. The goal of the HAF program is to prevent mortgage delinquencies and defaults, foreclosures, loss of utilities or home energy services, and displacement of homeowners experiencing financial hardship, primarily due to the COVID-19 pandemic. 3

Delays in the implementation of the HAF program and the rise in the Omicron variant prompted the passage of the “Foreclosure Moratorium Extension Emergency Amendment Act of 2022” (the “Act&”), which extended the moratorium through June 30, 2022.

The continued moratorium applies to any 4 1) Residential foreclosure that may be initiated or conducted under section 539 5 ; 2) Sale may be initiated or conducted under section 313(c) of the Condominium Act of 1976 6 ; and 3) Judgment foreclosing the right of redemption shall be entered under D.C. Official Code§ 47-1378. The moratorium is further extended for residential foreclosures through September 30, 2022, if the “homeowner or their representative applies for financial assistance to cure a debt or default with funds from the Department of Housing and Community Development's Homeowner Assistance Fund (“Homeowner Assistance Funds”) or a similar government fund established to assist homeowners impacted by the COVID-19 public” 7 In order to gain this additional time, the homeowner must show certain proof and do so no later than 60 calendar days after July 1, 2022. 8

Though this emergency Act keeps the moratorium in place for all residential foreclosures, there are three exceptions under the Act.

First, the moratorium does not apply to buildings with more than five units 9.

Second, the moratorium does not apply to borrowers that are entities 10 , as opposed to individuals. But there is one important exception: if the underlying mortgage is guaranteed by an individual, the moratorium does apply.

Third, the moratorium does not apply to non-resident borrowers. 11 “This section shall not apply to a residential property at which neither a record owner nor a person with an interest in the property as heir or beneficiary of a record owner, if deceased, has resided for at least 275 total calendar days during the 12 months period immediately preceding October 1, 2021.”

In addition to extending the foreclosure moratorium, the Act also tolled tenant deadlines under the Tenant Opportunity to Purchase Act (“TOPA&”). TOPA provides that, before an owner may sell, demolish, or discontinue housing use of a rental accommodation, the owner must give tenants an opportunity to purchase and a right of first refusal to match a third-party contract. Tenants have the power to assign their opportunity to purchase to any party for any consideration a tenant deems acceptable in her sole discretion. 12

Although TOPA deadlines initially ceased to be tolled in August 2021, based on the Mayor’s Public Health Emergency Declaration coming to an end in July 2021, due to the omicron variant the D.C. Council approved a new emergency extension of TOPA, once again tolling the deadlines for renters through February 15, 2022. The Act specifically notes, “The running of the time periods under sections 410(1) and 411(I) for tenants and tenant groups to submit a written statement of interest and tenant organizations to register to exercise rights and the time periods under sections 410(2) and 411(2) for tenants and tenant organizations to negotiate a contract of sale shall be tolled from the applicability date of the Foreclosure Moratorium Extension Emergency Amendment Act of 2022, passed on emergency basis on January 18, 2022 (Enrolled version of Bill 24-612), through February 15, 2022.” 13 This emergency legislation is in place for 90 days, but the Council has already sent the “Foreclosure Moratorium Extension Temporary Amendment Act of 2022” to Mayor Bowser for review. This Temporary Act mirrors the Emergency Act, but if approved by Congress will be in effect for 225 days.

 

 

1 Foreclosure Moratorium Extension, Scheduled Eviction Assistance, and Public Emergency Extension
Emergency Amendment Act of 2021.

2 See D.C. Code 42-815.05.

3 https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-
governments/homeowner-assistance-fund.

4 Foreclosure Moratorium Extension Emergency Amendment Act of 2022 § 2(a)(I)(A-C).

5 D.C. Official Code§§ 42-815 and 42-81.

6 D.C. Law 1-89; D.C. Official Code § 42- 1903.13(c).

7 Foreclosure Moratorium Extension Emergency Amendment Act of 2022 § 2(a)(2)(A-D).

8 Id.

9 See D.C. Code § 42-815.01 (a), “the term “residential mortgage” means a loan secured by a deed of trust or mortgage, used to acquire or refinance real property which is improved by 4 or fewer single- family dwellings, including condominium or cooperative units…”

10 See D.C. Code § 42-815 (a) …”but shall not include debts incurred, and currently obligating solely, an entity, as defined by § 29-101.02(10). D.C. Code § 29–101.02 (10)(A) defines “entity” as “(i) A business corporation; (ii) A nonprofit corporation; (iii) A general partnership, including a limited liability partnership; (iv) A limited partnership, including a limited liability limited partnership; (v) A limited liability company; (vi) A general cooperative association (vii) A limited cooperative association; (viii) An unincorporated nonprofit association; (ix) A statutory trust, business trust, or common-law business trust; or (x) Any other person that has a legal existence separate from any interest holder of that person or that has the power to acquire an interest in real property in its own name. The term entity under this provision does not include an individual. See § 42–815.01 (Right to cure residential mortgage foreclosure default); See also § 29-101.02 (Entity does not include The term “entity” does not include: (i) An individual; (ii) A testamentary or inter vivos trust with a predominantly donative purpose, or a charitable trust; (iii) An association or relationship that is not a partnership under the rules set forth in § 29-602.02(c) or a similar provision of the law of another jurisdiction; (iv) A decedent’s estate; or(v) A government or a governmental subdivision, agency, or instrumentality.

11 Foreclosure Moratorium Extension Emergency Amendment Act of 2022 § 2(b).

12 TOPA now exempts single family dwellings from the Tenant Opportunity to Purchase Act of 1980
(TOPA) unless occupied by elderly or disabled tenants. TOPA also exempts single family dwellings with
an Accessory Dwelling Unit and a single rental unit in a condo, co-op or homeowners’ association. An
owner of such an exempted unit must give tenants notice within three calendar days of soliciting or
receiving an offer of sale. Elderly and disabled tenants who signed a lease to occupy such an exempted
unit by March 31, 2018, and took occupancy by April 15, 2018, will have a limited opportunity to
purchase or assign their rights. See TOPA Single-Family Home Exemption Amendment Act of 2017 (Bill
22-0315).

13 Foreclosure Moratorium Extension Emergency Amendment Act of 2022 § 510(b) (The Act initially
proposed tolling deadlines being extended through February 28, 2022, but were negotiated down to
February 15, 2022).

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The Diversity of the Supreme Court

At various points in the history of the United States, Presidential candidates and Presidents have
made statements about the judicial nomination of the next Supreme Court Justice, indicating that
issues of ethnicity and gender may provide the deciding factor in a selection process. Several
Presidents have appointed individuals to add characteristics of diversity, as well as legal
brilliance and judicial temperament. However, considerations of geographic diversity were more
prevalent than gender or ethnic diversity in the first 200 years of our country, as reflected by the
white, male Justices who served for many years. Only recently, issues of gender and ethnicity
have become determining factors. Some examples include:

  • Lyndon Johnson stated that nominating Thurgood Marshall in 1967, the first Black
    Supreme Court Justice, was: “The right thing to do, the right time to do it, the right man
    and the right place.” Johnson nominates Thurgood Marshall
  • As a presidential candidate, Ronald Reagan stated in 1980 that he would appoint the first
    female justice. President Reagan followed through by appointing Sandra Day O’Connor
    in 1981. Washington Post: 10-15-1980
  • George H.W. Bush, upon the opening created when Justice Marshall resigned in 1991,
    appointed Clarence Thomas. Although President Bush resisted the implication that there
    was a “Black” seat on the Supreme Court, he identified the opening as an opportunity to
    continue efforts to diversify the Court. He also considered Judge Garza who is Hispanic.
    Thomas nomination
  • Barack Obama nominated the first Latina when he named Sonia Sotomayor in 2009.
    While not explicitly mentioning her ethnic origins, he was fond of taking credit for
    appointing the first Latina and third woman to the Court. Obama nominated Sotomayor
  • Donald Trump, when speaking of Amy Coney Barrett as a possible candidate on the
    occasion of Justice Kennedy’s departure said: “I’m saving her for Ginsburg”, pledging to
    replace Ruth Bader Ginsberg with another woman. He nominated Amy Coney Barrett in
    2020 following RBG’s untimely death. Trump nominates Barrett
  • As a presidential candidate, Joe Biden promised to appoint the first Black woman to the
    Supreme Court. He is now following through on that promise, and soon the Supreme
    Court will be the most diverse it has been in the history of the United States.
    The Court is finally starting to look a bit more like the United States of America.
    However, it should be noted that a Native American has never served on the Supreme
    Court, nor has anyone of Asian or Pacific Islander descent. Similarly, there has been no
    one who is openly gay to have served on the Supreme Court. Unless the Supreme Court
    has a variety of voices and life experiences, it is not likely to accurately represent the will
    of the people. In celebrating Black History month, it is important to recognize the
    richness of our society, and the advantages of a judiciary that represents all people.
| David L. Kelleher

The COVID-19 Vaccination – Testing Mandate Is Not Completely Dead

 

On January 13, 2022, the Supreme Court prohibited OSHA’s enforcement of its nationwide
emergency vaccination and testing standard declaring the scope of the regulation beyond
OSHA’s statutory authority. On January 25, OSHA conceded the point and withdrew the
standard. But even as OSHA withdrew the standard, OSHA made clear that employers are not
relieved of their obligation to protect employees from the risks of COVID-19 in the workplace.

After the Supreme Court declared the vaccination and testing standard unenforceable, OSHA
emphasized that it would use its existing authority under the General Duty Clause of the
Occupational Safety and Health Act and its COVID-19 National Emphasis Program to compel
employers to act.

In many respects, the result is more onerous for employers. Unlike the withdrawn standard, the
General Duty Clause is not limited to employers with 100 or more employees. Nor does the
General Duty Clause itemize the steps an employer may take to protect itself from citation and
penalty. Instead, now each employer must assess and address the risks of COVID-19 to its
workforce and workplace on a case-by-case basis.

What Is The General Duty Clause?

OSHA is equipped with two tools by which to lessen workplace hazards. First, OSHA is
empowered to issue mandatory workplace safety standards; OSHA tried and failed to establish a
vaccination and testing standard for COVID-19. Second, in the absence of a standard, OSHA
may compel action through what is commonly called the General Duty Clause which requires
that employers provide “employment and a place of employment which are free from recognized
hazards that are causing or are likely to cause death or serious physical harm to its employees
….”

To prove a violation of the General Duty Clause, OSHA must show (1) a condition in the
workplace presents a hazard to employees; (2) the hazard is recognized by the employer or the
industry; (3) the hazard is likely to cause death or serious injury; and (4) there is a feasible means
to eliminate or reduce the hazard.

COVID-19 certainly presents a recognized hazard for some workers and workplaces. Even while
rejecting OSHA’s one-size-fits-all emergency standard, the Supreme Court advised that a more
limited standard likely would survive judicial review, stating: “Where the virus poses a special
danger because of the particular features of an employee’s job or workplace, targeted regulations
are plainly permissible. We do not doubt, for example, that OSHA could regulate researchers
who work with the COVID-19 virus. So too could OSHA regulate risks associated with working
in particularly crowded or cramped environments.”

As for the final element of proof, there is ample scientific evidence that vaccinations, masks, and
social distancing are feasible means to reduce the risks from COVID-19.

Thus, all the elements necessary to trigger the General Duty Clause are present at least for
employees and workplaces where the danger from the virus differs in degree and kind from the
danger faced by all of us outside the workplace.

The question employers now must ask is: Are our employees at greater risk from the virus than
the general public because of their work or the conditions of their workplace? Is the cashier at
the grocery store at greater risk? Is the teacher in a crowded classroom at greater risk? Is the
usher at the theater at greater risk? If so, the General Duty Clause compels the employer to take
action to eliminate the hazard to the extent feasible, whether by vaccinations, masks, social
distancing, or other measures.

What Is OSHA’S COVID-19 National Emphasis Program

On July 7, 2021, OSHA published a directive implementing a National Emphasis Program to
enhance the protections from COVID-19 for employees who are involved in high-hazard
industries or work tasks.

The findings of the directive not only are unchanged by the recent Supreme Court ruling, but
may well be more important and serve to put employers on notice that OSHA, with the Supreme
Court’s blessing, will pay special attention to the COVID-19 protections provided to certain
categories of employees identified in the directive.

Among the industries targeted by the directive are most health care and residential care services,
meat and poultry processing, supermarket and grocery stores, discount department stores,
restaurants, and warehousing facilities.

Importantly, the directive does not limit the scope of the General Duty Clause. Employers in
industries targeted by the directive should expect OSHA to examine their COVID-19 protections.
All other employers should be prepared to provide documentation of their COVID-19 protections
to OSHA in the event of an accident, a scheduled inspection, or an employee complaint.

This summary is not intended to contain legal advice or to be an exhaustive review. Employers
with questions on how to craft and implement a compliant policy – and how to handle exemption
and accommodation requests – should contact Erica L. Litovitz, Esq., John J. Matteo, Esq., or
another member of Jackson & Campbell’s Employment Law Practice Group for more
information.

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Charitable Conservation Easements Found A Friend In The 11th Circuit

Many Tax Court cases have been decided based upon an obscure Treasury Regulation, upholding the IRS’ 100% disallowance of charitable conservation easement deductions.  The 11th Circuit struck down the Regulation, holding that it is “arbitrary and capricious”.  A rare win for taxpayers.

The Bloomberg article attached below was written by our own attorney, Nancy O. Kuhn.

A Rare Victory For Taxpayers in the Fight For Conservation Easements

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Court Limits Retirement Benefits For Those Who Received Civil-Service Pay

David Babcock was a dual-status military technician, which meant he received both military pay and pension payments through his service with the National Guard, and also received civil-service pay from the Office of Personnel Management. After he retired, he applied for Social Security benefits. The Social Security Administration considered his civil-service pay to be a “windfall” and reduced his SSA benefits accordingly. Babcock argued that the civil-service payments were exempt because they were “based wholly on service as a member of a uniformed service.” The district court and Sixth Circuit affirmed the agency’s reduction in benefits. An 8-1 Court in Babcock v. Kijakazi affirmed as well, in an opinion by Justice Barrett, holding that the civil-service pay Babcock received was separate and distinct from his National Guard service. Even if the dual service was a condition of his employment with the National Guard did not convert his civil service into uniformed service. Justice Gorsuch dissented, arguing that Babcock’s dual status functioned more as uniformed service. A link to the opinion is here: https://www.supremecourt.gov/opinions/21pdf/20-480_b97c.pdf

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Court Blocks OSHA Rule Requiring COVID-19 Vaccinations For Workers

The Occupational Health and Safety Administration, to combat the spread of COVID-19, issued a rule mandating that all employers who have at least 100 employees require that those workers be vaccinated—affecting some 84 million workers nationwide. The rule was enacted under an “emergency temporary standard” process which avoided the typical notice-and-comment procedures for rules. States and private parties challenged the rule and requested that it be stayed pending a ruling on the merits. The Sixth Circuit let the rule go into effect, and the matter was appealed to the Supreme Court. In National Federation of Independent Business v. OSHA, the Court, in a 6-3 per curiam decision, stayed the rule, holding that it went well beyond OSHA’s power to enact broad public health measures like this one, as its powers were limited to workplace safety only. The majority also noted that the was a “lack of historical precedent” for such a broad rule. Justice Gorsuch, joined by Justices Thomas and Alito, filed a concurrence noting that State and local power to regulate public health was “considerable,” while federal power was “limited and divided,” and OSHA’s rule failed to mind that separation of powers. Justices Breyer, Sotomayor, and Kagan filed a dissent jointly, arguing that the rule fit within OSHA’s power to protect workers from the danger of COVID-19 transmission at the workplace. A link to the decision is here: https://www.supremecourt.gov/opinions/21pdf/21a244_hgci.pdf

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Court Allows Vaccination Mandate For Health Care Workers To Go Into Effect

The Secretary of Health and Human Services issued a rule in November of 2021 requiring all health care workers be vaccinated or have a valid exemption in order for the health care facility to receive Medicare or Medicaid funding. Certain states sued to block the mandate, and the lower courts enjoined enforcement of the rule pending a determination on the merits. The federal government appealed, and in Biden v. Becerra, a 5-4 Court dissolved the injunctions in a per curiam decision, thus allowing the rules to go into effect. The majority determined that the rule requiring health care workers to be vaccinated “fits neatly within” the authority of the Secretary to issue all rules “the Secretary finds necessary in the interest of the health and safety of individuals who are furnished services.” 42 U.S.C. sec. 1395x(e)(9). The majority also pointed out that health care workers were already required to be vaccinated for other contagious diseases. Justice Thomas, joined by Justices Alito, Gorsuch, and Barrett dissented, arguing that there was no “actual and discernible nexus” between the Secretary’s generalized statutory authority and the rule at hand, arguing also that such mandates fell within a State’s police power instead. A link to the decision is here: https://www.supremecourt.gov/opinions/21pdf/21a240_d18e.pdf

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Sixth Circuit Dissolves Stay on OSHA’s Vaccine Mandate for Large Employers – UPDATE

On November 5, 2021, the Occupational Safety & Health Administration (“OSHA”) issued an Emergency Temporary Standard (“ETS”) requiring employers with 100 or more employees to take certain actions to minimize the spread of COVID-19 in their workplaces.  Enforcement of the ETS was initially set to begin on January 4, 2022.  Although often referred to as a “vaccine mandate,” the ETS did not actually require employers to mandate the vaccine.  Rather, it gave covered employers the option to require unvaccinated employees to undergo weekly COVID-19 testing and wear a mask when on site.  Covered employers also had the option to allow unvaccinated employees to work remotely.

Unsurprisingly, the ETS was immediately challenged by a bevy of employers, private citizens, and conservative states and organizations.  The day after the ETS was issued, the Fifth Circuit issued a stay barring OSHA from enforcing it pending further judicial review.  The next week, the Fifth Circuit issued a written opinion reaffirming the stay.  Similar lawsuits were brought in other jurisdictions across the country.  The petitions were consolidated into a single circuit and, on November 16, the U.S. Court of Appeals for the Sixth Circuit was designated to review them.

In a 2-1 decision issued on December 16, the Sixth Circuit reinstated the ETS.  In reaching that decision, the court acknowledged that OSHA has authority to issue an ETS if it determined that (i) employees are being exposed to grave danger from substances or agents, and (ii) an ETS is necessary to protect them from that danger.  OSHA found both of the foregoing to be true, and the court agreed with its finding. As a result of the Sixth Circuit’s decision, the stay of OSHA’s so-called “vaccine mandate” has been dissolved, and covered employers are, once again, expected to comply with the ETS.

Following the Sixth Circuit’s decision, OSHA announced that it would not begin enforcing the ETS until January 10 – six days after the original enforcement date.  It will not issue citations for noncompliance with the ETS’ testing requirements until February 9, so long as the employer in question is exercising reasonable, good faith efforts to bring itself into compliance with the ETS.

An application to stay the Sixth Circuit’s decision has already been filed with the Supreme Court, and it is widely expected that the Supreme Court will take the issue up on review.  In the meantime, employers with 100 or more employees must craft policies to ensure compliance with the ETS and implement those policies before the January 10 enforcement date.

-UPDATE-

In a 6-3 per curiam decision issued on January 13, 2022, the Supreme Court ruled that the
applicants were likely to succeed on the merits and granted emergency relief staying OSHA’s
mandate. “Although Congress has indisputably given OSHA the power to regulate occupational
dangers,” the Court held, “it has not given that agency the power to regulate public health
more broadly.” The Court found that the vaccine mandate fell within the latter category.

The Occupational Safety and Health Act (the “Act”) carves out a narrow exception to the
standard notice-and-comment procedure for emergency temporary standards. However, it
applies only where: (1) employees are exposed to grave danger from toxic or physically harmful
substances or agents; and (2) the ETS is necessary to protect employees from that danger. The
Court concluded that OSHA’s mandate was not sufficiently narrow to satisfy those
requirements.

In reaching that conclusion, the Court emphasized that the Act only authorizes OSHA to
regulate occupational hazards. The Court found that COVID-19 is not an occupational hazard
because spreads in all places where people gather – not just workplaces. As such, the Court
opined, the risk of contracting COVID-19 more closely resembles the risk posed to all Americans
by air pollution or crime than the occupational risks OSHA is tasked with regulating.

In light of this ruling, covered employers need not comply with OSHA’s vaccine mandate at this
time. Importantly, however, the ruling does not apply to healthcare facilities that participate in
Medicare or Medicaid. In a separate ruling issued on the same day, the Supreme Court upheld
the Biden Administration’s vaccine mandate for healthcare workers employed at facilities that
receive federal funding from either of those programs.

This summary is not intended to contain legal advice or to be an exhaustive review.  Employers with questions on how to craft and implement an ETS-compliant policy – and how to handle exemption and accommodation requests – should contact Erica L. Litovitz, Esq., John J. Matteo, Esq., or another member of Jackson & Campbell’s Employment Law Practice Group for more information.