360° Coverage : The Problem With Outcome-Based Jurisprudence

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The Problem With Outcome-Based Jurisprudence

May 9 2014, 2:08pm CDT | by

State court systems are created by state governments to enforce state law. It’s a relatively simple concept. Like the federal court system, state judicial branches are separate entities from the...

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11 weeks ago

The Problem With Outcome-Based Jurisprudence

May 9 2014, 2:08pm CDT | by

State court systems are created by state governments to enforce state law. It’s a relatively simple concept. Like the federal court system, state judicial branches are separate entities from the executive and legislative branches. Judges are charged with the difficult task of interpreting and implementing state laws and state constitutions and resolving disputes. Under the doctrine of the separation of powers, however, the judiciary does not make the law and it does not enforce the law.

Yet in practice, and particularly for cases in which revenue is involved, judges may feel tempted to take on the concerns of the executive and legislative branches and engage in outcome-based jurisprudence. This happens when a court decides what the outcome of the case should be and then works backward to determine the reasoning that will reach the desired conclusion.

Take, for example, a recent case from the Oklahoma Supreme Court. The case, CDR Systems Corp. v. Oklahoma Tax Commission, addressed a statutory capital gains deduction for taxpayers headquartered in Oklahoma. The statute was challenged by a company headquartered in Florida because it did not provide the same deduction for taxpayers headquartered outside Oklahoma. The company alleged the statute was unconstitutional because it taxes companies differently based on whether they are headquartered in Oklahoma.

Although an Oklahoma appeals court determined the statute was facially discriminatory in violation of the commerce clause, the Oklahoma Supreme Court, in what can only be described as a case of outcome-based jurisprudence, concluded the commerce clause did not apply. What’s troubling, though, is that the disparate treatment of in-state versus out-of-state taxpayers is exactly the type of situation in which the commerce clause should apply.

The opinion from Oklahoma’s highest court is questionable at best. The court went so far as to suggest the statute should be held constitutional because the “Legislature could have imposed a more burdensome means of promoting significant business investment in Oklahoma’s economy.” In other words, the Legislature could have created a more unconstitutional statute, so let’s just leave the current statute alone.

The real question, though, is why? Why did the court go out of its way to dismiss existing commerce clause precedent and produce an opinion that is rife with illogical conclusions?

The answer is likely in the remedy that would have been provided if the taxpayer had prevailed. Oklahoma Tax Commission spokeswoman Paula Ross reportedly conceded that if the statute were struck down, the state would have been liable for up to $400 million in refunds. Practitioners in the state aren’t surprised. Some suspected the court would find a way to protect the treasury while also protecting in-state businesses.

The CRD Systems opinion may have accomplished the goal of protecting the treasury, but its success ends there. Outcome-based opinions should be avoided. It is not for the court to worry about how the state will fashion a remedy. Its task is to interpret and enforce the state’s laws and strike down those that are unconstitutional. In that respect, the court in Oklahoma failed.

 
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7 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Ra ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

7 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was brok ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
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8

7 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by t ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
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7

7 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Min ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
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6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in th ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
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5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 million in com ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
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4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri Mustapa M ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
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8 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an allocation of RM20 million. ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
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2

8 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar Scheme ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
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1

8 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billio ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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