Skip to Main Content
 

Mark Allison Speaks to Law360 on Altera Corp.'s Failed Ninth Circuit Challenge

November 15, 2019, Law360 Tax Authority

Intel subsidiary Altera Corp.’s failed Ninth Circuit challenge to cost-sharing rules could tempt the U.S. Supreme Court to take up the case as a referendum on how much latitude the U.S. Treasury Department should have when writing and defending regulations.

. . .

If Altera were to draft a petition, it’s likely the company would try to leverage the court’s recent interest in the Auer deference issue, according to Caplin & Drysdale member Mark Allison.

He noted that Altera’s case isn’t viewed as an Auer issue, but rather as a case under Chevron or the 1983 Supreme Court case (Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29) Motor Vehicle Manufacturers Association of the United States Inc. v. State Farm Mutual Automobile Insurance Co. The high court’s ruling interpreted the Administrative Procedure Act’s standard for determining whether rules were “arbitrary and capricious.”

Altera could play into the interests of the Supreme Court’s two newest members, Justices Brett Kavanaugh and Neil Gorsuch, in pushing back on what they see as the extension of the administrative state, according to Allison.

While Altera probably wouldn’t submit a petition as a pure tax case, “a further piggyback off of Kisor might spark some interest,” he said.

. . .

The Tax Court hasn’t weighed in yet on another case like Altera’s, meaning there’s only a hypothetical circuit split, according to Allison.

“I think the notion of a hypothetical circuit split seems less likely to get the Supreme Court’s attention than one involving an actual split,” he said.

Even if the Tax Court were to rule against the IRS in a separate case that would be appealable outside of the Ninth Circuit, he said, the Supreme Court probably wouldn’t be interested unless that appellate court ruled a different way.

However, Allison added that generally, companies like Altera that develop intangibles are heavily concentrated in Silicon Valley and are therefore in the Ninth Circuit.

For the full article, please visit Law360’s website (subscription required).

________________________________________________

About Caplin & Drysdale
Having celebrated our 50th Anniversary in 2014, Caplin & Drysdale continues to be a leading provider of legal services to corporations, individuals, and nonprofits throughout the United States and around the world. We are also privileged to serve as legal advisors to accounting firms, financial institutions, law firms, and other professional services organizations.

The firm's reputation over the years has earned us the trust and respect of clients, industry peers, and government agencies. Moreover, clients rely on our broad knowledge of the law and our keen insights into their business concerns and personal interests. Our lawyers' strong tactical and problem-solving skills -- combined with substantial experience handling a variety of complex, high stakes, matters in a boutique environment -- make us one the nation's most distinctive law firms.

With offices in New York City and Washington, D.C., Caplin & Drysdale's core practice areas include:
For more information, please visit us at www.caplindrysdale.com.
Washington, DC Office:
One Thomas Circle NW
Suite 1100
Washington, DC 20005
202.862.5000
New York, NY Office:
600 Lexington Avenue
21st Floor
New York, NY 10022
212.379.6000

___________________________

Disclaimer
This communication does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose. Prior results do not guarantee a similar outcome.

Attorney Advertising
It is possible that under the laws, rules, or regulations of certain jurisdictions, this may be construed as an advertisement or solicitation.
© 2019 Caplin & Drysdale, Chartered
All Rights Reserved.