Virginia Supreme Court Opinions Affecting Local Government Law – January 8, 2015

By: Andrew McRoberts, Editor. This was posted Friday, January 9th, 2015

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Happy New Year!  The Virginia Supreme Court issued opinions yesterday, its first term for 2015.  This term resulted in cases which, in various ways, deal with the authority of government entities (Workers Compensation Commission to address issues other than compensation, Virginia Department of Health to regulate smoking at a hookah bar, State Tax Commissioner to interpret a tax deduction statute, City to collect special taxes for a Community Development Authority) which, in our opinion affect Virginia local government law.  As always, congratulations to the winners!

This firm was pleased to prepare an amicus curiae brief in the Nielsen case in favor of Arlington County and the Arlington Commissioner of the Revenue, on behalf of firm clients Virginia Association of Counties, Virginia Municipal League and the Local Government Attorneys of Virginia, authored by Andrew McRoberts.  The resulting opinion was a mixed bag, in our view.

The case summaries are taken from the Virginia Supreme Court opinions website. Click on the case number to read the opinion.

140011 City of Danville v. Tate (ORDER) 01/08/2015 The jurisdiction of the Virginia Workers’ Compensation Commission is limited to issues directly or necessarily related to the right of an employee to workers’ compensation for a work-related injury. Thus, the Commission had no jurisdiction to decide a dispute in which a city sought recovery of sick leave payments it had made to a retired firefighter – no more than the Commission would have jurisdiction to decide a dispute over any other employment benefit such as annual leave or maternity leave. The circuit court thus erred in holding that the Commission rather than the court had jurisdiction over this case, but it nevertheless reached the right result, as a matter of law, in dismissing the city’s complaint. The city did not have authority to recover sick leave pay from the retiree on the basis that he had also received workers’ compensation for the same disability period, because the ordinance and regulatory provisions on which the city relied pertain to a distinct type of claim by the city against an employee’s workers’ compensation payment, but here the city is seeking to recover sick leave payments. For these reasons, the judgment of the circuit court dismissing the city’s complaint in this case is affirmed.

140100 Virginia Dep’t of Health v. Kepa, Inc. 01/08/2015 The Court of Appeals erred in construing the Virginia Indoor Clean Air Act to exempt from smoking restrictions a retailer of tobacco and tobacco products operating as a hookah bar and café, despite the fact that it also serves food. Code § 15.2-2821 does not exempt the establishment from regulation under Code § 15.2-2825, because it is not exclusively a retail tobacco store. The General Assembly authorized the Virginia Department of Health to regulate smoking in “any restaurant,” defined broadly as “any place where food is served,” except as permitted by Code § 15.2-2825(A)(1) through (6). The judgment of the Court of Appeals is reversed and final judgment is entered in favor of the Department.

140422 Nielsen Co. v. Board of Arlington County 01/08/2015 The Virginia Tax Commissioner employed a permissible methodology – a payroll percentage calculation – to determine the amount of certain receipts that, pursuant to Code § 58.1-3732(B)(2), may be deducted from the pool of taxable gross receipts upon which a locality may levy a business license tax. The circuit court’s reversal of the Tax Commissioner’s ruling is reversed, and the matter is remanded for further proceedings consistent with this opinion.

140505 CVAS 2, LLC v. City of Fredericksburg 01/08/2015 A circuit court lacked authority to enter a decree of sale of real estate pursuant to a city’s suit to collect delinquent real estate taxes and delinquent special assessments under Code §§ 15.2-5158 and 58.1-3965. While the General Assembly has established a comprehensive statutory scheme affording localities, local governing bodies, and community development associations the ability to levy and collect real estate taxes, special taxes, and special assessments owed to a governmental entity by a property owner, including the right to sell the subjct real estate, the governmental authority must act pursuant to, and in compliance with, that statutory scheme in order to bring suit to collect such delinquent obligations. In this case, the city failed to act in compliance with the relevant statutory provisions and, as a result, the city had no basis for relief under those statutes. The decree of sale is vacated and the city’s suit against the property owner is dismissed.


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