Case Summary for March 18, 2015

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Case Summary for March 18, 2015

THE FOLLOWING DOCKET SUMMARIES ARE PREPARED BY THE COURT'S STAFF FOR THE INTEREST AND CONVENIENCE OF THE READER. THE SUMMARIES MAY NOT INCLUDE ALL ISSUES PENDING BEFORE THE COURT AND DO NOT REFLECT ANY OPINION OF THE COURT ON THE MERITS OF A CASE. COPIES OF ALL BRIEFS FILED WITH THE COURT ARE AVAILABLE AT THE SUPREME COURT BUILDING, COURT EN BANC DIVISION. SUMMARIES ARE UNOFFICIAL AND SHOULD NOT BE QUOTED OR CITED.

Attached to the following docketed cases are electronic copies of briefs filed by the parties. These electronic briefs have been converted to PDF to accommodate various word processors. If you do not already have Acrobat reader, which is necessary to open the PDFs, you may obtain it free at the Adobe website. (A set of free tools that allow visually disabled users to read documents in Adobe PDF format is available from access.adobe.com.) These briefs do not reflect any opinion of the Court about the appropriateness of the format of the briefs or the merits of the case, nor are they official court records. Copies of all briefs filed with the Court are available at the Supreme Court Building in the court en banc division.

The attachments below may not reflect all briefs filed with the Court, the complete filing or the format of the original filing. Appendices and other attachments generally will not be posted here. To see what documents have been filed in a particular case, visit Case.net.

DOCKET SUMMARIES
SUPREME COURT OF MISSOURI

9:30 a.m. Wednesday, March 18, 2015
____________________________________________________________________________________________________

SC94441
Visionstream Inc. v. Director of Revenue
Cole County
Taxation of deliveries of displays to out-of-state trade shows
Listen to the oral argument:

SC94441.mp3
Visionstream was represented during arguments by Harry Charles, an attorney in St. Louis; the director was represented by Rochelle L. Reeves of the attorney general’s office in Jefferson City.

From February 2007 through January 2010, Visionstream Inc. collected and remitted sales tax on the sales of trade show displays it designed and built for customers. The customers paid separately to ship the displays by common carrier to out-of-state shows, where the displays had to be assembled and inspected by the customers before Visionstream invoiced the customers. There was no written contract specifying the passage of title or assignment of the risk of the displays. Visionstream subsequently sought refund of these taxes, claiming the sales were “made in commerce” between Missouri and another state so as to qualify for tax exemption under state law. The director of revenue denied the refunds in major part, and Visionstream sought review from the administrative hearing commission. The commission, based on a “display order” containing the delivery term “F.O.B. manufacturer,” determined that title to all displays passed at Visionstream’s loading dock, making the sales taxable. (“FOB” is a delivery term standing for “free on board.”) Visionstream appeals.

Visionstream argues the commission erred in holding it was not entitled to sales tax refunds. The company contends its sales of tangible personal property were exempt from tax as out-of-state sales under section 144.030.1, RSMo. Visionstream asserts that this statute exempts transfers of title or ownership in commerce and that the title to the displays passed out of state. The company argues the term “FOB manufacturer” on which the commission relied appeared only in a blank, unsigned display order that rarely was used and was not part of any contractual agreement between Visionstream and its customers. The company contends that its understanding with its customers, based on the uniform commercial code, was that title to the displays would not pass until the customer had accepted the exhibits, which occurred out of state.

The director responds that, under the department of revenue’s regulations, the taxability of the transactions is predicated on title transferring in Missouri. The director argues that Visionworks’ only evidence concerning the terms of its contracts with its customers was in the display order the company introduced at the hearing before the commission. The director contends this display order is evidence of the parties’ intention for title to pass to the customer upon Visionworks’ delivery of the displays to the common carrier in Missouri for shipment to the out-of-state trade show. The director asserts that, although the customer did not have the opportunity to inspect the display until at the trade show, the display was a custom piece that could not be returned nor used for a different customer. The director responds that Visionworks failed to meet its burden of proving it has a right to a sales tax refund.

SC94441_Visionstream_brief.pdf

SC94441_Director_brief.pdf

SC94464
Gateway Taxi Management v. Division of Employment Security
St. Louis County and city
Whether taxicab drivers are employees or independent contractors
Listen to the oral argument:

SC94464.mp3
The taxicab company was represented during arguments by Brian E. McGovern of McCarthy, Leonard, Kaemmerer LC in Town and Country; the division was represented by Christopher R. Miller of the division in Jefferson City.

A division of employment security deputy determined that, beginning in January 2009, certain taxicab drivers for Gateway Taxi Management, which does business as Laclede Cab, performed services for wages in employment. A hearings referee reversed that decision, and it was appealed to the labor and industrial relations commission. At the hearing before the commission, Laclede Cab’s owner testified the company leases taxicabs to drivers and operates a dispatch system to help the drivers obtain fares. The company is regulated by the metropolitan taxicab commission and its vehicle for hire code, which applies uniformly throughout St. Louis County and city. The commission determined that taxicab drivers were employees. Laclede Cab appeals.

Laclede Cab argues the commission erred in finding that fares customers paid to the taxicab drivers were subject to unemployment taxes. Laclede Cab contends section 288.090.2, RSMo, expressly limits the amount employers are required to contribute to the unemployment compensation fund to wages paid by employers. Laclede Cab asserts the undisputed testimony establishes that the revenue at issue was paid by the taxicab customers to the taxicab drivers and did not constitute wages paid by Laclede Cab. The company argues the commission also erred in finding the taxicab drivers are employees. The company contends the facts compel a finding that the drivers are independent contractors. It asserts it does not retain the right to control the manner and means by which the drivers perform their jobs because its control does not exceed significantly the control imposed by the metropolitan taxicab commission’s vehicle for hire code. Laclede Cab argues it also does not have any financial incentive to control the manner and means by which taxicab drivers perform their jobs. Laclede Cab contends it receives the same amount of revenue from the drivers regardless of whether the drivers realized a profit or loss.

The division of employment security responds that Laclede Cab waived its argument that it did not provide remuneration to its drivers by not raising this issue before the commission. The division argues the argument also lacks substance because the fares generated through Laclede Cab’s taxicab business license and retained by its drives is remuneration payable by Laclede Cab to its drivers. The division contends the evidence showed the drivers rely entirely on driving for Laclede Cab as their sole source of income. The division asserts the taxicab drivers are Laclede Cab employees because the drivers legally cannot operate their own businesses independently of the company, which controls the manner and means of how the drivers perform their services. The division responds that this Court should overrule a 1996 appeals court opinion or find the decision does not apply in Laclede Cab’s case. The division asserts that, even if this prior opinion applies, the taxicab drivers still are Laclede Cab employees because the company imposes significant controls above and beyond the metropolitan taxicab commission’s code that restrain the drivers’ abilities to act independently.

SC94464_Gateway_Taxi_brief.pdf

SC94464_Employment_Security_brief.pdf

SC94464_Gateway_Taxi_reply_brief.pdf

SC94478
State ex rel. ISP Minerals Inc. v. The Labor and Industrial Relations Commission
Iron County
Jurisdiction to determine future medical care for injured worker
Listen to the oral argument:

SC94478.mp3
ISP Minerals was represented during arguments by Mary Anne Lindsey of Evans & Dixon LLC in St. Louis; the injured worker was represented by Nancy R. Mogab of Mogab & Hughes Attorneys PC in St. Louis.

Michael Alcorn sought worker’s compensation benefits from ISP Minerals Inc., claiming that, in October 2005, during his employment with ISP, he inhaled silica dust, damaging his lungs. The parties entered into a settlement agreement in which they stipulated that ISP would pay Alcorn about $36,500, representing an approximate 25-percent disability of the whole body. The parties agreed to leave open future related pulmonary medical care for Alcorn’s lung disease through a particular doctor. An administrative law judge approved the settlement in January 2009, and ISP paid Alcorn the agreed amount for his permanent partial disability. In July 2013, Alcorn filed an application in the circuit court asking the court to render judgment in his favor for $36,500 plus future medical costs for his lung condition. The court issued its judgment in May 2014 finding that the labor and industrial relations commission retained jurisdiction over Alcorn’s claim for compensation and remanded (sent back) the case to the commission. In August 2014, the commission ordered the claim for compensation remanded to the division of workers compensation to hear the parties’ evidence regarding medical treatment and to determine ISP’s obligation, if any, to provide future medical treatment to Alcorn. ISP seeks this Court’s writ prohibiting the commission from reviewing the parties’ rights and obligations under the previously approved settlement.

ISP asks this Court to make permanent its preliminary writ of prohibition. ISP argues the commission exceeded its jurisdiction under the workers compensation act in finding it had jurisdiction to review the approved settlement agreement and to determine the parties’ rights and obligations under that settlement. ISP contends the commission also exceeded its jurisdiction in remanding Alcorn’s claim for compensation to the division of workers compensation for a hearing regarding Alcorn’s medical care. The company asserts that, once the administrative law judge approved the settlement agreement, the division’s and commission’s jurisdiction was exhausted. ISP argues the commission lacked authority to review or otherwise act on the settlement agreement, Alcorn’s claim for compensation or Alcron’s request for a hearing. ISP contends nothing in the workers compensation act – including section 287.390, RSMo – or the legal authorities on which the commission relied in its August 2014 order gives the commission jurisdiction to review or enforce an approved settlement agreement or to remand for an evidentiary hearing a claim previously addressed by an approved settlement agreement. ISP asserts it has no adequate remedy to challenge the commission’s August 2014 order by appeal or otherwise. ISP argues that, absent this Court’s writ of prohibition, ISP will suffer immediate and irreparable injury through the time and cost involved in preparing for and participating in an evidentiary hearing, including hiring and deposing medical experts.

Alcorn asks this Court to quash (undo) its preliminary writ of prohibition. He responds that the division is not entitled to prohibition. He argues the commission did not exceed its jurisdiction in ordering an evidentiary hearing to determine what medical treatment is required because the settlement was a partial settlement. Alcorn contends the commission approved a partial settlement of all issues except future medical care and, therefore, retained jurisdiction over future medical treatment issues to make the settlement enforceable as required by state law. He asserts the workers compensation act and case law support the commission’s August 2014 order to determine whether medical treatment and care are related to Alcorn’s work-related lung injury and are reasonable and necessary to relieve the effects of that injury. Alcorn responds that ISP has not established that it will suffer immediate and irreparable harm should this Court quash its preliminary writ. He argues that because ISP has not been paying for his medication to date, it has not suffered financial harm. Alcorn contends ISP will have the opportunity to present its evidence regarding any future medical care to the commission, just as it would in circuit court.

The Missouri Association of Trial Attorneys, which filed a brief as a friend of the Court, argues that ISP is not entitled to a writ preventing the commission from exercising jurisdiction over the issue of future medical treatment. The association contends the approved settlement agreement was a partial settlement, leaving open the issue of future medical treatment. The association asserts the commission retained continuous jurisdiction to determine the medical care necessary to treat the effects of the injury and resolve disputed medical treatment issues to make the settlement enforceable under state law.

SC94478_ISP_Minerals_brief.pdf

SC94478_Alcorn_brief.pdf

SC94478_MO_Assoc_of_trial_attorneys_amicus_brief.pdf

SC94478_ISP_Minerals_reply_brief.pdf

SC94470
In the Matter of the Verified Application and Petition of Liberty Energy (Midstates) Corp d/b/a Liberty Utilities to Change its Infrastructure System Replacement Surcharge, Missouri Public Service Commission v. The Office of Public Counsel
Cole County
Gas utility’s eligibility to recover certain costs of replacing infrastructure
Listen to the oral argument:

SC94470.mp3
The public counsel was represented during arguments by Marc D. Poston of the public counsel’s office in Jefferson City; the public service commission was represented by Jennifer Heintz of the commission in Jefferson City; and Liberty Utilities was represented by Larry W. Dority of Fischer & Dority PC in Jefferson City.

Although the parties dispute the exact nature of the history behind the statutory provisions governing the “infrastructure system replacement surcharge,” generally the surcharge allows gas utility companies to seek – outside the periodic review of their general rates – more timely recovery of costs they incur in replacing specified government-mandated replacements, improvements and relocations in their infrastructure facilities to help maintain the safety of the utility systems. Liberty Energy (Midstates) Corp., a natural gas utility company that does business as Liberty Utilities, filed an application in July 2013 with the public service commission requesting a $650,670 increase to its infrastructure system replacement surcharge for infrastructure costs it incurred from June 2012 through May 2013. The commission’s staff investigated the issues and filed a report recommending a number of changes to Liberty’s proposal, and Liberty agreed with staff’s adjusted calculations. The office of the public counsel, which has discretion to represent ratepayers, opposed Liberty’s proposal to include in the surcharge costs the company incurred in replacing facilities that were damaged or destroyed by a contractor or other third party. The public counsel argued such costs do not qualify as pipeline replacement costs under state law. In October 2013, the commission issued its order approving Liberty’s surcharge increase, including the costs incurred in replacing and repairing damaged and destroyed facilities. The commission concluded that replacements of damaged facilities constitute replacements of pipeline system components that are “worn out or in deteriorated condition” and eligible as surcharge costs under state law. The public counsel appeals.

The public counsel argues the commission erred in approving an increase in Liberty Utilities’ infrastructure system replacement surcharge. The public counsel contends the commission’s order is unlawful and unreasonable and is subject to review under state law. The public counsel asserts that Liberty’s expenses to repair or replace facilities that were damaged by a third party do not qualify as eligible surcharge costs permitted by state law and should not have been included by the commission in the infrastructure surcharge increase. The public counsel argues that the commission’s interpretation of “worn out” or “in deteriorated condition” is inconsistent with the plain and ordinary meaning of these terms and with the legislature’s purpose in authorizing the surcharge, which was to address the natural tendency of steel or cast iron pipes buried underground to corrode or crack as they age. The public counsel contends that the surcharge increases are an exception to the general prohibition against single-issue ratemaking and, therefore, should be construed strictly.

Liberty responds that the commission properly approved the increase to Liberty’s infrastructure system replacement surcharge. Liberty argues the commission’s order is lawful and reasonable because the revised surcharge rate schedule recovers costs for projects that are eligible for the surcharge under state law. Liberty contends that the costs it incurred are necessary to make its infrastructure safe and that the surcharge statutes and rule were designed to eliminate disincentives that affect natural gas companies in making improvements necessary to operate safe and reliable natural gas systems and to relocate facilities to accommodate public improvement projects. Liberty responds that the commission’s interpretation of the statutory language is consistent with the plain and ordinary meaning of the terms “worn out” or “in deteriorated condition,” which it asserts includes damaged facilities that have been made inferior or have become impaired. Liberty argues it is the condition of the facility that determines eligibility for the surcharge, not the cause of its condition. Liberty contends that, because the meaning of the statute can be determined based on the plain meaning of the words, there is no need to analyze legislative intent further. Liberty asserts the history on which the public counsel relies is largely regulatory history of proceedings before the commission, with which the commission is most familiar. Liberty responds that it just completed a general rate proceeding before the commission in which the issues related to the surcharge were resolved by virtue of a partial stipulation and agreement entered into by parties including Liberty and the public counsel and approved by the commission in December 2014. Under the stipulation, Liberty argues it agreed to create a reserve fund to credit ratepayers should this Court reverse the commission’s order with respect to the surcharge and further agreed to exclude from its future surcharge filings costs associated with infrastructure damage caused by the company or a third party.

The commission responds that this Court should affirm its decision, which it argues is lawful. The commission argues that, given the nature of this case, the Court is not required to review the reasonableness of the commission’s decision and may affirm the decision if it determines the decision is lawful. Even if the Court reviews the decision for reasonableness, the commission contends it made sufficient findings of fact and conclusions of law for the Court to affirm the decision under that standard. The commission responds that it has statutory authority to approve an infrastructure system replacement surcharge and that the projects it approved for inclusion in Liberty’s surcharge are eligible within the meaning of the state statutes. The commission asserts that its interpretation of the surcharge statute is consistent with the plain and ordinary meaning of the phrase “worn out or are in deteriorated condition” as well as with legislative intent.

SC94470_Public_Counsel_brief.pdf

SC94470_Liberty_Utilities_brief.pdf

SC94470_Public_Service_Commission_brief.pdf

SC94470_Public_Counsel_reply_brief.PDF