Retrospective Tax Case

On September 26, 2001, the General Assembly levied a retrospective tax increase of 6.45% on top tax bracket income taxpayers (7.75% increased to 8.25%) for the first nine months of tax year 2001. About $76,000,000 was unconstitutionally taken from taxpayers. The tax hike was to be limited to three years, but the governor now proposes it be continued three more years thru 2006. Rodman, et al. v. Tolson, Wake County No. 03 CVS 005581. This case is scheduled for trial in the Fall of 2003.

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Peanut Insurance Case

For the last six years, peanut farmers were provided a price support system to protect the farmers from violent swings in prices.  Farmers also could obtain crop insurance to insure against different perils including adverse weather conditions.  Each year for the past six years, farmers would begin contract negotiations in the preceding year before planting their crops.  Relying upon the price support system as well as insurance coverage, peanut farmers entered into leases, bank loan agreements and other contracts with third parties.  The farmers were assuming they would receive price support and insurance coverage of 31¢ per pound.

The deadline for making changes to the insurance policy ended in February and March of 2002.  The farmers were still operating under the assumption that they would have coverage of at least 31¢ per pound.  On or about May 13, 2002, a farm bll was passed which significantly reduced payment for the Year 2002 crop of peanuts.  As part of that bill, Congress adjusted the crop insurance policy for peanuts from 31¢ per pound to 17.75¢ per pound.  They justified this adjustment under the procedures issued by the Federal Crop Insurance Corporation.

Boyce and Isley has filed two federal lawsuits seeking recovery of insurance coverage at 31¢ per pound for farmers who suffered peanut crop losses for the 2002 crop year.

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City/County Tax Diversion Case

In 2001 the governor issued an "Executive Order" to use for state operating expenses $335 million in local tax revenue which by law belonged to 541 towns and cities and 100 counties. At least 24 laws specifically state that these inventory reimbursement taxes, utility taxes, beer/wine taxes and others when collected by the secretary of revenue "shall" be paid over to the local governments. A civil action in the nature of a "writ of mandamus" commanding a public official to perform a clear legal duty was bought in September 2002. Cabarrus County, et al. v. Tolson, Wake County No. 02 CVS 12528. This case is scheduled for trial in the Fall of 2003.

Complaint

Highway Trust Fund Case

On February 6, 2002, the governor issued "Executive Order No. 19" by which $80 million was diverted from the highway trust fund. Tax revenue diverted had been collected pursuant to tax laws which directed it to be used exclusively for 31 specific highways, 7 specific urban loops, city street and state and state road projects designated in the "1989 Highway Trust Fund Act." Trust money was used to cover excess expenditures to balance the state budget. Goldston, et al. v. State, et al., Wake County No. 02 CVS 15252. This case is scheduled for trial in the Fall of 2003.

Tobacco Case

The challenge is to a $4.6 billion settlement in 1998 to recover taxpayers' money spent on public health plans. The yearly payments are not going into the state treasury but to 3 political appointee "Trust" funds. Tobacco growers and allotment holders in aeperate 1999 settlement are getting $1.9 billion in yearly payments. In addition, allotment owners are seeking an $8 billion federal "buyout." Latta, Et Al. v. State.

State, Teachers, and Local Government Retirees & Military and Federal Government Retirees - Lawsuits - 1989 to 2001

In March 1989 the U.S. Supreme Court ruled that states could not treat state employees different from federal and military employees as North Carolina and 23 other states were doing. In August 1989 a law was passed taking away state employees contractual retirement benefit of no state income tax so as to continue the tax against federal and military retirees. In 1998, the North Carolina Supreme Court held this was an impairment of the obligations of contract made with state employees since 1939. Retiree claims for $1.156 billion in illegal tax were resolved in 2000 by a saettlement of  $799 million. Bailey (State) and Patton (Federal) cases. Ultimately, the state plaintiffs received 100% in refunds and federal and military over 95%.

Disabled Teachers, State and Local Government Employees- Lawsuits 1985 to 1997

In 1982 and again in 1988, the state enacted laws that decreased the benefits to state employees in the eve of total disability. In April 1997, the North Carolina Supreme Court ruled this was an impairement of contract. Monthly benefits were restored and almost $100,000,000 in refunds have been paid and several billion in future benefits restored. A lifelong increase in benefits for about 6,000 disabled teachers and state employees was achieved. Attorney Marvin Schiller had won the Simpson Local Government Disabled Retiree Simpson Case in 1988 and G. Eugene Boyce assisted him in the four state cases. Faulkenbury/Woodard/Peele/Hailey Cases.

Intangibles Taxpayers - Lawsuits 1991 to 2000

North Carolina, in violation of the U.S. Constitution Commerce Clause, taxed owners of out-of-state corporate stock from 1990 thru 1994. The tax was repealed in 1995. In the Fulton and Smith A cases, after seven years of litigation and pursuant to the mandate of the U. S. Supreme court, $120,000,000 in illegal taxes and $30,000,000 in interest  was refunded to 185,000 taxpayers. In resolving the initial commerce clause  cases, the State violated the N.C. Constitution. In separate controversies based on different legal and constitutional issues, the law firm Boyce & Isley after its formation in May, 1999,  obtained a settlements of $110,000,000 in the 1998 Shaver case and $330,000,000 in the 1995  Smith B case for over  220,000 clients. These cases are still not concluded.    

Each of the cases handled by Eugene Boyce and his former regional law firm, could have been settled in the early years of litigation by repeal of the taxes and prospective relief only  at minimal cost to the State.   That is, that State could have kept the money they had and just stop violating the constitution. There were about 15 appeals in three separate controversies. Eugene Boyce won all four major cases in the trial court and won 14 of the State's 15 appeals to the appellate division.