James O. Ellison

The case concerned whether Tax & Accounting Software Corp. (TAASC) and its shareholders qualified for research tax credits under Internal Revenue Code § 41 for expenses incurred developing four software products during tax years 1993 and 1994. TAASC sought credits for costs associated with creating integrated accounting, check-printing, tax-preparation, and call-processing programs that involved novel features constrained by then-existing hardware limits. The district court addressed cross-motions for summary judgment, reciting the statutory definition of “qualified research” (which requires technological information discovery and a process of experimentation) and the standards under Fed. R. Civ. P. 56. The court emphasized that the IRS interpretation must be consistent with the statute’s plain language and the agency’s own regulatory preamble, which permits systematic trial-and-error methodologies.

taxesbusiness & regulatory

The case concerned a Chapter 13 bankruptcy plan in which the debtor sought to classify nondischargeable student loan debts separately from other unsecured debts, proposing 100% payment on the student loans and only 10% on the remaining unsecured claims. The Bankruptcy Court approved the separate classification and treatment, reasoning that it did not unfairly discriminate and advanced the debtor's fresh start. The District Court reversed on appeal, holding that the nondischargeability of student loans by itself does not justify the disparate treatment under 11 U.S.C. § 1322(b)(1) and that such discrimination against other unsecured creditors is unfair absent additional justification.

business & regulatoryprocedure

This case concerned Cardtoons' production of parody baseball trading cards that used images and names of Major League Baseball players, which the MLB Players Association claimed violated Oklahoma's right of publicity statute by misappropriating the players' likenesses for commercial products. The court conducted a de novo review of the magistrate's report finding a violation, examining the cards' status as parody that imitates the style and configuration of traditional baseball cards while exaggerating player images and biographies for humorous effect. It reasoned that parody inherently requires some copying to evoke the original, that the cards qualify as both commercial speech and protected expression under the First Amendment, and that denying use of the likenesses would eliminate the parody's viability without equating it to mere counterfeiting. The court ultimately denied the parties' cross-motions for summary judgment and declaratory relief, as well as related injunction requests.

free speechpropertybusiness & regulatory

This case is an appeal from a bankruptcy court decision in the Chapter 11 proceedings of gas station operator Thomas Slamans. After Slamans defaulted on payments to Sun Company, First National Bank paid $192,483 under a standby letter of credit it had issued to Sun and then sought subrogation to Sun's rights in $111,053 of credit-card proceeds held by Sun. The bankruptcy court awarded those proceeds to the bank under 11 U.S.C. § 509, and the district court affirmed. The court held that a letter-of-credit issuer qualifies as an entity "liable with" the debtor for purposes of § 509 subrogation and that equitable considerations supported allowing the bank to step into Sun's shoes rather than limiting it to its own security interest. The ruling rejected contrary authority that treats letter-of-credit issuers as primarily liable and therefore ineligible for statutory subrogation.

business & regulatoryprocedure

The case involved debtors Thomas and Marilyn Carter, who operated pet stores and sought to avoid a mortgage on their homestead that secured a $125,000 loan from RCB Bank, claiming the mortgage was obtained through economic duress after the bank initially indicated it would lend without requiring homestead collateral. The bankruptcy court ruled in the debtors' favor by disallowing the bank's secured claim on the homestead, and the district court affirmed. The court found that the bank had first agreed to lend based on other collateral, later demanded the homestead mortgage when the Carters were financially committed and unable to obtain alternative financing, creating duress under Oklahoma law; the debtors promptly sought rescission upon discovering their rights and received no additional value in exchange for the mortgage. The decision rested on factual findings that the bank's conduct left the Carters with no reasonable alternative but to sign, and on the legal conclusion that such economic pressure rendered the mortgage unenforceable without requiring restoration of value to the bank.

business & regulatoryproperty

This case involved an appeal from a bankruptcy court ruling that Wal-Mart breached its commercial lease with Oklahoma Plaza Investors by closing its discount store in a shopping center, leading to an award of over $130,000 in damages. The district court reviewed whether the lease language was unambiguous under Oklahoma contract law, particularly the terms regarding "deserted" premises in the default clause and the permitted use of the property. The court affirmed the bankruptcy court's rulings that the lease was not rejected under 11 U.S.C. § 365, that Wal-Mart's defenses of waiver and estoppel lacked merit, and that no implied covenant was breached. However, it reversed the breach finding and summary judgment because the lease terms on desertion and use were ambiguous, requiring consideration of extrinsic evidence rather than relying solely on the four corners of the document, and remanded for further proceedings.

business & regulatorypropertyprocedure

The case involved Cardtoons seeking to produce and sell parody baseball trading cards that used the likenesses and altered names of active Major League Baseball players, prompting the Major League Baseball Players Association to claim infringement of the players' rights of publicity under Oklahoma statute. The court granted declaratory judgment to the MLBPA, holding that the seventy-one player cards, twenty Big Bank Buck cards, and ten Spectra cards violated 12 O.S. § 1449(A), and denied Cardtoons any First Amendment right to market or sell the cards without a license. Injunctive relief was denied because no irreparable harm was demonstrated and an adequate remedy at law existed, while damages were denied to both sides as no sales of the cards had occurred. The core reasoning was that the cards constituted commercial products rather than non-commercial expressive works, so they did not receive First Amendment protection against the players' established publicity rights.

free speechproperty

This case involves taxpayer J. Charles F. Gille's claims against the IRS arising from notices of deficiency for tax years 1982 and 1983, the couple's moves and change-of-address filings between Utah and Oklahoma, the wife's separate payments and correspondence with the IRS, and the IRS's subsequent collection efforts including the mailing of undeliverable notices to an outdated address and the use of postal tracers. The court granted the plaintiff's motion to clarify a prior ruling and found the IRS liable for three additional wrongful disclosures of return information. The core reasoning was that the IRS negligently used postal tracers identifying both the taxpayer and the IRS itself as the inquiring party, despite having actual knowledge of the Oklahoma address through the wife's filings and communications, thereby violating the privacy protections in sections 6103 and 7431. The court therefore entered an additional judgment for the plaintiff in the amount of $3,000.

taxesprocedure

This case involved investors who alleged their broker churned their accounts without authorization at two firms, leading to arbitration under NASD rules and account agreements that called for New York substantive law. The arbitration panel awarded actual damages of about $2,750 after setoff plus over $500,000 in punitive damages against the broker. The court granted the investors' motion to confirm the award and denied the broker's motions to vacate or limit punitive damages. Review was limited under the Federal Arbitration Act to whether the award drew its essence from the contract, and the panel had authority to award punitive damages under the NASD code incorporated in the agreements and under applicable New York law on morally culpable conduct.

business & regulatoryproceduretorts & liability

The case involved an appeal by Wheels, Inc. from a bankruptcy court declaratory judgment determining the parties' rights under a motor vehicle lease agreement with Otasco, Inc., a debtor in bankruptcy proceedings. The district court applied de novo review to the legal conclusions drawn from the lease terms, which designated Wheels as lessor and Otasco as lessee, imposed all operational costs and risks on the lessee, allowed the lessee to cancel vehicles after an initial 12-month term, and provided for sale of vehicles at termination with adjustments to account for stipulated costs. Applying Oklahoma UCC § 1-201(37), the court analyzed whether the transaction created a security interest or a true lease, noting that features such as the lessee bearing risk of loss, paying taxes and maintenance, or holding renewal options do not alone establish a security interest. The court affirmed the bankruptcy court's ruling in favor of Otasco based on the lease's cancellation rights, lack of automatic ownership transfer, and other statutory factors indicating it was a true lease.

business & regulatorypropertyprocedure

The case involved a dispute over the enforceability of a non-compete clause in an employment agreement between plaintiff Paul Herchman, a medical equipment salesman, and defendant Sun Medical, Inc. Herchman sought a declaratory judgment that the covenant was void under Oklahoma law as an illegal restraint of trade, while Sun sought a preliminary injunction to enforce it and prevent disclosure of confidential information. The court denied the motion for preliminary injunction and entered judgment for Herchman. Applying Oklahoma's choice-of-law rules based on the most significant relationship test, the court determined that Oklahoma law governed because the employment occurred exclusively there, and found the non-compete unenforceable under 15 O.S. § 217 due to its overbreadth in scope and duration.

labor & employmentbusiness & regulatory

This case involves Phillips Petroleum Company challenging an order from the Minerals Management Service of the Department of the Interior to produce documents for auditing royalty payments from 1980-1982, arguing it exceeds the statute of limitations under 28 U.S.C. § 2415. The Secretary moved to dismiss for failure to exhaust administrative remedies before seeking judicial review. The court denied the motion, holding that the order constitutes final agency action under the Administrative Procedure Act because compliance is not stayed during appeal, and exhaustion is not required as the issue is purely one of statutory interpretation that does not benefit from further agency review or factual development.

business & regulatoryprocedurefederal power

This case involved plaintiffs suing their broker, Merrill Lynch, under the Securities Exchange Act of 1934 and Rule 10b-5, claiming the firm failed to disclose its knowledge of a pending merger between United Energy Resources and Midcon Corporation while handling the sale of plaintiffs' United stock, resulting in alleged fraud and breach of fiduciary duty. The court granted the defendant's motion to dismiss the complaint. The magistrate's findings, affirmed by the district judge, concluded that the plaintiffs failed to state a claim because the broker had no duty to share confidential merger information from its investment banking division with brokerage clients, and silence without such a duty is not actionable under the rule; additional claims for aiding and abetting and state law violations lacked supporting facts. The decision also referenced Oklahoma's two-year statute of limitations for fraud actions, borrowed for the federal claim, but centered on the absence of a viable legal theory.

business & regulatoryprocedure

This case involved a creditor's appeal from a bankruptcy court order denying its claim to post-petition rents from mortgaged property as cash collateral under 11 U.S.C. § 546(b). The bankruptcy court had ruled that the assignment of rents clause was void under Oklahoma law and that the creditor lacked a vested interest. The district court reversed, holding that under Butner v. United States the creditor's rights are determined by state law, which permits a mortgagee to recover rents through appointment of a receiver even if assignment clauses are unenforceable. Because the creditor could have obtained a receiver in state court foreclosure proceedings, the § 546(b) notice was sufficient to perfect its interest in rents accruing after the notice date, and the bankruptcy court was required to afford equivalent protection.

propertyprocedurebusiness & regulatory

This case involves a securities lawsuit where plaintiffs alleged violations of the Securities Act of 1933, specifically the sale of unregistered securities under §12(1) and misrepresentations under §12(2). The court considered defendants' motion to dismiss counts 1 and 5 based on the statute of limitations in §13 of the Act. The court dismissed count 1 entirely, finding that the one-year limitations period for §12(1) claims is absolute and not subject to equitable tolling, as the complaints were filed more than one year after the sales. For count 5, the court allowed the claims to proceed where plaintiffs sufficiently alleged they could not have discovered the violations earlier through reasonable diligence, but dismissed claims based on sales more than three years prior to filing unless fraudulent concealment is pled with particularity under Rule 9(b).

business & regulatoryprocedure

The case involved the Estate of Robert W. Adams, which elected to pay federal estate taxes in ten annual installments under Section 6166 after the decedent's 1974 death. The estate claimed a refund for interest paid above 4% on 1978-1980 installments, contending that the reduced rate from prior law should continue to apply. The court granted summary judgment to the United States, ruling that the estate owed the higher general interest rate. This conclusion rested on the plain language of 1975 statutory amendments that eliminated the 4% rate for amounts outstanding on or after July 1, 1975, and on legislative history showing that 1976 relief provisions for closely held businesses applied only to deaths after December 31, 1976.

taxes