DIRECTV v Utah State Tax Commission

DIRECTV sued commission alleging a tax credit available to cable companies but not satellite television companies violate the dormant commerce clause and Utah’s uniform operation clause. The district court granted judgment o Commission on the pleadings. The Court affirmed. It held there was no dormant commerce clause violation as the tax credit was based on whether or not a company pays franchise fees to a Utah government not whether it is a Utah company. Thus, the different treatment of cable and satellite providers is based on their business model not in state or out of state status. As such, there is no local protectionism and no violation. The court noted there is a split in authority on the issue, but, concluded its analysis of the dormant commerce clause precedent identifies discrimination against out of state companies, not different treatment of business models or shifting market share among interstate competitors, as the threshold for a dormant clause claim and that is simply not the case here. It rejected the uniform operations claim because it is rational to extend the credit only to companies that pay franchise fees and the credit advances legitimate interests of inducing cable companies to continue to provide internet access and public access channels.

Mind & Motion Utah Investments, LLC v Celtic Bank Corporation

Bank appealed summary judgment in favor of Investments arguing the requirement to record a certain document was a condition not a covenant. The Court affirmed. It stated that covenants are enforceable duties while conditions are events that must occur for a covenant to come into force. It further noted that under Utah case law mandatory language such as “shall”, “must” or “agree” often indicate a covenant while language such as “unless”, “on condition that” or “if” often create conditions. Here, the requirement to record was a covenant as the agreement used “shall” in describing it, provided a hard deadline to complete and used conditional language for other provisions. The Court also held that the agreement did not have a latent ambiguity as the affidavits submitted by Bank only set out its subjective belief not an objective collateral basis such as trade practice, course of dealing or some other linguistic particularity arising from the collateral matter.