Opinion
12472-20
10-06-2021
Rock Cliff Reserve, LLC, Five Rivers Conservation Group, LLC, Tax Matters Partner, Petitioners v. Commissioner of Internal Revenue, Respondent
ORDER
Joseph W. Nega, Judge
This case is calendared for trial at the session of the Court to be conducted remotely, commencing Monday, January 31, 2022, for cases in which Birmingham, Alabama, is listed as the place of trial. This case involves respondent's disallowance of petitioner's 2015 conservation easement as not being a qualified conservation easement under section 170(h). On September 18, 2021, respondent filed a motion for partial summary judgement seeking judgment as a matter of law on the grounds that petitioner's conservation easement deed fails to meet the perpetuity requirements of section 170(h)(5)(A); and section 1.170A-14(g)(6).
Unless otherwise indicated, all statutory references are to the Internal Revenue Code, Title 26, U.S.C., in effect at all relevant times, all regulation references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure.
On June 17, 2020, this Court released its opinion in Hewitt v. Commissioner, T.C. Memo. 2020-89 (2020). Hewitt addresses many of the issues raised by respondent's motion for partial summary judgment in this case, including the procedural and substantive validity of section 1.170A-14(g)(6)(ii) and the proper interpretation of section 1.170A14(g)(6)(ii). On September 15, 2020, petitioners in Hewitt filed their Notice of Appeal of the Tax Court's decision to the United States Court of Appeals for the Eleventh Circuit ("Eleventh Circuit"), where the current case would be appealable. I.R.C. sec. 7482(b).
On September 28, 2021, petitioner filed a motion for stay of proceedings requesting that this case be stayed pending a final disposition of the appeal in Hewitt, whose outcome will likely impact the disposition of the current case. Respondent does not dispute that the outcome in Hewitt will impact the disposition of the current case.
"[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants." Landis v. North American Co., 299 U.S. 248, 254 (1936). There is good reason for staying a case when a controlling question of law is pending on appeal. Miccosukee Tribe of Indians of Fla. v. S. Fla. Water Mgmt. Dist, 559 F.3d 1191, 1198 (11th Cir. 2009). The Tax Court has discretion to stay civil proceedings when the interests of justice seem to require such action. See, e.g., Iron Bridge Corp. v. Commissioner, T.C. Memo. 2012-158 (2012).
The Eleventh Circuit's decision in Hewitt will likely rule on the validity and proper interpretation of section 1. 170A-14(g)(6)(ii). While it is probable that the Hewitt decision will not address all of the issues in the current case, the Eleventh Circuit is likely to examine the issues central to respondent's motion for partial summary judgement. Therefore, we agree with petitioner that the outcome of the Hewitt appeal before the Eleventh Circuit will likely have a direct bearing on the disposition of the current case and more specifically on respondent'smotion for partial summary judgment.
Furthermore, a stay of this case will not prejudice respondent. As respondent is also a party in Hewitt before the Eleventh Circuit, a stay would also potentially benefit respondent, since he will be able to avoid parallel litigation in multiple cases. Accordingly, in the interest of judicial economy, we defer ruling on respondent's motion for partial summary judgment pending further developments.
On the basis of the foregoing, it is
ORDERED that petitioner's motion to stay proceedings, filed on September 28, 2021, is granted pending a decision of the United States Court of Appeals for the Eleventh Circuit in Hewitt v. Commissioner, No. 20-13700, and this Court shall hold respondent's motions for partial summary judgment in abeyance for the time being. It is further
ORDERED that the parties are free to file a motion seeking to lift the stay of this proceeding at any time and the Court will act upon the motion for good cause shown. It is further
ORDERED that on or before January 5, 2022, and then every 90 days thereafter, the parties shall file a joint report with the Court (or, if that is not expedient, then separate reports) describing the status of the case. It is further
ORDERED that this case is stricken for trial from the January 31, 2022 Birmingham, Alabama, session of the Court and is continued. It is further
ORDERED that jurisdiction is retained by the undersigned.