The U.S. disagreed with Georgia’s defense of electing Public Service Commission members for specific districts on a statewide, at-large basis. At the 11th U.S. Circuit Court of Appeals, Georgia’s state secretary argued that partisanship, not race, explained election results that have led to mainly white commissioners over the years, and federal courts can’t force new government models on states (see 2210200035). A lower court found that Georgia’s elections system for the PSC illegally dilutes Black votes in violation of Section 2 of the 1965 Voting Rights Act. The 11th Circuit should reject the state’s “argument that plaintiffs’ Section 2 vote-dilution claim fails because the racially polarized voting patterns in Commission elections are purportedly correlated with partisan preferences,” DOJ wrote in a Wednesday amicus brief in case 22-12593. While courts may consider evidence of political preferences, “such evidence can defeat a Section 2 vote-dilution claim only when the evidence proves that, despite apparent racial polarization, minority-preferred candidates have the potential to succeed under the existing electoral framework,” it said. “The district court did not clearly err in concluding that the Secretary failed to meet that difficult standard.” DOJ disagreed no remedy is available. “Single-member districting is the standard remedy for vote dilution caused by an at-large system,” it said. “The district court did not clearly err in concluding that Georgia lacks sufficiently compelling interests to justify the continued use of its current method of electing Commission members.”

A federal judge weighing Maryland’s digital ad tax asked if she should still hold oral argument Nov. 29 at the U.S. District Court for Northern Maryland. The U.S. Chamber of Commerce and other plaintiffs told Judge Lydia Kay Griggsby last week that a state court decision to strike down the tax didn’t moot the federal court’s review of the state’s ban on passing the tax’s cost on to customers (see 2210210068). Maryland should file a status report by Oct. 31 on whether it agrees the oral argument should proceed, Griggsby ordered Monday.

With a Maryland court striking down the state’s digital ad tax, federal plaintiffs challenging the same law urged the U.S. District Court for Northern Maryland to rule quickly on the state banning companies from passing the tax’s cost on to customers. In a Friday letter to the federal court, the U.S. Chamber of Commerce and other plaintiffs attached Anne Arundel Circuit Court Judge Alison Asti’s short Friday order, which was based on her Oct. 17 bench ruling (see 2210170076). The state court’s order (case C-02-CV-21-000509) said the tax violates the U.S. Constitution's supremacy clause and the Internet Tax Freedom Act because the tax is discriminatory; flouts the Constitution's Commerce clause because it discriminates against interstate commerce; and defies the First and 14th amendments “because it singles out the Plaintiffs for selective taxation and is not content-neutral.” Although that decision “was a step in the right direction, its lack of reasoning and the State’s intent to appeal have introduced problematic uncertainty for the regulated public,” the federal plaintiffs told the district court (case 21-cv-00410-LKG). “Companies engaged in digital advertising in this State need firm and final guidance on whether they will have to pay the tax and whether they may say anything about it on their invoices and other customer statements.” The state court’s judgment doesn’t moot the federal case, said the plaintiffs, noting Asti didn’t rule on the constitutionality of the pass-through prohibition. “Plaintiffs’ members have paid estimated taxes under the Act, and the question whether they may identify increased customer pricing with express fees or surcharges related to those estimated payments remains a live issue, regardless of any appeal.” The federal court earlier scheduled Nov. 29 oral argument (see 2209070026).

A Virginia Circuit Court in Richmond held in a Sept. 9 opinion that Alcatel-Lucent was entitled to a sales tax refund on software, equipment and related services it sold to Shenandoah Personal Communications, blogged the Eversheds Sutherland law firm Tuesday. Under Virginia law, software delivered electronically via the internet is exempt from sales tax, it said. The state tax commissioner argued the software was not exempt because there was no invoice, contract or other sales agreement certifying the delivery method, it said: “However, the court rejected this argument, concluding that there was no such requirement under the statute’s plain language.” The court also found that Alcatel’s sales of equipment were also exempt, said the firm. Tax-exempt equipment includes broadcasting equipment, parts and accessories thereto, plus amplification, transmission and distribution equipment when used by entities under the “regulation and supervision” of the FCC, the firm said: “The court concluded that the equipment was broadcasting equipment and the purchaser was a concern regulated and supervised by the FCC. The equipment was also amplification equipment used by an open video system.”

Maryland is weighing options after a state court struck down the state’s digital ad tax law, the state attorney general’s office said Monday. “Our office is reviewing the decision to determine next steps,” a spokesperson emailed. Anne Arundel Circuit Court Judge Alison Asti ruled from the bench at a Monday motions hearing in the lawsuit by Comcast against Maryland’s comptroller (case C-02-CV-21-000509). The ruling pleased Comcast, a spokesperson said. A federal court earlier said the Tax Injunction Act precluded it from reviewing the tax, but that court continues to review the state’s prohibition on passing on the tax’s costs to consumers (see 2209070026).

AT&T Illinois agreed to pay $23 million to resolve a federal criminal investigation over efforts to “unlawfully influence” former Illinois Speaker of the House Michael Madigan (D), said a DOJ release and deferred prosecution agreement released Friday. Under the agreement, AT&T “admitted it arranged for payments to be made to an ally of Madigan to influence and reward Madigan’s efforts” to get carrier of last resort legislation passed in the Illinois General Assembly in 2017. The legislation “provided one step needed to terminate AT&T Illinois’ costly obligation to provide landline telephone services to all Illinois residents,” the agreement said. DOJ will defer prosecution on the charge of “use of an interstate facility in order to promote and facilitate unlawful activity, namely legislative misconduct” for two years and then dismiss it as long as AT&T Illinois and other AT&T subsidiaries obey the conditions of the agreement, which include a compliance plan and continuing to cooperate with investigations related to the misconduct. The money goes to the federal Crime Victims Fund, the release said. According to the filing, AT&T paid thousands of dollars per month to a political ally of Madigan’s with the expectation that Madigan would get the legislation passed in return.

The 11th U.S. Circuit Court of Appeals set oral argument for Dec. 15 in Atlanta for a case on whether electing Georgia Public Service Commission members for specific districts on a statewide, at-large basis unlawfully dilutes Black citizens’ votes in violation of the 1965 Voting Rights Act (case 22-12593). The Supreme Court Aug. 19 vacated the 11th Circuit’s Aug. 12 stay of an Aug. 5 decision by the U.S. District Court in Atlanta to postpone PSC elections over the issue.

The 5th U.S. Circuit Court of Appeals has granted a request from NetChoice and CCIA to keep a Texas social media law from taking effect while a U.S. Supreme Court hearing of the case is pending, said an order Wednesday in docket 21-51178. The 5th Circuit previously ruled that the law doesn’t violate the First Amendment (see 2209190080). “This ruling means Texas’s unconstitutional law will not be in force as the issue of government-compelled dissemination of speech makes its way to the Supreme Court,” said CCIA President Matt Schruers in a release. “We are confident these laws will not stand.”

An Ohio court set a Nov. 14 status conference in the state’s lawsuit that seeks to regulate Google as a common carrier (case 21 CV H 06 0274). The in-chambers conference starts at 11:30 a.m. at the Delaware County Common Pleas Court in Delaware, Ohio, Judge James Schuck ordered Monday. The court ruled May 24 that Ohio “stated a cognizable claim” that Google could be a common carrier, though it disagreed the company is a public utility. Ohio also seeks declaratory and injunctive relief to stop alleged self-preferencing by Google on search results pages.