California CUL wins final battle in hotel tax case

ONTARIO, Calif. - Two months ago, the California Credit Union League argued that a 1999 9th Circuit U.S. Court of Appeals ruling that credit union employees are exempt from paying hotel occupancy tax while on business was a routine application of the Federal Credit Union Act, raised no constitutional issues, conflicted with no other circuit court rulings, and did not deserve review by the U.S. Supreme Court. Now the U.S. Supreme Court, by refusing to review the motion to appeal filed by the city of Anaheim, Calif. of the lower court's decision and upholding the court's ruling in favor of the league, has agreed, and in so doing, has ended the six-year old legal clash between the CCUL and Anaheim. The six-year old case began in 1994 when the CCUL sued the city of Anaheim because it charged federal credit union employees, officers and volunteers its 13% occupancy tax at the Disneyland Hotel during the league's 1993 annual meeting. The league won summary judgment in the case in U.S. District Court, and that decision was upheld in 1996 when Anaheim appealed the district court's decision to the 9th Circuit Court of Appeals. Anaheim then appealed the 9th Circuit Court's ruling to the U.S. Supreme Court and the high court overturned the 9th Circuit in 1997, ruling that the U.S. government needed to be a co-plaintiff in the case. The Department of Justice then joined the CCUL as a co-plaintiff in the lawsuit, and the 9th Circuit reaffirmed its original ruling last September. Beyond the implications of the U.S. Supreme Court's decision on federal credit unions, CCUL Vice President and General Counsel Joseph McDonald said the court's decision to deny certiorari also has implications for other federal instrumentalities because it means they cannot be held liable in litigation for punitive damages as instrumentalities of the federal government.