Justice Clarence Thomas wrote the court’s 9–0 decision in Connelly v. Internal Revenue Service. The case concerns two brothers’ closely-held corporation. After one of the brothers died, tax authorities and the estate did not agree on the value of the stock.

Closely-held corporations commonly enter into agreements that require the redemption of a shareholder’s stock after the shareholder dies to preserve the closely held nature of the business. Under such routine estate-planning devices, corporations that enter into such agreements purchase life insurance on the shareholder to make sure the transaction is funded.

The Supreme Court held that life insurance proceeds that will be used to redeem a decedent’s shares must be included when calculating the value of those shares for purposes of the federal estate tax.

The appeal of Thomas Connelly, executor of the estate of the late Michael Connelly, was rejected by the U.S. Court of Appeals for the 8th Circuit in June 2023.

The IRS said the estate owed close to $1 million after it found that St. Louis-based Crown C Corporation, a building materials business, failed to report life insurance proceeds after Michael Connelly died in 2013.

Michael Connelly, who was president and CEO of the corporation when he died, owned 77.18 percent of the company’s shares, while Thomas Connelly owned 22.82 percent.

The executor filed an estate tax return reporting the value of his late brother’s shares as $3 million, but the IRS conducted an audit in which an accounting firm valued the shares at more than $3.8 million at the time of the brother’s death.

The IRS determined that the life insurance proceeds needed to be included in the valuation of the corporation, which meant the company had a value of $6.8 million at the date of death. The IRS found that the estate owed an additional $890,000. The estate paid the amount and then sued the tax agency in federal court in Missouri.

The Supreme Court examined whether a life insurance policy obtained to finance the company’s repurchase of the late co-owner’s shares should be factored into the valuation of the stock.

The estate argued the stock should not be taxed because the proceeds were to be used to repurchase the outstanding shares. The IRS countered that the shares were subject to tax based on the fair market value as measured by what they could be sold for when the co-owner died.

The case concerns an important question of federal tax law on which the federal courts of appeal disagree, according to the surviving brother’s petition.

Under the Internal Revenue Code, when an individual dies that person’s estate is subject to federal estate tax calculated based on the fair market value of the estate’s holdings at the time of the death.

“In many cases, fair market value can be determined through a straightforward analysis of public markets. But when a particular type of asset is not freely traded, fair market value must be determined on the basis of assessment and evaluation,” the petition states.

“Under applicable Treasury regulations, life-insurance proceeds payable to a corporation may be relevant to determining the value of a decedent’s stock in the corporation in some circumstances but not others.”

“The question presented is whether the proceeds of a life-insurance policy taken out by a closely held corporation on a shareholder in order to facilitate the redemption of the shareholder’s stock should be considered a corporate asset when calculating the value of the shareholder’s shares for purposes of the federal estate tax.”

In his new opinion, Justice Thomas recounted that the Connelly brothers entered into an agreement to make sure the company would stay in the family if either brother passed away. In that pact, the corporation could be forced to purchase the deceased brother’s shares.

To finance this possible share redemption, the corporation took out life insurance on each brother. After Michael Connelly died, there was a dispute over how to value his shares for calculating the estate tax.

“The central question is whether the corporation’s obligation to redeem Michael’s shares was a liability that decreased the value of those shares. We conclude that it was not and therefore affirm” the decision of the 8th Circuit, Justice Thomas wrote.

The justice explained that when Michael Connelly died, the corporation was worth almost $4 million and the family valued his shares at about $3 million. But the tax agency took the view that the corporation’s value was closer to $7 million because of the $3 million in insurance proceeds. This made the decedent’s shares worth a little over $5 million.

“Because a fair-market value redemption has no effect on any shareholder’s economic interest, no willing buyer would have treated [the] obligation to redeem … as a factor that reduced the value of those shares,” Justice Thomas wrote.

Crown C Corporation’s “contractual obligation to redeem Michael’s shares did not diminish the value of those shares.

“[R]edemption obligations are not necessarily liabilities that reduce a corporation’s value for purposes of the federal estate tax[,]” the justice wrote for the court.

In the case, the Supreme Court turned away a longshot bid by Raland J. Brunson of Ogden, Utah, who has gained notoriety among Trump supporters for his legal activism.

The case at hand is known as Brunson v. Sotomayor. The petitioner sued Justices Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson in their official capacities for voting on Feb. 21, 2023, to deny the petition for certiorari, or review, in his previous lawsuit, Brunson v. Adams.

The three Democrat-appointed justices recused themselves, citing judicial disqualification mandates in the U.S. Code and the Code of Conduct for Justices of the Supreme Court of the United States, which the nation’s highest court adopted in November 2023.

The previous lawsuit was Brunson v. Adams, in which Mr. Brunson sued hundreds of members of Congress in 2021, claiming that they violated their oath of office by not investigating election fraud in the 2020 election and by certifying the election victory of then-challenger Joe Biden, over then-incumbent President Donald Trump in a vote that concluded in the early morning of Jan. 7, 2021, following the security breach at the U.S. Capitol.

Rep. Alma Adams (D-N.C.) appears in the short title of the petition filed in the appeal because she was named first in the list of 388 respondents. Also included as respondents were President Joe Biden, Vice President Kamala Harris, and former Vice President Mike Pence. The lawsuit sought the removal from office of President Biden, Vice President Harris, and the members of Congress.

In the unorthodox lawsuit, Mr. Brunson argued that avoiding an investigation “of how Biden won the election, is an act of treason and an act of levying war against the U.S. Constitution which violated Brunson’s unfettered right to vote in an honest and fair election and as such it wrongfully invalidated his vote.”

In that appeal, the Supreme Court denied the petition for certiorari, or review, in an unsigned order on Jan. 9, 2023. No justices dissented. No reason was provided for the decision. At least four of the nine justices have to vote to approve a petition for certiorari for it to advance to the oral argument stage.

The court denied a petition for rehearing on Feb. 21, 2023, in an unsigned order without providing a reason. No justices dissented.

This week, the Supreme Court denied the petition for certiorari in Brunson v. Sotomayor in an unsigned order without providing a reason. No justices dissented, but Justices Sotomayor, Kagan, and Jackson did not participate in the ruling.
The petition had been docketed with the high court on March 29, with Mr. Brunson serving as his own counsel.

Mr. Brunson argued in the second lawsuit that the justices violated their judicial oath in Brunson v. Adams.

The lawsuit began in state court but the justices as federal officers had the case removed to federal district court.

The district court found that the state court lacked jurisdiction in the suit, holding that the official capacity claims against the justices were tantamount to claims against the United States, which enjoys sovereign immunity. Sovereign immunity is the legal doctrine that the government cannot be sued without its consent.

The district court determined that the state court lacked jurisdiction and that the district court therefore lacked derivative jurisdiction due to the official capacity claims triggering the justices’ sovereign immunity.

The district court dismissed the action, finding that the justices enjoyed immunity.

Mr. Brunson appealed to the U.S. Court of Appeals for the 10th Circuit, arguing that even if derivative jurisdiction had been required, the state court still retained jurisdiction because the doctrine of sovereign immunity runs afoul of the First Amendment’s right to petition for redress of grievances.

On Feb. 9 of this year, the 10th Circuit dismissed the appeal.

In the Supreme Court proceeding, U.S. Solicitor General Elizabeth Prelogar, functioning as attorney for the justices being sued, waived the federal government’s right to respond to the petition in the Supreme Court in a document that was docketed on May 2.

Mr. Brunson argued that the three justices violated their oath of office “by giving aid and comfort to enemies of the Constitution, which is an act of treason, fraud and a breach of contract.”

He urged the Supreme Court to grant his petition, alleging the justices were guilty of “fraud, violations of the Oath of Office and … treason.”

“These serious offenses need to be addressed immediately with the least amount of technical nuances of the law and legal procedures because these offenses are flowing continually against Brunson’s liberties and life and consequently is [sic] a continual national security breach.

“Seeking a redress of grievances, as Brunson has done herein, is a great power one retains to protect himself from the encroachment of a tyrannical government. Brunson’s personal voice and the way he can protect his personal constitutional protected rights and the U.S. Constitution,” the petition stated.

“The federal government has broken the compact between the United States and the States,” the Republican governor wrote in a one-page statement posted on the former Twitter on Jan. 24.

“The Executive Branch of the United States has a constitutional duty to enforce federal laws protecting States, including immigration laws on the books right now. President Biden has refused to enforce those laws and has even violated them. The result is that he has smashed records for illegal immigration,” Mr. Abbott wrote.

“Under President Biden’s lawless border policies, more than 6 million illegal immigrants have crossed our southern border in just three years.

“That is more than the population of 33 different States in this country. This illegal refusal to protect the States has inflicted unprecedented harm on the People all across the United States.”

Rep. Chip Roy (R-Texas) promptly praised Mr. Abbott’s statement.

“This is the right position,” Mr. Roy wrote on X. “You have my full support to do what is necessary to protect Texas.”

The governor’s statement came as Texas continues to resist a U.S. Supreme Court order allowing the removal of razor wire fencing on a 2.5-mile stretch of Eagle Pass, Texas, that Texas authorities installed to prevent illegal migrants from entering the country. Eagle Pass borders the city of Piedras Negras, Coahuila, Mexico, on the Rio Grande River.

Both sides blame each other.

Attorneys for the Biden administration told the court that the wire barrier blocked U.S. Customs and Border Protection (CBP) agents from accessing the illegal border crossers entering the country. Attorneys for Texas countered that the state was forced to erect the border barrier because the federal government has been unable to secure the border.

The federal-state border standoff appears to be developing into a full-blown constitutional crisis as armed law enforcement officers on both sides refuse to acknowledge the other’s authority. The state refuses to remove the razor wire and is installing more wire fencing.

The Texas National Guard is handing over those it apprehends to the Texas Department of Public Safety to be charged with trespassing under state law.

On Jan. 22, the Supreme Court voted 5–4 to let CBP agents remove the razor wire. The ruling stayed a Dec. 19, 2023, injunction issued by the conservative U.S. Court of Appeals for the 5th Circuit that allowed the wire to remain intact.

Chief Justice John Roberts and Justices Amy Coney Barrett, Ketanji Brown Jackson, Elena Kagan, and Sonia Sotomayor voted in the majority, siding with the Biden administration. Justices Clarence Thomas, Samuel Alito, Neil Gorsuch, and Brett Kavanaugh dissented.

On Jan. 24, the Biden administration demanded that Texas give up control over the Shelby Park area in Eagle Pass that it is occupying in an effort to keep illegal migrants from entering the United States, The Washington Examiner reported.

“The state has alleged that Shelby Park is open to the public, but we do not believe this statement is accurate,” U.S. Department of Homeland Security counsel Jonathan Meyer told Mr. Abbott in a letter.

“To our knowledge, Texas has only permitted access to Shelby Park by allowing public entry for a memorial, the media, and use of the golf course adjacent to Shelby Park, all while continuing to restrict U.S. Border Patrol’s access to the park.”

Jack Phillips contributed to this article.

The comments came in a statement Justice Samuel Alito filed when the court denied a request to review the plan of New York City and New York State to deprioritize the treatment of white COVID-19 patients during the recent pandemic.

Justice Clarence Thomas joined the statement.

Both justices concurred with the denial only because the “circumstances underlying the dispute below have long since come and gone,” meaning because the COVID-19 emergency has ended.

Without providing an explanation, the Supreme Court turned down the petition for certiorari, or review, in Roberts v. McDonald (court file 22-757) in an unsigned order on June 30. At least four of the nine justices have to vote to grant a petition in order for it to move forward to the oral argument stage.

The denial of the petition came a day after the court issued a landmark ruling in Students for Fair Admissions v. President and Fellows of Harvard College, in which the court found that racial discrimination in the college admissions process was unconstitutional.

Petitioners Jonathan Roberts and Charles Vavruska, both New York residents, filed a lawsuit (pdf) on Feb. 8, 2022, in the U.S. District Court for the Eastern District of New York, against the New York State Department of Health and the Department of Health and Mental Hygiene of the City of New York.

As a surge in the Omicron variant of COVID-19 took place in December 2021, the U.S. Food and Drug Administration granted emergency approval for Paxlovid, a drug that was hailed as an “antiviral superstar,” that “reduces the rate of hospitalizations by around 90 percent” with “no safety issue beyond placebo.”

Despite plans to boost production, supplies of the drug were limited when the petition was filed.

Mr. Roberts and Mr. Vavruska objected to the policy of the state and city to instruct health care providers to adhere to the state’s directive for distributing scarce COVID-19 treatments—oral antivirals Paxlovid and Molnupiravir, along with monoclonal antibodies.

“The directives require providers to prioritize treatment to individuals based on age, vaccination status, and a number of risk factors. Risk factors include medical conditions such as cancer, chronic disease, diabetes, and obesity.

“The directives also state that, apart from any medical condition, non-white race or Hispanic/Latino ethnicity must be considered as an independent risk factor,” according to the petition.

For example, “an unvaccinated 64-year-old African-American with diabetes receives priority over an unvaccinated white 64-year-old with diabetes. A vaccinated 66-year-old who is Hispanic receives priority over a vaccinated 66-year-old who is not.”

“New York’s designation of race as an independent risk factor has no basis in science. Although race may be associated with different risk factors, New York has cited no evidence that race—on its own—makes an individual more susceptible to suffering adverse effects from COVID-19.”

Such evidence “does not exist, because race does not connote any attribute inherent to any individual. It is instead an arbitrary classification that lumps in many different individuals with different attributes and different needs.

“New York’s designation of race as an independent risk factor deprives deserving individuals of much-needed medical treatments solely due to their race.”

Mr. Roberts was white and not Hispanic, vaccinated against COVID-19, and had no known risk factors for severe illness that could result from the disease. This meant Roberts did not “qualify for inclusion in any tier of the ‘risk groups’ established” by the state or city health departments.

“If he were any race but white, he would qualify for the last tier [1E] of the risk groups,” the legal complaint stated.

Mr. Vavruska was also white and not Hispanic, and vaccinated against COVID-19. He contracted the disease in March 2020 and was hospitalized for 10 days. He had at least one risk factor for severe illness that could result from the disease and therefore “qualifies for inclusion in the last tier [1E] of the risk groups for prioritization of certain COVID-19 treatments.”

The petitioners sued to gain “the ability to access oral antiviral or monoclonal antibody treatments on an equal basis, without regard to their race, if they contract COVID-19.”

The district court dismissed the case for lack of standing, and that ruling was affirmed by the U.S. Court of Appeals for the 2nd Circuit.

Mr. Alito said in his statement that the case: “Involves an issue of ongoing importance: whether the Equal Protection Clause permits governments to use race or ethnicity as a proxy for health risk and therefore ‘prioritize the treatment of patients’ on that basis.”

He said if “any government again resorts to racial or ethnic classifications to ration medical treatment, there would be a very strong case for prompt review by this Court.”

The state’s policy “justified the use of race and ethnicity as proxies for health risk by appealing to ‘longstanding systemic health and social inequities.’”

But the Equal Protection Clause “places a ‘daunting’ obstacle in the way of any government seeking to allocate benefits or burdens based on race or ethnicity, typically giving way only when the measure in question is ‘narrowly tailored’—that is, ‘necessary’—to ‘remediate specific, identified instances of past discrimination that violated the Constitution or a statute,’” Mr. Alito wrote, quoting the Harvard decision last month.

New York’s reference to “longstanding systemic health and social inequities” does not justify the state denying a person medical treatment “simply because that person is viewed by the State as being a member of the wrong racial or ethnic group.”

“The shortage at issue in this case appears, thankfully, to have concluded. But in the event that any government again resorts to racial or ethnic classifications to ration medical treatment, there would be a very strong case for prompt review by this Court,” the justice wrote.

Jim Burling, vice president of legal affairs for the Pacific Legal Foundation (PLF), which represented Mr. Roberts and Mr. Vavruska, told The Epoch Times he agreed with Mr. Alito.

PLF is a national non-profit public interest law firm that challenges government abuses.

The idea of giving preference to a racial or ethnic group because of “‘longstanding systemic health and social inequities,’ makes no sense because all the data showed that there were no significant differences in morbidity between various ethnic groups,” Mr. Burling said in an interview.

“The court in this term, came out in no uncertain terms against racial gerrymandering for college admissions, and it shouldn’t be any different for health care,” he said.

“If there is a live case, and it gets up to the Court soon enough, they certainly could win.”

Usually, when the Supreme Court turns down a petition, it simply says “denied” and puts it on the list of denied cases, he said.

“But on those occasions where the Court comes out with a statement, or sometimes they dissent from the denial, that really gives a lot of people a roadmap to the future to try to get another similar case before the Supreme Court.”

So this Roberts v. McDonald case “is just another one of these cases where some members of the Court are saying, ‘hey, don’t give up on this. We’re interested and bring us another case and we might take it,’” Mr. Burling said.

Cornell Law School professor William Jacobson, who brought a similar case against New York for its discriminatory medical policy but did not appeal its dismissal for lack of standing to the Supreme Court, said the 2nd Circuit’s standing standard was impossible to meet.

The standard “required a plaintiff to contract Covid, be medically eligible, and be in a position to seek the medicine, before a suit.

“Legally and substantively it’s an idiotic standard because the medication was only effective if taken within five days of symptoms. So the courts set up a standing requirement that almost no one could meet as a practical matter because of the tight time frame to seek judicial relief.

“The courts gave health officials almost unbridled authority to engage in racist conduct as to emergency medical treatments,” Mr. Jacobson wrote at Legal Insurrection.

Because of Mr. Alito’s statement, “We know that at least two of the Justices are interested in hearing a case of medical racism in the right procedural posture,” he added.

The Epoch Times also asked New York State’s solicitor general, Barbara Underwood, for comment but had not received a response at the time of publication.

New York City Law Department spokesman Nick Paolucci said by email that the department “is not commenting.”

Article cross-posted from our premium news partners at The Epoch Times.