Weekly Legal Update: November 13, 2026.

A commercial developer sued a Michigan township and its attorney after the township declined to issue shell and foundation permits for a parcel without sewer access. The Sixth Circuit affirmed judgment for the township on every claim. The class of one equal protection claim failed because the developer could not negate every conceivable rational basis for conditioning building permits on a septic permit, and because the hostility the developer identified came from the township's outside counsel and an engineering consultant rather than from any final decisionmaker. The procedural due process claim failed because under Michigan law a developer acquires a protected interest in a permit only by holding a lawful permit and then performing construction of a substantial character, which this developer never did. The First Amendment retaliation claim failed because the township's instruction not to send mass emails to the board was content neutral, narrowly drawn to Open Meetings Act compliance, and left other channels open.

One hundred ninety six class members who had signed personal injury releases sought to vacate approval of the 600 million dollar East Palestine derailment settlement, out of a class of nearly half a million. The Sixth Circuit affirmed the denial of relief under every subsection of Rule 60 they invoked. Fraud on the court under Rule 60(d)(3) failed because class counsel made no intentionally false statement to the court and owed the challenged disclosures to the class rather than to the court. Relief under Rule 60(b)(3) failed because the defendant's post settlement briefing could not have induced a settlement already struck, and a confidential termination agreement whose existence had been disclosed was not concealed. The catchall under Rule 60(b)(6) failed as a repackaging of the same facts.

The Court of Appeals vacated an order dismissing a complaint with prejudice as a sanction for discovery failures and sent the case back. Under Vicencio v Ramirez a Michigan trial court must weigh seven factors before dismissing, including willfulness, prior noncompliance, prejudice to the other side, partial compliance, efforts to cure, and whether a lesser sanction would serve justice, and it must consider the alternatives on the record. The trial court here offered brief statements that gave the appellate court nothing to review. The panel was careful to say it was not holding that sanctions were unwarranted, since the record did show discovery failures, only that dismissal demands stated reasons. This decision is unpublished and is not binding precedent under MCR 7.215(C)(1).

A client sued her former appellate counsel and his firm in Macomb Circuit Court for breach of a retainer agreement and for discrimination, after losing on the same ground in federal court. The Court of Appeals affirmed dismissal. A federal order denying leave to amend as futile was a decision on the merits that merged into the final federal judgment, and the involuntary federal dismissal operated as an adjudication on the merits under MCR 2.504(B)(3), so res judicata barred the state claims. The panel acknowledged that the ground the trial court actually used, MCR 2.116(C)(6), no longer applied once the federal case ended, and affirmed instead on res judicata under MCR 2.116(C)(7). This decision is unpublished and is not binding precedent under MCR 7.215(C)(1).

Revenue Administrative Bulletin 2026-12 replaces Revenue Administrative Bulletin 1995-6 and restates how discounts, coupons, rebates, vouchers and promotional payments affect the gross proceeds subject to Michigan sales tax. A retailer's own coupon reduces the taxable base, but a manufacturer coupon generally does not, because the manufacturer's reimbursement is added back under MCL 205.51(1)(d)(vii) and Mich Admin Code R 205.22(2). Where a retailer doubles a manufacturer coupon, the retailer's added amount comes out of the base while the manufacturer's face value stays in it. A manufacturer rebate mailed to the customer after the sale does not reduce the price, although an instant rebate at the register does. An employee discount on a motor vehicle that a third party reimburses is excluded from the sales price under MCL 205.51(1)(d)(x) and R 205.22(3), but only for current employees, not retirees or relatives. The bulletin states that it is retroactive to all tax periods open under the statute of limitations in MCL 205.27a as of the approval date.

Revenue Ruling 2026-21 sets the applicable federal rates for November 2026. The annual short term rate is 4.67 percent, the annual mid term rate is 5.08 percent, and the annual long term rate is 5.52 percent. The rate under section 7520, which governs the valuation of annuities, life estates, remainders and reversions, is 6.20 percent for November 2026. These are the floor rates the Internal Revenue Service will accept on loans and the discount rates it will apply to split interest transfers made this month.

The Internal Revenue Service reminded taxpayers that, beginning with tax year 2026, individuals who do not itemize may deduct qualifying cash charitable contributions of up to 1,000 dollars, and married taxpayers filing jointly up to 2,000 dollars. Only cash contributions qualify. Contributions of property do not, nor do cash contributions to supporting organizations or cash contributions to establish or maintain a donor advised fund. The agency directs taxpayers to keep receipts, canceled checks, bank records or written acknowledgments showing the organization's name, the date and the amount. The release notes that further eligibility requirements, contribution limits and recordkeeping rules may apply.

Internal Revenue Bulletin 2026-46, dated November 9, 2026, carries two revenue procedures of direct interest to employers that sponsor retirement plans. Revenue Procedure 2026-34 revises and updates Revenue Procedure 2021-30, which had been the governing statement of the Employee Plans Compliance Resolution System, the program under which a plan sponsor fixes operational mistakes through self correction, voluntary correction or a closing agreement on audit. Revenue Procedure 2026-33 establishes a separate IRA Compliance Resolution System, including a voluntary correction program for certain inadvertent failures caused by custodian or service provider error, and moves requests to waive the sixty day rollover requirement out of the private letter ruling process and into that system. The same bulletin carries Notice 2026-65 on weighted average interest rates, yield curves and segment rates, and Announcement 2026-17 on recent disciplinary sanctions by the Office of Professional Responsibility.

The Tribunal reminded parties in its Small Claims division that a party who cannot attend a scheduled hearing, or who chooses not to, may ask to have the case heard on the file. Under Tax Tribunal Rule 277(1) the motion must be filed and served on the opposing parties not less than 28 days before the scheduled hearing. If the motion is granted, the Tribunal decides on the opposing parties' hearing testimony, if any, together with all pleadings and written evidence properly submitted not less than 21 days before the scheduled hearing, unless the Tribunal orders otherwise. For Entire Tribunal matters the newsletter strongly encourages parties to electronically file exhibits unless a scheduling order or notice of hearing directs otherwise, and notes that valuation disclosures filed with a motion to withhold, hearing and post hearing exhibits and exhibit lists, and rebuttal evidence may also be emailed.

The Internal Revenue Service expanded the Tax Pro Account so that authorized practitioners may submit certain payments on behalf of business clients, a function previously unavailable to them. The eligible categories are a full or partial balance due payment, a payment on an amended return, an extension payment, a payment on a proposed tax assessment, and a federal tax deposit. The agency states that tax professionals must have the appropriate authorization for both the client and the tax matters involved. The release sets no fee, no dollar threshold and no effective date beyond the date of the release itself.

Revenue Procedure 2026-35 sets the inflation adjusted transfer tax figures for calendar year 2027. The basic exclusion amount under section 2010(c)(3) is 15,480,000 dollars for decedents dying in 2027, and the same figure governs the gift tax credit and the generation skipping transfer tax exemption. The annual gift tax exclusion under section 2503 rises to 20,000 dollars per recipient for 2027, and the annual exclusion for gifts to a spouse who is not a United States citizen is 201,000 dollars. For a decedent dying in 2027, the aggregate decrease in value of qualified real property under the section 2032A special use valuation election may not exceed 1,500,000 dollars. We carry this item although it issued on November 5, one day before this week's research window opened, because it had not previously appeared in this update.

An estate that was not otherwise required to file an estate tax return failed to make the portability election under section 2010(c)(5)(A), which is what transfers a deceased spouse's unused exclusion amount to the survivor. The Service granted an extension of time under Treasury Regulation section 301.9100-3, giving the estate 120 days from the date of the letter to file a complete and properly prepared Form 706 with a copy of the letter attached. The grant is void if the estate is later determined to have been required to file under section 6018(a). The Service expressed no opinion on the amount of unused exclusion available to the surviving spouse. A private letter ruling binds only the taxpayer who requested it and may not be cited as precedent under 26 U.S.C. 6110(k)(3).

A taxpayer who funded six trusts was never advised of the election under section 2632(c)(5) to opt out of the automatic allocation of generation skipping transfer tax exemption, and no timely election appeared on the relevant gift tax returns. The Service granted an extension of time under section 2642(g) and Treasury Regulation section 26.2642-7, applying the standard that the transferor must have acted reasonably and in good faith and that relief must not prejudice the interests of the government. The extension runs 120 days from the date of the letter. As with any private letter ruling, it binds only the requesting taxpayer and may not be cited as precedent under 26 U.S.C. 6110(k)(3).

This interim final rule creates a definition of a United States importer of record at new 19 CFR 110.2. An entity qualifies only if it is organized under the laws of the United States, is located in the United States, and at all times either has at least 51 percent beneficial owners who are United States citizens or lawful permanent residents and who control the entity, or directly owns a significant amount of unencumbered real property in the United States. An importer that does not meet the test is a foreign importer of record and may enter merchandise for consumption only if it is validated under the Customs Trade Partnership Against Terrorism program, or if it designates a licensed customs broker who is so validated. Customs brokers must verify a client's status before filing and must retain verification records, and are expected to be in full compliance no later than May 6, 2027. Comments are due on or before January 5, 2027, the same date the rule takes effect.

The Delaware Supreme Court accepted an interlocutory appeal from a Court of Chancery preliminary injunction, finding that the application met the strict standards of Supreme Court Rule 42(b). The Court of Chancery had found that section 144(b)(1) of the Delaware General Corporation Law likely did not provide a safe harbor for the challenged transaction. The certified question asks whether a controlled mindset premised on controller influence can satisfy the individualized finding of bad faith as to otherwise independent, disinterested and careful directors, and the Supreme Court expressly stated that the parties are not limited to the issues as framed below. Briefing is expedited: the opening brief was due November 18, 2026, the answering brief December 9, 2026, and the reply December 16, 2026.

The Commission and four states announced a proposed settlement under which a single family rental operator and its owner will pay 49.75 million dollars, comprising 48.5 million dollars to the Commission for consumer redress and 1.25 million dollars to the State of Arizona. The complaint alleges deceptive advertising of monthly rental prices, undisclosed mandatory fees, homes advertised as move in ready that were not, and improper withholding of security deposits. The proposed order requires that the true total monthly rental price, inclusive of mandatory recurring fees, be shown more prominently than any other pricing information, requires an itemized statement of all deductions no later than thirty days after move out or within the time state law requires, bars deductions for normal wear and tear and preexisting conditions, and prohibits requiring consumers to agree to standardized nondisparagement clauses. The Commission vote was 2 to 0. These remain allegations, and the order takes effect only when the district court approves and signs it.

The Commission and its state co plaintiffs filed an amended complaint alleging that the company shared consumers' sensitive health information with third party advertising platforms, including Meta and Snap, while representing that its services kept that information private. Arizona, Florida, Nebraska, Ohio and Wisconsin joined Utah and California as plaintiffs, bringing the total to seven states. The claims rest on the Federal Trade Commission Act, the Restore Online Shoppers' Confidence Act and state consumer protection laws rather than on any health privacy statute. The Commission voted 2 to 0 to authorize the filing. These are allegations that a court has not resolved.

This final rule requires any person represented by an attorney or a non attorney representative to file through the Department's eFile and eServe system, unless a judge allows another method for good cause or a standing order provides otherwise. A person required to file electronically, and anyone who chooses to, is deemed to have consented to electronic service of documents issued by the judge. Self represented persons may still file conventionally. The rule takes effect December 9, 2026.

The final rule removes the affirmative action framework that applied to sponsors of Registered Apprenticeship programs and replaces it with a requirement to comply with all federal and state laws prohibiting discrimination. Rescinded items include the duty to designate an equal opportunity staff member, to post the equal opportunity pledge and to conduct anti harassment training, the affirmative action program required of sponsors with five or more apprentices including utilization analyses and numerical goals, the disability utilization goal and the annual invitation to disclose disability status, the selection procedure requirements, the part 30 recordkeeping requirements, and ETA Form 9039. Revised section 30.3 applies a nondiscrimination standard covering race, color, religion, national origin, sex, age 40 or older, genetic information and disability. Registration Agencies no longer investigate discrimination complaints and must immediately refer complainants to the Equal Employment Opportunity Commission, the Attorney General, a state fair employment practices agency or another appropriate enforcement entity.