The State Tax Notes Person of the Year for 2015 is Amy Silverstein of the San Francisco office of Silverstein & Pomerantz LLP, for her exceptional litigation work on constitutional issues in state taxation. Silverstein, known as a champion of taxpayer rights, has skillfully advocated on state and local tax issues of the year, including presenting arguments on behalf of taxpayers in critical Multistate Tax Compact litigation cases in California, Michigan, Minnesota, Oregon, and Texas, as well as constitutional arguments in Harley-Davidson Inc. v. Franchise Tax Board.1
If you weren't familiar with Silverstein's exceptional writing and argumentation skills before 2015 -- which is unlikely -- you are now. Her victory in Harley-Davidson leveled the playing field for interstate companies when the California Court of Appeal held that allowing only intrastate unitary businesses to elect separate or combined reporting is facially discriminatory.
Silverstein's arguments in Gillette v. Franchise Tax Board,2IBM v. Department of Treasury,3Graphic Packaging v. Combs,4Kimberly-Clark Corp. v. Commissioner of Revenue,5 and Health Net Inc. v. Department of Revenue6 involved whether, under principles of interstate compact law and the contract clause, the Multistate Tax Compact is a binding agreement requiring states to accept taxpayers' apportionment elections under the compact. She said that the states and the Multistate Tax Commission have wielded a broad array of disparate arguments to protect state revenue. If adopted by the courts, these arguments may endanger other important interstate compacts and the rights of stakeholders in those compacts.
In Michigan, after IBM established the right of taxpayers to elect the compact's apportionment formula for the years 2008 through 2010, the Legislature attempted to override that decision by retroactively repealing the compact. Thus, in Gillette v. Department of Treasury, in addition to the interstate compact law and the contract clause issues, her arguments focused on federal due process and the separation of powers.
Longtime colleague Thomas H. Steele of Morrison & Foerster says of Silverstein, "There is simply no one you'd rather have on your team. [A] forceful and insightful writer . . . poised and thoughtful on her feet . . . she's the full package and a terrific lawyer."
I spoke with Silverstein shortly after oral arguments in Gillette, about the year in tax, her cases, and life in general.
"Gillette was the hardest argument that I have ever done . . . because I was anticipating justices who are extremely bright and well prepared. And I worked harder for that than anything I have ever worked for," Silverstein said. "There were so many big issues that are different: the compact issues, the contract clause issues." Her preparation for Gillette included mastering all of the cases cited in the original briefs, as well as most of the cases referenced within those cases. "I literally kept going down, layer by layer, understanding the facts, reasoning, and holding of the cases," she said. She pointed out that a big problem in Multistate Tax Compact cases is that the states cite statements from cases out of context and try to argue to the court that a principle of law is at stake. "It is only when you understand the context that you can really understand why a requirement exists and what purpose it serves, why it was analyzed that way in that case, and then figure out if it's even relevant to, and how it applies in, another case," she explained. Nobody on the opposing side appeared to do that.
Silverstein's approach in Gillette was to involve the judges on more complex levels of analysis -- an approach they resisted following. "I was pretty disappointed that they weren't prepared to engage with me at these deeper levels, because I think that's where the case really needs to be resolved in order to get the right answer," she said. Simply saying a compact is not a binding agreement because it doesn't meet the three factors from Northeast Bancorp Inc. v. Board of Governors of the Federal Reserve7 is superficial analysis, she explained.
"Amy faced very tough (and discouraging, from a taxpayer's point of view) questioning from the justices, but acquitted herself well," said Prentiss Willson of Sutherland Asbill & Brennan LLP, who worked with Silverstein for over 20 years, dating back to her time at Morrison & Foerster. Willson said that at the Gillette arguments, he felt like a proud parent watching his children sparring.
Silverstein feels as strongly today about protecting taxpayers as she did early in her career. Asked whether she was discouraged by the Gillette argument, she said, "I feel so passionate about our position that you could not bring me down far enough to shake me from that confidence." She added, ultimately, the hard work pays off because I am that much further ahead for the next event. "Our briefs are constantly evolving, adapting, and getting better. It's a process."
Asked what it takes to be successful in state and local taxation, Silverstein said it is the ability to see things from different angles. "I think that a large reason for our success is going the extra mile and trying to do something different. It's not to distinguish ourselves for the sake of distinguishing ourselves, but we try to think outside the box and be one step ahead. We don't take no for an answer -- where there's a will there's a way." Willson said Silverstein's goal is "not to make gobs of money but to do interesting work," and "Wow, has she achieved that."
Silverstein and her spouse, Angela L. Padilla, head of Litigation and Employment Law at UBER, are, like many others, trying to balance successful careers with having a family. The mother of three children, Silverstein says that "being a woman in an accomplished profession is an important part of one's identity, and I recognize that I am a role model for young women entering this or similarly demanding fields." She believes that having her own business has allowed her to be more in control of her career.
Silverstein also recognizes her partner Edwin P. Antolin as being instrumental to her success. "Ed and I are a team when it comes to strategy. I couldn't have successes without him!"
"Amy is obviously a top-notch litigator and tax attorney," Antolin says. "We closely collaborate on pretty much all of our cases, especially our high-profile cases. I think what makes our practice dynamic is that we both bring a lot of creativity to the way we look at issues, and we are willing to question and, if necessary, challenge long-standing interpretations of the law. Amy has played a significant role in advancing state tax law and the interests of taxpayers over the years, and I am very happy she is being recognized with this honor."
Silverstein believes the hottest issue in state and local tax in 2016 will be "legislators sitting on their hands while cases go through the courts and then when they get a decision they don't like, enacting retroactive legislation." The consequence will be that when a company is questioning whether it should challenge a tax law, eventually it won't be rational to proceed because either state courts will continue to let them get away with it or possibly the U.S. Supreme Court will allow it.
Silverstein says the most memorable event of the year for her was arguing before the California Supreme Court in Gillette: "I was nervous, but excited and prepared. It felt prestigious, and despite the way it may have looked to observers, it was fun. I like engaging with smart people about things that I have worked really hard to master and that I feel very passionate about."
Silverstein remains mindful of the small moments. "Getting an e-mail from my daughter's teacher saying what a wonderful person my daughter is, how much she adds to the class, or another teacher stopping me to say how much she misses another one of my daughters and that she is still looking out for her. Spending time with Angela and our kids." Maybe not so small after all.
1 Cal. App. Ct., No. D064241 (May 28, 2015).
2 291 P.3d 327 (2013).
3 496 Mich. 642 (2014).
4 No. 03-14-00197-CV (Tex. Ct. App. 2014).
5 No. 8670-R (Minn. T.C. 2015).
6 No. T.C. 5127 (Or. Tax Ct. 2015).
7 472 U.S. 159 (1985).
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