LexMonitor | Recent Posts

Life Report From The International Brain Injury Association's 9th World Congress on Brain Injury

rdeluca@stark-stark.com (Richard DeLuca) — Thu, 22 Mar 2012 14:22:08 GMT

I am currently in Edinburgh, Scotland attending the The International Brain Injury Association’s 9th World Congress on Brain Injury. The World Congress on Brain Injury is an annual conference featuring lectures and educational seminars presented by world renowned doctors, lawyers, educators and researchers in the brain injury field.

I currently serve as the Treasurer of IBIA, and so yesterday I attended the IBIA Board meeting. During the meeting we selected David Arciniegas, MD. to serve as President of the 10th World Congress, which is scheduled to be held in 2014 in San Francisco, California. Eight new board members were also elected to the Board.

Today, Harvey Levin, Ph.D. was awarded the Jennett Plum Award for distinguished Scientific Contribution in the Field of Brain Injury. Dr. Levin's presentation was entitled "Evolution of TBI Research: A neuropsychologist's Personal Three Decade Perspective". This afternoon I attended a fascinating discussion of advanced neuro-imaging in TBI.

Mortgage Rescission And Bankruptcy

ngebelt@gebeltlaw.com (Nicholas Gebelt) — Thu, 22 Mar 2012 13:47:31 GMT

I. What Is Mortgage Rescission? Rescission is a way for a borrower to get out of a mortgage that was fraudulently or deceptively originated. For example, if the lender misrepresented the terms of the mortgage by failing to disclose a balloon payment, or the nature of the adjustable rate, or advised the borrower to inflate... Continue Reading

I. What Is Mortgage Rescission?

Rescission is a way for a borrower to get out of a mortgage that was fraudulently or deceptively originated. For example, if the lender misrepresented the terms of the mortgage by failing to disclose a balloon payment, or the nature of the adjustable rate, or advised the borrower to inflate income to qualify for a larger loan – gasp! does this sort of thing ever happen? up until recently, all the time – the borrower may cancel the loan.

II. The Legal Foundation For Mortgage Rescission

The main statutory vehicle for rescission is the Truth in Lending Act (“TILA”), 15 § U.S.C. 1601 et seq., and its regulatory partner, Regulation Z, 12 C.F.R. 226.31, et seq.. TILA and Regulation Z are complicated, so it is easy for a creditor to violate them. The most common violations involve inadequate disclosures. See 15 U.S.C. §§ 1638(a)-(b)(1) for some of the required disclosures. Regulation Z has its own plethora of required disclosures.

III. Rescission Of Non-purchase Money Loans

For a non-purchase money loan such as a refinancing or a HELOC, the lender must also provide notice – two copies to each borrower (thus, if the borrower has a multiple personality disorder with more than two personalities, then some of the personalities will have to share) – that the borrower may void or “rescind” the loan within three business days of the transaction. However, the right to rescind can be extended well beyond three days if the lender fails to give adequate disclosure. The relevant language from Regulation Z states:

When the creditor has failed to take the action necessary to start the three-day rescission period running, the right to rescind automatically lapses on the occurrence of the earliest of the following three events:

• The expiration of three years after the occurrence giving rise to the right of rescission.

• Transfer of all the consumer’s interest in the property.

• Sale of the consumer’s interest in the property, including a transaction in which the consumer sells the dwelling and takes back a purchase money note and mortgage or retains legal title through a device such as an installment sale contract.

Thus, the borrower could have three years to rescind the mortgage contract!

IV. From Secured To Unsecured Status

Rescission of the mortgage voids the lender’s security interest in the property, and converts the debt to unsecured status. The lender is required to return the interest portion of the mortgage payments it received, and the borrower must return the amount borrowed, minus principal already paid. The borrower may, of course, need to take out a new loan to get the money to repay the principal, but if the rescinded loan’s terms were onerous, the borrower may be able to get a loan with better terms. Since the early loan payments are mostly interest, this means that the borrower could effectively enjoy a three-year interest-free loan.

Outside of bankruptcy the rescinding borrower has to pay back the money received from the lender. In bankruptcy the debtor can rescind the mortgage, thus rendering the debt unsecured, and then modify or discharge the debt as part of the bankruptcy.

As you might expect, rescission is not self-executing (the Lord High Executioner in Gilbert & Sullivan’s operetta, The Mikado, would undoubtedly sympathize) and requires court intervention. Therefore, to successfully rescind a mortgage and treat it as an unsecured debt in bankruptcy, the debtor must convince the judge that TILA and Regulation Z really were violated by the lender.

V. Rescission In Chapter 7

The successful Chapter 7 debtor could in theory rescind a mortgage, thus converting it to unsecured status, and discharge it in a Chapter 7 bankruptcy – in essence, getting a free house out of the process. However, in practice this is rare. Indeed, in Yamamoto v. Bank of New York, 329 F. 3d 1167 (9th Cir. 2003) the Ninth Circuit held that a court – bankruptcy or district – had discretion to condition rescission on the return of the principal. And if the TILA action is unsuccessful, the lender may file a lawsuit to recover costs and attorney’s fees, alleging that the TILA action was frivolous. It is worth noting that while a court can condition rescission on return of principal, it is not required to. See, e.g., Botelho v. US Bank, N.A., 692 F. Supp. 2d 1174 (N.D. Cal. 2010).

Of course, in the highly unlikely event that the debt is discharged in its entirety and the debtor gets a “free house”, the nonexempt equity would be liquidated by the Chapter 7 Trustee for the benefit of creditors. Sorry – no free lunches here.

VI. Rescission In Chapter 13

How does this play out in Chapter 13? In theory the debtor could rescind, and deal with the now unsecured debt through the Chapter 13 plan; perhaps paying a relatively small percentage of the debt over the life of the plan, and discharging the remaining balance upon receiving a Chapter 13 discharge. Unfortunately, in practice things are not quite so easy. Two obvious problems conspire to make rescission a potentially weak Chapter 13 tool.

A. The Sudden Surge In Nonexempt Equity

First, after the rescission the debtor may suddenly have a great deal of nonexempt equity in the property. This can create a problem due to the Chapter 7 liquidation test for Chapter 13. This Chapter 13 plan requirement, which is found in 11 U.S.C. § 1325(a)(4), specifies that the plan must repay the general unsecured creditors at least the amount they would have gotten if the nonexempt assets had been liquidated in a Chapter 7 bankruptcy. Therefore, mortgage rescission could end up forcing the debtor to make impossibly large plan payments.

B. Too Much Unsecured Debt For Chapter 13

Second, since rescission converts the previously secured debt to unsecured status, the debtor’s unsecured debts may exceed the Chapter 13 unsecured debt limit of $360,475 found in 11 U.S.C. § 109(e), thus rendering the debtor ineligible for Chapter 13 relief.

C. Rescission: The Lien Strip Alternative

In spite of the negatives just mentioned, rescission may provide a way to strip off a second mortgage, even if it isn’t wholly unsecured – i.e., when a Lam motion (discussed in my last post) can’t be done. In other words, if rescission is available it can provide a way around the bifurcation prohibition of Nobelman v. American Savings Bank, 508 U.S. 324 (1993) discussed in my previous post.

Thus, if the debtor is underwater, but not sufficiently to strip off a HELOC through a Lam motion – i.e., there is some house behind the HELOC – the debtor may still be able to use rescission to strip off the second if the lender violated TILA and Regulation Z.

There are forensic experts who, for a fee, will review your client’s mortgage to determine whether a TILA lien strip is possible. However, their services are not free, so impecunious clients may be reluctant to pay for them in the absence of a guarantee of success – which an attorney obviously cannot give.

Set Off Provisions In Bank Agreement Does Not Override IRA Protection

jalper@alperlaw.com (Jonathan Alper) — Thu, 22 Mar 2012 14:48:52 GMT

A caller was concerned that his IRA funds held as his bank’s brokerage department are not protected against an outstanding judgment because of a “set off” provision of the bank’s depositor agreement. The agreement states that “to the extent permitted by applicable law” the lender has a right to set off all of the borrower’s accounts. Set off pertains to debts owed to the bank where the deposits are held. Set off does not mean that the bank can remove exemptions against debts owed to other creditors. The set off provision of this agreement means that the bank can take money from the caller’s accounts to pay a debt owed to this same bank, but it does not state that the bank can take the depositors money to pay someone else. .

The IRA money would be protected against a set-off to the same bank because the set off provision is limited by applicable laws. Because applicable law, Florida law, protects IRA money from creditors the set off provision does not apply to the caller’s IRA funds, and the bank could not take the IRA to pay debts the caller would owe to the same bank.

Landmark Product’s Liability Case: Liebeck v. McDonald’s Restaurants

Thu, 22 Mar 2012 15:26:50 GMT

Liebeck v. McDonald’s: The Case Where Public Perception Reveals its Limitations Almost everyone has heard of this infamous case decided in 1994, and many have strong opinions depending on what version of the facts they have heard. Liebeck v. McDonald’s Restaurants (Bernalillo County, N.M. Dist. Ct. 1994), is commonly referred to or otherwise known as the hot [...]

Liebeck v. McDonald’s: The Case Where Public Perception Reveals its Limitations

Almost everyone has heard of this infamous case decided in 1994, and many have strong opinions depending on what version of the facts they have heard.

Liebeck v. McDonald’s Restaurants (Bernalillo County, N.M. Dist. Ct. 1994), is commonly referred to or otherwise known as the hot coffee case. In the case, 79 year old Stella Liebeck suffered third degree burns to her pelvic region when she accidentally spilled the hot coffee that she had purchased from a McDonald’s drive thru.

On the day of the incident, Liebeck’s grandson was driving, and parked the car so that she could put cream and sugar in her coffee. When she pulled back the lid, the entire cup spilled into her lap, becoming absorbed into her cotton sweatpants, which then held the scalding liquid against her body.

The burns were quite intense, in sum covering 16 percent of her body, 6 percent of which were third degree, and causing her to lose 20 pounds, bringing her total weight down to 83 lbs. She was in the hospital for 8 days of treatment, including skin grafts, and her additional treatments lasted for some 2 years.

The jury awarded $160,000 for medical expenses and compensatory damages, and $2.7 million in punitive damages. However, the trial judge reduced the award amount, and the parties reached a confidential settlement prior to the pending appeal.

Here’s the kicker, Liebeck offered to settle the case for $20,000 before trial, which included her already incurred medical expenses, and those she anticipated to incur for future treatment. McDonald’s settlement offer was for $800.

How Hot Was the Coffee, You Ask?

The nature of the claim was interestingly based upon a product’s liability claim, which alleged that the coffee was defective, because it was too hot, and thus more likely to cause an injury than coffee served in other establishments. During the trial, plaintiff’s counsel discovered that McDonald’s required its franchisees to serve its coffee at 180–190 °F , which would cause a third-degree burn in two to seven seconds. Her attorney claimed that coffee should be served no hotter than 140 °F, and offered proof that other establishments served it cooler.

McDonald’s justification for serving such hot coffee in its drive-through windows was for the benefit of commuters who wanted the coffee to remain hot throughout a long drive. However, event the company’s own research showed that at least some customers intend to consume the coffee immediately while driving.

Apparently, the basis for the seemingly high punitive damages award, was based on plaintiff’s counsel’s suggestion to penalize McDonald’s for one or two days’ worth of coffee revenues, which were about $1.35 million per day. (It was also revealed at trial that McDonald’s had received some 700 other claims of burn injuries due to the coffee being too hot, and had already settled claims totaling more than $500,000 for burning incidents)

I chose to write about this case, because I believe it is a situation in which knowing the facts of the case demonstrates that popular opinion is not always an accurate depiction of a lawsuit. You have a 79 year old woman who suffered severe burns on 16% of her body, and McDonald’s wasn’t even willing to cover the amount of her medical costs, eventhough they didn’t even amount to 2% of the total they make on coffee sales alone in one day!

Additionally, I don’t know about you, but after their major coffee relaunch, meant to do battle with Starbucks, I have on occasion picked up a cup of coffee from McDonald’s drive thru, and let me tell you, it is probably still too hot. In fact, on one occasion, as the girl was handing me the cup, the lid popped off, and hot coffee spilled all over my hand and outside of my car. Ever since that incident, I have felt even more sympathetic to the plaintiff in this case.

Here is a great article about the case, if you want to learn more.

Click to learn more about Products Liability.

The Benefits of A Special Needs Trust

Thu, 22 Mar 2012 15:27:04 GMT

The Benefit of a Special Needs Trust (aka Supplementary Needs Trust) Once you have a special needs child, you become aware of a vast array of applicable laws and regulations almost by osmosis. From medical appointments, to specialists, to therapies, to educational plan meetings, parents of special needs children are constantly attending to distinct circumstances. [...]

The Benefit of a Special Needs Trust (aka Supplementary Needs Trust)

Once you have a special needs child, you become aware of a vast array of applicable laws and regulations almost by osmosis. From medical appointments, to specialists, to therapies, to educational plan meetings, parents of special needs children are constantly attending to distinct circumstances. What many special needs parents may not know, however, is the absolute necessity of setting up a water tight Estate Plan.

Estate planning is key because in order to qualify for the Social Security Administration’s Supplemental Security Income Benefits, (“SSI”), a disabled adult can’t hold more than $2,000 in assets (excluding a car and a home). This means that if you die intestate, or without a will, your child will likely inherit more than the $2,000 limit, thus rendering them ineligible for these benefits. In 1993, Congress explicitly created an exception for the use of Supplemental Needs Trusts for disabled adult individuals, and treats these trusts as non-countable assets.

Eligibility for SSI makes a disabled person eligible for food stamps and Medicaid, which pays medical expenses, nursing home care and mental health services. Medicaid eligibility may also make a disabled person eligible for many local community services. As a general matter, SSI benefits must be spent on food, clothing, and shelter expenses.

Additionally, by setting up a trust you not only ensuring that your child will be taken provided for beyond these programs, but you can also rest assured that your child will have a structured manner of receiving such support.

Why a Special Needs Trust Makes Sense

The benefits of having a trust for your special needs child are many. In particular, if you leave a close friend or relative as a beneficiary to your trust, the money might:

Be subject to legal judgments or divorce settlements against the relative, or be lost in bankruptcy
As the beneficiary, the relative can’t be legally forced to use the money to benefit the disabled person
Be taxed at a higher rate than the disabled child or a trust
If the relative or friend dies prior the disabled child, the money could potentially go to his or her heirs

In other words, leaving the money to anyone other than your child, means that it could be subject to claims against that other person, or otherwise subject to that person’s financial situation or judgment.

By meeting with an experienced Estate Planning Attorney, you can construct a trust with explicit instructions to take care of your special needs child. You have too much vested to leave your special needs child’s financial future up to chance.

Goodell: Saints Payton Suspended Without Pay For 1 Year For Bounties

Thu, 22 Mar 2012 15:27:32 GMT

The never shy to penalize NFL Commissioner Roger Goodell has cracked down once again. However, this time it was not against a player, but instead against those within the management ranks. Goodell suspended New Orleans Saints head coach Sean Payton for 1 year for his role in the team’s bounty system that rewarded defensive players [...]

The never shy to penalize NFL Commissioner Roger Goodell has cracked down once again. However, this time it was not against a player, but instead against those within the management ranks.

Goodell suspended New Orleans Saints head coach Sean Payton for 1 year for his role in the team’s bounty system that rewarded defensive players for laying injurious hits on opposing players, according to Yahoo News.

Additionally, the mastermind behind the bounty system, defensive coordinator Gregg Williams, now employed by the St. Louis Rams, was suspended indefinitely by the league.

Saints G.M. Mickey Loomis was suspended for eight games and assistant head coach Joe Vitt was suspended for 6.

All of those punished have been suspended without pay, which means Payton must relinquish the entirety of his $7.5 million salary during his suspension that begins on April 1.

The penalties imposed are unprecedented, as they mark the harshest sanctions imposed upon a head coach in NFL history

Payton was reportedly “stunned” by the news. “No, I’m not OK,” he reflected in an interview with Fox Sports’ Jay Glazier.

Further, the Saints must also pay a $500,00 fine and lose their rights to their 2nd-round picks in both 2012 and 2013.

“Beyond the clear and continuing violations of league rules, and lying to investigators, the bounty program is squarely contrary to the league’s most important initiatives — enhancing player health and safety and protecting the integrity of the game,” said Goodell in an issued statement. “Let me be clear. There is no place in the NFL for deliberately seeking to injure another player, let alone offering a reward for doing so. Any form of bounty is incompatible with our commitment to create a culture of sportsmanship, fairness, and safety.”

Although, Payton was not active in dispersing bounty payments to members of the Saints defense Goodell felt that in the end his lack of action served as a tacit endorsement of the bounties.

Goodell’s position is understandable when considering that NFL has ramped up its policy to provide a safer environment for its players of late. If Goodell would have looked the other way here or had he only imposed minor sanctions he would have established a double standard regarding player safety.

Although Payton was not an active member in handing out bounty payments, his punishment demonstrates Goodell’s belief that the captain must go down with the ship. He is the face of the Saints and accordingly he must answer the bell in both good times and bad.

Goodell also emphasized that the Saints lied to him during the NFL probe. It is unclear whether that added to the punishments, but it almost assuredly did.

It is also unclear whether those penalized will try to appeal the punishments issued by the NFL, through the appeals process provided in the CBA. Considering the lack of success in pro sports appeals it would be wise for Payton and the others to accept the suspensions.

Although unlikely, maybe they can channel their inner-Ryan Braun and receive a reduced punishment.

What do you think?

California HS Drug Counselor Taped Students Having Sex

Thu, 22 Mar 2012 15:27:43 GMT

A California HS drug counselor pleaded not guilty Wednesday to secretly videotaping 2 students having sex and possessing child pornography, according to CNN. 34-year-old Gilbert Olivares turned himself in to police late Monday. His bail has been set at $1 million. The Monterey County district attorney charged Olivares with 19 felonies to each of which [...]

A California HS drug counselor pleaded not guilty Wednesday to secretly videotaping 2 students having sex and possessing child pornography, according to CNN.

34-year-old Gilbert Olivares turned himself in to police late Monday. His bail has been set at $1 million.

The Monterey County district attorney charged Olivares with 19 felonies to each of which he plead not guilty.

The laundry list of charges in the criminal complaint includes: lewd act upon a child, contact with a minor for sexual offense, possessing child pornography and using a minor to do or assist prohibited acts.

Andrew G. Liu, Olivares’ attorney, declined to comment on the charges against his client

“We are at a very early stage,” Liu said to CNN. “I have just received 71 pages of police reports and I have not had time to review them yet.”

Olivares was first arrested last week at Salinas High School, initially on 11 charges, according to authorities.

He posted $50,000 bail at that time and was released, according to police Sgt. Christopher Lane.

The criminal complaint additionally accuses Olivares of inappropriately touching the buttocks of a 14-year-old, identified as John Doe, as minors names are not publicly disclosed in criminal cases. The 2 also allegedly also corresponded via Facebook.

During an investigation of Olivares’ home detectives found 14 videos made by Olivares in his office at the high school, police said in a statement.

“The videos are of teenage students engaged in sexual activity with each other within Olivares’ office, during school hours,” the statement says. “It appears the videos were taken without the knowledge of the victim students and Olivares is not in the room at the time. We continue to work closely with Salinas High School to help identify any possible victims in these cases.”

Police said the forensic search of Olivares’ computer revealed several pictures and videos of child pornography, but police believe that those were most likely downloaded from the Internet.

Police obtained a new arrest warrant Monday increasing bail to $1 million.

“The bail is unusually high and that might be subject to challenge in the future,” Olivares’ defense attorney Andrew Liu said.

Olivares’ preliminary hearing was originally set for April 5.

“He is innocent until proven guilty and we’re looking forward to a fair hearing in court,” said Liu. “He has the strong support of a loving family.”

Olivares was employed by an organization that counsels youth on drug and alcohol abuse, and even though he worked as a counselor at Salinas High School for 5 years, he was not officially employed by the school district.

The overwhelming weight of the evidence seems to disfavor Olivares and it is unlikely that a jury would be sympathetic to a guidance counselor who used his position to take advantage of youngsters, especially in a sexual manner.

Accordingly, if I were his defense attorney I would look for any way possible to plea bargain in this case. Yet, it is unlikely that the D.A. will offer a deal that would appeal to the defendant as he or she will most likely be looking to make an example of Olivares for his tasteless acts.

Finally, it is uncertain whether the school district could be hit with negligent supervision lawsuits from these victims as a result of Olivares’ actions. The fact that he was not officially employed by the school will help the school district, but will not on its own let it off of the hook.

What do you think?

Mom Sues Son’s Fraternity After Crown Royal Kills Him

Thu, 22 Mar 2012 15:28:01 GMT

Samuel Harris Mason’s BAC was .48% When Found Dead After Hazing Ritual A mother is suing Tau Kappa Epsilon, the fraternity that her son was attempting to become a pledge to when he died of excessive alcohol consumption. By the time his body was found, his blood alcohol content was .48%, and the complaint alleges that [...]

Samuel Harris Mason’s BAC was .48% When Found Dead After Hazing Ritual

A mother is suing Tau Kappa Epsilon, the fraternity that her son was attempting to become a pledge to when he died of excessive alcohol consumption. By the time his body was found, his blood alcohol content was .48%, and the complaint alleges that at the time he was most in need of emergency medical care, it was probably even higher.

In her complaint, Ms. Mason claims that at a ritual hazing event, members of the fraternity encouraged her son Samuel to imbibe fatal quantities of alcohol which eventually rendered him so intoxicated that he suffered from alcohol poisoning. She further alleges that rather than obtaining emergency medical care, which her son desperately needed, members carried his body to another location, and left him where he eventually succumbed to the condition and died.

Essentially, the complaint charges the fraternity, its chapter, and the 7 named parties, with engaging in the hazing activity and also failing to secure emergency medical treatment.

The complaint sets forth the scenario that Omicron-Omega had a tradition of giving pledges alcohol to drink in three- and five-gallon red gas cans, marked “DRINK MAGGOT DRINK. ” It states further that there was a tradition of Big Brothers gifting to their little brothers a bottle of the “family drink,” which in Samuel’s case was Crown Royal. In accordance with this ritual, the little brothers are instructed by the big brothers to finish the entire bottle of the family drink. Thus, according to the facts stated in the complaint, it is unclear exactly how much alcohol Samuel ingested, but it seems that he was encouraged to not only finish an entire bottle of Crown Royal but to also drink additional alcohol from a 3 or 5 gallon red gas can.

The complaint sets forth additional historical facts regarding the alarming rate in which fraternity and sorority students are killed from similar related alcohol binge drinking events.

The mother is seeking punitive and compensatory damages for wrongful death, under the theories of negligence, negligence per se, and willful/wanton misconduct, ”arising from the execution , perpetuation, and failure to supervise dangerous fraternity traditions that constitute hazing.”

Utah Bill Becomes Law: 72-Hour Wait For Abortion

Thu, 22 Mar 2012 15:28:32 GMT

Utah’s governor signed a bill into law requiring a 72-hour waiting period for women seeking an abortion, according to Yahoo News, although that a similar mandate was rejected recently in a South Dakota federal court. The Republican governor Gary Herbert’s decision is expected to meet approval of the majority conservative state legislature and reeks of political [...]

The Republican governor Gary Herbert’s decision is expected to meet approval of the majority conservative state legislature and reeks of political motives as he rejected a law seeking to restrain sexual education in schools just 4 days ago.

“Governor Herbert is an adamant supporter of rights for the unborn,” said Ally Isom, a Herbert spokeswoman. “He felt the bill appropriately allows a woman who’s facing that decision to fully weigh her options and the implications of that decision.”

The state currently requires a 24-hour waiting period before an abortion, which was also upheld in one of the Supreme Court’s landmark abortion cases, Planned Parenthood v. Casey, in the early 1990′s because the court found that it did not impose an undue burden upon women.

The law is is just the latest in the hot button field of abortion. Further, in neighboring Idaho, lawmakers are currently flirting with the idea of requiring women to undergo an ultrasound before ending a pregnancy.

A South Dakota law that passed last year also imposed a 72-hour waiting period for women seeking to have an abortion. However, the state’s Planned Parenthood organization sued in federal court because it felt the law violated both a woman’s right to equal protection of the laws and due process under the 14th Amendment.

Chief Judge Karen Schreier of the U.S. District Court for South Dakota agreed with Planned Parenthood as she issued a preliminary injunction against the mandate last June.

Schreier observed that the mandate imposed an undue burden on women because some low-income abortion patients travel long distances and cannot afford to make 2 separate trips when seeking an abortion.

“We believe that a court will find the 72-hour waiting period (in Utah) is not an undue burden,” the governor’s spokeswoman, said.

There is one slight distinction between the South Dakota and Utah laws. While South Dakota’s mandate required those seeking an abortion to wait 72-hours after an initial consultation with an abortion provider, Utah’s law only requires a 72-hour wait after the an initial meeting with any health provider.

A small distinction, but one that the governor believes will circumvent the undue burden standard.

The law is expected to take effect on May 7. Additionally, 24 States currently require some form of waiting period.

It begs the question how long of a wait is too long to constitute an undue burden on women seeking an abortion. I guess we will see if this law is eventually challenged in court. And, whether the slight difference in the Utah statute makes any difference to a potentially presiding judge.

What do you think?

Dealing with dismissal and compensated no fault dismissal for micro businesses

rbonino@reedsmith.com (Ruth Bonino) — Thu, 22 Mar 2012 14:34:04 GMT

The Government has recently issued a new “Call for Evidence”, Dealing with dismissal and “Compensated no fault dismissal” for micro businesses. The main aim of the paper is to gather evidence from businesses to establish what can be done to encourage small employers to recruit more employees, whilst at the same time ensuring some protection for employee rights. The paper also aims to gather evidence regarding the dismissal process, and in particular how well the 2009 Acas Code works in the case of dismissals for underperformance.

Small businesses

The Government’s paper looks at the Australian Small Business Fair Dismissal Code – a one page document which provides a very basic set of guidelines to follow when a business with fewer than 15 employees dismisses an employee for conduct or capability. Views are sought as to whether, as regards small businesses, a code such as this could replace the Acas Code which currently applies to all employers, irrespective of size, in relation to discipline and performance matters. The paper also seeks evidence on whether small businesses should be able to dismiss employees on a “no fault” basis, and instead that employees receive an automatic “compensation” payment, whatever the reason for dismissal. The Government is examining how other countries deal with dismissals in the case of small businesses. In Germany, for example, businesses employing 10 or fewer employees are exempted from unfair dismissal laws.

Whilst the immediate reaction of small employers will likely be to welcome such a change, the wider implications of no-fault dismissals must also be considered. It would appear that the proposal would effectively amount to giving such employers an exemption from unfair dismissal laws except if the dismissal is for a discriminatory reason, or in connection with whistleblowing or assertion of a statutory right. Could this inhibit small employers from taking on more staff if that means exceeding the maximum number of employees for “small businesses”? Since job security will be diminished, it may be harder for small employers to compete for the best talent. Further, without recourse to an unfair dismissal claim, there is a risk that an aggrieved employee will bring a discrimination claim or allege that the real reason for dismissal related to whistleblowing (whether or not this would have any substance at all). However, this risk could be addressed by strengthening the ability of the Employment Tribunal system to weed out unmeritorious claims.

Having acted for a number of small businesses and charities, our view is that a less complex code would be desirable, particularly for businesses with fewer than 10 employees. However, whether or not they should effectively be exempted from unfair dismissal laws is a more contentious issue. An area of controversy which is inherent in the Government’s proposals is the suggestion to compensate employees for no-fault dismissals. If the compensation is set too high, employers will remain discouraged from taking on staff. If too low, the employees will have virtually no dismissal rights. The Government asks for views on the appropriate compensation. Perhaps a compromise would be to increase the statutory minimum notice period by 2-4 weeks after the employee has 2 years’ continuous employment (ie the new minimum period of employment for unfair dismissal clauses for employees taken on after 5 April 2012), making sure that the legislation provides for employers to be free to pay in lieu of notice so that they not burdened with an employee they do not want.

A point which is unclear from the Government’s paper is whether small employers will be able to opt not to make a no-fault dismissal compensation payment on termination of employment in circumstances such as gross misconduct. It is unclear as yet, whether, if no compensation payment is made, the employee would be entitled to make an unfair dismissal claim, or would their remedy simply be for payment of the statutory no-fault dismissal compensation amount? It would seem sensible that small employers should not have to pay an employee compensation where it has followed a fair dismissal route in such circumstances but if this option is chosen, it also seems fair that the employee should have full recourse to usual unfair dismissal rights. It will be necessary for any legislation to define the concepts clearly and provide for this type of situation to be addressed.

Acas Code

The Government is also seeking views on the Acas Code, which was already substantially revised and reduced in length in 2009. As well as having a concern that it is not suitable for small businesses, the Government also considers that it may not deal adequately with cases of poor performance. The criticism is that the Code concentrates more on backward-looking actions (such as conducting investigations) which are more relevant to disciplinary issues, than what is to be done for the future.

Whilst there is no doubt that the abolition of the former statutory disciplinary and dismissal procedures was a beneficial step for employers and has simplified Employment Tribunal claims, we do not believe that the revision of the Acas Code has made much difference in the actual dismissal process. It would have been useful if it had been made absolutely clear that ill health dismissals were not covered by the Code. However, it is our experience that the Code does not hinder the performance management process and it would certainly not be helpful to make the Code any more complex or prescriptive.

Reed Smith will be responding to the Government Call for Evidence paper and for that purpose, we would be interested in hearing your views on the paper or, indeed, on any of the comments we have made above. Please feel free to send in your comments via our blog or to email direct by contacting Ruth Bonino (rbonino@reedsmith.com). Alternatively, you may wish to respond in person. The consultation closes on 8 June 2012.

Nine Steps to Integrating the Cloud into Your Business

info@fed-soc.org (info@fed-soc.org) — Thu, 22 Mar 2012 15:00:08 GMT

Last December, I was interviewed by Finance and Commerce magazine for an article titled “Tech Toolkit: IT planning for the year ahead.” Part of the article included cloud computing and what companies can do to include the cloud in their businesses. Early the same month, I posted on the technology trends for 2012, and the... Continue Reading

Last December, I was interviewed by Finance and Commerce magazine for an article titled “Tech Toolkit: IT planning for the year ahead.” Part of the article included cloud computing and what companies can do to include the cloud in their businesses. Early the same month, I posted on the technology trends for 2012, and the continued adoption of cloud computing was one of them. The Cloud Standards Customer Council has released its first “Practical Guide to Cloud Computing.” This guide includes nine steps that companies should consider to help integrate the cloud into their businesses. For the most part, the nine steps involve planning, but planning for the cloud is important. Not every application and data set is appropriate for the cloud. Using this planning tool will help inform a company about what cloud services are appropriate for its business.

Protecting Client Files in the Digital Age and Grabbing and Leaving

dave@sctriallaw.com (David) — Thu, 22 Mar 2012 14:12:42 GMT

The allegation is that before he left a former partner used Dropbox and thumbdrives to take copies of 70,000 client files. While understandably the firm is suing him, should the clients be concerned at the apparent ease with which this...

Law students interested in London this summer?

Thu, 22 Mar 2012 14:25:00 GMT

London is calling... Applications for the 21st Century Law Practice Summer Program in London (a partnership between Michigan State University Law and the University of Westminister Law) are due March 25 (though if you miss the deadline, email me at rk@law.msu.edu to see if we still have space--as of now a handful of spots remain open). The program runs June 17-July 2, and includes a first-of-its-kind, intensive study of technology, innovation, regulation, entrepreneurship and the international legal marketplace. The two weeks of classes will culminate in LawTechCampLondon, an event bringing together industry innovators, regulators, academics, and students. Apply here.

Plea Bargains and Effective Assistance of Counsel

Thu, 22 Mar 2012 14:53:18 GMT

Over at Volokh, Orin Kerr takes a look at the US Supreme Court's recent decisions about effective assistance of counsel in the context of plea bargaining. The two cases deal with scenarios that are familiar in the context of legal malpractice cases arising out of civil litigation. In one, Missouri v. Frye, the prosecutor offered a deal for a limited time but the defense counsel failed to communicate the deal on time. The accused claims that he would have accepted the deal. In the other, Lafler v. Cooper, the accused claims that defense counsel offered bad advice about whether to accept the deal or go to trial. Read the post by Kerr and, for that matter, there lots of discussion of these two important cases around the blawgosphere.

What Safety Precautions Should Be Followed as to Swimming in Florida Lakes and Waterways?

dwolf@woodatter.com. (David Wolf ) — Thu, 22 Mar 2012 15:00:00 GMT

Florida is a destination location for tourists, visitors, and families during Spring break and other times of the year. In most instances, a day outing to a beach, lake, river, ocean, or swimming pool is filled with fun and good times. However, at times, a simple day of fun and swimming can turn tragic when there is an accidental drowning. Many drowning incidents are preventable with planning, supervision, and other safety precautions. It is not just infants and toddlers who are at risk for drowning incidents. School aged children, high schoolers, and even college students are at risk for drowning on any given day and at any given moment. Because of this, it is important to establish a buddy system for each swimmer and, when possible, have an adult monitor and supervise especially if there are no lifeguards in the area. Parameters and limitations should be set as to where each swimmer can swim and how far out each swimmer / child should go. In addition, it is helpful to know the depths and drop offs when swimming in natural water ways like oceans, lakes, rivers, and canals. Of course, it is also helpful to know the depths and layouts of swimming pool areas as well. Even with safety precautions in place, some drownings still take place because there is always some risk associated with swimming.

In Florida, a drowning was recently reported that involved 12 year old girl who was on a Spring Break outing. The Associated Press and the Marion County Sheriff's Office reported that Zakiyah Dowdy drowned while swimming at Lake Weir. She was with her cousin - Joyisa Reid - and other family members at the time. It was reported that this area of the lake had a steep drop off approximatley 15 miles from the shore which the family and swimmers may have not been familiar with. Reid, who also had some trouble in the water, was rescued. Tragically, however, the family and others could not locate Dowdy in the water. A rescue team later arrives on the scene and located the body of Dowdy.

The death of Zakiyah Dowdy was certainly a great loss for her family, friends, neighborhood, and community. See Drowning of 12 Year Old Girl Reported in Marion County, Florida (Lake Weir).

When a child suffers serious personal injuries or dies, a parent often times has many issues and challenges to deal with. Many parents will relay on the support of family, friends, neighbors and the community while dealing with the initial shock and the grief process. It is important to have support during these troubling times. Thereafter, the parents may be in need of legal advice as issues that may arise including medical bills, funeral bills, insurance, liability, and other issues. A Florida Child Injury Lawyer provides advice, consultation, and legal representation to parents dealing with these and other issues.

The book titled - The ABCs of Child Injury - Legal Rights of the Injured Child - What Every Parent Should Know - has chapters on Damages / Compensation, Water Park and Swimming Related Injuries, and other topics. Get his book for free at The ABCs of Child Injury.

The Impeachment: Should Chief Justice Renato Corona Testify in his Defense?

Thu, 22 Mar 2012 15:49:05 GMT

Today, 22 March 2012, the defense presented its last witness (former Manila Mayor Lito Atienza) before the Senate, acting as an impeachment court, takes a break. Even before the trial...

Accredited Investors and Crowdfunding

jgravelle@porterwright.com (Jack J. Gravelle) — Thu, 22 Mar 2012 14:46:44 GMT

In February the SEC issued a Small Entity Compliance Guide that provides a summary of the relatively new net worth standard in the definition of “accredited investor” under the Securities Act, as required by the Dodd-Frank Act. Section 413(a) of the Dodd-Frank Act requires that the value of a person’s primary residence be excluded when determining whether the person has net worth in excess of $1 million in order to qualify as an “accredited investor.”

The Dodd-Frank Act has made it a bit harder to be an accredited investor, and yet the Senate is currently considering a version of the Jumpstart Our Business Startups Act or JOBS Act passed by the House earlier this month that would make it easier for non-accredited investors to participate in “crowdfunding.” The JOBS Act would create a new registration exemption that issuers could rely on to sell up to $1-2 million worth of securities to non-accredited investors as long as no individual investor invests more than the lesser of $10,000 or 10% of the investor’s annual income in any 12-month period. And, these “crowdfunders” would not count toward the 500 shareholders of record threshold that triggers Exchange Act registration under Section 12(g).

Furthermore, for those issuers that want to continue to sell to accredited investors, the JOBS Act would require the SEC to amend Regulation D to permit general solicitation and advertising in Rule 506 offerings sold only to accredited investors.

Both provisions blur the line between public and private offerings and potentially pit the goal of job creation against the goal of investor protection.

Courts - "Supreme Court expands rights in plea bargains"

moddi@iquest.net (Marcia Oddi) — Thu, 22 Mar 2012 14:53:38 GMT

Here from Google is a sampling of some stories about the SCOTUS's decision yesterday in Lafler v. Cooper: Justices expand...Here from Google is a sampling of some stories about the SCOTUS's decision yesterday in Lafler v. Cooper: Justices expand...

Ind. Courts - "CAUTION: Now Entering Grey Area: Indiana Judges’ Use of Internet Information"

moddi@iquest.net (Marcia Oddi) — Thu, 22 Mar 2012 15:12:16 GMT

That is the title to an article by Gary Price, Lewis & Kappes, and Ellen Winternheimer, 2011 summer associate at...That is the title to an article by Gary Price, Lewis & Kappes, and Ellen Winternheimer, 2011 summer associate at...

Ind. Gov't. - As if to show that fears of state government sites going down are real

moddi@iquest.net (Marcia Oddi) — Thu, 22 Mar 2012 15:33:59 GMT

In the past the ILB has expressed concern that the Indiana Register and the Indiana Administrative Code, which contain the...In the past the ILB has expressed concern that the Indiana Register and the Indiana Administrative Code, which contain the...