Secret Endless Editing of Published Supreme Court Opinions

Stare Decisis is one of the cornerstones of U.S jurisprudence.  Simply put, it means to “stand by things decided.” It is a touchstone of our justice system that requires courts to adhere, under many circumstances, to the principles of previous rulings.

Of course, exactly how (or whether) those previous rulings apply to each new set of facts is often a matter that rests on very slight turns of phrase that the court chooses to express its opinions and shade its intentions.

So what happens if the opinion of the court changes?  I am not talking about a new discussion, a new ruling, or a new case.  What happens if the written opinion of the court somehow… just… well… changes?

An intriguing column by John W. Dean from today’s edition of the Justia online publication Verdict discusses Harvard Law professor Richard Lazarus’ forthcoming article (and the New York Times article discussing it) which highlights the US Supreme Court’s practice of employing “secretive and dubious means” to alter its written and published opinions without public notice:

Secret Endless Editing of Published Supreme Court Opinions | John Dean | Verdict | Legal Analysis and Commentary from Justia.

How unsettling it must be to have fought your way all the way to the Supreme Court, argued your case, received a favorable ruling (or not), and then to see the “law” created by the decision shift subtly over the next days, months and even years as the “Bench Opinion” is trumped by the (potentially “corrected”) “Slip Opinion,” which remains published on the Court’s website until it is replaced by the (again potentially “corrected”) collected and printed opinions for the entire term in the U.S. Reports as much as seven years later.

But even this is not the whole story, for the U.S. Reports comes out first in paperback advance pamphlets called “Preliminary Prints,” which are themselves “corrected” again and finally bound into volumes that may span several sessions.  But wait, there’s more… the “final” bound editions contain errata sheets that may again “correct” former opinions, albeit usually only very slightly.

What does this mean for you?  Maybe not much.  But it does mean that any attorney who quotes Supreme Court precedent in a brief had better make sure he or she is not relying on a phrase or sentiment that has been “corrected out” of a subsequent generation of the opinion.

For the justice system as a whole, Dean suggests that Professor Lazarus’ study, if heeded by the Court, will help increase the institutional integrity of the court to the extent that it prompts “modest reforms” that lead to the elimination of what Dean describes as “secret editorial (and occasionally more than editorial) fixes.”

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New Facebook Message: You’ve Been Sued!

Does service of a civil lawsuit count if the defendant is personally handed the legal papers? Absolutely, as long as the person serving the papers is permitted to do so (different courts have different rules).

Does service count if the legal papers are handed to the defendant’s 27 year-old brother who lives with the defendant? Maybe.

But what about legal papers served on the defendant through the defendant’s personal Facebook account?

The answer is some countries is yes, a defendant can be served through a personal Facebook page.

Until quite recently, courts in the United States have refused to allow service through Facebook, citing concerns that doing so would deny defendants due process and actual notice of the lawsuit, which is required by the Constitution and related federal and state laws.

But in March 2013, a court in the Southern District of New York addressed the Federal Trade Commission’s request to serve non-U.S. defendants through email and Facebook after struggling to serve the foreign defendants personally. The judge ultimately granted the request, noting that while service through email alone satisfied the due process and notice requirements, service only through Facebook may not.

The U.S. is not the first country to tiptoe into the land of service via social media. In 2008, Australia allowed service on defendant debtors through Facebook when the attorneys were able to match the defendants’ birth dates, friends, and email addresses on the Facebook pages to their loan applications.

A year later a Canadian court allowed service on the defendant through the HR department of the defendant’s former employer and through the defendant’s private Facebook page. A New Zealand court also approved this method. The United Kingdom’s High Court has allowed service of an injunction on an anonymous blogger through a Twitter account, and Australia has allowed service through text message. All of these countries have similar due process and notice requirements as the United States.

Service of process can be tricky.  It can vary not only from country to country, but from state to state, county to county, and even court to court.  However, just because some courts have shown a willingness to move the law in new directions with the proliferation of social media, this does not mean that they have yet come to anything like a clear consensus.  Since service of process is one of the initial steps in asserting your rights in court, be sure you get it right.  Talk to a litigation attorney at Briskin, Cross and Sanford if you are in any doubt.

UPDATE – Raysoni v. Payless Auto Deals, LLC et al.

In a previous blog, I discussed the case of Raysoni v. Payless Auto Deals, LLC et al. (see “To Carfax or not to Carfax“), a rather frustrating case in which the Georgia Court of Appeals held that the plaintiff did not have a good claim for fraud against a used car dealership even though the salesman for the dealership told Raysoni that the car he purchased was not in a wreck – which was a blatant lie and the salesman knew it.

In that case, the Court of Appeals held that despite the salesman’s lie, a claim for fraud could not be supported because Raysoni’s reliance on the lie was not justified.

In a claim for fraud, the plaintiff must show that his/her reliance on a false and injurious representation was reasonable or justifiable. The Court of Appeals found that after verbal negotiations between Raysoni and the salesman, Raysoni signed a written contract which clearly stated that the car had been in a wreck, that a buyer was not to rely on the representations of a salesperson, and that a buyer should get the car independently inspected. The contract trumped the salesman’s representations as well as the Carfax report which showed the car as being clean.

Apparently, Raysoni did not take this decision lying down, as he is now appealing to the Supreme Court of Georgia.   Oral Arguments are set for June 16, 2014.

In his appellate brief, Raysoni argued that the Court of Appeals incorrectly applied the law, based on the Georgia Supreme Court case City Dodge, Inc. v. Gardner (1974), arguing that fraud prior to the entering of the contract voids the contract, and thus the disclaimer in the contract is of no significance. Under City Dodge, the disclaimer in a contract is only one of the factors a jury will look at in deciding whether reliance was justifiable, but does not by itself preclude a finding of fraud.  Raysoni also reiterated the fact that the disclaimer was in a font size the equivalent of 5.6 Arial type (!!) buried in other text.  See if you can find the disclaimer of damage:

disclaimer text

It will be interesting to see how the Supreme Court deals with the issue of justifiable reliance.  Stay tuned for the conclusion of this case… and feel free to call a contract attorney at Briskin, Cross & Sanford if you ever have ANY doubt about what you are being asked to sign.

The neverending cycle: bankruptcy and homeowner/condominium association dues

When the economy took a dive in 2007 taking the housing market with it, hundreds of thousands of Americans, walked away from homes and condominiums and declared bankruptcy to get out from under unmanageable debt.

But what about those homeowner association and condominium dues? Who is responsible for those? Common sense might lead you to think that the bank that holds the mortgage would be on the hook for association dues, too.  After all, the home was “given back” to the bank… wasn’t it?

Well… Not so fast. Under bankruptcy law, the owner of the house or condo remains personally liable for all homeowner association and condominium dues that accrue after the bankruptcy was filed and before legal title passes from the owner to the bank.  Due to a glut in inventory, many banks have been slow to actually take title to the property from the former borrower, and until they do, condominium association dues and fees owed continue to tick up.

To make matters worse, the homeowner or condominium association has four years to file a lawsuit against the owner under Georgia law, O.C.G.A. §9-3-29. If the association files the lawsuit before the expiration of those four years, the dues and fees continue to accrue during the lawsuit, assuming the bank does not successfully foreclose on or sell the property, causing legal title to transfer from the owner.

The result can be a perfect storm for a property owner, who, after discharge from bankruptcy, may once more be facing a judge with thousands of dollars in past-due association fees and dues and very limited options for relief, if any, from a potentially unbearable debt.

Quick, a scammer is stealing your business name: scams and rip-offs target US business owners (part 2)

We have posted recently on those legitimate-looking (and often tenuously legal, if scandalously unethical) solicitations designed to separate gullible business owners from their money, or worse. Here’s another one.

Quick, a scammer is stealing your business name!

Well, not really, but it looks like it. You receive an email that purports to be from the Asian Domain Registry, or something similar. It will start something like this:

Dear CEO:
We are a leading internet solutions company in China, and we have something urgent to confirm with you. We formally received an application on [recent date] from a company called [generic sounding Chinese company name] to
register [YOUR DOMAIN NAME.cn/ .com.cn/ .net.cn/ .in/ .tw/ .com.tw/ .com.hk/ .hk/ .vn/ .asia, or something like that] through our domain registration service.”

Your first reaction is to wonder who is trying to register a domain name containing my brand name, for what surreptitious purpose, and how can I protect myself and my valuable IP?

Fortunately the internet solutions company has thought of all that for you, as the message continues:

According to the principle in China, your company is the owner of the trademark, and our audit process permits us to keep the domain names safe for you by allowing you to register these domain names for your company during the five-day waiting period before they are released to the applicant. Please ask the responsible officer in your company to contact us as soon as possible. Thank you!

Kind regards
Mae Chen

Head Office
Registration Department Manager

Well, thank goodness for Mae Chen!  It seems all you have to do is purchase those ten domains yourself (and goodness knows what related hosting or forwarding services) and your brand will be safe!

Now, it may be that you really do need Alpharetta-Pizza.com.cnAlpharetta-Pizza.com.asia, or Alpharetta-Pizza.com.hk.  If so, you may want to drop the “delivery in 30 minutes or the pizza’s free” promotion.

If you do want to register a Chinese domain, you should check out the real China Internet Network Information Center (CNNIC) at http://www1.cnnic.cn/. CNNIC maintains lists of accredited registrars (the identities of non-approved companies, on the other hand, changes from day to day as these companies pop up and then disappear with their ill-gotten gains).

Do yourself a favor and do this before you punch in your credit card number or call up Mae Chen.

A Primer on Business Opportunities. Part I: “Business Opportunity” defined.

The term “business opportunity” is sometimes used in a generic sense to mean a variety of things related to purchasing and/or starting a business. Much like a “franchise,” however, a “business opportunity” (or “Biz Op”) has specific meaning under state and federal law. This blog is the first in a series of short articles discussing business opportunities. This part is dedicated to defining a business opportunity, an important threshold issue in determining whether the particular business is subject to regulation.

Since the term “franchise” is familiar to most people, it may be helpful to understand what a business opportunity is in terms of how it is different from a franchise. Purchasers of a franchise (franchisees) sell goods or services that are associated with the franchisor’s trademark, and the franchisee is subject to significant control by, or receives significant assistance from, the franchisor. By contrast, purchasers of business opportunities do not operate under the seller’s trademark, and the biz op purchaser has substantially more flexibility to run the business as he or she sees fit. Where the franchise typically becomes part of a “system,” the biz op purchaser is typically given the tools to operate his own business and then does so with a greater degree of freedom.  For further discussion on how a biz op platform can be used to grow your business, see the next blog in this series.

While this is a general definition of a business opportunity, the definition as prescribed by law is more particular and varies somewhat from state to state.  Nonetheless, it is essential to understand whether an enterprise qualifies as a business opportunity as defined by relevant law, because, if it does, the seller of the business opportunity must then comply with certain disclosure and registration requirements. Like securities laws, this is the ultimate purpose of business opportunity and franchise law – to promote transparency and accountability on the part of the seller and to give prospective purchasers enough information to make educated investment decisions. With that in mind, let’s take a loot at the specific definition of business opportunity under federal and state law.

Under the Federal Trade Commission (FTC) Trade Regulation Rules, 16 CFR § 437 et seq., a business opportunity is defined as a commercial arrangement in which a seller solicits a prospective purchaser to enter into a new business in exchange for a required payment, where the seller represents one of the following: (i) that the seller will provide locations at which the purchaser may operate vending machines or similar devices, (ii) that the seller will provide outlets, accounts, or customers for the purchaser’s goods or services (which includes providing sales leads for purchasers or recommending a source for sales leads), OR (iii) that the seller will buy back goods or services made by the purchaser. Vending machine or display routes, envelope stuffing or craft-building enterprises, and other opportunities that promise refund or buy-back are the traditional concerns of business opportunity law because these are some of the original business opportunities and those which have been the subject of the most abuse and deception.

Twenty-eight states have laws regarding business opportunities. The definition of a business opportunity varies on a state-by-state basis. Many states define business opportunities as the sale of products or services to a purchaser for a payment of $500 or more that enable the purchaser to start a business in which the seller represents one of the following: that the seller will provide locations for vending machines (mirroring federal law), that the seller will buy back products made by the purchaser (also mirroring federal law), that the seller guarantees that the purchaser will derive income from the opportunity that exceeds the price paid for the opportunity, or that the seller provides a marketing plan.

As you can see, while some state definitions of a business opportunity mirror those of federal law, some are more encompassing. For example, simply by offering a “marketing plan” along with the business, a seller may be providing a biz op. A marketing plan often is broadly defined, and includes a situation in which the seller provides know-how to help the purchaser get the business up and running. Suddenly, the representations made by the seller are of critical importance. While it is surely a compelling sales pitch to guarantee that purchasers of a business opportunity will make a certain amount of money, or at least make enough to cover the purchase price, doing so may cause the seller to be a biz op as defined by relevant state law, triggering duties of registration and disclosure.  What’s more, certain marketing representations can trigger a seller’s duty to obtain a bond to protect purchasers, which is costly and time-consuming.  If the seller does not comply with disclosure and registration requirements (explored further in a future blog), there can be serious consequences, including misdemeanor charges, right to full refund, and perhaps most damaging, a ban from selling in that state in the future (penalties will be explored further in a future blog).

To avoid the consequences of non-compliance, it is critical to identify the states in which compliance is required before selling in those  states.  For my clients, I suggest creating a roll-out plan.  I highly recommend this practice.  The offering will most likely be on the Internet, and it is tempting for the seller to begin expanding as quickly as interest develops and the market will bear, but doing so is certain to run afoul of state law.  Picture a map of the United States where all the states are red.  When a state turns green, you can begin selling there.  The roll-out plan determines the order in which states will turn from red to green, and ensures that compliance always precedes sales.  If you are considering growing your business by leveraging your knowledge, concept, or name, contact the business opportunity and franchise attorneys at Briskin, Cross & Sanford to learn more.