The Lawletter Blog

TAX: State and Local Sales Tax on Internet Sales of Goods

Posted by D. Bradley Pettit on Wed, Apr 15, 2015 @ 13:04 PM

The Lawletter Vol 40 No 2

Brad Pettit, Senior Attorney, National Legal Research Group

      A very recent decision by a Florida appellate court illustrates constitutional issues that arise when a state or locality seeks to impose a tax upon sales of goods to out-of-state customers via the Internet. In American Business USA Corp. v. Department of Revenue, 151 So. 3d 67 (Fla. 4th DCA 2014), the court addressed the question of whether Internet sales of flowers, gift baskets, other items of tangible personal property, and prepaid telephone calling arrangements by a corporation that was registered to do business in Florida to out-of-state consumers were subject to the Florida sales tax. The taxpayer in the American Business case objected to taxation of its Internet sales to out-of-state customers on the ground that such taxation violated the Commerce and/or Due Process Clauses of the U.S. Constitution. The American Business court upheld the State of Florida's taxation of Internet sales of prepaid telephone call cards but rejected the State's taxation of Internet sales of flowers and other tangible goods.

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Topics: Commerce Clause, Due Process Clause, tax law, Internet sales, state and local sales tax

ESTATES: Depletion of Eventual Probate Estate Through Inter Vivos Transfers

Posted by Matthew T. McDavitt on Tue, Apr 14, 2015 @ 13:04 PM

The Lawletter Vol 40 No 2

Matt McDavitt, Senior Attorney, National Legal Research Group

     One problematic issue regarding the administration of probate or intestate estates is that in which the property of mentally or physically incapacitated persons is found to have been significantly depleted through lifetime transfers in the period just prior to death. The Virginia Supreme Court recently addressed this problem, establishing that where such lifetime transfers benefit persons standing in a confidential relationship to the grantor, a rebuttable presumption of fraud arises so as to protect decedent estates from the depredations by third parties upon whom the decedent relied at the end of life.

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Topics: estates law, depletion of property in estate, inter vivos transfers, confidential relationship

PERSONAL INJURY: Does Medical Monitoring in Absence of Present Physical Injury Merit Award of Damages?

Posted by Alfred C. Shackelford III on Tue, Apr 14, 2015 @ 11:04 AM

The Lawletter Vol 40 No 2

Fred Shackelford, Senior Attorney, National Legal Research Group

     If a defendant's negligence causes no physical injury, can a plaintiff recover damages for the expense of monitoring his or her medical condition? That was the issue addressed by the Nevada Supreme Court in Sadler v. PacifiCare of Nevada, 340 P.3d 1264 (Nev. 2014). In that case, the plaintiffs sued a health maintenance organization for negligently failing to oversee the quality of care provided by medical providers in its network. The providers allegedly used unsafe injection practices, potentially exposing the plaintiffs to the risk of contracting HIV, hepatitis, and other blood-borne diseases.

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Topics: medical monitoring, damages, personal injury, quality of care, no physical injury

CRIMINAL LAW: Search Warrants—Good-Faith Exception

Posted by Douglas C. Plank on Tue, Apr 14, 2015 @ 11:04 AM

The Lawletter Vol 40 No 2

Doug Plank, Senior Attorney, National Legal Research Group

      In a recent case from the U.S. Court of Appeals for the Second Circuit, the court held that a search warrant obtained to search the defendant's residence for evidence of child pornography was not supported by probable cause, because the information supplied by the affiant was stale. United States v. Raymonda, 780 F.3d 105 (2d Cir. 2015). In seeking the warrant, the affiant referenced a single incident when someone had accessed thumbnail images of child pornography on the Internet from the defendant's Internet protocol address, which had occurred nine months earlier. The affidavit also included boilerplate language about how persons who look at and collect images of child pornography generally hold on to such images indefinitely. The court concluded that the evidence was equally consistent with an innocent user inadvertently stumbling upon a child pornography website, being horrified at what he saw, and promptly closing the window, and it held that absent any facts to show that the defendant was a collector of child pornography likely to hoard pornographic files, a single incident of access did not create a fair probability that child pornography would still be found on the defendant's computer months later.

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Topics: criminal law, search warrant, good-faith exception to exclusionary rule

BANKING LAW: Credit Card Issuer Prevails in Class Action Brought Under Credit CARD Act of 2009

Posted by Anne B. Hemenway on Wed, Mar 25, 2015 @ 12:03 PM

The Lawletter Vol 40 No 1

Anne Hemenway, Senior Attorney, National Legal Research Group

     The Credit Card Accountability Responsibility and Disclosure Act of 2009 (the "Credit CARD Act of 2009"), Pub. L. No. 111-24, 123 Stat. 1734, H.R. 627 (2009), amended the Federal Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601 et seq., by specifically requiring banks to make additional disclosures to consumers regarding their credit cards. These included disclosures prior to renewal of a credit card, 15 U.S.C. § 1637(d)(1), and disclosures when the creditor makes changes to the terms and notices, as well as advertising disclosures. Additional consumer regulations were later promulgated under the Credit CARD Act of 2009. In August 2010, regulations became effective that provided that if a card issuer prospectively changes the annual percentage rate ("APR") on the card based on certain factors, the card issuer must also apply the same factors to determine whether a reduction in the APR is proper. See 12 C.F.R. §§ 226.52(b), 226.59. Importantly, these regulations also require that a card issuer can assess penalty fees for late payments only in such a way as represents a "reasonable proportion of the total costs incurred by the card issuer." Id. § 226.52(b)(1)(i).

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Topics: credit card, banking law, Credit CARD Act of 2009, disclosures to consumers, Cred CARD Act of 2009

PRODUCTS LIABILITY: Expert Testimony Based on Unfounded Assumption Inadmissible

Posted by Jeremy Y. Taylor on Wed, Mar 25, 2015 @ 11:03 AM

The Lawletter Vol 40 No 1

Jeremy Taylor, Senior Attorney, National Legal Research Group

     The Virginia Supreme Court recently addressed the issue of the admissibility of expert testimony in a products liability case and ruled such testimony inadmissible under the circumstances presented. See Hyundai Motor Co. v. Duncan, ___ Va. ___, 766 S.E.2d 893 (2015). In Duncan, a driver was severely injured when he lost control of his car and ultimately struck a tree. Although the vehicle was equipped with a side airbag system, the airbag did not deploy. The circuit court entered judgment on a jury verdict for the plaintiff guardian/conservator.

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Topics: products liability, expert testimony, inadmissible if insufficient facts, unfounded assumption

CRIMINAL LAW: Prosecutorial Misconduct in Closing Argument

Posted by Suzanne L. Bailey on Wed, Mar 25, 2015 @ 11:03 AM

The Lawletter Vol 40 No 1

Suzanne Bailey, Senior Attorney, National Legal Research Group

     A recent en banc decision from the Supreme Court of Washington serves as a reminder of the bedrock upon which our criminal justice system stands, that is, that every defendant is entitled to a presumption of innocence, which is overcome only when the State proves guilt beyond a reasonable doubt as determined by an impartial jury based on evidence presented at a fair trial. In State v. Walker, 341 P.3d 976 (Wash. 2015) (en banc), the defendant was charged as an accomplice to aggravated first-degree premeditated murder, first-degree felony murder, first-degree assault, first-degree robbery, first-degree solicitation to commit robbery, and first-degree conspiracy to commit robbery in connection with an armored truck robbery at the Walmart where the defendant's live-in girlfriend was employed. The defendant was convicted of all charges, and he subsequently appealed, claiming, inter alia, that he had been denied a fair trial due to prosecutorial misconduct in closing argument.

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Topics: criminal, guilt beyond reasonable doubt, prosecutorial misconduct, presumption of innocence

CIVIL PROCEDURE: Simultaneous Involvement in Cobell Settlement Claim Bars Plaintiffs' Mineral Lease Complaint Against United States

Posted by Charlene J. Hicks on Thu, Mar 19, 2015 @ 12:03 PM

The Lawletter Vol 40 No 1

Charlene Hicks, Senior Attorney, National Legal Research Group

     A class action settlement may have far-reaching, unintended effects for particular class members who choose not to opt out of the settlement. This point is highlighted in a recent decision by the U.S. Court of Federal Claims in Two Shields v. United States, No. 13-90 L, 2015 WL 513315 (Fed. Cl. Feb. 6, 2015).

     In that case, two Native Americans filed claims against the United States, alleging that the Government had breached its fiduciary duty to prudently manage their mineral rights, which were held in trust by the United States. The plaintiffs were allottees of Indian lands on the Fort Berthold Indian Reservation who, in 2007 and 2008, had granted oil leases to a private party known as Dakota-3. The plaintiffs alleged that the United States had rubber-stamped its approval of the leases at below-market rates. In November 2010, Dakota-3 re-leased the plaintiffs' allotments for a bonus price roughly 20 times the original lease rate. The plaintiffs alleged that the United States had breached its duties under the Indian Long-Term Leasing Act, 25 U.S.C. § 396, which requires the Government to approve only those mineral leases that are in the best interests of the Indian owners.

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Topics: civil procedure, class action, opt-out option

MORTGAGES: Notice of the Truth Shall Set You Free: Timely Assertion of the Right of Rescission Under the Truth in Lending Act

Posted by Steven G. Friedman on Thu, Mar 19, 2015 @ 10:03 AM

The Lawletter Vol 40 No 1

Steve Friedman, Senior Attorney, National Legal Research Group

     The federal Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601–1677, was enacted to ensure "a meaningful disclosure of credit terms" to give consumers the opportunity to make informed credit decisions. Id. § 1601(a). In relevant part, TILA grants consumers a right to rescission, no questions asked, under certain circumstances. See id. § 1635(a); 12 C.F.R. § 226.15(a)(3). Once a consumer validly exercises the right to rescind, the entire transaction is voided without any liability or encumbrances. See 15 U.S.C. § 1635(b); 12 C.F.R. § 226.15(d)(1).

     To effectively rescind, however, consumers must timely do so. Specifically, consumers must notify the lender prior to the later of "midnight of the third business day following the consummation of the transaction or the delivery of the [requisite disclosures under the Act]." 15 U.S.C. § 1635(a). Although the second alternative seems open-ended, the Act further states that in no event shall the right of rescission extend beyond "three years after the date of consummation of the transaction or upon the sale of the property, whichever comes first." Id. § 1635(f). But what exactly must be exercised no later than three years after the transaction—the notice of intent to rescind, or the lawsuit seeking rescission? Abrogating the law of the Eighth Circuit Court of Appeals and applying the plain language of TILA, the U.S. Supreme Court held that it was the former. See Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (2015), rev'g 729 F.3d 1092 (8th Cir. 2013).

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Topics: Truth in Lending Act, mortgages, property, right of rescission

FAMILY LAW: Spousal Support in No-Guideline States

Posted by Brett R. Turner on Wed, Mar 4, 2015 @ 10:03 AM

The Lawletter Vol 39 No 12

Brett Turner, Senior Attorney, National Legal Research Group

     No field of family law is as diverse or controversial as that of support payments made by one spouse for the support of the other after a marriage has ended in divorce. The law in this area is so divided that the states cannot even agree on the name of the payment. Some states use the traditional name, "alimony." Other states follow the lead of the Uniform Marriage and Divorce Act and call the payment "maintenance." Still other states call the payment "spousal support."

     Disagreement over the label is matched by disagreement over the purpose of the payments. Most states recognize several different types of spousal support. Traditional support is awarded after a long-term marriage so that the less wealthy spouse does not suffer a drop in living standard. Rehabilitative support is awarded when it will help the less wealthy spouse to develop a higher earning capacity. It differs subtly from time-limited support, which is awarded when the marriage was not long enough to justify a traditional support award. Reimbursement support is awarded when one spouse made contributions during the marriage to the other's earning capacity, such as by supporting a spouse through graduate or professional school. Some states even recognize transitional support to bridge the gaps between other forms of support.

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Topics: family law, spousal support, no-guidelines states

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