The Lawletter Vol 35 No 4, March 4, 2011

Tim Snider, Senior Attorney, National Legal Research Group

The U.S. Supreme Court recently had occasion to examine one of the more controversial provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA").  Chapter 13 of the Bankruptcy Code uses a statutory formula known as the "means test" to help ensure that debtors who can pay creditors do pay them.  The means test instructs a debtor to determine his "disposable income"—the amount he has available to reimburse creditors—by deducting from his current monthly income "amounts reasonably necessary to be expended" for, inter alia, "maintenance or support."  11 U.S.C. § 1325(b)(2)(A)(i).  For a debtor whose income is above the median for his state, the means test identifies which expenses qualify as "amounts reasonably necessary to be expended."  As relevant here, the statute provides that "[t]he debtor's monthly expenses shall be the debtor's applicable monthly expense amounts specified under the National Standards and Local Standards, and the debtor's actual monthly expenses for the categories specified as Other Necessary Expenses issued by the Internal Revenue Service for the area in which the debtor resides."  Id. § 707(b)(2)(A)(ii)(I).

The Lawletter Vol 35 No 4, March 4, 2011

Brett Turner, Senior Attorney, National Legal Research Group       

A large and growing number of states require the parties in a divorce case to file a financial statement with the court.  The statement must list the parties' assets, the values thereof, and sometimes the filing party's position as to the classification of the assets as marital or separate property.

These statements generally constitute admissible evidence if the case is tried.  See, e.g., In re Marriage of Hubbs, 843 N.E.2d 478, 486 (Ill. App. Ct. 2006) ("[A] financial statement is competent evidence of value[.]"); Yauch v. Yauch, 901 So. 2d 920 (Fla. Dist. Ct. App. 2005) (where wife valued van at $4,000 on her financial statement and no other evidence of value was presented, trial court erred by valuing van at $0; valuation had no support in the record); Winter v. Winter, 857 N.Y.S.2d 69 (App. Div. 2008) (where wife's net worth statement valued vehicle at $11,000, trial court erred by valuing the vehicle at its $15,000 purchase price).  See generally 1 Brett R. Turner, Equitable Distribution of Property § 4:5 n.21 (3d ed. 2005 & Supp. 2010).  In particular, a financial statement that supports the opposing party's position may receive considerable weight as an admission against interest.

Because financial statements potentially carry so much weight, it is critical that the statement not contain errors.  But it is impossible to avoid errors completely, especially when a statement must be filed early in the case, before discovery is complete.

What should a party do when a mandatory financial statement contains an inadvertent error? A good example of what not to do is Doyle v. Doyle, Nos. 2007‑CP‑01925‑COA, 2008‑CP‑01927‑COA, 2010 WL 3221909 (Miss. Ct. App. Aug. 17, 2010) (not yet released for publication).  There, the husband filed a financial statement that valued a vehicle at $23,000, subject to a $28,000 lien.  But the statement listed the equity in the vehicle at positive $5,000.  The husband claimed that this number was a typographical error, with the minus sign simply omitted.  An amended statement was apparently filed, but it did not appear in the record.

The husband did not introduce any other evidence as to the value of the vehicle.  The trial court therefore had two pieces of evidence before it:  the financial statement, which supported two different values (positive and negative $5,000), plus the husband's oral testimony that the negative value was correct.  The trial court chose to believe the positive value.  By a 2-1 margin, the appellate court affirmed.

The Lawletter Vol 35 No 3, February 11, 2011

Fred Shackelford, Senior Attorney, National Legal Research Group

May an employee pursue common-law tort claims against an employer and a coemployee for conduct that occurs during the termination process?  The Nevada Supreme Court recently addressed this issue in Fanders v. Riverside Resort & Casino, Inc., No. 51225, 2010 WL 5422506 (Nev. Dec. 30, 2010).  The plaintiff in Fanders was a guest room attendant at a casino, whose job was to clean hotel rooms.  When she was accused by a coworker of improper conduct, she became angry and quit her job.  Before she could leave the premises, security guards approached her and attempted to photograph her.  She resisted by hiding under a table, and the guards allegedly grabbed her by the hair, pulled her from under the table, and called her by a derogatory name.  She sued the casino and the guards individually, presenting claims for assault and battery, vicarious liability, wrongful imprisonment, negligence, and punitive damages.  The trial court granted summary judgment for the defendants, ruling that the plaintiff's exclusive remedy was under Nevada's Industrial Insurance Act ("NIIA").

The Lawletter Vol 35 No 3, February 11, 2011

Scott Meacham, Senior Attorney, National Legal Research Group

After learning that a monumental 1925 church building would be deconsecrated, and fearing that the building could eventually be altered or demolished, a city council passed an ordinance declaring the parcel of land containing the church—and only that parcel—to be a historic district.

At first blush, this sounds like a case of spot zoning or the inhibition of religious exercise.  Indeed, when the religious corporation sued the City in federal court, it put forward a dozen claims under state and federal law, many of them focused on the First Amendment.

But the outcome was decidedly in favor of the City.  In Roman Catholic Bishop of Springfield v. City of Springfield, C.A. No. 10‑cv‑30033‑MAP, 2011 WL 31288 (D. Mass. Jan. 4, 2011) (slip copy), the federal district court granted the City's motion for summary judgment by focusing on two themes:  the fact that several of the claims were not ripe for adjudication and the fact that the City's ordinance was a proper implementation of an existing state law.

First, the state's Historic Districts Act clearly prohibits owners from making exterior alterations to an affected building within a district.  For the religious corporation that owned the church, this could have created a serious religious problem, since its own laws can require some of the building's religious symbols to be removed as part of the deconsecration.

The Lawletter Vol 35 No 3, February 11, 2011

Doug Plank, Senior Attorney, National Legal Research Group

The recent felony indictment of a Michigan man for accessing his wife's e-mail account on a shared family computer has drawn attention to the broad scope of some state statutes that were enacted for the more limited purpose of prohibiting unauthorized persons from hacking into corporate or governmental computers or computer networks for the purpose of carrying out criminal schemes.  See Hayley Tsukayama, Michigan Man Could Go to Jail for Reading His Wife's E-Mail, Washington Post, Dec. 27, 2010, http://voices.washingtonpost.com/fasterforward/2010/12/michigan_man_to_could_go_to_ja.html.  Michigan's relevant statute provides in pertinent part that "a person shall not intentionally and without authorization or by exceeding valid authorization . . . [a]ccess or cause access to be made to a computer program, computer, computer system, or computer network to acquire, alter, damage, delete, or destroy property or otherwise use the service of a computer program, computer, computer system, or computer network."  Mich. Comp. Laws § 752.795(a).  At the time that the statute was enacted, one law review article stated that "[t]he legislature recognized the growing influence of computers and computerized devices that are employed in criminal activities and amended the computer and telecommunications statutes to include new proscriptions and penalties for crimes committed with the aid of such devices."  Joseph A. Lavigne & Clara Scholla McCarthy, Annual Survey of Michigan Law June 1, 1996BMay 31, 1997, 44 Wayne L. Rev. 655, 734 (1998).  The same article further concluded that the statutes "represent positive attempts to penalize the ever increasing use of computers and computer technology to facilitate the commission of criminal acts."  Id. at 736-37.

The Lawletter Vol 35 No 3, February 11, 2011

Matt McDavitt, Senior Attorney, National Legal Research Group

When parties litigate claims implicating maritime law, an often misunderstood doctrine is the so-called "saving to suitors" rule, deriving from a cryptic phrase appearing in the U.S.C. section conferring admiralty jurisdiction to the federal courts:

The district courts shall have original jurisdiction, exclusive of the courts of the States, of:

(1)     Any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled.

28 U.S.C. § 1333(1) (emphasis added).  Under this rule, in circumstances where a plaintiff (1) possesses both state common-law claims as well as maritime claims arising from a single transaction, but (2) chooses to file an in personam suit in state court rather than an in rem suit in a federal forum, the plaintiff's forum and choice-of-law selections may not be circumvented by removal by the defendant to federal court unless federal jurisdiction is proper on grounds other than the maritime or admiralty claims arising from the events that are the subject of the suit.

The reasoning supporting application of this "reverse-Erie" doctrine is that once the plaintiff elects to initiate the suit as a common-law tort action rather than a federal admiralty one, this choice thereafter irrevocably removes the action from federal jurisdiction, despite the potential admiralty federal law claims.

The Lawletter Vol 35 No 3, February 11, 2011

John Buckley, Senior Attorney, National Legal Research Group

For most professional, commercial, and retail establishments, maintaining a website has become a matter of business necessity.  Yet with its undisputed advantages, the operation of a website also presents new areas of exposure to liability for its owner or operator.  Sources of potential liability include infringement (either in the domain name itself or in the content of the website), privacy (relating to the use of website user information or to the posting of website content containing the name or likeness of a person), defamation (in the form of web content), reliance (based on information contained on the website and the use of that information), or accessibility (for visually impaired individuals).

On January 10, 2011, the U.S. Department of Justice concluded a series of public hearings on proposed new rules that would expand the Americans with Disabilities Act by making certain websites accessible to the blind and deaf.  These new rules, expected to be promulgated within the next year, are sure to prompt litigation over website accessibility issues.  Even before the proposed rules, several judicial decisions revealed potential bases for website liability.