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Quote of the Day - A new way of thinking has become the necessary condition for responsible living and acting. If we maintain obsolete values and beliefs, a fragmented consciousness and self-centered spirit, we will continue to hold onto outdated goals and behaviors.
USEPA's Approval of California Air Quality Plan Overturned Due To Use Of Six-year, Outdated DataThe United States Environmental Protection Agency just lost a battle that it has been fighting with the Sierra Club since 2004. As you know, the USEPA sets the standards for air quality around the country. Since the air pollution is particularly bad in California, and especially in the San Joaquin Valley, the Sierra Club filed a challenge to the USEPA's approval of certain air quality standards for the Valley in 2010. While the Sierra Club argued that the approval had a number of problems - including the fact that the standards were impossible to comply with - the Ninth Circuit relied on just one of those problems to overturn the USEPA's approval. The Court said that the USEPA could not rely on data from 2004 in 2010 when approving the standards in California's State Implementation Plan. That's right - a six-year gap in data. Six years outdated, and yet the USEPA still approved the 2004 SIP in 2010. Read that last sentence again. The USEPA was six years behind in reviewing data supplied to it, and refused to consider more current data in reaching its decision. The USEPA failed to explain why it would not consider the new data, and the Ninth Circuit consequently held that refusal as "arbitrary and capricious," and ordered the USEPA to do it over again, and this time, consider new, relevant data. I've had cases against the USEPA before, and this tactic is quite common. They don't do their homework, and when challenged about it, retort back that they have the statutory/regulatory right to rely on old, out-of-date data. Finally, thanks to the Sierra Club, the USEPA has been called on its tactics and hopefully, we'll see the last of this bureaucratic nonsense.
California's State Board of Equalization's End-run Attempt Around Prop 13 ThwartedIf you run a business, you know all about the California State Board of Equalization. It's a euphemestically named government organization that is our equivalent of the IRS. You know, those folks who collect taxes. Proposition 13 was enacted by California voters in an attempt to keep property taxes down. The SBE's mission, it seems, is to figure out ways to increase tax revenue to the state. One of the ways the SBE tried to do that was to avoid the annual decrease in the value of fixtures (those things that are attached to real property, like machines bolted to the floor and the like). You see, each year, fixtures depreciate, which means less taxes are due because the value of those fixtures have declined. Worn out. Not as useful as the year before. Requires more maintenance. You get the idea. Well, so did the SBE, and they saw tax revenues slip away. Until some bright bulb in the SBE got the idea to reclassify fixtures as real property. We all know that real property increases in value over time - at least that was the theory that fueled the sub-prime mortgage crisis, but that's a whole 'nother story for another day. In the SBE's test-dummy attempt to pull this switcheroo, the SBE applied this theory to the petroleum industry first before attempting to apply it to every other industry in California. If you think about that plan, it wasn't the smartest. The petroleum industry has cash flow, and lots of it - especially since we keeep buying gas for our cards and trucks. So when the petroleum industry caught wind of this plan, it tasked its association, the Western States Petroleum Association, to file a legal challenge. The WSPA did just that, citing to the agoe-old division between the valuation of fixtures and the valuation of real property, and the attendant accounting methodologies used to appraise those two items. Accountants depreciate fixtures, but not real estate. Prop 13 was designed to limit taxes, not increase them, and the Court saw right through the SBE's plan, telling the government to keep the distinction between fixtures and real property, never the twain to meet. Your fixtures are once again safe from the evil overlord of taxes. Whew! Revisiting Citizens United in an Election YearThe Role Of The Super-PACSince 2010, there has been great debate over the controversial ruling commonly called Citizens United. Most recently, the Montana Supreme Court challenged the decision while Senator McCain called it "one of the worst decisions I have ever seen." Please join me as I welcome Attorney Joseph M. Birkenstock, former chief counsel of the Democratic National Committee and Bradley A. Smith, Chairman and Co-Founder of the Center for Competitive Politics and former Commissioner on the Federal Election Commission, for an in-depth discussion on the impact of the ruling during an election year and its influence on the upcoming Presidential election. 
A Lawyer In Your Pocket?You may say it would be better to have a judge in your pocket, but then, so does everyone else. I'm talking about a level playing field, with a lawyer in your pocket. You know, the kind you can ask any question to when you have a legal problem, and get a solid answer that will avoid you having to breach a contract, make a mistake that actually would be a crime or anything else that would land you in a courtroom. Why not? You can get a doctor in your pocket with Web MD, so why not all professions, especially law? Diagnosing a medical condition can be a difficult proposition. So can diagnosing a legal problem. But for those problems that have not yet landed you in court, good legal advice can steer you away from that eventuality. If you think about it, you do have a lawyer in your pocket. It's your cell phone. When you're facing a difficult legal problem, do what my clients do. Pick up the phone and call your laywer. We're happy to answer your questions, and even happier when our advice avoids landing you in court. For those who call their lawyers and get good advice, you're lucky. Many others who don't call end up calling when a legal disaster hits, and then it's too late. At that point, you need the other part of what I do - litigation. It's time consuming and can be very costly. Good legal advice before the problem hits is worth its weight in gold, especially since you will never experience the inside of a courtroom. Pay your lawyer a visit and avoid hiring me. Otherwise, I'm glad to take your call. What Are The Hottest Legal Trends For 2012?Lawyer2Lawyer Internet RadioDecriminalizing medical marijuana, fighting to repeal healthcare reform and using social media as evidence are just a few of the topics trending in the legal industry in 2012. My co-host, Bob Ambrogi, is off today, so please join me as I discuss the hottest trends currently transforming the legal world with attorney and legal trend-watcher Danny Cevallos, the founding partner of Cevallos & Wong, L.L.P.
Invest In An Internet Video Start-up And Get SuedHow Michael Eisner Avoided LiabilityIn yet another of a long line of cases involving copyright infringement, we now have the case of UMG Recordings v. Shelter Capital Group, where Universal Music Group attempted to get around the Digital Millenium Copyright Act by suing the investors in video-sharing case, with hints of Napster-like allegations. UMG sued Veoh, a web-sharing site for videos. Unlike Napster, however, Veoh took all kinds of pains to ensure that it was not posting videos that were protected by copyright. In the Court's words, "Veoh also began developing an additional filtering method of its own, but in 2007 opted instead to adopt a third-party filtering solution produced by a company called Audible Magic. Audible Magic’s technology takes audio “fingerprints” from video files and compares them to a database of copyrighted content provided by copyright holders. If a user attempts to upload a video that matches a fingerprint from Audible Magic’s database of forbidden material, the video never becomes available for viewing." That's a lot of effort, but it doesn't address the most interesting aspect of Universal's case against Veoh's investor. That's right. Read that last line again. Universal sued Veoh's investors for vicarious infringement, contributory infringement and inducement of infringement. Gives a whole new meaning to being an angel investor, one of whom was Michael Eisner. The Court noted, "UMG argues, however, that ... "the [Investor] Defendants remain potentially liable for their related indirect infringement" because ... the Investor Defendants do not qualify as "service providers" who can receive DMCA safe harbor protection." While the Court held that Veoh was protected by the DCMA for reasons noted in the opinion, it analyzed the contributory copyright infringement claim under the "site and facilities" test first announced in Fonovisa v. Cherry Auction, a test that was used to shut down Napster and hold one investor liable for the copyright infringment because that investor was able to control the start-up's funding, and directed its spending, holding significant power over Napster's operations. Unlike Napster, however, Michael Eisner was not the only investor. The Court found that the three investors who were on Veoh's Board of Directors did not either singly or with the other investors, individually control Veoh's operations to the point that would make them liable to UMG. Unfortunately for UMG, its Complaint did not make that allegation, and so the Court found that the "three investors individually acquiring one seat apiece is not the same as agreeing to operate as a unified entity to obtain and leverage majority control. Unless the three independent investors were on some level working in concert, then none of them actually had sufficient control over the Board to direct Veoh in the way UMG contends." So, the lesson here is at least two-fold. Read the copyright cases beforehand and ensure that you know how to properly plead around these issues, and if you're an investor, make sure you're not the only one, and make sure you don't work together with the other investors to control your start-up. And finally, just go ahead and pay Universal its fees to play its music.
How Many Settlements Will This Insurance Company Have To Pay?You can bet there will be a host of litigation spawned because of this accident: the death of a Mother, who was survived by her minor children and an adult daughter. But it might not be the lawsuits you're thinking. Let me explain. Mom was a passenger in a car. After she died, her oldest daughter made a claim against the driver's insurance company, and the insurance company settled without the daughter even filing suit. She told the insurance company that she was the sole heir of her mother's, and on that basis, the insurance company paid her. Apparrently someone didn't look too close at Mom's family tree - also known as a Table of Consanguinity. Mom had five other children through a different father. It may be that the oldest daughter didn't know about the other FIVE children, but stranger things have happened. She may also have truly been Mom's only heir - if the other children were written out of the will. It will likely take some time to sort this out. As you can expect from what I've told you so far and your keen sense of observation (since you know that the insurance company settled only with the oldest daughter), the FIVE children sued the driver, too. What a surprise. So, when the FIVE children sued, the insurance company said, "Oh no you don't. We already paid the sole heir, and we're not paying you anything." Well, the insurance company didn't say exactly that, but something probably quite a bit like that. The insurance company denied the FIVE children's claim, citing to the One Action Rule. No money was paid to the FIVE children. Now, if you know anything about the law, you may know about the one-action rule. That rule does provide the insurance company with a solid defense against any further payments to Mom's heirs. But, unfortunately for the insurance company, there are a couple of other elements to the One Action Rule. One of those elements requires the oldest daughter to have sued the insurance company, and then a settlement. As you know from your keen sense of observation, the oldest daugther did not sue. In fact, the insurance company settled voluntarily. Those last two facts doomed the insurance company's denial of the FIVE childrens' claim for wrongful death against the driver of the car, and ultimately his insurance company, who will now have to pay the FIVE children. You can read more about the case (and the One Action Rule) here in the case of Moody, a Minor, etc., et al, v. Bedford, et al, Cal. Court of Appeal, Second Appellate District, Division Five, No. B226074 (January 9). Now about that other litigation. Yup. You got that right. You can bet the insurance company will be suing the oldest daughter for a refund - assuming she hasn't spent all the settlement money yet.
Predictions For 2012 And Grades For Last Year's PredictionsLawyer2Lawyer Internet Radio PodcastFrom the spectacle of the Casey Anthony trial, to the great debate over the health care law, to the controversial immigration law in Arizona, 2011 was a big year in the law. Please join me and my fellow Lawyer2Lawyer co-host and attorney, Robert Ambrogi as we welcome our returning guest, Stephen L. Kaplan from the firm Hicks, Mims, Kaplan & Burns, to review his 2011 predictions and look ahead to a brand new year, 2012!
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