California Begins Taxing the Internet

Governor Jerry Brown recently signed a California bill into law that imposes the collection of taxes from consumers on sales by online retailers. The law is designed as a run around the 1992 Supreme Court decision that ruled states cannot tax businesses that are not physically within their boundaries.

This new statute would establish presence in California in two ways: either by sellers having an actual presence or related company operating in the state, or if they pay commissions to other internet sites operating in California who refer buyers. Amazon, Inc. acted quickly to alert the around 25,000 affiliate websites that it does business with in California that it would be terminating the relationships.

The California Board of Equalization says the tax will raise around $300 million a year for the cash-strapped state, but critics claim it will raise nothing because large internet retailers will simply stop doing business with the affiliate programs based in the state rather than pay the tax. Besides Amazon, Overstock.com has also told affiliates they should move to another state if they wanted to continue earning commissions.

A similar bill was passed by the California legislature last year but was vetoed by Governor Schwarzenegger when it became apparent that online retailers would simply stop doing business in the state, like they are now. Despite the online opposition, the tax is firmly supported by many retailers with brick and mortar locations, such as Walmart, Best Buy, and Barnes & Noble, who will be unaffected by the change. The president of the California Retailers Association, a major supporter of the bill, said, “You can’t give one segment of retail a 10% discount every day. It’s just not fair.”

California joins six other states, including North Carolina, that have enacted similar statutes. Lawsuits by Amazon are pending in Illinois and New York to determine the constitutionality of such laws.

For more Tax Law updates, please visit our website.

(c) Picture: renjith krishnan - freedigitalphotos.net

Bob Hagemann Named New Charlotte City Attorney

Congratulations to Bob Hagemann! He was selected as the new Charlotte City Attorney and will assume the post in January. Mr. Hagemann has served as the senior deputy city attorney for more than three years.

Hagemann earned a bachelor’s degree in political science from Northwestern University and a law degree from UNC Chapel Hill. As City Attorney, Hagemann will serve as the chief legal council to the mayor, city council and city manager.

For more informationo, please click here.

(c) Picture: Charlotte Business Journal

U.S. Supreme Court entscheidet Meinungsfreiheit umfasst auch Computerspiele

Computerspiele, auch solche mit hohem Gewaltanteil, sind von der Meinungsfreiheit geschützt und dürfen somit nicht durch Gesetz in ihrem Verkauf beschränkt werden. Dies entschied der U.S. Supreme Court am Montag und kippte damit ein umstrittenes Gesetz aus Kalifornien.

Der Rechtsstreit über dieses Gesetz dauerte seit seiner Verabschiedung durch die Regierung Schwarzeneggers im Jahre 2005 an und ging durch alle Instanzen. Das Gesetz sah ein Verkaufsverbot von bestimmten Computerspielen, in denen das „Abbild eines Menschen getötet, verstümmelt oder aber sexuell attackiert werden könne“ an Personen unter 18 Jahren vor. Zuwiederhandlungen sollten dabei mit einem Bußgeld von bis zu $1000 USD geahndet werden können.

Nun hat der U.S. Supreme Court mit einer Mehrheit von 7:2 Stimmen entschieden, dass ein solches Gesetz wegen Verstößen gegen die Meinungsfreiheit verfassungswidrig ist. In der Entscheidung hießt es, dass Computerspiele genauso wie Bücher, Filme oder auch Theaterstücke „Ideen und auch gesellschaftliche Botschaften“ enthalten. Damit unterfallen sie dem Schutz des ersten Zusatzartikels der U.S. Verfassung. Die Richter betonten dabei, dass der Staat Kalifornien nicht hinreichend belegt habe, dass Computerspiele minderjährigen tatsächlich psychischen-als auch physichen Schaden zufügen können.

Zwar bestätigten die Richter, dass dem Staat eine Verpflichtung obliege, Kinder und Jugendliche vor Gefahren zu bewahren, jedoch sei es gerade in den USA keine „Tradition“, dass Kinder vor Gewaltdarstellungen vom Staat beschützt werden. Richter Anthony Scalia verwies auf die Märchenbücher der Gebrüder Grimm. die ebenfalls sehr reich an Gewalt seien, wie er mit dem Besispiel des Töten der Hexe in dem Märchen „Hensel und Gretel“ verdeutlichte.

Als Schutz der Kinder und Jugendlichen vor Gewalt in Computerspielen gibt es in den USA ein freiwilliges Bewertungssystem der Computerspiele Herrsteller, an Hand dessen der Verbraucher den Grad der beinhaltenden gewalt einschätzen kann. Im Vergleich dazu existiert in Deutschland ein strenges Verkaufsverbot an Kinder und Jugendliche für Computerspiele, die mit "Keine Jugendfreigabe - ab 18" gekennzeichnet sind.

(c) Picture: Arvind Balaraman - freedigitalphotos.net

Supreme Court Refuses to Extend Jurisdiction Across Borders in Goodyear Case

On June 27, 2011 the United States Supreme Court handed down a decision in the case of Goodyear Dunlop Tires Operations v. Brown. This case made its way to the Supreme Court through the state courts of North Carolina.

In 2004 two North Carolina teenagers were killed in a bus accident in France. The cause of the accident was alleged to be the faulty tires manufactured in a Turkish plant by Goodyear Luxembourg, a subsidiary of Goodyear USA, an Ohio corporation. The boys’ families sued Goodyear USA in North Carolina court on the premise that although Goodyear Luxembourg did no business with the United States, the parent-subsidiary relationship with Goodyear USA provided the “continuous and systematic” contacts necessary for jurisdiction by the North Carolina courts.

The Supreme Court disagreed. In a unanimous opinion written by Justice Ruth Bader Ginsburg, the court reversed the decision of the North Carolina Appeals Court. The North Carolina court had based its ruling on the theory that the “stream of commerce” provided the Turkish plant and Luxembourg subsidiary enough contacts with the state. These connections were too tenuous the court reasoned, and were not enough to subject the companies to suit in North Carolina.

This is an important decision for international trade and business. The Obama administration and several business groups had written briefs supporting the position denying jurisdiction, arguing that if the case were allowed corporation could be sued anywhere their products are sold, even there exists no connection between the legal claim and location where the lawsuit is filed. The North Carolina court’s view of jurisdiction, they argued, would have extended jurisdiction over foreign businesses and could threaten to harm the foreign trade and diplomatic interests of the United States.

(c) Picture: Goodyear Blimp

New York State Legalizes Same-sex Marriage

Last Friday Governor Andrew Cuomo signed a bill into law making New York the sixth state to legalize same-sex marriage. When the law takes effect on July 24 it will double the number of people in the United States living in a state that allows same-sex marriage. The bill will provide same-sex couples many of the state benefits previously only recognized in traditional marriage relationships, such as several tax breaks, easier inheritance, and employer health benefits. Federal benefits, like social security and immigration issues, are not affected by the vote.

The vote came down to the wire, with many uncertain of whether or not it would pass. In the end, the Republican controlled Senate narrowly passed the measure 33-29, and the Governor signed it into law. People were speaking out on both sides of the debate after the passage, as Governor Cuomo told reporters that many in the country look to New York as a leader in progressive politics, and Columbia Law professor Suzanne Goldberg stated, “The point of civil rights laws is to protect everybody -- both the people who look like us or who we relate to and the people who don't.”

New York’s Catholic bishops released a joint statement, stating “We worry that both marriage and the family will be undermined by this tragic presumption of government in passing this legislation that attempts to redefine these cornerstones of civilization.” Many opposition lawmakers expressed concern over the potential for lawsuits against the state’s religious organizations, but an amendment was added that will protect these groups from litigation.

Although it is not the first, New York is the most prominent state to allow same-sex marriages. New York will join 5 other states in allow legal same-sex marriage. Massachusetts, Connecticut, and Iowa began allowing same-sex marriages after rulings by their state supreme courts decided that denying same-sex couples the right to marry was a violation of their rights under their respective state constitutions. Avoiding the courts, Vermont and New Hampshire passed statutes to legalize same-sex marriage in 2009 and 2010, respectively.

Alternatively, in the last decade 29 states have amended their constitutions to define marriage as between one woman and one man, and 12 additional states have passed statutes that include the same language. On the Federal side, the Defense of Marriage Act also limits the definition of marriage to one woman and one man.

(c) Picture: UBC

U.S. District Court Judge Blocks Georgia Immigration Law

On May 18, we reported on our blog about the controversial immigration bill which Georgia Governor Nathan Deal signed into law. The law was scheduled to go into effect this Friday.

On Monday, however, U.S. District Court Judge Thomas Thrash blocked the anti-immigration law from taking effect until a lawsuit by the Civil Liberties Group has been resolved. The Group asks the court to find the law unconstitutional.

After hearing arguments on the Civil Liberties Groups' request to block the law and the state's request to dismiss the lawsuit, Judge Thrash on Monday granted the request to avoid that officers are allowed to verify the immigration status of someone who cannot provide proper identification. In his 45 page order the judge also prevented the enforcement of the part of the law which would penalize those who transport or harbor illegal immigrants.

We will continue to update you on this topic, including a possible appeal of Judge Thrash's ruling by the State of Georgia.

(c) Picture: Georgia Secretary of State

New MyTSA Mobile App Aims to Make Traveling Easier for Everyone

More people are traveling now than ever before. While some people enjoy traveling and others despise it, and some travel only for business and others simply for pleasure, there is one thing that nearly everyone who must pass through the checkpoints and the lines at the airport can agree on: they do not like dealing with the TSA.

The Transportation Security Administration, or TSA, has had to frequently increase security at airports, and whenever they do so there is a predictable backlash amongst travelers. The TSA has now released its very own mobile phone App to try and take some of the stress and confusion out of the process.

The “My TSA” app will allow users to access information about their trip, such as which airports are experiencing general delays, or which items are prohibited on the airplane. The App will be able to answer questions about which items can be carried on and which must be checked, and will provide advice on topics such as packing, traveling with children, what clothes to wear to make traveling easiest, and how to travel with gifts and food. Users will also be share their wait times in line, and check ahead to see how long it took their fellow travelers to get through the security checkpoints before arriving at the airport.

TSA has the ability to update the App to give users the most up to date information, and users will be able to communicate directly with TSA through the app with specific questions about security procedures.

To get MyTSA on your mobile device, type in www.tsa.gov/mobile. You can find the MyTSA iPhone app on iTunes.

(c) Picture: TSA

IRS and Swiss Banks are Closer to a Settlement on Bank Secrecy

For most Americans a Swiss bank account is one of those things that everyone perceives as a sign of wealth and prestige. Keeping your money safe, secure, and most importantly secret, at an office in Zurich or Geneva was supposed to be the pinnacle of security for the funds of the rich. The reason for these types of accounts was to keep the IRS from collecting taxes on the assets. The United States employs a citizenship tax system, which means that it taxes its citizens for the income they earn the world over. This is where the secrecy of a Swiss bank account is valuable to American clients. The IRS has been fighting the banks who keep these secret, “off-shore” accounts for Americans for years. Due to the last few years of financial difficulty the world over the IRS and the U.S. government are putting increased pressure on the Swiss banks to divulge their American client lists, and threatening large fines if they fail to comply.

It seems that the two sides are close to an agreement. Swiss and U.S. officials are now in the advanced stages of forming a “global resolution”, and an announcement may be made as early as July. The deal is likely to be something like this: the Swiss banks will pay a large fine, discontinue any undeclared off-shore banking activity with U.S. clients, and turn over the names and account numbers of any U.S. clients that had previously held taxable assets in Switzerland. In return, the IRS will agree to discontinue any investigation into the banks themselves regarding their alleged contributions to U.S. tax evasion. The banks would also be allowed to continue operating in the United States.

So what is the future of off-shore banking in Switzerland? Well, if something like the agreement described above is finalized it will be a large blow to the Swiss banking tradition, which is founded on client confidentiality. Although the popular picture of the iron-clad, numbered Swiss bank account may be somewhat tarnished, it will not disappear all together. This resolution will likely only affect the larger banks that have significant interests in the United States, and therefore must be worried about what the U.S. government may do to them. Facing criminal fines and the possible revocation of their licenses, they will probably pay the fine and continue on with business. However, smaller Swiss banks that have only local ties and no real presence in the United States will probably not participate in the resolution, choosing instead to accept the increased scrutiny from the IRS and the Justice department in an attempt to win clients and maintain one of the traditions that Switzerland is known for.

*This article was contributed by our Summer Associate, Mark Van Wieren, a rising 3L at Wake Forest School of Law.

(c) Picture: Swiss National Bank headquarters

SC House Passes Controversial Immigration Bill

As previously reported on our blog, controversial immigration laws have been passed in Arizona, Georgia, Utah, and Indiana. On Tuesday, South Carolina became the fifth state whose House of Representatives agreed to a new parliamentary bill concerning illegal immigration. The lawmakers sent this new immigration bill to Governor Nikki R. Haley for her signature.

The South Carolina immigration bill requires business owners to verify an employee's immigration status through a federal electronic database known as E-verify. The new bill also requires law enforcement officers to check the immigration status of drivers they pull over or suspect of breaking the law. In addition, the new bill creates a new law enforcement unit within the Department of Public Safety to enforce state immigration laws.

The discussion about the bill is as controversial as in other states, like Arizona and Georgia, and the opponents already have announced their resistance against the bill. However, a spokesperson for South Carolina Gov. Nikki R. Haley has already confirmed that the Governor will sign the bill into law.

More Immigration Law news and updates can be found on our firm’s website.

(c) Picture: South Carolina Legislature

Supreme Court Throws Out Class-Action Lawsuit Against Walmart

On Monday, the Supreme Court threw out the huge class-action sex discrimination lawsuit against corporate giant Walmart.

As previously reported on our blog, it was one of the biggest lawsuits in American history. Over 1,5 million former or current female employees wanted to sue Walmart because of sex discrimination in Walmart’s pay and promotion policies. The plaintiffs complained that women at Walmart are paid less than men in comparable positions despite greater seniority and higher performance ratings, and that women receive fewer promotions to in-store management positions than men do.

First, the Court had to answer the question whether or not the lawsuit satisfied the requirement of the class-action rules that “there are questions of law or fact common to the class” of female employees. The Court’s five more conservative Justices said no, thereby shutting down the lawsuit.

Consequently, the Court did not reach the question whether Walmart's pay and promotion polices discriminate on the basis of sex. The Court merely ruled that the action could not proceed in its current form since the plaintiffs had not demonstrated that there is such a discriminatory policy at the 4,000 or so stores Walmart operates around the country.

The Supreme Court's ruling is a major victory for Walmart. Of course, every single woman can pursue her claim against Walmart individually. However, that course of action is much more complicated and expensive than joining a class action.

Business groups welcomed the Court's decision because it forces plaintiffs in big, ambitious class actions against an employer to evidence a nationwide practice or policy that hurt the class. Consumer groups, on the other hand, strongly criticized the ruling as a striking blow to those who face discrimination in the workplace to be able to join together and hold companies, especially large companies, accountable for the full range of discrimination they may be responsible for.

We will keep you posted as the discussion about this decision will continue.

(c) Picture: Walmart

NC Appeals Court Stays Order Taking Primary Custody from Mom with Breast Cancer

On June 15, the North Carolina Court of Appeals granted a temporary stay in the case of Aliana Giordano.

As previously reported on our Facebook page, the women with advanced breast cancer lost the primary custody of her two children in April 2011. A Durham County judge ruled the children were better off with her father in Chicago due to Aliana's uncertain prognosis. Since the judge was quoted as saying, Giordano’s health was one of many factors in the ruling, more than 21000 people have ‘liked’ a Facebook petition calling for the Governor of North Carolina, Bev Perdue, to overturn the decision.

As a consequence of the temporary stay by the North Carolina Court of Appeals, Giordano will not have turn her children over to their father next week. In a written statement the mother said, she is very pleased to hear the news about the stay. The appeals court now has to decide whether to extend the stay of the children with their mother for the entire appeals process. No date has been set yet for that decision.

(c) Picture: Nutdanai Apikhomboonwaroot - Freedigitalphotos.net

Deutscher Autobauer Audi von US-Rapper Eminem verklagt

Unerlaubte Verwendung seines Hits "Loose Yourself" wirft der US-Rapper Eminem dem deutschen Autobauer Audi vor. Audi soll den Song unerlaubt in seinem Werbespot für den neuen Audi A6 Avant verwendet haben.

Vor dem Hamburger Landgericht reichte Eminems Musikverlag "Eight Mile Style" nun Klage wegen Urherberrechtsverletzung gegen Audi ein. Die Wahl des Gerichts ist kein Zufall; es gilt als urheberfreundlich. Viele Rechteinhaber entscheiden sich daher ganz bewusst für eine Klage in der Hansestadt.

Von Seiten des Autobauers heisst es, der Spot sei ausschließlich für die Weltpremiere des Autos in Berlin produziert und nur dort vor einigen hundert Gästen gezeigt worden. Wie der Clip den Weg ins Internet fand, sei unklar.

Den ganzen Artikel lesen Sie bitte hier.

(c) picture: http://www.audi.de/de/brand/de.html

Familie wegen Verkauf von iPhone-Zubehör verklagt

Beim Thema Produktpiraterie versteht Apple keinen Spaß. Ein amerikanischer Teenager, der weiße Schalen fürs iPhone 4 verkaufte und damit rund 130.000 US-Dollar verdient haben soll, bekommt das gerade zu spüren.

Der Blog "Mac Rumors" beschreibt, wie das Unternehmen den Jungen und seine Eltern verklagt. Den Gewinn abtreten und Schadensersatz zahlen sollen sie; es sei denn, Apple und die Familie einigen sich. Ob das schon geschehen ist und um welche Summen es dabei geht, bleibt unklar.

(c) Picture: Salvatore Vuono - freedigitalphotos.net

SCAM ALERT: Annual Minutes Requirement Statement Solicitation

ATTENTION NC BUSINESSES: The Secretary of State’s Office has issued a Scam Alert Regarding National Business Register.

The Secretary of State's Office has become aware that an entity, "Compliance Services," has mailed solicitations titled "Annual Minutes Requirement Statement" to business entities in North Carolina.

These solicitations offer to process corporate meeting minutes on behalf of the corporation for a fee of $125.00. Despite the implications contained in the solicitations, North Carolina business entities are not required by law to file corporate minutes with the North Carolina Secretary of State's Office. This document is not affiliated with our office or any other governmental Set agency.

For more information, please visit the NC Secretary of State website.

Should you have any further corporate law questions, please visit our website or contact our Charlotte office at 704.333.5230.

(c) Picture: idea go - freedigitalphotos.net

SCAM ALERT Regarding National Business Register

ATTENTION NC BUSINESSES: The Secretary of State’s Office has issued a Scam Alert Regarding National Business Register.

The Secretary of State’s Office has discovered an apparent attempt to defraud North Carolina businesses. The “National Companies Register Corporation” is mailing “Important Final Notices” to North Carolina businesses in an effort to collect $487.00 on the premise that businesses are required to nationally register under the Patriot Act of 2001.

This notice contains elements of the North Carolina Seal and the website is capable of directing you to the North Carolina Secretary of State’s corporate search webpage. Be assured, no such governmental national registry exists.

Moreover, on December 27, 2007 North Carolina Secretary of State Elaine F. Marshall and North Carolina Attorney General Roy Cooper enjoined Bernd A. Taubert, doing business as National Business Registration and National Companies Registrar Corporation in a Temporary Restraining Order in North Carolina Superior Court for Deceptive Trade Practices in order to prevent further violations of law and further harm to businesses in North Carolina.

To see a copy of the Restraining Order go to this link: http://www.sosnc.com/TempRestrainingOrder.pdf

If you receive a fraudulent notice to register your business in a national database to avoid dissolution of your corporation, please do the following:

1. Keep the notice, mailing envelope and return envelope.

2. Contact the United States Postal Inspections Service to report mail fraud at:
877-876-2455 or http://postalinspectors.uspis.gov (investigations drop down menu – mail fraud – file a complaint)

3. Contact the North Carolina Department of the Secretary of State, Attention: Horace Farrar at 919-807-2040 or email at hfarrar@sosnc.com

You may check your business status anytime through the North Carolina Secretary of State’s website at www.sosnc.com and link to the Corporations Division webpage.

Should you have any further corporate law questions, please visit our website or contact our Charlotte office at 704.333.5230.

(c) Picture: idea go - freedigitalphotos.net