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There is a critical federal statute that all insurance litigators should be aware of when their case is “removed” from a State trial court to a federal court. Insurance companies often remove State court cases to the federal system to take advantage of what they apparently believe is a strategic advantage. Although this perceived advantage may or may not exist, all aggressive insurance attorneys should know how to fight back.

First, you should know that there is a presumption against federal court jurisdiction. By statute, a federal district court must send any case that lacks subject-matter jurisdiction back to State court. 28 U.S.C. §1447(c). And although a plaintiff usually has only thirty days to object to a defendant’s “removal” of a State case to federal court, an objection based on the federal Court’s lack of subject matter jurisdiction can be raised at any time before final judgment, even in the middle of a trial. 28 U.S.C. §1447(c). Federal courts routinely make thorough examinations of subject matter jurisdiction early in a case in order to avoid wasting resources on a case that ultimately needs to be sent back to State court.
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Silverman Thompson lawyers Bill Sinclair and Anna Skelton recently convinced a New Jersey federal judge that he should compel arbitration of their suit, effectively dismissing a federal complaint. The plaintiff, Precision Funding Group, sued its competitor, National Fidelity Mortgage, for alleged interference with contracts and business opportunities (among other business torts). PFG based its complaint in large part on the actions of two former employees who left PFG to work for NFM. In addition to its suit against NFM, PFG initiated arbitrations against its former employees pursuant to a clause in their employment agreement, drafted by PFG, that required mandatory arbitration.
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For users of the popular Pandora Internet Radio website, the day the music dies has been delayed for at least a few more years. That’s thanks to U.S. District Court Judge Denise Cote of the Southern District of New York, who earlier this month saved the music service from being stripped of its rights to play songs owned by major record companies Sony/EMI, Warner, Universal, and BMG. It’s a case showing that the ever-shifting legal landscape regarding online music consumption is still in many ways tied to the Golden Age of Radio.

For those who aren’t familiar (and if you’re a music fan, definitely check it out), Pandora works by playing songs that correspond to a general type of music or artist that the user selects. The listener can give positive or negative feedback for each song that plays, allowing the site to narrow its selections to songs that the listener is more likely to enjoy. Along the way, links are provided so that users can easily buy the songs or albums from online retailers. Combined with its popular streaming service and mobile app, this nifty little audio experiment has turned into big business: Pandora reportedly has more than 150 million registered users and is valued at $2.6 billion, having pulled in $427.1 million in revenue is Fiscal Year 2013.
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Section 230 of the Communications Decency Act of 1996, 47 U.S.C.A. § 230, (CDA) provides online businesses a refuge from civil liability that could otherwise arise from content posted to a website, online blog or other social media platform by a third party. Specifically, § 230(c) of the CDA immunizes providers of interactive computer services against liability arising from content created by third parties, stating: “No provider … of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” 47 U.S.C. § 230(c).

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Depending on the nature of your business, your employees may routinely handle or have access to information that is subject to privacy protection or financial/securities regulations under various federal and state laws. Improper handling or disclosure of statutorily-protected or otherwise private information could potentially result in (1) statutory and privacy violations and (2) civil liability exposure for your business generally and for your employees individually.

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The processes of setting and communicating prices are two of the most fundamental roles of a business. Price affects a business’s sales, revenue, investment returns, and ultimately profit. As a result, the term “price fixing” has a strong negative connotation, and deservedly so. Restrictions on price competition represent actual threats to the economy, and they carry the possibility of harsh penalties. However, the term sometimes may be misused in reference to pro-competitive, legal conduct, which actually may be beneficial for businesses and consumers.

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Delaware law permits a court to pierce the corporate veil of a company and hold its owners personally liable “where there is fraud or where [the corporation] is in fact a mere instrumentality or alter ego of its owner.” See, e.g., Geyer v. Ingersoll Publ’ns Co., 621 A.2d 784, 793 (Del.Ch.1992). In order to state a claim for piercing the corporate veil under the “alter ego” theory, a party must show (1) that the corporation and its principals sought to be held liable operated as a single economic entity, and (2) that an overall element of injustice or unfairness is present. See, e.g., Trevino v. Merscorp, Inc., 583 F.Supp.2d 521, 528 (D. Del. 2008) (applying Delaware law). The fraud or injustice that must be demonstrated in order to pierce the corporate veil must be found in the principal’s use of the corporate form. See Mobil Oil Corp. v. Linear Films, Inc., 718 F. Supp. 260, 267 (1989); Blair v. Infineon Technologies AG, 720 F. Supp. 2d 462, 473 (D. Del. 2010).
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Generally, it is the rule that a corporate director is not personally liable for the misconduct of co-directors where he or she has not participated in the misconduct. See, e.g., Seale v. Citizens Sav. & Loan Ass’n, 806 F.2d 99 (6th Cir. 1986). Corporate officers and directors can only become personally liable if they directly authorize or actively participate in the wrongful or tortious conduct complained of by a third party. See, e.g., Taylor-Rush v. Multitech Corp., 217 Cal. App. 3d 103 (1990). In other words, directors ordinarily will not be held liable for wrongdoing over which they have no practical control. See, e.g., Myers & Chapman, Inc. v. Thomas G. Evans, Inc., 89 N.C. App. 41 (1988).
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File your tax returns. A week from now will be too late. It can be cumbersome, stressful and certainly annoying. But it’s one of those things in life. Do it and be done with it. Some added incentives to filing:
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Very soon, the federal government could know what you bought for dinner last night, or whether you and your wife are having a nasty email fight about something very personal-and they could know this all because of CISPA-The Cyber Intelligence Sharing and Protection Act of 2013. If you’re using gmail, Google might already know this information, but our Constitution has traditionally protected us from the federal government getting its hand on such intimate, personal information without a warrant or court oversight.

CISPA is a bill that will be voted upon very soon in the U.S. House of Representatives; it allows for voluntary information sharing between private companies and the federal government. The bill’s language and provisions continue to be amended and shaped in closed-door, secret meetings by the U.S. House Intelligence Committee. In principal, the bill is supposed to prevent cyber-attacks. But it does this through sweeping, unprecedented information sharing provisions that allow and in fact encourage private companies, like Facebook and Google, to turn over every intimate detail they’ve collected about you from your online activities, your emails, your texts, your shopping habits, your web-browsing activities, etc., to the US government.

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Sure, we’ve all heard that mobile software applications collect more personal data from our smart phones than they need to or should; and the mobile apps’ privacy policies are such a byzantine morass, none of us read them anyway. But the news that the most popular children’s mobile software apps are surreptitiously collecting and then selling to dozens, even hundreds, of marketers and third parties exactly where our children are at all times, what their mobile phone numbers are, and where exactly they go and what they do online, and that this all being done without notice to parent or child…well that creeps out even the most jaded adult.

Yesterday, December 10, 2012, the Federal Trade Commission released a detailed Report replete with research and data that demonstrates the most popular mobile software apps designed for, marketed to, and used by our children are doing all of this, and in so doing, may be running afoul of numerous federal and state consumer protection/deceptive advertising and privacy laws.

The 12/10/12 Report is a follow-up to a February 2012 FTC report wherein the FTC surmised that there may be significant privacy issues with mobile apps designed for and targeted to children. After releasing the February 2012 report, the FTC did its homework: it investigated 400 popular children’s mobile software apps; it reviewed the apps’ stated privacy policies; and it tested the apps’ actual data collection and tracking practices. What it found is troubling, to say the least.
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Jennifer O’Brien, a tenured New Jersey public school elementary teacher with 13 years of teaching experience and a master’s degree in education, was teaching a class of 23-first grade students (all of whom were minorities and mostly six-years old), when she posted on her own, private Facebook page these comments about her job to her 300+ Facebook friends and their friends of friends, “I’m not a teacher-I’m a warden for future criminals!” O’Brien didn’t stop there; she later posted to Facebook, “They had a scared straight program in school-why couldn’t [I] bring [first] graders?”

When NJ school officials came across the Facebook post and confronted O’Brien, she said she didn’t intend her comments to be offensive or racist statements, but otherwise she essentially was unrepentant. Parents were deeply concerned and angered by O’Brien’s Facebook posts; protests formed outside of the school attended by dozens; and parents demanded their children be removed from O’Brien’s classroom. O’Brien was dismissed from her position; her dismissal was affirmed by an Administrative Law Judge (ALJ); and ultimately, O’Brien appealed to a NJ state appellate court. O’Brien argued that her dismissal constituted a violation of her First Amendment rights of free speech because (1) her comments addressed a matter of legitimate public concern, i.e., school discipline, and (2) because her comments were made on her private Facebook page, they were protected speech.
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United States citizens have an obligation to report to the IRS on Schedule B of their U.S. Individual Income Tax Return, Form 1040, whether they had a financial interest in, or signature authority over, a financial account in a foreign county in a particular year by checking “Yes” or “No” in the appropriate box and identifying the country where the account was maintained. They further have an obligation to report all income earned from foreign financial accounts on the tax return and to pay the taxes due on that income.
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In this economy, many small businesses continue to struggle just to stay afloat and, out of desperation, find means of shuffling business funds around to pay immediately due bills and put off paying others. Some business owners have used employment tax withholding to use the government as a bank to ‘borrow the money for a short while’ during financially difficult times with good intentions to pay it back later. Others have been prosecuted for collecting employment taxes from their employees and willfully failing to pay them to the IRS. Former IRS Commissioner Mark W. Everson has stated that the “failure to pay employment taxes is stealing from the employees of the business.”
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Maryland Offices:
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