Category Archives: Politics and Current Events

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Congress wants to protect your right to complain about bad service and products

Earlier this year Aaron wrote an article on companies suing customers for defamation resulting from bad reviews on sites such as Yelp. In order to further curb these bad reviews, companies with products that have agreements or terms of use had been adding “non-disparagement” clauses to consumer contracts. These clauses sought to fine those who posted negative reviews or ban customers from making them. Congress may soon put a stop to this practice.

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Thankfully For Plaintiffs, Halliburton Can Still Defraud the Entire Market

Halliburton Co. v. Erica P. John Fund was finally decided this summer (for background on this case, including the issues, see my first two articles on the case here and here) and the presumption of reliance on the integrity of the stock price that was created in Basic v. Levinson was upheld. The fraud-on-the-market theory is alive and well. Halliburton (the petitioners to the Court and the defendants in the class action) also lost on their request to require that plaintiffs in securities class actions prove “price impact” at the class certification stage. They won a small victory by granting defendants in securities class actions the ability to rebut the presumption of an efficient market at the class certification stage so they will no longer have to wait until arguments are made on the merits of the case in order to address it.

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Bitcoins are Property, Not Replacements for the Dollar

When the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) announced its rules for Bitcoin and other “cryptocurrencies” a little over a year ago, observers knew it was only a matter of time before the IRS would follow suit with its own guidance on how to treat virtual currencies for tax purposes.  This past Tuesday the Service finally did so, releasing Notice 2014-21 which clarifies the Service’s position on how to properly report transactions involving Bitcoin and other virtual currencies, effectively killing any chance of Bitcoin’s widespread adoption as a substitute for official currency in the US.

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The Fourth Amendment and License Plate Scanners

I was watching my favorite daily car news show, Fast Lane Daily, today and ran across  mention of police using license plate scanners on traffic. They do this to be alerted to potential crimes and violations such as cars wanted in connection with an amber alert. There Derek D., the host, states that the practice violates the Fourth Amendment to the US Constitution. I think this claim needs to be fleshed out a little bit so that people don’t have an incorrect understanding as to why this Fourth Amendment claim is being made.

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Bad Reviews are not Defamation

It’s an unavoidable fact of running a business that, sooner or later, a customer will be dissatisfied.  Decades ago this would have meant that they told a few of their friends, but today it can often mean a negative review on any one of a number of widely trafficked consumer review websites like Yelp.

When the inevitable happens, there are a few ways you can handle it.  For example, if you want to avoid bad publicity, you can simply ignore the review or respond calmly and professionally.  If you don’t mind things potentially blowing up in your face, you can respond angrily and irrationally.  And, of course, if you actively want things to go south in a great big hurry, you can do what a watch repair shop in New York did and threaten to sue the person leaving the unflattering review for defamation. Continue reading

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Fraud on the Market

Imagine that you bought 1000 shares of stock in Jimmy Co., a large publicly traded pharmaceutical company at $50 per share. Before you bought your stock, Jimmy Co.’s officers had been claiming that a new drug that was being developed would greatly enhance the ability to treat the plague. They predict that the drug will sail through the FDA testing because the drug is perfectly safe and the manufacturing process is up to code. They will get approval and be on the market in two years. Their stock price has been rising ever since that announcement and is now where you bought it, at $50. Continue reading

Deferred Prosecution Agreements and Tax Write-Offs

Earlier today the US Department of Justice announced that it has reached a deferred prosecution agreement with Toyota Motor Corporation regarding the “unintended acceleration” issues that owners of certain models claim to have experienced back in 2009 and 2010.  The announcement is of little note; as with most announcements of its kind it represents a chance for the DOJ to publicize itself and it is understandably a bit over-eager to praise the victory for safety.  The agreement itself, however, is interesting as Toyota has agreed to treat the $1.2 billion settlement amount as a penalty paid to the US government, including for tax purposes.  The upshot is that Toyota will not be able to take a tax deduction or credit for paying the settlement. Continue reading