12 Laws That Will Affect Your Business in 2012

 

By: David Mielach

 

The calendar won't be the only thing changing for small businesses when the clock strikes midnight this New Year's Eve.  According to Paychex, a leading provider of payroll, human resources and employee benefit services, small businesses will have to look out for 12 regulatory changes in 2012 that will change the way they operate.   

 "Some of these issues will lead to changes that are made legislatively, and others may be changed through simple rule modifications," said Martin Mucci, Paychex president and CEO. "Regardless of the level of attention they receive, changes to each of these issues could require business owners to make significant adjustments to the way they manage their businesses."

According to Paychex, the following areas where regulatory changes may occur are:

• Job Creation Changes - The recent extension of payroll-tax cuts for an additional two months  highlights the potential changes surrounding job creation, as it includes a recapture provision for employees earning more than  $18,350 in wages during the two-month extension.  Additionally, new legislation under President Obama's Jobs Bill may go into effect in the new year that would help fund infrastructure projects and encourage entrepreneurs and small businesses to start up by allowing access to capital.
• Worker Classification Changes - In 2012 several states will be enacting stricter legislation to more-heavily fine companies for misclassified workers. 
• Deficit Reduction Changes- Business- and personal-tax reforms may be put into place in the new year as the government tries to reduce record spending.
• Immigration Reform Changes -In the new year, efforts aimed at cutting down on the employment of illegal immigrants will increase. Many state laws will require private sector employers to use the federal E-verify system to determine employment eligibility.
• Employment Law Changes - The United States Department of Labor and many states are considering enacting new laws aimed at clarifying minimum wage and overtime requirements on the part of employers so workers better understand what they are owed. 
• Security and Privacy Changes - With incidences of cybercrimes on the rise in recent years, many states are enacting privacy and security measures to prevent further breaches in companies.
• Dodd-Frank Changes - New financial regulations may hurt small businesses as banks may limit the availability of credit or capital.  These regulations could also create higher fees for businesses that borrow, as a result of limited availability.
• Health Insurance Changes - With the outcome of the Affordable Care Act still unknown, as it is being debated in the Supreme Court, many businesses may be greatly affected by the potentially new legislation. 
• Unemployment Insurance Changes - If Congress reinstates the federal unemployment surtax, as it is considering doing, many businesses would see higher unemployment-tax costs. Additionally, many states may add more-detailed employer reporting requirements as they attempt to decrease unemployment insurance fraud.
• 401(k)Benefit Changes - The new year will also bring added fee disclosures for 401(k) providers. Additionally new laws will broaden who can be considered a plan fiduciary, make advice more accessible and restrict how many loans an employee can take from their 401(k). 
• Tax Changes - 2012 will bring tax changes ranging from a higher Social Security wage base to transportation and adoption-assistance-benefit limits.
• W-2 Form Changes - In 2012, employers filing 250 or more W-2 forms  in the past year will need to include the cost of employer-sponsored health coverage on the 2012 W-2 form.

 
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New year will bring new laws and regulations for small business

By Cyndia Zwahlen

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In California, the new rules include limits on the ability of businesses to check the credit reports of workers and job seekers. Nationwide, tax deductions for equipment purchases will be sharply reduced.

Small-business owners will be greeted Jan. 1 with dozens of new laws and regulations.

In California, they will include new mandates concerning employees, including a partial ban on checking the credit reports of workers and job applicants.

And it's no surprise that there are changes at the federal level too.

Here's a guide to some of the new laws and regulations set to go into effect in 2012.

Federal taxes

As of January, there will be a major decrease in how much of the total cost of new equipment — including items such as computers, machinery and vehicles — a business can deduct upfront on its tax return.

That deduction, which had been boosted by federal stimulus bills, will drop to $125,000 from $500,000. And unless there is a change in the law, the deduction will drop further to $25,000 in 2013.

Also, the Internal Revenue Service will have a new tool to catch businesses that don't report all their sales income. In 2012, the tax agency will require credit card processing companies and third-party payment services, such as PayPal, to report how much money they handle for merchants.

This doesn't apply to small operations. The new rule is in effect for businesses that process more than $20,000 in payments in a year and have more than 200 transactions.

This rule could have its biggest effect on online sellers.

"It's going to be a surprise to people who have small businesses on the Internet that have probably not been reporting anything at all," said Lynn Freer, president of Spidell Publishing Inc. in Anaheim, which publishes Spidell's California Taxletter.

•Accessibility rules

The Justice Department announced in 2010 new rules for how the 1990 Americans With Disabilities Act is to be implemented. Some go into effect March 15.

For example, under the original standards, one van-accessible parking space was required for every eight accessible parking spaces. The new rule calls for one for every six spaces. In general, however, a business complying with the former rules will not have to redo the parking spaces to conform to the 2010 standards.

Another new rule requires new or altered buildings to have light switches and thermostats mounted 48 inches above the floor. The old rule was 54 inches.

Hotels and motels of all sizes will be required by new regulations to provide more specific details on accessible and inaccessible features in their rooms. And they will have to hold all the accessible guest rooms until all other rooms of the same type — for example, those with two-double beds — have been reserved.

This has met with some opposition from the hotel industry.

"Once you start chopping up the room types for these particular customers you will have some more vacant rooms because of how the puzzle works," said John Manderfeld, president of the California Lodging Industry Assn.

There are also new standards for swimming pools, bowling alleys and other locales. Small businesses may qualify for a tax credit to help cover the costs of compliance.

California laws

As of January, employers will be banned from checking the credit of non-managerial employees and job applicants. There are some exceptions, including employees who handle confidential information.

Businesses will be required to provide new hires with additional, more detailed information about their pay and other matters, such as contact information for the workers' compensation insurance carrier.

For companies that want to include social benefits in their missions, there will be a new type of corporate structure. These firms, called B corporations (the "B" is for Benefit) that don't make decisions solely based on profit, will be more protected from shareholder suits.

And a new law boosts the penalty for misclassifying an employee as an independent contractor — a hot-button issue in California.

All in all, the new rules — whether state or federal — are not welcomed by many small business owners, especially if they add paperwork and scrutiny.

"Controls are important, but [regulators] made it impossible for us," said Joanne Weinoe, owner of Golden State Magnetic & Penetrant Lab Inc. in Arleta. "At what point do they not realize we are the ones keeping everything going?"

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New Ga. law requires safety features on golf carts

By AP

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ATLANTA (AP) — Golf cart owners in Georgia will soon have stricter requirements to follow if they plan to drive their carts on roadways.

A new law taking effect Jan. 1 creates a separate classification of personal transportation vehicles for golf carts. It also sets standards for towns and counties wanting to create ordinances allowing drivers to use the carts on residential streets and multi-purpose pathways. The law requires that golf carts have braking systems, a reverse warning device, tail lamps, a horn and hip restraints.

The carts must weigh less than 1,375 pounds and not top speeds of 20 mph. The carts must also be registered with the Department of Motor Vehicles.

The bill was signed into law by Gov. Nathan Deal this year after his predecessor, Gov. Sonny Perdue, vetoed a similar measure last year. It had backing from one of Georgia's key industries — golf cart manufacturing.

The Georgia-based International Light Transportation Vehicle Association, formerly known as the National Golf Cars Manufacturers Association — which prefers the term "car" to "cart" — estimates that 90 percent of the golf carts used in the U.S. are made in Georgia.

"Safety is what we're concerned about," said Fred L. Somers Jr., secretary of the association. "Unless you put in some safety equipment accessories, you're just asking for trouble."

And, he added, golf carts are a cheaper form of transportation for people who live in cities where they don't need to travel far to go to the grocery store.

Just 23 Georgia cities have golf cart ordinances, with some places like Peachtree City near Atlanta and Hahira in South Georgia creating golf cart lanes along local roadways, according to the Georgia Municipal Association. Spokeswoman Amy Henderson said the ordinances began popping up a couple of years ago when gas prices spiked, pushing people to cheaper alternatives for getting around town.

State lawmakers who sponsored the legislation did not return requests for comment.

Other laws going into effect next week include a measure allowing cities with 911 centers to require retailers selling prepaid cell phones to charge a fee to support the emergency systems. Towns can charge businesses up to 75 cents per sale, though the fee doesn't apply to sales of $5.00 or less.

Key parts of Georgia's new law targeting illegal immigration are also set to take effect. Starting Jan. 1, any employer with 500 or more employees will have to use a federal database called E-Verify to check the employment eligibility of all new hires.

The mandate is being phased in with smaller businesses that have 100 or more employees required to use the database starting July 1, and companies with more than 10 employees to start using E-verify by July 2013.

Employers with 10 or few employees are exempt from this requirement.

The law's sponsor and supporters said they wanted to deter illegal immigrants from coming to Georgia by making it tougher for them to work in the state. Already, any company with a federal contract is required to use E-Verify, and Georgia has required state and local government agencies and their contractors to use the database since 2007.

But the new law could cause trouble for many businesses, experts say.

"Many Georgia businesses are confused with respect to the provisions of the law that have to do with E-Verify," said Atlanta lawyer Teri A. Simmons, who advises businesses on immigration and employment matters. "Within most businesses, human resources professionals are already dealing with so much that it's hard to also fit in E-Verify training and administration."

When Georgia's governor signed the law in May, Georgia joined Arizona and several other states that have recently enacted tough laws taking aim at illegal immigration. Federal judges have since blocked all or parts of the various laws, and Arizona's is headed to the U.S. Supreme Court next year.

Also taking effect Jan. 1 is a provision that any agency administering public benefits must require each applicant to provide at least one "secure and verifiable document." A list of acceptable documents was provided by the attorney general's office over the summer.

The new law also instructs the state agriculture department to submit a report to the governor and the heads of each chamber of the state Legislature by Jan. 1. The department was tasked with examining the effect of immigration on the state's agriculture industry and providing suggestions to reform a federal guest worker program. The department also was supposed to evaluate the feasibility of a state guest worker program.

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Federal Judge Dismisses $1 Billion Suit Against Microsoft

Novell sued in 2004, claiming Microsoft duped it into developing the once-popular WordPerfect program for Windows 95, only to pull the plug so Microsoft could gain market share with its own product

A federal judge on Friday dismissed a Utah company's $1 billion federal antitrust lawsuit against Microsoft Corp. after a jury failed to reach a unanimous verdict in a case so important to the computer giant that it put Bill Gates on the stand for two days last month.

Novell Inc. sued the software giant in 2004, claiming Microsoft duped it into developing the once-popular WordPerfect writing program for Windows 95 only to pull the plug so Microsoft could gain market share with its own product.

Novell says it was later forced to sell WordPerfect for a $1.2 billion loss.

The trial began two months ago with jurors getting the case on Wednesday. After much confusion, and some perplexing questions from the panel, they told U.S. District Judge J. Frederick Motz they were deadlocked by early Friday evening.

He repeatedly asked them if they could keep trying.

"This has been a very long and expensive case," Mott told the panel.

Novell attorneys pleaded with Mott to give the panel just one more day. In the end, however, jurors said they were "hopelessly deadlocked." Mott dismissed the case and sent them home.

Novell now has little to show for a decade of work. It wasn't immediately clear if Novell attorneys would seek a new trial.

Microsoft lawyers have argued that Novell's loss of market share was its own doing because the company didn't develop a compatible WordPerfect program until long after the rollout of Windows 95. WordPerfect once had nearly 50 percent of the market for word processing, but its share quickly plummeted to less than 10 percent as Microsoft's own Office programs took hold.

Gates testified last month that he had no idea his decision to drop a tool for outside developers would sidetrack Novell. Gates said he was acting to protect Windows 95 and future versions from crashing.

He said that the company's preferred Word software was superior to WordPerfect, which was a "bulky, slow, buggy product" that did not integrate well with Windows 95.

Novell could have worked around the problem but failed to react quickly, he said.

Novell has argued that Gates ordered Microsoft engineers to reject WordPerfect as a Windows 95 word processing application because he feared it was too good.

Novell's lawsuit is the last major private antitrust case to follow the settlement of a federal antitrust enforcement action against Microsoft more than eight years ago.

Novell is now a wholly owned subsidiary of The Attachmate Group, the result of a merger that was completed earlier this year.

By, Paul Foy 

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Comcast CEO Agrees To $500K Settlement With Antitrust Regulators

Comcast Corp. chairman Brian Roberts has agreed to a pay a $500,000 civil penalty in an antitrust suit in Washington that alleged he violated reporting and waiting requirements before acquiring company stock, the U.S. Justice Department said.

The Justice Department, acting at the request of the Federal Trade Commission, filed suit today against Roberts in U.S. District Court for the District of Columbia. The government simultaneously filed settlement documents that a judge will review. The case is assigned to U.S. District Judge Colleen Kollar-Kotelly.

Prosecutors said in the complaint (PDF) that Roberts, chairman and chief executive officer of Comcast, violated the notification requirements of the Hart-Scott-Rodino Act of 1976. The law contains notification and waiting period provisions that address acquisitions that result in holding stock or assets above a certain value.

The complaint said Roberts failed to comply with the notification requirement before acquiring Comcast stock as part of his compensation beginning on Oct. 22, 2007. Roberts did not notify DOJ and the FTC before acquiring the Comcast shares, the complaint said.

DOJ lawyers said in court papers the "notification and wait period are intended to give the federal antitrust agencies prior notice of, and information about, proposed transactions. The waiting period is also intended to provide the federal antitrust agencies with an opportunity to investigate a proposed transaction and to determine whether to seek an injunction to prevent the consummation of a transaction that may violate antitrust laws."

A lawyer for Roberts, Michael Sohn, counsel in the Washington office of Davis Polk & Wardwell, declined to comment this afternoon. The FTC said in a statement that Roberts in August 2009 made a corrective filing. Roberts, according to the FTC, admitted to inadvertent violations of the law's filing requirements in 1999 and in 2000. He was not charged for the earlier violations.

Addressing the $500,00 settlement, the FTC said in a statementthis afternoon: "The amount of the fine was limited by a number of factors, including that the violation was inadvertent and technical; that it was apparently due to faulty advice from outside counsel; that Roberts did not gain financially from the violation; and that he reported the violation promptly once it was discovered."

by Mike Scarcella

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SEC Charges Six Former Fannie and Freddie Executives with Securities Fraud

The U.S. Securities and Exchange Commission today charged six top former executives of Fannie Mae and Freddie Mac with securities fraud, alleging that they knowingly approved misleading statements about the government-sponsored entities' holdings of risky mortgages.

Among those charged are former Fannie Mae CEO Daniel Mudd and ex-Freddie Mac Chairman of the Board and CEO Richard Syron in suits filed in U.S. District Court for the Southern District of New York.

Both Fannie and Freddie entered into non-prosecution agreements with the SEC, agreeing to accept responsibility for their conduct and not to dispute an agreed-upon statement of facts—but also without admitting nor denying liability. Each also agreed to cooperate with the SEC's litigation against the former executives.

Neither entity will pay a fine to the government, though they face multiple private suits by investors. The SEC is seeking financial penalties, disgorgement of ill-gotten gains with interest, permanent injunctive relief and officer and director bars against the former executives.

According to the complaint, Syron was paid $18.3 million in 2007. Mudd's salary is not disclosed, but The Washington Post in a 2008 executive compensation survey reported he earned $14.2 million. "Fannie Mae and Freddie Mac executives told the world that their subprime exposure was substantially smaller than it really was," said Robert Khuzami, director of the SEC's Enforcement Division, in a news release. "These material misstatements occurred during a time of acute investor interest in financial institutions' exposure to subprime loans, and misled the market about the amount of risk on the company's books."

The SEC explained its decision not to fine Fannie and Freddie, pointing to "the unique circumstances presented by the companies' current status, including the financial support provided to the companies by the U.S. Treasury, the role of the Federal Housing Finance Agency as conservator of each company, and the costs that may be imposed on U.S. taxpayers."

The complaint against the Fannie Mae executives, which in addition to Mudd include former chief risk officer Enrico Dallavecchia and former single family mortgage executive vice president Thomas Lund, focuses on the period of December 2006 until August 2008.

During that time, each made "materially false and misleading statements" about Fannie Mae's exposure to subprime loans, according to the complaint. For example, Fannie reported that 0.2 percent, or approximately $4.8 billion, of its single family credit book of business as of December 31, 2006, consisted of subprime mortgage loans.

But Fannie Mae failed to count $43.3 billion worth of loans targeted at borrowers with weak credit in tallying the numbers, according to the complaint. Such loans "were exactly the type of loans that investors would reasonably believe Fannie Mae included when calculating its exposure to subprime loans," the complaint alleges.

Freddie Mac's conduct was similar, according to the complaint. Freddie claimed its single family exposure to subprime loans was between $2 billion and $6 billion, or between 0.1 percent and 0.2 percent of its single family portfolio in 2007 and 2008. In reality, the complaint states, the exposure as of December 2006 was $141 billion, or 10 percent of the portfolio, and grew to about $244 billion (or 14 percent of the portfolio) by June 30, 2008.

The other Freddie Mac executives being sued are former chief business officer Patricia Cook and former executive vice president for the single family guarantee business Donald Bisenius.

It's not clear how the SEC case will affect the 18 suits filed against major investment banks in September by the Federal Housing Finance Agency, which took over as conservator of Fannie and Freddie in September 2008.

FHFA alleges that the banks misrepresented the quality of $200 billion worth of mortgage-backed securities they sold to Fannie and Freddie, but one of the defendants, Bank of America Corp., has countered that the entities knew exactly what they were buying. Still, legal onlookers say the cases may ultimately turn on the wording of the prospectus, and whether the documents accurately described the underlying mortgages.

by Jenna Greene

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Passengers Charge Delta Cheated Them

BY DEBORAH GRAHAM

If you flew on Delta Airlines and arrived at your destination minus your baggage, there's a class action lawsuit you might want to join.

The basis for the lawsuit is Delta's policy of telling passengers whose luggage has been delayed that they are only entitled to only $25 to $50 in daily expenses. Yet the "contract of carriage," which applies to Delta and other airlines, entitles passengers to be paid up to $3,300 for expenses they incur when their baggage is delayed.

Plaintiff Susan Miller filed a class action against Delta on December 5, because her bag was delayed during a business trip she took from Florida to Las Vegas to attend a convention. Given the different climate of Las Vegas, Miller went out and "bought her essentials," according to her attorney, John Mattes, a Florida public policy litigator, currently based in San Diego, and investigative reporter. She asked Delta to reimburse her for her purchases, but Delta refused. "She was infuriated with the way Delta had been treating her," says Mattes.

According to Mattes, "The policy of not being upfront with passengers about their rights is system-wide" at Delta. According to the lawsuit, Delta posts "small signs in out of the way places with legal notices of terms of contract of carriage. Delta knows full well that passengers boarding a plane won't notice such signs posted on the sides of tickets counters as they are boarding, not will passengers understand the legal language 'contract of carriage.' Delta knows its signs are not intended to be noticed or understood.  All it would take is a simple sign clearly posted in the baggage office telling passengers they can obtain reimbursement up to $3,300 for expenses they incur while the bags are delayed. Delta does not do that."

Indeed, Mattes says that at Delta's offices, there is "little to no signage," and  certainly none that tells passengers they are entitled to reimbursed expenses up to $3,300 when their baggage is delayed.  He notes that "baggage abuse and baggage complains are on the biggest issues for air passengers today."    While baggage issues are "systematic" in the airline industry, "Delta has been one of the biggest abusers."

A warning letter

Mattes, who was pursuing his own investigation of Delta's delayed baggage policies,  notes that the U.S. Department of Transportation issued a warning letter a year and a half ago to Delta and other airlines. The letter stated that the airlines were "deliberately misinforming passengers" about their rights when their baggage was delayed.  He notes, "How is a lay person to know what their rights are?"

According to Mattes, "we just want the contract [of carriage] enforced." The class action, filed in the Southern District of Florida, Key West, seeks compensatory damages on behalf of "all of the passengers on Delta who've had their bags delayed and been offered nothing," or at least far less than their just deserts. "Delta has made a business decision not to inform passengers of their rights, and we're seeking a remedy," says Mattes.

"Hopefully, this will be a wake-up call," Mattes adds. "We hope the airline industry will start treating people like customers, not like cattle.  You need to treat passengers as consumers in a respectful manner. Businesses that put consumers first flourish."  He adds, "The burden is always on [the passenger].  The burden should be on them."  

Mattes would not comment on whether the class action seeks punitive damages or whether he also might target other airlines.  His co-counsel in the case is David K. Tucker of Miami's Tucker & Kotler, P.A.

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Class Action Smells Something Fishy with HP’s Snapfish

BY ART BUONO

A class action filed in California claims there'ssomething fishy about Snapfish, Hewlett Packard's photo-hosting and products website. The lawsuit claims Snapfish illegally shares credit card information from customers with a third party. The third party then tricks Snapfish customers into purchasing a monthly service plan by baiting them with a $10 gift card.

"Stealing Its Customers' Money"

The alleged fraud takes place after Snapfish nets customers' credit card information for the purchase of goods or services on the Snapfish site. The customer proceeds to checkout through a series of screens, including one managed by a third party, a company called Regent, which does business as Encore Marketing. The screen is designed to look like the Snapfish site. There, it's alleged, Encore Marketing fools customers into enrolling in a monthly fee service called Snapfish ValuePass by enticing them to click on a $10 gift card offer.

Safe Online Shopping: A Few Simple Rules

If you shop the internet chances are it won't be long before you come across this type of bait-and-switch tactic – or worse. Mark Stein, a partner at the Florida law firm Higer Lichter & Givner, has seen just about every online swindle there is. He's compiled "Basic Rules for Online Shopping" also known as the "Consumer Common Sense Rule for the Web." Let's have a look at a slightly abbreviated version:

1. Read the Privacy Policy – It's usually accessed by a link at the bottom of the website's home page.  It will say if the company shares your information and with whom.  Caution: Sharing information with "affiliates" is often code for sharing information with third parties.
2. Keep Reading – Don't stop with the privacy policy.  Before agreeing to anything, read the entire offer to make sure you understand what you are agreeing to. Otherwise, you may unknowingly commit to an extended contract with a $24.99 monthly payment for something you do not want.  These so-called "negative option" plans are regulated by federal law. They are not illegal, provided the offering company complies with certain requirements.
3. Pay with Credit Cards – Don't pay with a debit card or check; use credit cards.  It's much easier to dispute charges, the money doesn't leave your account and you're liable only for the first the first $50 of an unauthorized charge.  Ideally, have one card that you only use for online purchases.
4. Save Copies of Orders and Receipts – Keep the orders and receipts in an electronic folder, or print them out if you prefer.  This way you have a record of what you ordered and received and, most importantly, these documents set forth the terms of the deal.
5. Keep Passwords and Social Security Numbers Confidential – People too frequently give out this information on the internet.  Except when communicating with a credit reporting agency, you shouldn't disclose your entire social security number to anyone on the web. Passwords are created by and only known by the user for a reason – keep it that way.
6. Limit the Companies You Shop with – Consider only shopping online with US companies or only with companies from developed nations (for example, U.K., Canada, Germany, France, Israel, Japan and others).  The consumer protection laws in developed nations tend to be strong and enforceable.
7. Use Common Sense – Consumers will often do things on the internet they would never do if they were physically standing in a store. Resist this temptation.The internet is more dangerous than the brick and mortar world, because you never really know to whom you are providing information.
8. Use Resources/Report Problems – There are many resources for information from theFederal Trade Commission ("FTC") to industry groups such aswww.lookstoogoodtobetrue.com and www.safteshopping.org.  Use the resources and if it sounds too good to be true, go to www.snopes.com, where you may find it is.  Do not be afraid to report problems.  The FTC is often a good place to start.

More Help for Consumers on the Way?

Stein says that federal lawmakers are likely to enact more online privacy and consumer protection laws soon. He notes that president Obama signed the Restore Online Shopper's Confidence Act (ROSCA) at the end of 2010. One of the evils this addressed is the above-referenced "negative option" plan.

Negative option plans require the user to decline a service, otherwise they will be billed for it automatically. "These are like the old Columbia Records come-ons, which some of us are old enough to remember," Stein adds wryly. "You got ten records for a dollar, but at the same time were subscribed to a monthly purchase program. The offerors made it difficult for buyers to opt out of the plan, and would collect the monthly fee until they did.

"ROSCA doesn't ban negative option plans altogether," notes Stein, "but they must be clearly and conspicuously disclosed, they must require an express consent or 'yes, I agree to be billed' from the consumer, and they must be simple to stop. The Snapfish ValuePass sounds like a typical negative option plan."

Stein is keeping tabs on the progress of "do not track" online privacy legislation in the US. He notes that Europe already has much stricter rules about consumer online privacy. There, Stein says, the definition of private information is very broad, and can include essentially public information like a consumer's address.

"Do not track" legislation would give consumers the option to opt out (or make them opt-in) to online tracking by websites. Stein lays out the "anti" and "pro" cases for "do not track."

"Business is opposed to 'do not track' because it will make it harder to complete online transactions, it will impose more steps a consumer will have to take to complete a purchase." On the other hand, says Stein, "the argument for 'do not track' is that it gives consumers more control over their information."

Joining a Class Action

Think you've been duped by Snapfish or another online scam? Want to join a class action? If a class action has been filed, all persons who've been injured by the unlawful conduct are potential class members. In fact, all persons described by the class as certified by the court will be included in it, unless they choose to "opt out."

Depending on the type of class action, potential members will be notified or sought in a couple of different ways. Potential members who can be identified from transaction records may be notified by mail. This happens very often in securities fraud class actions, where shareholders who've been injured can be identified by company or brokerage records. The notice will provide instructions on what the person should do to file a claim.

In other cases where such records aren't available, the attorneys for the class will publish notices in the newspaper, online, on television or in other mass media. Persons who think they may have been injured by the conduct will be directed to contact the attorneys for the class for consultation and further instructions about filing a claim.

Of course you can opt out of must class actions and choose to go it alone. But must class actions involve only small – relatively – harm to each individual. This makes it the most efficient way to get at least some recovery for the harm. If you've only been harmed to the extent of $25, for example, filing a lawsuit individually won't make sense.

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Tort Reform: Fighting Back for Consumers

BY KEITH ECKER

When Ronald Sanders' wife died of brain damage in a hospital in 2005, he sued neurologist Iftekhar Ahmed. The doctor had ordered Depakote, an anti-seizure medicine, for her but failed to order any blood tests. Sanders went into a coma because the drug's side effects caused her brain cells to die.

At the end of the medical malpractice trial, the jury awarded Sanders and his daughters money to pay back medical bills plus $9.2 million in non-economic damages.

There was just one problem: a state law that caps the non-economic damages in medical malpractice lawsuits. That statute cut down Sanders' $9.2 non-economic awards to $1.2 million. Sanders appealed and the case was heard by the Missouri Supreme Court on Nov. 2.

Sanders argues that the legislature's cap on non-economic damages in medical malpractice lawsuits violates the Missouri Constitution, which guarantees the right of trial by jury. The legislature first imposed limits on non-economic damage awards in an effort to hold down the rise in medical malpractice insurance rates.

Unless the state supreme court restores the will of the jury, it will be another example of how tort reform has throttled the authority of juries and taken away a legal award won by a consumer in court.

Chipping away at consumer rights

Consumer advocacy groups and a handful of other organizations are struggling to reverse the tide in favor of tort reform, which has chipped away at consumer rights to file a medical malpractice or defective drug lawsuit. Consumer groups face highly-organized associations of corporations that have achieved major results in limiting your access to get into court, restricting the types of claims you can assert and capping the recoveries you can obtain.

At the federal level, an example of pro-consumer legislation is the Arbitration Fairness Act. The proposed law would turn back the clock on forced arbitration agreements making such arrangements illegal. This would protect the Seventh Amendment rights of consumers and non-union employees, allowing these parties to access the courts should a legal dispute arise with a company.

Democratic Senator Al Franken sponsored the bill. He has received a significant amount of funding from organizations that traditionally support consumer rights. For example, from 2007 to the present, he has received more than $1.3 million from lawyers and law firms. In that same time frame, he has received nearly $1 million from associations which represent retired Americans and is another group that aggressively advocates against such tort reforms as limits on medical malpractice awards.

In addition, groups like Public Citizen and the American Association of Justice have urged Congress to look at proposing additional legislation to restore the rights of consumers.

"We've tried to get legislation introduced that would roll back nursing home arbitration agreements, but nothing is moving through the Congress," says Gary M. Paul, president of the American Association of Justice. "With the leadership that exists in the House right now, it's an anti-consumer situation. It's a deadlock."

Although consumers' rights may be dwindling, they can still have their opinions heard. Paul recommends consumers reach out to their members of Congress and voice their concerns.

"If citizens want their rights protected, such as a trial by jury, they have got to rise up and let their elected officials know," he says. "It's amazing how often elected officials have no idea what their constituents want."

An uphill battle for consumer rights

However, consumers face an uphill battle, not just on the federal front but within the states as well. For example, Wisconsin Governor Scott Walker ordered the state legislature into a special session recently to consider legislation that will promote job creation. However, consumer-rights advocates revealed the legislation has little to do with improving employment and everything to do with shielding pharmaceutical and medical device manufacturers from lawsuits — by taking away consumers' access to the courts.

Introduced by Republican state Senator Rich Zipperer, Senate Bill 13protects drug makers and medical device manufacturers from liability caused by defects in their products as long as the product was approved by the Food and Drug Administration (FDA). In essence, the tort reform measure removes any responsibility of the manufacturer to ensure the safety of its products and misplaces it on a government agency. Further, if the FDA fails to identify a harmful side effect or a design flaw, citizens who are injured will not be able to successfully sue the manufacturer in state court.

As exemplified by S.B. 13, one of the hottest areas for tort reform is medical malpractice. In this case, one well-funded representative is trying to pass a piece of legislation that has the potential to leave consumers virtually powerless against the leading businesses in the health care industry, from doctors and hospitals to drug companies and nursing homes.

According to the 2010 campaign finance summary of Wisconsin state Sen. Zipperer, some of his largest contributors were the health industry with $13,321 and the insurance industry with $6,822, totaling more than $20,000. This amount represented about 23.5 percent of total donor dollars he received for that cycle.

Sen. Zipperer did not respond after repeated requests for comment.

What you can do about tort reform

Your elected officials have whittled away at your legal right to bring a medical malpractice or defective drug lawsuit. If you are injured you'll face laws that:

• Limit your access to get into court
• Restrict the types of claims you can assert once you're in court
• Cap the recoveries you can obtain in court

Senators and representative accept generous contributions from well-organized pro-business groups to insulate them from responsibility for the damage they cause. The best hope for consumers is to go online and learn where your elected officials stand on tort reform. If your elected official voted to cut back your rights, the best place to respond is the ballot box.

For more information on these matters, please call our office at 305 548 5020. 


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Animal rights activists sue to challenge federal law that they say is chilling legal protest

By Associated Press, 

BOSTON — A group of animal rights activists sued the U.S. government Thursday to challenge the constitutionality of a rarely used law they say treats them like terrorists if they cause a loss in profits for businesses that use or sell animal products.

Five activists represented by the Center for Constitutional Rights filed the lawsuit in federal court in Boston, asking that the Animal Enterprise Terrorism Act be struck down as unconstitutional because it has a chilling effect on lawful protest activities.

Staff attorney Rachel Meeropol said the 2006 law has left activists afraid to participate in public protests out of fear they will be prosecuted.

"There are many terms in the law that are not defined, and because of that protesters don't have notice that certain conduct is going to violate the statute and what conduct is protected by the First Amendment," Meeropol said.

"Some of my clients want to engage in simple public protests — perhaps in front of a fur store — to change public opinion about fur," she said. "But they feel restricted from engaging in that clearly lawful activity because under the plain language of the law, if that protest is successful in convincing consumers not to shop at that fur store, they could be charged as terrorists."

The law can be used to prosecute someone for damaging or interfering with the operations of an "animal enterprise" when a person "intentionally damages or causes the loss of any real or personal property used by an animal enterprise" or a business connected to an animal enterprise.

Meeropol said courts have interpreted "personal property" to include a loss of profits for the business.

The law also can be used to prosecute anyone who "intentionally places a person in reasonable fear of death or serious bodily injury" through threats, vandalism, harassment or intimidation.

U.S. Attorney General Eric Holder is the only defendant named in the lawsuit. A Justice Department representative did not immediately return a call seeking comment.

The law has been rarely used since it was enacted in 2006, but Meeropol said the cases of those who have been prosecuted instilled fear among animal rights activists.

In 2009, four activists were charged for allegedly participating in threatening demonstrations at the homes of University of California scientists who did animal research. Prosecutors also alleged that the four created or distributed a flier listing the professors' home addresses and stating, "animal abusers everywhere beware we know where you live we know where you work we will never back down until you end your abuse." A judge eventually dismissed the charges.

Two other activists were indicted in Utah in 2009 for releasing hundreds of animals from a mink farm. Both pleaded guilty to animal enterprise terrorism and were sentenced to 21 months and 24 months in prison.

A Minnesota graduate student was sentenced to six months in prison for working with other activists in a 2006 raid on a farm where dozens of breeding ferrets were let loose. Scott Ryan DeMuth pleaded guilty to one count of conspiracy to commit animal enterprise terrorism under a deal with federal prosecutors in Iowa. Prosecutors said the raid contributed to the ferret farm's closure months later and destroyed the owner's livelihood.

Ryan Shapiro, a longtime animal rights activist from Cambridge who is one of the plaintiffs in the Boston lawsuit, said he no longer conducts undercover filmed investigations of animal treatment on factory farms because he is concerned about possible prosecution.

"One of the ways the Animal Enterprise Terrorism Act silences free speech is that if one obtains that footage and then brings that footage to the public about how animals are suffering on factory farms, it might affect the profits of that farm," Shapiro said. "As a result, simply bringing that information to the public and trying to educate individuals is now prosecutable as a terrorist act under the law."

For more information on these matters, please call our office at 305 548 5020.

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New parts of Ga. immigration law to take effect

By AP

ATLANTA (AP) — With the arrival of the new year, a key section of Georgia's new law targeting illegal immigration will begin to take effect.

Starting Jan. 1, any employer with 500 or more employees will have to use a federal database called E-Verify to check the employment eligibility of all new hires. Rep. Matt Ramsey, R-Peachtree City, author of the law, said from the start that his main goal was to deter illegal immigrants from coming to Georgia by making it tougher for them to work in the state.

The E-Verify requirement is being phased in slowly. It will take effect for employers with 100 or more employees on July 1 and for employers with more than 10 employees a year later on July 1, 2013.

Another key provision that takes effect Jan. 1 is one that requires any agency that administers public benefits to require each applicant to provide at least one "secure and verifiable document." A list of acceptable documents was provided by the attorney general's office over the summer. The agency administering public benefits must also complete a signed statement verifying the applicant's legal presence in the country.

The new law also instructs the state agriculture department to submit a report to the governor and the heads of each chamber of the state Legislature by Jan. 1. The department was tasked with examining the effect of immigration on the state's agriculture industry and providing suggestions to reform a federal guest worker program. The department was also supposed to evaluate the feasibility of a state guest worker program.

For many affected by the sections of the law set to take effect Jan.1, some confusion still remains.

"Many Georgia businesses are confused with respect to the provisions of the law that have to do with E-Verify," said Atlanta lawyer Teri A. Simmons, who advises businesses on immigration and employment matters. "Within most businesses, human resources professionals are already dealing with so much that it's hard to also fit in E-Verify training and administration."

Many of the larger companies that fall under the initial E-Verify deadline may weather the change easily because they have big, sophisticated human resources departments, but it may cause more problems as the requirement spreads to smaller companies, said Simmons, who added that she opposes the law because it places an additional burden on businesses.

Atlanta-based Home Depot, which has nearly 20,000 employees in Georgia alone, expects to have no problems implementing the E-Verify requirement, spokesman Stephen Holmes said.

"We use it in other states where it's required, so we can turn it on here when necessary," he said.

The Coca-Cola Co., another big Atlanta-based employer with more than 9,000 employees in Georgia, has used E-Verify for all of its employees since 2010, spokesman Charlie Sutlive said.

Already, any company with a federal contract is required to use E-Verify, and Georgia has required state and local government agencies and their contractors to use the database since 2007. Nationwide, 17 states have or are phasing in E-Verify requirements for some combination of private and public employers, according to the National Conference of State Legislatures.

Like for businesses, bigger local governments are likely in a better position to deal with their responsibilities under the new law than smaller ones, mostly because of the size of their staffs, said Todd Edwards of the Association County Commissioners of Georgia.

"We've gotten more questions on this issue than on anything else in recent years," he said.

The most common questions have to do with the definition of a public benefit and a contract and whether the required documents can be submitted electronically, Edwards said. The organization has held several training sessions around the state to try to educate county governments.

"They all want to comply," Edwards said, "but for some of the smaller ones, especially, it's a matter of having sufficient resources and staff."

When Georgia's governor signed the law in May, Georgia joined Arizona and several other states that have recently enacted tough laws taking aim at illegal immigration. Federal judges have since blocked all or parts of the various laws, and Arizona's is headed to the U.S. Supreme Court next year.

A federal judge in June blocked parts of Georgia's law pending the outcome of a legal challenge filed by immigrant rights and civil liberties groups. One of the blocked sections authorizes police to check the immigration status of suspects who don't have proper identification and to detain illegal immigrants. The other creates a state penalty for people who knowingly and willingly transport or harbor illegal immigrants while committing another crime.

The state has appealed the judge's decision, and a federal appeals court is set to hear arguments from both sides early next year.

Other parts of the law took effect in July, including:

— a new felony offense with hefty penalties for using false information or documentation when applying for a job;

— the creation of an immigration review board to investigate complaints about government officials not complying with state laws related to illegal immigration;

— fines and possible removal from office for any public official who fails to use federal databases to verify the immigration status of new hires or applicants for public benefits.

For more information on these matters, please call our office at 305 548 5020.

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