Posted by Carr McClellan | Share
As of July 1, 2013, California Public Resources Code §25402.10 requires the owner of a non-residential building with a total gross floor area of 50,000 square feet or more in the event of a sale, lease or finance of the property to disclose the building’s energy use data for the most recent 12 months, together [...] Read More
Category: Real Estate
Posted by Carr McClellan | Share
Does the trustee of a revocable trust ever have a duty to account to the remainder beneficiaries of the trust? The Supreme Court of California says yes, but not until after the death of the settlor. In a recent decision, In Re Estate of Giraldin, 290 P.3d 199 (Cal. 2012), the Court held that, because [...] Read More
Category: Estate Planning, Litigation
Posted by Carr McClellan | Share
Small and mid-size companies electronically transmit an increased amount of sensitive financial information via the Internet to comply with tax compliance obligations. Small and mid-size businesses electronically transmit company and employee information throughout the year to their accountants and taxing authorities, and even more so now during income tax season. Income tax withholding and reporting, [...] Read More
Category: Intellectual Property, Privacy & Data Security, Taxation
Posted by Carr McClellan | Share
On April 17, 2013, the Ninth Circuit issued an important anti-SLAPP decision in Makaeff v. Trump University, LLC, No. 11-55016 that raises the bar for parties seeking to defeat a California anti-SLAPP motion in District Court. Businesses, in particular, frequently confront an anti-SLAPP motion when they file a counter-claim against a dissatisfied customer who has [...] Read More
Category: Litigation
Posted by Carr McClellan | Share
Particularly with recurring transactions such as leases and construction contracts, which may be handled to some extent by the client’s non-legal members, outside counsel can create value for its corporate clients with in-house training that: (1) provides standards for uniformity in process and work product; (2) designates provisions for documents or policies that the client [...] Read More
Category: Real Estate
Posted by Carr McClellan | Share
A federal magistrate judge in New Jersey recently sanctioned a plaintiff for evidence spoliation after he deactivated his Facebook account during litigation, resulting in its permanent deletion by Facebook after 14 days passed. The court’s order confirms that social networking accounts are just like any other form of evidence and are subject to the same [...] Read More
Category: Litigation
Posted by Carr McClellan | Share
Just when many of us believed that, after years of changes and uncertainty, the federal estate tax exemption had stabilized at $5.0 million, subject to inflation adjustment (for 2013, it is a $5.25 million exemption), we have been put on notice that the President already favors changing it again soon. On January 1, 2013, Congress [...] Read More
Category: Estate Planning
Posted by Carr McClellan | Share
As of July 1, 2013, California Civil Code §1938 will require all commercial leases to state whether the premises have been inspected by a “Certified Access Specialist” (“CASp”) and, if so, whether the premises has or has not been determined to meet all applicable construction-related accessibility standards per California Civil Code §55.53. California Civil Code [...] Read More
Category: Real Estate
Posted by Carr McClellan | Share
There is a storm on the horizon for providers of cloud-based services as states determine whether and how to tax these services. Service providers should act now to anticipate upcoming tax issues for their particular business models. Aggressive state activity could impact a service provider’s sales tax collection responsibility and an end-user’s income tax filing [...] Read More
Category: Taxation
Posted by Carr McClellan | Share
New Labor Code section 980, effective January 1, 2013, generally precludes employers from requiring or asking employees or job applicants to disclose their user names or passwords, or to provide access to, or divulge “personal social media.” The definition of social media is broad, and includes “videos, still photographs, blogs, video blogs, podcasts, instant and [...] Read More
Category: Employment Practices, Intellectual Property, Privacy & Data Security
Posted by Carr McClellan | Share
Congress recently made permanent the “portability” of a predeceasing spouse’s unused estate tax exemption (currently, $5.25 million per spouse). On one hand, portability creates a potential tax planning opportunity: Before portability, a Bypass Trust created at the first death was the sole method of insulating assets from inclusion in the survivor’s taxable estate. Assets in [...] Read More
Category: Estate Planning
Posted by Carr McClellan | Share
The Sixth Circuit Court of Appeals recently held that severance paid to employees in a reduction in force event is not subject to FICA taxes. United States v. Quality Stores, Inc. No. 10-1563 (6th Circuit, September 7, 2012). The United States attempted and failed to get an en banc hearing on this ruling with the [...] Read More
Category: Employment Practices, Taxation
Posted by Carr McClellan | Share
In a decision surprising only because it has taken so long, on March 18, 2013, the California Court of Appeal in Ignat v. Yum! Brands, Inc., No. G046343 held that the privacy-based tort of public disclosure of private facts is not predicated on a writing containing the disclosure; an oral disclosure is sufficient to state [...] Read More
Category: Corporate and Business, Employment Practices, Litigation
Posted by Carr McClellan | Share
In Harris v. City of Santa Monica, (2013) 56 Cal.4th 203, the California Supreme Court provided long-awaited clarification of the standards that apply when an employer terminates an employee for “mixed motives”—that is, when the reasons for termination include a prohibited discriminatory motive under California’s Fair Employment and Housing Act (FEHA) as well as a [...] Read More
Category: Employment Practices, Litigation
Posted by Carr McClellan | Share
A California appellate court has given employers yet another reason for caution in their handling of employees on pregnancy disability leave. In Sanchez v. Swissport, Inc., B237761 (Feb. 21, 2013), the Second District Court of Appeal confirmed that disability discrimination laws augment employee rights under California’s Pregnancy Disability Leave Law (PDLL), which in practical terms [...] Read More
Category: Employment Practices
Posted by Carr McClellan | Share
A Merger and Acquisitions (“M&A”) holdback escrow, where a portion of the purchase price of an acquisition is placed in a third party escrow account to serve as security for the buyer, is a common element in structuring business acquisitions, whether the transaction is an asset or stock sale, or a merger. Both buyers and [...] Read More
Category: Corporate and Business
Posted by Carr McClellan | Share
Ever since January 1, 2010, when California overhauled the rules governing the enforceability of “no contest” clauses – provisions in testamentary instruments that say anyone who challenges the instrument will be disinherited – most practitioners have come to view these clauses as toothless. A recent case offers hope for the continued strength of the traditional [...] Read More
Category: Estate & Fiduciary, Litigation, Trust
Posted by Carr McClellan | Share
The California Supreme Court held today in Apple v. Superior Ct. that on-line merchants may require customers to provide personally identifying information (such as home address and phone number) to purchase electronically downloaded products with their credit cards. Background In June 2011, David Krescent brought a proposed class action suit against Apple alleging that Section [...] Read More
Posted by Carr McClellan | Share
On December 28, 2012, the President signed the Theft of Trade Secrets Clarification Act of 2012, which significantly expands trade secret protection by extending criminal penalties to the theft of a wider class of trade secrets. The Clarification Act amends the Economic Espionage Act of 1996 (“EEA”), 18 U.S.C. §1832. Before amendment, the EEA protected [...] Read More
Category: Corporate and Business, Employment Practices, Litigation
Posted by Carr McClellan | Share
On December 14, 2012, New York enacted A.8992-A/S.6608-A (the “SSN Privacy Law”) into law to help minimize identity theft. The SSN Privacy Law is broad reaching – it applies not only to businesses operating in New York but also to entities outside New York that are doing business with entities or individuals located in New [...] Read More
Posted by Carr McClellan | Share
On January 10, 2013, President Obama signed into law amendments to the 1988 Video Privacy Protection Act that facilitate social media sharing of video viewing preferences when users consent to disclosure of information via the Internet. The amendments have a number of practical implications for online video providers and their users. 1. Changes Effected by [...] Read More
Category: Intellectual Property, Privacy & Data Security, Litigation
Posted by Carr McClellan | Share
This week, California Attorney General Kamala Harris further built on her high-profile 2012 campaign to improve privacy protection for consumers who use mobile devices[1] by issuing a report titled “Privacy on the Go” (“Privacy Report”) which lists recommended best practices for app developers, mobile advertising networks, operating systems developers, app platform providers, mobile carriers and [...] Read More
Posted by Carr McClellan | Share
Until recently, California trial courts were not required to perform the rigorous expert testimony gatekeeping responsibility adopted by federal courts and a majority of state courts. As a practical matter, California’s standards meant that juries in California could consider and rely on expert opinion testimony that would have been excluded as scientifically unreliable or speculative [...] Read More
Category: Litigation
Posted by Carr McClellan | Share
Political debate for the past two years has focused on the future of the Patient Protection and Affordable Care Act, more recently called “Obamacare,” and the taxes enacted by Congress to help pay for it. With the national elections last month, we achieved greater certainty surrounding the future of this legislation. We now know that [...] Read More
Category: Corporate and Business, Employment Practices, Taxation
Posted by Carr McClellan | Share
California Supreme Court issues more liberal rule for property owner to recover attorney fees after defending accessibility lawsuit. The California Supreme Court has issued a ruling making it easier for a commercial property owner to recover attorney fees after successfully defending a lawsuit over accessibility. The case is Jankey v. Lee, No. S180890. The plaintiff [...] Read More
Category: Litigation, Real Estate
Posted by Carr McClellan | Share
Businesses choose contractual arbitration for many practical reasons: it’s seen as a cheaper, faster and more confidential alternative to traditional litigation, and it avoids the emotions of a jury. Arbitration, of course, is not without its risks, especially where the arbitrator can fashion relief that is “just and fair under the circumstances.” Heeding the guidance [...] Read More
Category: Corporate and Business, Litigation
Posted by Carr McClellan | Share
About a year ago to the day, the real estate financing market took an unexpected turn. Year after year for many years prior, we all witnessed the real estate market take a huge beating. However, never could we have expected that after enduring such a decline, a court in Michigan would render a decision, landing [...] Read More
Category: Real Estate
Posted by Carr McClellan | Share
When most people think of securities, they mean corporate stock. However, a limited liability company interest may also be a security for purposes of both federal and state securities laws. If it is a “security,” it may be subject to registration requirements under federal securities law and qualification requirements under California securities law. Section 25019 [...] Read More
Category: Corporate and Business
Posted by Carr McClellan | Share
In the 2012 elections, three states (Maine, Maryland, and Washington) legalized gay marriage, and one state (Minnesota) rejected a ballot measure that would have created a state constitutional amendment prohibiting gay marriage. This brings the total to nine states which, along with Washington D.C., recognize equal marriage rights for gay and lesbian couples. California is [...] Read More
Category: Litigation
Posted by Carr McClellan | Share
Just two days ago, Barack Obama was re-elected as President. In addition, the Republican Party retained control of the House of Representatives, while the Democratic Party retained control of the Senate. What does this mean for future tax policy, and transfer tax policy (e.g., estate and gift tax policy) in particular? Well, the short answer [...] Read More
Category: Estate Planning, Taxation
Posted by Carr McClellan | Share
Effective January 1, 2013 all employers who have employees working in California on a commission basis are required to have written commission agreements. The law also requires that the employer have a receipt from each commissioned employee acknowledging that they have received a copy of their respective commission agreement. Now is the time for employers [...] Read More
Category: Corporate and Business, Employment Practices
Posted by Carr McClellan | Share
The Association for Competitive Technology (“ACT”), an international trade organization that represents more than 5,000 small and mid-size app developers and information technology firms, recently released free app privacy icons (“App Privacy Icons”) that help developers comply with the FTC’s recommendations. The new App Privacy Icons are a useful, inexpensive tool that developers can use [...] Read More
Category: Corporate and Business, Intellectual Property, Privacy & Data Security
Posted by Carr McClellan | Share
All of us involved in land use and planning matters are familiar with the tactic of project opponents to file last-minute submissions with new factual allegations. These “hit pieces” are filed after the staff report is in, and the project proponent has no time to respond. Finally, a court has upheld a decision by a [...] Read More
Category: Litigation
Posted by Carr McClellan | Share
The Federal Trade Commission (“FTC”) stated earlier this year in its final privacy report that it is going to focus legal enforcement efforts on privacy and data security law compliance in the mobile space. As a part of this enforcement initiative, the FTC recently published additional guidelines called “Marketing Your Mobile App: Get it Right [...] Read More
Category: Corporate and Business, Intellectual Property, Privacy & Data Security
Posted by Carr McClellan | Share
A number of national enforcement agencies recently indicated they are going to start actively enforcing 2009/135/EC Directive (the “EU Cookie Directive”). If a US company has business operations in an EU member country, or if a US company has assets (including without limitation, bank accounts or employees), in an EU member country, it is likely [...] Read More
Category: Corporate and Business, Intellectual Property, Privacy & Data Security
Posted by Carr McClellan | Share
The remainder of 2012 will bring a politically charged Presidential election, a lame duck Congress and tremendous income tax planning opportunities. Unless Congress takes some legislative action, ordinary income and capital gains rates will increase significantly on January 1, 2013. Prudent individual taxpayers should accelerate income transactions into 2012 to avoid paying higher taxes. Individual taxpayers [...] Read More
Category: Corporate and Business, Taxation
Posted by Carr McClellan | Share
Every start-up lawyer counsels his or her client to be sure that everyone working for the company signs an agreement confirming that the company owns everything that’s developed by the company. However, when it’s time to sell the company or raise a financing round and the management team is asked to produce these agreements, it’s [...] Read More
Category: Corporate and Business
Posted by Carr McClellan | Share
Alternative dispute resolution (“ADR”) provisions are common in contracts because they may offer a less costly and speedier resolution to disputes. Corporate clients heavily favor ADR because it may shield them from a jury trial—a venue often not preferred by big companies. In California, it is clear that pre-dispute waivers of the right to a [...] Read More
Category: Corporate and Business, Litigation
Posted by Carr McClellan | Share
Last month, a federal Magistrate Judge in In re Hulu Privacy Litigation held that the Video Privacy Protection Act (“VPPA”) applies to online video streaming services. This ruling could have a broad impact on the video streaming services, advertisement and analytics provider industries. 1. Background The VPPA, which became law in 1988, prohibits “video tape [...] Read More
Category: Intellectual Property, Privacy & Data Security, Litigation
Posted by Carr McClellan | Share
Earn-Outs – contractual formulas in M&A transactions generally used to give sellers the opportunity to earn additional purchase price – are often derided for their ability to disappoint sellers, or worse, create post-closing disputes. But Earn-Outs can serve a very useful purpose in the right situations; typically, the acquired business must be allowed to continue [...] Read More
Category: Corporate and Business
Posted by Carr McClellan | Share
I am frequently asked about forming a corporation or limited liability company (“LLC”) for a sole proprietor, consultant or professional concerned with exposure to liability relating to his or her business or profession. Shareholders of a corporation or members of an LLC are in general shielded from most liabilities of the corporation or the LLC. [...] Read More
Category: Corporate and Business
Posted by Carr McClellan | Share
Clients (both employers and employees) frequently ask me whether employers may ask employees for their private social networking account user IDs and passwords. Although this may currently be permitted in some states, there is a clear legal trend towards prohibiting this practice. Two states, Illinois and Maryland, passed laws this year prohibiting employers from asking [...] Read More
Category: Corporate and Business, Intellectual Property, Privacy & Data Security
Posted by Carr McClellan | Share
California Attorney General Kamala Harris announced two major initiatives this year that indicate the California Department of Justice is likely going to increase the enforcement of both state and federal privacy and data security law breaches against app developers and owners. Mobile and Social App Platform Providers Industry Agreement In February 2012, Attorney General [...] Read More
Category: Corporate and Business, Intellectual Property, Privacy & Data Security
Posted by Carr McClellan | Share
Many companies use equity compensation to attract potential employees and to reward and retain existing employees. A brief overview of two typical equity compensation plans, the stock option plan and the restricted stock purchase plan, is provided below. Sometimes the features of a stock option plan and a restricted stock purchase plan are combined into [...] Read More
Category: Corporate and Business
Posted by Carr McClellan | Share
Clients who license intellectual property (“IP”) and technology from a university frequently tell us the university is asking for numerous license fees, and they ask whether this is customary. The answer is yes, if the U.S. government funded all or part of the research that led to the development of the licensed IP or technology. [...] Read More
Category: Corporate and Business, Intellectual Property, Privacy & Data Security
Posted by Carr McClellan | Share
Until 2012 a California contractor wanting limited liability protection for owners of the business had to use a corporation. The Contractors State License Board (“CSLB”) could not issue a license to a limited liability company. That has now changed. Senate Bill 392, which became law in 2010, required the CSLB to begin processing applications for [...] Read More
Category: Corporate and Business
Posted by Carr McClellan | Share
Having represented privately held companies, engaged in industries ranging from food to logistics to technology, for over 30 years, I have been fortunate to have gained valuable insights into what optimizes their Merger & Acquisition (“M&A”) exits. I have distilled those insights into my Top Ten M&A list of guidelines for privately held companies: Assemble [...] Read More
Category: Corporate and Business
Posted by Carr McClellan | Share
Private companies – whether organized as corporations, partnerships, or limited liability companies (LLCs) – are typically focused on growing profits, expanding the business footprints, and increasing shareholder values. Given this focus on growth, a company’s CFO or business owner is frequently caught off guard when the IRS decides to audit the business. The likelihood of [...] Read More
Category: Corporate and Business, Taxation
Posted by Carr McClellan | Share
Companies that qualify as a “Covered Entity”[1] or “Business Associate” [2] under the Health Insurance Portability and Accountability Act (“HIPAA”) should take note of the U.S. Department of Health and Human Services (“HHS”) pilot HIPAA audit program. Background Under Section 13411 of the HITECH ACT, HHS must conduct periodic audits to ensure that Covered Entities [...] Read More
Category: Corporate and Business, Intellectual Property, Privacy & Data Security
Posted by Carr McClellan | Share
One of the first topics that a start-up lawyer discusses with a company’s founding team is usually the ownership and vesting of the start-up’s initial shares of Common Stock. At the start of the discussion, some members of the founding team often don’t understand what vesting is and why it’s important. As described below, share [...] Read More
Category: Corporate and Business
Posted by Carr McClellan | Share
Forming a new business entity with other owners? You have several choices. If owners want limited liability protection, the decision often comes down to choosing between a corporation and a limited liability company. Each offers limited liability protection for its owners. If the owners want flexibility in structure and operation, the limited liability company is [...] Read More
Category: Corporate and Business
Posted by Carr McClellan | Share
General The Jumpstart Our Business Startup Act (“JOBS Act”) was passed by Congress on March 27, 2012 and signed into law by the President on April 5, 2012. The intent of the JOBS Act is to improve access to the capital markets by relaxing certain regulatory burdens for small companies, including providing securities registration exemption [...] Read More
Category: Corporate and Business
Posted by Carr McClellan | Share
On April 12, 2012, the California Supreme Court issued its decision in the Brinker Restaurant case clarifying a number of issues including the responsibilities of employers in complying with California law concerning meal periods for non-exempt employees. Below are the major holdings of the Brinker case regarding meal periods. 1. Meal Period Police are Not [...] Read More
Category: Corporate and Business, Employment Practices
Posted by Carr McClellan | Share
Under existing law, provisions in construction contracts which allow one of the parties to use indemnification clauses to pass on to the other party liability for damages for death, injury to property, injury to persons, or other loss, damage or expense (“Damages”) is prohibited if the damages are caused by the sole negligence or willful [...] Read More
Category: Corporate and Business
Posted by Carr McClellan | Share
When one of our clients and I talk about forming a new corporation, limited liability company (LLC) or limited partnership, we almost always spend some time discussing the state where the entity will be formed. Usually, we talk about the advantages and disadvantages of forming the entity in the state where the entity will initially [...] Read More
Category: Corporate and Business