Archive for the 'Laws' CategoryPage 2 of 26

Can Crowdfunding Help My Startup Business?

If you’re starting a business, a primary roadblock is probably the issue of raising money. In the old days, fundraising was a tiresome process that involved soliciting potential pools of investors, making cold-calls, and doing whatever it took to attract attention – even if it meant selling mattresses.

crowdfuning for startupsWith crowdfunding, you can now start your own business simply by asking your Facebook friends and other Internet users to make small donations to your business. To encourage donations, you can offer awards or promise a share in the value that the business creates.

The 2012 JOBS Act, which stands for Jump Start of Business Startups, has made crowdfunding more advantageous than ever. The JOBS Act exempts crowdfunding from the strict registration requirements of the Securities and Exchange Act of 1933 of the Securities Exchange Commission.

Now, a potentially limitless number of individuals lacking accreditation can invest their money in your startup!

It is helpful to consider what the Act does:

  1. It imposes limits on how much a crowdfunder can invest and on the amount a startup owner may raise in a year to one-million dollars. This represents a compromise to having no regulation at all.
  2. It imposed disclosure requirements, but otherwise the details were left to the Commission’s administrative rule-making process.  The Commission reserves the right to shape policy in how the rules are applied to crowdfunders.

How Does the Act’s Loosening of Requirements for Crowdfunding Benefit Startups?

The Act now allows the Commission to permit relatively inexperienced investors with modest savings to help support highly risky startups. If you were once a startup that would normally receive large investments, you can now establish yourself with the help of many crowdfunders.

This benefits the market as crowdfunders have greater options to choose from when it comes to supporting small-scale business innovation by startup owners lacking traditional support of high-profile venture capital firms.

Critics of the changes in the law point out that there is a limitation of the amount that crowdfunders can contribute in a twelve-month calendar year. They also point out that the full-disclosure requirement of crowdfunders indicate a distrust of crowdfunding among regulators as a legitimate way for a start-up to raise funds.

Athough the Act may not be perfect, it does allow crowdfunders and startups to work together in a constantly growing and changing marketplace.

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Why the Satanists’ Plan to Use Hobby Lobby Exemptions Won’t Work

Many religions believe in some version of “what goes around comes around.” So it seems appropriate that Satanists can demand the same religious liberty exemptions that the Supreme Court recently gave Hobby Lobby.

satanists anti-abortion using hobby lobby exepmtionsThe Satanic Temple has a simple argument. If the Supreme Court believes religious beliefs trump scientific fact, then religious beliefs which are based on scientific fact should also pass muster. Since the Satanic Temple believes that individual liberty is important, informed consent laws violate the Satanist’s religious beliefs because those laws require women to listen to false information before they can obtain an abortion. Of course, the Satanists believes all women who support abortion should be exempt from informed consent laws, so the Temple has drafted a letter that women can present to their doctors when the woman wants an abortion.

The Satanists’ Plan Won’t Work

I appreciate the effort that the Satanic Temple has put into this plan, but the anti-abortion campaign suffers from a number of flaws. First, it’s not that religious beliefs trump scientific fact. Judges do not question the sincerity of the parties’ beliefs, no matter how absurd those beliefs sound. The rule is necessary, even if it seems stupid. Imagine if there was a divorced couple fighting over whether their young child should be baptized. Courts want the attorneys to argue about the rights of the parents and child, not whether baptism will increase ones chances of going to heaven or whether heaven even exists. The last thing we want is judges deciding which beliefs are valid and which beliefs are full of it.

Second, judges won’t exempt women from laws based on religious beliefs the women don’t hold. If a woman seriously wants an exemption based on Satanic beliefs, the woman must hold those beliefs. It would be extremely ironic if Hobby Lobby’s legacy is a mass conversion to Satanism. However, a pregnant woman seeking an abortion might have enough things to worry about without trying to convert to a new religion.

Third, Hobby Lobby extends the right to exercise religion to closely held corporations. Unless a pregnant woman who wants an abortion works for a corporation whose owners belong to the Satanic Temple, the decision won’t exempt individuals. Indeed, there was another Supreme Court in 1990 which held that states didn’t have to accommodate every religious belief. The irony coming from Hobby Lobby is as thick as San Francisco’s fog cover. The Bills of Rights are supposed to be individual rights, but the Supreme Court has twisted the First Amendment such that fictional people have more religious liberty than real individuals. No wonder people are turning to Satanists for help.

The Right of Free Speech vs. Online Business Reputations

SLAPP Lawsuits and the Internet

In the mid-90’s, Oprah Whinfrey dedicated an entire episode of her talk show to the topic of mad-cow disease spreading around several countries, including the United States. Cattlemen in Texas formed a coalition, claiming that the show negatively affected future beef sales, and sued her in federal court on a tortious interference with business reputation claim. After spending an exuberant amount of money defending the suit, Whinfrey ultimately won, with the court finding that the cattleman failed to show she had made any false statements.

anti-slapp internet free speechSimilarly, in 2010, a towing company sued 21-year-old Justin Kurtz for creating a Facebook page dedicated to criticizing the company for wrongfully towing his car. This was a fairly unique lawsuit at the time because the comments were made on the Internet by a member of the general public, as opposed to a public figure with significant influence on traditional media.

Both of these suits are called SLAPP-suits. These types of lawsuits have triggered much state legislation aimed at protecting the general public under the 1st amendment right to free speech and the right to petition the government for unfair practices of big business.

These relatively new suits, targeting the general public for their negative comments on Internet sites like Yelp and Facebook, are the brain-child of a three decade old problem of lawsuits being filed by big business entities. Critics argue that these lawsuits against the everyday citizens are an attempt to silence them from exercising their right of free speech or their right to petition the government. These suits are called SLAPP suits, which stands for “Strategic Lawsuits against Public Participation.”

Since the real motive of a SLAPP suit is to punish and deter criticism, the lawsuits have been successful in “chilling” free speech and discouraging the public from making future complaints against the company. There are many documented cases where defendants found it easier to remove their posts and remain silent.

States Have Tried to Protect Individual Free Speech with Anti-SLAPP Legislation

Public outcry against these suits resulted in many states enacting anti-SLAPP legislation. The purpose was to prevent an entity from filing a suit when the result would chill free speech. For example, California’s version of anti-SLAPP legislation is California Civil Procedure Code, section 425.16, which states that a person is protected from a suit if “any act of that person in furtherance of the person’s right to petition or free speech under the United States or California Constitution in connection with a public issue.” If the person is sued anyway, they will lose. However, a relatively small number of states have legislation as broad as California and only about one half of the states have legislation at all.

Is the Internet Considered Media?

When a state legislature is drafting Anti-SLAPP legislation, they often leave out protections that would cover the media. The First Amendment does not protect the media for defamatory or libelous statements, for publishing information not of public concern, or for a statements that are false and published with actual malice. These restrictions don’t apply to the general public. A member of the general public would be protected for making statements about the same or similar subject matter. Remember, Oprah won her suit only because the court found the statements were true.

When the Internet became widespread, a federal statute called the Communications Decency Act was passed. Although its original wording restricted free speech on the Internet, the Supreme Court struck down those sections and included wording that ultimately protects sites like Yelp and YouTube. Unfortunately, only the owners of the sites are protected from a defamations suit resulting what other people post. The individuals is not explicitly protected.

Has the Internet Transformed the General Public into the Media?

The question stands, if a person voices their opinion on the Internet, which has become the new mass medium, have they transformed into an agent for the media, and thereby deserving of less protection? If so, what protections should they be awarded when it comes to potential SLAPP suits?

An increasingly popular view is that an individual retains their status as such, and is therefore not an agent of the media and is protected by Anti-SLAPP legislation. In fact, there have been a number of California cases where complaints for defamation arising from Internet postings were successfully defended by using the state’s anti-SLAPP statute.

Some of the protections for Internet postings have remained the same as those for which the traditional anti-SLAPP laws were established: to protect the general public. These protections include the right to free speech (online speech in this case), the fact that the cases have no legal merit, and the fact that the lawsuit creates a “chilling effect”, as explained earlier. The courts have also found that people on the Internet have the right to remain anonymous when posting criticism. Businesses have attempted to issue subpoenas to compel the person to reveal their identity, which has been successful in some cases and found to be a valid defense in others.

The fact remains, however, that there has failed to be consistent rulings regarding Internet use and the protections individuals are awarded. The problem remains that everyday citizens are often not financially equipped to defend lawsuits brought by big business and their criticisms are often silenced.

Modern Technology Calls for Broader Constitutional Rights

Since the states vary in the broadness of their anti-SLAPP legislation, further protection is sorely needed. This type of protection can only come from a broadly defined federal statute, which will force the states to protect their citizens. Recently, many have been advocating for a federal anti-SLAPP law to protect people in states that either do not have laws or have laws that are too broad to adequately protect an individual’s right to free speech.

As a strong supporter of First Amendment rights, my view remains: it is no longer valid that the media should be limited in protection. In a sense, we have all become the media because of the ease in which individuals can widely disseminate information on the Internet, creating just as much influence as traditional media. Therefore, if the goal of traditional anti-SLAPP legislation is to protect individual rights and to protect those who do not have the resources to defend themselves against big business, those protections should be expanded to the media. This would quell the controversy and prevent needless litigation. Most importantly, it would protect the constitutional rights that make the United States unique.

Florida Leads the Charge Overturning Medical Malpractice Caps

On February 23rd, 2006, Dr. Archibald was called into Fort Walton Medical Center to perform a cesarean section on 20-year-old Michelle McCall. Although Dr. Archibald determined that the C-section would be unnecessary, he did stay to repair vaginal injuries McCall had from the birth. Dr. Archibald relied exclusively on a nurse to check McCall’s blood pressure. The nurse failed to report that McCall’s blood pressure was dangerously low. Michelle McCall died of cardiac arrest shortly thereafter.

Decorative Scales of Justice in the CourtroomMcCall’s family sued Dr. Archibald for medical malpractice. A federal judge gave her parents $750,000 each and McCall’s infant son $500,000, for a total of $2 million. However, the judge reduced the amount by half because Florida had enacted a law in 2003 which capped wrongful death suits from medical malpractice to $1 million. In March 2014, Florida’s Supreme Court reviewed the case and declared the law unconstitutional in a 5-2 decision.

Malpractice cap proponents bitterly denounced the decision. The Florida Medical Association released a statement, arguing that the decision would intensify the “access-to-care crisis” for patients. The complaints fell on deaf ears though because the Florida Supreme Court is set to review another medical malpractice case.

The “Medical Emergency”

Medical associations and their attorneys have long justified medical malpractice caps by invoking fears about out of control insurance premiums. There are three problems with these so-called “access-to-care crisis.” First, the judges had real doubts about whether malpractice claims were actually driving doctors of Florida. One judge noted that “during this purported crisis, the number of physicians in Florida were actually increasing, not decreasing.” Second, even if there was a crisis, “there is no evidence of a continuing medical malpractice crisis” that would justify the caps. Finally, the law which establishes malpractice caps “does not require insurance companies to use the acquired savings to lower malpractice insurance premiums for physicians.”

In other words, the Florida Supreme Court voided the cap on medical malpractice in wrongful death because the crisis was not real, or if the crisis was real it was over, and the law had no actual relationship to the purpose of reducing insurance premiums.

Interestingly, the Court didn’t stress the most important argument against malpractice caps in its ruling. In theory, medical malpractice caps save patients money by lowering the cost of business for insurance companies, who pass the savings to physicians, who in turn pass the savings to their patients. The big question in that chain is what is the expenditure in that chain? Insurance companies and medical associations would claim that trial lawyers are the expenditures, but personal injury attorneys can’t file a lawsuit without a client.

In reality, patients who are injured by their physicians are passing the “savings” to patients who haven’t been injured by incompetent doctors. People like McCall’s parents and her infant son are denied just compensation so that the rest of us can save a few bucks. It is shocking to me that so many people are ready to put injured patients in a worse position. It is very likely that the doctors who injured the plaintiffs will be treating us. By hurting the injured, we hurt ourselves.

The Future

Insurance companies might argue that $1 million is more than adequate compensation. However, $1 million is no replacement for growing up without a mother. Once the lawsuit is over, the family can’t go back to collect more. McCall’s son will need someone to pay for his food, his clothes, his home, his medical expenses, his schoolbooks, his transportation, and anything else a child might need. The $1 million must last for eighteen years. Given inflation, he’ll be lucky if it lasts that long.

Inflation is a huge problem when medical malpractice caps use absolute figures like $1 million. For instance, California’s Medical Injury Compensation Reform Act (MICRA) set up a malpractice cap of $250,000. The problem is that cap was written in 1975. In 1975, the price of gas per gallon in California was 57 cents. Today, the price of gas per gallon in California is consistently over $4.00. Prices are still going up, so the $250,000 that would have lasted a lifetime back in 1975 will not cover the same expenses today.

I bring up California because this November, Proposition 46 will be the state ballot. Prop. 46 could amend California’s own medical malpractice laws. Florida isn’t the end of medical malpractice reform. It’s the beginning.

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Home Is Where You Park It: The Legality of Living in a Car

It used to be illegal to sleep in your car in Los Angeles. The city’s municipal code outlawed using any vehicle parked on a public street, lot, beach, or harbor as living quarters either overnight, day-by-day, or otherwise.

living in a vehicleIn June 2014, the 9th Circuit handed down a decision invalidating this law. The court unanimously held this language was “overbroad,” meaning quite simply that the municipal code criminalized otherwise innocent, legal conduct. Since it was overbroad, it violated the Due Process Clause of the Fourteenth Amendment.

This may seem like a no-brainer. After all, as written, any activity one would do in a “living quarters” was illegal in a car, meaning eating, talking on a phone, and checking hair in the mirror. More pointedly, a tired surfer couldn’t take a nap before paddling back out, a vacationing family, couldn’t catch a few hours of sleep for the night before hitting the road again, and a struggling software salesman, forced into foreclosure after being hit hard by the recession, couldn’t pull over into a quiet neighborhood to sleep after a hard day’s work.

Of those three examples, the first two typically weren’t the target of law enforcement, but the last one was.

Since the Great Recession, many have taken to sleeping inside of their vehicles. Unsurprisingly, particularly in more wealthy neighborhoods, similar anti-vehicle dwelling ordinances have passed in an effort to give police the ability to eradicate this new type of “homeless” population.

While this opinion only directly invalidates the Los Angeles law, it will also have an impact on any similar law in Arizona, California, Hawaii, Idaho, Montana, Nevada, Utah, Oregon, and Washington. Those states collectively hold about 62 million people, or nearly 20% of the nation’s total population. Thus, this single decision not only potentially impacts a large portion of the country, but asks an important question to all of us: is living in a car really that bad? Perhaps more importantly, now is a good time to change how our country looks at homelessness.

Recent polls and census efforts indicate that upwards of 55-60% of employed homeless individuals reside in a vehicle. Maintaining and running a vehicle isn’t cheap, but it can certainly be less than rent in larger metropolitan areas. Living out of a car is even a preference for many. Business Week has reported on a trend of successful, young professionals opting to live in their vehicle rather than pay for posh apartments.

One example is Foster Huntington, who left a well-paying design job and apartment in New York City to live and do freelance design work out of his Volkswagen van, amassing nearly a million followers on his social media sites, and leading to the recent publication of his photo book on the subject of “van life.” The carefree, anchorless lifestyle embodied by “van life” is demonstrative of how these laws criminalize perfectly legal, if not remarkably practical and utilitarian life choices.

The other side of the token is that homeowners should be free from finding trash or waste strewn about from vagrants. They should also be free from seeing a camper parked on the street in front of their home for days on end. Considering there are already perfectly valid laws against criminal damage to property and littering in place, the former concern can be dispelled. Moreover, there are also laws in many, many cities against leaving in a vehicle parked on the street in one space for more than 24 hours. This leaves the homeowners complaints seemingly solely against having to see vans, campers, or cars filled with possessions or extra storage, and the unnecessary, perhaps misguided shortsighted stigma attached to their occupants. After all, it’s quite likely the occupant of that vehicle is working, paying taxes, and supporting a local economy.

Homeowners should also consider this: having a vehicle parked on your street is preferable to having someone sleeping on the sidewalk. Where vagrancy has been a real issue, spending more time addressing the causes is certainly more desirable than criminalizing looking for a place to find some rest. In the meantime, Los Angeles will have to adjust to the changes in their law, and other cities should be prepared to either stop enforcing anti-vehicle dwelling laws altogether, or spend some of those complaining homeowners hard earned tax dollars on defending the laws in court.

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