Month: October 2006

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America’s Pastime of a Time Past: Baseball has lost its special place in the American courts, but why? (Part 1 of 2)

I. Introduction

Baseball has enjoyed a
special place in the hearts of American sports fans.  It is touted as
America’s pastime.  As Americans, judges are not immune to either the
love of the game or the special status it holds in American culture. 
While other sports faced antitrust regulation with respect to the
reserve clause, baseball was exempted by the courts. [1]  The reserve clause restricts the right of the player to contract with a team other than the one he is currently signed with.[2]  Justice Blackmun, in his famous opinion in Flood v. Kuhn, pays homage to the baseball gods with a nearly seven-page-long introductory section entitled “The Game.”[3]  This storied past of baseball (MLB) no longer holds sway as recent rulings evidence.  Specifically, in the CBC v. MLB Advanced Media,
a federal district court recently held that MLB did not have … Read the rest

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The Unlawful Internet Gambling Act and the Tax Revenue the United States Government Could Have Had

I. Introduction

Many
people who gamble on-line will tell you that October 13, 2006 truly was
an unlucky day. On that Friday, President Bush signed into law the
Unlawful Internet Gambling act.[1]. The bill makes it illegal for banks
and credit card companies to transact with online gambling
companies.[2] By preventing banks from allowing deposits into gambling
sites, the bill hopes to prevent people from partaking in on-line
gambling. The question many people have is why the United States would
outlaw internet gambling when it could have regulated the industry and
benefited from the tax revenue it would have received?

II. Analysis

The
first thing taught on the first day of an Income Tax class is that tax
base times rate equals revenue (tax base x rate = revenue). Congress
can increase tax revenue in one of two ways; increase the tax rate or
increase the tax base. Increasing the

… Read the rest
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From M-16s to the F.R.C.P. : The 11th Circuit’s USERRA Blunder

I: Introduction 

    On June 19, 1879, General William Sherman famously declared that war is hell. [1]. It is undeniable that war demands great sacrifices from those who serve. In 1994, Congress sought to mitigate the depth of such sacrifices through the enactment of the Uniformed Services Employment and Reemployment Rights Act (“USERRA”). The USERRA’s purpose is two fold: prevent employment discrimination against those who have served in the military and secure the reemployment of military servicepersons. [2]

    The 11th Circuit erred in its interpretation of the USERRA in deciding the matter of Coffman v. Chugach. [3]. The ultimate holding was correct in light of the recognition of the plaintiff’s failure to establish a prima facie case. Despite this, the court’s method of arriving at its conclusion failed to establish an acceptable standard for future courts to follow.

II: The USERRA

 The USERRA was born

… Read the rest
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Banks Cheating Workers Out of Overtime Pay Are In Trouble

Introduction:

There is
a common practice among banks to classify their brokers in such a way
that makes them ineligible to receive overtime pay, and now their
brokers are fighting back to receive the pay that they feel is
rightfully theirs. Morgan Stanley, Citibank, Wachovia, and Bear Steams
have all been sued for failing to pay overtime to eligible employees.
The U.S. Department of Labor is now chiming in to say which employees
must be paid overtime, and it is not looking good for the banks.

Morgan
Stanley has agreed to pay up to $42.5 million to settle a class action
suit against 4,000 of their employees and former employees for failing
to pay overtime to them even though they were eligible for overtime pay
under the law. [1] Similar cases have been filed against Citibank,
Wachovia, and Bear Steams Cos. [2]

The plaintiffs alleged that improper deductions were taken

… Read the rest
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Power Auction: Rates in Illinois to Rise

The cost of “running” your business, not to mention heating your home, in Illinois may change after the Illinois Commerce Department’s recent power auction. [1] Currently, power rates have been frozen since 1997, but the freeze will expire in 2007. [2] It is then that some people, including state legislators, feel power rates will increase and the results of the power auction will be felt. [3] The current statute governing power rates in Illinois is known as the Electric Service Customer Choice and Rate Relief Law of 1997. [4] In the next paragraphs this article will attempt to synthesize some of the information surrounding this topic by explaining the power auction, the extent of potential rate increases, and the potential for a continuation of the Rate Relief Act of 1997.

 

The power auction took place from September 5 to September 8. [5] During the power auction state suppliers placed

… Read the rest
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China’s New M&A Regulations

I. Introduction

The first piece
in this series (A Warning to Foreign Companies Entering "Sensitive" U.S. Markets, in the September 6th, 2006 edition of this publication) discussed the attempts of foreign companies to enter "sensitive" areas of the US
economy, focusing on how the US government derailed the purchase of US
companies by foreign entities. [1] This
piece will discuss the Chinese government's new regulations covering
M&A transactions involving foreign investors purchases of Chinese
companies will affect the M&A market and possible motivations behind the new legislation.   

II. Analysis

On Aug. 8, 2006, the People's Republic of China ("PRC")'s  Ministry
of
Foreign Commerce ("MOC") issued new regulations ("Revised Provisions")
on M&A transactions in China. [2] These new regulations would
simultaneously ease and impede foreign acquisitions by allowing all
stock purchases, but also requiring government approval of most M&A
transactions involving offshore entities. [3] The Revised Provisions
went into effect

… Read the rest
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Bank of America Settles Money Laundering Suit for $7.5 Million

The Bank of America recently settled a money laundering suit brought
by Manhattan District Attorney, Robert M. Morgenthau for $7.5 million,
$6 million in penalties and $1.5 million in costs, ending an almost
three year investigation conducted in coordination with foreign
authorities. [1]

District
Attorney Morgenthau said that a series of transfers, totaling more than
$3 billion, prompted the investigation because they possessed some of
the ear-marks of terrorist financing, much of which comes from South
America. [2] The transfers originated in offshore shell companies owned
by illegal Brazilian money services and were routed through the Bank of
America account of a Uruguayan money remitter. [3] Although officials
do not know the identity of many of the recipients, District Attorney
Morgenthau believes that some of the transferred funds went to Mideast
terrorist organizations. [4]

Under the terms of the settlement, Bank of America admitted that it
failed to adequately asses … Read the rest

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Merck owes the IRS big bucks – for taking advantage of the international tax market?

I. Introduction

There are two things in life that are certain: death and taxes. 
Corporations have successfully cheated the former by achieving
perpetual life.  And, from their births, it seems like corporations
have also been doing their darndest to avoid the latter.  Offshore
affiliates have become a popular corporate technique for avoiding
income tax.[1]  Recently, Merck has been investigated for putting its
own unique spin on the traditional offshore affiliate.

II. Analysis

In 1993, Merck in conjunction with a British bank entered into a
Bermuda partnership whose assets were substantially comprised of the
soon-to-be-valuable patents behind cholesterol-lowering medications
Zocor and Mevacor.[2]  In creatinig this partnership, Merck engaged in
a practice called "inversion:" a method of reorganization wherein a
domestic corporation reorganizes itself to become a subsidiary of a
foreign parent entity, thereby rendering any profits generated by the
foreign business operations outside of the reach of the federal income
tax.[3] 

… Read the rest
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Real Estate Auctions: Is a Bidder Legally Bound?

Real estate auctions exist in many forms and are becoming increasing popular over the internet. Ebay alone boasts that 55,000 property have already been sold through eBay Real Estate.  [1]  There are significant benefits to using the internet to purchase property, since one can shop for real estate around the globe, pick a suitable property, and bid online from the comfort of one's home.  [2]  Traditional real estate auctions still exist, most commonly as government auction of seized property [3] or as bank auctions of foreclosed property. With the current estimate that one in three properties will be sold by auction by the year 2010, [4] one might wonder which, if any, of these auctions legally bind the bidder to purchase the property.

Traditional real estate auctions for government property or bank foreclosures occur on the steps of the home at a specified time with the potential buyers present at

… Read the rest
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A Salty Flavor to Your (Formerly) Land-Based Contracts: Norfolk Southern v. Kirby Two Years Later

In 2004 the Supreme Court of the United States handed down a decision that changed the jurisdictional requirements of adjudicating a contract in admiralty.  [1]  This was a major development in an area of the law that is remarkably resistant to change because of the nature of shipping evolves little compared to other technology.  These changes should have had a larger effect in legal circles, because now certain “mixed contracts” that fell in the grey area between admiralty and non-admiralty law were considered to be within admiralty jurisdiction entirely.  [2]  Now certain contracts for the carriage of goods that arrange for transportation over both land and water in a single contract can be adjudicated in certain instances that were impossible before.  [3]  Currently, a shipping container undergoing some catastrophic event in Nevada could be litigated in admiralty as long as the majority of its journey was made on navigable waterways

… Read the rest