Newsletter, Summer, 1999, Law Offices of Gerald A. Spala, Attorney, Legal services

A Quarterly publication from the Law Offices of Gerald A. Spala, by Gerald A. Spala, Attorney at Law.

Summer breaks (last of the century):

Time to get cultured. Recommended reading for the beach from "100 Best English-language novels of the 20th Century"[Editorial Board of the Modern Library]:

#2 The Great Gatsby, by F. Scott Fitzgerald, short enough it deserves a re-read;

#5 Brave New World, by Aldous Huxley, technology and mind control run amok;

#19 Invisible Man, by Ralph Ellison and #54 Light in August, by William Faulkner, poetry and poignancy on the subject of race from two of the best authors on the list;

The beat goes on:

Cases and controversies:

Civil Rights Suit against Teacher Over Classroom Rape Can Go Forward. A federal judge has given the go-ahead to a civil rights lawsuit against the Philadelphia School District over its culpability in a sexual attack on a special education student in a middle school. Judge Anita Brody, in a 16-page memorandum, ruled that the school district must face civil charges that the student's civil rights were violated when the substitute teacher in the class failed to protect her after the attackers had assaulted another student in the classroom earlier that day. May 19, 1999

Supreme Court Allows Some School Harassment Suits. A bitterly divided U.S. Supreme Court has ruled that schools may be held liable for ignoring severe sexual harassment among students. The nation's highest court said in a 5-4 decision that, under a 1972 federal law, schools can be forced to pay damages for responding with deliberate indifference to a student's severe and pervasive sexual harassment by a schoolmate. The decision was one of the most important of the Supreme Court's 1998-99 term. It could have far-reaching impact because it affects an estimated 45 million students in U.S. schools. May 24, 1999 [These two recent cases represent new ground in the area of suing public school districts and employees.]

Federal Judge Rules Second Amendment protects an individual Right to Keep and Bear Arms. U. S. v. Emerson The opinion is significant because of modern efforts to justify gun control and confiscation on the grounds that the Second Amendment did afford individual rights, but rather only intended collective rights in the form of a "militia". [Click here for transcript of opinion.]

Baby born after mother's murder is a "person". Antonia Rodger was delivered by emergency Caesarean section after her 28-year-old mother died from multiple stab wounds. She lived six weeks. A Connecticut state Judge has ruled that Robert Courchesne should also stand trial for murder of the prematurely born child. He could face the death penalty. May 19, 1999

Wisconsin Late-Term Abortion Ban upheld. A federal judge has ruled a Wisconsin law that bars a type of late-term abortion, carrying a potential term of life in prison, is constitutional. In his ruling, U.S. District Judge John Shabaz said the law, aimed at what critics call ``partial birth abortions,'' is not vague. He also held that it does not place an undue burden on women and that the state does have a valid interest in banning the procedure. May 28, 1999

Cash for credentials: Talk about student loans being a problem. A recent study indicates that U.S. college students are seriously burdened with credit card debt. Although more data is needed, there is concern that there is linkage between such indebtedness and dropout rates, employment problems and even health problems. The problem is that with student loans so accessible, and basically not dischargeable in bankruptcy, what explains the abuse of credit cards in this segment of the population? Turns out that card issuers are targeting younger people (perhaps because they know reform will seriously impair their ability to discharge), funding activities, sponsoring school programs, and even entering into business partnerships with the colleges and universities. [Reuters, June 9, 1999]	Credentials for credit: Turns out that a whole new bureaucracy of credit reporting agencies has "sprung" up in the last few years. We are not talking about the traditional big three: Transunion, Experian and Equifax. The credit surveillance game has become a bit unruly with a wholly new developed layer of small players making it tougher for those with credit problems. Now that may not be such a negative one might think---especially if you are a business person stung by such a debtor. The problems are more complicated though when you expand the "privacy" equation to include those harmed by incorrect merchant reports, errors by the credit reporter, and identity fraud. With so many players in the game---not knowing who has the faulty information is wreaking havoc for those attempting to "clean up the mess". Public Interest Research Group, CNNfn, June 2, 1999
Credentials chase cash: Business school graduates are avoiding traditional positions in banking, investment, insurance and other financial fields in greater and greater numbers----in favor of further study or ecommerce and website electronic commerce, advertising, sales, marketing and management. Some are not even waiting for graduation the demand for such services and skills is so high with the almost endless juggernaut of digital startup companies flowing onto the scene. Associated Press, June 1, 1999	Credits for cash: The IRS has given a six-month reprieve to taxpayers who were not eligible to convert a traditional IRA to a Roth IRA in 1998 by missing the April 15, 1999 deadline. Those taxpayers will now have until October 15 to switch the Roth IRA back to a traditional IRA and retain their full tax advantages for 1998. Also on IRA's, the Senate Finance committee has approved legislation that would increas the Education IRA contributions to $2,000 a year and allow tax-free withdrawals for grades kindegarten through 12 expenses incurred in public, private, parochial or home school environments. [President Clinton vetoed a similar bill last year on the grounds "it posed a threat to public eduction".]
Tort Law: Structured Settlements: Have you ever seen the late night TV commercials using celebrities to offer cash for "annuity type settlements", lotto winnings or contracts and wondered what that was all about? Structured settlements utilize "annuity contracts" to pay out in installments over time. The advantages are real and many. In personal injury litigation such settlements are associated with "large loss" situations and very often involve sizable sums. Turns out that firms specializing in the "discounting" for cash are quite the discounters and the government doesn't like it anymore. Very often the discount can be as high as 30-40% once "fees" and actual discount are measured. Both the House and Senate have introduced bills designed to curb the sale of structured settlements at such deep discounts, save and excepting court approved sales in hardship cases. How? Well, the only way government seems to know how to to do something--by taxing. Both Bills would tax the company purchasing the structured settlement 50% of the difference between the discounted value of the structured settlement and the amount the company paid to purchase it. [One of the advantages to such settlements in the first place is the tax free status the pay-out enjoys as long as certain formalities in the formation process are satisfied.] The tax appears to be designed to completely eliminate the speculative process.	U. S. Prison Population {or, drug convictions give us a new country}: U. S. prisons and jails held a record 1.8 million inmates last year, meaning one out of every 150 residents was behind bars, the U. S. Justice Department has reported. The U. S. has more people in prison than the combined European and other western hemisphere nations. The state of California alone has more people incarcerated than the country of China. The prison population is 41% white, 41% African-American, 16% Hispanic, and 89% male predominantly between the ages of 18 and 45.

Legal Trends

Crypto is not cool: Last year about this time, a U. S. District Court, reflecting the general consensus of the "government's" position on the matter, ruled that a professor in Ohio could not post encryption software on his website without a review from the U. S. Department of Commerce. [Generally, making available to international transmission any serious (or competitive) form of encryption will just not be approved by government regulatory agencies as the law presently stands. American software engineers and companies are arguing this is seriously hampering their ability to be globally competitive.] The professor was making it available for his students. He now argues that the code is a form of "free speech" and has sought an appeal of the Court's decision.
Domain is the same as "dough": On the other side of the spectrum, a federal court in Virginia has ruled that "domain names" are property and are subject to more protection than was being traditionally bestowed in the courts. The ruling stems from a suit involving a trademark infringement between a soccer equipment manufacturer (Umbro)and a Canadian corporation. Umbro was claiming infringement when the Canadian firm registered the website domain name of "umbro.com".
Arbitration on the defensive: California Assembly Judiciary Committee Chairwoman Sheila Kuehl has proposed sweeping legislation to do away with pre-dispute, binding arbitration clauses in all employmen and consumer contracts. AB 858 would issue broad prohibitions on all consumer contracts, dictating to merchants or employers that they could not require consumers and workers to "waive any statutory, constitutional, or common law rights" in order to enter such a contract. Banks, insurance companies, HMO's and large employers would be most affected. Presently, as the legislation winds its way through the system, powerful, sometimes ironically contrasting forces have lined up for and against the legislation. Alternative Dispute Resolution, Mediation and Arbitration organizations are often staffed with ex-judges, lawyers, from both sides of spectrum. The legislation has primary support and is seen as the initiative of the California trial and personal injury lawyers.(More to follow.)
Arbitrate Not: The California Supreme court has decliened to review a case reported on previously in this newsletter. That case involved a dispute over whether or not Bank of America customers could litigate disputes with the bank in court, or be bound to arbitrate pursuant to mandatory arbitration clauses inserted in customer monthly statements (beginning in 1992). The case was tried and lost in 1994 in favor of the customers. The latest Supreme Court nondecision now clears the way for the sizable lawsuit. Bank of America has since amended the practice and basically the drift of all of this is that if an Arbitration clause is going to be binding, it probably is going to require a signature or some knowing affirmation of its content and significance. Badie v. Bank of America
Proposition 51- Some things just never end: This is the proposition that gave us the laws concerning how damages are to be assigned and collected in personal injury and accident cases. Basically, anyone found at fault can only be forced to pay toward those damages awarded for pain and suffering only that percentage to which the Judge or jury found them at fault. The initiative and subsequent laws have since spawned complicated debates and tortured formula applications to account for worker's compensation, other insurance, multiple parties and other settlements for the same facts or accident. In McComber v Wells, the 4th District Court of Appeals has held that the defendant (the personal causing the injury) was entitled to a setoff for pre-verdict economic[the kind of damages which anyone even if they are 1% at fault can be forced to pay the entire amount] damages settlements even though the jury later determined those settling/paying defendants were not liable. [Good lawyering doesn't matter. It's still a windfall in the eyes of the law.]
Coming commentary: on-line gambling

Links worth taking a look at:

Tech Trends

It's more than a village. *June 12, 1999* 13 million Canadians and Americans signed on to the internet, bringing the online population in those two countries alone to 92 million. Over 38% of the U. S. population over age 16 is surfing the net to some extent. And the prediction is that another 20 million or so will go online for the first time within the next year.
Really biggie E-economy. The U. S. internet industry generated $300 billion in revenues in 1998. That's nearly as big as the U. S. auto industry and it's actually larger than the energy industry. Between 1995 and 1998, the internet economy grew at a phenomenal annual rate of 175%.
Bricks or bits. Online shoppers say they plan to cut how much they spend at regular retail outlets in favor of spending more online. Some 24 percent of the consumers surveyed by NFO Interactive believe that their internet shopping use will reduce their spending on products and servies at retail stores in the next six months.
Hidden "internet stock play?" Ebanking/ebilling. Some of my clients have already adopted electronic banking. My brother and a good friend have been paying the monthly fee and using the electronic services available through a couple of the big banks. I recently decided to make the plunge and responded to a promotional ad for an internet bank based in North Carolina. [An initial deposit was communicated by credit card, and paperwork completed on the internet was printed, signed and mailed. All the stamps could not be avoided. :))For a period of time, I will be entitled to "35 electronic bill paying" transmissions per month. (Which pretty much covers the basics for a home/small business.] The startling fact is how fast this area is growing. International Data Corporation, the supreme monitor of all trends and demographics having anything to do with technology, reports that the data suggests a 500 percent increase in the number of households using online banking by the year 2003. Just as important, and perhaps overlooked though, is the impact that electronic billing will have on all this. Postage, personnel, shipping charges, capital and machinery to handle the paperwork---all are costs traditionally associated with large utility, financial, insurance and corporate accounts receivable departments. Companies that adopt electronic billing systems (the technology is available, in place and improving) can expect to save billions. The problem is whether their response will be like the U. S. Post Office who wants to INCREASE postage rates due to the loss of 180 million pieces of mail due to electronic billing and communication, or whether the economies in the private market will be passed on to the consumer. [Information Week, 1/22/99]
Predictions-no brainer (revisited): cheap flat panel displays; 30 gigabyte hard drives; more powerful handhelds.
*Coming commentary:*	*Recent innovations:*
Net education: learnin' for nothin'	E-fax: a small but very usefool tool
Net phone use: talkin' for nothin'	E-stamps: anything to stay away from the Post Office
Net taxation: good for nothin'

Copyright, 1999 Gerald A. Spala, Esq. All rights reserved. The materials and opinions contained herein are not intended as legal advice, nor should be relied upon as legal advice in the absence of a complete and thorough consultation or review of your matter by a licensed attorney.

Imagine Radio--personalize your music listening	Smart Ship--decide on the best method
My Simon--comparison shopping	Instinet--follow markets after closing
Online Surgery---view plastic and other procedures	Who is she/he?--background checks modestly priced
Electric Book--downloadable and free	Efax.com--portable fax number, delivered by email
Bibliomania--downloadable and free	Ziplip--encryption for free
Mental Health.com--reference	Estamps--use your printer to label and stamp
Biz Traveler--reservations	Government Search--daily fee check the entire government