Neighboring States Ban Corporate Farms in Effort to Protect Family Farmers. In an effort to protect the family farm, South Dakota joins Iowa, Kansas, Missouri, Minnesota, Oklahoma, Nebraska, North Dakota and Wisconsin in adopting laws or constitutional amendments to ban nearly all forms of corporate involvement in farming and agriculture. Such "corporate" farms are generally big business operations which are able to undercut local farm pricing, so that family farms cannot compete. Under the new South Dakota constitutional amendment, no corporations (except for related-family-member farm corporations), limited liability companies and partnerships in South Dakota may own, control or engage in farming or agriculture in the state.
Choice of New York Law in NASD Arbitration Case Does Not Avoid Punitive Damages. Although New York law prohibits arbitrators from awarding punitive damages, the arbitration contract itself did not waive the right to punitive damages, although the parties could have specifically so agreed. The contract's provision that "any controversy" should be submitted to arbitration controlled. Roubik vs. Merrill Lynch, Pierce, Fenner & Smith, Inc., 181 Ill.2d 373, 692 N.E.2d 1167 (1998), following Mastrobuono vs. Shearson Lehman Hutton, Inc., 514 U.S.52, 115 S.Ct. 1212, 131 L.Ed.2d 76 (1995)
Funds Seized to Cover Payments By Issuer Under Letters of Credit Recoverable by Bankruptcy Trustee. Denying certiorari, the U.S. Supreme Court has left intact a 7th Circuit opinion holding that funds seized by debtor's bank which issued letters of credit from the debtor's deposit accounts to cover the bank's payments to beneficiaries under letters of credit were preferential payments, and therefore recoverable. Debtor's payments to the bank did not come under the "new value" or "ordinary course of business" exceptions to statute. Seventh Circuit opinion at 140 F.3d 1111.
Notice that Payments Due Beginning "30 Days from Completion" Insufficient Under Truth in Lending Act. In retail installment contract, statement that payments would be due beginning within 30 days from completion of the work did not satisfy disclosure requirements. When exact information not available, creditor must give estimate based on best available information, and disclose that it is an estimate. Clay vs. Johnson, 1998 WL 685378 (N.D.Ill.)
No Claim for Breach of Fiduciary Duty Against Debtor's Officers & Directors. Absent dissipation or diversion of assets, Chapter 7 Trustee's allegations that Debtor corporation's officers and directors had prolonged the debtor's corporate life by incurring debt based on misleading financial information failed to state claim against them individually. In re Ben Franklin Retail Stores, Inc., 1998 WL 718346 (Bkrptcy.N.D.Ill.).
Creditor Had Standing to Bring "Alter-Ego" Action Against Shareholder of Debtor. Creditor truck lessor had standing to bring an alter-ego claim against the bankrupt lessee's shareholder. Bankruptcy Trustee's right to bring such claims is not exclusive. Sharon Leasing, Inc. vs. Phil Terese Transportation, Ltd., 1998 WL 718207 (Ill.App.2 Dist.).
Individual Providing Reference for Hedge Fund Subject to Rule 10b-5 Claim. Investor who relied on individual's statements that individual was invested in the hedge fund and did well during a time period when hedge fund did not actually exist sufficient to establish scienter. Investor's allegations as to transaction causation and loss causation established 10b-5 claim against individual making reference. Harding University vs. Consulting Services Group,, L.P., 1998 WL 708916 (N.D.Ill.)
Automobile Lessors Not Required to Pay Interest on Security Deposits . UCC Section 5/9-207(2) governing collateral in the hands of a secured party, does not apply to the security deposits paid under automobile leasing contracts. Any doubt about Legislature's intent was removed by passage of Motor Vehicle Leasing Act, which provides that lessor is not obligated to pay interest to lessee on the security deposit. Spina vs. Toyota Motor Credit Corp., No. 1-97-1162
Employer's Decision to Move Plant 16 Miles Qualifies Employee for Unemployment Benefits. Although employee quit and was not fired, fact that employer moved its plant 16 miles where employee worked from city's south side to suburb constituted "good cause attributable to the employer" so that employee was entitled to unemployment benefits.
Independent Contractor not "Employee" For Purposes of Americans With Disabilities Act. Salesman who was terminated 3 days after advising employer that his wife had lung cancer could not bring action under the ADA as an employee. Record showed that Plaintiff was paid set amount per month, with no taxes deducted, that he paid a substantial portion of his own costs of operation, that he received no employment benefits such as health insurance, vacation time, or pension, was free to continue to do business on behalf of companies he formerly represented, and received a 1099 rather than a W-2 form, all of which indicated his status as an independent contractor rather than an employee. Aberman vs. J. Abouchar & Sons, Inc., No. 97-1423 (11-18-98). Appeal, N.D.Ill., E. Div; Affirmed.