Massachusetts May Join Delaware
in Permitting Annual Meetings Online.
Amid concerns by some that permitting online annual meetings
would allow company executives to avoid embarrassing confrontations
with shareholders, Massachusetts is considering legislation
which would permit publicly traded companies to hold their annual
meetings online. Supporters say the new law will permit many
to participate in the meetings who would not otherwise be able
to attend. To date, the only other state to permit such online
annual meetings is Delaware.
The bill would also permit qualified companies to send proxy
statements and other routine communications by email, rather
than US mail, as is now required. See article at SiliconValley.com.
Higher Cost of Arbitration
over Litigation Voids Employer's Mandatory Arbitration Clause.
In what appears to be a case of first impression, a Federal Judge
in Utica, New York has ruled that the mandatory arbitration clause
of employment agreement is unenforceable where the claimant can
demonstrate a likelihood that she would incur significant costs
for arbitration (to pay the arbitrator) which she would not incur
in a judicial proceeding. Acknowledging the U.S. Supreme Court's
recent decision in Circuit
City Stores Inc. v. Adams, 121 S.Ct. 1302, finding such mandatory
employment agreement arbitration clauses enforceable (see our
April, 2001 issue), but saying that the decision did not address
"what, if any, minimal fairness requirements must be met
in order for a court to conclude that an employee is not being
compelled to forfeit [substantive rights]...," Judge David
N. Hurd ruled that the proper analysis is not whether the Plaintiff
can afford the costs of arbitration, but rather whether the costs
of arbitration are likely to be significantly more than the cost
of litigation. Ball
v. SFX Broadcasting, 00-CV-1090, (not posted online). As
reported by www.law.com
No Compromise on Article
2 Where Computer Software is Concerned.
In the continuing
battle over Article 2 of the Uniform Commercial Code (UCC)
and how and whether it relates to computer software, the General
Session of the National Conference of Commissioners on Uniform
State Laws (NCCUSL) declined on August 13, 2001, to present amendments
to Article 2 (Sales of Goods) of the UCC to the states for a
vote. Following three days of debate, the Conference voted to
accept the amendments, but then failed to report them out of
committee. Expect another year of drafts, proposals and debates,
both at NCCUSL and at the American Law Institute (ALI).
Assignment of Beneficial
Interest Under Land Trust Insufficient to Assign Contract Rights
Arising From Sale and Purchase of Land. Although Plaintiff, who was the
majority shareholder, officer and director of corporate purchaser
of land under real estate contract, received corporation's assignment
of its beneficial interest in land trust following purchase of
real estate and entry into land trust agreement with mortgagor,
such assignment did not operate to put shareholder in privity
with seller of land, so that shareholder had no standing to enforce
warranites regarding environmental representations, which proved
to be faulty. Kaplan
vs. Shure Brothers, Incorporated, No. 00-4027, U.S.Ct.App,
7th Cir., September 4, 2001.
Trade Dress Infringement
Claim Requires that Confusion be Probable, Not Just Possible.
Plaintiff and Defendant were both spring water bottlers, but
initially, Plaintiff was the only such bottler to use a 1.5 liter-sized
bottle. When Defendant and others began to use 1.5 liter bottles
similar to those used by Plaintiff, Plaintiff filed suit for
trade dress infringement. Following the multi-factor test set
out in Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492,
495 (2d Cir. 1961), the Second Circuit Court of Appeals, noting
that the trial court had found that Plaintiff's bottles had become
widely used and generic as early as 1983, and easily distinguished
by differing labels, the Court ruled that the mere possibility
of consumer confusion was not sufficient to sustain a cause of
action under under § 43(a) of the Lanham
Trademark Act ("Lanham Act"), 15 U.S.C. 1125(a)
(2000),for trade dress infringement. Nora
Beverages, Inc. vs. The Perrier Group of America, Inc., et
al, No. 00-7709, 2d Cir., August 23, 2001.
Debtor's Action Against Bank
Defeated by Voluntary Payment Doctrine.
Even though Defendant bank erroneously declared Plaintiff in
default and required Plaintiff to sell off stock in order to
repay loan, summary judgment in favor of bank was proper. By
accepting bank's interpretation of loan agreement rather than
seeking independent advice regarding its construction, Plaintiff's
payment was voluntary. A plaintiff who voluntarily pays money
in reply to an incorrect or illegal claim of right cannot recover
that payment unless he can show fraud, coercion, or mistake of
fact. Defendant bank made misrepresentations of law, not fact.
Randazzo
v. Harris Bank Palatine, N.A., No. 00-2915, 7th Cir., N.D.
Ill., E. Div (8/21/01).
Let's Be Careful Out There
I: No Expectation of
Privacy for Home Telephone Calls.
A divided Pennsylvania Supreme Court has ruled that no individual
has an expectation of privacy as to telephone calls to or from
his own home, because of the proliferation of speaker phones,
cell phones and the like. Commonwealth
of Pennsylvania vs. Rekasie, No. J-52-2000, Sup.Ct.Penn,
Western District, August 20, 2001. See also Justice
Zappala Dissenting Opinion, Justice
Nigro Dissenting Opinion, and Justice
Castille Dissenting Opinion. For commentary,
see the article. Would a conversation subject to the attorney-client
privilege survive a claim of no expectation of privacy?
Let's Be Careful Out There
II: City Emails on Personal
Computer Part of Public Record?
The City of Arlington, Texas has brought an action to declare
that city-related emails on a councilwoman's personal computer
are not part of the public record, subject to disclosure. The
dispute arose in part because the councilwoman put her home
email address on her city business card. Does including a personal
email address on a business card subject personal emails to disclosure?
Let's Be Careful Out There
III: Carnivore to Go
Wireless in October. The FBI plans, possibly as soon
as October, to expand the use of its controversial monitoring
system Carnivore,
to include the interception of email and other wireless text
messages sent through wireless carriers.
Let's Be Careful Out There
IV: Federal Judge Protests
Planned Monitoring of Computer Use of Federal Judiciary and Staff.
Warning that the plan to routinely monitor the email and web
usage of all federal court employees, including Judges and their
staff, would create an atmosphere of paranoia, and endanger the
confidentiality of sensitive court documents, Judge Edith H.
Jones, a federal judge for the 5th Circuit Court of Appeals,
objected
to a recommendation made by the Judicial Conference's committee
on Automation and Technology.