Online Sales Tax Reform

The debate over whether or not online businesses should be required to universally collect sales tax gains momentum.


ARTICLE ANALYSIS:
You may have wondered why many online retailers charge sales tax when a purchase is made, while others do not charge sales tax to their customers.  The legal reason is that in 1992, the U.S. Supreme Court ruled that online businesses are not required to collect a sales tax from customers who order products that are to be shipped to a state where their company does not have a physical presence.  Given the choice, most companies will not want to collect sales tax, because doing so places additional administrative workload on their information/accounting/processing systems, which ultimately will cut into their bottom-line.  In addition, not charging sales tax reduces the final price that a customer will pay for their product, which makes their business a more appealing choice.


For almost 20 years this has been the status quo, and it has created at least two inequalities:


1) It gives sales tax-exempt online retailers a competitive advantage over their brick-and-mortar counterparts.  Many customers go to a store just to get their hands on a product, with no intention to actually buy that product from said store.  By then ordering that item online, they won't be able to get the item right away, but the cost savings from the lack of sales tax is usually lucrative enough to endure the wait.  So, a customer is using the facilities that the retailer has paid for (the building, the utilities, possibly the employees) and the retailer receives nothing in return.


2) Online stores such as Amazon (who currently only charges sales tax to 5 states) have a competitive advantage over other online stores who are required to charge sales tax to the majority of buyers.


However, applying existing tax laws to all online purchases would mitigate these inequalities and better equip all stores to compete on a level playing field.  Amazon has historically been opposed toward the universal application of tax for the reasons previously mentioned.  However, as the company realized that it is going to eventually lose its tax battle (notably with the state of CA), it has now reversed its standpoint and is pushing for all companies to be bound by the online tax.  Amazon's competitors argue that the company is flip-flopping on the issue to hurt smaller business that may not have the technological capacity to process the collection of the tax as efficiently as larger companies can.


MY OPINION:
From a consumer standpoint, I'm not thrilled with the prospect of losing the ability to order goods from the Internet without paying any tax.  From a business standpoint, I agree that it will probably prove difficult for some businesses to implement the collection of sales tax.  From an objective governmental (& legal) standpoint, I believe that it is not only fair to collect sales tax from all consumers, but it is also a missed fiduciary opportunity not to collect taxes in accordance with pre-existing laws.  Just because the sales medium has evolved over the recent decades, why shouldn't our laws be applicable to those areas?  Not to mention the fact that states currently lose an estimated $23 billion aggregate, annually, in lost sales tax revenues due to online purchases.  Especially at a time when most states are struggling so severely financially, governments cannot afford to disregard such a large source of legitimate income.  Ultimately, I think my desire for fairness of policy wins out over my desire to be able to save a few bucks on my next purchase.


Original Article

UPDATE: Whale Washes Up on Point Loma Shore

Here is a video that provides an update on the dead whale that washed up on shore in Point Loma a few weeks ago. It is actually very interesting what they are doing with the whales body. They plan on submerging to the ocean floor 20 miles out at sea where it will create a brand new Eco-system in that location which will give marine biologist the chance to observe the changes in the ocean. Check out the video where cbs8 explains the process.

http://www.cbs8.com/story/16109705/dead-whale-being-moved-from-point-loma-beach

Black Friday Safety

Reports have it that a women in the Los Angeles area pepper sprayed 20 Black Friday shoppers in route to get an edge on an X-box and some games. Here is the link to the article below.

http://www.cbsnews.com/8301-501363_162-57331142/woman-pepper-sprays-other-black-friday-shoppers/

It is surprising to see what some people will do in order to get a "good deal". Black Friday sales and shopping are always pretty crazy. I wonder what the victims of this lady''s wrath will do. Authorities have not located the suspect yet, but talk of the victims filing law suites against Wal-Mart are surfacing.

This was not the only obscure thing happening on Black Friday 2011. Here is another link of a man getting arrested by the police, another getting tased also at a Wal-Mart.

http://www.huffingtonpost.com/2011/11/25/black-friday-wal-mart-violence_n_1113401.html


Makes you wonder if Wal-Mart can do something better to secure a safe and peaceful environment for its shoppers during this time of the year.

Selling Babies...Are you SERIOUS?!?!

Ok so I'm kind of heated right now because I just finished spending about an hour writing on this blog and pressing save periodically and then tried to publish when I finished, but it didn't publish for some reason? Then my internet stopped working on my laptop, and when I went back on the blog, all of my writing was gone! Sorry I'm kind of venting on here. Anyways, a summary version of what I had originally wrote is that I found out some emotional and disturbing news this Thankgiving break from my mother who had discovered that a lady named Theresa Erickson, and two of her assistants, had been selling babies through a surrogacy company in Poway, CA. The article stated, "Theresa Erickson, 43, pleaded guilty Tuesday to conspiracy to commit wire fraud for transmitting fake documents to the Superior Court of California, County of San Diego and falsifying information to the couples whose babies were born through surrogates she recruited." She and her partners had would sell babies for $100,000-$150,000, but through a contract where she only promised the surrogate mothers between $35,000-$40,000. Crazy, I know. This touches home because my mother was a surrogate mother under these three ladies. My mom is still waiting to see what actions she can take. I know justice will be served.

Here is the article and the video:

http://abcnews.go.com/US/attorney-pleads-guilty-baby-selling-ring/story?id=14274193

Hot Coffee: A different view on frivolous lawsuits

There is a documentary that was recently released called “Hot Coffee” that analyzes the famous McDonald’s court case where a customer, Stella Liebeck, had scalding coffee spill on her lap resulting in severe burns. Leibeck v. McDonald’s Restaurants is one of the most famous recent court cases and has brought much debate about the amount of today’s frivolous lawsuits. Earlier in class this year we have discussed frivolous lawsuits and our views on them. This documentary gives this concept a different spin and showed the story from the other side. Naturally, when the media is the main form of knowledge on a case or anything, there needs to be further unbiased research done to get the full story.

I learned about this film when the former attorney and film director Susan Saladoff appeared on the Colbert Report earlier this year. The film’s website says, “Seinfeld mocked it. Letterman ranked it in his top ten list. And more than fifteen years later, its infamy continues. Everyone knows the McDonald’s coffee case. It has been routinely cited as an example of how citizens have taken advantage of America’s legal system, but is that a fair rendition of the facts? Hot Coffee reveals what really happened to Stella Liebeck, the Albuquerque woman who spilled coffee on herself and sued McDonald’s, while exploring how and why the case garnered so much media attention, who funded the effort and to what end. After seeing this film, you will decide who really profited from spilling hot coffee.”

Although this film is biased, it is important to look at this case from both sides to be able to form a proper opinion on this case and a view on lawsuits and their frivolity. I have yet to see the film which was released at the beginning of this month; however, I plan on watching it. My personal view is that many of these cases are frivolous to a degree but it will be interesting to see how this film argues the opposite.

Below is a link to the film’s website and it has some interesting trailers, videos, and the director’s interview with Stephen Colbert that I referred to earlier.

http://www.hotcoffeethemovie.com/default.asp

More Dodger Legal Problems

In the past several months the LA Dodgers have had their share of legal issues and now are just trying to move on past the legal storm that is Frank McCourt, who finally agreed to sell the team. Selling the team has been a difficult process, with the variety of bidders and the need of approval by Major League Baseball on the accepted bidder. Now the Dodgers my face another issue, a subsidiary of Fox is interfering with their efforts to sell the team. Fox has a contract with the Dodgers to televise Dodger games through 2013. The contract also gives the subsidiary of Fox exclusive negotiating period from Oct. 15, 2012 through Nov. 30, 2012. A lawyer from Fox sent a letter to the Dodgers’ financial adviser, Blackstone Advisory Partners, demanding that they cease efforts to solicit bids for television rights to Dodgers games. Fox claims that by allowing the Dodgers to take bids on the media rights they have violate the exclusive negotiation term of the contract. The Dodgers rebuttal was that the letter “was intended to interfere with the sale of the Dodgers and their assets in bankruptcy.” The Dodgers asked U.S. Bankruptcy Judge Kevin Gross for a motion to allowing them to market the media rights for 2014 and beyond. Fox sued the Dodgers on Sept. 27, asking for an injunction to stop the Dodgers from acting in a manner inconsistent with the contract. The suit has not been settled but the Dodgers are required to be sold by April 30, 2012.

If the Dodgers are allowed to market the media rights for the 2014 season and beyond, they can greatly impact the price at which the team is sold for. The future owner would have the ability to negotiate a better deal than the one the Dodgers are currently under. This can be detrimental to Fox, who is looking to renew the contract. I am sure the Dodger games are the one of or the most valued programs on Fox Sports Net West, the Fox subsidiary suing. As for the suit is hard to tell which way the court will go. Fox does have exclusive negotiation rights, but whether they are valid only in the outlined period is still up in the air. If the motion the Dodgers requested is approved and they are allowed to market the media rights, Fox would have their exclusive 45-day negotiating period start whenever the court issues the order. This could play a fact in the final decision or settlement. The suit is up in the air, but what is not up in the air, is that the Dodgers, Dodger fans, and Major League Baseball are glad that the Dodgers will finally be out of the hand of Frank McCourt.

Original Article

Documentary Subject Sues

http://www.cinemablend.com/new/Documentary-Subject-Sues-Errol-Morris-Defamation-27729.html

I found this link to be very interesting. Most of the elements of the suit have to do with the Quasi-intentional torts, except the claims of intentional infliction of emotional distress and fraud (though i am not sure if the breach in contract can be deemed tortious.) As the figure of the piece was not in the "vortex of controversy" at that time, I believe the claims will be given consideration even though she might be deemed as "unstable" by some. What are your opinions?

Also for your enjoyment:

http://www.youtube.com/watch?v=y-e4vu_wL-M

Penn State Allegations

Generally college sports are taken as opportunities for students, faculty, alumni and fans to come together and support a common cause that involves the masterful combination of "spirits" and entertainment.  In essence, college sports (in particular, college football) is an excuse to party.  A chance to throw back a few drinks all in the name of fervently supporting your school.  Unfortunately, with every party comes the ones who ruin it for everyone else.  This past weekend, Penn State really ruined the party with new allegations pertaining to the former coach, Jerry Sandusky, who sexually abused what has been determined to be at least eight young boys over a period of 15 years.  Forget any idea of a party, this is just wrong and they should be punished severely. The following article covers the allegations with great depth and coverage:

http://www.cnn.com/2011/11/07/justice/pennsylvania-coach-abuse-charges/

The idea that anybody would use their power in such a disgusting and perverted way provokes the question of the character of mankind.  In this instance, here is a man that was highly revered for his work in football and was, by many accounts, a "charismatic individual."  He started a program called, "The Second Mile," with the vision to provide "a statewide non-profit organization for children who need additional support and who would benefit from positive human contact" (as taken from their website: http://www.thesecondmile.org/aboutUs.php).  There is literally no other word to describe this situation than ironic.  It's ironic that a "charismatic man," who out of the "goodness" of his heart, would start a program that gave children the opportunity for more "positive human contact" would actually turn out to be sexual predator.  That is ironic . . and horrible.  These actions are punishable, in my opinion, to the point of a life sentence.  These acts are despicable and should be met with heavy force of consequences. These boys will never be the same after these awful experiences.

As for the other men charged in the case (Gary Schultz, a university senior VP, and Tim Curley, the university athletic director), they shoould be held just as liable.  They had been informed by numerous sources that such actions were occurring, yet they didn't have the gumption to stop it all before more individuals were hurt.  Their actions upon hearing that such things were occurring should have been quick and with all intentions to make sure that these criminal acts were put to an end.  I find it completely baffling that these individuals didn't take it upon themselves to correct these obviously heinous acts.  These administrators should be held with just as much responsibility as Sandusky.

The most unfortunate part of this whole scandal (aside from what happened to the boys, of course) is that this leaves a huge black eye on the otherwise glorious saga of Joe Paterno.  Considered not only one of the greatest college football coaches of all time, but one of the greatest sports coaches ever, Joe Paterno had built Penn State in to a respected powerhouse.  Now simply because of the actions of a few men, the 46 year coaching reign that produced tens of millions of dollars for the school and two national championships, ends in an ugly and humiliating controversy.  Despite all the accusations, Paterno has been cleared of any wrong-doing as he informed university's officials of Sandusky's actions as soon as they were brought to his attention (even though Sandusky was no longer on Paterno's staff at the time).  Paterno had recently just become the winningest football coach in Division 1, but is now being nudged out of his job because of the scandal.  Unfortunate for a man who single-handedly put Penn State on the map.

These next few weeks will be interesting (to say the least) to watch unfold.  However, I believe that it is clear that all the men involved in this ugly scandal should be thoroughly punished.  As for the college often referred to as "Happy Valley," things are looking a little bit more on the grim side.

Common Law v. U.C.C. Case

http://www.lawnix.com/cases/princess-cruises-ge.html

Princess Cruises, Inc. v. General Electric Co., 143 F.3d 828 (4th Cir. 1998).

Facts: Princess Cruises (P) sought to schedule routine inspection and repair for the SS Sky Princess with General Electric, the original manufacturer of the ship’s engines. Princess issued a purchase order with a proposed price and a brief description of the required services. The reverse side of the purchase order listed terms and conditions stating that Princess considered the purchase order to be an offer.

GE received the order and answered by faxing a fixed price quote to Princess. It was more detailed than Princess’ order and included a parts and materials list, a work description, and an offering price of $231,925 with GE’s terms and conditions. GE rejected Princess’ terms and limited its liability on claims to the contract price and disclaimed any consequential damages, lost profits, or lost revenue.

Princess gave GE permission to proceed. Problems later arose due to rust on a rotor which needed to be rebalanced after cleaning. Delays caused the cancellation of a cruise and Princess alleged that continued vibration and high temperatures caused damage to the ship and added expenses for additional repairs.

Princes sued General Electric for breach of contract, breach of express warranty, breach of implied warranty, and negligence. GE was awarded summary judgment on the negligence claim. The trial court judge denied GE’s motion for judgment as a matter of law at the close of trial and instructed the jury on UCC 2-207. Princess was awarded $4,577,743 and GE’s motion for judgment as a matter of law was again denied. GE appealed.

Issues: 1) May a trial court apply UCC principles and concepts to a maritime service contract without any inquiry into the nature of the contract? 2) Must a court examine the facts to determine the predominant nature of a mixed contract before it can determine whether the UCC or the common law applies?

Holding and Rule: 1) No. A trial court may not apply UCC principles and concepts to a maritime service contract without any inquiry into the nature of the contract. 2) Yes. A court must examine the facts to determine the predominant nature of a mixed contract before it can determine if the UCC or the common law applies.

There is a principle in admiralty law that courts should adopt rules that accord with standard commercial practice. In standard commercial practice, a transaction must be predominantly for the sale of goods before the UCC applies. We are not persuaded that UCC 2-207 applies to maritime transactions regardless of their nature.

Mixed contracts: A court must first determine whether the predominant purpose of the transaction is the sale of goods. The test for inclusion or exclusion is not whether the contract is mixed but whether the predominant factor is the rendition of service with goods incidentally involved. The court must look to the language of the contract, the nature of the business of the supplier, and the intrinsic worth of the materials.

In this case there is no doubt that this was a service contract. Even though certain parts were to be supplied they were incidental to the predominant purpose of service. The contract was performed by the GE Installation and Service Engineer Division, which is comprised of engineers who do service work.

We adopt the rule followed by the majority of the states and refer to common law principles when assessing contracts predominantly for services. An acceptance that varies the terms of the offer is a counteroffer which rejects the original offer. GE’s Final Price Quotation was a counteroffer rejecting Princess’ PO. Princess accepted that offer and its terms by giving GE permission to proceed. Princess by its actions assented to the terms and conditions in GE’s Final Price Quotation offer. Such intent is determined from the outward objective manifestations of the acts and statements of the party.

GE’s terms constitute the contract between the parties. The verdict must therefore be reversed and remanded as the contract limited damages to a maximum of $231,925.

Disposition: Reversed and Remanded.

"Good Samaritans get no aid from high court"

In an article published in the Los Angeles Times, the California Supreme Court ruled that a young woman who pulled a co-worker from a mangled vehicle could be held civilly liable because she did not provide professional medical care. The co-worker, now paralyzed due to the defendant's improper care of the plaintiff's injuries, sued the vehicle's driver and the young woman for negligence. According to Good Samaritan statues, the law shelters health-care providers from lawsuits for "injuries they cause despite acting with reasonable care." Not only was the young woman not a health-care professional, but also she did not act with reasonable care when assisting her co-worker. Despite the young woman's belief of the car's impending explosion, she will not be immune from the liability rendered by her actions.

article: http://articles.latimes.com/2008/dec/19/local/me-good-samaritan19