To know the consumer class action is to fear it. Any online marketer or other retailer that has gone through a class action lawsuit – even if it prevails in the end – no doubt has scars and legal bills to show for it. Because the stakes are so high, even winning a class action case at trial may leave retailers limping and still in great peril. Numerous class actions have settled after the appeal from a defendant’s successful summary judgment motion because, even if the odds of winning on appeal were good, the downside risk of losing was large enough to make the gamble unthinkable. And the range of potential consumer class action lawsuits often seems overwhelmingly diverse. Is your “sale price” really a “sale price”? Is there enough fruit in your fruit roll-ups? Did you collect customer zip codes in credit card transactions?
While it is impossible for online and direct marketers to insulate themselves fully from an increasingly litigious world, there are rational steps you can take to help prevent your company from becoming "low hanging fruit" for class action lawyers. This is the first in a series of articles on just that subject, and it focuses on state consumer protection, marketing, and privacy laws that have per violation penalties. The recent Michaels Stores case in Massachusetts involved just such a law.
Honey for Class Action Lawyers. Among the main weapons for class action plaintiffs’ lawyers are statutes that impose monetary penalties on a per violation basis. A real vulnerability to maintenance of a class action is that, absent a penalty, a determination of damages may require an individual analysis of each plaintiff’s claim – which, as a general matter, is anathema to maintenance of a class action. A statutorily prescribed penalty makes the assessment of damages straightforward once a violation is shown. And so, if you are accused of illegally collecting zip codes on credit card transactions, you take the number of times zip codes were collected and multiply it by the per violation penalty.
Astronomical Numbers. As an example, if you collected 1,000,000 zip codes from customers over a six year-period (which is often the length of the statute of limitations) you simply multiply 1,000,000 by the maximum potential per violation penalty to determine your worst-case risk. In California, the penalty can be as high as $1,000 per violation, and so the potential exposure is $1,000,000,000. That’s right. One billion dollars. And if you want to gauge accurately your maximum potential liability, add to the $1 billion a third of that number again for plaintiffs’ attorneys fees. And, resign yourself to the fact that absent extraordinary circumstances which almost never occur, there is no hope for a defendant, even an outrageously successful one, to recover its own attorneys’ fees.
Of course, the “maximum” potential exposure may not be realistic. Penalties are often imposed on a sliding scale – for example, in California, they can range from $250 to $1,000 in certain cases. Many, if not most, of these cases also settle, so we do not have compelling public data on how much money actually changes hands. And most settlements are engineered around providing coupons and checks to class members that may or may not be redeemed by the ultimate consumer, ensuring that the only payout certainty will be for the plaintiffs’ attorneys' fees. Those fees, more likely than not, will be far higher than what you pay hourly-rate outside counsel to defend you.
Focused Compliance. And, so, an essential element of a strategy to reduce your risk of becoming a class action defendant is to focus like a laser beam on complying with consumer protection/privacy laws with per violation penalty provisions.
How does this help? While some states, like California, impose penalties in almost every consumer class action case, elsewhere, and at the federal level, the number of laws to be familiar with is more limited and manageable. One area to be wary about, for example, is telemarketing, with federal laws imposing penalties that can easily exceed $1,000 per violation. In this area, retailers should retain legal counsel to provide them with clear operating principles under which to engage in telemarketing. These principles should address both state and federal telemarketing laws, and they should be adopted in internal policies and employee training. The direct marketer should also make sure that risk is assigned to vendors that provide telemarketing services, with insurance policies to back them up. After all, indemnification from a vendor that goes belly up is obviously worthless. Since vendors often find themselves in hot water for a number of clients simultaneously, even a financially well-heeled vendor could be brought to its knees.
Careful focus and preparation to avoid violation of penalty-laden laws is a good first step in a process of prudently managing consumer class action risk. But, there are other steps to take, as well, which will be addressed in future posts.
Wednesday, May 29, 2013
Tuesday, May 28, 2013
Beer At Last! Beer At Last! Thank God Almighty, Beer At Last!
After years of discussion, zoning changes, bylaw amendments, renovation and false starts, Verdun's first honest to gosh drinking establishment has opened its doors on Wellington St. Here's a report from those nice CBC radio people.
Plus, a somewhat boring video tour.
Benelux, an authentic brewpub, has taken over the auspices of the former Bank of Montreal, near the corner of de l'Eglise, or Church St., as the old timers say.
A well-placed MontReal Estate reader, reports that for now the pub is only serving its house blonde but that should change as Benelux gets up to full speed.
A great event in Verdun history. The town, then city, then borough of Verdun has been officially dry for about 100 years. It is a sign of changing times and changing demographics that an upscale drinking hole is the first, and for now only, bar allowed to operate.
Plus, a somewhat boring video tour.
Benelux, an authentic brewpub, has taken over the auspices of the former Bank of Montreal, near the corner of de l'Eglise, or Church St., as the old timers say.
A well-placed MontReal Estate reader, reports that for now the pub is only serving its house blonde but that should change as Benelux gets up to full speed.
A great event in Verdun history. The town, then city, then borough of Verdun has been officially dry for about 100 years. It is a sign of changing times and changing demographics that an upscale drinking hole is the first, and for now only, bar allowed to operate.
3-Bedroom Cottage in Lachine's Leafy Village St-Louis
You can check out the full listing on my Century 21 website www.marylamey.com
Village St-Louis was built in the early 1990s by Prevel, one of Montreal's most respected residential developers. Prevel is the company behind the Lowney and Imperial loft projects, the Soeur Grises condos at the foot of McGill St. near the Old Port, as well as a massive development project now underway in Griffintown. They build good stuff.
This development was built on the footprint of Lachine's former municipal golf course, incorporating many of its mature trees, water hazards and pretty fairways into the parks and walking path.
3582 Anatole-Carignan features about 1500-square-feet of living space, excluding the finished basement. The main floor has a entry hall with closet, open concept living and dining, powder room with laundry (which my vendor love love LOVES) and a beautifully upgraded kitchen with walk-out to a trellised deck and nicely landscaped back yard. There's even a vegetable garden.
The kitchen is done in a warm contemporary style with12x24-inch matte black tile on the floor, offsetting the black granite counter and pearly white marble tile back splash. The cabinets are a warm mid brown and offer tons of storage. It's an easy kitchen for cooking, entertaining and hanging out.
The dining and living room have a bay window and wood fireplace and upgraded oak hardwood flooring.
Upstairs, two of the three bedrooms face the street and feature over sized windows, one with a semicircular fanlight. The master bedroom is big, with a walk-in closet and adjoins the main bath. The bathroom is done in neutral off-white, with a pedestal whirlpool bath set in a big bay window. The houseplants love hanging out there! There's a separate shower.
The basement has the same upgraded oak floors, tons of room for toys, a library, a man cave, a home office or even a fourth bedroom. There are a few steps up to a patio door out to the back yard.
The vendors have taken excellent care of their home and invested in upgrades like the oak flooring, and classic oak handrail, newel posts and balusters for the staircase, a thermopump with air conditioning and a new roof.
I'm having an open house Sunday, June 2, 2013. 2-4 p.m. Drop by and see for yourself!
Friday, May 24, 2013
Illinois Update: Oral Arguments Heard in PMA v Hamer
On Wednesday, May 22, 2013, the Illinois Supreme Court heard oral argument in Performance Marketing Association v. Hamer. The Court heard the State’s appeal from the ruling of the Cook Country Circuit Court that the Illinois Internet affiliate nexus law is unconstitutional. Brann & Isaacson senior partner George Isaacson argued the case on behalf of the PMA. A video of the oral argument is posted on the Court’s website. Isaacson’s portion of the argument begins at 21:20 of the Court’s video.
Thursday, May 23, 2013
Google Updates AdWords Policies Following Suit Over Trademark Infringement
After several years of litigation over the use of trademarks in paid search advertisements, or AdWords, Google recently introduced new policies protecting trademark owners. Google now requires written permission from the trademark owner in order to use a trademark term in the text of a paid search ad—even if the advertiser is a legitimate reseller of the trademarked product. This is a curious development considering that it departs from Google’s past practice of being less aggressive with regard to trademark issues. For example, Google long ago abandoned a policy of permitting trademark owners to block bidding on trademarks used as ad words. The explanation for this change appears to be linked to a rare defeat for Google in a lawsuit relating to its AdWords advertising service.
Back in 2009, Rosetta Stone sued Google for trademark infringement, contributory infringement, and dilution based on Google’s practice of allowing acknowledged counterfeiters of Rosetta Stone software to purchase sponsored search results using Rosetta Stone’s name. Although the suit was initially dismissed by a federal court in 2010, in April 2012, the United States Court of Appeals for the 4th Circuit reinstated Rosetta Stone’s claims. The 4th Circuit found that there was a genuine question of fact as to whether web users would be confused about the source of sponsored search results purchased by acknowledged counterfeiters of Rosetta Stone software. The court’s conclusion was based in part on internal Google documents that showed that consumers are often confused as to the meaning of sponsored search results. Moreover, the evidence in the case showed Rosetta Stone repeatedly notified of Google of paid search ads for counterfeit software—over 190 times in a seven month span.
The Rosetta Stone case is unusual in that it may be the first time that a trademark-related case involving AdWords appeared to be headed to trial. (In the US, that is—Google has lost a number of trademark cases in Europe and in fact has different AdWords policies there as a result). Not surprisingly, the case settled. No specific terms of the settlement have been disclosed, but in a somewhat terse joint statement, Google and Rosetta Stone announced their intention to “collaborate to combat online ads for counterfeit goods and prevent the misuse and abuse of trademarks on the Internet.” Shortly thereafter, Google amended its Ad Words policies. Given the language of the joint statement, and the timing of the subsequent change in Ad Words policies, it seems likely that the Rosetta Stone case is responsible for the new requirement that trademark owners provide permission for the use of trademarks in paid search ad copy.
Beyond the change to Google’s policies, the case is significant going forward as well. It suggests that Google may be held responsible in instances in which it has knowledge that the ads create confusion and/or point to counterfeiters’ web sites. This marks a new development in the area of paid search infringement analysis that bears further watching.
Back in 2009, Rosetta Stone sued Google for trademark infringement, contributory infringement, and dilution based on Google’s practice of allowing acknowledged counterfeiters of Rosetta Stone software to purchase sponsored search results using Rosetta Stone’s name. Although the suit was initially dismissed by a federal court in 2010, in April 2012, the United States Court of Appeals for the 4th Circuit reinstated Rosetta Stone’s claims. The 4th Circuit found that there was a genuine question of fact as to whether web users would be confused about the source of sponsored search results purchased by acknowledged counterfeiters of Rosetta Stone software. The court’s conclusion was based in part on internal Google documents that showed that consumers are often confused as to the meaning of sponsored search results. Moreover, the evidence in the case showed Rosetta Stone repeatedly notified of Google of paid search ads for counterfeit software—over 190 times in a seven month span.
The Rosetta Stone case is unusual in that it may be the first time that a trademark-related case involving AdWords appeared to be headed to trial. (In the US, that is—Google has lost a number of trademark cases in Europe and in fact has different AdWords policies there as a result). Not surprisingly, the case settled. No specific terms of the settlement have been disclosed, but in a somewhat terse joint statement, Google and Rosetta Stone announced their intention to “collaborate to combat online ads for counterfeit goods and prevent the misuse and abuse of trademarks on the Internet.” Shortly thereafter, Google amended its Ad Words policies. Given the language of the joint statement, and the timing of the subsequent change in Ad Words policies, it seems likely that the Rosetta Stone case is responsible for the new requirement that trademark owners provide permission for the use of trademarks in paid search ad copy.
Beyond the change to Google’s policies, the case is significant going forward as well. It suggests that Google may be held responsible in instances in which it has knowledge that the ads create confusion and/or point to counterfeiters’ web sites. This marks a new development in the area of paid search infringement analysis that bears further watching.
Tuesday, May 21, 2013
German Court Rules That Google Can Be Held Liable for Defamatory Auto-complete Search Suggestions
Anyone who has performed a Google search in the past several years will likely have noticed Google’s auto-complete function, which automatically suggests search terms as the user types. For example, when a user recently entered the terms “Brann & Isaacson,” Google suggested “Brann & Isaacson law firm.” But what happens if, instead of helpful or innocuous suggestions, Google suggests something scandalous?
Google itself has consistently maintained that it has no direct control over its results or suggestions, which are generated automatically. Because Google’s suggestion algorithm reflects the frequency with which particular search terms are entered, however, it is a natural engine for spreading and legitimizing gossip. The more a rumor is repeated, re-tweeted or re-blogged, and the more it is searched, the louder it becomes, and the more likely it is to find its way into Google’s suggested auto-complete terms. Now, a German Court has ruled that Google can be held liable if its auto-complete function suggests defamatory search results.
In Decision VI ZR 269/12 (May 14, 2013), The German Federal Court of Justice (Bundesgerichtshof), Germany’s highest court of ordinary jurisdiction, considered a case brought against Google by two plaintiffs, a company and the company’s chairman, who had sued to remove auto-complete suggestions the plaintiffs considered defamatory. Users who searched for plaintiffs’ names would see suggested search terms including “Scientology” and “Fraud.” The Court ruled that, while Google has no obligation to proof its auto-complete results in advance, it does have an obligation, once it has been put on notice that suggestions falsely imply a factual link between an individual or entity and terms that have negative connotations, to remove those terms from the suggestions and to prevent similar suggestions from appearing in the future.
The case is making headlines in Germany, partly because of its potential effect on a high profile lawsuit brought by Germany’s former first lady, who has sued Google under the same theory, alleging that Google’s suggested search terms gave credence to certain rumors about her past. At this blog, however, we will be paying particular attention to how the ruling plays out in a larger context, and whether any other jurisdictions adopt similar positions.
To date, courts in the United States have rejected attempts by private litigants to hold Google or other search engines liable for unwanted search results or suggestions. Section 230 of the Communications Decency Act provides interactive computer service providers with broad immunity against liability for third-party-created content, providing that “no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider,” and that “no cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section.” 47 U.S.C. §230(c)(1), (e)(3). This section makes it difficult to hold a search engine liable for defamation in the United States based on search results. A woman in Wisconsin, who objects to the appearance of results and advertisements for impotency drugs in connection with her name, has filed a series of lawsuits against search engines alleging trademark violation and commercial misappropriation, rather than defamation. Her efforts have thus far proven unsuccessful. (See, most recently, Stayart v. Google, 710 F.3d 719 (7th Cir. 2013)).
Google itself has consistently maintained that it has no direct control over its results or suggestions, which are generated automatically. Because Google’s suggestion algorithm reflects the frequency with which particular search terms are entered, however, it is a natural engine for spreading and legitimizing gossip. The more a rumor is repeated, re-tweeted or re-blogged, and the more it is searched, the louder it becomes, and the more likely it is to find its way into Google’s suggested auto-complete terms. Now, a German Court has ruled that Google can be held liable if its auto-complete function suggests defamatory search results.
In Decision VI ZR 269/12 (May 14, 2013), The German Federal Court of Justice (Bundesgerichtshof), Germany’s highest court of ordinary jurisdiction, considered a case brought against Google by two plaintiffs, a company and the company’s chairman, who had sued to remove auto-complete suggestions the plaintiffs considered defamatory. Users who searched for plaintiffs’ names would see suggested search terms including “Scientology” and “Fraud.” The Court ruled that, while Google has no obligation to proof its auto-complete results in advance, it does have an obligation, once it has been put on notice that suggestions falsely imply a factual link between an individual or entity and terms that have negative connotations, to remove those terms from the suggestions and to prevent similar suggestions from appearing in the future.
The case is making headlines in Germany, partly because of its potential effect on a high profile lawsuit brought by Germany’s former first lady, who has sued Google under the same theory, alleging that Google’s suggested search terms gave credence to certain rumors about her past. At this blog, however, we will be paying particular attention to how the ruling plays out in a larger context, and whether any other jurisdictions adopt similar positions.
To date, courts in the United States have rejected attempts by private litigants to hold Google or other search engines liable for unwanted search results or suggestions. Section 230 of the Communications Decency Act provides interactive computer service providers with broad immunity against liability for third-party-created content, providing that “no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider,” and that “no cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section.” 47 U.S.C. §230(c)(1), (e)(3). This section makes it difficult to hold a search engine liable for defamation in the United States based on search results. A woman in Wisconsin, who objects to the appearance of results and advertisements for impotency drugs in connection with her name, has filed a series of lawsuits against search engines alleging trademark violation and commercial misappropriation, rather than defamation. Her efforts have thus far proven unsuccessful. (See, most recently, Stayart v. Google, 710 F.3d 719 (7th Cir. 2013)).
Wednesday, May 15, 2013
Ave Maria School of Law looking for Contracts and Commercial Law Faculty
Ave Maria School of Law invites applications for multiple faculty positions from entry-level and lateral candidates, pre- or post-tenure. Ave Maria particularly welcomes applications from candidates with teaching and research interest in Contracts, Business Organizations, Sales, Negotiable Instruments, Secured Transactions, and related commercial subjects. Applicants should have superior academic credentials; a record, or the promise, of excellence in teaching and legal scholarship; and an interest and commitment in exploring his or her teaching and research interests in an institution that strives to integrate the Catholic intellectual tradition into teaching, scholarship, and service. Entry-level applicants may demonstrate scholarly promise by publications in scholarly journals or scholarly works in progress. In the case of any applicant with tenure, a distinguished record of teaching and scholarship is required. Interested candidates should send their materials to Professor Patrick T. Gillen, current chair of the Appointments Committee. Applications can be e-mailed to Professor Gillen at ptgillen@avemarialaw.edu or can be mailed to his attention at 1025 Commons Circle, Naples, Florida 34119. Resume review will begin immediately and continue until the positions are filled.
Ave Maria School of Law, providing legal education enriched by the Catholic Faith, seeks employees whose education, experience and beliefs are consistent with its mission. Ave Maria School of Law is an EQUAL OPPORTUNITY/AFFIRMATIVE ACTION employer that values diversity, including diversity in religious affiliation, and strongly encourages applications from persons of diverse backgrounds willing to support the institutional mission; it requires compliance with all state and federal laws governing employment discrimination. -JSM
Saturday, May 11, 2013
Sutton Brokers Were Left $600,000 Short When Their Agency Went Bankrupt
CBC Montreal recently had an excellent report on a group of former Sutton Royal agents who were done out of a combined $600,000 in real estate commissions when their agency was forced into bankruptcy.
The story began with an alleged cheque kiting scheme implicating the agency's director and his executive assistant. Two banks, the TD and National, stepped in when Sutton Royal accounts came up about $2 million short.
When it was discovered that the agency was depositing commission cheques for sales by its agents to a Bank of Montreal account, TD and National asked the court to seize the money. Last December, the Dollard des Ormeaux agency was forced into bankruptcy.
That's when things got ugly for Sutton Royal's agents. Money they had earned selling homes and supposedly held in trust by their agency, as per the Real Estate Brokerage Act, was gone - poof - sponged up as part of the bankruptcy proceedings. To make matters worse, Sutton Quebec appears to have quietly paid off the collaborating agents (the agents who represented buyers in deals involving Sutton Royal's sellers) while stiffing their own people. Ouch.
I cannot imagine the nightmare these brokers are living. First, the agency they work for collapsed in scandal. Next, their revenue was snatched away - in the case of one agent, $300,000 ! The brokers allege Sutton Quebec president Christophe Folla promised to help them but has not.
An aside. When I was The Gazette's real estate reporter, I had a story about a Sutton agent (they were called agents then, not brokers) at the La Salle brokerage, who appeared to pretty much try to screw an old lady out of her condo. Her daughter came to me with the story. (Quebec's real estate authority later convicted him of breach of ethics and his license was suspended.)
I tried very hard to talk to Christophe Folla at that time. He never once called me back. I hope these agents have better luck.
Click on the link above to read the whole story and watch the TV report. The CBC promises that a second report is coming up.
Stay tuned, as they say.
The story began with an alleged cheque kiting scheme implicating the agency's director and his executive assistant. Two banks, the TD and National, stepped in when Sutton Royal accounts came up about $2 million short.
When it was discovered that the agency was depositing commission cheques for sales by its agents to a Bank of Montreal account, TD and National asked the court to seize the money. Last December, the Dollard des Ormeaux agency was forced into bankruptcy.
That's when things got ugly for Sutton Royal's agents. Money they had earned selling homes and supposedly held in trust by their agency, as per the Real Estate Brokerage Act, was gone - poof - sponged up as part of the bankruptcy proceedings. To make matters worse, Sutton Quebec appears to have quietly paid off the collaborating agents (the agents who represented buyers in deals involving Sutton Royal's sellers) while stiffing their own people. Ouch.
I cannot imagine the nightmare these brokers are living. First, the agency they work for collapsed in scandal. Next, their revenue was snatched away - in the case of one agent, $300,000 ! The brokers allege Sutton Quebec president Christophe Folla promised to help them but has not.
An aside. When I was The Gazette's real estate reporter, I had a story about a Sutton agent (they were called agents then, not brokers) at the La Salle brokerage, who appeared to pretty much try to screw an old lady out of her condo. Her daughter came to me with the story. (Quebec's real estate authority later convicted him of breach of ethics and his license was suspended.)
I tried very hard to talk to Christophe Folla at that time. He never once called me back. I hope these agents have better luck.
Click on the link above to read the whole story and watch the TV report. The CBC promises that a second report is coming up.
Stay tuned, as they say.
Tuesday, May 7, 2013
Senate Passes Marketplace Fairness Act
By a vote of 69 to 27, the U.S. Senate on May 6 passed the Marketplace Fairness Act (“MFA”). The MFA would authorize states and other taxing jurisdictions that meet minimal tax simplification requirements to impose a sales/use tax collection obligation on Internet retailers and other remote sellers. The final version of the bill expanded the original scope of the authorization to include tribal organizations, in addition to states, US territories, and the District of Columbia. No additional simplification measures were added by the Senate, leaving a bill that does not require genuine reform of state and local sales and use tax systems. Nor did the Senate raise the threshold for the small seller exemption above $1 million in total US sales, leaving small businesses vulnerable to costly and burdensome compliance and tax administration requirements. As any business put through the rigors of even a single state’s audit process knows, the specter of more than 45 audits each year can be enough to cripple a smaller Internet or catalog vendor.
The MFA now moves to the House of Representatives, where the prospects for passage are less certain. Some Republican representatives have voiced support for the bill, however. Ecommerce sellers interested in the bill should contact their representatives to make their voices heard, before the bill becomes law. We will continue to update our readers on developments concerning the MFA.
The MFA now moves to the House of Representatives, where the prospects for passage are less certain. Some Republican representatives have voiced support for the bill, however. Ecommerce sellers interested in the bill should contact their representatives to make their voices heard, before the bill becomes law. We will continue to update our readers on developments concerning the MFA.
Saturday, May 4, 2013
The Gap Between Asked and Sold Prices, Not All Montreal Neighborhoods Are Created Equal.
Roberto Rocha, a tech-savvy reporter at The Gazette crunched some real-estate sales numbers to see which neighborhoods in Montreal have the smallest gap between asking prices and sale prices in this softer than usual market. It makes for interesting reading.
These are are average listing and sale prices for all housing types combined. Nice to see my favorite, Verdun, up near the top of the list. I think it might have done even better had the numbers been parsed more closely to exclude Nuns' Island. The island and mainland are very distinct real estate beasts.
I do wonder how it can be that Outremont, home to Quebec's francophone business, legal and health care elites and that great bald-headed Cirque du Soleil git Whatshisname, can possibly have an average asking price of $450,000. That will buy you a nicer than average house near the water in Verdun, but certainly not a three-bedroom starter mansion in Outremont. Hmm.
The Plateau, where I do a fair amount of business, remains a hot commodity, with properties selling for just a shade under 95 per cent of asking price.
Westmount trails the pack, with a nearly 10-per-cent gap between asking and sold prices.
Have a look.
These are are average listing and sale prices for all housing types combined. Nice to see my favorite, Verdun, up near the top of the list. I think it might have done even better had the numbers been parsed more closely to exclude Nuns' Island. The island and mainland are very distinct real estate beasts.
I do wonder how it can be that Outremont, home to Quebec's francophone business, legal and health care elites and that great bald-headed Cirque du Soleil git Whatshisname, can possibly have an average asking price of $450,000. That will buy you a nicer than average house near the water in Verdun, but certainly not a three-bedroom starter mansion in Outremont. Hmm.
The Plateau, where I do a fair amount of business, remains a hot commodity, with properties selling for just a shade under 95 per cent of asking price.
Westmount trails the pack, with a nearly 10-per-cent gap between asking and sold prices.
Have a look.
Friday, May 3, 2013
The Stigma of Murder Didn't Block the Sale of this $900,000 Toronto Home
Some people won't buy a house where there's been a gruesome crime. Some people are less bothered. Their agent probably wishes he wasn't quoted in Canada's biggest broadsheet saying "It's a great conversation piece."
Thursday, May 2, 2013
Not So Simple–Recent Developments in Taxing the Cloud
We write frequently about developments surrounding federal tax legislation such as the Marketplace Fairness Act, which is up for a vote before the Senate on May 6. One of the major issues critics have with the Act is that despite proponents’ claims, it fails to provide for real simplification of state and local tax regimes, such as a uniform tax base among the states. Without a uniform tax base, compliance is incredibly complex for even the savviest of retailers. The problem is much worse with respect to computing services and digital products delivered over the Internet.
For instance, cloud computing has some of the murkiest tax rules – some states have issued clear statements regarding taxability of IaaS, SaaS, or PaaS, but few have addressed all types of cloud services and many have failed to address the issue at all. Retailers are left guessing at the proper tax treatment of their sales and hoping their interpretation of tax rules is the correct one. That tax rules are ever-changing does not help matters. A uniform tax base would lessen this problem. Instead, retailers must monitor developments in myriad jurisdictions to find some clarity, although tax treatment still varies from state to state.
Idaho, for instance, recently exempted SaaS from sales and use tax by amending its statute to exclude “software accessed over the internet or through wireless media” from the definition of tangible personal property. See Idaho Code § 63-3616(b). Previously, the statute included as taxable tangible personal property any non-custom computer program “regardless of the method by which the title, possession or right to use the software is transferred.” The Idaho State Tax Commission interpreted this language as imposing tax on SaaS, although it noted in its opinion that “Due to the complexity of the business models, it is not possible to provide an all inclusive list of taxable sales transactions or taxable uses. As this technology advances, it may introduce more rather than less certainty.” Cloud Computing and Related Software Sales and Use Tax Issues (10/22/2012) (emphasis added). Even when providing some now-moot clarity to the taxability of SaaS, the state had to admit that its interpretations could not be considered definitive or final.
Meanwhile, in Massachusetts, Governor Patrick’s proposed FY2014 budget would impose tax on certain computer and data processing services, including “provision of access to software or the storage of data on the seller’s or a third party’s server.” It is unclear whether this provision will pass, but as is common, the language is open to interpretation. (Note that Massachusetts already imposes tax on SaaS. See 830 CMR § 64H.1.3(14)(a).) True simplification and a uniform tax base would alleviate much of the difficulty retailers have in complying with ever changing tax rules.
As always, with tax bases varying among the states and being subject to constant revision, we advise businesses to consult with their tax professionals early and often.
For instance, cloud computing has some of the murkiest tax rules – some states have issued clear statements regarding taxability of IaaS, SaaS, or PaaS, but few have addressed all types of cloud services and many have failed to address the issue at all. Retailers are left guessing at the proper tax treatment of their sales and hoping their interpretation of tax rules is the correct one. That tax rules are ever-changing does not help matters. A uniform tax base would lessen this problem. Instead, retailers must monitor developments in myriad jurisdictions to find some clarity, although tax treatment still varies from state to state.
Idaho, for instance, recently exempted SaaS from sales and use tax by amending its statute to exclude “software accessed over the internet or through wireless media” from the definition of tangible personal property. See Idaho Code § 63-3616(b). Previously, the statute included as taxable tangible personal property any non-custom computer program “regardless of the method by which the title, possession or right to use the software is transferred.” The Idaho State Tax Commission interpreted this language as imposing tax on SaaS, although it noted in its opinion that “Due to the complexity of the business models, it is not possible to provide an all inclusive list of taxable sales transactions or taxable uses. As this technology advances, it may introduce more rather than less certainty.” Cloud Computing and Related Software Sales and Use Tax Issues (10/22/2012) (emphasis added). Even when providing some now-moot clarity to the taxability of SaaS, the state had to admit that its interpretations could not be considered definitive or final.
Meanwhile, in Massachusetts, Governor Patrick’s proposed FY2014 budget would impose tax on certain computer and data processing services, including “provision of access to software or the storage of data on the seller’s or a third party’s server.” It is unclear whether this provision will pass, but as is common, the language is open to interpretation. (Note that Massachusetts already imposes tax on SaaS. See 830 CMR § 64H.1.3(14)(a).) True simplification and a uniform tax base would alleviate much of the difficulty retailers have in complying with ever changing tax rules.
As always, with tax bases varying among the states and being subject to constant revision, we advise businesses to consult with their tax professionals early and often.
Wednesday, May 1, 2013
Hello Folks,
We may have turned the corner in Ventura County. This is the first month I have seen an across the board increase in the total number of properties that have come to market during the past month! The total number of properties for sale has increased in most towns as well. Of the ten city markets I track, I only saw Agoura Hills and Westlake Village a bit low on the number of properties for sale. However they are experiencing strong sales with 61 homes sold in April compared to 44 in March. This may mean that their market is so hot that they cannot maintain their inventory – it sells as soon as it comes on the market!
January 2013 was a better month than December 2012. February continued the trend upwards but March took kind of a breather with weak showings in most of the numbers I track. Not unusual from my experience as people tighten their belts to pay taxes in April. There was some stock market volatility during the early months of this year as well. I don’t pretend to be able to separate cause and effect on our local real estate market, but the numbers for April are very encouraging with numbers bouncing back from March and in most cases exceeding the numbers we saw earlier in February.
Oxnard and Port Hueneme have seen strong, steady improvement in their markets this last month with numbers returning to the level of January’s sales after dipping down in Feb and March. The number of properties that sold in January were 92 vs April’s 138! The number of properties for sale are back up to 165 homes - with 74 of those homes coming to market just last month. 138 homes actually sold last month, so it’s easy to see there is strong demand – nearly twice as many homes sold as came new to the market last month. Guess what that is going to do to prices in Oxnard and Port Hueneme?! We are going to see some very strong home prices as this year continues to build.
Camarillo’s market has performed in similar fashion to Oxnard and Port Hueneme but on a much smaller scale. The current inventory numbers are back to January’s levels but properties sold are up from 42 homes sold in January to 81 for April! Again, like Oxnard and Port Hueneme, monthly sales doubled from the start of the year.
Thousand Oaks and Newbury Park have seen the number of homes on the market increase from 102 in January to 133 in April. In the 31 days of January we had 53 homes come to market. In the 30 days of April we saw 79 homes come to market. The number of homes which actually sold in January was 66, almost doubling to 125 homes in April. These are great numbers!
Moorpark has seen it’s inventory slowly increase from January’s 28 homes to April’s 38 homes on the market. In January there were 9 homes that came to market during the month, which has increased to 21 homes in the month of April. Demand has remained surprisingly flat with 28 homes actually selling in January compared to 30 homes in April.
Simi Valley and Wood Ranch have seen some major market improvements despite the same dips in the market for February and March that everone else experienced. We had 46 homes come to market in January and 60 homes come to market in April. 96 homes sold in January and 113 homes sold this last April.
Interestingly, we had 152 homes go into escrow in January and 175 homes in April so obviously there is a bit higher demand for homes in this market than Moorpark.
Ventura has had the biggest struggle regaining it’s market inventory. Inventory has still not recovered from February and March’s dip. There are currently 90 homes available in Ventura compared to 168 last January. April saw 38 homes come to market compared to 88 in January. Still the demand appears to be pretty constant with 84 homes selling last January and 81 homes in April.
With roughly half as many homes coming to market each month as selling each month – demand is strong and price increases will continue. Once prices reach the level where folks can afford to sell their homes without taking a loss, I think we will see many more homes coming to market in Ventura. That time is rapidly approaching.
Take care,
Mark Thorngren
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