Delaware – Overlawyered

Small business could use some advance funding. Too bad gift cards are a legal mess.

Walter Olson — Tue, 28 Apr 2020 10:15:32 +0000

Gift cards make a nice way to support your favorite business during the pandemic shutdown. They also make a compliance trap that can mire that same business in years of expensive hassle. My new piece at Reason explores the many legal exposures, from ADA lawsuits over lack of Braille translation to class actions over fine print and even exposure to money-laundering liability.

One durable problem, in some states at least, is state unclaimed-property law. Thinking of tossing a gift card into a drawer and never using it, as a kind of tip to an enterprise that’s brought you happiness over the years? Depending on what state you live in, you might actually be tipping your state tax authorities, and laying only future legal hassle on the merchant you wanted to help. I’ve covered state unclaimed-property law both here and at Cato. (More on its intersection with gift cards: Michael Waters, The Atlantic last fall.)

Delaware’s ambitious claims over unclaimed property have resulted in pitched courtroom battles for years, only a portion of which has been over gift cards specifically. Last year a jury awarded the state more than $7 million in a triple-damage unused gift card proceeding against just one national retailer, Overstock.com.

The Blue Hen State had to rewrite its unclaimed property law after a 2016 ruling by a federal court found its existing law a violation of due process and concluded that Delaware authorities had “engaged in a game of ‘gotcha’ that shocks the conscience.” The replacement law, which explicitly lays out a claim to gift cards rather than relying on older and more uncertain language, doesn’t have a long track record yet.

Tags: COVID-19 virus, Delaware, property law, small business, taxes, WO writings

Small business could use some advance funding. Too bad gift cards are a legal mess. is a post from Overlawyered - Chronicling the high cost of our legal system

Pharmaceutical roundup

Walter Olson — Fri, 24 Jan 2020 11:02:25 +0000

“A federal judge has ordered the nation’s leading pharmacy chains to turn over billions of nationwide prescription records going back 14 years – even as the American Civil Liberties Union and some states attack similar requests by the government as overbroad and an invasion of privacy.” [Daniel Fisher, Legal NewsLine] “Without evidence and unable to make public nuisance argument, Delaware’s opioid claims against Walgreens fail” [same] “Oklahoma Opioid Ruling: Another Instance of Improper Judicial Governance Through Public Nuisance Litigation” [Eric Lasker and Jessica Lu, Washington Legal Foundation, earlier]
“Merck v. HHS tests the limits of the federal government’s ability to control and compel commercial speech” [Ilya Shapiro and Dennis Garcia on Cato amicus brief in D.C. Circuit raising First Amendment issues]
Let’s try correcting the New York Times on drug pricing. Where to begin? [Molly Ratty, Popehat]
“Court Strikes Down NECC Convictions [New England Compounding Center] for Vagueness” [Stephen McConnell, Drug & Device Law]
Defense perspective: the ten worst and best prescription drug and medical device decisions of 2019 [Jim Beck, Drug & Device Law]
“If there are people out there with no options and they have terrible diseases, we are going to get those drugs to them as fast as feasible.” FDA approving potential breakthrough drugs more speedily [Michelle Fay Cortez and Cristin Flanagan, Bloomberg/MSN; related, Alex Tabarrok]

Tags: advertising, Delaware, FDA, lawyering vs. privacy, opioids, pharmaceuticals, public nuisance

Pharmaceutical roundup is a post from Overlawyered - Chronicling the high cost of our legal system

Banking and finance roundup

Walter Olson — Fri, 14 Jun 2019 10:05:26 +0000

Advice to Mark Calabria, newly installed as head of the Federal Housing Finance Administration, or FHFA [Arnold Kling; more on what to do with Fannie and Freddie]
Bad blood between Joe Biden and Elizabeth Warren on consumer bankruptcy issue goes back decades [Matthew Yglesias, Vox]
“Financial planning websites consistently emphasize paying off revolving high-interest debt before saving for retirement (unless a company offers a match rate).” But state-mandated auto-IRAs nudge workers the other way [Aaron Yelowitz, Cato, earlier]
Competition for incorporation: “Nevada adopts fee-shifting: Should Delaware worry?” [Stephen Bainbridge]
“The True Winners and Losers of Financial Regulation” [Diego Zuluaga] Fed vs. narrow banks [John Cochrane, more]
FATCA was the bad fairy’s curse at the royal baby shower: “Welcome to Tax Hell, Little Earl of Sussex” [Suzanne Lucas, earlier]

Tags: bankruptcy, banks, Delaware, FATCA, loser pays, mortgages, Nevada

Banking and finance roundup is a post from Overlawyered - Chronicling the high cost of our legal system

Liability roundup

Walter Olson — Mon, 02 Oct 2017 10:03:12 +0000

Multi-district litigation still a Wild West realm: “Lawyers for Civil Justice Urges Reform of MDL Procedures” [request for rulemaking via TortsProf] “Multidistrict Litigation Reform: The Case for Earlier Application of Federal Pleading Standards” [James Beck, WLF]
Lawyer vs. lawyer: “Philadelphia Injury Firm Sues Morgan & Morgan for False Advertising” [P. J. D’Annunzio, The Legal Intelligencer]
Trespasser injured climbing electrical tower loses suit against Metro-North railroad and utility [Robert Storace, Connecticut Law Tribune; Daniel Fisher, Legal NewsLine, earlier] “Ohl was walking along the train tracks with earbuds in on March 2”; family now suing CSX [Amanda C. Coyne, Atlanta Journal-Constitution]
“The U.S. Supreme Court Reins in Discovery Sanctions” [Phil Goldberg and Kathryn Constance, IADC]
Annual state lawsuit climate survey from U.S. Chamber is out; could be a “wake-up call” for Delaware, assumed to have pro-business courts [Zoe Read, Newsworks]
Boom in third-party litigation finance continues apace [Longford Capital]

Tags: chasing clients, Delaware, discovery, litigation finance, Philadelphia, pleading, railroads, Supreme Court, tort reform

Liability roundup is a post from Overlawyered - Chronicling the high cost of our legal system

Spending $40K in legal fees to defend a garage

Walter Olson — Thu, 13 Jul 2017 04:15:44 +0000

After a six-year battle that went to the Delaware Supreme Court, and spending what says was $40,000 on legal fees, car enthusiast Charles Williams has finally prevailed in a legal battle with neighbors over his construction of the garage a judge called “auto tinkerer’s Taj Mahal” [Cape Gazette]

Tags: Delaware, real estate

Spending $40K in legal fees to defend a garage is a post from Overlawyered - Chronicling the high cost of our legal system

Unclaimed property: headed eventually for the Supreme Court?

Walter Olson — Wed, 08 Jun 2016 04:05:39 +0000

I’ve got a new post at Cato at Liberty noting that Justices Samuel Alito and Clarence Thomas, in a concurrence this spring, appear to be inviting a constitutional challenge to states’ administration of escheat (unclaimed property) law on due process grounds. [More on Taylor et al. v. Yee from Daniel Fisher at Forbes] While the immediate questions posed would likely be whether states are doing too little to notify owners and using too short a period of idleness (three years is becoming common), the fact patterns might conceivably implicate some of the other problems noted by businesses on the receiving end of these laws, which we discussed back in 2013 (more): creative redefinitions of unclaimed property and outside “auditors” incentivized by contingency fees to overreach in assessments.

The Associated Press took a look at the issue last fall; more background at Maria Koklanaris, Tax Analysts and Odds and Means.

Reflecting widespread business discontent, the U.S. Chamber has addressed the issue in a series of papers and its publications have covered problems in states like Illinois, as well as in California as well as profiling the firms that specialize in these collections, which in some cases have filed qui tam (bounty-hunting) suits for a share of the proceeds.

On Delaware in particular see the Wall Street Journal (more), Forbes, and Delaware State News. And the Wilmington News-Journal has published an extensive investigation of the escheat contractors’ ties to the Delaware political class.

Tags: banks, contingent fee, Delaware, property law

Unclaimed property: headed eventually for the Supreme Court? is a post from Overlawyered - Chronicling the high cost of our legal system

Banking and finance roundup

Walter Olson — Thu, 11 Feb 2016 05:05:18 +0000

“The business model of Wall Street is fraud” line is, well, vintage B.S. (that’s Bernie Sanders to you) [Steve Chapman/Chicago Tribune, Bret Stephens/WSJ. More: “Sorry Bernie, Wall Street Wasn’t Deregulated Pre-Crash” [Jared Meyer, Forbes]
Auto lender shakedowns by Obama CFPB and DoJ continue, latest is Toyota for $21.9 million [WSJ] “Obama bullied bank to pay racial settlement without proof: report” [Paul Sperry, New York Post]
Delaware Chancery Court takes step toward countering plaintiff lawyers who sue on almost every deal, still has many miles to go [Ronald Barusch, WSJ “Dealpolitik”]
New York Times endorses financial transactions tax with unconvincing regulatory rationale [Peter Van Doren/Cato, earlier]
California insurance commissioner pushes politicized investing, which can actually complicate solvency risk by harming portfolio diversification [Business Insider]
“Smaller community banks appear to have a valid concern that their compliance burden is rising and the playing field is becoming more uneven” [Preston Ash, Christoffer Koch and Thomas Siems, Dallas Fed via Kevin Funnell] Marshall Lux/Robert Greene study ties trend to Dodd-Frank law [Harvard Kennedy School via Todd Zywicki]
Laws against money laundering hurt more good guys than bad guys, latest installment [Jeff Miron, Cato]

Tags: banks, Bernie Sanders, California, Delaware, Dodd-Frank, insurers, Toyota, Wall Street

Banking and finance roundup is a post from Overlawyered - Chronicling the high cost of our legal system

Discrimination law roundup

Walter Olson — Thu, 15 Oct 2015 04:05:55 +0000

“Requiring Employees to Return 100% Healed Costs Trucking Firm $300K in EEOC Suit” [Thompson’s HR Compliance Expert]
Update: Oregon appeals court upholds $400,000 ~~fine~~ judgment against Portland owner who asked transgender club to stop holding meetings at his nightclub [Oregonian, earlier]
Fire Department of New York commissioner: yes, we lowered fitness bar so more women could join the force [Matthew Hennessey/City Journal, my take in The Excuse Factory back when]
From May: “Oversight of the Equal Employment Opportunity Commission: Examining EEOC’s Enforcement and Litigation Programs” [Senate HELP committee via Workplace Prof]
Lengthy HUD battle: 2nd Circuit notes “no finding, at any point, that Westchester actually engaged in housing discrimination” [WSJ editorial, earlier here and here]
In 1992 Delaware settled an employment discrimination lawsuit by agreeing to assign prison guards “without regard to the gender of prisoners….A disaster ensued.” [Scott Greenfield on Cris Barrish, Wilmington News-Journal coverage]
NYC council speaker pushing “very bad bill to extend special employment protections to caregivers” [N.Y. Daily News editorial]

Tags: Delaware, discrimination law, EEOC, housing discrimination, NYC, Oregon, prisoners, sex discrimination

Discrimination law roundup is a post from Overlawyered - Chronicling the high cost of our legal system

Delaware: “Punkin Chunkin canceled for second year”

Walter Olson — Tue, 13 Oct 2015 10:03:45 +0000

Punkin Chunkin, a ballistic pumpkin-launching event, had developed into a beloved Delaware event until a 2013 accident where an ATV overturned on a farmer’s field, leading to an injury claim. “On Oct. 8…organizers pulled the plug for a second year, saying liability insurance for the event had proven unobtainable. Even supporters of Punkin Chunkin were left wondering: Is it over for good?” [Wilmington News-Journal, our coverage last year] More: Bob Dorigo Jones.

Tags: Christmas and other holidays, Delaware, recreation

Delaware: “Punkin Chunkin canceled for second year” is a post from Overlawyered - Chronicling the high cost of our legal system

Banking and finance roundup

Walter Olson — Thu, 30 Jul 2015 04:05:44 +0000

“Fee-shifting: Delaware’s self-inflicted wound” [Stephen Bainbridge, more] Needed: a new Delaware [Reuters] Fordham lawprof Sean Griffith fights trial bar on shareholder suits [Bainbridge, more]
Goodbye, insurance (hugs). I think I’ll miss you most of all. [Bridget Johnson on anti-cinema, anti-stock-trading views of radical Islamist British activist and former lawyer Anjem Choudary]
Rare coalition of bankers, housing advocates urges limits on mortgage-related suits [W$J]
“The Administrative State v. The Constitution: Dodd-Frank at Five Years” hearing includes testimony from Mark Calabria of Cato (law delegates vast authority to bureaucracy, has failed to generate clear rules for regulated parties) and Neomi Rao of George Mason (unconstitutionality of Consumer Financial Protection Bureau) [Senate Judiciary Committee, related on a CFPB constitutional challenge]
Do-it-yourself Operation Choke Point: letter from one Illinois sheriff shut down adult-ad credit card payments [Maggie McNeill, Daniel Fisher]
“Obama DOJ Channels Bank Shakedown Money To Private Groups” [Dan Epstein, Investors Business Daily]
“The U.S. listing gap” [Doidge, Karolyi, & Stulz NBER paper via Tyler Cowen, MR]

Tags: banks, Delaware, Dodd-Frank, insurance, mortgages, Operation Choke Point, securities litigation

Banking and finance roundup is a post from Overlawyered - Chronicling the high cost of our legal system