Law & Entrepreneurship News

Summer Long-term Hiatus

Law & Entrepreneurship News will be taking a break ~~for the summer, but we plan to be back in the fall with a new cast of editors and perhaps some other changes~~. A long break.

We had high hopes in the beginning, and we enjoyed the experiment. But our model was not sustainable. We might stage a comeback someday, but for now the site is dormant.

Thanks to all of our readers. We appreciate your support and the many wonderful comments that we have received via email.

Indiana Gives Small Businesses A Voice In The Regulatory Process

Inc.com is reporting that Indiana is the third state to pass a law requiring state agencies to analyze the economic impact to small businesses when proposing rules and regulations. The other two states to pass such legislation are New Mexico and Virginia.

In addition to requiring state agencies to analyze the economic impact of the proposed rules and regulations, the law also requires these state agencies to evaluate alternative regulatory methods.

Regulatory flexibility laws are important to small businesses because they help reduce the costs and burdens that come with regulatory compliance. Hopefully, these three states are just the beginning of a nation wide trend to free small businesses from some of the regulatory stranglehold.

Pros And Cons Of Franchising

The May edition of the SBA's Solutions newsletter focuses on the pros and cons of franchising. It is a must read for any entrepreneur looking to buy a franchise.

Court of Appeals Strikes Down the Broadcast Flag

In American Library Association v. Federal Communications Commission, the Court of Appeals for the District of Columbia ruled today that the FCC lacked authority to mandate the Broadcast Flag. The Broadcast Flag provision of the FCC rules adopted in November of 2003 would have required that every device capable of receiving a digital video transmission also recognize an encoding within the transmission that would control the manner in which the content could be used. The American Library Association and several individual consumers challenged the provision alleging that 1. The FCC lacked authority to enact the provision. 2. The provision directly conflicted with existing copyright laws.

Without reaching the question of how the Broadcast Flag rule conflicts with existing copyright laws, the court of appeals held that the FCC exceeded it's Congressionally delegated authority under the Communications Act of 1934. Because the Flag Rule did not directly regulate communication via video or wire, but rather attempted to control consumer electronics and the use of content after transmission the court concluded that the rule was not within the FCC's specific grant of statutory authority.

Neither did the FCC have valid ancillary jurisdiction. Ancillary jurisdiction is limited to circumstances where congress has delegated authority to regulate in a certain area, and the regulation proposed is reasonably related to the commissions statutory responsibilities. Although the FCC has authority to regulate wire or radio communications, it has no delegated authority to regulate consumer electronics when they are not engaged in the receipt of a broadcast.

The Broadcast Flag Provision of the FCC rules was adopted in 2003 in response to concerns of copyright owners that the nation's pending shift from analogue to digital television reception by December 31, 2005 created a "threat of mass indiscriminate distribution." In adopting the provision, the FCC claimed that the threat was not imminent, but forthcoming and that a preemptive measure was needed to ensure the continued availability of high-value video content.

Opponents of the Flag Rule appear joyous and perhaps shocked by this victory. However, everyone expects that this issue will be revisited in Congress before it is revisited in the courts.

Blawg Review #4

Welcome to Law & Entrepreneurship News for Blawg Review #4. This blog is powered by law students at the University of Wisconsin Law School. Things have been a bit slow around here lately, as the students are immersed in final examinations, so we are thrilled to have the Blawg Review this week.

Let me begin with a question: Do a disproportionate number of blawgers use Blogger? Having recently hosted the Carnival of the Capitalists, I can tell you that those business folks have mostly hopped off the Blogger train. I suspect that lack of funds (law students) and lack of technical prowess (some of the rest) explains the difference, though I am just speculating.

Ok, I know you're anxious, so let's get to the posts ...

Law Schools

Jeremy Blachman, on the eve of his graduation from Harvard Law School, confesses the dirty little secret of all new law school graduates -- law school teaches you nothing about the law. Colin Samuels, ten years removed from law school, consoles Jeremy: "You know more than you think you know." and "Much of what you know is useless in the real world, but will be impossible to forget."

My co-blogger Christine Hurt at Conglomerate asks, "Are Law Schools Family Friendly?" So how about this for irony: in her post, Christine observes, "Outside of class time, I am available whenever a child ... has a dentist appointment...." Then, look what happened this morning!

Robert Ambrogi suggests that at least two law professors would not have made the Legal Affairs list of "Top 20 Legal Thinkers in America" had is not been for their famous blogs. Another, Larry Lessig, would have made the list without his blog, but not without the internet. (Did anyone else notice the heavy University of Chicago representation on this list?)

Arthur Andersen

The Dark Goddess of Replevin -- who wins the award for coolest blawg name -- has learned this from the Arthur Andersen and Enron prosecutions: shred early and often.

For those who are interested in the Arthur Andersen case before the Supreme Court, I have a short primer on the legal issues (albeit with a horrible prognostication about the Supreme Court ... criminal law isn't my thing) and an update on the oral argument, with thoughts on SOX.

Intellectual Property Law

Stephen Albainy-Jenei of Patent Baristas -- which would get my vote in any blawg design contest -- discusses the proposed Bioshield II bill in a post entitled "Bioshield Bill Would Provide Drug Patent Term Extension". That bill as originally drafted would have added a wild card provision that could add up to two years to the exclusive patent term for a drug. For a major drug, those two years could be worth billions of dollar in revenue. The draft language in the new bill has now been changed to require the winner of a contract to name the designated drug within 180 days of receiving the contract.

Bloggers have been noticing Wal-mart's efforts to stop online criticism, and Evan Brown of InternetCases.com describes a recent arbitration victory for Wal-mart in his post, "Wal-mart on the Domain Name War Path".

War Stuff

Publius at Ex Post offers another in a series of posts about the debate between John Yoo and Jeremy Waldron on torture. In Power of the Presidency, Marbury, and Torture, Publius wonders about the framework for the constitutionality of presidential action. Professor Yoo noted in the debate that there can be situations where Congress not only has failed to regulate, but could not regulate the President. This post, and the discussion in the comments is aimed at fleshing out this very important idea that has seen shorter shrift in the debate.

Last week seems to have been the week for things believed extinct to resurface. On Thursday, it was the Ivory-Billed Woodpecker, but two days earlier heralded a rare Supreme Court sighting of the Curtiss-Wright doctrine of presidential supremacy in foreign affairs. As explained by Julian Ku at Opinio Juris, the Court's return to the doctrine after two decades, in an opinion written by Justice Thomas, may indicate the depth of Court support for deference in foreign policy matters to the Executive Branch and may point to the Court's future direction in cases involving enforcement of international court judgements and conduct of military tribunals. (Thanks to Colin Samuels for submitting this post.)

The Centrist -- a UCLA law student who gets big kudos from me for having participated in the Whad'ya Know Quiz -- is writing on Jag Central about the death sentence handed out by a military panel against double murderer Army SGT Hasan Akbar. The Centrist is also an Army Captain, and he helpfully explains the next steps in Akbar's appeals process.

California

You can make of this heading what you will, but here are two posts about the California legislature, which seems to have a lot of time on its hands.

So Cal Lawyer describes efforts to ban "pay per view" hunting.

E. L. Eversman at AutoMuse provides an "Update on California Crash Parts Bill." Now, I will confess that I needed more than an update, because I had never heard of this bill, but this is interesting. According to E. L., "The Certified Aftermarket Parts Association and insurers seek to create an “affirmative action” program to force consumers to accept inferior imitation crash parts in their vehicles’ repairs rather than providing and paying for original equipment manufacture (Ford, GM, Toyota, etc.) parts." E.L. even finds a way to squeeze in the debate about Social Security!

Canon Law

Two entries here, neither about canon law per se, but both about things Catholic. (We could have had another post in this category had Steve Bainbridge submitted this week. See here and here and here and here, for example.)

In a guest post at Notes from the (Legal) Underground, Abnu (a former altar boy) describes the ancient doctrine known as "benefit of clergy" and its relation to the priest sex-abuse scandals. He concludes: "As long as the Church views sexual abuse of children by clergy as a moral failure, a breach of the vow of chastity, even a cardinal sin, it is a matter for confession, penitence, forgiveness and absolution."

Meanwhile, KipEsquire at Stitch in Haste follows up with this question: "Should the U.S. Indict the Pope?" Why not? The prosecutors of Martha Stewart and Arthur Andersen probably have some free time.

Speaking of abortion ... (I realize that we weren't speaking of abortion, but I couldn't find another more appropriate category for this post), Sean Sirrine at Objective Justice describes that Florida case in which the Florida Department of Children and Families is claiming that they have the authority to require a court to decide if a 13 year-old may have an abortion. According to Sean, a juvenile court that delayed the abortion and ordered a psychological evaluation will be overturned by the higher Florida courts.

Legal Research Services

Yes, we actually have two posts about legal research services, and in my book, that merits a separate category.

Nivine Zakhari at Tech Law Geek asks "How long before clients catch on to the fact that online legal research is supported by offshore resources that hardly charge the hourly rates many lawyers dream of collecting? Could this be what Tom DeLay found to be so 'incredibly outrageous'?"

Our friend Denise Howell at Bag and Baggage follows up on the story about Supreme Court justices doing their own internet research, linking to a story about HighBeam's gift of reasearch services to the high court. Denise wonders whether there are any ethical constraints on the acceptance of complimentary memberships by the judiciary.

Law Practice

Evan Schaeffer at Notes from the (Legal) Underground offers some advice to young lawyers, expressing his frustrations with underhanded litigation tactics and suggesting that the U.S. model of adversarial litigation should be "transformed from the ground up." Evan is so hot under the collar that contract murder is not out of the question. Here is my advice to Evan and his correspondent: become a transactional lawyer. Or better yet, a law professor. You will still have frustrations, but nothing that will drive you to murder.

I am embarrassed to admit that I had never heard of Law Day until reading David Giacalone's informative post at f/k/a. David not only teaches about the creation of Law Day by President Eisenhower, but offers some commentary on lawyers. Read the whole post, and get some haiku as a bonus.

Raffi Melkonian praises apprenticeship (not the Donald Trump way) over at Crescat Sententia: "If I was opening a restaurant, I'd go apprentice for five or six years in a classical french restaurant. A good lawyer ought to cut his or her teeth on the work of better lawyers for at least that amount of time."

The self-proclaimed Greatest American Lawyer -- who is formally anonymous, but gives plenty of tips as to his identity -- suggests that the "billable hour obsession" and unhappiness are joined at the hip, and "unhappiness is a function of lack of purpose.."

Carolyn Elefant blogs as My Shingle, and last week she compared marketing by large firms (McMarketing) with marketing by small firms or solo lawyers. Here is the teaser: "It's pretty clear that law marketing has invaded large firm practice - and guess what? They're all doing the same thing."

Anthony Cerminaro at BizzBangBuzz describes "How to Buy a Business in 10 [not so] Easy Steps."

Ron Friedmann at Prism Legal Consulting suggests that corporate counsel should use blogs as "legal radar."

Lawyers are famously mathphobic, but George at his eponymous blog is using some math skills he learned in grade school to debunk the EEOC's sexual harrassment statistics against Burger King. If you ask me, Burger King should be charged with "human harrassment" for that so-called food they sell, but that's another post.

Humor

Jeremy Richey offers a satire about tort reformers and plaintiff's law.

Dwayne at Law School tells the strange tale of a misdirected email and Reinder Eekhof's quest to rule the world. (Ok, I made that last part up)

Administrative Stuff

Thanks to Felix the Cat on Flickr for the original photo of the United States Supreme Court, a modification of which appears at the top of this post.

Blawg Review has information about next week's host, and instructions how to get your blawg posts reviewed in upcoming issues.

Small Business Update 4/29/05

I am going to post stories from the past three days. Small Business Week has opened the floodgates to small business articles so here is a sampling:

- House Committee passes Small Business Checking Act which would allow small businesses to earn interest on checking accounts (NFIB)

- How women can enhance their bargaining skills (Business Week)

- The reasons why many startups collapse (Business Week)

- Tips on where to find funding (Business Week)

- The San Francisco Bay Guardian is calling on politicians to fight President Bush's SBA budget cuts

- An American Express survey shows that small business owners are optimistic about their growth prospects over the next six months (Inc.com)

- SBA Office of Advocacy testifies in front of Congress in an effort to eliminate the tax gaps between small business treatment compared to its big business counterparts (Press release here)

- Entrepreneur.com reports on why small businesses are vital to America

- SBA Office of Advocacy testifies in favor of regulatory reform

- Sen. John Kerry calls out the Bush administration and the SBA on its treatment of women owned businesses

IRS to Offer Free Tax Help to Small Businesses

In recognition of National Small Business Week, the Internal Revenue Service has announced an abundance of free resources available to assist the nation’s 45 million small business and self-employed taxpayers with their tax responsibilities. And, they are all just a mouse-click away.

The small business section of IRS.gov provides a one-stop resource for information on starting and operating a business. On this site taxpayers can:

Learn about employment tax requirements.
Make tax payments.
Find out how to set up and distribute retirement plans.
View a streaming video of a small business tax workshop.
Order free products like a tax calendar or small business resource guide.

Small Business Brief 4/26/05

- Tips for small business owners on delegating responsibility

- Pittsburgh Tribune Review has a nice article on financing startups and small businesses

- The Salt Lake Tribune has a nice story on how microloans have helped Utah entrepreneurs and how the Utah microloan program works

Happy Small Business Week

With finals taking up a majority of my time for the next couple of weeks, I am going to be providing quick hits (with links) for what is going on in the small business world instead of longer articles.

Yahoo.com is reporting that President Bush has declared this week small business week with programs and ceremonies to celebrate America's small businesses

Inc.com is reporting on the fastest growing counties in terms of job growth (interpreting a recently released Bureau of Labor Statistics report).

A Wal-Mart survey is indicating that small business economic confidence is waning.

The Chicago Tribune is reporting that spending on technology will be slow for small businesses this year.

House Passes Energy Bill with $8 Billion in Tax Breaks

The House of Representatives passed a new bill yesterday with $8 Billion of targeted tax incentives. The Energy Policy Act of 2005 includes provisions that would shorten recovery periods for natural gas pipelines and air pollution control facilities, ease restrictions for deductible contributions to nuclear decommissioning funds, exempt from tax-exempt bond arbitrage rules some prepayments for natural gas, and increase the limitation for the oil depletion deduction for small refiners.

The Bill also would provide limited incentives for residential solar- powered water heating, photovoltaics, and fuel cells and would create a 15 percent business tax credit for the purchase of fuel cells. Both individuals and businesses would be allowed to use several new energy credits against the alternative minimum tax. The Senate is expected to begin working on an energy bill within the next two weeks.

The House vote was 249 to 183 to pass the comprehensive energy bill, but only after narrowly overcoming a Democratic objection.

Rising Interest Rates Sneaking Up On Small Businesses

The AP is reporting that the realities of the interest rate hikes over the past ten months are starting to creep into the small business consciousness due to increased capital needs because of inflation and skyrocketing energy costs.

Family Entertainment and Copyright Act Passes House

The Family Entertainment and Copyright Act, passed last year by the Senate, has passed the House and is now in President Bush's hands.

The Washington Post reports:

The bill would protect technology that lets people automatically skip or mute sections of commercial movies that contain foul language, violence or nudity. The bill would assure manufacturers of DVD players and other devices that use the technology that they would not be violating Hollywood copyrights. The bill also would make it a federal crime to use video cameras to record films in movie theaters, and it would set penalties of up to 10 years in prison for anyone caught distributing a movie or song before its commercial release.

Bush Signs Bankruptcy Bill

President Bush signed legislation today that marks the biggest overhaul of our bankruptcy system in a quarter century.

The bankruptcy bill signed by President Bush will go into effect in six months. The major change under the bill is that debtors seeking to file bankruptcy will be subject to a means test. Debtors with incomes above their state’s median and who can pay back at least $6,000 over five years will have to file a Chapter 13 bankruptcy. These debtors will be required to enter into a payment plan to pay back some of their debt over time.

Currently, the court has discretion to determine whether an individual is required to file Chapter 13 rather than Chapter 7. Chapter 7 allows debtors to discharge their debts by liquidating certain assets and paying what they are able from the money generated.

President Bush has long supported this bill. He stated, "Bankruptcy should always be a last resort in our legal system. If someone does not pay his or her debts the rest of society ends up paying them."

Opponents of the bill feel that its impact will fall the hardest on low-income individuals, minorities, the elderly, and single mothers. It will be especially hard on those who suffer a medical crisis or lose their job.

Supporters of the bill see it as a long awaited change. The bill has been around in varied forms for the past eight years. Supporters feel that it will prevent abuse of the system by individuals seeking a way out of gambling debt, child support, bills resulting from compulsive shopping, and other abuse of the bankruptcy shelter provisions.

Innovation And Entrepreneurship Study

The SBA Office of Advocacy has released an excellent study that statistically analyzes the connection between entrepreneurship and innovation in 394 areas in the country. Please click here for the full report. Please click here for the research summary.

House Passes Bankruptcy Bill

The bankruptcy bill passed in the House of Representatives yesterday by a 302-126 vote.

Congressional approval of the bill was much expected this session, especially after the bill passed in the Senate last month by a 74-25 vote. The bill has come up but failed to pass in previous sessions largely due to a controversial abortion-related amendment that was not included in this bill this session. While largely a republican-supported bill, it has also gained the support of many democrats. Seventy-three democrats from the House voted for the bill.

The bill will make significant changes to our bankruptcy system, many people will be unable to completely discharge their debts under Chapter 7. Instead, individuals will be subject to a means test. Those with incomes above their state’s median will have to enter into a repayment plan under chapter 13. Opponents of the bill feel that it will punish consumers while aiding the credit industry.

President Bush has long been a supporter of the bill. Shortly after the House passed the bill President Bush stated, "I look forward to signing the bill into law." It may be presented to President Bush as early as next week.