The Supreme Court ruled Thursday that states can force retailers to collect state and local sales taxes no matter where the seller operates its business, saying those taxes support local police and fire departments and other services.

“The decision, in South Dakota v. Wayfair Inc., was a victory for brick-and-mortar businesses that have long complained they are put at a disadvantage by having to charge sales taxes while many online competitors do not,” explains The New York Times. “And it was also a victory for states that have said that they are missing out on tens of billions of dollars in annual revenue.”

Justices split 5-4 on the ruling, with Anthony M. Kennedy, Clarence Thomas, Ruth Bader Ginsburg, Samuel A. Alito Jr. and Neil M. Gorsuch in the majority.

Read the Times article.

The number of cases involving consumer data breaches is rapidly growing, points out Ehren M. Fournier in a post on the website of Schoenberg Finkel Newman & Rosenberg LLC. Data breaches inflict additional costs on financial institutions, leading those institutions to turn to litigation to recoup their losses from merchants.

Fournier discusses a recent case in which the United States Court of Appeals for the Seventh Circuit Court dealt a significant blow to attempts by financial institutions to bring negligence claims against merchants for failing to adequately safeguard their customers’ data:

In 2012, hackers infiltrated Schnuck Markets, a large Midwestern grocery chain, and stole the data of about 2.4 million credit and debit cards. Financial losses from the unauthorized purchases and cash withdrawals made with the stolen data reached into the millions. Because federal law requires the consumers’ banks to indemnify the consumers for losses incurred as a result of fraudulent activity, four banks brought a class action lawsuit against Schnucks to recover their losses. The plaintiff banks had no direct contract with Schnucks, and instead resorted to common-law negligence/tort claims, common-law contractual claims, and several claims under Illinois statutes. The Seventh Circuit affirmed the lower court’s decision to dismiss all claims, and its decision on the economic loss doctrine bears some discussion. The federal appellate court anticipated that the high courts of both Illinois and Missouri would reject imposing tort liability under these circumstances.

Read the article.

The American Arbitration Association has introduced the Streamlined Three-Arbitrator Panel Option to help parties in large cases lower the costs and escalate the speed of the dispute resolution process.

“When parties’ agreement calls for three arbitrators to hear and decide their case, the Streamlined Three-Arbitrator Panel Option allows them to utilize a single arbitrator for the preliminary and discovery stages of a case,” the AAA explains on its website. “The full panel of three arbitrators then participates in the evidentiary hearing and renders the final award—a more efficient and less expensive process.”

On its website, the AAA describes the three options and alternatives available.

Get more information.

Rent-A-Center, Inc. announced that it has entered into an agreement with Vintage Rodeo Parent, LLC, an affiliate of Vintage Capital Management, LLC, for Vintage to acquire all of the outstanding shares of Rent-A-Center common stock for $15 per share in cash. The transaction, which is not subject to a financing condition, and is expected to close by the end of 2018, subject to customary closing conditions including the receipt of stockholder and regulatory approvals, represents a total consideration of approximately $1.365 billion, including net debt.

Under the terms of the agreement, Rent-A-Center stockholders will receive $15 in cash for each share of Rent-A-Center common stock, which represents a premium of approximately 49 percent over the company’s closing stock price on Oct. 30, 2017, immediately prior to the announcement that the company’s board of directors initiated a process to evaluate strategic and financial alternatives focused on maximizing stockholder value.

The Rent-A-Center board has unanimously approved the transaction and recommends that stockholders vote in favor of the transaction. Upon completion of the transaction, Rent-A-Center will become a privately held company and its common shares will no longer be listed on any public market.

B. Riley Financial, Inc. and certain of its affiliates have committed to serve as equity and debt participants in the transaction.

J.P. Morgan Securities LLC is acting as exclusive financial advisor to Rent-A-Center and provided a fairness opinion to the Rent-A-Center Board of Directors. Winston & Strawn LLP is serving as legal advisor to Rent-A-Center, and Sullivan & Cromwell LLP is serving as legal advisor to the Rent-A-Center Board of Directors.

B. Riley FBR, Inc. is serving as financial advisor and lead arranger and Guggenheim Corporate Funding LLC is serving as administrative agent and joint lead arranger. Wilson Sonsini Goodrich & Rosati, Professional Corporation is serving as legal advisor to Vintage.

Morgan, Lewis & Bockius lawyers, writing in the firm’s Tech & Sourcing blog, discuss the typical ways that parties can use contracts to determine intellectual property ownership.

“In the context of negotiating an agreement where intellectual property rights are addressed, most parties will readily agree that those intellectual property rights owned by a party before the effective date of the agreement or developed outside of the agreement (commonly referred to as background rights) should be owned by that party,” write Vito Petretti and Cindy L. Dole.

Their article discusses the common allocations of foreground IP rights.

Read the article.

Image by Mike Mozart

Target Corp.’s $17 million class settlement to resolve consumer claims over a 2013 data breach passed Eighth Circuit scrutiny on its second trip to the appeals court, reports Bloomberg Law.

The court rejected an objector’s challenge that the named plaintiffs weren’t adequate representatives for the whole class because they received compensation while others didn’t, according to reporter Perry Cooper.

He explained:

“All class members had the ability to register for credit monitoring, and all of the compromised payment cards undoubtedly were canceled and replaced by the issuing banks,” Judge Bobby E. Shepherd wrote for the U.S. Court of Appeals for the Eighth Circuit.

“Any risk of future harm is therefore entirely speculative,” the court said.

Read the Bloomberg Law article.

Bloomberg is reporting that Walmart Inc. sued its former chief tax officer for violating her employment agreement by defecting to online rival Amazon Inc., the latest broadside in the slugfest between the two retail giants.

Walmart, citing contractual terms, is trying to block Lisa Wadlin, Walmart’s senior vice president and top tax executive, from taking the Amazon position until May 2020 and bar her from handing over “sensitive business information obtained at Walmart.”

Reporters Jef Feeley and Matthew Boyle write that Walmart’s suit claims that Wadlin “wrongfully left the Bentonville, Arkansas-based chain last month to move to Amazon’s headquarters in Seattle, Walmart officials said Wednesday in a lawsuit.”

Read the Bloomberg article.

Corporate counsel often hire external technology lawyers to review, draft, or negotiate technology contracts such as software licensing agreements because of their ability to identify software licensing issues, resolve complex licensing models, and compare the subject deal to the many other unique technology contract structures to solve problems, according to a blog post by Kirkpatrick Law.

There are a few technology contract types that should signal a need for a technology attorney to review, so the article lists some software examples to narrow the focus, but these could be true for other technology types.

The article covers one-sided enterprise agreements, the short and simple agreement, and the standard agreement.

Read the article.

The Fifth Circuit has affirmed an order compelling arbitration, despite the fact that the parties seeking to compel arbitration were not signatories to the relevant arbitration agreement, according to a post on Carlton Fields’ Reinsurance Post.

Jason Brost explained that the case involved a real estate sale contract that contained an arbitration agreement under which the parties agreed to arbitrate any disputes “in accordance with the Comprehensive Arbitration Rules and Procedures administered by J●A●M●S/Endispute.”

The plaintiff claimed that the defendants in the case induced the buyer to enter into the 1998 agreement based on the false premise that he would get a properly constructed home. The defendants, who were non-signatories to the agreement, moved that the arbitration clause be enforced.

The appellate court found for the defendants.

Read the article.

Nearly $4 million in fees are at stake in a California Supreme Court fight between a big law firm and a big client over broad advance conflict waivers the firm used in its client engagement letters, according to Bloomberg Law.

Reporter Joyce Cutler explains that Sheppard Mullin Richter & Hampton LLP was “disqualified from representing J-M Manufacturing Co. Inc. in a $1 billion qui tam action because the firm concurrently represented one of the hundreds of defendants in an unrelated matter. The state appeals court held the advance conflict waiver J-M gave Sheppard Mullin didn’t absolve the firm of its duty to tell J-M about the specific conflict once it came to light.”

The question for this case of first impression is whether a law firm needs to tell a sophisticated client about a specific conflict when it arises, or whether the firm can instead rely a boilerplate advance conflict waiver in the client’s engagement agreement.

Read the Bloomberg article.

Morgan Lewis authors, writing in the firm’s Tech & Sourcing blog, discuss how patent, copyright, and trade secret ownership works in the United States if there is no agreement in place to allocate these rights.

Striking an interest provision from a draft subcontract wasn’t enough to keep a party to the agreement from being required to pay interest, according to a review of a Missouri case by Jane Fox Lehman in Pepper Hamilton’s Constructlaw blog.

When the general contractor later failed to pay the subcontractor, the sub sued and won a verdict that included prejudgment interest at the rate of 9 percent pursuant to Missouri law. The general contractor appealed.

Lehman explains the outcome: “The court held that it could not consider the stricken interest provision because it was extrinsic evidence. ‘The rationale,’ it explained, ‘is that the writing excised from the agreement, whether by way of striking, erasing, or simply transferring the agreement to a new piece of paper without the stricken language, is not part of the agreement between the parties.’”

Because the parties had failed to reach an express agreement on an interest rate, the trial court’s ruling was upheld.

Read the article.

Trademark licensing disputes can present thorny issues at the intersection of contract and trademark law, warns an article in the
Dorsey & Whitney LLP blog TheTMCA.com.

“And when the dispute involves the Trump brand for residential buildings, the adjudication of rights and obligations under a trademark license agreement can become national news,” write Sandra Edelman and Dan Goldberger.

In Residential Committee of the Board of Managers of 200 Riverside Boulevard at Trump Place Condominium v. DJT Holdings LLC, the court held that the 200 Riverside Building was not required to use the Trump name on the façade of the Building.

The court agreed with the Condo Board that there are “no obligations or requirements in the license agreement for the building to carry the name ‘Trump’ on it in perpetuity.”

Read the article.

Perkins Coie has launched Consumer Protection Review, a blog designed to help businesses that market and sell to consumers navigate federal and state legal issues related to advertising, privacy, promotions, products liability, government investigations, unfair competition, class actions and general consumer protection.

Written for traditional retailers, manufacturers, technology companies and other consumer-facing enterprises, the Consumer Protection Review highlights legal developments in unfair or deceptive business practices, product safety claims, data collection, brand protection and more.

According to a release from the firm, the primary authors of “Consumer Protection Review” (listed alphabetically) are:

Amanda Beane counsels and defends clients on matters related to consumer protection and unfair competition, as well as Americans with Disabilities Act, contract trade secret and other commercial matters.

Mark Goodrich advises clients on advertising compliance matters and helps brands navigate complex state, federal and local advertising, promotion and consumer protection laws.

Jason Howell counsels clients on marketing, advertising, brand and consumer protection, and regulatory compliance issues, such as advertising claims and substantiation, sale and discount advertising, marketing and sponsorship agreements, product development, contests and sweepstakes, endorsements and influencers, and promotional offers.

Julie Hussey advises clients in high-exposure claims involving product liability, consumer fraud, and false and misleading advertisements and litigation related to injury and damage claims against manufacturers of dietary supplements, tires, paint, and automotive and aviation products.

Ryan Mrazik focuses on litigating for and counseling communications service providers—social media companies, mobile carriers and other communications and storage platforms—on the full range of legal issues those companies encounter regarding the privacy and security of their users’ information and content.

Eric J. Weiss represents clients in disputes arising under the Federal Trade Commission Act, the Sherman Antitrust Act, the California Cartwright Act, the Washington Consumer Protection Act and other state consumer-protection laws and advocates on behalf of plaintiffs and defendants in federal courts and arbitration forums nationwide.

Perkins Coie’s Consumer Protection practice represents innovative companies and industry leaders that advertise, market and sell products and services to the buying public. The attorneys help clients navigate compliance with the ever-changing field of consumer protection laws, and, when a matter spills into an investigation or active litigation, they resolve the dispute to match the client’s goals and preserve the company’s market reputation.

DLA Piper secured a victory in its representation of WebSpectator Corporation, a Santa Monica-based company that pioneered online analytics and attention ad space, as the plaintiff before the U.S. District Court for the Central District of California.

According to a release from DLA Piper, the litigation against the company’s former officers and directors included claims for violations of the Computer Fraud and Abuse Act, the Anti-Cybersquatting Consumer Protection Act and RICO, among other causes of action. Granting WebSpectator’s motion for sanctions for spoliation of evidence, the court entered defaults against the defendants and vacated the trial date.

The DLA Piper team representing WebSpectator was led by partner Ellyn Garofalo and associate Amir Kaltgrad (both of Los Angeles).

Bloomberg Law’s June 6 Cross-Border Deals Forum 2018: Applying Emerging Technologies for Efficiency & Success, will feature an examination of the dealmaking landscape and new risks to watch.

The live event will be Wednesday, June 6, 2018, at Bloomberg LP, 120 Park Avenue, New York. A networking reception will follow.

Ed Hammond, senior deals reporter for Bloomberg L.P., will talk with Diane Holt, managing editor at Bloomberg Law, about how business leaders are leveraging technology, implementing new compliance strategies, and mitigating risks as the market changes and new regulations come into effect.

Speaking at other sessions will be:

• Julia Shullman, VP, Chief Privacy Counsel, AppNexus
• Elizabeth Sanders, Chief Counsel – Transactions/M&A, Panasonic Corporation of North America
• Jonathan Anastasia, Senior Managing Counsel, Mastercard Labs

Register for the event.

State and federal authorities are picking up the pace of investigations into cryptocurrency markets, digital investment promotions and so-called initial coin offerings (ICOs) after being caught unprepared by the rapid adoption of cryptocurrency and blockchain technology behind digital currency transactions, according to a post on the website of Androvett Legal Media & Marketing.

“Until now, the explosive growth and soaring cryptocurrency valuations have occurred within a Wild West atmosphere of limited regulatory oversight,” said white collar defense attorney Douglas Richards of Denver-based Richards Carrington. “Regulators have taken notice and we’re starting to see a broad range of state and federal enforcement actions.”

State securities regulators in Texas, Colorado and other states recently took part in “Operation Cryptosweep,” a coordinated crackdown targeting fraudulent cryptocurrency operations that has resulted in the shuttering of certain investment websites and seizures of cryptocurrency and other assets. On the federal level, the Securities and Exchange Commission is examining whether certain cryptocurrency should be considered a commodity or an investment vehicle, which could trigger extra regulatory oversight.

“Blockchain technology and cryptocurrency are playing an important place in our modern economy, but parties raising funds through ICOs and individuals interested in cryptocurrency as an investment need to make sure they understand what they’re trading and do everything they can to protect themselves from fraud and regulatory scrutiny,” Richards said.

Trial attorney Rogge Dunn has filed a lawsuit in Dallas County against FindLaw for alleged fraud and misrepresentation of services the company provided for the new Rogge Dunn Group, PC firm website.

According to Dunn, FindLaw, a Thomson Reuters business, promised to create a website with content he would own, and conduct SEO services. Instead, he says the website FindLaw proposed contained only basic images and stock language that didn’t align with the business objectives of his law practice.

In a release from Dunn’s firm, he said discovered that FindLaw, and not the Rogge Dunn Group, is the owner of the content, “which forces the firm to start from square one should it decide to build a new website.” The release also said that, after entering into the contract, Dunn learned that if he failed to renew his FindLaw contract, the company would basically “flip a switch” and un-tag the attorney, eliminating any benefit for the 12 months of SEO.

Dunn says FindLaw rejected his attempts to find a solution.

“When you hire a big company, you expect them to live up to their representations and the work they promised,” said Dunn. “Instead, all I have encountered has been a series of misrepresentations compounded by bureaucratic and corporate indifference.”

In his lawsuit, Dunn said, after interviewing a number of website developers, he was prepared to hire an alternate company, but a FindLaw salesperson talked him out of the decision by falsely claiming the other company had a poor reputation.

The case is Rogge Dunn vs. FindLaw, West Publishing Corporation, a/b/a FindLaw, Super Lawyers, and LawInfo, and Kevin Donahue at al. in Dallas County Court.

eSignLive by Vasco has published a paper discussing how to mitigate legal risks of electronic signatures and increase enforceability by leveraging e-signatures when moving business processes online.

The paper can be downloaded from the company’s website at no charge.

The ESIGN act, recognizing the legal validity of electronic signatures, has been in effect for over 10 years. It governs the minimum requirements for legal electronic and digital signatures. Moving business process online and leveraging e-signatures is not entirely without risk.

This paper outlines the top six legal risks to be aware of, and how to prevent fraud, repudiation and increase admissibility and compliance when executing transactions digitally.

The company says a well-designed process, supported by electronic signature technology, can actually reduce the legal risks and increase the enforceability of e-transactions compared to paper processes.

Download the paper.

SecureDocs has introduced NDAworks, which is designed to help companies manage non-disclosure agreements.

The company says on its website that NDAWorks helps manage the signing, tracking and storing of a company’s NDAs from a central, secure location.

By utilizing agreement templates, built-in electronic signature, and custom document tagging, a legal team can save time and remain in control of every single NDA issued by the organization, the developer says.

The company is offering a free 14-day trial.

Learn more about NDAworks.