Vinod Khosla’s Martins Beach Dispute

Vinod Khosla’s Martins Beach Dispute

The Surfrider Foundation is a nonprofit organization set up to protect oceans, beaches and the public’s access to them. In September of 2014, Surfrider brought suit against Vinod Kholsa to open the gates to his Martins Beach Property. Khosla, the founder of Martins Beach 1, LLC and Martins Beach 2, LLC, bought the property from a previous owner and continued their practice of charging a car parking fee to allow access to the beach. This continued until 2011, but then Kholsa closed and locked the gates leading to Martin’s Beach. He also hired security guards to be sure their were no trespassers. Surfrider filed suit against the billionaire at the CA Superior Court in San Mateo County. Surfrider wanted public access to the beach, as well as penalties against Khosla for a violation.

Superior Court Judge Barbara Mallach sided with Surfrider in saying that Khosla had violated the California Coastal Act by blocking public access to the beach. She said permanently locking the gates and hiring a security guard clearly prevented public access to the beach. Judge Mallach said Khosla and his company must apply for coastal development permits if they want to lock the gates and prevent public access. Until the correct permits are granted, the beach must be publicly accessible. Surfrider also wanted Khosla and his companies to pay penalties for locking their gates, but Judge Mallach did not agree with the foundation. She said since Khosla’s behavior was “in good faith,” penalties were not justified.

Surfrider celebrated a victory and claimed that “great wealth cannot be used to circumvent and ignore the law.” Vinod Khosla is expected to appeal the decision. He said he was disappointed with the court’s decision and says he “will continue to seek protection of the constitutional rights of private property owners that are guaranteed by the U.S. and California Constitutions .” Fast forwarding into 2016, Kholsa’s years-long dispute is headed to trial. A federal appeals court in San Francisco has approved the case against Khosla and his attorney’s are eager to protect the right’s of coastal property owners in the upcoming trial.

Sources referenced:

  1. Silicon Valley Business Journal
  2. Fortune
More Fake Law Firm Websites Emerging

More Fake Law Firm Websites Emerging

The European Regulator and the Law Society of Scotland are warning lawyers and clients about the increase in the number of fake law firm websites. These websites are set up to look like a real attorney’s website and may even be using a real attorney’s name and information to scam “clients.” The designers of these websites hope to gather personal and financial information of clients from these websites. There is a high chance these scammers are able to gain confidential information because many law sites ask clients to fill out a short form in order to schedule a consultation. The Law Society of Scotland encourages lawyers to check the Law Society’s site to see whether their site has been cloned. It is also recommended that lawyers to go to search engines and confirm that their website is the only one to show up when they enter their name.

Although many lawyers think something like this can never happen them, they should take necessary precautions. Edward Scott was a victim of a fake site scam. He found out that he was listed as a partner at Carter Legal Associates. The real law firm Scott worked at was Capital Defense Lawyers of Edinburgh. Scott was surprised to find a nearly identical website and profile that described Scott as a well-regarded criminal and traffic defense attorney. Not only was it a hassle for Scott to take down the fake website, he was also concerned about his clients becoming targets of these scams. A law firm’s reputation can also suffer because their name is linked to a scam website.

The ABA Journal advises attorneys to prevent scams like this one from taking place by talking to their clients and searching themselves up online. Not only do attorney’s suffer from scams like this, many innocent people become victims. People think they are sharing their personal and confidential information with an attorney, but this is not always true. Clients are encouraged to make sure an attorney actually exists before providing their legal information to him or her. Calling the attorney’s office is recommended to verify the website.

Source referenced: ABA Journal

Is Bitcoin money? US Courts Say Yes.

Is Bitcoin money? US Courts Say Yes.

As the popularity of digital currency Bitcoin increases, the United States will need to take a stance on how they will regulate the currency through different sectors of the economy. The media and the general public may think lawmakers will decided the US stance on Bitcoin, but our court system may be the one that decides the future of digital currency in this country. There have been a couple of cases in the past few years where the court system seems to be taking a position on Bitcoin. Although bitcoin may not be considered money in the traditional sense, many of the court cases have viewed Bitcoin as a currency. In fact, bitcoin  has also been compared to international currencies like the Euro or Yuan. The cases provided below may be providing hints of where the future of Bitcoin may be going in America.

SEC v. Trendon Shavers

In September 2014, Trendon Shavers was fined $40 million for defrauding investors into a Bitcoin Ponzi scheme. Shavers was the operator of Bitcoin Savings and Trust and was known to have solicited illicit investments in bitcoin-related opportunities. He accumulated about $64 million with his activities. The SEC brought the case against him and the court charged him by saying that bitcoin is a form of money  and therefore he could not defraud people with it. The court’s ruling was going against a 2013 declaration by the FinCEN guidance, which said Bitcoin could not be considered a currency. However, the Texas Court said it was pretty clear that Bitcoin can be used as a form of money and can help a consumer purchase goods and services. This case was also crucial because Judge Amos Mazzant provided insight on how bitcoin-denominated damages would be considered. In this case, Judge Mazzant looked at the average daily price of bitcoin to determine the amount of damages. This may set a precedent for similar cases in the future.

US v. Faiella

Charlie Shrem and Robert Faiella came under fire when the two were accused of providing bitcoin to Silk Road users, an online black market. Shrem was the CEO of BitInstant, a bitcoin exchange company. Both Shrem and Faiella were charged with several counts of money laundering and transferring money without a license. Faiella tried to plead his case by saying that Bitcoin was a digital currency and therefore did not fall under the money laundering counts. Judge Jed Rakoff rejected this reasoning and said something very similar to Judge Mazzant, explaining that anything that bought goods and services counted as money. Since bitcoin had the capability of purchasing goods and services and paying for things like a rental payment, it could be considered money. With this reasoning, both Shrem and Faiella were forced to plead guilty to the charges and ultimately ended up paying nearly $1 million in fines.

State of Florida v. Espinoza

Pascal Reid and Michell Abner Espinoza were arrested in February 2014 for engaging in fake transactions on LocalBitcoins.com and converting $30,000 of cash into bitcoin. Both were charged with Florida’s anti-money laundering law and with money transmission charges. In August, the Bitcoin foundation filed an amicus brief to dismiss the money transmission charges because Florida’s law applied only to corporations and entities qualified to do business in the state. Reid and Espinoza did not fall under this category. Although the foundation’s brief may help Reid’s case, that was not the goal of the organization. Their amicus brief was only an attempt to ensure an outcome that sets a favorable precedent for the rest of the Bitcoin community. Reid and Espinoza turned to the IRS to help them prove that bitcoin is not money.

US vs Ross William Ulbricht

This last case was fairly similar to the three presented above, where Ulbricht argued that he could not be charged with money laundering because bitcoin did not count as money. Ulbricht was charged with being the leader of the online black market Silk Road. He was found guilty on charges of computer hacking, drug trafficking, money laundering and engaging in a criminal enterprise. Like previous judges, Judge Katherine Forrest compared bitcoin to the Euro and other international currencies. While Ulbricht was not willing to plead guilty on any of his charges, there seems to be little hope that a decision will be made in his favor.

As it is clear through the four court cases present above, the legal definition of money is somewhat debated. US Courts seems to agree that bitcoin does fall under the category of money, but defendants continue challenging this definition of money. Their explanation for this is that bitcoin, like money, can help someone pay for goods or services. Many foreign countries have criticized the use of bitcoin and want to ban the currency all together. A case involving Bitcoin has not yet reached the Supreme Court, but their decision may put an end to all this debate.

Source referenced: Coin Desk

What are Blockchain Smart Contracts?

What are Blockchain Smart Contracts?

Smart contracts are “contracts between parties stored on a blockchain” or “any computation that takes place on a blockchain.” The term can be used to identify a specific technology (smart contract code) or a specific application of that technology (smart legal contracts). The two uses of this term often lead to confusion and debates among individuals. Understanding the difference between the two uses of the word smart contracts will help you answer questions and better take a stand for your position on smart contracts.

Smart Contract Code

Smart Contract Code is the term used to identify a specific technology. Individuals who develop blockchain technology used the term “smart contract code” to refer to blockchain code. However, many people generically use this term to refer to any complex program that is stored and executed on blockchain. The reason we call these codes contracts is to show that they hold something valuable. Think of it as something equivalent to money or someone’s identity. Unlike legal contracts, smart contracts are not actually “contracts.” They do need conditioned financial language at all times.They can also hold balances of cryptocurrency. Augur, Slock.it, and Boardroom are examples of application that are made out of smart contract code. As the use and understanding of this term increases, we may be able to get out of using the analogy to legal contracts. Instead, we may be able to refer to smart codes the same way we refer to JavaScript or HTML.

Smart Legal Contracts

The terms smart legal contracts refers to “a way of using blockchain technology to complement, or replace, existing legal contracts.” Unlike Smart Contract Code that can operate on its own, smart legal contracts need the assistance of the law. In other words, it would require a blend of code and natural language. An example would be a supplier of goods who enters into a contract with a retailer. While the payment may be automatically made when the delivery is made, an indemnification clause would no bring any value to a smart legal contract because a court would be needed to enforce it.

When can you use a Smart Contract?

There are many different uses for smart contract. In the past, they have been used by the financial field as instruments for stocks, bonds, or derivative contracts. This allowed them to simplify the process related to trading. In the future, real estate and intellectual property can be exchanged and traded over the blockchain system. The hope is that smart contracts can be used to facilitate new types of commercial arrangements and make more commercial relationships possible. Machine-to-machine commerce and the growing system of smart devices with the ability to communicate to one another is also a region for smart contracts to grow. While smart contracts will not necessarily work for legal contracts, they are commercially viable if there is a trusting relationship.

We hope this article has cleared up confusion on the term smart contracts and has provided information on when to use smart contracts. The different uses of the term in the field only adds to the confusion of blockchain technology and smart contracts. With more and more technologies emerging, we should see an increase in the use of smart contracts for commercial purposes. Using them for legal matters is not recommended for the reasons stated above. Lawyers looking at smart contracts often see them as marginally approved legal agreements, but fail to see the potential of blockchain-code to extend beyond law’s reach.

Source referenced: Coin Desk

Is it Time to Revise your Employee Handbook?

Is it Time to Revise your Employee Handbook?

We recently blogged about the importance of having an employee handbook. Not only is the handbook a way for employers to protect themselves against lawsuits, it is also a way for them to showcase themselves to potential employees. Richard F. Griffin, Jr., General Counsel of the National Labor Relations Board (NLRB), issued a report on common employee handbook provisions. In the previous blog post, we suggested writing a custom employee handbook, but taking suggesting from the NLRB is definitely recommended for all of our business client.

This report specifically restricted employers from issuing policies or rules that “inhibit employees from engaging in activities protected by the act, such as discussing wages, criticizing management, publicly communicating about working conditions and discussing unionization.” Many employers have confidentiality policies that may be well-intentioned, but can be seen by the NLRB as over-intrusive and illegal. Although the NLRB report was lengthy and detailed, there were some clear “DON’Ts” that emerged from the documents:

  • Do not prohibit employees from discussing “employee information.”
  • Do not prohibit disclosure of “another’s confidential information.”
  • Do not prohibit disclosure of “details about the employer.”
  • DO not prohibit disclosure of all categories of “non-public information.”

Some of the things listed above may not specifically prohibit employees from taking collective action or freely expressing themselves, but the NLRB is concerned about anything that may dissuade an employee from acting. However, the NLRB is also aware of the rights of employers and how most employers are concerned about doing their best to protect their businesses. Due to this, there are confidentiality provisions that the NLRB has deemed legal:

  • No unauthorized disclosure of “business ‘secrets’ or other confidential information.”
  • “Misuse or unauthorized disclosure of confidential information not otherwise available to persons or firms outside [the Employer] is cause for disciplinary action, including termination.”
  • “Do not disclose confidential financial data, or other non-public proprietary company information. Do not share confidential information regarding business partners, vendors or customers.”

One of the most important takeaways from the NLRB’s report is that employers have to be careful in what they imply with their words. There are some rules that are nested among others and may be seen as unnecessary or too prohibitive by an employee. However, the NLRB also understands an employer’s position. Therefore, an employers best bet is to steer clear of vague instructions in an employee handbook. We would recommend our business clients to stay up-to-date with the NLRB and update their employee handbooks accordingly.

Source referenced: Labor Sphere

 

Think Twice Before Flying Your Drone

Think Twice Before Flying Your Drone

The State of California has always been very concerned about its citizens privacy and has done its best to protect it. In the 21st century, the biggest threat to someone’s privacy is a camera drone. California is tackling this problem with Assembly Bill No. 2306. This law makes it both illegal and costly for anybody seeking to invade someone else’s privacy by taking photos of them with a camera drone. Many people say this law applies to paparazzi, but this is not entirely true. Drone sales have been increasing and many people buy drones for personal use. This can lead to concerns over where they  can legally fly their drone in certain areas. As a rule of thumb, a drone should not fly anywhere someone would have a reasonable expectation of privacy. An example would be your neighbor’s backyard.

The bill is an attempt to “expand a person’s potential liability for constructive invasion of privacy  by removing the limitation that the person use a visual or auditory enhancing device, and would instead make the person liable when using any device…to engage in illegal activity.” California lawmakers felt that existing laws on invasion of privacy did not cover drones and adding Assembly  Bill No. 2306 would better protect people’s privacy. The full act can be read at the link specified below.

Past laws on privacy said that a person was liable

"for 'constructive invasion of privacy' for attempting to capture, in a 
manner highly offensive to a reasonable person, any type of visual image, 
sound recording, or other physical impression of another person engaging 
in a personal or familial activity under circumstances in which the  
plaintiff had a reasonable expectation of privacy, through the use of a 
visual or auditory enhancing device."

Assembly Bill No. 2306 removes the statutory tort of “constructive invasion of privacy,” which required that device used to invade someone’s privacy either enhance the video or audio. Removing this part of the bill allows drones to fit the requirement.

The civil punishments for this act are very expensive and should serve as a deterrent for possible criminals. The act says any “person who comes within the description of this subdivision is also subject to a civil fine of not less than five thousand dollars ($5,000) and not more than fifty thousand dollars ($50,000).” In addition, anyone in violation of this law would be liable for up to three times the amount of any general, special damages, or punitive damages. In the case of paparazzi or anyone else invading someone’s privacy for commercial gain, all profits from the invasion will be given to the victim.

Although drones are available to buy in many big box stores and on several online sites, we recommend everyone to be careful when flying their drones. Many experts recommend flying drones in rural areas and far from residential areas. The fines and penalties for violating this law are very expensive, so we highly encourage everyone to strongly consider the purpose behind flying their drone and taking all necessary precautions.

Source referenced:

  1. PetaPixel
  2. Assembly Bill No. 2306
  3. Assembly Bill No. 2306 Analysis

 

 

Does GPS Tracking Count as a Search? Yes.

Does GPS Tracking Count as a Search? Yes.

Law enforcement agencies have become more aware of how technological advances can help them monitor and track suspects and criminals. The Supreme Court, however, has put a limit on what exactly counts as a “search” and how far authorities can go in tracking repeat offenders. Torrey Dale Grady, a repeat sex offender, was told he must wear a GPS ankle bracelet 24 hours a day so that he can be monitored by the North Carolina police. Grady said that since the device needed to be charged, he was required to sit next to a wall outlet for at least 4 to 6 hours per day. Grady unsuccessfully battled the ankle bracelet in North Carolina courts, but eventually made his way to the US Supreme Court. Grady claimed that the GPS ankle bracelet would be the equivalent of an unreasonable search and seizure, therefore violating his 4th Amendment rights. The Supreme Court was  interested in answering this question for once and for all.

In a unanimous decision, the Supreme Court agreed with Grady and said that if the government attaches anything to your body or your property, it counts as a search. Although the North Carolina Supreme Court had sided with its police authorities and said the ankle bracelet was perfectly legal, the Supreme Court sent the case back to the state’s highest court to be heard once again. Siding with Grady, the Supreme Court also mentioned precedents. One of the cited cases was US v. Jones, in which the Supreme Court had ruled that installing GPS devices in a suspect’s vehicle fell under the 4th Amendment search.

The Fourth Amendment and advances in technology seem to be in contradiction. It is expected that the Supreme Court will soon have to deal with the issue of whether geolocations from our phones are also protected under the Fourth Amendment. We will have to wait and see when such a case makes its way to the nation’s highest court. The concern about technology and surveillance is growing as more and more Americans purchase smartphones. This ruling will force lower courts to consider whether attaching a GPS tracker to someone is a violation of their constitutional rights. North Carolina was not alone in requiring repeat sex offenders to wear ankle bracelet. Wisconsin did the same thing, but both of these states and others will now be forced to reconsider their method of monitoring criminals.

 

Source referenced:

  1. Naked Security
  2. The Atlantic
Why you should have an Employee Handbook

Why you should have an Employee Handbook

A Double-edged Sword

There was a time when employers avoided having an employee handbook. It was a common misconception that having an employee handbook protected employees, but not employers. This is definitely not the case. While an employee handbook can protect employees, it can also help employers with legal matters. An employee handbook can be a double-edged sword, but it is recommended that every business have one. The type of business or the number of employees working should not determine whether or not an employer has a handbook. In addition to protecting both employers and employees, a handbook can encourage employees to behave in a more appropriate fashion, make sure all employees are treated the same way, and help win unemployment lawsuits. We provide more reasons for having an employee handbook below.

Establishing Expectations

While an employee handbook does not need to be an instruction manual on how to perform a specific job or duty, it can provide some baseline expectations for a new employee. It can include anything from dress codes to information on how to request a day off. An employee handbook can also include information on filing a complaint about harassment, keeping a time record, and complying with the law while on the job. Adding this information to your employee handbook can come in handy in case of a lawsuit or any legal trouble.

“Selling” the Benefits You Offer

When a new employee is considering his or her options for employment, providing them with your employee handbook can definitely be beneficial to you. In the handbook, you can highlight all the resources you provide for your employees and why your business is the best place to work. You can even include Worker’s Compensation and Medical Insurance benefits.

Lawsuits

If your business ever faces a lawsuit from an employee, an employee handbook can serve as your first defense. For example, if you terminated an employee you will need proof that the employee was on notice for his actions. It would be extremely helpful if you have outlined your procedure for terminating employees in your handbook, as it would serve as the proof you need. If the employee signed the employee handbook, it becomes an even stronger defense.

Some additional considerations about employee handbooks are that they must comply with state and federal laws. While you do not need to spell out each law in the handbook, none of your policies should be conflicting with the law. In addition, your handbook should be tailored to the needs of your business. This means you should write your own handbook as a business owner. Getting the handbook published and checked for typos is also a good idea. Lastly, making sure your employee handbook is up-to-date is crucial. There is no point in having a handbook that focuses on laws from the past. We advise all of our business clients to either write or revise their handbooks based on the advise found here. More information on how to perfect your employee handbook can be found at the link below.

Source referenced: JD Supra

What to Know Before Using DIY Legal Sites

What to Know Before Using DIY Legal Sites

Perhaps in an attempt to save some time and money, some businesses are turning to DIY Legal Sites to fulfill their legal needs. These sites, like everything else on the internet, are readily available and are fairly easy to figure out. Not only are these sites cheap, they provide click-download-and-print legal forms for your business needs. However, before you use one of these sites for your business, we will highlight a few things you should consider if you plan on becoming an amateur attorney from the comfort of your couch.

One size does not fit all: In this case, one form does not fit all cases. While the site may lead you to one specific form for your needs, there is no guarantee that the form will actually work for you. At the end of the day, you get what you pay for. You pay for a form and simple instructions on how to fill it out. You did not pay for an attorney to walk you through the problem and help you find the one form that can fulfill your needs. Online forms are designed for the masses, but your attorney can find the specific form you need.

What you don’t know can hurt you: While attorneys with years of experience will be able to easily catch the smallest details in forms and contracts, the same cannot be said about an online form. Attorneys know the kind of loopholes and information they are looking for, but the online forms and legal services do not have any experience with this.

Forming a relationship with your attorney: Your attorney, by knowing you and your business, will always be able to recommend the best path forward for your company. If you have worked with the same lawyer for a number of years, he or she can help you avoid unnecessary hurdles and keep potential issues from turning into problems. A DIY legal site may be able to solve the problem at hand, but will not be able to advise you for the future.

If you look closely at these DIY legal sites, they explicitly say their services are not a substitute for a licensed attorney. This alone should serve as a warning to businesses using these sites instead of consulting their attorneys. While attorneys can be costly, their expertise does not match up to a legal site designed for the masses. In addition, you should weigh the risks and rewards of the situation. If hiring an attorney helps you avoid legal complications in the future, avoiding DIY legal sites may be your best plan. We hope this post has provided valuable information for our business clients.

Source referenced: Entrepreneur

Eavesdropping Explained

Eavesdropping Explained

As residents and citizens of California, everyone in the state enjoys the “inalienable right of privacy.”The California government has always taken privacy very seriously. In 1967, the state legislature passed an “Invasion of Privacy Act,” which outlined criminal penalties for invading another citizen’s privacy.

Today, Penal Code 632 makes it “a crime to use an electronic device to overhear or record a private conversation.” In order for eavesdropping to be a crime, the following elements are required:

  1. Must be intentional.
  2. Must take place without the permission of the parties to the overheard conversation.
  3. The conversation needs to be confidential. In other words, at least one party intended that no one else hear the conversation and expected privacy.
  4. Must involve the use of an electronic device, either to hear the conversation or to record it.

California has also acted quickly to protect cell phone and cordless phone calls. Penal Code 632.5 and 632.6 say intercepting “a call between two cell phones, two cordless phones, a cell or cordless phone and a landline phone, OR a cell phone and a cordless phone, with criminal intent and without the consent of both parties to the call” has the same penalties as ordinary eavesdropping.

Penal Code 632 Penalties

The penalties for eavesdropping can vary based on the accused individual’s record and the prosecutor. A prosecutor may try eavesdropping as a misdemeanor or a felony. If it is a misdemeanor, the accused individual can be fined up to $2,500, one year in county jail, or both. If it is a felony, then the accused can be fined $2,500 and/or sixteen months, two years, or three years in state prison. The maximum fine can be raised to $10,000 if the individual has a record of eavesdropping.

Not only can the accused face criminal penalties, an eavesdropper may also face a civil lawsuit. A victim of eavesdropping can sue for up to three times the damages they suffered or for $5,000, whichever is greater. Even if the victim does not suffer any economic damages as a result of the eavesdropping, he or she can still sue for up to $5,000.

Can you use information gathered through eavesdropping as evidence?

The answer to this question is no. Although gathering information by using an electronic device to eavesdrop may seem like a reasonable way to win a legal argument, you can face criminal charges for the eavesdropping. The evidence gathered through eavesdropping will not be admissible in a court of law.

When can you eavesdrop legally?

There are certain circumstances and situations where private citizens can eavesdrop legally to gather evidence. An individual can legally eavesdrop if he/she is one of the parties in the conversation and the person recording the conversation is collecting evidence because he/she believes that the other person is involved with the following crimes: extortion, kidnapping, bribery, any felony, or any annoying phone calls (Penal Code 653m).

You can also legally record a conversation with someone, without their permission, if you are seeking a restraining order against that person. This usually falls under the CA Domestic Violence laws and Penal Code 273.6. These recordings would be admissible in a court of law.

Wiretapping

CA Penal Code 631 prohibits wiretapping. While eavesdropping and wiretapping are similar crimes, wiretapping is “the act of intercepting and listening in on phone conversations by using a machine to ‘tap’ into the phone line over which they take place.” Eavesdropping is only listening in on the conversation. Similar to eavesdropping, the penalties for wiretapping depend on whether the crime is tried as a misdemeanor or a felony.

Eavesdropping and Wiretapping by Law Enforcement

Interestingly, most citizens are not concerned about other citizens eavesdropping on their private conversations. They are more concerned about the government listening to them. The 1967 Invasion of Privacy Act made it very clear that eavesdropping laws did not apply to law enforcement officials. In addition, any evidence they gather by eavesdropping is accepted in court.

However, this does not mean law enforcement officials can listen in on your private conversations whenever the want to. If they want to wiretap your phone or intercept your calls, they must get a court order. Authorities are usually able to get court orders for the following crimes: serious drug crimes, murder or solicitation of murder, kidnapping, and terrorism. They must also convince the judge that other investing procedures have failed and wiretapping and eavesdropping are a last resort.

For Americans today, eavesdropping has become a serious issue with the rise of terrorism. We hope this analysis of eavesdropping laws in California has provided you with more information on illegal and legal eavesdropping. Our goal is that a more thorough understanding of eavesdropping laws in California will better protect our clients and businesses.

Source referenced: Shouse California Law Group