Richmond Journal of Law and Technology

The first exclusively online law review.

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Can an Improved Debt Collecting System Prevent Effective Scam Enforcement?

By: Daria Ivanova,

What is the IRS impersonation scam? A person receives an unsolicited phone call from a live person or from an automated call dialer who claims to be talking on behalf of IRS.[1] The caller may use a fake name or may not use name at all, or can also provide a fake IRS employee’s badge number.[2] The alleged IRS representative may know the victim’s Social Security Number or other personal information of the victim. The caller tells a targeted victim that he or she owes taxes to the IRS and if this person does not respond and pay them immediately, the victim will be arrested or sued. There also can be threats such as the loss of a business or driver’s license or deportation.[3] The impersonators often use the technique called spoofing when they use voice-over Internet protocol technology to hide their real phone numbers behind real IRS phone numbers.[4] Thus, when a person tries to call back that number, the individual is redirected to a real office of IRS.

The impersonators often ask the victims to use prepaid debit cards, wire transfers, Western Union payments, or MoneyGram payments.[5] As recent as April 2016, the impersonators started to demand the payments in Apple iTunes gift cards. Between April 2016 and October 2016, between 70 and 80 percent of all payments to the impersonators were made through Apple iTunes gift cards.[6] Moreover, in August 2017, the IRS informed the public that impersonators had moved to the e-mail domain. The impersonators started sending phishing emails pretending to work for the IRS and the FBI, urging victims to complete a fake IRS or FBI questionnaire. By clicking the link to that questionnaire, victims downloaded a ransomware that locked their data stored on the device until they paid a ransom to the impersonators.[7]

In October 2016, an IRS scam call center operation in Mumbai, India, was raided by local authorities to uncover that the center produced between $90,000 and $150,000 per day for more than a year.[8] The center produced $33 million to $55 million for that year, and it was targeting U.S. taxpayers.[9] The Treasury Inspector General for Tax Administration (TIGTA) had stated prior to the incident that it knew of 5,500 U.S. taxpayers who lost approximately $29 million, dating back to October 2013, because of the scam operation.[10] The TIGTA Deputy Inspector General for Investigations stated in August 24, 2016 that his agency received 1.5 million complaints and recorded almost $47 million stolen from 8,000 victims.[11] The Department of Justice has been actively trying to prosecute the IRS impersonators, and, in 2016, it successfully prosecuted two individuals tied to Indian scam call centers. One of the individuals, Kaushik Kanti Modi, has been convicted of money laundering charges under 18 U.S.C. Section 1956.[12] Modi bought store-value cards which were subsequently loaded with the scam proceeds and used to buy money orders to deposit into bank accounts.[13] The second individual, Sahil Patel, has been sentenced to 175 months in prison for racketeering, extortion, and aggravated identity theft due to his involvement in India-based scam call centers.[14]

A new piece of legislation may create an obstacle to an effective way of prosecuting these kinds of impersonation scams. The Fixing America’s Surface Transportation (FAST) Act (P.L. 114-94) requires the IRS to use private debt collectors for certain types of debts.[15] The private debt collectors are first required to contact a debtor by a letter and, only after the letter, can the private collectors contact the debtor by a phone call.[16] It has been argued that this could help IRS phone impersonators to deceive more people, as the IRS has historically emphasized that it does not directly contact people by phone to notify them of their debt.[17] With a new debt-collecting mechanism that arguably differs, this would not be so clear anymore. The proponents of private debt collectors have been claiming that people who do owe taxes are, first, notified by a letter, and once they receive a call, the call would already be expected.[18] If a person would receive a phone call prior to a notification letter, he or she could understand that it is a scam. However, it can also be argued that the people who have been notified by a letter would expect a phone call and, thus, may let their guards down once they receive a fake call from IRS impersonators.

These issues were addressed in the deliberations regarding the private debt collector requirement, and the proponents of private debt collectors claimed that the IRS would have time to address that issue prior to putting a new amendment into a full operation.[19] One of the safeguards proposed was to publicly identify private debt collectors so that general public would be able to discern a scam debt collector from a real one much more quickly.[20] Another argument was made that a proper protocol could ensure that the usage of private debt collectors would not make taxpayers more vulnerable to these kinds of scams.[21] Congress has been closely monitoring the issue and bringing up specific problems associated with private debt collectors and impersonating scam operations.[22] The IRS has also been consistently updating its website with all necessary information to inform and warn the general public. Having this scrutiny gives hope that private debt collectors can effectively take on some IRS responsibilities without affecting the U.S. taxpayers’ safety, but only time will tell whether this can be the case.

 

[1] Grassley Letter Raises Impersonation Scam Enforcement Questions, Tax Notes Today (Apr. 11, 2016), https://www.taxnotes.com/tax-notes-today/fraud-civil-and-criminal/grassley-letter-raises-impersonation-scam-enforcement-questions/2016/04/11/g462.

[2] IRS Impersonation Scams Have Victimized Thousands, TIGTA Says, Tax Notes Today (Feb. 16, 2017), https://www.taxnotes.com/tax-notes-today/criminal-violations/irs-impersonation-scams-have-victimized-thousands-tigta-says/2017/02/16/gdmc.

[3] Id.

[4]  Emily Frye & Gregory Staiti, Hold the (Internet) Phone! The Implications of Voice-over-Internet Protocol (VoIP) Telephony for National Security & Critical Infrastructure Protection, 1 ISJLP 571, 585 (2005).

[5] IRS Impersonation Scams Have Victimized Thousands, TIGTA Says, supra note 2.

[6] Id.

[7] IRS Issues Urgent Warning to Beware IRS FBI Themed Ransomware Scam, IRS (Aug. 28, 2017), https://www.irs.gov/newsroom/irs-issues-urgent-warning-to-beware-irs-fbi-themed-ransomware-scam.

[8] Indian Call Center Raid Sheds Light on Scope of IRS Scam Calls, Tax Notes Today (Oct. 7, 2016), https://www.taxnotes.com/tax-notes-today/fraud-civil-and-criminal/indian-call-center-raid-sheds-light-scope-irs-scam-calls/2016/10/07/g988.

[9] Id.

[10] Id.

[11] Id.

[12] Maryland Man Pleads Guilty to Scheme Involving IRS Impersonation, Tax Notes Today (Mar. 22, 2016), https://www.taxnotes.com/tax-notes-today/criminal-violations/maryland-man-pleads-guilty-scheme-involving-irs-impersonation/2016/03/24/g3pd.

[13] Id.

[14] Pennsylvania Man Sentenced for Call Center Tax Fraud Ring, Tax Notes Today (Jul 8, 2015), https://www.taxnotes.com/tax-notes-today/criminal-violations/pennsylvania-man-sentenced-call-center-tax-fraud-ring/2015/07/09/fw8s.

[15] Fixing America’s Surface Transportation (FAST) Act, Pub. L. No. 114-94 § 32102бб, 129 Stat. 1312 (2015).

[16] I.R.C. § 6306 (2016).

[17] Tax Scams / Consumer Alerts, IRS (last updated Aug. 29, 2017), https://www.irs.gov/newsroom/tax-scams-consumer-alerts.

[18] Grassley Letter Raises Impersonation Scam Enforcement Questions, supra note 1.

[19] Id.

[20] Id.

[21] Id.

[22] Collection Agency May Not Be Protecting Taxpayers, Lawmakers Say, Tax Notes Today (Jun. 23, 2017), https://www.taxnotes.com/tax-notes-today/collections/collection-agency-may-not-be-protecting-taxpayers-lawmakers-say/2017/06/26/1rbxs.

Image Source: http://money.cnn.com/2015/01/22/pf/taxes/irs-tax-scams/.

Vaping: Not Just Tobacco

title_ny_4thave_0

By: Daniel Eggleston

 

E-cigarettes, also called vape pens, were once heralded as a much safer alternative to traditional cigarettes, and a way for smokers to either kick the habit or decrease cancer risks.[1] Because e-cigs are available in a wide array of flavors and devices (some look like pipes, others like cigarettes, and many look like futuristic gadgets), many members of the public grew concerned of the e-cig’s potential appeal to youngsters.[2] The FDA released statistics corroborating this fear: in “2013-2014, 81% of current youth e-cigarette users cited the availability of appealing flavors as the primary reasons for use.”[3], and that “e-cigarettes . . . [w]ere the most commonly used tobacco product among youth” in both 2014 and 2015.[4]

While these statistics might raise eyebrows by themselves, a new use for vape pens is becoming increasingly more widespread.[5] CNN published a story on vape pens being used to as a vehicle to consume illegal drugs like flakka, methamphetamines, heroin, and marijuana.[6] “Water-soluble synthetics are easily converted into liquid concentrate that can go into the device cartridges and be vaped just like nicotine and other legal substances.”[7] This makes it difficult for law enforcement officers to detect if illicit drug use is occurring or whether an e-cig simply contains flavored tobacco oil.[8] Police have a harder time establishing probable cause because of the uncertainty of an e-cig contains nicotine, or something worse.[9] Furthermore, this masked consumption has also resulted in people unknowingly consuming, and in some cases overdosing, on illegal drugs the user unknowingly consumed.[10]

Researchers at Virginia Commonwealth University received a grant from the Department of Justice to explore “how drug users are increasingly using e-cigarette devices to vape illicit drugs.”[11] Users pass on this knowledge via online drug forums and YouTube tutorials, explaining how meth can be consumed in the workplace, with no one the wiser.[12] What’s more, social media users and celebrity culture are endorsing vape pens as a discreet way to get high in public, in school, or in the workplace.[13]

The research team is testing the efficacy of vape pens in delivering drugs like meth, heroin, marijuana, and others to the user.[14] That vape pens are effective is indisputable given the wide-spread consumption of drugs through the devices – what the researchers are measuring is the dosage levels transmitted in the vapor clouds and analysis of the “commercially available e-liquids to see if the purported contents matched the labels.”[15] The researchers found wide discrepancies between ingredients listed on the labels and what the e-liquids actually contained.[16] Some e-liquids contained drugs that labels specifically claimed they did not contain, prompting the researchers to cite major concern over the lack of regulatory labeling oversight.[17]

The Food and Drug Administration has responded to some of these concerns with increased regulation over the e-cigarette industry.[18] One of these regulations requires “federal approval for most flavored nicotine juices and e-cig devices sold in vape shops.”[19] What remains to be seen, however, is how the FDA responds to the use of e-cigs for their as a vehicle for consuming illicit drugs.

 

 

 

[1] See Sara Ganim & Scott Zamost, Vaping: The latest scourge in drug abuse, CNN, (last visited Sept. 5, 2015) http://www.cnn.com/2015/09/04/us/vaping-abuse/.

[2] See id.

[3] Vaporizers, E-Cigarettes, and other Electronic Nicotine Delivery Systems (ENDS), Food and Drug Admin. (last visited Feb. 13, 2017) https://www.fda.gov/TobaccoProducts/Labeling/ProductsIngredientsComponents/ucm456610.htm#regulation.

[4] See id.

[5] See supra note 1.

[6] See id.

[7] Id.

[8] See id.

[9] See supra note 5.

[10] See id.

[11] Brian McNeill, Shedding light on a vaping trend: Researchers study the use of e-cigarettes for illicit drugs, Va. Commonwealth Univ. News (last visited Feb. 22, 2017) https://news.vcu.edu/article/Shedding_light_on_a_vaping_trend_Researchers_study_the_use_of.

[12] See id.

[13] See id.

[14] See id.

[15] Supra note 10.

[16] See id.

[17] See id.

[18] See Laurie Tarkan, How new rules could kill the vaping boom, Fortune (last visited Sept. 29, 2015) http://fortune.com/2015/09/29/vaping-fda-rules/.

[19] Id.

Image Source: http://assets.hightimes.com/styles/large/s3/title_ny_4thave_0.jpg.

Volume XXII Issue IV

May 16, 2016

Dear Readers,

The Richmond Journal of Law and Technology is proud to present its fourth and final issue of the Twenty-Second Volume. At its inception in 1995 JOLT became the first law review to be published exclusively online. From this moment on, the Journal has continued to set trends in legal scholarship. As one of the leading publications in the legal technology field, JOLT has the privilege of publishing articles that address topics at the forefront of the law. The articles in the Fourth Issue offer exciting discussions on forward-looking areas of the law and give readers a glimpse into the ways in which technology is transforming the legal landscape. The Journal hopes that these articles will drive advancements in the law and in practice, and we look forward to the discussions they evoke.

In our first article, entitled “Digital Direction for the Analog AttorneyData Protection, E-Discovery, and the Ethics of Technological Competence in Today’s World of Tomorrow,” authors Stacey Blaustein, Melinda McLellan, and James Sherer outline some of the many challenges facing attorneys operating in the current high-tech legal environment. The article examines the ways in which existing and emerging ethical rules and guidelines may apply to the practice of law in the digital age. Cloud technology and social media are among the prominent technical platforms which, while convenient and efficient, pose significant threats to the technologically incompetent lawyer and his clients. This article is certain to spark further conversation about these issues as they continue to evolve.

Our second article, and final article of Volume XXII, is the selected 2016 JOLT Student Comment. Written byJOLT’s graduating Managing Editor, Megan Carboni, this article makes an exciting and bold proposal to bridge the gap in employment classification for workers in the “sharing” or “collaborative” economy. This new technology-enabled marketplace, spurred by Uber and mimicked by numerous other innovative service-sharing applications, posits a vexing balancing act between meeting the needs of businesses and their quasi-employees. Uber and similar businesses rely on classifying their workers as independent contractors, avoiding the potentially crippling benefits and obligations that these businesses would be forced to provide for their employees. At present there are only two definitions—employee and independent contractor—making it difficult to strike a balance without severely interfering with the employer’s business or employee expectations and needs. This article proposes an innovative third classification, the “dependent contractor,” as the best solution to meet the needs of both employer and employee.

On behalf of the entire 2015–2016 JOLT staff, I want to extend our sincerest thanks for your continued readership. I would also like to thank each of our authors for the time and hard work they have put into these articles. As always, JOLT greatly appreciates the ongoing support from the University of Richmond School of Law and is especially grateful for the guidance of our faculty advisors, Dean Jim Gibson and Professor Chris Cotropia.

On a more personal note, I wanted to extend my utmost appreciation and gratitude to the 2015–2016 JOLTEditorial Board and staff. It has been a pleasure serving as the Editor-in-Chief of Volume XXII and I could not have successfully completed the Volume without the consistent hard work and dedication of the Journal’s members. On behalf of the outgoing class of 2016, I would like to wish Volume XXIII and the new Editorial Board all the best as they continue shaping JOLT’s reputation as the leading publication in the legal technology world.

 

Sincerely,

 

John G. Danyluk                                                                                                                             Editor-in-Chief, Volume XXII

 

Digital Direction for the Analog Attorney – Data Protection, E-Discovery, and the Ethics of Technological Competence in Today’s World of Tomorrow, by Stacey Blaustein, Melida L. McLellan, and James A. Sherer

A New Class of Worker for the Sharing Economy, by Megan Carboni

What about Us? Are the disabled getting a fair treatment with the rapid growth in smartphones?

old-people-with-ipad-655x400

By: Matt O’Toole

Have you ever wondered what kind of tablet applications are out there for disabled people? You probably aren’t the only one. In fact, part of your answer may to do with the fact that they are little out accommodating those affected with disabilities.

When the ADA was enacted in 1990, the Internet was only in its nascent stage, and e-commerce as we think of it today was unheard of.[1] Nevertheless, some courts have extended the ADA’s reach to websites that offer and sell goods or services to the public, mandating that websites are accessible to persons with disabilities.[2]

Putting aside the merits of whether the ADA, in its current form, should apply to websites at all, the question that is then raised is: how do companies make their websites fully accessible?[3] Unfortunately, there currently are no generally accepted ADA standards for website construction and that seems like a big issue that gets very little attention.[4]

How can this country be so advanced in its technology but yet be so behind on its advances to folks with disabilities?

According to the United States Bureau, 8.4% of our population has a disability, under the age of 65.[5] There is certainly a market out there and whether legislation has done enough to reach that remains to be seen.

Congress instituted section 508 in 1998 to make new online opportunities available to people with disabilities and to encourage the development of software and technologies to help make this happen.[6] An amendment of the Rehabilitation Act of 1973, Section 508 requires federal agencies to make their electronic and information technology available to disabled citizens.[7]

In 2006, the National Federation of the Blind brought Target to district court and charged that Target’s Website is inaccessible to the blind and violates the Americans with Disabilities Act of 1990, along with several other California human rights act.[8]

“What this means is that any place of business that provides services, such as the opportunity to buy products on a Web site, is now a place of accommodation and therefore falls under the ADA,” said director of user experience for Mindshare Interactive Campaigns LLC Kathy Wahlbin.[9]

As baby boomers start to turn the corner, the number of disabled users increases and the software continues to develop.[10] Section 508 will continue to be relevant and I’m not sure that it’s necessarily the government at fault here. It is just that the advancement of technology comes more people, and more disabled user. It is just that we shouldn’t leave them behind.

With technology now moving to much greater heights than just the internet, I think instead of making more updates to Snapcaht, folks should consider making phone applications more accessible to those in need.

Photo Source: http://icdn5.digitaltrends.com/image/old-people-with-ipad-655×400.jpg

 

 

[1] Kyle David, Web Accessibility: Section 508 Compliance , Blog, (Oct. 28, 2015), http://www.corpcounsel.com/id=1202728515700/New-ADA-Lawsuits-Target-Website-Accessibility?mcode=0&curindex=0&curpage=ALL. [hereinafter David]

[2]Id.

[3] Michael J. Chilleen and Brad Leimkuhler, New ADA Lawsuits Target Website Accessibility, Corporate Counsel (June 5, 2015), http://www.corpcounsel.com/id=1202728515700/New-ADA-Lawsuits-Target-Website-Accessibility?mcode=0&curindex=0&curpage=ALL&slreturn=20150929131629

[4]Id.

[5]United States Census Bureau. (Oct. 28, 2015), http://www.census.gov/quickfacts/table/PST045214/00.

[6]See David supra, note 1.

[7]Rehabilitation Act of 1973, Pub. L. No. 93-112, 87 Stat. 355 (1973).

[8] Nat’l. Fed’n of Blind v. Target, 452 F.2d 946, 956 (2006).

[9]See David supra, note 1.

[10]Id.

Overbearing or Common Sense? Drone Registry.

travel-channel-drone-australia

By: Curtis Hazelton,

In our society, it makes perfect sense for one to be accountable for his or her actions, so why should unmanned aircrafts be any different? The Department of Transportation and the Federal Aviation Administration have recently proposed a possible fix to this accountability issue.

Traditionally, unregistered aircrafts (manned or unmanned) could fly up to 600 feet above ground level, a rather empty section of the skies, where they were unlikely to fly into anything.[1] Although600 feet above ground level seems spacious fordrone users, not every drone user flies their drone within the 600 feet fly-zone nor do they follow the guidelines of drone-free locations. According to Department of Transportation Secretary, Anthony Foxx, “Registration will help us enforce the rules against those who operate unsafely, by allowing the FAA to identify the operators of unmanned aircraft.”[2] Regulation of the traditionally unregistered aircraft may make it easier to address the important issues of insurance and liability.

The increase of personal drone purchase and operation in the United States has caused many problems.The FAA stated that so far in 2015, pilots reported unsafe activity by unmanned aerial vehicles about 100 times a month.[3] In July, 5 “unmanned aircraft systems” prevented California firefighters from dispatching helicopters with water buckets for up to 20 minutes over a wildfire that roared onto a Los Angeles-area freeway, burning out cars.[4] During the second round match of the U.S. open between FlaviaPennetta and Monica Niculescua drone flew over the stadium and crashed into the stands. Subsequently, the match was stopped for a period while officers examined the drone and the operator arrested for reckless endangerment and operating a drone in a New York City public park outside of prescribed area.[5] The aforementioned situations highlight the need to impose liability on drone operators for accidents caused by drones.

Although some people are wary about government regulation, the registration proposal by the FAA and DoT could be the best way to ensure that drones and other unmanned aircraft are used safely. Though the Department of Transportation is still working to finalize their efforts to require drone registration before the holiday season, drone users, new and old, should be on the lookout for a change in legislation.

Photo Source: http://skift.com/wp-content/uploads/2015/10/travel-channel-drone-australia.jpg

 

 

 

[1] Jordan Golson, The Feds Want a National Drone Registry by Christmas,

Wired (Oct. 19, 2015, 2:28 PM) www.wired.com/2015/10/the-feds-want-a-national-drone-registry-by-christmas/.

[2]Id.

[3] Renee Marsh and Ben Brumfield, U.S. announces task force aimed at mandatory drone registration, CNN (Oct. 19, 2015 6:11 PM)www.cnn.com/2015/10/19/politics/drone-registration-task-force-announced/index.html

[4]Id.

[5] Laura Wagnor, Drone Crash At U.S. Open; New York City Teacher Arrested, National Public Radio (Sep. 4, 2015, 2:24 PM) www.npr.org/sections/thetwo-way/2015/09/04/437539727/drone-crash-at-u-s-open-new-york-city-teacher-arrested.

The End of DraftKings and FanDuel?

fanduel-draftkings-100615-getty-ftrjpg_1p54pimj33xpv1ul6hwkremi6f

By: Jenni Lyman,

On Sundays, each NFL play seems to be sandwiched in between a series of incessant testimonials touting the ease of winning thousands of dollars from onlinedaily fantasy football. Both DraftKings and FanDuel are on target to spend $150 million in Q3. [1] It is reasonable to believe these two companies will remain a staple of sportsprogramming considering the amount of cash in their quiver devoted to marketing. However, there appear to be a slew of legal principles tailored to prevent unfairness to consumers that may put an end to the two companies. [2] Recent promo codes such as ‘Win’, ‘Success’, or ‘Fun’ could change to ‘Fraud’.

Online daily fantasy sports are not regulated under the Unlawful Internet Gambling Enforcement Act of 2006 because they are considered games of skill as opposed to raw gambling. Slate. See also. Act. [3]

Last Thursday, Draft Kings player, Adam Johnson filed a class action lawsuit in federal court in Manhattan. [4] The complaint alleges the two companies violated the laws of three states—New York, FanDuel’s corporate headquarters, Massachusetts, where DraftKings maintains its principal place of business, and Kentucky, where Johnson resides. [5]

First, the complaint alleges the two companies acted in concert. [6] Moreover, they follow the same rules regarding employee participation and issue numerous joint statements on their website. [7] The linchpin of the suit is the fact that employees of both companies had access to data and information that is not public. [8] The suit alleges that analytics are run to determine how lineups on FanDuel would fare if they were entered into DraftKings contests. [9] Finally, Johnson alleges the “companies failed to take reasonable steps to prevent insiders from competing against members of the proposed class of plaintiffs.”[10] Shockingly, DraftKings employees have won around $6 million in winnings from the $2 billion awarded by FanDuel so far. [11]

So, if Johnson can prove the two companies had knowledge of the insider trading, he has a successful claim for fraud and could recover his money by proving he would not have paid $100 to play a rigged game. [12]

To add to the legal fire, even if Johnson is unable to prove insider trading exists, there is also a possible claim of negligence. The claim alleges the companies failed to take reasonable steps to prevent competition from insiders against the proposed class of plaintiffs. [13] The suggested class is only those who dished out money in a DraftKings account prior to October 6, 2015. [14] Lastly, violations of the Kentucky consumer protection statute and the New York false advertising law are included in the suit. [15]

As we settle in for another weekend of FanDuel and DraftKings commercials spattered with football, could Johnson v. FanDuel be a season ender?

 

 

 

[1] Anthony Crupi, Fantasy Sports Sites DraftKings, FanDuel September Spend Tops $100 Million, Advertising Age, Sept. 30, 2015, http://adage.com/article/media/draftkings-fanduel-spe/300658/.

[2]John Culhane, The DraftKings Crash, Slate, Oct. 13, 2015, http://www.slate.com/articles/sports/sports_nut/2015/10/the_insider_trading_scandals_could_bring_down_draftkings_and_fanduel.html.

[3]Id.

[4] Darren Rovell, Class action lawsuit filed against DraftKings and FanDuel, ESPN, Oct. 9, 2015, http://espn.go.com/chalk/story/_/id/13840184/class-action-lawsuit-accuses-draftkings-fanduel-negligence-fraud-false-advertising.

[5]John Culhane, The DraftKings Crash, Slate, Oct. 13, 2015, http://www.slate.com/articles/sports/sports_nut/2015/10/the_insider_trading_scandals_could_bring_down_draftkings_and_fanduel.html.

[6]Id.

[7]Id.

[8]Id.

[9] Darren Rovell, Class action lawsuit filed against DraftKings and FanDuel, ESPN, Oct. 9, 2015, http://espn.go.com/chalk/story/_/id/13840184/class-action-lawsuit-accuses-draftkings-fanduel-negligence-fraud-false-advertising.

[10]Culhane, supra note 4.

[11]Rovell, supra note 8.

[12]John Culhane, The DraftKings Crash, Slate, Oct. 13, 2015, http://www.slate.com/articles/sports/sports_nut/2015/10/the_insider_trading_scandals_could_bring_down_draftkings_and_fanduel.html.

[13]Id.

[14] Darren Rovell, Class action lawsuit filed against DraftKings and FanDuel, ESPN, Oct. 9, 2015, http://espn.go.com/chalk/story/_/id/13840184/class-action-lawsuit-accuses-draftkings-fanduel-negligence-fraud-false-advertising.

[15]Culhane, supra note 11.
Photo Source: http://images.performgroup.com/di/library/sporting_news/3f/f1/fanduel-draftkings-100615-getty-ftrjpg_1p54pimj33xpv1ul6hwkremi6f.jpg?t=1051596368

The Legality of Self-Driving Cars: Whose fault is it?

volvo_road_train-10

By: Manny Olojede,

Welcome to the future, Marty. Self-driving or autonomous cars will actually become a “thing” soon. But whose fault is it if the self-driving car runs a red light? The driver or the car? The manufacturer or some other third party? The chicken or the egg? Are robot cars even legal? With Tesla Motors’ recent announcement regarding its new “Auto-Pilot” software, there are numerous questions of legality and liability brought to the forefront of lawmakers’ agendas.

On October 14, 2015, Tesla Motors became the first automotive company to roll out advanced auto-pilot technology into its vehicles.[1] The Tesla Version 7.0auto-pilot software update will allow its Model S car to steer within lanes, change lanes, manage speed by using active, traffic-aware cruise control and scan for a parking space, alert [the driver] when one is available, and parallel park on command.[2] Though these features are an advancement in autonomous car technology, Tesla emphasizes that this update does not mean the car is fully autonomous and hands free.[3] In order for this software to function, your hands must be touching the wheel; otherwise the car will revert to manual mode after a few seconds.[4] Tesla is cautiously rolling out this technology, as it is aware of the few regulations surrounding autonomous vehicles.[5] However, Tesla does seek to allow its cars to be hands free in the future as new regulations are implemented and the technology improves.

Currently, the law surrounding self-driving cars in the United States has been ambiguous at best. In the majority of states, autonomous cars are not illegal, though New York is the only state that requires a “driver” to have his hands on the wheel at all times.[6] Only fourteen states have considered legislation regulating self-driving cars and nine of those have failed to pass bills specifically legalizing the cars, leaving the area of self-driving cars relatively grey.[7] Consequently, Tesla’s announcement has put on pressure on lawmakers to clarify these grey areas.

The National Highway Transportation Safety Administration has declined to comment on Tesla’s announcement but lauded the potential safety benefits of autonomous technology in statements made by Transportation Secretary Anthony Foxx earlier this year.[8] “The Department wants to speed the nation toward an era when vehicle safety isn’t just about surviving crashes; it’s about avoiding them,” Foxx said. “Connected, automated vehicles that can sense the environment around them and communicate with other vehicles and with infrastructure have the potential to revolutionize road safety and save thousands of lives.”[9] Based on these statements, autonomous technology seems to align with the future goals of the NHTSA and this may give a clue to as how regulations will be shaped surrounding them. However, it remains to be seen how the law will evolve.

Though the legal landscape surrounding self-driving cars in the United States has not been fully carved out, carmakers such as Volvo, Mercedes-Benz, and Google have indicated that they will likely accept the legal liabilities for their cars in the United States when they are put on sale to the general public. Volvo, in particular, has promised to accept full liability whenever one of its cars is in autonomous mode.[10] Though this promise may indicate car makers’ current confidence in the technology and hold carmakers strictly liable, Volvo, along with Mercedes and Google, have expressed that as the technology improves, they will expect fewer and fewer accidents.[11]

Ultimately, as the development of self-driving car technology quickly improves, it will be important for lawmakers to tackle these tough questions in a timely fashion. Carmakers have set the pace, and if the law does not catch up soon, there will be many more questions and problems for the government to answer about self-driving cars.

 

 

[1] Grayson Ullman, Tesla’s Self-driving Software: Is It Legal?, Fed scoop (October 16, 2015, 5:43 PM), http://fedscoop.com/teslas-self-driving-update-how-is-it-legal.

[2]Id. (citing Tesla Motors Team, Your Autopilot Has Arrived, Tesla Motors Blog (October 14, 2015), http://www.teslamotors.com/blog/your-autopilot-has-arrived)

[3] Molly McHugh, Tesla Cars Now Drive Themselves, Kinda, WIRED.com (October 14, 2015 6:19 PM), http://www.wired.com/2015/10/tesla-self-driving-over-air-update-live.

[4]Id.

[5]Id.

[6]Ullman, supra note 1.

[7]Id.

[8]Id. (citing Catherine Howden, Transportation Secretary Foxx Announces Plan to Add Two Automatic Emergency Braking Systems to Recommended Vehicle Advanced Technology Features, National Highway Transportation Safety Administration (January 22, 2015), http://www.nhtsa.gov/About+NHTSA/Press+Releases/NHTSA-sets-AEB-plans,-highlights-lives-saved-repoot)

[9]Id.

[10]Mark Harris, Why You Shouldn’t Worry About Liability for Self-Driving Car Accidents, IEEE Spectrum (October 12, 2015, 8:00PM), http://spectrum.ieee.org/cars-that-think/transportation/self-driving/why-you-shouldnt-worry-about-liability-for-selfdriving-car-accidents (citing Press Release, Volvo Car Group, US Urged to Establish Nationwide Federal Guidelines for Autonomous Driving (October 7, 2015), available athttps://www.media.volvocars.com/global/en-gb/media/pressreleases/167975/us-urged-to-establish-nationwide-federal-guidelines-for-autonomous-driving).

[11] Neil Briscoe, Car Makers to Accept Liability for Self-driving Cars, The Irish Times (October 12, 2015, 2:16 PM), http://www.irishtimes.com/life-and-style/motors/car-makers-to-accept-liability-for-self-driving-cars-1.2388608.

 

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Blog: The Growing Problem of E-Waste

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By: Ryan Suit,

Lining up to be the first person to get the latest and greatest device has become a cultural phenomenon, and to some it could even be called a religion.[1] Just this past weekend, Apple sold 13 million new iPhones.[2] But when you get that iPhone 6S or 6S Plus, will you throw away your iPhone 6? And what ever happened to your iPhone 5, 4, 3, 2, or even original iPhone? Concern over so-called “e-waste” has lead many jurisdictions to pass legislation to combat the accumulation of technological garbage.[3]

E-waste is the broad term for any piece of technology that has an electric cord or battery that is thrown away. The term is a catch-all for phones and computers to refrigerators and appliances.[4] The problem of e-waste is worldwide. 41.8 Million tons of e-waste were dumped globally in 2014, yet less than a sixth of that was properly recycled.[5] When many people think of e-waste, they conjure images of computer dumps in Africa, China, and India, where old pieces of technology are burned and scavenged for leftover precious metals.[6] That is obviously a huge problem, but the issue is not solely abroad.[7] In 2014, the United States was responsible for 7.1 tons of e-waste, over 1 million more tons than any other country.[8] The need for legislation to deal with e-waste is not just apparent, it is pressing.

Currently, the EPA recommends that e-waste such as phones, computers, and televisions be recycled at your local e-waste collection center.[9] Additionally, the EPA has made it the responsibility of the e-recycler to erase all the data on devices being recycled.[10] One of the most notable problems of e-waste recycling is the risk of identity theft.[11] If old hard drives or devices still have private or personal information stored on them, there is a risk that such information could be recovered.[12] Although the risk of identity theft is present, many recycling centers can wipe storage devices clean, or can destroy the devices entirely.[13] That being said, the EPA’s recommendation has only done so much to curb the threat of identity theft and increase rates of e-waste recycling.

Most e-waste recycling policies are left to the states.[14] To date, twenty eight states have passed legislation to deal with e-waste.[15] Most of the legislation places the responsibility of recycling e-waste on the manufacturers of the products. However, only about 1 million of the 7.1 million tons of e-waste in the U.S. was recycled last year.[16] Such a low rate of e-waste recycling, coupled with close to half of the states in the U.S. still not having any e-waste laws on the books, makes for a bleak outlook.

States have not done enough to combat e-waste. The EPA’s recommendation has fallen short of what it aims to achieve. E-waste is becoming more common, and the constant creation of new tech products only creates more e-waste. Now is the time for federal legislation to tackle the e-waste problem. Pull out your new iPhone to look up where your local landfill is located. If legislation is not passed soon, that landfill may be filled with e-waste.

 

[1] Philip Elmer-DeWitt, “Welcome to the Church of Apple”, Fortune (Sept. 27, 2015), http://fortune.com/2015/09/27/apple-church-temple/.

[2] James Vincent, “Apple sells 13 million iPhones in opening weekend record”, The Verge (Sept. 28, 2015), http://www.theverge.com/2015/9/28/9407767/apple-iphone-sales-6s-6s-plus.

[3] Sophia Bennett, “It’s 2015: Which States Have E-Waste Legislation?”, Electronic Recyclers Internation, Inc. (July 2, 2015), http://electronicrecyclers.com/2015/07/it-s-2015-which-states-have-e-waste-legislation.

[4] Id.

[5] Alister Doyle, “U.S., China top dumping of electronic waste; little recycled”, Reuters (April 20, 2015), http://www.reuters.com/article/2015/04/20/us-environment-waste-idUSKBN0NA00V20150420.

[6] Samantha L. Stewart, “Ghana’s e-Waste Dump Seeps Poison”, Newsweek (July 25, 2011), http://www.newsweek.com/ghanas-e-waste-dump-seeps-poison-68385.

[7] Id.

[8] Supra note 5.

[9] U.S. Environmental Protection Agency, Frequent Questions, http://www3.epa.gov/epawaste/conserve/materials/ecycling/faq.htm.

[10] Virginia Department of Environmental Quality, Computer and Electronics Recycling, http://www.deq.virginia.gov/Programs/LandProtectionRevitalization/RecyclingandLitterPreventionPrograms/ElectronicsRecycling.aspx.

[11] ForeRunner Recycling, http://www.forerunnerrecycling.com/faq.html#What_if_we_needed_destruction_of_the_drives_to_insure_the_data_is_secure.

[12] Id.

[13] Id.

[14] Supra note 5.

[15] Supra note 3.

[16] Supra note 5.

 

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Blog: Bad Review or Get Sued?

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By: Corinne Moini,

Have you ever posted a bad review of a product or company? Most people do this without a second thought—they feel cheated and want the world to know about it. They have a false sense of security that comes with an online post because many of these posts are submitted anonymously.[1] Whether you tell the truth or tell a lie, anonymously or not, companies are looking for these damaging reviews and those angry words you wrote can come back to haunt you in the form of a lawsuit.

You must be thinking to yourself—how is this possible? How can a company sue me for speaking my mind and exercising my constitutional right of freedom of speech? Many unhappy customers like Jennifer Ujimori felt the exact same way when she was served with a lawsuit for the online reviews she posted on Yelp and Angie’s List.[2]

Like the dog training company in Ujimori’s lawsuit, companies are able to sue customers for these reviews by sneaking non-disparagement clauses deep into the fine print of sales contracts. These clauses prohibit a consumer from posting or commenting about their purchase on social media sites.[3] For the most part, a non-disparagement clause is unenforceable:[4] partially because they allow businesses to intimidate customers into silence,[5] and partially because they contradict the basics of contract law by being one-side and lacking consideration.[6]

Ujimori is not the only person who believes non-disparagement clauses stifle a person’s ability to freely express themselves. In 2014, the state of California adopted a ban on non-disparagement clauses and threatened violators with a monetary fine.[7] Stressing the importance of protecting First Amendment rights, two California representatives introduced the Consumer Review Freedom Act, which makes non-disparagement clauses in companies’ sale contracts illegal.[8] The act does not hinder a business’s ability to sue consumers for deceitful reviews but only prevents them from bullying truthful consumers into silence.[9]

If the Consumer Review Freedom Act is enacted consumers will be free to post honest, negative online reviews. However, if the act fails to pass, then be wary—and keep your angry reviews as a draft on your computer.

 

winery-online-review

 

 

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[1] See Mathew S. Adams, Business Owners Beware: Avoid the Temptation to Post Fake Reviews or Feedback Regarding Your Competition on Social Media or Elsewhere on the Internet, Above the Law (Feb. 12, 2015),

http://abovethelaw.com/2015/02/business-owners-beware-avoid-the-temptation-to-post-fake-reviews-or-feedback-regarding-your-competition-on-social-media-or-elsewhere-on-the-internet/.

[2] Jennifer Ujimori was unhappy with the dog obedience class she paid for and posted negative reviews on Yelp and Angie’s List to alert other consumers. She wrote, “in a nutshell, the services delivered were not as advertised and the owner refused a refund.” The dog obedience company did not offer her a refund but instead served her with a defamation lawsuit for $65,000 claiming statements were false and destroyed her business reputation. See Justin Jouvenal, Negative Yelp, Angie’s List reviews prompt dog obedience business to sue, Wash. Post (Mar. 25, 2015), https://www.washingtonpost.com/local/crime/negative-yelp-review-of-dog-obedience-class-spurs-lawsuit/2015/03/25/eb92dab6-d183-11e4-8fce-3941fc548f1c_story.html.

[3] See Id.

[4] See Jim Hood, Non-disparagement clauses: a new way to get nothing for something, Consumer Affairs (June 24, 2014), http://www.consumeraffairs.com/news/non-disparagement-clauses-a-new-way-to-get-nothing-for-something-062414.html.

[5] See Id.

[6] Hood, supra note 4, at 1.

[7] See Tim Cushing, Legislators Introduce Bill Calling For Nationwide Ban On Non-Disparagement Clauses, Tech Dirt (May 8, 2015), https://www.techdirt.com/articles/20150502/16355830865/legislators-introduce-bill-calling-nationwide-ban-non-disparagement-clauses.shtml.

[8] See Herb Weisbaum, Can a company stop you from writing a negative online review? Not if Congress passes this bill, Today Money (Sept. 24, 2014), http://www.today.com/money/congress-wants-you-be-able-criticize-companies-2D80168557.

[9] See Id.

Blog: Sarbanes-Oxley Act Being Used Outside of the Original Scope

feds-destroyed-evidence-of-thousands-of-wall-streets-worst-financial-crimes-290x206

By: Brandon Bybee,

What does a drug dealer deleting text messages off of his phone have in common with an international corporation failing to retain emails regarding a business transaction? Interestingly, both may fall under the application of certain provisions of the Sarbanes-Oxley Act. While many assume that Sarbanes-Oxley only applies to businesses (and some believe exclusively publicly traded companies,) specific sections pertaining to criminal activity apply to not only private companies, but in recent court decisions individual citizens.[1]

Sarbanes-Oxley was enacted in 2002 as a result of the corporate scandals of 2001 and 2002 (Enron and WorldCom). The act was passed by Congress to “deter and punish corporate and accounting fraud and corruption.”[2] Contained within the act under Title VII is §1519, commonly referred to as the anti-shredding provision. This provision makes it a criminal act to destroy or conceal, “…any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States…”.[3] §1519 violators can be fined and imprisoned up to 20 years for what has been deemed as an act of anticipatory obstruction of justice.

While the application of §1519 to corporations concealing documents seems an obvious utilization of the statute, perhaps a more difficult application to anticipate would be charging an individual citizen. In the case of United States v. Keith[4] the FBI determined that the defendant had been utilizing the Limewire downloading interface to search for and download child pornography. As agents approached the defendant’s home he deleted some of the illegal materials that he had downloaded. Among other charges, he was found guilty of violating Sarbanes-Oxley §1519 for anticipatorily obstructing justice by deleting the files. Since the case was under investigation by the FBI this constituted a “…department or agency of the United States…”[5]. The defendant was sentenced to 240 months in prison. This case exemplified the broad application of §1519, even to individual private citizens.

Additional recent applications of §1519 have included an attempt to convict one of the alleged conspirators of the Boston Marathon Bombings.[6] The alleged defendant is accused of deleting pertinent material from his computer relating to the planning of the bombings. Among other illegal actions prosecutors are attempting to charge the conspirator with a violation of §1519. On multiple occasions police officers have been charged with violating §1519. In United States v. McRae[7] a police officer was charged under §1519 for burning a car and a victim’s body as well as falsifying a police report. In United States v. Moyer[8] another police officer was charged for falsifying a report.

An even more popular recent newsworthy issue has brought §1519 into the national spotlight. The Hillary Clinton email deletion scandal has brought §1519 into play as any charges that would be brought against her by the state would likely include an anticipatory obstruction of justice charge.[9] (No charges have been brought against Mrs. Clinton.) Even if former Secretary Clinton deleted files exclusively from her personal computer §1519 has been shown to extend to private citizens.

Finally, and perhaps most disturbingly, some circuits have found that there is no need to establish a connection between the deleting of data or destruction of evidence and the knowledge of a possible criminal investigation in the future. United States v. Moyer[10] asserts that §1519 does not require the government to prove that the defendant knew the obstruction at issue was within jurisdiction of federal government, nor is the government required to prove nexus between defendant’s conduct and specific federal investigation. By asserting that the government need not define a correlating nexus between the defendant’s conduct and a specific federal investigation the case broadens the application of §1519 once more.

What does this mean for the typical American citizen? Essentially, any document, digital file, or tangible item that could be involved in an investigation by a government agency at any time should not be destroyed. If the item is destroyed, technically an individual could be charged with an anticipatory obstruction of justice. While it seems likely that the application of §1519 would only apply to those who knowingly engage in criminal activity, the broad nature of its utilization does bring cause for concern of anyone in possession of large amounts of digital files. It will be interesting to see how broadly the court systems allow the application of §1519 to extend.

600full-arrested-development-screenshot

 

 

[1] See generally Robert F. Mechur, Esq., Yes, Sarbanes-Oxley Applies to Private Companies. Boylan Code Law Library: Articles, http://www.boylancode.com/news-knowledge/articles/62-yes-sarbanes-oxley-applies-to-private-companies; United States v. Keith, 440 F. App’x 503 (7th Cir. 2011).

[2] Christopher R. Chase, To Shred Or Not To Shred: Document Retention Policies And Federal Obstruction of Justice Statutes, 8 Fordham J. Corp. & Fin. L. 721, 740 (2003) citing President’s Statement on Signing the Sarbanes-Oxley Act of 2002, 38 Weekly Comp. Pres. Doc. 1286 (July 30, 2002); David S. Hilzenrath, Anderson’s Collapse May Be Boon to Survivors, Wash. Post, Aug. 24, 2002, at E01 (stating that that passage of the law was in response to the accounting scandals).

[3] Sarbanes-Oxley Act 18 U.S.C.S. § 1519 (2002).

[4] United States v. Keith, 440 F. App’x 503 (7th Cir. 2011).

[5] Sarbanes-Oxley Act 18 U.S.C.S. § 1519 (2002).

[6] United States v. Tsarnaev, 2014 U.S. Dist. LEXIS 134596 (D. Mass. Sept. 24, 2014).

[7] United States v. McRae, 702 F.3d 806 (5th Cir. 2012).

[8] United States v. Moyer, 674 F.3d 192 (3d Cir. 2012).

[9] See generally Ronald D. Rotunda, Hillary’s Emails and the Law. The Wall Street Journal (September 17, 2015 10:15 AM) http://www.wsj.com/articles/ronald-d-rotunda-hillarys-emails-and-the-law-1426547356.

[10] United States v. Moyer, 674 F.3d 192 (3d Cir. 2012).

 

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