Louisiana Law Blog

By Sean T. McLaughlin

It is a fairly common practice for individuals purchasing pleasure yachts to take calculated steps to minimize sales taxes on their purchases. In fact, a simple “Google” search on the subject reveals many websites offering free advice on this issue. One of the tactics suggested by several websites seems fairly simple: instead of the individual purchasing the yacht, the individual forms a corporation, and the corporation purchases the yacht.

By Bradley C. Myers
 

The United States Supreme Court recently resolved conflicts among the Circuit Courts about the citizenship of a corporation for determining diversity of citizenship jurisdiction (1). This will allow corporations to analyze with more predictable results whether to remove a case to federal court. In Hertz Corp. v. Friend, et al, No. 08-1107 (February 23, 2010) (a unanimous decision, which is unusual in and of itself), the Court decided that when determining a corporation’s citizenship for diversity of citizenship jurisdiction, the “principal place of business” of the corporation is “the place where the corporation’s high level officers direct, control, and coordinate the corporation’s activities”—something that courts have referred to as the “nerve center” of the corporation.

Cordell and Brian Haymon are attorneys, which means the fine points of selling a business do not intimidate them. Yet when the time came to sell Petroleum Services Corporation, a firm their father started in 1952, they didn’t try to do all the work themselves. Instead, they hired Kean Miller's Blane Clark. As Mr. Clark explains, many business owners are far less comfortable with the process.

Read the entire article. 

By Clay J. Countryman

On March 21, 2010, the U.S. House of Representatives on almost a straight party-line vote passed two final healthcare reform bills late Sunday night. Initially, the House of Representatives passed H.R. 3950, the Patient Protection and Affordable Care Act, by a vote of 219 to 212.

Following the passage of H.R. 3950, the House of Representatives passed H.R. 4872, the Health Care and Education Affordability Reconciliation Act of 2010, by a vote of 220 to 211. This second bill by the House modifies the Senate bill (H.R. 3590), and H.R. 4872 will serve as the foundation for any changes made by Congress to the current healthcare delivery, payment and insurance system. Some of the insurance-related changes that may have immediate impact include: lifetime caps on coverage end; children can stay on parents’ policies until age 26, and insurance companies can’t cancel coverage except in the case of fraud. A significant issue of addressing the Medicare physician payment formula still remains unresolved, as well as medical liability reform.

The changes addressed in H.R. 4872, sought by House Democrats and President Obama, will be considered by the Senate under budget reconciliation rules requiring a simple majority to pass and send it to President Obama for his signature. Senate Republicans have stated their intention to offer numerous amendments and raise multiple points of order to the legislation. If the H.R. 4872 is changed in any way prior to Senate approval, it must return to the House for an additional vote before President Obama can sign it.
 

By Dean P. Cazenave

As discussed in the recent New York Times article, federal and state officials, many facing record budget deficits, are starting to aggressively pursue companies that try to pass off regular employees as independent contractors.

President Obama's 2010 budget assumes that the federal crackdown will yield at least $7 billion over 10 years.  More than two dozen states also have stepped up enforcement, often by enacting stricter penalties for misclassifying workers.  This effort is intended to reign in what regulators believe is a trend among companies to cut costs by classifying regular employees as independent contractors, though they often are given desks, phone lines and assignments just like regular employees. Moreover, the experts say, workers have become more reluctant to challenge such practices, given the tough job market.

To determine if you or your company is complying with the rules and regulations as applicable to independent contractors, please call your attorney.  

By Maureen Harbourt

On January 27, 2010, the SEC voted 3-2 to issue an interpretive guidance “on existing SEC disclosure requirements as they apply to business or legal developments relating to the issue of climate change.” Chair Mary Shapiro emphasized that the interpretive release is not intended to create new legal requirements, but is to clarify the requirements already applicable for reporting material risks on public disclosure statements. She was careful to avoid arguments on the science, stating: “We are not opining on whether the world's climate is changing, at what pace it might be changing, or due to what causes. Nothing that the Commission does today should be construed as weighing in on those topics."

By Kevin C. Curry

On January 22, 2010, President Obama signed a law which allows taxpayers to claim a charitable deduction in the 2009 tax year for cash donations made through March 1, 2010 for the relief of victims in areas affected by the January 12, 2010 earthquake in Haiti. The IRS notice on this new law indicates that cash contributions eligible for the deduction against last years taxes include contributions made by text message, check, credit card or debit card. The law gives the taxpayer the option of deducting the cash contribution on his or her 2009 return or his or her 2010 return, but not both. The law does not change any of the other rules applicable to charitable donations such as the percentage limitations, the requirement that the charity be a qualified charity or the fact that the taxpayer must itemize in order to benefit from the deduction.

Each taxpayer should look at his or her own individual situation to determine whether or not the deduction should be claimed against 2009 income or 2010 income. Generally, the sooner the deduction the better but the taxpayer should consider his or her income in each year, tax rate in each year, and applicability of the itemized deduction phase out which is eliminated in 2010.

Further information regarding the deduction for Haiti earthquake relief donations and the identification of possible qualified charities can be found on the IRS website.
 

By Tara Madison

Social networks like Facebook, YouTube and Twitter are transforming the way companies communicate with consumers.  Facebook, YouTube and Twitter can be powerful business tools, but you must be mindful of certain legal limitations and guidelines.

The words “Facebook,” “YouTube,” and “Twitter” are proprietary to the companies that own them.   “Facebook,” “YouTube,” and “Twitter” are all registered with the U.S. Patent & Trademark Office.  A trademark is distinctive word, logo or phrase that is used by an individual or business to identify a unique source of products or services.
 

By A. Edward Hardin, Jr.

Effective July 24, 2009, the federal minimum wage increased from $6.55 per hour to $7.25 per hour for all non-exempt employees.  The 2009 increase in the federal minimum wage was the third and final increase to the federal minimum wage pursuant to Fair Minimum Wage Act of 2007.  Under the 2007 Act, the minimum wage established by the Fair Labor Standards Act increased in three steps from $5.85 per hour effective July 24, 2007, to $6.55 per hour effective July 24, 2008, and to $7.25 per hour effective July 24.

By Pamela A.  Baxter

Recent court decisions show that patent infringement opinions are still important for any person or entity that becomes aware of a United States patent that is similar to their products, methods or processes.

Under federal patent law, anyone who either makes, uses, offers to sell, or sells any patented invention in the United States or actively induces another to do so is liable for patent infringement.  In addition to regular damages, courts may award up to three times the damages for willful infringement.  Under the 1983 Underwater Devices Inc. v. Morrison-Knudsen Co. opinion, if a party had actual notice of another person’s patent rights, then that party had an affirmative duty to exercise due care to determine whether that party was infringing those patent rights.  This affirmative duty included the duty to obtain patent infringement opinions prior to engaging in any potentially infringing activities.
 

By Christopher J. Dicharry and Jason R. Brown

On July 7, 2009, Louisiana Governor Bobby Jindal signed Act 442 (SB 9) into law, preserving Louisiana’s long-standing law excluding purchases, rentals and repairs of component parts of immovable property from state and local sales/use tax. Under a law enacted in 2008, purchases of several items previously considered non-taxable component parts of buildings and other immovables (e.g., installed commercial refrigerators and other commercial and industrial fixtures) could have been subjected to state and local sales/use tax. Many taxpayer representatives questioned the constitutionality of the 2008 Act and legislators agreed that it was not their intention to increase sales/use taxes during the 2008 Legislative Session. Act 442 became effective when it was signed by the governor and applies retroactively to all transactions occurring after the July 1, 2008 effective date of the 2008 Act.

Beginning at 12:01 a.m. (Eastern Standard Time), on Saturday, June 13, 2009, members of the social networking website, Facebook, will be able to claim usernames to associate with their Facebook accounts and Facebook pages. This will allow Facebook pages to be accessed by using a url such as, http://www.facebook.com/unitedairlines, or something similar.

Facebook is taking certain steps to prevent infringement of intellectual property through “name-squatting.” In connection with this, Facebook is allowing Federally registered trademark holders to prevent the registration of usernames that would infringe their intellectual property rights.

There is a link to the form on Facebook’s Web site if you want to complete the form yourself. You will need the trademark registration number and the exact wording of the trademark as registered.

For more information, or to protect your trademark, please contact Pamela Baxter at pamela.baxter@keanmiller.com (225.389.3761) or Russel Primeaux at russel.primeaux@keanmiller.com (225.382.3454).

By Mark D. Mese

June marks the beginning of Hurricane Season and should serve as a reminder to review your personal and business property insurance coverage. The effect of recent Hurricanes on the Gulf Coast generally and Louisiana specifically have been significant with respect to both damages and the insurance covering those damages.

By Eric Lockridge

The judge overseeing Chrysler LLC’s bankruptcy entered an order on June 1, 2009 approving Chrysler’s motion seeking permission to sell substantially all of its assets to a new company.  The procedure by which this sale was accomplished, and by which a similar sale in the GM bankruptcy will likely be accomplished, is known in the bankruptcy and finance worlds as a “363 Sale,” after the relevant provision of the U.S. Bankruptcy Code.

(For those well-versed in 363 Sales, see Stephen Sather’s thoughtful post about practical and ethical concerns with the Chrysler sale here. )

By Russel O. Primeaux

As we continue our shift to a more knowledge-based economy, frequently the greatest assets of a company reside in the creativity of its employees. This is especially true for service companies in which the services can be repeated for multiple customers (example: software). Whether or not a company owns something that has been created by one of its employees will depend to a great extent on the category of intellectual property into which the creation is classified. Generally, the creations or discoveries of employees will fall into the intellectual property categories of copyright, patent, or trade secret.

By Kevin C. Curry

A recent court case illustrates the need for having advance tax planning when selling a business. In the case of Muskat v. U.S., No. 08-1513, 103 AFTR 2d _____, the taxpayer was majority shareholder in a corporation. He and the other shareholders sold all of the stock in the corporation to a third party interested in buying the business. The buyer also agreed to pay the taxpayer $1,000,000.00 for a non-compete agreement. The transaction was documented in this manner.

After the fact, the taxpayer realized that the non-compete proceeds would be taxable as ordinary income to him. He attempted to re-characterize the $1,000,000.00 payment as the sale of his personal goodwill and claim capital gains treatment.

The IRS denied his claim for a refund and the court agreed with the IRS. The court found that the taxpayer had a significant burden of proof to overcome the manner in which the transaction was documented. The taxpayer could not overcome his burden of proving that the payment was not for his non-compete agreement given the fact that all of the documentation reflected that was the purpose for the payment.

Perhaps the result would have been different if the taxpayer had considered this issue prior to the sale and agreed with the buyer that the payment was for his personal goodwill. There have been some cases where courts have allowed shareholders to sell their “personal goodwill” as opposed to corporate goodwill when selling a business. Therefore, proper tax planning in negotiating a sale or other transaction is very important.
 

By A. Edward Hardin, Jr.

On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (the “ARRA”), the comprehensive economic stimulus package. Among its other provisions, the ARRA includes an extension of the right to elect COBRA coverage, a reduction in COBRA premiums for eligible participants, and new notice obligations for employers.

by Dean P. Cazenave

The federal First Circuit Court of Appeals recently rejected a taxpayer’s claim for a refund based on recharacterization of a payment for a non-competition agreement. Muskat v. United States, 2009 WL 211067 (1st Cir. 2009).

In connection with the sale of a business structured as an asset sale, the Buyer and the CEO (who was also the largest shareholder of the Seller) agreed in definitive documents that $1.0 million of the retained CEO’s new compensation package would be allocated to his non-compete covenants. Although the CEO initially recorded that payout as ordinary income for his 1998 taxes, in 2002 he filed an amended return for 1998, recharacterizing the $1 million payment as consideration of his personal goodwill, which he argued entitled him to capital gain treatment (which would have entitled him to a refund of over $200,000). The IRS denied Muskat’s request so he brought an enforcement action against the IRS. The district court, too, denied his request, finding that Muskat lacked “strong proof” that the non-competition payment was intended as payment for personal “goodwill” rather than as a covenant not to compete.
 

by Dean P. Cazenave

Offers and sales of “securities” must be registered unless there is an applicable exemption from the federal and state securities laws. The most commonly known exemption is the private placement exemption set forth in Regulation D promulgated by the Securities and Exchange Commission under the Securities Act of 1933 (and corresponding private placement exemptions under applicable state “blue sky” laws).

Regulation D was primarily designed to facilitate capital raising transactions, as opposed to employee stock option or stock purchase plans. Many people are unaware that when an employer (or controlling Shareholder) sells stock to an employee (even at a discount, or even if to an executive), such a sale is subject to the securities laws and applicable federal and state exemptions from registration must be found.
 

By Kevin C. Curry

Historically, the IRS has said that a disregarded entity could (and maybe should) use the owner's taxpayer identification number for income and other tax purposes. For employment tax reporting, the IRS issued Notice 99-6, 1999-1 CB 321 , which said that employment taxes for employees of a disregarded entity could be reported by a disregarded entity in one of two ways:

(1) Calculation, reporting, and payment of all employment tax obligations with respect to employees of a disregarded entity by its owner (as though the employees of the disregarded entity are employed directly by the owner) and under the owner's name and taxpayer identification number; or

(2) Separate calculation, reporting, and payment of all employment tax obligations by each state law entity with respect to its employees under its own name and taxpayer identification number.

by Melanie M. Hartmann

Louisiana's non-competition statute, La. R.S. 23:921, was amended effective August 15, 2008, to provide additional situations in which non-competition agreements may be enforced. The recent amendments allow for the enforcement of certain non-competition and non-solicitation agreements between a corporation and its individual shareholders; between a partnership and its individual partners; and between a limited liability company and its individual members.

by Laura L. Hart

        On May 19, 2008, OSHA Directive Number 08-03 became effective. That directive provides the criteria by which OSHA will conduct the 2008 Site-Specific Targeting (“SST-08”) plan. OSHA’s SST program is the main programmed inspection plan for non-construction workplaces that have 40 or more employees.

       OSHA’s SST-08 plan has three listings of “establishments” that will be targeted. The focus of the agency’s unannounced comprehensive safety inspections under SST-08 are approximately 3,800 high-hazard workplaces contained on OSHA’s Primary List.  The workplaces on the Secondary List and Tertiary List will only be inspected pursuant to SST-08 if all of the workplaces on the Primary List are inspected. 

by James R. Chastain, Jr.

In New Investment Properties, L.L.C. v. ABC Company, et al, 2007 W.L. 4305464 (4^TH Cir. 2007), the Court of Appeals addressed the range of personal jurisdiction. Like that of a shepherd’s crook, the court exercised personal jurisdiction over a non-resident defendant. Plaintiffs, New Investment Properties, L.LC. and Creek Apartments Team, L.L.C. (“Creek Apartments) are both Louisiana corporations and the owners of two apartment complexes in New Orleans. Defendant, R. P. Beckendorf, is a California corporation with its principal place of business in Los Angeles. It is an independent insurance agency which obtained flood and wind policies for an apartment complex. The policies were delivered to the Champion Group, Inc., which is a California corporation with its principal place of business in Los Angeles.   The two managers of the plaintiffs are both residents of California, who are also managers of the Champion Group in California.

by Scott D. Huffstetler

On January 22, 2008, in Allen v. Administrative Review Bd., ____ F.3d ____, 2008 WL 171588 (5th Cir. 2008), the United States Court of Appeals for the Fifth Circuit (the federal appellate court circuit that includes Louisiana, Mississippi, and Texas) issued its first ruling addressing the employee whistleblower protections provided by the Sarbanes-Oxley Act (“SOX”). In the Allen ruling, the Fifth Circuit interpreted the scope of “protected activity” under SOX narrowly. Hopefully, this trend will continue and this new whistleblower protection for employees of publicly-traded companies will not be unreasonably broadened by the courts.

by Dean P. Cazenave

The Louisiana Fourth Circuit Court of Appeal recently held that the single business enterprise theory may apply in a breach of contract case.

The single business enterprise theory, a jurisprudential theory under which one or more entities affiliated with another entity may be held liable for such other entity’s debts or liabilities, was first recognized in Louisiana by the First Circuit Court of Appeal in 1991 in the case of Green v Champion Insurance Co. This theory is somewhat unique to Louisiana and greatly erodes traditional corporate laws which generally shield shareholders and affiliated entities from the debts or liabilities of a corporation or other entity.   Although the Louisiana Supreme Court has not expressly adopted the single business enterprise theory, it has had opportunities to repudiate or criticize such a theory but has not done so; and as a result, other appellate courts in Louisiana have continued to invoke the theory.

by Amy D. Berret

GENERAL DUTIES OF EMPLOYERS

Louisiana Revised Statutes 23:1306: requires employers to notify the Office of Workers’ Compensation within ten (10) days of actual knowledge of an injury resulting in death or lost time in excess of one week after the injury. This rule applies even if no claim for workers’ compensation benefits has been filed. 

Ø    The form generally used for this purpose is a Form 1007 Employer First Report of Injury/Illness (a copy of which is attached for your ready reference).

Ø    If an employer elects not to use the Form 1007, he must provide, at the minimum, the following information: (1) The name, address, and business of the employer; (2)  The name, Social Security number, street, mailing address, telephone number, and occupation of the employee; (3) he cause and nature of the injury or death; (4) The date, time, and the particular locality where the injury or death occurred; (5) The wages, as defined in R.S. 23:1021(10), the worker was earning at the time of the injury.

Ø    All information and records submitted pursuant to this Section shall be confidential and privileged, shall not be public records, and shall not be subject to subpoena. However, such information or records may be used to compile statistical data wherein the identity of the individual or employer is not disclosed.

by Eric Lockridge

Several provisions in Louisiana’s Code of Civil Procedure were amended in the last legislative session, and those changes are now in effect. One change made by the new law, Act 140 of the 2007 Regular Legislative Session (H.B. 203) (hereinafter, “Act 140”), is that the Code of Civil Procedure now specifically provides for the discovery of electronically stored information (hereinafter, “ESI”). Act 140 modifies Articles 1460-62 of the Code of Civil Procedure to explain how ESI should be requested and produced. The changes are intended to make Louisiana civil procedure more similar to federal procedure with regard to the discovery of ESI.   There are still many differences, however, between federal procedure and the changes made by Act 140. The Act did not copy and paste the recent federal rule changes regarding ESI (discussed here http://www.louisianalawblog.com/general-litigation-electronic-evidence-update-for-inhouse-counsel.html into our state Code of Civil Procedure. 

by Eric Lockridge

Many businesses have come to realize the value of having a document retention/ destruction policy as part of their regular operations. A policy that is well planned and consistently followed will help a business increase its efficiency, reduce its document storage costs, and protect itself from allegations that particular documents were destroyed because the company did not want them to become public in litigation.

by Theresa R. Hagen

On May 29, 2007, the Supreme Court handed down Ledbetter v. Goodyear Tire & Rubber Col, Inc., – U.S. –, 127 S.Ct. 2162 (2007), a decision favorable to employers and enforcing the timeliness requirements under Title VII for bringing a claim for alleged discriminatory pay. The court ruled that an employer’s decision setting an employee’s pay or raise within an otherwise neutral pay structure was a “discrete act,” triggering the running of the limitations period under Title VII. The plaintiff argued unsuccessfully that the pay claim was always timely because the disparate pay continued and compounded throughout her employment.

by Gordon D. Polozola

Yes, businesses are allowed to make campaign contributions in Louisiana. The limits vary depending upon the office being sought by the candidate to whom the business wishes to contribute. The limits (as of the date of this article) are set forth below. Individuals are subject to the same contribution limits.

The Limits:

by James R. Chastain, Jr.

On March 23, 2007, the Louisiana First Circuit addressed the validity of an arbitration agreement in Lafleur v. Law Offices of Anthony G. Buzbee, 2007 WL 858859 (La. App. 1^st Cir. 2007). The opinion has not been released in permanent law reports and is still subject to revision or withdrawal.

The case arises out of a contract between Mr. Lafleur, a Louisiana resident, and his Texas attorneys, Jeffrey M. Stern and the firm of Stern, Miller, and Higdon. Mr. Lafleur retained the Stern defendants to pursue his maritime claim for personal injuries he sustained while traveling on a vessel in navigable waters off the coast of Louisiana. He executed an agreement with the Stern defendants which stated, "Any and all disputes, controversies, claims or demands arising out of or relating to this Agreement or any provisions hereof, the providing of services by the Stern defendants to Mr. Lafleur, or in any way relating to the relationship between the Stern defendants and Mr. Lafleur, whether in contract, tort or otherwise, at law or in equity, for damages or any other relief, made by or on behalf of Mr. Lafleur shall be resolved by binding arbitration pursuant to the Federal Arbitration Act in accordance with the Commercial Arbitration Rules then in effect with the American Arbitration Association." It also provided "the expense of any arbitration shall be a Case Advance pursuing the claims" and that "Mr. Lafleur understands and acknowledges that Mr. Lafleur is waiving all rights to a trial by jury or a judge."

by Brett N. Brinson

Most commercial leases for multi-tenant properties contain clauses which regulate the tenants' use of the leased premises. Many tenants will require a landlord to grant the tenant the exclusive right to operate a certain business or sell a certain product to avoid competing with other tenants. These provisions are appropriately referred to as exclusive use clauses. For the landlord to satisfy its obligations under an exclusive use clause of one lease, the landlord is required to incorporate provisions in its other leases prohibiting the other tenants from using the leased premises for the restricted purpose. These clauses are commonly referred to as prohibited use clauses. 

by A. Edward Hardin, Jr.

On March 1, 2007, the United States House of Representatives passed the "Employee Free Choice Act of 2007." The bill passed by a 56 vote margin. The bill was sponsored by Rep. George Miller (D) of California. Louisiana Reps. William Jefferson (D) and Charlie Melancon (D) were two of the bill's 233 co-sponsors. Only seven House Republicans joined as co-sponsors. Thirteen Republicans joined House Democrats in voting for the bill, and two Democrats voted against it. Sen. Ted Kennedy (D) of Massachusetts is expected to introduce similar legislation in the Senate. Sen. Mitch McConnell (R) of Kentucky pledged to fight the bill. Pres. George Bush is expected to veto the bill should it pass the Senate.

So what is the Employee Free Choice Act of 2007? What's the big deal?  

The Employee Free Choice Act of 2007 amends the National Labor Relations Act (which was last amended nearly 70 years ago) and provides new, more relaxed, rules for the selection of an employees' collective bargaining representative (i.e., unions). 

by Hays M. Alexander

It is not uncommon for 501(c)(3) non-profit organizations, large and small, to have money making opportunities during their existence. For instance, a larger non-profit organization may have a talented IT department that creates software to benefit the organization, but which can later be marketed to other organizations. In addition, a non-profit organization may receive a bequest of income producing property. Since 501(c)(3) non-profit organizations must be created and operated exclusively for charitable purposes, and not to generate profits, should these organizations ignore these opportunities and miss out on the income that could benefit their just causes, or can they take action? The short answer is that action can be taken but with caution.

by David K. Nelson

Much of the time of a construction lawyer is spent assisting clients in finding solutions to the many problems that befall the typical construction project. These problems range from simple contract preparation and negotiation to the more fact-intensive work of constructive defect litigation, surety claims, liens, and payment issues. Each construction project, no matter how complex or simple, involves the same basic issues:

• What is the scope of work that the parties agreed to?

• What documents or plans define the scope of work?

• How is the contractor to be paid for his work?

• How can the owner be assured that the contractor is doing the work properly?

• What is to be done when there are issues or problems with respect to any of the above?

The job of the construction attorney is to help chart a course through this minefield and ideally resolve issues without judicial intervention.

See the rest of the article here. It is an article of some heft, so give it a few seconds to open.  

by Kevin C. Curry

On February 16, 2007, the IRS issued a formal ruling approving a sale of a life insurance policy to a grantor trust. This ruling is a rare formal ruling by the IRS in the grantor trust area. Grantor trusts, or intentionally defective grantor trusts, are used often in a variety of estate planning situations. Grantor trusts are typically used in estate planning situations where the parties want the income of the trust to be taxed to the grantor of the trust (the person who set up the trust) or where they want the grantor to be deemed to be the owner of the trust property for income tax purposes.

by Ben R. Miller, Jr.

The Internal Revenue Service has released a draft of guidelines for good governance of nonprofit organizations. A discussion draft of the guidelines highlights a mission statement, code of ethics, whistle blower protections, conflicts of interest, due diligence, transparency, audits and compensation practices. A copy of the draft can be found on the IRS Website

by Linda Perez Clark

The court in Petch v. Humble, 41,301 (La.App. 2 Cir. 8/23/06) 2006 WL 2422914, --So.2d-- considered the limited scope of liability for members of a limited liability company. The plaintiffs in that case, property owners, sued a limited liability company that owned neighboring property and three members of the limited liability company. Plaintiffs claimed defendants negligently failed to obtain a stormwater permit before beginning to develop a subdivision and in failing to employ a stormwater pollution prevention plan, which allegedly resulted in damage to plaintiffs' property.  

When a business selects a trademark under which a product or service will be sold, it hopes to develop brand loyalty among its customers and have them come to know the trademark in the market place. As part of the strategy to create a brand, it is prudent to seek federal trademark registration for the name in order to help protect the business' rights to use the trademark.

The Uniform Trade Secrets Act, La. 51:1431, et seq., provides a cause of action for misappropriation of a trade secret. However, it is important to recognize that these are specific terms which must be satisfied in order to trigger the remedies provided in the Act.

Many C-Level executives and small business owners have heard of the Gulf Opportunity Zone (the GO Zone Act) and know that it does something for Louisiana businesses, but they do not know if or how the new law can help them and their employees. Kean Miller has prepared a comprehensive summary of the GO Zone Act and its sister law, the Katrina Emergency Tax Relief Act of 2005 ("KETRA"). This summary describes the key legislative provisions and explains how Louisiana-area businesses, both large and small, can maximize the GO Zone benefits available to them.

The Third Circuit seems to think that shareholders of corporations that elect to be taxed as S Corporations have no limited liability. The good news is that the bizarre language to this effect is not relevant to the decision and therefore should not be treated as governing law or given any precedential value.

A recent Third Circuit decision joined the long and growing list of cases supporting the Single Business Enterprise Theory exception to the long standing principle that corporations are separate and distinct legal entities apart from their shareholders and affiliated companies.

By Russel Primeaux

Someone once observed that most car accidents occur within 10 blocks of the driver's home. We see a analogous trend in Intellectual Property "crimes" - i.e. infringement of patents, trademarks, or copyrights; or misappropriation of a trade secret. Intellectual Property (IP) disputes between two parties that are strangers to one another are the exception, not the rule.

By Linda Perez Clark

Very often, contracts prohibit assignment without the other party's consent. If you think you might ever want to assign a contract (bearing in mind that a merger or sale of the business can trigger assignment), then this kind of provision should generally be modified by adding that the other party's consent cannot be unreasonably withheld, conditioned or delayed.

By the Kean Miller Business Law Team

Many businesses in Louisiana are now assessing how Hurricane Katrina and Hurricane Rita have affected and will continue to affect their contracts with clients, vendors, partners, and others. This article provides some general guidelines that businesses can use to determine if and how their contracts' terms or Louisiana's commercial law may affect contractual rights and obligations in light of the hurricanes.

The IRS has granted various extensions to taxpayers in areas affected by Hurricane Katrina. Generally, this relief extends the due dates for any business or individual return due on or after August 29, 2005 until January 3, 2006.

By the Kean Miller Construction Law Team

One of the Executive Orders enacted by Governor Kathleen Blanco in response to the disaster arising out of Hurricane Katrina and the flooding caused by the breaches of the levees around New Orleans is Executive Order KBB 2005-27. This Executive Order is captioned "Emergency Procedures for Conducting State Business".

By Mark Mese

Hurricane Katrina will undoubtedly go down in history as the worst natural disaster to hit the United States. The current estimated cost to repair damage from Hurricane Katrina caused has reached $50.0 billion, much of which may be covered by insurance. Hurricane Katrina will have enormous impact on policyholders and their insurers in Louisiana, Mississippi, and Alabama. Policyholders will need to act carefully and in some cases promptly to protect their rights under insurance policies providing coverage for environmental claims, business interruption claims, property loss claims, and general liability claims.

By Christopher J. Dicharry

Assessors are charged with the duty of determining the fair market value of business and residential property in Louisiana so that annual ad valorem property taxes can be imposed. This duty to determine fair market value is modified by a duty to insure that assessments are uniform. That is, similar properties should have similar assessments.

By Mark D. Mese

Insurance companies are continuing to reduce the coverage provided under general liability policies. Many carriers are modifying the coverage provided under Coverage B, Advertising Injuries/Personal Injury.

By Carey J. Messina

So you've built a successful business that provides you a good salary and employment for several of your children. Things are going fine, but you are worried about what happens to the business when you retire in a few years, or die. What are you going to do? (i) sell to that "national group" for cash and a nice consulting arrangement; (ii) sell to several loyal employees who have helped grow the business, but have not participated in management; or (iii) transfer the business to the children working in the business.

By Lolly White

In-house counsel who are employed in Louisiana but are not licensed to practice law here have until July 1, 2005 to file an application for limited licensure to practice under the Louisiana Supreme Court's new In-House Counsel Rule.

By Brett N. Brinson

Who owns the improvements constructed by a tenant is often a critical issue when a lease terminates. If a lease does not address the issue, the relevant Louisiana Civil Code Articles will apply. Effective January 1, 2005, Louisiana revised the Civil Code Articles regarding leases. The revised Articles specifically address improvements made by tenants and govern if the lease is silent on the issue.

By Russel O. Primeaux

It is a situation we see repeated all too often. A successful small business owner is considering a major expansion - either by franchising or by opening more company-owned offices. The business has many of the key ingredients for success. However, as we investigate the trademarks of the business, we learn of potential problems.

By Linda Perez Clark

Parties often use a confidentiality agreement to protect against disclosure of trade secrets. Even without a confidentiality agreement, persons are prohibited from misappropriating other's trade secrets under Louisiana law. But how much protection does a confidentiality agreement or Louisiana law really afford?

By Sonny Chastain

The Lanham Act was passed in 1946 pursuant to Congress' power to regulate commerce. Section 43 of the Act prohibits false and misleading advertising, stating that "any person who uses in commerce any false or misleading description of fact, or false or misleading representation of fact, which . . . in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is likely to be damaged by such an act." This section of the Act was at the center of a recent Listerine ad campaign.

By Dean P. Cazenave

After twenty years of fighting tenant-favorable bankruptcy decisions on lease assignments, landlords have won a major victory. The case of In re Trak Auto Corporation v. West Town Center, LLC, 2004 WL 856859 (4th Cir.), decided April 22, 2004, could be a turning point in upholding a landlord's rights to enforce lease restrictions on use, alterations and other operating issues.

The issue revolved around a limitation in the Trak lease that permitted only the retail sale of automobile parts and accessories and such other items as are customarily sold by Trak at its other auto stores. Trak also agreed to use the leased property only as a Trak Auto Store.