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fantasy football, gaming, gambling, legal, las vegas

Is It Legal to Gamble on Fantasy Football?

Football season is back! I would just like to congratulate my fellow football fanatics for making through another tough, football-less offseason1)when will the silly Europeans learn how much better tackle football is and starting training their athletes to play so we have gridiron action all year round?. More importantly for some of us, it is fantasy football season!

How did your draft go? How do you draft Adrian Peterson without any idea how he will play2)gotta be better than my Montee Ball play from last year…here is a free tip from someone who has watched Broncos’ football since the Elway [We love you John!] days: Do not take a Broncos’ running back. Just trust me. There is just no way to predict who will get the carries this year.?

Regardless, I suspect that some of you may be playing fantasy football for cash prizes this year…

 

 

 

Since the sports gaming entities have yet to be finalized3)Stay tuned to the blog for more information. My contact says they should be here in a couple weeks, the only means for non-Nevadan folks to wager on sports, supposedly, is through fantasy leagues.

All of our loyal, intelligent readers are asking themselves now: How is it illegal to bet on football, but legal to wager on fantasy football? The answer is what you would expect: a combination of governmental favoritism, arbitrary demarcations, and a lack of political mettle to do the right thing4)And perhaps a good faith mistake.

Let’s get a little more in depth.

 

Fantasy Football and the Internet Gambling Prohibition and Enforcement Act

In 2006, our friends in the Congress decided that this unregulated internet poker nonsense needed to end5)And rightful so. In turn, the Congress passed the Internet Gambling Prohibition and Enforcement Act. Below is the pertinent part for our discussion:

`(6) The term `bets or wagers’–

`(D) does not include–

`(ix) participation in any fantasy or simulation sports game or educational game or contest in which (if the game or contest involves a team or teams) no fantasy or simulation sports team is based on the current membership of an actual team that is a member of an amateur or professional sports organization (as those terms are defined in section 3701 of title 28) and that meets the following conditions:

`(I) All prizes and awards offered to winning participants are established and made known to the participants in advance of the game or contest and their value is not determined by the number of participants or the amount of any fees paid by those participants.

`(II) All winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals (athletes in the case of sports events) in multiple real-world sporting or other events.

`(III) No winning outcome is based–

`(aa) on the score, point-spread, or any performance or performances of any single real-world team or any combination of such teams; or

`(bb) solely on any single performance of an individual athlete in any single real-world sporting or other event.6)Source

 

Is your head spinning like mine is after reading that? I actually pulled that part of the law from the entry in the Logic Dictionary for “Distinction without a difference7)This is an inaccurate statement.  We have hit that far-too-common crossroads8)That we seem to be crossing more and more these days where we are trying to determine if the law was just poorly written, or drafted  entirely in bad faith. Per usual, I cannot tell. Maybe our lovely congress-folk have not the slightest idea what sports gambling is9)If this is true, why are they writing laws about it?. We will just assume that is that case, because the alternative is much more cynical10)As in, legislators drawing arbitrary demarcations in the law at the behest of special interests. Am in the wrong? Read this NY Post article about the law.

In reference to `(II) above, how do they think sports betters operate? The old, throw a dart at a couple of team names on the board and bet on the punctured organization routine11)Granted this routine needs a catchier name? Every (as in, likely without much exception) serious handicapper considers the “accumulated statistical results of the performance of individuals” before making a sizable wager. Do the congress-folk think the serious betters just guess? They have to know better than that, right?

What about `(III)? This section, if I am to analyze this silliness in good faith, makes a bit more sense, if this law is supposed to be about preserving the integrity of the game and not regulating socially acceptable gambling. The thinking could be (all I can do is make my best guess at what they are going for, assuming good faith) that if the athletes are spread amongst multiple teams, impropriety is less likely to occur. Yet most fantasy teams have less players on them than the actual, real world teams the players work for. The larger the team, the less effect one individual has on the results. So this language is not all that logical either.

Also, most importantly, let us not get lost in the forest. This law is supposed to protect the public from internet gambling. How is the character of gambling any different if you bet on one team as opposed to a collection of players on multiple teams? This is the logical equivalent of legalizing heroin in pill form, but disallowing any derivation of the product that can be injected. Is the issue how the gambling/substance is consumed, or the consumption itself?12)Stay tuned for my post next week that will be done entirely in question form. Your move Ron Darling!

In reference to my point regarding the integrity of sport, former attorney13)Sorry Mike, if you are still in practice; though maybe he is like Paul Finebaum in that he pretends to have never practiced law. Mike Florio evaluates the bill correctly, in my eyes:

The hair-splitting and nonsensical distinction from Congress has made gambling on fantasy football as legal as gambling on stocks, which has spawned an industry that includes some very high-stakes fantasy leagues, some of which undoubtedly include NFL players.  But while it’s only a matter of time before word emerges of the involvement of NFL players in six-figure fantasy leagues, another potential complication could emerge when it comes to the non-gambling gambling of large amounts of money on fantasy football.

Peter King of TheMMQB.com explains that, during his training-camp tour, he has caught wind of “undue pressure some players and coaches feel from big-money fantasy-football players.”  Writes King, “I had one coach tell me there’s so much money in some of these fantasy-football playoff pools that people who used to gamble with bookies illegally are now gambling in high-stakes fantasy-football leagues, which is not illegal.” King adds that the “NFL has its antennae up over this, and it’ll be interesting to see if the pressure escalates to more serious threats on players or coaches.” 14)Source

 

Should this have been thought out more thoroughly? Likely yes. How can the NFL know if one of its players/coaches are playing in a high end fantasy league. Given the concerns above15)valid in my eyes, it is possible that legalizing only fantasy sports betting is much worse than leaving the general gambling prohibition in place.

It is also worth reminding folks that our sports books actually assist federal regulators in catching athlete’s point shaving, recall the Arizona St. scandal from the 1990s.

 

Will fantasy football gambling be legalized as part of a broader movement to legalize internet gambling?

We have trends going in both directions in regards to the question above; it is hard to speculate what will happen. Usually the rich and powerful are on one side of an issue, so it will be easy to see what will happen. There are movers and shakers on both sides of this debate, neither looking like they will give in.

Each side of the internet gambling debate are16)shockingly…don’t make me post that Casablanca clip again disingenuous in regards to the opposing views. On the one hand, the pro fantasy football  folks are making peculiar claims like fantasy football helps kids learn17)maybe more like fantasy football is a cheap/easy cop-out for teachers that are struggling to motivate their students. If your students are not engaged in world affairs, don’t you have some responsibility to show them why they should care? I cringe even writing that. Teaching is so,so difficult. Even still, ignoring the civics component of a public education is an error.

On the other side, Mr. Adelson’s friends against internet gaming18)no truth to the rumor that this was the initial name for the group are equally, if not more disingenuous19)and I say this as someone sympathetic to their views with such specious claims as “Internet gaming hurts union jobs”20)as we all know, union labor is a real passion of Mr. Adelson and “Internet gaming hurts farmers”21)Huh? I cannot even make a bad joke because the connection is so attenuated.

What can we conclude from all the name-calling? It will probably be a few years before internet gambling regulation is resolved at a federal level. Your best chance will be if the federal government becomes even more desperate for revenue than it currently is.

 

So is it safe to play fantasy football for money online?

This is not legal advice22)Note that this is a legal blog, not legal counsel. If you would like legal counsel on the issue, we have great attorneys here who will assist you. Just give us a call, more basic risk analysis. If it was me, and I was going to play fantasy football online, I would think very hard about what happened to the internet poker sites. If you recall, one day people of all ages23)Purposeful cliche were playing with the Caribbean-based sites, the next, they all got shut down. As you can read in the NPR article, all the folks with money in the accounts abroad had no access to get the money back, as all the property was seized. As you can deduce from the ambiguous text of the law above regarding fantasy football, is it conceivable that the DOJ could decide this fall that instead of going after online escort services24)They had quite the summer, they will direct their attention to fantasy football sites.

If you live in Nevada, this seems like an unnecessary risk as there are many companies that will allow you to wager, in-state, on football over the internet25)and unlike Wall Street, you will know the odds of your wager at the moment you make it. If you are out-of-state, it might be worth being patient for a few more weeks until the sports betting entities’ regulations are finalized by the Gaming Control Board. Coming this fall, you can wager with publicly traded companies (Las Vegas casinos) from throughout the country on football through a sports gaming entity. Pretty exciting stuff.

It is difficult enough to win at gambling, why gamble through a medium where there is also a risk that you will not get paid if you win? Think of it as an unnecessary parlay. One wonders if fantasy football gambling was legal in Nevada, why wouldn’t the casinos want some of the action?

Either way, best of luck this year. And Go Broncos!

 

These are two really great academic journal pieces on the history of fantasy football26)Yes, academia seems to be going in a strange direction

Harvard’s Journal of Sports and Entertainment Law

John Marshall Law School

 

Even more reading:

Forbes

RGJ

Politico

Washington Post

The Hill

 

Footnotes   [ + ]

1. when will the silly Europeans learn how much better tackle football is and starting training their athletes to play so we have gridiron action all year round?
2. gotta be better than my Montee Ball play from last year…here is a free tip from someone who has watched Broncos’ football since the Elway [We love you John!] days: Do not take a Broncos’ running back. Just trust me. There is just no way to predict who will get the carries this year.
3. Stay tuned to the blog for more information. My contact says they should be here in a couple weeks
4. And perhaps a good faith mistake
5. And rightful so
6. Source
7. This is an inaccurate statement
8. That we seem to be crossing more and more these days
9. If this is true, why are they writing laws about it?
10. As in, legislators drawing arbitrary demarcations in the law at the behest of special interests. Am in the wrong? Read this NY Post article about the law
11. Granted this routine needs a catchier name
12. Stay tuned for my post next week that will be done entirely in question form. Your move Ron Darling!
13. Sorry Mike, if you are still in practice; though maybe he is like Paul Finebaum in that he pretends to have never practiced law.
14. Source
15. valid in my eyes
16. shockingly…don’t make me post that Casablanca clip again
17. maybe more like fantasy football is a cheap/easy cop-out for teachers that are struggling to motivate their students. If your students are not engaged in world affairs, don’t you have some responsibility to show them why they should care? I cringe even writing that. Teaching is so,so difficult. Even still, ignoring the civics component of a public education is an error.
18. no truth to the rumor that this was the initial name for the group
19. and I say this as someone sympathetic to their views
20. as we all know, union labor is a real passion of Mr. Adelson
21. Huh? I cannot even make a bad joke because the connection is so attenuated
22. Note that this is a legal blog, not legal counsel. If you would like legal counsel on the issue, we have great attorneys here who will assist you. Just give us a call
23. Purposeful cliche
24. They had quite the summer
25. and unlike Wall Street, you will know the odds of your wager at the moment you make it
26. Yes, academia seems to be going in a strange direction
personal information, nevada, Internet Theft

How Nevada Safeguards Your Personal Information on the Internet

These days, you cannot watch the news without hearing about a security breach where personal information is stolen and private data has been exposed. We put all of our important information onto the public domain and rely on businesses and other entities to protect it for us. It is highly likely that you or someone you know has had their personal information compromised whether from the large scale breaches at Target, Home Depot, Sally Beauty Supply, Trump Hotels, Ashley Madison, Blue Cross Blue Shield, and CVS; or on a smaller scale at a local business. Anyone who uses a credit cards or shops online is at risk. If personal information is stolen, bank accounts can be hacked, credit cards charged, home addresses could be revealed, social security numbers can be stolen, and so on. People may not even know that the information has been stolen until years later when they try to get a loan or a new credit card and realize their credit is destroyed.

Keeping all these breaches in mind, it is nearly impossible to get by these days without using a credit card or shopping online, so we must all put our faith in the hands of the business we patronize to provide enough security to protect our personal information. But what happens when companies fail to protect our information? Are there any consequences? What if the businesses do not provide sufficient security? Or what if they do the best they can but the security is still breached?

 

Nevada continues to pass laws to protect personal information

Nevada Revised Statute 603A governs proper data protection for any “data collectors” who deal with nonpublic personal information whether it be driver’s licenses, social security numbers, credit cards or user names and passwords. Such data collectors are required to take “reasonable security measures” to protect records from unauthorized access, use, modification, or disclosure. Data collectors are required to maintain certain security standards, sometimes by using encryption, to protect personal data. If companies take credit cards they must comply with “Payment Card Industry Data Security Standards” which require encryption for information transferred electronically. For companies that do not accept credit cards, Nevada law still requires them to encrypt data transferred electronically.

In an effort to keep up with the ever increasing amount of personal information being transferred electronically, Nevada recently updated its statute to expand the definition of “personal information.” Prior to July 1, 2015 personal information required to be protected included social security numbers, driver’s license or identification numbers, and any account numbers in combination with passwords that permit access to a financial account. After July 1, 2015 personal information now includes medical information numbers, health insurance information numbers, driver authorization numbers, or user names/login information that in combination with a password or security question would permit access to an online account. This expansion of the meaning of personal information now seems to cover just about anything a consumer would be uniquely identified by at a business or on the internet, whether it be shopping with an online account, requesting a referral for a doctor visit, or subscribing to an online service.

Data collectors are not responsible for damages caused by a security breach as long as they are complying with the reasonable security standards outlined in the statute. If a business reasonably believes personal information has been stolen, they must provide the potential victims with notice right away.

Nevada considers itself to be the “gold standard” in consumer breach and notification laws1)See Senate Committee on Commerce, Labor and Energy, April 24, 2015 at page 4.. Nevada also prides itself on being “business-friendly” by having uncomplicated, clear and reasonable guidelines for what business need to do to comply with protection of consumer data2)Id.. The new guidelines expanding the definition of personal information was thought to incentivize businesses to protect the data or force them to go public with their breach by providing notice to the public.

 

Any press is good press? Or is it?

But are there any remedies to really protect a harmed consumer? It does not really appear so at this time in Nevada. Although businesses do have to notify individuals when the personal information is compromised, I am not convinced this is all that much of an incentive to do use all possible efforts to protect information. For example, Target was brought to the forefront of the news recently for its large scale data breach, but I do not know anyone who loves to shop there any less. I would make an educated guess that any number of my soccer mom friends are enjoying a stroll through Target as I write this. Not only that, but my home-improvement-enthusiast husband still goes to Home Depot at least once a week despite having to get an entirely new debit card when his information was breached a few months back. Point being that I just do not think it is a sufficient disincentive for companies to have to “out” themselves after a breach. Studies are showing that consumers are used to breaches and do not seem overly concerned about it. Typically consumers are not held responsible for unauthorized credit card charges and likely are not inconvenienced by more than a phone call to the bank.

Many companies that have suffered from security breaches have provided identity protection services at no charge for a certain amount of time. That is certainly helpful and likely comes at a substantial cost for the business, but it is not required. Connecticut recently passed legislation that will require identify theft protection to be provided in the event of a breach. California also requires these services.

 

What else can Nevada do to protect the personal information of her citizens?

In the future, Nevada may implement a law to require companies to provide these identity protection services. But it appears that most do anyway in an effort to show their customers that they care and that they will work hard to protect their data in the future. But is this enough? It is hard to say.

It is my perception that many of these computer hackers live abroad. Additionally, I believe that where there’s a will there’s a way, and if criminals are looking to find a way to steal personal information, they will always be one step ahead of the security game. So can we really fault a store for falling victim to an extremely sophisticated hacker when they took “reasonable measures” to protect my identity as required by law? Maybe. Say, for example, if someone does not receive notice of a breach because they changed their address since shopping at a certain store and they do not opt in to identity protection. Maybe a few years go by and this person is denied for a car loan because someone else has been taking out loans in his or her name and ruined the credit score of the victim. The consumer is innocent, so who should s/he blame? The store that permitted the data breach? Maybe.

Perhaps in the future, legislators would consider a private cause of action by a wronged consumer against a business who suffered a breach. Even if the business took reasonable protection measures, should an innocent consumer really be left holding the proverbial bag of harm when s/he now cannot buy a car? If this happens to a large number of people, maybe a class action suit would be a way to address wronged consumers. In that scenario, the benefit of a class action lawsuits come to fruition as a consumer who suffered only a small amount could seek redress without incurring substantial attorney’s fees. But, on the other hand, I can understand how a store who took all best efforts to stay up to date on the cutting edge of security protection should not be held liable for falling victim to a sophisticated scammer. If a business follows all laws and procedures, maybe it is unfair to require the entity to pay damages for a breach they could not have anticipated.

Since Nevada likes to stay on the forefront of consumer data protection, we will have to wait and see how these issues play out in the future. But for now, keep checking those credit reports and be on the lookout for any strange activity.

 

Footnotes   [ + ]

1. See Senate Committee on Commerce, Labor and Energy, April 24, 2015 at page 4.
2. Id.
Late rent Payment, nevada, landlord tenant

The Few Options That Exist for a Tenant Who Owes a Late Rent Payment

Nevada is considered by many to be a “landlord friendly” state with less protections for tenants than nearby states, such as California. Therefore, it is always best for tenants to stay on good terms with their landlords, follow all  the lease terms, and pay rent in a timely manner.

 

Sometimes you will have a late rent payment even with the best of intentions

But, it is not uncommon for a tenant to face financial difficulties at one time or another and have a late rent payment due at the beginning of any given month. If that happens, a tenant is somewhat at the mercy of their landlord, unfortunately.

If you can persude your landlord to agree to an extension, that will be the best option. That way, the landlord and the tenant can agree for the late rent to be paid at a time when the tenant will have the money available. A tenant may request that any late fees be waived, and the landlord is free to oblige as a courtesy. It is always best to get the extension and waiver in writing so both parties are bound.

Given that it is so hard, time consuming, and expensive for a landlord to find a reliable and trustworthy tenant, a landlord will likely be sympathetic to the situation and grant an extension. If you are a troublesome tenant who is often late, the landlord does not have to grant any extensions. Also, any late fees required by the lease become part of the rent owed.

A tenant should never write a check that s/he knows will bounce. Not only is that possibly a violation of the lease, but it will cause additional fees to be incurred. Importantly, a person can even be charged with a crime for writing a bad check1)This is a serious crime in Nevada, please do not do this. The law presumes a person who writes a check with non-sufficient funds in their accounts knows that the check will bounce, and this is considered a crime. Certainly not a hassle that anyone needs!

If a landlord does not grant an extension for you to pay the late rent, s/he must give you a five day notice after which an eviction proceeding may be commenced. If you receive this five day notice, you will need to pay the rent within those five days or vacate the property. If the landlord has not waived the late payment, the entire rent plus the late payment must be paid within the five day period to bring the amount owed current.

If you have a legal defense to the eviction, then you can file papers with the Justice Court to request a hearing on your eviction. You will not be asked to leave the property pending the outcome of the hearing, but if you do not have a valid legal defense you will just be delaying the inevitable eviction. Not only that, but if you file a petition for a hearing with the intent to delay knowing that you have no valid legal defense to the eviction, you might end up paying your landlord’s attorneys’ fees and costs.

Importantly, there are certain legal defenses to your possible eviction. For instance, if you can make a partial payment of the late rent, you should do so. If you do, and the landlord accepts it, this may be a defense to eviction based on the landlord’s acceptance of this payment knowing it was not the full amount. But, the landlord does not have to accept the partial payment and may choose to refuse it and proceed with an eviction.

There are various legal reasons to withhold rent, including if there are major issues with the property that have gone unfixed after notification that make the property uninhabitable2)called constructive eviction.  But, if you owe late rent and claim to the court that your property is uninhabitable, the court will not be sympathetic if you have never given the landlord a chance to fix the problem.

So, unless the landlord has failed to fix major problems that they knew about in advance, you are at his or her mercy if you are unable to make the late rent payment. It is always best to be on good terms with your landlord so in the event that you need an extension of time to pay the rent, your landlord is likely to have faith in you and give you a little extra time.

Footnotes   [ + ]

1. This is a serious crime in Nevada, please do not do this
2. called constructive eviction
back to school, ccsd, nevada, esa, children, teacher

Everything You Need to Know Before the Kids Go Back to School

In this episode, we will update you on how the Education Savings Accounts are coming along1)could be better, and then provide a one stop directory for everything you need before the kidlets go back to school. If you would like to read more about the updated Nevada Bullying law, we have you covered.

 

Back to School and the New Education Savings Accounts

21 August, the state treasurer held a meeting to discuss the radical new education law passed by the legislature in the 2015 session. Check out the link to get our full analysis of the law. In particular, the questions proposed at the end of the piece have still not been answered. What happens to the rest of the students attending struggling schools in Nevada when more kids (and the subsequent funding) are taken out? Will the struggling schools have to make due with even less resources? Why not take the money/effort/resources being used to help kids leave the public schools and hire more teachers? If you have not tried to teach a class of more than 40 kids2)I sure have, it is quite difficult, even with public speaking experience. Without lowering classroom size, almost nothing else will matter3)in my humble opinion.

I digress. Let us see how the ESA meeting went. Neal Morton did a real nice job covering the event for “the newspaper”4)as Mr. Ralston puts it, as did the Nevada Succeeds twitter account. I will post tweets from the meeting of 21 August so you can get a feel for how it went:

https://twitter.com/StudentsFirstNV/status/634772569963560960

 

Breaking: Attempting to drastically reform the school system in 3 months may not be possible5)my Drudge siren is broken, or it would be adjacent to this headline. Allow me to clarify, it is possible to do, but probably not possible to do well.

I keep seeing the proponents of the bill cite how many people signed up for it so far, 2200 from the last citation. How many students does the Clark County School District have6)#RonDarlingesqRhetoricalQuestion? Try more than 318,000. For those scoring at home, .69% of the students have signed up.

Let us say that the program is a big hit, and doubles the participation so far. Was all this time/effort/money to implement this program worth it? Before you answer, consider also that money spent on public schools will be taken away to pay tuition7)and other costs for these students. Consider also that the money spent on public education cannot be proportionally deducted from the students that remain. For example, if there is not a sufficient amount to pay for a teacher, computer, text book, we cannot buy 3/4s of a teacher, 1/2 a text book, etc. We have to be able to pay for the entire expenditure, or it will not be paid for.

Again, we are talking about harming 99% of the school district’s children so that 1% will be better off. Fair? Best use of the legislature/governor’s time?

The school district has put the application for the ESAs online, which you may see here. Remember, the bill does not go into effect until 2016, so you will not be getting any money until then.

 

More good, back to school information

With our economy still in recovery, we all know how tough it can be to get the work schedule to line up with when the kids get out of school. Safekey is a free program that will supervise your kids until you get off of work.

http://cityoflasvegas.tumblr.com/post/126341349263/not-too-late-to-register-for-safekey

 

The Clark County School District Superintendent penned an article for the Las Vegas Sun that he discusses many of the new, exciting programs coming to the school district this year. An interesting/pretty great concept he included:

Ready by third grade

Third grade is a critical point in our students’ education. Our students must be proficient in reading and writing by the end of third grade. Beginning in fourth grade a child makes the transition from learning to read to reading to learn. Dedicated funds from the Legislature will allow us to implement additional programs that focus on literacy and ensure our students don’t fall behind.

 

If you need information on school vaccinations, you can get it here. Note that usually vaccinations are done Monday to Friday, but an exception has been made for Saturday, 22 August.

On Saturday, Aug. 22, a special back-to-school immunization clinic is scheduled at the health district’s main facility, 330 S. Valley View from 9 a.m. – 1 p.m.

 

PBS produced a special with even more back to school information that you can watch here.

Clark County School District has a website with almost any other additional information you may need for all the back to school drama.

 

Back to school is not just for the kids!

Look at this neat program offered by Clark County! We love civics, and so will you!

The kids will have a tough time complaining about homework if you are doing it as well.

 

A little humor before you go…

No one covers back to school quite like The Onion.

 

Have a great school year everyone!

 

Footnotes   [ + ]

1. could be better
2. I sure have
3. in my humble opinion
4. as Mr. Ralston puts it
5. my Drudge siren is broken, or it would be adjacent to this headline
6. #RonDarlingesqRhetoricalQuestion
7. and other costs
google alphabet series LLC

Google, Alphabet, & Your Small Business

Having billions of dollars at your disposal must be a lot of fun. For instance, you could use some of your money trying to develop a self-driving car, try to figure out how to use drones to deliver goods and merchandise to your consumers’ doorsteps, build massive barges in the middle of San Francisco Bay for who knows what reason1)Is it inappropriate to make a Fountainhead joke? Hopefully.. The point is: money may not buy happiness, but it will allow you to have some fun you probably could not have otherwise.

Google’s founders are swimming in money, figuratively speaking and maybe even literally2)who would be surprised if Google announced that one of its secret projects was the development of the first swimming pool full of $100 bills instead of water.. A mid-90s research project to build a better online search engine has ballooned into a behemoth technology company with interests as far flung as you can imagine. Google’s growth certainly presents a systemic organizational challenge in trying to develop the myriad of different products, projects, and business interests that Google has taken on.

 

Enter Alphabet, Inc.

On August 10, 2015, Google announced plans to organize a new corporation, Alphabet, Inc., to act as a parent company for not only Google, but also for many of Google’s other business interests. Why would Google need to add another layer of corporate structure to what appears to be an otherwise, well-oiled machine?

For starters, the parent company model will allow Google to remain flexible and diverse in its various business endeavors and still-under-development business projects. Presumably, Alphabet will also spin off countless other subsidiary companies under Alphabet3)A subsidiary company is a company that is owned 100% by the parent company, while the parent company is owned by individual shareholders. For instance, upon Alphabet’s organization, shareholders of Google stock will receive new Alphabet stock and Alphabet (the parent) will be owned by regular Joes like you and me. On the other hand, Google, now as a subsidiary of Alphabet, will have only one shareholder: Alphabet itself. . Each subsidiary will become its own separate business with its own officers, directors, and employees. Thus, it is assumed that the current arm of Google that is working on developing the self-driving car could be spun-off to a separate business entity (for example: Self-Driving Cars, Inc.), while the search engine aspect of the business will continue to operate under Google, Inc..

Google thrives on ingenuity and creativity. Spreading corporate governance more broadly will take advantage of the creative juices of its people who will theoretically take on more responsibility with new job titles of CEO, President, and Director of Let’s-Make-Stuff-Up-That-Would-Be-Totally-Awesome4)tm pending.

 

Even if you are not Google, an Alphabet may be for you

Similarly, separating out business interests creates a powerful asset-protection model that prevents one division of a company from dragging down the rest of the company in the event of a business disaster. For example, if Google’s wide-ranging business projects are currently doing business all under Google, Inc., then a liability that might arise when5)if a self-driving car goes rogue on the streets of San Jose and runs someone over. This could, in turn, affect business operations in the unrelated Google Translate department. Instead, with subsidiaries, Alphabet will isolate liabilities and protect other subsidiary companies from the dangers of liabilities caused by other aspects of the business.

Again, imagine that the self-driving car caused personal injury, and a fine personal injury attorney6)hopefully our hypothetical victim is lucky enough to be represented by lawyers as fine as our own Mr. Richards or Mr. Featherstone, Esqs. sued Self-Driving Cars, Inc., and won a court verdict of $5,000,000 in damages. With subsidiary companies, the injured person can look only to Self-Driving Cars, Inc., for payment of the court verdict. The injured person cannot look to Google Translate, Inc., to tap into its resources to pay the verdict because Google Translate, Inc., is treated by the law as a wholly separate legal entity that is not subject to the debts or liabilities of the other subsidiaries. This kind of asset protection allows Google to continue to innovate with speculative projects that may be more dangerous and prone to liability than you might expect from a company like Google Translate.

 

Dr. Canal is kind enough to provide us with an example

Google’s reorganization with Alphabet at its head does raise some interesting tips that even Jane Doe in Nevada could follow to her benefit. Most of us regular Nevadans do not have swimming pools full of $100 bills, nor are we investing our funds in the development of the first working time-machine, Delorean. However, many Nevadans do have varying business interests that could be protected from each other.

For example, consider your local dentist, Dr. Root Canal. Dr. Canal’s dental business actually consists of several different aspects: the practice of dentistry itself, the purchase, leasing, and use of medical equipment, and possibly the purchase and ownership of the building that the dental office is located. Thus, Dr. Canal actually has three separate business interests, all of which could be safely and legally protected from the other.

For example, imagine that Dr. Canal does a poor job on his next tooth extraction and his patient, Ayall B. Suing, sues him and his company, Root-Canals-R-Us, for dental malpractice. Dr. Canal loses the trial and the District Court for Clark County tells Dr. Canal and Root-Canals-R-Us that they must pay Mr. Suing $500,000 for his pain and suffering. Dr. Canal, unfortunately, kept all of his business interests (the dental practice, the dental equipment, and the office building) under just one umbrella: Root-Canals-R-Us. Thus, when Mr. Suing begins poking around for payment on his judgment, Mr. Suing first takes all of the business bank accounts, but he does not stop there. Next, he literally takes all of Dr. Canal’s examination chairs, the x-ray machine, and a box of promotional toothbrushes and even the dental floss to boot! Finally, Mr. Suing puts a lien against the building for the remaining amount of his judgment that was not covered by the other items he collected from Root-Canals-R-Us.

If Dr. Canal had followed Google’s lead, he would be in a much better situation. Dr. Canal could create separate business entities for each of his business interests: Root-Canals-R-Us to operate the actual dental practice; Dental Equipment, Inc., to own the dental equipment (which leases the equipment to Root-Canals-R-Us); and Dental Building, Inc., to own the dental building (which leases office space to Root-Canals-R-Us). Thus, when Mr. Suing looks for payment on his judgment against Root-Canals-R-Us, he will be limited to only that which Root-Canals-R-Us actually owns, which in this case would only be the business bank accounts (in general). Mr. Suing would not be able to swipe the examination chairs or put a lien on the building because those assets are owned by totally separate legal entities, which do not owe Mr. Suing anything.

 

Google, Alphabet, and the Series LLC in Nevada

Unlike with Alphabet, however, most Nevadans in these situations probably would not have a pressing need for a parent corporation to own separate subsidiaries because doing so for the average Nevadan unnecessarily adds another layer of corporate structure with minimal purpose. However, think again. Nevada is one of a handful of states that allows an ingenuous business entity called a Series LLC. In a Series LLC, the owner creates just one business entity with the State of Nevada, but then is allowed to create a “series” under the main LLC. Each series does not have to be registered with the State; only the main LLC. The beauty of this is that each separate series LLC is treated as if it is a totally separate business entity. For example, Dr. Canal can create Root Canal, LLC, as a series LLC, and then he would create Series A: Root-Canals-R-Us, Series B: Dental Equipment Company, and Series C: Dental Building Company. Thus, Dr. Canal accomplishes a parent-subsidiary type relationship (his own little Alphabet) where each series is treated as a separate business with asset protection between the different series.

Though you may not have billions to play with business ideas like Google, by creating and using a Series LLC you too can and should protect your business interests simply and powerfully. And, now that your business assets are sufficiently protected, you can finally create that Series D you always wanted: Build-a-Moonrover Company.

Footnotes   [ + ]

1. Is it inappropriate to make a Fountainhead joke? Hopefully.
2. who would be surprised if Google announced that one of its secret projects was the development of the first swimming pool full of $100 bills instead of water.
3. A subsidiary company is a company that is owned 100% by the parent company, while the parent company is owned by individual shareholders. For instance, upon Alphabet’s organization, shareholders of Google stock will receive new Alphabet stock and Alphabet (the parent) will be owned by regular Joes like you and me. On the other hand, Google, now as a subsidiary of Alphabet, will have only one shareholder: Alphabet itself.
4. tm pending
5. if
6. hopefully our hypothetical victim is lucky enough to be represented by lawyers as fine as our own Mr. Richards or Mr. Featherstone, Esqs.
Nevada corporation, LLC

Converting a Nevada Corporation to an LLC

Earlier this year, Nevada’s Republican-controlled Senate, Republican-controlled Assembly, and Republican Governor passed into law the largest tax increase in Nevada history1)Source. Among many other tax increases, the tax package significantly affects Nevada corporations, while largely leaving other Nevada business types (such as LLCs) alone. Because of the significant financial hit on corporations, many, and possibly most, Nevada corporations should now convert their business entity from a corporation to an LLC. First, we will analyze the cost to do business as a corporation and how the new tax package affects your bottom line. Second, I will provide you with the process to convert a Nevada corporation to an LLC.

 

The New Nevada Corporation Taxes and Fees

All Nevada business entities, whether a corporation or an LLC or a partnership, etc., are required to file an Annual List with the Secretary of State that includes the names and addresses of the entity’s management. The Annual List is due every year on the anniversary of the incorporation or organization of the entity. Failure to file the Annual List will eventually lead to the Secretary of State revoking the entity’s Charter to do business in Nevada. Prior to the new tax package, the filing fee for the Annual List was $125 for all business entities that are NOT for-profit corporations (such as LLCs, partnerships, etc.). For corporations, however, the annual filing fee ranged from as low as $125 to a maximum of $11,125 depending on the value of the total authorized stock of the corporation.

The new tax package increases the Annual List filing fee to a minimum of $150 for all entities, including corporations and LLCs. However, the filing fee for corporations continues to increase, as previously, depending on the value of the stock. Thus, the tax package does not cause a huge change from the previous fee schedule; basically, an increase of $25 across the board on the bottom end.

However, the new tax package really smacks corporations with the filing fee for the Nevada State Business License. In addition to paying the filing fee for the Annual List, all Nevada business entities2)I say all, but really not all entities are implicated. For instance, non-profit corporations are not issued a State Business License and some other types of entities are exempted from the requirement. must also pay for the Nevada State Business License on an annual basis at the same time as the filing of the Annual List. Prior to the tax increase, the fee for the Business License was $200 across the board for all entities. Now, thanks to the tax hike, the filing fee for Nevada corporations was increased to $500. Meanwhile, the filing fee for LLCs (and other entities) remained at $200. The effect of the tax increases to the Annual List and the State Business License filing fees is that a corporation now must pay a minimum of $650 every year to the State of Nevada for the privilege of doing business in Nevada3)This amount does not include local business license fees charged by cities and counties.. Meanwhile, LLCs pay only $350 total every year.

Governor Sandoval’s new tax plan adds two new reasons4)there are many more to why forming an LLC is preferable to a corporation formation:

(1) the Annual List filing fee for corporations increases depending on the value of the stock of the corporation, while the filing fee for an LLC stays the same regardless of the value of the LLC; and (2) a corporation will pay $300 more for its annual State Business License than will an LLC. Over the course of several years, these differences will add up.

 

How to convert a Nevada Corporation to an LLC

As you can see above, converting your Nevada corporation to an LLC makes great business sense given the new law. In order to do so, a corporation must do the following:

First, the board of directors of the corporation must adopt a resolution adopting a plan of conversion and make a recommendation to the corporation’s shareholders to approve the plan of conversion.

Second, the shareholders of the corporation must vote to approve the plan of conversion.

Third, upon approval by the board and shareholders, the corporation files Articles of Conversion with the Nevada Secretary of State.

And Voila! Your Nevada corporation is now an LLC, and you are saving yourself at least $300 (and maybe more) each year in annual filing fees to the State of Nevada5)There is a filing fee of $325 for the Articles of Conversion, but saving one year’s worth of the increased State Business License fee makes this filing fee a wash in a short amount of time..

For nearly all businesses, the Nevada corporation is a dying dinosaur in the world of business entities. An LLC has many advantages over a corporation, while the advantages of a corporation over an LLC are quite few. If you are currently operating your business as corporation, you are not stuck! There is a plan of rescue to convert to an LLC with all of its advantages. Give me a call to talk about adopting a plan of conversion and change your entity to an LLC today.

 

Footnotes   [ + ]

1. Source
2. I say all, but really not all entities are implicated. For instance, non-profit corporations are not issued a State Business License and some other types of entities are exempted from the requirement.
3. This amount does not include local business license fees charged by cities and counties.
4. there are many more
5. There is a filing fee of $325 for the Articles of Conversion, but saving one year’s worth of the increased State Business License fee makes this filing fee a wash in a short amount of time.
crying child, screaming

Screaming at a Crying Child in a Public Place: What is the Right Thing to Do?

As a business owner, what would you do if patrons of yours had a child with them that they would (or could) not stop from crying?

Before you answer, assume that 1) the establishment is full of other customers that are both annoyed with the crying and will see what you are about to do and 2) that we are living in the era of the “hyper gotcha-media”1)tm pending where we all now have electronic devices that can easily take video of what happens around us, and will likely tattle at the first whiff of unreasonable behavior.

Not an easy hypothetical, is it2)I have a more personal anecdote. A few weeks ago I flew back to Las Vegas from New York on a late night flight [the equivalent of a red-eye going west]. This couple with at least 4 children did not purchase a seat for their two very young kids, presuming [I assume] that they would hold the child through the 6 hour flight. For whatever reason, the child cried continuously [this is an appropriate time to use the term ‘literally’] for the entire flight. If you do not know many New Yorkers, they are more likely than most to tell you exactly how they feel about a particular set of circumstances. I could see folks starring lasers at the young couple in the back of the plane, then leaning over to the person next to him/her and stage whispering nasty thoughts that I will not repeat here. I was concerned that someone was about to get up, start an altercation, and we would all end up in Denver for the night. Luckily, this did not occur. But still, what were we all supposed to do? I felt both sorry for the young couple and angry at them for not being more responsible. I imagine the customers in the following scenario felt a similar cognitive dissonance. I share this tale only so you know, before I evaluate the behavior of the folks involved in this scenario, that I am certainly not better or superior to them.?

Hopefully, if this happens to you, the following does not occur:

In Portland, ME, a few weeks ago, a young couple with their toddler daughter arrived at a small, busy, breakfast establishment. After waiting thirty minutes for a table, the couple had to wait an additional forty minutes for their food to be prepared3)those familiar with the east coast small breakfast establishments will not find this wait time surprising. Unlike the spacious kitchens in Southern Nevada, there is a finite amount of space that these folks have to cook in, and it takes a bit longer to get your food. Plus, there is no pressure from the casino to get you out of the restaurant and back on the floor.

What happened next is not very clear; it depends upon whom you ask. All I can report with certainty is that the toddler became unruly, and there was a confrontation between the toddler’s family and the restaurant owner. I will allow you to read what each party stated on the facebook, and allow you to do your best Judge Judy4)it is shame we do not have more of her. If are sensitive to belligerent language, you may want to skip the posts from Marcy’s Diner.

 

Crying child, portland maine, restaurant owner, tort

Ms. Carson then went on to write an op-ed for the Washington Post regarding the incident5)It is tough for the Post to find hard news to report without an upcoming election..oh wait.

Again, I do not know for sure, the following is not anything more than conjecture, but there seems to be an agreement that the restauranteur addressed the child directly in an unfriendly manner. I know this may shock you, loyal reader, but the internets went into a tizzy over this. Most folks have previously been similarly situated, and therefore, have a strong opinion as to what was right for the parents/restauranteur to do.

The Press Herald of Portland, ME, polled their readers to discover how the public would adjudicate this issue. Out of 5500 votes, 61% of the respondents said that they approved of the way Ms. Neugebauer handled the unruly child.6)Source  I, for one, was a bit shocked by the result. And here I thought America loved children unconditionally. Perhaps it is just when they are seen, but not heard.

I got a lukewarm take of my own, as a matter of fact! It is a bit more nuanced than most of the opinions I have seen, so please bear with me.

 

If this crying child scenario happened in Nevada, is there a potential tort?

Assuming that folks name-calling on the facebook is not the most efficacious means to resolve societal issues, is the court system the right forum? If so, assuming the mother’s account of the events is correct, do the parents have a cause of actions against the restauranteur? Before we begin, know that each state has its own tort law, so what is true in Nevada is not necessarily true anywhere else. Given what we know of the facts, it is possible that a similarly situated plaintiff in Nevada might have a cause of action against the restauranteur through Intentional Infliction of Emotional Distress(IIED) cause of action. The necessary elements of IIED are as follows:

1) the defendants’ conduct was extreme and outrageous;

2) defendants’ conduct was non-privileged;

3) defendants acted with the intention to cause plaintiffs emotional distress, or with reckless disregard for the probability for causing such distress;

4) plaintiffs actually suffered severe or extreme emotional distress; and

5) defendants’ conduct actually or proximately caused the emotional distress.7)Alam v. Reno Hilton Corp., 819 F. Supp. 905, 911 Dist. Court, D. Nevada 1993

 

If I may guess, you have read through those elements and are still not sure if these facts meet those standards. Fair enough. I am happy to elaborate in the pertinent ones. Elements 2 and 3 are easily met in our hypothetical restaurant scenario. There is no legal privilege to yell at another person’s child, and the restauranteur clearly intended to yell at the child, as expressed in her facebook post. As to the other three elements, things get a bit murky.

Was the conduct “extreme and outrageous?” That is a tough question to answer. “Extreme and outrageous” conduct “go[es] beyond all possible bounds of decency, is atrocious and utterly intolerable.”8)Id. I can hear you muttering under your breathe; more synonyms do not make the issue any more clear. The behavior of the restauranteur is what is called a question of fact that would be decided by a judge or jury.  The finder of fact would query, “is the behavior ‘extreme and outrageous’ in the eyes of the hypothetical reasonable person?” The answer again is unclear. As we saw last year with the hoopla surrounding Adrian Peterson9)the football player that was suspended for punishing his young son with a switch, mores with respect to parenting vary greatly through the country. If these facts were presented to a jury in the affluent part of the Bay Area/Park Slope, Brooklyn/Los Angeles, my guess is that the twelve, randomly selected folks would be more inclined to find yelling at another’s child as “extreme and outrageous.” If the case was tried in rural Texas, the deep south, or middle-west, I think it would be less likely.

As to the fourth element, the Alam court states “the stress must be so severe and of such intensity that no reasonable person could be expected to endure it. Moreover, the less extreme the outrage…the more appropriate it is to require evidence of physical injury or illness from the emotional distress.”10)Id. Citation omitted A similar social mores issue as above exists here. Depending on where you are, folks have different expectations of their children. Some think tough love is good for them, others think nurture is more important than nature. Considering the Las Vegas Valley is in between these two extremes, it is difficult to predict how a 12-person jury would decide.

In order for there to be a valid claim, the child would need to manifest actual harm suffered that was caused by the event. The kid would need to go from being gregarious around adults to needing multiple sessions of psychotherapy a week, for example. Even then, if the child suffered a trauma before the incident, it might be difficult to determine if this restauranteur is the actual or proximate cause of the child’s damages.

That was my long-winded way of telling you that a potential case, like most, will be fact-specific. As to the possibility of a tort, a few years ago in New York, Patti Labelle11)according to news accounts returned to an apartment building where she was staying, saw an unsupervised child, and lost her cool, to say the least12)read more here. The case did not go to trial, but Ms. Labelle decide to settle for six-figures before she was to be deposed. Although there is no telling why she settled, it is not that common for folks to pay out six-figures over frivolous claims.

 

Compassion for the Crying Child

Before we wrap up here, if I may, a few words13)#Synecdoche on sympathy, empathy and compassion. At least from the press accounts I have come across, I have yet to see my writer friends get to the underlying issue of this unfortunate incident. Comment if you disagree, but my feelings are that folks heard the details of the story, then latched onto the perspective that they were most familiar: either empathy for the toddler’s parents after they have suffered through a similar, painful episode with their own uncontrollable children, or empathy for the restauranteur as a person with no kids that who is tired of parents that cannot control their children in public.

Is this what we have become? Only able to understand perspectives we are most familiar with? Over the weekend I finished Ta-Nehisi Coates’ Between the World and Me14)Highly recommended. There are too many great parts to elaborate on in a footnote, but I must say that I deeply admire his vulnerability. The book elicited thoughts of Vollmann’s “sleepwalkers” in Europe Central, Ellison’s Invisible Man [thematically], Morrison’s Song of Solomon [again, thematically], and the comment made by David Foster Wallace to David Lipsky in Although Of Course You End Up Becoming Yourself[This is in no way an endorsement of that movie. I am about to paraphrase.] that the real heroes of our society are the ones who will let go of the cynical irony and be genuine, honest, and vulnerable about how they feel, without any regard for how the remaining cynics will react. Toward the end of the letter to his son, Mr. Coates describes an incident in New York City when he was walking with his young son and a woman of another race shoved his son out of the way as if he was not entitled any amount of human decency. Mr. Coates describes becoming agitated (as I am sure we all would) and addressing the woman in a stern manner in reference to what she had done. Other men of the woman’s race saw the conversation and stepped in and threatened to have Mr. Coates arrested for speaking to the woman in such a way. Mr. Coates went on to express his regret to his son on how he had 1) lost his cool and 2) put his son at risk through the confrontation. How many of us would have responded in the same way and been left with similar regrets?

What is most apparent about the restaurant incident is that neither party seems to have any regard for how the other side must be feeling. It is doubtful that the parents of the toddler wanted her to be crying in the restaurant for all that time15)they do not seem like malicious people from what I have seen. To respond the way the restauranteur makes it look as if she thought the parents were trying to drive away her weekend breakfast crowd. Even if she cannot understand why the parents cannot or will not stop the child from crying, would not sympathy and compassion lead to a better outcome? Bring the child a little something to eat to tide her over? How about a crayon and a piece of paper? Upon their arrival, let the parents know that there will be a bit of wait with the breakfast rush so they know what they are getting into? If these options are not functional, and the child is crying in a manner unsuitable to the owner, perhaps pull the parent(s) aside and speak to them respectfully about why the disturbance is unacceptable. To yell at a small child seems to be the worst outcome possible besides violence (as we saw from the facebook post, the restaurateur was not against that option). Not that I am judging folks here, but I cannot fathom why it is necessary to call the small child those horrible names on the facebook. It is not like the family will be returning to the restaurant.

Ah, but what about the parents? Even if it takes a village to raise a child, perhaps the villagers should be permitted to opt in? Just because you are used to the volume of your crying child, it is not fair to assume others are as well. The restaurateur, her employees, and their fellow customers deserve more respect than that. If you do not know what to do, you could always ask for help! Like Mr. Coates spoke of, as parents you are possibly putting your child at unnecessary risk by not addressing the incessant crying. How important could those pancakes possibly be? Worse, instead of trying to understand why the restauranteur would respond in an unconscious manner16)as Eckhart Tolle would put it, you chose to instigate further harm by attacking the restaurant owner on the facebook, which is what triggered the media firestorm. Clearly the parents do not want to behave this way from the comment the mother made to her child after the yelling about not wanting the young girl to grow up to be that way. So is it ok to behave that way online? Now they have turned the incident into a crying shame, for the parents and the child. And for what good? Did shaming the owner bring about the desired result? Or just create a shame cycle?

Is this a product of our friends in the media exploiting conflict for their own profit without regard for the feelings of those involved? Who is to say. No one made the participants publish responses on the facebook and Washington Post, they all made that choice. But we in the media could show more compassion as well. Clear these folks were a bit out of mind during this incident, but by turning the incident into click-bait, we have defined these poor people by their worst behavior of one weekend morning17)it would be a different story if the incident was so-called “news-worthy,” but you will have a difficult time persuading me that breakfast incident in Portland, Maine, affects any of our lives. I do not think any of us want to be defined by our worst actions. Just because we can make a snap judgments does not mean we should.

Nor will you be able to persuade me that if each party showed sympathy and compassion for one another that it would not have led to a more desired result. Anger, shame and humiliation resulted in worse outcome for all involved. It does not have to be this way! Let us follow Mr. Coates’ example and use this incident to stay more conscious and have more sympathy for one another, even if it is not clear why in the moment. Good can come of all this hoopla after all.

 

More reading for your perusal:

NY Post on Patti Labelle

The Washington Post

The USA Today

Footnotes   [ + ]

1. tm pending
2. I have a more personal anecdote. A few weeks ago I flew back to Las Vegas from New York on a late night flight [the equivalent of a red-eye going west]. This couple with at least 4 children did not purchase a seat for their two very young kids, presuming [I assume] that they would hold the child through the 6 hour flight. For whatever reason, the child cried continuously [this is an appropriate time to use the term ‘literally’] for the entire flight. If you do not know many New Yorkers, they are more likely than most to tell you exactly how they feel about a particular set of circumstances. I could see folks starring lasers at the young couple in the back of the plane, then leaning over to the person next to him/her and stage whispering nasty thoughts that I will not repeat here. I was concerned that someone was about to get up, start an altercation, and we would all end up in Denver for the night. Luckily, this did not occur. But still, what were we all supposed to do? I felt both sorry for the young couple and angry at them for not being more responsible. I imagine the customers in the following scenario felt a similar cognitive dissonance. I share this tale only so you know, before I evaluate the behavior of the folks involved in this scenario, that I am certainly not better or superior to them.
3. those familiar with the east coast small breakfast establishments will not find this wait time surprising. Unlike the spacious kitchens in Southern Nevada, there is a finite amount of space that these folks have to cook in, and it takes a bit longer to get your food. Plus, there is no pressure from the casino to get you out of the restaurant and back on the floor
4. it is shame we do not have more of her
5. It is tough for the Post to find hard news to report without an upcoming election..oh wait
6. Source 
7. Alam v. Reno Hilton Corp., 819 F. Supp. 905, 911 Dist. Court, D. Nevada 1993
8. Id.
9. the football player that was suspended for punishing his young son with a switch
10. Id. Citation omitted
11. according to news accounts
12. read more here
13. #Synecdoche
14. Highly recommended. There are too many great parts to elaborate on in a footnote, but I must say that I deeply admire his vulnerability. The book elicited thoughts of Vollmann’s “sleepwalkers” in Europe Central, Ellison’s Invisible Man [thematically], Morrison’s Song of Solomon [again, thematically], and the comment made by David Foster Wallace to David Lipsky in Although Of Course You End Up Becoming Yourself[This is in no way an endorsement of that movie. I am about to paraphrase.] that the real heroes of our society are the ones who will let go of the cynical irony and be genuine, honest, and vulnerable about how they feel, without any regard for how the remaining cynics will react.
15. they do not seem like malicious people from what I have seen
16. as Eckhart Tolle would put it
17. it would be a different story if the incident was so-called “news-worthy,” but you will have a difficult time persuading me that breakfast incident in Portland, Maine, affects any of our lives

The Importance of Alleging All Possible Causes of Action in the Beginning of a Complaint

Although parties are not sure of exactly what happened during an incident that they were injured, it is important to speculate and make all reasonable guesses as to what may have occurred at the time you file your lawsuit. If not, and if only some theories are alleged, you may not be able to add additional theories later on.

 

The Curious Case of Mr. Nutton’s complaint

This happened in the recent case of Nutton v. Sunset Station, Inc.1)131 Nev. Adv. Op. 34.. Mr. Nutton fell while bowling at the casino and broke his knee. When he sued for under a personal injury theory of liability, he alleged in his complaint only that the casino had applied to much oil to the bowling lanes which made the lanes unsafely slippery, causing his injury. Mr. Nutton, who was not wearing bowling shoes at the time, steadfastly defended his shoe choice throughout the whole litigation process. He testified under oath that his choice to wear street shoes had nothing to do with his fall, because it was the oil and not the shoes that caused him to slip. As the case went on, it became rather obvious that Mr. Nutton was wrong about the oil in the lane. No other witnesses noticed oil, security footage showed no one else slipping, and Nutton could not even find an expert witness to state that there was too much oil on the lane. So, in order to save his case, a few months before trial, Mr. Nutton moved to amend his Complaint to allege that it was the negligence of the casino employees in not making him wear the bowling shoes that caused his fall.

Because Nutton had not originally alleged this theory, he needed permission from the Court to amend his complaint. Problem was, that at such a late time, it is difficult to meet standard for amending a pleading. First, if the time for amending pleadings has passed, (which it had), Nutton needed to show “good cause” for the court to allow him to amend. To determine whether good cause for amendment exists, the court looks at whether the complaint could not have been reasonably filed within the deadline despite best efforts of the party. Here, it was clear that this theory could have been alleged earlier since Nutton knew from day one that he was not wearing his bowling shoes. He could have easily added this theory at an earlier time. Next, the court had to decide whether to allow the amendment at all. Under Rule 15, leave to amend is generally given, unless it is clear that allowing a party to amend his complaint would be futile. Here, it was clear from discovery that alleging this new theory would be futile because he had maintained all along that his shoes were not the cause of the fall. So further pursuit of this claim would have just involved dismissal through a motion for summary judgment based on Mr. Nutton’s own testimony. However, the court was hesitant to disallow Mr. Nutton’s amendment based on his contradictions because his contrary statements were an issue for a jury to decide. But, ultimately, the amendment was not allowed because good cause for the delay was not shown.

So, what did we learn?

The court prefers to permit amendments to a complaint to give parties the chance to fully litigate cases on their merits. But, the court wants parties to do so in a timely manner, and if the parties do not, they risk losing the right to make their claims.

Footnotes   [ + ]

Street performers, Las Vegas, regulations

The Proposed Regulations of Las Vegas Street Performers

It is confirmed loyal Clear Counsel Legal Blog reader; the City of Las Vegas is as much of a fan of our humble blog as you are. Only a couple days after we published our expose on obscene street performers in Las Vegas, the city announced  that it will be introducing ordinances to regulate street performers on the Fremont Street Experience.

Following the recent pattern, the city worked with the ACLU of Nevada to ensure that the regulations were not overbearing or violate the 1st Amendment rights of the performers1)Source. In turn, the ACLU has endorsed the ordinances, which one has to imagine, lowers the odds of a §1983 action2)the parlance used by attorneys to describe civil rights lawsuits tried in federal court, 1983 refers to the Section of the U.S. Code where the right of citizens to sue over civil rights violations is located against the city.3)I love when folks work together!

 

But what do these ordinances for street performers say?

A hat tip to Sergio Avila4)of Channel 3 for tweeting out a picture of the ordinances soon after the announcement. You can see the picture below.

https://twitter.com/SergioNews3LV/status/626424016350281729/photo/1

 

The city published a summary of the new ordinances on its tumblr page5)What an age we are living in.  Here are some of the highlights:

  • The city will designate 38 performance zones for performers to use between 3p.m. and 2a.m.. The little material that is available is silent as to how performance spaces are regulated between 2a.m. and 3p.m.. I am happy to speculate, if that tickles your fancy. It will either be that no performances are allowed6)that seems like a like quite a bit of pressure on Metro to keep a fairly large area clear of performers, or during the off-hours, Fremont will revert back to the wild-west of street performances, as it is currently. The performance spaces are 6 feet each in diameter, 40 feet apart from one another.
  • The performers must register with the City of Las Vegas or with the Fremont Street Experience. They do not plan on charging a fee and the registration will be good for 180 days. The city should consider charging a fee, even if nominal7)it does not have to be $37 like Santa Monica, even $5 or $10 will do as a means to keep the most disreputable folks away.
  • There is a prohibition against open flames, flying projectiles, and sitting/laying on the ground.

If you take a quick glance at the pictured tweeted out by Mr. Avila, you will see that the city plans on adopting the noise regulations used by the Santa Monica Promenade, yet they do not make explicit which regulations they are referring to.  Not to fret loyal reader! I dug them up for you to see:

 

6.116.030 Allowable noise levels on Promenade and Transit Mall.

Individuals and businesses shall comply with all of the following noise levels and standards of this Section:

(a) The following maximum noise level (Lmax) shall apply on the Third Street Promenade and the Transit Mall during the times indicated:

Time Maximum Noise Level (Lmax)

Mon-Fri 9 a.m.-7:00 p.m. 75 dBA*/97 dBA**

Mon-Thurs 7 p.m.-10:30 p.m. 85 dBA*/107 dBA**

Friday 7 p.m.-midnight 85 dBA*/107 dBA**

Saturday 9 a.m.-midnight 85 dBA*/107 dBA**

Sunday 9 a.m.-10:30 p.m. 85 dBA*/107 dBA**

Sat/Sun 12:01 a.m.-1:30 a.m. 65 BA*/87 dBA**

* When measured at a minimum distance of twenty-five feet from the source of the noise.

** When measured at a minimum distance of one foot from the source of the noise.

At all other times, the City-wide noise standards as reflected in Chapter 4 of this Code shall apply except the Lmax standard shall provide the basis for measuring the dBA level.

(b) No person or group shall create any noise, or allow the creation of any noise on the Third Street Promenade or Transit Mall which causes the noise level to exceed the Lmax standard established in this Section.

(c) No business on the Third Street Promenade shall utilize any speaker or sound reproduction system at a volume that can be heard inside the premises of another building or structure while the doors and windows to the premises are closed.

(d) No person shall interfere with or resist the taking of any noise measurement authorized by this Section.

(e) No person shall use a speaker on a public sidewalk, street, or right-of-way unless it is placed on the ground and is no more than three feet in height.

(f) Amplified sound shall not be unreasonably loud, raucous, jarring or disturbing to persons of normal sensitiveness within the area of audibility. (Added by Ord. No. 1888CCS § 6, adopted 10/28/97; amended by Ord. No. 2009CCS § 3, adopted 5/22/01; Ord. No. 2047CCS § 8, adopted 7/9/02; Ord. No. 2075CCS § 6, adopted 5-13-03; Ord. No. 2145CCS § 5, adopted 11/23/04; Ord. No. 2337CCS § 5, adopted 12/14/10)

 

What’s that? You cannot eyeball8)earball? 75 dBA? Multiple sources state that a passenger car passing you from 25 feet away will do so at a volume of 77 dBA9)Source. Decibel levels are measured using logarithms10)do not click away! I promise there will be no more math!, so from a starting point of 70 dBA, a noise measured at 80 dBA is twice is loud, relatively, and a noise measured at 60 dBA is half as loud as 70 dBA.

When the statement reads “to match Promenade rules,” one must presume all of the rules or they would have used a different verb. Will no noise be permitted afrer 10:30p.m. Monday-Thursday? What about after 1:30a.m. on the weekends? Our city stays up a bit later than most, I would be surprised if they used these time limits.

 

What about the obscenity issue in reference to street performers?

Last time, we talked extensively about the difficulties in regulating the obscene acts of street performers in Las Vegas. Nothing I have found regarding these new ordinances addresses this pressing issue.  Just because the issue is difficult does not mean it should be ignored. It sounds11)from afar like the city of Las Vegas and the ACLU have a nice working relationship; now would be the time to try to address these problems. Granted, the noise issue on Fremont Street needed to be addressed, however, it is the lewdness of a few of the Fremont street performers that would be far more likely to perturb a new tourist into not returning. I am not saying that we need the same social norms applied when folks visit a European church or anything12)covered shoulders, no hats, etc., but there has to be a way to enforce a modicum of decency in the areas where the public is free to roam.

As the Downtown Las Vegas project continues to try to attract new business to the district, this type of obscenity hurts the cause. Why would a company want to relocate to an area where its more conservative employees are uncomfortable to walk the neighborhood? As I have said previously, the lewd street performers also bring a bad name to the rest of the folks working hard down there. There is no reason the city should not continue to provide adult entertainment, but there is a proper time and space for such activity.

I commend the city of Las Vegas for taking on this tough issue of regulating street performers; let us hope it is only the first step. I look forward to hearing what the City Counsel has to say at the 2 September meeting.

 

Watch the press conference here.

Footnotes   [ + ]

1. Source
2. the parlance used by attorneys to describe civil rights lawsuits tried in federal court, 1983 refers to the Section of the U.S. Code where the right of citizens to sue over civil rights violations is located
3. I love when folks work together!
4. of Channel 3
5. What an age we are living in
6. that seems like a like quite a bit of pressure on Metro to keep a fairly large area clear of performers
7. it does not have to be $37 like Santa Monica, even $5 or $10 will do
8. earball?
9. Source
10. do not click away! I promise there will be no more math!
11. from afar
12. covered shoulders, no hats, etc.
spending for legal issues

Paying Fees after an Offer of Judgment When Someone Else is Footing the Bill

Generally, Nevada law encourages settlement through the offer of judgment rules. These rules dictate that if someone makes an offer to settle a case that is rejected, and that rejecting party is awarded less at trial, the rejecting party has to pay the offering party’s attorneys’ fees incurred after the offer. But, whether this rule applies when a third party pays someone’s attorneys’ fees had not been decided by the Nevada Supreme Court until the recent case of Logan v. Abe, et al.((131 Nev. Adv. Op. 31))

In Logan, the Plaintiff sued the Defendants after he was shot at a hotel owned by Defendants. Prior to trial, Defendants offered Plaintiff $55,000.00 to settle the case, which the Plaintiff rejected. At trial, the Plaintiff was awarded less than $55,000.00 by the jury. As such, the Defendant was entitled to an award of attorneys’ fees and costs incurred since pursuant to NRS 17.115 and NRCP 68. When the Defendant moved for their attorneys’ fees to be paid, the Plaintiff refused to do so, arguing that the Defendant did not incur any attorneys’ fees since his insurance company paid for the defense. Essentially, the Plaintiffs argued that the insurance company, and not the Defendants, was the rightful party to pursue repayment of attorneys’ fees.

 

Did the Logan Court say the Plaintiff has to pay the fees?

The Court entertained the Plaintiff’s argument because technically the Defendants had not “incurred” any attorneys’ fees and costs since they were not obligated to pay the attorneys’ fees incurred by their insurance company. However, the Court ultimately rejected Plaintiff’s argument by finding that an expense is still incurred even if someone else is paying for it. The Court cited to other states who have analyzed the issue and found that the arrangement between a party and its defending insurance company is irrelevant to the issue of repayment of attorneys’ fees. The Court noted that it would extend the offer of judgment principles to fees paid by a third party because in actuality the Defendants would have had to pay their attorneys’ fees and costs had the insurance company not paid it. In other words, the Plaintiff cannot avoid payment of fees for failing to improve upon the offer of judgment simply because someone is paying for the Defendants’ defense. Someone has to pay the expenses, so the analysis is the same regardless of who foots the bill.

This finding seems to fit well within the already existing laws of Nevada. Since so many lawsuits are defended by insurance companies, offers of judgment and settlement would be greatly stifled if the rules did not apply to parties defended by insurers. Further, even if someone pays legal fees on your behalf, you are still the one with the attorney-client relationship. The attorney owes you all of the special duties that come with the relationship, such as confidentiality, and this does not change just because someone pays your legal expenses.

If you are involved in a lawsuit and receive an offer of judgment, you should always consider whether rejection is the best thing in light of the potential for paying the other side’s attorneys’ fees and costs down the road if you do not obtain a better settlement at trial.

For advice on offers of judgment and other litigation related matters, schedule a free consultation today.

 

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