Articles Tagged with “sacramento business law attorney”

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Kristina Michelle Reed has been selected to the Northern California Super Lawyers list for the 4th year in a row. Each year, no more than five percent of the lawyers in the state are selected to receive this honor.

Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area. Each candidate is evaluated on 12 indicators of peer recognition and professional achievement.

Bar associations and courts across the country have recognized the legitimacy of the Super Lawyers selection process. Most recently, the New Jersey Supreme Court upheld the findings of a Special Master assigned by the court to, among other things, examine the details of the Super Lawyers’ process. In his July 2008 report, the Special Master lauded Super Lawyers’ lawyer-rating process, stating:

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Normally corporate bylaws are drafted during the business formation process. However, sometimes corporations amend their bylaws. The question then becomes one of whether amendments to the corporate bylaws can or should be applied retroactively. When these amendments would impair previously accrued claims, both California and Delaware courts agree that the answer to this question is “no.”

California Court Refuses to Apply Bylaws that would Impair an Accrued Claim Retroactively

A California court has refused to apply bylaws that would impair an accrued claim retroactively. The case is Cobb v. Ironwood Country Club. In this case Ironwood’s board of directors adopted a bylaw that required binding arbitration of disputes. Ironwood did not pass this bylaw until four months after past and current members of the country club had already filed a lawsuit dealing with an alleged breach of an agreement by Ironwood. Ironwood then argued that, because the members had agreed to follow the bylaws, including a provision in the bylaws that allowed their amendment, that the members and former members were bound by the new bylaw that mandated the arbitration. The trial court and the Court of Appeal disagreed with Ironwood’s assessment.

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When foreign corporations do business in California they need to comply with California laws governing such corporations. However, California’s law is not the only law that applies to a foreign corporation. Such corporations also have to consider laws in their native states, as a recent case from Delaware demonstrates. This is why it is important for any such business to consult with an experienced business law attorney.

Delaware Rules its Courts Have Authority to Impose Specific Condition on Books and Records Inspection

In United Technologies Corp. v. Treppel, the Delaware Supreme Court held that a Delaware court has the authority to impose a specific condition on a books and records inspection under the Delaware General Corporation Law (DGCL). The condition in question in that case was one that would have said that “any claim, dispute, controversy or causes of action . . . arising out of, relating to, involving or in connection with” the inspection be brought in a Delaware court.

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For many of our clients, determining whether they do business in California is simple, because they either hold substantial real estate here or engage in the majority of their business dealings here. But whether or not your business is doing business in California is not that simple of a question. So we are going to take this opportunity to address some issues that could come up for those out-of-state businesses doing business in California.

You May be Doing Business in California Without Even Knowing

At least, that is the position of California’s Franchise Tax Board. As an example, consider a company called Swart Enterprises that runs a farm in Kansas. The company has no physical presence in California, and it owns no property in California. It is a Kansas farm company. However, the Franchise Tax Board claimed that Swart was doing business in California simply because it passively held an investment in a manager-managed California LLC. And the board went on to tax Swart accordingly. Swart filed suit, and the trial court ultimately agreed with the Kansas company, but it remains to be seen what might happen on appeal.

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The California Assembly has passed a law that will change the form and wording of certificates of acknowledgment, jurat and proof of execution. A jurat is the clause at the bottom of an affidavit that shows when, where, and before whom the affiant swore an oath or made an affirmation. These requirements will affect the format of documents used in real estate transactions as well as in some business transactions.

What is the New Law and What Does it Require?

The bill passed by the assembly is SB 1050 which will amend Sections 1189 and 1195 of the Civil Code and Section 8202 of the Government Code. It was approved by the governor back on August 15, 2014, and will take effect on January 1, 2015. California law allows authorized notaries public to execute acknowledgment or proof of execution of an instrument and jurats attached to sworn affidavits. Up until now the state required that the certificate of acknowledgment, proof of execution, or jurat be in a specific form. Under the new law, that form will change. Now a legible notice will have to be included in an enclosed box on those documents. That box will have to state that the acknowledgment, proof of execution, or jurat verifies only the identity of the individual who signed the document as opposed to verifying the truthfulness, accuracy, or validity of the document. The law also provides a sample of the required boxed notice. The sample is just an example and is not the only format of the boxed notice that would comply with the law.

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Earlier this month, in Altavion, Inc. v. Konica Minolta Systems Laboratory, Inc., The California Court of Appeals held that patentable ideas that are kept secret can be protected by trade secret law. This decision clarifies an area of law that was muddied in 2010 by the court’s decision in Silvaco Data Systems v. Intel Corp., which seemed to indicate that trade secret law did not protect such ideas. This seeming change in the law is a good reason for California businesses, both small and large, to contact a licensed attorney who practices business and commercial law.

The Court’s opinion in Altavion starts by explaining the purpose of trade protection, that it “promotes the sharing of knowledge, and the efficient operation of industry by permitting the individual inventor to reap the rewards of his labor by contracting with a company large enough to develop and exploit it.” The basic idea is that those who come up with ideas should be able to pitch their ideas to companies without fear of the company using the idea without compensating the person who came up with it

Altavion invented a process for creating self-authenticating documents through the use of barcodes that contain encrypted data about the original documents. Konica Minolta is a research subsidiary of a company that manufactures multifunction printers. The two companies entered into negotiations for Konica Minolta to use Altavion’s newly developed technology. Of course, in those negotiations, Altavion had to disclose details about the technology, so both sides agreed to a nondisclosure agreement. After negotiations proved unsuccessful, Altavion learned that Konica Minolta had filed for patents encompassing Altavion’s technology.

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A recent federal court ruling offers a good reminder of the many unique claims that may be made against employers by their unhappy employees. All Sacramento business owners–from established enterprises to start ups–should be familiar with their risks before trouble arises.

The Situation

Shaw Rahman was employed by Crystal Equation, a staffing company that assigned him to a job with AT&T. Rahman signed more than one document that specifically described his employment as “at-will,” and stated his employment could be terminated at any time.

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A typical commercial lease in California requires a commercial tenant to maintain and repair the leased property and not commit “waste.” For legal purposes, waste is defined as permanent harm done to real property by a person or persons in legal possession of that property, such that the property’s value is diminished. If the tenant breaches the maintenance requirement, the landlord may provide a notice of default. If the tenant does not cure the breach, the landlord may terminate the lease and sue to recover the cost of repairs for damage to the property. But, what happens if the tenant does not cure the breach, and the landlord does not terminate the lease or the lease has not expired? Can the landlord sue to collect the cost of repairs for damage to the property? A recent decision by the California Court of Appeals for the Fourth District answers this question.

In Avalon Pacific-Santa Ana v. HD Supply Repair & Remodel, 192 Cal. App. 4th 1183 (2011), the Appeals Court held that a commercial landlord could not recover from a tenant the cost of repairs for damages where the parties continued to perform under their lease agreement, which had neither expired nor been terminated. The facts of the case are instructive.

HD Supply Repair & Remodel leased vacant warehouse and office space from Avalon Pacific-Santa Ana, intending to convert the space into a retail facility. The 10-year lease was set to expire in 2017, but included an option to extend. After demolishing the office space, HD Supply stopped renovations because of the economic downturn. HD Supply unsuccessfully attempted to sublease the property. The property eventually fell into disrepair, was vandalized, burglarized, and became home to vagrants. Avalon sued HD Supply for breach of the maintenance and repair obligations of the lease and for waste; however, Avalon never terminated the lease and HD Supply continued to pay rent of $50,000 per month. The case proceeded to trial, where a jury found in favor of Avalon, awarding $677,000 in damages for breach of the lease and $561,000 in damages for waste.

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The startup community has been hearing a lot lately about net neutrality. What is net neutrality? Why is it making headlines? Why should should startups be worried? In the following paragraphs, we will address these questions.

Net neutrality, also known as network neutrality or Internet neutrality, is the principle claiming that Internet service providers (ISPs) and government should treat all data on the Internet equally, meaning that Internet users should be able to access any web content they choose and use any applications they want, without their ISP imposing limitations or restrictions. Net neutrality regulations were first approved by the U.S. Federal Communications Commission (FCC) in December 2010. In January 2011, telecommunications giant Verizon filed suit against the FCC, challenging the net neutrality rules. In particular, Verizon argued that the FCC does not have enforcement authority.

Net neutrality is making headlines because, last month, in Verizon v. FCC, No. 11-1355 (D.C. Cir.), the U.S. Court of Appeals for the District of Columbia Circuit finally issued a ruling in the case, striking down the FCC’s net neutrality rules. The court ruled that because ISPs are not classified as traditional telecommunications services, or “common carriers,” the FCC cannot impose on them its anti-discriminatory regulations. The FCC has decided not to appeal the ruling; instead, the agency will examine the possibility of drafting new net neutrality rules. Yesterday, The New York Times reported that the FCC already has unveiled a new proposal that would “discourage Internet service providers from charging companies to stream their movies, music and other content through a faster express lane.” Although the FCC has not written the formal rules, it has begun accepting public comments on its newest proposal.

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This year, California small businesses and the legal community will be keeping a close eye on how the State Supreme Court rules on major disputes over arbitration agreements. An arbitration agreement is a written agreement between two parties, designating an arbitrator — instead of a court of law — to resolve any disputes that may arise out of their business relationship. Companies often require employees to sign arbitration agreements as a means of limiting the costs associated with any disputes that may arise out of the employment relationship.

Legality and History of Arbitration Agreements

As far as the legality of arbitration agreements, the Federal Arbitration Act of 1925 (FAA) provides that arbitration agreements are “valid, irrevocable and enforceable, and entitled to the same respect as other contracts.” Despite this, several years ago, the California Supreme Court struck down an arbitration clause in a consumer agreement because the arbitration agreement did not permit the consumer to bring a class action arbitration. In a 5-4 decision, the United States Supreme Court reversed that ruling, holding that state law cannot interfere with an arbitration agreement’s elimination of the class action mechanism to resolve disputes. In AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), the Court held that, “[r]equiring the availability of classwide arbitration interferes with fundamental attributes of arbitration…. We find it hard to believe that defendants would bet the company with no effective means of review, and even harder to believe Congress would have intended to allow courts to force such a decision.” Accordingly, the Court found that the FAA preempts California state law and ruled that states may not enact special rules that disfavor arbitration, even in the interest of public policy. The decision effectively made it much more difficult for employees to file employment-related class actions, and led to California courts issuing very conflicting and often confusing decisions in employment cases involving arbitration agreements.