Free Enterprise - The FindLaw Small Business Law Blog

June 2010 Archives

Chef Susan Spicer Brings Class Action Against BP

With the oil spill now devastating businesses all over the Gulf Coast, BP has repeatedly said it would make good on all legitimate claims of loss. Here is one more to add to BP's list. Famed New Orleans Chef Susan Spicer is suing the oil company for losses to her restaurant business due to the spill. Although she is a highly regarded and well-known chef, Ms. Spicer is also a small business owner who, like the fisherman and others who earn a living from the sea in Louisiana, has seen her business decline in the wake of the oil contamination.

According to a report by Reuters, Spicer is suing BP as the owner of her restaurant, Bayona, in New Orleans' French Quarter, and is also seeking class-action status on behalf of restaurants and others in the seafood industry. Spicer's suit states, "Much of plaintiff's business is based on the unique quality of Louisiana seafood, as well as the chain of delivery of that resource from the initial harvester (be it fisherman, oyster grower or shrimper). Because this chain of delivery cannot be maintained, plaintiff's business has been, and continues to be, materially damaged."

.XXX Domain Moves Closer to Approval

Since the year 2000, proponents of creating an .xxx Internet domain have been lobbying for the creation of a separate domain for adult entertainment. They say it makes sense to have a clear domain category for pornography and adult entertainment. Critics counter that it will be costly, confusing and will create difficult technical issues about how to categories and define pornography.

Last Friday, the Internet Corporation for Assigned Names and Numbers or “ICANN,” seemingly put to rest a decade long dispute over whether porn sites should have their own top level domain, which is the technical terms for the end name of a website, such as .com, .net or soon to be, .xxx.

Business Credit Cards Exempted from CARD Act

President Obama signed the Credit Card Accountability Responsibility and Disclosure Act of 2009 or "CARD Act" on May 22, 2009. The legislation aims, " establish fair and transparent practices relating to the extension of credit under an open end consumer credit plan..."

After the passage of the CARD Act, consumers gained a number of protections regarding how the credit card companies operate. Gone are the days of two-cycle billing and APR increases for being one day late on a payment. Now, with a few exceptions, credit card companies cannot raise interest rates on existing balances, and they must provide additional advance notice on all hikes. Credit card companies must also adhere to fee restrictions and set up a payment allocation that is more fair and allow more time to pay.

What Is a Fictitious Business Name?

The term “Fictitious Business” gets thrown around quite frequently. While some might mistake it for a shady business that is “made up,” it actually is a legal term for a form of registration required of businesses in certain situations. So how does one know whether they need to file a fictitious business statement?

The simplest way of explaining how to determine if one needs to file a fictitious business statement is to ask whether they plan on running the business under an assumed name. If so, then they will need to follow state fictitious business statement laws. So, if the name is John Smith and he wants to start a business called “Super Duper Widgets,” he is going to need to file a fictitious business statement or DBA (“doing business as”) with the county clerk’s office. However, if he wants to start a business called John Smith’s Widgets, he would not need to file a fictitious business statement, because the business has his name in it already.

Things get a bit more tricky when you do not have your entire name in the business name. For example, what about Smith Widgets, or JS Widgets?

New Bill Could Mean Free PCs for Small Businesses

Senators John Kerry of Massachusetts and Mary Landrieu of Louisiana have introduced a bill to help small businesses that seek broadband internet access and other new technology. The bill is called the "Small Business Broadband and Emerging Technology Enhancement Act of 2010," S. 3506. It addresses many of the recommendations from the FCC's March 2010 report entitled "Connecting America: The National Broadband Plan" which calls for increased broadband access for rural small businesses.

According to a press release by the U.S. Senate Committee on Small Business & Entrepreneurship, the legislation would:

How to Apply for SBA Disaster Loans

Has your small business been harmed due to the BP oil spill? Did you know that the U.S. Small Business Administration offers disaster loans to assist distressed businesses? Business Owners can apply for SBA disaster loans at the SBA website:  Businesses may also apply by mail.  The interest rates are three percent for non-profit organizations and four percent for for-profit businesses. Loan amounts and terms are based on each applicant's financial condition. The deadline to return economic injury applications is February 14, 2011.

The disaster loans exist because most people and small businesses cannot afford to pay for disaster repairs out-of-pocket. Anyone with damage to their home or business which is the result of a declared disaster can apply for disaster loan assistance. Businesses can apply for help due to damage to their real estate, business contents and economic losses. 

Congress Takes Final Swipe at Swipe Fees

On Monday, June 21, the Senate and House came to a compromise over one hotly contested portion of the finance reform bill. Members of both houses announced yesterday an agreement to include, in the final version of the bill, limits on the fees that banks can charge merchants when their customers complete a debit card transaction. These inter-change fees or "swipe fees" are a major cost for the nation's merchants, from Walmart, to the corner Mom & Pop grocery.

According to the Associated Press report, these fees require merchants to pay about 1 to 2 percent of each debit card transaction (far more than the fee on a paper check). The money then goes to Visa, Mastercard and the banks, with the banks receiving the lion's share. Under the proposed compromise, the fees will now be limited to what will be termed "reasonable and proportional" to the cost to the banks. The Federal Reserve will be charged with deciding what exactly "reasonable and proportional" means.

Small Business Lending Fund Act Passes House

The House passed the Small Business Lending Fund Act (SBLF) last week by a vote of 241-182. The legislation, H.R. 5297, is designed to provide an incentive for community banks to increase small-business lending. An increase of small-business lending aids small businesses by increasing their access to capital. The bill will now be taken up by the Senate, where it faces a questionable future.

To get access to the new lending, banks would submit a plan for how the plan to use the infusion of captial. The legislation is designed with incentives to get banks to lend to small businesses. However the prospect of SBLF passing the Senate remains slim. Senate Republicans have branded SBLF as another bank bailout, "TARP Jr.," according to Representative Scott Grarrett of New Jersey. One point of contention: the bill does not require banks to lend to small businesses, it only creates an incentive.

Trademark Infringement: Vogue v. Victoria Small Biz

The world of fashion is no place for the delicate, no matter what those runway models may look like. If you cross someone in the business of fashion, they will not hesitate to put a stiletto through you; don't doubt it for a minute. Remember the case of the House of Balenciaga suing shoe maker Steve Madden for copying its (allegedly ugly) Lego heels? The current case throws an even sharper point.

According to a report by The Vancouver Sun, fashion bible Vogue sent a cease and desist letter to a fledging charity in Victoria B.C., for alleged trademark infringement. If you are a die-hard fashionista, you will recall that this past September Vogue magazine launched its "Fashion's Night Out" in New York City. This evening of fashion fun, frolic and big-time spending was a concerted effort to help lift that sector of the economy out of the doldrums. It must have worked fairly well, because it seems Vogue is planning a repeat this year which will cover cities from "Brooklyn to Brazil." Well, Brazil isn't a city, but it sounds good.

House Passes Small Business Jobs Tax Relief Act

A small business jobs bill was passed by the house this Tuesday and is now on its way to the Senate. The Small Business Jobs Tax Relief Act of 2010, was sponsored by Rep. Sander Levin of Michigan. It passed the house by a vote of 247 to 170, largely by house Democrats on party lines. The fate of the bill in the Senate is unknown, but it is likely to be hotly contested by Senate Republicans.

As discussed by AccountingWeb, several aspects of the bill are worth noting:

1)  The bill has a tax provision that is designed to encourage investment in small businesses and to enhance business cash flow in the early stages of the business. The provision is designed to benefit C corporations with gross assets that are less than $50 million dollars.

Health Care Reform May Lead to End of Current Plans

Small business owners are concerned that due to the health care reform, the health insurance plans most small businesses currently use will no longer be offered once there is a transition to the new system.

The Obama Administration believes it can remedy this issue. The White House has assured everyone that they will be able to keep their current plans, though they may wish to transition to new plans with greater protections. In the meantime, the administration is currently looking into exemptions for some small business insurance plans.  

Small Businesses Should Be Proactive on Trademarks

For small business owners, the concept of trademarks and branding can be confusing. Many worry that the expense will be prohibitive, and instead focus on getting their business off the ground. Owners assume that they will be better able to deal with the issue down the road, perhaps after they turn a profit. But trademark experts say that this can be a major mistake.

"The time to think about a brand is absolutely before the brand gets traction," said Anthony Biller, a partner with Coats & Bennett in Raleigh, N.C., and chairman of the American Bar Association's Intellectual Property Law Trademark Committee. 

Bernanke Encourages Loans to Small Businesses

As the economy slowly shows signs of recovery, many wonder what steps should be taken in order to speed things up. While some see a bright future ahead, other economists are concerned about a double dip recession. 

In order to reduce unemployment and spur economic recovery, banks must increase loans to small businesses, Ben Bernanke, the Federal Reserve Chairman said this week, in a meeting at the Federal Reserve Bank in Detroit. Bernanke stated that banks must increase the flow of capital to small businesses in order to get the country back on track and improve lagging growth.

Federal Reserve Discusses CARD Act, Credit Card Reform

Last year when congress passed the CARD act, they did not include small businesses in the regulations to protect consumers as they were unsure how the regulations would affect credit price and availability of credit to small businesses. Before they made a decision, they asked the Federal Reserve to analyze the issue. Their report came back this week. However, it was not very conclusive.

The CARD act protects consumers by requiring credit card issuers to adhere to stricter disclosure requirements about the terms of the account. It also places limitations on issuers' actual practices, what the Federal Reserve calls "substantive" protections, such as the ability to change interest rates. 

Small Businesses Fear Financial Reform Amendment

Both Consumer advocates and small businesses are concerned about a significant amendment that was included in the Senate financial reform bill. The amendment, created by Senator Olympia Snowe, was intended to benefit small businesses, but if it clears the House, it may end up hurting them. 

The amendment would require the Consumer Financial Protection Bureau to to analyze the costs created by the regulation of credit firms. This would result in the CFPB being subject to the rules of the Small Business Regulatory Enforcement Fairness Act. Under the Act, regulations expected to have a significant economic impact on small entities first require a panel of government officials to convene and collect the opinions of those small business affected.

Social Media Complaints, Defamation & SLAPP Suits

Today, when a person is upset with the service they receive from a business, they take to sites like Yelp, Twitter and Facebook to express themselves. Such social networks are an easy place to post reviews and tips, as well as to vent frustration. 

However, these sites and others have led to some interesting legal situations. Take Justin Kurtz, a Michigan college student who received a bill for $118 to retrieve his car after it was towed, despite him having a permit to park in the lot. The local towing company, T&J towing, contends that the permit was not visible.