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Gift Cards: The Updated Chart is Still Free

Just more than a year ago, a Legal Bytes post entitled “Gift Cards: The Chart is Free. It’s Our Experience You Pay For.” gave our readers and visitors a handy chart that listed and briefly summarized the key legal requirements applicable to Gift Cards – those payment instruments that are increasingly blurred with prepaid debit cards, stored value cards, smart or chip-cards, reward cards, discount certificates, and traditional credit, charge and debit cards. Now those of you with gift card programs – or who are thinking about gift card programs – already know there are various state laws and regulations that require certain disclosures, and impose certain restrictions on expiration dates and on the imposition of inactivity fees, not to mention the applicability of escheat and abandoned property laws that may apply on a state-by-state basis.

If you have been coming back to Legal Bytes to keep up with this and other developments in the law of Advertising Technology & Media (“ATM”), you also know that Keri Bruce in Rimon’s ATM practice group posted a report entitled Gift Cards Tag Along with Credit Card Legislation, noting that federal legislative and regulatory requirements will soon apply to gift cards.

Well, with one legislative delay granted by Congress with respect to certain requirements that apply to gift cards issued before April 1, 2010, the law and corresponding regulations have just now gone into effect.  Time to update the chart for you loyal readers and to entice new visitors to subscribe via email or RSS Feed to keep up-to-date. As before, the US Gift Card Statutory Chart (Updated) is provided at no cost or obligation. As we have said previously, it’s our experience and skill you pay for, not our ongoing research services in areas where we already remain current for a wide variety of clients.

First, the obligatory disclaimers. No chart can be comprehensive or substitute for actually knowing the statutes and regulations. It is a guide, not an authority, and you should not rely on it for anything other than as a roadmap to proper and thorough legal counsel based on the source material itself. That said, I do not wish to trivialize or minimize its value – it represents the distillation of years and hours of work and effort – a special thanks to Keri Bruce for helping to update it.

We point out, as we did previously, that the chart (with one new and notable exception – keep reading) doesn’t cover state escheat, abandoned or unclaimed property laws that may apply to the “breakage” remaining on unused gift cards. It also does not cover the various requirements and obligations applicable to money transmitters under state law. But it does cover disclosure requirements and expiration date restrictions, as well as various exclusions and exemptions; and, of course, it provides citations to the relevant laws in each jurisdiction. Now about that new and notable exception: the chart does make reference to a recent law enacted in New Jersey and applicable to abandoned property (escheat), which effectively alters the tenor and scope of the New Jersey gift card law. Because of the complexity, Legal Bytes has created a separate post that describes that law in greater detail (see, Gift Cards in New Jersey: It’s Complicated).

The chart provides a handy citation and reference tool for the various gift card and gift certificate laws in the 50 states in the United States and the District of Columbia, and now includes a description of the new federal U.S. requirements that have just gone into effect as a result of the Credit Card Act of 2009. In addition, if you have an interest in this area, you really should go back and read (or re-read) the prior Legal Bytes’ posting since it provides valuable context as online loyalty and promotional programs have proliferated, and as gift and payment instruments are increasingly being scrutinized by regulators and legislators and dealt with by the courts. As this update evidences, the law is dynamically changing, evolving and being re-configured to reflect our inter-connected, digital information age. Whether online or offline, this is a sophisticated regulated category of financial payment services and products; in a complex retail, promotional, loyalty-reward consumer environment; with a large number of possible variations; offered and used across multiple jurisdictions; governed by an even larger number of evolving state (and now federal) laws and regulations – and we haven’t even scratched the surface internationally.

So if you are wondering why we give the chart away for free – don’t wonder too long. If you are in this business and you need help from lawyers who know this area and can provide experienced, practical counsel, contact Joseph I. (“Joe”) Rosenbaum or Keri Bruce, or your favorite Rimon lawyer, all of whom will be happy to help.

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Gift Cards in New Jersey: It’s Complicated!

As we mention in our post entitled Gift Cards: The Updated Chart is Still Free, a  New Jersey Bill (A3002), effective July 1, 2010, has now amended and expanded New Jersey’s Unclaimed Property Act (the "Act") to apply to stored value cards.  But don’t be lulled into a false sense of security. The Act, as amended, defines "stored value card" as any "record that evidences a promise, made for monetary or other consideration, by the issuer or seller of the record that the owner of the record will be provided, solely or a combination of, merchandise, services, or cash in the value shown in the record, which is pre-funded and the value of which is reduced upon each redemption.  The term ‘stored value card’ includes, but is not limited to the following items: paper gift certificates, records that contain a microprocessor chip, magnetic stripe or other means for the storage of information, gift cards, electronic gift cards, rebate cards, stored-value cards or certificates, store cards, and similar records or cards."

As it relates to unclaimed property and as amended, the Act includes a presumption of abandonment after two years of inactivity and a presumption that if the issuer does not have the address of the purchaser, the address is deemed to be New Jersey, if the card was purchased in New Jersey.  We leave to your assessment and future court battles whether this violates the Supreme Court’s decision in Texas v. New Jersey, 379 U.S. 674 (1965), which rejected a transactional priority rule for reporting unclaimed property.

What is curious about the amended Act is that, although it is an "unclaimed property" statute, it now contains significant stored value card (e.g., gift card) provisions.  The Act prohibits imposition of dormancy fees and, presented here in simplified summary form, exempts stored value cards issued: (i) under a promotional, loyalty or charitable program for which no monetary or other consideration has been tendered; (ii) by an issuer (or "family" of issuers) that sold stored value cards with an aggregate face value in the previous year of $250,000 or less; and (iii) any business or class of businesses that the State Treasurer decides to exempt (see section 5(f) of AB 3002).

But what is most perplexing about the amended Act is that it cross-references New Jersey’s current Gift Card Law (see New Jersey Attorney General – Gift Cards & Gift Certificates), and provides that only a stored value card that is exempt from the Unclaimed Property Act shall be considered a gift card or gift certificate for purposes of the Gift Card Law.  Now if you want the analysis of what the original Gift Card Act covers and how the "exemption" essentially neuters much of that definition, replacing it with the new "stored value" reference – well you are going to have to call Keri Bruce or me.  Bottom line, the amended Act effectively and significantly alters the definition of a gift card and gift certificate under New Jersey law.

More significantly, this inter-relationship between New Jersey’s amended Unclaimed Property Act and its Gift Card Law demonstrates the complexity of developing a legally compliant gift card and gift certificate program.  Now, in the United States at least, an issuer (and sometimes the seller) must comply with the U.S. Federal Credit Card Act of 2009; the gift card and gift certificate laws on the state level; the applicable escheat, abandoned or unclaimed property laws; and an increasingly complex and often perplexing overlap between one or more of these statutes, sometimes, as is the case in New Jersey, including complexities within the same state.

Need help?  Feel free to contact Keri Bruce or Joseph I. ("Joe") Rosenbaum, or the Rimon lawyer with whom you regularly work.  We are all happy to help.

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What Every Litigant Should Know About Social Media Channels

On September 8, 2010, from 12 p.m. to 2 p.m. (ET), Joseph I. ("Joe") Rosenbaum will be presenting on social media for a web cast entitled "What Every Litigant Should Know About Social Media Channels: Their Impact on Discovery and at Trial." 

This program will address social media channels from several key perspectives for litigants: (1) understanding what social media channels are and what information they contain; (2) how social media channels figure in the discovery process, as to the preservation, collection and production of the information they contain; (3) what courts have held regarding the admissibility of evidence from social media sites at trial; and (4) what types of policies and procedures organizations should adopt around social media tools. As part of the overall presentation, Joe’s discussion will center around understanding the distinctions that online social media present, looking at the issues of social media in the judicial process (e.g., can judges have "friends"?), and corporate policies designed to guide employees and prevent litigation disasters before they occur.

The Knowledge Congress is producing the event and Rimon has secured a special discount of $50 off the registration fee for this program. Click to Register and enter code mith6874 for your discount.

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Viacom Appeals Google/YouTube Ruling

Just over a month ago, Legal Bytes reported [Federal Court Awards YouTube Summary Judgment in Viacom Copyright Infringement Case] that a federal court ruled in favor of YouTube and Google in the billion-dollar case brought by Viacom on a summary judgment motion. The court decided YouTube is protected against claims of copyright infringement by the safe harbor provisions of the Digital Millennium Copyright Act (the “DMCA”).

We also told you that we haven’t heard the last of this case, since immediately after the ruling was announced, Michael Fricklas, Viacom Executive Vice President, General Counsel & Secretary, noted, “This case has always been about whether intentional theft of copyrighted works is permitted under existing law and we always knew that the critical underlying issue would need to be addressed by courts at the appellate levels. Today’s decision accelerates our opportunity to do so.”

Consistent with that announcement, Viacom has now filed its notice to appeal in the U.S. Court of Appeals for the Southern District of New York. Many legal scholars feel that in this case, the District Court opinion will be very persuasive; one never knows until the appellate court has rendered its decision. Stay tuned. If you did not read the original District Court decision, you can read and download it through the original posting on Legal Bytes: [Federal Court Awards YouTube Summary Judgment in Viacom Copyright Infringement Case].

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Transcending the Cloud – Cloud Coverage (Insurance for a Rainy Day)

As part of our Cloud Computing initiative, we promised to tackle some issues that have seen little coverage elsewhere and can often be overlooked in the “technological” arena. Here is a look at the insurance coverage issues representing our next chapter in Rimon’s on-going series, “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing.” This White Paper and Chapter takes a look at the insurance coverage implications of cloud computing, and is aptly titled “Cloud Coverage.”

We would like to thank Richard P. Lewis and Carolyn H. Rosenberg for their thoughtful and practical insights and effort. Feel free to contact them directly if any questions arise or if you need help or more information. As we continue to do, we updated the entire work so that in addition to the single chapter on “Cloud Coverage,” you can access the PDF of our “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing” compendium, receiving a complete update, including this one on insurance coverage.

Make sure you subscribe via email or get the Legal Bytes RSS Feed so you are always in touch with our latest information. Of course, if you ever have questions, you can always contact me, Joseph I. (“Joe”) Rosenbaum, or Adam Snukal, or any Rimon attorney with whom you regularly work.

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Transcending the Cloud – The German Perspective

As part of our Cloud Computing initiative entitled, we take a step over to Europe and proudly present our next chapter in Rimon’s on-going series “Cloud Computing – A German Perspective.” This white paper and chapter, takes a look at cloud computing from a German and, to some extent, potentially representative European perspective. It’s a refreshing look at both some legislative and regulatory implications, as well as a view from outside the United States.

We would like to thank Thomas Fischl and Katharina A. Weimer in our Rimon Munich office for their insight and effort. Feel free to contact them directly if any questions arise or if you need help or more information. As we continue to do, we updated the entire work so that when you access the .PDF of our “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing” compendium, you will receive all of the sections, now updated with this chapter from Germany.

Make sure you subscribe via email or get the Legal Bytes RSS Feed so you are always in touch with our latest information. Of course, if you ever have questions, you can always contact me Joseph I. (“Joe”) Rosenbaum, Adam Snukal, or any Rimon attorney with whom you regularly work.

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Every Cloud Has a Lining – Maybe a Legal One

Stimulated by the recently launched Rimon Cloud Computing initiative, Joseph I. ("Joe") Rosenbaum was interviewed by CFO U.S. reporter David McCann, and in the August 10, 2010, Today in Finance section, you can read the entire interview, "The Cloud’s Legal Lining".

You can also read and download a current copy of all of the white papers in our ongoing series, "Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing." Be sure you subscribe via email or get the Legal Bytes RSS Feed so you are always in touch with the latest and most updated version, as new white papers on additional topics are released. Of course, if you have questions, you can always contact Joseph I. ("Joe") Rosenbaum directly, or the Rimon attorney with whom you regularly work.

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E-Discovery in the Cloud: Next Installment in Transcending the Cloud

As part of our Cloud Computing initiative, we are proud to present the next installment and chapter in our on-going series, “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing.” This White Paper and Chapter, entitled E-Discovery in the Cloud, takes a close look at some of the challenges that lie ahead in the world of discovery, when information and applications are processed, stored, accessed and used in a cloud-computing environment.

We would like to thank Jennifer Yule DePriest and Claire Covington for their hard work in putting this together, and you should feel free to contact them directly if any questions arise or if you need help or more information. As we have in the past, we have also updated the entire work so that when you access the PDF of our “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing” compendium, you will receive all of the sections, now updated with this “E-Discovery in the Cloud” chapter, and you will have our updated and growing body of legal and regulatory insight into Cloud Computing.

Make sure you subscribe via email or get the Legal Bytes RSS Feed so you are always in touch with our latest information. Of course, if you ever have questions, you can always contact me Joseph I. (“Joe”) Rosenbaum, Adam Snukal, or any Rimon attorney with whom you regularly work.

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Federal Court Awards YouTube Summary Judgment in Viacom Copyright Infringement Case

Yesterday, the federal court hearing the billion-dollar case brought by Viacom against YouTube and Google ruled in favor of Google and YouTube on a summary judgment motion, deciding that YouTube is protected against claims of copyright infringement by the safe harbor provisions of the Digital Millennium Copyright Act (the “DMCA”), since it promptly sought to comply with the DMCA by removing protected content when notified of it.

The federal court held that under the law, if service providers were required to try to determine what content is infringing, or if service providers were held liable because they know infringement is rampant in the industry, or that users routinely post infringing materials, it “would contravene the structure and operation of the DMCA.” Only Congress has the power to decide to alter or reallocate the burden of copyright protection from the rights holder (i.e., the copyright owner) to the service provider. In examining that question, the court stated that where such a huge volume of works are posted by others, the service provider “cannot by inspection determine whether the use has been licensed by the owner, or whether its posting” is a “fair use” of the material, or even whether its copyright owner or licensee objects to its posting. The DMCA is explicit: it shall not be construed to condition “safe harbor” protection on “a service provider monitoring its service or affirmatively seeking facts indicating infringing activity . . . .” Under the DMCA, if one has no notice of infringement and innocently publishes infringing content, until knowledge is shown – by “take down” notice or otherwise – a passive service provider platform would generally not be liable for intellectual property infringement.

It’s unlikely you have heard the end of this lawsuit. In a statement posted yesterday by Michael Fricklas, Viacom Executive Vice President, General Counsel & Secretary, Viacom noted that, “This case has always been about whether intentional theft of copyrighted works is permitted under existing law and we always knew that the critical underlying issue would need to be addressed by courts at the appellate levels. Today’s decision accelerates our opportunity to do so.”

You can read and download the court’s entire decision right here.

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Cloud Computing: ‘Transcending the Cloud’ Adds Government Contracting Case Study

Last week, Legal Bytes announced Rimon’s new global initiative, Cloud Computing. With that announcement, the Task Force released the first three in a series of white papers entitled, “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing.” We also promised to release “case studies” shortly after the white papers, to demonstrate how the insights in each paper have practical implications through case study examples.

Here is the first: A case study on government contracting, now attached to the white paper entitled, “The Risks and Rewards of a U.S. Federal Government Contractor Employing a Cloud Service Provider to Perform a Federal Government Contract,” authored by Lorraine Campos, Stephanie Giese and Joelle Laszlo. Contact them if you need to know more about this important area of cloud computing.

We will update each individual paper, as well as the compendium, as each paper, case study and update is released, so make sure you subscribe via email or get the Legal Bytes RSS Feed so you are always in touch with the latest information. Of course, if you ever have questions, you can always contact me Joseph I. (“Joe”) Rosenbaum, Adam Snukal, or any Rimon attorney with whom you regularly work.