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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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Useless But Compelling Facts – August 2010

Happy summer . . . beach season . . . time to get back into the water (except for you folks in the Southern Hemisphere who are dealing with Winter – we will get back to you in December). Back to our Useless But Compelling Facts, a/k/a trivia:

Tell me, what was the nickname of the mechanical shark used by Steven Spielberg in the filming of "Jaws" – and from where was the name derived.

If you know the answer and you are first to send it to me, you’ll win – but you will have to win to find out what. Send your answers directly to me at joseph.rosenbaum@rimonlaw.com.

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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].

Louis D. Brandeis

“Fear of serious injury alone cannot justify oppression of free speech and assembly. Men feared witches and burnt women. It is the function of speech to free men from the bondage of irrational fears.”

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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.

Ernest Shackleton

“I called to the other men that the sky was clearing, and then a moment later I realized that what I had seen was not a rift in the clouds but the white crest of an enormous wave.”

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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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North Carolina Creates Tax Incentive for Digital Media Companies

Interactive digital media developers that are currently located in North Carolina—as well as those contemplating doing business in North Carolina—should evaluate their business activities to take full advantage of the tax benefits of a new North Carolina tax credit for companies developing interactive digital media, including video game companies and developers of online virtual worlds and interactive websites that allow consumers to create and manipulate certain digital goods (i.e., avatars in role-playing scenarios). In particular, digital media developers should consider joint ventures with educational institutions that will allow them to maximize the benefits provided by the North Carolina credit. For more information on North Carolina’s new tax credit for digital media developers, please read our full client alert, “North Carolina Creates New Tax Incentive Opportunity for Digital Media Companies,” written by Rimon attorneys Donald M. Griswold, Michael A. Jacobs, John P. Feldman and Kelley C. Miller.