Thursday, April 27, 2006

The Smithy Code

In the Court's 71 page Judgment dismissing the Claimant's copyright infringement case regarding the Da Vinci Code, the Judge inserted a code himself.

Can you be the first to decipher it?

Hint- See the individually italicized letters in the opinion.

Tuesday, April 25, 2006

GAO Weighs-In On Corporate Formations

In what seems to me to be a nicely put-together 77 page report, the GAO acknowledges that there are differences in the ways that States handle incorporations, and gather information regarding the owners.

The GAO does not make recommendations in this report, but suggests that any changes be made with deliberate care, and in consideration of the many competing concerns.

Monday, April 17, 2006

No Child Held Behind

Our public education systems are woefully inadequate. No wonder why Delaware has a high rate of private school attendance. And they are becoming more and more ineffective by the impostion of politically targeted testing programs at the expense of actually teaching the children.

Our children are spending an inordinate amount of time taking tests that aren't conducive to their education. The tests are to propagate political agendas. Why can't our education system have an agenda which includes educating the children!?

Ask your children how much time during their 4th marking period is going to be devoted to test taking. My kids are indicating that it is their entire 4th marking period... that there isn't room in their school schedule for learning for the rest of the school year. This is outrageous (even giving allowance for childrens' propensity to exagerate).

And this is in addition to the 4 weeks they have already dedicated to non-educational testing earlier in the year. (the 4 weeks are half-day testing and half day easy days... days where it is alleged to be mandatory that there be no challenging work and no homework). This is an estimate of the combined time for the DSTP testing and the MAP testing.

It makes me sick to think of how our future generations' education has become a pawn in the political game, and a casualty of En Passant.

If we have to have a slogan for education.... shouldn't it be... "No Child Held Behind" instead of "No Child Left Behind"? (insert snide remark about your politician of choice here)

I suppose it's easy not to leave anyone behind if you never do anything.

Thursday, April 13, 2006

Hard drives and pending litigation

In a scenerio that's becoming more common, computerized evidence can play an integral part in pending law suits. And the destruction of that evidence can be significantly harmful to a case.

Delaware's State Police have been the target of at least 17 lawsuits since 1997, according to a Wilmington News Journal article from last June.

In a couple of those cases which targeted the former head of the State Police, who left the force last year, a federal judge has made a ruling sanctioning the state police for erasing their former chief's computer.

According to the News Journal, the hard drive for the computer was reimaged and reassigned according to routine practices within the agency.

There's probably a lesson there to be learned that goes beyond these cases against the Delaware Police force.

A recent New York Times article, Deleting May Be Easy, but Your Hard Drive Still Tells All, discusses some of the computer forensic issues that involve hard drives that have been written over. It starts off with an example of a software company almost missing out on a $ 64 million payday, when documents involved in a sale of a company they partly owned showed they were only five percent owners, instead of fifteen. The electronic documents that indicated the percentage of ownership had been changed to remove a "1" which would mean that they would only receive $32 milliion from the sale instead of $ 96 million.

A consulting group, which specializes in electronic discovery and forensics was able to determine when the document was changed, and who made the changes. It can be expensive to conduct that type of reconstruction of evidence, but this was a case where the cost was probably worth paying.

A findlaw article from a couple of years ago covers a number of points about this aspect of discovery: Delete At Your Peril: Preserving Electronic Evidence During The Litigation Process. As they note there, in these days after Enron people often know that they shouldn't destroy paper records that might be asked for during discovery, but electronic documents might be overlooked at a source of information that should be maintained and preserved.

These can include such things as:
  • e-mails,

  • electronic calendars and

  • drafts of documents

Many companies have data retention policies that determine when data of different types can be purged. But, those policies need to adapt and change when pending litigation may find some of the data possibly relevant to a law suit.

There are a number of potential risks involved in not preserving evidence that might be relevant to a pending case. These can range from sanctions to something significantly more serious. As the Findlaw article notes:
At a minimum, if you have been found to have destroyed evidence, the judge may draw or the jury may be told it can draw an inference that the materials you destroyed were harmful to your case. Courts can also impose monetary sanctions and exclude evidence and witness testimony as a result of misconduct. In extreme circumstances, if a court finds clear and convincing evidence that you have intentionally concealed or destroyed evidence, your case could be dismissed (if you are the plaintiff), or you could be found summarily liable without a trial (if you are the defendant).

As the judge noted in the Delaware case, the State Police probably should know better than to have reused the hard drive in question. If you run a business or organization of some type, do you have policies in place for the preservation of electronic documents?

Wednesday, April 05, 2006

Tax Attorney v Accountant: The Tax Free Extreme Makeover: Home Edition

As the April 15th IRS deadline approaches for filing returns, I recently learned what the differences and roles are between tax attorneys and accountants. As a University of Delaware senior, I am currently taking a class that has a variety of guest speakers from the Delaware legal community. Recently, I had the opportunity to listen to a former tax attorney talk about the roles of a tax attorney and the issues they face.

One of the issues addressed was the "attorney-client privilege" and how Certified Public Accountants can be forced by the IRS to testify against you in a criminal trial. However, tax attorneys are legally protected and cannot testify against you. More importantly the role of a tax attorney is to provide both people and/or businesses with tax advice so that they may make full use of the ever-changing complexity of the IRC code. Interestingly enough, in the attorney's speech he talked about the primetime ABC hit show "Extreme Makeover: Home Edition" and how the families on that show do not have to pay any taxes based on the renovations that are done to their homes. After some research, I found out that ABC can get away with this because of Sec. §280A (g) of the IRC Code. The provision basically says that if you rent your house out for a period of less than 15 days, then any rental income you receive is tax free.

On television, the family is given an all expense paid trip to Walt Disney World or some other vacation resort so that the family can lease the house out to ABC. ABC, Sears and other sponsors are given a period of 10 days to complete the house construction. When the family returns, any improvements that are made to the house are in fact considered "rental income" and therefore the family does not have to pay any taxes on the improvements made to the house. However, I am unsure when the families have to pay the adjusted property and school taxes. Regardless, I thought it was a really intuitive and creative use of a tax code that Congress is always changing from year to year.

POSTED BY: Craig J. Springer