Archive for the ‘CONSUMER PROTECTION’ Category

Appellate Summaries: Gun control – Abramski v. United States, 2014 U.S. LEXIS 4170 (June 16, 2014)

Friday, June 27th, 2014

ISSUE I:

Under a federal statute, it is a crime to make a false statement to a federally licensed gun dealer about a fact “material to the lawfulness of the sale” of a gun.  Abramski purchased a gun from a federally licensed gun dealer.  On a form that he was required to complete, he indicated that he was purchasing the gun for himself.  In fact, he was purchasing the gun for his uncle.  It was not unlawful for Abramski, or for his uncle, to have a gun.  Did Abramski violate the statute?

HOLDING:

Justice Kagan, joined by Justices Kennedy, Ginsburg, Breyer and Sotomayer said that Abramski had violated the statute.  Justice Kagan reasoned that one of the primary goals of the statute is to enable law enforcement to easily identify the purchasers of guns that are subsequently used to commit crimes.  She said that Abramski’s false statement would have hampered law enforcement’s ability to identify the actual purchaser of the gun and, therefore, Abramski’s statement was materially false.

DISSENT:

Justice Scalia, joined by Justices Roberts, Thomas, and Alito, dissented.  Justice Scalia reasoned that, since the sale to Abramski was lawful, and remained lawful whether or not Abramski’s statement was false, the false statement was not “material to the lawfulness of the sale.”  He said that statements by some of the legislators who voted for the statute, about their personal goals and objectives for the statute, should not trump the plain language of the statute.  He said that the language of the statute was a compromise between competing goals and objectives on a highly controversial subject.  He said that, at a minimum, the statute is ambiguous as to whether Abramski’s false statement was “material to the lawfulness of the sale” and that, under the principle of lenity, the ambiguity should be resolved in Abramski’s favor.

 

ISSUE II:

Under a federal statute, it is a crime to make a “false statement or representation with respect to the information required by this chapter to be kept in the records” of a federally licensed gun dealer.  Abramski purchased a gun from a federally licensed gun dealer.  On a form that he was required to complete, he indicated that he was purchasing the gun for himself.  In fact, he was purchasing the gun for his uncle.  The chapter in question did not require the dealer to keep information about the fact that Abramski was purchasing the gun for his uncle.  It required the dealer to record “the name, age, and place of residence” of the person to whom the gun was sold, and it required the dealer to keep the form on which this information was recorded.  Did Abramski violate the statute?

HOLDING:

Justice Kagan, joined by Justices Kennedy, Ginsburg, Breyer and Sotomayer, said that Abramski had violated the statute.  Justice Kagan reasoned that the dealer was required to keep the form and, by extension, the information on the form.  She said that, in reality, Abramski’s uncle was the person to whom the gun was sold and, therefore, his “name, age, and place of residence” were required.

DISSENT:

Justice Scalia, joined by Justices Roberts, Thomas, and Alito, dissented.  Justice Scalia said that the dealer was only required to keep Abramski’s “name, age, and place of residence.”  And, since Abramski did not make any false statement or representation with respect to his “name, age, and place of residence,” he did not violate the law.  Justice Scalia drew a distinction between the “information” that the dealer was required to keep, and the dealers duty to keep the “form.”  He said that, at a minimum, this statute is also ambiguous and that, under the principle of lenity, the ambiguity should have been resolved in Abramski’s favor.

Florida Accountants, are you practicing law without a license?

Wednesday, March 12th, 2014

Accountants who are called upon by their clients for advice must be careful not to give legal advice or provide legal services.  In order to determine whether an activity constitutes the unlicensed practice of law, a two part analysis must be made. First, it must be determined whether the activity is the practice of law. The second question is whether the practice is authorized. If an activity is the practice of law but the activity is authorized, the activity is not the unlicensed practice of law and may be engaged in by a non-lawyer.  The Florida Supreme Court developed the following test to determine whether an activity is the practice of law: “. . .if the giving of [the] advice and performance of [the] services affect important rights of a person under the law, and if the reasonable protection of the rights and property of those advised and served requires that the persons giving such advice possess legal skill and a knowledge of the law greater than that possessed by the average citizen, then the giving of such advice and the performance of such services by one for another as a course of conduct constitute the practice of law.” When applying this test it should be kept in mind that “the single most important concern in the Court’s defining and regulating the practice of law is the protection of the public from incompetent, unethical, or irresponsible representation.”

There are clear practices that accountants may be tempted to engage in which constitutes the unlicensed practice of law, including drafting corporate documents, drafting legal documents for clients (such as non-compete agreements, confidentiality agreements, asset purchase agreements, stock purchase agreements, employment agreements, independent contractor agreements, non-disclosure agreements, real estate contracts, etc…), interpretation of laws and advice regarding a client’s rights and obligations under those laws, advising clients regarding immigration and bankruptcy matters and completing forms filed to obtain benefits under the immigration laws and bankruptcy laws, and representation in certain venues (such as courts and certain administrative agencies).  It also constitutes the unlicensed practice of law for a accountants to hold themselves out as an attorney either expressly or impliedly. This would include using the title Esquire , using the initials J.D. if they are being used to solicit legal services,  using “legal” in the name of their business  or advertisement, using the title “attorney” or “lawyer” or any other title, such as notario publico, which holds the person out as being able to provide legal services. It also constitutes the unlicensed practice of law for an accounting firm to advertise to provide legal services even if the services are being performed by a member of The Florida Bar since a company may not practice law. Furthermore, although an accountant may sell forms and complete the form with information provided in writing by a client, if the accountant is using a form approved by the Supreme Court of Florida, the accountant may engage in limited oral communication to elicit the factual information that goes in the blanks of the form, however, she may not make any changes to the form and may not give advice on possible courses of action. If the accountant uses a form which has not been approved by the Supreme Court of Florida, she may only type the blanks on the form with information obtained from the individual in writing.   Therefore,  accountants may not prepare corporate documents for clients. This includes the articles of incorporation, the corporate charter and related documents.  Likewise,  accountants cannot prepare a warranty deed, quitclaim deed, land trusts, leases and mortgage agreements for clients.

Any person not licensed or otherwise authorized to practice law in Florida who practices law or holds herself out of the public as qualified to practice law in Florida, or who willfully pretends to be, or willfully takes or uses any name, title, addition, or description implying that he or she is qualified, or recognized by law as qualified, practice law in this state, commits a felony of the third degree, punishable by a term of imprisonment not exceeding 5 years and a fine of up to $5,000.00.  So, if an accountant is guilty of practicing law without a license, she may face stiff criminal penalties.  In addition to criminal penalties, some courts have held that non lawyers who perform legal services may be held to the same standard as lawyers providing those serves. Therefore, if an accountant does provide legal services to her clients and was negligent in doing so, and her negligences causes her clients damages, she may be sued for legal malpractice.

The unlicensed practice of law is a serious issue with serious consequences. Any accountant who has been involved in helping their clients with legal issues needs to be aware of these prohibitions and the potential ramifications that can result if she is deemed to have engaged in the unauthorized practice of law.   If she does not, she can expose herself to stiff criminal and civil liability. If you are unsure of whether or not your actions constitute the unauthorized practice of law, please contact Attorney Persad at 407-647-7887 or email him at attorneypersad@cplspa.com.  Attorney Persad is a former member and chairman of the Florida Bar’s 9th Circuit Unlicensed Practice of Law Committee.

 

The Regulation of State Banks

Monday, February 25th, 2013

Is a state law that is preempted from enforcement against national banks also preempted from enforcement against out-of-State, State banks? That was the question in Baptista v. PNC Bank, 91 So. 3d 230 (Fla. 5th DCA 2012).

RBC Bank was a North Carolina bank. One of its account holders wrote a check to Ms. Baptista.  Ms. Baptista went to one of RBC’s branches in Florida, and presented the check for payment. Ms. Baptista did not have an account at RBC. The teller charged Ms. Baptista a $5.00 check-cashing fee.

However, Florida Statutes, section 655.85 provides that “an institution may not settle any check drawn on it otherwise than at par.” Accordingly, we filed a class action suit against RBC. After some preliminary discovery, RBC moved for summary judgment. It claimed that because section 655.85 is preempted from enforcement against national banks, it was also preempted from enforcement against out-of-State State banks, pursuant to title 12 U.S.C. § 1831a(j)(1). Section 1831a(j)(1) provides in part: 

(1)Application of host State law. The laws of a host State, including laws regarding community reinvestment, consumer protection, fair lending, and establishment of intrastate branches, shall apply to any branch in the host State of an out-of-State State bank to the same extent as such State laws apply to a branch in the host State of an out-of-State national bank.

At the time of RBC’s motion, every court that had addressed the issue had interpreted section 1831 to mean that statutes that are preempted from enforcement against national banks are also preempted from enforcement against out-of-State State banks. The trial court granted RBC’s motion for summary judgment, and we appealed.

On appeal, we pointed out that section 1831 does not refer to the “enforceability” of State laws; only to the “applicability” of State laws. We argued that although section 655.85 is “unenforceable” against national banks it is “applicable” to them. We noted that section 655.85 is only preempted from enforcement against national banks because enforcement against national banks would conflict with 12 C.F.R. § 7.4002. However, enforcement of section 655.85 against State banks would not conflict with section 7.4002, because section 7.4002 does not apply to State banks. We argued that section 1831 only prevents States from discriminating against out-of-State State banks. In other words, if a State law provides that it does not apply to national banks, section 1831 prevents that law from applying to out-of-State State banks. Section 655.85 does not discriminate against out-of-State State banks because section 655.85 applies to all banks.

RBC argued that section 1831 was enacted to place State banks on par with national banks, and to preserve competitive equality between national banks and State banks. It said that Congress’ intent was to remove incentives for banks to charter at the federal level rather than the State level, and vice-versa, in order to insure the health and stability of our dual banking system. It argued that having to adjust to bank policies and procedures on a State-by-State basis, and having to stay current on the changes in each State’s laws would be virtually impossible for State banks, and that they would be forced to either abandon banking in foreign States or increase fees to depositors.

The court said that RBC’s arguments contorted the express language of section 1831. It said that the statute simply prohibits States from discriminating against out-of-State State banks. It concluded that section 1831 was not applicable because section 655.85 applies to all banks. Accordingly, the court reversed, and remanded the case for further proceedings.

RBC subsequently filed a petition for a writ of certiorari with the Supreme Court of the United States, but the petition was denied.

Bank of America sued for not crediting payments to credit card accounts upon receipt

Saturday, November 28th, 2009

CPLS and Morgan and Morgan have partnered in an action against Bank of America to force the Bank to credit payments made by consumers to their credit card accounts upon receipt by Bank of America. The named plaintiffs, Jennifer Mendoza and Heydee DeLeon, both had credit cards with Bank of America. They both made payments on their cards on a Saturday at a Bank of America Banking Center on or before the date due, but Bank of America did not credit their accounts until the following business day, causing a $39 late fee, despite the express terms of the Bank’s credit card agreement which requires the Bank to credit the payment upon receipt. Bank of America moved to dismiss the case, but a Federal Judge refused to dismiss the case, finding that there is a valid case for Breach of Contract. The plaintiffs seek to have the case certified as a national class action so that they can stop the Bank from violating the terms of their contract. For more information, please contact Cynthia Conlin, Esq. at cconlin@cplspa.com

Is your Bank charging your employees fees for cashing your payroll checks without your knowledge?

Sunday, November 22nd, 2009

Is your bank charging your employees to cash their payroll checks. Our firm discovered that Bank of America and other banks are charging between $5.00 to $10.00 to cash payroll checks when your employees who are not customers of the bank present their payroll checks to the bank in person. To say the least, this practice was very disturbing to us, especially since it also affects our employees. Our investigation into this practice revealed that the banks have been engaging in this practice for almost 10 years and that this fee is a major revenue source for large national banks and mid sized regional banks.

According to the Consumers Union Southwest Regional Office (http://www.consumersunion.org/finance/noncustsw1001.htm): “Those most likely to be affected by non-customer check cashing fees are individuals often referred to as the unbanked, individuals without their own bank account, who go to banks to cash their paychecks. A study of the Survey of Consumer Finances found that more than half of families without checking accounts are nonwhite or Hispanic, and 85 percent have incomes of less than $25,000. The rising costs of having a bank account combined with the lack of access to a local bank and branch offices have made keeping an open bank account difficult for some families… In an effort to increase profits, banks are looking for other revenue sources. In addition to directing resources into check-cashing operations, banks are tapping into a new market of low income and minority consumers – this time directly – by charging check-cashing fees, even for checks drawn against their own customer’s accounts. Mark Ferrulo, a public interest advocate for Florida PIRG, noted, ‘that used to be part of the package. This fee really just serves to add to the income stream. ‘ It’s almost pure profit.”

Our firm was so outraged with this practice that we sued Bank of America on bahelf of employees in Florida who have been charged for cashing their payroll checks. Not suprisingly, Bank of America vigorously defended its practice and relied upon letters from the Office of the Comptroller of Currency (OCC) addressed to Bank of America for its defense. In support, they argue that your empoyees are the bank’s non relationship “customers” and as “customers” they can charge them the fee. When we reviewed the letters from the OCC to the bank, we noted that, althought the OCC is required to provide notice and an opportunity for the public to comment on the opinion letters, it did not; instead, it relied soley on the information provided by the bank. Suprisingly, in the face of the letter the OCC acknowledged that the bank reqeusted that the informatin it provided be kept confidential and the OCC has obliged. So, there is no way of telling whether or not the information relied upon is enough to provide a sufficient and valid basis for the OCC’s opinion that your employees are customers of the bank.

If you or your emplyees are affected by this unfair bank practice and would like to find out more please feel free to email Tee Persad at attorneypersad@cplspa.com.