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InfoBytes Breakfast – March 16, 2007 – In conjunction with the American Bar Association's Spring Meeting of the Business Law Section, Buckley Kolar LLP will host a Breakfast for InfoBytes subscribers and other friends of the firm on Friday, March 16th from 7:30 AM until 9:00 AM. We appreciate the large and growing readership of InfoBytes and hope that as many of our subscribers as possible will join us to meet the attorneys and staff of Buckley Kolar who bring you InfoBytes each week. The breakfast will be held at the Embassy Suites near the DC Convention Center where the ABA meeting is being held. Click here for more information and to RSVP.
Topics – Covered This Week (Click to View)
FEDERAL ISSUES
Fannie and Freddie to Release Uniform Master and Short Form Mortgage Documents. On February 21, Fannie Mae and Freddie Mac announced the upcoming release of jointly developed uniform master form and short form mortgage and deed of trust documents early this spring. These documents are intended to help lenders take advantage of laws in 27 states that allow a lender to file a “master” form mortgage or deed of trust in a recording district for a first origination, and to use a “short” form for subsequent originations in that district. The use of short forms translates to significant savings in closing costs as recordation fees are usually calculated based upon the number of pages that are recorded. In Ohio, for example, a short form costs only $36 while a master form costs $148 to record. Both Fannie Mae and Freddie Mac anticipate that they will have state-specific versions of the forms and instructions for filing available as downloads from their respective websites. To read the full Fannie Mae press release, see http://www.fanniemae.com/newsreleases/2007/3936.jhtml.
COURTS
Court Holds FCRA Statute of Limitations is Jurisdictional. A U.S. District Court in Packer v. Security National Automotive Acceptance Corp., No. 06-119, 2007 WL 515409 (E.D. Va. Feb. 8, 2007) dismissed a claim that a lender had violated FCRA by inaccurately reporting that the consumer was delinquent on his automobile loan, on the grounds that the claim was barred by the FCRA statute of limitations. In an unusual procedural twist, the court held that the running of the statute of limitations under FCRA deprives the federal courts of jurisdiction to hear the case. Therefore, the plaintiff had the burden of proving that the statute had not run, and the court could consider evidence of when the alleged violation occurred rather than simply assuming that the allegations in the complaint were true, as is normally the case in a motion to dismiss for failure to state a claim. Because the court found that the plaintiff had not met its burden, it dismissed the FCRA claim as well as the plaintiff’s state law claims. For a copy of this decision, please contact .
New Class Action Suit Alleges Referrals to Affiliated Title Company Violate Fiduciary Duties Owed By Real Estate Agents. On February 20, a class action complaint was filed in Minnesota state court alleging that Coldwell Banker Burnet, a real estate brokerage company, violated state statutory and common law for its practice of referring clients to its affiliated title company, Burnet Title. The complaint alleges that Burnet Title has "some of the most expensive insurance rates and settlement service fees in the marketplace," and that by referring client home buyers and sellers to Burnet Title without also fully and adequately disclosing that lower-priced alternatives are available and without fully disclosing the financial incentives provided to sales associates for such referrals, the real estate broker and its agents violated their common law and statutory fiduciary duties to act in the best interests of their clients.
Notably, the complaint does not allege a violation of the Real Estate Settlement Procedures Act (RESPA) – in fact, the complaint admits that the "Affiliated Business Disclosure" given to clients by Burnet sales associates "may satisfy the minimum requirements" of RESPA. However, the complaint claims that the Affiliated Business Disclosure does not satisfy "the greater obligations of a fiduciary, under common law and state statutes, to fully disclose all material facts known to it which might affect the clients' rights or interests...". Grady v. Burnet Realty Inc. (Minn. D.Ct. Feb. 20, 2007). For full text of the complaint, please contact .
Invoice Can Incorporate Web-Based Contract Terms. In International Star Registry of Illinois v. Omnipoint Marketing, LLC, No. 06-61417, 2007 U.S. Dist. LEXIS 6062 (S.D. Fla. Jan. 29, 2007), the United States District Court for the Southern District of Florida determined that invoices can incorporate by reference contractual terms that are posted on a website. In this case, the plaintiff purchased e-mail marketing services and an e-mail prospect list from Omnipoint Marketing, LLC . Most of Omnipoint’s invoices contained a clause next to the signature line that incorporated Omnipoint’s standard terms and conditions, which were posted on a website. The clause also provided the website URL address for the terms and conditions. The plaintiff argued that these terms and conditions, including a jurisdiction selection clause, were not binding. The court disagreed, holding that the terms and conditions were validly incorporated into the parties’ agreement, which creates a “hybrid” contract – part electronic, part paper. Please contact for a copy of the court’s decision.
Judge Grants Motion to Inspect Plaintiff's Computer under New Federal E-Discovery Rules, but Places Limits on Execution. A Michigan federal district court judge in Thielen v. Buongiorno USA, Inc. No. 06-16, 2007 U.S. Dist. LEXIS 8998, (W.D. Mich. February 8, 2007) granted a defendant's motion to compel inspection of a computer for discovery, but in recognizing the potential burden of allowing unfettered access to the information on the computer, also placed significant limitations on how the discovery request could be executed. Plaintiff Thielen had sued the defendant for sending text messages to the plaintiff's cell phone without permission while Buongiorno USA, Inc. maintained that their communications are sent only in response to a consumer initiating the contact either through the internet or a cell phone text message. The plaintiff denied making initial contact, prompting Buongiorno to file a motion to inspect Thielen's computer to determine if the plaintiff did initiate contact through an internet website. The court agreed that such information would be highly pertinent to a decisive issue at trial, but also noted that discovery requests must not be unnecessarily burdensome. To that effect, the court granted the motion to compel discovery, but included the following parameters: (i) the examination shall be done by imaging the hard drive of the computer and the examination of the imaged drive is limited to a particular timeframe; (ii) the examination must be done by a forensic examiner outside the presence of the parties or their attorneys; and (iii) the forensic examiner shall provide a hard copy of his proposed findings to the plaintiff to review and potentially object before providing the findings to the defendant. This decision was held under the new federal electronic discovery rules that went into effect last December (see the December 1 InfoBytes Special Alert for details). Please contact for a copy of this opinion.
District Court Upholds State’s Sovereign Immunity Right in FCRA Lawsuit. A federal district court in Betts v. Virginia, No. 06-753, 2007 WL 515406 (E.D. Va. Feb. 2, 2007), dismissed a plaintiff’s Fair Credit Reporting Act (FCRA) lawsuit against the Virginia Employment Commission (VEC), based on the state’s Eleventh Amendment sovereign immunity. The plaintiff had applied for employment with the VEC and, as part of the application process, granted permission to obtain the applicant’s credit report. After viewing the report, the VEC declined to grant the plaintiff an employment offer, based at least in part on the contents of the credit report. The plaintiff sued, claiming that the VEC willfully misused the credit report and that the VEC willfully failed to provide her with notice of the adverse action. The state moved to dismiss the suit, claiming sovereign immunity under the Eleventh Amendment of the U.S. Constitution. The court, in dismissing the case, noted that there was no indication that Congress intended to abrogate states’ Eleventh Amendment rights when it enacted FCRA. Also, the court noted that Virginia had not waived its immunity in FCRA cases as of the time of the plaintiff’s claims. For a copy of the opinion, please contact .
STATE ISSUES
Rhode Island Licensees Required to Provide Notification of Change in Business Plan. On February 12, the Rhode Island Department of Business Regulation issued a notice that any individual or company licensed by the Department is now required to notify the Department if it “significantly modifies” its business plan or activity within the state. Licensees will now be required to submit written notification to the Department at least 30 days before such a modification. Banking Bulletin 2007-2 lists information that must be included in the notification, and may be viewed at http://www.dbr.state.ri.us/documents/news/banking/Banking_Bulletin_2007-2.pdf.
Maine Adopts Continuing Education Requirements for Loan Officers, Brokers, Lenders. On February 10, a new rule adopted by Maine’s Office of Consumer Credit Regulation to establish initial and continuing education requirements for loan offers, brokers, or supervised lenders went into effect. Under the new rule, individuals who are licensed or registered prior to January 31, 2008 must complete 12 hours of education prior to January 31, 2008 and 12 hours of continuing education annually thereafter. Individuals who obtain a license or registration on or after January 31, 2008 must complete 16-hours of education prior to becoming licensed or registered and 12 hours of continuing education annually thereafter. For more information including a copy of the rule, please go to http://www.maine.gov/pfr/consumercredit/rules/LoanOfficerEd00207.pdf.
Amended Oregon Rules Address Education and Supervision of Loan Supervisors. The Oregon Department of Consumer and Business Services recently amended its rules, effective January 17, 2007, relating to loan originators and the licensing of mortgage bankers and brokers. Among other things, the amended rules require that mortgage loan originators complete an approved course and pass an approved exam before taking a loan application. Those mortgage loan originators hired prior to January 12, 2007 have until April 13, 2007, to meet this requirement. The amended rules also spell out what it means for a mortgage banker or broker to “diligently supervise and control a loan originator” under his or her employ. To view the amended rules, please visit http://www.cbs.state.or.us/external/dfcs/ml/ml_requirements_strengthened.html.
Oklahoma Proposes Rules Delaying Continuing Education Renewal Requirements. The Oklahoma Department of Consumer Credit recently proposed changes to rules regarding, inter alia, mortgage loan originator licensure that would allow renewals of licenses for 2007 without meeting the continuing education requirement. This proposed rule would formally replace an emergency rule, signed by the Governor last November, delaying the implementation of last year’s Senate Bill 1877 which imposed continuing education requirements on mortgage loan originators. Comments are due by the end of public hearings on March 20, 2007. To view the proposed rules, see http://www.okdocc.state.ok.us/2007ProposedPermanentRules.pdf.
Oregon Adopts and Amends Rules Relating to Consumer Finance Act. The Oregon Department of Consumer and Business Services recently adopted and amended rules applicable to consumer finance licensees. The new rules deal with operations under a consumer finance license, license application requirements, and the furnishing of payoff information to a borrower upon request. The amendments expand on the qualifications required of a person in charge of a licensed office, as well as the information to be included in a licensee’s annual report. To view the adopted new rules and amendments, please visit http://www.cbs.state.or.us/external/dfcs/rules_statutes/441_730.pdf.
MISCELLANY
FTC to Host Workshop on Identity Theft Prevention. The Federal Trade Commission (FTC) will hold a workshop entitled “Proof Positive: New Directions in ID Authentication” on April 23 and 24, 2007. The FTC is seeking public comment on several issues to help arrange the workshop’s agenda including (i) how individuals can prove their identities when first establishing them, (ii) promising current or emerging authentication technologies or methods, and (iii) whether these technologies work for the consumer. Public comments are due March 23, 2007. For more information, see http://www.ftc.gov/opa/2007/02/authentication.htm.
Richard Neiman Nominated to Head New York Banking Department. On February 21, New York Governor Elliot Spitzer announced his intention to nominate Richard H. Neiman to be Superintendent of the New York State Banking Department. If approved by the State Senate, Mr. Neiman will leave his current post as CEO of TD Bank USA, N.A. To see the Governor’s press release regarding the nomination, see http://www.state.ny.us/governor/appointments/rh_neiman.html.
FIRM NEWS
Jeremiah Buckley today spoke at a Mortgage Bankers Association Congressional Education Series discussion entitled “Proposed Solutions to Increased Foreclosures." This series provides background to Congressional staff on issues related to mortgage banking.
Robert Serino was quoted in an article by moneylaundering.com on a recent Office of the Comptroller of the Currency (OCC) enforcement action for poor Office of Foreign Asset Control (OFAC) list screening compliance. According to the article, the OCC ordered the offending bank to, among other things, “consider closing” high-risk accounts and “not opening” accounts for high risk customers. Mr. Serino is quoted as saying “they should be doing that anyway. That’s like saying, ‘It’s raining, get your umbrella.’ Financial institutions should always run client names against the OFAC list before opening new accounts.” The article is available, with a subscription, at http://www.moneylaundering.com/NewsBriefDisplay.aspx?id=1226.
Lee Negroni this month is attending the Third Annual International Conference of the Information Technology Law Association in Bangalore, India. She and Buckley Kolar partner John Kromer have been assisting clients with legal issues in the area of business process outsourcing (BPO) for U.S. and India-based financial institution clients. During her trip, Lee will be available to lead discussion groups and present seminars on regulatory issues implicated by BPO in the fields of consumer loan application processing, loan servicing, consumer data privacy and similar subjects, in the cities of Bangalore, Mumbai (Bombay) and Delhi between February 13 and 25, 2007. Lee’s "Blog from Bangalore" is available on the Buckley Kolar website in the News section.
New Class Action Suit Alleges Referrals to Affiliated Title Company Violate Fiduciary Duties Owed By Real Estate Agents. On February 20, a class action complaint was filed in Minnesota state court alleging that Coldwell Banker Burnet, a real estate brokerage company, violated state statutory and common law for its practice of referring clients to its affiliated title company, Burnet Title. The complaint alleges that Burnet Title has "some of the most expensive insurance rates and settlement service fees in the marketplace," and that by referring client home buyers and sellers to Burnet Title without also fully and adequately disclosing that lower-priced alternatives are available and without fully disclosing the financial incentives provided to sales associates for such referrals, the real estate broker and its agents violated their common law and statutory fiduciary duties to act in the best interests of their clients.
Notably, the complaint does not allege a violation of the Real Estate Settlement Procedures Act (RESPA) – in fact, the complaint admits that the "Affiliated Business Disclosure" given to clients by Burnet sales associates "may satisfy the minimum requirements" of RESPA. However, the complaint claims that the Affiliated Business Disclosure does not satisfy "the greater obligations of a fiduciary, under common law and state statutes, to fully disclose all material facts known to it which might affect the clients' rights or interests...". Grady v. Burnet Realty Inc. (Minn. D.Ct. Feb. 20, 2007). For full text of the complaint, please contact .
Fannie and Freddie to Release Uniform Master and Short Form Mortgage Documents. On February 21, Fannie Mae and Freddie Mac announced the upcoming release of jointly developed uniform master form and short form mortgage and deed of trust documents early this spring. These documents are intended to help lenders take advantage of laws in 27 states that allow a lender to file a “master” form mortgage or deed of trust in a recording district for a first origination, and to use a “short” form for subsequent originations in that district. The use of short forms translates to significant savings in closing costs as recordation fees are usually calculated based upon the number of pages that are recorded. In Ohio, for example, a short form costs only $36 while a master form costs $148 to record. Both Fannie Mae and Freddie Mac anticipate that they will have state-specific versions of the forms and instructions for filing available as downloads from their respective websites. To read the full Fannie Mae press release, see http://www.fanniemae.com/newsreleases/2007/3936.jhtml.
Rhode Island Licensees Required to Provide Notification of Change in Business Plan. On February 12, the Rhode Island Department of Business Regulation issued a notice that any individual or company licensed by the Department is now required to notify the Department if it “significantly modifies” its business plan or activity within the state. Licensees will now be required to submit written notification to the Department at least 30 days before such a modification. Banking Bulletin 2007-2 lists information that must be included in the notification, and may be viewed at http://www.dbr.state.ri.us/documents/news/banking/Banking_Bulletin_2007-2.pdf.
Maine Adopts Continuing Education Requirements for Loan Officers, Brokers, Lenders. On February 10, a new rule adopted by Maine’s Office of Consumer Credit Regulation to establish initial and continuing education requirements for loan offers, brokers, or supervised lenders went into effect. Under the new rule, individuals who are licensed or registered prior to January 31, 2008 must complete 12 hours of education prior to January 31, 2008 and 12 hours of continuing education annually thereafter. Individuals who obtain a license or registration on or after January 31, 2008 must complete 16-hours of education prior to becoming licensed or registered and 12 hours of continuing education annually thereafter. For more information including a copy of the rule, please go to http://www.maine.gov/pfr/consumercredit/rules/LoanOfficerEd00207.pdf.
Amended Oregon Rules Address Education and Supervision of Loan Supervisors. The Oregon Department of Consumer and Business Services recently amended its rules, effective January 17, 2007, relating to loan originators and the licensing of mortgage bankers and brokers. Among other things, the amended rules require that mortgage loan originators complete an approved course and pass an approved exam before taking a loan application. Those mortgage loan originators hired prior to January 12, 2007 have until April 13, 2007, to meet this requirement. The amended rules also spell out what it means for a mortgage banker or broker to “diligently supervise and control a loan originator” under his or her employ. To view the amended rules, please visit http://www.cbs.state.or.us/external/dfcs/ml/ml_requirements_strengthened.html.
Oklahoma Proposes Rules Delaying Continuing Education Renewal Requirements. The Oklahoma Department of Consumer Credit recently proposed changes to rules regarding, inter alia, mortgage loan originator licensure that would allow renewals of licenses for 2007 without meeting the continuing education requirement. This proposed rule would formally replace an emergency rule, signed by the Governor last November, delaying the implementation of last year’s Senate Bill 1877 which imposed continuing education requirements on mortgage loan originators. Comments are due by the end of public hearings on March 20, 2007. To view the proposed rules, see http://www.okdocc.state.ok.us/2007ProposedPermanentRules.pdf.
Oregon Adopts and Amends Rules Relating to Consumer Finance Act. The Oregon Department of Consumer and Business Services recently adopted and amended rules applicable to consumer finance licensees. The new rules deal with operations under a consumer finance license, license application requirements, and the furnishing of payoff information to a borrower upon request. The amendments expand on the qualifications required of a person in charge of a licensed office, as well as the information to be included in a licensee’s annual report. To view the adopted new rules and amendments, please visit http://www.cbs.state.or.us/external/dfcs/rules_statutes/441_730.pdf.
Richard Neiman Nominated to Head New York Banking Department. On February 21, New York Governor Elliot Spitzer announced his intention to nominate Richard H. Neiman to be Superintendent of the New York State Banking Department. If approved by the State Senate, Mr. Neiman will leave his current post as CEO of TD Bank USA, N.A. To see the Governor’s press release regarding the nomination, see http://www.state.ny.us/governor/appointments/rh_neiman.html.
Court Holds FCRA Statute of Limitations is Jurisdictional. A U.S. District Court in Packer v. Security National Automotive Acceptance Corp., No. 06-119, 2007 WL 515409 (E.D. Va. Feb. 8, 2007) dismissed a claim that a lender had violated FCRA by inaccurately reporting that the consumer was delinquent on his automobile loan, on the grounds that the claim was barred by the FCRA statute of limitations. In an unusual procedural twist, the court held that the running of the statute of limitations under FCRA deprives the federal courts of jurisdiction to hear the case. Therefore, the plaintiff had the burden of proving that the statute had not run, and the court could consider evidence of when the alleged violation occurred rather than simply assuming that the allegations in the complaint were true, as is normally the case in a motion to dismiss for failure to state a claim. Because the court found that the plaintiff had not met its burden, it dismissed the FCRA claim as well as the plaintiff’s state law claims. For a copy of this decision, please contact .
Oregon Adopts and Amends Rules Relating to Consumer Finance Act. The Oregon Department of Consumer and Business Services recently adopted and amended rules applicable to consumer finance licensees. The new rules deal with operations under a consumer finance license, license application requirements, and the furnishing of payoff information to a borrower upon request. The amendments expand on the qualifications required of a person in charge of a licensed office, as well as the information to be included in a licensee’s annual report. To view the adopted new rules and amendments, please visit http://www.cbs.state.or.us/external/dfcs/rules_statutes/441_730.pdf.
Court Holds FCRA Statute of Limitations is Jurisdictional. A U.S. District Court in Packer v. Security National Automotive Acceptance Corp., No. 06-119, 2007 WL 515409 (E.D. Va. Feb. 8, 2007) dismissed a claim that a lender had violated FCRA by inaccurately reporting that the consumer was delinquent on his automobile loan, on the grounds that the claim was barred by the FCRA statute of limitations. In an unusual procedural twist, the court held that the running of the statute of limitations under FCRA deprives the federal courts of jurisdiction to hear the case. Therefore, the plaintiff had the burden of proving that the statute had not run, and the court could consider evidence of when the alleged violation occurred rather than simply assuming that the allegations in the complaint were true, as is normally the case in a motion to dismiss for failure to state a claim. Because the court found that the plaintiff had not met its burden, it dismissed the FCRA claim as well as the plaintiff’s state law claims. For a copy of this decision, please contact .
Judge Grants Motion to Inspect Plaintiff's Computer under New Federal E-Discovery Rules, but Places Limits on Execution. A Michigan federal district court judge in Thielen v. Buongiorno USA, Inc. No. 06-16, 2007 U.S. Dist. LEXIS 8998, (W.D. Mich. February 8, 2007) granted a defendant's motion to compel inspection of a computer for discovery, but in recognizing the potential burden of allowing unfettered access to the information on the computer, also placed significant limitations on how the discovery request could be executed. Plaintiff Thielen had sued the defendant for sending text messages to the plaintiff's cell phone without permission while Buongiorno USA, Inc. maintained that their communications are sent only in response to a consumer initiating the contact either through the internet or a cell phone text message. The plaintiff denied making initial contact, prompting Buongiorno to file a motion to inspect Thielen's computer to determine if the plaintiff did initiate contact through an internet website. The court agreed that such information would be highly pertinent to a decisive issue at trial, but also noted that discovery requests must not be unnecessarily burdensome. To that effect, the court granted the motion to compel discovery, but included the following parameters: (i) the examination shall be done by imaging the hard drive of the computer and the examination of the imaged drive is limited to a particular timeframe; (ii) the examination must be done by a forensic examiner outside the presence of the parties or their attorneys; and (iii) the forensic examiner shall provide a hard copy of his proposed findings to the plaintiff to review and potentially object before providing the findings to the defendant. This decision was held under the new federal electronic discovery rules that went into effect last December (see the December 1 InfoBytes Special Alert for details). Please contact for a copy of this opinion.
District Court Upholds State’s Sovereign Immunity Right in FCRA Lawsuit. A federal district court in Betts v. Virginia, No. 06-753, 2007 WL 515406 (E.D. Va. Feb. 2, 2007), dismissed a plaintiff’s Fair Credit Reporting Act (FCRA) lawsuit against the Virginia Employment Commission (VEC), based on the state’s Eleventh Amendment sovereign immunity. The plaintiff had applied for employment with the VEC and, as part of the application process, granted permission to obtain the applicant’s credit report. After viewing the report, the VEC declined to grant the plaintiff an employment offer, based at least in part on the contents of the credit report. The plaintiff sued, claiming that the VEC willfully misused the credit report and that the VEC willfully failed to provide her with notice of the adverse action. The state moved to dismiss the suit, claiming sovereign immunity under the Eleventh Amendment of the U.S. Constitution. The court, in dismissing the case, noted that there was no indication that Congress intended to abrogate states’ Eleventh Amendment rights when it enacted FCRA. Also, the court noted that Virginia had not waived its immunity in FCRA cases as of the time of the plaintiff’s claims. For a copy of the opinion, please contact .
New Class Action Suit Alleges Referrals to Affiliated Title Company Violate Fiduciary Duties Owed By Real Estate Agents. On February 20, a class action complaint was filed in Minnesota state court alleging that Coldwell Banker Burnet, a real estate brokerage company, violated state statutory and common law for its practice of referring clients to its affiliated title company, Burnet Title. The complaint alleges that Burnet Title has "some of the most expensive insurance rates and settlement service fees in the marketplace," and that by referring client home buyers and sellers to Burnet Title without also fully and adequately disclosing that lower-priced alternatives are available and without fully disclosing the financial incentives provided to sales associates for such referrals, the real estate broker and its agents violated their common law and statutory fiduciary duties to act in the best interests of their clients.
Notably, the complaint does not allege a violation of the Real Estate Settlement Procedures Act (RESPA) – in fact, the complaint admits that the "Affiliated Business Disclosure" given to clients by Burnet sales associates "may satisfy the minimum requirements" of RESPA. However, the complaint claims that the Affiliated Business Disclosure does not satisfy "the greater obligations of a fiduciary, under common law and state statutes, to fully disclose all material facts known to it which might affect the clients' rights or interests...". Grady v. Burnet Realty Inc. (Minn. D.Ct. Feb. 20, 2007). For full text of the complaint, please contact .
Invoice Can Incorporate Web-Based Contract Terms. In International Star Registry of Illinois v. Omnipoint Marketing, LLC, No. 06-61417, 2007 U.S. Dist. LEXIS 6062 (S.D. Fla. Jan. 29, 2007), the United States District Court for the Southern District of Florida determined that invoices can incorporate by reference contractual terms that are posted on a website. In this case, the plaintiff purchased e-mail marketing services and an e-mail prospect list from Omnipoint Marketing, LLC . Most of Omnipoint’s invoices contained a clause next to the signature line that incorporated Omnipoint’s standard terms and conditions, which were posted on a website. The clause also provided the website URL address for the terms and conditions. The plaintiff argued that these terms and conditions, including a jurisdiction selection clause, were not binding. The court disagreed, holding that the terms and conditions were validly incorporated into the parties’ agreement, which creates a “hybrid” contract – part electronic, part paper. Please contact for a copy of the court’s decision.
Invoice Can Incorporate Web-Based Contract Terms. In International Star Registry of Illinois v. Omnipoint Marketing, LLC, No. 06-61417, 2007 U.S. Dist. LEXIS 6062 (S.D. Fla. Jan. 29, 2007), the United States District Court for the Southern District of Florida determined that invoices can incorporate by reference contractual terms that are posted on a website. In this case, the plaintiff purchased e-mail marketing services and an e-mail prospect list from Omnipoint Marketing, LLC . Most of Omnipoint’s invoices contained a clause next to the signature line that incorporated Omnipoint’s standard terms and conditions, which were posted on a website. The clause also provided the website URL address for the terms and conditions. The plaintiff argued that these terms and conditions, including a jurisdiction selection clause, were not binding. The court disagreed, holding that the terms and conditions were validly incorporated into the parties’ agreement, which creates a “hybrid” contract – part electronic, part paper. Please contact for a copy of the court’s decision.
Judge Grants Motion to Inspect Plaintiff's Computer under New Federal E-Discovery Rules, but Places Limits on Execution. A Michigan federal district court judge in Thielen v. Buongiorno USA, Inc. No. 06-16, 2007 U.S. Dist. LEXIS 8998, (W.D. Mich. February 8, 2007) granted a defendant's motion to compel inspection of a computer for discovery, but in recognizing the potential burden of allowing unfettered access to the information on the computer, also placed significant limitations on how the discovery request could be executed. Plaintiff Thielen had sued the defendant for sending text messages to the plaintiff's cell phone without permission while Buongiorno USA, Inc. maintained that their communications are sent only in response to a consumer initiating the contact either through the internet or a cell phone text message. The plaintiff denied making initial contact, prompting Buongiorno to file a motion to inspect Thielen's computer to determine if the plaintiff did initiate contact through an internet website. The court agreed that such information would be highly pertinent to a decisive issue at trial, but also noted that discovery requests must not be unnecessarily burdensome. To that effect, the court granted the motion to compel discovery, but included the following parameters: (i) the examination shall be done by imaging the hard drive of the computer and the examination of the imaged drive is limited to a particular timeframe; (ii) the examination must be done by a forensic examiner outside the presence of the parties or their attorneys; and (iii) the forensic examiner shall provide a hard copy of his proposed findings to the plaintiff to review and potentially object before providing the findings to the defendant. This decision was held under the new federal electronic discovery rules that went into effect last December (see the December 1 InfoBytes Special Alert for details). Please contact for a copy of this opinion.
FTC to Host Workshop on Identity Theft Prevention. The Federal Trade Commission (FTC) will hold a workshop entitled “Proof Positive: New Directions in ID Authentication” on April 23 and 24, 2007. The FTC is seeking public comment on several issues to help arrange the workshop’s agenda including (i) how individuals can prove their identities when first establishing them, (ii) promising current or emerging authentication technologies or methods, and (iii) whether these technologies work for the consumer. Public comments are due March 23, 2007. For more information, see http://www.ftc.gov/opa/2007/02/authentication.htm.
Judge Grants Motion to Inspect Plaintiff's Computer under New Federal E-Discovery Rules, but Places Limits on Execution. A Michigan federal district court judge in Thielen v. Buongiorno USA, Inc. No. 06-16, 2007 U.S. Dist. LEXIS 8998, (W.D. Mich. February 8, 2007) granted a defendant's motion to compel inspection of a computer for discovery, but in recognizing the potential burden of allowing unfettered access to the information on the computer, also placed significant limitations on how the discovery request could be executed. Plaintiff Thielen had sued the defendant for sending text messages to the plaintiff's cell phone without permission while Buongiorno USA, Inc. maintained that their communications are sent only in response to a consumer initiating the contact either through the internet or a cell phone text message. The plaintiff denied making initial contact, prompting Buongiorno to file a motion to inspect Thielen's computer to determine if the plaintiff did initiate contact through an internet website. The court agreed that such information would be highly pertinent to a decisive issue at trial, but also noted that discovery requests must not be unnecessarily burdensome. To that effect, the court granted the motion to compel discovery, but included the following parameters: (i) the examination shall be done by imaging the hard drive of the computer and the examination of the imaged drive is limited to a particular timeframe; (ii) the examination must be done by a forensic examiner outside the presence of the parties or their attorneys; and (iii) the forensic examiner shall provide a hard copy of his proposed findings to the plaintiff to review and potentially object before providing the findings to the defendant. This decision was held under the new federal electronic discovery rules that went into effect last December (see the December 1 InfoBytes Special Alert for details). Please contact for a copy of this opinion.
FTC to Host Workshop on Identity Theft Prevention. The Federal Trade Commission (FTC) will hold a workshop entitled “Proof Positive: New Directions in ID Authentication” on April 23 and 24, 2007. The FTC is seeking public comment on several issues to help arrange the workshop’s agenda including (i) how individuals can prove their identities when first establishing them, (ii) promising current or emerging authentication technologies or methods, and (iii) whether these technologies work for the consumer. Public comments are due March 23, 2007. For more information, see http://www.ftc.gov/opa/2007/02/authentication.htm.
© Buckley Kolar, LLP 2005. INFOBYTES is not intended as legal advice to any person or firm. It is provided as a client service and information contained herein is drawn from various public sources, including other publications.