Internet Lawyer Blog

As some of readers, who have active facebook profiles know, the like button is a way to express your support for a cause or idea. However, a federal judge states that, clicking it doeos not constitute constitutionally protected speech.

For example, the employees of a local police department sued their boss (Sheriff B.J. Roberts) for firing them after they supported his opponent in his 2009 re-election campaign. One of those workers, Daniel Ray Carter, had "liked" the Facebook page of Roberts' opponent, Jim Adams. Exactly what a "like" means - if anything is the main question. The ex-employees posit that their First Amendment rights were violated.

While public employees are allowed to speak as citizens on matters of public concern, the United States District Judge, the Honorable Raymond Jackson, ruled that clicking the "like" button does not amount to expressive speech. Express conduct, also referred to as "symbolic speech," relates to the communication of ideas through one's conduct. Expressive conduct raises some interesting constitutional questions because it combines expression, which typically receives First Amendment protection, and conduct, which typically does not receive First Amendment protection. This dualistic nature may account for the court's position of affording expressive conduct some constitutional protection, but substantially less protection than pure speech.

What is personal jurisdiction? It is the court's authority to determine a claim affecting a specific person. Generally, providing any type of data or information on the world-wide-web (i.e., Internet) is insufficient to subject a person to personal jurisdiction in each state wherein the date or information is accessed. However, a nonresident's online activity, must be expressly targeted at, or directed to, the forum state in order to establish minimum contacts necessary to support the exercise of personal jurisdiction. In general, personal jurisdiction may not be exercised against a nonresident whose website was not directed toward any state.

If a non-resident defendant publishes statements that fall under the category of defamatory comments concerning the plaintiff on a website, the effects of which were clearly directed at the forum state, result in sufficient contact with the forum to warrant the assertion of jurisdiction over the nonresident defendant. On the other hand, the publication of defamatory comments concerning the plaintiff on a website is not, by itself enough to support the exercise of jurisdiction over a nonresident defendant (e.g., when an article was not specifically directed to residents in the forum state, or was not primarily directed at the plaintiff in that state).

Our readers must keep in mind that the tort of defamation can be committed in the jurisdiction (i.e., the state), even if the message was not directed there, if it has effects in that state.

Generally, a court may assert jurisdiction over a nonresident defendant in a patent infringement action wherein the defendant's website was directed at the forum state. Courts have also found, under particular circumstances, that a defendant's web activity was directed at the forum state, supporting the court's assertion of jurisdiction over the nonresident defendant in an action for breach of contract. Even though a defendant's marketing did not specifically target customers in the forum state, and its business process was completely automated, long-arm jurisdiction may still be based on a finding that it was exploiting that state's market.

Also, if a person routes his/her customer's e-mail through another's mail server (with the knowledge that the unauthorized traffic was causing problems for that person) is evidence showing that defendant purposefully directed his/her conduct at the forum state and can be a basis on which to assert jurisdiction over the nonresident defendant.

If you have any further questions or concerns, contact the Law Offices of Salar Atrizadeh for a consultation.

Cyberattacks can hit businesses of any size, causing catastrophic damage to a business's finances and to the integrity of its information security. Hundreds of breaches occurred at large corporations during 2011, affecting over thirty million sensitive or confidential records. Hackers went after Sony, NASDAQ, and other giant businesses, but small companies are also vulnerable to attack. According to a report in the Business Journals, as many as eighty-five percent of small business owners do not see cyberattacks, which may include hackers or malicious software, as a serious threat. Heightened security at these big companies, though, could lead hackers and other cyber criminals to focus their attacks on smaller businesses who may not be so prepared.

Guarding against cybercrime is simply good business for small companies. A hacker targeting a small business can cripple the business or even force it to shut down with a very simple series of hacks or viruses. If a cyber criminal targets a small business' banking system, it could empty its cash reserves and leave it unable to operate. A hacker who compromises a business' confidential client data could expose the business to enough liability to put it out of business.

The "Common Sense Guide to Cyber Security," published by a coalition of government agencies and organizations, including the Federal Emergency Management Agency and the U.S. Chamber of Commerce, offers a set of security practices small businesses can use to protect themselves from cyberattack. After an initial set-up period, most practices involve simple daily maintenance and monitoring.

Risk Management Planning. Businesses should carefully assess the risks and weaknesses in their computing systems to see where protection is most needed. They should prepare contingency plans in case a breach or loss occurs, including how to continue business operations with alternate computing systems or at an alternate location.

Access Control and Accountability. A business's network security plan should include access controls that limit who may access critical systems and information. A single department or officer should have responsibility for information security and for approving new hardware and software, thus ensuring accountability for decisions and errors. At the same time, a business should educate all employees and officers as a means of creating a "culture of security." All employees should sign an agreement committing to the company's cybersecurity policies.

Firewalls and Other Security Measures. Firewalls can protect businesses from many common attacks, particularly from viruses and malware. Companies should also encourage use of complex passwords that combine upper- and lowercase letters, numbers, and other symbols; avoid common words and phrases; and change at least every three months.

Continue reading "Protecting Your Company's Data from Cybercrime" »

Computers and computing activities play an increasingly integral role in daily life in America, affecting our financial activity, social interactions, and more. With an increased level of dependence on networked devices comes the risk of theft, or even attacks, on and through our computer networks. While the business community has already recognized the importance of cybersecurity, the government and legal system are finally responding in five key areas.

National security. The federal government has made cybersecurity a central feature of its national security strategy. Recognizing the risk of an attack on the nation's computer networks by a foreign power or sub-national group, the Department of Defense created a comprehensive strategy for cybersecurity (PDF file) in 2011. The strategy treats "cyberspace" as its own "operational domain," requiring specialized training and organization. The government has also taken steps to combat online theft, which can include not only monetary theft but theft of intellectual property and identity theft. The latter has become more and more sophisticated as thieves find ways to exploit personally identifiable information (PII) stored online.

Federal legislation. The Obama administration proposed legislation outlining ten points for cybersecurity protection. These generally included protection of the American people, the nation's infrastructure, and the federal government's networks and computer systems. Several bills pending in Congress address aspects of cybersecurity. The controversial Cyber Intelligence Sharing and Protection Act (CISPA), for example, allows sharing of data between companies and the National Security Agency in order to investigate and combat cybersecurity threats.

State legislation. Protection of government data, PII, and personal privacy have informed numerous state statutes enacted in the past ten years. California passed a law requiring notification of cybersecurity breaches in 2003, and forty-six other states and the District of Columbia followed suit. Laws requiring "reasonable" levels of security for protected information exist in at least ten states, and numerous states are enacting statutes protecting people from wiretapping and other monitoring of electronic activity.

Regulatory initiatives. Multiple regulatory agencies have addressed cybersecurity concerns through additional regulations, guidelines, and enforcement actions. The U.S. Security and Exchange Commission (SEC), for example, recently issued a new set of guidelines for publicly-traded companies. The guidelines address disclosure of cybersecurity breaches as a means of making information available to investors. The FBI, meanwhile, established a joint task force to investigate cyber threats.

Continue reading "Legal Developments and Trends in Cybersecurity for 2012" »

When hackers breached the e-commerce firm Zappos in January, they may have compromised the personal information of as many as 24 million users. Legislatures in several states, including California, have responded to attacks such as this one by passing laws enhancing cybersecurity investigation and enforcement, and increasing requirements for disclosure of cyberattacks. The U.S. Securities and Exchange Commission (SEC) has also issued new guidelines for businesses and individuals under attack. The key issue to consider, in light of these new laws and regulations, is how much disclosure is not enough, and how much is too much.

The SEC is recommending disclosure of cyberattacks to an unprecedented degree. A new set of guidelines issued in October 2011 advises publicly-traded companies to disclose details of cybersecurity breaches as part of the quarterly 10-K report. Companies should disclose any and all cyberattacks, regardless of whether they caused a loss. The SEC even encourages companies to disclose "cyberrisks," even in the absence of a breach. This potentially benefits investors, the SEC says, by providing comprehensive information about both actual and potential losses due to hacking and other cyberattacks. At the same time, extensive disclosure could put companies at greater risk by exposing weaknesses to hackers. Companies must carefully consider how much, or how little, to disclose. Too much disclosure could make them vulnerable to attack. Too little disclosure could make them vulnerable to lawsuits by investors.

State laws regarding cybersecurity disclosures are typically not as stringent as the SEC's guidelines. California passed the first such law a decade ago. That law applies to any person or business that owns or licenses computer data containing a California resident's "personal information," such as social security number, home address, driver's license number, and so forth. In the event of a breach that would reasonably lead to an unauthorized person obtaining the personal information, an owner or licensor of personal data must notify the person whose personal information may have been breached.

Forty-six states have followed California's lead and passed similar laws. California has actually fallen behind some states that have passed laws with stricter disclosure requirements. A new law that took effect on January 1, 2012, requires an individual or business to notify the state attorney general of a cybersecurity breach if the breach affects more than five hundred California residents. The notice must include specific details of the type and size of the breach, and a toll-free number to allow users to contact credit agencies.

Continue reading "New Laws and Guidelines on Cybersecurity Disclosures Both Protect and Endanger Personal Information" »

Chapter 11 Bankruptcy

Bankruptcy protection allows certain individuals and businesses to repay their debts by either selling their assets or restructuring the company. Bankruptcy proceedings have flourished as the failing economy and lackluster job performance force applicants to seek relief under federal bankruptcy law. Over 1.3 million Americans filed for bankruptcy in 2009. Most were "consumer" cases, marking a 91% increase in chapter 11 filings that year. California still leads the nation in the total number of bankruptcies filed. Chapter 11petitions have also continued to increase despite the national drop in bankruptcy cases filed last year.

Chapter 11 is derived from title 11 of the United States Code (the "Bankruptcy Code"). Chapter 11 protection is used primarily by commercial enterprises that want to keep the business running while they repay creditors through a court-approved plan. Chapter 11 allows businesses to remain in operation while they restructure the organization and use the resulting profits to pay back creditors. Under an approved reorganization plan, businesses can reduce their debts by repaying a portion of their obligations and discharging others. Chapter 11 is unique in that it allows the debtor to be the trustee of the estate (also referred to as the "debtor in possession") and to keep possession of the company's assets while the case is in court.

Depending on the needs of the business, Chapter 11 offers debtors various protections, including but not limited to, the following:

• Maintenance of an intact business
• Opportunity to rescale operations
• Power to object to creditors' claims
• Extended deadline to repay creditors
• Greater flexibility than other chapters
• Recovery of assets and return to profitability
• Discretion to terminate onerous contracts and leases
• Time to sell real estate with equity and handle delinquent taxes

Chapter 11 gives businesses a chance to restructure their finances so they can continue to run. This keeps people employed and produces a profit for stockholders while ensuring that creditors get paid. The rationale behind this protection is that a functioning business is more valuable than one whose assets are sold. Companies under Chapter 11 protection get a financial "reprieve" to reduce debts, extend the repayment deadline, or lower operating costs, until they can "return" to a more viable state. While the case is in court, the debtor remains in possession of the estate and keeps control of the assets while the court approves a reorganization plan. Chapter 11 allows the "debtor in possession" to keep the business going while acting as trustee of the estate.

Under Section 1107 of the Bankruptcy Code, the debtor assumes the same fiduciary duties as a Chapter 11 trustee. These duties include providing an accounting of property and filing monthly operating reports as required by the bankruptcy court. Under this section, trustees have the power to discharge a portion of their obligations and object to creditors' claims. They also have the discretion to employ attorneys, accountants, and other professionals to assist the debtor in bankruptcy proceedings. Chapter 11 debtors generally enjoy more freedom as they undergo a period of consolidation before emerging with a reduced debt load and a reorganized business.
If you are a business owner seeking bankruptcy protection, the experienced California Chapter 11 bankruptcy attorneys at the Law Offices of Salar Atrizadeh can help. Our skilled attorneys and highly trained staff are dedicated to providing the highest quality legal representation to individuals and businesses throughout California. We have successfully handled all types of bankruptcy cases, helping clients get back on their feet. Regardless of the extent of your personal or business liability, we can help you restructure your finances and get a fresh start.

For a confidential consultation, call us at (310) 694-3034 or contact us online.

In July 2011, the Federal Deposit Insurance Corporation (FDIC) brought a lawsuit in a California federal court against Michael Perry, former CEO for Indymac Bank, over his purported actions during the United States mortgage crisis. The lawsuit alleges Perry allowed Indymac Bank to pool approximately $10 billion worth of unsalable and risky subprime loans that resulted in a $600 million loss to the company. When Indymac Bank ultimately closed, the FDIC was appointed as the company's receiver.

Perry argued before the U.S. District Court for the Central District of California that California's business judgment rule, which protects a corporation's directors from legal liability for their business decisions, also protects corporate officers. Judge Otis Wright disagreed and allowed the FDIC's case against Perry to proceed. Last week, Perry filed an interlocutory appeal with the Ninth Circuit Court of Appeals. In his appeal, Perry has asked the Ninth Circuit to consider the reach of California's business judgment rule before the FDIC's lawsuit against him proceeds.

Although the state's business judgment rule applies solely to directors, Perry has argued a common law component to the rule also exists which ought to be read by California courts to protect a corporation's officers from liability for business decisions. Perry also argued every other state in the nation has construed the common law associated with the business judgment rule to provide protections to corporate officers as well as directors. If the Ninth Circuit disagrees with Perry, California will be the only state in the nation that does not apply the business judgment rule to corporate officers.

A corporation is a business entity provided with many of the same legal rights as an individual. A variety of corporate structures exist in the United States. The most common corporate structures include closely held corporations, S corporations, and C corporations. Every corporation is subject to the laws of the state in which it was incorporated regardless of where its principal business takes place.

If a corporation issues stock, the company will normally be governed by its stockholders either directly or through a board. A board of directors must govern the corporation in a manner that serves the best interest of its stockholders. A corporation's board of directors is responsible for making major business decisions. The board will also appoint and supervise corporate officers who handle the company's daily business decisions.

By choosing to incorporate your business, you can normally limit an individual's personal liability to corporate assets. The business judgment rule also generally protects agents of a corporation from liability for losses incurred during corporate transactions that are within the scope of the agent's authority and made in good faith. A qualified business lawyer can explain the benefits of incorporating your business.

Continue reading "California's Business Judgment Rule and Corporate Officers" »

Individuals considering bankruptcy are often concerned about losing their retirement savings accounts. In most situations, unless you voluntarily choose to use the funds to satisfy debt obligations, filing for bankruptcy will not have an effect on your individual retirement savings. In a Chapter 13 bankruptcy, a debtor's assets are reorganized instead of liquidated and the bankruptcy plan is funded by the debtor's wages. During a Chapter 7 bankruptcy, retirement accounts are normally exempt or not considered part of the bankruptcy estate.

11 U.S.C. 522(d)12, passed in 2005, allows up to $1,095,000 in retirement funds exempted from taxation to be retained by each spouse when a debtor files for bankruptcy. This means retirement accounts established under sections 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code cannot be liquidated through bankruptcy without your consent. Additionally, 11 U.S.C. 522(d)10(E) protects retirement payments used to support a debtor or the debtor's dependents from being considered by a bankruptcy court. Certain retirement plans governed by Title 1 of the ERISA statute and state regulated health insurance plans are also exempt from consideration by a bankruptcy court.

If a debtor cannot exercise dominion and control over a retirement account, it will be removed from the bankruptcy estate. This means if the person filing for bankruptcy cannot access the account except at specific life events such as retirement, termination, or death, it will not be considered by a bankruptcy court. On the other hand, if the debtor has total control over a self-funded account that is not subject to one of the federal exemptions discussed above, the account will usually be considered a part of the bankruptcy estate. It is important to note that states such as California provide additional protections for an individual's retirement account which extend beyond those established by Congress.

Generally, an individual's retirement fund will be protected in almost every individual bankruptcy proceeding. If your employer files for bankruptcy, however, your retirement account might be at risk of terminating. How an employee's retirement fund is affected will depend on the type of bankruptcy a company chooses to file. If an employer files for Chapter 11 reorganization, retirement plans may continue to exist throughout the process. If instead a business files for Chapter 7 liquidation, both retirement and health plans will generally end immediately.

Even when an employer liquidates its assets and ceases to exist, a worker's pension benefits will generally be protected from business creditors. The ERISA statute requires that all retirement funds promised by an employer be held in a trust account separate from the company's business assets. Additionally, if an employer's retirement or pension plan is terminated, an employee is immediately 100 percent vested in the plan. Some defined benefit plans are also insured by the United States government through the Pension Benefit Guaranty Corporation. A skilled California bankruptcy lawyer can further explain the protections that apply to retirement accounts during bankruptcy proceedings.

Continue reading "Retirement Accounts Are Generally Protected During Bankruptcy" »

An effective employee manual is an essential tool for any business or corporation that employs workers. It is a valuable way for businesses to communicate a company's expectations to its employees. A well written employee manual will outline company procedures, policies, and expectations. A poorly written manual can create both legal and personnel headaches for your business.

The following policies are important for any employer to consider when writing or revising an employee manual:

• Each employee manual should include a disclaimer which states that the publication is not an employment contract. This can protect a business from terminated workers filing breach of contract claims against the business.

• An employee manual should successfully communicate company objectives and the organization's mission statement. By doing so, the manual can foster each employee's understanding of business goals and provide them with an enhanced sense of purpose.

• An effective employee manual will state your business has a zero tolerance policy for any kind of discrimination or harassment. The manual should also explain how to identify and report harassment. A company's employee manual should also specifically prohibit discrimination based upon sexual orientation.

• Employee leave and termination policies should always be addressed in an employee manual. Any leave eligibility differences or restrictions based on job functions or employee status should also be addressed. A well written manual will also remind employees that any discrimination based on disability will not be tolerated, and also discuss the Family Medical Leave Act.

• An employee handbook should define worker misconduct and discuss the company's disciplinary process. A disciplinary policy should be flexible and include a disclaimer which states misconduct is not limited to behaviors specifically outlined in the manual.

• A well written employee manual will describe the process for raising workplace issues and filing a formal complaint or grievance. This is important because it shows workers the company will take employee concerns seriously.

• Because no one should feel threatened at work, each employee manual should provide workers with guidance regarding how to address and respond to workplace violence and other conflicts. An employee handbook should also include a zero tolerance policy for workplace bullying.

• Finally, as the use of social media such like Facebook and Twitter becomes more common, it is essential for businesses to address employee use or misuse of social networking websites. An employee handbook should discuss what sort of workplace-related communications are inappropriate and remind workers that disseminating confidential or proprietary information is prohibited. A social media policy should also address disparaging or harassing the company or fellow employees.

Continue reading "Employee Manual Guidance for California Businesses" »

A new California law provides companies with the option to legally organize as a benefit corporation. The benefit corporation law, which took effect on January 1st, 2012, allows companies to utilize a new organizational structure which goes beyond that of traditional corporate and nonprofit formations. The new corporate category allows a company to place environmental or social policies within the corporate charter. It also expands the fiduciary duties of board members and company executives beyond the traditional role of creating a profit for shareholders. In effect, the law limits a shareholder's ability to sue based on social and environmental policies which may impact the value of his or her stock.

Since the law took effect, more than a dozen companies like Patagonia have already filed the necessary paperwork to become a benefit corporation. In California, the board of directors and executives of a corporation generally have a fiduciary duty to place the interests of shareholders above any other company interests and policies. As a benefit corporation, a company may take into account the interests of its employees and community in addition to profitability.

In order to convert the corporate structure of a company to a benefit corporation, two-thirds of shareholders must approve the change. Returning to a traditional corporate structure requires similar shareholder approval. California is the seventh state in the nation to provide a benefit corporation option to companies.

A corporation is a business entity that is afforded many of the same legal rights as an individual. A corporation may be made up of a single individual or a group of people. Although a variety of corporate structures exist in the United States, the three most common include closely held corporations, C corporations, and S corporations. Each corporation is subject to the laws of the state in which it was incorporated regardless of where its business takes place. If a company chooses to issue stock, it will generally be governed by its shareholders either directly or through a board. In a traditional corporation, a board of directors has a duty to govern the company in a way that serves the best interest of its shareholders.

One of the chief benefits of incorporating a business is it can limit an individual's liability to corporate assets. This is especially important for those engaged in highly litigated fields and trades. Contact an experienced business lawyer today to learn more about the benefits of incorporating your business.

Continue reading "New California Law Allows Benefit Corporation Status" »

According to an analysis recently performed by Professor Ronald Mann of Columbia Law School for the National Bankruptcy Research Center, the number of Americans who filed for bankruptcy protection fell by about 12 percent last year. Approximately 1.35 million people in the U.S. filed for bankruptcy in 2011. In 2010, that number was 1.5 million, or one out of every 150 people. Additionally, Chapter 7 filings declined by 17 percent and Chapter 13 filings were down 25 percent. The decline was the first drop in the number of U.S. bankruptcy filings since 2006.

However, California did not fare as well as the rest of the nation. One in every 120 Californians filed for bankruptcy protection in 2011. California had the fifth-highest statewide bankruptcy rate in the nation. The state with the highest bankruptcy rate was Nevada. Even after a 20 percent decline in filings from 2010, one in 88 Nevada residents filed for bankruptcy protection in 2011. Two California counties, San Bernardino and Riverside, were among the top five urban counties for highest bankruptcy rates nationwide. The remaining three counties are home to the cities of Memphis, Tennessee, Atlanta, Georgia, and Las Vegas, Nevada.

Unlike 2010 when regional variations existed, the decreases in bankruptcy filing rates in 2011 were spread out across the nation as a whole. Only the State of Delaware experienced an increase in personal bankruptcy filings last year. Professor Mann was careful to warn against reading too much into the 2011 bankruptcy rate decline. Because bankruptcy filing rates increased during the last two months of 2011, he believes bankruptcy filings may again be on the rise in 2012.

An individual, or debtor, who seeks to regain control of their finances through bankruptcy will generally file for Chapter 7 or Chapter 13 protection. In a Chapter 7 bankruptcy, a debtor's nonexempt assets are liquidated at the direction of a bankruptcy court in order to satisfy creditor claims. Any remaining claims are then discharged and the debtor is no longer personally liable for the debt. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires a bankruptcy court to determine whether an individual consumer debtor qualifies for relief under Chapter 7. If the debtor's income is too high, he or she may not be eligible for Chapter 7 relief.

A Chapter 13 bankruptcy focuses on reorganization and is designed for an individual debtor who has a regular source of income. A debtor must make regular payments according to a bankruptcy plan and is protected from garnishments, lawsuits, and other creditor actions. After the plan is completed, any remaining debts are discharged. This type of bankruptcy is more common among homeowners. The bankruptcy process is complex. If you are struggling financially, it is a good idea to contact an experienced bankruptcy attorney to discuss your options.

Continue reading "Personal Bankruptcy Filings Fell Nationwide, Still High in California" »

When a husband and wife face a relatively simple divorce (e.g., no children and little assets or liabilities) they can agree to be financially liable for debts that each person incurred (i.e., the legal terms for obtained) on his/her own. So, neither person is jointly liable for any of the other person's debt. For example, if the husband stops payments on his credit card bill, the credit card company may not seek payments from his former wife since she was not on her former husband's account. In this situation, if either of the formerly-married persons made the decision to file for bankruptcy, the divorce does not have an impact on bankruptcy procedure. If either or both of them qualified for chapter 7, they could do so and not be concerned about their prior divorce.

Another situation that may come up in divorce and bankruptcy situation is when the couple have joint debts (i.e., they are both financially liable for a specific debt). For example, they are joint account holders of credit cards, or under the Family Purpose Doctrine, they are jointly responsible for a debt. In some states, this type of scenario may come up when a former spouse incurs medical fees during marriage, which is generally treated as a joint or shared debt. So, her husband is legally responsible for those debts as well if the wife goes through medical procedures and cannot make payments.

Generally, it is not abnormal for a divorcing couple to find out they are financially liable for a debt and they are mandated to hold each other harmless from liability on that debt. In such circumstances, the court does not change the rights of the creditor. Stated otherwise, if both husband and wife are liable for a debt (i.e., it is a joint debt) and the court enters an order making only one of them responsible for that debt and to "hold harmless" the other former spouse, the following situation may occur:

If the husband fails to make payment to the creditor, the creditor has the legal right to contact the husband's former wife for payment. The creditor can also file a lawsuit against the wife in order to collect the debt. The wife may have no remedy or recourse against the creditor; however, she does have recourse against her former husband. Stated otherwise, she can request the judge to hold the former husband in contempt, due to his failure to follow the court's order to hold her harmless regarding the specific debt.

The option of which type of bankruptcy to file is fairly important in this situation. Please note that chapter 7 bankruptcy does not discharge or wipe out debts that are incurred in the course of a divorce or separation agreement. In other words, if the former husband files for bankruptcy relief under chapter 7, any debts that he was responsible for in his divorce will not be discharged. But under chapter 13, a person who owes a large amount of debt that he/she was responsible for in their divorce, can deal with such debts through a repayment plan.

In this scenario, if the former husband files bankruptcy under chapter 13 and lists his former wife as a creditor and co-debtor, and if he complies with his confirmed repayment plan, then at the conclusion of the repayment plan he will not be responsible for "divorce debt." Also, the court which was administering the divorce should not find the former husband in contempt, as long as the specific debt constitutes property settlement and is not child support or alimony.

This situation may apply to either of the spouses, i.e., the former husband or wife. If either person is liable for the debts of the other, stemming from their divorce settlement, a chapter 13 bankruptcy allows them to discharge that debt. However, a chapter 7 bankruptcy does not, and it permits the court to hold the non-paying spouse in contempt.

Please remember that debts regarding a domestic support obligation, such as child support or alimony, will not be discharged in chapter 7 or chapter 13. These types of debts can be repaid via chapter 13 bankruptcy. For more information on this topic, please contact Salar Atrizadeh, Esq. or visit the law firm's website at www.atrizadeh.com.

Last year, the California State Legislature made various efforts to regulate commercial transactions on the Internet. These efforts provide interesting questions and concerns regarding practical and constitutional limits on a state's capability to legislate or regulate transactions on the world-wide-web (i.e., the Internet) due to its intrinsic interstate character.

One important consideration is the Dormant Commerce Clause, which stems from Article I, section 8, clause 3 of the federal Constitution. This doctrine implies that Congress only has the power to regulate interstate commerce and that the states do not have such power. Its application to the regulation of activities on the Internet is not quite developed and includes a series of judicially-created analyses. So far, the United States Supreme Court (which is the nation's highest court) has not issued any definitive rulings. In addition, we do not have authoritative decisions by federal courts regarding the capability of the states to control online privacy and data security, tax online sales, or regulate online gambling.

As mentioned in this article, the legislators in this state passed or proposed laws that would develop our state's regulatory power over transactions on the Internet which relate to the following topics: (i) privacy and data security; (ii) taxation of retail sales over the Internet; and (ii) online gambling.

California's legislation (i.e., enactment of laws) may be different from federal legislation efforts which could cause the United States Supreme Court to repeal or strike down the law. SB 761, which is "Do Not Track" bill, posits that legislation would violate the Dormant Commerce Clause since it would cause regulation of an out-of-state activity and would subject online businesses to inconsistent state regulation. As such, a state's efforts to tax online retail activity are limited by current federal laws (e.g., court decisions and/or statutes) preventing the states from taxing sales of businesses which do not have a geographic presence in the specific state. A state's power to control or regulate online gambling is still uncertain, especially because of the absence of clear federal law on the subject. Thus far, one state supreme court has upheld a state's right to ban online gambling over a Dormant Commerce Clause challenge.

The future of state regulation of Internet activity depends on various developments. For example, it depends on the standard of scrutiny which courts apply to state regulation of the Internet. Second, it depends on the arrival of new technology which can help website operators to distinguish users from different states. Third, it depends on the viewpoint of Congress towards online transactions and whether it is willing to subject activities exclusively to federal regulation or to grant states the power to regulate these type of activities.

The following is a list of new and pending legislation in California:

I. Privacy and Data Security

1. S.B. 24 (Data Security Breach Notice)
2. S.B. 445 (Library Records
3. S.B. 602 (Reader Privacy )
4. S.B. 761
a. Do Not Track
b. Un-passed

II. Taxation -- A.B. 28 ("Amazon" tax)

III. Gambling

1. S.J.R. 14 (opt out of federal regulation)
2. S.B. 40 & 45
a. State framework
b. Did not pass

Megaupload.com was among the world's biggest file-sharing sites with 150 million registered users and about 50 million hits daily. It was big enough that it earned founder Kim Dotcom $42 million in 2011.

The movie industry objected that the site was making money off pirated material; even though, Megaupload is based in Hong Kong and the founder was living in New Zealand, some of the alleged pirated content was hosted on leased servers in Virginia, which was sufficient for U.S. prosecutors to take action.

Thereafter, the site was closed and its founder and three Megaupload employees were arrested in New Zealand on allegations by American prosecutors that they facilitated millions of illegal downloads of films, music and other content, costing copyright holders at least $500 million in lost revenue.

The authorities in New Zealand were able to obtain artwork, weapons, and more than $8 million in funds and cars valued at nearly $5 million after serving 10 search warrants at several businesses and homes around Auckland.

A group of hackers retaliated for the recent news and claimed credit for attacking the Justice Department's website. After investigations by federal officials, it was confirmed that the department's website was down for several hours and the disruption was being "treated as a malicious act." This group of hackers who are also known as "Anonymous" claimed credit and also claimed that they also broke into the Motion Picture Association of America's website.

Fairfax Media located at New Zealand reported that the defendants were present at the courtroom for extradition proceedings which may last a year or longer. Dotcom's lawyer raised objections to a media request to take photographs and video, but then Dotcom spoke out from the dock, saying he didn't mind photos or video "because we have nothing to hide." The judge granted the media access, and ruled that the four would remain in custody until a second hearing Monday.

Michelle Obama is officially live on Twitter. The first lady's Twitter feed went live on Thursday and her link is being managed by the president's re-election campaign. The first two tweets came from the campaign staff and described the account as "a new way for you to connect with First Lady Michelle Obama and the President's campaign." The traffic was high within the first hour with more than 20,000 followers. President Barack Obama also has a Twitter account managed by the campaign. Its first tweet of the day: "It's not every day we get to welcome the First Lady of the United States to Twitter - happy to have you, Michelle Obama!"

This acknowledges that technology plays a key role in our lives and allows us to communicate with each other through different means and methods. Twitter is an online social networking service and microblogging service that enables its users to send and read text-based posts of up to 140 characters, known as "tweets". It was created in March 2006 by Jack Dorsey and launched that July. The service rapidly gained worldwide popularity, with over 300 million users as of 2011, generating over 300 million tweets and handling over 1.6 billion search queries per day. It has been described as "the SMS of the Internet." Twitter Inc. is based in San Francisco, with additional servers and offices in New York City.