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Attention Retailers: Gift Cards In NJ Involve Refunds, as of Sept. 1

Pillsbury's Consumer & Retail Practice has issued a reminder detailing a new law taking effect soon in the state of New Jersey.

As noted by the attorneys:

"Beginning September 1, 2012, if a stored value card or stored value card deemed a gift card or gift certificate is redeemed and a balance of less than $5 remains on the card after redemption, at the owner’s request, the merchant or other entity redeeming the card is required to refund the balance in cash to the owner."

The new law contemplates significant civil penalties for a violation of the law, the lawyers noted, quoting from the statute as follows:

“A merchant or other entity required to comply with the provisions of this subsection shall be liable to a penalty of $500 for each violation plus restitution of the amount of the cash value remaining on the stored value card, provided however that the amount of the penalty shall be trebled for an aggregate of such violations occurring during any 12 month period. Failure to provide requested cash redemption for each stored value card shall be considered a separate violation.”

Patent Trial Practice Guide Provides Model Order for E-Discovery

For parties looking at the possibility of a patent trial at the U.S. Patent and Trademark office, the new guidance for handling of e-discovery in this venue may make it a more attractive option. Overall, the newly issued rules for trial proceedings before the Patent Trial & Appeal Board (PTAB) attempt to strike a better balance between disclosure of the information needed to properly prepare for and litigate the proceeding, and the costs of obtaining and exchanging such information, according to the Pillsbury client alert titled "USPTO Trials: Understanding the Scope and Rules of Discovery."

With regard to e-discovery in particular, intellectual property lawyer Bryan Collins writes:

"The new rules and the Office Patent Trial Practice Guide explicitly recognize the burden of e-discovery costs and the fact that those costs often outweigh the relevance of any information. To address this concern, the Practice Guide contains a Model Order at Appendix C, which is expected to be used and issued as part of or together with the Scheduling Order. This Order calls for cost-shifting for disproportionate requests for Electronic Stored Information (ESI), or non-responsiveness or dilatory tactics, and no production of metadata, except the date, time, and distribution list, if any."

"Most importantly, discovery of emails is presumptively prohibited absent permission from the PTAB. Even if permitted, the Model Order limits the email search to five custodians using five search terms, and may permit five additional terms. While these limitations may be modified, the burden will be on the party seeking discovery to establish a need, and the existence of a well-thought-out Model Order should make production of emails the exception, rather than the rule."

Successful Defense of Bank's Trust Preferred Securities Redemption

Wells Fargo has won a pair of precedent-setting victories connected to the passage of the Dodd-Frank Act, which are important to all financial institutions that issued, and have recently been considering redeeming, trust preferred securities.

Many trust indentures contain "Capital Treatment Event" clauses that are very similar to those interpreted in these cases. The orders of a federal judge indicate that President Obama's signing of the Dodd-Frank Act in 2010 constituted a "Capital Treatment Event" that might entitle similarly situated banks to redeem their trust preferred securities, regardless of the timing of any so-called optional redemption date, so long as all other requirements are met.

The United States Reforms Its Burma (Myanmar) Sanctions

The recent reform of U.S. sanctions targeting Burma presents "opportunities for companies and individuals in the United States and around the world," note Pillsbury international trade lawyers in a new client alert.

However, given the complex mix of sanctions still in place and detailed new reporting requirements for investment, the authors note, "companies should remain cautious and obtain guidance on sanctions, anti-corruption and anti-money laundering issues as they engage in this opening market."

Is your investment or pension fund eligible for a European tax refund?

A new Pillsbury client alert notes that the European Court of Justice recently determined that France may no longer require 30% withholding on dividends paid to non-resident investment funds meeting the requirements of a UCIT because the country does not withhold on such funds if they are domestic.

The ruling does not limit its application to investment funds/UCITS resident in an EU country, and it has retroactive effect, which under French law allows refund claims for French withholding tax paid as of January 1, 2009 and later.

The authors suggest that US investment and pension funds should consider making a claim for refunds of the French dividend withholdings "as soon as reasonable."


Less deference to government agencies in interpreting regulations

A government agency's interpretation of its own ambiguous regulation--even if it is advanced in a legal brief--is ordinarily entitled to deference under the 1997 Supreme Court decision in Auer v. Robbins.

But as noted in a new Pillsbury client alert, the court's June 18 decision in Christopher v. Smithkline Beecham appears to have to have put a small dent in that deference, which could benefit companies in disputes over regulatory interpretations that first appeared as part of an enforcement proceeding or in a private lawsuit seeking damages.

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