LJN Newsletters

Conducting a due diligence review has long been standard practice for anyone considering the purchase of a company's stock or assets or a piece of real estate. In some disciplines, such as environmental law, the potential imposition of strict liability for contamination or the threat of third-party lawsuits has resulted in comprehensive environmental due diligence becoming an essential part of any pre-acquisition review. The same is the case with respect to product liability. Given the proliferation of product liability lawsuits, due diligence should no longer be thought of as a tool used exclusively in mergers and acquisitions ("M&A"). Rather, it should become an integral part of the corporate culture.

On Sept. 30, 2004, the Federal District Court for the Eastern District of Pennsylvania (Kelly, J.) dismissed an attempt to challenge a settlement reached by the U.S. Consumer Product Safety Commission ("CPSC"). Jerome Mahoney and Rebecca G. Mahoney v. U.S. Consumer Product Safety Commission, U.S. D.C. (E.D. Pa.), Civil Action No. 04-1833, Sept. 30, 2004. The 2001 administrative action against Daisy Manufacturing Company ("Daisy"), the manufacturer of the Daisy air rifle, is one of its most controversial cases. In that action, announced by outgoing Chairman Ann Brown over the vigorous dissent of Commissioner Mary Sheila Gall, the CPSC charged that some 7.5 million Daisy Powerline Airguns were defective due to alleged design defects that created a "substantial product hazard" under Section 15(a)(2) of the Consumer Product Safety Act and that the guns presented a "substantial risk of injury" to children under Sections 15(c)(1) and (c)(2) of the Federal Hazardous Substances Act. The complaint alleged, among other things, that design defects could cause BBs to become lodged in the gun's magazine, even though the gun might appear to be empty. As a consequence, the Commission stated, it is reasonably foreseeable that consumers, most of whom are children or young adults, are likely to be less careful when handling the gun, and that BBs are "likely to be fired at and strike the consumer or another person in the vicinity."

Recent rulings of interest to you and your practice.

The Supreme Court considered gay rights at the justices' first private conference of the new year on Jan. 7. The Florida gay adoption case, Lofton v. Secretary of the Florida Department of Children and Families, is one of dozens of cases the Court discussed at its conference with an eye toward granting or denying review.

International marriages and personal relationships place special demands on family lawyers whose clients require dependable advice about complex international family law issues. This has led to an increasing role for international family law counsel. Today, it would hardly be unusual for an American man and a French woman living in New York to marry in Bermuda, move from New York to Singapore on business, own real estate in Canada and a business in England, and have children in school in Switzerland. If they separated and one spouse unilaterally returned with the children to live in New York, both parties might well require legal advice regarding many matters, each of which might have a significant international component, concerning divorce, custody, equitable distribution, child support, spousal support and child abduction.

While many clients establish trusts and execute estate plans to eliminate or reduce the estate tax burden of their estates, there are non-tax benefits to creating trusts that are especially relevant to the clients of family lawyers. With the possibility of estate tax repeal on the horizon, the timing is right to focus on these non-tax benefits and remind ourselves and our clients of the valuable protections and control available through the use of trusts. Regardless of whether or not the federal estate tax is permanently repealed, the possibility of such repeal allows us to put aside many of the complexities of tax planning and focus on the key family issues and concerns that motivate clients to initiate trust planning.

It has become important to keep track of national trends with respect to the definition of income for support purposes. More often than not, your state will not have decided the specific question with which you are struggling, ie, whether or not a particular item constitutes income. The odds are increasing that other states will have dealt with the issue. This article presents some examples of cases over the last few years.

Effective July 1, 2004, the Delaware General Assembly adopted significant amendments to the Delaware General Corporation Law, the Delaware Limited Liability Company Act, and the Delaware Revised Uniform Limited Partnership Act as part of its periodic amendments to these Acts for the purpose of keeping them current and maintaining their preeminence among U.S. business laws.
This article summarizes the most pertinent of those changes.