The District Court for the Middle District of Pennsylvania Holds Two-Year Statute of Limitations Applicable to Plaintiff’s FLSA Claim for Unpaid Overtime

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Plaintiff’s claims stemmed from unpaid overtime wages she allegedly was entitled to during her employment at Troy Construction (Troy) in 2013. Stone v. Troy Constr., LLC, No. 3:14cv306 2018 U.S. LEXIS 50232 (M.D. Pa. 2018). The critical question was whether a two-year or three-year statute of limitation would apply. The statute of limitations provides a set amount of time for the injured party to commence an action to recover damages for the alleged injury. The Fair Labor and Standards Act (FLSA) provides the plaintiff with two possible statute of limitations. The usual statute limitations for FLSA claims is two-years, but if the plaintiff sufficiently pleads a willful violation of the FLSA, the statute of limitation can be extended to three years. A plaintiff can sufficiently plead a willful violation if they provide facts and evidence to allow a factfinder to reasonably conclude that the employer “knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute.” The willful violation standard is not an easy standard to meet. Employers have found not to be acting willfully when they act reasonably in determining its legal obligation. For example, a court has found that an employer did not willfully violate the FLSA when, based on an incorrect interpretation of the FLSA, it instructed its employees not to fill out time cards for more than 40 hours.

In this matter, the Court determined that the plaintiff’s complaint did not offer facts to support her claim that Troy willfully violated the FLSA. Without sufficient facts to support her willful allegation, the two-year stature of limitations applied to Plaintiff’s claim. As the last cause of action that could give rise to a FLSA violation occurred outside of the two-year limitations period, the plaintiff’s FLSA claim was dismissed.

If you suspect that you have been wrongfully denied overtime pay, you may have a valid claim. Schedule a consultation with a Philadelphia overtime dispute lawyer at the Law Office of Sidkoff, Pincus & Green P.C. by calling 215-574-0600 to discuss your legal options or contact us online today.

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Eastern District of PA Prevents Credit Reporting Agencies from Venue Transfer

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On June 20, 2018 the Eastern District of Pennsylvania prevented a consumer credit reporting agency, Equifax, from transferring a case from Pennsylvania to Georgia. Edwards v. Equifax Info. Servs., LLC, No. CV 18-1077, 2018 WL 3046603, at *1 (E.D. Pa. June 20, 2018). Consumer credit reporting agencies gather consumers’ personal information about their credit history, credit worthiness, mode of living, and other personal characteristics which they then analyze and sell. Credit reporting agencies like Equifax gather this information independently and not at the request of the person whose credit is being reported on. Consumers must therefore react to the actions of credit agencies in this unilateral relationship. To properly maintain this unusual relationship Congress passed the Fair Credit Reporting Act (FCRA) to create a “national standard for regulating the relationship between credit reporting agencies and consumers.”

In this case the plaintiff brought a claim alleging that Equifax violated the FCRA by failing to provide contact information for entities that accessed his credit information. After the case was removed to the Eastern District Court, Equifax then sought to have the venue changed and moved to the Northern District of Georgia. Equifax is headquartered in Atlanta and claimed that “all documents, data, and witnesses pertinent to the claim are also located there” which made it a far more suitable location to litigate the dispute. The Court however rejected the change in venue due to the concern that any FCRA claim would force all plaintiffs to bring claims in districts far from where they live, “a burden that would inevitably undermine enforcement of federal consumer protection laws under the system of private litigation that Congress sought to incentivize.” The Court predicated their belief on the fact that in the e-commerce era credit reporting agencies operate nationwide and impact the lives of people hundreds or thousands of miles from the agencies’ headquarters and do so not at the behest of the person who is being reported on. After analyzing the procedural rules for changes in venue pursuant to the Federal Rules of Civil Procedure, the Court articulated that Congress has repeatedly amended the FCRA to promote private enforcement and to allow all credit agencies to force plaintiffs to litigate elsewhere would stop private enforcement. Further the balance of convenience strongly favored and required maintaining venue in the Eastern District of Pennsylvania where the plaintiff resides.

For more information, contact the Philadelphia business lawyers at the Law Office of Sidkoff, Pincus & Green at 215-574-0600 or contact us online.

Third Circuit Affirms District Court in EMTALA Whistleblower Appeal

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On June 12, 2018 the United States Court of Appeals for the Third Circuit found that a fired nurse was not protected under the Emergency Treatment and Active Labor Act (“EMTALA”) whistleblower provision because she did not actually “report” a violation. Gillispie v. Regionalcare Hospital Partners, Inc., No.16-4307 (3rd Cir. 2018). The appellant in the case was the nurse on duty when a pregnant patient reported to the emergency room with complaints of vaginal bleeding and discomfort. After examining the distressed woman the hospital personnel discharged her to go directly to a gynecologist. The hospital did not transport the distressed woman nor were they able to contact the gynecologist to confirm she arrived. The hospital organized several conference calls and meetings to discuss whether the distressed woman’s discharge violated the EMTALA.

The EMTALA requires hospitals to first examine each patient to determine whether an emergency medical condition exits. If the examination reveals the patient is suffering from an emergency medical condition, the hospital usually must stabilize the patient before getting into the business of trying to discharge or transfer him or her elsewhere. A hospital that either (1) fails to properly screen a patient or (2) releases a patient without first stabilizing his or her emergency medical condition thereby violates EMTALA. Moreover, EMTALA’s whistleblower provision protects only employees who have “reported a violation” of one of the statutes provisions.

The appellant contends that during the meetings regarding the possible EMTALA violation, she insisted that the hospital report the circumstances surrounding the distressed woman’s discharge to the PA Department of Health or PA Patient Safety Authority. According to appellant, everyone in the meeting agreed that the hospital’s discharge failed to comply with EMTALA. Nevertheless, over the objections by appellant, no one at the hospital reported the discharge to any regulatory authority or agency.

The Court first pointed out that “in the absence of direct evidence of retaliation, courts have applied the McDonnell Douglas burden –shifting framework to whistleblower claims under EMTALA . . . Although [the Court] has not yet specifically decided if we should apply that framework to resolve EMTALA claims, we found that if a statute does not provide for a burden shifting scheme, McDonnell Douglas applies.” Therefore, the court set forth that the McDonnell Douglas burden shifting scheme will be utilized when analyzing EMTALA claims. Accordingly, Appellant had the burden to establish that (1) she engaged in conduct that is protected by EMTALA (2) her employer subsequently took an adverse employment action against her and (3) the employer did so because she engaged in protected activity.

The Court found that Appellant had not established a prima facie case because she had not “made a report” as that term is considered under EMTALA. Report was defined as “something that gives information” or “a notification”. The Court said that “it is clear that [Appellant] failed to establish that she actually provided any information of an alleged EMTALA violation to anyone”. Rather, Appellants own deposition shows that her efforts occurred after the CEO of the hospital and other attendees concluded the discharge was a violation. That testimony was “fatal” to her attempt to claim protection under the whistleblower provision because she did not “make a report” under EMTALA.

For more information, please call our Philadelphia whistleblower lawyers at the Law Office of Sidkoff Pincus & Green at 215-574-0600 or contact us online.

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Third Circuit Adopts McCarthy Test for Distributor-Manufacturer Trademark Disputes

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On April 18, 2017, the Third Circuit held that the McCarthy Test should be applied in trademark disputes between distributors and manufacturers when there is no written contract. Covertech Fabricating, Inc. v. TVM Bldg. Prod., Inc., 855 F.3d 163 (3d Cir. 2017). Plaintiff Covertech Fabricating, Inc., headquartered in Canada, manufactures protective packaging and reflective insulation. In 1998, Plaintiff entered into an informal agreement with Defendant TVM Building Products, Inc. which designated Defendant as the exclusive marketer and distributor of Plaintiff’s rFOIL insulation products in the United States. After disputes regarding payment and Defendant’s purchase of competitor insulation products, Plaintiff terminated its informal agreement with Defendant and trademarked the rFOIL product in Canada. In response, Defendant petitioned to register rFOIL as a trademark in the United States. Plaintiff sued Defendant to assert its ownership over the trademark. The lower court granted Plaintiff’s claims. The Third Circuit affirmed the decision but found that the lower court’s use of the first use test was legal error.

The Third Circuit held that the McCarthy Test should be applied in distributor-manufacturer disputes rather than the First Use Test due to the unique attributes of a relationship between an exclusive and noncompetitive distributor and manufacturer. The First Use Test is generally appropriate for unregistered trademark disputes as it favors the entity that used the trademark first thus rewarding the party with actual and continuous use of the mark. The Third Circuit held that the McCarthy test is more appropriate under these circumstances because it would unjustly benefit the distributor in the majority of cases simply due to the distributor making the first sale of the goods solely at the manufacturer’s request. The McCarthy tests states that “the manufacturer is the presumptive trademark owner unless the distributor rebuts that presumption using a multi-factor balancing test.” The factors of the balancing test are:

(1) which party invented or created the mark”; (2) which party first affixed the mark to goods sold; (3) which party’s name appeared on packaging and promotional materials in conjunction with the mark; (4) which party exercised control over the nature and quality of goods on which the mark appeared; (5) to which party did customers look as standing behind the goods, e.g., which party received complaints for defects and made appropriate replacement or refund; and (6) which party paid for advertising and promotion of the trademarked product.

The Third Circuit ruled that Plaintiff was the proper owner of the trademark given a balancing of the McCarthy factors. Even though the balancing clearly favored Plaintiff in this case, the Court asserted that ownership generally goes to the manufacturer if the factors are equal given the presumption of ownership for the manufacturer. The Court also dismissed Defendant’s challenges regarding Plaintiff’s successful fraud and acquiescence claims.

For more information, please call our Philadelphia Trademark Lawyers at the Law Office of Sidkoff Pincus & Green at 215-574-0600 or submit an online inquiry.

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Third Circuit Affirms District Court Ruling Poor Performance is Not Severe Enough to Circumvent Right-to-Cure Provision in Employment Contract

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In Milton Reg’l Sewer Auth. v. Travelers Cas. & Sur. Co. of Am., 648 Fed.Appx. 215 (3rd Cir. 2016) the Third Circuit Court of Appeals found that Pennsylvania contract law requires a more severe breach before contracting parties may violate a right-to-cure provision in a contract. Appellant Milton Regional Sewer Authority (“Milton”), a municipal authority, entered into a contract with Appellee Travelers Casualty and Surety Company of America (“Travelers”), a construction company, for a public works project. The contract contained a right-to-cure provision that states “[Travelers’] services will not be terminated if [Travelers] begins within seven days of receipt of notice of intent to terminate to correct its failure to perform and proceeds diligently to cure such failure within no more than 30 days of receipt of said notice.” In other words, before Milton could terminate the contract, it was required to give Travelers 30 days to fix whatever problem had arisen.

After the contract was finalized, Travelers began working on the project. Milton quickly became unsatisfied with the work being done and proceeded to send a letter to Travelers ordering it to suspend work. Travelers offered to correct the work in their response but Milton rejected and terminated the contract without giving Travelers an opportunity to fix its allegedly defective work. Following the termination of the contract, Milton hired another construction company to complete the project. Milton filed a complaint for additional costs incurred as a result of the termination.

The Court of Appeals for the Third Circuit began their analysis by stating “Pennsylvania follows the general rule of contract law that ‘a material breach of a contract relieves the non-breaching party from any continuing duty of performance thereunder.’” Such a contract may only be terminated without providing an opportunity to cure when there is a material breach of the contract so serious it goes directly to the heart and essence of the contract, rendering the breach incurable. The breach must be so severe that requiring notice before termination would be a useless gesture. The Court said a “typical example of a breach that goes directly to the essence of a contract is fraud.” Milton in this case alleged various deficiencies in the work performed by Travelers which, taken together, amount to an allegation that Travelers performed poorly. The Court found that “unlike fraud, poor performance is not incurable” and Travelers was eager to cure its deficiencies if given the chance. Lastly, the Court points out that “Pennsylvania contract law, therefore, requires a more severe breach before contracting parties may violate right to cure provisions.” Thus, Milton’s conduct in terminating Travelers amounted to wrongful termination and an ineffective exercise of contract rights.

At the Law Offices of Sidkoff, Pincus & Green P.C. our experienced Pennsylvania and New Jersey attorneys handle many types of legal matters, including contract law. If you are interested in having a consultation with one of our attorneys, please call us at 215-574-0600 or contact us online.

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PA Court Maintains Limited “Coming and Going” Rule in Workers Compensation Claims

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On May 17, 2018 the Commonwealth Court of Pennsylvania declined to extend the “coming and going” rule to cover an electrical worker who sustained substantial injuries in a car accident while driving from home to a job site, despite sporadically receiving compensation for travel expenses. Kush v. Workers’ Comp. Appeal Bd. (Power Contracting Co.), No. 1688 C.D. 2017, 2018 WL 2246523, at *1 (Pa. Commw. Ct. May 17, 2018). The Claimant was employed by two separate corporations doing electrical work, and routinely traveled to different jobs for both employers on the same day. The truck Claimant drove was owned by one of his employer’s, Vantage, but the present claim was against the other employer Power Contracting Company (PCC). Claimant had been working almost exclusively on the same PCC job site for the month preceding the accident.

Claimant sought compensation for medical expenses from PCC for injuries suffered while driving to the same job site after he lost control when driving over an ice patch. The Workers’ Compensation Judge dismissed his claims on the grounds that the “coming and going” rule did not apply to Claimant as he was commuting to a fixed job location. The “coming and going” rule states that injuries sustained by an employee while traveling to and from their place of employment are outside the scope of employment and are generally not compensable. On appeal, Claimant argued that he fell under two exceptions to the “coming and going” rule: he had no fixed place of employment, and his employment agreement included time spent for transportation to and/or from work. On appeal both arguments were rejected by the Court.

The Court emphasized that exceptions for the “coming and going” rule have been narrowly construed and have been fact specific holdings. The Court said that while Claimant may have traveled to different job sites for PCC, for the weeks preceding the accident he had been working at the same site and he anticipated only working at the one site on the day of the accident. The court then found that travel was not included in Claimant’s contract with PCC as his other employer, Vantage, actually owned and provided the truck. PCC did not own or control the Claimant’s means of commute, and while PCC would pay for the gas used to travel to its sites, his wages did not include pay for travel. He was only paid for time spent traveling to pick up equipment for the job by PCC if the pick-up took place on the way to the job. Claimant was not paid for time spent driving home at the end of the day and there were no provisions in his contract covering travel. The Court affirmed the Workers’ Compensation Board’s finding and dismissed Claimant’s petition.

he experienced Philadelphia employment lawyers at the Law Office of Sidkoff, Pincus & Green P.C. are available to answer questions about your case. To learn more about how we can help, call us today at 215-574-0600 or contact us online. Our offices are centrally located in Philadelphia, and we serve clients throughout Pennsylvania and New Jersey.

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Third Circuit Upholds FTC Cybersecurity Standards

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The Third Circuit recently clarified the requirements for an “unfair practices” claim under §45 (a) of the Federal Trade Commission Act. FTC v. Wyndam Worldwide Corp., 799 F.3d 236 (3d Circ. 2015). In this case, the FTC brought claims of unfair and deceptive practices against Wyndham Worldwide Corporation (Wyndam) following data breaches of Wyndam’s computer systems. Wyndam is a hospitality company that franchises and manages hotels and timeshares through subsidiaries. In 2008 and 2009, Wyndam’s systems were hacked resulting in the theft of hundreds of thousands of consumers’ personal and financial information and over $10.6 million dollars in fraudulent charges. The FTC filed suit alleging that its failure to protect consumers’ information and deception regarding its privacy policy amounted to unfair practices. The District Court denied Wyndam’s motion to dismiss, and the Third Circuit ruled that the FTC had the authority to regulate cybersecurity under the unfairness prong of § 45 (a).

Under § 45 (a), the Federal Trade Commission (FTC) cannot declare an act to be an unfair practice unless it meets the following requirements: (1) It must be substantial; (2) it must not be outweighed by any countervailing benefits to consumers or competition that the practice produces; and (3) it must be an injury that consumers themselves could not reasonably have avoided. While the statute lists these requirements, it does not answer whether these are the only requirements for finding unfair practices. Wyndam argued that the necessary conditions for unfair practices go beyond the listed elements based on the plain meaning of the word “unfair.” Wyndam further argued that practices are only “unfair” if they display unethical behavior, or are marked by injustice, partiality, or deception. The Court rejected this argument because it is unnecessary to read the plain meaning of “unfair” into the statute. Applying this rationale to this case, the Court stated that “a company does not act equitably when it publishes a privacy policy to attract customers who are concerned about data privacy, fails to make good on that promise by investing in adequate resources in cybersecurity, exposes its unsuspecting customers to substantial financial injury, and retains the profits of their business.”

However, Wyndam argued that even if cybersecurity would be covered by § 45 (a) as it was originally enacted that recent congressional provisions alter this meaning to exclude cybersecurity. The Court rejected this argument based on the FTC’s history of regulatory authority over cybersecurity issues. The Court found that while the FTC had not previously required companies to adopt fair information practice policies that earlier policy was not inconsistent with the FTC currently bringing unfairness actions against companies causing harm to consumers through inadequate cyber security practices. Furthermore, the Court also rejected Wyndam’s claims that it did not have fair notice of the FTC cybersecurity standards. The Court affirmed the District Court’s decision finding that Wyndam’s proposed requirements in addition to those listed in the statute were not persuasive.

For more information, call our business lawyers in Philadelphia at the Law Offices of Sidkoff, Pincus & Green at 215-574-0600 or contact us online.

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Employee Fails to Prove That Union Acted Arbitrarily or in Bad Faith When Refusing to Arbitrate His Termination

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Recently, the United States District Court for the Eastern District of Pennsylvania ruled in favor of an employer’s motion for summary judgment denying Plaintiff’s hybrid claim for breach of contract/unfair representation. Smokowicz v, Graphic Packaging Int’l, Inc., 2018 U.S. Dist. LEXIS 94099 (E.D. Pa. 2018). Plaintiff Micheal D. Smokowicz (“Smokowicz”) brought claims for breach of contract against his former employer, Graphic Packaging International, Inc. (“Graphic”) for their alleged violation of § 301 of the Labor Management Relations Act; and a claim against his union for failure to provide fair representation under 29 U.S. C. § 159(a).  In order for a plaintiff to succeed on a § 301/fair representation claim, the plaintiff must prove both breach of contract and the union’s failure to provide fair representation. The Court determined that Smokowicz failed to prove that the Union breached its duty of fair representation; and thus, the Court was not required to rule on the employer’s alleged breach.

In this present matter, Smokowicz was involved in multiple incidents leading up his termination. Before Smokowicz’s termination, Graphic attempted to terminate him for violating the company’s anti-harassment and violence policy. In lieu of terminating Smokowicz, his union was able to negotiate a Last Chance Agreement which allowed for Smokowicz to return to his previous position under the condition that any future violation of the standard of conduct will be cause for termination. Three years following the Last Chance Agreement Smokowicz was terminated for mislabeling packages. In an attempt to resolve the issue, Smokowicz’s union attended numerous meetings with the Human Resources Department and supervisors at Graphic with the goal of allowing Smokowicz to return to work. After days of negotiating and pleading with Graphic, the Union informed Smokowicz that it believed that it could not prevail in arbitration and that it would not proceed any further with a grievance.

The Court ruled that in order for a claim that a union breached its duty of fair representation, the plaintiff must present evidence demonstrating that the union’s conduct was arbitrary, discriminatory, or in bad faith. Previous precedents have defined “arbitrary conduct” as being irrational and being without a rational basis or explanation. Further, mere ineptitude or negligence is not sufficient to establish conduct is “arbitrary.”  Under this standard, even if a more experienced representative would have used a different strategy or achieved a different result, the plaintiff cannot successfully claim that the union acted arbitrary.

The standard for bad faith is much more ambiguous, and findings of bad faith “require more than unsupported allegations.” The Third Circuit has held that a plaintiff must show that “the union and its representatives harbored animosity towards the employee; and . . . that animosity manifested itself as a material factor in the union’s handling of the employee’s grievance.” The plaintiff, when claiming bad faith, must present evidence in the record to support such allegations of animus and that the union’s animus towards the plaintiff manifested itself in the handling of the plaintiff’s employment grievance.

Even when viewing the facts in the most favorable light to Smokowicz, the Court determined that he was unable to demonstrate that the Union’s conduct was without a “rational basis or explanation,” or that the Union manifested any animosity towards Smokowicz. The Union had already successfully negotiated Smokowicz’s previous termination, and although it did not pursue a formal grievance regarding his second termination; the Union did not act in bad faith or breach its duty to provide fair representation.

At the Law Offices of Sidkoff, Pincus & Green our experienced Philadelphia employment lawyers handle many types of legal matters, including contract law. If you are interested in having a consultation with one of our Philadelphia business lawyers, please call us at 215-574-0600 or contact us online.

District Court Approves AT&T and Time Warner Merger

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On June 12, 2018 the District Court for the District of Columbia released the much anticipated opinion in the AT&T and Time Warner merger case. United States v. AT&T Inc., et al., No. 17-2511 RJL (D.D.C. 2018). Justice Richard Leon approved the historic “marriage” in a 172 page opinion that was rife with exclamatory statements, much to the Government’s chagrin.

In this case, the Government sought to enjoin the merger based on Section 7 of the Clayton Act, 15 U.S.C. § 18. Section 7 prohibits “acquisitions, including mergers, ‘where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition.’” The Government claimed, in essence, that permitting AT&T to acquire Time Warner would likely substantially lessen competition in the video programming and distribution market nationwide by enabling AT&T to raise its rivals’ video programming costs or drive them to use DirecTV.

Defendants’ viewed the proposed merger as an essential response to Netflix, Hulu and Amazon, who are threatening the amount of traditional video subscribers Defendants’ could retain, and the value of television advertisements. By acquiring Time Warner, AT&T executives testified that the company will gain access to high-quality content and an extensive advertising inventory. In addition, Defendants claimed that the merger will increase not only innovation but competition in this marketplace for years to come by allowing AT&T to more efficiently pursue what it sees as the future of video programming and distribution: increased delivery of content via mobile devices.

The Court concluded that the Government had failed to meet its burden to establish that the proposed transaction is likely to lessen competitions substantially. Lacking any modern judicial precedent regarding vertical merger challenges (the Antitrust division hasn’t tried a case in four decades) Justice Leon found that evidence indicating defendants recognition that it could possibly act in accordance with the Government’s theories of harm is a far cry from evidence that the merged company is likely to do so. The Court found the Government’s expert, Professor Shapiro, unpersuasive. Specifically, the Court chastised Shapiro’s “bargaining model” saying that it “lacks both reliability and factual credibility and thus fails to generate probative predictions of future harm associated [with the merger].” In its concluding paragraphs, the Court announced that “the defendants have won” but goes on to warn the government of the irreparable harm that could result in an appeal of this decision – a $500 million breakup fee AT&T would owe Time Warner if the merger did not go through by June 21, 2018. Justice Leon notes that he “hope[s] and trust[s] that the Government will [exercise] good judgement, wisdom and courage to avoid such a manifest injustice but in his own words; “[T]he process is not quite over yet!”

For more information, call our business lawyers in Philadelphia at 215-574-0600 or contact us online.The legal team at Sidkoff, Pincus & Green represents clients in Pennsylvania and New Jersey.

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Supreme Court Overturns Physical Presence Rule and Requires Out-of-State Retailers to Collect and Remit Sales Tax

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In a 5-4 decision, the Supreme Court in South Dakota v. Wayfair, Inc. overturned a longstanding precedent requiring businesses to maintain a physical presence in the state before being required to collect and remit sales tax. Under the physical presence requirement, only out-of-state retailers with an actual physical presence in the state were required to collect sales tax. This precedent allowed for retailers that solely participated in shipping goods into the state, upon the request of a consumer via a catalog or online, to bypass the sales tax requirement.  The physical presence doctrine has been the subject of heavy criticism since its inception in 1992, and due to the recent technological advancements in the past twenty years, these complaints have become even more glaring. Due to the rise of the online retail market, it is estimated that the physical presence doctrine has cost states an estimated $8 – $33 billion every year.

In an attempt to mitigate the effects of the physical presence requirement and secure critical funding for essential public services, South Dakota enacted a law requiring out-of-state retailers who deliver more than $100,000 of goods or services in the state or engage in 200 or more separate transactions for delivery to the state to collect and remit sales tax.  The South Dakota Legislature found that due to the State’s inability to collect sales tax and the dramatic revenue loss associated with such regulation, the State has been unable to support its basic services effectively and has declared an emergency.

Justice Kennedy was unsympathetic to the corporate respondents and their request to remain exempt. Kennedy referred to the precedent as “artificial, not just at its edges, but in its entirety.” Furthermore, Kennedy was adamant that the physical presence requirement was inherently flawed and as technology became more and more advanced, the physical presence requirement became “further removed from economic reality.” Kennedy stated that Wayfair, Inc. was requesting the Court to “retain a rule that allows their customers to escape payment of sales taxes. . .” Kennedy further labeled Wayfair’s marketing slogan “one of the best things about buying through Wayfair is that we do not have to charge sales tax” as simply a “subtle offer to assist in tax evasion.” Additionally, while Wayfair specializes in helping their customers build their “dream home” Kennedy reminded them that it is the very state taxes that Wayfair objects to paying that “fund the police and fire departments that protect the home containing their customers’ furniture.”

For more information, contact the Philadelphia business lawyers at the Law Office of Sidkoff, Pincus & Green at 215-574-0600 or contact us online.

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