In addition to the lawsuit, various members of Congress from the affected states have been working to find a solution.  Michigan and Illinois lawmakers agree that it is necessary to permanently separate the Mississippi River watershed from the Great Lakes watershed, but have not yet reached an agreement on the specific methodology, or even on short-term solutions to be implemented before the permanent solution is put in place.  Illinois lawmakers seem to be more concerned about protecting the shipping industry in Chicago than in protecting Lake Michigan from ecological destruction.

Even this action could be too late to fully protect Lake Michigan, as a 20-pound Asian carp was found in Lake Calumet, south of Chicago, in June.  Lake Calumet is 6 miles beyond an electronic barrier that was set up in Chicago waterways to prevent Asian carp from getting to Lake Michigan.

Besides the threat to Lake Michigan, there is now a concern that Asian carp could also enter Lake Erie, through rivers in Indiana and Ohio.  Asian carp are already present in the Wabash River in Indiana, which connects via marshlands and floodwaters with the Maumee River in Ohio.  The Maumee River connects to Lake Erie.   Earlier this month, Indiana placed mesh fences in marshes between the two rivers to attempt to keep Asian carp out of the Maumee River.

Stay tuned for further updates.  Also, see these articles in The Detroit News for more information: http://bit.ly/bPaiaA, http://bit.ly/bqt8dU, http://bit.ly/brspfu, http://bit.ly/amEzQb, and http://bit.ly/bVObfQ.

Click on the following for links to the first article on the dispute, the second article, and the third article.

This article was written by Melissa L. Demorest, Associate at Demorest Law Firm.

Key provisions of the CARD Act include:

• Interest rates on existing balances cannot be changed unless (1) your payment is 60 or more days late; or (2) you have an introductory rate that expires.
• If a payment is more then 60 days late, but your payments for the next 6 months are all on-time, the credit card company must reduce your interest rate back to the original rate.
• Interest rates on new purchases can be changed, but the credit card company must give you 45 days notice before raising your rate.  You can opt out of the rate change, but that means your account will be closed and you will have five years to pay off the existing balance at the existing interest rate.  There are some exceptions to this rule, however.  For example, if you have a variable rate card tied to the prime rate, this provision does not apply.
• Credit card companies can no longer use the “universal default” provision that some were using.  If you pay late or default on any account (credit card, utility, etc.), other card issuers can no longer raise your interest rate on your existing balance on those cards.
• Credit card companies can no longer approve a charge that exceeds your limit and then charge you an over-limit fee and penalty interest rate.  Beware of “opt-in” offers to avoid over-limit fees, as this is a scam.
• You cannot be charged for paying online, by mail, or over the phone, unless you speak to a live operator and then they must disclose the fee before you pay.
• Payment due dates must be the same every month, and if the due date falls on a holiday or weekend, the payment is due the next business day.
• Your bill must now disclose how long it will take to pay off the current balance if you only pay the minimum amount each month, as well as the total amount of principal and interest you would pay over that time period.
• Anyone under 21 cannot get a credit card without either (1) proof of income to pay the bills or (2) an adult co-signer.

One problem with the CARD Act, however, is that it was signed into law in May 2009, but did not become effective until this week.  This gave credit card companies significant time to find ways around the new laws, including cutting credit limits and raising interest rates before the restrictions on such practices went into effect.  Some other new negative practices include:

• Closing accounts or charging fees for inactivity or even for “low activity”
• The return of annual fees to many cards – even if you have never had an annual fee on a particular card, there is nothing to stop the card issuer from charging one now
• Converting fixed rate cards to variable rate cards, and setting these rates with a floor that they will never fall below
• Redefining terms of certain fees, such as what is considered an “international transaction”
• Increasing balance transfer fees and cash advance fees
• Adding fees for paper statements
• Changing the terms of rewards programs or eliminating such programs altogether
• Stricter review of who is issued credit
• Reducing credit limits without warning

Pay attention to all correspondence from your credit card company, and if they are acting in a way that should be covered by the CARD Act, call and complain.  If that doesn’t work, contact your US Senator or Representative.

This article was written by Melissa L. Demorest, Associate at Demorest Law Firm.

Last week, the Supreme Court refused to immediately close the waterways.  However, the Court did not explain the reasons for its ruling, nor did it indicate whether it would rule to close the waterways at some point.

Just hours after the Court issued its ruling, it was announced that Asian carp DNA had been detected in Calumet Harbor, part of Lake Michigan near Chicago.  It is unclear whether this finding will influence the Supreme Court, or cause it to reconsider its prior ruling.

Michigan has been joined in its fight by Ohio, Indiana, Wisconsin, Minnesota, Pennsylvania, and New York (all the Great Lakes border states except Illinois), as well as Ontario.  President Obama has invited the governors of these states to a summit to be held next month regarding these issues.

Various members of Congress are also looking at possible solutions for the Asian carp problem.  A bipartisan group is looking at measures to poison the Asian carp; to strengthen an electronic barrier in the Chicago waterways; and other options.  Additionally, U.S. Rep. Dave Camp (Midland), introduced a bill called the Carp Act, which would close the waterways, and strengthen protections against Asian carp within the waterways, without the Supreme Court’s involvement.

Not surprisingly, the shipping industry opposes the closure of the waterways leading from Chicago to Lake Michigan.  At this point, it appears to be up to the Supreme Court, Congress, and/or the President to decide whether protecting the Great Lakes from Asian carp is more important than allowing commercial shipping between the Great Lakes and the Mississippi River (through Chicago).

Stay tuned for further updates.  Also, see these articles in The Detroit News for more information: http://bit.ly/cfUu7V, http://bit.ly/83fqws, http://bit.ly/6WoS1, and http://bit.ly/aSDOEd.

This article was written by Melissa L. Demorest, Associate at Demorest Law Firm.

An independent contractor calculates this amount for the IRS each year, based on the “fixed and variable costs of operating an automobile”  in the previous year.  These costs include fuel prices, as well as maintenance.  The 2010 rate is $.05 lower than the 2009 rate of $.55 per mile.  The IRS attributes this reduction to “generally lower transportation costs” as compared to the previous year (2008).

The mileage reimbursement rate has risen dramatically in recent years, mainly due to the sharp increase in gas prices over the past few years.  For example, the rate in 2003 was $.36 per mile; in 2006 it was $.445 per mile; and in the second half of 2008, it was $.585 per mile.

See this article on the IRS web site for more information: http://www.irs.gov/newsroom/article/0,,id=216048,00.html

This article was written by Melissa L. Demorest, Associate at Demorest Law Firm.

This week, Michigan Attorney General Mike Cox filed a petition with the United States Supreme Court, essentially asking the Court to close all waterways from Illinois leading to Lake Michigan, to prevent Asian carp from reaching the Great Lakes.  You may be wondering why the United States Supreme Court is involved.  The answer is that this is a dispute between two states – Michigan and Illinois – and the US Supreme Court has “original jurisdiction” over disputes between the states.  28 USC § 1251(a).  Original jurisdiction means that if such a dispute arises, the only court that is allowed to hear that dispute is the US Supreme Court.

Essentially, Michigan’s Attorney General is arguing that the threatened harm to Michigan and the Great Lakes is so severe that the Court should take the drastic measure of closing off all rivers and canals leading from Illinois to Lake Michigan, by closing locks and/or sluice gates.  The Attorney General acknowledges that this would likely harm commercial and pleasure boating traffic in the Chicago area, but maintains that this harm would be insignificant compared to the harm caused by Asian carp reaching Lake Michigan and destroying the Great Lakes fishing industry.

Michigan’s Attorney General has asked the Supreme Court to weigh the environmental and business concerns of protecting the Great Lakes against the business concerns of keeping open the waterways from Chicago to Lake Michigan.  Stay tuned for the Court’s ruling.

See this article in The Detroit News for more information: http://www.detnews.com/article/20091222/METRO01/912220363/1448/LIFESTYLE14/Groups-laud-Cox-in-carp-fight

Also see the Michigan Attorney General’s website for more information: http://www.michigan.gov/ag/0,1607,7-164-34391-228350–,00.html

This article was written by Melissa L. Demorest, Associate at Demorest Law Firm.

Some oral contracts are enforceable, but several types of contracts are enforceable only if they are in writing.  This stems from a legal concept called the “Statute of Frauds,” which was developed in the 17th Century and is still followed today.  The purpose of the Statute of Frauds is to prevent fraud in certain types of contracts

Under Michigan law, the following types of contracts (among others) generally must be in writing to be enforceable:

• real estate agreements, including purchase agreements, deeds, mortgages, and leases (unless the lease is for less than one year)
• contracts that cannot be performed within one year (e.g. a two-year employment contract)
• promises to pay the debt of another (e.g. a personal guarantee)
• marital contracts (e.g. prenuptial agreements)
• real estate commission agreements
• promises made by financial institutions (such as a promise to lend)
• misrepresentations regarding credit
• sales of goods worth more than $1000
• sales of personal property

How can you protect yourself or your business?  First, it’s generally a good idea to make sure that all contracts are in writing and are signed by all parties to the contract.  If the agreement is in writing, and signed by all parties, the parties usually cannot dispute later that something was left out of the agreement.  Second, if you have an existing agreement that’s not in writing, you should contact an attorney to find out whether that agreement should be put into writing in order to make it enforceable.

This article was written by Melissa L. Demorest, Associate at Demorest Law Firm.

Once you’ve found the bar that you want to buy, the first step is to sign a purchase agreement.  The purchase agreement should cover everything that you and the seller have agreed upon – purchase price, payment method (e.g. cash, promissory note, etc.), timing of various steps, all terms and conditions, default provisions, naming rights, etc.  (See our article on Merger Clauses for the importance of including everything in one document).  The purchase agreement should also provide a date for closing, which will not occur until after the liquor license is transferred.

Note that Michigan law requires that all liquor inventories be purchased in cash.  Therefore, if your purchase includes any type of financing (such as a promissory note or loan), the purchase of liquor inventory must be specifically excluded from the purchase agreement and must be done in cash at closing.

The purchase agreement should also include provisions about the liquor license, including the purchase price and a provision covering what will happen if the liquor license cannot be transferred.  This is because the license itself cannot be transferred just through a purchase agreement.  Rather, the purchaser has to apply to the Michigan Liquor Control Commission (“LCC”) to transfer the license.  The purchaser then must undergo a rigorous application process in order to be approved to buy the license.  This process can take months, so purchasers must be patient!

While the liquor license transfer is pending, you should conduct due diligence on the operations of the bar.  If you plan to keep the bar open continuously before and after the closing, you should plan accordingly for a seamless transition.  Once the liquor license transfer has been approved, you can hold a closing and complete the sale.

This article was written by Melissa L. Demorest, Associate at Demorest Law Firm.

FOIA could also be helpful if your business was negotiating with a city to enter into a contract.  You could use FOIA to obtain copies of prior contracts that the city has entered into with other businesses.

If your business was involved in a dispute with a business that is required to be licensed by the state (such as a medical practice or insurance company), you could submit a FOIA request to the state regarding their licensing history and any disciplinary proceedings.

The Michigan Freedom of Information Act, MCL 15.231 et seq., requires all “public bodies” in the State of Michigan to disclose certain public records upon request.  The entire Act is available at http://tinyurl.com/l22wnu.

“Public records” include, but are not limited to, the following:

• open meeting minutes;
• voting records;
• staff manuals;
• written statements interpreting laws, rules, and policies;
• reports

The records may be in any format – hand-written, typed, photocopies, photographs, sound recordings, maps, discs, or any other means of recording information.

There are also several types of records that are exempt from FOIA disclosure.  These include, among other types:

• records disclosing personal information about an individual;
• investigation records compiled for law enforcement proceedings (with limitations);
• any records that would compromise security;
• student records;
• trade secrets;
• information subject to attorney-client or other privilege;
• test questions and answers;
• pending public bids

To obtain information under FOIA, simply send a letter detailing the requested information to the FOIA Coordinator at the applicable “public body,” which includes all state and local government agencies, divisions, and officials in the state, with the exception of the governor, lieutenant governor, and employees of the executive branch.  “Public body” also includes all bodies created or funded by state or local authority, including public schools, some hospitals, and public libraries.

Based on the above example, your letter should request all applicable information regarding the particular property and the appropriate time frame, and should be addressed to the FOIA Coordinator in the appropriate city.

You may request to inspect, copy, or receive a copy of the applicable public records.  The FOIA Coordinator must respond to your request within 5 business days, with a possible extension of 10 business days.  The “public body” may charge you for copying or inspecting records, as well as separating confidential information from the other requested records.  This fee must be limited to actual copying, mailing, and labor costs.

If the FOIA coordinator denies your request, they must provide a full explanation for the denial, and advise you of your right to appeal.   You may appeal then to the head of the applicable public body, or directly to circuit court.  If you choose to file in circuit court, the lawsuit must be filed no more than 180 days after the public body’s final denial.  If the court finds that the public body violated FOIA, it can award actual and/or compensatory damages, as well as punitive damages of $500.00.

This article was written by Melissa L. Demorest, Associate at Demorest Law Firm. Click here to view her professional resume.

“Evergreen contract – A contract that renews itself from one term to the next in the absence of contrary notice by one of the parties” – BLACK’S LAW DICTIONARY 321 (7th ed. 1999).

Imagine that your business entered into a contract with a company to supply all of your paper needs for one year.  Towards the end of that year, you decide that you’d prefer to switch to a different paper supplier.  When you contact your current supplier to tell them that you’re going to be using another supplier, they inform you that your contract won’t allow you to do that.  In fact, you are contractually obligated to keep using the current supplier for another year!

The problem here is an “evergreen” clause in your contract.  Many contracts – particularly service or supply contracts, as well as leases – include a so-called “evergreen” clause.  This type of contract automatically renews at the end of the contract term, unless one of the parties notifies the other party that it does not want to renew the contract.  Often, this notice must be given within a specified time period prior to the end of the current contract term.

Here is a typical evergreen clause:

Term.  The Commencement Date will be May 1, 2009.  The Term of this Contract will be for five (5) years beginning on the Commencement Date.  The Contract will automatically be renewed at each fifth anniversary for an additional five (5) year term unless terminated by either party by giving written notice to the other party at least ninety (90) days, but no more than 120 days, prior to the end of the then-current five (5) year term.

Under this specific clause, the customer would have to notify the service company, in writing, that they did not want to renew the contract no less than 90 but no more than 120 days prior to the last day of the contract.  If the customer failed to notify the service company in writing within that time frame, the contract would automatically renew.

So how can your business avoid a scenario like the one above involving the paper supply company?  The simplest option is to review every contract before signing, and pay special attention to anything that could be an evergreen clause.  If you’re unsure whether a particular term is an evergreen clause, you should consult with an attorney.  If there is an evergreen clause in the contract, you should negotiate with the other company to try to get the clause removed before signing the contract.

If the company refuses to remove the evergreen clause, you have two options.  First, you can “calendar” the specific date or time period in which you would need to provide notice that you will not be renewing the contract.  That way, you will ensure that you won’t forget about the automatic renewal provision.  Second, you can simply refuse to sign the contract and choose another company that doesn’t require this type of provision!

To avoid getting stuck in a contract with an evergreen clause, we recommend you always consult an attorney before signing a supply or service contract, or any other contract about which you have concerns.

The small cost of due dilligence up front could save your company big money down the road.

This article was written by Melissa L. Demorest, Associate at Demorest Law Firm. Click here to view her professional resume.