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MichiganLegislationUpdate

E-Mail MessagesCan CreateBinding Contract

In the Law

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O N L A WA M O N T H L Y P U B L I C A T I O N F R O M C U M M I N G S , M C C L O R E Y , D A V I S & A C H O , P . L . C .

FEBRUARY, 2007

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E-MAIL MESSAGES CAN CREATE BINDING CONTRACT

The Michigan Court of Appeals recently held that a settlement agreement was binding, eventhough it was negotiated through a series of -email messages exchanged between the plaintiff’sattorney and the defendant’s attorney. In an e-mail message, the plaintiff’s attorney stated that

he had confirmed his client would accept payment of $48,000 in exchange for a release of all possibleclaims. In response, the defendant’s attorney stated that the offer was accepted. Documents reflect-ing the agreement were prepared, but the plaintiff refused to sign.

The Court of Appeals held that the e-mail messages between the parties constituted a binding settle-ment agreement. The Court determined the e-mail from the plaintiff’s attorney constituted a settle-ment offer, and the e-mail from the defendant’s attorney constituted acceptance of that offer. There-fore, a binding contract was created between the parties, even though it was done through e-mailmessages.

The Court also held that the e-mails satisfied the requirement that the agreement be in writing and“subscribed” by the party. The e-mail messages contained the “signature” of the attorneys becauseeach attorney typed or attached his name at the end of the e-mail message. The Court noted, however,that it is not sufficient to include the attorney’s name at the top in the e-mail heading; a signature mustbe at the bottom of the e-mail to be valid.

RECENTLY ENACTED MICHIGAN LAWS

Liquor License RedevelopmentProjectUnder a new law, the Liquor Con-trol Commission can issue publicon-premises liquor licenses, inaddition to the number of licensesallowed in each city, for commu-

nities engaging in redevelopment and revitalization.The licenses have to be issued to businesses thatare engaged in activities related to dining, enter-tainment and urban recreation, and are located in acity redevelopment project area meeting specificcriteria. The licenses are non-transferrable and mustbe surrendered if the establishment goes out of busi-ness, although the local government can approveanother applicant to replace a business that hassurrendered its license.

The new legislation also eliminates the authority toissue new tavern or Class C licenses. Licenses is-

sued before the effective date of the bill will re-main valid and can be renewed if in compliancewith the licensing requirements.

Cable Legislation Signed into LawThe controversial cable legislation designed toincrease competition in the state’s cable TV busi-ness was recently approved by the Governor.The new legislation essentially releases cablecompanies from franchising agreements arrangedwith local units of government. Instead, it al-lows companies to pay the state for one fran-chise agreement and go anywhere in Michiganinstead of negotiating agreements with everycommunity in which they operate.

The Public Service Commission (PSC) is requiredto write a statewide franchising agreement byJanuary 31, 2007. Companies with existing localfranchise agreements can either terminate exist-ing agreements and apply for the new uniform

MICHIGAN LEGISLATION UPDATE

Karen M. Daley

Karen M. Daley

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ON LAW FEBRUARY 2007

statewide franchise, amend existing agreements to mirror thestatewide franchise or continue to operate under current agree-ments until their expiration.

The issue of franchise fees is an important one across the statebecause many municipalities receive revenues from cable tele-vision. The new legislation could substantially reduce rev-enues to a number of communities because it allows currentcable companies to break current municipal franchising con-tracts for no reason.

The new law will likely have an effect on consumers as well.Instead of cable subscribers being able to go to their townshipboard or city council for cable problems, they now will have totake their complaints to the Public Service Commission. Thelack of local control and accountability could make it more dif-ficult for consumers to have their issues resolved.

Identity Theft NotificationNew legislation was enacted that requires Michigan residentsto be notified if the security of a database containing theirpersonal information is breached. The law requires individualsand government agencies to notify consumers when a securitybreach puts personal information, such as social security num-bers, drivers license numbers and financial information, at risk.Failure to properly notify consumers of a security breach canresult in a fine of up to $750,000. The new law will take effect inJune of this year.

Commercial RehabilitationLegislation has been signed that will allow local governmentsto provide commercial redevelopment tax breaks for certain busi-nesses in their communities. Under the Commercial Rehabilita-tion Act, rehabilitated commercial property in specially desig-nated districts can receive a reduction in property taxes if ap-proved by the local government. The new law now extends theact to include multifamily residential property. The amendmentalso reduces the minimum size of a district from 75 acres tothree acres, but also permits districts less than three acres iflocated in a downtown or business area. The bill also elimi-nates size and vacancy criteria, and now only requires that thebuilding or group of buildings be at least 15 years old.

Protection for Police StatementsA new bill to keep involuntary statements made by police offic-ers from appearing in the media was recently signed into law.

As a condition of employment, police officers can be requiredto answer questions about fellow officers and submit reportsto investigating officers. Previously, these statements couldbe released to third parties outside the investigation, such asnews reporters. Legislation has been enacted to prevent therelease of such statements without written approval.

The bill makes statements made by law enforcement officersduring internal investigations confidential, and prevents theuse of such statements against an officer in a criminal proceed-ing. Such statements can still be disclosed by the law enforce-ment agency under limited circumstances.

Closer Monitoring of ParoleesNew legislation requires the state Department of Correctionsto more closely monitor parolees convicted of violent felonies.The new law requires parole agents to visit the homes of parol-ees earlier, and also requires periodic drug testing of paroleeswho have a history of substance abuse.

New Limits on BillboardsMichigan ranks second in the nation in the number of bill-boards, with more than 14,000 throughout the state. Therefore,to improve and enhance the scenic beauty of our state, thelegislature has enacted new laws to regulate and control out-door advertising.

The new legislation is not intended to take away billboardsthat are already up, but rather puts a plan in place to limit futurebillboards by banning new permits. The legislation also pro-vides a consistent, state-wide method for determining whatconstitutes proper maintenance of billboard sites, and createspenalties for billboard owners who fail to take care of theirbillboards.

Companies that hold outstanding billboard permits for whichsigns have not yet been constructed will have one year to acton those permits or lose them. Companies can also trade exist-ing permits for new ones that allow them to erect signs at anylocation, with no time limit. For every three permits surren-dered, a company can be issued one new sign permit.

Taser Gun UseA bill allowing more people to carry Taser guns and stun gunswas recently signed into law. Although police officers have

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MICHIGAN LEGISLATION UPDATE (CONT.)

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ON LAW FEBRUARY 2007

Karen M. Daley

been able to carry the weapons since 2002, the new lawallows the possession and use of a Taser or stun gun bypersons employed by local governments to work in a localjail or lockup facility and by private security police officers.Private security police officers are trained and certified bythe same commission as state troopers and police officers.They carry guns and have full police powers, although theirauthority is restricted to the property of their employers.

Emergency Services Authorities Given Power to AdoptOrdinancesUnder the Emergency Services Act, two or more municipali-ties (counties, cities, villages, and townships) may incor-porate an authority to provide emergency services to the

MICHIGAN LEGISLATION UPDATE (CONT.)

municipalities. Emergency services include fire protectionservices, emergency medical services, police protection andany other emergency health or safety services designatedin an authority’s articles of incorporation.

New legislation now permits such authorities to adopt ordi-nances that will allow it to assess fees on property ownersor occupants of property who receive emergency servicesto cover the costs of providing the services under the Act.However, an ordinance would have to be rescinded if, within60 days from the date it was adopted, at least one-third ofthe municipalities affected by the ordinance voted to re-scind it.

Compiled by Patrick R. Sturdy

In the Law

ADVERTISERS REJOICE:GOOGLE KEYWORD ADS AND METATAGS

DON’T CONFUSE CONSUMERS

The cases featured in this section do not necessarilyinvolve CMDA. They are interesting cases wethought you would enjoy reading. To read addi-tional cases, visit our website at www.cmda-law.com.Each Monday new articles are posted on ourhomepage.

In the recent case of J.G. Wentworth SSC Ltd v. SettlementFunding LLC, a federal district court held that, as a matter oflaw, the use of keyword-triggered ads and keyword metatagscannot confuse consumers if the resulting ads or search re-sults do not display another’s trademark.

In this case, J.G. Wentworth claimed to be the market leader inpurchasing settlements. (i.e. immediate cash payments in ex-change for the rights to future payments from structured settle-ments, annuities, real estate notes and other assets). Settle-ment Funding, the defendant in this case, is supposed to bethe number two competitor in the industry. Settlement Fund-ing purchased the keywords “J.G. Wentworth” and “JG

Wentworth” in Google AdWords and allegedly put J.G.Wentworth’s trademarks into the keyword metatags of itswebsites. J.G. Wentworth sued Settlement Funding for trade-mark infringement, false representation, trademark dilution,and injury business reputation, but did not allege that theads or search results displayed J.G. Wentworth’s trademarks.

J.G. Wentworth claimed that Settlement Funding infringed onits trademarks through Google’s AdWords program1 by us-ing the terms “J.G. Wentworth” or “JG Wentworth” as itskeywords so that an Internet search for those terms pro-duces a Sponsored Link to Settlement Funding’s websiteimmediately proximate to the link to J.G. Wentworth’s websiteon the search-results screen. J.G. Wentworth claimed thatparticipation in Google’s AdWords program further infringesupon J.G. Wentworth’s mark because at least eight differentwebsites use the Google database and thus produce links toSettlement Funding’s website in response to searches for“J.G. Wentworth” or “JG Wentworth.”

1 Google’s AdWords program is the keyword-triggered advertisingprogram that generates the Sponsored Links section on the search-results screen. Advertisers participating in AdWords purchase orbid on certain keywords, paying Google for the right to have linksto their websites displayed in the Sponsored Links section when-ever an internet user searches for those words. Additionally, eachtime an internet user clicks on a particular Sponsored Link, Googlecharges a fee to the AdWords participant associated with that linkedwebsite. Businesses often participate in the AdWords program togenerate more visits to their websites.

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