Minimum Competence - Daily Legal News Podcast
Minimum Competence
Legal News for Tues 3/5 - Biden Admin to Cap Credit Card Fees at $8, COVID-19 Insurance Issues, SCOTUS Decision on Trump Ballot, and Tax Zappers

Legal News for Tues 3/5 - Biden Admin to Cap Credit Card Fees at $8, COVID-19 Insurance Issues, SCOTUS Decision on Trump Ballot, and Tax Zappers

Biden's rule to cap credit card fees at $8, COVID-19 insurance cases, the Supreme Court decision on Trump ballot eligibility and Column Tuesday on tax zappers and entrapment.

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A cash register, pencil sketch

This Day in Legal History: Nuclear Non-Proliferation Treaty Takes Effect

On this day in legal history, March 5 marks a pivotal moment in the realm of international law and global security. In 1970, the Nuclear Non-Proliferation Treaty (NPT) officially took effect, following its ratification by 43 countries. This landmark agreement represented a monumental effort by the international community to prevent the spread of nuclear weapons and to promote peaceful uses of nuclear energy.

The NPT, negotiated during the height of the Cold War, aimed to forestall the proliferation of nuclear weapons and to ensure that nuclear technology for peaceful purposes, such as energy generation, would be shared freely, under appropriate safeguards. It established a framework based on three pillars: non-proliferation, disarmament, and the right to peacefully use nuclear technology.

As a cornerstone of international security, the treaty created a distinction between nuclear-weapon states (NWS) and non-nuclear-weapon states (NNWS), with the former committing not to transfer nuclear weapons or other nuclear explosive devices to any recipient, and the latter agreeing not to receive, manufacture, or acquire such devices.

Over the years, the NPT has faced challenges, including criticisms over its perceived inequality between nuclear-armed and non-nuclear-armed states, concerns about compliance, and the emergence of nuclear-armed states outside the treaty. Despite these challenges, the NPT remains a critical element of the international legal framework aimed at reducing the nuclear threat and promoting global peace.

The treaty's review conferences, held every five years, provide a forum for its parties to assess its implementation, address emerging challenges, and reinforce their commitment to its objectives. As of today, the NPT has been ratified by 191 countries, making it one of the most widely adhered-to arms control agreements in history.

The effectiveness of the NPT in preventing the proliferation of nuclear weapons and promoting disarmament has been a subject of debate. However, its role in establishing norms against proliferation and fostering dialogue on nuclear issues cannot be overstated. The NPT's entry into force on March 5, 1970, stands as a testament to the international community's ongoing quest for a safer, more secure world free from the threat of nuclear war.

President Joe Biden's administration is set to finalize a rule significantly reducing credit card late fees to $8, a measure aimed at alleviating financial pressures on households and bolstering his reelection campaign by addressing everyday costs. This initiative, estimated by the Consumer Financial Protection Bureau (CFPB) to save 45 million people an average of $220 annually on penalties, is part of a broader effort announced during a White House Competition Council meeting. The efforts include tackling deceptive practices in the agriculture sector and misleading pricing strategies across various industries, demonstrating Biden's commitment to reducing living expenses for Americans.

These steps are part of Biden's broader strategy to combat inflation and improve his approval ratings by focusing on reducing costs that directly impact middle-class and working-class families. The reduction in credit card late fees, from the current $30 for a first missed payment and up to $41 for subsequent ones within six months, to a flat $8, is expected to cost credit card issuers up to $9 billion of the annual $12 billion they earn in late fees.

The rule also aims to eliminate the automatic adjustment of fees for inflation, opting instead for adjustments based on market conditions. CFPB Director Rohit Chopra criticized the excessive late fees enabled by a loophole, indicating the rule's introduction to counter unreasonable charges. Despite anticipated legal challenges from banking trade groups, the administration has made adjustments based on industry feedback and remains optimistic about the rule's implementation.

Furthermore, the administration is addressing issues beyond credit card fees, such as proposing a ban on bulk billing for broadband services in apartment buildings and introducing new rules to protect farmers from unfair practices by meatpackers, highlighting an extensive effort to ensure fair competition and protect consumers and small businesses from exploitative practices.

Biden to Finalize Rule to Cap Credit Card Late Fees at $8

The California Supreme Court is set to hear a significant case involving the Los Angeles Lakers, the National Hockey League, and a concert promoter, Another Planet Entertainment, in a bid to secure insurance coverage for losses incurred during the COVID-19 pandemic shutdowns. This case, which could influence billions of dollars in insurance claims, centers on whether the presence of COVID-19 on an insured's premises constitutes "direct physical loss or damage to property" under commercial property insurance policies. Vigilant Insurance Co., owned by Chubb Limited, contends that the virus's temporary presence, being a readily removable substance, does not meet the criteria for "direct physical loss or damage."

Another Planet Entertainment argues that the COVID-19 virus physically alters and damages property, challenging the dismissal of its lawsuit against Vigilant for breach of contract, bad faith, and fraud. The dispute highlights a broader debate within the legal and insurance sectors over the application of "all risks" coverage to pandemic-related losses, with potential widespread implications for the insurance industry.

Trade groups warn that mandating coverage for economic losses without structural property damage could adversely affect California policyholders and the insurance market, citing estimates of massive financial impacts. This case is one of three COVID insurance-coverage disputes the California high court agreed to review, signaling a critical juncture in how pandemic-related insurance claims are adjudicated.

Entities such as the NHL and Major League Baseball are closely watching the outcome, as they too seek compensation for pandemic-induced financial losses. The case's resolution could redefine the scope of insurance coverage for businesses affected by COVID-19, with a decision expected within 90 days of the oral arguments.

Covid Coverage Case Heads to Argument With Billions on the Line

The U.S. Supreme Court delivered a unanimous verdict siding with Donald Trump, which prevented states from excluding candidates for federal office from ballots based on a constitutional provision regarding insurrection. However, this unanimous decision masked a deeper division within the Court, reflecting ongoing ideological splits on significant issues. Despite agreeing on the outcome, the justices were at odds over their reasoning, particularly concerning the enforcement of the 14th Amendment's Section 3, which addresses disqualification from office for engaging in insurrection or rebellion. 

The Court ruled that enforcement of this provision is a matter for Congress, not individual states, aiming to prevent inconsistent eligibility decisions across the country. Nonetheless, four justices expressed concerns that the majority opinion unnecessarily limited the scope of enforcement to federal legislation, a move criticized as overreaching given the current polarized political climate. 

This ruling underscores the complex dynamics within the Supreme Court, as it navigates divisive legal questions amidst national polarization. The decision, while technically fostering a sense of unanimity, actually highlights significant reservations among the justices about the majority's approach and the implications for future enforcement of the 14th Amendment. The case not only reflects the Court's internal divisions but also its increasingly prominent role in political debates, with potential long-term implications for how insurrection-related disqualifications are handled.

US Supreme Court ruling in Trump ballot case showed unanimity, not unity | Reuters

In my latest column, I delve into the pressing issue of sales tax evasion facilitated by "zappers," electronic sales suppression tools that manipulate sales records to avoid sales tax remittance. Highlighting the necessity for state revenue departments to adopt a more proactive stance rather than relying solely on post-hoc enforcement, I argue for the importance of transparency and public awareness. I discuss how listing problematic point-of-sale (POS) software, akin to the IRS's practice with tax shelters, could deter tax evasion by making the risks known to businesses and software providers alike.

The adoption of such transparency measures, I suggest, could not only foster a more compliant business environment but also shift the focus towards prevention rather than punishment. By maintaining publicly accessible lists of POS systems under scrutiny, state revenue departments can signal to businesses the importance of choosing their software wisely to avoid unintentional entanglement in tax evasion schemes.

However, I also caution against the potential for undue scrutiny of businesses merely for their association with a POS system known to have zapper capabilities. I highlight the fine line between proactive measures and the risk of penalizing innocent business owners who may unwittingly possess software capable of sales suppression.

I propose a balanced approach that encourages collaboration between state revenue departments and the business community, advocating for the provision of guidance and support to help businesses navigate the complex landscape of tax compliance. By fostering an environment of mutual trust and cooperation, we can ensure a fairer and more efficient tax system that benefits all stakeholders.

Tax ‘Zappers’ Warrant Transparency by State Revenue Departments

Minimum Competence - Daily Legal News Podcast
Minimum Competence
The idea is that this podcast can accompany you on your commute home and will render you minimally competent on the major legal news stories of the day. The transcript is available in the form of a newsletter at