Class Actions — Consumer Protection

CLASS ACTIONS  — CONSUMER PROTECTION

The United States was the first and remains one of the only legal systems that provides a litigation remedy for a class of people, as opposed to individual plaintiffs.  The rationale behind the rule is that there are some economic injuries that touch on a large number of individuals, but the amounts involved are too small to justify legal representation for the individual.  For instance, if a telephone company were to overcharge each of its 10 million customers by a dollar per month, the individuals would have little incentive or power to challenge the charge.  As a group, however, they would have the power to convince the company to cease its wrong conduct.  The class action is the vehicle by which this case could be brought.

At Baylaw, LLC we have tremendous experience in the field of consumer protection class action lawsuits.  If you have you been overcharged by a company, and it is possible that they have overcharged others in a similar way, you may have an important case.  We would be glad to evaluate your claim.  In the event that we decide that a class action is appropriate, if you are one of the plaintiffs, you may be entitled to incentive payments that are significantly above amounts that you have actually lost.  You may also achieve the impossible: stopping a major company from abusive consumer practices.

Business Formation and Representation

Businesses, new and old, large and small, need legal assistance.   The team at Baylaw, LLC can assist with your business at every turn, from formation of the entity that is going to conduct the business, to the establishment of the operating agreement that will govern the interrelation between the owners, to ongoing advice and representation once the business is up and running.

We can provide prudent and experienced advice regarding the advantages and disadvantages of every business type from large corporation to single-person limited liability companies.  The attorneys at Baylaw, LLC will ensure that your future and assets are protected and that any potential liability is mitigated from the beginning.

We have formed and served as general counsel for numerous marine, waterfront, non-profit and other businesses in the Chesapeake Bay region.  If you are interested in starting a business or would like some advice on how to further protect your ongoing business please contact one of our experienced attorneys.

Vessel Documentation

Vessel documentation is a national form of registration, which essentially registers the ownership of your vessel with the United States Coast Guard. Your “Certificate of Documentation” essentially replaces a title and registration that you would receive from state authorities.

There are certain minimum requirements that must be met in order to document your vessel; specifically your vessel must be at least 5 net tons, at least 51% of the vessel’s owners must be U.S. citizens, and your vessel must have marking certificate (hull number).

Documentation provides conclusive evidence of nationality for international purposes, provides for unhindered commerce between the states, and admits vessels to certain restricted trades, such as coastwise trade and the fisheries.  Vessel documentation also allows for greater flexibility in obtaining financing. Certain types of mortgages, specifically a “Preferred Ships Mortgage”, are only available to documented vessels and are only available from FDIC approved banks or other lending institutions that have received federal approval.

Baylaw, LLC differs from many “documentation companies” in that we have our staff of attorneys directly handle our clients’ documentation ensuring that the documentation is done correctly and in accordance with maritime legal standards.  If you are interested in documenting your vessel or have questions related to the documentation process, please contact one of our attorneys.

Avoiding Maryland Boat Tax

Note: This article is valid as of November, 2014.  Laws change.  If you have a significant issue you should invest time in having an attorney advise you personally on this subject.

Maryland imposes boat tax on the purchase/sale of a boat in Maryland or on the use of a boat in Maryland for period of more than 90 days in a calendar year.  The tax is 5% of the purchase price or fair market value of the boat.  At present, the tax is capped at $15,000 so boats over $300,000 achieve some tax relief, and high value boats can achieve significant savings over an uncapped state.  Tax is required to be paid within 30 days of the date that it becomes due.  If unpaid the tax is subject to interest running at 18% plus an immediate 10% penalty.  The penalty can rise to 100% if the tax authorities believe that tax was unpaid due to fraud or gross negligence.

For high value boats that anticipate spending a significant part of the year in Maryland, it is generally advisable to pay the tax.  For boats that will spend all or most of their time in Maryland, it is also generally advisable to pay the tax.  If a boat is not in that category, there are many scenarios in which tax can be deferred to a later date or avoided altogether.

1. A boat purchased in state, but leaving for another location.  Such boats can file a Maryland B110 form with the Maryland Department of Natural Resources, and so long as the boat leaves the state in short order is principally used in another state, no tax is owed to Maryland.  If the destination is international or no or  low-tax state (Delaware, Virginia, Rhode Island, for example) then no tax will be due at purchase and no tax will later be due for the use.

2. A boat that is purchased elsewhere and is in Maryland less than 90 days.  Such boats would not pay sales tax to Maryland, and would not be principally used here because they in the state for too short a time.  No tax would be due.

3. Boats that paid at least $15,000 in sales tax to another state.  The payment to the other state would be a credit against anything owed to Maryland, so no tax would be due.  If it is in the state for more than 90 days, and is not expected to return to its home state for the majority of the year, it should register in Maryland.  No tax should be due.

4. International and interstate commercial boats.  Boats that are in the US under a valid customs sticker and boats that are in interstate commerce have always been excepted from tax in Maryland.  In this author’s view, that is something that could potentially be changed by policy, but it has been the case for at least the last decade.

5. Other exemptions: there are other potential exemptions including boats that are out of the water and in readiness for use; boats that are listed for sale with a dealer and not being personally used; and boats that are held for maintenance and repair.  These may still apply even if a boat spends a significant amount of time in Maryland, but they can be factually difficult to prove.  Consult counsel.

Boat tax avoidance myths:

1. A boat owned by a Delaware LLC does not owe tax.  This is a myth — if its in principal use in Maryland (or any other use state) its taxable notwithstanding the location of the corporation that owns it.

2. Federally documented boats do not owe tax.  This is a myth.  Federally documented boats are exempt from titling in a state, but may still be required to register and pay tax.

3. Transient boats do not owe tax.  This is usually true.  But if the owner gets laid up or distracted and the boat stops in a state — it is likely to become taxable in that state.

J. Dirk Schwenk is graduate, cum laude, of the University of Maryland School of Law.  He practices in real estate, civil litigation and issues surrounding boats, marinas and waterfront property.  

 

 

For additional information and articles regarding our boat tax practice, please visit our website: www.boattax.com

 

Admirality and Maritime Law

At Baylaw, LLC we have a tradition of working on maritime cases and boat related issues – a tradition that draws from years and years spent in boats on the water.  We do not do every type maritime issue, however, there are others more qualified to litigate issues relating to ocean cargo or the Jones Act.  Here are some the things that we focus on:

Recreational and Commercial Vessel Transactions

Our attorneys have worked with numerous recreational and commercial vessel purchasers and sellers as well as marine lenders,  brokers and insurance agents over the years to successfully close hundreds of recreational and commercial vessel transactions.  We have the facilities and knowledge to draft all appropriate purchase contracts and documentation to ensure a smooth experience for all parties.  We also provide advice on how to minimize tax on boat purchase.

Captain and Crew Contracts and Claims

The attorneys at Baylaw, LLC have represented shipowners,  captains and crew members over the years and have gained tremendous experience in the potential pitfalls and liabilities of all parties involved in the shipowner-crew relationship. Our attorneys can assist with the creation to limited liability companies and the drafting of captains contracts to ensure that liability is mitigated before the captain steps onboard.  Our firm is also well-suited to prosecute and defend Jones Act unseaworthiness and maintenance and cure claims against vessel owners and operators.

Marinas and Boatyards

Baylaw, LLC assists its clients who operate marinas and boatyards  by serving as general counsel for the myriad of esoteric issues that arise in the daily operation of these businesses.  Beyond drafting  dockage and storage agreements, we have dealt with zoning and environmental compliance matters, products liability matters and repairer’s liability issues.  Our attorneys are also prepared to answer questions and resolve issues dealing with the Maryland Workers’ Compensation Act and the Longshore and Harbor Workers Compensation Act.

Recreational Marine Litigation and Insurance Coverage

Our attorneys have a broad base of experience in the investigation, reconstruction, prosecution and defense of recreational boating casualties and claims. Representative cases include collisions, groundings, sinkings, fires, wake injuries and heavy weather casualties, which resulted in wrongful death, serious personal injury or significant property damage.  Our attorneys have the skill, knowledge and experience to properly investigate and reconstruct recreational boating accidents in order to be able to provide a skillful prosecution or defense of such claims.  We have litigated coverage issues under most of the major policies, and have been successful in getting coverage for our clients for denied claims.