Bar Journal - December 1, 2000
By: Attorney Michael S. DeLucia
When the notice asking for authors to submit articles for this special "Internet" issue of the New Hampshire Bar Journal was published, over twenty attorneys expressed interest in contributing to the issue. That level of interest was never anticipated. This issue contains articles from fourteen of those attorneys, making it the single largest issue Bar Journal has ever published on any one theme.
The articles range widely in subject matter, from the tax implications of the Internet to electronic signatures, from state and federal legislation to privacy concerns, from the impact of the Internet on patent law to its implications under the Americans with Disabilities Act. The articles introduce a variety of new words ("anticybersquatting") and new concepts ("business practice patents"). My personal thanks to all those who submitted materials. It was a pleasure to read and discuss the impact of the Internet with so many members of the bar association, especially the younger members.
This introduction is too brief to fully describe the impact of the Internet upon the practice of law. Instead, I want to touch upon the impact of the new technology on three specific areas: greater citizen access to public information, the concern over privacy rights, and the potential impact upon philanthropy in this state.
CITIZEN ACCESS TO PUBLIC INFORMATION
To say that the Internet has revolutionized the public’s ability to access information about governmental activities and financial data is an understatement. In the mid-1990’s, when the Securities and Exchange Commission (the "SEC") required all publicly-traded corporations to file their proxy statements, annual reports and financial data on the Internet, citizens everywhere gained immediate access to complex and sensitive data about every publicly-traded corporation in the United States. This is a remarkable development, especially in terms of accountability.
Today, any citizen with a computer can access information about corporations as diverse as United Technologies, Disney Corporation, Fleet Financial Group, or Amazon.com. Within seconds, a citizen can obtain immediate information about the shareholders derivative action brought against the governing board of directors of Disney, alleging breach of fiduciary duties, or obtain information on employment contracts with senior management.
That same citizen can also access the proxy materials for Amazon.com, learn about the structure of that corporation, review the stock holdings of senior management, and review the annual reports and all other corporate filings. There is no need to call or write corporate headquarters to obtain such information – or to experience delays in receipt of the information. A wealth of information is also available on pending or completed mergers, such as the recent Chrysler/Daimler-Benz merger involving corporations on two continents. Not only are the essential documents now available, but so too is informed commentary on these transactions – all within seconds.
It is this immediate access to information that makes the Internet so revolutionary, not only in the securities sector but across all sectors, from healthcare to news dissemination, from political developments to legal analysis. It empowers everyone by making information and data universally accessible.
The area of greatest concern currently is the collection and dissemination of sensitive personal information about those individuals using the Internet. Three articles in this special issue of Bar Journal address that topic, including the articles by (i) Susan Richey, a professor at Franklin Pierce Law Center, (ii) Courtney Merrill, an attorney at Orr & Reno, P.A., and (iii) my own article on charitable trusts.
The concerns center upon the past practices of corporations in misusing confidential information obtained from clients, cardholders or donors. The Federal Trade Commission ("FTC") has initiated a number of actions against the most egregious offenders, but there has been no concerted effort to deal with the problem thus far. The most troubling cases are discussed in the three articles, including the Double-Click case where that entity "collected personal information, for the most part, without the knowledge of the consumers in question and marketed that information to third parties without notice to or consent from the profiled customers." (See the Susan Richey article)
On a parallel level, the recent cases involving financial corporations selling and reselling sensitive information about credit card holders without informing the customers have led to an effort to encourage online entities to adopt "privacy statements". The dialogue on this major issue appears to be just beginning; and the passage of the Children’s Online Privacy Protection Act was a good starting point.
DIFFICULT ENFORCEMENT ISSUES
The articles in this issue demonstrate how difficult the landscape is, whether it involves tax issues or patent law issues. The "dark side" of the Internet can be gathered under the title "Cybercrime" and involves the use of the new technology in ways never envisioned. There are now 30 "Internet Crimes Against Children" task forces around the nation investigating sexual crimes against children. The Internet proves to be a perfect tool for predators, allowing entry directly into our homes via the Internet. The recent case involving a New Jersey teen-ager allegedly engaged in securities fraud on the Internet and that of a Philippine hacker paralyzing the Internet system world-wide with a computer virus are only two of the growing number cases presenting enforcement agencies with difficult issues – across state lines, national borders and continents.
The impact of the Internet on philanthropy should be significant, given the success that charitable entities have had in soliciting donations via interactive websites. However, the problem of controlling fraudulent solicitations becomes more difficult. With a charitable entity in Germany hiring a professional fundraiser in Spain to solicit funds in all fifty states, the problem of fraudulent solicitation becomes almost impossible to control. Who has jurisdiction? How is the charitable entity held accountable for mismanagement of the donations or breach of fiduciary duties?
Will this new technology cause charitable giving to increase? For the state of New Hampshire, where the level of charitable giving has consistently remained among the lowest of the fifty states, there is some hope that there will be an increase in philanthropic levels as New Hampshire charities prepare web sites and use the Internet to inform citizens about their charitable missions and activities. There are now approximately 5,000 charities registered in New Hampshire; and the Internet offers them all an opportunity to present their messages in clear, compelling ways.
Attorney Michael S. DeLucia is the Director of Charitable Trusts at the New Hampshire Attorney General’s Office. He is a past president of NASCO and serves on the governing board of NASCO, an affiliate of the National Association of Attorneys General (NAAG).