Author Archives: Jorge Pereira, Esq.

About Jorge Pereira, Esq.

I was born in Portugal and raised in Bethlehem after immigrating with his family to the Lehigh Valley at the age of 2. I attended Rutgers University, New Brunswick graduating with B.A. in Political Science and a minor in Psychology. After graduating with honors from Rutgers University, I attended Rutgers-Newark Law School. While at Rutgers-Newark Law School, I was part of Appellate Moot Court, Urban Legal Clinic and the Animal Rights Clinic. Upon graduating Rutgers-Newark Law School Law, I initially practiced at a small boutique law firm in Newark, New Jersey but always maintained a desire to return to his home in the Lehigh Valley. I spent the last eighteen years working in civil litigation and personal injury law firms in the Lehigh Valley. For the last sixteen years, I has worked at an Allentown law firm, The Law of Business, P.C. f/k/a Douglas M. Marinos & Associates, P.C. focusing on business divorce, corporate law, creditor’s rights and general civil litigation. I am a member of the Pennsylvania and New Jersey bars and admitted to practice in the United States District Court of Pennsylvania for the Eastern District and the United States District Court of New Jersey. I have litigated cases throughout the Courts of Common Pleas of Eastern Pennsylvania from Susquehanna County to Philadelphia County and represented both debtors and creditors in the United States Bankruptcy Court for the Eastern and Middle District of Pennsylvania. As counsel for Sovereign Bank, I wrote the appellate brief in the precedent setting decision in the matter of Sovereign Bank v. Schwab, 414 F.3d 450 (3rd Cir. 2005). I am an avid cigar smoker and a founding member, board member and former officer of the Lehigh Valley Cigar Club, a non-profit social club with over 200 members dedicated to protecting and promoting the enjoyment of cigar smoking in the Lehigh Valley.I played Rugby for ten years on the men’s team of the Lehigh Valley Rugby Football Club, becoming a captain of the men’s team, and President of the club. I own a commercial building in the historical district of Main Street, Bethlehem where my business partner and I own a hair salon, Hair Studio Main.

More Pennsylvania Cities Decriminalize Marijuana Despite State Law.

With the noted exception of the current Attorney General, there is a growing acceptance of legalize use of marijuana in the United States. Thirty of the fifty states have legalized marijuana for either medical and/or recreational use. As the laws with regards to marijuana use continue to change state by state, the states which have legalized medical and/or recreational marijuana must navigate the conflict between their state law and Federal law which continues to classify marijuana as a prohibited Schedule 1 narcotic – a “harmful substance of no known medical benefit.”

The classification of marijuana as a schedule 1 drug is antiquated and patently false. However, perception and laws are hard to change. Change usually begins at a grass roots level. Within Pennsylvania, several cities have started to pass local ordinances that have decriminalized marijuana. Philadelphia, Pittsburgh, Harrisburg, Allentown, York, and, most recently, Bethlehem have all passed local ordinances essentially reducing the punishment for possession of small amounts of marijuana for personal use, typically 30 grams or less, from a crime to a summary offense subject to a fine.

These local ordinances create a perceived conflict with Pennsylvania State laws. Under Pennsylvania’s Controlled Substance, Drug Device and Cosmetic Act (“CSA”), 35 P.S. §780-113 (a)(16), no person may knowingly possess a controlled substance without a lawful prescription from a doctor. Under the CSA, marijuana is also classified a Schedule 1 controlled substance. Pennsylvania’s penalty for possession of 30 grams or less of flower or 8 grams or less of hashish is a misdemeanor punishable by 30 days in jail and/or a $500 fine. See 35 P.S. §780-113 (a)(31)(i). Possession of more than 30 grams of flower or more than 8 grams of hashish is a misdemeanor with a maximum penalty of 6-12 months incarceration and a $5,000 fine.

So which law applies and how severe can you be punished for possession of a small amount marijuana in theses cities that have decriminalized marijuana. Typically, when there is a conflict between state law and local ordinances, state law preempts the local ordinance. Some local law enforcement authority have argued the CSA preempts all of the local ordinances as they are attempts to alter the penalties under the CSA.

In Holt’s Cigar Co. v. City of Philadelphia, 608 Pa. 146 (2011), the Pennsylvania Supreme Court rejected the argument that the Controlled Substance Act prohibits local regulation in order to create uniformity in the regulation of controlled substances. In Holt’s Cigar, the Supreme Court held that the Act does not prohibit local regulations of controlled substances unless there is an “irreconcilable conflict” between the CSA and the local regulation. The proper standard for determining whether the local ordinances “irreconcilably conflicts” with the Controlled Substances Act was stated by the Supreme Court in Holt’s Cigar.

[I]t has long been the established general rule, in determining whether a conflict exists between a general and local law, that where the legislature has assumed to regulate a given course of conduct by prohibitory enactments, a municipal corporation with subordinate power to act in the matter may make such additional regulations in aid and furtherance of the purpose of the general law as may seem appropriate to the necessities of the particular locality and which are not in themselves unreasonable.

Holt’s Cigar, 608 Pa. at 154. (emphasis added).

The Holt’s Cigar decision makes it clear that local laws with a different penalty do not create an irreconcilable conflict, as long as the local law does not permit what the Act forbids or forbid what the Act permits. The Supreme Court stated that the the nature or severity of the penalties imposed is not determinative and does not eliminate the conflict arising from the discrepancy with respect to mens rea for a particular course of proscribed conduct.” Id.at 165 (emphasis added).

While Holt’s Cigar decision provides some clarity as to whether local municipalities may enact ordinances decriminalizing marijuana, person may still be punished under state laws. Usually, it will depend on the law enforcement authority that arrests and prosecutes the individual. If you are arrested by a state trooper as opposed to the local municipal police, there is a good chance you will be charged with a violation of state law. It will then be up to the local courts and prosecutors on how to proceed with charges and punishment

An interesting enforcement scenario exists in the city of Bethlehem. On June 26, 2018, the Mayor of Bethlehem signed into law Bill No. 16-2018, creating a summary offense for possession of up to 30 grams of marijuana (or eight grams of hashish), possession of marijuana paraphernalia and personal use of marijuana. Under the new law, there is a fine of $25 for a first offense, $50 for a second offense, $100 for a third offense, and $150 fourth offenses or eight hours of community service.

The problem arises with enforcement. The City of Bethlehem is divided between two counties, Lehigh and Northampton. The District Attorney of Lehigh County maintains the position that the CSA preempts local ordinance despite the fact that both Allentown and now Bethlehem – Lehigh County’s largest cities – have decriminalized possession of under 30 grams of marijuana. The District Attorney of Northampton County maintains the opposite position and will enforce the local ordinances. So it is possible you could be punished differently depending on where you are caught in Bethlehem with marijuana.

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The Supreme Court recognizes privacy right to cell phone location history.

On May 22, 2018, the U.S. Supreme Court issued an important decision extending the Fourth Amendment right against unlawful search and seizure into the digital age. In Thomas Ivory Carpenter v. United States, the Court sided with the privacy rights of cellphone users over law enforcement using private tracking data compiled and saved by cell phone companies. At issue was whether the Fourth Amendment required law enforcement to obtain a warrant before accessing cell phone location history from cell phone service providers.

The Supreme Court recognized the importance and prominence of cell phones in an individual’s daily life and the right to privacy of the sensitive information generated by the cell phone’s use.

The Court stated that there are 396 million cell phone service accounts in the United States for a Nation of 326 million people. Cell phones perform their wide and growing variety of functions by connecting to a set of radio antennas called “cell sites” mounted on towers, light posts, flagpoles, church steeples, or the sides of buildings. Cell sites typically have several directional antennas that divide the covered area into sectors. Cell phones continuously scan their environment looking for the best signal, which generally comes from the closest cell site. Cell phones, smartphones, tablets, and other devices tap into the wireless network several times a minute whenever their signal is on. Each time the smart device connects to a cell site, it generates a time-stamped record known as cell-site location information (CSLI). Wireless carriers collect and store CSLI for their own business purposes, including finding weak spots in their network and applying “roaming” charges when another carrier routes data through their cell sites. In addition, wireless carriers often sell aggregated location records to data brokers, without individual identifying information. Carriers retained CSLI for the start and end of incoming calls,text messages and routine data connections. Accordingly, modern cell phones generate increasingly vast amounts of increasingly precise CSLI.

In December of 2010, there were a series of robberies in Michigan and Ohio of cell phones, ironically. Several cell phones stores were robbed of their cell phones at gunpoint. Eventually, the FBI arrested four men suspected of the robberies. One of the men confessed and provided names and cell phone numbers of accomplices including the petitioner, Timothy Carpenter.

Prosecutors applied for court orders under the Stored Communications Act (“SCA”) to obtain cell phone records for Carpenter and several other suspects. The SCA permits the Government to compel the disclosure of certain telecommunications records when it “offers specific and articulable facts showing that there are reasonable grounds to believe” that the records sought “are relevant and material to an ongoing criminal investigation.” The SCA stops short of requiring that prosecutors demonstrate probable cause, which is necessary to obtain a warrant.

Federal Magistrate Judges issued two orders directing Carpenter’s wireless carriers to disclose the CSLI for Carpenter’s telephone at call origination and at call termination for incoming and outgoing calls during the four-month period when the string of robberies occurred.

Law enforcement was able to track Carpenter’s locations and connect Carpenter to the crimes by obtaining more than 100 days’ worth of his smartphone location data records without a warrant. The location data records placed his phone in over 12,000 locations including when he was at church and whether or not he spent the night at home.

Before his trial, Carpenter argued that obtaining the records constituted a Fourth Amendment search, and therefore the police should have needed a warrant. His motion was denied, and the Sixth Circuit Court of Appeals later upheld the case.

The Supreme Court reversed and remanded with Chief Justice Roberts providing the deciding vote and writing the majority opinion.

The Court held that the acquisition of Carpenter’s CSLI records was a Fourth Amendment search. The Fourth Amendment protects not only property interests but certain expectations of privacy as well. Thus, when an individual “seeks to preserve some thing as private,” and his expectation of privacy is “one that society is prepared to recognize as reasonable,” official intrusion into that sphere generally qualifies as a search and requires a warrant supported by probable cause.

The Court further held that the digital data at issue, personal location information maintained by a third party, does not fit neatly under existing precedents but lies at the intersection of two lines of cases. One set of cases addressing a person’s expectation of privacy in his physical location and movements. The other set of cases addresses a person’s expectation of privacy in information voluntarily turned over to third parties.

The third-party doctrine, as first set forth in United States v. Miller, 425 U. S. 435 (no expectation of privacy in financial records held by a bank), and Smith v. Maryland, 442 U. S. 735 (no expectation of privacy in records of dialed telephone numbers conveyed to telephone company) holds that information customers voluntarily provide to a third party is outside the bounds of Fourth Amendment protections and, therefore, law enforcement does not need a warrant in order to access that information.

The Supreme Court stated that the third-party doctrine partly does not apply given “the nature of the particular documents sought” and “legitimate ‘expectation of privacy’ concerning their contents.” The Supreme Court cited prior case law where the court had already recognized that individuals have a reasonable expectation of privacy in the whole of their physical movements. Additionally, the Supreme Court recognized in many way CSLI is not voluntarily provided by the cell phone users but automatically obtained when the cell phone is used in some form.

The Supreme Court found the Government did not obtain a warrant supported by probable cause before acquiring Carpenter’s cell-site records. It acquired those records pursuant to a court order under the SCA, which required the Government to show “reasonable grounds” for believing that the records were “relevant and material to an ongoing investigation” which falls well short of the probable cause required for a warrant.

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Supreme Court declines to extend automobile exception to Fourth Amendment to vehicles parked in driveways or curtilage of home.

In yet another victory for Fourth Amendment advocates, the Supreme Court on May 29, 2018 ruled against a warrantless search and examination of motorcycle under a tarp in the driveway of a home.   In the matter of Ryan Austin Collins vs. Virginia, No. 16-1027, the Court in a 8-1 decision reversed the lower court’s decision which upheld a warrantless search of motorcycle under the so-called automobile exception to the Fourth Amendment.

An orange and black motorcycle was believed to have been stolen and in the possession of Mr. Collins. Apparently Mr. Collins was proud of his accomplishment and posted photos of the stolen motorcycle parked in his driveway on his Facebook profile. The police discovered the photos on Mr. Collins’ Facebook profile, drove to his house and observed what appeared to be the motorcycle under a tarp parked in Mr. Collin’s driveway. The arresting police officer acting without a search warrant, walked to the top of the driveway, removed the tarp, confirmed that it was the stolen motorcycle, returned the tarp, and waited for Mr. Collins to return.

Upon his return Mr. Collins was arrested and charged with receiving stolen property. At trial, Mr. Collins sought to suppress the evidence on the grounds that the police had violated his Fourth Amendment rights when they had trespassed on Mr. Collins’s house curtilage (driveway) to conduct a warrantless search. Mr. Collins was convicted of receiving stolen property. The conviction was affirmed by the Virginia Court of Appeals who found “numerous exigencies justified both the entry onto the property and the moving of the tarp to view the motorcycle and record its identification number.” The Virginia Supreme Court also affirmed the conviction holding that the warrantless search was justified under the so-called automobile exception to the Fourth Amendment. The State Supreme Court held that the police officer had probable cause to believe that the motorcycle was contraband, and that the warrantless search was justified.

The central question before the Supreme Court was whether the so-called automobile exception to the Fourth Amendment, which allows the police certain latitude to search vehicles on public streets without a warrant, also allows the police to walk up a driveway without a warrant and search a vehicle parked in the area near a house.

The so-called automobile exception, first articulated in Carroll v. United States, 267 U.S. 132 (1925), allows police to search a car without a warrant if the car is “readily mobile” and they have probable cause to believe that it contains evidence of a crime.

The Court began its Fourth Amendment discussion by examining the intersecting case law of the so-called automobile exception to the warrant requirement with case law extending the protection against warrantless searches to the curtilage of a home. The “curtilage” of a home being the area immediately surrounding the house, where residents expect privacy.

In its near unanimous opinion written by Justus Sonia Sotomayor, the Court held that the driveway where Mr. Collins’ motorcycle was parked was part of the curtilage protected by the Fourth Amendment. Justice Sotomayor further wrote, “To allow an officer to rely on the automobile exception to gain entry to a house or its curtilage for the purpose of conducting a vehicle search would unmoor the exception from its justifications, render hollow the Fourth Amendment protection the Constitution extends to the house and its curtilage, and transform what was meant to be an exception into a tool with far broader application,”

The court explained that the justification for the automobile exception doesn’t consider a resident’s privacy interest in his home and its curtilage at all; rather, the rationale rests on the twin ideas that cars can easily be moved and are subject to regulation simply by virtue of being on the roads.

The stated that there are no Supreme Court’s cases that indicates the automobile exception allows a police officer to enter the home or its curtilage without a warrant to search a vehicle – if anything, the court has emphasized the need to treat “automobiles differently from houses.”

The sole dissent in the case was filed by Justice Samuel Alito, who stated that “The Fourth Amendment prohibits ‘unreasonable’ searches,” and that, “What the police did in this case was entirely reasonable.”

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U.S. Supreme Court Finds That An Unauthorized Driver In Lawful Possession of Rental Car Has A Right To Privacy

On May 14, 2018, the United States Supreme Court held that people who borrow rental cars from friends are afforded the same protections against unlawful searches as the authorized driver. In the matter of Terrence Byrd v. United States, 2018 WL 2186175, the Supreme Court justices unanimously held “ the mere fact that a driver in lawful possession or control of a rental car is not listed on the rental agreement will not defeat his or her otherwise reasonable expectation of privacy”.

In September of 2014, Pennsylvania State Troopers pulled over a car driven by Terrence Byrd. Byrd was the only person in the rental car which had been rented by his fiancée, Latasha Reed in Wayne, New Jersey. Reed rented the car with Byrd present but failed to list Byrd as authorized driver on the rental agreement. The rental agreement specifically stated that “PERMITTING AN UNAUTHORIZED DRIVER TO OPERATE THE VEHICLE IS A VIOLATION OF THE RENTAL AGREEMENT.”

Shortly after Reed rented the car, Byrd returned with the car to his home in Patterson, New Jersey to get his belongings and later departed in the car alone for Pittsburgh, Pennsylvania. After driving three hours, Byrd was stopped by Pennsylvania Troopers on Rt. 81, near Harrisburg, Pennsylvania.

The Troopers became suspicious of Byrd because he was driving with his hands at the “10 and 2” position on the steering wheel, sitting far back from the steering wheel, and driving a rental car. Based on these observations, the Troopers decided to follow Byrd and, a short time later, stopped him for a possible traffic infraction.

In the course of the traffic stop the troopers learned that the car was rented and that Byrd was not listed on the rental agreement as an authorized driver. The Troopers discovered that Byrd had identification under two different possible alias. The Troopers further discovered that Byrd had prior convictions for weapons and drug charges as well as an outstanding warrant for a probation violation in New Jersey. Byrd then revealed he had a “blunt” in the car and offered to retrieve it for them. The Troopers declined Byrd’s offer and continued to seek consent to search the car, though they stated they did not need consent because he was not listed on the rental agreement. The Troopers began a thorough search of the car and trunk. In the trunk, the Troopers found a laundry bag containing body armor and found 49 bricks of heroin.

The evidence was turned over to federal authorities, who charged Byrd with distribution and possession of heroin with the intent to distribute in violation of 21 U. S. C. §841(a)(1) and possession of body armor by a prohibited person in violation of 18 U. S. C. §931(a)(1). Byrd moved to suppress the evidence as the fruit of an unlawful search. The United States District Court for the Middle District of Pennsylvania denied the motion, and the Court of Appeals for the Third Circuit affirmed.

The Court of Appeals recognized that a “circuit split exists as to whether the sole occupant of a rental vehicle has a Fourth Amendment expectation of privacy when that occupant is not named in the rental agreement”; but it noted that Circuit precedent already had “spoken as to this issue . . . and determined such a person has no expectation of privacy and therefore no standing to challenge a search of the vehicle.”

In its Opinion, the Supreme Court recognized that one who owns and possesses a car, like one who owns and possesses a house, almost always has a reasonable expectation of privacy in it, but it is more difficult to define and delineate the legitimate expectations of privacy of others. The Court stated that a person does not always need to have a recognized common-law property interest in the place searched to be able to claim a reasonable expectation of privacy in it.

On the other hand, the Supreme Court also noted that legitimate presence on the premises of the place searched, standing alone, is not enough to accord a reasonable expectation of privacy, because it “creates too broad a gauge for measurement of Fourth Amendment rights.”

The Supreme Court explained that “[l]egitimation of expectations of privacy by law must have a source outside of the Fourth Amendment, either by reference to concepts of real or personal property law or to understandings that are recognized and permitted by society. The Supreme Court further noted that the two concepts in cases like Byrd’s case are often linked. “One of the main rights attaching to property is the right to exclude others,” and, in the main, “one who owns or lawfully possesses or controls property will in all likelihood have a legitimate expectation of privacy by virtue of the right to exclude.”

In rejecting the Government’s position that only authorized drivers of rental cars have expectations of privacy in those vehicles, the Court saw no reason why the expectation of privacy that comes from lawful possession and control and the attendant right to exclude would differ depending on whether the car in question is rented or privately owned by someone other than the person in current possession of it.

The central inquiry was whether Byrd had lawful possession of the car.  The Court reasoned that under some circumstances ‘wrongful’ presence at the scene of a search would not enable a defendant to object to the legality of the search. A car thief would not have a reasonable expectation of privacy in a stolen car. However, Byrd was a permissive driver of the rental car and therefore, had the right to exclude others and a reasonable expectation of privacy.

The Supreme Court vacated the judgment of the Court of Appeals and remanded the case to further consider two of the Government’s arguments: that one who intention- ally uses a third party to procure a rental car by a fraudulent scheme for the purpose of committing a crime is no better situated than a car thief; and that probable cause justified the search in any event.

Attorneys arguing on behalf of Byrd argued that 115 million car rentals take place annually in the United States and if the government won, police would have an incentive to pull over a rental car driver who commits a traffic violation because police will know they can search the car if the driver isn’t on the rental agreement.

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The 3rd Circuit holds debtors may sue creditors who offer to settle time-barred debt under the FDCPA.

Recently, the United States Court of Appeals for the Third Circuit, rendered an opinion in the class action, Michelle Tatis vs. Allied Interstate, LLC: John Does 1-25, No. 16-4022, clarifying whether time-barred offers from creditors to settle old obligations violated the Fair Debt Collection Practice Act (“FDCPA”). On appeal, the 3rd Circuit reversed a decision by the United States District Court for the District Of New Jersey granting Defendant’s Motion To Dismiss suit. Plaintiff, Michelle Tatis, commenced a class action suit against Defendant, Allied Interstate, LLC, alleging that a collection letter sent by Allied offering to settle her time-barred debt violated the FDCPA’s prohibition against using “any false, deceptive, or misleading representations or means in connection with the collection of any debt.” See 15 U.S.C. § 1692e. Tatis had a ten year old debt of $1,289.86 owed to Bally Total Fitness which Allied sought to collect by sending a letter offering to settle the obligation for pennies on the dollar.

In the state of New Jersey, the statute of limitations to commence a debt collection action is six years. Pennsylvania has a four year statute of limitations to commence a debt collection action. What that means is that if the 6 years, or 4 years in Pennsylvania, has passed since a debtor defaulted on his/her obligation to pay his/her debt, a creditor cannot sue the debtor to recover the debt. It does not mean that a creditor cannot offer to settle and that a debtor cannot voluntarily agree to repay the debt. A debtor may voluntarily agree to repay the obligation for personal reasons or a desire to honor the obligation. However, there is no legal threat to the debtor after the statute of limitations has passed. Whether or not an offer to settle misrepresents the legal status of a time-barred obligation is the focus of the 3rd Circuit’s Opinion.

In Tatis, Allied sent a letter after the statute of limitations had run stating: “[The creditor] is willing to accept payment in the amount of $128.99 in settlement of this debt. You can take advantage of this settlement offer if we receive payment of this amount or if you make another mutually acceptable payment arrangement within 40 days . . . .”

Tatis’ complaint alleged that Tatis interpreted the word “settlement” in the letter to mean that she had a “legal obligation” to pay the debt, and the least- sophisticated debtor would hold a similar belief. Tatis claimed that letter violated several prohibitions of the FDCPA including: §1692 e(2)(A), falsely representing the legal status of debt; §1692e(5), making false threats to take legal action that cannot be legally taken; and §1692e(10) using false representations and/or deceptive means to collect or attempt to collect a debt. Allied filed a Motion To Dismiss alleging that no threat to take legal action was made to Tatis by the settlement letter.

The U.S. District Court agree with Allied and held that an attempt to collect a time-barred does not violate the FDCPA unless it is accompanied a threat of legal action. District Court stated that the use of the word “settlement” in a letter did not constitute a threat of legal action. Finally, The U.S. District Court held that because under New Jersey law partial repayment would not revive the statute of limitations, the letter could not deceive or mislead a consumer into inadvertently reviving the debt.

The 3rd Circuit in reversing the District Court focused on the remedial nature of the FDCPA and the broad prohibitions set forth in the FDCPA by Congress to curb abusive, deceptive, and unfair debt collection practices. Because of the remedial nature of the FDCPA, its language is construed broadly to protect debtors. In addition, the “least sophisticated debtor” standard is used to determine whether any debt collection practices violate the FDCPA. The “least sophisticated debtor” standard is a very low standard which does requires a plaintiff to prove that he or she was mislead, but only that the least sophisticated debtor could be mislead.

The 3rd Circuit looked at several other court decisions involving similar settlement letters which found that offers to “settle” could mislead the least sophisticated debtor to believe that debt was legally enforceable in court. The 3rd Circuit agreed with its sister courts and held that in the specific context of a debt-collection letter, the least-sophisticated debtor could be misled into thinking that “settlement of the debt” referred to the creditor’s ability to enforce the debt in court rather than a mere invitation to settle the account. The 3rd Circuit concluded that the least-sophisticated debtor could plausibly be misled by the specific language used in Allied’s letter and vacated the District Court’s order granting Allied’s motion to dismiss. However, the 3rd Circuit would not go as far as to hold that standing alone, settlement offers and attempts to obtain voluntary repayments of stale debts constitute deceptive or misleading practices. Additionally, the 3rd Circuit declined to hold that the use of the word “settlement” is “misleading” as a matter of federal law or mandate the use of any specific language. The 3rd Circuit, in keeping with the text and purpose of the FDCPA, reiterated that any such letters, when read in their entirety, must not deceive or mislead the least-sophisticated debtor into believing that she has a legal obligation to pay the time-barred debt.

What it means for creditors is that they must very careful in drafting “settlement offers” for time-barred debt. A settlement offer cannot imply that a time-barred debt is legally enforceable. The 3rd Circuit believed the word “settle” could imply “concluding or avoiding a lawsuit.” Perhaps a disclaimer that no legal action can or will be taken if the debtor choses to voluntarily repay the debt.

With regards to debtors, if the language of settlement letter would mislead an unsophisticated consumer into believing that if he or she does not settle the time-barred debt he or she may be subject to suit, then that letter may violate the FDCPA. A debtor who receives a settlement letter may bring suit against the creditor. Under the FDCPA, a debtor may sue for actual damages, statutory damages of $1,000.00 per violation, and attorney’s fees so long as the suit is commenced within a year of the violation.

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Doctors and dispensaries may not advertise participation in PA’s medical marijuana program but they can educate the public.

Despite some serious concerns caused by Attorney General Jeff Sessions’ decision to abandon the Cole Memo guidelines for how the Department of Justice would treat state medical and recreational marijuana programs, the legal state programs are continuing to move forward. There is simple too much demand, interest, and money involved in the marijuana industry to put the genie back in the bottle.

Pennsylvania’s medical marijuana program is set to begin in full this year. To date, the Pennsylvania Department of Health has approved 10 grower/processors to begin operations and three dispensaries. The demand and interest is evident and hundreds of millions of dollars have been invested in Pennsylvania’s Medical Marijuana Program. Given the substantial investment in the program, you would think it would be a high priority to notify and educate interested patients on how to participate in the program. However, Pennsylvania law prohibits growers/processors and dispensaries from advertising or promoting themselves.

Moreover, certified doctors are prohibited from advertising their services to write cannabis recommendations. As marijuana is still illegal under federal law, doctors cannot prescribe medical marijuana but may write recommendations under state law. There are over 14,000 patients who have registered but only 2,300 have been certified by doctors. Additionally, physicians continued to register to participate in the program with over 625 registered, of which 326 have been certified by the state.

Given the level of interest and investment, one would think it would be a priority to notify patients on how they can participate in the program, to identify doctors who can recommend medical marijuana and to list where it can legally be purchased. Certified doctors and dispensaries are listed on the Department of Health’s website but the Department of Health has no budget for advertising the program. The Pennsylvania Department of Health believes that all the information a patient will need is on the state’s website.

Dispensaries and doctors must get creative. Under the law, there is no prohibition against educating the public about the medical marijuana program. Dispensaries and doctors can post educational blogs, youtube videos, and/or devote sections of their websites to informing people of the program. Use social media to promote the program itself but do not advertise. So long as there is no direct advertisement or publication of their participation in the medical marijuana program, participants in the program should not run afoul of the law. Instead, they may direct any prospective patients to the Department of Health’s website where the certified doctors and approved dispensaries are legally listed. Certified doctors and approved dispensaries will have to thread the needle until the law changes.

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One company is trying to make a profit before Pennsylvania’s medical marijuana program commences.

Back in June of this year, the Pennsylvania Department of Health granted 12 medical marijuana grower/processor permits to the following companies:

Prime Wellness of Pennsylvania (Berks County)
Franklin Labs (Berks)
Pennsylvania Medical Solutions (Lackawanna)
Standard Farms (Luzerne)
Ilera Healthcare (Fulton)
AES Compassionate Care (Franklin)
Terrapin Investment Fund 1 (Clinton)
GTI Pennsylvania (Montour)
AGRiMED Industries of PA (Greene)
PurePenn (Allegheny)
Holistic Farms (Lawrence)
Cresco Yeltrah (Jefferson)

Under Pennsylvania’s Medical Marijuana Act, in order to obtain a grower/processor permit, an applicant had to pay a nonrefundable $10,000 initial application fee and along with $200,000 for the actual permit. The grower/processor also had to prove it had $2 million in capital on hand. Despite the steep price, the health department still received 177 applications for grower/processor permits and generated $1,770,000.00 in nonrefundable application fees.(The Department of state also received 280 applications for a dispensary permit which required payment of a $5,000.00 in non refundable initial application fees, or $1,400,000.)

Of the 177 applicants, only 12 grower/processor permits were issued so the demand was great. Now apparently one of the successful permit applicants is trying to sell the rights to his permit. Franklin Labs, LLC in Reading, Berks County is willing to sell 100% of Franklin Labs including the grower/processor permit for $20 million dollars. Franklin Labs also applied for a special clinical research (CR) license, and only applied for the grow permit as a backup plan. The CR license would allow the company to partner with a teaching hospital to conduct research on medical cannabis. Companies that are granted CR permit will receive permits to open a growing facility as well as six storefront dispensaries for selling oil-based cannabis products.

Under Pennsylvania’s Medical Marijuana Act, the issuance of a permit is a revocable privilege and any permit issued may not be transferred to any other person or location. Apparently, Franklin Labs is trying to circumvent the Act by selling of the whole company lock, stock, and barrel. The Department of Health has issued a statement saying that “no permit may be sold or transferred without approval from the Department of Health” but what about an entire company. Needless to say, this has caused some unsuccessful applicants to requests that Department of Health revoke Franklin Labs’ permit.

There is significant risk in purchasing Franklin Labs and its permit for $20 million dollars. The cost of applying for a permit during Phase II of the applications will still be $210,000.00. While there is no guarantee, the risk is still only the non-refundable $10,000.00 and whatever costs are incurred as part of the application process. While those costs could be significant, they are not likely to near $20 million dollars. Additionally, the Pennsylvania Department of Health could revoke the permit at any time or choose not to re-new it the next year. Despite the risk, Medical Marijuana is big business and it would not surprise me if an existing company in a state such as Colorado or California saw the sale of Franklin Labs as an opportunity to expand into Pennsylvania.

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