Friday, May 12, 2017

International Competition Network (ICN), new recommended practices


Antitrust: Competition: Market studies: ICN:

At its annual meeting, the International Competition Network (ICN) adopted new recommended practices for merger review, addressing notification thresholds, remedies, and efficiencies; a framework for analyzing unilateral conduct; guiding principles for market studies; and a report on setting cartel fines, the Federal Trade Commission announced today.

The Advocacy Working Group provides guidance and facilitates experience sharing to improve the effectiveness of ICN members’ competition advocacy. This year, the group created new Market Studies Guiding Principles, a compilation of effective practices for agencies to consider when undertaking studies to understand the state of competition in specific sectors. It also expanded its “Explaining the Benefits of Competition” resources to include tips, messages, and case studies on communicating with the public.


Wednesday, April 12, 2017

Swiss-U.S. Privacy Shield


Privacy: Data: Shield: Swiss-U.S. Privacy Shield:

Protecting Privacy in Transatlantic Data Flows:

As of April 12, 2017, companies can join a Swiss-U.S. Privacy Shield for transfers from Switzerland.

At the first annual review, the Department of Commerce will work with the Swiss Government to put in place the binding arbitration option in Annex I of the Swiss-U.S. Privacy Shield Framework.

Privacy Shield is a program with a set of Principles to which U.S. companies can self-certify. Those companies can then transfer data from the European Union to the United States in compliance with EU data protection requirements. The U.S. government and the European Commission negotiated the Privacy Shield Principles to enhance and replace the U.S.-EU Safe Harbor Framework. Privacy Shield also includes safeguards and limitations, addressed by other parts of the U.S. government, about national security and law enforcement data access.


The substantive requirements of the EU-U.S. and Swiss-U.S. Privacy Shield are the same. The full text of the Swiss-U.S. Privacy Shield Framework is available here ( http://trade.gov/td/services/odsi/swiss-us-privacyshield-framework.pdf )

The Department of Commerce maintains a list of companies that have joined. Each entry includes a company’s covered subsidiaries, a description of the covered data, and dispute resolution information. Currently about 1,900 companies have joined the Privacy Shield program.

Tuesday, April 4, 2017

Decision and Order In the Matter of China National Chemical Corporation, FTC Matter/File Number: 1610093, Docket Number: C-4610


Contract drafting

Confidentiality agreement

(From Decision and Order In the Matter of China National Chemical Corporation, a corporation; ADAMA Agricultural Solutions Ltd., a corporation; and Makhteshim Agan of North America, Inc., doing business as ADAMA, a corporation, FTC Matter/File Number: 1610093, Docket Number: C-4610 (last updated April 4, 2017)).


M.

“Confidential Information” means any and all of the following information:

1.all information that is a trade secret under applicable trade secret or other law;

2.all information concerning product specifications, data, know-how, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, past, current and planned research and development, current and planned manufacturing or distribution methods and processes, customer lists, current and anticipated customer requirements, pricelists, market studies, business plans, software and computer software and database technologies, systems, structures, and architectures;

3.all information concerning the relevant business, which includes historical and current financial statements, financial projections and budgets, tax returns and accountants’ materials, historical, current and projected sales, capital spending budgets and plans, business plans, strategic plans, marketing and advertising plans, publications, client and customer lists and files, contracts, the names and backgrounds of key personnel and personnel training techniques and materials; and

4.all notes, analyses, compilations, studies, summaries and other material to the extent containing or based, in whole or in part, upon any of the information described above;

Provided, however, that Confidential Information shall not include information that (i) was, is, or becomes generally available to the public other than as a result of a breach of this Order; (ii) was or is developed independently of and without reference to any Confidential Information; or (iii) was available, or becomes available, on a non-confidential basis from a third party not bound by a confidentiality agreement or any legal, fiduciary or other obligation restricting disclosure.

Decision and Order In the Matter of China National Chemical Corporation, FTC Matter/File Number: 1610093, Docket Number: C-4610


Contract drafting

Meaning of "records"

(From Decision and Order In the Matter of China National Chemical Corporation, a corporation; ADAMA Agricultural Solutions Ltd., a corporation; and Makhteshim Agan of North America, Inc., doing business as ADAMA, a corporation, FTC Matter/File Number: 1610093, Docket Number: C-4610 (last updated April 4, 2017).

FF.

“Record(s)” means information, data, books, records, files, databases, printouts, and documents of any kind, whether stored or maintained in hard copy paper format, by means of electronic, optical, or magnetic media or devices, photographic or video images, or any other format or media, directly relating to the CP Products or the CP Business, including: customer files, customer lists, customer purchasing histories; correspondence; sales and purchase order information and records; referral sources; supplier, vendor, and procurement files and lists; specifications and information for all materials, ingredients, and components used in product formulation; process and production formulas, instructions, and guidelines, including Confidential Statements of Formulas; product data sheets and specifications; production reports; research and development data and information; quality control and quality assurance specifications, testing methods, and reports; labeling specifications; packaging specifications; Material Data Safety Sheets; advertising, marketing, display, and promotional materials; sales materials; marketing analyses and research data; educational and training materials; employee lists and contracts, salary and benefits information, and personnel files and records (to the extent permitted by law) for CP Employees; financial and accounting records and documents, financial statements; studies and reports; product registration data; registrations, licenses, and permits; regulatory compliance records and data; applications, filings, submissions, communications and correspondence with Government Agencies; operating guides, technical information, manuals, policies and procedures; service and warranty records, maintenance logs, equipment logs; and all other Records that are necessary for the Acquirer to operate the CP Business in a manner consistent with the purposes of this Order.

Thursday, March 30, 2017

Proposed New and Amended California Rules of Professional Conduct


Proposed New and Amended California Rules of Professional Conduct:




The Board of Trustees adopted proposed new and amended Rules of Professional Conducts at its November 17, 2016 and March 9, 2017 meetings. On March 30, 2017, the State Bar submitted the proposed rules to the California Supreme Court. Rule amendments adopted by the Board of Trustees of the State Bar of California do not become operative unless and until they are approved by the Supreme Court.


PDF of all proposed Rules:




Cross-Reference Chart of the Current California Rules to the Proposed Rules
sorted by the Current California Rules:





Monday, March 27, 2017

P. v. Romanowski, S231405


Theft of access card account information: E-card: Trade secrets: CALCRIM  No. 1801: Market value:

(…) Whether section 490.2 (Pen. Code) applies to theft of access card account information. The answer is yes.

The provision of Proposition 47 reducing punishment for theft crimes provides:  “Notwithstanding Section 487 or any other provision of law defining grand theft, obtaining any property by theft where the value of the money, labor, real or personal property taken does not exceed nine hundred fifty dollars ($950) shall be considered petty theft and shall be punished as a misdemeanor.”  (§ 490.2, subd. (a)). 

(…) People v. Kozlowski (2002) 96 Cal.App.4th 853, 865 [holding that PIN numbers meet the Penal Code’s definition of “property” since that definition “includes personal property such as money, goods, chattels, things in action and evidences of debt”]; see also Farell, 28 Cal.4th at p. 381 [holding that the term “theft of an amount exceeding fifty thousand dollars” covers the theft of trade secrets worth over $50,000].  Access card information is a form of intangible property, just like PIN numbers and trade secrets.

(…) How do courts determine whether the value of stolen access card information exceeds $950? 

Section 484e, subdivision (d) punishes the theft of an access card or access card information itself, not of whatever property a defendant may have obtained using a stolen access card or stolen information.  Fraudulent use of access cards or account information is punished as a separate crime.  (See § 484g.)  This means a defendant can be convicted of violating section 484e, subdivision (d), even if he or she never uses the stolen account information to obtain any money or other property.  So the $950 threshold for theft of access card information must reflect a reasonable approximation of the stolen information’s value, rather than the value of what (if anything) a defendant obtained using that information. 

How to value stolen access card account information is elucidated in part by the Penal Code’s definition of “theft,” which requires courts to determine the value of property obtained by theft based on “reasonable and fair market value.”  (§ 484, subd. (a) [“In determining the value of the property obtained, for the purposes of this section, the reasonable and fair market value shall be the test.”].) 

Courts must use section 484’s “reasonable and fair market value” test when applying section 490.2’s value threshold for theft crimes.

We (…) hold that the Penal Code’s reference to the “reasonable and fair market value” requires courts to identify how much stolen access card information would sell for.  (§ 484, subd. (a); see also Tijerina, 1 Cal.3d at p. 45 [“in the absence of proof . . . that the price charged by a retail store from which merchandise is stolen does not accurately reflect the value of the merchandise in the retail market, that price is sufficient to establish the value of the merchandise”]; People v. Pena (1977) 68 Cal.App.3d 100, 103 [“When you have a willing buyer and a willing seller, neither of whom is forced to act, the price they agree upon is the highest price obtainable for the article in the open market.  Put another way, ‘fair market value’ means the highest price obtainable in the market place . . . .”]; CALCRIM  No. 1801 [“Fair market value is the price a reasonable buyer and seller would agree on if the buyer wanted to buy the property and the seller wanted to sell it, but neither was under an urgent need to buy or sell.”].)  The fact that stolen access card information is not sold legally does not relieve courts of this duty.  This court has never suggested that the term “reasonable and fair market value” must refer to legal market value even in cases where there is no legal market for the stolen property.  When a defendant steals property that is not sold legally, evidence related to the possibility of illegal sales can help establish “reasonable and fair market value.”  Only in cases where stolen property would command no value on any market (legal or illegal) can courts presume that the value of stolen access information is de minimis.


(Cal. S.C., March 27, 2017, P. v. Romanowski, S231405).


Vol d'une carte de données électroniques

Les dispositions du droit pénal californien en matière de vol ("theft") s'appliquent au vol d'un code PIN. Un code PIN est compris dans la définition de "propriété" au sens du droit pénal. Il en est de même du vol de secrets commerciaux. Ainsi que du vol d'une carte contenant des données électroniques, le contenu de dite carte étant une forme de propriété immatérielle, comme les codes PIN et comme les secrets commerciaux.

La Section 484 e (d) du Code pénal californien punit le vol d'une telle carte de données ou le vol des données elles-mêmes, et non pas le vol d'une quelconque propriété que l'auteur du vol peut avoir obtenu par l'usage de la carte volée ou des informations volées. L'usage illicite de la carte ou des informations est puni comme infraction séparée (cf. Section 484g). Dès lors, un auteur peut être condamné de violation de la Section 484 e (d) même s'il n'a jamais utilisé les données volées pour obtenir une somme d'argent ou d'autres biens. Par conséquent, déterminer la valeur d'un vol d'une carte de données électroniques revient à procéder à une approximation raisonnable de la valeur des informations volées, mais ne revient pas à retenir la valeur de ce que l'auteur aura peut-être obtenu en utilisant les données électroniques de la carte.

Déterminer la valeur d'une carte de données électroniques volée revient à se référer à la définition de "theft" donnée par le Code pénal, laquelle demande au Tribunal de déterminer la valeur d'une chose obtenue par vol en retenant sa valeur sur le marché, fixée équitablement et raisonnablement (cf. Section 484(a)).

La Cour juge que la référence du Code pénal à dite valeur sur le marché impose aux Tribunaux de déterminer à quel prix peuvent être vendues les informations contenues dans la carte dérobée. Des jurisprudences précédentes ont précisé à cet égard qu'en l'absence de la preuve que le prix fixé par un détaillant, victime du vol, ne reflète pas précisément la valeur de la chose vendue sur le marché, ce prix fixé est suffisant pour établir la valeur de dite chose. Ou encore : quand un acheteur et un vendeur, libres tous les deux et décidés à conclure, s'accordent sur le prix, ce prix représente le prix le plus élevé qu'il soit possible d'obtenir sur le marché libre. Autrement dit : la valeur de marché équitable équivaut au prix le plus haut qui peut être obtenu sur le marché. En outre, le fait que les informations contenues dans une carte ne sont pas vendues légalement ne change rien à l'analyse précitée. En effet, la Cour n'a jamais suggéré que la valeur de marché équitable doive se référer à la valeur sur le marché légal même dans les cas où il n'existe pas de marché légal pour les biens dérobés. Le Tribunal ne pourra présumer que la valeur des informations volées est négligeable que si ces informations sont dépourvues de valeur sur le marché légal aussi bien qu'illégal.





Thursday, March 23, 2017

Carmack v. Reynolds, S224985


Spendthrift trust: Bankruptcy: Vested right:

A spendthrift trust is a trust that provides that the beneficiary’s interest cannot be alienated before it is distributed to the beneficiary.  Creditors of the beneficiary generally cannot reach trust assets while those assets are in the hands of the trustee, even if they have secured a judgment against the beneficiary.  Rather, creditors must wait until the trustee makes distributions to the beneficiary.  The law permits such trusts because donors have “the right to choose the object of their bounty” and to protect their gifts from the donees’ creditors.  (Canfield v. Security-First Nat. Bank (1939) 13 Cal.2d 1, 11 (Canfield)).  Providing donors some measure of control over their gifts encourages donors to make those gifts, to the benefit of the donor, the beneficiary, and ultimately the beneficiary’s creditors.

Under the Probate Code, spendthrift provisions are generally valid as to both trust income and trust principal.  (Prob. Code, §§ 15300 [trust income], 15301, subd. (a) [trust principal]).

Yet creditors need not always wait for distributions to reach the debtor’s hands.  Spendthrift provisions are invalid when grantors name themselves beneficiaries.  (§ 15304, subd. (a)).  When a trust includes a valid spendthrift provision, certain creditors may reach into the trust.  Such creditors include those with claims for spousal or child support (§ 15305) and those with restitution judgments (§ 15305.5).  In addition, a state or local public entity can reach trust assets when the beneficiary owes money for public support (§ 15306, subd. (a)) unless distributions from the trust are required to care for a disabled beneficiary (§ 15306, subd. (b)).

Even general creditors, including a bankruptcy trustee standing as a hypothetical lien creditor, have some recourse under three provisions:  section 15301, subdivision (b), section 15306.5, and section 15307.  The question here is how much access to trust principal a general creditor has under these provisions.

(In construing the provisions at issue, we are mindful that the Reynolds Family Trust is distinctive in directing all disbursements to be made from principal.  In other trusts, productive assets produce periodic income payments during the life of the trust, and preserving principal is one of the trustee’s paramount duties.  (See 76 Am.Jur.2d (2016) Trusts, § 429.)  It is common for trusts to specify that the principal may not be distributed for many years, and liquidating principal may signal that the trust’s purpose has been fulfilled.

We are also mindful that this case arises out of a bankruptcy proceeding.  Ordinarily, a judgment creditor who is unable to satisfy all of the judgment out of the beneficiary’s trust interest may continue to attempt to collect on the balance of the judgment from whatever other assets the beneficiary may have.  Here, however, the amount Reynolds’s creditors will receive depends on the reach of the bankruptcy trustee.  Any remaining debts after the bankruptcy process will be extinguished, and any further distributions will be unencumbered.  (11 U.S.C. § 541(c)(2).)  That spendthrift provisions can work to beneficiaries’ advantage in bankruptcy in this way has long been recognized as a characteristic of such provisions.  (See Rest.3d Trusts, § 58, com. a [“An important byproduct of the limited spendthrift protection, however, is the again limited but nevertheless important insulation that may result from a discharge in bankruptcy.”]).

The provision thus requires an amount of principal to “have become” due to the beneficiary, at which point upon a creditor’s petition the court may enter an order “directing the trustee to satisfy the money judgment out of that principal amount.  (§ 15301(b)).  In other words, under this provision creditors may reach the principal already set to be distributed and only up to the extent of that distribution.  Such principal has served its trust purposes, and in many (but not all) cases, the distribution may signal that the trust is ending.  Section 15301(b) makes these assets, and these assets only, fair game to creditors. 

In this light, section 15301(b) is properly viewed not as an exception to the general spendthrift protections but as a corollary.  The general rule is that principal held in a spendthrift trust may not be touched by creditors until it is paid to the beneficiary.  (§ 15301, subd. (a)).  Section 15301(b) adds that once an amount of principal has become due and payable, the court can order the trustee to pay that amount directly to the beneficiary’s creditors instead.  A distribution of principal is reasonably understood to signify that the amount distributed has satisfied its trust purposes.  Because the beneficiary’s interest in those assets has effectively vested, the law no longer has any interest in protecting them (except as provided in section 15302, as explained below).

Importantly, creditors’ access under section 15301(b) is not unlimited.  Section 15302 explains that where the trust instrument specifies that a distribution, whether from income or principal, is for the beneficiary’s support or education, the amount the beneficiary actually needs for either purpose may not be reached by creditors until in the hands of the beneficiary.  Section 15302 explicitly provides that it does not apply where creditors seek access under sections 15304 through 15307, but section 15302 does not exclude orders under section 15301(b).  Section 15302 thus provides limited continued protection to former trust assets where the donor specifically intended the distribution to support the beneficiary.  This protection encourages donors to provide for beneficiaries’ support and helps to prevent beneficiaries from becoming public charges.  (See Canfield, supra, 13 Cal.2d at p. 11.)

We now turn to sections 15306.5 and 15307.

Section 15307 (…) appears to allow any creditor to access all of a beneficiary’s interest in a spendthrift trust besides what is necessary for the beneficiary’s education and support, whereas section 15306.5 limits creditors to only 25 percent of the same interest.  How are these two provisions to be reconciled?

(We (…) conclude that section 15307 applies to both income and principal, as its text plainly says).

(…)  In light of this history, we decline to adopt an interpretation of section 15307 that simply undoes the limitations on general creditors that section 15306.5 sets forth in a set of specific and carefully calibrated provisions.  We conclude instead that the ultimate enactment of section 15307 without apparent limitations on the reach of general creditors was inadvertent.  The Legislature plainly intended general creditors to be limited to 25 percent of distributions from the trust.

(…) The more likely answer is that section 15307 reflects a drafting error.

(…) We need not decide the full reach of the 25 percent cap under 15306.5(f) as this case involves only the scope of sections 15301(b) and 15306.5.  Whatever other orders may be subject to section 15306.5(f)’s cap, we conclude that the cap does not apply to orders under section 15301(b). 

Section 15301(b) makes clear that spendthrift protections do not apply to distributions of principal that have become due and payable.  Where trust assets are not protected by a spendthrift provision, the default rule is that creditors may reach those assets.  (See § 709.010, subd. (b)).  (…) Applying section 15306.5(f)’s cap to section 15301(b) assets would defeat the Legislature’s specific intent to treat due and payable principal “in the hands of the trustee” on par with such principal “after payment to the beneficiary.”  (See 1986 Report, 18 Cal. Law Revision Com. Rep. at pp. 1302–1303).

In sum, after an amount of principal has become due and payable (but has not yet been distributed), a creditor can petition to have the trustee pay directly to the creditor a sum up to the full amount of that distribution (§ 15301(b)) unless the trust instrument specifies that the distribution is for the beneficiary’s support or education and the beneficiary needs the distribution for those purposes (§ 15302).  If no such distribution is pending or if the distribution is not adequate to satisfy a judgment, a general creditor can petition to levy up to 25 percent of the payments expected to be made to the beneficiary, reduced by the amount other creditors have already obtained and subject to the support needs of the beneficiary and any dependents.  (§ 15306.5).

As an illustration, suppose a trust instrument specified that a beneficiary was to receive distributions of principal of $10,000 on March 1 of each year for 10 years.  Suppose further that a general creditor had a money judgment of $50,000 against the beneficiary and that the trust distributions are neither specifically intended nor required for the beneficiary’s support.  On March 1 of the first year, upon the creditor’s petition a court could order the trustee to remit the full distribution of $10,000 for that year to the creditor directly if it has not already been paid to the beneficiary, as well as $2,500 from each of the nine anticipated payments (a total of $22,500) as they are paid out.  If the creditor were not otherwise able to satisfy the remaining $17,500 balance on the judgment, then on March 1 of the following years, upon the general creditor’s petition the court could order the trustee to pay directly to the creditor a sum up to the remainder of that year’s principal distribution ($7,500), as the court in its discretion finds appropriate, until the judgment is satisfied.


Secondary sources: Rest.3d Trusts, § 58; West’s Ann. Prob. Code (1991 ed.) foll. § 15307, p. 562; Witkin, Summary of Cal. Law (10th ed. 2005) Trusts, § 155; Cal.Jur.3d (2017) Statutes, § 177.


(Cal. S.C., March 23, 2017, Carmack v. Reynolds, S224985).


Un "spendthrift trust" prévoit que l'intérêt du bénéficiaire ne peut pas être aliéné avant de lui avoir été remis. Les créanciers du bénéficiaire ne peuvent généralement pas atteindre les biens du trust pendant que ces biens sont en main du trustee, même s'ils ont obtenu un jugement contre le bénéficiaire. Bien plutôt, les créanciers doivent attendre jusqu'à ce que le trustee procède à des distributions en faveur du bénéficiaire. La loi autorise la création de ce type de trusts parce que les donateurs ont le droit de choisir les destinataires de leurs attributions. Les donations sont ainsi protégées des créanciers du donataire. De la sorte, les donations sont encouragées, au bénéfice du donateur, du bénéficiaire, et finalement des créanciers du bénéficiaire.

Cependant les créanciers ne doivent pas toujours attendre une distribution pour atteindre les biens destinés au bénéficiaire. Les dispositions d'un "spendthrift trust" sont invalides si le "grantor" se nomme lui-même bénéficiaire (Probate Code, § 15304, subd. (a)). Les créanciers en prestations d'entretien du droit de la famille (époux, épouses, enfants) ne doivent pas attendre non plus (§ 15305), ni les créanciers en "restitution" (§ 15305.5). Les collectivités publiques (état et collectivités locales) ne doivent pas attendre non plus quand le bénéficiaire est leur débiteur suite à des aides publiques (§ 15306, subd. (a)), à moins que les distributions du trust ne soient destinées à l'entretien d'un bénéficiaire handicapé (§ 15306, subd. (b)).

Le trust objet de la présente affaire a ceci de particulier qu'il prévoit des distributions de parties du capital lui-même, et non pas des distributions des revenus de ce capital. Usuellement, le capital du trust est préservé. Veiller au maintien des actifs du trust est d'ailleurs un devoir principal du trustee. Il est usuel pour les trusts de spécifier que le capital ne peut pas être distribué pendant de nombreuses années, et la liquidation de ce capital peut signaler que le trust a atteint son but.

En outre, la présente affaire est particulière en ce qu'elle survient dans le cadre d'une procédure de faillite (celle du bénéficiaire). Un créancier au bénéfice d'un jugement exécutoire peut engager des procédés de recouvrement contre le capital du trust si les revenus de celui-ci ne suffisent pas. Cependant, ici, la somme totale que les créanciers recevront dépendra des biens que le trustee de la faillite du bénéficiaire pourra atteindre. Toutes dettes restantes à l'issue de la procédure de faillite seront éteintes, et toutes distributions ultérieures seront hors d'atteinte des créanciers (11 U.S.C. § 541(c)(2)).

Que les dispositions d'un "spendthrift trust" puissent ainsi avantager son bénéficiaire dans un contexte de faillite est reconnu de longue date.

En pratique, quand une part du capital du trust devient exigible par son bénéficiaire, le créancier peut déposer une requête devant le Tribunal, qui peut rendre une décision ordonnant au trustee de verser cette part de capital audit créancier (§ 15301(b)). C'est ainsi que le créancier peut être désintéressé par la partie du capital prête à être versée au bénéficiaire. Cette part du capital a servi le but du trust et dans bien des cas la distribution peut signaler que le trust prend fin.

A la lumière de ce qui précède, la Section 15301(b) ne doit pas être vue comme une exception à la protection générale accordée par un "spendthrift trust", mais comme son corollaire. La règle générale est que le capital détenu par ce trust est inaccessible aux créanciers avant qu'il ne soit versé au bénéficiaire (§ 15301, subd. (a)). La Section 15301(b) ajoute qu'une fois la part de capital exigible par le bénéficiaire, le Tribunal peut ordonner au trustee de verser cette part directement aux créanciers du bénéficiaire. La distribution d'une partie du capital est comprise raisonnablement comme signifiant la réalisation du but du trust s'agissant de cette partie. Du fait que l'intérêt du bénéficiaire dans cette partie a "vested", la loi n'a plus d'intérêt à la protéger.

L'accès aux créanciers favorisé par la Section 15301(b) n'est pas illimité. La Section 15302 dispose ainsi : quand le trust spécifie qu'une distribution, de revenu ou de capital, est destinée à l'entretien ou à l'éducation du bénéficiaire, le montant dont le bénéficiaire a effectivement besoin pour l'un de ces buts ne peut pas être atteint par un créancier avant distribution à dit bénéficiaire. Cette particularité encourage les donateurs à soutenir les bénéficiaires, leur évitant d'émarger à l'aide publique.

Ensuite s'agit-il de procéder à l'analyse des Sections 15306.5 and 15307. La Section 15307 semble permettre à tout créancier d'accéder à l'entier de l'intérêt du bénéficiaire au "spendthrift trust" à l'exception de la partie destinée à l'éducation ou à l'entretien du bénéficiaire. Pour sa part, la Section 15306.5 limite l'accès aux créanciers à seulement 25% de ce même intérêt. Comment donc ces deux Sections se comprennent-elles ?

Après avoir considéré l'histoire législative des diverses dispositions applicables, la Cour indique qu'elle n'entend nullement interpréter la Section 15307 de manière à défaire les limitations du droit d'accès des créanciers tel que prévues par la Section 15306.5. Bien plutôt, la Cour estime que le législateur a par inadvertance ou suite à une erreur de rédaction promulgué la Section 15307 sans limitations apparentes audit droit d'accès des créanciers.

La Cour ne juge pas ici l'étendue exacte de la limite à 25% selon 15306.5(f). En effet, la présente affaire ne porte que sur l'étendue respective des Sections 15301(b) et 15306.5. Ainsi la Cour juge que la limite à 25% ne s'applique pas aux décisions de distribution fondées sur la Section 15301(b).

A cet égard, la Section 15301(b) stipule clairement que la protection conférée par les "spendthrift trust" ne s'applique pas aux distributions de capital devenues exigibles. Et quand les biens d'un trust ne sont pas protégés par une clause "spendthrift", le principe par défaut est que les créanciers peuvent prétendre à ces biens. Appliquer la limite de 25% selon la Section 15306.5(f) aux biens selon la Section 15301(b) reviendrait à contrarier l'intention spécifique du législateur de traiter le capital exigible encore en mains du trustee de la même manière que ce même capital après paiement au bénéficiaire.

En résumé, après qu'une partie du capital du trust est devenue exigible, mais avant sa distribution, un créancier peut exiger du trustee un paiement direct en sa faveur. Ce paiement sera prélevé sur la somme devenue exigible, et ne dépassera pas cette somme (§ 15301(b)). Mais ce paiement ne sera pas limité par un plafond de 25%. Il pourra cependant être limité si le trust lui-même spécifie que le montant devenu exigible est destiné à l'entretien ou à l'éducation du bénéficiaire, à condition que le bénéficiaire ait besoin de ce montant pour son entretien ou son éducation (cf. Section 15302). Si aucune partie du capital n'est devenue exigible, un créancier peut requérir le versement en sa faveur d'un montant jusqu'à 25% des paiements prévus en faveur du bénéficiaire. Ce montant sera réduit de ce qui aura déjà été versé à d'autres créanciers, et de ce qui sera nécessaire à l'entretien du bénéficiaire et à l'entretien de ceux qui dépendent de lui (cf. Section 15306.5).

A titre d'illustration, soit un trust prévoyant qu'un bénéficiaire recevra des distributions, prélevées directement sur le capital, par $10,000 le 1er mars de chaque année, pendant 10 ans. Un créancier sans privilège particulier dispose d'un jugement exécutoire par $50,000 contre le bénéficiaire. Les distributions du trust ne sont pas faites aux fins de l'entretien ou de l'éducation du bénéficiaire, qui n'a par ailleurs pas de besoins à ce niveau. Le 1er mars de la première année, à la requête du créancier, la cour peut ordonner au trustee de remettre audit créancier la somme de $10,000 exigible pour l'année (si dite somme n'a pas déjà été versée au bénéficiaire), ainsi que la somme de $2,500 x 9 = $22,500 (montant correspondant à la somme de 25% des 9 annuités qui deviendront exigibles pendant les 9 années suivantes). Soit un total de $32,500 pour la première année, le solde en faveur du créancier étant de $17,500. Puis, le 1er mars de l'année suivante, le créancier pourra solliciter paiement d'une somme de $7,500 ($10,000-$2,500).