Seasonal Attorney-Client Memo

To: Kris “Santa Claus” Kringle, CEO, North Pole Industries
CC: Jack Frost, Vice President, Human, Elf and Reindeer Resources
From: Pepper Mintstix, Esquire, Chair, Nauman Smith Holiday Division
In Re: Case File Update
Date: December 25, 2015

As requested, below is a summary of the current matters we are handling for North Pole Industries as of December 25, 2015.

Ralphie Parker v. North Pole Industries – Right-to-Know Law Litigation

Ralphie really wants that Red Ryder Carbine-Action Two-Hundred-Shot Range Model Air Rifle. In an attempt to determine his prospects, he submitted a Right-to-Know request to North Pole Industries back in July to obtain the Naughty List, claiming it was a public record. In a pretty sophisticated argument for a nine-year-old (we suspect the Old Man may have been involved), Ralphie argued that North Pole Industries performed a government function by delivering toys to needy children and that the Naughty List was directly related to that work. However, as gift giving is not a governmental function, we think we have a pretty good shot (wink!) at winning this argument. The Right-to-Know practice group is hoping to shine some Right on the matter.

Buddy, Snowflake, Jingles, et al. v. North Pole Industries – FLSA Litigation

The elves brought a class action civil suit alleging that you failed to pay them overtime as required by the Fair Labor Standards Act (yes, it applies to elves!). The elves claim that North Pole Industries required them to work over 40 hours per week during the busy season and that they were not paid at time and a half for these extra hours. Unfortunately, your position that “the elves just lay around the place from January to August” won’t fly. Hours are looked at on a weekly basis, and you cannot offset time if an employee works less than 40 hours in a previous week. To be honest, we think you’re pretty scrooged on this one. Start forking over those extra candy canes (the official currency of North Pole Town) now if you don’t want further claims to come to town. The Business and Employment Law practice group is working overtime on the case.

IRS v. Kris Kringle – Gift Tax Liabilities

It looks like Santa Claus has been giving away extra gifts in his personal capacity. We received a notice this year from the IRS that Santa slipped too many sables, ’54 convertibles, deeds to platinum mines, yachts, etc. under his favorites’ trees without filing gift tax returns. Generally speaking, if Santa gives personal gifts to someone (other than Mrs. Claus) totaling more than $14,000 in a single year, he must file a gift tax return (Form 709) and pay any gift tax due. Most people will never incur gift tax liability, even where they make gifts in excess of the annual exclusion (the $14,000 mentioned above), because there is also a lifetime exemption of $5.43 million. Married couples can also split gifts by making an election on Form 709 to take advantage of each spouse’s annual exclusion (i.e. gifts of up to $28,000 from married couples can be excluded). But those sables, ’54 convertibles, platinum mines, and yachts were pricey, and it looks like Santa is going to be slapped with a big gift tax bill. The Tax, Trusts, and Estates practice group is assessing your chances on this one.

Grandma v. North Pole Industries, Santa Claus, and Rudolph – Personal Injury Litigation

You guessed it, Grandma got run over by a reindeer. Santa and the reindeer fled the scene (note that we may see some criminal charges on that account), but the sleuthy police used the hoof prints on her forehead and Claus marks on her back to track them down. She brought a civil suit against North Pole Industries and Santa and Rudolph in their personal capacities alleging negligence. Our interviews revealed that Rudolph turned his nose up a little too high and blinded himself and Santa was texting Mrs. Claus. However, we also believe Grandma had been drinking too much egg nog and failed to take her medication. We will confirm in discovery. The Litigation and Rail and Transportation Law (there may be some preemption issues under the Federal Sleigh and Reindeer Safety Act) practice groups are on track with your defense.

North Pole Industries v. Town of North Pole – Zoning Variance Matter

The new North Pole Town zoning ordinance requiring all new buildings and additions to be built out of gingerbread has thrown a real gumdrop into the permit approval process for the workshop expansion. Fortunately, because the workshop is constructed on ice, which tends to be a bit unstable, we believe we can secure a variance that will allow you to build the workshop addition using sturdier candy cane framing. The Land Use and Municipal Law practice groups are zoned in on the case.

Season’s Greetings and Happy New Year from the
Whole Team at Nauman Smith!

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