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law bans cash transactions for secondhand goods.

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GrGr

Diamond Member
Sep 25, 2003
3,204
0
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Fascinating. Does the same goes for banks? We know that Wall Street banks are laundering many billions of drug dollars each year (not to mention other economic crime). Are they prepared to lose that revenue? Or are the politicians only gunning for easy target small fry again?
 

sactoking

Diamond Member
Sep 24, 2007
6,912
1,743
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http://legallad.quickanddirtytips.com/legal-tender.aspx
Oh well. What has people confused is the notion that cash is “legal tender.” If you look at a dollar bill -- er, Federal Reserve Note -- in your wallet, you’ll see that it says “this note is legal tender for all debts, public and private.”
“Legal tender” is what makes an official currency official. It means that a creditor must accept federal reserve notes in satisfaction of a debt. If you get to the checkout line at the local Piggly Wiggly and the cashier demands payment in rubles or pesos you have every right to say “Sorry buddy, but I’ve got some Federal Reserve notes burning a hole in my pocket.”
You have that right under the "legal tender" statute which states: "United States coins and currency (including Federal Reserve notes and circulating notes of Federal Reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."
This means that US notes and coins are a valid and legal offer of payment for debts when tendered to a creditor. However, although businesses must accept dollars, that doesn’t mean they literally have to take your big wad of bill,s which is bulky, difficult to make change for, and, frankly, a breeding ground for germs. A vendor can usually put reasonable conditions on the manner in which they will accept dollars, and one of those conditions can be that they’ll only accept dollars electronically, via credit card. Or, as the US Treasury explains on their website, “Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise.”
http://en.wikipedia.org/wiki/Legal_tender
There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services.
http://www.treasury.gov/resource-center/faqs/Currency/Pages/legal-tender.aspx
I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?

The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.
 

Wreckem

Diamond Member
Sep 23, 2006
9,305
753
126
Again, the assertion that it is illegal is wrong. Here is the relevant case law.

Tennessee Scrap Recyclers Ass'n v. Bredesen, C.A.6 (Tenn.),2009 442 at 458.
Gensee Scrap & Tin Baling Co., Inc. v. City of Rochester, W.D.N.Y.2008, 558 F.Supp.2d 432 at 436.

Metal Management Mississippi, Inc. v. Barbour, S.D.Miss., unreported 2008, sums it up nicely.

"State and federal court jurisprudence has held, though, that while the states must not infringe upon Congress' exclusive right to declare what constitutes legal tender, a state may declare what manner of payment of legal tender is permissible or required for particular types of transactions"

/thread
 
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Bateluer

Lifer
Jun 23, 2001
27,730
7
0
How's Craigs List supposed to work then? No way in hell I'm using Paypal, debit card, or money orders on that.
 

Wreckem

Diamond Member
Sep 23, 2006
9,305
753
126
How's Craigs List supposed to work then? No way in hell I'm using Paypal, debit card, or money orders on that.
Don't get me wrong. It IS a poorly designed and misguided law that is more or less entirely impossible to enforce.
 

Zenmervolt

Elite member
Oct 22, 2000
24,510
11
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Again, the assertion that it is illegal is wrong. Here is the relevant case law.

Tennessee Scrap Recyclers Ass'n v. Bredesen, C.A.6 (Tenn.),2009 442 at 458.
Gensee Scrap & Tin Baling Co., Inc. v. City of Rochester, W.D.N.Y.2008, 558 F.Supp.2d 432 at 436.

Metal Management Mississippi, Inc. v. Barbour, S.D.Miss., unreported 2008, sums it up nicely.

"State and federal court jurisprudence has held, though, that while the states must not infringe upon Congress' exclusive right to declare what constitutes legal tender, a state may declare what manner of payment of legal tender is permissible or required for particular types of transactions."

/thread
Had you started with citations and not unsupported assertions, this would have ended much sooner.

That said, I disagree with the Gensee Scrap court's contention that, "a distinction between an ordinance directing that a business must accept a certain form of payment, and an ordinance providing that a business may not accept cash ... is a distinction without a difference." While I accept that persuasive precedent will likely win the day, I am not at all convinced that the court got it right in these cases. Of course, that may be why I'm not a judge. :p

ZV
 
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Harrod

Golden Member
Apr 3, 2010
1,901
21
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I see no problem here, basically if you are going to pay with cash, then it makes it also illegal to tax someone on the purchase.
 

Mursilis

Diamond Member
Mar 11, 2001
7,756
11
81
Again, the assertion that it is illegal is wrong. Here is the relevant case law.

Tennessee Scrap Recyclers Ass'n v. Bredesen, C.A.6 (Tenn.),2009 442 at 458.
Gensee Scrap & Tin Baling Co., Inc. v. City of Rochester, W.D.N.Y.2008, 558 F.Supp.2d 432 at 436.

Metal Management Mississippi, Inc. v. Barbour, S.D.Miss., unreported 2008, sums it up nicely.

"State and federal court jurisprudence has held, though, that while the states must not infringe upon Congress' exclusive right to declare what constitutes legal tender, a state may declare what manner of payment of legal tender is permissible or required for particular types of transactions"

/thread
Cites are nice and all, but got anything above the district/circuit court level?
 

piasabird

Lifer
Feb 6, 2002
17,168
60
91
It is one thing to write a law and another thing to enforce it. Why write a law like that and exclude pawn shops? Maybe the law is aiming to do away with street vendors or something like that??
 

Wreckem

Diamond Member
Sep 23, 2006
9,305
753
126
Genesse is the leading case on this specific issue. There is nothing higher than the 6th circuits citation of it.

The root issue has been decided, and that is decades of cases at the federal and state level interpret a check or other instruments drawn on US currency as valid forms of payments where legal tender is required.

Further cases built upon that that allows state and federal entities to require payment by check. Even so far as allowing states to require payment by check for taxes.

This is an extension on those cases. So far its been adopted by different federal district courts through out the country, as well as the 6th circuit. There is also a case pending before the 3rd.

Mississippi Metal Management v Barbour is a federal district case inside the fifth circuit. Its a very lengthy and detailed opinion, more so for a district court opinion. Mississippi Metal is very similar to this case. IE: LA isn't the first state that requires businesses to use checks(etc) for transactions. Mississippi regulates what form of payments scrapers can use. IE: Mississippi forbids scrappers to use cash. the State of Mississippi uses the same justifications and reasoning as LA does. Mississippi Metal Management says its completely constitutional. That case was 3 years ago.

Now there could be a constitutional claim with the LA law, but that would be the regulation isn't narrowly tailored and is both over and under inclusive. It is pretty broad, and they don't include pawn shops, but it probably isn't going to be a sufficient argument because in this case it would be weak to argue that under the 14th and even if it was strong the courts would use a rational basis test. All other constitutional claims(sec 1 art 10, commerce clause, dormant commerce clause, takings, etc etc) are out right rejected in the three aforementioned cases.
 
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sactoking

Diamond Member
Sep 24, 2007
6,912
1,743
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Cites are nice and all, but got anything above the district/circuit court level?
There isn't anything other than the Supreme Court Legal Tender cases from the 1800's because this isn't an issue of constitutionality. Sec 1 Art 10 is the only thing applicable and it is not directly on topic.
 

sjwaste

Diamond Member
Aug 2, 2000
8,758
3
76
Now there could be a constitutional claim with the LA law, but that would be the regulation isn't narrowly tailored and is both over and under inclusive. It is pretty broad, and they don't include pawn shops, but it probably isn't going to be a sufficient argument because in this case it would be weak to argue that under the 14th and even if it was strong the courts would use a rational basis test. All other constitutional claims(sec 1 art 10, commerce clause, dormant commerce clause, takings, etc etc) are out right rejected in the three aforementioned cases.
I think there is a constitutional claim for being overbroad, but do keep in mind that none of those cases you cited preclude other constitutional claims for this particular case. LA is in the 5th Circuit, which does fancy itself more important than the 11th, so if nothing else, they'd probably take a look. It's not unusual for the 5th and 11th circuits to come out differently, either. I believe the cases you cited (haven't had time to read all of them yet) all deal with scrappers, too. A case dealing with the LA law would obviously be distinguishable on the facts, enough so to look at other constitutional claims.

I don't do constitutional or appellate law, nor am I licensed in LA or any jurisdiction within 1000 miles of it. Just my conjecture on the subject.
 
Dec 30, 2004
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How can passing this law be legal? That's what I want to know.
it's not. This note is legal tender for all debts, public and private.
He gives it to you on credit in exchange that you promise to pay -- debt is created.
You give him the money in payment for that debt.
 

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