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May 2013
LexisNexis® Launches Web-Enabled Version of Early Data Analyzer
LexisNexis® Early Data Analyzer filters, indexes and searches data at its source location so that you can determine the nature and amount of relevant data in a lawsuit, rather than processing an entire data set that includes many duplicate and extraneous files. Using this tool, litigators can reduce the number of files for e-discovery processing and review by up to 80%—helping to save time and money. Click here to learn more.
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Bankruptcy Law:
Wife’s Homestead Claim Remains in Limbo With No Answer from 5th Circuit
The plight of the non-filing spouse who stands to lose an interest in the homestead is a trap that is easy to overlook. Under 11 U.S.C. Sec. 541(a)(2), when one spouse files bankruptcy, all joint management community property enters the bankruptcy estate. This means that if the filing spouse elects not to claim the homestead as exempt in favor of selecting other property or is subject to a cap, the non-filing spouse may lose her interest in the property without having any say in the matter. Click here to read this post by Stephen Sather.
Please Take Subpoenas Seriously: A Recent Sanction Ruling in a Ponzi Scheme Case
The Moss Adams accounting firm was sanctioned for not complying with a bankruptcy trustee’s subpoena for documents related to Frederick Darren Berg’s Meridian Mortgage $100 million real estate investment Ponzi scheme. The court ruled that Moss Adams did not fully comply with a 2010 subpoena and must compensate the trustee for the costs of the legal battle to get the information. A copy of the court’s unpublished decision is here. Click here to read this post by Kathy Bazoian Phelps.
Student Loans: Nondischargeability Questioned in 7th Circuit and Beyond
Conventional wisdom says that it is nearly impossible to obtain a discharge of student loan debt in bankruptcy. Indeed, Section 523(a)(8) expressly excepts student loans from discharge, unless the exception of such indebtedness from discharge would impose an undue hardship upon the debtor. But two recent developments may signal that this bedrock principle is eroding—i.e., (i) the Seventh Circuit’s affirmance of a bankruptcy court’s ruling that an impoverished but otherwise healthy woman’s student loan debts were dischargeable, and (ii) the recent introduction of a Congressional bill that would make it easier to discharge privately issued student loan debt. Click here to read this post by Sheppard Mullin.
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Corporate & Securities Law:
Remedies of FCPA Violations—Lessons Learned from the Boeing 787 Lithium-Ion Battery Issue
Over the past three months, the aircraft manufacturer Boeing has gone through a public relations nightmare and financial disaster over the failure of lithium-ion batteries in its new flagship aircraft, the 787. This Boeing case study can provide some interesting lessons for the compliance professional who is working under a Foreign Corrupt Practices Act or Bribery Act compliance program. Click here to read this post by Thomas Fox.
Will Obstacles Deter the SEC’s Dodd-Frank Whistleblower Program?
Whistleblower information may be one of the SEC’s “most effective weapons in its new enforcement arsenal,” but the agency’s whistleblower program “faces challenges on many fronts,” according to an April 23, 2013, The New York Times DealBook® article entitled “Hazy Future for Thriving S.E.C. Whistle-Blower Effort” (here). As evidence of the whistleblower program’s promise, that article cites several “previously undisclosed” enforcement actions that whistleblower information have triggered or aided. Yet due to several potential obstacles and impediments, the future of the program may, according to one source cited in the article, “hang in the balance right now.” Click here to read this post by Kevin M. LaCroix.
March 2013 Ponzi Scheme Roundup
March continued the trend of way too many breaking news stories in Ponzi scheme cases. Here is the summary of the stories that were reported this month. Click here to read this post by Kathy Bazoian Phelps.
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Emerging Issues Law:
Fulbright & Jaworski Releases Trade Secrets and the Regulation of Hydraulic Fracturing—Toward a Global Perspective
Trade Secrets and the Regulation of Hydraulic Fracturing provides a global view of how governments have attempted to strike a balance between the benefits of hydraulic fracturing technology innovation to the economy with the environmental and health concerns raised by this widely used technology. Click here to read this post by Fulbright & Jaworski L.L.P.
State Net® Capitol Journal: States Ponder Broadening Health Care Scopes of Practice
Many states are pondering whether it is time to allow nurses, physician assistants, optometrists and even dentists to offer patients services they could previously only get from their primary care physician. Click here to read this post from State Net Capitol Journal.
William A. Ruskin: Among Environmentalists, Hydrofracking Is Not a “Yes or No” Issue
The discussion over hydrofracking is not merely an environmental debate. What is at stake has important economic and social implications, not just for the United States, but for the entire world. Click here to read this post by William A. Ruskin.
Supreme Court Upholds the Continuing Vitality of the 177-Year-Old Dunham Rule
The Pennsylvania Supreme Court has upheld the continuing vitality of the 177-year-old Dunham rule in Pennsylvania, reiterating that a rebuttable presumption arises in any private deed or land conveyance that natural gas is not a “mineral” unless it is expressly designated as such in the document. To rebut that presumption, the party seeking to have it so considered must present “clear and convincing evidence that the parties intended to include natural gas or oil within” the word minerals. Click here to read this post by Fulbright & Jaworski L.L.P..
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Environmental Law & Climate Change:
Marten Law: EPA Finalizes Hazardous Air Emission Rules for Boilers and Process Heaters Affecting 90,000 Facilities
In this Emerging Issues Analysis, Svend Brandt-Erichsen of Marten Law PLLC discusses the EPA’s new standards for hazardous air emissions from boilers and process heaters, commonly referred to as “Boiler MACT.” Many industrial facilities that use oil, biomass or coal to fuel their boilers will now face significant costs for new controls on existing boilers and process heaters to meet the rule’s new emission limits. Click here to read more about this expert commentary and to download or purchase the article.
Jenner & Block: Minnesota Bans Triclosan for State Government
Minnesota is believed to be one of the first state governments to stop buying products containing triclosan, an antibacterial commonly used in soap and cosmetics. While there is uncertainty about whether triclosan is hazardous to humans, there also is no evidence that hand soaps and/or hand sanitizers containing triclosan are better than regular soap and water at preventing infections. Click here to read more about Triclosan.
Pepper Hamilton: How Are We Doing? The Mercury Story
The late Ed Koch (former mayor of New York) famously used to ask his constituents “How am I doing?”. Answering this question is also prudent (if not required) in evaluating environmental policies. Probably the most relevant measure of how we are doing for mercury is the level of total mercury in blood, which primarily reflects recent methylmercury levels in blood. Click here to learn about the considerable progress we have made in reducing levels of mercury.
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Estate Practice & Elder Law:
Deirdre Wheatley-Liss: Love Is Lost—And So Is Your Inheritance—Divorce Really Ends Things
Sometimes, love is lost and a couple divorces. But what happens if the will in existence at the time of death leaves everything to his or her (now-ex) spouse? Click here to read this post by Deirdre Wheatley-Liss.
Preventive Medicine for the Health of Your Estate
Unlike many other businesses, a health care practice cannot be passed by will or otherwise to the provider’s spouse or children, unless they too maintain the same license. Click here to read this post by Jennifer F. Hillman and Leora A. Ardizzone.
4 Good (?) Reasons to Contest a Will
A will contest usually happens when your heirs are surprised by what your will says. I have represented both heirs and estates, and in all cases there are some big misunderstandings about the reasons you can challenge a will. Click here to read this post by Deirdre Wheatley-Liss.
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Immigration Law:
MAVNI (Military Accessions Vital to the National Interest): Noncitizens May Bypass the Green Card Process and Earn U.S. Citizenship for Military Service
Noncitizens who serve honorably in the U.S. military now may be able to naturalize without first obtaining “green cards” or meeting any residency requirements. This is possible through a Pentagon program called “Military Accessions Vital to the National Interest.” This piece by Margaret D. Stock, the author of Immigration Law and the Military and an Editorial Board member of Bender's Immigration Bulletin, explains the MAVNI program, highlights its benefits and drawbacks, and offers practice tips for attorneys who represent clients interested in it. Click here to learn more.
Customs and Border Protection Search Did Not Violate 4th Amendment, 9th Circuit Rules
The search of a man’s laptop computer by Customs and Border Protection officials that occurred 170 miles from the border did not constitute an “extended border search” and did not violate his rights under the Fourth Amendment to the U.S. Constitution, an en banc Ninth Circuit U.S. Court of Appeals majority ruled, finding that the search was justified due to a “reasonable suspicion of criminal activity” based on the man’s status as a sex offender, among other factors. Click here to read this post by Mealey’s Mark Rogers.
News Excerpts from the May 1 Bender’s Immigration Bulletin
Read excerpts from the May 1 Bender’s Immigration Bulletin, including “EOIR Releases Information Regarding Mandatory Attorney Registration.” Click here to read this and other news excerpts from the May 1, 2013, Bender’s Immigration Bulletin.
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Insurance Law:
Court Confirms $20 Million Settlement with Louisiana Citizens for Late Claim Payments after Hurricanes Katrina and Rita
District Judge Kern Reece of Orleans Parish, La., has approved a $20 million class action settlement with Louisiana Citizens Property Insurance Company for claims related to the insurance company’s alleged untimely payment of claims resulting from Hurricanes Katrina and Rita. This commentary by Perkins Coie LLP describes the complex path to the settlement, including related litigation against the Louisiana Citizens Property Insurance Company. Click here to read more about this expert commentary and to download or purchase the article.
Lowenstein Sandler LLP on Measuring Business Interruption Losses in the Wake of Superstorm Sandy
In the aftermath of a widespread devastation, such as caused by Superstorm Sandy, companies look to their business interruption insurance to recover profits that were lost because of the cessation or suspension of their business operations. The measurement of the business interruption losses which they are entitled to recover under their insurance policies is often controversial and leads to complex and litigated insurance coverage issues. This commentary discusses various pertinent insurance policy provisions as well as recent case law addressing the measurement of business interruption losses. Click here to learn more about this Emerging Issues Analysis by Joseph Jean and Matthew Stockwell of Lowenstein Sandler LLP.
Bullivant Houser Bailey: Washington Supreme Court Announces New Presumption of No Attorney-Client Privilege for First-Party Insurers
In Washington bad faith actions, first-party insurers now face a presumption that the attorney-client privilege does not apply. In Cedell v. Farmers Ins. Co. of Wash., a fire damaged the policyholder’s home. The policyholder, Cedell, was not at home at the time. But Cedell’s girlfriend, Ackley, was there and she called the fire department, saying a lit candle caused the fire. Farmers denied the claim because Ackley may have been using methamphetamine on the day of the fire. Cedell sued Farmers, alleging bad faith. In response to Cedell’s discovery requests, Farmers declined to answer certain interrogatories and redacted its claim file based on the attorney-client privilege. Click here to download the decision and read why the Washington Supreme Court rejected the insurer’s claim of attorney-client privilege.
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Intellectual Property Law:
“Do Not Track” Impasse Threatens Future of Online Behavioral Advertising
Online Behavioral Advertising (OBA) involves the use of information collected about consumers for the purpose of targeting them with ads based on their interests. This information is collected from the consumers’ Web surfing, their queries to search engines, and even from the content of their e-mails. The past few years have witnessed a robust debate over the types of conduct (if any) that ought properly to be permitted in implementing OBA. Among the stakeholders are various components of the OBA industry, governments, consumer advocates and consumers themselves. Proponents of OBA claim that it funds the World Wide Web and permits advertisers to focus their ads on individuals interested in them, while reducing advertising costs and avoiding the broadcast approach that results in unwanted ads for most recipients. Although behavioral advertising did not begin with the WWW, the online milieu has provided a fertile environment for it, and an entire industry has grown up around OBA. Click here to read this post by David Bender.
Is It Malpractice to File a Declaratory Judgment of Invalidity after the AIA?
The face of patent litigation in the United States was forever changed on Sept. 16, 2012. This was the date the post-grant patentability trials of the America Invents Act first became available to patent challengers. The emergence of the new low-cost alternatives to patent litigation creates opportunities for patent challengers to pursue a lower cost resolution to patent disputes on far more favorable terms relative to the district court. If not adequately considered as an alternative to patent litigation, ignorance of the new AIA proceedings may create malpractice opportunities for unsuccessful litigants against their former law firms. Click here to read this post by Scott A. McKeown.
Fitch, Even, Tabin & Flannery LLP: Gunn v. Minton Holds Malpractice Claims Belong in State Court
On Feb. 20, 2013, in Gunn v. Minton, the U.S. Supreme Court issued a unanimous decision concerning whether there is federal subject matter jurisdiction over an attorney malpractice claim involving attorney conduct in a patent infringement lawsuit previously brought in a federal court. The court held that state courts have jurisdiction over such attorney malpractice claims and that such claims do not arise under federal patent law for purposes of federal jurisdiction under 28 U.S.C. 1338(a). Click here to read this post by Fitch, Even, Tabin & Flannery LLP.
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International & Foreign Law/International Rule of Law:
Looted Resources in Global Supply Chains: Asking the Right Questions
Business globalization can be the source of human rights and environmental violations that trigger criminal and civil liability for corporations and their executives. This is particularly the case in conflict-affected areas and weak governance zones. Click here to learn more.
Cheap Shots: EU Privacy, the USA PATRIOT Act and Cloud Computing
For the past year or two, foreign cloud providers—particularly some based in the EU—have been making claims and insinuations about the scope and use of the Patriot Act in an attempt to secure a marketing advantage over their U.S. competitors. Click here to read an excerpt of this article by David Bender.
Military Tenders and Procurement in Saudi Arabia: Guidelines for the Payment of Commissions, Success Fees, and Agency Fees
Concerning bribery, focus is on laws with international reach (the US Foreign Corrupt Practices Act, the UK’s Bribery Act 2010), local laws are often overlooked. One is a Saudi Council of Ministers Resolution on the defense industry. One can run afoul of these restrictions on payment of commissions to third parties, while complying with the FCPA or Bribery Act. Click here to read this post by John Balouziyeh.
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Labor & Employment Law:
The Legal and Ethical Issues of the Class Action “Pick Off”
Have you heard that the new owner of the Cleveland Browns has gotten himself into a bit of legal trouble? It’s alleged that Jimmy Haslam’s other business, Pilot Flying J, defrauded trucking companies of fuel rebates. In an effort to head off a stream of civil lawsuits, Mr. Haslam has been meeting with customers to settle the alleged missing rebates. One such customer sought a temporary restraining order to stop such meetings because, according to The Wall Street Journal®, Pilot was “obtaining releases, and settling claims before the potential class members even know the full extent of their claims.” The court denied the restraining order, permitting Haslam’s company to continue attempting to settle these claims. Click here to read this post by Jon Hyman.
Employment Blawg Carnival—Tips for HR Spring Cleaning!
I am thrilled to be hosting the Employment Law Blog Carnival this month, Lorene Schaefer writes in this post. For the uninitiated, this carnival is the brain child of Eric Meyer who writes The Employer Handbook and like the carnivals of old features a vast array of vendors (aka bloggers) sharing their wares (aka HR knowledge). Tradition has it that the host each month picks a theme and says something (hopefully) witty and inspiring enough to get you to click on that person’s blog entry. So, without further ado—I bring you the HR Spring Cleaning edition of the Employment Blawg Carnival. Click here to read this entire post.
Workplace Violence: Some Things an Employer Can Do
First responders in West, Texas. Sales clerks in the stores near the finish line at the Boston Marathon. Staff of the District Attorney’s office in Kaufman County, Texas. Teachers and administration at Sandy Hook Elementary. Ticket-takers and popcorn-scoopers at the Century 16 movie theater in Aurora, Colo. Employers, do you have a workplace violence plan in place? Of course, it may not stop a terrorist, but it should prevent some incidents and save lives in the event of a crisis. Click here to read this post by Robin Shea.
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Litigation Resource:
Big Data: What It Is and What It’s Good For
Are you using data analytics to identify profitability of individuals or specific matters? Or to support or refute claims? Or to spot and exploit trends and opportunities? These are some of the things made possible by “big data.” Click here to read this post.
Fulbright Briefing: Supreme Court Holds That Alien Tort Statute Does Not Have Extraterritorial Jurisdiction
On April 17, 2013, the United States Supreme Court held that the Alien Tort Statute does not have extraterritorial jurisdiction in a 9 – 0 decision in Kiobel v. Royal Dutch Petroleum Co. Click here to read this post by Fulbright & Jaworski L.L.P.
The Economic Loss Rule: An Under-Utilized but Not-So-Secret Weapon
In a decision issued on March 7, 2013, the Supreme Court of Florida reaffirmed Florida’s commitment to adherence to the economic loss rule in product liability litigation. In Tiara Condominium Association, Inc. v. Marsh & McLennan Companies, Inc. etc., et al., No. SC10-1022 [enhanced version available to lexis.com® subscribers], the high court provides a helpful discussion of the origin and development of the economic loss rule. In summary, the economic loss rule is described as “the fundamental boundary between contract law, which is designed to enforce the expectancy interests of the parties, and tort law, which imposes a duty of reasonable care and thereby encourages citizens to avoid causing physical harm to others.” Thus, economic loss has been defined by Florida courts as “damage for inadequate value, costs of repair and replacement of the defective product, or consequent loss of profits—without any claim of personal injury or damage to other property.” In other words, economic losses are “disappointed economic expectations,” which are protected by contract law, rather than tort law. Click here to read this post by William A. Ruskin.
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Real Estate Law:
Duane Morris: Nevada Ruling Suggests Lenders Wait until Foreclosure Before Pursuing Guarantor Claim
In Ken L. Templeton Family Trust, et al. v. Eighth Judicial District Court of the State of Nevada, et al., the Nevada Supreme Court agreed that a lender needed to wait until the completion of a foreclosure sale before making a deficiency claim against a guarantor. Although it appears to require a slight stretch in the interpretation of the Nevada statutes, the court agreed with the guarantors, adding that the completion of the trustee’s sale avoided any potential for double recovery. Click here to read more analysis of the decision from Duane Morris LLP.
Plaintiff Lacked Standing to Sue for Associational Discrimination against Her Disabled Mother
Rosa Gonzalez, a tenant in an apartment complex, was hard of hearing and lacked mobility and balance. Her daughter Milly took care of Rosa every day, but did not live in the same apartment complex. Milly sued the apartment owner for violating the California Fair Employment and Housing Act and the Fair Housing Act, on the basis that Rosa suffered unlawful housing discrimination. The appeals court considered the applicability of associational discrimination because both the California and federal fair housing laws prohibited discrimination against a person who was “associated with” a person with a disability. Click here to learn from Andrea Lee Negroni why the court found that Milly did not have standing to bring the action.
Vetstein Law Group: E-mail Disclaimers: Toothless, Useful, or a Little of Both?
Boilerplate e-mail disclaimers at the bottom of messages are so ubiquitous that most of us hardly notice them anymore. They certainly take up a lot of text space and can be annoying to some, but are they legally effective or just plain toothless? In the real estate context, where realtors and attorneys write in the language of contract every day, Richard Vetstein believes that a short and simple e-mail disclaimer may help, and certainly cannot hurt, the sender. Click here for a discussion on a few common real estate situations where an e-mail disclaimer could come into play, with examples of the author’s disclaimers.
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Tax Law:
Constitutional Limitations on State Taxation of Securities Transactions
Income from securities transactions may be subject to both federal and state income taxes, at least in the substantial majority of states that impose income taxes. The U.S. Constitution imposes limits on state taxes to which the federal income tax is not subject, and which therefore require consideration. Taxation of Securities Transactions treatise author Andrew W. Singer, Esq. shares extensive analysis of Constitutional Limitations on State Taxation of Securities Transactions.
California Residency for Income Tax Purposes
California recently passed Proposition 30, increasing the Golden State’s already high income tax rates, now topping out at 13.3 percent on those earning more than $1 million a year, and prompting many high earners to leave the state. Bradley Marsh and Dina Segal discuss litigation bearing on California Residency for Income Tax Purposes.
FATCA Regs Expand Deemed-Compliant FFIs
Under final regulations defining Foreign Accounts Tax Compliance Act compliance requirements, U.S. withholding agents must withhold tax on certain payments to foreign financial institutions to certain nonfinancial foreign entities that do not provide prescribed information to the IRS and to withholding agents, respectively. Lexis® Federal Tax Analyst Neil Aragones describes how the recently issued FATCA Regs Expand Deemed-Compliant FFIs.
California Taxpayers Whipsawed!
First, California’s Second District Court of Appeals determined that the “qualified small business stock” (QSBS) exclusion and deferral statutes were unconstitutional. Related guidance subsequently issued by the California Franchise Tax Board retroactively penalized flummoxed taxpayers who had fully complied with QSBS exclusion caveats. Lexis Tax Analyst Deanne Morton tells the story of California Taxpayers Whipsawed!
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Workers’ Compensation Law:
Strong Association Exists Between AMA Guides Impairment Ratings and Earnings Losses, but Losses Vary Significantly across Body Regions
A new major study funded by the California Commission on Health and Safety and Workers’ Compensation focuses on the AMA Guides Fifth Edition in California but has implications for the AMA Guides Fourth and Sixth Editions used in other states. The study purports to quell the main criticism that the AMA Guides can only measure severity of impairment and not disability. Click here to read more about this study by Robert Rassp, the author of The Lawyer’s Guide to the AMA Guides and California Workers’ Compensation.
Combating the Evils of Opioid Addiction: When the Cure Is Worse than the Disease
The numerous ills associated with workers’ compensation claimants abusing prescribed opioids is a perfect example of medical care professionals acting in haste. High drug costs are a near certainty; addiction and a fatal overdose are additional significant risks. One element of the widespread problem relates to the practice of medical care providers prescribing unduly high dosages of opioids and/or keeping claimants on those drugs well beyond the “immediate postoperative period.” Click here to read about possible solutions to this serious problem.
New Study on Why Workers Settle Their Workers’ Comp Claims
The Minnesota Department of Labor & Industry’s newly released survey on “Workers’ Perspectives on Settlements and Hearings” (February 2013) finds that a large percentage of workers with settlements were concerned about the fairness and outcome of the settlement process, and felt pressured by primarily their attorneys, followed by insurers and employers, to settle their workers’ comp claims. Interestingly, about half of the workers surveyed were not employed, and of those that were employed, approximately half of them reported a decrease in wages compared to their pre-injury wage. Additionally, many workers reported that their medical condition had become worse. Click here to see the survey instruments and to learn more about the survey results.
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