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Louisiana Rejects Negligent Spoliation of Evidence as a Tort Claim

Posted in Business Litigation, General Litigation, Louisiana In General, Products Liability, Professional Liability


By J. Eric Lockridge

The Louisiana Supreme Court recently determined that there is no tort liability for negligent spoliation of evidence.  “Regardless of any alleged source of the duty, whether general or specific, public policy in our state precludes the existence of a duty to preserve evidence.  Thus, there is no tort.”  Reynolds v. Bordelon, No. 2014-2362, — So.3d — , 2015 WL 3972370 (La. 6/30/2015).

The lawsuit that led to the Reynolds decision was filed as a result of multi-vehicle accident that occurred in 2008.  Reynolds filed suit against the other driver and against Nissan North America, the manufacturer of his own car, based on the allegation that his airbag did not deploy as it should have.  The petition also alleged that his insurer and his insurer’s custodian for his vehicle were liable for damages relating to their failure to preserve his vehicle for inspection after he specifically put them on notice that the vehicle needed to be preserved.  The trial court eventually sustained the insurer and storage company’s exceptions of no cause of action, which means that the facts stated in the petition, accepted as true, did not entitle the plaintiff to any legal relief against them.

After reviewing the foundation of tort liability under Louisiana law, the history of negligence and intentional spoliation-based claims in Louisiana and other states, and considering many duty and policy-related factors, the Louisiana Supreme Court concluded that “Louisiana law does not recognize the duty to preserve evidence in the context of negligent spoliation.”  While the factual scenario presented in the Reynolds case dealt with third-party negligence, the logic could be applied to situations where a party to a litigation negligently allowed spoliation to occur, particularly if it occurred before that party was on notice of a potential claim.  This decision offers no comfort to litigation parties who allow or encourage spoliation.  The Court specifically noted that discovery sanctions and criminal sanctions are available for first-party spoliators, and that Louisiana recognizes an adverse presumption against litigants who had access to evidence and did not make it available or destroyed it.

For more information on spoliation and how it can affect Louisiana litigation, please click here.

Awaiting the Arrival of Proposed Revisions to OSHA PSM and EPA’s RMP Rules: New OSHA Policy Statement Defining RAGAGEP

Posted in Environmental Litigation and Regulation, OSHA, Process Safety Management


by Lee Vail

The Occupational Safety and Health Administration (“OSHA”) published a Request for Information (“RFI”) on December 9, 2013 concerning possible changes to the Process Safety Management (“PSM”) program codified at 29 C.F.R. 1910.119. See 78 Fed. Reg. 73756 (Dec. 9, 2013). Likewise, the Environmental Protection Agency (“EPA”) published an RFI on July 31, 2014 relating to possible changes to the similar Risk Management Program (“RMP”) rules codified at 40 C.F.R. Part 68. See 79 Fed. Reg. 44604 (July 31, 2014 ). At the time of this writing, the respective comment periods have closed and we are waiting to see new proposed regulations. This is the seventh article in a series of articles concerning these potential rulemaking actions.

OSHA requested information concerning the wisdom of updating the rule as it relates to application of recommended and generally acceptable good engineering practices (“RAGAGEP”). Both PSM and RMP rules require use of RAGAGEP in relationship to equipment construction, inspection, and testing. See 29 C.F.R 1910.119(d)(3)(ii) and (j)(4)(ii) and 40 C.F.R 68.65(d)(2) and 68.73(d)(2). However, neither the PSM nor the RMP programs define RAGAGEP. Specifically, OSHA and the EPA requested comment as to whether RAGAGEP should be defined and whether the facility should be compelled to consider new codes and standards (when applied to existing equipment).

On June 5, 2015, OSHA issued an interpretation letter that addresses the issue of RAGAGEP. Apparently, OSHA decided that it was unnecessary to define RAGAGEP through rulemaking and instead decided to define the term as a policy matter.  Interestingly, the interpretation letter neither refers to the RFI nor any of comments received pursuant to such.

On June 19, 2015, OSHA, the EPA, and the Department of Homeland Security held a webinar to provide an update to agency actions in response to Executive Order 13650 titled “Improving Chemical Facility Safety and Security.” In response to questions, OSHA stated that the definition of RAGAGEP was an enforcement issue and not an issue for rulemaking. “OSHA has not written a lot about RAGAGEP or the four sections in PSM where it is either directly referenced or implied. This was a first attempt to take a bite at that apple.” Furthermore OSHA intends to begin testing the adequacy of the “new definition” and may change it again in the future if necessary.

The new policy based RAGAGEP definition contains several new concepts that are not supported by prior rulemaking. First, OSHA now says that for an internal procedure to be “appropriate” it must “meet or exceed the protective requirements of published RAGAGEP where such RAGAGEPs exist.” Such is internally inconsistent with the policy itself which allows an employer to choose between similar codes and standards as long as the one chosen is “protective.” OSHA’s policy would be more consistent by saying that internal procedures must be likewise protective.

Second, OSHA indicated that the term “should” as used in industry standards really essentially means “shall” by putting the burden of proof on an employer to justify an alternative. The interpretation letter requires that the employer determine and document if an employer chooses to use an alternative approach to an action designated within a published industry standard as a recommendation using the word “should.” Such is counter to the language in the codes and standards themselves. According to API-520 (Eighth edition, 2008), “as used in a standard, ‘should’ denotes a recommendation or that which is advised but not required in order to conform to the specification.” (Emphasis added.)

Third, as equipment is constructed to the code or standard (i.e., RAGAGEP) in place at the time of construction, an employer is required to show that the equipment meets that version of the code or standard, and that its operation is safe where those codes and standards are no longer in general use. According to the new policy, where updates contain provisions that explicitly require retroactive application, the employer must “upgrade their equipment, facilities, or practices to meet current version of their selected RAGAGEP.” That said, during the June 19, 2015 Webinar, OSHA confirmed that further changes to the rule, as it applied to updates of RAGAGEPs, were being considered as part of rulemaking.

In conclusion, OSHA appears to believe that the term RAGAGEP is so undefined that it is permissible for the agency to define it, without rulemaking, after twenty years of application. OSHA further believes that they can change the definition again in the future (presumably without rule making).

Changes to the Louisiana Motion Picture Investor Tax Credit Program Released by Louisiana Department of Economic Development

Posted in Film and Entertainment, Louisiana In General, State and Local Taxation


By Meg Kaul and  Phyllis Sims

Today the Louisiana Department of Economic Development in conjunction with the Office of Entertainment Industry Development released a high-level overview of the changes made to the Louisiana Motion Picture Investor Tax Credit Program during the recent 2015 legislative session.

It is important to note that some changes are effective July 1, 2015, while others are effective beginning January 1, 2016. It is also important to review all of the recent changes carefully, as some of the new legislation may be applied retroactively, even to those productions which have received initial certification letters from the State of Louisiana prior to July 1, 2015.

Click here for an overview of the legislative changes.

U.S. Army Corps of Engineers Provides New Resource for Marine Operators

Posted in Admiralty and Maritime, Corps of Engineers, Energy, Louisiana In General


By McClain Schonekas and Daniel Stanton

On May 26, the U.S. Army Corps of Engineers launched a new website to provide the public and industry interests with nationally-issued Notices To Navigation Interests (NTNI).  The new website can be found here.  The new site allows users to search NTNIs by keywords, providing a new-user friendly interface. The site will keep navigation interests up to date on events that affect waterway navigation, such as maintenance activities, hazards to navigation, dredging, and river bank protection projects.

But mariners and industry interests should be aware that the new Corps site does not contain notices from other federal agencies, such as the U.S. Coast Guard. U.S. Coast Guard Notices to Mariners may be found here. Users may also subscribe to the U.S. Coast Guard’s list serve for the districts of their choice and be notified by email when new Local Notices to Mariners are posted here. Also, NOAA Charts can be found here.

These available references are particularly relevant given the U.S. Fifth Circuit’s recent affirmation that marine operators working for the U.S. Army Corp of Engineers need to remain diligent in reviewing the most updated information disseminated by the various federal resources before beginning work that involves risks of striking underwater obstructions and pipelines. This opinion was released two days after the new Corp NTNI website was published, but the NTNI will likely be included in the available resources that the Fifth Circuit expects marine operators to review, calling the burden to remain up-to-date “minimal” given the potential risks.  See Contango Operators, Inc. v. Weeks Marine, Inc., No. 14-20265, slip op. at 15 (5th Cir. 2015) (unpublished).

McCorpen Under Attack at the U.S. Supreme Court

Posted in Admiralty and Maritime


By Daniel Stanton

As we recently reported, the Fifth Circuit decided the case of Meche v. Doucet, 777 F.3d 237 (5th Cir. Jan. 22, 2015) earlier this year. At issue in the Meche case was a well-founded and widely adopted defense to an employer’s obligation to pay maintenance and cure to an injured seaman – the McCorpen defense. In deciding Meche, the Fifth Circuit applied McCorpen to deny maintenance and cure benefits to a seaman who was injured on the job but failed to disclose prior, similar injuries on his employment application. The twist in Meche was that the Fifth Circuit allowed the employer to rely on its predecessor’s employment application that the plaintiff completed to deny the benefits.

Earlier this month, Willie Meche filed a writ with the United States Supreme Court not only to overturn the Fifth Circuit’s ruling, but eviscerate McCorpen entirely. In support, Meche advances three primary issues which he claims warrant the Supreme Court’s attention:

  1. Is the 5th Circuit’s McCorpen defense a valid bar to a seaman’s right to maintenance and cure?
  1. If so, should the 5th Circuit’s objective or the 2nd Circuit’s subjective test apply to determine whether the McCorpen defense is available? Relatedly, should the McCorpen defense require the employer demonstrate that he would not have hired the employee if he had known of the employee’s relevant medical history?
  1. Should successor employers be afforded the benefit of the McCorpen defense based on medical information not disclosed to the employer’s predecessor?

With respect to these issues, Meche first argues that the McCorpen defense in its entirety is at odds with Supreme Court’s jurisprudence on the available defenses to maintenance and cure claims and legal remedies available to seaman. Meche argues this despite the fact that the McCorpen defense has been cited approvingly by the Courts of Appeal of the 3rd, 6th, 7th, 8th, and 9th Circuits and the district courts of the 11th. Yet Meche asks the Supreme Court to stop the “unauthorized application” of this defense.

Alternatively, Meche argues that even if the Supreme Court supports the McCorpen defense, it must reconcile the alleged circuit split in its application. In the 5th Circuit, a successful McCorpen defense requires three parts: (1) the seaman intentionally misrepresented or concealed medical facts; (2) the non-disclosed facts were material to the employer’s decision to hire the claimant; and (3) a connection exists between the undisclosed facts and the injury complained of.

Meche advocates in favor of the 2nd Circuit’s “subjective test,” as applied in Sammon v. Central Gulf Steamship Corp., 442 F.2d 1028 (2d Cir. 1971), in that a seaman may only be denied maintenance and cure if he concealed medical history that he knew or reasonably should have known would be relevant to his employer. Whether or not applying the 2nd Circuit’s test would have rendered a different outcome for Meche is unknown, but unsurprisingly, Meche argues that the 2nd Circuit’s test should be adopted by the Supreme Court as the uniform maritime rule.

In the further alternative, Meche argues that the McCorpen defense should require an additional showing by the employer, as is required by the courts of the 7th Circuit. In addition to the elements listed above, the 7th Circuit, in Sulentich v. Interlaken S.S. Co., 257 F.2d 316 (7th Cir. 1958), required the employer to also demonstrate that it would not have hired the employee or would have terminated his employment if the relevant medical facts were known. Although the distinction is slight, the 5th Circuit does not require that an employer demonstrate that it would have not hired or fired the employee had it known of his condition; the employer need only demonstrate that the information was material.

Lastly, Meche argues that even if McCorpen is upheld as is, that the Fifth Circuit impermissibly expanded the scope of McCorpen to successive employers who do not complete their own physical examinations or require medical questionnaires. Meche asks the Supreme Court to take up this issue and deny successor employers the benefits of their predecessors’ inquiries into the medical history of its employees.

While there is no guarantee that the Supreme Court will take up these issues – the Supreme Court has never cited to McCorpen – some of Meche’s arguments should concern maritime employers should the Supreme Court decide to do so. Meche’s primary goal appears to be the reversal of almost 50 years of maritime case law applying the McCorpen defense. This is a defense that provides employers with a considerable incentive to inquire about and investigate the medical history of its employees, and it also discourages employees from concealing prior medical conditions. Additionally, adoption of the 2nd Circuit’s subjective test would substantially diminish the effectiveness and usefulness of the McCorpen defense. Not only would the test likely remove any potential success of a dispositive motion based on the McCorpen defense because it would require a showing of the seaman’s intent, but it would also make proving the first element of the defense much more difficult. Oddly, the most significant advancement of the McCorpen defense in Meche, availability of the defense to successor employers, may be the least important issue on the table should the Supreme Court grant Meche’s writ application. Given the potential of this attack, if writs are granted, this may be a call to arms to all Jones Act seaman employers to approach your industry associations about filing an amicus brief on your behalf.

The HEAT is Turned Up on Medicare Fraud

Posted in Health Law

By Jennifer J. Thomas

The U.S. Department of Justice (DOJ) and U.S. Department of Health and Human Services (HHS) announced on June 18, 2015, that the efforts of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative between the DOJ and HHS to prevent and deter Medicare fraud, resulted in a nationwide Medicare Fraud Strike Force take down with charges against 243 individuals in 17 districts involving $712 million in Medicare fraud claims. In New Orleans alone, eleven individuals were charged in five separate schemes totaling almost $110 million in allegedly fraudulent claim submissions to Medicare.   Grand juries in the Eastern District of Louisiana returned four indictments charging defendants with crimes involving 13 companies in addition to a criminal complaint filed against another defendant. The schemes involved home health care services, psychological testing services, durable medical equipment, and psychotherapy services. The Medicare claims were allegedly submitted between 2007 through 2015 for services and equipment that were either not medically necessary or not provided at all.

HEAT claims that as a result of the Medicare Fraud Strike Force teams work since 2007 more than 2,300 defendants have been charged with defrauding Medicare of more than $7 billion and convictions of approximately 1,800 defendants of felony health care fraud offenses.   The June 18th takedown made history with the most defendants charged and the largest alleged loss amount. It also demonstrates the movement of the Medicare Fraud Strike Force to districts outside of the current nine Medicare Fraud Strike Force locations: Baton Rouge, Louisiana; Brooklyn, New York; Chicago, Illinois; Dallas, Texas; Detroit, Michigan; Houston, Texas; Los Angeles, California; Miami-Dade, Florida; and Tampa Bay, Florida. The expansion of Medicare fraud prevention efforts is attributed to funding provided by the Affordable Care Act, which provides $350 million over ten years for tools such as: advanced predictive modeling technology; enhanced screening for providers who may pose a higher risk of fraud or abuse; and tougher federal sentencing guidelines for health care fraud. Given the success of HEAT and the Medicare Fraud Strike Force teams, it is expected that the government will continue to hotly pursue those individuals engaging in Medicare fraud. For health care providers wanting to stay out of the HEAT, regular Medicare compliance reviews of business and billing practices is the key for staying cool.

The press releases from the U.S. Department of Justice and the U.S. Eastern District of Louisiana detailing the June 18th takedown as well as other enforcement actions can be viewed at http://www.justice.gov/.

Tax Sale Redemption Period Reduced for Blighted and Abandoned Property

Posted in Business and Corporate, Louisiana In General, New Orleans/Louisiana Recovery


By Edwin R. Noland, III

Each year, as the calendar changes, the tax collecting divisions of political subdivisions (Parish, City, etc.) gear up for the increased workload that comes along with preparing for tax sales.  In the State of Louisiana, owners of immovable property (real estate) are required to pay property taxes to the parish and/or the city.  In certain instances, some or all of the property tax may be exempt (either due to non-profit status or a homestead exemption).  However, for many residents, at least a portion of the property taxes remain due.  When the property taxes are not paid, the property is subject to a tax sale.

If property is sold at a tax sale, the former assessed owners (tax debtors) have a period of time when they may redeem the property from the tax sale purchaser by paying the delinquent amounts paid by the tax sale purchaser along with applicable penalties, fees, and interest.  Previously, that redemption period was three years for all properties (excluding property in New Orleans).  However, in 2014, Constitutional Amendment Number 10 (Act 436 – HB 256) was proposed to reduce the tax sale redemption period from three years to eighteen months on properties that were considered blighted, hazardous, uninhabitable, or abandoned.  On the November 4, 2014 ballot, the proposed Constitutional Amendment was approved by 54.32% of the voting public.[1]  Louisiana Constitution Article 7, Section 25 (B)(3) now states, in part, “…when such property sold is vacant residential or commercial property which has been declared blighted … or abandoned … it shall be redeemable for eighteen months after the date of recordation of the tax sale …”

The tax sale process involves multiple steps.  The procedure begins by the distribution of tax bills informing the landowner of all amounts due.  In most parishes, including East Baton Rouge Parish, tax bills are sent to homeowners starting in late November or early December and are delinquent by January 1st the following year.  Louisiana law provides that “the tax collector shall seize, advertise, and sell tax sale title to the property or an undivided interest therein upon which delinquent taxes are due, on or before May 1st of the year following the year in which the taxes were assessed, or as soon thereafter as possible.”  LSA R.S. 47:2154

The tax collector must comply with multiple requirements in the tax sale process.  First, the tax collector must provide a delinquency notice in January or February to the tax debtor (and any other party requesting notice) by certified mail informing them of amounts owed.  Thereafter, if the tax bill remains unpaid, there is a mortgage and conveyance record search performed, and an additional notice is sent out.  Finally, the tax collector will publish a notice in the official journal of the political subdivision twice within thirty days and advertise for sale properties with delinquent statutory amounts owed.

After the notice and advertising requirements are met, the tax sale title to the property is sold at a public auction (either in person or online).  At the tax sale, potential purchasers bid on percentage interests in the tax sale title.  The lowest percentage bid will purchase that interest in the tax sale title in exchange for paying 100% of the past-due amounts.

Once the tax title to the property is sold, the tax debtor has either a three year or eighteen month redemption period, depending on the condition of the property.  The property is redeemed by paying the price given, including the amount paid by the tax sale purchaser, five percent penalty thereon, and interest at the rate of one percent per month until redemption.  LSA Const. Art. 7, Section 25 (B)(1)

The above referenced constitutional amendment reducing the redemption period for tax sales of properties which are considered blighted or abandoned became effective January 1, 2015.  It is easy to forget about the amendments and laws passed during different elections when those changes do not necessarily affect our daily lives.  However, property owners should be cognizant of this change to the redemption period for abandoned or blighted properties to avoid their properties being placed in potential jeopardy.  This constitutional amendment may also provide opportunities for investors to focus the properties that they target due to the opportunities afforded by the shortened redemption period.

[1] http://staticresults.sos.la.gov/11042014/11042014_Statewide.html


Louisiana Legislature Cuts Net Operating Loss Deduction: Taxpayers Should Consider Filing Returns Before July 1, 2015

Posted in Business and Corporate, Louisiana In General, State and Local Taxation


by Christopher J. Dicharry

Effective July 1, 2015, the net operating loss carryback (NOL) will be eliminated and the carryover will be limited to 72% of the carryover. La. Acts 2015, No. ___( HB No. 624 (Rep. Jackson) amending La. R.S. 47:287.86) and La. Acts 2015, No. ____(HB No. 218 (Rep. Broadwater) amending La. R.S. 47:287.86).

Under the bills, the NOL is curtailed based upon when a taxpayer’s return is filed. All returns claiming a NOL deduction filed on or after July 1, 2015 will be subject to the 72% limit regardless of the taxable year to which the return relates. However, the filing of an amended return on or after July 1, 2015 amending a return filed before July 1, 2015 will receive the full NOL if the NOL was properly claimed on the original return. Thus, a late filed original 2013 return filed after July 1, 2015 will be subject to the reduced NOL deduction even though other taxpayers got full deductions for timely filed 2013 returns. Additionally, 2014 returns under extension will not get the full deduction if the returns are not filed before July 1, 2015. A taxpayer that loses the benefit on a return filed after July 1, 2015 and for which a valid extension to file was granted prior to July 1, 2015 is allowed to proportionally recoup the disallowed NOL deduction for each taxable year beginning during calendar years 2017, 2018, and 2019.

Taxpayers should consider filing income tax returns for 2014 and earlier years before July 1, 2015 claiming the proper amount of the NOL deduction even if the returns will have to be amended after July 1, 2015.

Note: HBs 218 and 624 have not been signed by the Governor; however, it is very likely that HBs 218 and 624 will become law.

The Louisiana Legislature made numerous changes to business exclusions, exemptions, deductions, and credits. Many of these changes are effective July 1, 2015.  This article addresses only two of the major changes enacted by the Louisiana Legislature during the 2015 regular session. 

For more information or questions about tax law changes during the 2015 regular session, contact Chris Dicharry.

Louisiana Legislature Cuts Inventory Tax Credit: Taxpayers Should Consider Filing Returns Before July 1, 2015

Posted in Business and Corporate, Louisiana In General, State and Local Taxation


By Christopher J. Dicharry

The inventory tax credit is the method used by Louisiana to reimburse taxpayers for the cost of the annual local property taxes paid on the value of inventories. Rather than providing an exemption from local property taxes on inventory, taxpayers pay the local property tax on the value of inventories and are reimbursed by means of a 100% refundable credit on their income and corporation franchise tax returns filed after the inventory tax is paid. If the inventory tax exceeds the income and corporation franchise tax due to the state, the Louisiana Department of Revenue issues a check for the balance of the credit.

Effective July 1, 2015, the refund of inventory taxes for eligible taxpayers whose ad valorem taxes paid to all political subdivisions in the taxable year is $10,000 or more will be limited to 75% of any excess credit instead of 100% of the excess credit. The remaining 25% of the excess credit is carried forward against income and corporation franchise tax for up to 5 years. Smaller taxpayers will continue to receive full refunds of inventory tax paid. La. Acts 2015 No. ___( HB No. 805 (Rep. Adams) amending La. R.S. 47:6006).

Under the bill, the inventory tax credit is curtailed based upon when a taxpayer’s return is filed. All claims for credit on any return filed on or after July 1, 2015 will be subject to the refund limit regardless of the taxable year to which the return relates. However, the filing of an amended return on or after July 1, 2015 amending a return filed before July 1, 2015 will receive the full inventory tax credit if the inventory tax credit was properly claimed on the original return. Thus, a late filed original 2013 return filed on or after July 1, 2015 will be subject to the reduced refund even though other taxpayers got full refunds for timely filed 2013 returns. Additionally, 2014 returns under extension will not get the full refund if the returns are not filed before July 1, 2015.

Taxpayers should consider filing income and corporation franchise tax returns for 2014 and earlier years before July 1, 2015 claiming the proper amount of the inventory tax credit even if the returns will have to be amended after July 1, 2015.

Note: HB 805 has not been signed by the Governor; however, it is very likely that HB 805 will become law prior to July 1, 2015.

The Louisiana Legislature made numerous changes to business exclusions, exemptions, deductions, and credits. Many of these changes are effective July 1, 2015. This article addresses only one of the major changes enacted by the Louisiana Legislature during the 2015 regular session. 

For more information or questions about tax law changes during the 2015 regular session, contact Chris Dicharry.



Colorado Supreme Court Upholds Termination of Employee for Off-Duty Medical Marijuana Use

Posted in Labor and Employment Law


By Erin L. Kilgore

In a much-anticipated decision, the Colorado Supreme Court issued a ruling on Monday upholding an employer’s decision to discharge an employee for his off-duty medical marijuana use.

In Coats v. Dish Network, LLC, a quadriplegic employee filed a wrongful termination suit against his former employer, claiming Dish Network violated Colorado’s “lawful activities statute” by terminating his employment after he tested positive for tetrahydrocannabinol (a component of medical marijuana) during a random drug test.  The plaintiff was a registered medical marijuana patient and used medical marijuana at home during non-working hours.  Nevertheless, Dish Network fired the plaintiff for violating the company’s zero tolerance drug policy.

The crux of the case was whether the plaintiff’s termination violated Colorado’s “lawful activities statute.”  As the Colorado Supreme Court explained, that statute generally makes it an “unfair and discriminatory labor practice” to fire an employee based on his “lawful” activities while off duty and outside of work.  Because marijuana use is legal in Colorado, the plaintiff argued that his marijuana use was “lawful” for purposes of the lawful activities statute.  However, marijuana remains an illegal drug listed in Schedule 1 of the federal Controlled Substances Act; thus, marijuana use is illegal under federal law.

The employer argued, and the trial court and court of appeals found, that the plaintiff did not engage in a “lawful activity” within the meaning of Colorado’s lawful activities statute because marijuana use remains illegal under federal law.  The Colorado Supreme Court agreed.   Significantly, the Colorado Supreme Court held that the term “lawful” in the Colorado statute referred only to activities that are lawful under both state and federal law.  Consequently, employees who engage in activities that are permitted by state law but are unlawful under federal law – such as medical marijuana – are not protected by the Colorado lawful activities statute.

As more states move toward some legalization of some marijuana use, the Coats v. Dish Network, LLC case is a significant victory for employers.  Employers should review and update their current drug policies to ensure their policies properly articulate company policy.  For some employers, it may be prudent to acknowledge that some marijuana use may be legal in some states under some circumstances, but to reiterate that any marijuana use is prohibited by federal law and company policy.

A copy of the Colorado Supreme Court’s opinion can be found here.