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Punitive Damages: “One Bite of the Apple” or Exception to Res Judicata

Posted in Legacy Oil Field Sites, Louisiana In General, Toxic Tort Litigation


By Tyler Moore Kostal

The Louisiana Supreme Court recently heard oral argument in two cases, Oleszkowicz v. Exxon Mobil Oil Corporation, et al. and Chauvin v. Exxon Mobil Corporation, et al., both involving a plaintiff’s damages for potential exposure to naturally occurring radioactive material (NORM). This is the second lawsuit for both plaintiffs against the same defendant, for the same exposure to NORM as in the first suit. Both plaintiffs initially sued (in other matters) for fear/increased risk of cancer and then later sued for developing cancer due to the same potential NORM exposure. The fact that the plaintiffs can bring separate lawsuits for the same exposure is not in dispute. What is in dispute is whether the plaintiffs are entitled to punitive damages for each claim.

In the initial Oleszkowicz case, a jury awarded plaintiff compensatory damages for the increased risk of cancer but specifically denied punitive damages. The denial was based on the jury’s express finding that that the defendant had not engaged in wanton or reckless conduct. Soon after that suit, plaintiff actually developed cancer and filed suit again, claiming that his cancer was caused by the same exposure and conduct as the first suit. He sought compensatory damages and renewed his claim for punitive damages. Contrary to the verdict in the first suit, the jury awarded plaintiff $10 million in punitive damages. The defendant appealed. The court of appeal reduced the punitive damages award but failed to eliminate it entirely, rejecting defendant’s argument of res judicata. Instead, the court of appeal found that “the complexity of and convoluted circumstances” of the case constituted “exceptional circumstances,” thereby relieving plaintiff of the preclusive effect of the final judgment in his first suit. The Louisiana Supreme Court granted defendant’s writ of review, limiting the argument to the issue of res judicata.

The Chauvin case involves essentially the same issue except that, rather than a jury verdict in the first instance, the parties entered into a settlement agreement. The defendant settled plaintiff’s fear/increased risk claim and received a release from all future claims, except for future cancers. Plaintiff later developed cancer and filed another lawsuit, including a claim for punitive damages. The defendant sought dismissal of all claims barred by plaintiff’s prior settlement. The trial court agreed and granted defendant’s exception of res judicata as to all claims, including punitive damages, other than damages for future cancer. Plaintiff appealed, and the court of appeal reversed the trial court’s judgment as it pertained to punitive damages, finding an exception to res judicata. The Louisiana Supreme Court granted defendant’s supervisory writ.

Oral argument was heard in both cases on Monday, October 13, 2014.


DHH Proposes Rule on Prohibition of Provider Steering of Medicaid Recipients

Posted in Health Law


By Deborah J. Juneau

On September 20, 2014, the Department of Health and Hospitals (“DHH”) published its notice of intent to promulgate a rule to continue the provisions of a March 20, 2014 Emergency Rule regarding the prohibition on provider steering of Medicaid recipients to select a particular health plan. DHH had previously promulgated an Emergency Rule on this issue in December, 2013 and then promulgated amendments to the Emergency Rule in March 2014 to clarify the provisions and sanctions and to incorporate provisions for provider appeals. No additional amendments to the March 2014 Emergency Rule are proposed in the notice of intent. The Emergency Rules, and the proposed Rule, were issued by DHH to avoid federal sanctions by the Centers for Medicare and Medicaid, by ensuring the integrity of Medicaid recipients’ freedom of choice in choosing a health care provider and ensuring compliance with federal regulations applicable to contract requirements.

Under the March 2014 Emergency Rule and the proposed Rule, a health plan is defined to include any managed care organization, prepaid inpatient health plan, prepaid ambulatory health plan, or primary care case management entity contracted with the Medicaid program. A provider is defined as any Medicaid service provider contracted with a health plan and/or enrolled in the Louisiana Medicaid Program. Provider steering is defined to mean “unsolicited advice or mass-marketing directed at Medicaid recipients by health plans, including any of the entity’s employees, affiliated providers, agents, or contractors, that is intended to influence or can reasonably be concluded to influence the Medicaid recipient to enroll in, not enroll in, or disenroll from a particular health plan(s).”

Both providers and health plans are subject to significant sanctions for steering Medicaid recipients. For a first offense of steering of Medicaid recipients, a provider may be subject to recoupment of all payments to the provider for services rendered to the Medicaid recipient for the time period the recipient’s care was coordinated by the managed care health plan to which the recipient was steered. If the recipient was steered to Medicaid fee-for-service, the provider may be subject to recoupment of payments for services rendered to the recipient for the time period the recipient’s care was paid for by Medicaid fee-for-service. A provider may also be subject to monetary sanctions of up to $1,000.00 for each recipient steered to join a particular Medicaid plan, up to a maximum of $10,000.00. Additionally, the provider may be required to send a letter to the particular Medicaid recipient notifying the patient of the sanctions imposed and the patient’s freedom of choice right to freely choose another participating managed care health plan or, if eligible, to participate in Medicaid fee-for-service. If the provider is found to have a second violation of patient steering, the provider may be subject to disenrollment from the Medicaid program.

A provider who receives a notice of sanction related to prohibited Medicaid recipient steering is entitled to appeal rights, including an informal hearing and/or an administrative appeal. The provider must make a written request for the informal hearing and administrative appeal within the deadlines provided in the notice.

If a health plan is found to violate the Medicaid recipient steering prohibition, DHH may impose the following sanctions: 1) disenrollment of the member(s) from the health plan; 2) recoupment of up to 100% of the monthly capitation payment or care management fee for the month(s) the member(s) was enrolled in the health plan; and 3) assessment of a monetary penalty of up to $5,000.00 per member. The health plan may also be required to submit a letter to each member providing notice of the sanctions imposed and the member’s right to choose another health plan.



DHH Implements New Adverse Actions Web Search for Excluded Individuals and Entities

Posted in Health Law


By Deborah J. Juneau

To participate in the Louisiana Medicaid Program, providers have been required to ensure that their current and potential employees, contractors and other agents and affiliates were not excluded from participation in the Medicare or Medicaid Programs. Providers have been instructed to check the Department of Health and Human Services’ Office of Inspector General’s website for the list of excluded individuals and entities upon hire and monthly thereafter. These requirements have been included in the Provider Enrollment Agreements, the Medical Assistance Program Integrity Law, Louisiana Revised Statutes 46:437 et seq., referenced in the Louisiana Administrative Code Title 50, and the Code of Federal Regulations, 42 CFR §455.436.

The Louisiana Department of Health and Hospitals (“DHH”) has now implemented its own website to check for adverse actions taken against individuals and entities. The website is found at https://adverseactions.dhh.la.gov. Pursuant to guidance issued by DHH in September, 2014, effective immediately, providers are now directed to check the DHH website for all individuals and entities upon hire or contracting and monthly thereafter to determine whether they have had any adverse action imposed. Providers are required to maintain proof in their records that the checks were performed for employees and/or contractors, including subcontractors, by printing out the search results.

DHH directs that the search should include all current and previous names used (first, middle, last, maiden, married, and/or hyphenated names and aliases) for all owners, employees and contractors.

If the search conducted for potential employees or contractors reveals that the person or entity has been excluded from working with Medicare and/or the Louisiana Medicaid Program in any capacity, the provider should not employ or contract with the person or entity.

If the search reveals that an existing employee or contractor has been excluded from the Medicare and/or Louisiana Medicaid Programs, the provider must notify the DHH within ten (10) working days of discovering the exclusion and provide the following information: 1) the name of the excluded individual or entity; 2) the status of the individual or entity, whether an employee or contractor; 3) the beginning and ending dates of employment or contract; 4) documentation of the termination of employment or contract; and 5) the type of services provided to the provider by the excluded individual or entity. The findings should be reported to DHH.Medicaid.State.Exclusion@la.gov or to Department of Health and Hospitals, Program Integrity, P.O. Box 91030, Baton Rouge, LA 70821-9030. Providers who employ or contract with excluded individuals and entities may be subject to penalties, including monetary penalties.

DHH also made clear that using the new adverse actions web search tool does not replace the Nurse Aide Registry/Direct Service Worker Registry requirements. Providers that employ Certified Nursing Assistants (CNAs) and Direct Service Workers (DSWs) are still required to check those registries upon hire and every six (6) months thereafter.



Prescription Monitoring Program Now Accessible By Delegates

Posted in Health Law


By Jennifer J. Thomas

The Louisiana Board of Pharmacy has revised the rules on access to patient information maintained by the Prescription Monitoring Program (“PMP”). Historically, only persons authorized to prescribe or dispense controlled substances or drugs of concerns could access the PMP. The Board recently revised the PMP rules to now allow a “delegate” of the prescriber or dispenser access to the PMP records. A delegate is defined as a person authorized by a prescriber/dispenser who is also an authorized user to access and retrieve program data for the purpose of assisting the prescriber/dispenser and for whose actions the authorizing prescriber and dispenser retains accountability. Each delegate must register for their own account which will be linked to the supervisor’s account. The prescribers and dispensers are responsible for supervising their delegate’s activities.

The goal of the PMP is to improve the State of Louisiana’s ability to identify and inhibit the diversion of controlled substances and drugs of concern. The information maintained on the PMP is used to report suspected violations of any law to State and Federal Law Enforcement agencies as well as to assist prescribers with the treatment of their patients. All dispensers of controlled dangerous substances and drugs of concern are required to submit information to the PMP, including both prescriber and patient information. Failure to report prescription information to the PMP will result in a referral to the prescriber or dispenser’s professional licensing board for administrative sanctions.

The Louisiana Board of Pharmacy has issued a PMP Delegate Registration and Request Guide with instructions for prescribers, dispensers and their delegates on how to register for a delegate account. More information can be found at the Louisiana Board of Pharmacy website www.labp.com


Lights, Camera, Action: A Spotlight on Louisiana Location Agreements for Motion Picture, Television, and Commercial Productions

Posted in Film and Entertainment

By Meg Alsfeld Kaul


Louisiana has become a primary hub for motion picture, television and commercial productions over the last ten years. With the rise of filming occurring in this state, production companies are always looking for locations to shoot their projects. You may have heard of friends, family or neighbors who have been approached by a location scout looking to use their home or business as a “location” for a film or TV project. While it is exciting to become involved with a production, it does not come without some risks. If approached to use your home or business, the following considerations may help you assess whether or not you would like to rent your home or business to a production company. It is also helpful to hire an entertainment attorney to review any agreements provided to you.

Always Get It In Writing. Make sure that any agreement to lease your home or business is in writing. Often production companies will give you their “standard” agreement—but that does not mean you have to keep every provision included within this agreement. Therefore, if you and/or your attorney are not comfortable with some of the provisions, you should make the necessary changes. Remember that a standard agreement can always be altered.

Research. You may want to do some research on the production company and the parent or related companies to the contracting entity to ensure the people you are dealing with are reputable. It also helps to know whether the project has been funded. You can contact Louisiana Economic Development’s entertainment division and ask the film department if they are aware of the production or production company to determine if the project is in fact legitimate.

Insurance. Ask for a copy of their insurance certificate. You should be named as an additional insured. If they are going to do any heavy construction on your property and/or major alterations to your home, you should seek the advice of an attorney or insurance agent to ensure that the insurance obtained is sufficient.

Set a Timeline. Even though a project may only “film” at your location for two days, the production will require time to set up and wrap the location. So what may start as a “two day shoot” may also include two days for prep and then three days for clean-up, totaling a week’s worth of your time. Therefore, you will want to get that timeframe spelled out with as much specificity as you can. Ask for specific dates, as you don’t want to close your business unless they’re actually going to show up on that date, or plan to be out of your home for five days when it is really going to be ten. A location agreement will also provide for some additional days in the future if they need to do “reshoots” or things of that nature. You will want to ask for advanced notification for these future days in the agreement as well.

Pricing. You should be properly compensated. This will include being compensated for the days of prep and wrap. If you own a business, be prepared to provide a number for how much it will cost to close down your business per day. The production company should clean and restore your property after they wrap, but you may also ask for a cleaning stipend up front to hire someone additionally to clean your home or business. If you would like to have a representative of your business or someone from your family on site while they are filming, you may request a “site representative” fee which may be an hourly fee or based on a per day rate. In addition, the production company should compensate your hotel expenses and provide a per diem if the company is renting out your house.

Changes and Restoration. Production companies are probably going to tailor your location to fit the needs of the project. If they are filming inside of your home, these changes could be anything from building artificial walls within your living room, to removing all your furniture and storing it in a separate location, to adding moss and trees to your exterior or building a garage in the backyard. You will want to know in advance what they plan to do inside and outside of your home or business, how they plan to care for your things if they move them, and how they’ll put it all back together after they are done. Most importantly, you want to ensure that they will fix what they damage. For instance, if they are removing your plants in the front yard or building a shed on top of your grass, you will want to put it in writing that they will replant your plants or replace them if they have died since removal, or that they will restore or re-sod your grass if, upon removal of the shed structure, your grass underneath has died. You’ll also want to be able to do a site inspection of your home or business after they have wrapped and notify them immediately of any issues or damage to the property. The production company should be responsible for any damage they cause, except for normal wear and tear incurred with the permitted uses of the property.

Permission. If you are one of several owners of a building, or are simply leasing a house, you will want to get the consent to lease the location from every owner. Simply providing the consent as a tenant in a house without the landlord’s consent could land you in some hot water, especially if anything happens to the house.

Consider Your Neighbors. If, for example, you know your neighbors are particular about noise, have a new baby, or you share a backyard or common area, you may want to approach them about the potential production. Productions are loud. They involve a ton of crew members and equipment. It will also mean that a lot of extra vehicles, trucks and trailers will be on or around your location. If they are shooting at night, it may involve bright lights and lots of noise at unattractive hours. So giving the neighbors a heads up is usually a good move in order to keep the peace during filming and after the crew leaves.

Seeing your home or office on a big screen is exciting and can be well worth the hassle of being inconvenienced for a few days. You should be prepared to ask the right questions, map out the details in advance, and hire an attorney to review the paperwork. There is always a chance that something valuable could break or it could take them longer to film than anticipated. However, the rental fees are typically generous and the bragging rights of seeing your home on screen are priceless!


CMS and ONC Issue Final Rule Modifying Meaningful Use Requirements

Posted in Health Law

By Lyn Smith Savoie


On August 29, 2014, the Centers for Medicare & Medicaid Services (CMS) and the Office of the National Coordinator for Health Information Technology (ONC) issued a final rule modifying the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs. While CMS is responsible for managing the EHR incentive programs and meaningful use, ONC is responsible for creating and maintaining an EHR certification program. The final rule includes the following significant changes: (1) the issuance of various options providers may use to meet the 2014 reporting requirements; (2) extension of the deadline for implementation of Stage 3 for certain providers; and (3) modification of the reporting requirements for Clinical Quality Measures (CQMs) to reflect a provider’s choice of certified electronic health record technology (CEHRT).

2014 Reporting Options:

Due to product availability delays, CMS and ONC recognized that many providers may have difficulty fully implementing the 2014 Edition CEHRT to meet meaningful use. As a result, CMS and ONC developed the following three options providers can utilize for their 2014 meaningful use attestations:

Option 1: Utilize 2011 Edition CEHRT. Eligible professional (“EPs”), eligible hospitals (“EHs”) and critical access hospitals (“CAHs”) may use the 2011 Edition CEHRT for the 2014 EHR reporting period and must meet the meaningful use objectives and measures for Stage 1 that were applicable during the 2013 payment year, regardless of the provider’s current stage of meaningful use.

Option 2: Utilize a Combination of 2011 and 2014 Edition CEHRT. The second option for EPs, EHs, and CAHs who were impacted by the delays is to utilize a combination of 2011 Edition CEHRT and 2014 Edition CEHRT for their 2014 reporting period. These providers may choose to meet (a) the 2013 Stage 1 objectives and measures; (b) 2014 Stage 1 objectives and measures, or (c) for those providers scheduled to begin Stage 2 in 2014, the Stage 2 objectives and associated measures.

Option 3: Utilize 2014 Edition CEHRT for 2014 Stage 1 Objectives and Measures Instead of Stage 2 Objectives and Measures. For some EPs, EHs, and CAHs, the 2014 Edition CEHRT availability delays resulted in the inability to fully implement all the necessary Stage 2 objectives and measures for the 2014 reporting period. Consequently, CMS and ONC are permitting providers scheduled to begin Stage 2 for the 2014 EHR reporting period to attest to the Stage 1 objectives and measures.

Under all three options, the EP, EH or CAH utilizing the alternative reporting measures for 2014 must attest that it was “not able to fully implement” 2014 Edition CEHRT due to “delays in 2014 Edition CEHRT availability.” CMS and ONC did not intend for the alternative reporting options to be broadly utilized by providers. Therefore, the final rule provides guidance on the terms “not able to fully implement” and “delays in 2014 Edition CEHRT availability,” which limit who can attest to meeting these requirement.

The final rule lists the following examples of situations that would not be permissible reasons to “not be able to fully implement” 2014 Edition CEHRT and, therefore, would not be grounds to use the optional reporting requirements: (a) failure to implement due to financial issues, such as the costs of implementing, upgrading, installing, or testing; (b) experiencing personnel problems, such as staff changes and turnover; and (c) inaction or delay by the provider, including waiting too long to engage a vendor or the provider’s inability or refusal to purchase requisite software updates. Regarding “delays in 2014 Edition CEHRT availability, CMS and ONC clarified that this term refers specifically to one or more delays related to the development, certification, testing and release of an EHR product by the EHR vendor or developer, not from merely whether the software is certified and then installed or not.

The above-mentioned attestation options are not available to providers who have fully implemented 2014 Edition CEHRT.

Stage 3 Implementation Extension:

Another significant change in the final rule was the finalization of the proposed delay in the deadline for implementation of Stage 3 meaningful use requirements for those providers who became meaningful users of EHR in 2011 or 2012. Originally set for January 1, 2016, the Stage 3 deadline has not been delayed until January 1, 2017. The delay is intended to provide CMS and ONC with the opportunity to focus on successful implementation of the Stage 2 requirements. The Stage 3 objectives and measures, as well as reporting criteria, will be defined in future rulemaking.

CQM Submissions for 2014:

In light of the 2014 reporting changes, CMS and ONC also adjusted the CQM submission requirements. For providers who choose to attest to the 2013 Stage 1 objectives and measures, they must also report the CQMs that were applicable for 2013. Similarly, those providers choosing to attest to the 2014 Stage 1 or Stage 2 objectives and measures must also report the 2014 CQMs in the manner required for 2014.

The reporting options set forth in the final rule only apply to the 2014 reporting period. No changes have been made to reporting requirements for 2015. Providers must use 2014 Edition CEHRT for the 2015 reporting period and for subsequent years.


Louisiana Second Circuit Holds that Routine Nonsurgical Medical Treatment Does Not Require Compliance with the Louisiana Uniform Consent Law

Posted in Medical Malpractice


By Karen M. Fontana

William McDougald et al. v. St. Francis North Hospital Inc. No. 48,955 (La. App. 2nd Cir. April 9, 2014) 137 So.3d 1233 writ denied 2014-0815 (La. 6/3/14), 140 So.3d 1191.

In this medical malpractice wrongful death action, the plaintiffs contended that the defendant physician breached the standard of care in temporarily discontinuing the patient’s Plavix and aspirin in anticipation of orthopedic surgery without informing the patient of the associated risks. The patient died of a myocardial infarction several days after stopping the medications and just one day before the planned surgery.

Ms. McDougald was a 58 year old woman with a history of heart disease and smoking and had undergone placement of stents as her heart disease advanced. The patient had been maintained on Plavix and aspirin for over two years since her last stent placement in 2007. In 2009, Ms. McDougald planned to undergo knee surgery and was referred to defendant, her cardiologist, for a medical clearance.

Evidence was presented at trial that medical clearance was provided after the defendant’s head nurse (1) spoke with the patient’s primary care physician to confirm that the patient had not presented with any cardiac issues in the preceding year; (2) confirmed this with the patient directly as well; and then (3) discussed with the patient the need to temporarily discontinue the Plavix and aspirin seven days prior to the planned knee surgery. Nurse Gibson stamped the defendant physician’s signature on the clearance for the knee surgery. The patient was not seen by the defendant physician as part of this surgical clearance.

Ms. McDougald’s family filed a PCF claim alleging that the defendant physician committed malpractice by failing to inform Ms. McDougald of the risks associated with the cessation of Plavix and aspirin, including the possibility of death. Plaintiffs alleged that the physician had a duty to inform the patient of these risks pursuant to the Louisiana Uniform Consent Law (LUCL), La. R.S. 40:1299.40. Plaintiffs contended that the defendant physician never spoke to Ms. McDougald and therefore breached the standard of care by failing to obtain informed consent.

The Medical Review Panel found that the order to discontinue Plavix was appropriate because the accepted practice guidelines for Plavix therapy after stent placement called for 12 months of administration only and it had been two years since Ms. McDougald’s last stent. The panel further found that the standard of care did not require a doctor to discuss the discontinuance of Plavix because the risk of having a stent thrombosis due to discontinuation of Plavix was so minimal that it was not a material risk.

At time of trial, the court ruled that the Louisiana Uniform Consent Law did not apply to the decision to discontinue medications prior to surgery. However, the issue of informed consent was again raised during argument over jury instructions. Plaintiffs again sought a jury instruction regarding the LUCL and the general principles of its disclosure requirements.

Ultimately the trial judge accepted the defense argument that informed consent was not required when temporarily stopping medications such as Plavix or aspirin for surgery. Defendant successfully argued that physicians are not required to comply with the informed consent law when undertaking routine actions. Further defendant had argued that, even if the informed consent law were found to be applicable, a physician is only required to disclose a material risk, and plaintiff bears the burden of establishing materiality.

After jury verdict was returned for the defense, plaintiffs appealed arguing the trial court had erred in finding the LUCL to be inapplicable. The Louisiana Second Circuit affirmed the trial court decision, confirming that La. R.S. 40:1299.40 did not apply to the facts of this case and thus lack of informed consent was not an issue.

In rejecting the application of the informed consent statute to these facts, the Second Circuit cited with approval the Third Circuit decision in Novak v. Texada, Miller, Masterson & Davis Clinic, 514 So.2d 807 (La. 1987) which found that the administration of a flu shot did not fall within the scope of La. R.S. 40:1299.40 because it was a routine procedure not requiring written consent. The Second Circuit also cited the Third Circuit’s decision in Daniels v. State, through Department of Health & Human Resources, 532 So.2d 218 (La. App. 3d Cir. 1988) which held that the nonsurgical treatment of a closed wrist fracture was a routine medical procedure in which surgery was not involved and to which the informed consent statute did not apply.

Thus, in McDougal, the Second Circuit concluded that “the clearance of a patient for surgery and the recommendation that the patient should cease taking Plavix and aspirin seven to ten days prior to surgery is a routine, nonsurgical decision made on a daily basis. It is not a ‘medical or surgical procedure’ as contemplated in the LUCL to which the duty of informed consent applies.” Emphasis added. Thus the appellate court affirmed the trial court determination that the LUCL did not apply to the facts of this case and lack of informed consent was not an issue.

Plaintiffs often argue for the application of the LUCL requirements to physician decisions regarding selection of medications and other nonsurgical treatment decisions. This Second Circuit’s decision provides further support for limitation on the scope of the Louisiana Uniform Consent Law and its required disclosures. Where the challenged medical decision is a routine, nonsurgical decision such as the cancellation of a medication; or a decision to pursue nonsurgical treatment options, according to the Second and Third Circuits, physicians will not have to demonstrate compliance with the Louisiana Uniform Consent Law.

Of course there is no brightline as to what will be deemed a routine medical decision, and the materiality of risks of all treatment decisions must be assessed on a case by case basis. However, this Second Circuit opinion offers important clarification on the scope of the LUCL and its application in the clinic or non-operative setting.




Electing Portability – It’s Not Too Late to File

Posted in Estate Planning, Tax, and Probate Law


By Wendy B. Horton

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 was signed into law on December 17, 2010, and included a key provision – providing for “portability” between spouses of the unified credit. On January 2, 2013, the American Tax Relief Act of 2012 (“ATRA”), was signed into law, including a provision making portability a permanent feature.

Generally, portability allows a surviving spouse to elect to take advantage of any unused portion of the unified credit of his or her predeceased spouse, provided that the deceased spouse died on or after January 1, 2011. Thus, a surviving spouse will be provided a larger exclusion amount to be used for his or her own gift or estate tax purposes. The portable amount that can be used by a surviving spouse is referred to as the “deceased spousal unused exclusion amount” (“DSUE amount”).

Historically, the applicable exclusion amount, or the maximum dollar amount the unified credit will allow to be transferred tax free at a decedent’s death are as follows: $5,000,000 in 2011; $5,120,000 in 2012; and $5,250,000 in 2013.

Assume for example that Jack and Jill are married. In 2011, Jack makes multiple taxable gifts in an amount equaling $3,000,000. In 2013, Jack dies having no taxable estate and is survived by Jill. Jack is considered to have used only $3,000,000 of the $5,250,000 exclusion available in 2013. Thus, Jack has $2,250,000 remaining. A timely filed estate tax return with a portability election will allow Jill to use not only her entire $5,250,000, but also the remaining $2,250,000 from Jack. Thus, Jill will be able to transfer up to $7,500,000 tax free.

One caveat of portability is that in order for a surviving spouse to use the predeceased spouse’s DSUE amount, the executor or representative of the predeceased spouse’s estate must file a federal estate tax return and affirmatively elect portability. Although estate tax returns are not required to be filed unless a decedent’s gross estate exceeds the basic exclusion amount, for decedents dying on or after January 1, 2011, an estate tax return must be timely filed, even if no estate tax is due, in order to affirmatively elect portability.

Estate tax returns generally are required to be filed within nine months after the date of a decedent’s death, unless an executor claims the available six-month extension. An estate tax return filed solely for the election of portability must meet the same filing deadline. However, there is good news for executors of the estate of decedents dying in 2011, 2012, or 2013, who were not required to file an estate tax return and who in fact did not file an estate tax return – portability may still be elected even if the deadline for filing the estate tax return has passed.

In order to file an estate tax return electing portability, an executor can file the otherwise late return with a notation at the top which provides: “FILED PURSUANT TO REV. PROC. 2014-18 TO ELECT PORTABILITY UNDER § 2010(c)(5)(A).” The deadline for filing an otherwise late return filed in this manner is December 31, 2014.


Protection of Trademarks from Cybersquatters

Posted in Intellectual Property


By Bill Caughman

In 1999, the Internet Corporation for Assigned Names and Numbers (“ICANN”) adopted the Uniform Domain-Name Dispute-Resolution Policy (UDRP) which established a system for dispute resolution between owners of internet domain names and trademark owners. The UDRP allows a trademark owner to file a complaint with various administrative bodies, such as the National Arbitration Forum, by which the trademark owner asserts their rights and requests that offending domain names, including those held by cybersquatters, be either cancelled or transferred to the trademark owner as the rightful owner of a given trademark.

While the UDRP is certainly less expensive and less time consuming than formal litigation in court, the proceedings usually take many months and expenses can be substantial. In 2013, a new system for dispute resolution was implemented called the Uniform Rapid Suspension System (URS). This system has been expanding in use and coverage; only recently URS became applicable to .us top level domains. The URS is intended to provide certain trademark owners with an alternative to the UDRP. Under the URS, when a trademark owner files a complaint, the registrar of the domain name immediately locks the domain to prevent modification or transfer. The registrar will then provide notice to the domain owner of the complaint, and the domain owner has 14 days to file a response. If there is no response from the domain owner (which is frequent for cybersquatters), then the domain is immediately suspended. Once the domain is suspended, when a person enters the domain name into a search engine, they will be redirected to a URS placeholder page showing that the domain is suspended. This remedy is different from the UDRP where the domain can be terminated or transferred to the trademark owner, but it does shut down the offending site much faster, and the fees are typically less under the URS procedure.

There are some additional limitations of the URS process. A trademark owner desiring to use the URS must be the owner of a mark consisting of a word only, as opposed to a trademark on a design, symbol or other feature that is ordinarily protectable under trademark law. Additionally, the burden of proof under the URS is “clear and convincing” which is a higher standard than the “preponderance of evidence” standard under the UDRP.

For the right situation, the URS is another tool to help trademark owners protect their rights in the ever expanding world of internet domain names.


ONC Report on Surge in Use of Electronic Health Records (“EHR”)

Posted in Health Law

by Linda G. Rodrigue


Two recent studies published by the office of the National Coordinator for Health Information Technology (the “ONC”) suggest that the use of electronic health records among physicians and hospitals has greatly increased. The study is based on information collected in calendar year 2013.

According to ONC, approximately 78% of office-based physicians have adopted some form of electronic health record. Almost 50% of these record systems have advanced functionalities. Similarly, ONC reported that almost 60% of hospitals had adopted EHR systems with advance functional capabilities by 2013, a 400% increase since calendar year 2010.

The United States Department of Health and Human Services (“HHS”) believes that these findings are the result of the “meaningful use” program. Meaningful use is a program that incentivizes Medicare payments for using electronic technology in the performance of certain functions (for example, electronic prescribing). Meaningful use has been introduced in stages. Stage 1 involved more “in-house” electronic functionality, while Stage 2 addresses sharing information with other entities. There is still, according to HHS, a great need for improvement in Stage 2 implementation.

Karen DeSalvo, M.D., MPH, who heads the ONC, stated recently that HHS continues to focus on the goal of “an interoperable health system that enables nationwide health information exchange.”