On May 10, 2013, the Federal Circuit, sitting en banc, handed down its opinion in CLS Bank Int’l v. Alice Corp., No. 2011-1301, slip op. (Fed. Cir. May 10, 2013). The majority of the Federal Circuit judges agreed on little other than that the method and computer-readable medium claims involved in the dispute were patent ineligible. Essentially, Alice Corporation owned patents that the Federal Circuit found to be nothing more than abstract ideas based on use of escrow accounts and record keeping associated with the settling of transactions. However, the Court failed to agree on the reasoning as to why such claims were ineligible subject matter with the judges evenly split regarding the eligibility of comparable computer systems claims.
]]> The panel of ten Federal Circuit Justices was so fractured in their reasoning that the “decision” constitutes six separate opinions. In the most basic sense, the Judges agreed that prior Supreme Court precedent require that patent claims containing abstract ideas must have meaningful limitations. However, a group of five Judges (Lourie, Dyk, Prost, Reyna, and Wallach) rejected patent eligibility of the computer system claims, concluding that incorporation of the method into a computer program was an insufficient limitation. This opinion drew heavily from the Supreme Court’s language in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S.Ct. 1289, 1298 (2012), a case which ultimately invalidated a process patent dealing with the treatment of Crohn’s Disease by monitoring transformations occurring in the human patient’s body. In Mayo, the Court invalidated the patent through the use of a judicially created exclusion by ruling that the process was based on a law of nature. Although it was proposed that the Mayo claims contained other non-law of nature elements such as administering drugs and measuring the results, the court was unpersuaded, holding:[these] step[s] tells doctors to engage in well-understood, routine, conventional activity previously engaged in by scientists who work in the field. Purely “conventional or obvious” “[pre]-solution activity” is normally not sufficient to transform an unpatentable law of nature into a patent-eligible application of such a law. 132 S.Ct. at 1298.
With Mayo in mind, the Federal Circuit noted that routine and conventional steps are insufficient limitations to an otherwise patent ineligible subject matter (i.e., laws of nature, natural phenomena, and abstract ideas) to overcome the judicially created exclusion. Lourie Slip op. at 20-21. Since, computers are routinely adapted with software to perform all sorts of tasks, this opinion carries the implication that the inclusion of a computer within the claim is not a substantive limitation. Lourie Slip op. at 36-37. This implication seems to contradict long standing caselaw which has held that new computer software indeed creates a new computer. In re Alappat, 33 F.3d 1526 (Fed. Cir 1994). The opinion of the five Judges strongly denote their belief that recent Supreme Court decisions may have overturned Alappat and, in light of the possible overruling of Alappat, that the incorporation of a computer program into a computer, relying on an abstract idea, is not patent eligible. Lourie Slip op. at 37. If this viewpoint is allowed to stand, all computer programs, which at a basic level rely to some degree on one of the three judicially excluded criteria, may be excluded from patent protection.
A second group of four Judges (Rader, Linn, Moore, and O’Malley) were no less than horrified by the majority opinion. These Judges stressed that the scope of patent eligibility under 35 U.S.C. §101 is intended to be broadly interpreted while the judicially created exceptions are limited. In a dissenting-in-part opinion, these Judges cut to the chase about the potentially devastating outcome of their counterpart’s holding, stating:
[a]nd let’s be clear: if all of these claims, including the system claims, are not patent-eligible, this case is the death of hundreds of thousands of patents, including all business methods, financial system, and software patents as well as many computer implemented and telecommunications patents. Moore (dissenting-in-part) Slip op. at 2.
These Judges view the judicially created exceptions as being limited, especially when applied to a machine such as a computer. These judges would hold patent eligible a claim wherein a “computer plays a meaningful role . . . and the claim does not pre-empt virtually all uses of an underlying abstract idea.” Rader (concurring in part) Slip op. at 2. In the end, Judge Newman generally disagreed with all of the other nine judges by concluding that all the claims were patent eligible. His vote brought the vote for patent eligibility for the computer system claim up to five, resulting in an overall tie on the issue.
In conclusion, Chief Judge Rader of the Federal Circuit, in apparent frustration, criticized the Supreme Court for their decisions in various cases including Parker v. Flook, 437 U.S. 584 (1978), Bilski v. Kappos, 130 S.Ct. 3218 (2010), and Mayo. In a last adage, Chief Justice Radar advised: “When all else fails, consult the statute.” Radar (additional reflections) Slip op. at 2-3. Until a final decision on this matter is handed down by the Supreme Court, the status of computer system claims that contain judicially excluded subject matter (i.e., a majority of computer system claims) is completely up in the air.
All persons associated with non-public construction projects in Louisiana are affected by, and should be familiar with, the Louisiana Private Works Act. La. R.S. 9:4801, et. seq. (“PWA”). The two fundamental policies behind the implementation of the PWA summarized are:
The PWA was first enacted in 1981 and was based upon the work and recommendations of the official advisory law revision commission and, the law reform agency and legal research agency of the State of Louisiana – The Louisiana Law Institute. Over the last thirty years, numerous amendments and revisions to the PWA have resulted in piece-meal changes to certain provisions that lead to confusion, ambiguity, and potential traps for the unwary.
Recognizing the undesirable effects of the many revisions, the 2012 Louisiana Legislature has once again turned to the Louisiana Law Institute for its recommendations to simplify and better organize the provisions of the PWA.
]]> On February 15, 2013, the Louisiana Law Institute issued its report to the Legislature stating, “…to restore the integrity and in cohesiveness of the act, the law institute feels that more comprehensive review of the act as a whole is warranted, particularly with respect to the numerous changes that have been enacted over the last three decades.” Based upon the February report, the changes being considered are not expected to be “wholesale revisions” with “far-reaching substantive effects.” Rather, the focus will be to eliminate the ambiguities and inconsistencies resulting from the last thirty years of legislative revision.Presumably, upon completion of its study, the Law Institute is expected to provide recommendations for specific revisions to the PWA. The February report does not provide a comprehensive list of provisions being evaluated; however, a review of the eight questions set out in the report suggests that several revisions may be on the horizon.
The eight questions are:
1.) Should a contractor who has filed a timely Notice of Contract with proper surety bond attached be afforded a simple means of causing the cancellation of record of a Statement of Claim or Privilege?
2.) Should the notice provisions of the Act be consolidated in a central location and adjusted to better accomplish their intended purpose?
3.) Should a contractor under a construction contract of more than $25,000.00 be deprived of any privilege upon the immovable if he fails to file a timely Notice of Contract?
4.) Should language be added to the Act making explicit that a personal claim against an owner is extinguished if the claimant fails to take the necessary action to preserve his privilege?
5.) Should an outside time limitation be placed on the filing a Statement of Claim and Privilege when a timely Notice of Contract has been filed, just as an outside time limitation exists when no Notice of Contract is filed?
6.) Should the Act be amended to address the level of specificity that a claimant must include in a Statement of Claim or Privilege?
7.) Should the Act explicitly state that a contractor enjoys no right of subrogation to the claims and privileges of his own laborers?
8.) Are additional protections for homeowners warranted?
The PWA has been revised and amended in some fashion every year since it was first enacted thirty years ago. These changes have resulted in the unintended creation of ambiguity and uncertainty. The legislative recognition of these concerns and its request for further study from the Law Institute suggest that several clarifications and/or revisions to the PWA are on the horizon.
]]>Those health care providers and suppliers who are contemplating accepting donations of electronic health records software and training services should be aware of proposed amendments to the regulations that might protect such arrangements under the anti-kickback statute and the Stark physician self-referral law. The Department of Health and Human Services, Office of Inspector General (“OIG”) is proposing to amend the anti-kickback safe harbor pertaining to electronic health records (“EHR”) items and services found at 42 CFR 1001.952(y). The Centers for Medicare and Medicaid Services (“CMS”) is proposing the same amendments to the Stark physician self-referral exception pertaining to donations of certain EHR software and directly related training services found at 42 CFR 411.357(w). The OIG safe harbor and physician self-referral exception were promulgated in 2006 to protect certain arrangements involving the donation by permitted donors of interoperable electronic health records software or information technology and training services. Both proposed rules make the identical changes to the protections offered under the safe harbor and exception.
First, the proposed amendments would update the provision under which EHR software is deemed interoperable. Interoperable has been defined to mean “able to communicate and exchange data accurately, effectively, securely, and consistently with different information technology systems, software applications, and networks, in various settings, and exchange data such that the clinical or operational purpose and meaning of the data are preserved and unaltered.” Both CMS and the OIG consider interoperability to be an important concept to reduce the risk that parties might use the donated software and technology to capture referrals. Both considered that, if the donated technology is interoperable, the recipient would be able to use the technology to transmit EHR not only to the donor but to others, including competitors of the donor, and would not be “locked-in” to communications with the donor only.
]]> The current regulations provide that software is deemed to be interoperable if a certifying body “recognized by the Secretary” of HHS has certified the software within no more than 12 months prior to the date the software was donated to the recipient. The proposed amendments would modify this deeming provision to be in accord with the certification program for EHR technology by the Office of the National Coordinator (“ONC”) for Health Information Technology. The amendments will recognize that the ONC is responsible for recognizing certifying bodies that complete an authorization process established by the ONC. Thus, with the proposed amendments, a certifying body must be “authorized by the National Coordinator for Health Information Technology” rather than “recognized by the Secretary.”The proposed amendments would also modify the time period within which the software must have been certified, changing it from the current 12 months prior to the donation of the software. The ONC developed a regulatory process that is anticipated to occur over a two-year regulatory interval, so the change would bring the safe harbor and exception in line with that time period. The amendments propose to remove the 12-month time period and provide that software would be eligible for deeming to be interoperable if, on the date it is provided to the recipient, it has been certified to any edition of the EHR certification criteria identified in the then-applicable definition of Certified EHR Technology in 42 CFR Part 170. The 2013 applicable definition for Certified EHR Technology identifies both the 2011 and the 2014 editions of EHR certification criteria, while the 2014 definition identifies only the 2014 edition. The OIG and CMS are seeking comments on whether the 12-month period should be retained.
Second, the proposed amendments would delete the requirement that the donated software must contain electronic prescribing capability. The OIG and CMS considered that most EHR systems include an electronic prescribing component and referred to legislation enacted to address electronic prescribing, including the electronic prescribing incentive programs in place.
Third, the amendments propose to extend the sunset deadline for the safe harbor and the exception from December 31, 2013 to December 31, 2016, to coincide with the last year to receive a Medicare EHR incentive payment and to participate in a Medicaid EHR incentive program. Both the OIG and CMS are considering December 31, 2021 as an alternative sunset date to coincide with the end of EHR Medicaid incentives and asked for comments on the alternative date or whether some other sunset date should be considered.
Fourth, in response to comments that suggested abusive donations were being made, the proposed amendments would limit the scope of protected donors. The current safe harbor protects any donor that is an individual or entity that provides patients with health care items or services covered by a Federal health care program and submits claims or requests for payments for the items or services directly or through reassignment to Medicare, Medicaid, or other Federal health care programs and that otherwise meets the regulatory requirements. The Stark exception permitted donation by any Designated Health Service entity. The original proposals by the OIG and CMS would have limited the scope of protected donors to hospitals, group practices, prescription drug plan sponsors, and Medicare Advantage organizations. The proposed amendments would return to this limited scope of donors. The OIG and CMS are seeking comments on whether other individuals or entities with front-line patient care responsibilities should be included, such as safety net providers. They are also considering whether to retain the current definition of protected donors but to exclude certain suppliers of ancillary services, such as laboratory companies, durable medical equipment suppliers, and independent home health agencies. The proposed limitation on the scope of permissible donors is viewed as a means to prevent donations that subvert the intent of the safe harbor and exception by locking in referrals. The OIG and CMS also invited comments on what new or modified conditions could be added to achieve the goals of: 1) preventing the misuse of the safe harbor and exception that results in data and referral lock-in; and 2) of encouraging the free exchange of data in accordance with protections of privacy.
Finally, the preambles to the 2006 Final Rules for the safe harbor and exception defined the term “’software, information technology and training services necessary and used predominantly’ for electronic health records purposes” to include the following, by way of example: [i] interface and translation software; rights, licenses, and intellectual property related to electronic health records software; connectivity services, including broadband and wireless internet services; clinical support and information services related to patient care (but not separate research or marketing support services); maintenance services; secure messaging (e.g., permitting physicians to communication with patients through electronic messaging); training and support services (such as access to help desk services). Both the OIG and CMS declined the request to include this definition in the regulatory text but requested public input on the issue.
]]>Background of Louisiana Revised Statute 9:4815
Louisiana has a unique statute in its Private Works Act which requires owners to deposit retainage funds in an interest bearing escrow account for construction contracts over $50,000. While a number of other states have statutory provisions as to how much retainage may be withheld under a construction contract, Louisiana’s statute, which does not regulate those substantive terms, instead dictates how those funds are handled during the course of the project.
The statute, found at Louisiana Revised Statute 9:4815, was added to the Private Works Act by Act 638 of 2010. While the bill as originally introduced applied to all funds withheld from periodic payments by an Owner, the final version of the Act applies only to “retainage.”
The retainage statute applies to construction contracts over $50,000. It requires the owner to deposit funds withheld from periodic payments as retainage into an interest bearing escrow account.
The retainage statute primarily applies to commercial construction, as residential and industrial construction projects are generally included within the Act’s express exclusions for single family or double family residences and various industrial facilities.
The retainage statute requires that the escrow account be under the control of an escrow agent mutually agreeable to the owner and contractor and provides specific guidelines for when the disputed and undisputed retainage funds should be released following completion of the work.
Last, the retainage statute provides a qualified immunity for the escrow agent and financial institution where the escrow account is maintained.
Limited Application
Since its introduction in 2010, this escrow requirement has been largely ignored in practice, due in large part to the absence of any penalty or enforcement mechanisms.
Waiver
It has become common practice in construction agreements executed since 2010 for the parties to waive the escrow requirements of the Act. The question of whether or not the provisions of the retainage statute can be waived has been the subject of some debate. On one hand, the language of 9:4815 is imperative. It says that the retainage, “shall be deposited by the owner into an interest bearing account.” On the other side of the argument is the absence of any penalty or enforcement mechanism and the current state of Louisiana law, that the broader protections of the Private Works Act are not considered to be matters of public policy, and may be waived. There are no published decisions addressing this issue.
Prospective Amendments
In 2012, the author of Act 638 of 2010 introduced a bill that would have expressly dictated that the requirements of 9:4814 are not waivable (SB 340). He has prefiled a similar bill for the 2013 session, Senate Bill 137, which would prohibit waiver of the escrow requirements, but which would also raise the contract amount from $50,000 to $500,000.
It will be interesting to see whether SB 137 fares better in 2013 than did SB 340 in 2012.
The U.S. Citizenship and Immigration Services (“USCIS”) released a revised Employment Eligibility Verification form, Form I-9, on March 8, 2013. The revised form contains formatting changes, the inclusion of additional data fields for employee email addresses and telephone numbers, and improved instructions. Employers must begin using the new form by May 7, 2013, but should not complete a new Form I-9 for current employees if a properly completed Form I-9 is already on file. The new Form I-9 can be identified by the date 03/08/13 in the bottom left corner of the document. Failure to use the revised Form I-9 after May 7, 2013 is an administrative violation that may result in penalties. The fines for paperwork violations range from $110 to $1,100 per violation.
The number of Form I-9 audits has increased dramatically over the past decade, rising from only three audits in 2004, to 500 audits in 2008, and 3,004 audits in 2012. I-9 audits may result from unhappy former employees complaining to the U.S. Immigration and Customs Enforcement (“ICE”). ICE may also target employers connected to the U.S. infrastructure, such as power plants and food-service businesses.
Employers are required to complete a Form I-9 for each new employee hired in the United States in order to verify the identity and employment authorization of the individual. Form I-9 is not filed with USCIS or any other government agency. Rather, an employer must retain Form I-9 for three years after the employee’s date of hire or one year after the date the employment ends, whichever is later. An employer’s I-9 Forms are subject to inspection by the Department of Homeland Security, the Department of Labor, and the Office of Special Counsel for Immigration-Related Unfair Employment Practices.
Employers can download the new form and instructions here.
The program will provide an in-depth briefing on closely-held, private company mergers and acquisitions. Attendees will learn about business and legal challenges of an exit strategy, key issues to be aware of, and the risks and rewards in preparing for, marketing, structuring and executing an exit sale of a business.
Speakers include Kean Miller attorneys Dean Cazenave, Blane Clark, Linda Clark, Andrew Goodman, Ed Hardin, Matthew Meiners, Mark Mese and Carey Messina.
Click here for the invitation.
If you are interested in attending, please RSVP to rsvp@keanmiller.com or 225.389.3753.
]]>The U.S. Fifth Circuit Court of Appeals dealt a blow to secured creditors in a recent opinion affirming a successful “cramdown” reorganization plan in a commercial real estate (“CRE”) case. See In re Village at Camp Bowie I, L.P., --- F.3d --- (5th Cir. Feb. 26, 2013), 2013 WL 690497. The panel opinion in Bowie allowed a debtor in CRE bankruptcy case to intentionally delay paying trade debt that it had cash available to pay and to classify those trade creditors as “impaired” under Chapter 11 – thus giving a class of friendly creditors the ability to vote for the debtor’s plan of reorganization. The court expressly rejected the argument that “artificially impaired” creditors that a debtor could pay in full, like the trade creditors in Bowie, should not be allowed to vote on a Chapter 11 plan. The result in Bowie was a confirmed plan based on the vote of unsecured creditors owed $60,000 over the objection of the fully secured creditor owed $32 million.
In Bowie, the debtor financed the acquisition and development of land in Fort Worth (the “Property”) with equity capital and short-term promissory notes (the “Notes”). The Notes were secured by a first mortgage on the Property. The debtor’s development of offices and retail did not do as well as planned. After a series of modification agreements and forbearance agreements to extend the due dates for the Notes, the then-current holder of the Notes initiated foreclosure proceedings on the Property. The debtor filed its petition for relief under Chapter 11 of the Bankruptcy Code one day before the scheduled foreclosure sale, which stayed the foreclosure proceedings.
The secured creditor urged its “artificial impairment” and “good faith” arguments on appeal to the Fifth Circuit, which had not squarely addressed the issue before. The Fifth Circuit noted that other circuits are divided over the question of “whether §1129(a)(10) draws a distinction between artificial and economically driven impairment.” For example, the Eight Circuit recognizes impairment only to the extent that it is driven by economic need. See In re Windsor on the Rivers Associates, Ltd., 7 F.3d 127 (8th Cir. 1993). Stated differently, a claim is not really “impaired,” and thus not eligible to vote on the plan, if the impairment is a result of the debtor’s discretion rather than economic necessity. On the other hand, the Ninth Circuit does not distinguish between discretionary and economically driven impairment. See Matter of L & J Associates, 995 F.2d 940 (9th Cir. 1993).
In Bowie, the Fifth Circuit held that the “impairment” requirement in 11 U.S.C. §1129(a)(10) does not distinguish between an impairment created at the debtor’s discretion and impairment dictated by economic necessity. The Fifth Circuit expressly rejected the secured creditor’s argument and the Eighth Circuit’s view of what qualifies as an “impaired claim.” As a result, a debtor, in the Fifth Circuit, may purposefully delay paying unsecured creditors for the purpose of creating an accepting “impaired” class, despite having enough cash on hand to pay them at confirmation.
The Bowie opinion does have something positive for secured creditors dealing with undersecured single asset real estate (“SARE”) cases. Footnote 30 to the Bowie opinion states that in a SARE where the creditor is undersecured, the creditor’s deficiency claim should be placed in the same class as the debtor’s unsecured debt. Debtors often argue that a lender’s deficiency claim is different than other unsecured debt and should be place in its own class, thus improving their chances of having at least one class of creditors vote in favor of a proposed plan. Footnote 30 in Bowie, however, gives an undersecured creditor good support for the argument that its deficiency claim should be classified with the other unsecured claims, which may give that creditor the opportunity to control the unsecured class’s vote on the plan and prevent the debtor from cramming down an unwanted plan under 11 U.S.C. §1129(a)(10).
“What is in a name? That which we call a rose. By any other name would smell as sweet . . .”
-William Shakespeare, Romeo and Juliet
Roses aside, classifying someone as an “employee” or an “independent contractor” (or rather misclassifying them) can have significant effects. The misclassification of employees as independent contractors is the focus of a U.S. Department of Labor Wage and Hour Division enforcement initiative. The DOL and the IRS have joined forces and signed a memorandum of understanding that will allow the sharing of information across the two agencies in an effort to improve compliance. More importantly, the Louisiana Workforce Commission has likewise entered into an agreement with the DOL to establish “a collaborative relationship to promote compliance..." For more information on the enforcement initiative and other states who have signed similar agreements with the DOL click here.
The potential cost of misclassification of employees as independent contractors can be high. For example, the DOL recently obtained a $1.3 million consent judgment against a technology company that had misclassified employees as independent contractors. So, what is in a name (or classification) can be very important.
On January 30, 2013, the U.S. Department of the Treasury, the Department of Labor, and the Department of Health and Human Services (the “Departments”) issued proposed regulations to amend to exempt group health plans established or maintained by certain “religious employers” with respect to the Affordable Care Act ("ACA") requirement to cover contraceptive services. The ACA currently requires non-exempt, non-grandfathered group health plans to provide, without cost-sharing by employees, certain preventive health services including contraceptive services, sterilization, and abortion services. In response to concerns that this requirement violates religious beliefs of employers, the Departments have promulgated proposed amendments to the regulations.
The proposed regulations amend the criteria for the religious employer exemption. The current definition of “religious employer” requires that the employer:
The proposed regulations revise the definition of "religious employer" to eliminate the first three prongs listed above, but maintain prong number four. Section 6033 of the Internal Revenue Code refers to churches, their integrated auxiliaries, and conventions or associations of churches, as well as to the exclusively religious activities of any religious order. The Departments have represented that with the revised definition there will “no longer be any question as to whether group health plans of houses of worship that provide educational, charitable, or social services to their communities qualify for the exemption.”
The purpose of the accommodation is to provide women with contraceptive coverage without cost- sharing and without the eligible organization having to contract, arrange, or provide contraceptive coverage. Instead, the health insurance issuer providing group health coverage maintained by an eligible organization would assume sole responsibility to provide contraceptive coverage without cost-sharing, premium fee, or other charge to plan participants and beneficiaries. For this accommodation to apply, the eligible organization presents its health insurance issuer with a self-certification specifying the contraceptive services that the eligible organization will not establish, maintain, administer, or fund coverage. The health insurance issuer will automatically enroll plan participants in separate individual health insurance policies that cover the recommended contraceptive services and assume all costs associated with providing that separate contraceptive coverage.
The Departments are seeking comments to the proposed regulations on or before April 8, 2013. The proposed regulations are intended to become final before August 1, 2013.
Practically speaking, a houseboat is still a vessel. But the same is not true for every floating house. And just when we thought that the highest tribunal in the land had a fast hold on its commitment to expanding the definition of a vessel, the Supreme Court issues a holding that not only creates confusion by curtailing its existing definition, but also indicates a new method for determining if a floating structure is, in fact, a vessel.(1) Owners of residences afloat throughout the United States admiralty jurisdiction, now wonder, “Is my houseboat a vessel?” Houseboat owners, you are not alone! Maritime attorneys and judges alike try to answer the same question secondary to the Supreme Court’s recent contribution to the ever-developing jurisprudence attempting to define a vessel.
The controversial subject of the Supreme Court’s latest vessel status pronouncement arose in 2006 when Fane Lozman docked his 60’x 12’ floating home in a marina owned by the City of Riviera Beach, Florida. Lozman’s abode — equipped with French doors on 3 sides, a sitting room, bedroom, closet, kitchen, and an office — remained at the Riviera Beach Marina until the City, despite the absence of admiralty jurisdiction, filed an in rem suit against the vessel, purchased the home at auction, and destroyed it. The district court and the 11th Circuit Court of Appeals both found admiralty jurisdiction to exist holding that the home was a vessel. The Supreme Court reversed the judgment of the Court of Appeals finding that Fane Lozman owned nothing more than a floating house.
The Rules of Construction Act defines a “vessel” as including “every description of water craft or other artificial contrivance used, or capable of being used, as a means of transportation on water.”(2) The quandary that has befuddled jurists for over 150 years is determining which floating structures fall within the definition. And because there is no all-encompassing list of items which are vessels, the debate continues. In fact, even the Supreme Court has reached dissimilar vessel status conclusions for similar structures based on individual characteristics and design.(3)
Justice Breyer’s opinion — alluding to familiar fictional fables — sets forth obvious examples of artificial contrivances that are not vessels, including Pinocchio’s whale, a plastic dishpan, and a wooden washtub. But here’s the rub-a-dub-dub: a floating structure possessing physical characteristics, which lead a reasonable observer to conclude that it was designed to a practical degree for carrying people or things over water is — in the opinion of the U.S. Supreme Court — a vessel. The Court’s holding, in addition to considering the many non-vessel-like-qualities of Fane Lozman’s floating house, focused on the practical possibilities of the structure’s use as a means of transportation on water.(4) But for its ability to float, Lozman’s house differed quite significantly from an ordinary houseboat as it had no steering mechanism, no propulsion, a rectangular bottom, and no capacity to generate or store electricity.
And how is the Supreme Court’s unexpected narrowing of that which constitutes a vessel going to preserve or alter the maritime’s industry vessel status quo? Certainly, a reasonable observer, looking at a Single Point Anchor Reservoir would not consider it practically designed for transporting people or things over water.
___________________________________________________
(1) Lozman v. City of Riviera Beach, Fla., 133 S.Ct. 735 (2013).
(2) 1 U.S.C. § 3.
(3) See Evansville & Bowling Green Packet Co. v. Checo Cola Bottling Co., 271 U.S. 19, 46 S.Ct. 379, 70 L.Ed. 805 (1926) (Holding that a floating wharf boat used to transfer cargo was not a vessel); See Also Stewart v. Dutra Constr. Co., 543 U.S. 481, 125 S.Ct. 1118, 160 L.Ed. 2d 932 (2005) (Holding that a floating dredge used to remove silt from the ocean floor was a vessel).
(4) Stewart, 543 U.S. at 496.
The U.S. Equal Employment Opportunity Commission (“EEOC”) is seeking public input into a Quality Control Plan it is developing as part of its Strategic Plan for the fiscal years 2012-2016. The Strategic Plan provides the framework by which the EEOC accomplishes its mission to stop and remedy unlawful employment discrimination. The Quality Control Plan will revise the criteria by which the EEOC evaluates the quality of its investigations and conciliations. Criteria currently used by the EEOC measure whether a charge has been correctly categorized and filed within the agency’s data system, but do not measure whether charges are appropriately reassessed on a timely basis, how efficient and timely the investigation has been, what the investigation consisted of, or whether the investigator correctly applied the law to the facts of the charge. The EEOC would like recommendations for criteria to assess the quality of its investigations or conciliations or general recommendations for improving the quality of its intake process, investigations, and conciliations.
Suggestions must be submitted to the EEOC by 5:00 p.m. EDT on Friday, March 1, 2013 and should be submitted electronically to strategic.plan@eeoc.gov or by mail at Executive Officer, Office of the Executive Secretariat, U.S. Equal Employment Opportunity Commission, 131 M Street, NE, Washington, D.C. 20507. Submissions should include a contact e-mail and/or mailing address. Submissions will be reviewed for possible inclusion in a future EEOC Commission meeting in Washington, D.C. and if a submission is selected, the author or a representative will be invited to testify before the Commission.
The EEOC is responsible for enforcing federal laws prohibiting employment discrimination. These laws include Title VII of the Civil Rights Act of 1964, the Pregnancy Discrimination Act, the Equal Pay Act of 1963, the Age Discrimination in Employment Act of 1967, and Title I of the Americans with Disabilities Act of 1990.
The Occupational Safety and Health Administration (OSHA) is seeking public comments regarding a proposal for a new online whistleblower complaint form. The form, which would allow whistleblowers to electronically submit whistleblower complaints directly to OSHA, is part of OSHA’s proposal to revise the information collection requirements for handling retaliation complaints filed with OSHA under various whistleblower protection statutes. The proposal may be accessed electronically here, and comments are due on or before March 18, 2013.
OSHA is responsible for investigating alleged violations of whistleblower provisions contained in a number of statutes. These statutes include:
The electronic form expands the methods in which a whistleblower may submit a complaint to OSHA under one of these statutes – either by submitting the form electronically directly through the Internet; or by downloading, completing, and submitting the form to OSHA by fax, mail, or hand-delivery. The proposed form will enable workers to electronically submit whistleblower complaints directly to OSHA 24-hours a day. Last year, a record number of whistle-blower cases were filed and resolved by OSHA. This was after a series of initiatives were launched during the 2012 fiscal year to strengthen OSHA’s whistleblower protection programs. It is believed that the current proposals, if accepted and initiated in 2013, will result in an even greater number of OSHA whistleblower claims being filed.
]]>In a recent Tax Court case, a law firm was denied a current deduction for litigation expenses advanced on behalf of its contingent fee clients. The Tax Court held that the expenses were in nature of loans, and not ordinary and necessary business expenses that could be deducted when paid (advanced), even if there was low likelihood of reimbursement. At issue in the case were both expenses for contingency fee cases with individual clients as well as class action cases. The Tax Court found the cost advances in both types of cases to be loans and not currently deductible. With respect to the contingency fee cases with individual clients, the taxpayer had a system for classifying cases as high risk vs. low risk and would only deduct the advances on the higher risk cases. Only the advances for the low risk cases were booked as loans. The Tax Court found that there was a significant likelihood for reimbursement of the expenses advanced and stated that a low likelihood of recovery does not justify deductibility when advanced. With respect to the class action cases, the taxpayer argued that advanced expenses in class action cases were not loans and were therefore deductible because expense awards required court approval and/or there was “no identifiable obligor” until judgment was entered. The Tax Court rejected this argument on the basis that the taxpayer was entitled to reimbursement of those expenses from class members under common-fund doctrine.
(Humphrey, Farrington & McClain, P.C. v. Commissioner, (2013) TC Memo 2013-23, 2013 RIA TC Memo ¶2013-23).
]]>February 5, 2013, the U.S. Department of Labor issued its final rule rolling out new amendments to the FMLA regulations that correspond with military related leaves of absence. The FMLA was amended in 2008 and 2010 to provide leave rights for military families. The amended regulations implement changes made to the FMLA. In addition, the prior FMLA regulations included appendices with model forms. The appendices were removed from the revised regulations to allow the DOL greater flexibility to make non-substantive changes to the forms. Although the forms will no longer be in the regulations, they will still be available from the DOL. You may need to amend your current practices, posters, and/or your employee handbooks to comply with the new regulations. The new regulations will take affect March 8, 2013.
]]>
In a unanimous 3-0 decision, on January 25, 2013, the U.S. Court of Appeals for the D.C. Circuit Court held that President Obama’s three recess appointments to the National Labor Relations Board exceeded his Constitutional authority.
Articles on this decision can be found here, and here.
The decision calls into question all of the Board’s rulings and orders issued following the recess appointments. The Supreme Court may ultimately have the last say. Stay tuned.
]]>