As discussed in the recent New York Times article, federal and state officials, many facing record budget deficits, are starting to aggressively pursue companies that try to pass off regular employees as independent contractors.

President Obama's 2010 budget assumes that the federal crackdown will yield at least $7 billion over 10 years.  More than two dozen states also have stepped up enforcement, often by enacting stricter penalties for misclassifying workers.  This effort is intended to reign in what regulators believe is a trend among companies to cut costs by classifying regular employees as independent contractors, though they often are given desks, phone lines and assignments just like regular employees. Moreover, the experts say, workers have become more reluctant to challenge such practices, given the tough job market.

To determine if you or your company is complying with the rules and regulations as applicable to independent contractors, please call your attorney.  

In testimony before the Senate Appropriations Subcommittee on Interior and Related Agencies on March 3, 2010, Administrator Lisa Jackson of the Environmental Protection Agency indicated that EPA plans to move forward with adopting the Greenhouse Gas (“GHG”) Tailoring Rule (74 Fed.Reg. 55,292) later this month.  The Tailoring Rule is intended to ameliorate the impact of GHGs becoming “regulated pollutants” under the Clean Air Act Prevention of Significant Deterioration and Title V programs, which would otherwise be fully triggered by the enactment of another EPA proposed rule concerning GHG emissions from cars and light duty trucks. (74 Fed.Reg. 49,454)

The primary GHGs are carbon dioxide (‘CO’), methane (‘CH4”) and nitrous oxides (“N2O”). To put these on an equal footing for purposes of comparison of their global warming potential, they must be converted to carbon dioxide equivalents. The common unit is referred to as a carbon dioxide equivalent or CO2e. While methane and nitrous oxides are emitted in lesser quantities than CO2, they have a much higher global warming potential. To convert to tons CO2e, use by the factors below (all in metric tons):

• 1 ton of carbon dioxide = 1 ton CO2e
• 1 ton of methane (CH4) = 23 tons CO2e
• 1 ton of nitrous oxide (N2O) = 310 tons CO2e

Thus, sources emitting 75,000 TPY of CO, 3,260 TPY methane, or 242 TPY of nitrous oxide, or any combination of these that totals 75,000 TPY CO2e will be subject to the PSD requirements of the tailoring rule at the outset (all in metric tons).

Administrator Jackson indicated in response to questions from Senator Lisa Murkowski of Alaska that EPA is considering adopting regulations under the New Source Performance Standards for GHGs from electric power plants and perhaps for other sources later. She hinted that these control rules would likely affect sources at a threshold of somewhere between 50,000 and 75,000 TPY. Murkowski quizzed the Administrator concerning why EPA is moving towards regulation of GHGs if she favors Congressional legislation to address GHGs. Jackson responded that the approach under the Tailoring Rule will not be inconsistent as EPA is likely to have a significant role in regulating GHGs under any Congressional action. She also indicated that EPA was required to address whether GHGs endanger public health and welfare pursuant to the United States Supreme Court decision in Massachusetts v. EPA (127 S.Ct. 1438)(2007).
 

The February 10, 2010 Federal Register contains a notice of EPA's final decision that the Baton Rouge ozone nonattainment area “has attained the 1-hour ozone National Ambient Air Quality Standard (NAAQS)." (The Baton Rouge area consists of the parishes of Ascension, East Baton Rouge, Iberville, Livingston, and West Baton Rouge.) EPA found that the ambient monitoring data for 2006-2008 demonstrated attainment and noted there were no exceedances of the standard in 2009. Although this 1-hour ozone standard was revoked in 2005 and replaced with a more stringent 8-hour standard, some of the SIP requirements associated with the old 1-hour standard were continued under the Clean Air Act’s “anti-backsliding” provisions. The EPA action, known as a "Clean Data Policy Determination," formally suspends several requirements associated with the Louisiana Department of Environmental Quality’s (“LDEQ’s”) State Implementation Plan (“SIP”) as long as the area continues to achieve the 1-hour standard. These suspended requirements include “a severe attainment demonstration, a severe reasonable further progress plan (RFP), applicable contingency measures plans, and other planning State Implementation Plan (SIP) requirements related to attainment of the 1-hour ozone NAAQS.”

The January 5, 2010 Guidance referred to by EPA clearly stated that once an area meets either the old 1-hour ozone standard or the new 8-hour ozone standard, the obligation to have a Section 185 fee program is discontinued. Because the Clean Data Policy Determination in the February 10th Federal Register confirms that the Baton Rouge Area has met the 1-hour standard, it is expected that EPA will soon make a determination that no Section 185 program is needed. Such a decision would avoid a significant adverse economic impact to the community.

It should be noted that the 5-Parish Baton Rouge Area has also achieved attainment with the 8-hour ozone standard and the LDEQ also submitted a request for a Clean Data Policy Determination to the EPA for that 8-hour standard, thus providing further support for discontinuation of any requirement to adopt a Section 185 fee program. It is expected that EPA will soon propose such a determination for public comment. LDEQ also submitted a request to EPA last August for a determination that the Baton Rouge Area should be redesignated to full attainment with existing ozone standards. The full redesignation requires not only a Clean Data determination, but also approval of a maintenance plan to ensure continued attainment.

The EPA notice also indicated that the existing requirements for nonattainment new source review (“NNSR”) “may change after the area is redesignated and has an approved maintenance plan.” EPA indicated that at that time, the Louisiana Prevention of Significant Deterioration (“PSD”) requirements would apply within the area in lieu of the NNSR requirements. EPA is likely to propose full redesignation of the area to attainment within the next few months.

EPA and LDEQ are subject to a pending lawsuit filed by the Louisiana Environmental Action network (“LEAN”) in the U.S. District Court for the District of Columbia last year arguing that one or both of the agencies should impose a Section 185 fee program, a 1-hour severe NNSR program, and other requirements of the old 1-hour standard on sources within the Baton Rouge Area. The Baton Rouge Chamber of Commerce, the Louisiana Chemical Association, and the Louisiana Mid-Continent Oil and Gas Association have moved to intervene in that lawsuit.

The EPA Federal Register notice of the Clean Data Policy Determination for Baton Rouge is available here.

On January 27, 2010, the SEC voted 3-2 to issue an interpretive guidance “on existing SEC disclosure requirements as they apply to business or legal developments relating to the issue of climate change.” Chair Mary Shapiro emphasized that the interpretive release is not intended to create new legal requirements, but is to clarify the requirements already applicable for reporting material risks on public disclosure statements. She was careful to avoid arguments on the science, stating: “We are not opining on whether the world's climate is changing, at what pace it might be changing, or due to what causes. Nothing that the Commission does today should be construed as weighing in on those topics."

• Impact of Legislation and Regulation: When assessing potential disclosure obligations, a company should consider whether the impact of certain existing laws and regulations regarding climate change is material. In certain circumstances, a company should also evaluate the potential impact of pending legislation and regulation related to this topic.

• Impact of International Accords: A company should consider, and disclose when material, the risks or effects on its business of international accords and treaties relating to climate change.

• Indirect Consequences of Regulation or Business Trends: Legal, technological, political and scientific developments regarding climate change may create new opportunities or risks for companies. For instance, a company may face decreased demand for goods that produce significant greenhouse gas emissions or increased demand for goods that result in lower emissions than competing products. As such, a company should consider, for disclosure purposes, the actual or potential indirect consequences it may face due to climate change related regulatory or business trends.

• Physical Impacts of Climate Change: Companies should also evaluate for disclosure purposes the actual and potential material impacts of environmental matters on their business.
   

See SEC Press Release here. 
 

On January 22, 2010, President Obama signed a law which allows taxpayers to claim a charitable deduction in the 2009 tax year for cash donations made through March 1, 2010 for the relief of victims in areas affected by the January 12, 2010 earthquake in Haiti. The IRS notice on this new law indicates that cash contributions eligible for the deduction against last years taxes include contributions made by text message, check, credit card or debit card. The law gives the taxpayer the option of deducting the cash contribution on his or her 2009 return or his or her 2010 return, but not both. The law does not change any of the other rules applicable to charitable donations such as the percentage limitations, the requirement that the charity be a qualified charity or the fact that the taxpayer must itemize in order to benefit from the deduction.

Each taxpayer should look at his or her own individual situation to determine whether or not the deduction should be claimed against 2009 income or 2010 income. Generally, the sooner the deduction the better but the taxpayer should consider his or her income in each year, tax rate in each year, and applicability of the itemized deduction phase out which is eliminated in 2010.

Further information regarding the deduction for Haiti earthquake relief donations and the identification of possible qualified charities can be found on the IRS website.
 

In the January 20, 2010 Louisiana Register, the Office of Conservation, Louisiana Department of Natural Resources issued a Notice of Intent to amend Statewide Order 29-B to incorporate new rules for the evaluation and remediation of groundwater conditions at exploration and production sites.

The proposed rules can be found at this link.   As part of the proposal, Conservation has published a draft manual entitled “Exploration and Production Waste Site Evaluation and Remediation Procedures Manual” or “SERP Manual.”   A copy of the SERP Manual can be found here. 

Conservation will accept comments on the proposal through March 8, 2010.   A public hearing on the proposal is scheduled for March 1, 2010, at 9:00 a.m. (CST).   Anyone with interests involving energy exploration and production sites should carefully review the proposal.

During the past few years, the Louisiana Legislature has adopted many “green” initiatives as part of climate and energy policies. The state has placed a strong emphasis on increasing both renewable energy generation and energy efficiency. The following is a list of some of these important initiatives:

• The Louisiana Renewable Energy Development Act allows Grid Tied Net Metering systems throughout the state, which allows electric utility customers, who wish to install a net metering facility, to reduce their monthly electricity bill by using electricity that is generated from solar, wind, hydroelectric, geothermal, or biomass resources. See La. R.S. 51:3061-51:3063 (2003).
   

• The Louisiana Biofuel Standard requires all gasoline to contain two percent ethanol and that two percent of all diesel must be biodiesel. The standard is set to go into effect six months after the time when the state has either (i) 50 million gallons of ethanol in annual production or (ii) 10 million gallons of biodiesel. See La. R.S. 3:4674, 3:4674.1, and 3:3712 (2006).

• Wind and Solar Energy Tax Exemptions provides an individual income tax credit of up to for the installation of a wind or solar energy systems on residential property, which may be carried forward for 10 tax years. According to “Green Scene” magazine, this is one of the most progressive pieces of legislation in the country. The credit shall be equal to 50% of the first $25,000 dollars of the cost of each wind energy system or solar energy system, including installation costs. It applies to a wind or solar system that is purchased and installed on or after January 1, 2008. The credit may be used in addition to any federal tax credits earned for the same system. See LAC La. R.S. 47:6030. (2007). In addition, equipment used for solar power is exempt from property taxation. See La. R.S. 47:1706.

• The Louisiana Geologic Sequestration of Carbon Dioxide Act establishes a comprehensive regulatory program for the control of injection, storage, and use of carbon dioxide under the auspices of the Office of Conservation within the Department of Natural Resources (DNR). The act further establishes liability limits for operators with transfer of liability for storage operations to the Geologic Storage Trust Fund (run by the state) after a specified time. Finally, the act provides authority for expropriation of pipeline servitudes, storage facilities and other associated facilities necessary for carbon sequestration operations upon a determination of public convenience and necessity. See La. R.S. 30:1101-30:1111 and La. R.S. 19:2 (2009).

• Advanced Biofuel Industry Development Initiative, has been described as one of the most comprehensive and far-reaching biofuels development programs in the nation. Called the “field to pump” strategy, it creates pilot programs and incentives. It creates two pilot programs – one for Advanced Biofuel Variable Blending Pumps which will involve blending of fuels with advanced biofuel percentages between 10 and 85 % until January 1, 2012. During the pilot, the Louisiana Department of Agriculture and Forestry (LDAF) will monitor the equipment used to dispense the ethanol blends to ascertain that the equipment is suitable and capable of producing accurate measurement. The second pilot calls for trial use of hydrous ethanol blends of E10, E20, E30 and E85 in motor vehicles specifically selected for test purposes until January 1, 2012. During this period the LDAF will monitor the performance of the motor vehicles. An income tax credit of ten cents per gallon of advanced biofuel is available to qualified small advanced biofuel manufacturing facilities. The credit applies only to the first ten million gallons of advanced biofuel produced in a tax year and expires on December 31, 2012. The act requires state agencies to purchase/lease only vehicles capable of using alternative fuels. Finally it provides a pricing discount for members of any governmental body, state educational institution, or instrumentality of the state on the price of E20, E30 or E85 advanced biofuel at a price equal to 15% less per gallon than the price of unleaded gasoline for use in any motor vehicle.

• Alternative Fuel Vehicle Incentives provide an incentive to persons or corporations to invest in qualified clean-burning motor vehicle fuel property by allowing credits against income tax liability, which equal fifty percent of the cost of the qualified clean-burning motor vehicle fuel property. See La. R.S. 47:6035 (2009).

• The Green Jobs Tax Credit provides a corporate or income tax credit for qualified capital infrastructure projects in Louisiana that are directly related to industries including but not limited to the energy efficient and advanced drive train vehicle industry and the biofuels industry. The tax credit is worth up to $1 million per state-certified green project, calculated on the base investment costs of the project, for up to a total of $5 million per year. See La. R.S. 47:6037 (2009).

• Sustainable Energy Financing Districts, authorizes “creation of sustainable energy financing districts by local governmental subdivisions and provides for issuance of bonds and property assessment programs for solar and energy efficiency projects.” This will allow local governments and subdivisions to incur debt for the purposes of providing these “energy financing districts” with necessary funds to cover the cost of energy efficiency improvements or renewable energy improvements. These loans are made directly by the district to the home or property owner, and can be paid back over a twenty year period. Property owners can even make arrangements to pay back loans through its payment of annual property taxes. See La. R.S. 33:130.790 – 793 (2009).

In addition to these legislative efforts, Governor Bobby Jindal issued a green Executive Order in 2008 which, among other things, required the Division of Administration to set energy efficiency goals for state facilities, office buildings; required each department of the executive branch to adopt a program to reduce solid waste and adopt recycling programs; directed the Division of Administration to review its purchasing practices to ensure 100% compliance with existing state requirements related to energy conservation, to adopt best energy purchasing practices and to develop or increase standards for such products as appliances, light bulbs, smart chargers, and computers using Energy Star as a minimum standard. See Executive Order BJ-2008-8.

In 2007, the Louisiana Public Service Commission developed a “Geaux Green” program whereby customers of regulated utilities can choose to purchase green power in blocks from their local utilities. Such power is generated from renewable fuels (Louisiana agricultural by-products such as rice hulls and bagasse) and is priced somewhat higher than power from traditional fuels. The cost is $2.25 per month per 100 kilowatt-hours (kWh) of electricity. A typical household uses from 1000 to 1500 kWh per month. A customer can choose to purchase only 100 kWh or any multiple of 100. Thus far, Entergy has been the only utility to offer the program; however, SWEPCO and CLECO are working with potential renewable fuels suppliers and may join.

The Louisiana Department of Natural Resources (LDNR) manages two long-standing programs that have been successful at promoting real energy efficiency measures. The first of these, the Home Energy Rebate Option or “HERO” is a LDNR program that provides cash rebate payments to Louisiana residents who have made energy efficiency improvements of 30% or more - currently applicable only to existing homes. Since its inception in 1999, the HERO program has awarded more than 17,000 grants valued at over $24 million. LDNR estimates a savings of 1529 kilo tons of CO2, over 2,000 tons of NOx reduction and over 3,000 tons of SO2 reduction. The latter program, the Home Energy Loan Program (HELP) provides home owners the ability to obtain 5-year loans to improve the energy efficiency of their existing homes. LDNR subsidizes one half of the financing for the energy efficient improvements, up to $6,000, at a low interest rate to participating lenders.

Assistant Attorney General Lanny A. Breuer of the Criminal Division of the Department of Justice (DOJ) and U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced on December 15, 2009 the expansion of Medicare Fraud Strike Force teams to Baton Rouge, Brooklyn, Tampa in the fifth, sixth and seventh phases of a targeted criminal, civil and administrative effort against individuals and health care companies that fraudulently bill the Medicare program.

Since the inception of Strike Force operations in March 2007 – Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three), Houston (Phase Four), and Brooklyn (Phase Five) – the Strike Force has obtained indictments of more than 460 individuals and organizations that collectively have falsely billed the Medicare program for more than one billion dollars. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

During the announcement of the expansion to these three cities, the DOJ also commented on five indictments that were unsealed on December 15th in Miami, Detroit and Brooklyn, following the arrests of twenty-five individuals in Miami, four individuals in Detroit and one in Brooklyn. In addition, Strike Force agents also executed four search warrants at businesses and homes in Coconut Creek, Fla.; Miami and Brooklyn.

The DOJ press announcement also noted that individuals charged in the indictments that were unsealed were accused of various Medicare fraud crimes, including conspiracy to defraud the Medicare program, conspiracy to launder money, money laundering, criminal false claims, making false statements and receiving kickbacks.

According to the DOJ’s charging documents, the defendants participated in schemes to submit claims to Medicare for products and services that were in fact medically unnecessary and oftentimes, never provided. In the Detroit cases, defendants are alleged to have participated in a scheme whereby they paid pay kickbacks to patients who received instructions from the clinic owners and patient recruiters to feign symptoms to justify expensive testing, including nerve conduction studies. In Brooklyn, the two defendants are alleged to have billed Medicare for durable medical equipment, including expensive shoe inserts reserved for diabetes patients, when in fact much cheaper and over-the-counter shoe inserts were provided to beneficiaries who often didn’t need them. In Miami, 15 individuals, including doctors and nurses, are charged in connection with fraudulent claims to Medicare for home health services. In another case in Miami, individuals are charged for their various roles in running a medical clinic that purported to provide injection and infusion treatments to HIV/AIDS patients and submitted fraudulent claims Medicare for such services, which were often medically unnecessary and/or never provided.

Collectively, the DOJ announced that the physicians, company owners, executives and others charged in the indictments are accused of conspiring to submit approximately $61 million in false claims to the Medicare program.
 

In May, 2009, the United States Court of Appeals for the Eleventh Circuit ruled that, among other things, a Florida dermatologist’s failure to produce photographs, which were part of her medical records, in response to a grand jury subpoena constituted obstruction of justice.  The dermatologist had been convicted of health care fraud, filing false claims and obstruction of justice in the trial court.

Subsequent carrier requests in 2001 for photographs went unanswered. Nevertheless, the carrier educated the physician on proper documentation. Billing anomalies apparently continued after that time. A subsequent carrier request for records resulted in a record production, but without photographs. Again, the operative reports appeared to be identical.

In 2002, the Office of Inspector General (OIG), on referral from the carrier, conducted a search warrant at the physician’s practice, but could not locate 300 patient files. In January, 2003, a federal grand jury issued a subpoena for the missing records. A majority of the 300 files was produced, but without photographs. The physician was indicted on charges of health care fraud, filing false claims, and one count of obstruction of justice. The apparent basis for the obstruction conviction was that she had instructed her staff not to produce the photographs to the grand jury as part of her records.

On appeal, the Court of Appeal reasoned that the crime of obstruction of justice applied to the physician’s withholding of the photographs from the grand jury. The obstruction of justice statute prohibits the knowing alteration, destruction, mutilation, concealment, cover-up or falsification of a record with the intent to impede, obstruct, or influence an investigation within the jurisdiction of any department or agency of the United States. The Court did not accept the physician’s argument that the obstruction of justice statute does not extend to judicial proceedings such as a grand jury investigation. The Court reasoned that the prohibition reaches activity “`in relation to or in contemplation of’ any matter `within the jurisdiction of any department or agency of the United States’”. Because the Department of Health and Human Services conducted the investigation and the grand jury subpoenaed records “in relation to or in the contemplation of” the investigation, the obstruction of justice statute applied.

The full case can be found at United States v. Hoffman-Vaile, 568 F.3d 1335 (11th Cir. 5/27/09).
 

In April, 2009, the United States Court of Appeals for the Sixth Circuit decided in reviewing a Michigan case that the representative of a deceased woman could sue a hospital under EMTALA for allegedly releasing her husband after admission to the hospital, when he was then hallucinating, disoriented, and behaving in a threatening manner toward her when he was brought to the emergency department.  Five days after admission, it was decided that the husband should be transferred to a facility for the acutely mentally ill.  However, the transfer did not occur and he was, instead, released seven days after admission.  Ten days later, he murdered his wife.

The trial court decided that regardless of whether or not a non-patient can sue under EMTALA, the suit against the hospital could not go forward because the patient was screened in the emergency room and no emergency medical condition was recognized.  The Court of Appeal reversed this decision and returned the case to the trial court.

The Sixth Circuit reasoned that a non-patient can be an EMTALA plaintiff. The Court stated that “any individual who suffers personal harm as a direct result of a hospital’s EMTALA violation may sue.”   Such an individual is not limited to the patient.  The Court dismissed “an isolated statement in a [congressional] committee report to the contrary.”

On the question of whether the hospital’s EMTALA obligation ends once a patient is admitted, the Court said no.  The patient who presents with an emergency medical condition must be stabilized, not just admitted and tested.  The hospital may not admit and then discharge to avoid its stabilization requirement.  The Court took this position despite the existence of a Centers for Medicare and Medicaid Services (CMS) regulation to the contrary.  The Court reasoned that the CMS regulation does not comport with the language of EMTALA.

This case can be found at Moses v. Providence Hospital and Medical Centers, Inc., 561 F.3d 573 (6th Cir. 4/6/09). A petition for further review was filed with the United States Supreme Court in October, 2009. The Supreme Court apparently has not yet decided whether it will accept the case.
 

The Louisiana Civil Code provides an implied warranty for all things sold.  Specifically, a seller warrants the buyer against all redhibitory vices and defects.  A defect is “redhibitory” if it renders the item so useless or inconvenient that a buyer would not have purchased it or would have purchased it for a lesser price.   Louisiana does not have warranty statutes which are specific to marine products.  The following outline is an overview of Louisiana's warranty statutes in connection with marine products such as boats, personal watercraft, and outboard motors.

Louisiana does not have warranty statutes which are specific to marine products.

B. General Warranty Statutes

The Louisiana Civil Code provides an implied warranty, “redhibition”, for all things sold. Specifically, a seller warrants the buyer against all redhibitory vices and defects. A defect is “redhibitory” if it renders the item so useless or inconvenient that a buyer would not have purchased it or would have purchased it for a lesser price. (La. C.C. art. 2520). The defect is not redhibitory, if it was disclosed to the buyer or should have been discovered by reasonably prudent buyer. (La. C.C. art. 2521). The defect must exist at the time of delivery of the thing, but is presumed to have existed if the defect appears within three days of delivery. (La. C.C. art. 2530). Additionally, a thing must be reasonably fit for its intended use; and it must be of the particular kind or quality if such was specified in the sale. (La. C.C. arts. 2524 and 2529).

Typically, a buyer is required to give notice to a seller of a discovered defect, and permit the seller an opportunity to repair the defect; however, this notice is not required when the seller had actual notice of the defect. (La. C.C. art. 2522). Unfortunately, by law, a manufacture is deemed to have known of the defect. (La. C.C. art. 2545).

The buyer has a choice of remedies which includes full rescission of the sale or merely a reduction in the purchase price. (La. C.C. art. 2541). A manufacturer—a seller deemed by law to know of the defect—is liable for the return of the purchase price with interest from the date paid, reimbursement of the reasonable expenses of the sale and preservation of the thing, damages and attorney fees, minus a credit for any value the buyer received from use of the thing. (La. C.C. art. 2545).

The implied warranty of redhibition may be excluded or limited by agreement, but it must be clear and unambiguous and brought to the attention of the buyer. (La. C.C. art. 2548). The exclusion will not apply if the claim is that the thing was not of the quality declared in the sale. Moreover, despite a valid exclusion with the seller, the buyer may step into the warranty rights his/her seller may have against others.

A seller who is held liable for a defect has an action against the manufacturer of the defective thing, if the defect existed at the time the thing was delivered by the manufacturer to the seller. (La. C.C. art. 2531). The manufacturer cannot eliminate this obligation by contract. (Id.; see also La. R.S. 32:1621.1, providing that a manufacturer must hold harmless and indemnify its franchised dealers).

Statute of Limitations: The statute of limitations is called “prescription” under Louisiana’s Civil Code. The prescriptive period against a manufacturer—a seller deemed by law to know of the defect—is one year from the date the defect is discovered. The prescriptive period against good faith sellers is four years from delivery of the thing or one year from the date the defect is discovered, whichever occurs first.

Recoverable Attorneys’ Fees: A manufacturer—a seller deemed by law to know of the defect—is liable for reasonable attorney fees. (La. C.C. art. 2545).

C. Lemon Law

For the most part, Louisiana’s “Lemon Law,” La. R.S. 51:1941, et seq., does not apply to boats or marine products. However, the Lemon Law does apply to a “personal watercraft” which is sold in Louisiana which is used exclusively for personal and not commercial purposes. “Personal watercraft” means a vessel which uses an inboard motor powering a water jet pump as its primary source of motive power and which is designed to be operated by a person sitting, standing, or kneeling on the vessel, rather than the conventional manner of sitting or standing inside the vessel (La. R.S. 34:855.2).

If a manufacturer has established an informal dispute settlement procedure which substantially complies with the provisions of Magnuson-Moss Warranty Act, the provisions of the Lemon Law concerning refunds or replacement will not apply to any consumer who has not first resorted to such procedure. (La. R.S. 51:1944(D)).

Statute of Limitations: The consumer has no more than three years from the date he purchased the personal watercraft or until one year from the end of the warranty period, whichever is longer, in which to file suit against the manufacturer. (La. R.S. 51:1944(E)).

Recoverable Attorneys’ Fees: If the consumer has complied with the requirements of the Lemon Law, the consumer shall be entitled to reasonable attorney fees actually incurred if a judgment is rendered in part or whole in his favor. (La. R.S. 51:1947).

D. Warranty Reimbursement Rate Statute

Unless provided otherwise in the contract between the manufacturer and the dealer, “in no event shall any manufacturer or distributor pay its dealers at a price or rate for warranty work that is less than that charged by the dealer to the retail customers of the dealer for nonwarranty work of like kind.” La. R.S. 32:1262.

E. Louisiana Consumer Protection Act

Louisiana’s Unfair Trade Practices and Consumer Protection Law, La. R.S. 51:1401, et seq., creates a cause of action for unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce. If the court finds practices were knowingly used, after being put on notice by the attorney general, the court shall award three times the actual damages sustained. (La. R.S. 51:1409(A)).

Statute of Limitations: The private action prescribes one year from the time of the transaction or act which gave rise to the action. (La. R.S. 51:1409(E)).

Recoverable Attorneys’ Fees: The person bringing a private action is entitled to reasonable attorney fees and costs. However, if the court finds that an action under this section was groundless and brought in bad faith or for purposes of harassment, the court may award to the defendant reasonable attorney fees and costs. (La. R.S. 51:1409(A)).

Mr. Jalenak’s practice includes products liability defense, products warranty defense, and the representation of recreational product manufacturers in dealer disputes.
 

On December 1, 2009, the Certification Commission for Health IT (CCHIT) announced that it has certified the first group of Electronic Health Record (EHR) products that meet preliminary federal recommendations for "meaningful use."  The importance of this to health care providers is they are eligible for incentive payments from the Medicare program beginning in 2011 under the stimulus package passed by Congress last spring for providers that become “meaningful users” of certified EHR technology.  However, health care providers are expected to have adopted and actively utilizing a certified EHR in compliance with the “meaningful use” definition or they will be subject to financial penalties under the Medicare program.

Alisa Ray, CCHIT’s executive director, commented that “these first four health IT companies, demonstrating their compliance with the proposed Federal standards, are now able to offer certified products to providers who wish to purchase and implement EHR technology and achieve meaningful use in time for the 2011-2012 incentives. We’ve had about 25 applications in our 2011 programs and inspections are continuing. Look for additional announcements from these early applicants in the upcoming days and weeks.”

The product certified in the CCHIT Certified 2011 Comprehensive program is ABELMed EHR-EMR/PM, Version 11, by ABEL Medical Software Inc.

The Preliminary ARRA 2011 program is a modular, limited certification and inspects technology only against the Federal standards. It offers maximal flexibility for health IT companies, developers and providers in meeting ARRA 2011-2012 certification requirements.  The products certified in the Preliminary ARRA 2011 program are:

• eHealth Made EASY, Version 3, by eHealth Made EASY, LLC, supporting 2 of 27 meaningful use objectives for eligible providers
• eHealth Made EASY - PQRI Made Easy, Version 3, by eHealth Made EASY, LLC, supporting 2 of 24 meaningful use objectives for hospitals
• KIS Track, Version 5.1, by Kaulkin Information Systems, supporting 2 of 27 objectives for eligible providers
• Medios, Version 4.5, by IOS Health Systems, supporting 27 of 27 objectives for eligible providers

CCHIT said it plans to upgrade its criteria and re-evaluate its certification programs after federal officials release a final meaningful use definition in spring 2010.

Additional Information is available on the CCHIT web site. 
 

The Fifth Circuit Court of Appeals recently addressed the standard for a declaratory judgment action in the context of trademark rights. In Vantage Trailers, Inc. v. Beall Corporation, 567 F.3d 745 (5th Cir. 2009), Vantage filed civil action seeking declaratory judgment finding that its designed for a new aluminum bottom dump trailer would not infringe on any valid trademark rights of Beall Corporation.  Beall manufacturers and sells an aluminum bottom dump trailer which is protected by a registered trademark.  In early 2006, Vantage began designing its own aluminum bottom dump trailer.  In July 2006, Beall’s vice president sent a letter to Vantage stating that if your company places any trailers into service that violate any of Beall’s trademarks we will pursue legal action to stop the infringement. In response to the letter, Vantage filed a civil action seeking a declaratory judgment that Beall’s trademark is invalid and that the design of Vantage’s trailer did not infringe on any intellectual property rights of Beall’s.

Vantage argued that its activities related to the design and attempted sale of an aluminum bottom dump trailer demonstrated the immediacy and reality of the controversy between itself and Beall.  Vantage had worked with an engineer on private development and began construction of a new manufacturing facility, purchased specialized equipment, built a sub-frame and offered to sell its new model trailers.  Although it was undisputed that Vantage had begun to manufacture a type of trailer, Vantage’s design was not substantially fixed and definite when it filed the action.  Even during the litigation, Vantage had made modifications to the external configuration or appearance of the trailers it was working to build.  Thus, the court could not compare the potentially infringing characteristics of Vantage’s trailer against those of the Beall trailers.

This ruling highlights that although a threatening letter had been sent, this threat alone cannot create an actual controversy under the Declaratory Judgment Act.  In order for a case to exist, a person must use a trademark or service mark.  A word, slogan, design or product configuration can only function as a trademark or service mark if used in commerce to identify and distinguish certain goods/services from those of others.  A mark is used in commerce when it is affixed to a good or service which is sold or transported in commerce. In this instance, the potentially infringing elements, i.e., the appearance of the trailers, were not substantially fixed, so as to constitute a distinctive shape that functioned to identify a source.  Therefore, no true controversy existed. Vantage was not yet using a mark in commerce so as to give rise to a controversy.  The ruling shows that the “cart must be before the horse” – a controversy must in fact exist as a matter of law before one can seek a declaration as to rights and obligations involving such controversy, regardless of the “warning shot” letter.
 

In the wake of the Fraud Enforcement and Recovery Act of 2009 (FERA), which was enacted by Congress on May 20, 2009 and expands the federal False Claims Act, the Louisiana Department of Health and Hospitals (“DHH”) announced on October 29, 2009, a new fraud initiative against agencies who deliver in-home direct care to Medicaid beneficiaries.  DHH is partnering with the Louisiana Attorney General’s office to audit of all Medicaid in-home direct care providers. DHH will engage the services of six (6) audit firms to perform the audits.  Any potential fraud or abuse identified by the auditors will be reported to the Attorney General for prosecution. Funding for these audits will be provided by a $3,000,000.00 fund created with dollars previously recovered from fraudulent providers.

To read the DHH news release on the Medicaid fraud audits, click here. 
 

Read the entire article from Around the Bar by Katie D. Bell and reprinted with permission from the Baton Rouge Bar Association.