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IRS Updates Required Tax Notice to Address Plan Loan Offsets and Other Law Changes

The IRS has updated the model notice (sometimes referred to as the “402(f) Notice” or “Special Tax Notice”) that is required to be provided to participants before they receive an “eligible rollover distribution” from a qualified 401(a) plan, a 403(b) tax-sheltered annuity, or a governmental 457(b) plan.  Notice 2018-74, which was published on September 18, 2018, modifies the prior safe-harbor explanations (model notices) that were published in 2014. Like the 2014 guidance, the 2018 Notice includes two separate “model” notices that are deemed to satisfy the requirements of Code Section 402(f):  one for distributions that are not from a designated Roth account, and one for distributions from a designated Roth account. The 2018 Notice also includes an appendix that can be used to modify (rather than replace) existing safe-harbor 402(f) notices. 

Changes to Missouri’s Public Sector Labor Law Impacts Employers, Unions, and Employees

A new law, making it easier for Missouri public employees to opt out of both union membership and paycheck deductions funding political advocacy work, goes into effect on August 28, 2018. The new law, a victory for public sector employers, effectively enacts “right-to-work” protections for public sector employers, despite the fact that voters rejected right-to-work generally for the state of Missouri (see Missouri Right to Work is Overwhelmingly Rejected by Voters, Spencer Fane HR Solutions August 15, 2018). Therefore, public sector employers should review the new law and determine what steps need to be taken in order to comply with it upon the forthcoming effective date. (See Full Text of Law Here).

Another court rules that contractual consent to be called using an ATDS cannot be unilaterally revoked

The Telephone Consumer Protection Act,  47 U.S.C. § 227 (TCPA),  makes it unlawful for any person, absent the “prior express consent of the called party,” to make non-emergency calls using any Automated Telephone Dialing System (ATDS) to any telephone number assigned to a cellular telephone service. Anyone who violates the TCPA may be liable for “actual monetary loss” or $500 in damages for each violation, whichever is greater.

Air Quality – Colorado to Join 13 States That Have Adopted California’s LEV Requirements

On August 16, the Colorado Air Quality Control Commission set a hearing to consider establishing a new Regulation Number 20 to adopt specific provisions of the California low emission vehicle (LEV) rule for model year 2022 and newer light and medium duty vehicles. The Division’s proposed rule will not include a Zero Emissions Vehicle (ZEV) mandate and has no impact on heavy-duty vehicles or non-road (construction and agricultural) equipment.

Missouri Right to Work is Overwhelmingly Rejected by Voters

By a greater than two to one margin, Missouri voters rejected the Right to Work Act passed early in the legislative session.  The law was supported and signed by former Missouri Governor Greitens.  With strong local and national union backing and a ton of dollars, the unions led the effort first to get the issue on the ballot with more than 300,000 petition signatures and then to defeat the measure soundly at the polls. 

Phase I Environmental Site Assessments: What You Need to Know to Close Your Deal

As someone who frequently helps businesses buy and sell commercial and industrial properties, I frequently encounter misunderstandings about Phase I Environmental Site Assessments (ESAs) and their role in a property transaction. Although not an exhaustive list, these 10 items are among the most important you should know about for your next property transaction.

Oil and Gas Development Would Be Blocked on 85% of Non-Federal Land in Colorado

A recent analysis by the Colorado Oil and Gas Conservation Commission (“COGCC”) shows that increasing the current regulatory setback of 500 feet to the 2500-foot setback proposed in Initiative # 97 would prevent oil and gas development on 85% of the non-federal land surface in the state. 

Upcoming Proposition 65 Changes May Catch Companies Without Warning

All companies in supply chains for products sold in California need to be aware of the law known as California’s Proposition 65. This is especially true because significant changes to Proposition 65 requirements go into effect on August 30, 2018, increasing potential liability.

Colorado Orders Safety Fixes at Orphaned Oil and Gas Wells

On Wednesday, July 18, 2018, Governor Hickenlooper of Colorado issued an Executive Order directing the Colorado Oil and Gas Commission (COGCC) to act to “plug, remediate, and reclaim” orphaned oil and gas wells and sites.  Of the over 50,000 oil and gas wells in the state, the COGCC is currently tracking 262 orphaned wells and 373 associated well sites that require remediation and reclamation. 

DOL Rescinds Persuader Rule

On July 17, 2018, the Department of Labor (“DOL”) officially abandoned the “Persuader Rule” by filing a notice of rescission in the Federal Register. The rescission is expected to become effective on or about August 17, 2018 (i.e. 30 days after the rescission notice is published in the Federal Register). This rescission gives employers and certain legal service providers more certainty as to whether their business dealings are subject to the reporting requirements of the Labor Management Reporting and Disclosure Act (“LMRDA”).

The Data Breach Tide is Shifting Toward Proactive Security Obligations

When an organization faces a security incident, it is thrown into a complicated analysis of forty-seven state breach notification laws.  With the laws based on the residence of the affected consumer, consideration must be given to the variances in the definition of a breach that triggers notification; the content, timing, and manner of notification; additional regulatory, credit agency, or media communications; and potential litigation or enforcement.  Thus, the states in which an organization provides goods or services and collects personal information can have a significant impact on obligations following a security incident.

U.S. Will Produce More Crude Oil Than Any Other Country in 2019, According to EIA

The U.S. is projected to produce more crude oil than any other nation, including Saudi Arabia and Russia.  The July 10, 2018 forecast from the U.S. Energy Information Administration (EIA) predicts that, in 2019, U.S. crude oil production will grow to 11.8 million barrels a day.

New Colorado Consumer Data Privacy Law Impacts Governmental Entities

On May 29, 2018, Colorado Governor John Hickenlooper signed House Bill 18-1128 (the “Consumer Privacy Law”) which expanded protections of consumer data and placed additional requirements on covered and governmental entities that maintain, own, or license personal identifiable information.  The Consumer Privacy Law’s new requirements will take effect on September 1, 2018.

The Consumer Privacy Law has unique requirements for covered entities and governmental entities.  A general discussion of how the law impacts governmental entities follows.

Janus v. AFSCME – Mandatory Agency Fees Unconstitutional for Public Sector Unions

On June 27, 2018, the Supreme Court of the United States issued what may be one of its most impactful decisions of the 2017/2018 term in Janus v. American Federation of State County and Municipal Employees, Council 31, Case No. 16–1466.  In its opinion, found here, the Court held that laws requiring public sector workers who are not union members to pay union dues would be compelled speech in violation of the First Amendment. This decision reverses nearly forty years of federal precedent, and declares unconstitutional a host of state laws which allow such fee arrangements. It also has significant implications for the manner in which public sector unions collect their dues.

Cyber Liability Insurance for Employee Benefit Plans: Hackers and Malware and Phishing – Oh My!

Cyberattacks have managed to invade all walks of life, and employee benefit plans are no exception.  When a plan is attacked, the fallout can be overwhelmingly expensive and burdensome to correct.  Many plan sponsors are purchasing cyber liability insurance coverage to supplement their data security measures.  Understanding those policies – and their exclusions – is important for sponsors who are exploring such coverage.

Federal Court Halts EPA’s Waters of the United States (WOTUS) Rule in 11 States

On June 11, 2018, the U.S. District Court of the Southern District of Georgia issued a preliminary injunction preventing implementation of the U.S. Environmental Protection Agency’s 2015 Waters of the United States (WOTUS) rule in 11 states including Georgia, Alabama, Florida, Indiana, Kansas, Kentucky, North Carolina, South Carolina, Utah, West Virginia and Wisconsin.  The court held that if the WOTUS rule became effective the states would suffer irreparable harm in both a “loss of sovereignty and unrecoverable monetary losses.” 

The Masterpiece Cakeshop Decision – Bakery Owner Wins, But on Narrow Grounds

On June 4, 2018, the Supreme Court of the United States issued its highly anticipated decision in Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission, Case No. 16-111. In its opinion, found here, the Court vacated an administrative order entered by the Colorado Civil Rights Commission (“CCRC” or the “Commission”) against the bakery, which had refused to sell custom wedding cakes to same-sex couples on the grounds that doing so would violate the owner’s sincerely held religious beliefs. The Court made it clear that judges and administrative officials violate a litigant’s constitutional rights if they engage in conduct that displays hostility toward a particular set of religious beliefs. But the majority opinion left many questions unanswered. It remains to be seen if a business owner may refuse to do business with a prospective customer because of the customer’s sexual orientation when the refusal is based on a sincerely held religious belief.

The Responsibility of Regulation Relief Within the Economic Growth, Regulatory Relief and Consumer Protection Act

Matt outlines the potential risks and benefits of the Economic Growth, Regulatory Relief and Consumer Protection Act., which was introduced by a bi-partisan group of 23 senators with the primary intent of reducing regulatory burdens for smaller financial institutions. Published in The Show-Me Banker and In Touch.

“As Is” Clause Held to Preclude Claim Arising From Seller’s Oral Representations That Damaged Parts on an Aircraft Were Repairable

The significance of “as is” language in an aircraft sales agreement is demonstrated again in a recent decision of the Federal District Court for the Northern District of Texas.  In Red River Aircraft Leasing, LLC v. JetBrokers, Inc., the aircraft buyer had learned of hail damage to an aircraft during the course of negotiations, but was assured by the seller that the damaged parts were repairable.  Of course, after taking possession of the aircraft, the buyer learned that the parts in question were not repairable, and proceeded to sue the seller on a theory of negligent misspresentation.  The Federal Court, however, ruled that because the buyer had accepted the aircraft “as is” and “with all faults” in its purchase agreement, it would be unable to establish that it relied on the seller’s statement in buying the aircraft.  The court therefore entered a summary judgment for the seller, leaving the buyer without a remedy.

Insurance Benefits – Unreasonable Delay and Denial. Supreme Court of Colorado Decides Three Cases Against Insurance Companies.

In a trio of case opinions issued on May 29, 2018, – all written by Chief Justice Nancy Rice who will retire in June – the Colorado Supreme Court ruled against the arguments of insurance companies. 

Federal Appellate Court Decision Highlights Importance of “Firestone” Language

In a recent decision, the Sixth U.S. Circuit Court of Appeals resolved an important question in a way that should put administrators of ERISA plans in a far stronger position vis-à-vis claimants who disagree with the administrators’ plan interpretations.  Essentially, the court in Clemons v. Norton Healthcare Retirement Plan held that the contract-interpretation doctrine of “contra proferentum” has no application once a court has determined that a plan document grants the administrator the type of broad discretion approved by the U.S. Supreme Court in its 1989 Firestone decision.

Employee Class Action Waivers Held Enforceable

On May 21st, the United States Supreme Court held that the National Labor Relations Act (“NLRA”) does not prohibit employers from requiring workers to agree, as a term and condition of their employment, that they waive the right to bring class or collective actions, and will individually arbitrate employment-related legal claims.  Epic Sys. Corp. v. Lewis, U.S., Case No. 16-285 (Slip Opinion, May 21, 2018). This decision resolves a high profile conflict, in which the National Labor Relations Board and some federal courts had found that the NLRA prohibits enforcement of arbitration agreements containing class action waivers. The Court’s decision makes clear that the NLRA does not prevent the enforcement of an arbitration agreement that is otherwise valid under the Federal Arbitration Act (“FAA”). 

Health Plans’ Anti-Assignment Clauses Upheld by Two More Federal Appellate Courts

Over the past two months, the United States Court of Appeals for both the Ninth Circuit and the Third Circuit have upheld “anti-assignment” clauses in ERISA-governed health plan documents.  These holdings – which adopt the same position previously taken by the First, Second, Fifth, Tenth, and Eleventh circuits – are a blow to healthcare providers that attempt to bring suits against employer-sponsored health plans (or the insurance companies funding benefits under those plans) as “assignees” of individual plan participants. 

NLRB Restored to Employer-Friendly Three Republican/ Two Democrat Composition

Relief for employers under the Trump Administration continues, following the U.S. Senate’s narrow confirmation of John Ring, former Morgan Lewis & Bockius LLP attorney, to the National Labor Relations Board on April 11, 2018.  The 50-48 Senate vote returned the five-member board to an employer-friendly composition of three Republicans and two Democrats and alleviates the log jam of the 2-2 split created when Board Member Phillip Miscimarra stepped down. On April 13, Ring became Chair of the Board, replacing Marvin Kaplan as Chair. Kaplan remains a member of the Board. 

Loosened Maximum Distance Requirements for APRNs in Missouri

Effective Thursday, April 26, the Missouri Board of Registration for the Healing Arts (MBHA) and the Missouri Board of Nursing (MBN) loosened the regulatory requirements which dictate the maximum distance between the location at which an Advance Practice Registered Nurse (APRN) practices and the location at which his/her collaborating physician practices.

U.S. Supreme Court Rules That Inter Partes Review Challenges On Patent Validity Before the U.S. Patent and Trademark Office Are Constitutional

Your business may at some point find itself in the unfortunate position of facing an allegation that it is infringing another’s patent.  The situation can be even more aggravating if you believe that the subject patent is obvious or not novel and therefore wrongfully issued.  You can defend against an allegation of patent infringement by challenging the validity of the patent in a civil suit before a court of law.  A patent carries a presumption of validity, which can only be overcome by clear and convincing evidence.  That places a high burden on you to invalidate the patent in the lawsuit.

2017-18 Autonomy 5 Athletics Directors’ Compensation Survey

We reviewed all forms of compensation for the athletics directors at member institutions in the Autonomy 5 Conferences. We analyzed these employment agreements and related documents (the, “Contracts”), which were obtained in partnership with USAToday, and created a sortable database of primary compensation (click here to view the FBS Athletic Director Database, the “Database”).

The SEC’s Fiduciary Proposal – Form CRS

On April 18, the Securities and Exchange Commission issued a proposal package that includes two new rules and one interpretative release.  The package consists of three components – Regulation Best Interest, Investment Adviser Standard of Conduct Interpretation, and Form CRS – Relationship Summary.   According to the SEC, the proposal is intended to balance investor protections and regulatory requirements with investor access and choice.  Each component of the proposal is available for public comment for 90 days after publication in the Federal Register.

In a series of three articles, Spencer Fane LLP describes the SEC’s proposal and potential impacts on broker-dealers and investment advisers.  This third article describes the Form CRS – Relationship Summary portion of the SEC’s fiduciary proposal.

The SEC’s Fiduciary Proposal – Investment Adviser Standard of Conduct

The Securities and Exchange Commission voted on April 18 to issue a proposal package that includes two new rules and one interpretative release.  According to the SEC, each component of the proposal – Regulation Best Interest, Investment Adviser Standard of Conduct Interpretation, and Form CRS – Relationship Summary – is intended to enhance investor protections and regulatory clarity while maintaining investor access and choice.  Each part of the SEC’s proposal is available for public comment for 90 days after publication in the Federal Register.

In a series of three articles, Spencer Fane LLP describes the SEC’s proposal and potential impacts to broker-dealers and investment advisers.  This second article describes the Investment Adviser Standard of Conduct Interpretation.

City of Springfield Receives Approval to Designate 3 Areas as “Qualified Opportunity Zones”

Missouri Governor Eric Greitens and U.S. Senator Roy Blunt (R-MO) recently announced the selection of 161 census tracts receiving designation as “qualified opportunity zones,” including ten census tracts located in the City of Springfield[1]. The ten census tracts receiving designation in Springfield are concentrated in three distinct areas of the city: center city, north Springfield, and a portion of central Springfield.  The qualified opportunity zones program was adopted as part of the recent tax reform legislation and is designed to spur economic and infrastructure growth in areas with high poverty and low job growth.

The SEC’s Fiduciary Proposal – Regulation Best Interest

In an open meeting on April 18, the Securities and Exchange Commission voted four to one to issue two new rules and one interpretative release that are intended to provide investor protections and regulatory clarity, as well as investor access and choice.  Specifically, the SEC issued Regulation Best Interest, Investment Adviser Standard of Conduct Interpretation, and Form CRS – Relationship Summary.  Each component of the SEC’s proposal is available for public comment for 90 days after publication in the Federal Register.  In a series of three articles, Spencer Fane LLP describes the SEC’s proposal and potential impacts on broker-dealers and investment advisers.  This first article describes the Regulation Best Interest portion of the SEC’s fiduciary proposal.

Intermediate Sanctions Tax: For Athletics Directors It’s Personal

The recent enactment of the Tax Cuts and Jobs Act has drawn attention from all corners of the intercollegiate athletics industry. 

Ramifications for Missouri Physicians of Enhanced Mo HealthNet OPI Program

Effective March 1, 2018, the Missouri Department of Social Services (“MDSS”) – Mo HealthNet Division (“Mo HealthNet”) began working collaboratively with the Missouri Department of Mental Health and the Missouri Department of Health and Senior Services to enhance the Mo HealthNet Opioid Prescription Intervention (“OPI”) Program. 

New WHD Opinion Letters Provide Guidance to Employers

Last week, the U.S. Department of Labor’s Wage and Hour Division (WHD) issued three new opinion letters for the first time since 2010.  The Obama administration had ceased the practice of issuing opinion letters – which answer specific questions from employers or other parties – in favor of general administrative interpretations.  Last June, Secretary of Labor Alex Acosta announced that he was reinstating the practice of issuing opinion letters for the Trump administration.  This announcement was praised by businesses and employment lawyers because the opinion letters apply the law to a specific set of facts and represent official statements of agency policy.  In addition to the new letters, WHD republished 17 letters the Obama administration rescinded following their original publication late in the Bush administration.

Equal Pay Act: Ninth Circuit Says Prior Salary Not Job-Related

On April 9, the full Ninth Circuit held that employers may not rely on an employee’s prior salary as a “factor other than sex” in defending against a claim under the Equal Pay Act. Rizo v. Yovino, No. 16-15372 (9th Cir. April 9, 2018) (found here). In making this determination, the court phrased the question before it concisely, asking “can an employer justify a wage differential between male and female employees by relying on prior salary?” The answer: a resounding “no.” The court further stated that the “text, history and purpose of the Equal Pay Act” do not allow an employer to rely on an employee’s prior salary to justify a wage disparity. Id. 

Air Emissions From Oil and Gas Wells Health Risks Analyzed – More Study Needed

About the only thing that stakeholders agree on is that the risk assessment saga in Colorado means one thing – more study is needed. On March 27, 2018, the latest in a series of health risk studies was published by the Colorado School of Public Health at the University of Colorado Medical Campus. Using air emissions data taken from within the 500 foot regulatory setback requirement for homes near wells, the study concludes that people living in close proximity to oil and gas wells are subject to an increased risk of developing cancer.

The Superfund Petroleum Exclusion – Alive and Well in the Ninth Circuit

In an unpublished opinion on March 21, 2018, the Ninth Circuit Court of Appeals affirmed the trial court’s dismissal of a lawsuit citing the application of CERCLA’s petroleum exclusion. The Court held that the site investigation at a former gas station did NOT identify anything other than petroleum or fractions thereof. Consequently, the Plaintiff did not plausibly allege any CERCLA “hazardous substances” were present at the site. The case was dismissed.

Congress Enacts Redevelopment-Friendly Changes to the Superfund Law, and Tenants and State and Local Governments Gain Clarity on How to Avoid Cleanup Liability

On March 23, 2018, the President signed into law the BUILD Act of 2018, which significantly clarifies the potential scope of cleanup liability for tenants and state and local governments under the federal Superfund law.  Now, a tenant at an industrial or manufacturing site can, under appropriate circumstances, claim the “bona fide prospective purchaser” (BFPP) defense to Superfund liability and escape what would otherwise be strict, joint, and several owner/operator liability when leasing previously-contaminated property. 

EPA Will Revise Emission Standards For Cars and Light Trucks for Model Years 2022-2025

On April 2, 2018, the EPA announced the results of its updated Midterm Evaluation (MTE) determination related to greenhouse gas (GHG) emissions standards for cars and light trucks for model years 2022-2025. The agency stated that the current standards are not appropriate, and that it will work with the National Highway Traffic Safety Administration to set a notice and comment rulemaking to set new standards.

Hazardous Waste Generators, Transporters, and TSDFs Should Plan Now for EPA’s 2018 e-Manifest System

Authorized by Congress in 2012, the EPA’s Electronic Manifest System (e-Manifest) will become effective on June 30, 2018.  When they register, generators, transporters, and receivers of hazardous wastes will be able to use this system to facilitate the electronic transmission of the uniform hazardous waste manifest form.  States must adopt the provisions of the final rule in order to enforce them under state law and to maintain manifest program consistency.

Chapter 9 – More than just Orange County and Detroit

A Chapter 9 bankruptcy offers protection to a financially-distressed municipality so that it may develop a plan for addressing its debts. A product of the Great Depression, bankruptcy protection for municipalities was first enacted in 1934.  However, the Supreme Court held the act unconstitutional as an improper interference with the sovereignty of states. See Ashton v. Cameron County Water Improvement Dist. No. 1, 298 U.S. 513 (1936). Congress subsequently passed a revised Municipal Bankruptcy Act in 1937, which was eventually upheld by the Supreme Court. See United States v. Bekins, 304 U.S. 27 (1938).

Colorado Court of Appeals Upholds Warrantless Inspections at Oil and Gas Sites

On March 22, 2018, the Colorado Court of Appeals held that the Colorado Oil and Gas Conservation Commission’s authority to undertake unannounced, warrantless inspections (i.e., administrative searches) at oil and gas sites does NOT violate the U.S. or Colorado constitutions.

Here We Go Again… Fifth Circuit Strikes Down DOL’s Fiduciary Rule

In a significant blow to the Department of Labor’s controversial regulation re-defining what constitutes an investment-advice fiduciary, a split three-judge panel of the Fifth Circuit Court of Appeals ruled on March 15 that the DOL exceeded its authority when creating the rule.  The 2-1 decision of the appellate court strikes down the regulation and its associated prohibited transaction exemptions in their entirety.  (Chamber of Commerce v. U.S. Dept. of Labor (5th Cir. March 15, 2018)).  In its wake, the court’s decision leaves even more of the confusion that has plagued the DOL’s 2016 rulemaking.

Changes to Chapter 12 Bankruptcy May Increase Farmers’ Ability to Reorganize in Bankruptcy

Farmers attempting to reorganize under Chapter 12 of the Bankruptcy Code may propose selling land as a means of generating cash to pay creditors. This sale creates a large capital gains tax, as the cost basis for the land is likely low. That capital gains tax has priority over general unsecured creditors, and the farmer needs to pay that capital gains tax in full to get a Chapter 12 plan confirmed.

DOL Announces “PAID” Program

On March 6, 2018, the Wage and Hour Division of the U.S. Department of Labor (DOL) announced that it will soon launch a nationwide pilot program for employers to self-report potential overtime and minimum wage violations. The pilot program is called the Payroll Audit Independent Determination (PAID) program. The primary objective of PAID, according to the agency, is to “improve employers’ compliance with overtime and minimum wage obligations, and to ensure that more employees receive the back wages they are owed—faster.” Many details are not yet available, but the DOL has announced the broad outlines of the program, which are available here:  https://www.dol.gov/whd/paid/#1

New Chapter 14 Bankruptcy Code Recommended by the United States Treasury Department

Would Handle Liquidation of Failing Financial Firms and Limit the Use of Orderly Liquidation Funds as Established in the Dodd-Frank Act

In February 2018, the United States Treasury Department issued the Orderly Liquidation Authority and Bankruptcy Reform Report (the “Report”) advocating for the enhancement of the Bankruptcy Code, specifically as it applies to financial institutions.  This report is in stark opposition to the CHOICE Act proposed by a conservative group of lawmakers in the U.S. House of Representatives that seeks to undo much of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) and fully repeal the orderly liquidation authority (“OLA”) established in Dodd-Frank.

Investment Advisers and Conflicts Of Interest

The Department of Labor and the Securities and Exchange Commission have expressed concerns regarding potential conflicts of interest that investment advisers do not explicitly disclosed.  Thus, plan fiduciaries may not be aware of such conflicts when they engage and monitor their plan’s investment consultant.  These concerns were recently highlighted when the SEC launched an initiative in connection with investment advisers’ selection or recommendation of a higher-cost mutual fund share class for their clients when a lower-cost share class of the same fund is available.  The SEC’s initiative reminds plan fiduciaries of the importance of obtaining appropriate information to fulfill their fiduciary obligations when engaging and monitoring investment advisers.

Colorado Legislation Could Halt Oil and Gas Production

House Bill 1071, if enacted as written, will obviate the need for the Colorado Supreme Court to resolve the dilemma caused by the Colorado Court of Appeals opinion in the Martinez case.   As described in earlier Spencer Fane posts, that appellate decision effectively elevated the protection of public health and the environment over the interests of mineral rights owners and developers.  The issue before the Colorado Supreme Court is whether the current statute dictates that the Colorado Oil & Gas Conservation Commission (COGCC) implement a statutorily directed balancing act without giving priority to any particular interest.

Supreme Court Adopts Restrictive Minority View of Section 546(e) Safe Harbor Regarding Certain Securities Payments

On February 27, 2018, a unanimous Supreme Court held in Merit Management Group, LP v. FTI Consulting, Inc. (link here) that an otherwise-avoidable transfer is not subject to the safe harbor in Section 546(e) (which provides, in relevant part, a trustee may not avoid a transfer that is a “settlement payment . . . made by or to (or for the benefit of) a . . . financial institution” or that “is a transfer made by or to (or for the benefit of) a . . . financial institution . . . in connection with a securities contract”) of the Bankruptcy Code merely because funds flow through covered financial entities.  Rather, the availability of the Section 546(e) safe harbor depends on the particular transfer sought to be avoided.

SEC Launches Share Class Selection Disclosure Initiative

The Securities and Exchange Commission recently announced a temporary program for investment advisers who may have inadequately disclosed potential conflicts of interest related to their selection or recommendation of mutual fund share classes. Participation in the program, however, is not without its drawbacks.

Congress Eases Restrictions on Hardship Withdrawals

Buried in Sections 41113 and 41114 of the recent Bipartisan Budget Act of 2018 are provisions designed to facilitate hardship withdrawals from 401(k) and 403(b) plans.  Because these provisions take effect for plan years beginning after December 31, 2018, sponsors of these plans will want to consider whether to broaden their hardship withdrawal provisions – or even add such provisions.

Tax Cuts and Jobs Act – Modified Rules for UBTI

For many years tax exempt organizations and retirement plan trusts have been permitted to avoid tax on income generated by unrelated trades or businesses they hold by netting the gains, losses, and deductions among those trades or businesses.  The Tax Cuts and Jobs Act modifies those rules, increasing the likelihood that such entities must report, and pay tax on, UBTI.

Tougher Oil & Gas Rules in Colorado Set to Take Effect

On February 13, 2018, the Colorado Oil and Gas Conservation Commission approved new rules to require the industry to track the location of oil and gas pipelines. The new rules stem from an explosion in Firestone, Colorado caused by a leaking pipeline that destroyed a house and killed two people on April 17, 2017. That disaster triggered a massive public outcry, directives from the Governor, and now significant revisions to state regulations. 

Large Arizona Jury Award Reversed Because of Timely Raised Procedural Defense

The Arizona Court of Appeals recently reversed a jury’s award of $375,000 in damages to a former police officer for the City of Surprise. In Peterson v. City of Surprise, No. 1 CA-CV 16-0415 (Feb. 6, 2018), the court held that the employee, who claimed she was constructively discharged in retaliation for reporting sexual harassment, was precluded from bringing the case in court because she had failed to file a charge of discrimination within 180 days after she left her employment. As the court stated, the employee specifically “crafted her claim against the City to allege not constructive discharge caused by ‘firsthand’ discrimination, but constructive discharge caused by illegal retaliation under the [Arizona Employment Protection Act].” A claim of illegal retaliation is one that contends that the employer’s actions were wrongful in response to a report of discrimination, not wrongful because of the discrimination itself. The court held that there was no difference between the claim of retaliation and the harassment claims for purposes of the filing deadline.

Colorado Supreme Court Will Address Oil and Gas Development in its Review of the Martinez Case

On January 29, 2018 the Colorado Supreme Court agreed to hear the appeal of the Martinez case.  The state’s high court will decide whether, in the agency’s review of oil and gas permit applications, the Colorado Oil and Gas Conservation Commission (“COGCC”) must elevate “public health and the environment” over other factors identified in the agency’s organic statute.

City of KCMO Adopts Ban The Box Ordinance for All “Employers”

On February 2, 2018, the City of Kansas City Missouri (“KCMO” or “the City”) adopted a “Ban The Box” ordinance that applies to private employers. The KCMO “Criminal Records in Employment” ordinance enacts a new section, Section 38-104. The ordinance becomes effective on June 9, 2018.  Before this ordinance, private employers located in KCMO were encouraged, but not required, to limit the extent to which they based employment-decisions on an applicant’s criminal history. The new Section 38-104 clearly and unambiguously places limitations on the extent to which all private employers located in KCMO can take an applicant or current employee’s criminal history into account when making employment decisions. (The City has applied a similar rule to its own employment procedures since 2013.). Employers with locations in KCMO should carefully review the ordinance and seek guidance from legal counsel in determining whether, how and when to make inquiries regarding criminal history.

EPA Asks States to the Take the Lead in Environmental Enforcement

Recently, EPA issued an Interim OECA Guidance on EPA and state roles on managing enforcement and compliance assistance.  See, Interim OECA Guidance on Enhancing Regional—State Planning and Communication on Compliance Assurance Work in Authorized States. While EPA is seeking to emphasize cooperative federalism in modifying the emphasis of the 1986 revised policy on state/EPA enforcement agreements, as provided in the first footnote of the Guidance, the policy issued on January 22, 2018, appears to make the states the primary enforcer of environmental laws and provides a secondary role for EPA in that regard.

New Disability Claims and Appeals Procedures Finally Take Effect

When the Department of Labor (“DOL”) delayed by 90 days the date by which ERISA plans were required to comply with a set of disability claims and appeals regulations issued in the waning days of the Obama Administration, we predicted that a further delay – or even a complete withdrawal – of the regulations could be in the works.  As it turns out, we were wrong.  Instead, the DOL announced in early January that the regulations will become fully applicable on April 1st – and without change.

The Bankruptcy Venue Reform Act of 2018

In January 2018, Senators John Cornyn (R-TX) and Elizabeth Warren (D-MA) introduced a bill that would require corporate debtors to file for bankruptcy protection in the district in which their principal assets or principal place of business is located. In other words, the Bankruptcy Venue Reform Act of 2018 would eliminate a corporate debtor’s ability to commence a case in its state of incorporation if the state of incorporation is neither the debtor’s principal place of business nor the location of its principal assets. Moreover, the bill would do away with the so-called “Affiliate Rule” that allows corporate debtors to file in any district where an affiliate has a pending bankruptcy case. If signed into law, the act would also put an end to protracted, expensive battles over venue: judges would be required to make a decision on a venue transfer request within fourteen days of the objecting party’s request.

Tax Cuts and Jobs Act – New Rules for Retirement Plans and IRAs

Although the main feature of the Tax Cuts and Jobs Act is a significant reduction in the corporate federal income tax rate, the Act also makes a number of significant changes to the rules governing employer-sponsored retirement plans and individual retirement accounts.  From plan loans to hardship withdrawals and Roth recharacterizations, employers should make sure that they understand how these new rules might affect them.

Tax Cuts and Jobs Act – Affordable Care Act Changes

Although the recent Tax Cuts and Jobs Act eliminates the ACA individual mandate, the employer mandate, ACA benefit mandates, and ACA reporting requirements remain in effect.  Thus, employers should continue to be mindful of and comply with their obligations under the ACA.

EPA and OSHA Increase Civil Penalties

In January 2018, both EPA and OSHA increased civil penalties for new enforcement cases.  These increases are required by the Federal Civil Penalty Inflation Adjustment Act of 2015 (Inflationary Adjustment Act), which directs federal agencies to annually adjust civil penalties for inflation by January 15 of each new calendar year in order to “maintain the deterrent effect of civil penalties by translating originally enacted statutory civil penalty amounts to today’s dollars.” 83 Fed. Reg. 1190, at 1191 (January 10, 2018).

Tax Cuts and Jobs Act – New Executive Compensation Rules

This is the second in a series of articles by which the Spencer Fane LLP Employee Benefits Practice Team will explain key changes made in the employee benefits area by the Tax Cuts and Jobs Act (Public Law 115-97), which was signed into law on December 22, 2017.  In addition to establishing new rules for transportation fringe benefits (see our first article in this series), the Act makes a number of changes that may affect how employers structure their executive compensation programs.  This article describes the Act’s impact on for-profit employers, and outlines options that those employers should consider for their compensation arrangements.

Limited Liability Company Interests as Collateral: Remedies on Default

Various business formations and financial transactions utilize alternative entity forms, such as limited liability companies (“LLC”), limited partnerships, master limited partnerships, limited liability partnerships, limited liability limited partnerships—you get the idea. In turn, commercial borrowers may offer—and lenders may request—interests in such entities as collateral. This blog post focuses on LLC membership interests (“LLC Interests”) as collateral.

By The Numbers: FBS Assistant Football Coach Contracts

In partnership with USA Today we collected and analyzed employment agreements for assistant football coaches at public Football Bowl Subdivision (FBS) colleges and universities (the, “Sample Set”).

Bankruptcy Rule Changes: What You Need to Know

Nearly every year, there are changes to the Federal Rules of Bankruptcy Procedure. 2017 was no exception, and new rules went into effect on December 1, 2017. Creditors should be aware of the new timeframe for filing claims and new relief that can be sought in Chapter 12 and Chapter 13 plans. Below is a summary of some of the new rule changes.

Pass Through Deduction in New Tax Bill Unlikely to Slow Trend Toward Industry Consolidation

The Tax Cuts and Jobs Act of 2017 signed into law on December 22, 2017 by President Trump added a new deduction for noncorporate taxpayers (i.e. S corporations, partnerships, sole proprietorships, and trusts) who have qualified business income.  This deduction, found in section 199A of the Internal Revenue Code, is also referred to as the “business pass-through income deduction.” 

The FLSA & Unpaid Internship Programs: DOL Adopts “Primary Beneficiary” Test

On January 5, 2018, the U.S. Department of Labor (“DOL”) clarified its position regarding paid and unpaid internships. They will now use the “primary beneficiary” test for determining “whether interns are employees” under the Fair Labor Standards Act (“FLSA”). The agency has issued a revised Fact Sheet called “Internship Programs under the Fair Labor Standards Act.”

How The New Excise Tax Impacts Coach Compensation

Heralded by some as the most significant overhaul of the Internal Revenue Code (IRC) in decades, the bill (now awaiting the President’s signature before becoming law) formerly known as “The Tax Cuts and Jobs Act” – its title removed pursuant to a special budget rule – could significantly impact the business of college athletics.

Tax Cuts and Jobs Act – New Tax Rules For Transportation Fringe Benefits

Although the recent Tax Cuts and Jobs Act largely retains the favorable tax treatment afforded employees who receive employer-provided transportation assistance, it denies employers any tax deduction for providing these tax-favored benefits. Moreover, tax-exempt employers will now be subject to unrelated business income tax on such benefits. Because the new rules took effect as of January 1, 2018, employers currently sponsoring such programs should promptly evaluate their options.

It’s a Three-Peat: ACA-Reporting Deadline Extended Once Again

The Affordable Care Act (“ACA”) imposed reporting requirements on health coverage providers (including self-funded employer plans) and “applicable large employers” (those with 50 or more full-time employees). For health coverage provided during both 2015 and 2016, the IRS extended the deadline for issuing certain of the required reporting forms. In Notice 2018-06, the IRS has now granted a similar extension with respect to reporting health coverage provided during calendar-year 2017.

Is Fluoridated Drinking Water a Risk? A Federal Court Allows Citizen Suit to Proceed Against EPA Concerning TSCA Oversight

A citizens group cleared the first major hurdle to obtaining a declaratory judgment compelling the U.S. Environmental Protection Agency to consider whether to regulate the fluoridation of drinking water supplies under Toxic Substances Control Act (TSCA)’s Section 6(a) when a federal judge denied the EPA’s motion to dismiss the citizen group’s petition for such a declaration. Consequently, the citizen suit will proceed in evaluating whether EPA must initiate proceedings to decide if it should issue a rule under Section 6 to impose regulatory controls on fluoridation of drinking water.

IRS Issuing Employer Play-or-Pay Notices

Although the GOP tax reform bill reduces to zero the penalty for failing to comply with the Affordable Care Act’s individual coverage mandate, it does nothing to alleviate the employer ACA mandate.  Coincidentally, the IRS has just started issuing notices of potential penalty assessments under that employer mandate (commonly known as the “play-or-pay” provision).

These notices take the form of a “Letter 226J” (this notation appears in the footer of each page), and the Letter makes crystal clear the amount of the potential penalty assessment (which can be substantial).  This dollar amount appears in bold on the second line of the Letter’s text.

It’s Not Too Late to Complete OSHA Electronic Reporting

December 15, 2017, was the deadline for employers to electronically submit information from work-related injuries and illnesses under OSHA’s Electronic Reporting Rule. Nevertheless, OSHA announced on December 18, 2017, that it will continue accepting electronic submittals until midnight on December 31, 2017.

NLRB Issues Two Landmark Decisions: Return to Original Joint-Employer Standard & New Handbook Policy Review Standard

On December 14, 2017, the National Labor Relations Board (the “Board”) issued two landmark decisions. Both are of note because they directly and substantively address two issues that have vexed employers for a number of years: (1) When can two separate and distinct corporate entities be treated as joint-employers for NLRA purposes? and (2) When is a work rule or handbook policy unlawfully overbroad under the NLRA?

DOL Proposes Rescission of Regulations that Restrict Tip Pooling

On December 5th, 2017, the U.S. Department of Labor, Wage and Hour Division will publish a Notice of Proposed Rulemaking (“NPRM”) and a request for comments on tipping regulations issued pursuant to the Fair Labor Standards Act (“FLSA”). The NPRM will propose that the tip pooling regulations issued by the DOL in 2011, which placed restrictions on employers’ ability to implement tip pooling arrangements, should be rescinded.

New Age Harassment: When Will the Next Shoe Drop? What to Do When You Learn One of YOUR Employees Might Be on the Naughty List.

Who will be next? After Matt Lauer, Garrison Keiller, and Russell Simmons each faced assertions of inappropriate conduct in the last week, the “who’s next” question predominates pop culture and the daily news cycle. In the wake of numerous sexual harassment accusations unfolding across Hollywood and corporate America, sexual harassment has become one of the hottest topics in today’s news. While claims of sexual harassment in the workplace are nothing new, the almost daily media coverage of so many high-profile claims will likely result in an increase in reports of sexual harassment allegations for many employers in the immediate future.

Fiduciary Rule – Status Quo until July 1, 2019

On November 29, 2017, the Department of Labor granted an extension of the transition period for the Fiduciary Rule’s Best Interest Contact Exemption and Principal Transaction Exemption, and delayed the applicability date of the amendments to Prohibited Transaction Exemption 84-24. The new transition period will end on July 1, 2019, rather than January 1, 2018. The Department also extended the temporary enforcement policy in Field Assistance Bulletin 2017-02 to July 1, 2019. Thus, financial institutions and advisers impacted by the Fiduciary Rule and related exemptions remain subject to the same requirements as they have been since June 9, 2017, when the Fiduciary Rule and the Impartial Conduct Standards became applicable.

Deadline for OSHA Electronic Reporting Rule Delayed Until December 15, 2017

OSHA has delayed the December 1, 2017, deadline for the Electronic Reporting Rule until December 15, 2017.  This rule requires a wide range of establishments to electronically submit injury and illness information from their OSHA Forms 300A.  The deadline extension was announced via a November 24, 2017, OSHA notice in the Federal Register.

EPA and Corps of Engineers Take Another Step to Roll Back “Waters of the United States” Definition and Issue a New Proposed Rule

The United States Environmental Protection Agency and United States Army Corps of Engineers last week took another step toward rolling back their 2015 proposed definition of “waters of the United States” (WOTUS). On November 22, 2017, the agencies published in the Federal Register a new proposed regulation to delay the effective date of the 2015 WOTUS rule until two years from the date of final action on the new proposal. The agencies seek comments until December 13, 2017, on their new November 22 proposal, so stakeholders who wish to comment have limited time to do so.

Deadline for OSHA Electronic Reporting Rule Fast Approaching

Employers have until December 1, 2017, to electronically submit injury and illness information from their 2016 Summary of Work-Related Injuries and Illnesses (Form 300A) under OSHA’s 2016 Improve Tracking of Workplace Injuries and Illnesses Rule (“Electronic Reporting Rule” or “the Rule”).

Trump Administration EPA to Focus Criminal Enforcement on Significant and Egregious Violators, Citing 1994 “Devaney Memorandum”

A high-ranking Environmental Protection Agency (EPA) enforcement official in the Trump Administration recently cited a 1994 memorandum by Earl Devaney, then Director of EPA’s Office of Criminal Enforcement, as presenting guiding principles to select cases for criminal enforcement of environmental violations. The January 12, 1994, memorandum, “Exercise of Enforcement Discretion,” is often referred to as the “Devaney Memorandum,” and it is available at this link:  https://www.epa.gov/sites/production/files/documents/exercise.pdf. This may signal that criminal enforcement of environmental laws under the Trump Administration will be limited to situations in which there has been significant actual or threatened environmental harm and truly culpable conduct.

Major Department Chain’s Improper Disposal of Household Goods and Consumer Products Results in Significant RCRA Penalty from EPA

On October 25, 2017, the EPA announced that it had reached a settlement with Macy’s Retail Holding, Inc. (Macy’s) in connection with alleged violations of RCRA associated with retail goods and items that were improperly disposed of at department store locations. Under the settlement with EPA, Macy’s agrees to correct the violations, develop a training program for its retailers, conduct third-party audits of eleven of its largest facilities, pay $375,000 in civil penalties, and comply with other requirements within one year.

GOP Tax Bill Contains Benefits Surprises

Despite rumors to the contrary, the tax bill introduced into the House of Representatives by the Republican Party leadership would do nothing to restrict employees’ ability to make pre-tax deferrals to 401(k), 403(b), or 457(b) plans. Trial balloons had suggested that pre-tax deferrals might be limited to only half of the overall annual deferral limit (or even less), with any remaining deferrals made only on a “Roth” (after-tax) basis. But at least for now, “Rothification” appears to be dead.

What the House bill would do, however, is perhaps even more surprising. A slew of tax-favored fringe benefits would be eliminated. And nonqualified deferred compensation as we now know it would be entirely transformed. Incredibly enough, most of these changes would take effect as of January 1, 2018 – less than two months after the bill’s introduction.

EPA Administrator Directs EPA to Cease its “Sue and Settle” Practice

On October 16, 2017, EPA Administrator Pruitt issued a directive, requiring EPA to immediately cease a practice known as “sue and settle,” in response to concerns that EPA has lately been defending against suits brought by environmental organizations with insufficient vigor.  The “sue and settle” concept is not defined in relation to a specific political party or view of environmental protection.  Rather, it is the concept that political parties in power sometimes half-heartedly defend against lawsuits, when the relief sought by such suits is actually favored by the party in power.

2018 Inflation Adjustments

Following announcements by both the Internal Revenue Service and the Social Security Administration, we know most of the dollar amounts that employers will need to administer their benefit plans for 2018. The key dollar amounts for retirement plans and individual retirement accounts (“IRAs”) are shown on the front side of our 2018 limits card.

The reverse side of the card shows a number of dollar amounts that employers will need to know in order to administer health flexible spending accounts (“FSAs”), health savings accounts (“HSAs”), and high-deductible health plans (“HDHPs”), as well as health plans that are not grandfathered under the Affordable Care Act.

A laminated version of the 2018 limits card is available upon request. To obtain one or more copies, please contact any member of our Employee Benefits Group. You also can contact the Spencer Fane Marketing Department at 816.474.8100 or marketing@spencerfane.com.

Administration Proposes Delay of Disability Claims and Appeals Procedures

The Department of Labor has proposed a 90-day delay in the applicability of disability claims and appeals regulations that were finalized in the waning days of the Obama Administration. Rather than applying to claims filed on or after January 1, 2018, the regulations would now apply to claims filed on or after April 1, 2018. Moreover, it seems likely that a further delay – or even a complete withdrawal – of the regulations could be in the works.

Bifurcated Distribution Options Made Easier

Earlier this year, the IRS issued Notice 2017-44. This Notice provides model amendments that plan sponsors may use to amend qualified defined benefit plans to offer a bifurcated distribution option. Because the IRS has terminated its determination letter program (except in limited circumstances), plan sponsors may find the model language helpful as they consider design changes to their defined benefit plans for 2018.

The Tivol Decision – Must An Employer Challenge The Issuance of an MCHR Right-To-Sue Letter By Filing A Writ of Mandamus?

The Missouri Supreme Court recently issued an opinion that clarifies when it is appropriate to challenge the issuance of a Missouri Commission on Human Rights (“MCHR”) right-to-sue letter.

Mistaken Use In Sales Contract Of Spec Sheet For A Different Aircraft Is Held To Void Buyer’s Purchase Obligation

The importance of selecting the correct specification sheet is driven home in a recent decision of the Federal District Court for the Western District of New York.

OSHA Issues New Guidance on Process Safety Management

OSHA recently published a guidance document to help petroleum refineries comply with OSHA’s Process Safety Management (PSM) standard, 29 CFR 1910.119, distilling lessons learned by OSHA over the past ten years from the Petroleum Refinery PSM National Emphasis Program (NEP).  The OSHA guidance serves as a road map for process safety professionals to understand specific areas that OSHA will focus on during a PSM audit and areas most likely for OSHA to find gaps in PSM programs.

Cyber-attacks – A Universal Issue

The Federal Bureau of Investigation has cautioned organizations, regardless of industry, that cyber-attacks continue to increase and evolve. Cyber-attacks often target digital files containing sensitive and proprietary data. Thus, the operational, financial and reputational impact caused by cyber-attacks to an organization, either directly or through its service providers, can be significant.

To illustrate the widespread acknowledgement across industries of the importance of cybersecurity, this article describes: 1) best practices identified by the Securities and Exchange Commission Office of Compliance Inspections and Examinations for designing cybersecurity programs, and 2) guidance issued by the Department of Health and Human Services Office for Civil Rights under the Health Insurance Portability and Accountability Act for responding to cyber-attacks.

The Ins and Outs of Opt-out Incentives

As annual open enrollment season approaches, many employers may be evaluating ways in which to control rising health plan costs. One strategy frequently considered is a financial incentive for employees to waive or opt out of the employer-sponsored group health coverage. Although such “cash-in-lieu” or “opt-out” arrangements have long been common, they raise potential problems under the Affordable Care Act (“ACA”), as well as a number of other federal laws.

Ninth Circuit: Seller is not liable for calls made by telemarketer in violation of the Telephone Consumer Protection Act

In a recent decision that may affect any company that sells products or services using telemarketers, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s grant of summary judgment in Jones v. Royal Admin. Servs., Inc. in favor of a product seller, holding the seller was not vicariously liable for calls made by a telemarketer in violation of the Telephone Consumer Protection Act[1] (TCPA) because the telemarketer was an independent contractor.

Eleventh Circuit: Consumers may “partially revoke” consent to be called by automatic dialing systems

In a new decision that may have important implications for telemarketers and others using automatic dialing systems, the United States Court of Appeals for the Eleventh Circuit held in the case of Schweitzer v. Comenity Bank that the Telephone Consumer Protection Act (TCPA) allows a consumer to partially revoke his or her consent to receive automated telemarketing calls.

FBS Athletic Directors’ Compensation Survey

We reviewed all forms of compensation for the athletic directors at National Collegiate Athletic Association member institutions of the Football Bowl Subdivision (“FBS”).

What property owners need to know about new registration requirements

Missouri Governor Greitens recently signed into law, RSMO §347.048, a new registration requirement affecting limited liability companies (LLCs) that own and either rent or lease real property, or own vacant real property, located in Kansas City, Missouri or Independence, Missouri.

Federal Court Says EPA Too Stringent on Recycling and Reclamation of Hazardous Secondary Materials

Companies that beneficially reuse hazardous secondary materials by recycling or reclaiming those materials rather than discarding them as hazardous waste need to be aware of a new federal court ruling that may provide additional flexibility in the reuse and recycling of those materials. In its July 7, 2017, opinion in Am. Petroleum Inst. v. EPA, No. 09-1038, slip op. (D.C. July 7, 2017), the U.S. Court of Appeals for the District of Columbia struck down two key elements of the EPA’s 2015 Final Rule aimed at revising EPA’s “Definition of Solid Waste”: Factor 4 of the legitimacy test (i.e., “toxics along for the ride”) and, in pertinent part, the Verified Recycler Exclusion pertaining to reclamation under RCRA.

Major Changes to Missouri Human Rights Act Signed Into Law by Governor Greitens

On Friday, June 30, 2017, Missouri Governor Eric Greitens signed Senate Bill 43 into law. The Bill implements significant changes to the Missouri Human Rights Act (“MHRA”) and will likely have a significant impact on the litigation of MHRA claims. When he signed the legislation, Governor Greitens touted Senate Bill 43 for bringing Missouri law in closer alignment with the standards under federal law and 38 other states’ laws.

CERCLA Due Diligence Requirements Revised to Reflect Updated Phase I Standard for Forested and Rural Land

Purchasers of rural and forested land need to be aware of a recent change in EPA’s environmental due diligence rules. On June 20, 2017, EPA published a Direct Final Rule in the Federal Register, amending the All Appropriate Inquiries (AAI) Rule, 40 CFR Part 312, to reflect 2016 updates to ASTM E2247, a standard for Phase I investigations on rural and forested land.

Sale of New Aircraft With Used Engine Supports Claim of Fraud

The Texas Court of Appeals in Dallas ruled this week that a buyer purchasing a new aircraft from the manufacturer made a submissible case of fraud against the seller when it introduced evidence that one of the aircraft engines had previously been used on another aircraft, and that this fact had not been fully disclosed to the buyer.

7th Circuit Holds That Title VII’s Prohibition on Sex Discrimination Includes A Prohibition on Sexual Orientation Discrimination

On April 4, 2017, the en banc Seventh Circuit Court of Appeals overruled its own precedent and became the first Circuit to hold that discrimination on the basis of sexual orientation can constitute unlawful sex discrimination under Title VII.

Requirements for Arizona employers to stay in compliance with new paid sick leave law

In November, 2016, voters in the State of Arizona adopted Proposition 206, known as The Fair Wages and Healthy Families Initiative. As of July 1, 2017, all employers in Arizona must provide employees with paid sick leave.

The Second Circuit issues potentially impactful ruling on revocation of consent to be called under the Telephone Consumer Protection Act when that consent is given as bargained-for consideration for a binding contract

Congress enacted the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq., (TCPA) to protect consumers from “[u]nrestricted telemarketing, which it determined to be “an intrusive invasion of privacy.” The TCPA prohibits, among other conduct, telephone calls to residential phone lines or cell phones using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party.

Subsurface Intrusion now a Factor for NPL Listings According to New EPA Final Rule

On May 22, 2017, EPA finalized a new rule establishing subsurface intrusion as a new component of the Hazard Ranking System (HRS), the principal mechanism for placing contaminated sites on the National Priorities List (NPL).

Denver Post Supports AG’s Appeal of Martinez Case to Colorado Supreme Court

As stated here in an earlier post, the Martinez decision, if upheld by the Supreme Court, has major implications for all fossil fuel as well as hardrock mineral development in the state of Colorado.

When is a seller liable for illegal calls made by a third party telemarketer? Fleshing out vicarious liability under the Telephone Consumer Protection Act

Using a telemarketer to market goods or services can be extremely costly to the seller if the telemarketer conducts its business in a manner that violates the Telephone Consumer Protection Act (TCPA). Penalties for violations of the TCPA range from $500 to $1,500 per call. And with call or text campaigns that may reach thousands of recipients, or even millions – the potential liability can be astronomical. It should be no surprise TCPA class action lawsuits are flourishing.

By the Numbers: 2016-2017 Autonomy 5 Men’s Basketball Assistant Coach Contracts

AthleticDirectorU has teamed with Spencer Fane to provide unprecedented insight into coaching contracts and salaries. Tonight is the first in a series aimed to provide context and clarity.

The Fiduciary Rule is Alive

According to U.S. Labor Secretary Alexander Acosta, the Department of Labor’s Fiduciary Rule will become effective on June 9th. As discussed in our May 9th article, the Rule’s expanded definition of “fiduciary” will apply, and advisers and financial institutions providing investment advice as fiduciaries must comply with the Rule’s “impartial conduct” standards, beginning on June 9, 2017. At this time, the full scope of the Fiduciary Rule and its related prohibited transaction exemptions will be applicable on January 1, 2018.

Treatment of “Collateral” Employees Under Retirement Plans

It is common for employers to contract with one or more third parties (sometimes referred to as “leasing companies”) to provide individuals to perform services for the employer. Various issues may arise regarding the treatment of such individuals under a retirement plan maintained by the employer.

The Future of Oil and Gas Development in Colorado – Appeal by Attorney General of the Martinez Case Raises the Stakes

On May 18, 2017, the Colorado Attorney General filed an appeal with the Colorado Supreme Court seeking to overturn the recent 2-1 decision of the Colorado Court of Appeals which arguably conflicts with the long-standing interpretations embraced by the Colorado Oil and Gas Conservation Commission (“OGCC”) related to its organic statute.

EPA Administrator Consolidates Authority to Select Costly CERCLA Remedies

EPA Administrator Scott Pruitt recently redelegated to the EPA Administrator the authority to select $50 million plus site cleanup remedies under CERCLA Records of Decision or RODs. Some years ago, such authority had been delegated to the Regional Administrators in each EPA Region.

Oklahoma – New Law Requires the Losing Party to Pay Attorney Fees

HB 1470, signed into law last week, does away with the “American Rule,” which impacts which party is responsible for attorney fees at the conclusion of a lawsuit. Set to go into effect in November 2017, the new law requires the court to award attorney fees to the prevailing party – paid for by the non-prevailing party.

Federal Court in Missouri holds technical failure to comply with the FCC’s TCPA opt-out notice requirements on fax advertisements does not confer standing on recipient who consented to receive the faxes

The FCC’s TCPA “opt-out” notice requirements for sending solicited faxes continues to be weakened.

DOL’s Fiduciary Rule Countdown

For investment advisers and financial institutions, the countdown to compliance with the Department of Labor’s new “conflict of interest” rule ends on June 9, 2017. The Department of Labor (“DOL”) issued a final rule on April 7, 2017, that delays the original applicability date of its conflict of interest regulation (the “Fiduciary Rule”) and its related prohibited transaction exemptions for 60 days, creating a “Transition Period” that starts on June 9, 2017, and ends on December 31, 2017.

St. Louis City Minimum Wage Set To Increase to $10 Per Hour

Today, the Circuit Court for the City of St. Louis, Missouri lifted an injunction that had blocked a St. Louis City ordinance increasing the minimum wage for St. Louis City businesses. This action came after the Missouri Supreme Court ruled that state law did not prohibit the higher local minimum wage.

Shopping for Cyber Insurance? Initial Lessons Learned from the Courts

The burgeoning multi-billion dollar cyber insurance market is expected to continue its 25%+ annual growth over the next few years. Despite this dramatic growth, the market is plagued with uncertainty over the meaning of key policy terms and scope of coverage. The lack of both uniformity in cyber policy language and judicial guidance interpreting policy language prevent companies from confidently assessing their loss exposure in the event of a major data breach.

DOL Fiduciary Rule Enforcement – Confusion and Disruption Relief

The Department of Labor (“DOL”) has proposed to delay for 60 days the “applicability date” of the Fiduciary Rule (“Rule”), and the new and revised prohibited transaction exemptions related to the Rule. The proposed delay has created confusion within the financial services industry because it is not certain that a final rule implementing the delay can be published (and become effective) before the Rule’s April 10th applicability date. In response to the confusion, the DOL issued Field Assistance Bulletin 2017-01 (“Bulletin”) announcing a temporary enforcement policy that assures advisers and financial institutions that the DOL will not seek to enforce the Rule or the related prohibited transaction exemptions in the event the Rule becomes applicable before it is officially delayed.

IRS Clarifies Permissible Substantiation Procedures for Hardship Withdrawals

In recent years, sponsors and administrators of 401(k) and 403(b) plans have received conflicting advice on the steps they should take to substantiate an employee’s entitlement to an in-service withdrawal on account of financial hardship. For instance, an April 2015 IRS newsletter seemed to require that plan sponsors obtain and retain documentary proof of an employee’s entitlement to a hardship withdrawal. However, two recent internal IRS memos outline a permissible approach to this substantiation requirement that need not involve conditioning a hardship withdrawal on an employee’s provision of supporting documents. Plan sponsors should thus consider this new alternative.

Stormwater Runoff from Construction Activities Subject to New EPA 2017 General Permit

Construction companies, general contractors, developers, and property owners involved in land clearance and disturbance activities will want to take note of the new Stormwater Construction General Permit (“Construction General Permit”) issued by the United States Environmental Protection Agency (“EPA”) on February 17, 2017. As with earlier Construction General Permits, the 2017 permit applies to land clearance and disturbance activities greater that one acre and requires site operators to comply with best management practices (“BMPs”), effluent limits, and other permit requirements, including developing a Stormwater Pollution Prevention Plan (“SWPPP”).

The EEOC’s Proposed Enforcement Guidance on Unlawful Harassment

The Equal Employment Opportunity Commission (EEOC) has issued proposed enforcement guidance on unlawful harassment (the “Proposed Guidance”). The Proposed Guidance is intended to be a follow-up to the EEOC’s Select Task Force on the Study of Harassment in the Workplace in 2016 (“2016 Harassment Study”). The Proposed Guidance provides a detailed explanation of the EEOC’s position on the three components of a hostile work environment claim: 1) covered bases and causation; 2) hostile work environment threshold; and 3) liability.

SEC Issues Robo-Adviser Guidance

The increased popularity of automated digital investment advisory programs (often called “robo-advisers”) has drawn the attention of the Securities and Exchange Commission (“SEC”). On February 23, 2017, the SEC’s Division of Investment Management issued Guidance Update No. 2017-02 (the “Update”). That Update provides guidance to robo-advisers as they seek to satisfy their disclosure, suitability, and compliance obligations under the Investment Advisers Act of 1940 (“Advisers Act”). On the same day, the SEC’s Office of Investor Education and Advocacy issued an Investor Bulletin to educate investors about robo-adviser programs.

DOL Proposes 60-Day Delay for Fiduciary Rule

After nearly a month of regulatory machinations and behind-the-scenes lobbying, the Department of Labor has released a proposed rule that would delay the “applicability date” of its recently enacted “conflict of interest” (or “fiduciary”) regulation (the “Fiduciary Rule”). The 60-day delay in the applicability of the Fiduciary Rule would have only an indirect effect on employers, but is of great interest to investment advisors and other service providers.

IRS Extends Deadline for Providing Small-Employer HRA Notices

As explained in our December 19, 2016, article, the 21st Century Cures Act allows small employers (those that are not subject to the Affordable Care Act’s “play-or-pay” requirements because they have fewer than 50 full-time employees, including full-time equivalents) to offer their employees a premium reimbursement arrangement that would otherwise violate the ACA. By establishing a “qualified small employer health reimbursement arrangement” (or “QSEHRA”), such an employer may subsidize its employees’ purchase of individual health insurance coverage. In its recent Notice 2017-20, the IRS has granted these employers additional time to comply with the QSEHRA notification requirement.

Steps for Employers to Avoid Violating the Fair Credit Reporting Act

The federal Fair Credit Reporting Act (“FCRA”) outlines a strict procedure that employers must follow when they obtain criminal background reports, credit histories, and other background reports on employees and applicants from a third party which is engaged in the business of preparing such reports. All such reports are called “consumer reports” under FCRA.

IRS: No More Closing Agreements Under FICA “Special Timing Rule”

A recent IRS Chief Counsel Memorandum (AM 2017-01) raises the stakes for employers that fail to apply the proper FICA taxation rules to nonqualified deferred compensation. An option previously available to those employers has been taken off the table. Under this option – which required a formal “Closing Agreement” with the IRS – both employer and employee FICA taxes could be minimized by voluntarily paying those taxes for years as to which IRS assessments were otherwise barred under the Tax Code’s three-year statute of limitations. Without this correction option, employers have an even greater incentive to apply the proper FICA taxation rules to their deferred compensation arrangements.

Right to Work Enacted in Missouri

Governor Greitens signed the Missouri Right to Work Bill on February 6, 2017. See Missouri Senate Bill 19. It becomes effective on August 28, 2017 and applies to any new collective bargaining agreements or renewals, extensions, amendments, or modifications after the effective date.

Trump Orders DOL to “Reconsider” Fiduciary Rule

On Friday, February, 3, 2017, President Trump issued a Memorandum directing the Secretary of Labor to “re-examine” the Department of Labor’s final regulation defining “fiduciary” investment advice (sometimes referred to as the “Fiduciary Rule” or the “Conflict of Interest Rule”), and to consider whether the Rule should be revised or rescinded. The Rule, which significantly expands the circumstances under which an individual becomes a “fiduciary” by reason of providing investment advice for a fee, was finalized in April of 2016, and technically became effective last July, but was drafted such that its provisions generally do not become “applicable” to financial advisers until April 10, 2017.

EPA and OSHA Increase Civil Penalties – Days Before New Administration

In January 2017, both EPA and OSHA increased civil penalties for new enforcement cases. While the increases became effective just days before the new Administration took office, the increases are a result of Congressional action in 2015 to annually adjust civil penalties for inflation by January 15 of each new calendar year.

DOL Disability Regulations and the Impact on ERISA Plans

The Department of Labor has issued final regulations under Section 503 of ERISA that purport to enhance the disability benefit claims and appeals process for plan participants. These regulations amend the DOL’s disability claims procedure regulations issued in 2002. The new regulations generally affect the procedures for filing disability benefit claims, providing notice of adverse benefit determinations, and appealing adverse benefit determinations.

OSHA Releases “Recommended Practices” for Anti-Retaliation Programs

The Occupational Safety and Health Administration (“OSHA”) recently released so-called “recommended practices” directed at employers who may be covered by any of the 22 whistleblower protection statutes enforced by OSHA. While these “recommended practices” are not mandatory, they are provided by OSHA to assist employers in creating workplaces free from retaliation.

Summary of the Guidance Issued by ICBA on ADA Accessibility for Websites

The Independent Community Bankers of America (“ICBA”) reached out to the Department of Justice (“DOJ”) asking for guidance regarding whether the DOJ will adopt the standards in the World Wide Web Consortium’s Web Content Accessibility Guidelines (“WCAG”). The DOJ stated that although it has not yet adopted the WCAG standards, it is leaning toward adopting the standards. Furthermore, the DOJ stated that in its view, ADA requirements to provide accessible technology is an “already-existing obligation” and compliance is expected unless a business can prove an undue burden.

SEC Guidance Update and the DOL’s Fiduciary Rule

In December, the Division of Investment Management of the Securities and Exchange Commission issued Guidance Update No. 2016-06. The Update provides disclosure and procedural guidance to address potential issues for mutual funds responding to the Department of Labor’s adoption of the Conflict of Interest Rule. To address concerns by financial intermediaries that variations in mutual fund sales loads may violate the Rule, Funds are exploring various options, including changing fee structures and creating new share classes. Such changes may impact fiduciary decisions regarding a plan’s investments and compensation arrangements.

Amending College Coach Contracts: Let Prudence Not Panic Be Your Guide

Coach Corso’s familiar caution invites consideration of the velocity with which the contracts of his former college football coach colleagues are being renegotiated.

Governor Greitens Orders Review of Every Missouri Regulation

On January 10, 2017, Missouri Governor Eric Greitens signed Executive Order 17-03 (the “Order”). Among other things, the Order compels all state agencies to review each and every Missouri regulation appearing in the Code of State Regulations that falls within their jurisdiction.

Cures Act Allows for Small-Employer HRAs

Before leaving DC for the winter holidays, Congress and President Obama agreed on a provision granting small employers a bit of relief from the Affordable Care Act. Tucked at the very end of the 21st Century Cures Act is a provision allowing certain small employers to offer their employees a health reimbursement arrangement (“HRA”) that need not be “integrated” with a group health plan. Employees may then use their employer’s pre-tax contributions to such an HRA to pay premiums under individual health insurance policies.

White Collar Update: The Supreme Court Weighs In On Bank Fraud

With Monday’s decision in Shaw v. U.S., the Supreme Court cleared up any ambiguity regarding who is protected by the bank fraud statute (18 U.S.C. §1344) and, along the way, continued to encourage federal prosecutors to rely on the powerful and far-reaching bank fraud statute. In saying that fraud against a customer is fraud against a bank, the decision continues the Court’s strong support of the statute and intolerance for technical, loophole-seeking defenses.

EPA Issues Final Hazardous Waste Generator Improvements Rule

On November 28, 2016, EPA published the final version of the Hazardous Waste Generator Improvements Rule (the Rule) in the Federal Register. Promulgated under the Resource Conservation and Recovery Act (RCRA), the Rule updates EPA’s regulations governing generators of hazardous waste, most of which EPA promulgated in the 1980s. The Rule significantly revises the hazardous waste generator requirements.

Court Halts New Overtime Rules on Nationwide Basis

Just as employers across the nation were bracing for the new rules governing white-collar exemptions to the overtime laws (“the New OT Rules”), a federal district court in Texas blocked the Department of Labor from implementing them. The New OT Rules—which drastically increased the minimum salary threshold for employees classified as exempt under the executive, administrative and professional employee exemptions—were set to take effect on December 1, 2016.

ACA-Reporting Deadline Extended by 30 Days

The Affordable Care Act (“ACA”) imposed additional reporting requirements on health coverage providers (including self-funded employer plans) and “applicable large employers” (those with 50 or more full-time employees). In Notice 2016-70, the IRS has granted coverage providers and employers 30 more days to issue the appropriate ACA-reporting forms to their insureds and full-time employees for coverage provided during 2016. Rather than January 31, 2017, these Forms 1095-B and 1095-C will now be due by March 2, 2017. In addition, the IRS has extended by one year the period of “good-faith compliance” with these reporting rules. As of now, however, the IRS has not extended the deadline for coverage providers and employers to transmit these ACA-reporting forms to the IRS.

DOL’s Persuader Rule Permanently Enjoined on a Nation-wide Basis by Texas District Court – May Be Sign of Things to Come for Other DOL Regulations

On November 16, 2016, the United States District Court for the Northern District of Texas (Lubbock Division) entered an order holding that the Department of Labor’s Persuader Advice Exemption Rule is unlawful and should be set aside pursuant to 5 U.S.C. § 706(2). The Persuader Rule regulations are now subject to a permanent nation-wide injunction and the DOL will be prohibited from enforcing the regulations unless and until the district court’s order is revised or reversed on appeal.

Getting Ready for the Presidential Election – Voting Leave Law

With the Presidential Election just days away, employers need to be ready to accommodate workers who may want or need to leave during the workday to cast their votes. The purpose of this blog post is to help employers prepare for the anticipated surge of political activity by providing a summary of the voting leave laws for the states of Arkansas, Colorado, Illinois, Iowa, Kansas, Missouri, Oklahoma and Texas.

2017 Inflation Adjustments

Following recent announcements by both the Internal Revenue Service and the Social Security Administration, we know most of the dollar amounts that employers will need to administer their benefit plans for 2017. The key dollar amounts for retirement plans and individual retirement accounts (“IRAs”) are shown on the front side of our 2017 limits card.

Certificate of Airworthiness Ineffective When Noncompliance with FAR is Present

In Munich v. Columbia Basin Helicopter, Inc., the U.S. District Court for the District of Oregon found that a contract term requiring delivery of an airworthiness certificate by the seller may be breached even when a certificate is provided at the time of delivery.

Washington Decision Rejects Seller’s Reliance on Boilerplate Warranty Disclaimer

The Seattle seller of a used aircraft discovered that its use of an “as is” clause in its general disclaimer of warranties did not suffice to exonerate it from the consequences of delivering an unairworthy aircraft, even after the buyer’s conditional acceptance of the aircraft.

EPA Issues Guidance Encouraging Greener Cleanup Activities

On August 2, EPA issued a guidance document encouraging parties to opt for “greener cleanup activities” when conducting CERCLA response actions, to reduce the environmental costs associated with these cleanups. The guidance document defines “greener cleanup activities” as “practices or technologies that reduce or mitigate the environmental impacts of CERCLA removal and remedial actions, while meeting regulatory and other cleanup requirements.” Examples include generating renewable energy on-site, using energy-efficient equipment, and choosing land management methods that do not require mowing. The guidance document builds on EPA’s 2009 Principles for Greener Cleanups, a general statement of intention to manage CERCLA cleanups in a more environmentally sustainable manner.

Retail and Consumer Product Hazardous Waste – Update on Reverse Distribution and Aerosol Cans by EPA

On September 12, 2016, EPA issued its “Strategy for Addressing the Retail Sector under RCRA’s Regulatory Framework.” The strategy document sets forth three actions the agency is expected to finalize in the short-term to help ease the RCRA burden on managing retail and consumer products that may trigger RCRA hazardous waste characteristics or RCRA listings once a decision to discard is made.

A New Type of Student Union – the NLRB’s decision in Columbia University

In its August 23, 2016 decision in Columbia Univ., 364 N.L.R.B. No. 90 (2016), the National Labor Relations Board (the “Board”) ruled that graduate students working as teaching and research assistants at private universities qualify as employees for collective bargaining purposes under the National Labor Relations Act (“NLRA”) and thereby paved the way for graduate students to join or form unions. Depending on the size of the academic institution, the unionization of graduate employees could pose not only a significant financial burden but also a disruption to the completion of academic programs. This type of student union may be one that not all campuses are ready for.

EEOC’s Revised EEO-1 Rule Seeks to Identify Equal Pay Discrimination

Companies should consider examining the extent to which there may be pay disparities in their workforce. Current events and the EEOC’s revised EEO-1 Rule suggests that all regulatory agencies will be taking a much closer look at corporate pay practices in an attempt to try and root out unintentional bias that is identifiable through inexplicable differences in pay between men and women (as well as between other protected categories).

Avoiding Cleanup Liability for Industrial and Commercial Properties Under New Kansas Law

Effective July 1, 2016, buyers of industrial and commercial properties in Kansas may qualify for a Certificate of Environmental Liability Release (CELR) under the state’s new Contaminated Property Redevelopment Act. This liability release for pre-existing contamination is important for prospective purchasers of industrial and commercial properties by helping to facilitate those transactions and allow the buyer to avoid state cleanup responsibility. But not only buyers benefit, as sellers can also demonstrate a framework that allows the transaction to proceed and maximize the property value without the buyer or seller taking on unnecessary risk if the proper steps to obtain the CELR are followed.

New 50(d) guidance

The Internal Revenue Service (IRS) has recently issued temporary regulations with respect to income inclusion rules under Section 50(d) of the Internal Revenue Code (the Code). Guidance on Section 50(d) has been anticipated primarily in the historic tax credit (HTC) arena, due to its implications for the pass-through of tax credits under a master tenant structure.

A federal district court in Missouri rejects an FDCPA claim based on the legal theory that post-judgment interest in Missouri nontort cases must be specifically awarded in the judgment to be collectable

We are pleased to report a victory in the Eastern District of Missouri in an FDCPA case concerning the collection of statutory post-judgment interest on an unpaid Missouri state court judgment.

Supreme Court Refuses to Enforce the DOL’s FLSA Regulation on Car Dealership Service Advisors

On June 20, 2016, the Supreme Court of the United States held that the Department of Labor’s (“DOL”) 2011 regulation classifying “service advisors” as eligible for overtime pay under the Fair Labor Standards Act (“FLSA”) was not enforceable.

Document Retention Policy for Banks

Document retention sounds like a boring topic until you realize that your bank can be subject to huge monetary damages and possible regulatory action if it doesn’t handle document retention correctly. In the old days, banks could simply keep every document forever to be on the safe side. That isn’t a practical alternative in today’s environment. Nowadays, retaining documents after their useful date can actually harm the bank.

Injunctive Relief Summary

This summary covers (i) the types of injunctive relief, and when it is obtained; and (ii) what is necessary to obtain injunctive relief.

OSHA Reporting Rules Discourage Use of Mandatory Post-Accident Drug Testing

On May 12, 2016, OSHA published the final version of new reporting rules intended to “Improve Tracking of Workplace Injuries and Illnesses.”

Internal Investigations – Best Practices

Organizations conduct internal investigations when confronted with significant legal and financial risks. A successful internal investigation follows recognized best practices. Spencer Fane LLP presents this best practices information to inside counsel. It is based on Spencer Fane’s experience in conducting internal investigations, and on case law, ethics rules and the experience of other law firms. We believe this is a valuable resource that will support inside counsel’s oversight and decisions in internal investigations.

DOL Issues New, More Expansive, Interpretation of Persuader Rule

In March of this year, the Office of Labor-Management Standards (“OLMS”) issued new regulations regarding the Persuader Rule. See 29 CFR Parts 405 and 406. The new regulations, which become fully effective on July 1, 2016, require employers and their law firms or consultants to comply with federal reporting and disclosure requirements if they engage in certain labor relations advisory activities.

IRS Issues Long-Awaited Guidance Regarding (Nonqualified) Deferred Compensation Arrangements of Governmental and Tax-Exempt Employers

Deferred compensation arrangements that are not “tax-favored” retirement plans under Code Sections 401(a), 403(b), or (in the case of a governmental employer) 457(b) are generally referred to as “nonqualified” plans. So long as a nonqualified plan is “unfunded” (meaning the amounts deferred remain the property of the employer, and subject to the employer’s general creditors, until paid), the amounts deferred are generally not taxable until they are “paid or otherwise made available” to the employee.

EEOC Releases Sample ADA Notice for Employee Wellness Programs

In our June 2, 2016, article summarizing final wellness program regulations issued by the EEOC under Title I of the Americans with Disabilities Act (“ADA”), we noted the EEOC’s promise to post on its website a sample notice by which employers could satisfy the ADA’s notification requirements. The EEOC has today posted such a sample notice, along with a series of FAQs shedding further light on the notification requirement. Although employers are not required to use this sample notice, they should make sure that their notice covers all the points addressed in the EEOC sample.

New EEOC Guidance on Employee Wellness Programs

Final regulations issued by the Equal Employment Opportunity Commission (“EEOC”) under both the Americans with Disabilities Act (“ADA”) and the Genetic Information Nondiscrimination Act (“GINA”) will require modifications to many employee wellness programs. These modifications may include the deletion of certain questions from health risk assessments, additional employee notification requirements, and a reduction in the incentives used to discourage tobacco usage. Although certain aspects of these regulations will not apply until the first day of the 2017 plan year, others are already in effect.

Who’s a Fiduciary Now? Understanding the Department of Labor’s New Definition

The sky isn’t falling, but in a very real sense the retirement world is changing. After months of angst from many in the industry and boisterous posturing by members of Congress, on April 8, 2016, the Department of Labor released a final regulation that more broadly defines who is an “investment-advice” fiduciary for purposes of ERISA and the Internal Revenue Code.

Volume 7A, MISSOURI PRACTICE SERIES, Business Organizations in Missouri (West 1991)

The multivolume Legal Forms is the most extensive collection of Missouri forms and analysis available in the state. The forms are annotated, well-indexed, and cross-referenced to simplify drafting, and are accompanied by commentary, analysis, and drafting tips. The collection covers all major areas of business practice, including:

  • Real estate transactions
  • Leases
  • Building and construction agreements
  • Estate planning
  • Business organizations
  • Much more

Department of Labor Releases New Overtime Rules

The long anticipated DOL overtime rules have been issued. On May 18, 2016, the Department of Labor released the Final Rule governing the “white-collar exemptions” to the Fair Labor Standards Act’s (“FLSA”) overtime pay requirements. These long-awaited regulations will have substantial implications for most employers. The final rule is set to become effective on December 1, 2016.

Closing on Sale and Acceptance of Aircraft with Bill of Sale Specifying “As Is” Delivery Waives Contract Provisions Requiring Seller to Correct Discrepancies and Deliver an Airworthy Aircraft

The aircraft buyer in Wedderburn Corporation v. Jetcraft Corporation learned the hard way that a contract term calling for delivery of an airworthy aircraft with discrepancies repaired would not protect the buyer under all circumstances.

DOL Releases Final Regulation Defining Investment Fiduciaries

After years of effort, the Department of Labor released final rules on April 6, 2016, that will substantially alter the way investment advice is provided to ERISA plans, their participants, and even non-ERISA IRAs.

CJR “To-Do-List”

With the effective date for the Comprehensive Care for Joint Replacement (“CJR”) program now upon us, we wanted to take a moment to highlight key steps that affected hospitals should be pursuing if they wish to realize the benefits of – or at a minimum, avoid potential adverse consequences of – this new payment model.

Supreme Court Allows Representative Evidence to Establish Liability in a FLSA Collective Action

Federal Rule of Civil Procedure 23(b)(3) requires that, before a class is certified, a district court must find that questions of law or fact common to class members predominate over questions affecting only individual members.” In a recent decision by the Supreme Court, the majority explained that “[i]n a case where representative evidence is relevant in proving a plaintiff’s individual claim, that evidence cannot be deemed improper because the claim is brought on behalf of a class.” Tyson Foods, Inc. v. Bouaphakeo, et al., No. 14-1146, 2016 WL 1092414 (S. Ct. 2016).

New OSHA Silica Dust Rule to Impact Over 675,000 Workplaces, Biggest Impact on Construction Industry

On March 25, 2016, 81 Fed. Reg. 16286, OSHA issued a new final rulemaking to reduce silica dust exposure that will directly affect more than 2 million construction workers who drill, cut, crush, or grind silica-containing materials such as concrete and stone, and 300,000 workers in general industry operations such as brick manufacturing, foundries, and hydraulic fracturing. OSHA explains that silica dust exposure occurs in common workplace operations involving cutting, sawing, drilling, and crushing of concrete, brick, block, rock, and stone products (such as construction tasks), and operations using sand products (such as in glass manufacturing, foundries, sand blasting, and hydraulic fracturing).

EPA to Focus on RMP Chemical Accident Prevention and Safety, Issues Proposed Rule and Will Increase Enforcement

Businesses that store and use flammable and toxic chemicals that are regulated under EPA’s Risk Management Plan (RMP) Program at 40 CFR Part 68 need to be aware of recent actions by the U.S. Environmental Protection Agency aimed at curtailing chemical accidents and releases through new proposed regulations and also enforcement. Facilities potentially subject to EPA’s initiatives include chemical plants and refineries, POTWs that use chlorine as a disinfectant, as well as those companies that use and store bulk anhydrous ammonia as an industrial refrigerant (dairy operations, food and pharmaceutical manufacturing, cold storage warehousing) or as fertilizer (agricultural cooperatives, fertilizer distribution).

You Can Run But You Can’t Hide: HIPAA Audits are Coming

On March 21, 2016, the HHS Office for Civil Rights (OCR) announced that it has begun “Phase 2” of audits of covered entities and their business associates for compliance with the HIPAA Privacy, Security and Breach Notification Rules (“HIPAA Rules”). Phase 1 was limited to a pilot program designed to develop a standard set of audit protocols.

Environmental Enforcement and Crimes – EPA and DOJ Announce New Initiatives and How They Affect You

On February 18, 2016, the U.S. Environmental Protection Agency announced its new National Enforcement Initiatives aimed at protecting public health and national pollution challenges for FY 2017-2019. These new initiatives, coupled with other recent significant announcements by the U.S. Department of Justice regarding a new emphasis for individual accountability for corporate malfeasance (“Yates Memo”) along with an expanded focus on DOJ’s and OSHA’s worker endangerment initiative, underscore a new paradigm shift for businesses and individuals in how EPA and the DOJ intend to enforce the nation’s environmental, health and safety (“EHS”) laws over the coming years.

EEOC Now Releasing Position Statements to Charging Parties

When an employee or former employee files a charge of discrimination against their employer, the EEOC has the authority to investigate. As part of the investigation, the EEOC asks the employer to submit a position statement explaining its side of the story.

Yet Another Data Sheriff In Town: CFPB Issues Its First Data Security Enforcement Action

On March 2, 2016, the CFPB finalized a Consent Order with Dwolla, an online payment platform, for violations of the CFPA.  It is the CFPB’s first enforcement action related to data privacy and security.  It is notable because Dwolla appears to have become an enforcement target due solely to its robust claims about security, and not due to any data breach.  It also places obligations on Dwolla’s Board to become responsible for data privacy and security in the company.

EU-US “Privacy Shield” Disclosed to the Public

The past week has seen two key developments in EU-US data privacy relations — the US enacted the Judicial Redress Act into law, and EU and US officials published the proposed EU-US Privacy Shield protocol for transatlantic data transfers.  While the Privacy Shield still has a gauntlet of EU bureaucracy to navigate, companies that relied on Safe Harbor should begin to plan now to comply with the robust new requirements of Privacy Shield, or implement other measures to satisfy the EU Privacy Directive to import EU data to the US.

A Tidal Wave of Meaningful Use Audits Hits the Midwest – 5 Steps to Take Now

The Centers for Medicare and Medicaid Services (“CMS”) provided over $20 billion in Meaningful Use incentive payments to hospitals and eligible professionals who attested to compliance with the EHR Incentive Program (the “Program”).

OSHA to Focus Enforcement at Manufacturing Facilities in Kansas, Missouri, and Nebraska

Earlier this month, OSHA Region VII announced that it was launching a new Region-wide Local Emphasis Program in Kansas, Missouri, and Nebraska designed to address certain industries viewed by OSHA as high-hazard manufacturing industries because the injury and illness rates exceed the average for the private sector.

EPA Releases National Enforcement Initiatives

Beginning October 1, 2016, the U.S. Environmental Protection Agency (EPA) will target its enforcement efforts in seven different focused areas, including three areas designed to protect water quality, two initiatives aimed at reducing toxic air pollutants and reducing air pollution, an initiative to reduce accidental chemical releases from industrial facilities, and an enforcement initiative geared at energy extraction activities.

Providers Need to Take the “Necessary Steps” for HIPAA Compliance

On February 3, 2016, the U.S. Department of Health and Human Services issued a statement and released the opinion of the Administrative Law Judge who found in favor of the Office of Civil Rights (“OCR”) determining that a home health agency, Lincare, Inc. (“Lincare”) violated the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) Privacy Rule requiring Lincare, to pay $239,800 in civil money penalties. All covered entities should review the opinion and the OCR’s comments and begin taking any and all “necessary steps” to ensure HIPAA compliance and to make certain protected health information is adequately protected.

Three Key Take-Aways from CMS’ Final Rule on Reporting and Returning Overpayments

In the Centers for Medicare & Medicaid Services’ (“CMS”) Reporting and Return of Overpayments Final Rule, published February 11, 2016 (“Final Rule”), CMS has clarified some outstanding questions faced by healthcare providers and suppliers who may have received overpayments from the Medicare program.

President Obama Goes Big on Privacy and Cybersecurity

As part of a massive new initiative, Obama establishes the Federal Privacy Council and a national commission on cybersecurity

Making Contractor-Financing Work

Contractor-financed infrastructure projects can help the public sector tackle one of its most significant challenges. During the Great Recession, municipalities often opted to defer infrastructure maintenance and improvement projects to curtail budget shortfalls. Not surprisingly, the long-term useful life of neglected infrastructure suffered due to these fiscal constraints.

EU announces “Privacy Shield” agreement to replace Safe Harbor transatlantic data pact

  • U.S. organizations wishing to import data from EU subjects will be subject to much more “robust” privacy protocols
  • Final approval still faces hurdles

EEOC Seeks Additional Pay Information from Large Employers

In a nutshell – Last week, the EEOC unveiled its proposal to seek increased amounts of data from large employers in a stated effort to “combat the persistent gender gap in employee compensation.” Practically, the proposal revises the EEO-1 form. The EEOC’s proposed changes to the EEO-1 form will require all employers with 100 or more employees to submit the new EEO-1 form and provide substantial information regarding pay ranges and hours worked as well as salary data by race, gender and ethnicity.

HIPAA Hodgepodge

After more than ten years, HIPAA is still a hot topic. Here is a rundown of recent developments.

You’ve (Still) Got to Be Kidding: Supreme Court Holds ERISA Plan Participants May Ignore Reimbursement Provisions If They Spend the Money Fast Enough

The Supreme Court has handed down its latest in a long line of decisions on enforcing the reimbursement provisions of self-funded ERISA welfare plans. As evidenced by the Court’s lopsided 8-1 decision, the result in Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan will not surprise those familiar with the law in this area. But as indicated by Justice Ginsburg’s indignant dissent, plan sponsors may find the decision downright bizarre. After all, it tells participants who double-recover for medical benefits paid by their employer’s health plan that they’re off the hook – if they spend the money fast enough.

DOL Guidance on Joint-Employer Standard Raises a Red Flag for Businesses

On Wednesday, January 20, 2016, the U.S. Department of Labor’s Wage and Hour Division (WHD) released an administrator’s interpretation that is intended to provide guidance to employers on the WHD’s position on the joint-employer standard under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act.

Another Court Rejects EEOC Position on ADA and Wellness Programs

Following the lead of Seff v. Broward County, another federal court has disagreed with the EEOC on the scope of an ADA exemption for employee benefit plans. In EEOC v. Flambeau, Inc., the court held that this benefit-plan “safe harbor” could be used to justify a wellness program that included both a health risk assessment and a biometric screening.

EPA Revamps Voluntary Self-Disclosure Audit Policy

Businesses and companies seeking to qualify for penalty mitigation and relief by submitting voluntary self-disclosures under EPA’s Audit Policy need to be aware of significant changes and modifications that took effect in December 2015.

IRS Extends ACA-Reporting Deadlines

In a belated Christmas present, the IRS on December 28th extended the deadlines for large employers and health insurers to comply with certain reporting requirements imposed by the Affordable Care Act (“ACA”).  Notice 2016-4 grants an additional two months to provide statements to employees, and an additional three months to transmit those statements to the IRS.

Criminal Prosecution of Worker Safety Violations – New DOJ Initiative to Increase Criminal Enforcement of OSHA Matters

On December 17, 2015, the U.S. Department of Justice (DOJ) announced a major new initiative to increase the number of criminal charges in worker endangerment and worker safety cases. Although the DOJ and the Occupational Safety and Health Administration (OSHA) have had a worker endangerment initiative for a number of years, the new changes are intended to bolster the likelihood and number of criminal prosecutions which historically have languished, according to DOJ, due to the OSH Act’s misdemeanor criminal provisions.

Manufacturer’s Corner: A Word on Warranties of Future Performance

Courts sometimes have trouble determining whether a warranty explicitly extends to future performance.  A recent case provides refreshing clarity on the issue.

Proposed Extension of New Markets Tax Credit

Despite increased optimism in Congress’s ability to pass this year an extenders bill which would make certain temporary tax provisions permanent, House Ways and Means Committee Chairman Kevin Brady, R-Texas, has prepared a two-year “fallback” bill. The proposed bill contains provisions pertaining to both the low-income housing tax credit (LIHTC) and new markets tax credit (NMTC).

How to Remove a General Partner from a Real Estate Partnership

Default is an unfortunate reality in any partnership.  Though no one enters a partnership expecting the other party to default on its obligations, it poses a risk that must be properly addressed to mitigate the limited partner’s risk before the partnership is ever established.  This article will address the rights and remedies available to the limited partner when the general partner has failed to live up to its commitments, and the procedures that should be followed in obtaining relief.

IRS Issues Guidance for Integrated HRAs

In a recent Chief Counsel Advice (CCA 201547006), the IRS has provided guidance for employers wishing to offer health reimbursement arrangements (“HRAs”) that both (1) provide reimbursements on a tax-free basis, and (2) satisfy the “market reform” requirements of the Affordable Care Act (“ACA”). In particular, this CCA focuses on HRAs (and similar “employer payment plans”) that reimburse employees for medical premiums paid for coverage under a health plan maintained by a spouse’s employer.

Prohibited Transactions: Co-investments Involving Qualified Retirement Plans

Under both ERISA and the Internal Revenue Code, certain transactions involving qualified retirement plans and “disqualified persons” or “parties in interest” (such as a plan trustees) are prohibited. One example of a “prohibited transaction” involves a plan fiduciary (e.g., plan trustee) using plan assets to purchase property for his own benefit or as an indirect loan because he cannot afford the purchase without the plan assets (ERISA § 406).

Sexual Orientation Discrimination Claims Not Available Under MHRA, But Availability of Sex Stereotyping Claims Still an Open Question

On October 27, 2015, the Missouri Court of Appeals for the Western District issued an opinion holding that sexual orientation was not a protected category under the Missouri Human Rights Act (“MHRA”) and, as a result, the plaintiff’s sexual orientation discrimination claim was not cognizable under Missouri law. See Pittman v. Cook Paper Recycling Corp., 2015 WL 6468372 (Mo. App. W.D. Oct. 27, 2015). However, Judge Gabbert wrote a lengthy dissenting opinion and the majority opinion identified but declined to reach the question of whether a claim for sexual orientation discrimination would be actionable under the MHRA if the claim is framed as a claim for unlawful sex-based stereotyping.

Manufacturer’s Corner: Climate Change and Consumer Protection Statutes

A new theory of securities fraud may prove important (and dangerous) to manufacturers.

Manufacturer’s Corner: Highlighting Some Important Distinctions Between UCC Article 2 and CISG

If you’re like many manufacturers who sell internationally, your standard terms and conditions provide that the UN Convention on Contracts for the International Sale of Goods (“CISG”) does not apply to your transaction.  But, maybe they don’t, or maybe your disclaimer is ineffective (it happens a lot).  In those instances, it’s important to understand where CISG differs from Article 2 of the Uniform Commercial Code, which typically covers sales of goods within the United States.

Manufacturer’s Corner: Delivery Terms Have Important Tax Implications for Missouri Manufacturers

Today’s column is prompted by a recent decision by the Supreme Court of Missouri, in which the Court denied a Missouri manufacturer a sales tax refund.

Contract with Foreign Buyer Calling for Delivery in Airworthy Condition may Imply Compliance with Airworthiness Standards of Foreign Nation

In a recent decision in Daiichi Koku Co. v. J.E. Aero, Inc., the U.S. District Court for the Northern District of Illinois considered a claim in which the plaintiff, a Japanese air carrier, had entered into an Aircraft Purchase Agreement to acquire a used aircraft from an Illinois broker.

Use-It-Or-Lose-It Vacation Policies in Colorado – The Colorado Department of Labor’s New Stance

Historically in Colorado, employers could safely implement use-it-or-lose-it vacation policies without fear of consequences from the Colorado Department of Labor (“CDOL”). Those days are officially over. Effective January 1, 2015, the CDOL assumed new enforcement authority with respect to claim for nonpayment of wages or compensation. Pursuant to that authority, the CDOL issued limited guidance this week with respect to use-it-or-lose-it vacation policies. That guidance indicates that employers can no longer implement use-it-or-lose-it vacation policies without consequences.

2016 Inflation Adjustments

Following recent announcements by both the IRS and the Social Security Administration, we now know most of the dollar amounts that employers will need to administer their benefit plans for 2016. The key dollar amounts for retirement plans and individual retirement accounts (“IRAs”) are shown on the front side of this card.

Spencer Fane Team Secures Court Order Striking St. Louis Minimum Wage Increase

On October 14, 2015, a St. Louis judge declared the city’s planned minimum wage increase invalid because it conflicts with the state minimum wage, currently set at $7.65 per hour. In August, the City of St. Louis passed an ordinance that would have eventually raised the minimum wage to $11.00 per hour by 2018. The first increase to $8.25 per hour was set to take effect on October 15, 2015.

Safe Harbor Under Siege – Is This The End For The EU-U.S. Safe Harbor?

The EU-U.S. Safe Harbor Framework (“Safe Harbor”) has provided companies on both sides of the Atlantic an efficient means to transfer personal information to and from the EU and the U.S. Recently, however, the Safe Harbor has come under attack. EU officials have opined that modern U.S. policy has eroded protections afforded under the Safe Harbor, resulting in the Safe Harbor no longer offering “adequate” protection as required by the EU Data Protection Directive 95/46/EC (“EU Directive”). Most recently, and perhaps the most concerning, is the opinion from Advocate General Yves Bot of the European Court of Justice (“ECJ”), whereby Bot recommended the Safe Harbor be declared invalid.

New Trademark Office Program Helps You Preserve Your Trademark Registration as Technologies Evolve

Starting September 1, the U. S. Patent and Trademark Office (USPTO) has instituted a pilot program to help you preserve your trademark registration if new technology replaces the format under which the underlying goods or services identified under the registration are offered for sale or provided to consumers.

4th Cir. Says It Is Unlawful to Fire Managers That Reasonably Refuse to Take Company’s Side During Internal Investigations

In DeMasters v. Carilion Clinic, the Fourth Circuit Court of Appeals clarifies what constitutes protected oppositional activities under Title VII and refuses to extend the FLSA’s “manager rule” to Title VII retaliation claims. This case serves as an important reminder to employers that managers relaying information about harassing conduct are protected by Title VII and cannot be disciplined for disagreeing with how the company is handling a particular complaint.

The Netflix Approach to HR – Could It Work for Your Company?

Here is a little food for thought for the week. As I’m sure many of you have read, Netflix has received much praise (and some criticism alike) for its approach to company culture, talent management, and HR issues.

A federal district court in California denies class certification to a nationwide putative TCPA class of consumers against a debt collector who allegedly made more than 500 million prohibited calls

The United States District Court for the Southern District of California recently issued an order denying class certification to a nationwide putative class of consumers against The CBE Group, Inc. (“CBE”), which alleged that CBE made over 500 million calls to these consumers’ cell phones without their prior express consent in violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. (“TCPA”).  Blair, et al. v. The CBE Group, Inc., No. 3:13-cv-00134-MMA-WVG (S.D. Cal. August 26, 2015).

The NLRB Redefines the Standard for Joint Employer Status

On August 27, 2015, the National Labor Relations Board (the “Board”) issued its opinion in Browning-Ferris Industries of California, Inc. d/b/a BFI Newby Island Recyclery, and FRP-II, LLC d/b/a Leadpoint Business Services, and Sanitary Truck Drivers and Helpers Local 350, International Brotherhood of Teamsters, 362 NLRB No. 186 (August 27, 2015), which overturned longstanding precedent regarding the standard for determining if a joint employer relationship exists.  

The Sixth Circuit sheds light on meaning of “prior express consent” under the TCPA in a case involving hundreds of calls to a debtor’s cellphone by a creditor using an autodialer

One thing that telemarketers and other companies that communicate with their customers by calling their customer’s cellphones crave is clarity under the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227.  The Sixth Circuit recently shed some light on the meaning of “prior express consent” under the TCPA in connection with calls by a creditor to its debtor’s cellphone in the case of Hill v. Homeward Residential, Inc., No. 14-4168 (6th Cir. August 21, 2015).

The Eleventh Circuit rules that Capital One is not a debt collector under the FDCPA with respect to defaulted credit card debt it acquired from HSBC

In the case of Davidson v. Capital One Bank (USA), N.A., No. 14-14200 (August 21, 2015), the Eleventh Circuit had occasion to decide whether a bank that collects on defaulted debt it acquired from another bank is a “debt collector” under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692-1692p.

Manufacturer’s Corner: Conflict Mineral Reporting Requirement Still Illegal

On August 18, 2015, the D.C. Circuit Court of Appeals, sitting en banc, upheld its prior order striking a portion of the SEC’s conflict mineral rule.

The DOL Announces Guidance on Wage and Hour Misclassification – Employees vs Independent Contractors

The Department of Labor recently released new guidance (Administrator’s Interpretation No. 2015-1) on how it will decide whether a worker is properly classified as an employee or an independent contractor. Although the factors discussed in the Administrator’s Interpretation are not new, the DOL’s broad reading of the term “employee” under the Fair Labor Standards Act and the heightened focus on the “economic realities” of the business relationship between the worker and the purported employer indicate that wage and hour misclassification will be an enforcement priority for the DOL going forward.

The EEOC Weighs In on Sexual Orientation and Title VII

On July 16, 2015, the Equal Employment Opportunity Commission (“EEOC”) issued a 3-2 decision finding that under Title VII, sex discrimination includes actions based on sexual orientation. The decision involved an appeal from a Federal Aviation Administration (“FAA”) dismissal of a sexual orientation discrimination complaint. The issue before the EEOC was whether a complaint alleging discrimination based on sexual orientation in violation of Title VII lies within the EEOC’s jurisdiction. Apparently buoyed by the U.S. Supreme Court’s recent decision on same sex marriage, the EEOC unequivocally answered that question with a resounding “Yes.”

Have you revised your Reg E disclosures to take advantage of the recent changes in Kansas Law?

Effective July 1, 2015, a Kansas bank can reduce its liability for fraudulent electronic fund transfers on a consumer account by revising its Reg E disclosures.

Certain Mid-Sized Employers May Have Even MORE Time to Comply with the ACA’s Play-or-Pay Rules

Thanks to a special transition rule, employers with 50 to 99 full-time employees (including full-time equivalents) are generally shielded from the Affordable Care Act’s “play-or-pay” penalties until January 1, 2016. Moreover, in a wrinkle that is easily overlooked, any such “mid-sized” employer that already sponsors a health plan operating on a non-calendar-year basis has even more time to comply with these rules.

Manufacturer’s Corner: The Danger of Conditioning Your Sale on the Buyer’s Acceptance of Your Terms

If you review the terms and conditions given by many manufacturers in their invoices (including, probably, yours), you likely will find a provision that says something to the effect of “we agree to sell you this product if, and only if, you agree to each of these terms and conditions.”  It’s a common term, and there’s a good reason for it: it can counteract standard form language in the buyer’s purchase order that you don’t like.

Using Alack’s “Magic Word” in Exculpatory Contract Provisions

There is almost never such a thing as a magic word anymore.  In medieval England, people would recite things three times to get magical protection (“third time’s the charm”).  Similarly, in the earliest days of the law, parties would write contracts “under seal” that protected them, regardless of whether the contract was otherwise valid.  That is what a magic word does; it protects you just by being there.  Today, the law hates magic words; courts constantly dig into the hidden meaning behind material terms and the intent and understanding of the parties who use them.  Because there is almost never such a thing as a magic word these days, when one does occur business owners would do well to take note.

Supreme Court Upholds Limit On Royalties To Life Of Patent, But Other Strategies Exist To Extend Life Of Compensation

A patent issued under the U.S. Patent Laws has a finite life, which is 20 years from the date of filing.  A strategy to monetize a patent through licensing must take into consideration that finite life span because after the 20 year patent term, the underlying invention falls into the public domain.  A patent holder may not continue to receive license royalties after the patent’s expiration, as long ago decided by the U.S. Supreme Court in Brulotte v. Thys Co., 379 U. S. 29 (1964).

EPA’s Air Rules Must Consider Costs, Says U.S. Supreme Court

On June 29, 2015, the United States Supreme Court announced its decision in Michigan v. Environmental Protection Agency, holding that EPA unreasonably interpreted a provision of the Clean Air Act regarding the regulation of power plants under the EPA’s Mercury and Air Toxics Standard (MATS) (also referred to as the Utility MACT).

White Collars May Turn Blue: Prepare for New Rules on Overtime Eligibility

Responding to a call by President Obama last year, the U.S. Department of Labor this week issued a proposal to update the regulations governing which employees qualify for the “white collar” exemptions to federal minimum wage and overtime pay requirements. Currently those exemptions – for executive, administrative and professional employees – require the workers to meet job duties-related tests and receive a salary of at least $455 per week, or $23,660 annually. Certain computer and outside sales employees are also exempted.

Same-Sex Marriage Ruling Impacts Benefit Plans (Again)

On Friday, June 26, 2015, the Supreme Court published its ruling in Obergefell v. Hodges, holding (by a 5 to 4 margin) that the Fourteenth Amendment requires a state to license marriages between two people of the same sex, and to recognize any such marriage that is lawfully licensed and performed out-of-state. As a result, all (remaining) state laws or constitutional amendments banning same-sex marriage are now invalid.

Manufacturer’s Corner: Breach of Warranty Claims and CGL Coverage

A court recently held that a CGL insurer owed a duty to defend its insured accused of breaching express and implied warranties.

Supreme Court Upholds Affordable Care Act Subsidies

The Supreme Court announced today that it has upheld Affordable Care Act (“ACA”) subsidies for insurance purchased on federally-facilitated exchanges. By a 6 to 3 vote, the Court concluded that the statute allows for subsidies on any exchange created under the ACA. The decision in King v. Burwell may come as a disappointment to some who hoped that the subsidies would be struck down and that the entire ACA would unravel in the aftermath.

The Supreme Court Enters Decision in King v. Burwell

This morning, the U.S. Supreme Court entered the much anticipated decision in King v. Burwell.  In a 6-3 decision, the Supreme Court held that the subsidies “are available to individuals in States that have a Federal Exchange.”

EPA Issues Final Vapor Intrusion Guidance and Declares EPA, not OSHA, in Charge of Indoor Air Quality at the Workplace

At long last, after operating under the draft Vapor Intrusion Guidance of 2002 for almost 13 years, EPA finally issued final vapor intrusion guidances on June 11, 2015, a specific guidance for petroleum vapor intrusion at leaking underground storage tank sites, and a more general technical guide for assessing and mitigating the vapor intrusion pathway at chlorinated solvent sites. (Technical Guide). In response to criticism that EPA did not subject the guidances to the public scrutiny of the administrative rule-making process, EPA allowed for a longer public comment period than is customary for guidances. Additionally, both vapor intrusion guidances were the subject of extensive discussions between EPA, various sister agencies, private industry, environmentalists, and the White House.

Fano Authors ‘Tips to Avoid Discrimination Lawsuits’ in Bloomberg BNA

Spencer Fane Partner Ron Fano recently authored an article in the June 12th edition of Bloomberg BNA’s Corporate Law & Accountability Report this past week, offering advice on the prevention of discrimination lawsuits, which can be both costly and damaging to a company’s reputation.

Manufacturer’s Corner: Manufacturer Gets Second Chance Following Unsuccessful Litigation With Supplier

This is a story about a U.S. manufacturer who got into a dispute with its Chinese supplier. 

Clarity for Colorado Employers: Colorado Supreme Court Decides that Marijuana Use is Not a “Lawful” Off-Duty Activity in Colorado

The Colorado Supreme Court has now heard and decided a case (Coats v. Dish Network) critical to Colorado employers in terms of whether the legalization of marijuana in Colorado mandates an exception to zero tolerance drug policies. The Court decided in favor of the employer, ruling that marijuana use, at least for medicinal purposes, is not a lawful off-duty activity for purposes of receiving protection under Colorado’s lawful activities statute even though state law has legalized the use of marijuana for medicinal and recreational purposes. As a result, employers may continue to maintain and enforce zero tolerance policies that include marijuana within their scope.

Home Builder’s Stormwater Violations at Construction Sites Result in $1 Million Enforcement Settlement

A residential home builder, Garden Homes, has agreed to resolve alleged stormwater violations with the EPA and U.S. Department of Justice, according to a June 8, 2015, Federal Register Notice. The settlement involves a civil penalty of $225,000 and a Supplemental Environmental Project valued at $780,000 involving the acquisition of 108 acres of land for preservation.

Warehouse and Distribution Center Fined $3 Million for Anhydrous Ammonia Releases from its Industrial Refrigeration System

On June 2, 2015, the U.S. EPA and DOJ announced a $3 million dollar settlement with Millard Refrigerated Services, a company specializing in refrigeration and distribution services to retail, food service, and food distribution companies. The settlement resolves alleged violations of the EPA’s Risk Management Program, the Clean Air Act’s General Duty Clause, and CERCLA and EPCRA release reporting requirements stemming from three releases of the industrial refrigerant anhydrous ammonia from the facility’s Mobile Marine Terminal in Alabama. Among the release incidents was an August 2010 release involving hospitalization and medical treatment of individuals who were offsite working on decontaminating ships in response to the 2010 oil spill in the Gulf of Mexico.

Kansas City Passes Ordinance Requiring Building Owners to Disclose Energy and Water Usage

On June 4, 2015, by a 12-1 vote, the City Council of Kansas City, Missouri, passed the Energy Empowerment Ordinance (No. 150299) that will require building owners to disclose energy and water usage.

Western District of Missouri Bankruptcy Court Finds No FDCPA Violation for Proof of Claim Filed on Time-Barred Debt

Recently, several courts across the country have considered whether filing a proof of claim on debt that is barred by the statute of limitations violates the Fair Debt Collection Practices Act (“FDCPA”). The increased attention on this issue was sparked by the Eleventh Circuit’s decision in Crawford v. LVNV Funding, LLC, 758 F.3d 1254 (11th Cir. 2014). The Eleventh Circuit held that filing a proof of claim on debt that is barred by the applicable statute of limitations violates the FDCPA. After the Eleventh Circuit’s decision, many other courts have decided the issue, and the results of these cases have been mixed. Last week, the Bankruptcy Court for the Western District of Missouri weighed in, and it found that there was no violation of the FDCPA. Dunaway v. LVNV Funding, LLC, No. 14-04132-drd, Adv. No. 14-4132, Doc. 29 (Bankr. W.D. Mo. May 19, 2015).

“Practically Speaking” the OIG Releases Compliance Guidance for Health Care Boards

A little over a month ago the Office of Inspector General, U.S. Department of Health and Human Services (“OIG”), in collaboration with a number of other independent health care organizations, issued what it deemed to be “practical guidance for health care governing boards on compliance oversight.” This document is intended to assist governing boards in carrying out their compliance program oversight function under the applicable health care laws, rules and regulations.

Application of Equal Credit Opportunity Act’s Notice Provisions to Delinquent Borrowers

A California court recently found that delinquent borrowers may bring a claim under the Equal Credit Opportunity Act (“ECOA”) when a lender does not respond to an application for a loan modification within thirty days. MacDonald v. Wells Fargo Bank, N.A., No. 14-cv-04970 (N.D. Cal. Apr. 24, 2015).

New Rule Issued by EPA and the Army Corps of Engineers Expands Federal Jurisdiction over Waters and Wetlands

On May 27, 2015, EPA and the Corps of Engineers released a final rule that expands federal jurisdiction under the Clean Water Act. The rule expands on existing law by asserting jurisdiction by rule over all tributaries to traditional navigable waters, without regard to the quantity or timing of flow.  Tributaries are defined in the rule as “waters that are characterized by the presence of physical indicators of flow – bed and banks and ordinary high water marks – and that contribute flow directly or indirectly to a traditional navigable water, an interstate water, or the territorial seas”.

Manufacturer’s Corner: FTC Announces Nothing

In 2011, the FTC requested public comment regarding its interpretations, rules, and guides issued under the Magnuson-Moss Warranty Act.  After four years of hard work, the FTC today issued a press release headlined “FTC Will Keep Consumer Product Warranty Rules in Current Form with Some Modifications.”

EEOC Begins Roll-Out of Digital Charge System. Going Forward, Administrative Filings Submitted Through Online Web Portal.

The EEOC recently announced that it will begin communicating with employers through an online Digital Charge System rather than regular mail and e-mail. The EEOC receives roughly 90,000 charges of discrimination per year. The proposed purpose of the “ACT Digital” pilot program is to ease the administrative burden of handling those charges and to reduce the use of paper submissions and files.

Can a Rule 68 offer of judgment that offers complete relief to the named plaintiff in a putative class action moot the entire case? While federal courts continue to reach different conclusions, the Supreme Court may finally weigh in

One tactic often used with varying degrees of success to thwart putative class actions brought under various federal statutes is to file an early offer of judgment under Rule 68 that provides the named plaintiff or plaintiffs complete relief in an effort to moot the putative class claims at the inception of a class case.

It’s Unanimous: The Fiduciary Duty to Monitor Has Teeth

The United States Supreme Court gave considerable comfort to defined contribution plan participants – and their lawyers – who sue plan fiduciaries for failing to keep track of plan investment options. In a unanimous decision handed down on May 18, 2015, the Court held in Tibble v. Edison International that ERISA fiduciaries have a “continuing duty” to monitor investment options, and that plan participants have six years from the date of an alleged violation of that duty to file a lawsuit against the plan’s fiduciaries. This ruling significantly undercuts the utility of a statute of limitations defense that had been successfully deployed by plan fiduciaries in previous cases, and creates fertile ground for more litigation.

Missouri LIHTC Update: MHDC Weighs Domestic Violence and LIHTC Concentration Proposals

Recently, Missouri Treasurer Clint Zweifel urged the MHDC to use its LIHTC allocation to help combat affordable housing issues that are exacerbated among victims of domestic violence.

Manufacturer’s Corner: Eighth Circuit Offers Expansive View of Economic Loss Doctrine

If you regularly read this column, you know that one of the things we spend a lot of time discussing is working appropriate protections into your contracts.  Plaintiffs’ attorneys understand that, and often try to work around those protections by restyling breach of contract or breach of warranty actions as tort claims – that is, claims for negligence or fraud or the like.

Courts May Review EEOC Conciliation Efforts, According to Supreme Court

In an employer friendly decision, last week the U.S. Supreme Court ruled unanimously that courts may review whether the Equal Employment Opportunity Commission (EEOC) has satisfied its duty to attempt pre-suit conciliation.

Snail Mail: A whale of a fail that will make your borrowers bail, your lending business flail, and leave you on the rail.

With the upcoming regulatory changes going into effect on August 1st, it is more important than ever for mortgage lenders and title companies to have an electronic disclosure system to handle the disclosure requirements promulgated by the new regulations.

What does it mean to be an “Additional Insured?”

The answer lies in the details of the underlying contract and the details of the underlying insurance policy. Today more and more companies are focusing on risk transfer mechanisms within the contracts they have with their vendors, suppliers, contractors and sub-contractors.

Think You Can Avoid RESPA by focusing on construction and land loans? Think again, August 1st is coming!

The Real Estate Settlement Procedures Act (“RESPA,” implemented by Regulation X) and the Truth-In-Lending Act (“TILA,” implemented by Regulation Z) have long been a bane for mortgage lenders as they attempt to interpret the statutes associated with each law and apply them to real-world lending.

Manufacturer’s Corner: Warranties of Future Performance

File this one under “does your warranty really say what you think it says?”

A federal district in Pennsylvania dismisses a putative FDCPA class action based on the filing a proof a claim on a time-barred debt in a Chapter 13 bankruptcy

I recently wrote about a decision from a federal district court in Alabama that sidestepped the Eleventh Circuit’s Crawford decision by finding that the Bankruptcy Code (the “Code”) and the Fair Debt Collection Practices Act (“FDCPA”) were in irreconcilable conflict, and the FDCPA gave way to the Code on the question of whether the mere act of filing a proof of claim on a stale debt in a Chapter 13 bankruptcy violated the FDCPA.

Fracking Claims Get Their Day in Court as Lone Pine Orders Axed in Colorado

Lone Pine orders have become an increasingly common case management tool employed by trial courts to help streamline proceedings for defendants and the court while maintaining equity for the plaintiffs. Lone Pine orders are most often used in cases involving complex issues and multiple plaintiffs, but are becoming more widely employed in a greater variety of cases.

EEOC Proposes ADA Rules on Wellness Program Incentives

The EEOC has issued proposed regulations providing guidance on the extent to which the ADA permits employers to offer incentives to employees to promote participation in wellness programs that are employee health programs. The new guidance is similar, but not identical, to the rules governing incentives for health-contingent wellness programs under HIPAA. Employers should review their wellness programs to ensure compliance with both laws.

Manufacturer’s Corner: The “Ambush Election” Rule Is In Effect

Beware union organizers loitering around your premises!

Want immediate judicial review of a Corps of Engineers’ wetlands jurisdictional determination? Pick a property within the Eighth Circuit (Minnesota, Iowa, Missouri, Arkansas, North Dakota, South Dakota and Nebraska)

On April 10, 2015, the U.S. Court of Appeals for the Eighth Circuit gave a northwestern Minnesota peat mining operation something the company wanted very much — judicial review of a wetlands jurisdictional decision issued by the U.S. Army Corps of Engineers. Hawkes Co., Inc., et. al v. U.S. Army Corps of Engineers, slip op. No. 13-3067 (8th Cir. April 10, 2015). In so doing, the Eighth Circuit built on the U.S. Supreme Court’s decision in Sackett v. EPA, 132 S. Ct. 1367 (2012), which had made Clean Water Act administrative orders subject to court scrutiny, and continued the Eighth Circuit’s focus on curtailing what it sees as government agency overreaching, as recently expressed in Iowa League of Cities v. EPA, 711 F.3d 844, 868 (8th Cir. 2013).

Labor and Employment in Nebraska – A Guide to Employment Laws, Regulations, and Practices (Matthew Bender)

Josh Dickinson and Brian Peterson, authors of treatise concerning Nebraska law on labor and employment.

New Rule Accelerating Union Organizing Takes Effect April 14th

A new NLRB rule, known by pro-business critics as the “ambush election rule,” takes effect on Tuesday, April 14th. The rule makes it easier for unions to organize unrepresented employees through a dramatically shorter time period between the union’s filing of a representation petition and the election. Congress passed a resolution to block the rule in March, but in another victory for labor organizations, President Obama vetoed the Congressional measure.

Missouri is Utilizing Historic Tax Credits to Revitalize Downtown Kansas City

Over the last fifteen years, you may have observed significant construction and rehabilitation of commercial and residential real estate in downtown Kansas City. To finance many of these projects, developers utilize both Federal and Missouri Historic Tax Credits (HTCs).

EPA Revises its Supplemental Environmental Project – SEP Policy

On March 10, 2015, EPA issued a new revised 2015 Update to its Supplemental Environmental Project (SEP) Policy, thereby superseding prior SEP policies.

IRS Eases Correction Rules for Missed Elective Deferrals

The IRS has just given sponsors of 401(k) and 403(b) plans a number of additional options for correcting a failure to honor an employee’s election to defer a portion of his or her pay. These new options, as announced in Revenue Procedure 2015-28, will be particularly helpful to sponsors of plans that provide for automatic enrollment (including those with an automatic escalation feature).

Federal Judge in California brings down the curtain on a FCRA class action against Paramount Pictures

Class actions alleging technical violations of the Fair Credit Reporting Act (FCRA) against employers who obtain consumer reports on job applicants are all the rage, generating large settlements and headlines (at least in legal circles).

IRS to Plan Sponsors: You Must Retain Documentation for Loans and Hardship Withdrawals

Most sponsors of defined contribution plans rely on a third-party administrator (a “TPA”) to handle participant loans and hardship withdrawals—typically through the TPA’s website. However, in guidance issued last week, the IRS cautions that the sponsor—not the TPA or the participant—is responsible for maintaining documents proving that those transactions comply with the law.

Promoting LIHTC Allocation Beyond Traditional Low-Income Areas: MHDC Proposal and Supreme Court Case Potentially at Odds

While the Missouri Housing Development Commission (“MHDC”) considers a proposal to encourage LIHTC allocations away from areas with high concentrations of low-income housing, the Supreme Court of the United States is considering depriving plaintiffs an important tool used for enforcement of the Fair Housing Act—which may have the effect of discouraging allocating agencies from diminishing high concentrations of low-income housing.

Manufacturer’s Corner: Warranty Disclaimers By Intermediate Sellers

If you’re like many manufacturers, you have no dealings with the end user of your product.  Rather, you sell to a distributor or other intermediate seller, who then sells your product to the end user.  We have previously discussed disclaiming your implied warranties against your intermediate buyer and whether that disclaimer travels “downstream” to the end user, but we haven’t addressed whether a disclaimer made by the intermediary can protect you in a suit by the end user if, say, you failed to disclaim your implied warranties yourself or if for some reason they are not effective against the end user.

The bona fide error defense to FDCPA claims is alive and well in the Eleventh Circuit

In the case of Isaac, et al. v. RMB, Inc., et al., No. 14-11560 (11th Cir. March 17, 2015), the Eleventh Circuit recently upheld summary judgment in favor of a debt collector based on the affirmative defense of bona fide error.  The case presents a good opportunity to see what type of evidence is needed to prevail on the defense.

Another Court Enforces DOL’s Electronic SPD Rules

At some point, as electronic communication becomes the norm – and as paper virtually disappears from the workplace – we will surely see a softening of the conditions imposed by the Department of Labor (“DOL”) on the electronic distribution of summary plan descriptions (“SPDs”). But a recent decision by a New York federal court confirms that we are not yet at that point.

Young v. UPS – An Important Case on Pregnancy Discrimination

On March 25, 2015 the United States Supreme Court issued its opinion in Young v. United States Parcel Service. This is an important case because it clarifies what constitutes unlawful discrimination under the Pregnancy Discrimination Act (“PDA”). Employers should carefully review this case and ensure that they are not inadvertently discriminating against pregnant employees by refusing to accommodate their temporary physical restrictions.

Proceeds from Insurance Settlement Outside the Scope of Article 9

The Bankruptcy Appellate Panel for the First Circuit recently held that a creditor holding a perfected security interest in accounts and payment intangibles did not have a perfected security interest in the proceeds of an insurance settlement.

Manufacturer’s Corner: The Interplay Between Limited Remedies and Damages Limitations

I previously have urged you to limit the remedies available under your express warranty (e.g. to repair or replacement), and to disclaim liability for incidental and consequential damages.  Here, we’ll discuss a common argument made by people who want to render your efforts meaningless.

Supreme Court Issues Opinion on TILA Rescission Rights

We previously provided an update on developments concerning the right of rescission granted under the Truth in Lending Act (“TILA”). The United States Supreme Court recently issued a consumer-friendly decision regarding the rescission process.

Pat Whalen Publishes Data Breach Notification Article in BankNews

Spencer Fane Chairman Pat Whalen was featured as a guest author in this month’s issue of BankNews magazine providing insights and updates on the protocol for handling data breach notifications. The article, titled “When to Send a Data Breach Notification,” discusses the laws surrounding security breaches and the responsibility of companies to determine when notification of customers is both necessary and required by law.

Top 10 Things You Need to Know About Phase I Environmental Site Assessments

In a recent Midwest Real Estate News guest column, Spencer Fane Partner Andrew Brought shared his knowledge and insight on Phase I Environmental Site Assessments (ESAs) with readers. The article outlines the role and common misconceptions of environmental site assessments in property transactions and provides 10 important facts on ESAs as well as their impact on buyers and sellers involved in real estate transactions.

A federal district court sidesteps Crawford in dismissing claim for FDCPA violation based on filing a proof of claim on a time-barred debt in a Chapter 13 bankruptcy

In a 2014 decision rued by debt collectors everywhere, the Eleventh Circuit in Crawford v. LVNV Funding, LLC, 758 F.3d 1254 (11th Cir. 2014) ruled that filing a proof of claim to collect a time-barred debt in a Chapter 13 bankruptcy violated the Fair Debt Collection Practices Act

Policy Update: FMLA Rights Extended to Same-Sex Spouses

The U.S. Department of Labor’s (DOL) new rule broadening the definition “spouse” under the Family and Medical Leave Act (FMLA) to provide legally married same-sex couples the same rights under the law as married opposite-sex couples becomes effective on March 27, 2015.

Davidson v. Henkel: A Rather Taxing Decision

A recent decision by a Michigan federal trial court serves as a warning to employers that their failure to shield participants in nonqualified deferred compensation plans from adverse tax consequences may subject the employers to unanticipated liability. Although this decision (in Davidson v. Henkel Corporation) involved FICA taxation, the court’s reasoning would seem to apply equally to the 20% penalty tax and interest assessments triggered by a violation of Code Section 409A.

Manufacturer’s Corner: Just What Is the “Ordinary Use” for a Product Anyway?

For this installment, we turn to an aspect of the implied warranty of merchantability that has not gotten its fair share of attention here: what is “the ordinary purpose” for which your product is used?  It seems like a simple question, but it can be deceptively tricky.

Supreme Court Makes It Easier for Administrative Agencies to Change “Interpretive Rules”

Last week, the Supreme Court of the United States held that Interpretive Rules issued by administrative agencies do not have to undergo the notice-and-comment rulemaking procedures of the Administrative Procedure Act (“APA”) even if they contradict or substantially change previously issued Interpretive Rules. Perez v. Mortgage Bankers Association, et al., —S.Ct.—, 2015 WL 998535 (Mar. 9, 2015). Specifically, the Court held that the Department of Labor was allowed to change its position on whether mortgage-loan officers were exempt from the overtime provisions of the FLSA even though (1) it did not follow the APA’s notice-and-comment rules prior to changing its position and (2) it had taken the exact opposite position just four year earlier.

Manufacturer’s Corner: Merchants, Battles of the Forms, and Forum-Selection Clauses

If you read this column with any regularity, it will not surprise you that I was thrilled to read this introduction to a recent court opinion: “The motions to dismiss in this case present a difficult legal issue, as if a civil procedure professor and a Uniform Commercial Code professor conspired on a law school exam question[.]”

Anthem Security Breach May Require Plan Sponsor Action

The well-publicized cyber-attack on Anthem, Inc.’s information technology system may require employers to take prompt action to protect the rights of their health plan participants. Although neither the scope nor the cause of the security breach has yet been determined, the attack has been described as both “massive” and “sophisticated.”

No Missouri Use Tax Due When Aircraft is Purchased for Immediate Lease to a Missouri Common Carrier

In its recent ruling in Five Delta Alpha, LLC v. Director of Revenue, the Missouri Supreme Court has ruled that an aircraft transfer is exempt from Missouri use tax under the “sale or resale” exemption even when the aircraft is leased rather than sold to a Missouri common carrier.

CFPB Proposes Changes to Increase Mortgage Lending in Rural Markets

The Consumer Financial Protection Bureau recently proposed amendments to regulations that would broaden the definition of “small creditor” in an attempt to increase mortgage lending to rural and underserved markets. Currently, small creditors are able to make loans with slightly less restriction than larger creditors. The proposed changes would make this exemption available to a greater number of creditors.

Potential Liability for Quoting LIBOR Rates

In drafting loan documents, banks frequently cite to an index rate as the source of the interest rate governing a particular loan. One of the most commonly cited rates is LIBOR.

Next Generation Compliance—EPA Strategy to Delegate Enforcement to Third Parties?

In a recent January 2015 Memorandum to EPA’s Regional Enforcement Managers from Cynthia Giles, EPA Assistant Administrator for Enforcement, EPA is touting its Next Generation Compliance strategy as “an integrated strategy” intended to “bring together the best thinking from inside and outside EPA.” 

IRS Grants Limited Transition Relief to Small-Employer Premium Reimbursement Arrangements

In a series of notices and FAQs, the IRS has clearly enunciated its view that an employer’s reimbursement of an employee’s premiums for individual health insurance violates certain provisions of the Affordable Care Act (“ACA”). While reiterating this key point, Notice 2015-17 does grant a limited period of relief for smaller employers. Nonetheless, even those employers should be working toward a June 30 deadline to comply with these ACA constraints.

Illinois court rules that engineering firm that prepared and recorded plat for new subdivision is not entitled to a mechanic’s lien

An Illinois appellate court recently had an opportunity to decide whether an engineering firm hired to plat undeveloped land for a new subdivision was entitled to file and enforce a mechanic’s lien after the firm was not paid in full for its work.

Manufacturer’s Corner: The West Coast Port Labor Dispute and You

Manufacturer’s Corner. So, there’s a big shipping backlog forming out west while port owners and the longshoremen work a few things out.  How’s that affecting your supply contracts?

Home mortgage lenders hire law firm to send 88,937 collection letters to defaulted borrowers: Borrowers allege this violated the FDCPA and a federal judge certifies the class

In Lori Jo Vincent, et al. v. The Money Store, Inc. et al, No. 03 cv 2876 (S.D.N.Y.  February 2, 2015), the United States District Court for the Southern District of New York certified a class of home mortgage borrowers who defaulted on their loans and received uniform “breach letters” from a law firm sent on behalf of the defendant mortgage servicing company and the defendant lenders. 

“Home Care Rule” Called Into Doubt by Federal Courts

A recent district court opinion invalidated the Department of Labor–Wage and Hour Division’s “Home Care Rule,” a regulation slated to become effective this year that would alter the scope of an exemption from the Fair Labor Standards Act’s (“FLSA”) minimum wage and overtime provisions. Health care employers that provide in-home care or in-home medical services to individual customers should watch this case closely. Whether the Home Care Rule is valid and enforceable will have major implications for the viability of many home care businesses.

New NLRB “Quickie” Election Rules – To Become Effective April 14, 2015

In December of 2014, the National Labor Relations Board (“NLRB”) issued new regulations that govern how union representation elections will be conducted. The new rules are set to become effective on April 14, 2015.  Although the U.S. Chamber of Commerce and business groups are challenging the new regulations, Employers should pay careful attention to the new rules because the rules will  require Employers to act much more quickly and to be proactive when responding to a union organizing campaign and subsequent election. This blog post highlights key aspects of the new rules.

Alter Ego and Joint Venture Theories Permitted Under Montreal Convention

The Montreal Convention provides that carriers are liable for damages when a passenger is injured or killed on an international flight. When a carrier lacks the assets to cover these damages, however, claimants may have no recourse unless liability under the Convention may be applied against other parties. A recent ruling by the U.S. District Court for the Southern District of Florida has endorsed a theory for expanded liability in a noteworthy decision.

IRS Now Accepting “Cycle E” Determination-Letter Applications

The IRS is now accepting applications for updated determination letters on behalf of individually designed retirement plans falling within “Cycle E” of the determination-letter program. These include plans sponsored by employers having either a “5” or “0” as the last digit of their employer identification number, as well as governmental plans that elected not to file during Cycle C.

Manufacturer’s Corner: Disclaiming Implied Warranties to Remote Purchasers

As I’ve noted before in these columns, an implied warranty disclaimer is an essential part of your terms and conditions.  But giving an effective disclaimer is sometimes easier said than done, especially when you do not sell your product directly to the end user, but rather through a wholesaler, retailer, or other intermediary.

Manufacturer’s Corner: President Proposes New Federal Data Breach Notification Law

Shortly before issuing his State of the Union address, President Obama released a proposed federal law mandating notification to individuals whose personal information is compromised in certain data breaches.  Not long ago, I wouldn’t have written about this issue in a Manufacturer’s Corner column, but since I recently decided that the Internet of Things will expose manufacturers to litigation over data privacy, it seems appropriate.

A Sham, a Waste? EPA’s New Recycling and Hazardous Waste Rules Finalized

Last week, on January 13, 2015, EPA issued its new “Definition of Solid Waste” Final Rule in the Federal Register at 80 Fed. Reg. 1694. This new rulemaking will have significant impacts regarding how secondary hazardous materials are recycled and exempted from the hazardous waste regulations. Unless challenged (and by all accounts it appears at least certain aspects may be litigated based on initial comments by various industrial sectors) the rule becomes effective on July 13, 2015, where EPA is the authorized implementing agency (Iowa, Alaska, American Samoa, and Puerto Rico and the U.S. Virgin Islands). Because RCRA is a federally delegated program, other states will have to adopt the more stringent aspects of the rule discussed below.

Unfair Competition: Righting Wrongs

If you’re in business, chances are you’ve experienced unfair marketing tactics by one or more of your competitors. Such tactics may include false or misleading advertising or representations concerning the nature or quality of the competitor’s products or services. Or, they may consist of false or misleading statements about what you sell.
You need not stand by while your competition engages in such underhanded tactics.

Is a communication between a debt collector and a credit reporting agency a communication “in connection with the collection of any debt” for purposes of the FDCPA?

In a case in which the Eighth Circuit found against a debtor on her claim against a collection agency based on the FDCPA, the court nevertheless adopted a standard followed by other circuits in defining when a communication is “…in connection with the collection of any debt” for purposes of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692 et seqSarah McIvor v. Credit Control Services, Inc., No. 14-1164 (December 4, 2014).

The Sixth Circuit rules that making an offer to settle a valid but time-barred debt may give rise to an FDCPA violation.

In a case that will likely cause debt collectors seeking to collect time-barred obligations grave concern, the Sixth Circuit recently ruled that making an offer to settle a time-barred debt at a discount could mislead an unsophisticated consumer to believe the debt could be enforced in court in violation of the Fair Debt Collection Practices Act.  Buchanan v. Northland Group, Inc., No. 13-2523 (January 13, 2015).

Manufacturer’s Corner: New Law Exempts Non-Financial End Users From Margin Requirements For Uncleared Swaps

Here is good news for a certain subset of Manufacturer’s Corner readers.

Commercial Receivership Bill Introduced to Missouri Senate

On January 12, 2015, the Missouri Commercial Receivership Act was introduced to the Missouri Senate as SB 216.

Manufacturer’s Corner: A Word on Consumer Class Actions

This is not a litigation column, but I’m a trial attorney, so litigation is always on my mind.  I’ve been hearing a lot of chatter lately about consumer class actions.  Specifically: what must a putative consumer class do to show that the class members are ascertainable – that is, that the court and the lawyers and the class members can figure out who is in the class and who is not.

Updated Proposed Federal 30-day “Shot Clock” For Data Breach Notification

As we wrote yesterday, President Obama has called for legislation (the Personal Data Protection and Privacy Act) that will require notice of a data breach within 30 days of discovery by your company.

Proposed Federal 30-day “Shot Clock” For Data Breach Notification

In November we discussed the standards in place for whether and when a consumer must be notified of a data breach. The current answer is that almost all states have laws requiring notification, but the format and timing of the notification vary from state to state.

Manufacturer’s Corner: Don’t Fall For Your Own “No Oral Modification” Clause

Here’s a thing that probably appears in your standard terms and conditions: “This agreement cannot be modified or rescinded, except in writing signed by an authorized agent of [your company].”  You can go ahead and check.  It’s probably down toward the bottom, above the miscellaneous provisions like choice of law.

Court Rejects Claim That Fractional-Share Owner Holds An Interest In Operator’s Entire Fleet

The bankruptcy of fractional-share operator Avantair triggered a dispute regarding exactly what property its fractional-share owners held. Like other fractional-share operators, Avantair operated a fleet of airplanes, selling fractional shares in each of them to individual participants.

Contract Language Calling For Sale “As Is” Prevails Over Airworthiness Provision When Prepurchase Inspection Fails To Note Condition Compromising Airworthiness

The aircraft buyer in McMahan Jets, LLC v. Roadlink Transportation, Inc. discovered that a contract term calling for delivery of the aircraft “in airworthy condition” was not sufficient to protect it from aircraft discrepancies found after the buyer’s prepurchase inspection and acceptance of the aircraft.

Banks: The Forgotten Victim of a Data Breach

Data breaches have become a phenomenon of late—with news seemingly breaking everyday on the latest victim and the potential harm to consumers. Often overlooked, however, is the impact that each new data breach has on banks.

New OSHA Reporting and Recordkeeping Rules Take Effect

On January 1, 2015, new OSHA regulations took effect that broaden the scope of work-related injuries that employers must now report to OSHA.

Don’t Forget About HIPAA When Addressing Data Security

Among the many data security and breach laws that exist, covered health care providers and health plans must also contend with the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

No Good Deed…: Allowing Part-Time Employees to Make Health FSA Contributions May Trigger ACA Penalties

When it comes to health coverage, many employers draw a distinction between full-time and part-time employees. To be eligible to enroll in the employer’s health plan, an employee must work a minimum number of hours per pay period. But many of those same employers then allow even part-time employees to contribute to a health flexible spending account (“health FSA”). After all, doing so costs the employer nothing (and even saves a modest amount in employment taxes), and why not at least give those employees an opportunity to pay some of their medical expenses on a pre-tax basis? Unfortunately, this paternalistic approach may now subject an employer to substantial daily penalties under the Affordable Care Act (“ACA”).

Manufacturer’s Corner: The Importance of Notice Provisions

An easily-overlooked portion of a contract for the sale of goods is the one that addresses what notice the buyer must give the seller in the event the goods do not conform to contract specifications or warranties.  These provisions warrant your close attention, however, because they can be outcome-determinative in the event of litigation over the alleged non-conformity.

New OSHA Reporting Rules to Become Effective Jan. 1, 2015

The Occupational Safety and Health Administration (OSHA) will celebrate 2015 by implementing new regulations relating to an employer’s duty to report work-related fatalities, injuries, and illnesses. The new regulations go into effect on January 1, 2015 for all workplaces that fall under federal OSHA jurisdiction.

Rip Van Winkle Awakens! – The NLRB Overturns Register-Guard

In their dissent to the National Labor Relations Board’s Register-Guard decision, Board Members Liebman and Walsh classically stated that “the NLRB has become the ‘Rip Van Winkle of administrative agencies. Only a Board that has been asleep for the past 20 years could . . . contend, as the majority does, that an e-mail system is a piece of communications equipment to be treated just as the law treats bulletin boards, telephones, and pieces of scrap paper.” See 351 NLRB 1110, 1121 (2007). After a seven year slumber, the Board has awoken and is attempting to get with the times. See Purple Commc’ns, Inc., 361 NLRB No. 126 (2014). A 3-2 majority of the Board adopted the logic of Liebman and Walsh’s dissent and overruled what many believed to be a canonical case on the balance between employees’ Section 7 rights and employers’ property rights.

Changing laws keep Missouri business on its toes

Psychologist William Frederick Book wrote a person should learn to adjust to the conditions they have to endure, but also try to prepare for and control those conditions so that they are as favorable as possible. The same is true in business.

5 tips for procuring a cyber insurance policy

Cyber attacks are not only increasingly prominent, but are also increasingly costly. The financial impact of a data breach averages $10 million per occurrence. Data breach insurance coverage may help ameliorate these financial consequences and constitutes a vital part of a comprehensive data security strategy.

Manufacturer’s Corner: Missouri Supreme Court Limits Scope of Manufacturers’ Sales and Use Tax Exemption

Here is a troubling new case from the Missouri Supreme Court.  And I don’t mean troubling in the abstract sense of “oh maybe there could be liability down the road if you don’t do this,” which is pretty much the bread and butter of this column.  I mean troubling in the “you may have already botched this, so you better pull out the books and call the accountants and lawyers” sense.

Legislation Introduced to Limit Operation Choke Point

Missouri Representative Blaine Luetkemeyer recently introduced legislation to the U.S. House of Representatives seeking to require the Federal Reserve and FDIC to provide a material reason to support any order to terminate a banking relationship.

Employers Must Wait for A More Permanent Immigration Solution

On November 20, 2014 President Obama announced that he would take executive action to further immigration reform amid Congressional gridlock. However, it is critical that employers understand the limited scope of the President’s Executive Order.

Manufacturer’s Corner: Incorporating Software Into Your Products (Part 3)

Now that we have completed our brief detour into what the Supreme Court could maybe do with the BP oil spill case if it decides to do anything with it, we resume our ongoing series on what law applies when you incorporate software into your products.

When must a company send a data breach notification?

In our last post, we discussed how to minimize your risk of a data breach. But what do you do if and when a data breach occurs? How will you know when to send a notification? Today, we’ll discuss just that.

Data Breach: Are You Prepared to Respond?

Data breaches are becoming an everyday occurrence. Just ask The Home Depot, Target and Schnuck’s. The number of companies reporting a data breach increased over 30% in the past two years. Experts agree that every company is susceptible to data breaches, and that it is not a question of if but when it will happen.

Manufacturer’s Corner: Supreme Court Considering Case With Important Implications for Manufacturers

We take a break from our series on incorporating software into your products to talk about a case the Supreme Court is considering that may prove significant to manufacturers.  This column is not typically the place to go for predictions on what the Supreme Court may do, but I want to bring this case to your attention, and circumstances are forcing me to do it now rather than later.

The Four I’s to proactively addressing data breach risks

You’ve been hearing about data breaches for quite some time now. It seems like there’s a new one every day. Most of the news focuses on credit card transactions, but regardless of your industry and the safeguards you use to protect your data, if you collect any type of information about your customers, you’re at risk.

Missouri Changes Garnishment Fee

Missouri recently amended Mo. Rev. Stat. §525.230 to allow for higher fees to be charged by financial institutions in processing garnishment orders. Previously, the statute allowed a financial institution to charge a fee equal to the greater of $8 or 2% of the amount to be garnished, for the trouble and expense of processing the garnishment and paying over any garnished funds to the court.

Agencies Plug Several Holes in the ACA Dike

In the years since the 2010 enactment of the Affordable Care Act (“ACA”), the agencies charged with enforcing the ACA have worried that certain responses to the law’s requirements could negatively affect the overall health insurance system. For instance, because the ACA requires insurers to issue individual health insurance coverage without regard to health status, sponsors of self-funded employer plans may be tempted to shift their high-risk employees into the individual market. But by leaving only healthier employees in the self-funded plans, this approach could result in “adverse selection” – leading to an erosion of the individual insurance market.

Manufacturer’s Corner: Incorporating Software Into Your Products (Part 2)

In the first installment of this series, we discussed the general scope of Article 2 of the Uniform Commercial Code, and, in the broadest terms, whether and when the purchase or sale of software falls within that scope.  In this installment, we’ll move toward our goal of understanding when your purchase or sale of software is governed by Article 2 by looking at how the question has been treated by various courts over time.

Same-sex Marriage and its Effect on Health Plans Offering Spousal Coverage

The United States Supreme Court’s decision on October 6, 2014, to deny review of various appellate court rulings (including the Tenth Circuit, the federal appeals court covering Colorado), which had struck down bans on same-sex marriage as unconstitutional, effectively legalized same-sex marriage in the state of Colorado.

Contract Term Requiring Delivery of Aircraft in Airworthy Condition Prevails Despite “As Is” Language in Sale Agreement

The United States District Court for the Northern District of Texas recently decided a case involving an aircraft sales agreement with seemingly conflicting provisions.

Manufacturer’s Corner: Incorporating Software Into Your Products (Part 1)

This column spends a lot of time talking about Article 2 of the Uniform Commercial Code.  A lot of time.  That’s because it’s a column directed to manufacturers, and Article 2, generally speaking, deals with sales of goods.But that “generally speaking” glosses over quite a bit, and it can cause us to miss important issues.

Loan officer’s statements about lien priority in home mortgage transaction do not give rise to borrower’s claims for breach of fiduciary duty and negligent misrepresentation against lender

The North Carolina Supreme Court recently analyzed whether a loan officer owes a borrower a fiduciary duty in a home mortgage transaction.  Dallaire v. Bank of Am., ___N.C.___, 747 S.E.2d 535 (2013), decided June 12, 2014, No. 51PA13.  Jacques and Fernande Dallaire (“Borrowers”) purchased a home as their primary residence in 1998.  Seven years later they filed Chapter 7 bankruptcy due to unrelated business debts. 

Manufacturer’s Corner: Apple Revisited

Remember when I wrote a glowing column about a Master Development and Supply Agreement Apple and its lawyers drafted?  It was one of the most-read posts I’ve written, so I bet a good number of you do.  Since the post was so popular, and since there have been some, well, we’ll say “unanticipated consequences” for Apple, I thought it warranted some follow up.

Employee Benefits Plans – 2015 Inflation Adjustments

Following recent announcements by both the IRS and the Social Security Administration, we now know most of the dollar amounts that employers will need to administer their benefit plans for 2015.

Class certification denied to putative class alleging Quest Diagnostics engaged in consumer fraud by routinely overbilling patients

The Third Circuit recently affirmed denial of certification of a class of patients who alleged that the medical testing company, Quest Diagnostics, Inc., routinely overbilled patients.  See Grandalski, et a. v. Quest Diagnostics, Inc., et al., No. 13-4329 (September 11, 2014).  Quest Diagnostics is the country’s largest provider of medical testing.

Manufacturer’s Corner: Obligatory Post on the Internet of Things

There’s an unwritten rule that if you blog about manufacturing, you must blog about the Internet of Things.  I blog about manufacturing, so here we are.

Manufacturer’s Corner: Apple’s Master Course on Master Supply Agreements

This post comes to you based on a story by the always-excellent Matt Levine of BloombergView. Evidently Apple loaned a company called GT Advanced Technologies a bunch of money so GTAT could develop and supply Apple with sapphire screens for a long time. Anyway, there may have been a default under part of that agreement, and GTAT filed for bankruptcy protection because that default was going to ruin everything (at least according to industry speculation).

FinCEN’s red flags for identifying human smuggling and/or trafficking

The Financial Crimes Enforcement Network (“FinCEN”) recently released advisory regarding indicators related to human smuggling and human trafficking.  FinCEN states that that human smuggling involves: (1) acts or attempt to bring unauthorized aliens to or into the United States, (2) transporting them within the United States, (3) harbor unlawful aliens, (4) encourage entry of aliens or (5) conspire to commit these violations, knowingly or in reckless disregard of illegal status.  FinCEN states that human trafficking involves: (1) recruiting, (2) harboring, (3) transporting, (4) providing or (5) obtaining a person for forced labor or commercial sex acts through the use of force, fraud or coercion.

Manufacturer’s Corner: A Brief Return to Our Discussion of Statutes of Limitations

A thing I like to do is approach people at parties and other gatherings and ask them if they know they can use contracts to shorten some statutes of limitations.  Usually I get quizzical looks, but I guess the context just worked better when I mentioned it while speaking at a recent event put on by the Kansas Bar Association.  An especially attentive participant asked a good follow-up question that warrants some discussion: can you shorten the limitations period for fraud?

Upcoming “endangered” listing could affect timber harvesting, wind energy and natural gas developments

At a national conference on the Endangered Species Act (ESA) in San Francisco last month, a major topic of discussion was the recent settlement agreement that ended litigation between the U.S. Fish and Wildlife Service (“the Service”) and two major environmental groups.  The settlement agreement is noteworthy because it requires the Service to take action over the next few years to determine whether to list an additional 251 species.  As of May 2014, the Service had listed 97 of these species.  
One species that will be listed pursuant to the settlement agreement is the northern long-eared bat.  The listing of the bat as “endangered” will affect a large part of the country since the bat’s range includes the following 38 states: Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Vermont, Virginia, West Virginia, Wisconsin, and Wyoming.

Practical Pointers: Top 10 Pitfalls for Mediation Advocates

Frank discusses a “Top 10” list of pitfalls for mediation advocates to avoid.

Missouri’s Implied Duty of Good Faith and Fair Dealing

The Missouri Court of Appeals for the Eastern District issued a lender-friendly decision earlier this year regarding the implied duty of good faith and fair dealing regarding a promissory note.

HIPAA Compliance Update – Business Associate Agreements and Unique Health Plan Identifiers

On January 25 2013, the Department of Health and Human Services (HHS) issued its final Omnibus Rule, mandating, among other things, that covered entities update their Business Associate Agreements (“BAAs”) with service providers who maintain, utilize, or come into contact with protected health information (“PHI”). Group health plans are considered covered entities and the Omnibus Rule’s expansion of the definition Business Associate meant that several plans entered into BAAs with a variety of service providers by or before last September.

Municipal Solar Development Heats Up with P3 Models

In response to customer demand for clean energy, and with the public sector being driven to install solar power facilities to minimize energy costs, municipal solar development is heating up. One of the ways the construction market is responding to this demand is by offering project delivery through public-private partnerships (P3s).

Recent cases seek increased access to courts to challenge Clean Water Act enforcement actions

The 2014 Missouri Water Seminar was recently held in Columbia, Missouri.  The Water Case Law Update session highlighted three recent court cases that attempted to expand the Supreme Court’s landmark ruling in Sackett v. EPA, 132 S.Ct. 1367 (2012).  In Sackett, the Supreme Court held that an administrative compliance order (ACO) issued by EPA concerning alleged wetland violations was subject to judicial review because it constituted “final agency action”.   Before Sackett was decided, recipients of ACOs had to wait to sue until either the regulatory agency issued an adverse permitting decision or decided to initiate an enforcement action.

Manufacturer’s Corner: Anatomy of a Limited Warranty (Part 5)

In the first four installments of this series, we covered the essential components of an effective limited warranty.  But each of those installments carried an important caveat: that you were not selling consumer goods.  In this fifth and final installment of the series, we turn our attention to additional warranty issues to consider when selling consumer goods.

New Ruling: “All air transportation services are not subject to South Dakota sales or use tax.”

The South Dakota Department of Revenue recently issued a release stating that “all air transportation services are not subject to South Dakota sales or use tax” after June 9, 2014.  Find the release here: http://sdrevenue.blogspot.com/2014/06/all-air-transportation-services-are-not.html.

Environmental Compliance Certifications: What Your Clients Need to Know Before They Sign

On September 9, 2014, Andrew Brought of Spencer Fane will be one of the panelists in the ABA’s Presentation Environmental Compliance Certifications: What Your Clients Need to Know Before They Sign.

Manufacturer’s Corner: Anatomy of a Limited Warranty (Part 4)

We pick up our discussion of effective limited warranties by addressing limitations of remedies.

Missouri Supreme Court Rules that Lenders and Servicers are Subject to the MMPA

The Missouri Supreme Court recently issued two decisions (Conway v. Citi Mortgage, Inc. and Federal National Mortgage Association and Watson v. Wells Fargo Home Mortgage, Inc.) holding originators and servicers of mortgage loans may be subject to causes of action for unfair or deceptive practices under the Missouri Merchandise Practices Act (MMPA).

Eighth Circuit Issues ECOA Decision

The Eighth Circuit recently issued a decision regarding the Equal Credit Opportunity Act (“ECOA”) that may change your bank’s approach to spousal guaranties.

Four weeks and counting for “grandfathered” HIPAA business associate agreements

The HIPAA Omnibus/Final Rule, published on January 25, 2013, changed the specifications for business associate agreements (BAAs). In general, covered entities were required to comply with the changes to the rule; however, rather than requiring covered entities to immediately enter into new BAAs with all business associates, the Final Rule grandfathered valid HIPAA business associate agreements entered into by the covered entity prior to that date through September 22, 2014. But now this grace period is quickly coming to an end. With the ultimate compliance deadline looming, covered entities that took advantage of this grace period will be required to ensure their grandfathered BAAs, and for that matter all their BAAs, are fully compliant with the Final Rule requirements.

FTC PROSCRIPTION FOR ANTITRUST ENFORCEMENT IN HEALTH CARE

On June 19, 2014, Deborah Feinstein, the current Director of the Federal Trade Commission’s Bureau of Competition, addressed the Fifth National Accountable Care Organization Summit in Washington, D.C. Her speech, entitled “Antitrust Enforcement in Health Care: Proscription, Not Prescription, advised that “there is no tension between rigorous antitrust enforcement and bona fide efforts to coordinate care, so long as those efforts do not result in the accumulation of market power.”

The changing face of estate planning

Adlai Stevenson said that which seems the height of absurdity in one generation often becomes the height of wisdom in another.

Putative class action alleging United Airlines breached its frequent-flyer program is dismissed by the Seventh Circuit

The Seventh Circuit recently affirmed dismissal of a putative class action alleging that a major airline improperly calculated frequent-flyer miles.  In Han v. United Continental Holdings, Inc. et al., No. 13-3871, decided August 11, 2014, the plaintiff, Hongbo Han, filed a putative class action against United Air Lines, Inc. and related entities (“United”) alleging it breached the terms of its frequent-flyer program, called the “MileagePlus Program.”

Home builder’s Commercial General Liability Insurance Policy does not cover faulty workmanship of subcontractors

In the case of J-McDaniel Construction Co., Inc. v. Mid-Continent Casualty Company, the Eighth Circuit, applying Arkansas law, had occasion to explore the scope of a home builder’s coverage under its Commercial General Liability Insurance Policy. No. 13-267, August 4, 2014.

Manufacturer’s Corner: Anatomy of a Limited Warranty (Part 3)

In our last installment in this series, we looked at the express warranty portion of an effective limited warranty.  We now turn our attention to the importance of shortening the limitations period for bringing a warranty claim.  Please remember that, for our purposes here, we’re assuming a non-consumer sale.

A New Bill Could Pave the Way for the Post Office to Join the Financial Services Industry

On July 23, 2014, Representative Cedric Richmond introduced the Providing Opportunities for Savings, Transactions, and Lending Act of 2014 (also referred to as the POSTAL Act of 2014).  The bill proposes that the United States Postal Service (“USPS”) be allowed to provide some financial services, including small-dollar loans, checking accounts, and interest-bearing savings accounts.

Manufacturing Custom-made Goods in the United States

Pat and I recently had the opportunity to publish an article with Practical Law, called “Manufacturing Custom-made Goods in the United States.”

FTC Proscription for Antitrust Enforcement in Health Care

On June 19, 2014, Deborah Feinstein, Director of the Federal Trade Commission’s Bureau of Competition, addressed the Fifth National Accountable Care Organization Summit in Washington, D.C.  Her full comments, entitled “Antitrust Enforcement in Health Care: Proscription, not Prescription,” are available on the FTC’s website: www.ftc.gov.

When Does 9.5% Equal 9.56%?

Although 9.5% has been a key threshold in determining the “affordability” of employer health coverage, the IRS has just announced (in Revenue Procedure 2014-37) that this threshold will be adjusted to 9.56% for 2015. This adjustment reflects the fact that health insurance premiums have risen more rapidly than incomes. Similar adjustments have also been announced for related percentage thresholds.

Manufacturer’s Corner: Anatomy of a Limited Warranty (Part 2)

In our last installment, I introduced the importance of making your warranty terms clear.  Now, we turn to the specifics, beginning with the express warranty itself.  Here are some of the boxes you need to check when reviewing your express warranty.

Are federal courts committing a FCRA violation when lawyers pay filing fees online?

Fellow federal practitioners, could something most of us do on a regular basis be a money making opportunity we’ve simply overlooked? An enterprising lawyer in the Northern District of Illinois thought so.  Unfortunately, in the case of Bormes v. United States of America, No. 13-1602, (7th Circuit), handed down July 22, 2014, the Seventh Circuit answered in the negative.

CFPB Issues Policy Regarding Same-Sex Marriages

CFPB Director Richard Cordray recently issued a memorandum clarifying the CFPB’s policy with respect to same-sex marriages. The memorandum clarifies that the CFPB recognizes all lawful marriages that were valid at the time of the marriage in the jurisdiction where the marriage was celebrated.

Administrative Agencies Cracking Down on Overly Broad Arbitration and Severance Agreements

The Supreme Court’s pro-arbitration and pro-alternative dispute resolution jurisprudence is being met with opposition from administrative agencies, especially the National Labor Relations Board (“NLRB”) and the Equal Employment Opportunity Commission (“EEOC”). As a result, common employment practices, such as mandatory arbitration provisions and severance agreements, are being subject to intense legal scrutiny.

SEMINAR: Learn How to Succeed in Government Contracts

If you’ve shied away from government contracts in the past, this free seminar will give you a working knowledge of how to succeed when working with the government.

Antitrust “market allocation” claims against nation’s two biggest grocery wholesalers survive summary judgment

In In re: Wholesale Grocery Products Antitrust Litigation, No. 13-1297 (May 21, 2014), the Eighth Circuit allowed an antitrust case brought by a small town, family owned grocery store in Iowa, D&G, Inc.,[1] to continue against the nation’s two largest wholesale distributors, SuperValu, Inc. and C&S Wholesale Grocers, Inc., finding disputed facts prevented summary judgment.

Lessor of aircraft denied Michigan use tax exemption because aircraft was not leased to the general public in an arm’s length transaction

In FMG Leasing, LLC v. Dep’t of Treasury, FMG Leasing was a limited liability company formed to hold title to an aircraft. No. 312448, 2014 WL 2931938 (Mich. Ct. App. June 26, 2014) (no reported citation available). FMG leased the aircraft to a concrete company that was one of FMG’s forming partners, and to the company’s president. FMG then sought to take advantage of a statutory exception under Michigan law that permits a lessor of tangible personal property to pay use tax on receipts from the rental of the property, instead of paying a sales or use tax on the full cost of the property at the time of purchase.

Update on rideshare battle in St. Louis: Court issues preliminary injunction against Lyft

I previously wrote about the legal battle in St. Louis brought by Metropolitan Taxicab Commission (“MTC”) against the rideshare app company Lyft in the Circuit Court of the City of St. Louis, Missouri, Case No. 1422-CC0089-01. My comment can be found here.
As I discussed, the court entered a temporary restraining order prohibiting Lyft from operating in St. Louis and St. Louis County. On July 14, 2014, the court again ruled in favor of the MTC, granting a preliminary injunction prohibiting Lyft from operating in the St. Louis area until a final decision is reached on the merits of the case.

In Kansas City, EPA Administrator Seeks to Clarify Proposed “Waters of the United States” Regulation

On July 10, EPA Administrator Gina McCarthy spoke to the Agricultural Business Council of Kansas City in an attempt to ease concerns over the Administration’s proposed rule to clarify the reach of the Clean Water Act (CWA).  The proposed rule, issued jointly by EPA and the Army Corps of Engineers, seeks to specify by regulation the scope of the CWA following the 2006 Supreme Court decision in Rapanos v. United States. The competing tests for CWA jurisdiction issued by the Court in Rapanos have complicated efforts to determine when smaller waters, wetlands, and ephemeral streams are subject to CWA jurisdiction and would require government permits before they can be impacted. In response to mounting criticism of the proposed rule from a number of stakeholders, McCarthy tried to reassure the audience, saying, “We don’t believe that we are expanding jurisdiction.”

Manufacturer’s Corner: Anatomy of a Limited Warranty (Part 1)

It’s a sad fact of life at companies and law firms that sometimes things are done a certain way just because that’s how they’ve always been done. Part of the reason this column spends so much time talking about your terms and conditions, however, is because that’s dangerous: how you do things now should be informed by the past, but not bound by the past.

Eighth Circuit continues to hold that Missouri’s economic loss doctrine bars negligent misrepresentation claims involving allegedly defective or unsuitable products

Manufacturers and lessors of equipment and other products doing business in Missouri can take heart that the Eighth Circuit has issued its third opinion in the past year applying Missouri’s economic loss doctrine to bar negligent misrepresentation claims in cases involving allegedly defective or unsuitable products. 

Missouri Governor Signs Bill Extending Sales Tax Exemption

Missouri Governor Jay Nixon has now signed a bill extending indefinitely the exemption of aircraft replacement parts from the Missouri sales tax.

Manufacturer’s Corner: Revocation of Acceptance and the Statute of Frauds

I’m going to break my self-imposed rule of writing for manufacturers instead of lawyers. This post is some pretty in-the-weeds stuff, but the topic has been on my mind and I think it’s interesting. If you have opinions on it, I’d love to hear them.

Hobby Lobby Decision – Contraceptive Mandate Not Applicable To Certain For-Profit Employers

Under certain circumstances, the Patient Protection and Affordable Care Act’s (“ACA”) “contraceptive mandate” cannot be enforced against closely held for-profit corporations.The ACA requires non-exempt employers to offer female employees health insurance plans that cover preventative care and screenings without any cost sharing requirements. “Preventative care” includes contraceptive methods that can prevent a fertilized egg from implanting into the uterus and developing further. Non-profit religious organizations are expressly exempt from the ACA but for-profit employers are not. The issue before the Supreme Court was whether the ACA’s contraceptive mandate was enforceable as applied to closely held for-profit corporations.

Manufacturer’s Corner: Dealing With Sales on Approval or Return

Expanding on our recent discussion about how your shipping terms can affect risk of loss in the product you sell, let’s turn to other contract provisions that implicate the same issue: sales on approval or return.

Colorado Supreme Court Approves Ballot Measure Language Restricting Fracking, Part Two

In another “end run” around the state’s General Assembly, proponents of greater restrictions on oil and gas exploration in Colorado are again employing the initiative process, this time to authorize local governments to enact laws within their geographic boundaries more restrictive than state law, and even go so far as to potentially ban all exploration activity.  Alongside a companion ballot language challenge allowing for more restrictive statewide setback requirements (the subject of a prior article, (Colorado Supreme Court Approves Ballot Measure Language Restricting Fracking), the Colorado Supreme Court ruled that two ballot initiatives permitting a state constitutional amendment allowing for more restrictive local control did not violate “the single subject rule.” Constitution, State of Colorado, Article V section 1(5.5) and section 1-40-106.5(1)(e), C.R.S. (2013).

Colorado Supreme Court Approves Ballot Measure Language Restricting Fracking

In an “end run” effort around the state legislature, proponents of more restrictive oil and gas well setback requirements in Colorado are employing the initiative process to achieve more restrictive minimum setbacks than present state law permits. On June 30th, the Colorado Supreme Court ruled that three potential ballot initiatives permitting a state constitutional amendment requiring the more restrictive setbacks did not violate “the single subject rule.” Constitution, State of Colorado, Article V section 1(5.5) and section 1-40-106.5(1)(e), C.R.S. (2013).

“Common Carrier” and “Sale for Resale” Tax Exemptions Denied to Lessor of Aircraft

The Missouri Administrative Hearing Commission has held that a lessor of an aircraft does not qualify for the “common carrier” or the “sale for resale” tax exemptions, even if the lessee of the aircraft would qualify.

New Study in the Journal Science Affirms Underground Injection from Fracking Causes Earthquakes, While Industry Cautions Reserving Judgment

According to a new study in the journal, Science, an increase in the number of earthquakes in central Oklahoma likely arises from the use of underground injection wells to dispose of treated wastewater from oil and gas fracking operations. The study, funded in part by the U.S. Geological Survey (“USGS”)and the National Science Foundation (“NSF”), focused on Oklahoma earthquakes and injection well practices. The research was led by Cornell University and included researchers from the University of Colorado, Boulder.

Manufacturer’s Corner: Responding to Claims That Your Goods Do Not Conform to Contract Specifications

It’s inevitable: at some point, you will ship goods to your buyer, and the buyer will complain that they don’t conform to the contract specifications.  When you’re dealing with a small shipment or a great customer, often the simplest solution is to accept the return and send replacement goods.  Other times, however, you’ll be dealing with a major shipment or a problem customer, and you must be certain that you protect yourself while responding to the customer’s concerns.

Supreme Court Affirms D.C. Circuits’ Noel Canning Decision, Hundreds of NLRB Decisions May Be Moot

Last week, the United States Supreme Court held that the purported “recess appointments” of NLRB Members Block, Flynn and Griffin were unconstitutional. See N.L.R.B. v. Canning, 12-1281, 2014 WL 2882090 (U.S. June 26, 2014). Therefore, the Board will have to reconsider and reissue hundreds of prior opinions.

How Small is Small?

Lenders that participate in Small Business Administration (“SBA”) loan programs should be aware that the SBA recently issued an interim final rule to increase monetary based small business size standards.  These standards are based on criteria such as receipts, assets, net worth and income.

National Health Plan Identifiers Required by November

The HIPAA Electronic Transactions and Code Sets rule requires most group health plans to obtain new health plan identifier numbers (HPIDs) by November 5, 2014.  While insurers will likely obtain the HPID on behalf of fully insured plans, the task of obtaining the HPID for a self-funded plan will fall upon the plan sponsor.  While the process is relatively simple, plan sponsors should begin identifying which group health plan arrangements are subject to the HPID requirement and communicating with plan vendors regarding the requirements.

Manufacturer’s Corner: When Bankruptcy and Your Shipping Terms Collide

In recent installments of the Manufacturer’s Corner, we have discussed how to protect yourself from insolvent customers and how your shipping terms can expose you to unexpected risk. Thanks to the Bankruptcy Court for the Eastern District of Pennsylvania, we can explore how those two issues play together.

Kansas City Area Restaurants Targeted by Union Organizers

The Union is acting as though it is a public interest group that is seeking to increase the minimum wage to $15. But its true goal is to become the restaurant workers’ exclusive bargaining representative. First, the Union ingratiates itself with restaurant workers by advocating for a substantial increase in the minimum wage. Second, it asks the workers to sign letters that they support and will participate in a strike with other employees in support of a minimum wage increase. Then the union seeks employee signatures on union authorization cards. Finally, once it has collected a sufficient number of signed authorization cards, it files an election petition with the National Labor Relations Board (“NLRB”).

Supreme Court Strikes Down Key Aspects of EPA’s Greenhouse Gas Regulations, But Upholds Other Provisions

Earlier today, June 23, 2014, the United States Supreme Court dealt a blow to EPA’s current approach to regulating greenhouse gas emissions (GHGs) through its air permitting program for new or expanding stationary sources. Utility Air Regulatory Group v. Environmental Protection Agency. No. 12-1146, ___ U.S. ___, June 23, 1014. The Court said it left intact EPA’s ability to regulate 83 percent of such GHG emissions, compared to the 86 percent EPA championed under its approach. Nevertheless, in its ruling the Court undercut key foundations of EPA’s current GHG regulatory approach. This ruling will require EPA to re-think many aspects of its approach to GHGs and will give opponents increased leverage in the upcoming discussions.

Manufacturer’s Corner: Recent Development in Implied Warranties (Part 2)

We continue our discussion of June’s interesting implied warranty cases with a trip south to the Supreme Court of Texas.  As I mentioned in the previous installment of the Manufacturer’s Corner, the Court declared a simple, bright-line rule on how a valid disclaimer of the implied warranty of merchantability affects remote purchasers.

California Modifies Proposed Fracking Regulations, Mandating Seismic Monitoring

The Ventura County Star reported on June 17th that the California Department of  Conservation, Division of Oil, Gas and Geothermal Resources (the “Division”), has modified its proposed hydraulic fracturing regulations mandated by last year’s Senate Bill 4, requiring well operators to conduct real-time seismic monitoring. The modified regulations specify that they apply both to offshore and on shore oil drilling operations. Most drilling off the California coast, however, occurs in federal waters that are beyond the reach of state regulations.

2005 Phase I ESA Will No Longer Satisfy All Appropriate Inquiries Under EPA Proposed Rule

On June 17, 2014, EPA issued a proposed rule in the Federal Register, 79 Fed. Reg. 34480, proposing to amend the standards and practices for satisfying All Appropriate Inquiries (AAI) under CERCLA. In particular, EPA is proposing to remove references to the 2005 Phase I ESA Standard ASTM E1527-05 as satisfying AAI.

Manufacturer’s Corner: Recent Developments in Implied Warranties

In this head-scratcher of an opinion, the Michigan Court of Appeals makes three legal conclusions that will shock practitioners.

Debunking the Rumor that Directors Should Not Have Access to Information in Suspicious Activity Reports

Do you remember that children’s game called “Telephone” that you played long ago at birthday parties, on car trips or around campfires?  You know — the game where one person passes a message to the next, and then to the next?  The message evolves as it travels, inevitably surprising and confounding everyone by the time it reaches the end of the circle.

CERCLA Will Not Save a Toxic Tort Claim which is Barred by a State Statute of Repose

Earlier today, June 9, 2014, the United States Supreme Court handed down its decision in CTS Corp. v. Waldburger, et al., slip op. No. 13–339 (U.S., 6-9-2014). Reversing the Fourth Circuit, the Supreme Court held that the Superfund law’s preemption of state statutes of limitation for personal injury or property damage claims does not apply to state statutes of repose. Not every state has such a statute on the books, but for those that do, this may provide an additional shield for defendants, and an additional hurdle for plaintiffs.

Manufacturer’s Corner: Protecting Against the “Efficient Breach”

The Oregon Supreme Court has given us a great platform to discuss what happens when a buyer simply decides that breaching the contract is a better idea than performing.  It’s an important case to consider, both in your capacity as a seller of goods, and in your capacity as a frequent buyer of goods under long-term sales contracts.

Inflexible Leave Policies can Protect the Rights of the Disabled

Last week, the 10th Circuit Court of Appeals issued its decision in Hwang v. Kansas State University, and directly addressed the legality of so-called “inflexible leave policies,” i.e., policies that set an exact limit on the amount of leave an employee can take.  In that case, Ms. Hwang was hired as a professor at Kansas State and was diagnosed with cancer.  Kansas State had a policy that allowed for no more than six months’ sick leave.  Ms. Hwang argued that this “inflexible” policy was illegal on its face.  The 10th Circuit disagreed.

Manufacturer’s Corner: Can You Prove the Contents of Your Shipment?

In a happy coincidence of timing, the Eleventh Circuit Court of Appeals recently issued an entertaining opinion addressing the Carmack Amendment, which is a federal law limiting the liability of motor carriers for loss or damage of goods during shipment. The opinion will allow us to continue our discussion of mitigating shipping risks, introduced in the last installment of this column.

Additional Action Required by Late Filers of Form 5500 (Even Those That Have Already Filed)

Plan administrators who fail to timely file Form 5500 annual reports for their retirement plans may be subject to penalties under both ERISA and the Tax Code. Under previous guidance from the IRS, correcting such a late filing under the Department of Labor’s Delinquent Filer Voluntary Compliance (“DFVC”) Program could relieve the filer from penalties assessed by both the Department of Labor (“DOL”) and the Internal Revenue Service (“IRS”). However, under new guidance from the IRS, relief from its penalties now depends on a separate filing. Moreover, this new IRS requirement will apply retroactively to DFVC Program filings made since 2009.

Manufacturer’s Corner: Are Your Shipping Terms Exposing You to Unexpected Risk?

Today we continue our review of your terms and conditions to make sure they are appropriate for you.  Manufacturers are often surprised to learn that their shipping terms can be a significant source of risk.  Let’s explore that risk – and learn how to guard against it – by beginning with the basics.

Stormwater Violations at Concrete Ready-Mix Plants, Enforcement Nets More than $4 Million

EPA Region 2 and the U.S. Justice Department have resolved a stormwater enforcement case against CEMEX, associated with stormwater violations at 18 ready-mix concrete plants. The settlement will result in a civil penalty of $360,000, compliance upgrades of approximately $1.8 million, and a supplemental environmental project (SEP) involving the conservation of more than 400 acres of land valued at approximately $2.36 million.

Missouri Division of Finance Transitioning Licensing to NMLS

Effective May 1, 2014, the Missouri Division of Finance is authorized to license all Missouri mortgage brokers and originators through the Nationwide Mortgage Licensing System (NMLS). All currently licensed Missouri companies may request transition of their licenses onto the NMLS beginning on June 2, 2014. 

Manufacturer’s Corner: EPA Issues Final Rule on Cooling Water Intake (Again)

After much legal wrangling over earlier rulemaking efforts, on May 19 EPA issued a new final rule pursuant to Section 316(b) of the Clean Water Act.

“Common Carrier” Tax Exemption Lost When Operator Reserves the Right to Select Its Passengers

A recent ruling by the Missouri Supreme Court considered whether an aircraft ride operator qualified for the “common carrier” exemption from Missouri use taxes on its out-of-state equipment purchases. In Balloons Over the Rainbow, Inc. v. Director of Revenue, the Court denied this exemption to an operator that reserved the right to reject passengers presenting themselves for carriage.  Under these circumstances, the Missouri Supreme Court found that it did not qualify for “common carrier” status and was therefore liable for Missouri use taxes.

EPA Initiates Advanced Notice of Proposed Rulemaking (“ANPRM”) re Transparency in Reporting Fracking Chemicals

On May 19th, EPA published an ANPRM in the Federal Register requiring the reporting and analyzing of chemicals used in hydraulic fracturing (“fracking”). EPA had delayed regulatory action for several years as environmental groups debated whether more transparent public disclosure was critical to ensure public safety, while industry representatives responded that regulation within their borders should be left to the states. The move largely comes as a result of insistence by Earthjustice and 114 other environmental groups, arising from a petition seeking greater federal involvement filed more than three years earlier. 

FDCPA Summary Judgment Victory

We are pleased to report a victory in the Eastern District of Missouri in an FDCPA case.

It’s a match: federal district court in New York certifies rare nationwide class on fraud claim against “It’s Just Lunch” matchmaking company

A rare nationwide class of plaintiffs in a fraud action was certified by the United States District Court for the Southern District of New York in the case of Rodriguez, et al. v. It’s Just Lunch International, Inc., et al., No. 07 Civ. 9227 (SHS), May 14, 2014.
As everyone knows from its advertising, It’s Just Lunch (“IJL”) provides personalized matchmaking services nationally through franchises.  The plaintiffs proposed that both a nationwide class of customers and a New York specific class of customers be certified.   The crux of the plaintiffs’ nationwide fraud claim was that they were enticed to pay for IJL’s services by means of corporate-mandated misrepresentations repeated by individual IJL employees.  Specifically, plaintiffs allege that IJL required its salespeople to use a corporate prepared uniform script that told prospective customers that IJL had at least two matches in mind for those customers’ first dates – even if this statement was not true.

Tickets for Scenic Aircraft Rides are Exempt from Missouri Sales Tax

The Missouri Supreme Court has held that tickets sold for hot air balloon rides are exempt from the assessment of Missouri sales tax.

Aircraft Repair Lien Takes Priority Over Lender’s Security Interest

A recent decision of the Oklahoma Court of Civil Appeals reinforced the priority of statutory liens protecting aircraft repair facilities.

Manufacturer’s Corner: A Primer on “Vouching In”

Here at the Manufacturer’s Corner, we typically focus on litigation avoidance rather than litigation tactics. After all, this column is written for manufacturers, not lawyers. But we want to take a moment to address a procedure called “vouching in,” because (a) it can be a useful tool for you, and (b) if somebody is trying to vouch you into litigation, you need to recognize what is happening and understand the consequences.

Contracts for Contractors – A Best Practices Guide (Part Two)

In my last post, I discussed the fact that the most important tool for a contractor is your written contract, which can help build a customer’s confidence in your company and avoid the types of misunderstandings and unrealistic expectations that ultimately can lead to a breakdown of the customer relationship, jeopardize the project and result in litigation.

Manufacturer’s Corner: Dealing With Your Insolvent Buyer

It’s unfortunate, but it happens: you reach a deal with your customer and prepare to perform your side of the agreement, only to discover that your buyer is insolvent or close to it. It is essential that you having a working knowledge your rights in this situation, because time is of the essence.

Contracts for Contractors – A Best Practices Guide

The most important tool for a contractor is your written contract. A good solid contract is the foundation for a positive experience for both you and your customers. It establishes a relationship with your customers, and builds their confidence in you and your company. More importantly, it helps to prevent misunderstandings and false expectations that can lead to a breakdown in your customer relationship, jeopardize the project and result in litigation.

Manufacturer’s Corner: Implied Warranties, Part 6

We bring our series on implied warranties to a close with a discussion about the consequences of breaching an implied warranty. The general rule is that the damages for breach of warranty are the difference in value of the goods as delivered and the value of the goods as promised. But, that simplistic statement glosses over many important issues that you need to consider in evaluating how to price your product.

Real estate is back. So is construction lending. Be prepared.

A bank’s commercial construction lending portfolio often covers a wide variety of projects ranging from residential developments, apartments, condominiums and hotels, to office buildings and shopping centers.  Every type of commercial construction project requires a borrower with requisite expertise and skills to construct and market the project. Accordingly, a bank’s construction lending team not only needs to believe the project is a viable one, but they must also have the requisite expertise and skill to understand if a borrower’s budget is appropriate for the project. Understanding the budget process helps to make sure that the loan will accommodate both the initial project costs as well as reasonable cost overruns.

Are unpaid internship programs lawful?

The Fair Labor Standards Act (“FLSA”) sets a federally mandated floor on the hourly wages of employees that are employed by for-profit employers. It also governs the maximum number of hours that an employee may work in a single week without receiving overtime pay. The number of employers that have allegedly violated the FLSA by improperly maintaining unpaid internship programs continues to grow.

Agencies Revise COBRA and CHIPRA Notices; Announce Special Marketplace Enrollment for COBRA Beneficiaries

The federal agencies charged with administering the Affordable Care Act (“ACA”) have issued revised versions of the model COBRA and CHIPRA notices.  Moreover, current COBRA beneficiaries have been given a special one-time window in which to enroll in Marketplace coverage.

Supreme Court of Missouri Overrules Prior Case Law and Adopts “Contributing Factor” Causation Standard for Workers’ Comp. Retaliation Claims

There is nothing in the entire field of law which has called forth more disagreement, or upon which the opinions are in such a welter of confusion’ than causation.” Templemire v. W&M Welding, Inc., No. SC 93132, 2014 WL 1464574, at*9 (Mo. banc April 15, 2014) (quoting Prosser and Keeton on Torts, § 41 at 263 (5th ed. 1984). In a 5 – 2 decision, the Missouri Supreme Court overruled its own precedent on the appropriate causation standard for workers’ compensation retaliation claims. Id. Plaintiffs no longer need to prove that filing a workers’ compensation claim was the “exclusive cause” of an adverse employment action. They only need to prove that the workers’ compensation claim was a “contributing factor” in their employer’s decision to take an adverse employment action against them.

IRS Announces 2015 Amounts for HSAs, HDHPs, and Out-of-Pocket Limits; Creates Another Trap for HDHP Sponsors

In Revenue Procedure 2014-30, the IRS has announced the 2015 inflation-adjusted amounts for health savings accounts (“HSAs”) and qualifying high deductible health plans (“HDHPs”), all as determined under Section 223 of the Internal Revenue Code. The maximum annual out-of-pocket expense amounts for all “essential health benefits” under non-grandfathered health insurance plans and policies will also increase for the 2015 plan and policy years. Unfortunately, there will now be a “disconnect” between the maximum HDHP out-of-pocket amount and the maximum amount allowed under other non-grandfathered plans.

Manufacturer’s Corner: Should You Opt Out of the CISG?

So far, the Manufacturer’s Corner has usually assumed that your contract will be controlled by the law of a U.S. jurisdiction that has adopted Article 2 of the Uniform Commercial Code. But that may not always be the case.  In some instances, you may sell non-consumer goods to a company that is deemed to have its place of business outside the United States, and that place of business may be in a country that is a party to the U.N. Convention on Contracts for the International Sale of Goods (“CISG”). Although the provisions of CISG are similar to the provisions of Article 2, there are important differences both in the substance of the rules and in some procedural matters.

Eighth Circuit Rules that Chiropractor who had license suspended prior to seeking treatment for alleged disability does not qualify for disability income benefits

The Eighth Circuit recently handed down a decision determining whether a chiropractor whose license to practice was suspended prior to a purported diagnosis of disability qualified for disability payments under two disability insurance policies he maintained.  Cich v National Life Ins. Co. et al., No. 12-3223, April 8, 2014.

Recent Missouri Loan Modification Reminders Decision

The Missouri Court of Appeals for the Western District recently issued an opinion that reminds banks in Missouri, and elsewhere, of several important points when modifying loans.

Renovation Contractor’s Lead-Paint Violations at Three Homes Lead to $500,000 Penalty and Comprehensive Compliance Program

The U.S. Justice Department, EPA, and Lowe’s Home Centers, LLC, have entered into a Consent Decree to resolve alleged violations of the EPA’s Lead Renovation, Repair, and Painting Program requirements, according to an April 24, 2014 notice in the Federal Register. The allegations, associated with violations at three home sites, require Lowe’s to pay a $500,000 civil penalty and implement a comprehensive compliance program.

Is it Kosher? Eighth Circuit rules buyers of hot dogs who alleged products were not 100% kosher as advertised lacked standing because they did not allege the actual products they purchased were defective

The Eighth Circuit, in Melvin Wallace, et al. v. ConAgra Foods, Inc., No. 13-1485, April 4, 2014, recently addressed the requirements of adequately pleading an actual injury in fact sufficient to maintain standing in federal court in the context of an allegedly defective product – in this case, kosher hot dogs. The plaintiffs are consumers who claim that some of the hot dogs they purchased from Hebrew National are not 100% kosher, as the label reads. These individuals sued Hebrew National’s parent company, ConAgra Foods, Inc., in Minnesota state court, seeking to represent a class consisting of all Hebrew National buyers in the country over a multi-year period.

Manufacturer’s Corner: Implied Warranties, Part 5

This post is prompted by a recent BloombergBusinessweek article reporting that the American Tort Reform Association “announced a ‘multiyear, multistate campaign to reform [state consumer protection laws].’”  Those laws address a host of issues, many of which are not particularly important to manufacturers.  But, they can serve as a workaround for plaintiffs who want to circumvent a warranty disclaimer and, accordingly, they are important to consider in this series.

Texas Jury Awards Ranching Family Nearly $3 Million Dollars for Fracking Damages, While National Groundwater Association Position Paper Declares Fracking Safe

In a first–of-its-kind-ruling, the LA Times reported yesterday that a six-person Texas jury awarded almost $3,000,000 against a natural gas company whose drilling, a ranching family contended, caused debilitating sickness, memory problems, killed pets and livestock, and forced them out of their home. Other landowners have sued over fracking claims and drilling, but reached settlements. However, this appears to be the first reported case which has proceeded to judgment.

IRAs Are Not Exempt From Tax Levy

One of the most persistent rumors regarding individual retirement accounts (“IRAs”) is that they are exempt from all creditors. While it is true that the laws of most states exempt IRAs from general creditors, including in the event of a bankruptcy, IRAs are generally not exempt from tax levies.

Need a Lyft? St. Louis judge issues restraining order against rideshare app in St. Louis City and County

A St. Louis Circuit Court Judge, David Dowd, entered a temporary restraining order finding that immediate and irreparable harm will or may result in the form of risk to the public by allowing the online ride share app Lyft to engage in the business of transporting passengers in commerce without being duly licensed under the Metropolitan Taxicab Commission Vehicle for Hire Code. The relief granted in the restraining order is quite sweeping: it requires Lyft to “…disable its software application from use by prospective riders within the City of St. Louis or St. Louis County.”

OCC Issues Garnishment Booklet

We frequently receive questions from banks regarding garnishments, particularly in response to recent changes in applicable regulations. To assist banks with such questions, the Office of the Comptroller of the Currency recently issued the “Garnishment of Accounts Containing Federal Benefit Payments” booklet.

Manufacturer’s Corner: Implied Warranties, Part 4

In each of Parts 1, 2, and 3 of this series on implied warranties, we urged you to disclaim your implied warranties, and promised that we would soon tell you how. In this post, we make good on that promise.

Landlords Beware: Court rules that a new owner’s failure to give a tenant timely notice of the purchase of rental property bars action for unpaid rent

Thinking about buying rental property in Missouri?  If you are, make sure you review all relevant statutes or, better yet, give us a call. 
The recent opinion handed down by the Missouri Court of Appeals in Investors Alliance, LLC v. Bordeaux, No. ED99804 (April 15, 2014), serves as a cautionary tale for unwary buyers of rental properties.

Manufacturer’s Corner: SEC’s Final Rule on Conflict Minerals Partially Stricken by D.C. Circuit

In 2010, Congress tasked the SEC with imposing disclosure requirements on reporting company manufacturers if so-called “conflict minerals” are “necessary to the functionality or production of [their] product[s].”  On April 14, the D.C. Circuit struck down part of the SEC’s final rule, but left most of it intact.

Recent Developments concerning TILA Rescission Rights

Under the Truth in Lending Act (“TILA”), consumers are granted a right of rescission for mortgage loan transactions. Normally, a mortgage lender provides the consumer notice of this rescission right, and the consumer has three business days to rescind the transaction. If the mortgage lender does not provide the required TILA disclosures, the right to rescind is extended from three business days to three years. The Eight Circuit and the Eastern District of North Carolina have both recently provided additional guidance with respect to a consumer’s rescission rights and the rescission process.

EPA “Pre-Rulemaking” Notice Sent to OMB re Reporting Chemicals Used in Fracking

Recently the Environmental Protection Agency (“EPA”) sent a “prerule” notice to the White House Office of Management and Budget (“OMB”) in an initial effort to determine what reporting might be required for chemicals used in hydraulic fracturing.  OMB’s Office of Information and Regulatory Affairs announced last month that it had received an “advance notice of proposed rulemaking” from EPA concerning the potential regulation of chemicals used in “fracking.” According to the Unified Agenda listing for this rulemaking (RIN: 2070-AJ93), this action was initiated in response to a petition filed under section 21 of the Toxic Substances Control Act (“TSCA”).

The Heartbleed Paradox

Data breaches have been big news lately.  Hot on the heels of revelations by major retailers that hackers were able to obtain personal information about their customers, a vulnerability in Open SSL was made public on April 7.  The vulnerability, known colloquially as Heartbleed, allowed easy access to sensitive information held by a host of major companies, including customer passwords.

Colorado Supreme Court Agrees to Hear Reversal of “Lone Pine” Fracking Order

On April 7th the Colorado Supreme Court, en banc, granted a petition for writ of certiorari filed by Antero Resources, agreeing to review the decision of the Colorado Court of Appeals which reversed the trial court’s grant of a “Lone Pine” order. No. 13 SC 576, Court of Appeals Case No. 12 CA 1251, Antero Resources Corporation, et al, Petitioners v. William G. Strudley, et al., Respondents. (Cert. granted, April 7th, 2014.) The Colorado court agreed to consider whether a district court is barred as a matter of law from entering a modified case management order requiring the plaintiffs to produce evidence essential to their claims after initial disclosures but before further discovery. The court also agreed to consider whether, if such modified case management orders are not prohibited as a matter of law, the district court in this case acted within its discretion in entering and enforcing such an order.

Manufacturer’s Corner: Implied Warranties, Part 3

We now turn to the implied warranty of fitness for a particular purpose. This is an important one, because it examines not only how your product should perform as a general matter, but how the product should perform with respect to specific customers.

IRS Issues Same-Sex Guidance: Many Qualified Plans Must Amend By Year-End

The IRS has issued additional guidance regarding how the Supreme Court’s 2013 decision in Windsor v. United States (regarding same-sex marriage) applies to qualified plans and Section 403(b) arrangements. Notice 2014-19 provides that plans must operationally comply with the Windsor decision as of June 26, 2013, although certain same-sex marriages are not required to be recognized until September 16, 2013. Plans with language that is inconsistent with the Windsor decision must generally be amended by December 31, 2014 (although certain plans may have additional time to amend). The related FAQs provide that Section 403(b) plans are also subject to the same operational effective dates, but are not required to be amended at this time.   Plan sponsors should consult with counsel to determine whether their qualified plans must be amended to comply with Windsor and to discuss correction of any operational failures that may have occurred since June 26, 2013.

$5.15 Billion Settlement for Environmental Liabilities – Largest Ever Recovery

Earlier today, April 3, 2014, the U.S. Department of Justice announced its largest ever environmental enforcement recovery case involving a $5.15 billion settlement, $4.4 billion of which will go to environmental cleanup and claims. The settlement, with Kerr-McGee Corporation and certain of its affiliates, along with their parent company Anadarko Petroleum, arose from the 2009 bankruptcy of Tronox, Inc., and a December 2013 ruling by the federal bankruptcy court finding a fraudulent transfer of assets to avoid paying environmental cleanup obligations.

Manufacturer’s Corner: Know Thy Outside Sales Representative

Thank you for bearing with us while Pat and I prepared for trial.  The case ended up settling at the eleventh hour, but we learned some valuable lessons from it.  Please indulge this detour from our ongoing series on implied warranties, which will resume shortly.
We represented a manufacturer (of course).  The plaintiff contended that he was owed a commission on our client’s sale of a substantial piece of equipment, pursuant to an alleged oral agreement he entered with an employee of our client.  Our client’s position was that no such contract existed and, even if one did, the plaintiff failed to perform under it (long story).
The plaintiff faced a series of obstacles in recovering from our client, and those obstacles will serve as good learning tools for manufacturers.

Can Depository Banks Have Liability to PACA Claimants?

The Perishable Agricultural Commodities Act (“PACA”) is a federal statute regulating the purchase and sale of agricultural commodities, such as fruits and vegetables.  7 U.S.C. § 499(a)-(s).  PACA provides protection to producers and growers of perishable goods who transfer such perishables to brokers, dealers, and merchants, who in turn sell the food to purchasers.  Essentially, PACA provides that all inventory and proceeds held by a broker that are related to perishable commodities are held in trust by the broker.  The PACA trust is for the benefit of all producers that have sold products to such broker.  PACA trust funds can be commingled and producers are generally entitled to a pro rata distribution of trust funds without the need for tracing.  Producers, as the beneficiaries of a PACA trust, are entitled to a priority position over secured creditors of the broker.

Collection Fees Based on Percentage of Debt Violates FDCPA

For convenience, when collecting a debt, lenders may be tempted to simply add a percentage of the outstanding balance as the collection costs, rather than determining the actual costs of collection. The Eleventh Circuit, in the recent case of Bradley v. Franklin Collection Service, Inc., determined that, even in situations where the debtor has agreed to pay all costs of collection, this practice violates the Fair Debt Collection Practices Act (“FDCPA”).

FMLA Leave – 7th Circuit Rejects Participation in Ongoing Treatment Requirement

HR managers are frequently asked to decide whether employee requests for unpaid time off qualify as leave protected by the Family Medical Leave Act (“FMLA”). The FMLA gives eligible employees a right to take up to twelve weeks of unpaid leave in order to care for their spouse, son, daughter or parent if that person has a serious health condition. See 29 U.S.C. § 2612(a)(1)(C) (2013) (emphasis added). Some courts have held that “caring for a family member with a serious health condition involves some level of participation in ongoing treatment of that condition.” See Marchisheck v. San Mateo County, 199 F.3d 1068,1076 (9th Cir.1999).

Construction Site Stormwater: Turbidity Numeric Criteria Out, BMPs In

On March 6, 2014, EPA published its final rule for construction activities which will require the use of best management practices (BMPs) in lieu of numeric criteria for turbidity.

Manufacturer’s Corner: The Unenumerated Implied Warranties

This post continues our series on implied warranties under the Uniform Commercial Code (“UCC”). In our last installment, we discussed the most-litigated implied warranty, the warranty of merchantability. Here, we go to the other extreme and discuss the least-litigated – and often forgotten – implied warranties: those that aren’t actually enumerated in the UCC.

OSHA Cites Frozen Food Manufacturer for Anhydrous Ammonia PSM Violations

On March 12, 2014, OSHA cited Schwan’s Global Supply Chain Inc., for a number of alleged process safety management (PSM) violations at the company’s Atlanta facility concerning the storage and use of the industrial refrigerant anhydrous ammonia. OSHA is seeking more than $185,000 in penalties associated with the facility’s PSM and related OSHA violations.

Extraction Gas and Oil shale: The Controversy of Fracturing in the regulations of the European Union and U.S.

According to the U.S. Department of Energy , from 2013 at least two million oil wells and gas in the United States have been hydraulically fractured , and that currently about 95% completed oil wells and gas in the U.S. is hydraulically fractured . Hydraulically fractured wells represent 43 % oil and 67 % of the current natural gas production in the United States . Safety and environmental health concerns about hydraulic fracturing appeared in the 1980s and are still being debated at the state and federal government . Vermont and New Jersey have banned the practice , with other states , including New York , placing regional moratoriums in place.

Final Regulations Streamline ACA Reporting Rules

Final regulations under the Affordable Care Act’s information reporting provisions streamline and simplify the compliance burdens imposed on employers.  Some of these requirements apply to employers of any size, while other requirements apply only to large employers (i.e., those with 50 or more full-time employees, including full-time equivalents).  These information reporting provisions are effective for calendar year 2015, with the first returns and employee statements due in early 2016.

“Play-or-Pay” Road Map Updated to Reflect 2015 Transition Rules

As reported in our February 19, 2014, article, final regulations under the Affordable Care Act’s employer “play-or-pay” mandate include a number of special provisions that will apply only for 2015. We have now updated our Play-or-Pay Road Map to reflect many of those transition rules. For help in deciphering this Road Map, please contact any member of Spencer Fane’s Employee Benefits Group.

Seventh Circuit tells debtor who attempted to evade creditor by transferring assets to new entity after collection lawsuit was filed to heed the old adage: “When you’re in a hole, stop digging”

Every so often, a debtor tries to evade creditors simply by transferring assets to another entity owned or controlled by the same principals. The Seventh Circuit, applying Illinois law, recently handed down an opinion dealing with this exact scenario in the case of Centerpoint Energy Services, Inc. v. Halim, Nos. 13–1797, 13–1807, (7th Circuit, February 18, 2014). The defendant debtor and its principals owned numerous rental properties in the Chicago area and contracted with plaintiff, a natural gas supplier, to buy natural gas for those properties. Defendant stopped paying plaintiff and racked up $1.2 million in unpaid gas bills.

Startup, Shutdown, and Malfunction Notifications – EPA Approves Missouri SIP Revision

On March 5, 2014, EPA announced that it was approving SIP revisions to the Missouri SIP regarding start-up, shutdown, and malfunction (“SSM”) conditions, effective April 4, 2014.  79 Fed. Reg. 12394 (Mar. 5, 2014).

Time Spent Donning and Doffing Personal Protective Equipment Not Compensable, According to U.S. Supreme Court

Under the Fair Labor Standards Act (“FLSA”), employers are required to compensate employees for time spent changing clothes before the workday has started and after the workday has ended if doing so is integral and indispensable to the employees’ employment. But the FLSA also states that employers and unions may mutually agree that time spent changing clothes is not compensable. 29 U.S.C. § 203(o). These conflicting rules raise an important question. Can employers and unions mutually agree that employees will not be compensated for time spent putting on and taking off clothing that is necessary to perform their job? The Supreme Court of the United States recently announced that the answer to that question is yes. Unions and employers may mutually agree that employees will not be compensated for time spent changing clothes even if that clothing is necessary to safely perform their job. Sandifer v. United States Steel Corp., No. 12-417, 2014 WL 273241 (U.S. Jan. 27, 2014).

Reliance on Reg. Z Model Forms May Be Misplaced

Lenders beware! A federal district court recently held that despite a lender’s use of a model form, the disclosure provided by the lender did not adequately notify the borrower of his rescission rights under the Truth in Lending Act (“TILA”) and Regulation Z.  In the case of Simmons v. CitiMortgage Inc. the United States District Court for the District of Utah the borrowers successfully sued the lender to enforce their rescission rights.

Idaho Supreme Court: No Implied Warranty Claims By Remote Purchasers (Usually)

We have written before about the need for clarity as to whether vertical contractual privity is an element of a breach of implied warranty claim under Section 2-314 of the Uniform Commercial Code.  Idaho may not have reached that lofty goal quite yet, but it recently clarified that the answer is generally “yes.”

Missouri Legislature Considers Proposals to Extend Sales Tax Exemption on Aircraft Replacement Parts

Both the Missouri House and Senate are currently considering bills that would extend indefinitely the exemption of aircraft replacement parts from the Missouri sales tax.

Compliance with FARs Provides Defense to Claim of Negligence Against Aircraft Manufacturer

A February decision by a federal court in Washington State found that federal regulation of aviation safety has “occupied the field” with respect to aircraft design and testing.

Wait a Minute (or 90 Days): Final and Proposed ACA Waiting Period Rules Issued

The three agencies charged with implementing the ACA’s 90-day cap on eligibility waiting periods have simultaneously issued final and new proposed regulations on that topic. All plans – both grandfathered and non-grandfathered – are already subject to the 90-day cap on waiting periods as of the 2014 plan year.However, the recently finalized regulations confirm earlier guidance regarding waiting periods, and also answer a number of questions that had remained unresolved until now.

Manufacturer’s Corner: Implied Warranties, Part 1

If you only read one series in the Manufacturer’s Corner, I hope it’s this one.  In this series, we will discuss the implied warranties that come with your product unless you disclaim them.  Without a working knowledge of these warranties, you may be breaching contract terms you didn’t know existed.  And even worse, you are inviting a court to second-guess your determinations of what your industry and your product require.  Please follow us carefully through this series.

Ninth Circuit denies class certification to a putative class of retail customers who rented tools from Home Depot, finding each member would have to demonstrate they were exposed to misleading information during the transaction

The Ninth Circuit recently denied class certification to a putative class of individuals who rented tools from Home Depot stores in California.  In Berger, et al v. The Home Depot, Inc., No. 11-55592, February 3, 2014, the named plaintiff alleged that Home Depot automatically imposed a ten percent surcharge for a damage waiver on tool rentals in its California stores and failed to inform its customers that the surcharge was optional and could be declined.  The plaintiff alleged various causes of action against Home Depot, including a claim for unfair competition. 

IRS Guidance Answers Key Questions About In-Plan Roth Conversions

The IRS has resolved key questions about in-plan Roth conversions.  Notice 2013-74 addresses both old concerns (raised when Congress first authorized in-plan Roth conversions in 2010) and new ones (raised when Congress expanded the scope of Roth conversions in 2013).  With the added certainty this guidance offers to employers, administrators, and recordkeepers, plan sponsors who decided against adding an in-plan conversion feature may wish to reconsider.  Sponsors who already offer in-plan conversions may now wish to take advantage of the new options.

Responding to Data Breaches: What Should a Federal Law Look Like?

Nearly every state has its own statute on responding to data breaches, and each of them imposes different obligations and penalties.  So, if you do business nationwide and you are the victim of a data breach, the laws of 47 jurisdictions are there to add insult to injury.  That’s why it is so pleasing to see that federal legislators are looking at imposing a federal law on point.  What should such a bill include?

Banking the “Legal” Marijuana Industry is Still a Risky Business

Last Friday, the Financial Crimes Enforcement Network issued Guidance that is intended to clarify how banks can provide financial services to marijuana-related businesses and still comply with their BSA/AML obligations.  Unfortunately, the intent of the Guidance is undermined by its stipulations.   So much so, in fact, as to beg the question of whether FinCEN’s actual intent is to make compliance impossible.

A More Pragmatic Approach to Cleaning Up Hazardous Waste Facilities

EPA is attempting to expedite cleanup at thousands of hazardous waste sites across the United States by directing its corrective action program to focus on practical cleanup strategies rather than on process.  This emphasis should yield faster and more efficient cleanups for industrial facilities in that program.

Final Play-Or-Pay Regulations Include Significant Transition Rules

The recent finalized regulations under the Affordable Care Act’s employer “play-or-pay” provision give larger employers (those with 50 or more full-time employees) a reason to turn their attention back to compliance with these rules. These regulations answer a number of questions that had been left unresolved by the regulations proposed in December of 2012.

Employers with 50 to 99 full-time employees may be pleasantly surprised to learn of a transition rule that may allow them yet another year (until 2016) to come into compliance. But even employers with 100 or more employees may take advantage of transition rules making compliance easier – or penalties for noncompliance smaller – during 2015.

FCC Seeks Comment on a Controversial Rule and on a Petition Filed by Spencer Fane Britt & Browne

The Federal Communications Commission (“FCC”) has solicited public comment on its rule that requires certain opt-out language on faxes for which the recipients have agreed to receive. If the language is not included, the fax sender is subject to statutory damages.  Seizing on this rule, class action lawsuits have proliferated.  In these lawsuits, plaintiffs are seeking statutory damages—millions of dollars in damages—for engaging in consensual communications.

Is Marijuana Use a Lawful Off-Duty Activity Under Colorado Law? Supreme Court Agrees to Decide

The Colorado Supreme Court has agreed to hear a case that will determine whether marijuana use, at least for medicinal purposes, is a lawful off-duty activity under Colorado’s statute that prohibits an employer from discharging an employee for engaging in any lawful activity off the premises of the employer during nonworking hours. The decision will directly impact whether employers in Colorado can have and implement zero tolerance drug policies that include marijuana within their scope.

Report to IRS Is Required for Sales Not Paid by Personal Check or Bank Wire

Federal regulations make most aircraft sellers subject to mandatory reporting requirements when they are involved in transactions of more than $10,000.  Since a failure to report may trigger both civil and criminal penalties, aircraft dealers should be aware of the need to comply with these requirements.  A dealer is required to file Form 8300, reporting the transaction to the IRS, under any of the following circumstances:

Third-Party Claims under the Fair Debt Collection Practices Act

A recent decision from the Seventh Circuit reminds creditors, including banks, that the provisions of the Fair Debt Collection Practices Act (the “FDCPA”) may apply to parties other than the debtor.  In the case of Todd v. Collecto, Inc., a man brought claims under the FDCPA against a debt collection company that contacted him with respect to a debt owed by the man’s mother. 

Relief for the Over-Regulated?

Belatedly EPA may be recognizing that the RCRA regulatory scheme was not intended to regulate secondary materials generated during retail operations, and EPA has decided to seek input from retailers on potential changes to how the Agency regulates retail operations. Retailers have been EPA enforcement targets during the last few years and EPA has collected substantial penalties. Recently EPA announced that it was releasing a retail sector specific Notice of Data Availability (NODA). EPA is asking the retail industry for comments on retail operations data collected by the Agency including the quantity of hazardous waste generated during such operations.

For Steelworkers, Time Spent Donning and Doffing Protective Gear Not Compensable


Unionized employers do not have to compensate employees for the time they spend putting on and taking off protective gear if the collective bargaining agreement states that time spent changing clothes is not compensable. However, time spent changing into and out of non-clothes is compensable even if the collective bargaining agreement states otherwise.

IRS Now Accepting “Cycle D” Determination Letter Applications

The IRS is now accepting applications for updated determination letters on behalf of individually designed retirement plans falling within “Cycle D” of the determination letter program.  These include plans sponsored by employers having either a “4” or “9” as the last digit of their employer identification number, as well as all multiemployer plans.

Manufacturer’s Corner: Forming the Contract

In the introduction to this column, we discussed in very broad terms how two people can form a contract for the sale of goods: one person offers to buy or sell, and the other accepts the offer. Simple!
But that isn’t the way business usually happens, and when it does, things go wrong. Consider this far more common scenario: your customer issues you a purchase order, you issue an invoice, you deliver product, you receive payment. If everything goes smoothly, it really can be (and often is) this easy.
Say there is a problem though. You have an issue with your supplier and can’t get the product out to your customer as you quickly as you thought. Or your customer isn’t paying when you expected.  Now we need to know what the terms of the contract are, and that can be tricky.

Do Spousal Waivers Violate Reg B?

The reach of the Equal Credit Opportunity Act (“ECOA”) and Regulation B (“Reg B”) has become a popular conversation topic among banking professionals. As part of that conversation, many commentators have questioned whether Regulation B prohibits the use of a spousal waiver.

UST Violations at County’s Fueling Facilities Lead to $5 Million in Fines and Compliance Upgrades

EPA Region 2 and the U.S. Attorney’s Office for the Eastern District of New York recently announced a significant settlement involving underground storage tank (UST) violations for tank systems owned and operated by the County of Suffolk, New York. The settlement serves as a timely reminder of the RCRA compliance obligations for states, counties, municipalities, and local governments that own and operate vehicle fleets, USTs, and tank systems at fueling facilities for Police, Fire, Department of Public Works, Department of Transportation, and related governmental departments.

New Filing Requirement to Notify IRS of Changes in an Entity’s “Responsible Party”

Effective January 1, 2014, the IRS now requires the use of a new form, Form 8822-B, for any entity that has a federal Employer Identification Number (FEIN) to report changes in the entity’s “responsible party.” The requirement to file Form 8822-B applies to all entities with an FEIN, including those which are tax-exempt. Although not required, Form 8822-B may also be used to report changes to an entity’s mailing and/or street address.

Employees Accepted Arbitration Program by Failing to “Opt-Out”

Frank Neuner discusses best practices for implementing a legally enforceable arbitration program through the use of opt-out provisions.

Do LLC’s Need Operating Agreements?

Did you know that most states do not require that a limited liability company adopt a formal operating agreement? In fact, only five states, including California, Delaware, Maine, Missouri and New York, require that an LLC maintain an operating agreement. Therefore, the question often arises as to whether a customer needs or should have an operating agreement.

What to do When Litigation Happens: Part II

Doug Weems reminds employers although litigation risks can be minimized, litigation is a fact of life in the United States.

Davidson v. Henkel: A Painful Reminder of the Special Rules for FICA Taxation of Nonqualified Deferred Compensation

Although the compensation that an employer pays to an employee is generally subject to FICA taxation at the time the compensation is paid, there are special rules for the FICA tax treatment of amounts payable under nonqualified deferred compensation plans (such as long-term incentive plans or supplemental retirement programs). These rules affect both the timing, and the amount, of the FICA tax that is payable with respect to such compensation (which tax is typically shared 50/50 by the employer and employee).   In the recent case of Davidson v. Henkel, an employer that failed to heed those special rules found itself facing the prospect of bearing substantial additional tax liability – for both the employer’s and the employee’s share of the FICA tax. This case serves as a reminder that employers should pay special attention to when amounts deferred under a nonqualified plan are properly taken into account as “wages” for purposes of FICA taxes.

Manufacturer’s Corner: An Introduction

We here at the MCLB love manufacturers.  In an economic climate where so much of our growth rests on intangibles and virtual goods, you provide the tangible items and the jobs that make it all possible.
As a way to say thank you, we’re beginning this column for you.  The Manufacturer’s Corner will focus on important issues for manufacturers, such as warranty exclusions, protection against insolvent buyers, and product liability issues.

Seventh Circuit Rejects Employer’s Ability to Assert “Failure to Conciliate” Defense Against EEOC

Megan Meadows analyzes a recent Seventh Circuit case holding that employers may not assert a “failure to conciliate” defense after they are sued by the EEOC.

University of Missouri-Columbia Study Links Endocrine System Health Effects to Fracking

In the controversy over potential health effects from hydraulic fracking and the injection of chemicals to abet oil and gas extraction processes, a December 16th, 2013 study released by U. of Missouri-Columbia on Colorado fracking sites has garnered significant attention.    Published in the journal, Endocrinology, the study focused on a selected subset of chemicals, including over one hundred known or suspected endocrine disrupting chemicals (“EDCs”), used in natural gas drilling operations, as well as surface and ground water samples collected in a drilling region of Garfield County, CO.

What to do When Litigation Happens: Part I

Doug Weems discusses what to do when litigation happens. Although litigation risks can be minimized, litigation is a fact of life in the United States.  Here are some suggested steps to take if you or your bank is sued.

Oral Argument Casts Doubt on Validity of Recess Appointments to the NLRB

David Wing offers his perspective on the oral arguments before the U.S. Supreme Court in the case of Noel Canning v. NLRB, involving the validity of President Obama’s recess appointments to the National Labor Relations Board in January 2012.

In a Putative Class Action Case, Another Missouri Appellate Court Finds an Automated Red Light Camera is Unconstitutional and Void for Conflicting with State Law. Are Automated Speed Cameras Next?

In Missouri, red-light enforcement systems are now the target of class actions and recent rulings suggest the gravy train for Missouri cities using these cameras, and their corporate partner, may be coming to an end.

Insurance Remains Property of Dissolved Corporation Even After Wind-up, According to Delaware Supreme Court

As Delaware has often been selected as a preferred place of incorporation by U.S. businesses, and consequently the venue for dissolution and bankruptcies, the recent decision by the Delaware Supreme Court, In the Matter of Krafft-Murphy Co., Inc., No. 85, 2013 (Del. Nov. 26, 2013), holding that insurance contracts remained property of the dissolved corporation may have significant implications for “orphan shares” at co-disposal, environmental remediation sites, as well as for non-environmental liabilities. As in other states, otherwise formerly insolvent corporations may find themselves once again parties to litigation as potential creditors seek to attach insurance assets.

The Message from Regulators in 2014: “You had Better Mind Your Own Business and Everyone Else’s . . . . Or Else!”

If you look back at all of the regulations, guidance and enforcement actions over the past year, you will notice a very distinct trend. That is, more and more banks are being held responsible for the acts of others. For the acts of their customers. For the acts of their service providers. For the acts of completely unrelated third-parties with whom banks choose to do business. Indeed, in this regulatory environment, the consequences of not minding everyone else’s business can be devastating!

Prevailing Defendants Can Recover Costs Incurred After Plaintiff Rejected Offer of Judgment in MHRA Case

This post discusses a recent decision by the Missouri Court of Appeals allowing a prevailing employer to recover costs incurred in a case filed under the Missouri Human Rights Act after the plaintiff had rejected an offer of judgment. 

Oil, Gas & the 2014 Colorado Legislative Session

Colorado is not alone in experiencing the job creation and economic development that is associated with the more robust development of traditional energy resources. States like Oklahoma, Wyoming and Texas, which are normally associated with energy development, have been joined by states like North Dakota, Ohio and Pennsylvania. These new “plays” are made possible by the modern use of a technology that has been around since the 1940’s – hydraulic fracturing.

How Missouri’s Consumer Protection Laws Would Require Target to Respond to Its Data Breach

The laws governing corporate responses to various forms of data breaches are extensive, but I think it would be useful to take a look at Missouri’s consumer protection law that provides the proper response to data breaches.  It will serve as a helpful reminder to companies doing business in Missouri of their notice obligations and, perhaps by extension, their data security obligations.  If it helps persuade you that this is worth your attention, violators are subject to civil penalties of up to $150,000 per breach if they fail to notify the appropriate parties.

Missouri’s Economic Loss Doctrine Bars a Negligent Misrepresentation Claim Against a Product Manufacturer for Recommending a Product Allegedly Unfit for its Intended Purpose

The economic loss doctrine is a judicially crafted rule that defines the remedies of a purchaser of a product who suffers only economic harm when that product fails to perform up to expectations. Economic harm is defined as damage caused by the allegedly defective product, including its diminished value and any lost profits caused by the product’s failure to perform as expected.

Good Faith Counterparty Dealings in Zero-Sum Contracts

In October, Bloomberg reported a delightful trade in which a unit of Blackstone (1) bought short-dated CDS on a troubled global gambling concern called Codere SA; (2) took over Codere’s revolver on the condition that Codere delay an interest payment sufficiently to trigger a credit event under the CDS contracts; and (3) made a whole bunch of money doing so.
There are two ways to view the trade. One is that it is a hilarious bit of creative maneuvering in an everyone-for-themselves market. The other is that, well, the whole thing smacks of bad-faith collusion (especially since Codere got advance permission from the majority of its US and EU bondholders prior to entering the new loan agreement, and as part of that permission the bondholders agreed not to accelerate bond obligations upon the specifically-contemplated default).

IRS Grants Temporary Nondiscrimination Relief to Closed DB Plans

In Notice 2014-5, the IRS has granted temporary relief to sponsors of “closed” defined benefit plans.  This will allow such a plan (which has been “soft frozen” to new entrants) to be aggregated with a defined contribution plan sponsored by the same employer when testing the plans for compliance with the Tax Code’s minimum coverage and nondiscrimination requirements.  This relief only modestly expands the circumstances under which such aggregation is already allowed, and it applies only for plan years beginning before January 1, 2016.

A Friendly Reminder About Lost Profits and Consequential Damages Waivers

I recently had occasion to litigate the issue of whether a client was barred by a contractual consequential damages waiver from recovering lost profits. I had never given the issue much thought, but the contract provision was a problem for our client, so I needed a workaround.
As it turns out, lost profits are not (always) consequential damages, and therefore recovery of lost profits is not barred by a consequential damages waiver unless specifically called out.

Under Illinois Law, Projections as to Future Sales Figures Given to Franchisees by a Franchisor to Entice Them to Purchase Franchises Were Held Not Actionable As Fraud

An Illinois court recently held that projected sales figures contained in pro formas given to franchisees by the franchisor, presumably to entice the franchisees to purchase a franchise, were statements of opinion rather than fact, and thus could not be the basis of the franchisees’ fraud and negligent misrepresentation claims when the franchisees actual sales figures never met expectations.

Some Practical Thoughts About the Brave New World of Virtual Currencies

A few days ago, I was speaking with some friends about the “cryptocurrency” called Bitcoin. We laughed about the bubble in the Bitcoin market (it gained 1200% on the US Dollar in the past six months), the perceived need for such a “currency” untethered from any nation or central bank, and whether Bitcoin would be subject to U.S. regulation in the near future. It was a good time. If you’re interested in investing in our new Bitcoin fund, let me know.

Free Speech Rights of Government Employees – More Limited Than You Might Think

Brian Peterson discusses a recent Seventh Circuit decision affirming summary judgment against a Chicago teacher who was suspended after voicing concerns about certain practices at her school.

It’s Time to Clarify the Law on Breach of Warranty and Vertical Privity

You’re a manufacturer.  If you’re also a client of ours, I hope you’ve already taken our advice and disclaimed your implied warranties under Article 2 of the Uniform Commercial Code (e.g., that the product will be merchantable, fit for its intended purpose, etc.). 
But let’s say you’re not a client of ours or, for whatever reason, you decided to keep the implied warranties, or your disclaimer was ineffective.  You sold your product to a big box store, and an end user purchased it from there.  The end user has decided to sue you for breach of the implied warranty.

EPA Approves 2013 Phase I ESA Standard – Agency Says Not to Use 2005 Standard

Effective December 30, 2013, parties may use the 2013 Phase I Environmental Site Assessment standard ASTM E1527-13 to satisfy the All Appropriate Inquiries Rule, according to the EPA. And while the agency has not yet removed references to the 2005 standard in the final rule, 78 Fed. Reg. 79319 (Dec. 30, 2013), EPA clarified that it intends to issue a proposed rule to remove the references to the 2005 standard.

Outpatient Physical Therapy Supervison Requirement

As reported in the Kansas City and Wichita Business Journals, in January 2014, CMS will begin enforcing a law requiring the supervision of outpatient physical therapy services by physician or non-physician practitioners.  Outpatient physical therapy services that do not meet this supervision requirement will not be reimbursed by Medicaid.

Federal Court Puts to Rest Challenges to the Method of Determining the Amount of Foreclosure Deficiency

In prior Alerts we described appellate court decisions addressing challenges to the Missouri common law rule of basing the amount of loan deficiency after real estate foreclosure on the foreclosure price paid, regardless of the fair market value of the affected real property. Challengers have pressed for adoption of a rule that would establish the amount of deficiency as the difference between the unpaid loan obligation and the fair market value of the real property subject to the foreclosure sale. By statute that is the rule in several states, including Kansas.

Groundwater Restoration Guidance Issued by EPA – Remedial Action Completion to Entail Well-by-Well Analysis According to Agency

On November 25, 2013, EPA issued a new groundwater cleanup guidance document specifying the need for a well-by-well review when determining whether groundwater restoration remedial action is complete.

FFIEC Issues Final Guidance on Social Media

The Federal Financial Institutions Examination Council (“FFIEC”) issued final guidance on December 11, 2013, about the applicability of existing consumer protection laws, regulations, and policies to financial institutions’ activities on social media. The guidance does not introduce new requirements, but it is intended to assist financial institutions in understanding the risks related to social media.

Missouri Use Tax Applies To In-State Aircraft Sale When Sales Tax Not Collected

In Featherston v. Director of Revenue, the Missouri Supreme Court addressed the question of whether Missouri use tax applied to an in-state sale of an aircraft that fell outside the scope of Missouri’s sales tax statute. Missouri sales tax applies only to in-state transactions. Sales tax does not apply unless the seller is engaged in the business of selling tangible personal property.

What is a Captive Insurance Company and How Can it Benefit Your Clients?

A captive insurance company is a vehicle that allows a company or group to manage some of their own risks as part of an overall risk management strategy. It is a licensed and regulated insurance or reinsurance company whose business is supplied and controlled by its owners who are the principle insureds. A captive insurance company can provide for better control of risk management and opportunities to reduce costs. Captive insurance laws in Missouri allow for a variety of flexible options to manage your mainstream as well as non-traditional risks where traditional insurance coverage may not be readily available or best suited for your particular needs. Captive Insurance Companies are licensed and regulated by the Missouri Department of Insurance Financial Institutions and Professional Registration (DIFP).

The Bankruptcy Code v. the Fair Debt Collection Practices Act: Who Wins?

The case of Simon v. FIA Card, Services, N.A., recently decided by the Third Circuit, demonstrates the potential for conflicts between the Bankruptcy Code and the Fair Debt Collection Practices Act (“FDCPA”) and emphasizes that banks should approach bankruptcy debtors with caution.

Presence Of Unrepaired Squawks Does Not Overcome Sale Contract’s Allocated Risk Of Loss

In a recent decision in the case of Eagle Jets, LLC v. Atlanta Jet, Inc., the Georgia Court of Appeals considered the claim of an unfortunate buyer whose aircraft crashed during the ferry flight from the seller’s locale to the buyer’s.  The case illustrates the importance of including a clear allocation of the risk of loss in any aircraft sale contract.

Aircraft Dealer’s Compliment Concerning A Distressed Manufacturer Does Not Constitute Fraud

Though buyers sometimes seek to undo purchase agreements by claiming they were misled by a crafty salesperson, a recent federal case illustrates the limits of this tactic. In Morris Aviation, LLC v. Diamond Aircraft Industries, Inc., the Sixth Circuit Court of Appeals upheld the dismissal of an aircraft buyer’s claim of fraudulent misrepresentation.

American Arbitration Association Establishes New, Optional Appellate Process

Decisions of arbitrators are normally very difficult to get reversed on appeal.  That may be changing under new appellate rules adopted by the American Arbitration Association, discussed here by Casey Murray.

The State Selected For Delivery Of An Aircraft May Exercise Personal Jurisdiction Over The Seller

A recent federal case in the Western District of Tennessee demonstrates the importance of including a forum selection clause in any aircraft sales agreement. In McMahan Jets, LLC. v. Roadlink Transportation, Inc., the court ruled, in the absence of such a clause, that the Utah seller of an aircraft was subject to the jurisdiction of a Tennessee court when it acceded to a Mississippi buyer’s request that the aircraft be delivered to it in Tennessee.

Happy Holidays from the CFPB: 1,088 Pages of New Disclosure Rules that will Present Some Interesting Practical Problems for Implementing Banks

Just in time for the holidays, the CFPB gifted the banking industry another 1,088 pages of final mortgage disclosure rules. 

Fifth Circuit Rejects NLRB’s Class Action Waiver Ban

This article discusses the recent decision reversal by the U.S. Court of Appeals for the Fifth Circuit regarding the National Labor Relations Board’s D.R. Horton decision.

Use Of Intermediary Precludes Set-off Of Trade-In Value For Calculation Of Missouri Use Tax

In a recent use tax ruling, the Missouri Supreme Court addressed the circumstances that would entitle a buyer to use an offset for trade-in value in calculating the use tax due on an aircraft purchase.

Anhydrous Ammonia Violations Result in RMP and PSM Enforcement – Focus on Mechanical Integrity

EPA and OSHA continue to target companies that store and use the industrial refrigerant anhydrous ammonia as reflected in recent EPA Risk Management Plan (RMP) enforcement and OSHA enforcement of the Process Safety Management (PSM) regulations. Failures in the Mechanical Integrity requirements were prevalent in both enforcement cases.

New Homeownership Counseling Requirements Bookmark This Page and Update Your Mortgage Loan Procedures

Last week, the CFPB launched a website tool to help consumers find local housing counseling agencies to answer their questions or address their concerns about home ownership.  This tool can also be used by banks to generate a list of approved counselors for borrowers in connection with mortgage loan applications. 

Is OSHA Now Enforcing EPA’s Laws? OSHA to Use TRI Release Data for Targeted Inspections

On November 12, 2013, OSHA Region 7 announced a new Local Emphasis Program applicable in the states of Kansas, Nebraska, and Missouri, that will specifically target companies for OSHA inspections based on their Toxic Release Inventory (TRI) submissions to the U.S Environmental Protection Agency (EPA).

Final FDIC Guidance regarding Deposit Advance Products

The FDIC has issued final guidance for state chartered banks regarding deposit advance products.  We previously mentioned the proposed guidance and discussed applicable risks in connection with our first of two blog entries regarding changes to Missouri law that may now make deposit advance products more appealing.

Reminder of Fee Changes for Certain Missouri Loans

As you may be aware, Section 408.140 of the Missouri Revised Statutes, concerning loan fees for small loans, has recently been modified.  We previously blogged about the changes regarding short term cash advance fees.  As we indicated, with respect to open-end credit tied to a transaction account, the maximum credit advance fee that may be charged by a lender is now the lesser of $75 or 10% of the amount advanced.  This change became effective August 28, 2013.

Kansas Abolishes Assumption of the Risk Defense for Inherently Dangerous Workplaces

Stephanie Lovett-Bowman discusses the Kansas Supreme Court’s recent case holding that the “assumption of the risk” defense will no longer be available to employers who operate “inherently dangerous workplaces” as a complete bar to recovery.

MEDC 2013 Fall Conference

Spencer Fane’s “The Spirit of 76” Project was featured at the MEDC 2013 Fall Conference conference held in Branson, Missouri.

Paying the Salary of Certain Union Officers Held to Be Unlawful

This post analyzes a recent Seventh Circuit case holding that an employer’s agreement to pay the full-time salaries of union officers was illegal and could not be enforced by the union.

Top Tips: Holiday Parties – Practical Guide for Employees

Sue Willman provides general guidelines for employers hosting holiday parties that may help to reduce or minimize potential liability.

Environmental Indemnity or Waste of Words?

On November 12, 2013, the First Circuit Court of Appeals handed down its decision in VFC Partners 26, LLC v. Cadlerocks Centennial Drive, LLC, slip op. (1st Cir., 2013). This decision serves as a reminder that courts will look carefully at the words used in a loan agreement’s environmental indemnity provisions to decide whether or how they apply. If the actual wording chosen (likely many years earlier) does not fit the environmental costs sought to be indemnified, the party pursuing indemnity may be greatly disappointed.

The “Name Game” Continues for Locating Notices of Federal Tax Liens

Under Article 9 of Uniform Commercial Code, security interests in most personal property securing business debt are perfected by filing a UCC financing statement in the appropriate office that provides the “name of the debtor,” among other information. UCC §9-502(a). What is the “name of the debtor” has been the subject of two major revisions to UCC Article 9. The 2001 revisions adopted an “only if” answer to this question for registered organizations (corporations, limited partnerships, limited liability companies and certain registered business trusts). Under that revision, the only correct name for a UCC filing against a registered organization is “… the name of the debtor indicated on the public record of the debtor’s jurisdiction of organization….” UCC §9-503(a)(1).

Changes Regarding Force-Placed Hazard Insurance

Along with the CFPB’s numerous other mortgage regulations, some regulations concerning force-placed hazard insurance are set to take effect on January 10, 2014. The new regulations, which can be found in 12 C.F.R. § 1024.37, dictate a specific procedure that must be followed before a servicer can charge a borrower for force-placed insurance.

New Final Phase I ESA Standard E1527-13 Issued

On November 6, 2013, ASTM issued its revised standard practice for conducting Phase I Environmental Site Assessments (ESA), with an effective date of November 1, 2013. Now the wait begins to see if EPA will continue to allow the 2005 version of the Phase I ESA standard E1527-05 to satisfy the All Appropriate Inquiries Rule (AAI) at 40 CFR Part 312, or whether the new revised E1527-13 completely supersedes the prior version.

SPCC Violations by Food Company Result in $475,000 Penalty and Injunctive Relief

ConAgra Foods, Inc. and ConAgra Grocery Products, LLC, have agreed to settle alleged violations of the Clean Water Act’s Spill Prevention Control and Countermeasure (SPCC) requirements and the Facility Response Plan (FRP) regulations. The violations were identified by EPA Region 4 during an October 2007 inspection at ConAgra’s plant in Memphis, Tennessee, that refines crude vegetable oil into cooking oils for consumer and commercial use.

2014 Annual Limits Benefits Card

Here is our annual update of a card listing the dollar amounts applicable to employer retirement plans, health savings accounts, Social Security, and Medicare.

2014 Inflation Adjustments

Following recent announcements by both the IRS and the Social Security Administration, we now know most of the dollar amounts that employers will need to administer their benefit plans for 2014.

IRS Loosens Health FSA Carryover Rules

Thanks to recent IRS guidance, sponsors of health FSAs may now allow employees to carry over up to $500 of their account balance from one plan year to the next.  Notice 2013-71 creates a new exception to the “use-it-or-lose-it rule” that has long discouraged employees from contributing to a health flexible spending account (“health FSA”).  This new carryover option is immediately available, but FSA sponsors who wish to implement this option in either 2013 or 2014 will need to act quickly.

Colorado Court Sides With Agency in Withholding Documents at Superfund Site

Documents sought to be obtained from the Colorado Department of Public Health and Environment (“Department”) by watchdog group Colorado Citizens Against Toxic Waste will remain protected pursuant to an Order issued October 22, 2013. Following an in camera review, Denver Judge J. Eric Elliff granted the Colorado Attorney General’s petition to withhold the documents.

Practical Suggestions for Dealing with Issues Regarding Social Media, the ADA and Independent Contractors – Part III

On October 15, 2013, Ron Fano, Jamie Cotter, and Phil Quatrochi presented the webinar addressing practical suggestions regarding issues implicating the ADA, independent contractor status, and social media. If you were unable to attend you may view the session recording by clicking here
The webinar generated several interesting questions with broad application. We have previously posted questions and answers regarding the ADA and independent contractors.  Today, the series concludes with the social media topic.

Agencies Issue Disappointing Statement on Qualified Mortgage Fair Lending Risks

Earlier this year, I authored a client alert examining the potential implications of the CFPB’s new mortgage rules in light of HUD’s recent clarification on how it will apply the statistical disparate impact approach to fair housing enforcement. That article examines the potential conflict between the two rules and concludes that bankers who attempt in good faith to comply with the new mortgage rules by making only “Qualified Mortgages” will be at high risk for a fair housing / fair lending enforcement action.

Practical Suggestions for Dealing with Issues Regarding Social Media, the ADA and Independent Contractors – Part II

On October 15, 2013, Ron Fano, Jamie Cotter, and Phil Quatrochi presented a webinar addressing practical suggestions for proactively dealing with issues implicating the Americans with Disabilities Act, independent contractor status, and social media. If you were unable to attend, you may view the session recording by clicking here.
The webinar generated several interesting questions with broad application. In our previous post, we discussed questions involving reasonable accommodations under the ADA.  Today, we address a question involving independent contractor classification. 

Adventures of the Missouri No-Oral-Credit-Agreement Statute; Governor Signs Corrective Amendment in SB 100

The Missouri credit agreement statute of frauds has had uneven interpretations by the courts.  It has been amended twice to overrule appellate court decisions that limited its obvious intent, which is to eliminate all claims by borrowers and guarantors(or lenders) that oral promises or commitments had been made or breached or that there were representations at variance with written loan agreements, promissory notes, guaranties or similar documents.  It was originally adopted as § 432.045, R.S.Mo., in 1990. 

Practical Suggestions Regarding Social Media, the ADA and Independent Contractors – Part I

On October 15, 2013, Ron Fano, Jamie Cotter, and Phil Quatrochi presented a webinar addressing practical suggestions for proactively dealing with issues implicating the Americans with Disabilities Act, independent contractor status, and social media. If you were unable to attend you may view a recording of the session by clicking here.  
The webinar generated several interesting questions with broad application. Today, we answer two of these questions (regarding the ADA), and we will address others in upcoming posts.

Top Tips: Dual-Use Devices in the Workplace

Denise Portnoy and Dave Kight provide the following tips on how to reduce the risks of dual-use devices used by employees in the workplace.

An Expensive Word

Changing one word in your loan documents could save you thousands of dollars if you sue borrowers in Kansas. That word is “reasonable”—as in whether your borrowers must pay for “reasonable” attorneys’ fees that you spend to collect their loans, rather than all of your costs of collection.

Workplace Dress Codes: The Issue We Love To Discuss But Hate To Manage

Brian Peterson discusses how some employers’ handling of workplace dress codes has led to lawsuits and bad publicity, and offers several best practices in this area.

EPA Withdraws Wetland Guidance, Issues Study That May Expand Federal Jurisdiction

On September 17, 2013, EPA issued a new hydrological connectivity study that may expand the federal reach of the EPA and U.S. Army Corps of Engineers to regulate upstream waters and wetlands that do not have a permanent connection to traditional navigable waterways. In companion with this action, EPA has also withdrawn guidance intended to clarify the scope of Clean Water Act jurisdiction which the White House Office of Management and Budget has had since February 2012. In lieu of issuing guidance, EPA has sent a proposed rule to OMB for interagency review.

Impact of Chapter 11 Bankruptcy on Liens

In the Chapter 11 bankruptcy case of Acceptance Loan Company, Inc. v. S. White Transportation, Inc., the Fifth Circuit recently held that a secured creditor’s lien remained in place after the confirmation of the debtor’s plan, despite the fact that the secured creditor received bankruptcy notices and took no action to protect its interest until after the plan was confirmed.

Top Threat to Rural Health Care

Critical Access Hospitals are a critical to providing access to health care in rural America, yet they face devastating budget cuts and must take action to survive.

Missouri Appeals Court Invalidates Arbitration Agreement Placed In Employee Handbook

Megan Meadows discusses a recent case from the Missouri Court of Appeals invalidating an arbitration agreement between an employer and employee that was placed within the company’s “Employee Handbook”.

Retail Store Penalty Exceeds $600,000 for Two Mislabeled Pesticides Under FIFRA

EPA Region 4 and Family Dollar, Inc., have entered into a Consent Agreement and Final Order (CAFO) to resolve allegations that the retail store distributed two bleach products with labels that purportedly were not identical to the EPA-approved labels. The settlement, under the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), requires the company to pay a $602,438 penalty.

CMS Lessens the Threat of MAC/RAC Review of Inpatient Admissions Under the Two-Midnight Rule

The Centers for Medicare and Medicaid Services (CMS) recently provided additional information regarding the newly-implemented two-midnight rule for inpatient admissions.

How to Draft a Hybrid Code with Flexible Standards

The presentation “How to Draft a Hybrid Code with Flexible Standards” was given at the 2013 APA Colorado State Conference on October 4, 2013.

Top Tips: Handling Inspections by OSHA & Other Government Agencies

Andrew Brought provides useful information in responding to OSHA and other government inspections of facilities.

Interagency Guidance Clarifies Banks’ Right to Report Financial Abuse of Elders

The Federal Reserve, CFPB, FDIC, OCC, SEC, NCUA, FTC, and CFTC recently issued Interagency Guidance to clarify that banks and other financial institutions are generally free to report suspected exploitation of elderly customers to government authorities without violating federal privacy provisions of the Gramm-Leach-Bliley Act.

Agencies Slam the Door on Pre-Tax Payments for Individual Health Insurance

Many employers are concerned that the “market reforms” included in the Affordable Care Act (“ACA”) will lead to an unacceptable increase in the cost of providing health coverage to their employees. In response, some employers have considered moving to an “account balance” approach. They would simply deposit pre-tax dollars into an account (such as a health reimbursement arrangement, or “HRA”) that each employee could then use to purchase individual health insurance. However, in coordinated guidance issued on September 13, 2013, the three agencies charged with implementing the ACA have slammed the door on this approach.

Employee Assistance Programs under the Affordable Care Act

Employers offering employee assistance programs (“EAPs”) will want to take note of recent agency guidance concerning the impact of the Affordable Care Act (“ACA”) on those EAPs. This impact could be felt by their employees, as well. An employer’s immediate task will be to determine whether its EAP constitutes an “excepted benefit” under the ACA rules. If it does not, the EAP should be revised or terminated before January 1, 2014.

Tax Abatements as a Shield for Looming Property Tax Increases

Throughout the Great Recession and well into what has become an extended period of slow recovery, the tax revenue base for municipal governments has been shrinking.

Straight Talk: OFCCP’s Final Disability Rules Significantly Expand Federal Contractors’ Obligations

This article discusses the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) recently enacted Final Rule making changes to the regulations implementing Section 503 of the Rehabilitation Act (“Section 503”). Section 503 prohibits federal contractors and subcontractors (“contractors”) from discriminating in employment against individuals with disabilities (“IWDs”) and requires the employers to take affirmative action to recruit, hire, promote, and retain these individuals.

Update: OFCCP’s New VEVRAA and Disability Rules Published, Effective March 24, 2014

This post discusses an alert for federal contractors that the OFCCP’s new rules designed to improve employment opportunities for protected veterans and qualified workers with disabilities were published in the Federal Register on September 24, 2013 and, therefore, become effective March 24, 2014.

VETS 100 and VETS 100A Reporting Deadline Extended to October 31, 2013

This post discuses about the filing deadline for VETS 100 and 100A reports which has been extended to October 31, 2013 (from September 30, 2013).

“Sorry, Your Former Employee’s MHRA Claim Was Untimely, But You’re Too Late To Challenge It”

Frank Neuner and Brian Peterson discuss an important new case that requires employers to be vigilant about taking steps before a lawsuit is filed in order to preserve certain defenses to discrimination claims.

The New Uniform Commercial Code Article 9 Rules To Determine An Individual’s Name For Filing Financing Statements

Under Article 9 of the Uniform Commercial Code security interests in most personal property securing business debt are perfected by filing a UCC financing statement in the appropriate central filing office. With few exceptions, such as perfection of purchase money security interests, the first creditor to file a correctly prepared financing statement in the proper location has priority over a security interest perfected in the same property by a later filing. Prospective lenders search the UCC filing office records under the “name” of the proposed borrower to confirm that there is no indication on file that any other party may have a prior perfected security interest against the proposed borrower covering the offered collateral. Filing offices index UCC files by the debtor’s “name.”

As Colorado Flood Clean-up Begins, Water Quality Concerns are Front and Center

As the floodwaters recede in Colorado, they leave behind scenes of devastation. Communities torn apart, lives lost, homes and businesses left in ruin and disrepair. Second to life & safety concerns during this natural disaster have been impacts to infrastructure like our roads, bridges and water treatment facilities, leaving a major effect of the recent flooding on water quality. While floodwaters were high, the top priority of state and local officials was the preservation of life. As the rescues continue, many are now turning to cleaning-up and the start of rebuilding. Especially for small businesses owners, the process of cleaning and rebuilding can be fraught with legal and regulatory landmines.

Bottom Line: What Revised VEVRAA Regulations Really Mean for Federal Contractors

This article discusses and analyzes the Office of Federal Contract Compliance Programs (“OFCCP”) long-awaited release of a Final Rule that substantially impacts federal contractors’ and subcontractors’ compliance obligations to take affirmative action to recruit, hire, promote, and retain protected veterans under the Vietnam Era Veterans’ Readjustment Assistance Act (“VEVRAA”).

Practical Implementation of the CFPB’s New Mortgage Rules: Here is Where You Should Start

In the past year, the CFPB has issued 1,097 pages of final mortgage rules.
I consider myself to be an efficient reader, and it took me roughly three and a half minutes to read just one of those pages.  At that rate, a bank compliance officer would need almost 64 hours of uninterrupted time just to read the text of the new regulations.

Refrigerant Violations at Supermarket Chain Result in $4.7 Million Clean Air Act Settlement

One of the nation’s largest food and drug retailers, Safeway, Inc., has agreed to a $4.7 million settlement associated with violations of the Clean Air Act’s commercial refrigerant and repair rules. The settlement involves a $600,000 civil penalty and a corporate-wide compliance plan, covering 659 stores nationwide, estimated at $4.1 million.

Colorado Attorney General Resists Document Production at Superfund Site

In an effort to resist the production of documents sought by an environmental group under the Colorado Open Records Act, the Colorado Attorney General filed a petition on September 5, 2013, on behalf of the Colorado Department of Public Health and Environment (“Department”), seeking to protect disclosure under the “deliberative process privilege.” The case presents an intriguing question of exactly how much and what types of information must be made available to the public under the Colorado Open Records Act as it pertains to an environmental cleanup action.

EPA to Withdraw Rule Regarding New Phase I ESA Standard E1527-13 as Satisfying All Appropriate Inquiries

When EPA issued its Direct Final Rule on August 15, 2013 (78 Fed. Reg. 49690), approving the use of the new proposed 2013 Phase I Environmental Site Assessment (ESA) standard (ASTM E1527-13) to satisfy the All Appropriate Inquiries Rule, 40 CFR Part 312, the agency specified it would withdraw the Final Rule and it would not take effect if EPA received an adverse comment during the comment period. That has now happened as an adverse comment was received on August 28. Consequently, EPA will withdraw the final rule (if it does what it said it would do) and rely upon the companion Proposed Rule issued simultaneously on the same day, 78 Fed. Reg. 49714, and respond to comments in order to proceed with a final rule.

Top Tips – The FLSA and Unpaid Interns

Sue Willman identifies the factors under the FLSA that must be met for an intern to legally work without pay in the private, for-profit sector.

Regulatory Alert – Examiners are Taking a Close Look at Interest Rate Risk

The news is rolling in from both banks and regulators — interest rate risk (“IRR”) will be a primary focus of upcoming safety and soundness examinations. In the current market of tight net interest margins and slow loan growth, regulators are concerned that banks may begin reaching for higher yields in the form of longer-term assets. This concern could be well-founded given the strong forces that are creating incentives on both sides of the closing table.

OSHA Proposing to Adopt Stricter Silica Dust Exposure Limits and Work Practice Standards

On August 23, 2013, OSHA issued a Notice of Proposed Rulemaking designed to reduce the permissible exposure limit (PEL) associated with silica dust exposure. OSHA is proposing a new PEL for respirable crystalline silica (quartz, cristobalite, and tridymite) of 50 μg/m3 in the general industry, construction, and shipyard sectors, a standard anywhere from two to five times more stringent than current PELs that date back to 1971.

Same-Sex Marriages Recognized for Federal Tax Purposes Regardless of Where Taxpayers Live

The Internal Revenue Service has issued guidance (in the form of a revenue ruling and two sets of Frequently Asked Questions) clarifying that same-sex couples that are legally married will be treated as married for purposes of federal income, gift and estate taxes, regardless of whether the couple lives in a state that recognizes same-sex marriage or a state that does not.  However, couples in domestic partnerships or civil unions will not be treated as “married” for federal tax purposes.  The ruling, which is effective as of September 16, 2013, generally applies prospectively, although individual taxpayers will have the opportunity to file amended tax returns (and claim refunds for taxes paid) for “open” tax years.   The IRS intends to issue additional guidance regarding the extent, if any, that the ruling applies to retirement plans and other tax-favored arrangements for periods prior to the effective date of the ruling.

Tax, legal developments signal estate plan review

It has often been said the only constant in life is change.

Nebraska Supreme Court Weighs in on Tax Implications of Jury Verdicts

Josh Dickinson and Shilee Mullin analyze a recent case from the Nebraska Supreme Court, holding that the entire amount of a general-verdict award for an on-the-job injury should be considered lost wages for tax withholding purposes.

Deposit Advance Products are Now Available to Missouri Banks . . . But Mind Your Regulatory Ps & Qs

Missouri’s Senate Bill 254, which will become effective on August 28, 2013, will permit Missouri banks to charge the lesser of $75 or ten percent of the loan amount on short-term, direct deposit cash advance products. Although existing Missouri law already allows state-chartered banks to offer similar products, the fees in relation to those short-term loans were previously capped at the lesser of $25 or five percent of the loan. Due to the lower fee cap, most Missouri banks did not offer these products, presumably because the potential fees did not compensate for the related risks.

Federal Court Strikes Down EPA’s “Deferral Rule” – Landfill Carbon Dioxide Emissions and Other Biogenic Sources Cannot Be Treated Differently in Greenhouse Gas Permitting

According to the D.C. Circuit Court of Appeals, the U.S. EPA acted in an arbitrary and capricious manner in promulgating the 2011 “Deferral Rule” which, albeit temporarily, treated biogenic sources of carbon dioxide differently than greenhouse gas emissions from fossil-fuel combustion in vehicle tailpipes and stationary sources such as coal-fired power plants for purposes of greenhouse gas permitting. The D.C. Circuit’s recent decision to vacate the Deferral Rule in Center for Biological Diversity v. EPA, essentially means that sources of biogenic carbon dioxide – such as landfill gas, wastewater treatment plants, manure management facilities, biomass combustion sources, and ethanol production plants – may no longer rely on the temporary deferral and must now consider such emissions as part of pre-construction and construction permitting (PSD and NSR) and major source operating permits (Title V).

Betsy Garvin Confirmed as Vice Chair of the Missouri Bankers Association Bank Counsel Section

Betsy Garvin was chosen as Vice Chair of the Missouri Bankers Association Bank Counsel Section at the Missouri Bank Association’s Board of Directors Annual Convention held on June 11, 2013 in Branson, Missouri.

Top Tips: Pay Issues for Nurses and Nannies Working in Your Home

As President Clinton’s would-be Attorney General learned to her embarrassment in the 1990s, even a single domestic working in a residence can trigger reporting and withholding duties on the part of a household employer. 

Missouri Court of Appeals Rejects Expansion of Public Policy Exception to At-Will Employment

This post discusses a recent case from the Missouri Court of Appeals rejecting the claim of an employee of a car dealership who lost his job when his girlfriend bought a car at another dealer. The court held that the public policy exception to the at-will employment doctrine did not apply.

Federal Judge Strikes Down Federal Reserve’s Interchange Fee Rule

On July 31, Judge Richard Leon of the Federal District Court of the District of Columbia ordered the Board of Governors of the Federal Reserve (the “Federal Reserve”) to go back to the drawing board on its rule governing debit card transaction fees. Judge Leon found that the fees permitted under the Federal Reserve’s rule were invalid under the Administrative Procedures Act (“APA”) because they were not a correct interpretation of the statute the rule was intended to implement. In his order, Judge Leon stated that the Federal Reserve “clearly disregarded Congress’ statutory intent by inappropriately inflating all debit card transaction fees by billions of dollars and failing to provide merchants with multiple unaffiliated networks for each debit card transaction.”

Chemical Facility Safety and Security Under Scrutiny with Presidential Executive Order

On August 1, 2013, President Obama issued an Executive Order – Improving Chemical Facility Safety and Security – aimed at improving safety and security at facilities where chemicals are manufactured, stored, distributed, and used.

Sentencing and the Alternative Fines Act in Clean Air Act Enforcement—The Difference Between Billions and Millions in U.S. v. CITGO

The events in U.S. v. CITGO serve an important learning lesson for both criminal defense attorneys and environmental practitioners of the significance of the Alternative Fines Act, 18 U.S.C. § 3571(d), in the sentencing process in environmental criminal cases and how federal prosecutors may attempt to leverage increased criminal fines and penalties through its provisions.

Top Tips Part V – Tips for Employers in Preventing/Addressing Workplace Violence

Sue Willman concludes her five-part series on workplace violence, discussing measures employers can take when violence or the threat of violence arises.

National Labor Relations Board at Full Strength for First Time Since 2003

On July 30, 2013, the U.S. Senate confirmed all five members of the National Labor Relations Board (Board).  The nominees, Harry Johnson III, Philip Miscimarra, Nancy Schiffer, Kent Hirozawa and Mark Pearce, were approved as part of a brokered deal with Republican Senators and President Obama.  The deal allowed the U.S Senate to avoid Senate rule changes which would virtually eliminate filibusters on executive branch nominates. 

Top Tips Part IV – Tips for Employees in Preventing Workplace Violence

Sue Willman continues her series providing tips for employees in preventing workplace violence.

Changes to Kansas Concealed Carry Statutes

Kansas recently enacted amendments to the state’s concealed carry statutes, the Personal and Family Protection Act (the “Act”). These changes, contained in HB 2052, are relevant to all public and private entities, including banks. The Act allows businesses to post signs indicating that concealed weapons are not allowed on their premises. Previously, however, the Act did not speak to the potential implications of posting such signs. Now, as a result of the amendments in HB 2052, there is more clarity as to the impact such signage may have on business-owner liability for incidents related to concealed weapons.

Kansas Considering New Fracking Regulations Regarding Chemical Disclosure Obligations

The Kansas Corporation Commission (KCC) is evaluating whether to propose a set of new regulations that would require oil and gas companies to disclose the chemicals used in hydraulic fracturing operations.

Top Tips Part III – Warning Signs of Workplace Violence

Sue Willman continues her series addressing warning signs of workplace violence.

How to Handle Data Security Breaches & Internet Fraud Losses

Elizabeth Fast will be speaking on the subject of data security breaches and internet fraud losses at the  4th Annual MIBA Security Conference in Columbia, MO on September 25, 2013.

EPA Finalizes RCRA Exclusion for Solvent-Contaminated Rags, Industrial Wipes, and Shop Towels

On Monday, July 22, the EPA finalized its long-awaited final rule excluding from RCRA regulation solvent-contaminated rags, industrial wipes, and shop towels, provided those rags and wipes are managed properly.  The rule was published in the July 31 Federal Register with an effective date of January 31, 2014.

House Energy and Commerce Health Subcommittee Approves Repeal of SGR Formula

The Congressional Budget Office estimates the costs of maintaining physician Medicare reimbursement at current levels and preventing cuts to the sustainable growth rate (SGR) formula at $139 billion over the next 10 years.  Today, in an attempt to address that issue, the House Energy and Commerce Health Subcommittee approved legislation aimed at repealing the Medicare physician payment system that is presently in place.

Top Tips Part II – Perpetrators and Triggers of Workplace Violence

Sue Willman continues her series on workplace violence addressing perpetraators and triggers of workplace violence.

Background Check Laws: Kansas