Category: Uncategorized

NIEHS-Funded Research Finds that Graphene Shield Shows Promise in Blocking Mosquito Bites

On August 26, 2019, the National Institute of Environmental Health Sciences (NIEHS) announced that the results of an NIEHS-funded study show that graphene could provide alternatives to chemicals in insect repellant and protective clothing.  The study, “Mosquito Bite Prevention through Graphene Barrier Layers,” was published in the Proceedings of the National Academy of Sciences.

According to the abstract, the researchers hypothesized that graphene films may provide mosquito bite protection for light, fiber-based fabrics.  The researchers investigated the fundamental interactions between graphene-based films and the mosquito species Aedes aegypti through a combination of live mosquito experiments, needle penetration force measurements, and mathematical modeling of mechanical puncture phenomena.  The abstract states that “[t]he results show that graphene or graphene oxide nanosheet films in the dry state are highly effective at suppressing mosquito biting behavior on live human skin.  Surprisingly, behavioral assays indicate that the primary mechanism is not mechanical puncture resistance, but rather interference with host chemosensing.”

The researchers propose that the interference is “a molecular barrier effect that prevents Aedes from detecting skin-associated molecular attractants trapped beneath the graphene films and thus prevents the initiation of biting behavior.”  According to the abstract, placing water or human sweat on the external film surface circumvents the molecular barrier effect.  In this scenario, the abstract states, “pristine graphene films continue to protect through puncture resistance — a mechanical barrier effect — while graphene oxide films absorb the water and convert to mechanically soft hydrogels that become nonprotective.”

©2019 Bergeson & Campbell, P.C.
This article was written by Lynn L. Bergeson and Carla N. Hutton of Bergeson & Campbell, P.C.
For more environmental research, see the National Law Review Environmental, Energy & Resources law page.

ICE To Increase STEM OPT Worksite Inspections

U.S. Immigration and Customs Enforcement (“ICE”) has recently increased site visits for employers who employ F-1 students under STEM OPT (short for Science, Technology, Engineering, Mathematics Optional Practical Training) work authorization. While ICE has had this authority since the STEM regulations were passed in 2016, the agency only recently started conducting site visits to ensure that employers and F-1 students remain in compliance with the regulations governing F-1 STEM OPT work authorization.

What Is STEM OPT?

STEM OPT allows eligible F-1 visa students with STEM degrees from accredited U.S. colleges or universities to apply for an additional 24 months of Occupational Practical Training. This is in addition to the initial, one-year post-completion OPT granted to all non-STEM-degree F-1 students. In addition to the STEM degree requirements, the F-1 visa student must secure employment with a bona fide employer, work a minimum of 20 hours per week for that employer, and the employer must provide a formal, practical training and learning program within the STEM field which is related to the F-1 student’s degree. Details of the training program are outlined by the employer on Form I-983, which is submitted to and approved by the Designated School Official at the F-1 student’s academic institution.

What Is a Site Visit?

ICE conducts site visits to ensure that STEM OPT students receive the structured and guided work-based learning experiences required by the regulations. The purpose of the site visit is to confirm that information reported on the F-1 student’s Form I-983 training plan is accurate and being executed by the employer.

ICE generally notifies employers at least 48 hours prior to conducting a STEM OPT site visit. However, ICE is authorized to conduct unannounced site visits in the event that the agency receives a complaint or other evidence of noncompliance with STEM OPT guidelines. ICE has been sending emails directly to the managers of F-1 student STEM OPT trainees with an attached Notice of Site Visit. These communications contain:

  • The date of the scheduled visit;
  • A list of F-1 students whose STEM OPT training has been selected for inspection;
  • A request for a copy of each F-1 student’s Form I-983, Training Plan for STEM OPT Students; and
  • A request for other documentation related to the organization’s STEM OPT training program.

If you receive any communication from ICE or the Department of Homeland Security, please notify your attorney immediately before responding. This is to ensure both the legitimacy of the correspondence as well as to ensure that an appropriate response is submitted to ICE.

What Will Happen During a Site Visit?

The purpose of the STEM OPT site visit is to ensure that the employer and F-1 student are following the training plan as outlined in the Form I-983, and that the employer possesses the ability and resources to provide the structured and guided work-based learning experiences outlined in the training plan. During a site visit, ICE may review several aspects of the F-1 student’s STEM OPT training plan, including a review of pay documents to ensure that the student is being paid properly, a review of the Form I-983 training plan, and a review of the trainee’s workspace.

The inspection may include individual interviews with company personnel, a review and discussion of the F-1 student’s training plan and its implementation, and a review of the F-1 student’s skills and degree in relation to the STEM degree. ICE may also request to view F-1 student workspaces or receive a tour of the premises.

It is important that students and STEM OPT employers accurately and comprehensively complete the Form I-983 training plan, and that the F-1 student, the student’s immediate manager, and the immigration contact are all familiar with the contents of the Form I-983 training plan. Inconsistencies between the opportunity as described in the training plan and what the student is actually doing can have serious consequences for students and employers.

While this type of site visit should focus exclusively on STEM OPT, if evidence of other immigration-related violations is found during the site visit, ICE may address the violation or refer it to the appropriate agency or ICE unit for further review.

How Can I Prepare for a Site Visit?

At each worksite where an F-1 STEM OPT student is being trained, your organization should designate a point of contact, such as a human resource or immigration manager, to receive ICE officers. Receptionists and security personnel should be advised to complete the following steps should an ICE officer arrive to conduct an inspection:

  1. Notify the designated point of contact to inform him or her that an ICE officer has arrived to conduct a site inspection;
  2. Verify the officer’s identity: ask to see and take note of the officer’s identification, including badge, name, and ID number. Ask for the officer’s business card and call the number on the card to verify the identity of the officer. Officers should expect this and it is important that the officer’s identity is verified before disclosing or discussing employee information;
  3. Wait for the designated point of contact to arrive before releasing any information.

During the visit, the officer will ask questions, request documentation, and may take photographs. The designated point of contact should remain with the officer throughout the visit and take detailed notes, including the name, title and contact information of each officer; the names and titles of anyone interviewed by the officer; questions asked during interviews; any company documents provided to the officer; worksite areas visited by the officer; and any photographs taken by the officer. If company documents are provided to the officer, the designated point of contact should be sure to list the documents provided and retain copies. If the officer takes photographs of the worksite, the designated point of contact should ask for copies. The officer may request that the designated point of contact not be present during interviews with the F-1 student or managers. In this instance, the designated point of contact should remain available to answer any questions that may arise.

Managers, supervisors and F-1 students should be prepared to answer questions on the following topics:

  • The information provided in the trainee’s Form I-983 training plan;
  • The nature of the F-1 student’s job duties at the organization;
  • How the job duties relate to the F-1 student’s degree and academic program;
  • Why the F-1 student is qualified for the position;
  • What qualifications managers look for when hiring for similar positions;
  • How the manager supervises the F-1 student and executes the training plan; and
  • If the F-1 student is placed at a third-party worksite, how does the manager supervise the F-1 student and implement the training plan.

Special Note for California Worksites: Immigrant Worker Protection Act (AB 450)

Employers who have worksites in California are also required to comply with portions of the Immigrant Worker Protection Act. In 2017, California passed the Immigrant Worker Protection Act (AB 450), placing requirements on how public and private employers could interact with Federal immigration authorities. On March 6, 2018, the U.S. Department of Justice filed a lawsuit challenging the Immigrant Worker Protection Act, and on July 5, 2018, the U.S. District court enjoined California from enforcing portions of the law related to worksite inspections and employment eligibility as it applied to private employers. This means that private employers cannot currently be prosecuted for:

  1. Allowing or consenting to a federal immigration enforcement agent’s request to enter nonpublic areas in the workplace;
  2. Voluntarily allowing the federal immigration enforcement agent access to employee records; or
  3. Re-verifying the employment eligibility of a current employee outside the time and manner required by federal law, under Section 1324a(b) of Title 8 of the United States Code.

Private employers are still required to comply with the notice requirement provisions of the Immigrant Worker Protection Act. An explanation of the Immigrant Worker Protection Act, and information regarding the Act’s notice requirements, can be found here.

© 2019 Mitchell Silberberg & Knupp LLP

Read more regarding ICE activities on the National Law Review Immigration Law page.

Facebook “Tagged” in Certified Facial Scanning Class Action

Recently, the Ninth Circuit Court of Appeals held that an Illinois class of Facebook users can pursue a class action lawsuit arising out of Facebook’s use of facial scanning technology. A three-judge panel in Nimesh Patel, et al v. Facebook, Inc., Case No. 18-15982 issued an unanimous ruling that the mere collection of an individual’s biometric data was a sufficient actual or threatened injury under the Illinois Biometric Information Privacy Act (“BIPA”) to establish standing to sue in federal court. The Court affirmed the district court’s decision certifying a class. This creates a significant financial risk to Facebook, because the BIPA provides for statutory damages of $1,000-$5,000 for each time Facebook’s use of facial scanning technology was used in the State of Illinois.

This case is important for several reasons. First, the decision recognizes that the mere collection of biometric information may be actionable, because it creates harm to an individual’s privacy. Second, the decision highlights the possible extraterritorial application of state data privacy laws, even those that have been passed by state legislatures intending to protect only their own residents. Third, the decision lays the groundwork for a potential circuit split on what constitutes a “sufficiently concrete injury” to convey standing under the U.S. Supreme Court’s landmark 2016 decision in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016). Fourth, due to the Illinois courts’ liberal construction and interpretation of the statute, class actions in this sphere are likely to continue to increase.

The Illinois class is challenging Facebook’s “Tag Suggestions” program, which scans for and identifies people in uploaded photographs for photo tagging. The class plaintiffs alleged that Facebook collected and stored biometric data without prior notice or consent, and without a data retention schedule that complies with BIPA. Passed in 2008, Illinois’ BIPA prohibits gathering the “scan of hand or face geometry” without users’ permission.

The district court previously denied Facebook’s numerous motions to dismiss the BIPA action on both procedural and substantive grounds and certified the class. In moving to decertify the class, Facebook argued that any BIPA violations were merely procedural and did not amount to “an injury of a concrete interest” as required by the U.S. Supreme Court’s landmark 2016 decision in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016).

In its ruling, the Ninth Circuit determined that Facebook’s use of facial recognition technology without users’ consent “invades an individual’s private affairs and concrete interests.” According to the Court, such privacy concerns were a sufficient injury-in-fact to establish standing, because “Facebook’s alleged collection, use, and storage of plaintiffs’ face templates here is the very substantive harm targeted by BIPA.” The Court cited with approval Rosenbach v. Six Flags Entertainment Corp., — N.E.3d —, 2019 IL 123186 (Ill. 2019), a recent Illinois Supreme Court decision similarly finding that individuals can sue under BIPA even if they suffered no damage beyond mere violation of the statute. The Ninth Circuit also suggested that “[s]imilar conduct is actionable at common law.”

On the issue of class certification, the Ninth Circuit’s decision creates a precedent for extraterritorial application of the BIPA. Facebook unsuccessfully argued that (1) the BIPA did not apply because Facebook’s collection of biometric data occurred on servers located outside of Illinois, and (2) even if BIPA could apply, individual trials must be conducted to determine whether users uploaded photos in Illinois. The Ninth Circuit rejected both arguments. The Court determined that (1) the BIPA applied if users uploaded photos or had their faces scanned in Illinois, and (2) jurisdiction could be decided on a class-wide basis. Given the cross-border nature of data use, the Court’s reasoning could be influential in future cases where a company challenges the applicability of data breach or data privacy laws that have been passed by state legislatures intending to protect their own residents.

The Ninth Circuit’s decision also lays the groundwork for a potential circuit split. In two cases from December 2018 and January 2019, a federal judge in the Northern District of Illinois reached a different conclusion than the Ninth Circuit on the issue of BIPA standing. In both cases, the Northern District of Illinois ruled that retaining an individual’s private information is not a sufficiently concrete injury to satisfy Article III standing under Spokeo. One of these cases, which concerned Google’s free Google Photos service that collects and stores face-geometry scans of uploaded photos, is currently on appeal to the Seventh Circuit.

The Ninth Circuit’s decision paves the way for a class action trial against Facebook. The case was previously only weeks away from trial when the Ninth Circuit accepted Facebook’s Rule 23(f) appeal, so the litigation is expected to return to the district court’s trial calendar soon. If Facebook is found to have violated the Illinois statute, it could be held liable for substantial damages – as much as $1000 for every “negligent” violation and $5000 for every “reckless or intentional” violation of BIPA.

BIPA class action litigation has become increasingly popular since the Illinois Legislature enacted it: over 300 putative class actions asserting BIPA violations have been filed since 2015. Illinois’ BIPA has also opened the door to other recent state legislation regulating the collection and use of biometric information. Two other states, Texas and Washington, already have specific biometric identifier privacy laws in place, although enforcement of those laws is accomplished by the state Attorney General, not private individuals. A similar California law is set to go into effect in 2020. Legislation similar to Illinois’ BIPA is also currently pending in several other states.

The Facebook case will continue to be closely watched, both in terms of the standing ruling as well as the potential extended reach of the Illinois law.

© Polsinelli PC, Polsinelli LLP in California

For more in biometric data privacy, see the National Law Review Communications, Media & Internet law page.

Running Backs NLRB Petition Seeks To “Stiff Arm” NFL Players Association With New Bargaining Unit

An upstart labor organization, the International Brotherhood of Professional Running Backs (IBPRB), has filed a petition with Region 13, the Chicago office of the National Labor Relations Board (NLRB), seeking to form a separate union for the National Football League’s running backs. The unit clarification petition, NLRB Case No. 13-UC-246227, seeks to sever and create a separate running back bargaining unit from the National Football League Players Association (NFLPA), which has historically represented all NFL players regardless of position.

A unit clarification or “UC” petition generally is used to resolve disputes regarding the unit placement of disputed positions, typically newly created positions, in a process referred to as an accretion. However, a UC petition also can be used as a method to affect the subdivision of an existing bargaining unit, as the IBPRB seeks to do here. A severance effort is most often undertaken when some changed circumstances have occurred that have negated any “community of interest” (similarity of terms and conditions of employment) that may have previously existed among the bargaining unit and raise uncertainty regarding the continued appropriateness of the existing bargaining unit.

The petition filed by the IBPRB cited “the unique career structures” of running backs as its basis for the loss of the necessary community of interest between the running backs and the other NFL player members of the NFLPA.

For a successful UC petition, the petitioner must show “recent, substantial changes in their operations, or that other compelling circumstances exist which would warrant disregarding the long-existing bargaining history” of the parties. In Batesville Casket Company, Inc., 283 NLRB 795 (1987), the NLRB relied upon the standard established in Rock-Tenn Co., 274 NLRB 772 (1985), and dismissed a UC petition because the employer-petitioners did not show any “recent, substantial changes in their operations, or that other compelling circumstances which would warrant disregarding the long-existing bargaining history” of the parties.

It may be difficult for the IBPRB to meet the “recent, substantial changes” test.

While the role of a running back has evolved over recent years as the passing game has become the dominant force in offensive schemes, the basic mission of the position– to carry the ball, catch passes, and block – is unchanged. Whatever may be the unique career structures to which the IBPRB referred in the petition (the average career of an NFL running back is 2.5 years compared to 3.3 years for all positions), it may be difficult for the union to show that there have been “recent, substantial changes” in the running back position to satisfy the Batesville Casket threshold for unit clarification.

In representation cases such as this, the regional office of the NLRB conducts an initial investigation and holds a hearing if appropriate. A notice of hearing has not yet been issued. The NLRB may still be in a huddle.

Jackson Lewis P.C. © 2019

More sports law on the National Law Review Entertainment, Sports & Art law page.

HAVEN ACT Provides Military Veterans With Increased Income Protections In Bankruptcy

Military veterans often pay a heavy toll for their service from a physical, emotional and even financial standpoint. A new federal law— the Honoring American Veterans in Extreme Need Act of 2019 or the HAVEN Act— aims to address the latter hardship, providing disabled military veterans with greater protections in bankruptcy proceedings.

Prior to the passage of the HAVEN Act, federal Department of Veterans Affairs (VA) and Department of Defense disability payments were included when calculating a debtor’s disposable income when in bankruptcy. In other words, this income is subject to the reach of creditors.

By contrast, Social Security disability benefits are exempt from calculating a debtor’s disposable income. The HAVEN Act places military disability benefits in the same protected category as Social Security disability.

The actual language of the new exception reads as follows:

“(IV) any monthly compensation, pension, pay, annuity, or allowance paid under title 10, 37, or 38 in connection with a disability, combat-related injury or disability, or death of a member of the uniformed services, except that any retired pay excluded under this subclause shall include retired pay paid under chapter 61 of title 10 only to the extent that such retired pay exceeds the amount of retired pay to which the debtor would otherwise be entitled if retired under any provision of title 10 other than chapter 61 of that title.”

The HAVEN Act received strong bipartisan support in both the House and Senate, and was endorsed by both the American Bankruptcy Institute and a host of veterans’ advocacy organizations, including the American Legion and VFW. Reps. Lucy McBath (D-GA) and Greg Steube (R-FL) co-sponsored the legislation in the House, while Sen. Tammy Baldwin (D-WI) and John Cornyn (R-TX) co-sponsored the Senate legislation. President Donald Trump signed the HAVEN Act into law August 23, 2019 and it became effective immediately.

Specific benefits protected under the Haven Act are:

  • Permanent Disability Retired Pay

  • Temporary Disability Retired Pay

  • Retired or Disability Severance Pay for Pre-Existing Conditions

  • Disability Severance Pay

  • Combat Related Special Compensation

  • Survivor Benefit Plan for Chapter 61 Retirees

  • Special Survivor Indemnity Allowance

  • Special Compensation for Assistance with Activities of Daily Living

  • VA Veterans Disability Compensation

  • VA Dependency and Indemnity Compensation, and

  • VA Veterans Pension.

Veterans advocates pushed for the HAVEN Act following five recent Bankruptcy Court Decisions that held that under previous bankruptcy law, disabled veterans were required to include military disability in their disposable income in bankruptcy proceedings.

The new law also provides relief to a segment of the population that needs assistance. According to the 2018 VA Annual Benefits Report, 4.74 million US veterans—or 25 percent of the total veteran population—receive VA disability benefits.

Veterans also make up a disproportionate share of bankruptcy filers. Nearly 15 percent of both Chapter 7 and Chapter 13 bankruptcy filers are veterans, who make up approximately 10 percent of the overall population. Approximately 125,000 veterans filed for bankruptcy in 2017 alone.

Copyright © 2019 Womble Bond Dickinson (US) LLP All Rights Reserved.

For more on veteran’s affairs, see the Government Contracts, Maritime & Military Law page on the National Law Review.

Celebrity Entertainer Sues Over Video Game Avatar

As real-world celebrities continue to expand the reach of their persona into the digital realm, the potential benefit for advertisers, game developers and esports event promoters is exceedingly high. But with increased opportunity comes increased risk.

A New York Supreme Court recently addressed this risk when it construed the State’s right of publicity statute[1] in a dispute over an NBA 2K18 video game avatar. In Champion v. Take Two Interactive Software, Inc., celebrity basketball entertainer Phillip “Hot Sauce” Champion sued the video game developer, alleging violation of his right to privacy for Take-Two’s use of his name and likeness. The Court ultimately dismissed the lawsuit, but not before it provided a helpful discussion of New York’s publicity statute and its modern application to the esports industry.

A Primer on New York’s Publicity Statute

New York publicity law allows both criminal charges and civil liability for use of a person’s “name, portrait or picture” for advertising or trade purposes without prior written permission. This right to publicity extends to any recognizable likeness that has a “close and purposeful resemblance to reality.” Courts have already held that video game avatars are within the scope of the statute’s reach.

However, while seemingly broad at first pass, this statutory right is actually more narrow than similar rights in other states where the right to publicity is recognized only at common law (i.e., in states that have no black-letter publicity statute). For example, in New York, neither “incidental” use of a person’s name or likeness, nor use that is protected under the First Amendment, are violations.

Further, unlike the words “portrait” and “picture,” the word “name” in the statute is construed literally. In fact, New York courts find liability only for uses involving an individual’s full name, and not just a surname, nickname, or business name. The statute does, however, protect certain “stage names” in limited situations, such as when the individual has become known by a stage name virtually to the exclusion of his or her real name.

The Plaintiff and the Video Game

Phillip Champion is a prominent street basketball entertainer known professionally as “Hot Sauce.” Champion claims that he is widely recognized as both “Hot Sauce” and “Hot Sizzle” in social media, and is regularly depicted on television and in blogs, movies, YouTube videos, sports magazines and live halftime shows. As a result, Champion is able to license his celebrity persona through sponsorships and endorsement deals with prominent consumer brands like AND1.

Photographs of Champion filed with the Court.

Take-Two created the NBA 2K18 basketball simulation video game, which realistically depicts the on-court competition and off-court management of the National Basketball Association. Users can create a custom player avatar, or select from existing player avatars modeled after real-life professional athletes. The game’s “MyCareer” mode allows the user to create a custom basketball player, and then design and play through the character’s entire career, competing in games and participating in off-court activities. The “Neighborhoods” option, which ties to the off-court activities in the MyCareer mode, lets users explore an off-court urban world while interacting with other basketball players—most of which are non-playable characters controlled by the computer—in scenarios like exercising in public gyms and playing casual basketball games on city courts.

Champion’s Claims

Champion’s lawsuit stems from one of the non-playable characters in the game’s Neighborhood mode, who is depicted as a young, African-American male with a mohawk, wearing all-white hi-top sneakers, a tank-top, and black shorts with white piping. On the front and back of the tank-top is the numeral “1,” and on the back are the words “Hot Sizzles.”

Images of the “Hot Sizzles” avatar filed with the Court.

Champion alleged that the look of the “Hot Sizzles” avatar incorporated numerous personal aspects of his life and identity in violation of the New York publicity statute, and further that the avatar’s “Hot Sizzles” name was itself a violation because Champion is “ubiquitously” known as “Hot Sizzle.”  Take-Two responded that its “Hot Sizzles” avatar does not sufficiently resemble Champion, whether in name or image, under New York law.

On Champion’s claims to his likeness, the Court found no physical resemblance between Champion and the “Hot Sizzle” avatar, and determined that the only reasonable commonalities are that “both are male, African-American in appearance, and play basketball.” The Court compared this case to two similar cases (Lohan v. Take-Two Interactive Software, Inc.  and Gravano v. Take-Two Interactive Software, Inc. ), both involving Take-Two’s Grand Theft Auto video game, in which the avatars exhibited many closer similarities to the plaintiffs in clothes, hair, poses, voice, and life stories. Finding no similar likenesses in this case, the Court ruled that, at least from a visual perspective, the Hot Sizzles avatar in NBA 2K18 is not recognizable as Champion as a matter of law.

On Champion’s claim to the name “Hot Sizzles,” the Court recognized that the use of a person’s celebrity or “stage” name with a video game avatar could aid in recognition of the avatar as that person’s likeness. However, the Court determined that Champion’s “primary performance persona” is actually “Hot Sauce,” which is entirely distinct from the NBA 2K18 avatar’s name, “Hot Sizzles.” Champion was not able to show that he is widely known as “Hot Sizzle” to the public at large—as opposed to just in the sporting or gaming circles—so the Court ruled that, without this level of connection between Champion and the name “Hot Sizzle,” Take-Two’s use of “Hot Sizzles” does not aid in the visual recognition of the NBA 2K18 avatar as Champion.[2]

Incidental Use and the First Amendment

Take-Two also defended against Champion’s claims by alleging that the “Hot Sizzles” character falls within the “incidental use” exception to liability under New York’s statute. After reviewing the NBA 2K18 game content and related advertising, the Court seemed to agree that the avatar “is a peripheral non-controllable character” that “adds nothing of true substance to a user’s experience in the game.” However, the Court declined to make an affirmative ruling on this component of the lawsuit.

Finally, Take-Two argued that its NBA 2K18 game is protected speech under the First Amendment, and as such, it does not constitute “advertising or trade” under New York’s law. In response, the Court declared that, while video games may conceptually qualify for free speech protection, not every video game constitutes “free speech” fiction or satire. In comparing NBA 2K18 to games that contain a detailed story with pre-defined characters, dialogue and unique environments created entirely by the game designers, the Court determined that here, the users create their own basketball career and completely define their character. Accordingly, the Court found that categorizing NBA 2K18 as “protected fiction or satire” under the First Amendment is “untenable.”

What it Means

As novel sponsorship and endorsement opportunities are created through the advent of esports, advertisers, game developers, and event promoters must be certain they have the appropriate content and publicity licenses in place. However, because publicity laws, in particular, are enforced at the state level, doing this without expert guidance can be daunting. Using the right tools and a proactive licensing and review strategy, brands and marketing agencies can capture (and keep) a broader share of the esports industry’s revenues, and keep the competition on the court, not in it.

[1] New York Civil Rights Law, §§ 50-51.

[2] The Court determined that “Hot Sizzle” is, at best, Champion’s secondary “nickname.”

Copyright © 2019, Sheppard Mullin Richter & Hampton LLP.

Not So Fast And Furious – Executive Indicted for Stealing Self-Driving Car Trade Secrets

Back in March, 2017, we posted about a civil lawsuit against Anthony Levandowski, who allegedly sped off with a trove of trade secrets after resigning from Waymo LLC, Google’s self-driving technology company. Waymo not only sued Levandowski, but also his new employer, Uber, and another co-conspirator, Lior Ron. Since our initial post, things have gotten progressively worse for the Not So Fast and Furious trio: (1) Levandowski was fired in May, 2017; (2) Uber settled, giving up 5% of its stock, which totaled $245 million dollar;  and (3) the case against Levandowski and Ron was sent to arbitration, where the arbitration panel reportedly issued a $128 million interim award to Waymo.

Just when things couldn’t seem to get any worse, they did.

On August 15, 2019, a federal grand jury indicted Levandowski on 33 counts relating to trade secret theft. Levandowski has pled not guilty, has been released on $2 million dollars bail, and  is currently wearing an ankle monitor.

This legal saga is a reminder that trade secret theft is serious… it not only has civil consequences, but also criminal ones.  Unfortunately, trade secret theft happens every day.  And regardless of whether your company has trade secrets regarding self-driving car technology, worth hundreds of millions of dollars, or customer information worth less than a hundred thousand dollars, it’s important to make sure your company’s information is protected.

Equally important is knowing how to investigate potential trade secret theft. Some helpful tips as you launch your investigation:

1. Secure and preserve all relevant computing devices and email/file-sharing accounts.

2. Consider enlisting the help of outside computer forensic experts.

3. Analyze the employee’s computing activities on company computers and accounts.

4. Determine whether there is any abnormal file access, including during non-business hours.

5. Examine the employee’s use of external storage devices and whether those devices have been returned.

6. Review text message and call history from the employee’s company issued cell phone (and never instruct anyone to factory reset cell phones).

7. Enlist the help of outside counsel to set the parameters of the investigation.

© 2019 Jones Walker LLP
For more on trade secret law, see the National Law Review Intellectual Property law page.

Third Circuit Upholds Decision Blocking Trump Administration’s Birth Control Rules

OVERVIEW

A Third Circuit appeals panel upheld the lower court ruling in Commonwealth of Pennsylvania v. President United States of America et al. No. 17-3752. This ruling grants a nationwide preliminary injunction against the religious and moral exemptions for employers to the ACA’s birth control mandate, so employers may want to take a cautious approach toward limiting contraceptive coverage.

IN DEPTH

A Third Circuit appeals panel upheld the lower court ruling in Commonwealth of Pennsylvania v. President United States of America et al. No. 17-3752, a ruling granting a nationwide preliminary injunction against the religious and moral exemptions for employers to the ACA’s birth control mandate. The decision was passed down in January by a Pennsylvania federal judge, and follows a sequence of similar appeals cases brought in the Ninth Circuit.

In an opinion written by Circuit Judge Patty Shwartz, the panel found that the plaintiffs had proved particularized injury—rejecting the Trump Administration’s argument that the states lacked standing. The panel found there was evidence in the record showing the exemptions would result in increased spending of state-funded services either from women who have lost coverage or states bearing the costs of unintended pregnancies. This holding goes farther than the recent Ninth Circuit decision in The Little Sisters of the Poor Jeanne Jugan Residence v. California, et al. No. 18-1192, which limited injunction to the select states that brought the litigation because there was not a sufficient showing of economic injury.

The appeals panel ruled it was necessary to halt the implementation of the rules until it has been decided whether or not the agencies responsible for the rules—the Departments of Health and Human Services, Treasury and Labor—followed the Administrative Procedure Act. The panel was not convinced by either argument presented: that there was good cause sufficient to avoid notice and comment or that the Religious Freedom Restoration Act required a religious exemption.

Whether any appeal to the Supreme Court is in progress has yet to be determined. Accordingly, employers may want to take a cautious approach toward limiting contraceptive coverage.

© 2019 McDermott Will & Emery
Article by Judith Wethall of McDermott Will & Emery. Teal Trujillo, a summer associate in our Chicago office, also contributed to this On the Subject.
For more in healthcare regulation, see the National Law Review Health Law & Managed Care page.

Payment Processor Held Accountable by FTC

The Federal Trade Commission and the Ohio attorney general recently initiated legal action against a payment processor arising from alleged activities that enabled its customers to defraud consumers.

According to the FTC, the defendants generated and processed remotely created payment orders (“RCPOs”) or checks that allowed unscrupulous merchants, including deceptive telemarketing schemes, to withdraw money from their victims’ bank accounts.

The FTC’s Telemarketing Sales Rules specifically prohibits the use of RCPOs in connection with telemarketing sales.  RCPOs are created by the processor and result in debits to consumers’ bank accounts without a signature.

“To execute their payment processing scheme, Defendants open business checking accounts under various assumed names with banks and credit unions, the majority of which are local institutions,” according to the complaint.  Within the last five years, the defendants opened at least 60 business checking accounts at 25 different financial institutions, mainly in Texas and Wisconsin, to enable their activity, the regulators said. “Defendants often misrepresent to the financial institution the type of business for which they open the account, and routinely fail to disclose the real reason for which they open the account—processing consumer payments for third-party merchants via RCPOs.  Red flags about Defendants’ practices have led at least 15 financial institutions to close accounts opened by Defendants.  When that happens, Defendants typically open new accounts with different financial institutions.  ”

According to the Ohio AG and FTC lawyers, the defendants specifically market their RCPO payment processing service to high risk merchants.  The complaint also alleges that the defendants are aware that some of their largest merchant- clients sell their products or services through telemarketing.

The FTC and Ohio AG also allege that the defendants violated the TSR by charging consumers advance fees before providing any debt relief service, failing to identify timely and clearly the seller of the purported service in telemarketing calls, and failing to pay to access the FTC’s National Do Not Call Registry.

The Ohio AG previously had previously filed suit against the defendants for similar violations.

According to the FTC CID attorneys, the telemarketing operations that defendants supported included, among others, student debt relief schemes, and a credit interest reduction scheme.  The FTC and Ohio allege that using RCPOs, the defendants have withdrawn more than $13 million from accounts of victims of these telemarketing operations since January 2016.

“The FTC will continue to pursue such schemes aggressively, and hold accountable payment processors that are complicit in the illegal conduct,” FTC lawyer Andrew Smith said in a statement about the case.

The complaint alleges violations of the FTC Act and Ohio state law, and seeks injunctive relief plus disgorgement of alleged ill-gotten gains.

At the same time, the FTC and state of Ohio filed another enforcement action against one of the processor’s biggest clients based in Canada and the Dominican Republic.

Federal and state regulators have evidenced a willingness to both go after merchants that engage in unfair and deceptive practices that are injurious to consumers, as well as the payment processors that enable merchants to engage in such conduct.

© 2019 Hinch Newman LLP

Fore more FTC finance enforcement actions, see the National Law Review Financial Institutions & Banking law page.

NAMWOLF 2019 Annual Meeting & Law Firm Expo

The National Association of Minority and Women Owned Law firms, or NAMWOLF, has a stated mission of promoting diversity in the legal profession by fostering successful relationships among preeminent minority and women-owned law firms and private/public entities.

NAMWOLF’s Annual Meeting and Law Firm Expo will take place at the JW Marriot Los Angeles Live on September 22-25, 2019. This is a great opportunity to connect with a network of Minority & Women Owned Law Firms, hear from great speakers, and get CLE credit.

NAMWOLF

Speakers include Verna Myers, VP Inclusion Strategy at Netflix and Mark Curriden, author of Contempt of Court, plus many more!

Don’t forget, in house Counsel attend for free! Check out agenda and speaker list here: https://tinyurl.com/yxf3epxx