Yesterday afternoon, after months of wrangling and a marathon 4th of July weekend session, the Illinois House of Representatives voted to override Governor Bruce Rauner’s veto of Senate Bill (SB) 9, the revenue bill supporting the State’s Fiscal Year (FY) 2017-2018 Budget. The vote ended Illinois’ two year budget impasse and may avoid a threatened downgrade of Illinois bonds to junk status. The key tax components of the bill as enacted Public Act 100-0022 (Act) are as follows:
Rate increase. Income tax rates are increased, effective July 1, 2017, to 4.95 percent for individuals, trusts and estates, and 7 percent for corporations.
Income allocation. The Act contains a number of provisions intended to resolve questions regarding how income should be allocated between the two rates in effect for 2017.
- Illinois Income Tax Act (IITA) 5/202.5(a) provides a default rule, a proration based on the days in each period (181/184), for purposes of allocating income between pre-July 1 segments and periods after the end of June when rates increase. Alternatively, IITA 5/202.5(b) provides that a taxpayer may elect to determine net income on a specific accounting basis for the two portions of their taxable year, from the beginning of the taxable year through the last day of the apportionment period, and from the first day of the next apportionment period through the end of the taxable year.
Note: This provision will create planning opportunities for taxpayers. For example, a taxpayer who paid bonuses to employees early in the year may wish to elect specific accounting, whereas taxpayers who paid bonuses out after the effective date of the tax increase may wish to pro rate under the default rule.
- A new sub-section (IITA 202.5(c)(3)) provides that a taxpayer who elects a specific allocation different from the default rule must divide any Section 204 exemptions between the respective periods in amounts which bear the same ratio to the total exemption allowable under Section 204 as the total number of days in each period bears to the total number of days in the taxable year. We note that no mention is made regarding the treatment of credits.
- Finally, another new sub-section (IITA 202.5(c)(4)) provides that a taxpayer who elects a specific allocation different from the default rule may not claim negative net income for one portion of the year and not the other. If a taxpayer’s net income otherwise would be negative for a portion of the year, the taxpayer is required to attribute all of its net income to the portion of the taxable year with positive net income and report net income for the other portion of the taxable year as zero.
Elimination of non-combination rule. For taxable years beginning on or after December 31, 2017, the definition of “unitary business group” is amended to eliminate the non-combination rule for group members that use different apportionment methods. There is no exception for insurance companies.
Note: For calendar year corporations, this change will take effect this year.
Expanded definition of “United States.” For taxable years ending on or after December 31, 2017, the definition of “unitary business group” is amended to include an expanded definition of “United States” to include the fifty states, the District of Columbia and “any area over which the United States has asserted jurisdiction or claimed exclusive rights with respect to the exploration for or exploitation of natural resources,” but not any territory or possession of the United States.
Note: For calendar year corporations, this change will take effect this year.
Decoupling from Domestic Production Activities Deduction (DPAD). The Act decouples from the federal domestic production activities deduction.
Research and Development Credit Extended and Reliance Protected. The research and development credit is restored retroactively (it had expired on January 1, 2016) and extended through December 31, 2021. The Act provides that all actions taken by taxpayers “in reliance on the continuation of the credit” are “hereby validated.”
Income Cap on individual taxpayer eligibility for certain exemptions and credits. Taxpayers with adjusted gross income for a taxable year in excess of $500,000 (in the case of spouses filing a joint federal return) or $250,000 (for all other taxpayers) may not claim the standard exemptions set forth in IITA Section 204. (IITA 5/204(g)). In addition, they may not claim a tax credit for residential real property taxes (IITA 5/208) or the education expense credit (IITA 5/201(m)).
Increased education expense credit. The education expense credit is increased to $750 for tax years ending on or after December 31, 2007. (See note above about limitations on taxpayer eligibility for the credit.)
Instructional materials credit. A new credit (maximum $250.00) is created for taxpayers who are teachers, instructors, counselors, principals or aides in qualified schools (for at least 900 hours during a school year) for instructional materials and supplies.
Sales tax base not expanded to include services. The Act does not change the sales tax rate or expand the base to tax services.
Gasohol, majority blended ethanol, biodiesel and certain biodiesel blends. The Retailers’ Occupation Tax Act, Use Tax Act and Services Tax Act are amended to provide that gasohol is taxed at 100 percent of sales proceeds, effective July 1, 2017. Exemptions for blended ethanol, biodiesel and biodiesel blends are extended through 2023.
Manufacturing, Machinery and Equipment Exemption expanded to include graphic arts. The manufacturing, machinery and equipment exemption is expanded to include graphic arts machinery and equipment, effective July 1, 2017.
State Tax Lien Registration Act
The Act creates a central state tax lien registration system, which eliminates the requirement for the Illinois Department of Revenue (DOR) to post liens for taxes due in counties throughout the state. Taxpayers are required to pay any administrative fee imposed by the DOR by rule when creating the State Tax Lien Registry.
Revised Uniform Unclaimed Property Law
The Act includes a complete rewrite of the Illinois Unclaimed Property Laws, which we describe in a separate post.
President Donald Trump has issued an executive order striking the 80-percent/three-week goal for interviewing nonimmigrant visa applicants following submission of applications.
Since September 11, 2001, the State Department has given priority to security over quick visa adjudications. For many reasons, including heightened security, between 2001 and 2010, the U.S. share of the global tourism market had dropped markedly. The Obama Administration, concerned about the effect on the U.S. economy, took measures to “support a prosperous and secure travel and tourism industry in the United States.” The first steps were in 2010, when the National Export Initiative and the Travel Promotion Act became law. They mandated intergovernmental cooperation to work to establish a stronger brand identity for the U.S. and to promote exports. By 2012, President Barack Obama issued an executive order to continue the process of fostering more tourism and travel: Establishing Visa and Foreign Visitor Processing Goals and the Task Force on Travel and Competitiveness Order. One section ordered Consulates to “ensure that 80 percent of nonimmigrant visa applicants are interviewed within three weeks of receipt of application, recognizing that resource and security considerations . . . may dictate specific exceptions[.]”
Although the Obama EO contained a security waiver, on June 21, 2017, Trump signed his own EO, striking the 80 percent/three-week goal. This is being done in conjunction with the travel ban partially reinstated by the U.S. Supreme Court and the extreme vetting procedures instituted by Secretary of State Rex Tillerson.
Pursuant to extreme vetting, if deemed necessary to determine eligibility, visa applicants may be asked to supply:
Travel history during the last 15 years, including source of funding for travel;
Address history during the last 15 years;
Employment history during the last 15 years;
All passport numbers and country of issuance held by the applicant;
Names and dates of birth for all siblings;
Names and dates of birth for all children;
Names and dates of birth for all current and former spouses, or civil or domestic partners;
Social media platforms and identifiers, also known as handles, used during the last five years; and
Phone numbers and email addresses used during the last five years.
Assessing this amount of information and data obviously will take time. A White House spokesman stated that the elimination of the “arbitrary” three-week goal was needed because “[t]he president expects careful, accurate vetting of visa applicants, not a rushed process . . . .”
Business groups already troubled about possible deleterious effects from the travel ban and extreme vetting have expressed concern about additional delays in visa issuance. According to State Department’s own data, the nonimmigrant visa issuance rate has been dropping. In March, 907,166 were issued and the number was down to 735,000 in April.
The Supreme Court Says “Game Over” to Crafty Gamers’ Attempt to Circumvent Class Certification Appeals
The Xbox 360 is designed for gaming. Appellate litigation, gamers learned, is not. On behalf of a putative class of purchasers of the Xbox 360, a group of gamers brought suit alleging a defect with the consoles. After the district court struck the class allegations, plaintiffs sought permission to appeal under Rule 23(f), which the Ninth Circuit denied. Rather than proceeding in litigation to final judgment, plaintiffs instead voluntarily dismissed their claims, with prejudice, while reserving a right to appeal the order striking class allegations. Plaintiffs then appealed the order under Section 1291. On appeal, the Ninth Circuit held that it had appellate jurisdiction and thus the case was still “sufficiently adverse” to be heard under §1291. The Supreme Court granted certiorari on the question of whether courts of appeals “have jurisdiction under §1291 and Article III . . . to review an order denying class certification (or, as here, an order striking class allegations) after the named plaintiffs have voluntarily dismissed their claims with prejudice.” Writing for the majority in Baker, Justice Ginsburg reasoned that permitting plaintiffs’ back door to the appellate courts to remain open would defeat the even-handedness codified as part of the final judgment rule under §1291 and in the Federal Rules of Civil Procedure. For similar reasons, Justice Ginsburg wrote, the Court previously rejected the judicially-created “death-knell doctrine”—under which an appellate court could review an order refusing to certify a class when the rejection of class certification “sounded the ‘death knell’ of the action”—because it served only to favor the plaintiffs. Describing plaintiffs’ circumvention tactic as a “voluntary dismissal device,” the Court held that permitting only plaintiffs to immediately appeal adverse class certification orders would be manifestly unfair and upset the balance between the parties. Indeed, as the Court noted, “the ‘class issue’ may be just as important to defendants . . . for an order granting certification . . . may force a defendant to settle rather than . . . run the risk of potentially ruinous liability.” Yet plaintiffs’ tactic would confer no right to immediate appeal on defendants. Moreover, the Court held, plaintiffs’ voluntary dismissal tactic would “undercut Rule 23(f)’s discretionary regime,” which states that interlocutory appeals of grants or denials of class certification may be permitted by a federal court of appeals, but do not create an obligation on the part of Article III courts. The primary drafters of this rule believed that creating a right to interlocutory appeal could be abused, and instead granted such a decision “to the sole discretion of the court of appeals.” Plaintiffs’ maneuver to manufacture appellate jurisdiction would subvert this discretion by impermissibly “transform[ing] a tentative interlocutory order . . . into a final judgment claims with prejudice—subject, no less, to the right to ‘revive’ those claims if the denial of class certification is reversed on appeal.” To embrace plaintiffs’ reasoning would render “Congress’ final decision rule . . . a pretty puny one.” The majority concluded that “Congress chose the rulemaking process to settle the matter, and the rulemakers did so by adopting Rule 23(f )’s evenhanded prescription. It is not the prerogative of litigants or federal courts to disturb that settlement.” Taking a more narrow view, in his concurrence, Justice Thomas wrote that though he disagreed with the majority’s interpretation of §1291—because “[w]hether a dismissal with prejudice is ‘final’ depends on the meaning of §1291, not Rule 23(f )”—plaintiffs nevertheless could not appeal because the court lacked Article III jurisdiction. By voluntarily dismissing their claims, “the plaintiffs asked the District Court to dismiss their claims, they consented to the judgment against them and disavowed any right to relief from Microsoft,” including their right to appeal the order on class certification. Baker serves as an important reminder to litigants to consider both the purpose and intent of the Federal Rules of Civil Procedure, which take an even-handed approach. The downstream effects of an alternative ruling would have been significant, as defendants could face undue and increased pressure to settle potentially meritless cases rather than risk incurring the large expense of litigating a judicially-created, one-sided appellate process. There is no appellate “cheat code” available only to plaintiffs, and the Supreme Court has helped ensure that one of the most seminal moments in class litigation remains a fair game.
On June 29, 2017, President Donald Trump made his second group of nominations of prospective United States Attorneys. With the eight lawyers he nominated earlier in June, this group brings the current number of Trump’s United States Attorney nominations to seventeen – around 20% of the total number of positions. The nine lawyers he nominated last week are:
Kurt Alme, the President and General Counsel of the Yellowstone Boys and Girls Ranch Foundation, to be the United States Attorney for the District of Montana.
Donald Q. Cochran, a Professor of Law at Belmont University College of Law, to be the United States Attorney for the Middle District of Tennessee.
Russell M. Coleman, a member of the Frost Brown Todd law firm, to be the United States Attorney for the Western District of Kentucky.
Bart M. Davis, the Majority Leader in the Idaho State Senate since 2002, to be the United States Attorney for the District of Idaho.
Halsey B. Frank, an Assistant United States Attorney for the District of Maine, to be the United States Attorney for the District of Maine.
J. Cody Hiland, the District Attorney in Arkansas’s 20th Judicial District, to be the United States Attorney for the Eastern District of Arkansas.
D. Michael Hurst, Jr., the director of the Mississippi Justice Institute and General Counsel for the Mississippi Center for Public Policy, to be the United States Attorney for the Southern District of Mississippi.
William C. Lamar, an Assistant United States Attorney in the Northern District of Mississippi, to be the United States Attorney for the Northern District of Mississippi.
R. Trent Shores, an Assistant United States Attorney in the Northern District of Oklahoma, to be the United States Attorney for the Northern District of Oklahoma.
So far, thirteen of Trump’s seventeen nominees have come from states with two Republican Senators where the “blue slips” approving Presidential nominations are likely easier to come by. Thirteen of Trump’s nominees are also from small or medium districts as DOJ categorizes them. Small and medium districts are those with fewer personnel resources (especially given the DOJ hiring freeze currently in effect), so adding Presidentially-appointed United States Attorneys to these districts will free up the acting United States Attorneys (career prosecutors who were already in the office) to return to prosecuting cases and other matters – no small addition in offices that may only contain twenty or thirty lawyers.
This batch of Trump nominees is very similar to his initial group, as well as similar to the Obama nominees as a whole:
Trump’s first batch of nominees had around 26 years of legal experience on average. Reverting to the mean, Trump’s seventeen nominees as a whole average around 23 years of legal experience – the same as the average Obama nominee.
Sixteen of the seventeen Trump nominees have prior state or federal prosecutorial experience (everyone but Idaho’s Bart Davis), compared with the more than 80% of Obama nominees who had prosecutorial experience prior to nomination. Eleven of Trump’s nominees have federal prosecutorial experience, consistent with the approximately 60% of Obama nominees who served as federal prosecutors prior to nomination.
Two of Trump’s seventeen nominees are former Congressional staff members: Donald Coleman for current Senate Majority Leader Mitch McConnell of Kentucky, and D. Michael Hurst, Jr., for former Representative Chip Pickering of Mississippi and for the House Judiciary Committee. This is also consistent with the Obama nominees, of which around 10% had service as staffers on the Hill. These types of relationships are thought to be helpful when issues involving DOJ are being decided by Congress.
Despite the similarities, Trump continues to emphasize state prosecutorial experience in a way that Obama did not. While less than a third of the Obama nominees had state prosecutorial experience, over half of Trump’s nominees to this point do. Furthermore, three of Trump’s nominees are elected District Attorneys; while three of Obama’s more than 100 total United States Attorney nominees had prior service as an elected District Attorney, none were serving in that capacity at the time of nomination. As noted before, studies have shown that violent crime is more often addressed by state courts than by federal courts. Trump’s continued focus on lawyers with state prosecution experience is still in keeping with his recent executive order emphasizing DOJ efforts to fight violent crime.
A couple of stray observations:
In 2015, Donald Cochran wrote a research paper for the American Journal of Trial Advocacy about how Malcolm Gladwell’s teachings in his book The Tipping Point can be helpful to lawyers during jury trials, which probably upped his “cool factor” among the law students he taught.
Shortly after Trump’s inauguration, Halsey Frank wrote an editorial in the southern Maine newspaper The Forecaster arguing in part that “President Trump is appointing some able people” – a nifty coincidence, that (or maybe an indicator he thought he might get the nomination?).
And a final note: This batch of nominees puts the pace of Trump’s United States Attorney nominations slightly ahead of Obama’s – Trump began July 2017 with seventeen nominations, while at the end of June 2009 Obama only had nine. Given that Obama finished July 2009 with nineteen total United States Attorney nominations, it is not unlikely that Trump’s nominations will continue to move along somewhat more quickly than Obama’s, at least in the short to medium term.
Guide to State Procurement: A 50-State Primer on Purchasing Laws, Processes, and Procedures, Second Edition
The legal frameworks for procurement that states have developed contain both similarities as well as critical differences, making it difficult for suppliers who provide products to multiple states. This book delineates each state’s law, practice, and key issues, offering time-saving access to information in a single volume.
Purchase the guide here.
With each state having its own procurement statutes, regulations, and policies, there are similarities as well as important differences in the legal frameworks that have developed over the years, making it difficult and time-consuming for suppliers who provide products to multiple states. Now fully updated, this useful, single-volume resource contains a summary of purchasing laws and processes for all 50 States. Each chapter is written by individuals knowledgeable in each state’s’ laws and processes, and includes:
- A listing of purchasing laws and regulations
- Descriptions of purchasing methods
- An explanation of:
- Bid protest procedures
- Contract claims processes, and
- Administrative and judicial review
Those involved in state procurement — government officials, contract administrators, attorneys, and contractors — will find the information in this Guide to be invaluable.
In its latest action regarding the “Gainful Employment” regulations promulgated under the Obama administration, late on June 30, 2017, the U.S. Department of Education (“the Department”) announced a delay in certain disclosure requirements that were to have taken effect on July 1, 2017. This announcement occurred through Electronic Announcement #106, a pre-publication draft Federal Register notice (which will appear in the Federal Register on July 5, 2017) and an official press release.
The Gainful Employment regulations require all education programs offered by proprietary institutions of higher education, and non-degree programs offered by public and private nonprofit institutions, to meet specific debt-to-earnings measures in order to remain eligible for federal student financial aid. Additionally, the regulations require institutions to provide extensive informational disclosures to students regarding their Gainful Employment programs, and to issue warnings to students when a program is in danger of losing its eligibility for federal student financial aid. As described in a previous alert, the Department announced on June 16, 2017, that it will establish a negotiated rulemaking committee to develop proposed revisions to the Gainful Employment regulations; however, that prior announcement did not alter the effectiveness of the current regulations.
Through this latest announcement, the Department has now delayed until July 1, 2018, the requirements for institutions to include a link to the required Gainful Employment program disclosure template in all promotional materials, to provide a copy of the required template to all students on an individual basis, and to receive acknowledgements from individual students that they received the template. Importantly, institutions are still required as of July 1, 2017, to incorporate the new Gainful Employment program disclosure template into their website descriptions of educational programs offered.
Please also note that unless an institution submitted a timely notice of intent to appeal its programs’ Gainful Employment measures to the Department in late January, this latest action does not affect the regulatory requirement to issue student warnings for programs in danger of losing federal student financial aid eligibility because of those measures.
Bring on the Bad Word Brands? What Supreme Court’s Decision in Matal v. Tam Means for Trademark Owners
The Supreme Court’s June 19, 2017 decision in the Matal v. Tam case has been burning-up the news wires all week. The decision struck down a 70-year-old ban on federally registering disparaging trademarks, finding that the disparagement clause of Section 2(a) of the Trademark Act violates the First Amendment principal against banning speech that expresses ideas that offend. The decision was joined by all 8 participating justices. The case was heralded as not just a win for the Asian-American dance-rock band The Slants, but also for the Washington Redskins whose trademark registrations were challenged based on the same disparagement clause.
The USPTO was quick to act, issuing Examination Guide No. 1-17 on June 26, providing a framework for how the PTO will examine applications following the Supreme Court’s decision. Opportunistic brand owners were also quick to act; World Trademark Review reports that at least 11 trademark applications for marks that could possibly be deemed disparaging were filed the day of the ruling.
In light of Tam, two other provisions of Section 2(a) — those that preclude registration of immoral and scandalous marks — also seem likely to fall, as both could be interpreted as banning speech likely to offend. In fact, the constitutionality of the scandalousness provision of 2(a) is currently pending before the Federal Circuit (In re Brunetti), and it seems likely the Fed. Cir. will move forward with Brunetti in the aftermath of Tam.
What does Tam mean to brand owners? It seems unlikely that the ability to now federally register offending marks will herald a seismic shift in branding strategies. The ability to use a trademark was never at issue in Tam, simply the ability to protect a mark by federal registration. Similarly, the public’s appetite for offensive brands will likely also not be enhanced by the new ability to obtain federal registration for such source indicia. Just as it is unlikely that the Court’s decision in Tam will persuade my son’s middle school principal that a T-shirt bearing the phrase HOMEWORK.SUCKS (INTA swag courtesy of the folks at dotSucks) is appropriate classroom attire. As always, the strength of a brand goes not to its novelty, but to its long-term ability to communicate the positive attributes of the associated products and services to consumers.
As the holiday weekend approaches, many employers in Chicago and Cook County find themselves scrambling to prepare for the Chicago and Cook County Paid Sick Leave Ordinances that will take effect this Saturday, July 1, 2017. The Ordinances, though straightforward in their purpose of providing some limited sick paid time off to employees, raise a number of thorny, confusing questions and various administrative concerns for all employers. To add to this uncertainty, the City of Chicago only yesterday released its extensive final interpretative rules on the City’s Ordinance, which raise a number of interpretative questions and, in places, appear to diverge from the previously-issued final rules of the Cook County Commission on Human Rights on the County’s Ordinance. Not only that, the list of Cook County’s municipalities that are opting out from the County’s Ordinance has been changing, literally, by the hour. To help you get up to speed and make any final necessary changes, in this Alert we will review some key requirements and provide responses to some FAQs employers have been asking related to paid sick leave in Chicago and Cook County.
Paid Sick Leave Requirements
The Ordinances require employers in Chicago and certain municipalities in Cook County to provide all employees, regardless of full-time, part-time, seasonal, or temporary status, with one (1) hour of paid sick leave for every for 40 hours worked, up to a maximum accrual cap of 40 hours in any benefit year. Employees are entitled to begin using accrued paid sick leave following 180 days of employment, provided they have worked at least 80 hours in any 120 day period.
Employees must be allowed to use paid sick leave for any of the following reasons:
The employee is ill, injured, or requires medical care (including preventive care);
A member of the employee’s family is ill, injured, or requires medical care;
The employee or a member of his or her family, is the victim of domestic or sexual violence; or
The employee’s place of business, or the childcare facility or school of the employee’s child, has been closed by an order of a public official due to a public health emergency.
In addition to providing employees with paid sick leave, employers are required to inform employees about their rights to paid sick leave by posting the Chicago and Cook County notices in the workplace and distributing these notices to employees with their first paycheck following the Ordinances’ effective date, or with any new employee’s first paycheck.
Frequently Asked Questions
When updating their employment policies and/or practices, employers should be mindful of the following frequently asked questions:
Do the Ordinances apply to all employees working in Chicago and/or Cook County?
The Ordinances are broadly worded such that employers are required to provide paid sick leave to all employees working in the geographic boundaries of the City of Chicago and/or Cook County. However, the Cook County Ordinance permits municipalities in Cook County to opt out of the Ordinance prior to its effective date.
So far, more than half of the municipalities in Cook County have opted out of the Cook County Ordinance, meaning that employers are not required to provide paid sick leave to employees working in these locations. However, if an employee should change work locations, or travel for work, into a municipality that has not opted out of the Cook County Ordinance (such as the City of Chicago), the employee would be entitled to accrue paid sick leave for hours worked in that municipality.
Are employees able to carryover accrued paid sick leave?
The Ordinances permit employees to carryover half of their accrued unused paid sick leave, up to a cap of 20 hours, into the next benefit year. Employees working for employers covered by the Family Medical Leave Act (FMLA) may carryover up to an additional 40 hours of paid sick leave into the next benefit year, to be used exclusively for FMLA-specific purposes.
Nonetheless, in most instances, employers may cap the amount of paid sick leave that an employee can use in a benefit year at 40 hours. The exception to this rule being that employees who carryover and use all 40 hours of FMLA-specific paid sick leave may use an additional 20 hours of regular paid sick leave in any benefit year. Thus, in limited circumstances employees may be able to use as many as 60 hours of paid sick leave in a single benefit year.
Are employers permitted to front-load paid sick leave?
Both Ordinances permit employers to front-load paid sick leave at the start of the benefit year, or at the time of hire. Employers who front-load paid sick leave do not need to track paid sick leave accrual or permit the carryover of paid sick leave into the next benefit year, provided that the requisite amount of paid sick leave has been front-loaded. The precise amount of paid sick leave to be front-loaded may depend on whether the employer is subject to FMLA and/or based in Chicago or Cook County, as their respective rules address front-loading differently. Employers with questions regarding the precise amount of paid sick leave that must be provided to employees should contact counsel.
Are employers able to provide paid time off in lieu of paid sick leave?
Employers may provide employees with paid time off (PTO) instead of paid sick leave, provided that all their employees are provided at least as much PTO as the Ordinances require to be made available for paid sick leave use in a benefit year. Employers should note, however, that accrued unused PTO must be paid out upon termination of employment. There is no such requirement to pay out accrued unused paid sick leave.
In light of the impending effective date for Chicago’s and Cook County’s Paid Sick Leave Ordinances, it is important that employers take any remaining necessary steps to ensure that their paid sick leave policies and practices will comply with the Ordinances. Policies that do not provide the requisite benefits to employees, or those that are silent on key issues such as paid sick leave accrual and/or usage restrictions, will be construed against the employer and could lead to costly violations.
The diplomatic cable instructs consulates on how to interpret the US Supreme Court’s direction to enforce the restriction only against foreign nationals who lack a “bona fide relationship with a person or entity in the United States.”
This Immigration Alert serves as an addendum to our prior summary of the Supreme Court decision partially granting the government’s request to stay enforcement of two preliminary injunctions that temporarily halted enforcement of Executive Order (EO) No. 13780. As a result of this decision, foreign nationals from six countries (Libya, Somalia, Sudan, Syria, Iran, and Yemen) who cannot show bona fide ties to the United States may be denied visas or entry for 90 days starting Thursday, June 29 at 8:00 p.m. EDT.
The communication from the US Secretary of State’s office enumerates the following situations where the EO’s travel restrictions will not apply:
When the applicant has a close familial relationship in the United States, which is defined as a parent (including parent-in-law), spouse, fiancé, child, adult son or daughter, son-in-law, daughter-in-law, or sibling, whether whole or half. This includes step relationships, but does not include grandparents, grandchildren, aunts, uncles, nieces, nephews, cousins, brothers-in-law and sisters-in-law, or any other “extended” family members.
When the applicant has a formal, documented relationship with an entity formed in the ordinary course, rather than for the purpose of evading the EO. This includes established eligibility for a nonimmigrant visa in any classification other than a B, C-1, D, I, or K, as a bona fide relationship to a person or entity is inherent in the visa classification.
When there are eligible derivative family members of any exempt applicant.
When the applicant has established eligibility for an immigrant visa in the immediate relative, family-based, or employment-based classification (other than certain self-petitioning and special immigrant applicants).
When the applicant is traveling on an A-1, A-2, NATO-1 through NATO-6, C-2 for travel to the United Nations, C-3, G-1, G-2, G-3, or G-4 visa, or a diplomatic-type visa of any classification.
When the applicant has been granted asylum, is a refugee who has already been admitted to the United States (including derivative follow-to-join refugees and asylees), or is an individual who has been granted withholding of removal, advance parole, or protection under the Convention Against Torture.
Applicants admitted or paroled into the United States on or after the date of the Supreme Court decision are also exempted, as are those currently in the United States who can present a visa with a validity period that includes either January 27, 2017 (the day the EO was signed) or June 29, 2017. Any document other than a visa, such as an advance parole document, valid on or after June 29 will also exempt the holder.
As described in the prior alert, any lawful permanent resident or dual foreign national of one of the six named countries who can present a valid passport from a country not on the list is not impacted by the EO. The EO also permits consular officers to grant case-by-case waivers to otherwise affected applicants who can demonstrate that being denied entry during the 90-day period would cause undue hardship, that entry would not pose a threat to national security, and that their admission would be in the national interest.
We all get them. Repeated marketing calls to our mobile and home phones with the incoming phone number altered to make it appear that it’s a local call, when in fact, the call is from a robo-scammer using IP technology to “spoof” the phone number. As it turns out, there’s a federal law that makes such spoofing illegal, the Truth in Caller ID Act of 2009 (“TICIDA”), and in its first enforcement action under TICIDA, the FCC hit an alleged serial robocaller, Adrian Abramovich and his companies (together, Abramovich) with a whopping $120 million Notice of Apparent Liability for allegedly originating nearly 100 million such calls.
The Commission also issued a Citation and Order to Abramovich for alleged violations of the Telephone Consumer Protection Act (“TCPA”) for making unauthorized prerecorded telemarketing calls to emergency phone lines, wireless phones and residential phones without obtaining the required prior express written consent from the called party. While TICIDA allows the Commission to directly fine first-time violators through its NAL authority, which it did here, in TCPA FCC enforcement actions involving entities and individuals that do not hold Commission authorizations, the Commission must first issue a citation, and then can only proceed with a fine if the recipient repeats the violation. That still leaves Abramovich open to potentially monumental TCPA class action exposure. The Citation and Order also notified Abromovich that he had violated the federal wire fraud statute by transmitting or causing to be transmitted, by means of wire, misleading or false statements with the intent to perpetrate a fraud.
According to the Commission, Abramovich ran a scheme where his spoofed calls appeared to originate from local numbers and offered, via a pre-recorded message, holiday vacations and cruises claiming to be associated with well-known American travel and hospitality companies. The pre-recorded messages would prompt customers to “press 1” to secure their reservation. Once a customer pressed “1”, the customer was transferred to a call center where live operators pushed vacation packages typically involving timeshare presentations, that were not affiliated with the well-known brands used in the recorded messages. The Commission characterized Abramovich’s schemes as “one of the largest – and most dangerous – illegal robocalling campaigns the Commission has ever investigated.” According to the Commission, in addition to defrauding consumers, the robocalling campaign also caused disruptions to an emergency medical paging service, which provides paging services for emergency room doctors, nurses, emergency medical technicians, and other first responders.
While significant in absolute terms, the $120 million proposed fine, according to the Commission, was significantly below the penalty that could have been proposed in the NAL. Rather than fine the statutory maximum of $11,052 for each spoofing violation, or three times that amount for each day of a continuing violation, the Commission calculated the base forfeiture amount at $1,000 per unlawful spoofed call, since this was the first time the Commission used its TICIDA forfeiture authority.
Mr. Abromovitz now has an opportunity to respond to both the NAL and Citation. Stopping illegal robocalling has been a key priority for Chairman Pai, and no doubt the Commission is expecting that the threat of huge monetary forfeiture penalties against the industry will provide a powerful incentive for roboscammers to look for other ways to make a buck. Given the Commission’s struggle with fashioning tools to go after serial robocallers that do not have the effect of increasing TCPA exposure for established companies engaging in legitimate customer communications, we do not expect the Commission to back down from its proposed penalty, and expect this to be the start of a new enforcement initiative using TICIDA and its direct penalty provisions.