Tag: Litigation

U.S. Supreme Court Makes It Easier To Avoid Method Patents Requiring Multiple Actors

Neal Gerber

On June 2, 2014, the United States Supreme Court unanimously held that a defendant was not liable for inducing infringement of a patented method where there is no direct infringement because the method steps are “divided” between the defendant and its customers. See Limelight Networks, Inc. v. Akamai Technologies, Inc., No. 12–786. The Court was reviewing a 6-5 en banc decision from the Court of Appeals for the Federal Circuit that held a party might be liable for inducing infringement under 35 USC 271(b) where a defendant carried out some steps and encouraged others (such as its customers) to carry out the remaining steps. In other words, the performance of the method steps was divided between a party and its customers, so the party could be liable for inducing the performance of the remaining steps it did not perform itself.  The Supreme Court reversed and remanded the judgment against Limelight, reasoning that there could be no liability for inducing infringement if no party directly infringed.

The Supreme Court relied on a prior decision by the Federal Circuit that there is no direct infringement of a method claim unless a single party performs every step of a claimed method or exercises “control or direction” over the entire process such that every step is attributable to that party. See Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1329 (Fed. Cir. 2013). Muniauction held that there was no direct infringement of a patented method when its distinct steps were performed by “mere arms-length cooperation” between parties. In Limelight, the Supreme Court “assumed” that Muniauction’s holding was correct but observed that the Federal Circuit could revisit it when the Limelight decision was remanded.

Both Limelight and Muniauction involved client-server scenarios for web-based businesses and cloud-based application services, but this decision has broad implications across a variety of fields, such as personalized or precision medicine.  For example, a patented method directed to diagnosing and treating a disease would not be infringed where a laboratory provides the diagnosis and the treating physician does not exercise “control or direction” over the steps performed by the laboratory.

Until Muniauction is further defined, the Court has returned the law to its state prior to the Federal Circuit’s Akamai holding, where liability turned on whether a single infringer exhibited sufficient “control or direction” over steps performed by others; if not, no one is liable for patent infringement.  For would-be infringers, this potentially provides a useful defense.  For patent applicants, it is a reminder to draft method claims in a manner such that all actions can be taken by a single entity.

Article By:

Michael B. Harlin
James P. Muraff
Kevin A. O’Connor Ph.D.
Mike R. Turner
Of:
Neal, Gerber & Eisenberg LLP

Wisconsin Right to Life v. Barland (7th Cir. May 14, 2014)

Godfrey Kahn

On May 14, 2014 the Seventh Circuit U.S. Court of Appeals released its long-awaited decision in Wisconsin Right to Life v. Barland. Click here to read a copy of the court’s decision.

The opinion is authored by Judge Diane Sykes who was a member of the Wisconsin Supreme Court before being nominated by President Bush and then appointed to the federal Court of Appeals in 2004. The matter had been fully briefed, argued and pending since January 2013.

In 2010, the Government Accountability Board (the G.A.B.) adopted an administrative rule, GAB 1.28. In short, this rule greatly expanded the scope of communications subject to regulation as independent expenditures. As a result, issue advocacy communications in the 30/60 days before an election that identified a candidate would be presumed to be independent expenditures and subject to full PAC regulation under state campaign finance law, including donor disclosure.

In response to the G.A.B.’s adoption of this highly controversial rule, three lawsuits were filed almost immediately after the rule took effect. One of those lawsuits was filed in federal court in the Eastern District of Wisconsin by attorney James Bopp on behalf of Wisconsin Right to Life (WRTL). However, WRTL not only sued the G.A.B. about administrative rule GAB 1.28, it also challenged a multitude of other Wisconsin campaign finance laws. Today’s decision is essentially a resolution of WRTL’s lawsuit and all of those legal challenges.

WRTL prevailed in virtually all of its arguments, including:

  • Wisconsin’s ban on corporate political spending is unconstitutional under Citizens United;
  • GAB 1.28 which treats issue advocacy during the 30/60 day preelection period as fully regulable express advocacy/independent expenditures is unconstitutional; and,
  • GAB 1.91 which imposes PAC-like registration and reporting requirements on all organizations that sponsor independent expenditures is unconstitutional as applied to sponsors who are not superPACs (such as 501(c)(4) organizations and other non-committee sponsors).

The Court of Appeals reached its conclusions using very strong and clear language on government’s limited ability to regulate political speech:

  • “The effect of [Buckley] was to place issue advocacy—political ads and other communications that do not expressly advocate the election or defeat of a clearly identified candidate—beyond the reach of the regulatory scheme.” (p. 20)
  • “As applied to political speakers other than candidates, their committees, and political parties, the statutory definition of ‘political purposes’ in section 11.01(16) and the regulatory definition of ‘political committee’ in GAB 1.28(1)(a) are limited to express advocacy and its functional equivalent as those terms were explained in Buckley and Wisconsin Right to Life II.” (p. 62)
  • The G.A.B.’s administrative rule “sweeps a far wider universe of political speech into [state campaign finance laws], introducing confusion for ordinary political speakers who lack the background or assistance of a campaign finance lawyer.” (p. 64)
  • “Regulations on speech, however, must meet a higher standard of clarity and precision. In the First Amendment context, ‘rigorous adherence to [these] requirements is necessary to ensure that ambiguity does not chill protected speech.’ Vague or overbroad speech regulations carry an unacceptable risk that speakers will self-censor, so the First Amendment requires more vigorous judicial scrutiny.” (p. 65)

The WRTL decision also highlights the confusing nature of Wisconsin’s campaign finance statutes and the burdens these laws place on those organizations desiring to participate in the process:

Like other campaign-finance systems, Wisconsin’s is labyrinthian and difficult to decipher without a background in this area of the law; in certain critical respects, it violates the constitutional limits on the government’s power to regulate independent political speech. Part of the problem is that the state’s basic campaign-finance law—Chapter 11 of the Wisconsin Statutes—has not been updated to keep pace with the evolution in Supreme Court doctrine marking the boundaries on the government’s authority to regulate election-related speech. In addition, key administrative rules do not cohere well with the statutes, introducing a patchwork of new and different terms, definitions, and burdens on independent political speakers, the intent and cumulative effect of which is to enlarge the reach of the statutory scheme. Finally, the state elections agency has given conflicting signals about its intent to enforce some aspects of the regulatory mélange. (pp. 3-4)

The WRTL decision also is an excellent summary of the history of campaign finance regulation and litigation in Wisconsin during the last 20 years. It covers in detail successful legal challenges brought against the Elections Board / Government Accountability Board (the G.A.B) by our law firm on behalf of Wisconsin Manufacturers & Commerce (Wis. Supreme Court 1999); Wisconsin Realtors Association (W.D. Wis. 2002); and, Wisconsin Club for Growth / One Wisconsin Now (W.D. Wis. 2010). And, it discusses how despite losing in each of these instances, the G.A.B. continued to push for greater regulation—not less—of political speech.

Bottom line, the WRTL decision makes clear that the government’s authority to regulate political speech extends only to money raised and spent for speech that is express advocacy and that “ordinary political speech about issues, policy, and public officials must remain unencumbered.” (p. 9) Hopefully, with the strong language in this opinion, the G.A.B. will now understand the statutory and First Amendment limitations on its ability to regulate political speech. And, hopefully, the State Legislature will now understand that “Wisconsin’s foundational campaign finance law is in serious need of legislative attention to account for developments in the Supreme Court’s jurisprudence protecting political speech.” (p. 80)

Article By:

Mike B. Wittenwyler
Godfrey & Kahn S.C.

Wind Farms and Eagle “Take” Permits – Litigation is Coming Over the New “30-Year” Permit Rule

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The U.S. Fish and Wildlife Service (FWS) recently changed its eagle “take” permitting rules to allow wind developers to apply for 30-year take permits; previously, such permits, which allow the incidental killing of eagles, were available for a maximum of just five years.  Wind developers had lobbied for the rule change based on concerns that shorter permitting periods inhibit their ability to obtain financing.  But now, a bird conservation group, the American Bird Conservancy (ABC), is threatening litigation to overturn the “30-Year” rule.

 

How strong are ABC’s claims?

Not especially strong, because the FWS has powerful responses to each of ABC’s contentions.  The FWS will also be protected by the deferential standard of review that typically applies in this type of lawsuit.  And even if ABC were to prevail on its claims, the end result is less likely to be wholesale revocation of the rule than some delays in implementing it.  That is because ABC’s claims are largely procedural in nature, not substantive.

ABC’s claims are summarized in an April 30 letter to the U.S. Department of the Interior and the FWSannouncing the group’s intention to file suit over the 30-Year rule.  The letter contends that the FWS committed three legal errors when it extended the maximum take permitting period from five years to 30 years.  According to ABC, the FWS violated:  (1) the National Environmental Policy Act (NEPA), by failing to prepare an environmental impact statement or environmental assessment for the 30-Year rule; (2) the Endangered Species Act (ESA), by allegedly failing to ensure that the rule is not likely to jeopardize the continued existence of endangered species; and (3) the Bald and Golden Eagle Protection Act (BGEPA), which is the statute that authorizes take permits, by prioritizing the concerns of wind developers over those of the eagles the statute is designed to protect.

The problem for ABC – and the good news for wind developers – is that FWS has strong defenses to ABC’s assertions.  First, the NEPA claim will almost certainly turn on whether the FWS correctly concluded that the 30-Year rule falls within a “categorical exclusion” from NEPA’s requirements.  In its letter, ABC quibbles with the FWS’s conclusion, but courts generally review such conclusions under a highly deferential standard of review.  Indeed, agencies often prevail on such claims simply by offering a facially plausible explanation of why NEPA does not apply.  Here, the FWS has done that.  The agency’s NEPA implementation regulations permit the FWS to forego NEPA analysis for rules that have broad or speculative impacts, provided that those impacts will be analyzed on a case-by-case basis in the future.  The FWS contends that is the situation here – it will conduct a NEPA analysis on a permit-by-permit basis in the future.  Courts have rejected NEPA claims under similar circumstances in the past.

The FWS has a similar defense to ABC’s ESA claim.  That claim turns on whether the FWS had a duty to engage in internal consultation about the potential impact of the 30-Year rule on endangered species or critical habitat.  ABC’s letter insists that the FWS was subject to that duty and failed to comply with it.  But the FWS previously concluded, in 2009, that the eagle take permitting rule as a whole would not have any impact on endangered species.  That leaves the FWS in a strong position now, because the 30-Year rule does little more than change the maximum available permitting period under the existing permitting rule.  The FWS will also likely argue that, contrary to ABC’s assertions, the 30-Year rule does not affect endangered species because all it does is authorize the issuance of permits, it does not itself grant any developer permission to undertake any activity.  In sum, the FWS will likely argue that the proper time for ESA consultation is in the context of specific permit applications in the future, not in the context of this more general rulemaking that is not project-specific.

Finally, although ABC insists that the FWS should not have privileged the interests of wind developers over the protection of eagles, that is probably not enough to establish that the 30-Year rule violates the BGEPA.  The BGEPA expressly allows the FWS to permit eagle takes “for the protection of . . . other interests in any particular locality.”

ABC will likely wait 60 days before actually commencing litigation, so as to comply with the ESA’s citizen suit provision.  In the interim, the FWS will surely be evaluating the merits of ABC’s contentions and considering what options it has for addressing them.  Wind developers may want to make their voices heard during that 60 day period, and may want to consider intervening to defend the 30-Year rule in the event this matter does in fact proceed to litigation.

Article By:

Jacob Hollinger
Of:
McDermott Will & Emery

Legal Updates for Government Entities Covering March and April 2014

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Arizona Court of Appeals

Immunity under A.R.S. § 12-820.05

Tucson Unified School District v. Gallagher, –P.3d–, 2014 WL949114 (March 11, 2014)

The Gallaghers sued TUSD and a TUSD school employee, Michael Corum, alleging that Corum sexually abused and/or exploited their developmentally challenged daughter at a TUSD school. The Gallaghers claimed that TUSD was vicariously liable for Corum’s conduct and was negligent in hiring and supervising Corum. The Gallaghers alleged that if TUSD had properly investigated Corum’s employment history they would have discovered that a prior employer recommended that he not be employed in a position that involved disabled children. TUSD filed for summary judgment, arguing that it was immune under A.R.S. § 12-820.05 because Corum had committed a felony and it had no actual knowledge of Corum’s purported propensity for such conduct. The trial court denied summary judgment, concluding that TUSD should have known of the circumstances of Corum’s previous conduct and thus the immunity statute did not apply. TUSD appealed.

A.R.S. § 12-820.05(B) provides that a public entity is not liable for losses that arise out of and are directly attributable to a public employee’s act or omission that is determined by a court to be a felony, unless the public entity knew of the public employee’s propensity for that action. The Court of Appeals held that immunity under A.R.S. § 12-820.05(B) applies unless the entity has actual, not constructive, knowledge. The Court based its decision on the plain language of the statute. When the legislature intends a standard of actual or constructive knowledge, it expressly states so. The use of the word “knew” in the immunity statute unambiguously shows the legislature’s intent to require actual knowledge rather than constructive knowledge. A.R.S. § 12-820.05(B) means exactly what it says—that immunity applies unless the public entity actually knew of the “employee’s propensity.”

Ninth Circuit Court of Appeals

Qualified immunity for warrantless entry

Sheehan v. City and County of San Francisco, 743 F.3d 1211 (9th Cir. 2014)

Sheehan suffered from a mental illness and was residing in a group home.  Her assigned social worker was concerned about her deteriorating condition, deemed her gravely disabled, and called the police to transport her to a mental health facility for a 72-hour involuntary commitment. When officers Reynolds and Holder arrived at the home, they entered Sheehan’s room, without a warrant, to confirm her mental condition and take her into custody. Sheehan reacted violently, grabbed a knife, threatened to kill the officers, and told them that she did not wish to be detained in a mental health facility. The officers retreated to the hallway for their safety and called for backup. But rather than waiting for backup to arrive, the officers drew their weapons and forced their way back into Sheehan’s room. Sheehan again threatened them with a knife. The officers shot her six times. Sheehan survived and filed a § 1983 action, claiming the officers’ entry into her room violated the Fourth Amendment and they used excessive force. The district court found the officers were entitled to qualified immunity and granted summary judgment. Sheehan appealed.

Generally, a warrantless search or seizure in a person’s home is presumptively unreasonable under the Fourth Amendment. But there are exceptions to the warrant requirement, including the emergency aid exception. The emergency aid exception applies when, under the totality of the circumstances, (1) law enforcement had an objectively reasonable basis for concluding that there was an immediate need to protect others or themselves from serious harm, and (2) the search’s scope and manner were reasonable to meet the need. Under this exception, the Ninth Circuit held that the officers’ first entry into Sheehan’s room did not violate the Fourth Amendment because they had an objectively reasonable basis for concluding that there was an urgent need to protect Sheehan from serious harm. The officers knew she was off of her medication, was not taking care of herself, had threatened her social worker, and was gravely disabled and in need of involuntary hospitalization.  Indeed, the court noted that the officers reasonably took a cautious approach to the situation and that “erring on the side of caution is exactly what we expect of conscientious police officers.”  And they carried out the search in a reasonable manner. They knocked and announced and used a pass key to gain entry. They did not draw their weapons and had no reason to believe that their entry would trigger a violent confrontation.

The court found that the emergency aid exception also justified the second warrantless entry into Sheehan’s room. The officers continued to have an objectively reasonable basis for concluding that there was an urgent need to protect Sheehan from serious harm. And because the two entries were part of a single, continuous search or seizure, the officers were not required to separately justify the continuing emergency with respect to the second entry. But the court found that fact issues as to whether the entry was conducted in a reasonable manner precluded summary judgment, and noted that Ninth Circuit case law would put any reasonable, competent officer on notice that it is unreasonable to forcibly enter the home of an armed, mentally ill subject who is acting irrationally and threatening anyone who entered, when there was no objective need for immediate entry.

Lack of resources defense/ jury instruction in § 1983 cases

Peralta v. Dillard, 744 F.3d 1076 (9th Cir. 2014)

Peralta, a prison inmate, sued a prison dentist claiming deliberate indifference under the Eighth Amendment. At trial, the court instructed the jury that “whether a dentist or doctor met his duties to Peralta under the Eighth Amendment must be considered in the context of the personnel, financial, and other resources available to him or her or which he or she could reasonably obtain.” Peralta challenged this jury instruction on appeal.

The Ninth Circuit noted that the Supreme Court has not said whether juries and judges may consider a lack of resources as a defense in § 1983 cases. But the Supreme Court has held that prison officials are not deliberately indifferent to a prisoner’s medical needs unless they act wantonly, and whether an official’s conduct can be characterized as wanton depends on the constraints facing him. See Wilson v. Seiter, 501 U.S. 294, 303 (1991). The Court has also held that even if an official knows of a substantial risk, he’s not liable if he responded reasonably. Farmer v. Brennan, 511 U.S. 825, 844 (1994). This framework makes clear that what is reasonable depends on the circumstances that constrain what actions an official can take.

Several constraints impacted and delayed provision of care for Peralta. Security concerns dictate that only one prisoner at a time can be in the exam room, and the prisoner cannot be left alone in the room because dental tools can be used as weapons. During lockdown, only emergency cases can be seen. Dentists can’t accept prisoners’ complaints at face value, as inmates often try to jump the line by exaggerating symptoms.

The Ninth Circuit noted that lack of resources is not a proper defense to a claim for prospective relief. But a claim for damages is different. Damages provide redress for something an official could have done but did not. So with respect to a claim for damages, the nature of the available resources is highly relevant to show the scope of choices that the individual defendant had. A prison medical official who fails to provide needed treatment because he lacks the necessary resources can hardly be said to have intended to punish the inmate. The court held that the challenged jury instruction properly advised the jury to consider the resources the dentist had available in determining whether he was deliberately indifferent.

United States Supreme Court

Scope of Fourth Amendment consent to search

Fernandez v. California, 132 S.Ct. 1126 (2014)

Officers responding to an assault call saw a man running through an alley and into a building.  A minute or two later, they heard sounds of screaming and fighting coming from the building. They knocked on the apartment unit from which the screams were coming. A crying woman, Rojas, answered the door. Her face was red, she had a large bump on her nose, and fresh blood was on her shirt and hand. Officers asked her to step outside so they could do a protective sweep of the apartment.  The plaintiff, Fernandez, stepped forward and told the officers that they could not enter. Believing that Fernandez had assaulted Rojas, the officer removed him from the apartment and arrested him. About an hour later, a detective returned to the apartment and requested and received oral consent from Rojas to search the premises. Police found evidence incriminating Fernandez, which Fernandez moved to suppress in his criminal case. Fernandez argued that the search was unconstitutional because his denial of consent trumped the later consent Rojas gave. The trial court denied the motion to suppress, the California Court of Appeals affirmed the denial, and the California Supreme Court denied the petition for review. The Supreme Court granted certiorari.

Consent searches are recognized as an exception to the requirement for a search warrant. In 1974, the Supreme Court held that police officers may search jointly occupied premises if one of the occupants consents. See United States v. Matlock, 415 U.S. 164 (1974).  Years later, the Court recognized a narrow exception to this rule, holding that the consent of one occupant is insufficient when another occupant is present and objects to the search. Georgia v. Randolph, 547 U.S. 103 (2006). Here, the Court declined to expand the current rule. They rejected Rodriguez’s argument that his objection to the search should have barred a later search since he was absent from the premises only because the police arrested and removed him.  The Court held that an occupant who is absent due to a lawful detention or arrest stands in the same shoes as an occupant who is absent for any other reason. The Court also rejected the idea that once an occupant objects to a search, the objection remains effective until withdrawn.

Article By:

Lisa S. Wahlin
Of:
Ryley Carlock & Applewhite, A Professional Corporation

Only one week until the Trademark Infringement & Litigation Summit – April 28-29, San Francisco

The National Law Review is pleased to bring you information about the upcoming Trademark Infringement & Litigation Summit hosted by IQPC.

Trademark

When

Monday April 28 & Tuesday April 29, 2014

Where

San Francisco, California, USA

Trademark law may not be changing, but its application certainly has and will continue to do so. Brands are increasingly global, which opens up new possibilities for companies… but also new trademark issues and potential pitfalls. The online experience adds to this global focus and changes the interaction between brands and consumers dramatically.

IQPC’s Trademark Infringement & Litigation Summit will address the topics that you grapple with on a daily basis, including:

  • How business and infringement concerns guide strategic registration and vigilance
  • Methods of enforcing your mark, including a “soft approach,” ICANN dispute resolution, cancellation and opposition
  • Litigation and enforcement management
  • Evolving company domain name strategy

Perhaps the biggest benefit of attending, however, is the practical, frank conversation about the legal and business choices involved in protecting and maintaining your brand. Attend the Trademark Infringement & Litigation Summit to work through these issues with your colleagues.

Do not miss your opportunity to network and engage with top in-house and outside counsel working in the area. Register today!

NOTE: IQPC plans on making CLE credits available for the state of California (number of credits pending).  In addition, IQPC processes requests for CLE Credits in other states, subject to the rules, regulations and restrictions dictated by each individual state.  For any questions pertaining to CLE Credits please contact: amanda.nasner@iqpc.com.

Employer Used As Means to Commit Crime not a Victim under Restitution Act, Fourth Circuit Court Rules

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The Mandatory Victims Restitution Act of 1996 (“MVRA”) provides that a victim of a federal crime may be entitled to an order of restitution for certain losses suffered as a direct result of the commission of the crime for which the defendant was convicted.  A question that courts sometimes face is whether a company can be considered a “victim” under the MVRA if an employee uses that company as an instrument to defraud the federal government.

Looking at this issue, the U.S. Court of Appeals for the Fourth Circuit on April 4, 2014, declined to allow a company’s bankruptcy estate to receive restitution for a large debt caused by an owner/employee’s fraud because that company was used as an instrument for that fraud.  In re Bankruptcy Estate of AGS, Inc., No. 12-cr-113 (4th Cir., April 4, 2014).

Dr. Allen G. Saoud was convicted after a June 2013 jury trial of five counts of health care fraud.  Dr. Saoud, who is a dermatologist, in 2005 was excluded from participating in Medicare and Medicaid for 10 years.  He then plotted to maintain ownership and control of his dermatology practice, AGS, Inc. in violation of the exclusion.  He founded a new dermatology practice and transferred all of his patients to this new practice.  After selling  his new practice to Dr. Fred Scott for $1.8 million,  Dr. Saoud then sold AGS, which had lost its value, for $1 million to nurse practitioner Georgia Daniel.  Despite  these sales, he continued to control and profit from both entities, partly by collecting Medicare and Medicaid reimbursement funds.

After Dr. Saoud was convicted, the estate of AGS, Inc., which had filed for bankruptcy, sought a $1 million restitution award to cover bankruptcy creditor claims that stemmed partly from the underlying fraud.   The district court declined.  The Estate of AGS, Inc. then filed a writ of mandamus with the Fourth Circuit.

The Fourth Circuit also refused  to award restitution to the Estate.  The Court held that Dr. Saoud used AGS, Inc. as an instrument in his scheme to illegally obtained Medicare and Medicaid funds, and as such, the Court declined to “also hold that AGS was one of the scheme’s victims.”

AGS, Inc. should be a source of concern to companies that have sustained losses as a result of employee fraud.  If an employee, director, officer or owner uses a company to defraud the government and that company incurs tax or other debt liability as a result of that fraud, that company may not be able to receive restitution under the MVRA.  Jackson Lewis attorneys are available to advise companies on the scope of the Mandatory Victims Restitution Act and their rights in collecting amounts lost to criminal acts.

Article By:

Ramsay C. McCullough
Of: 
Jackson Lewis P.C.

Detecting FMLA (Family and Medical Leave Act) Abuse

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Dealing with employees who abuse FMLA can be difficult. Letting abuse run rampant, however, can impact business productivity and put a damper on company morale (as present employees often have to pick up the slack of someone on leave). Employers who detect abuse must proceed with caution because it is very easy to run afoul of regulations.

Under the FMLA, it is unlawful for any employer to interfere with, restrain, or deny the exercise of any right provided by the Act. Further, employers cannot use the taking of FMLA leave as a negative factor in employment actions, such as hiring, promotions, or disciplinary actions. Violating these provisions can lead to employee lawsuits for interference or retaliation. Having said that, an employer is not helpless in thwarting employees’ ill-intentioned leaves.

If there is suspected abuse, it should be documented in detail. Who reported it? Is the source credible? Is there evidence (i.e., photographs)? Employers should refrain from overzealously playing detective or prompting other employees to snoop on a coworker – doing so may violate privacy laws. However, if there is a reasonable belief or honest suspicion that abuse is occurring, an employer may begin a confidential investigation, perhaps with the aid of private investigator. Surveillance of an employee should only be used in the most egregious situations and should always be conducted by a professional. Be sure to allow the employee the chance to refute the allegation and present his or her side of the story before taking any adverse action against him or her.

FMLA leave is a right for covered employees, but it does not act as a shield for misconduct nor does it prohibit termination of an employee who abuses the terms of an FMLA leave. You can terminate an employee on FMLA leave, but caution must be used. If you are an employer and detect abuse, it is highly recommended you contact an employment attorney about how to proceed so as to avoid costly lawsuits alleging interference or retaliation.

Article By:

Benjamin L. Riddle
Of: 
McBrayer, McGinnis, Leslie and Kirkland, PLLC

Register today for IQPC's Trademark Infringement & Litigation Summit

The National Law Review is pleased to bring you information about the upcoming Trademark Infringement & Litigation Summit hosted by IQPC.

Trademark

When

Monday April 28 & Tuesday April 29, 2014

Where

San Francisco, California, USA

Trademark law may not be changing, but its application certainly has and will continue to do so. Brands are increasingly global, which opens up new possibilities for companies… but also new trademark issues and potential pitfalls. The online experience adds to this global focus and changes the interaction between brands and consumers dramatically.

IQPC’s Trademark Infringement & Litigation Summit will address the topics that you grapple with on a daily basis, including:

  • How business and infringement concerns guide strategic registration and vigilance
  • Methods of enforcing your mark, including a “soft approach,” ICANN dispute resolution, cancellation and opposition
  • Litigation and enforcement management
  • Evolving company domain name strategy

Perhaps the biggest benefit of attending, however, is the practical, frank conversation about the legal and business choices involved in protecting and maintaining your brand. Attend the Trademark Infringement & Litigation Summit to work through these issues with your colleagues.

Do not miss your opportunity to network and engage with top in-house and outside counsel working in the area. Register today!

NOTE: IQPC plans on making CLE credits available for the state of California (number of credits pending).  In addition, IQPC processes requests for CLE Credits in other states, subject to the rules, regulations and restrictions dictated by each individual state.  For any questions pertaining to CLE Credits please contact: amanda.nasner@iqpc.com.

Retirement Plan Fee Litigation Finds Its Way to North Carolina

Poyner Spruill

Over the last few years, we have seen a significant increase in litigation involving the fees paid by retirement plans. However, until recently, no major litigation had occurred in North Carolina.  On March 12, 2014, one of these cases was filed against Winston-Salem-based Novant Health, a large hospital system in the southeast.  This case and other recent litigation should serve as a reminder to retirement plan fiduciaries of the need to monitor their plans’ service provider arrangements.

The complaint against Novant Health alleges that Novant’s retirement plan paid unreasonable fees to the plan’s recordkeeper and to an investment advisor.  The plaintiffs argue that the fees paid by the plan were unreasonable because, among other things, plan expenses increased more than 10-fold in one year without a corresponding increase in services.  The plaintiffs also claim that the fiduciaries breached their duties by failing to leverage the size of the plan to negotiate lower fees and by selecting retail mutual fund share classes when cheaper, “institutional” share classes were available.

While this case is still a long way from being decided, it should serve as a pointed reminder to plan sponsors and other plan fiduciaries that they need to routinely monitor the reasonableness of plan fees and expenses.

If the plan document so provides, a plan can pay its own administrative expenses, but only if the appropriate fiduciary determines that those expenses are reasonable.  Before entering into a service provider relationship, the fiduciary must first make a determination that the services are necessary and the fees are reasonable.  The fiduciary then must monitor the arrangement over time to ensure that it remains reasonable.

The following fiduciary risk-management practices are worth considering for any plan committee or other fiduciary involved in the selection or monitoring of service providers:

  • Regularly identify all service providers that directly or indirectly receive fees from the plan.
  • Make sure each service provider has provided the plan fiduciaries with fee disclosures required by ERISA.
  • Regularly calculate the amounts that each service provider directly or indirectly receives from the plan.
  • Understand what services are provided to the plan for the fees paid.  If one vendor provides both services to the plan and non-plan services, make sure that the plan is not subsidizing any non-plan services.
  • Periodically confirm whether the service provider’s pricing is competitive.  This is particularly important as the size of the plan grows because the fiduciary will be expected to leverage the plan’s size to reduce fees.  Depending on the circumstances, it might be best to conduct a formal request for proposals from time to time.
  • If an advisor questions whether a fee arrangement is reasonable, take prompt action to investigate the issue and determine whether the arrangement is reasonable.
  • Make sure that participant communications accurately reflect how plan expenses are paid.
  • Document, document, document!  Document the decision-making process used to select a service provider, and document the fiduciary’s monitoring and review process.

These practices will assist the fiduciary in meeting its fiduciary duties and, perhaps more importantly, demonstrate fiduciary prudence to any inquiring party.

Article By:

Kelsey H. Mayo
David L. Woodard
 
Of:
Poyner Spruill LLP

Register for the Trademark Infringement & Litigation Summit – April 28 & 29, San Francisco, California

The National Law Review is pleased to bring you information about the upcoming Trademark Infringement & Litigation Summit hosted by IQPC.

Trademark

When

Monday April 28 & Tuesday April 29, 2014

Where

San Francisco, California, USA

Trademark law may not be changing, but its application certainly has and will continue to do so. Brands are increasingly global, which opens up new possibilities for companies… but also new trademark issues and potential pitfalls. The online experience adds to this global focus and changes the interaction between brands and consumers dramatically.

IQPC’s Trademark Infringement & Litigation Summit will address the topics that you grapple with on a daily basis, including:

  • How business and infringement concerns guide strategic registration and vigilance
  • Methods of enforcing your mark, including a “soft approach,” ICANN dispute resolution, cancellation and opposition
  • Litigation and enforcement management
  • Evolving company domain name strategy

Perhaps the biggest benefit of attending, however, is the practical, frank conversation about the legal and business choices involved in protecting and maintaining your brand. Attend the Trademark Infringement & Litigation Summit to work through these issues with your colleagues.

Do not miss your opportunity to network and engage with top in-house and outside counsel working in the area. Register today!

NOTE: IQPC plans on making CLE credits available for the state of California (number of credits pending).  In addition, IQPC processes requests for CLE Credits in other states, subject to the rules, regulations and restrictions dictated by each individual state.  For any questions pertaining to CLE Credits please contact: amanda.nasner@iqpc.com.