Category: Administrative & Regulatory

Second Draw Paycheck Protection Program Loans: Answers to Employers’ Frequently Asked Questions

The Consolidated Appropriations Act (CAA), 2021 includes a provision that modified and extended the Small Business Administration’s (SBA) Paycheck Protection Program (PPP). Specifically, Section 311 of the Additional Coronavirus Response and Relief provisions of the CAA provides for PPP second draw loans for eligible businesses. Employers seeking a PPP loan may apply through March 31, 2021. Below are answers to some key questions regarding second draw PPP loans.

Question 1. What are some key distinctions between first and second draw PPP loans?

Answer 1. Second draw PPP loans are intentionally narrower and smaller in terms of eligibility and amount. In order to be eligible, businesses must be able to demonstrate that they experienced a 25 percent reduction in gross receipts in a 2020 calendar quarter compared to the same quarter in 2019. While first draw PPP loans were capped at $10 million per borrower based on payroll costs in 2019, second draw PPP loans have a maximum of $2 million per borrower based on payroll costs in either 2019 or 2020. Additionally, first draw PPP loans were subject to a $20 million maximum for businesses that were part of a single corporate group, but second draw loans are subject to a $4 million maximum.

Q2. What employer missteps may impact forgiveness for PPP loans?

A2. A common mistake is not looking at the loan forgiveness application or their own data until after the conclusion of the “covered period.” This may limit a borrower’s ability to implement strategies that take advantage of the various safe harbors or exceptions to rules that reduce the amount of the loan that may be forgiven.

Another common mistake occurs when borrowers do not maintain PPP loan records in a centralized location, which may cause them to scramble to collect the information needed when they are completing the loan forgiveness application. In some instances, employers may not be able to find documents to substantiate unique situations, such as bona fide offers to rehire terminated employees that were refused or employee requests for reduced hours.

Q3. What steps might employers take to aid in managing the requirements for loan forgiveness?

A3. Borrowers may want to start contemplating loan forgiveness before they receive their loan disbursements. For example, in order to properly account for these funds, consider setting up a separate bank account to receive the PPP loan distribution. This step will streamline a borrower’s ability to track how each dollar of the loan is spent.

Borrowers may also want to contact their vendors shortly after receiving their loans to determine what type of reporting features may be available to help them document the permitted payroll and non-payroll costs during the covered period. Many vendors are producing standardized PPP loan reports that facilitate a borrower’s ability to complete the loan forgiveness application.

Q4. Are there any special considerations in the PPP loan process?

A4. In an effort to provide targeted relief to businesses that have been hardest hit by the pandemic, there are special rules in place for determining eligibility and the maximum amount of the PPP loans for borrowers that are in the hotel or restaurant industries (those with an NAICS code beginning with 72).

Borrowers that receive a loan in excess of $2 million are subject to a higher level of scrutiny and review following submission of their loan forgiveness applications. In addition to a mandatory SBA audit, such borrowers also need to complete an additional loan necessity questionnaire on SBA Form 3508 or 3509 (depending on their for-profit status).

© 2020, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

ARTICLE BY Michael K. Mahoney of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
For more, visit the NLR Coronavirus News section.

Flying Car Receives EASA Certification in Europe

AL-V, the first flying car to be allowed on the road in Europe, is now also the first flying car to complete full certification with European Union Aviation Safety Agency (EASA). The PAL-V Liberty (flying car) went through 10 years of testing, and now is in the final phase of compliance demonstration before becoming available to its customers.

PAL-V CEO, Robert Dingemanse, said, “Although we are experienced entrepreneurs, we learned that in aviation everything is exponentially stricter. Next to the aircraft, all aspects of the organization, including suppliers and maintenance parties must be certified.”

In 2009, PAL-V worked with EASA to amend the Certification Specifications for Small Rotorcraft, CS-27, as a starting point for certification of its flying car. Ultimately, together they amended the complete list of more than 1,500 criteria to make it applicable for PAL-V. The final version of these criteria was published last week. Note that this development only occurred after more than 10 years of analysis, test data, flight tests, and drive tests.

This EASA certificate is valid in Europe AND is also accepted in about 80 percent of the world’s market, including the United States and China.

Copyright © 2020 Robinson & Cole LLP. All rights reserved.

ARTICLE BY Kathryn M. Rattigan of Robinson & Cole LLP

Vaccine Volunteers: Is “Thank You” Sufficient Compensation?

The Fair Labor Standards Act (FLSA) requires employers to pay nonexempt employees at least minimum wage for all hours worked up to 40 hours in a workweek and time and one-half for all hours worked over 40 hours in the same workweek. An exception to this rule exists for volunteers, who are not categorized as “employees” under the statute. Typically, volunteers are individuals who donate their time to non-profit, civic, religious, and other charitable organizations.

In light of the COVID-19 pandemic and the urgency to administer vaccines as quickly as possible, hospitals and healthcare facilities are relying on volunteers to assist in organizing vaccine distribution. Employers may want to review their program to ensure volunteers are donating their time in a way that does not run afoul of the FLSA.

Unfortunately, no bright-line rule exists to determine whether an individual is volunteering his or her time or performing compensable work under the FLSA. Instead, this determination hinges, in large part, on the type of work performed by the individual.

If an individual is performing service that relates to commercial activities, he or she will likely be considered an employee under the FLSA, and therefore entitled to wages. For example, an individual who “volunteers” his or her time working at the hospital gift shop may be entitled to compensation under the FLSA. Further, if a volunteer performs tasks on a full-time schedule, is retained for an indefinite period, or displaces a regular employee, it is likely the FLSA would categorize this individual as an employee who should be paid wages for all hours worked.

Recently, some hospitals have been faced with situations in which employees offered to volunteer their time after their shifts to perform the same types of services they are otherwise employed to provide. For example, a nurse employed at a hospital to administer the COVID-19 vaccine to patients during her regular working hours may volunteer to continue vaccinating patients after her assigned shift. Because this is likely impermissible “volunteer” work under the FLSA, the nurse may be entitled to compensation for any hours worked after her shift.

Another similar situation would be when a retired nurse wants to assist with clinical aspects or vaccine administration on a volunteer basis. For the same reasons noted above, this may also be problematic. Employers may want to review each situation on a case-by-case basis and proceed with caution. At a minimum, the employer may want to consider the below recommendations before classifying the returning nurse as a volunteer—who will likely be working alongside paid employees performing the same tasks.

So how can hospitals and similar facilities potentially use volunteers? Some ideas that may be permissible under the FLSA include: organizing the hospital’s vaccine distribution process, including ensuring patients waiting for their vaccine are wearing masks and staying six-feet apart in a line (among other safety recommendations); helping with check-in and other administrative work; and answering questions from patients.

If permitting volunteer work, healthcare employers may want to consider asking volunteers to sign authorization or other written forms that acknowledge the volunteers are knowingly and willingly donating their time to specific tasks and that the duration of the work is temporary. This type of acknowledgment may help to verify that the volunteer and employer are aligned in terms of the work performed, their relative expectations, and the (lack of) compensation provided.

With hospitals and other healthcare distribution facilities maintaining a commitment to administer the vaccine as effectively and efficiently as possible, volunteers are a key part of this mission. Many roles may exist for volunteers that comply with the FLSA and applicable state laws. While employers may want to carefully consider each situation and take precautions, the additional assistance provided by volunteers may be worthwhile to service communities and provide a quick and seamless process to administer vaccinations. At the very least, employers may want to ensure that volunteers are receiving proper recognition and resources for their time, even if it is a simple “thank you.”

© 2020, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved
ARTICLE BY John B. Brown and Jamie E. Brod of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

USDA Certified Organic Ciders: One of a Kind?

Anheuser-Busch introduced its Michelob Ultra Organic Seltzer last month, advertising the beverage as the “First-of-its-kind organic option to the hard seltzer category,” “First USDA-certified organic seltzer,” “First National USDA Certified Organic Hard Seltzer,” and “First-ever national USDA certified organic hard seltzer.” Anheuser-Busch even aired commercials during the nationally televised, highly viewed NFL Division Championship games, along with the Super Bowl that took place on Sunday, February 7. But now the question before an Oregon Court is whether these advertisements imply that it is the first and only kind in the country.

USDA Certified Organic Ciders

Suzie’s Brewery Company brews and packages Organic Hard Seltzer in Pendleton, Oregon. Suzie’s Brewery first launched its product line in July 2020 after obtaining its national organic certification from the USDA’s National Organic Program in June 2020. This program grants businesses the right to display the “USDA Organic” seal on their products should the business meet specific national standards. It also allows certified businesses to represent in advertising that their products have received national USDA organic certification. While most alcoholic beverages are regulated by the Federal Tax and Trade Bureau (“TTB”), and sugar fermented seltzers by the Food and Drug Administration (“FDA”), the USDA governs any food or beverage products that bear the “organic” label.

On February 2, 2021, Suzie’s Brewery sued Anheuser-Busch for false advertising and filed a motion for a temporary restraining order that would keep it from airing ads that Suzie’s Brewery claims are false. “Suzie’s Seltzer also has a national USDA organic certification, and was available on the market well before ULTRA Seltzer,” argued the attorney for Suzie’s Brewery, “In addition, there are several other hard seltzer brands on the market that have USDA organic certification.” Suzie’s Brewery further claims multiple consumers and product distributors contacted them regarding the Michelob Ultra Organic Seltzer advertisements, confused about it being the “first” or “only” USDA Organic certified seltzer. Others questioned the veracity of Suzie’s Brewery and their seltzers being USDA Certified organic, since Anheuser-Busch had claimed to be the “only” one on the market.

One of a Kind?

“Using the bully-pulpit its massive national advertising budget allows, Anheuser-Busch has premiered a new false and misleading advertising campaign aimed at convincing health-conscious drinkers that its new organic hard seltzer is a unique, one-of-a-kind product. To be clear, it is not,” Suzie’s Brewery stated, “and Anheuser-Busch will continue to pursue its strategy of unfairly squeezing out its smaller competitors in the organic hard seltzer market (like Suzie’s Brewery) unless this court puts a stop to its misconduct.”

On February 9, 2021, Judge Michael H. Simon of the United States District Court for the District of Oregon granted the temporary restraining order requiring Anheuser-Busch to immediately stop falsely claiming that its product – Michelob ULTRA Organic Hard Seltzer – is the only or first national USDA certified organic hard seltzer on the market. “It is false for Anheuser-Busch to say this,” the judge said, “because Suzie’s Organic Hard Seltzer is certified organic under the USDA’s National Organic Program and was certified under the national program before Michelob Ultra was.” This temporary restraining order will remain in effect until June 2, 2021, when Judge Simon is scheduled to rule on a motion for preliminary injunction filed by Suzie’s Brewery.

©2020 Norris McLaughlin P.A., All Rights Reserved
For more, visit the NLR Corporate & Business Organizations section.

Food & Food Packaging Is Unlikely to Spread COVID-19

The U.S. Food and Drug Administration (FDA) and Department of Agriculture (USDA) published a press release yesterday underscoring the international consensus that no credible evidence shows that food or food packaging is a source of viral transmission of SARS-CoV-2, the virus that causes COVID-19.

The press release highlights a September 2020 opinion from the International Commission on Microbiological Specifications for Foods that stated, “Despite the billions of meals and food packages handled since the beginning of the COVID-19 pandemic, to date there has not been any evidence that food, food packaging or food handling is a source or important transmission route for SARS-CoV-2 resulting in COVID-19.”  This consensus is consistent with literature reviews and research in other countries, and the fact that in the 100 million cases of COVID-19 worldwide, no epidemiological evidence suggests food or food packaging is a source of transmission to humans.

The U.S. Centers for Disease Control and Prevention (CDC) together with the U.S. Occupational Safety and Health Administration (OSHA) have provided guidance for food manufacturers to reduce the risk of spreading COVID-19 between workers. These guidelines complement the USDA and FDA food safety requirements that all U.S. food manufacturers must follow, such as the current Good Manufacturing Practices and preventative controls that focus on good hygiene practices and worker safety.

© 2020 Keller and Heckman LLP
For more, visit the NLR Biotech, Food, Drug section.

The Carbon Tax Checklist

Many stakeholders have called for the United States to adopt a carbon tax. Such a tax could raise billions of dollars in annual revenue while simultaneously reducing greenhouse gas emissions. Several carbon tax proposals were introduced in the last Congress (2019-2020 term), and it is likely that several more will be introduced in the new Congress. Several conservative economists have endorsed the idea, as has Janet Yellen, President Biden’s Secretary of the Treasury. But the details of a carbon tax matter—for revenue generation, emissions reductions and fairness. Because Congress is likely to consider several competing carbon tax proposals this year, this article provides a way to compare proposals with a checklist of 10 questions to ask about any specific legislative carbon tax proposal, to help understand that proposal’s design and implications.

1. What form does the tax take: Is it an emissions tax, a fuel tax or a production tax?

The point of a carbon tax is to reduce greenhouse gas emissions by imposing a price on those emissions. But there is more than one way to impose that price. Critically, the range of options depends, to a very large degree, on the type of greenhouse gas the tax is trying to address.

The most ubiquitous greenhouse gas is carbon dioxide (CO2) and the largest source of CO2 emissions is the combustion of fossil fuels. Those emissions can be addressed by imposing a fee on each individual emission source or by taxing the carbon content of the fuel—because carbon content is a reliable predictor of CO2 emissions across different combustion circumstances. Most carbon tax proposals are fuel tax proposals; they impose a tax on fuel sales, corresponding to the amount of CO2 that will be emitted when the fuel is burned.

For CO2 emissions, the fuel tax approach has one significant advantage over the emissions fee approach. The fuel tax can be imposed “upstream,” rather than “downstream,” thereby reducing the total number of taxpayers and the overall administrative burdens associated with collecting the tax. A tax imposed on petroleum products as they leave the refinery, for example, is a way to address CO2 emissions from motor vehicles without the need to tax every individual owner of a gasoline-powered car. Most CO2-related carbon tax proposals work that way—they are upstream fuel taxes rather than downstream emissions taxes.

But not all greenhouse gas emissions can be addressed through a fuel tax, because not all greenhouse gas emissions come from fossil fuel combustion. Methane, for example, is released in significant quantities from cows, coal mines and natural gas production systems. A carbon tax directed at those emissions is likely to take the form of an emissions fee imposed on the owner or operator of the emission source. Many carbon tax proposals, however, simply ignore methane emissions or expressly exempt agricultural sources.

Fluorinated gases are yet another type of greenhouse. If they are subjected to a carbon tax, that tax is likely to take the form of a production tax, which would be imposed at the point of production and/or importation into the United States. (Fluorinated gases are used in a variety of refrigerant and cooling applications and contribute to global warming when they leak out of those applications). However, the prospect of such a tax is less likely now because Congress recently adopted legislation imposing a phase-down of domestic hydrofluorocarbon gas production over the next 15 years.

2. Which greenhouse gases are covered? Which sources (if any) are exempt?

The answer to this question dictates, to a large degree, which particular form a carbon tax takes. Legislative proposals that address more than one type of greenhouse gas will very likely include more than one type of tax mechanism. Just as important, the range of greenhouse gases covered by a proposal is relevant to evaluating the proposal’s environmental and economic impacts. A carbon tax that addresses only CO2 emissions from fossil fuel combustion will cover the largest segment of US greenhouse gas emissions but will still omit several other significant greenhouse gas sources. Sources omitted from a federal carbon tax may become targets for other types of regulation.

3. Who pays the tax?

Most carbon tax proposals address CO2 emissions through an upstream fuel tax—a tax that is based on the carbon content of the fuel and that is imposed at the refinery (for petroleum products), the coal mine (for coal) and the compressor station (for natural gas). But that still leaves the question of who pays the tax. Some carbon tax proposals dictate exactly who pays. They specify, for example, that the taxable event is the delivery of crude oil to the refinery and that the taxpayer is the refinery operator. Other proposals specify only the taxable event (such as the first sale of natural gas extracted from a well) without saying which person or entity (the seller or buyer) is responsible for paying the tax. If Congress enacts a carbon tax that specifies the taxable event but not the taxpayer, it will likely fall to the Treasury Department to make that decision, through rulemaking.

4. How much is the tax, how is it set and how does it change over time?

One potential approach is to link the tax rate to the “social cost of carbon,” a dollar figure intended to express the harm associated with emitting one ton of CO2.** But the more fundamental question to ask of any carbon tax proposal is whether the tax rate (or “carbon fee,” as some proposals call it) is linked to any specific environmental goals or metrics. Many proposals set an initial tax rate (such as $50 per ton of CO2 emitted) and increase that rate every year until a specific level of emissions reduction has been achieved (such as a 90% reduction in domestic CO2 emissions compared to 2005 levels). Other proposals base the yearly tax increases (or decreases) on inflation or other economic measures, rather than environmental measures.

**The Obama administration published social cost of carbon (SCC) figures. The Trump administration did not and actually disbanded the interagency task force that had previously been charged with developing the SCC. The Biden administration has re-established that task force and directed it to publish new SCC figures by no later than January 2022.

5. How is the revenue used?

A carbon tax could raise billions of dollars for the federal government every year. In 2018, fossil fuel combustion in the United States produced more than five billion metric tons of CO2 emissions. A carbon tax of $50 per ton would have raised $250 billion that year, assuming emissions held steady (although the point of a carbon tax is to drive emissions down). What should the government do with the money?

Many commentators have argued for a “carbon dividend”—that is, that the revenue should be returned to American citizens in the form of a quarterly or annual rebate. (The Climate Leadership Council, of which Janet Yellen was a founding member, has called for such an approach.) Congress will not necessarily take that approach. Some alternatives for the revenue include: using it to reduce income taxes, spending it on social justice initiatives of various kinds and funding career transition services for oil and gas industry workers. Another approach is to use the revenue to fund green infrastructure, such as electric vehicle charging stations along interstate highways. Some proposals call for a combination of these approaches.

6. Does the tax include a border adjustment?

One concern frequently raised about a carbon tax is that unless other countries also impose a tax, certain domestic manufacturing activities may move overseas to areas without a tax, reducing domestic US employment without reducing overall global emissions. A border adjustment is one way to address that concern.

A border adjustment would apply a carbon tariff to imported goods and, very likely, exempt exported goods from the US carbon tax (i.e., by providing a tax credit or refund to exporters). Most, if not all, carbon tax proposals introduced in Congress to date have included some form of border adjustment. The details of the border adjustment can be critical, with the export provisions posing a particularly tricky set of issues. Exempting exports may protect US competitiveness but it also means that some emissions are not taxed, thereby undermining the tax’s environmental goals. Exempting exports also requires a mechanism for refunding, or crediting, exporters.

7. Does the tax modify or replace existing carbon-related tax credits?

Section 45Q of the US tax code currently provides a substantial tax credit for qualifying carbon capture and sequestration activities. The tax code also includes tax incentives for investing in solar energy, producing wind energy and blending biodiesel into diesel fuel. An important question for any legislative carbon tax proposal is whether it adjusts, modifies, expands or repeals any of those other carbon-related tax provisions.

8. Does the tax replace or preempt existing greenhouse gas regulations?

If domestic greenhouse gas emissions are addressed through a carbon tax, it may not be necessary to regulate those emissions under the federal Clean Air Act and other statutory programs. Indeed, the Climate Leadership Council, a leading proponent of enacting a carbon tax, has expressly called for the tax to replace federal regulation of CO2 emissions (albeit while retaining the Clean Air Act’s greenhouse gas reporting rule). A critical question for any legislative carbon tax proposal is whether it addresses other federal regulatory programs or is silent about those programs, leaving debate over their fate for another day. A closely related question is whether the proposal addresses state regulatory programs. Some of those programs, such as California’s cap-and-trade program and the northeast’s Regional Greenhouse Gas Initiative, have reduced emissions substantially while raising billions of dollars for renewable energy and energy efficiency programs. A federal proposal that preempted those programs might encounter substantial opposition from state officials and other stakeholders.

9. How transparent is the legislative language?

There is a robust academic (and advocacy) literature about carbon taxes. But that does not mean that any specific federal legislative proposal is well designed, easy to understand or easy to implement. An important question to ask of any legislative carbon tax proposal is whether the specific language is clear enough to be implemented efficiently and effectively. Is it clear what gets taxed? Is it clear who actually pays the tax and files the tax forms? Is it clear how the tax rate is set and how that rate relates to emission reduction goals? Is it clear whether any emission sources are exempt? Is it clear to what extent other carbon-related tax provisions and regulatory programs are impacted? Is it clear how the tax will work based on the legislative language alone, or will it be necessary for the Treasury Department to issue regulations or guidance explaining the legislation? If regulations are required, will those regulations be implemented by the Treasury Department alone, or will the Department of Energy and/or the Environmental Protection Agency also be involved?

10. What does the modeling show?

Finally, what impact will the tax actually have on greenhouse gas emissions and the economy? This is not so much a question to ask of the legislative language but of the modeling that will almost certainly accompany it—modeling done by the Congressional Research Service, the Treasury Department, other federal agencies and/or the proposal’s advocates and opponents.

© 2020 McDermott Will & Emery

ARTICLE BY Jacob Hollinger, Heather Cooper and
Carl J. Fleming of McDermott Will & Emery
For more, visit the NLR Environmental, Energy & Resources section.

Bias in Healthcare Algorithms

The application of artificial intelligence technologies to health care delivery, coding and population management may profoundly alter the manner in which clinicians and others interact with patients, and seek reimbursement. While on one hand, AI may promote better treatment decisions and streamline onerous coding and claims submission, there are risks associated with unintended bias that may be lurking in the algorithms. AI is trained on data. To the extent that data encodes historical bias, that bias may cause unintended errors when applied to new patients. This can result in errors in utilization management, coding, billing and healthcare delivery.

The following hypothetical illustrates the problem.

A physician practice management service organization (MSO) adopts a third-party software tool to assist its personnel in make treatment decisions for both the fee-for-service population and a Medicare Advantage population for which the MSO is at financial risk. The tool is used for both pre-authorizations and ICD diagnostic coding for Medicare Advantage patients, without the need of human coders. 

 The MSO’s compliance officer observes two issues:

  1. It appears Native American patients seeking substance abuse treatment are being approved by the MSO’s team far more frequently than other cohorts who are seeking the same care, and
  2. Since the deployment of the software, the MSO is realizing increased risk adjustment revenue attributable to a significant increase in rheumatic condition codes being identified by the AI tool.

Though the compliance officer doesn’t have any independent studies to support it, she is comfortable that the program is making appropriate substance abuse treatment and utilization management recommendations because she believes that there may be a genetic reason why Native Americans are at greater risk than others. With regard to the diagnostic coding, she:

  1. is also comfortable with the vendor’s assurances that their software is more accurate than eyes-on coding;
  2. understands that prevalence data suggests that the elderly population in the United States likely has undiagnosed rheumatic conditions; and,
  3. finds through her own investigation that anecdotally it appears that the software, while perhaps over-inclusive, is catching some diagnoses that could have been missed by the clinician alone. 

 Is the compliance officer’s comfort warranted?

The short answer is, of course, no.

There are two fundamental issues that the compliance officer needs to identify and investigate – both related to possible bias. First, is the tool authorizing unnecessary substance use disorder treatments for Native Americans, (overutilization) and at the same time not approving medically necessary treatments for other ethnicities (underutilization)? Overutilization drives health spend and can result in payment errors, and underutilization can result in improper denials, patient harm and legal exposure. The second issue relates to the AI tool potentially “finding” diagnostic codes that, while statistically supportable based on population data the vendor used in the training set, might not be supported in the MSO’s population. This error can result in submission of unsupported codes that can drive risk adjustment payment, which can carry significant legal and financial exposure.

©2020 Epstein Becker & Green, P.C. All rights reserved.

ARTICLE BY Bradley Merrill Thompson and
Jason E. Christ of Epstein Becker & Green, P.C.
For more, visit the NLR Health Law & Managed Care section

Understanding the Four Goals of Biden’s “American Rescue Plan”

President Joe Biden announced his plan for a new COVID-19 relief package on January 20, 2021 – the day he took office. He, along with Democrat leadership, attempted to gain bipartisan support for the legislation, but ultimately failed to gain Republican support to proceed with the measure. Instead, Democrats will use the budget reconciliation process to pass the relief package with a simple majority vote.

In total, it is a $1.9 trillion plan with the stated goals of: (1) funding a comprehensive COVID response plan, (2) delivering relief to working families, (3) supporting communities that are struggling, and (4) protecting against future cyberattacks. Read on for the top details to know about the plan:

  • The comprehensive COVID response includes creating a national vaccination program, scaling up testing, and working to re-open schools.
  • The relief for working families is the most wide-ranging of the goals. It consists of:
    • Direct payments of $1,400 per person to households under a certain income threshold across America.
    • Increasing the minimum wage from $7.25 per hour to $15 per hour by 2025.
    • Expanding unemployment insurance benefits by providing an additional $400 per-week supplement to those in need through August 2021. This measure will also expand benefits for “gig” workers and extend the amount of time that unemployed individuals can qualify for payments.
    • Working to solve hunger problems by extending the 15 percent SNAP benefit increase and investing $3 billion in WIC.
    • Expanding tax credits for low- and middle-income families to $3,000 from $2,000 for any child 17 and younger.
    • Boosting and expanding Medicaid coverage by allowing state programs to penalize drug companies for drug pricing hikes. It also includes new incentives to encourage states to expand Medicaid under the Affordable Care Act. This would be the first expansion of ACA subsidies in over 10 years.
  • To support communities, the plan aims to:
    • Provide support for small businesses.
    • Provide $130 billion for K-12 schools to access the resources they need in order to safely reopen by hiring more staff and putting in place new testing protocols. It may also include $25 billion for childcare centers and $35 billion for colleges and universities.
    • Send $350 billion to state, local, and territorial governments, along with $20 billion for public transit systems. This is an area of partisanship, as Democrats have been pushing for more funding for several months and Republicans see it as a bailout.
  • The cybersecurity efforts included are largely in response to the recent SolarWinds breach of federal systems. The plan funds modernization of federal IT and networks. The Administration also indicated that the modernization will assist with the COVID-19 vaccine process.

The timing for this bill is still up in the air. President Biden set a deadline of March 14 for passage, as that is when the current funding for extended unemployment insurance expires. That will require Congress to work quickly, and they are attempting to meet the deadline; however, Congress is simultaneously working to confirm Biden’s nominees to his administration and holding an impeachment trial for former President Trump.

Congress’s process began last week when the House and Senate passed and adopted a budget resolution. Over the next few days, House committees will work on marking up and drafting legislation, which will then get sent to the Budget Committee, the Rules Committee, and, eventually, to the floor for a vote. After its expected passage in the House of Representatives, the bill will be sent to the Senate, where it is also expected to pass on a party-line vote. Finally, it will be sent to President Biden for his signature.

© 2020 Foley & Lardner LLP

ARTICLE BY Jared B. Rifis and Kate M. Merrill of Foley & Lardner LLP
For more, visit the NLR Coronavirus News section.

Heavy Metals In Baby Food Pose Concern For Baby Food Industry

On February 4, 2021, the U.S. House of Representative’s Committee On Oversight and Reform (Subcommittee on Economic and Consumer Policy) issued a report entitled “Baby Foods Are Tainted With Dangerous Levels of Arsenic, Lead, Cadmium and Mercury“, which sent ripples of concern through the consumer ranks and the baby food industry. Heavy metals in baby food has received attention before, but never before in such a significant way from a House Subcommittee report like the one published this month. The findings and the proposed changes to regulations for the baby food industry that the subcommittee put forth will have significant compliance impacts on companies, as well as open certain baby food companies up to litigation risks that cannot be ignored.

Findings In the House Report

On November 6, 2019, the House Subcommittee requested internal documents from seven of the largest manufacturers of baby food in the United States, which included companies making both organic and conventional products. The request was prompted by reports that alleged that there are high levels of heavy metals in baby foods, specifically arsenic, lead, cadmium and mercury. The Food and Drug Administration (FDA) and World Health Organization (WHO) have both found these heavy metals to be dangerous to human health, especially infants and children. Four of the baby food manufacturers complied with the House Subcommittee’s request.

From the documents obtained from the four companies, the House Subcommittee concluded that there was evidence that “commercial baby foods are tainted with significant levels of toxic heavy metals,
including arsenic, lead, cadmium, and mercury.” The report said that internal company standards “permit dangerously high levels of toxic heavy metals, and documents revealed that the manufacturers have often sold foods that exceeded those levels.”

The FDA currently has maximum allowable limits for the heavy metals at issue in certain circumstances, including 10 parts per billion (ppb) of arsenic, 5 ppb of lead, and 5 ppb of cadmium in bottled water. The Environmental Protection Agency has also set the permissible level of mercury in drinking water at 2 ppb. However, the House Subcommittee concluded that  “the test results of baby foods and their ingredients
eclipse those levels: including results up to 91 times the arsenic level, up to 177 times the
lead level, up to 69 times the cadmium level, and up to 5 times the mercury level.”

The FDA indicated that it is reviewing the House Subcommittee’s report. It also noted that the heavy metals at issue in the report are present naturally in the environment and can enter baby food through the soil, water or air.

Recommendations From the House Report

As a result of its findings, the House Subcommittee outlined five recommendations:

(1) Mandatory testing – this would require baby food manufacturers to test finished products (not just ingredients) for heavy metals. The House Subcommittee urged the FDA to set this requirement;

(2) Labeling – the Subcommittee proposed that the FDA require baby food manufacturers to list all heavy metals in the finished product on labelling so that consumers are aware of the elements’ prsence;

(3) Phase Out – the House Subcommittee urged manufacturers to voluntarily phase out heavy metals from products entirely, or at least phase out products that have high amounts of ingredients that test high in heavy metals;

(4) FDA Standards – the Subcommittee urged the FDA to set limits for permitted heavy metals in baby foods; and

(5) Parental Vigilance – the report urges parents to avoid baby foods that contain ingredients that test high in heavy metals. The Subcommittee indicated that implementing recommendations 1 through 4 would inform parents to make determinations soundly.

Immediate Litigation Impact

The day after the House Subcommittee’s report was published, three major baby food companies were sued for selling products with elevated levels of certain heavy metals. One such lawsuit was filed in New Jersey, while the other was filed in California. While the class actions lawsuits present several legal theories for liability, the one that may have some weight with courts is the simple allegation that the products were unsafe for consumption by the very class (infants and babies) for which the products were made.

Baby food has been on California’s Proposition 65 target list for quite some time, and many companies that manufacture or sell baby food products in California have been receiving customer and retailer inquiries regarding heavy metals in baby food products. Companies have also begun testing baby food products to ensure compliance with Prop 65 regulations. Ensuring proper responses to consumer and retailer inquiries, compliance auditing of ingredients and end products, and developing risk management plans are key for any company right now in the baby food industry, especially with the potential for future FDA regulations.

©2020 CMBG3 Law, LLC. All rights reserved.

ARTICLE BY John Gardella of CMBG3 Law
For more, visit the NLR Biotech, Food, Drug section.

Five Tips for Enhancing Your Virtual Proceedings

In 2020, you learned to provide advocacy for your clients outside of the courtroom through use of online platforms. Conducting virtual trials and arbitrations has now become a common procedure. If you are looking for ways to improve the quality of your online proceeding, I have five pieces of advice to offer you.

1. Check Your Setup.

You don’t want any tech mishaps during your virtual proceeding. Take the time to prepare your setup so that everything goes off without a hitch. You will want an external monitor—or two—connected to your laptop. Use one screen to see all the participants and the other screen to show exhibits displayed on the screen share. A quality webcam is a must-have, ideally one with 1080p resolution. You will need clear audio too, and I recommend either headphones embedded with a microphone or a USB microphone attached to your computer. If you’re able to work from an office, turn a conference room into your “presentation room.” Set up a dedicated videoconference computer with a simple backdrop and have everyone examine witnesses there. Finally, a week or two before your proceedings begin, test out your equipment and software, and make sure all the features work for every party in the proceeding.

2. Get a Host.

If you want the smoothest virtual proceeding, you’ll need a host. Most courts have a host for online proceedings, but for arbitrations, the parties may need to find their own. All parties should agree on one neutral vendor to act as host. The host will then assign a technician to focus on connectivity, security, technical troubleshooting, and ensuring everything flows well. Having this agreement in place will alleviate virtually all of your potential technical problems.

3. Use a Hot Seat Operator.

As with an in-person hearing, a hot seat operator is vital when proceedings are virtual. The host and hot seat operator should not be the same person. This way, the hot seat operator can focus on pulling up exhibits, showing demonstratives, and running video clips, instead of on troubleshooting connectivity. You don’t need the hot seat operator with you physically in order to present evidence. Last year, I worked on a virtual arbitration; the host was in Florida, the attorneys were in Europe, and I was in the hot seat, presenting evidence from California—and it all worked perfectly.

4. Pick a Platform.

There are many video conference platforms available. Most courts are using Zoom, Webex, or Skype. However, if you are planning a virtual arbitration, you will likely have a choice. After using a number of platforms, my personal preference is Zoom. It is the industry standard, and for a good reason. It has a user-friendly interface and easy screen-sharing capabilities. Zoom is also highly secure. It has 256-bit TLS (Transport Layer Security) encryption, and all shared content can be encrypted. With these security measures, along with a meeting password and the waiting room enabled, you will have a secure meeting.

5. Focus on Details.

Practice makes perfect for a virtual proceeding. Examining witnesses over a virtual platform is an art form, so make sure you rehearse over a videoconference. Additionally, it’s critical to be prepared, especially when you are operating in a remote setting. Set up a messaging service such as Slack or Microsoft Teams, so your whole team can easily communicate in writing while your arbitration is in session. You don’t want messages popping up all the time when you are sharing your screen, so make sure you’ve turned off notifications or consider using a separate laptop for messaging with your team. Be prepared by making backups of all your important documents and have a backup laptop and a backup Wi-Fi provider, such as a cellular hot spot, in case the internet goes out while you’re in session.

Conducting your proceedings over a virtual platform can offer you so many benefits. First, it allows you to continue to serve the needs of your clients despite court closures. Second, it is allows you forgo travel expenses and spend more time at home. Who doesn’t want more time and money? Most importantly, when you put in place an expert team and follow the tips I’ve provided, virtual proceedings offer you a way to vigorously and effectively advocate for your client.

© Copyright 2002-2020 IMS ExpertServices, All Rights Reserved.

ARTICLE BY Jeff Dahm of IMS ExpertServices
For more, visit the NLR Law Office Management section.