Category: Administrative & Regulatory

October Visa Bulletin – Some Gains in the EB-3 Category, but Near Future Bleak for EB-2 India

Greenberg Traurig Law firm

The Department of State released its October Visa Bulletin today.  On a positive note, the EB-2 category for Chinese nationals has made a five week gain, from October 8, 2009 to November 15, 2009; and the EB-3 category for skilled workers/professionals for Chinese nationals has jumped five months, from November 1, 2008 to April 1, 2009.  The EB-3 category will advance six months for nationals of “all other countries” from April 1, 2011 to October 1, 2011; whereas it will only move forward a week for Indian nationals from November 8, 2003 to November 15, 2003.  Elsewhere, the EB-2 category for Indian nationals remains at May 1, 2009 and, unfortunately, this category is likely to retrogress over the next several months because of a spike in demand.  This is grim reading for Indian nationals who account for a large percentage of highly-skilled workers seeking permanent residence in the United States.  Indeed, based on current retrogression dates for Indians in the EB-3 category, priority dates are moving forward one week every month, which translates to a wait time of more than forty years.

Employment Based Category

All Other Countries

China

India

Mexico

Philippines

EB-1

Current

Current

Current

Current

Current

EB-2

Current

10/08/2009

05/01/2009

Current

Current

EB-3 Skilled Workers/Professionals

04/01/2011

11/01/2008

11/08/2003

04/01/2011

04/01/2011

EB-3 Other Workers

04/01/2011

07/22/2005

11/08/2003

04/01/2011

04/01/2011

 

ARTICLE BY

Ian R. Macdonald
 
OF 
Greenberg Traurig, LLP

Report on State Preparedness to Implement EPA Clean Power Plan

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States are well positioned to implement the Environmental Protection Agency’s (EPA) Clean Power Plan, according to a new study conducted by Analysis Group Senior Advisor Susan Tierney and Vice Presidents Paul Hibbard and Andrea Okie. The report, “EPA’s Clean Power Plan: States’ Tools for Reducing Costs & Increasing Benefits to Consumers,”is based on a careful analysis of states that already have experience regulating carbon pollution. It finds that those states’ economies have seen net increases in economic output and jobs. “Several states have already put a price on carbon dioxide pollution, and their economies are doing fine. The bottom line: the economy can handle – and actually benefit from – these rules,” said Dr. Tierney.

The EPA’s proposed Clean Power Plan would regulate carbon emissions from existing fossil-fueled power plants using EPA’s existing authority under the Clean Air Act. The draft rules, due to be finalized next year, allow a variety of market-based and other approaches states can choose from to cut greenhouse gas emissions from power plants.

The Analysis Group team analyzed the carbon-control rules already in place in several states to see what insights they might hold for the success of the national rule. The report was based on states’ existing track records, rather than projecting costs and benefits that might be expected under the Clean Power Plan. The report, funded by the Energy Foundation and the Merck Family Fund, was released at the summer conference of the National Association of Regulatory Utility Commissioners (NARUC) in Dallas, Texas.

Read the report

ARTICLE BY

Susan F. Tierney, PhD
Paul J. Hibbard
Andrea Okie
 
OF
Analysis Group, Inc.

Full D.C. Circuit to Rehear ACA Premium Tax Credit Case

Mcdermott Will Emery Law Firm

The full U.S. Court of Appeals for the D.C. Circuit has vacated the 2-1 panel decision issued July 22, 2014, in Halbig v. Burwell, which struck down the Internal Revenue Service (IRS) Rule providing for Affordable Care Act (ACA) premium tax credits to be available to lower income exchange customers, regardless of their state of residence.  The government’s brief is due October 3, 2014, and the plaintiffs’ opposing brief is due a month later on November 3, 2014, to precede oral arguments on December 17, 2014.  It is likely that the full D.C. Circuit would not render its opinion before mid- to late Spring 2015.  This has the effect of preserving the status quo with respect to the availability of premium tax credits, at least until the full D.C. Circuit renders its decision.

Meanwhile, the plaintiffs have sought review by the Supreme Court of the United States in King v. Burwell, Halbig’s sister case in which the U.S. Court of Appeals for the Fourth Circuit upheld that same IRS Rule.  The Clerk of the Supreme Court has granted the government an extension until October 3, 2014, to respond to the petition for certiorari.  The plaintiffs have urged the highest court render its decision as quickly as possible to resolve the circuit split.  If the Supreme Court accepts King for review before mid-January, it could issue a ruling in the current term, which is scheduled to end in late June 2015.

Among the highest profile legal challenges to the ACA, Halbig and King seek to invalidate a May 2012 IRS Rule providing that health insurance premium tax credits will be available to all taxpayers nationwide, regardless of whether they obtain coverage through a state-based exchange or a federally facilitated exchanges (FFE).  The plaintiffs (represented by the same lawyers in both cases) argued that the plain language of the ACA limits the availability of premium tax credits to only those taxpayers who reside in the 14 states (plus the District of Columbia) that set up their own exchanges, and thus nullifies the IRS Rule’s application to the 36 states operating exchanges through the FFE.  Plaintiffs’ argument is based on language providing that premium tax credits are only available for plans “enrolled in through an Exchange established by the State under section 1311 of the [ACA].”  ACA § 1401(a), enacting 26 U.S.C. § 36B(c)(2)(A)(i) (emphasis added).  The government counters that other provisions of the ACA make clear that the subsidies are to be made available in the FFE states as well.  

There are also two similar cases awaiting decisions by federal trial courts on motions for summary judgment.  First, in Pruitt v. Burwell, pending in federal district court in Muskogee, Oklahoma, the state complains that the availability of the premium tax credit in FFE states forces the state to choose between the costs of providing coverage to its employees or paying the IRS a significant financial penalty.  Second, in Indiana v. IRS, pending in federal district court in Indianapolis, the state and 39 of its public school districts argue that the IRS Rule directly injures the state and school districts in their capacities as employers by subjecting them to increased compliance costs and administrative burdens.  On August 12, 2014, the plaintiffs survived the government’s motion to dismiss based upon lack of standing inIndiana v. IRS, although the court dismissed one aspect of the case because of the delay in enforcing the employer mandate.  Oral arguments on the merits are set for October 9, 2014.

ARTICLE BY

Lauren D’Agostino
J. Peter Rich
 
OF 
McDermott Will & Emery

Manufacturer of Spinal Devices and Indiana Spinal Surgeon to Pay U.S. Government $2.6 Million for Violating the False Claims Act

tz logo 2On August 29, 2014, the Department of Justice (DOJ) announced that Omni Surgical L.P. (dba Spine 360), and Dr. Jamie Gottlieb, an Indiana Spinal Surgeon, agreed to pay the U.S. Government $2.6 million to settle allegations that Spine 360 and Dr. Gottlieb knowingly violated the False Claims Act when Dr. Gottlieb accepted kickbacks from Spine 360 for using their medical devices.  In addition, Spine 360 falsified financial documents in order to cover up illegal incentives paid to Dr. Gottlieb in an attempt to avoid suspicion.

The Anti-Kickback Statute, a provision of the False Claims Act, is designed to protect patients and federal health care programs from fraud and abuse by prohibiting the use of money or anything of value that is intended to induce, reward, or influence health care decisions. Therefore, anyone who knowingly and willfully accepts or offers payment or compensation of any kind and in any manner with the intention of influencing medical decisions is in violation of the False Claims Act.  In this case, between 2007 and 2009, Spine 360, located in Austin, Texas, allegedly offered Dr. Gottlieb monetary kickbacks for using their medical devices on his patients.  In doing so, it allegedly influenced Dr. Gottlieb’s medical decisions and possibly compromised the quality care and best interest of his patients.

Medical violations of this kind are not new.  However, the U.S. Government continues to hold those in violation of the False Claims Act accountable for their actions.  For example, in July 2014, the government settled a lawsuit filed against two Infirmary Health System Inc. (IHS) affiliated clinics and Diagnostic Physicians Group P.C. (DPG) for violating the False Claims Act by paying or receiving financial inducements in connection with claims to the Medicare program. In this case, whistleblower, Dr. Christian Heesch, a physician formerly employed by Diagnostic Physicians Group, is entitled to $4.41 million for reporting fraud against government-funded programs.  Furthermore, last month, the government settled allegations that Carondelet Health Network (CHN) and its affiliate hospitals, Carondelet St. Mary’s and Carondelet St. Joseph’s in Tucson, Arizona, knowingly violated the False Claims Act by overcharging the U.S. Government when it submitted false bills to Medicare and other Federal Health Care programs, and whistleblower, Jacqueline Bloink, formerly employed by the CHN, is entitled to a share of the settlement payment for reporting fraud against the government, which amounts to $6 million.

ARTICLE BY

Whistleblower Practice Group
 
OF 
Tycko & Zavareei LLP

DOL Institutes Enhanced Password Requirements for Permanent Case Management System (PERM) Users

Greenberg Traurig Law firm

Effective August 25, 2014, the Department of Labor (DOL) has instituted enhanced password requirements for Permanent Case Management System (PERM) users. In the next 90 calendar days, current PERM users will be required to update existing passwords to meet the new security criteria. In addition, all PERM users will be required to update their passwords every 90 days. The DOL sends reminder emails on the 75th, 80th, 85th, 88th, 89th, and 90th day. Users may also choose to update their password at any time prior to expiration. Should the password expire, the user will be required to re-activate the account by identifying himself or herself and answering a secret question correctly. The DOL will send a temporary password for the user to access the PERM account and set up a new password.

The new password must meet the following criteria: 1) 8-15 characters, 2) one special character, 3) one upper case letter, 4) one lower case letter, 4) one number, and 5) no recycling of a prior password used in the past 12 passwords. For detailed instructions regarding the new password rollout, you can review the DOL’s Quick Start Guide.

ARTICLE BY

Emily R. Liss
 
OF 
Greenberg Traurig, LLP

DOL Institutes Enhanced Password Requirements for Permanent Case Management System (PERM) Users

Greenberg Traurig Law firm

Effective August 25, 2014, the Department of Labor (DOL) has instituted enhanced password requirements for Permanent Case Management System (PERM) users. In the next 90 calendar days, current PERM users will be required to update existing passwords to meet the new security criteria. In addition, all PERM users will be required to update their passwords every 90 days. The DOL sends reminder emails on the 75th, 80th, 85th, 88th, 89th, and 90th day. Users may also choose to update their password at any time prior to expiration. Should the password expire, the user will be required to re-activate the account by identifying himself or herself and answering a secret question correctly. The DOL will send a temporary password for the user to access the PERM account and set up a new password.

The new password must meet the following criteria: 1) 8-15 characters, 2) one special character, 3) one upper case letter, 4) one lower case letter, 4) one number, and 5) no recycling of a prior password used in the past 12 passwords. For detailed instructions regarding the new password rollout, you can review the DOL’s Quick Start Guide.

ARTICLE BY

Emily R. Liss
 
OF 
Greenberg Traurig, LLP

U.S. Sentencing Commission Weighing Recommendation to Increase Criminal Antitrust Penalties

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In June, the United States Sentencing Commission, which is appointed by the President to make recommendations to Congress on the criminal penalties for the violation of federal law, issued a request for comments regarding whether the guidelines for calculating antitrust fines should be modified. Currently, corporate fines for cartel price fixing are calculated on a sliding scale, tied to the amount of the “overcharge” imposed by the violators, with the standard maximum fine under the Guidelines for a corporation capped at $100 million and, for an individual, capped at $1 million. The deadline for such comments was July 29, and the views expressed on the issue varied considerably.

Contending that the current Guidelines do not provide an adequate deterrent to antitrust violations, the American Antitrust Institute urged the Commission to recommend an increase in the fines for cartel behavior. The AAI stated that the presumption in the Guidelines that antitrust cartels, on average, “overcharge” consumers for goods by 10% is greatly understated, and thus should be corrected to reflect more accurate levels. Pointing to economic studies and cartel verdicts, the AAI suggests that the median cartel “overcharge” is actually in excess of 20%, and therefore the presumption should be modified in the Guidelines. If adopted, the AAI’s proposal would double the recommended fines under the Guidelines for antitrust violations.

Perhaps surprisingly, the DOJ responded to the Commission’s Notice by stating that it believes that the current fines are sufficient, and that no increase in antitrust fines is warranted at this time. The DOJ indicated that the 10% overcharge presumption provides a “predictable, uniform methodology” for the calculation of fines in most cases, and noted that the Guidelines already permit the DOJ to exceed the fine levels calculated using the 10% overcharge presumption in some circumstances. Specifically, the DOJ noted that the alternative sentencing provisions of 18 USC 3571 already permit it to sidestep the standard guidelines and seek double the gain or loss from the violation where appropriate. Notably, the DOJ utilized this provision in seeking a $1 billion fine from AU Optronics in a 2012 action, although the court declined the request, characterizing it as “excessive”. The court did, however, impose a $500 million fine, an amount well in excess of the cap under the standard antitrust fine guidelines.

Finally, D.C. Circuit Court of Appeals Judge Douglas Ginsburg and FTC Commissioner Joshua Wright offered a completely different view on the issue in comments that they submitted to the Sentencing Commission. Suggesting that fines imposed on corporations seem to have little deterrent effect, regardless of amount, they encouraged the Commission to instead recommend an increase in the individual criminal penalty provisions for antitrust violations. Notably, they encouraged the Commission not only to consider recommending an increase in the fines to which an individual might be subjected (currently capped at $1 million), but also to recommend an increase in the prescribed range of jail sentences for such conduct (which currently permit for imprisonment of up to 10 years).

The Commission will now weigh these comments and ultimately submit its recommendations to Congress by next May. If any changes are adopted by Congress, they would likely go into effect later next year. Stay tuned.

ARTICLE BY

James M. Burns
 
OF 
Dickinson Wright PLLC

North Carolina General Assembly Fails to Jump Start Our Businesses with Crowdfunding Legislation

Poyner Spruill Law firm

Crowdfunding is a relatively new capital raising tool, which was generally used in the past as a financing method for such ventures as films and music recordings.  To date, crowdfunding has not been a popular method for offering and selling securities because offering a share of financial returns or profits from business activities would subject the transaction to federal and state securities laws, requiring certain registrations with the Securities and Exchange Commission (SEC) and state securities regulators. U.S. Securities and Exchange Commission, SEC Issues Proposal on Crowdfunding (October 23, 2013).

In 2012, Congress passed the JOBS Act (Jumpstart Our Business Startups Act).  The JOBS Act, among other things, added a new section, 4(a)(6), to the Securities Act of 1933, creating a new exemption for certain crowdfunding offerings from SEC and state law registration requirements.  However, before the law can become effective the SEC must promulgate and implement rules regulating the exemption.  For further information on the JOBS Act, please see The JOBS Act—An Overview and Some Recent Developments, written by Michael E. Slipsky and David R. Krosner.

As of this summer, the SEC has proposed rules for crowdfunding, but those rules are not final. A dozen states are making an effort to join Georgia, Kansas, Michigan, Alabama, Maine, Washington, Wisconsin, and Indiana by developing their own regulations allowing crowdfunding within the states. States are growing frustrated and tired of waiting for the SEC to adopt federal regulations.  See Posting of Bill Meagher to TheDeal.com, States make own crowdfunding rules, rather than wait for SEC (May 5, 2014, 15:03 EST).

In response to the federal delay, Representative Tom Murry of Wake County sponsored state legislation attempting to allow and regulate crowdfunding in North Carolina, filing House Bill 680, the JOBS Act, on April 9, 2013.  House Bill 680 did not pass the Senate and was not eligible for consideration in the 2014 short session.  For that reason, in June the House added the crowdfunding provisions, titled, “Jump-Start Our Business Start-Ups Act,” to the 32 page fifth edition of Senate Bill 734, Regulatory Reform Act of 2014. 

When compromise discussions between the House and Senate on Senate Bill 734 stalled, the Senate added to House Bill 1224 various provisions regarding modifications to the local government sales and use tax rate as well as other provisions including the crowdfunding provisions.  House Bill 1224 had been filed at the beginning of the short session as a bill modifying the Job Maintenance and Capital Development Fund.  The House rejected the Senate’s modifications of House Bill 1224.  As a result, the House and Senate appointed a conference committee, and the committee made its report on July 31, 2014.  The Proposed Conference Committee Substitute was passed by the Senate, however it failed in the House. 

The final version of House Bill 1224, the Proposed Conference Committee Substitute, would have allowed North Carolina residents to invest up to only $2,000 per purchaser – unless the purchaser is an accredited investor as defined by rule 501 of SEC regulation D, 17 C.F.R. § 230.501 – in new in-state ventures through the crowdfunding mechanism.  It would have allowed most companies to raise up to $1 million in capital through unregistered securities without a financial audit and up to $2 million in capital if the issuer has undergone and made available to each prospective investor and the Secretary of State the documentation resulting from a financial audit.  Essentially companies would have been able to sell securities directly to the North Carolina public without having to incur the expense of conducting a registered securities offering.  The NC Secretary of State would have been tasked with the regulation of these types of transactions and would have collected quarterly reports.  See Posting of Mark Binker to WRAL TechWire, Crowdfunding bill clears N.C. Senate Committee,  (July 16, 2014 14:08 EST).

The General Assembly has adjourned sine die.  Although crowdfunding provision had an opportunity to become law during the 2014 short session in either Senate Bill 734 or the Proposed Conference Committee Substitute of House Bill 1224, the General Assembly did not pass the crowdfunding provision.  House Bill 1224 failed in the House and the compromise finally reached for Senate Bill 734 in the ratified bill excluded the crowdfunding provision.  There is a possibility the crowdfunding provision could again be considered before the 2015 session, scheduled for late January, if three-fifths of all members of the Senate and three-fifths of all members of the House vote to do so, as provided in Section 11(2) of Article II of the North Carolina Constitution.  However, the more likely scenario for the General Assembly to return would be for a “special session” by call of the Governor.  As provided in Section 5(7) of Article 3 of North Carolina Constitution, “[t]he Governor may, on extraordinary occasions, by and with the advice of the Council of State, convene the General Assembly in extra session by his proclamation, stating therein the purpose or purposes for which they are thus convened.”

ARTICLE BY

Jillian DeCamp
 
OF 
Poyner Spruill LLP

Oregon’s Same-Sex Marriage Ban Unconstitutional, Judge Rules

Jackson Lewis Law firm

 

Oregon’s prohibition on same-sex marriage conflicts with the United States Constitution’s guarantee of equal protection, newly appointed U.S. District Court Judge Michael McShane has held in a case filed on behalf of four couples in Multnomah County. Geiger v. Kitzhaber, No. 6:13-cv-01834-MC (May 19, 2014).

Judge McShane explained the measure discriminates against same-sex couples. “The state’s marriage laws unjustifiably treat same-gender couples differently than opposite-gender couples. The laws assess a couple’s fitness for civil marriage based on their sexual orientation: opposite-gender couples pass; same-gender couples do not. No legitimate state purpose justifies the preclusion of gay and lesbian couples from civil marriage.”

A state Constitutional amendment, enacted pursuant to a 2004 ballot initiative organized and sponsored by the Defense of Marriage Coalition, had prohibited same-sex marriage, stating that only “marriage between one man and one woman shall be valid or legally recognized as a marriage.” This initiative and the subsequent Constitutional amendment were in response to the Multnomah County commissioner’s decision to issue marriage licenses to same-sex couples. During the Geiger litigation, Oregon’s Attorney General stated she found it impossible to legally defend the ban because “per- forming same-sex marriages in Oregon would have no adverse effect on existing marriages, and that sexual orientation does not determine an individual’s capacity to establish a loving and enduring relation- ship.” With Geiger, and the U.S. Supreme Court’s 2013 decision in United States v. Windsor invalidating the federal Defense of Marriage Act, same-sex marriage is valid under Oregon state and federal law.

Further, although Oregon enacted a domestic partnership law in 2008, the Family Fairness Act, granting domestic partners similar rights and privileges to those enjoyed by married spouses, the Legislature acknowledged domestic partnerships did not reach the magnitude of rights inherent in the definition of marriage. For example, same-sex couples in Oregon were not entitled to the rights or benefits under the federal Family and Medical Leave Act because Department of Labor guidance recognizes same-sex marriage only if valid under the employee’s state of residence. The DOL, however, has proposed a rule expanding the term “spouse” and, if implemented, will recognize same-sex marriages when recognized in the couple’s state of residence or if performed in a state recognizing same-sex marriage. According to the Secretary of Labor, “The basic promise of the FMLA is that no one should have to choose between succeeding at work and being a loving family caregiver. Under the proposed revisions, the FMLA will be applied to all families equally, enabling individuals in same-sex marriages to fully exercise their rights and fulfill their responsibilities to their families.” No changes have been proposed, however, for purposes of the Employment Retirement Income and Security Act (“ERISA”), the federal law governing employee benefit plans. The DOL counsels employers that, for purposes of ERISA, same-sex marriage should be recognized if valid in the state it is performed.

While Geiger will simplify the legal landscape, employers should review policies, procedures, and benefit plans closely to ensure that same-sex spouses are treated equally in all respects. In addition, Oregon law further prevents employment discrimination based on sexual orientation and family status. Requiring same-sex couples to “prove their status” or take other similar measures that are not required of opposite-sex couples may increase the risk of potential litigation under these laws.

Mei Fung So contributed to this article. 

ARTICLE BY

Scott Oborne
Bryan P. O’Connor
Roger S. Kaplan
 
OF
Jackson Lewis P.C.

“Do You Want Liability With That?” The NLRB McDonald’s Decision that could undermine the Franchise Business Model (Part II)

 

McBrayer NEW logo 1-10-13

 

Yesterday’s post discussed the decision of NLRB’s General Counsel to hold McDonald’s Corp. jointly responsible with its franchise owners for workers’ labor complaints. The decision, if allowed to stand, could shake up the decades-old fast-food franchise system, but it does not stop there. The joint employer doctrine can be applied not only to fast food franchises and franchise arrangements in other industries, but also to other employment arrangements, such as subcontracting or outsourcing.

This decision could also impact the pricing of goods and services, as franchisors would likely need to up costs to offset the new potential liability. Everything from taxes to Affordable Care Act requirements could be affected if the decision stands.

If you are a franchisor and are currently in what could be determined to be a joint employer relationship, consider taking steps to further separate and distinguish your role from that of your franchisee. While franchisors should always take reasonable measures to ensure that franchisees are in compliance with applicable federal and state employment laws, they should take care to not wield such force over them to give the appearance of a joint-employer relationship.

We will be following the NLRB decision and keep you updated as the issue progresses.

ARTICLE BY

Luke A. Wingfield
 
OF 
McBrayer, McGinnis, Leslie and Kirkland, PLLC