Category: Administrative & Regulatory

Just the TTIP (Transatlantic Trade and Investment Partnership): A Review of the Transatlantic Partnership Agreement One Year After It Is Introduced to America

Sheppard Mullin 2012

 

Next week will mark one year since President Obama introduced the Transatlantic Trade and Investment Partnership (TTIP) to the nation in his State of the Union Address.  Although the TTIP received only a brief nod in the President’s speech, the TTIP initiative has moved forward at a stunning pace . . . well, a stunning pace for an international trade negotiation, a process that normally crawls along.  As discussed in this blog, the U.S. and European parties to this proposed partnership set an ambitious goal of finalizing an agreement by the end of 2014.  A year into the process, we take a look at the progress to date and the challenges to come.

TTIP Background

We often hear news of trade agreements and other arrangements designed to increase business between the United States and one or more partner countries.

TTIP is different. It’s bigger.

The European Union and the United States comprise the largest and wealthiest market in the world, accounting for over 54% of the world’s GDP and 40% of the world’s purchasing power.  It follows that even the slightest reduction in marketplace barriers on a scale that large could result in sizeable trade increases and economic benefits.  The European Centre for Economic Policy Research estimates that TTIP could boost U.S. exports to the EU by $300 billion annually and add $125 billion to U.S. GDP each year.

Tariffs between the trading partners are already some of the lowest in the global market.  Accordingly, TTIP focuses on reducing non-tariff-barriers (NTBs) to trade between the United States and Europe.  The proposed NTB reductions include aligning domestic standards, cutting costs imposed by bureaucracy and regulations, and liberalizing trade in services and public procurement.

TTIP Negotiations Thus Far

Over the past year, U.S. and EU representatives have met for three rounds of negotiations – the first round was primarily introductory and the other two were more substantive.  The most recent of these negotiation rounds, completed in December, left the U.S. Trade Representative sanguine.  The USTR stated on its website that, “it is a measure of progress that we are firmly in the phase of discussing proposals on core elements of each of the main negotiating areas, as well as beginning to confront and reconcile our differences on many important issues. We have a lot of work to do in 2014, but I am optimistic about what we’ll be able to accomplish in the coming year.”

TTIP in the Coming Year

The next round of TTIP negotiations will be held in Washington, D.C. from March 16 – 20, 2014.  In this fourth round, negotiators expect to work on the wording of provisions designed to ease compliance with existing rules.  Negotiators also expect to draft agreement language to enable U.S. and EU regulators to work together as they draft their respective domestic regulations in the future.  Specific provisions to be addressed in this fourth round will include rules on food safety and animal and plant health, as well as technical regulations, product standards, and testing and certification procedures.  Taken together, these items are often referred to as “Technical Barriers to Trade” (TBTs).

The Chief Negotiator for the EU made clear that, although this set of negotiations will focus on the reduction of TBTs, “TTIP is not and will not be a deregulation agenda.”

This statement exemplifies the numerous conflicts that the negotiators will face in the coming year.  They will have a mandate to harmonize two regulatory systems, reducing the NTBs and TBTs without overly compromising or placing inordinate burdens on either system.  In other words, the negotiators must aim to reduce regulatory barriers without having a deregulation agenda – a tough target to hit.

From that conundrum, potential snares for the negotiating team only multiply.  Interest groups and protectionist factions from both sides of the Atlantic will continue to actively oppose the partnership.  Some Europeans will raise an objection that the deal gives away too much to American business interests.  Further, the voices of labor unions, consumer advocates, environmental groups and other skeptics in opposition to TTIP may grow louder as the parties get closer to a final agreement.  Finally, political sways – a backlash against NSA monitoring of European communications as well as elections in the U.S. and EU in 2014 – may adversely affect the ongoing negotiations.

TTIP proponents remain optimistic, however, confident that a deal can be completed by the end of 2014.  We will keep an eye on developments and report on how nimbly these negotiators can manage the myriad concerns to achieve a useful partnership for the economies on both sides of the Atlantic.

Article by:

Reid Whitten

Of:

Sheppard, Mullin, Richter & Hampton LLP

Bulgaria Adopts New Gambling Tax Regime

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Bulgaria has a new gambling taxation regime effective January 1, 2014, which, together with the reasonable and balanced regulations currently in place, makes the country attractive for local licensing and gambling operations based upon a low corporate tax and highly qualified and low-priced technical specialists. One and a half years after theGambling Act (“Act”) was introduced, the tax base for gambling has been changed and is now in line with good business practices: switching from a turnover base to aGross Gaming Revenue (“GGR”) base.

On December 19, 2013, amendments in the Act (“Amendments”) for liberalizing gambling regulation in Bulgaria passed successfully the second reading in the Bulgarian Parliament amidst tense disputes. The Amendments were promulgated in the National Gazette on January 3, 2014, and came into force effective January 1, 2014.

The Amendments assure that as of January 1, 2014, the taxation of any online games in Bulgaria will be based on GGR with a 20% tax rate. For games in which fees and commissions are collected (such as poker), the tax rate will be 20% of the collected fees. In addition, there is a single fee for issuing and maintenance of a five-year license in the amount of approximately EUR 50,000 (BGL 100,000). No annual fee will be required during the five years’ validity of the license.

Offline bingo and keno will be taxed at a 10% corporate tax rate.

The GGR-based taxation is not a part of the common tax system, but rather it is an administrative fee regulated entirely in the Act instead of the tax laws. Nevertheless, any operator who decides to have an establishment in Bulgaria can take advantage of a favorable and stable corporate tax – only 10%. The low corporate tax rate would apply only to operators who decide to establish a local company in Bulgaria, which might be strongly supported from other economic arguments – for example, a very well-educated and qualified labor force at insignificant costs.

The Amendments introduce a new requirement for any licensed operator not established in Bulgaria but established in any other EU/EEA country or Switzerland. Such operators must have an authorized representative in Bulgaria, but this would not constitute having a local business in the country for purposes of obtaining the 10% corporate tax rate. An operator, in all events, is required to have a local representative in Bulgaria, who should be authorized for representation before Bulgarian authorities and courts.

From a regulatory perspective, the Bulgarian gaming regime is now one of the most balanced in Europe. It does not require a local establishment and main server in Bulgaria for any foreign operator who decides to obtain a local Bulgarian license (nevertheless, a local control server in Bulgaria is required). There are no specific requirements for performing payments through a local bank or to make certain investments in the country. The operators are not required to operate a dot bg domain. Foreign operators – registered, investing, and having a main server anywhere within EU, EEA, and Switzerland – can apply for a license. Nevertheless, the restrictions the Act imposes on an applicant whose shareholder is an offshore company should be carefully considered in light of provisions of the Act relating to economic and financial relations with companies registered in preferential tax regime jurisdictions and their actual shareholders.

A significant number of online gambling operators are expected to apply for a license in Bulgaria. The first online operators have already submitted applications. They are eager to enjoy not only reasonable taxation but also liberal regulation. The Bulgarian government has further stimulated the licensing of online operators by approving amendments that allow the operator to be removed from the blacklist even before being granted a license if the online operator applies for such removal not later than March 31, 2014.

The Amendments also permit the operators to perform any other business activity apart from organized gambling, which was not the case until now.

The efforts of the Bulgarian Parliament are of major significance. Instead of concentrating on blocking measures (such as ISP and/or payment blocking), the government has focused on best practices and introduced regulations that motivate the online gambling operators to get a license and work not only in a balanced regulatory environment but also under a favorable tax regime. These changes are aimed at balancing and optimizing the new sector regulation model that was introduced back in 2012. They give the online operators promising conditions to work legally in the Bulgarian market. At the same time, the new regulations impose stricter administrative sanctions on illegal online gambling operations.

Nadya Hambach, of Velchev & Co., authored this article.

Article by:

Dickinson Wright PLLC

4th Cir. First to Apply "Disability" Definition Under ADAAA – ADA Amendments Act of 2008

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On January 23rd, in a ground-breaking decision under the ADA Amendments Act of 2008 (“ADAAA”), the United States Court of Appeals for the Fourth Circuit held that an injury that left the plaintiff unable to walk for seven months and that, without surgery, pain medication, and physical therapy, likely would have rendered the plaintiff unable to walk for far longer can constitute a disability under the Americans with Disabilities Act.  The Fourth Circuit in Summers v. Altarum Institute, Corp. indicated that it is the first appellate court to apply the ADAAA’s expanded definition of “disability.”

The Court reversed a District Court’s dismissal of the plaintiff’s case pursuant to a Rule 12(b)(6) motion.  The U.S. District Court for the Eastern District of Virginia based its dismissal of the plaintiff’s disability-based discharge claim on its view that the plaintiff’s impairment was temporary and therefore not covered by the Americans With Disabilities Act. In its reversal, the Fourth Circuit held that the plaintiff “has unquestionably alleged a ‘disability’ under the ADAAA sufficiently plausible to survive a Rule 12(b)(6) motion.”

Article by:

Timothy M. McConville

Of:

Odin, Feldman & Pittleman, P.C.

Let the Light of Day Shine Re: SEC (Securities and Exchange Commission) Insider Trading Case

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We want to spend a moment talking about an old subject—the Securities and Exchange Commission’s insider trading case against Mark Cuban—and Cuban’s new business venture that has resulted from that case. The case, the SEC’s handling of the matter, and Cuban’s reactions (then and now) say a lot about how “the G” does business and may even be revelatory in the future.

As you recall, the SEC charged Cuban with insider trading in 2008. The case was originally dismissed by the trial court. The Fifth Circuit Court of Appeals reinstated the case, concluding that the inquiry into whether Cuban had, in fact, traded on the basis of material, non-public information was simply too fact-intensive for the trial court to have decided without a full factual inquiry.

This, of course, is the problem with fraud-based government enforcement: the question of a person’s intent is difficult to determine without an expensive factual inquiry—and the costs of such an inquiry (combined with the potential consequences) are so high that many people settle with the G rather than seek to exonerate themselves. Historically, the SEC “extorted” settlements (not our view, necessarily, see Al’s Emporium Commentary in the Wall Street Journal Online Edition as of October 19, 2010) in reliance on this heavy burden. At the heart of the SEC’s effort was the “no admit or deny” settlement.

In these settlements, the SEC would recite each allegation of wrongdoing against a defendant as well as the terms under which the defendant had settled the charges. The defendant would neither admit nor deny the SEC’s allegations. Since Mary Jo White took over at the helm of the SEC in April 2013, she purportedly has set a new course, requiring that defendants must admit wrongdoing in more and more settlements—whether or not that changes the seemingly extortive nature of these cases remains to be seen.

But Cuban, with his seemingly unlimited resources and non-retiring personality, would not be extorted. He fought back, all the way through trial, and won. Ultimately, a jury of Cuban’s peers concluded (among other things) that the SEC had not proven that Cuban received confidential information, that he traded on such information, or that he had acted knowingly or recklessly (with “fraudulent intent”) when trading. (See the Associated Press’ “Big Story” on October 16, 2013, which has a digital recreation of the jury verdict form).

When he walked out of the courtroom, Cuban went ballistic on the SEC. See his comments on YouTube – his specific comments about the SEC are found beginning about the 50th second of the clip.

“When you put someone on the stand and accuse them of being a liar, it is personal,” he said, criticizing specific members of the SEC’s staff and, generally, the SEC’s enforcement practices. Since then, Cuban has reinforced his criticism, stating: “There’s such a revolving door, and [the SEC] was run by attorneys with an attorney’s mind-set looking for their next job. It’s a résumé builder,” [Cuban] said. “No wonder they say or do whatever they damn well please. I’m like, ‘OK, I’m going to start calling them out by name.” (WSJ’s Law Blog)

Cuban isn’t stopping with these castigatory remarks. He is putting his money where his mouth is. Cuban’s latest business venture is to publicize SEC trial transcripts (which are not generally publicly available). Cuban hopes that, by publicizing trial tactics and tactics he believes are problematic, he will change the way this agency of the G does business.

Article by:

Vincent P. (Trace) Schmeltz III

Of:

Barnes & Thornburg LLP

California Continues to Shape Privacy Standards: Song-Beverly Act Extended to Email Addresses

Womble Carlyle

 

Executive Summary: California retailer restricted from requiring a customer email address as part of a credit card transaction. We knew that asking for zip codes is intrusive personal questioning, and now asking for email has been added to the list.

California’s Song-Beverly Credit Card Act (Cal. Civ. Code Sec. 1747 et seq.) (“Song-Beverly Act” or “Act”) restricts businesses from requesting, or requiring, as a condition to accepting credit card payments that the card holder provide “personal identification information” that is written or recorded on the credit card transaction form or otherwise. “Personal identification information” means “information concerning the cardholder,other than information set forth on the credit card, and including, but not limited to, the card holder’s address and telephone number.” The California Supreme Court has previously ruled that zip codes are also “personal identification information” under the Song-Beverly Act. See Pineda (Jessica) v. Williams-Sonoma Stores, Inc., 2011 Cal. LEXIS 1502 (Cal. Feb. 10, 2011).

Recently, a United States federal district court in California expanded “personal identification information” to include email addresses in a decision denying retailer Nordstrom’s motion to dismiss claims it violated the Song-Beverly Act. The plaintiff sued Nordstrom for collecting his email address as part of a credit card transaction at one of its California stores in order to email him a receipt, then subsequently using his email address to send him frequent, unsolicited marketing emails. See Capp v. Nordstrom, Inc., 2013 U.S. Dist. LEXIS 151867, 2013 WL 5739102 (E.D. Cal. Oct. 21, 2013).

Raising a case of first impression under California law, Nordstrom claimed that email addresses are not “personal identification information” under the Song-Beverly Act, so the Act did not apply. The court disagreed with Nordstrom and found the opposite based on the California Supreme Court’s earlier ruling in Pineda. Nordstrom’s argument that email addresses can readily be changed, unlike zip codes, and consumers can have multiple email addresses was not persuasive. The court held that an email address regards a card holder in a more personal and specific way than a zip code. Unlike a zip code that refers to the general area where a card holder works or lives, email permits direct contact with the consumer and implicates their privacy interests. The court concluded that the collection of email addresses is contrary to the Song-Beverly Act’s purpose to guard against misuse of personal information for marketing purposes. In particular, the plaintiff’s allegation that his email address was collected to send him a receipt and then used to send him promotional emails directly implicates the protective purposes of the Act as interpreted in Pineda.

Pineda held that zip codes are personal information for purposes of the Song-Beverly Act, and therefore a brick and mortar retailer violated the Act when it requested and recorded such data. In the Pineda decision, the California Supreme Court found that zip codes, like the card holder’s address expressly called out as “personal identification information” under the Act, were unnecessary to completing the credit card transaction and inconsistent with the protective purpose of the Act. This is especially true when a zip code is collected to be used with the card holder’s name in order to locate the card holder’s address, permitting a retailer to locate indirectly what it is prohibited from obtaining directly under the Act.

Nordstrom also argued that the plaintiff’s claims under the Song-Beverly Act were preempted by the federal “Controlling the Assault of Non-Solicited Pornography and Marketing Act” (better known as the CAN-SPAM Act), but the court disagreed. While the CAN-SPAM Act contains a preemption provision, it only preempts state laws that regulate the manner in which email messages are sent and their content, both of which are not regulated under the Song-Beverly Act.

Retailer tip: The federal court issuing this most recent decision recommends waiting to request an email address (or a zip code) until after the consumer has the receipt from their credit card transaction in hand, and then sending the consumer emails only in conformance with the CAN-SPAM Act.

In the wake of Pineda, retailers faced class action lawsuits for requesting consumer zip codes at check out. This new decision could have a similar effect.

Article by:

Of:

Womble Carlyle Sandridge & Rice, PLLC

January 2014 New Jersey Regulatory Developments

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The following are the most recent health care related regulatory developments as published in the New Jersey Register on January 6, 2014:

  • On January 6, 2014 at 46 N.J.R. 12, the Department of Banking and Insurance published notice of its proposal of amendments to its rules and the proposal of a new rule governing the Small Employer Health Benefits Program.  The amendments were proposed in order to comply with the requirements of the federal Affordable Care Act.
  • On January 6, 2014 at 46 N.J.R. 76, the Department of Human Services published notice of its readoption of its rules governing outpatient mental health service standards.
  • On January 6, 2014 at 46 N.J.R. 77, the Department of Human Services published notice of its adoption of amendments to its rules governing managed health care services for Medicaid and New Jersey FamilyCare beneficiaries.
  • On January 6, 2014 at 46 N.J.R. 77, the Department of Human Services published notice of its readoption of its rules governing independent clinical laboratory services under Medicaid.
  • On January 6, 2014 at 46 N.J.R. 93, the Department of Human Services published notice of its adoption of amendments to its rules governing the scope of practice of athletic trainers outside of schools and professional teams.

Article by:

Beth Christian

Of:

Giordano, Halleran & Ciesla, P.C.

The New gTLD Program: Latest Updates on Brand Protection and the Trademark Clearinghouse


Katten Muchin

The most significant development in the Internet space in recent years is the ongoing generic top-level domain (gTLD) expansion. (As a reminder, a TLD is what appears to the right of the “dot” in a domain name (i.e., .COM, .ORG, .GOV).) The Internet Corporation for Assigned Names and Numbers (ICANN) has embarked on an aggressive plan to expand the Internet from just 23 gTLDs to more than a thousand gTLDs, culminating in an application process in 2012 that allowed any organization with an interest in running a registry to apply for a new gTLD, provided it could meet the designated technical, operational and financial criteria. After this lengthy application and vetting process, ICANN has now delegated the first 44 gTLDs, with additional gTLDs launching each week. Over the next couple of years ICANN expects to delegate nearly 1,400 new gTLDs – including .CLOTHING, .COMPANY, .EDUCATION, .GURU, .HOSPITAL, .INC, .INVESTMENTS, .LAND, .MENU, .MOVIE, .NEWS, .PHOTOS, .SCIENCE, .SPORTS and .WEBSITE.

ICANN’s new gTLD program presents an opportunity for brand owners to utilize the Internet in ways not previously possible, but also raises new enforcement challenges for brand owners. For the first time ever, brand owners can register their trademarks on domain registries tailored to their target industries. On the other hand, brand owners may also be required to monitor 1,400 additional registries to prevent misuse and abuse of their trademarks. With that in mind, in order to ensure that trademark and brand owners’ rights are protected as the Internet expands, ICANN has devised a Trademark Clearinghouse (TMCH), one of the key new gTLD enforcement tools for brand owners, which now serves as a repository for information regarding trademark rights.

A very important step in developing a TMCH strategy is understanding the benefits of participating in the TMCH. The TMCH offers brand owners two separate services for protecting their brands online:

  • Participation in the Sunrise Period. The Sunrise Period is an initial period of at least 30 days before domain names are offered to the general public. Companies that participate in the TMCH have priority in registering domain names that match their trademarks on any of the new gTLDs to protect them from cybersquatting or to actively use them for strategic business and marketing purposes.
    • To take advantage of the Sunrise Period, brand owners can enter registered trademarks for which they can provide proof of use of the mark.
    • For example, by entering KATTEN MUCHIN ROSENMAN in the TMCH for .LAW, our firm can later register the domain namewww.kattenmuchinrosenman.law to prevent a third party from obtaining that domain name. Alternatively, the firm may choose to redirect its current website to the new domain name and drop the .COM altogether.
    • Opting not to participate in the Sunrise Period does not preclude brand owners from registering domain names matching their trademarks on the new gTLDs. However, once the Sunrise Period expires, brand owners will be competing with the general public on a first-come, first-served basis.
  • Trademark Claims Service. This is a mandatory service that must be available for at least 90 days during the initial launch of a new gTLD (some registries are opting for longer periods). When attempting to register a domain name, the potential registrant receives a warning notice that the domain name exactly matches a verified trademark record in the TMCH. If a potentially infringing domain name registration proceeds, the trademark owner is notified, and the owner can take appropriate action.
    • To take advantage of the Trademark Claims Service, companies can enter registered trademarks in the TMCH (proof of use not required) and be notified of up to 50 domain labels that were found to be abusive by a court under the Anti-Cybersquatting Consumer Protection Act (ACPA) or under the Uniform Domain-Name Dispute-Resolution Policy (UDRP).
    • For example, by entering KATTEN MUCHIN ROSENMAN in the TMCH for Claims Service, our firm would receive a notification upon the registration of the domain name www.kattenmuchinrosenman.fail. The firm can take immediate action against the domain name registrant, and transfer or suspend the infringing domain.
    • Deloitte, ICANN’s TMCH provider, recently announced plans for a free Extended Claims Service wherein the TMCH will offer notification to trademark owners of marks listed in the TMCH of domain names registered in any of the new gTLDs that match their marks or abused labels for an indefinite time period after each new gTLD registry’s Claims Period. Brand owners must opt-in for the service.
    • However, unlike the standard mandatory Claims Service, the Extended Claims Service will not provide a warning notice to prospective domain name registrants that an applied-for domain name matches marks listed in the TMCH or their abused labels prior to their registration, thus providing less deterrent effect than the Trademark Claims Service.

There is no deadline to enter marks into the TMCH. However, as of January 3, 2014, ICANN has already launched 44 new gTLDs, and it is anticipated that ICANN will continue to announce the start-up information for additional TLDs on a weekly basis until all 1,400 new gTLDs are delegated. As such, it is recommended to submit your trademarks as soon as possible to allow sufficient time for processing and to avoid missing out on Sunrise registration opportunities.

Article by:

Of:
Katten Muchin Rosenman LLP

December New Jersey 2013 Health Care Regulatory Developments

Here are the most recent health care related regulatory developments as published in the New Jersey Register in December 2013:

  • On December 2, 2013 at 45 N.J.R. 2478, the Board of Medical Examiners published notice of its adoption of new rules which create the Genetic Counseling Advisory Committee and will require licensure of genetic counselors in the State of New Jersey.
  • On December 2, 2013 at 45 N.J.R. 2465, the Department of Health published notice of its cancellation of certificate of need calls for the following services:  (1) pediatric long-term care; (2) specialized long-term care; and (3) pediatric intensive care beds and services.  In addition, the Department of Health published notice that it was also postponing its certificate of need call for applicants for maternal and child health consortia changes in membership and intermediate and intensive bassinettes.
  • On December 16, 2013 at 45 N.J.R. 2602, the Department of Human Services published notice of its readoption of its rules governing community mental health services.
  • On December 16, 2013 at 45 N.J.R. 2602, the Department of Human Services published notice of its readoption of its rules governing payment for dental services under Medicaid.
  • On December 16, 2013 at 45 N.J.R. 2607, the Board of Physical Therapy Examiners published notice of its readoption of its rules governing the licensure and regulation of physical therapists and physical therapist assistants.
  • On December 16, 2013 at 45 N.J.R. 2618, the State Board of Dentistry published notice of its action on a petition for rulemaking filed by the New Jersey Dental Association requesting that the Board adopt a rule to establish regulatory guidance with respect to the corporate and/or unlicensed practice of dentistry in New Jersey.  This petition was filed following the issuance of a joint staff report on the corporate practice of dentistry by the U.S. Senate Committee on the Judiciary which found that corporations not owned by dentists operated dental clinics under the guise of providing administrative and/or financial management support to licensed dentists.  The Board referred the matter to its Rules and Regulations Committee for further deliberation.

Article by:

Beth Christian

Of:

Giordano, Halleran & Ciesla, P.C.

Prepare Now for Foreign Talent Acquisition: H-1B Cap Demand Projected to Reach Five-Year High

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I. FISCAL YEAR FOR 2015 H-1B CAP

U.S. Citizenship and Immigration Services (“USCIS”) will start accepting new H-1B petitions for Fiscal Year 2015 on Tuesday, April 1, 2014. As such, employers must start identifying current and future employees who will need to be sponsored for new H-1B petitions as soon as possible, as it is likely that this year’s H-1B quota (“H-1B cap”) will be met within one week of it opening and USCIS will then stop accepting new petitions until next year’s H-1B cap opens on April 1, 2015. Once the H-1B cap closes, employers will need to look at alternative visa options for affected employees to assess whether a viable option is available. Please note that only new H-1B petitions are affected; H-1B petitions involving someone who is already in H-1B status or has previously held H-1B status are not affected by the H-1B cap.

By way of background, U.S. businesses use the H-1B program to employ foreign workers in specialty occupations that require theoretical or technical expertise in specialized fields, such as scientists, engineers, or computer programmers. The number of initial H-1B visas available to U.S. employers (the “H-1B cap”) is 65,000, with an additional 20,000 numbers set aside for individuals who have obtained a U.S. master’s degree or higher. This year’s H-1B cap will leave employers unable to secure all of the highly skilled workers needed to remain competitive and will no doubt re-ignite the debate about the need to implement a comprehensive immigration reform.

The rate at which USCIS has received cap-subject H-1B petitions in the past few years has dramatically increased. The usage of the H-1B program is strongly connected to the health of the U.S. economy, and the increase in the H-1B usage rate corresponds with the economic recovery following the 2008 Economic Recession. In keeping with this trend, business immigration practitioners are predicting that the H-1B quota will be reached by the second quarter of 2014, if not much sooner. In fact, it is possible that initial demand for H-1B visas will exceed the 85,000 supply during the first week of the filing season, April 1, 2014 through April 4, 2014.

If USCIS receives more than 85,000 H-1B Cap Petitions during the first week of availability, then a lottery will be conducted to select the petitions that will be processed under this cap. Those petitions not selected in the lottery will be rejected. Should such a rejection occur, an affected foreign national seeking immigration and employment authorization sponsorship with an employer will be unable to obtain an H-1B petition until October 1, 2015 (with the filing season beginning April 1, 2015). Affected foreign nationals may also be required to forego employment with employers and possibly leave the United States.

II. HISTORICAL CONTEXT

As an historical example, in FY 2009 (October 1, 2008 – October 1, 2009), approximately 163,000 H-1B petitions were filed within the five-day filing period at the beginning of April 2008 and a lottery was needed to select the petitions which would enjoy processing under that year’s cap.

Last year, the FY 2014 H-1B cap was reached within the first week of filing. USCIS received a total of 124,000 H-1B petitions and therefore had to conduct a lottery in order to select the petitions needed to meet the regular cap of 65,000 and master’s cap of 20,000.00

The markedly higher demand for H-1B visa petitions in the FY 2014 season is indicative of an improving job market and economy in the United States, and the economy and need for highly skilled workers have picked up over the last year. Accordingly, we project that the demand for H-1B visas this year will be even greater than last year with up to 40% of all H-1B petitions filed by employers rejected by USCIS pursuant to a randomized lottery system.

III. RECOMMENDED ACTION

Based upon the above, we strongly urge employers to file H-1B cap-subject petitions with USCIS on the earliest possible start date in FY 2015: April 1, 2014. This will allow for the mailing of H-1B cap-subject petitions to USCIS on March 31, 2014, for delivery to USCIS on Tuesday, April 1, 2014, the very first day of filing. This will provide the best possible chance for acceptance of the H-1B petition. It can take two to four weeks or more to gather all of the necessary information and documentation and prepare the requisite forms and supporting documentation for filing of an H-1B petition. Therefore, we recommend that H-1B cases should be initiated immediately.

Article by:

Of:

Greenberg Traurig, LLP

Federal District Court in Mississippi Provides Good Discussion of Negative Corpus from National Fire Protection Association (NFPA) 921

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The United States District Court for the Southern District of Mississippi recently handed down its opinion in Russ v. Safeco Insurance Company of America, 2013 WL 1310501 and the opinion provides a good example of the 2011 change in NFPA 921 commonly known as the negative corpus.  In Russ, plaintiff was an insured of Safeco Insurance Company at the time he suffered a fire loss for property located in Ovett, Mississippi.  Safeco denied the claim asserting various defenses to coverage, such as plaintiff’s failure to submit to an EUO and that the fire loss was incendiary.  The court had before it several competing motions, including plaintiff’s motion to strike Safeco’s origin and cause expert, primarily on the basis that the investigator’s initial and addendum report conflicted and for the investigator’s alleged failure to follow NFPA 921.

The court set forth in its analysis that NFPA 921 has “established guidelines and recommendations for the safe and systematic investigation or analysis of fire and explosion incidents.  It even cited the 8thCircuit opinion previously reported on this blog, Russell v. Whirlpool Corp., 702 F.3d 450, 454 (8th Cir. 2012).  However, the court also stated that reliance on a methodology other than NFPA 921 does not necessarily render an expert’s opinions, per se, unreliable.  Schlesinger v. United States, 212 WL 407098 (EDNY 2012)  Although the court seemed to recognize that an expert could rely on methodology other than NFPA 921, it found that NFPA 921 was applicable to the Safeco expert’s opinions because “an expert who purports to follow NFPA 921 must apply its contents reliably.”  In other words, this court believed that you did not necessarily have to follow NFPA 921, but if an expert did choose to utilize it, the investigator would be required to follow it in toto.

The court went on to provide a good discussion of the history of the negative corpus which began in 1992.  Negative corpus was initially used to deem a fire incendiary by ruling out the possibility of any accidental cause.  However, in 2011, the NFPA rejected the use of the negative corpus, finding that the process was not consistent with the scientific method.  The court sided with approval in NFPA 921, Section  18.6.5 (2011 Ed.) stating “it is improper to base hypotheses on the absence of any support of evidence . . . that is, it is improper to opine a specific ignition source that has no other evidence to support it, even though all other hypothesized sources were eliminated.”

Applying this rationale to the facts of the case, the court found that no foundational evidence or specific facts such as eye witness testimony or the finding of an accelerant were cited by Safeco’s expert in support of his conclusions. Instead, the investigator simply speculated that the fire was probably caused by human involvement due to the absence of supportive evidence for certain accidental causes.

This case can be used as a good example of how to effectively use NFPA 921 even in jurisdictions where a court has not deemed NFPA 921 the standard.  It can still be argued that if NFPA 921 is utilized, then it has to be used for all of the principles it contains.  In other words, an expert should not be allowed to adopt some NFPA 921 provisions and feel free to disregard others.  It is also a good example of how to utilize negative corpus and its inconsistency with the scientific method to limit an origin and cause expert’s opinions.

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Armstrong Teasdale