Category: Administrative & Regulatory

Supreme Court Holds That State Attorney General Actions are Not “Mass Actions” Under Class Action Fairness Act (CAFA)

DrinkerBiddle

 

On January 14, the Supreme Court of the United States held that lawsuits that are filed in the name of a State Attorney General but seek relief on behalf of a State’s citizens cannot be removed to federal court as “mass actions” under the Class Action Fairness Act (CAFA). See Mississippi ex rel. Hood v. AU Optronics Corp., No. 12-1036 (Jan. 14, 2014). Resolving a split between the Fifth Circuit on the one hand and the Fourth, Seventh and Ninth Circuits on the other, the ruling means that businesses will have to defend AG actions in state courts, and state courts will have to resolve whether such actions can proceed even though the consumers on whose behalf they are brought have agreed to settle their claims in a class action or, conversely, to pursue their own claims individually rather than collectively.

“Mass Actions”

CAFA gives federal courts original subject matter jurisdiction over certain “class actions” and “mass actions.” It defines a “class action” as “any civil action filed under rule 23 of the Federal Rules of Civil Procedure or similar State statute or rule of judicial procedure authorizing an action to be brought by 1 or more representative persons as a class action” and defines a “mass action” as “any civil action . . . in which the monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact, except that jurisdiction shall exist only over those plaintiffs whose claims in a mass action [exceed $75,000, exclusive of interest and costs].” 28 U.S.C. §§ 1332(d)(1)(B), (d)(11)(B)(i).[1] Excluded from the definition of “mass action” are (among other things) actions in which “all of the claims are asserted on behalf of the general public (and not on behalf of individual claimants or members of a purported class) pursuant to State statute specifically authorizing such action . . . .” Id.§ 1332(d)(11)(B)(ii)(III).

The Hood Case

Jim Hood, the Attorney General of Mississippi, filed a parens patriaeaction that alleged that the companies that manufacture and market liquid crystal display (LCD) panels had engaged in price-fixing that violated the Mississippi Consumer Protection Act and Mississippi Antitrust Act. Hood sought equitable and compensatory relief on behalf of both the State and its citizens. The defendants removed the action to federal court under CAFA and the Attorney General moved to remand. The district court remanded, finding that the suit was not a “mass action” because it fell within the definition’s “general public” exception. The Fifth Circuit reversed. Looking at each claim rather than the action as a whole, it reasoned that the real parties in interest were not only the State but also the individual citizens who had purchased LCD products, and as a result the “claims of 100 or more persons [we]re proposed to be tried jointly.” Id. § 1332(d)(11)(B)(i). Hood then petitioned for certiorari, which the Supreme Court granted.

The Supreme Court’s Decision

Yesterday, the Supreme Court unanimously reversed. Justice Sotomayor’s opinion is a primer on statutory construction:

Respondents argue that the [mass action] provision covers [AG actions] because “claims of 100 or more persons” refers to “thepersons to whom the claim belongs, i.e., the real parties in interest to the claims,” regardless of whether those persons are named or unnamed. We disagree.

To start, the statute says “100 or more persons,” not “100 or more named or unnamed real parties in interest.” Had Congress intended the latter, it easily could have drafted language to that effect. Indeed, when Congress wanted a numerosity requirement in CAFA to be satisfied by counting unnamed parties in interest in addition to named plaintiffs, it explicitly said so: CAFA provides that in order for a class action to be removable, “the number of members of all proposed plaintiff classes” must be 100 or greater, and it defines “class members” to mean “the persons (named or unnamed) who fall within the definition of the proposed or certified class.” Congress chose not to use the phrase “named or unnamed” in CAFA’s mass action provision, a decision we understand to be intentional.

More fundamentally, respondents’ interpretation cannot be reconciled with the fact that the “100 or more persons” referred to in the statute are not unspecified individuals who have no actual participation in the suit, but instead the very “plaintiffs” referred to later in the sentence—the parties who are proposing to join their claims in a single trial….[2]

The Court then rejected the argument that “plaintiffs” should be read as including both named and unnamed parties, finding that such a reading “stretches the meaning of ‘plaintiff’ beyond recognition” and would impose an “administrative nightmare” on the lower courts:

The term “plaintiff” is among the most commonly understood of legal terms of art: It means a “party who brings a civil suit in a court of law.” It certainly does not mean “anyone, named or unnamed, whom a suit may benefit,” as respondents suggest.

…

Yet if the term “plaintiffs” is stretched to include all unnamed individuals with an interest in the suit, then §1332(d)(11)(B)(i)’s requirement that “jurisdiction shall exist only over those plaintiffs whose claims [exceed $75,000]” becomes an administrative nightmare that Congress could not possibly have intended. How is a district court to identify the unnamed parties whose claims in a given case are for less than $75,000? Would the court in this case, for instance, have to hold an evidentiary hearing to determine the identity of each of the hundreds of thousands of unnamed Mississippi citizens who purchased one of respondents’ LCD products between 1996 and 2006 (the period alleged in the complaint)? Even if it could identify every such person, how would it ascertain the amount in controversy for each individual claim?

…

We think it unlikely that Congress intended that federal district courts engage in these unwieldy inquiries. By contrast, interpreting “plaintiffs” in accordance with its usual meaning—to refer to the actual named parties who bring an action—leads to a straightforward, easy to administer rule under which a court would examine whether the plaintiffs have pleaded in good faith the requisite amount. Our decision thus comports with the commonsense observation that “when judges must decide jurisdictional matters, simplicity is a virtue.”[3]

The decision means that the troubling trend of retaining private class action lawyers to file public AG actions in state courts can continue and could conceivably quicken. It also raises a number of interesting questions the Court did not address, for example whether AG actions are barred by agreements to settle class actions brought on behalf of the same consumers,[4] or affected by agreements to resolve claims in individual arbitration rather than representative litigation.[5]

[1]           The defendants did not ask the Court to hold that the case qualified as a “class action,” although they had raised that point below. See Opinion at 4 & n.2.

[2]           Opinion at 5-6 (emphasis in original, citations omitted).

[3]           Id. at 7-10 (citations omitted).

[4]           Cf. New Mexico ex rel. King v. Capital One Bank (USA) N.A., 13-0513, 2013 WL 5944087, at *4-8 (D.N.M. Nov. 4, 2013) (finding that class action settlement barred AG action to the extent it sought compensatory relief).

[5]           Cf. Iskanian v. CLS Transp. Los Angeles, LLC, 206 Cal. App. 4th 949, 964 (2012) (finding that Concepcion requires enforcement of waiver of right to bring representative action under California’s Private Attorney General Act), review granted Sept. 19, 2012 (No. S204032).

Article by:

Of:

Drinker Biddle & Reath LLP

A Look Ahead: Top 5 Health Law Issues for 2014

vonBriesen

 

From Affordable Care Act implementation to the continued transition to quality and evidence-based medicine, we expect to see a host of new regulatory and industry changes in 2014. Moreover, federal and state governments will continue to ramp up detection and enforcement of fraud, abuse, and other laws. These changes provide ample opportunities for lawyers to represent and counsel health care industry clients.

In addition to health lawyers, these changes and new opportunities will also affect lawyers who practice in other areas, including business, antitrust, technology, employee benefits, and elder law. Below is an overview of five hot issues in health care law that practitioners – new and seasoned – should monitor in 2014.

1. Affordable Care Act Implementation

Exchanges and the Individual Market. As millions of Americans obtain insurance on the individual market through Exchanges (a.k.a. the “Marketplace”), the ACA individual mandate and the individual insurance market will create a host of issues for health lawyers in 2014. Beginning early in the year, health lawyers will be called on to address coverage, enrollment, and compliance issues. Attorneys and firms looking to expand their ACA practice should consider employee benefits regulations and related legal issues as ACA implementation continues and employers look for help understanding and complying with coverage requirements and pay or play rules.

Medicaid. The ACA’s expansion of Medicaid will also bring increased attention to the Medicaid program in 2014. Attorneys should be prepared to see increased scrutiny of program integrity in the coming year, including inspector general attention at the state and federal levels (e.g., program audits). Attorneys may be called upon to address these and other Medicaid issues in 2014, including issues with eligibility, covered benefits, and movement between Exchanges and Medicaid.

Tax Exemption. Section 501(r) of the Internal Revenue Code, introduced as part of the ACA, requires, among other things, that tax-exempt hospitals conduct a community health needs assessment and adopt a written financial assistance policy. Hospitals that do not meet the 501(r) requirements risk an excise tax, taxing of hospital revenue, and revocation of exempt status. Proposed regulations outlining the 501(r) requirements were released in 2013, and final rules are expected in 2014.

2. Health Information Privacy and Security

This year is shaping up to be another big year for health information privacy and security and the Health Insurance Portability and Accountability Act (HIPAA), as providers, payers, and businesses that support the health care industry (including lawyers) adapt to new compliance requirements and increased liability under the Omnibus Rule regulatory scheme.

This is an area that will be important for health lawyers, as the Omnibus Rule outlines clear compliance requirements for lawyers providing legal services to providers and payers. (For more information on lawyers as business associates, see “Casting a Wider Net: Health Information Privacy is Not Just For Health Lawyers” in the September 2013 Wisconsin Lawyer).

Health lawyers are also awaiting the 2014 release of another major HIPAA rule – expected to outline requirements for tracking uses and disclosures of health information – as well as legislative changes in Wisconsin dealing with confidentiality of mental health records (an in-depth Wisconsin Lawyer article on this is forthcoming).

Lawyers that deal with health information should be familiar with HIPAA and other federal and state laws protecting the confidentiality of health information to address an increased emphasis on HIPAA audits, security, and technology issues in 2014.

3. Provider Reimbursement and Emphasis on Quality Care

Medicare Billing and Payment. As of this writing, Congress is still debating options for repealing the sustainable growth rate (SGR), which is part of a reimbursement formula used to calculate Medicare physician payments. For years, the SGR has resulted in cuts to physician payments. However, Congress has always used SGR “doc fixes” to extend and delay the cuts (most recently, on Dec. 18, 2013, a 23.7 percent cut set to take effect Jan. 1, 2014, was delayed until March).

However, bipartisan efforts in Congress may make 2014 the year of the SGR repeal. Health care attorneys should take note because the SGR repeal will mean significant changes in how Medicare physician reimbursement is calculated, and the wide-spread effect will touch any number of contractual arrangements that use Medicare reimbursement to set compensation terms.

Quality-based Reimbursement. We have seen a steady change from productivity-based compensation models, which pay for volume, to quality-based reimbursement models, and 2014 will continue this progression. Attorneys that represent physicians and physician practices should be prepared for the introduction (or addition) of quality metrics in physician compensation arrangements, as well as an increase in co-management arrangements and opportunities, which engage physicians in hospital management to better align physicians and hospitals.

Narrow Networks. With additional products available in the individual insurance market in 2014 and an increased focus on performance-based contracting, payers are tying rate increases to quality metrics and tightening provider networks. Attorneys representing physician groups may see an increase in narrow network products and, as a result, their clients’ exclusion from networks.

Changing reimbursement concepts are not new but some methodologies will affect physician behavior, require more patient engagement, and influence efficiency as the industry demands accountable care and continues to introduce quality-based incentives.

4. Increased Joint Venture Activity and Market Consolidation

We expect to see increased joint venture activity and market consolidation in 2014. Increasing market share and patient population allows providers and payers to introduce and monitor their quality care initiatives to a broader base of patients and standardize care with the hope of better outcomes and efficiency. Attorneys representing parties in these transactions should be mindful of fair market value and other fraud and abuse requirements, leasing and construction considerations, and potential antitrust implications.

5. Government Enforcement

The health care industry has seen increased government scrutiny, including emphasis on payment, program integrity, and compliance. From Medicare and Medicaid compliance audits, Strike Teams, increased HIPAA penalties, overpayment recoupment, to fraud and abuse self-disclosures and intervening in whistleblower suits, the federal government is improving its enforcement mechanisms used against hospitals and providers. The federal agencies and their contractors have increased their damages and penalty recoveries over the last few years, and we expect this to continue in 2014.

The primary goal of the U.S. Department of Health and Human Services Office of Inspector General’s (OIG) strategic plan for 2014 to 2018 is fighting fraud, waste, and abuse. In order to achieve its goal, the OIG intends to build upon existing enforcement models, refine self-disclosure protocols, and use all appropriate means (including exclusions and debarments) to maximize recovery.

If you are new to health care, or if you want to expand your practice into health law, these areas of strict liability and increased enforcement will be fundamental to your practice in 2014. Understanding the complex regulations and strict liability statutes is fundamental to providing sound legal and business advice to health care clients.

Honorable Mentions

Retail health clinics and on-site health services, changes in medical malpractice standards, increased emphasis on post-acute care, non-physician health care professionals, and the corporate practice of medicine will also be hot topics in 2014.

This article was first published in WisBar Inside Track, Vol. 6, No. 1, a State Bar of Wisconsin publication.

Article by:

Meghan C. O’Connor

Of:

von Briesen & Roper, S.C.

Judge Rules in Favor of DOJ Finding Bazaarvoice / PowerReviews Merger Anticompetitive (Department of Justice)

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On January 8, 2014, Judge Orrick of the Northern District of California ruled that Bazaarvoice’s acquisition of competitor PowerReviews violated Section 7 of the Clayton Act.  The ruling was in favor of the U.S. Department of Justice (DOJ).  The public version of the opinion was made available on January 10.  In its self-described “necessarily lengthy opinion,” which spans 141 pages, the court ultimately found that the facts overwhelmingly showed the acquisition will have anticompetitive effects and that Bazaarvoice did not overcome the government’s prima facie case.  The case included 40 witnesses at trial, more than 100 depositions and 980 exhibits.  Dr. Carl Shapiro testified as DOJ’s economist and Dr. Ramsey Shehadeh testified on behalf of Bazaarvoice/PowerReviews.  The court noted that the case presented some difficult issues, including that there were no generally accepted “market share statistics covering the sales of R&R solutions or social commerce solutions and no perfect way to measure market shares.”  And while neither side presented flawless analyses, the court found Dr. Shapiro’s approaches more persuasive than those of Dr. Shehadeh.

Bazaarvoice and PowerReviews each offered sophisticated “R&R platforms.”  R&R platforms provide a user interface and review form for the collection and display of user-generated content (i.e., user reviews) on the product page of a commercial website where the product can be purchased.  Often these are in the form of star ratings and open-ended reviews in a text box.  R&R platforms increase sales for the retailer and have a variety of different features.  The court noted that many on-ine retailers view an R&R platform as “necessary.”  Before the merger, Bazaarvoice and PowerReviews offered similar products and features and targeted similar customers.

The court found that the relevant product market was the narrow “R&R platforms,” rather than the broader “social commerce tools” or “eCommerce platforms.”  The court went through many popular social media platforms such as Facebook, Google+, Twitter, Instagram, and Pinterest, explaining why each was not a substitute for these R&R platforms.  In this relevant market, the court found that PowerReviews was Bazaarvoice’s only real competitor, and thus the merger “would eliminate Bazaarvoice’s only meaningful commercial competitor.”

At the end of the opinion, the court commented on the role of antitrust “in rapidly changing high-tech markets.”  It noted that there is a debate as to whether antitrust is properly suited to assess competitive effects in these markets.  The court declined to take sides and stated that its “mission is to assess the alleged antitrust violations presented, irrespective of the dynamism of the market at issue.”

The case now moves to the remedy phase.  In its complaint, the DOJ requested that the court order Bazaarvoice to divest assets originally possessed by either Bazaarvoice and/or PowerReviews to create a viable, competing business.   However, as Judge Orrick noted, 18 months after the merger, it may not be so simple to divest assets.  The judge scheduled a conference for January 22 with the parties to discuss a possible remedy.

There are several lessons to be gathered from this case.  First, the Bazaarvoice litigation is further evidence that the antitrust agencies are not shy about litigating mergers they feel are anticompetitive.  The DOJ invested significant resources and time – including three full weeks at trial in California – into litigating the case, beginning with its investigation that it launched two days after the firms closed their transaction on June 12, 2012.  It has established a significant record of bringing, and winning, merger cases.

Second, this is a significant event, having a federal district court evaluate a consummated merger transaction.  While the agencies have challenged many non-reportable transactions, almost all have been resolved by consent order, or litigated through the Federal Trade Commission’s (FTC’s) in-house administrative hearing process (where, not surprisingly, the FTC essentially always wins).  Accordingly, parties to a non-reportable transaction that raises significant antitrust risks should expect the agencies to investigate and, if warranted, litigate.

Third, the Court heavily discounted Bazaarvoice’s arguments regarding lack of any actual anticompetitive effect, because the companies knew the DOJ was reviewing the deal and could moderate their behavior.  The court discounted Bazaarvoice’s arguments that none of the 104 customers who were deposed complained that the merger has hurt them.  The court stated “it would be a mistake to rely on customer testimony about effects of the merger for several reasons.”  Among the reasons the court included was “Bazaarvoice’s business conduct after the merger was likely tempered by the government’s immediate investigation; the customers were not privy to most of the evidence presented to the Court, including that of the economic experts; many of the customers had paid little or no attention to the merger; and each had an idiosyncratic understanding of R&R based on the priorities of their company and their different levels of knowledge, sophistication, and experience.”  Thus, while raising prices after a transaction provides strong evidence to support the government’s case, the lack of a price increase does not necessarily support the merging parties’ defense.

Finally, and perhaps most importantly, the case shows the need to be circumspect in preparing ordinary course documents.  Aside from the fact that in reportable transactions, the DOJ and FTC are entitled to “4(c)” and “4(d)” documents about the transaction, once a second request is issued or discovery begins, documents created in the ordinary course of business are discoverable.  This includes Strengths, Weaknesses, Opportunities and Threats (SWOT) analyses, board meeting minutes, business and strategic plans, market and market share analyses, and competitive assessments.  In this case, the court found the ordinary course documents, and particularly those made by the companies’ executives, some of the most persuasive evidence.  The court quoted extensively from the documents and cited numerous documents from Bazaarvoice and PowerReviews that showed that the parties viewed each other as their primary competitor, that there were no other strong competitors in this market, that the two companies operated in essentially a duopoly, and that the intent of the merger was to eliminate a primary competitor.  Despite the parties’ efforts to explain away these documents, the court was not persuaded.  Thus, it is important that companies carefully consider what to include in documents and e-mails, and assume that any non-privileged material may be discovered.

The agencies’ aggressive pursuit of perceived anticompetitive, non-reportable transactions places a premium on parties’ evaluating the antitrust risk.

The public version of the court’s opinion can be found here:http://www.justice.gov/atr/cases/f302900/302948.pdf

Article by:

Carrie G. Amezcua

Of:

McDermott Will & Emery

Department of State Releases February 2014 Visa Bulletin

Morgan Lewis

 

Bulletin shows no movement of cutoff dates in the EB-2 and EB-3 India categories; the cutoff dates in the EB-2 and EB-3 China categories show minor forward movement with EB-3 China continuing to move ahead of EB-2 China.

The U.S. Department of State (DOS) has released its February 2014 Visa Bulletin.The Visa Bulletin sets out per-country priority date cutoffs that regulate the flow ofadjustment of status (AOS) and consular immigrant visa applications. Foreign nationals may file applications to adjust their statuses to that of permanent residents or to obtain approval of immigrant visas at U.S. embassies or consulates abroad, provided that their priority dates are before the respective cutoff dates specified by the DOS.

What Does the February 2014 Visa Bulletin Say?

At the end of fiscal year 2013, there were considerable advancements in cutoff dates in the EB-2 and EB-3 India categories. In order to regulate the large increase in demand that followed, these cutoff dates retrogressed significantly in December. In January, there was no movement in cutoff dates for the EB-2 and EB-3 India categories; meanwhile, cutoff dates for the EB-3 China category continued to move ahead of those for the EB-2 China category. The February 2014 Visa Bulletin again indicates no movement in cutoff dates for the EB-2 and EB-3 India categories with continued advancement of cutoff dates for the EB-3 China category ahead of the EB-2 China category.

A cutoff date of September 1, 2013 for individuals in the family-based F2A category from Mexico, as well as a cutoff date of September 8, 2013 for individuals in the F2A category from all other countries, remains in effect.

EB-1: Cutoff dates for all EB-1 categories will remain the same.

EB-2: The cutoff date for individuals in the EB-2 category chargeable to India will remain unchanged from last month at November 15, 2004. The cutoff date for individuals in the EB-2 category chargeable to China will advance by 31 days to January 8, 2009. Cutoff dates for the EB-2 category for all other countries will remain the same.

EB-3: The cutoff date for individuals in the EB-3 category chargeable to India will remain unchanged from last month. The cutoff date for individuals in the EB-3 category chargeable to China will advance by 61 days. The cutoff date for individuals in the EB-3 category chargeable to the Philippines will advance by 59 days. The cutoff date for individuals chargeable to Mexico and the Rest of the World will advance by 61 days.

The relevant priority date cutoffs for foreign nationals in the EB-3 category are as follows:

China: June 1, 2012 (forward movement of 61 days)
India: September 1, 2003 (no movement)
Mexico: June 1, 2012 (forward movement of 61 days)

Philippines: April 15, 2007 (forward movement of 59 days)
Rest of the World: June 1, 2012 (forward movement of 61 days)

Developments Affecting the EB-2 Employment-Based Category

Mexico, the Philippines, and the Rest of the World

The cutoff dates for EB-2 individuals chargeable to all countries other than China and India has been the same since November 2012. The February 2014  Visa Bulletin indicates no change to these categories. This means that EB-2 individuals chargeable to all countries other than China and India may continue to file AOS applications or have applications approved through February 2014.

China

The January 2014 Visa Bulletin indicated a cutoff date of December 8, 2008 for EB-2 individuals chargeable to China. The February 2014 Visa Bulletin indicates a cutoff date of January 8, 2009, reflecting forward movement of 31 days. This means that EB-2 individuals chargeable to China with a priority date before January 8, 2009 may file AOS applications or have applications approved in February 2014.

India

Between August and September 2013, the cutoff date for EB-2 individuals chargeable to India advanced by approximately three and a half years. This was followed in December 2013 by retrogression of the cutoff date by three and a half years to November 15, 2004 due to unprecedented demand for EB-2 visa numbers from applicants chargeable to India. The cutoff date remained unchanged in the January 2014 Visa Bulletin, and the February 2014 Visa Bulletin again indicates no change. This means that only EB-2 individuals chargeable to India with a priority date before November 15, 2004 may file AOS applications or have applications approved in February 2014.

Developments Affecting the EB-3 Employment-Based Category

There were significant advancements in cutoff dates for EB-3 individuals chargeable to most countries in the latter half of 2013. In January, the cutoff date for individuals in the EB-3 category from China, Mexico, and the Rest of the World advanced by 183 days, and the cutoff date for individuals in the EB-3 category chargeable to India remained unchanged.

China

From September through December 2013, the cutoff date for EB-3 individuals chargeable to China advanced by 2.75 years. The January 2014 Visa Bulletin indicated a cutoff date of April 1, 2012, reflecting forward movement of 183 days. The February 2014 Visa Bulletin indicates a cutoff date of June 1, 2012, reflecting additional forward movement of 61 days. This means that EB-3 individuals chargeable to China with a priority date before June 1, 2012 may file AOS applications or have applications approved in February 2014. As noted above, this cutoff date remains later than that imposed for individuals chargeable to China in the EB-2 category.

India

In the January 2014 Visa Bulletin, the cutoff date for EB-3 individuals chargeable to India was September 1, 2003. The February 2014 Visa Bulletin indicates no movement of this cutoff date. This means that EB-3 individuals chargeable to India with a priority date before September 1, 2003 may continue to file AOS applications or have applications approved through February 2014.

Rest of the World

From September through December 2013, the cutoff date for EB-3 individuals chargeable to the Rest of the World advanced by 2.75 years. The January 2014 Visa Bulletin indicated forward movement to April 1, 2012. The February 2014 Visa Bulletin indicates a cutoff date of June 1, 2012, reflecting additional forward movement of 61 days. This means that EB-3 individuals chargeable to the Rest of the World with a priority date before June 1, 2012 may file AOS applications or have applications approved in February 2014.

Developments Affecting the F2A Family-Sponsored Category

In October 2013, a cutoff date of September 1, 2013 was imposed for F2A spouses and children of permanent residents from Mexico, and a cutoff date of September 8, 2013 was imposed for F2A spouses and children of permanent residents from all other countries. There was no movement of these cutoff dates in December or January. The February 2014 Visa Bulletin again indicates no movement. This means that AOS applicants with a priority date that falls on or after the applicable September cutoff date will be unable to file AOS applications or have applications approved in February 2014.

How This Affects You

Priority date cutoffs are assessed on a monthly basis by the DOS, based on anticipated demand. Cutoff dates can move forward or backward or remain the same. Employers and employees should take the immigrant visa backlogs into account in their long-term planning and take measures to mitigate their effects. To see the February 2014 Visa Bulletin in its entirety, please visit the DOS website.

Article by:

Of:

Morgan, Lewis & Bockius LLP

FDA (Food and Drug Administration) Declines Courts’ Requests to Define “Natural” with respect to GMO (Genetically-Modified Organisms) Foods

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The FDA recently issued a letter to three federal district court judges declining the courts’ requests to adopt a definition of “natural” or to state whether the terms “natural” or “all natural” can be used to refer to foods containing genetically-modified organisms (GMOs) to help resolve pending consumer class actions over the term. The FDA cited three reasons for its decision not to define the term(s): (1) it would prefer to use a public, administrative process than to define the term in the context of private litigation; (2) the definition implicates other agencies, most notably, the USDA; and, (3) the FDA has limited resources and other matters currently take priority.

As noted in our August 2013 Alert on the issue, Judge Yvonne Gonzalez Rogers of theNorthern District of California started the trend in Cox v. Gruma Corp., a case in which the plaintiff alleges that Gruma’s use of “all natural” on its tortilla shells violates various consumer protection laws because they contain genetically-modified corn. In Van Atta v. General Mills, pending in Colorado and involving GMOs in granola products, a magistrate judge agreed with Judge Rogers and recommended a stay of proceedings in the case pending the FDA’s response to Judge Rogers’s request. Most recently, in Barnes v. Campbell Soup Co., also pending in the Northern District of California and involving GMOs in various soups, a different judge also stayed the case pending the FDA’s response.

These cases are potentially quite important because there are many pending consumer class actions, particularly in California, over whether the use of some variant of the term “all natural” is proper in light of one or more ingredients in the food at issue. Indeed, some quip that food labeling litigation has replaced tobacco and asbestos as the favorite category of suit for the plaintiffs’ bar. Thus, the FDA’s response to the request by these courts, and the courts’ further actions based on the response, could resolve or guide the resolution of many of these cases.

In a related development, the Grocery Manufacturers’ Association has recently filed a citizen’s petition asking FDA to state that GMO foods may be labeled “natural.” The FDA alluded to the possible filing of this petition in its letter, but did not state whether it is willing to take up the issue using that procedure, which does allow for public comment.

A copy of the FDA’s letter can be found here.

Article by:

Of:

Barnes & Thornburg LLP

Hey Wait, What About North Carolina's Fancy New Quasi-Judicial Statute?

Poyner Spruill

 

In 2009, the North Carolina General Assembly adopted Senate Bill 44, an act that codified the case law regarding quasi-judicial land use proceedings, including the proper standards and procedures for judicial review. See N.C. Gen. Stat. § 160A-393. Quasi-judicial land use decisions include, among other things, decisions involving variances, special and conditional use permits, and appeals of administrative decisions. See N.C. Gen. Stat. § 160A-393(b)(3).  The adoption of this new statute took the effort of many accomplished land use attorneys and interested stakeholders.  In fact, discussions regarding the need for this legislation originated before my legal career even began. So, when I read a recent Court of Appeals decision involving the denial of a special use permit by a quasi-judicial body, I was befuddled as to why the opinion did not contain a single citation to G.S. § 160A-393.

In Blair Investments, LLC v. Roanoke Rapids City Council, et al. (filed December 17, 2013), the petitioner sought a special use permit to construct a cell phone tower.  After considering the evidence presented by the applicant, planning department and concerned neighbors, the Roanoke Rapids City Council denied the special use permit on the grounds that the proposed tower would “endanger the public or safety” and would “not be in harmony with the surrounding area.”  The Superior Court affirmed the Council’s decision.  On appeal, however, the Court of Appeals reversed the Council’s decision on the grounds that the applicant had met its burden of making a prima facie showing of entitlement to the special use permit and the testimony of the concerned neighbors were speculative opinions, unsupported by any documentary or testimonial evidence.  Therefore, the Court held the Council’s decision was not supported by substantial, competent, and material evidence and remanded the case with instructions that the special use permit be granted.  

To be clear, I take no issue with the Court’s ultimate decision in Blair.  The Court appropriately reviewed the record and made the correct determination based on the facts and evidence that were before the Council.  I also take no issue with the overall legal principles and case law cited by the Court in Blair.  I do find it perplexing, however, that in discussing the appeal procedure, scope of review and its ultimate disposition of the case, the Court cited to a number of cases decided prior to the adoption of G.S. § 160A-393, but did not cite to or discuss 160A-393 at all.  As already discussed, the purpose of adopting 160A-393 was to codify prior case law and establish the black letter law governing the review of quasi-judicial decisions.  Perhaps the failure to recognize or cite to 160A-393 was an oversight by the lawyers who argued the case or perhaps it simply slipped by the law clerks working on the opinion.  I can’t imagine, however, the statutory framework for reviewing quasi-judicial decisions was completely ignored by the Court intentionally.

Many might consider this article to be a technical assault on an otherwise good appellate opinion.  While I believe it to be a substantive omission, my true reason for writing this article is to hopefully ensure that this fancy new statute at least gets dropped in a future footnote. Too many people worked too hard for it not to.

Article by:

Chad W. Essick

Of:

Poyner Spruill LLP

Comment Period Almost Over for OSHA (Occupational Safety and Health Administration) Crystalline Silica Proposal

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In August 2013, the Occupational Safety and Health Administration (“OSHA”) announced a proposed rule regarding workplace exposure to crystalline silica. The proposal includes two separate standards – one for general industry and maritime employment, and one for construction.

If you do not know what crystalline silica is, chances are you are not in an industry that has exposure to it. Crystalline silica is minute, respirable particles that are generated from operations involving stone, rock, concrete, brick, block, mortar and industrial sand. Workers who encounter these materials are in a broad range of industries, including mining, oil and gas, foundries, masonries, pottery manufacturing, and sand blasting.

OSHA’s proposal seeks to limit routine occupational exposure to the so-called “deadly dust.” Inhalation of the particles causes silicosis, an incurable lung disease. Workers are also at risk for developing lung cancer, chronic obstructive pulmonary disease, and kidney disease.  OSHA estimates that its proposal will save 700 lives each year and prevent 1,600 cases of silicosis annually. There are already established permissible exposure limits (“PEL”) for silica, but they were established in 1971 – new research reflects that more stringent standards are needed. The new PEL, 50 micrograms per cubic meter of air, would apply to all the regulated industries (though OSHA plans to create distinct standards for the construction industry). In addition to the PEL, the rule also calls for medical surveillance, worker training, recordkeeping, and exposure assessments.

Initially, the deadline to submit written comments and testimony to OSHA was December 11, 2013. That deadline, however, was extended by an additional 47 days to allow for additional public input. The new cut-off is January 27, 2014. Public hearings on the issue are scheduled to begin in March and will likely continue for several weeks due to the significant impact the rule will have on so many industries. Millions of American workers encounter crystalline silica in their day-to-day work operations.

The proposal will directly affect many small businesses and OSHA is specifically interested in receiving input from these entities. Be sure to check back on Wednesday with some tips on what employers can do now to protect workers (and potentially limit their liability for future silica-related claims).

Article by:

Cynthia L. Effinger

Of:

McBrayer, McGinnis, Leslie and Kirkland, PLLC

PTO Litigation Center Report – January 14, 2014

Sterne Kessler Goldstein Fox

Listed below are all new filings before PTAB of requests for inter partes review (IPR) and covered business methods review (CBM).  Since the last report, no new requests for ex parte reexamination at the USPTO have been posted.  This listing is current as of 9:30 AM on Tuesday, January 14, 2014.

New IPR Requests

Trial Number – IPR2014-00346
Filing Date – 1/13/2014
Patent # – 8,364,295
Title – INTERACTIVE SOUND REPRODUCING
Assignee – BOSE CORPORATION
Petitioner – SDI TECHNOLOGIES, INC.
Status – Pending
Tech Center – 2600

Trial Number – IPR2014-00347
Filing Date – 1/13/2014
Patent # – 8,504,631
Title – METHOD APPARATUS AND BUSINESS SYSTEM FOR ONLINE COMMUNICATIONS WITH ONLINE AND OFFLINE RECIPIENTS
Assignee – EVERYMD.COM LLC
Petitioner – GOOGLE INC. and TWITTER, INC.
Status – Pending
Tech Center – 2400

New CBM Review Requests

There have been no new requests for CBM review since the last report.

Newly-Posted Reexam Requests

Control # – 90/013,118
Date – 1/13/2014
Patent # – 6,435,450
Inventor –  SHIELDS, John et al.
Assignee –  SASCO
Title – MULTI-COMPARTMENT PARALLELING REEL HAVING INDEPENDENT COMPARTMENTS
Co-pending Litigation – SASCO v. Weber Electric Mfg. Co., Case No. 8:13-cv-00022-CJC-JPR, CD Cal.

 

Article by:

PTO Litigation Center

Of:

Sterne, Kessler, Goldstein & Fox P.L.L.C.

New Jersey Governor Publicly Signs DREAM Act, Calls Undocumented Students 'An Inspiration'

GT Law

 

On January 7, 2014, the Governor of New Jersey publicly signed the state’s DREAM Act,which provides in-state tuition benefits at public colleges and universities to undocumented graduates of New Jersey high schools. The legislation, which the Governor privately signed last month, emerged from a bipartisan compromise after legislators agreed to remove a provision that would have extended financial aid eligibility to undocumented students. The Governor previously said he would veto the bill if the financial aid provision remained.

Explaining his support for the law, the Governor stated, “Our job I believe as a government is to give every one of these children, who we have already invested hundreds of thousands of dollars in, an opportunity to maximize that investment for their own benefit, for the benefit of their families, and for the benefit of our state and our country.” The Governor also urged students who stand to benefit from the legislation to “make the most of the opportunity,” while a U.S. Senator for New Jersey released a statement describing New Jersey as “a more welcoming and inclusive state for immigrants and their families” due to the new law.

Article by:

Nataliya Binshteyn

Of:

Greenberg Traurig, LLP

Updates from the January 2014 Visa Bulletin

GT Law

 

The Department of State (“DOS”) recently released the January 2014 Visa Bulletin, which contains some very interesting developments that affect foreign workers in the Employment-Based 2nd and 3rd categories, particularly those who are citizens of China. The Visa Bulletin is issued by the DOS on a monthly basis and informs applicants when they are eligible to apply for U.S. Permanent Residence (commonly referred to as “Green Card”). Each fiscal year, each country is issued an equal number of immigrant visa numbers. However, as there are more applicants seeking green cards from certain countries (i.e. India, China, Mexico and Philippines) than there are numbers available, the citizens of affected countries experience significant delays in getting their green cards. This is known as visa retrogression. Affected applicants cannot adjust their statuses to green card holders until the priority dates on their respective cases become current. Each month the DOS publishes the Visa Bulletin, which indicates what priority dates are current and who is eligible to apply for the final stage of the green card process. Wait times published in the Visa Bulletin range from a few months to 10 or more years.

The January 2014 Visa Bulletin is unusual because the EB-3 category is moving faster than the EB-2 category for Chinese citizens. (To qualify for the EB-2 category, the offered position must require a Master’s degree or Bachelor’s degree and five years of experience; EB-3 requires a Bachelor’s degree.) For example, a Chinese national whose EB-3 PERM application was filed on or before March 31, 2012 is now eligible to adjust status, whereas a Chinese national whose EB-2 PERM application was filed on the same date is not. Historically, China EB-2 has moved faster than China EB-3, which is why this month’s visa bulletin is unique. As a result, many employers may see an increase in requests from employees for an EB-3 green card process. If the employee already has an approved EB-2 I-140 (second phase of the employment based green card process), the company can consider filing an amended I-140 and request EB-3 classification while retaining the priority date. If the amended I-140 will make the applicant’s priority date current, the applicant is eligible to concurrently file an Adjustment of Status application (the final phase of the green card process). We’ll continue to monitor Chinese EB-3 movement on this blog. Unfortunately, for Indian nationals we saw no change from the December 2013 to January 2014 Visa Bulletin. The February Visa Bulletin is expected to be released in the next 12 -14 days, and we will report on any pertinent developments.

Employment-Based Visa Bulletin Predictions

The Department of State also issued predictions in Visa Bulletin movement for the next few months. For the EB-2 category, the Department of State predicted no forward movement for India EB-2, slight movement of 3-5 weeks for EB-2 China, and Worldwide will remain current.

For the EB-3 category, the Worldwide category has experienced rapid movement forward, which is expected to end in February 2014. China and Mexico will likely continue to match the Worldwide dates. No forward movement is estimated for India, and the Philippines is projected to have slight movement forward of 3-6 weeks.

EB-1 is expected to remain current.

EB-3 Worldwide, China, and Mexico applicants with a current priority date should consider filing their Adjustment of Status applicants now as EB-3 priority dates may retrogress in the next few months.

December Visa Bulletin (includes DOS projections for upcoming months): http://travel.state.gov/visa/bulletin/bulletin_6211.html

January Visa Bulletin: http://www.travel.state.gov/visa/bulletin/bulletin_6228.html

Article by:

Emily R. Liss

Of:

Greenberg Traurig, LLP