Category: Environmental Law

Asbestos Litigation Case Questions Safety in the Workplace

Recently posted in the National Law Review on  an article by C. James Zeszutek and David J. Singley of Dinsmore & Shohl LLP regarding an unsual case  in that the plaintiff worked as a technician servicing laboratory equipment and the alleged asbestos exposures occurred:

Although most would consider asbestos to be an old problem, limited to mainly the manufacturing and construction industries, asbestos has been incorporated into a myriad of products that had many and varied uses. Because asbestos was so pervasive, claims such as the one described below, occurring many years after the last occasions on which asbestos was used and arising from the use of sophisticated equipment in a laboratory, are still prevalent.

Dinsmore attorneys recently handled a premises liability case for a major minerals supply company. The case was unusual in that the plaintiff worked as a technician servicing laboratory equipment and the alleged asbestos exposures occurred into the 1990’s. This is in contrast to the typical asbestos case that usually involves exposure in heavy industry prior to 1980.

The plaintiff in this case initially worked as a technician for a manufacturer of laboratory instruments including thermoanalyzers. A thermoanalyzer is an instrument that allows the user to determine the amount of water in the sample being tested as well as certain other characteristics of the sample as the result of heating the sample to high temperatures. The thermoanalyzer at our client’s premises contained an asbestos paper separator between the “hot” portion of the instrument and the unheated side. The plaintiff testified that whenever he installed or performed service work on the thermoanalyzers, including the one at our client’s laboratory, he was exposed to friable asbestos from the paper separator as well as component insulation on vapor lines contained in the thermoanalyser. The plaintiff also contended that he was exposed to friable asbestos from an asbestos glove and asbestos pad that were provided with the thermoanalyzer. The plaintiff ultimately left his employment with the thermoanalyzer’s manufacturer and started his own business doing the same type of work, namely servicing various laboratory instruments, including thermoanalyzers. Significantly, the plaintiff alleged exposures at our client’s premises into the 1990’s. The plaintiff was diagnosed with mesothelioma, a rare type of cancer which is uniformly fatal and is, except in rare circumstances, a signature disease for asbestos exposure.

The plaintiff’s theory of liability as to our client was that because the thermoanlayzer in our client’s laboratory had asbestos in it, and further because the client had not provided a warning to the plaintiff regarding asbestos in the thermoanalyzers, that our client had breached its obligation to provide a safe workplace for tradesmen at its premises. As is typical in asbestos cases, it was not initially clear what theory of liability the plaintiff was pursuing. It was not until the plaintiff was deposed and additional discovery undertaken that it became apparent that the plaintiff was focusing on the alleged failure to provide a safe work place because of the asbestos containing components in the thermoanalyzer. The case was further complicated because it was filed in New Jersey, where the plaintiff lived, but our client’s premises were located in Pennsylvania. Thus, there was a question as to whether New Jersey or Pennsylvania law would apply. We argued that regardless of which state’s law was applied, as the premises owner, our client did not owe a duty of care to the plaintiff, an independent contractor, who was allegedly injured by the very piece of equipment on which he was hired to work.

The Plaintiff argued that the Olivo v. Owens – Illinois case, a New Jersey Supreme Court Case, required a premises owner to provide a reasonably safe place to work for tradesmen coming on to the owner’s premises, including an obligation to inspect for defective or dangerous conditions. The Olivo case was one in a series of cases in which the New Jersey courts were attempting to address premises liability in terms of a reasonableness standard as opposed to the traditional categories of trespasser, licensee, and invitee, all of which deal with the person’s status while on the premises. In Olivo, the New Jersey trial court granted summary judgment. The New Jersey appellate court reversed and held there were issues of fact regarding the degree of control the premises owner retained over the work, what safety information the premises owner provided, and what the premises owner told the contractor regarding the presence of asbestos on the premises. The Plaintiff argued that these were exactly the same issues in our case.

Dinsmore argued that Pennsylvania law applied (because the premises in question was in Pennsylvania) and in any event, Pennsylvania law was similar to that of New Jersey, namely, that a premises owner does not owe a duty of care to an independent contractor for dangers inherent in the work the independent contractor was hired to perform. Although the court did not overtly address the choice of law issue, it held that our client, the premises owner, did not owe a duty of care to plaintiff because the plaintiff was responsible for his safety on the equipment on which he was working. In granting our motion for summary judgment, the court focused on the premises owner’s lack of any supervision or control over the worked performed by the independent contractor. We also emphasized the independent contractor’s superior knowledge regarding the thermoanalyzer and its components.

Our Advice 

Facilities and equipment managers need to be alert that in facilities built or remodeled prior to the mid-1970’s, or equipment, even laboratory equipment, assembled prior to 1980 and where there was a need for thermal insulation, asbestos may still be present and care should be used in dealing with such equipment. Additionally, although waivers of liability, obtained from the tradesmen coming on the property may provide some legal protection, the facilities and equipment managers should make clear with the tradesmen, or the tradesmen’s employers, that they are being hired for their expertise and knowledge regarding the proposed work and that they are being relied upon to perform the work in a safe manner.

© 2011 Dinsmore & Shohl LLP. All rights reserved.

 

What To Expect From a President Perry on the Environment? Some Texas-Sized Clues

Posted on August 19, 2011 in the National Law Review an article by Jim Morris and Evan Bush of Center for Public Integrity regarding  Texas Gov. and Republican presidential candidate Rick Perry’s environmental stance: 

From climate change denial to stances against EPA and Supreme Court, candidate resists feds, aids businesses and helped a billionaire donor

What would President Rick Perry’s environmental agenda look like?

As Texas governor, Republican presidential candidate Rick Perry often relied on Bryan Shaw, chairman of the state’s environmental regulatory agency, second from right. Harry Cabluck / Associated Press

For clues, one need only examine Perry’s record as governor of Texas, where the chairman of the state environmental agency writes vitriolic letters to the U.S. Environmental Protection Agency and questions the science behind climate change.

Bryan Shaw , a 2007 Perry appointee to the Texas Commission on Environmental Quality who became the agency’s chairman in 2009, opined in a guest column in the El Paso Times last month that a new EPA rule designed to reduce cross-state air pollution from coal-fired power plants was in fact “aimed at cutting Texas jobs, cutting Texas economic growth, increasing Texas energy costs, and harming Texas energy security.”

The column closely followed a statement by Perry himself, who called the rule “another example of heavy-handed and misguided action from Washington, D.C.”

Perry’s gubernatorial campaign received more than $5 million in contributions from energy companies and their employees during the 2009-2010 election cycle, according to data compiled by the nonpartisan National Institute on Money in State Politics . Among Perry’s largest contributors during the cycle: Houston oilmen Jeffrey Hildebrand and Gary Petersen , and Valero Energy Corp . Oil and gas companies consistently are among the state’s biggest polluters.

Perry recently told the Christian Broadcast Network that he prays for President Obama every day, asking in particular that “his EPA back down these regulations that are causing businesses to hesitate to spend money.”

Shaw, in June 30 testimony before the a Senate clean air and nuclear safety subcommittee, attacked another EPA rule meant to limit emissions of mercury and other toxic compounds from coal- and oil-fired power plants. Shaw maintained, among other things, that “any health benefits [from the rule] would be insubstantial compared to the cost of regulation” and expressed concern that “the reliability of the Texas electrical power system will be severely compromised.”

And in a testy letter to EPA Administrator Lisa Jackson and Regional Administrator Al Armendariz a year ago, Shaw and Texas Attorney General Greg Abbott said they would defy EPA regulations – stemming from a 2006  U.S. Supreme Court decision , Massachusetts v. EPA – requiring Texas to begin issuing permits for greenhouse gas emissions from industrial sources.

Shaw declined Wednesday, through a spokeswoman at the agency he chairs, to be interviewed byiWatch News . Catherine Frazier, a spokeswoman in the governor’s office, said “the governor is proud of [Shaw’s] leadership and expects he will put Texas’s interests at the top of his decision-making.”

Frazier said that Perry, like Shaw, finds the science linking human activities to climate change to be “very questionable.” The EPA, she said, “continues to impose burdensome, job-killing mandates on Texas and the governor believes there needs to be a balanced approach to protecting jobs and protecting the environment. Texas has created a model for how to accomplish that goal.”

Environmental activists in Texas say they grew worried about Shaw when he disclosed during his 2009 confirmation hearing that he didn’t believe the science on climate change was “fully settled.”

“He denies the science no matter what it is – climate change, ozone, mercury,” Jim Marston, director of the Environmental Defense Fund’s Texas office, said of Shaw. “All the other scientists around the world are wrong. Somehow, the laws of physics and chemistry don’t apply in Texas, apparently.”

“Adhering to the party line is [Shaw’s] guiding compass,” said Matthew Tejada, executive director of Air Alliance Houston , an environmental group that closely follows the commission Shaw chairs. “Every decision, policy, program or position that the TCEQ takes at the commission level is being guided by that compass – what can it do to strike back at an imaginary federal foe and what can it do to coddle industry here in the state.”

Shaw is a former associate professor in Texas A&M University’s Biological and Agricultural Engineering Department. His views on global warming contrast sharply with some of his former A&M colleagues – notably, the entire Department of Atmospheric Sciences, which declared in a statement several years ago that it is “very likely that humans are responsible for the recent warming.”

Loathsome though it may be to environmentalists, Shaw’s and Perry’s anti-EPA posture sits well with at least some members of the Texas business community.

“I think our political leaders in the state have done an excellent job protecting the environment while allowing the state’s economy to flourish in the past 10 years,” said Alex Mills, president of theTexas Alliance of Energy Producers. The EPA, under Obama, has “gone wacko,” Mills said, adding that a Perry administration would feature a “much more hands-off approach” to environmental regulation.

What some critics find most worrisome is Perry’s apparent willingness to reward major donors.

In 2009, the TCEQ approved a low-level radioactive waste dump for Andrews County in West Texas. The dump, expected to open next year, will accept waste from Texas and other states and be operated by Waste Control Specialists, owned by Dallas billionaire Harold Simmons.

Records show that Simmons and his wife have donated roughly $1.2 million to Perry’s campaigns since 1998, according to the National Institute on Money in State Politics. In 2004, Simmons helped finance the “Swift Boat” ads attacking the military record of Democratic presidential candidate John Kerry.

Karen Hadden, executive director of the Austin-based Sustainable Energy and Economic Development (SEED) Coalition , fought licensing of the dump, saying radioactive leakage threatens groundwater and could lead to serious transportation accidents. The term “low-level” is a misnomer, Hadden said; in fact, the dump will take everything but uranium fuel rods from nuclear power plants and plutonium components of nuclear bombs.

An eight-member TCEQ team unanimously advised against licensing the facility in 2007 but was overruled by top-level managers (not including Shaw). Three members of the team, including Glenn Lewis, left the agency in protest.

“We came to the conclusion that it was an unsuitable site geologically because of the immediate vicinity of groundwater,” Lewis told iWatch News . Nonetheless, he said, “We were immediately instructed to begin drafting a license” for Waste Control Specialists.

Asked if he believed Simmons’s relationship with Perry was behind the order, Lewis said, “I’m 99 to 100 percent sure. From the first day I reported for duty on this team, the other members were quite resigned to the fact that if Simmons is behind this, he’s going to get his license.”

The company and the candidate deny any favorable treatment.

“I think the record’s pretty clear there is absolutely no evidence of special treatment of any kind,” said Chuck McDonald, a Waste Control Specialists spokesman. “The licensing process was a long and arduous one. It took five years.”

Frazier, Perry’s spokeswoman, said the Andrews County dump “is supported by that community. It’s a project that will create jobs and bring them economic development opportunities.”

Questions also were raised about a 2005 Perry executive order expediting the state permitting process for coal-fired power plants. At the time, a Dallas-based utility and major Perry contributor, TXU, wanted to build 11 such plants; plans for eight of the 11 were scrapped in 2007 after TXU was acquired by two private equity groups.

In 2008, The Center for Public Integrity and Fort Worth Weekly reported that TXU’s coal plants exceeded federal emission limits nearly 650 times between 1997 and 2006, putting more than 1.3 million pounds of lung-damaging sulfur dioxide into the air.

A growing body of science suggests greenhouse gases produced by human activities – chiefly deforestation and the burning of fossil fuels – are responsible for shifting temperatures and other changes in climate across the globe that could threaten people and wildlife and exacerbate international frictions over scarce resources.

Reprinted by Permission © 2011, The Center for Public Integrity®. All Rights Reserved.

Power NY Act of 2011 Swings the Door Open for Renewable Development

Posted in the National Law Review on August 17, 2011 an article written by attorneys: David A. Domansky, Joseph G. Tirone and Brian J. Kelly of Bracewell & Giuliani LLP regarding Power NY Act of 20ll which Gov. Cuomo recently signed into law:

 

On August 4, 2011, Governor Cuomo signed into law the Power NY ACT of 2011 (A. 8510/S. 5844), a comprehensive energy bill that, among other things, reimplements and significantly revises Article X of the New York State Public Service Law. As revised, new Article X provides power project developers a more efficient, streamlined “one-stop” siting process. The new law was sought and supported by both business and environmental groups to remedy a patchwork of inconsistent local siting rules throughout New York, which have hampered project development efforts. Old Article X, which expired on January 1, 2003, was limited to power plants with 80-megawatts or more of nameplate generating capacity. New Article X reduces the capacity threshold to 25-megawatts, thereby allowing smaller generation projects, such as wind, solar and other renewable project developers, an opportunity to take advantage of the streamlined siting process.

Creation and Composition of the Review Board

Following the expiration of former Article X, developers were required to seek the requisite regulatory and environmental permits mandated by state and local laws from the various state and municipal regulatory authorities who had jurisdiction over the site where the proposed power project was to be developed. Under new Article X, the siting and licensing of electric generation facilities of at least 25-megawatts, or the increase in nameplate capacity by 25-megawatts or more of a current power facility, will fall within the purview of the New York State Board on Electric Generation Siting and the Environment (“Board”).The seven member Board will consist of five state agency officials (Department of Environmental Conservation, Department of Economic Development, Department of Health, Department of Agriculture and Markets and the New York State Energy Research and Development Authority), as well as two ad hoc members who are required to reside in the community in which the proposed facility is to be located. The Board will be tasked with determining if the contemplated project should receive a Certificate of Environmental Compatibility and Public Need (“Certificate”), which must be obtained before commencement of any site development or facility construction.

Filing Process

New Article X separates the Certificate process into two distinct phases, a pre-application preliminary scoping statement (the “Pre-Application”) and the actual Certificate application. In  the Pre-Application, an applicant is required to provide the Board with, among other things: (a) a description of the proposed facility and its environmental setting; (b) potential environmental and health impacts resulting from the construction and operation of the proposed facility; (c) proposed studies or programs of studies designed to evaluate the potential environmental and health impacts; (d) measures proposed to minimize environmental impacts; and (e) identification of all other state and federal permits required for the construction, operation or maintenance of the proposed facility.

Prior to submission of the Pre-Application, the applicant must meet with interested parties, including community groups and interested state agencies to address these groups’ concerns  with regard to the proposed facility. Following the applicant’s submission of the Pre-Application, the applicant has the ability to enter into side agreements or stipulations to address any concerns regarding the siting and location of the proposed facility. Once completed, the applicant is then required to file a Certificate application with the Board, which includes: (a) a description of the site and facility to be built; (b) an evaluation of the anticipated environmental and health impacts and safety and security ramifications that the facility will have on the surrounding community; (c) a comprehensive environmental impact analysis; and (d) a comprehensive demographic, economic and physical description of the community within which the facility is to be located, compared and contrasted with the county and with the adjacent communities in which the facility is proposed.

Board Decision Process and Timeline

New Article X requires that the Board issue a final decision on a Certificate application no later than: (a) 12 months after submission of a Certificate application deemed complete by the Board for a new-build facility, and (b) six months after the submission of a complete Certificate application deemed complete by the Board for modifications to (1) an existing facility, or (2) the site of a new facility adjacent or contiguous to an existing facility, provided the new facility would result in greater operating efficiencies and lower environmental impact than the original facility.

New Article X also requires that the Board schedule a hearing on the Certificate application no later than 60 days after the date the Board determines the Certificate application is complete. After conducting and taking testimony at the hearing, the Board may grant the Certificate if it finds that: (a) the facility is a beneficial addition to or substitution for the electric generation capacity of New York; (b) the construction and operation of the facility will serve the public interest; (c) the facility’s environmental impact has been minimized or eliminated to the maximum extent practicable; and (d) the facility complies with all state and local laws and regulations.

Any appeal of the Board’s decision denying or granting a Certificate is first heard by the Board itself. The application for rehearing must be filed no later than 30 days after issuance of the Board’s decision. The Board is required to render a decision on the application no later than 90 days after the expiration of the period for filing rehearing petitions. Thereafter, an aggrieved party may seek judicial relief in the Appellate Division of the New York Supreme Court. Such proceeding must be initiated within 30 days after the issuance of a final decision by the Board on the application for rehearing.

© 2011 Bracewell & Giuliani LLP

Doing Business at ART HK: Better, Bigger, Faster, Stronger

Recently posted in the National Law Review an article by Sheppard, Mullin, Richter & Hampton’s Art Law Practice regarding the Hong Kong International Art Fair:

 

On the verge of becoming an international institution, the recent Hong Kong International Art Fair, known as “ART HK,” represents an exciting development in the state of the art world in China. This growth has critical, yet profoundly inspiring, implications upon the international art community.  Since its humble beginnings in 2008, ART HK has shown rapid growth with over 260 galleries from over 38 countries participating in the recent fair.  Momentum of ART HK’s success and prominence was recently propelled by an announcement that MCH Swiss Exhibition, owners of Art Basel, the world’s biggest contemporary art fair, have just signed an agreement with Asian Art Fairs, the owners of ART HK, to purchase a majority stake in ART HK, which went into effect on July 1, 2011.  This tactical move, combined with rising auction revenue, favorable tax considerations, a newfound interest in art as an asset class, and interest based on national identity, cements China’s role in the global art market.

It was recently reported in Artprice.com, a French-based data service, that China ranks number one in fine art auction revenue, surpassing the U.S.  Moreover, the contemporary Chinese auction market has grown from just below $1 million in 2002 to $167.4 million in 2010. Prominent auction houses, Sotheby’s and Christie’s Hong Kong have seen sales turnover increase by 300% between 2009 and 2010.  The total auction sales value (all categories) for both auction houses in Hong Kong rose by 122 percent, from US$658 million in 2009, to US$1.46 billion in 2010.  Even mainland Chinese state-owned auction houses, such as Poly and Guardian, have seen their Chinese sales seasons grow from $397 million in 2009 to $2.2 billion in 2010.  This year is also set to become a record year in light of the sale of the Ullen Collection at Sotheby’s Hong Kong in April 2011.

The art world focus in Hong Kong, as opposed to mainland China, may have something to do with the tax advantages it provides.  While imported art is taxed by mainland China at a steep 34 percent, Hong Kong offers collectors the advantage of more relaxed sales tax and export policies. Organizers of ART HK are aggressively promoting the incredible tax advantages, since there are no tariffs on the import or export of art as it relates to the initial sale at ART HK.

A newfound interest in art as an asset class has also prompted growth in the Chinese art market.  The affluent in China have begun to invest in art as an asset, traditionally viewed as a Western luxury.  Observers note that the proliferation of art in China is the steady result of a rise in investment-oriented purchases of art, bolstered by China’s growing wealth, and not merely spontaneous overnight purchases.  In response to this, at least three Chinese financial institutions have set up hedge funds investing in Chinese art.  Notably there have been a succession of Chinese clients who have been spending millions of yuan recently at New York auctions.

National identity and pride is showing itself to be another significant factor behind the surge of Chinese interest in the art world.  Such national pride is evident by a report released by Artprice.com on March 19, 2011 showing that 2010 is the first year that four Chinese artists (Fu Baishi, Qi Baishi, Xu Beihong, and Zhang Daqian) have ranked in the top ten of global art auction earners.

In China, the impact of art fair culture through ART HK is no different than in other emerging markets.  Art Basel is itself is a pioneer for developing new markets.  In fact, in 2002, the decision to open Art Basel Miami Beach in the U.S. was partly to explore the emerging Latin American market.  A roaring success – Art Basel Miami provides a new platform for emerging dealers, contemporary artists, new collectors and the art world cognoscenti.

Popularity of the Chinese market for the international art community during ART HK has clearly prompted auction houses to be active.  For example, Christie’s has a partnership with ART HK to hold its spring auctions in the same venue and at the same time as ART HK with sales of art, antiques, wines, watches and jewels.  Other auction houses, particularly smaller Asian ones, are similarly following suit with auction sales planned at hotels around town during ART HK.

On May 23, 2011, ART HK and ArtTactic even announced in two art market reports (China Contemporary Art Market Report 2011 and US & Europe Contemporary Art Market Report 2011) that confidence in the Chinese contemporary art market greatly exceeds confidence in its US and European counterparts.  In fact, the reports claim that 75% of art industry experts indicate that the Chinese market will continue to grow over the next six months, compared to only 36% of art experts indicating growth in the US and European contemporary art markets.

Hong Kong offers a range of comforts for those doing business in the Hong Kong art market. In addition to the tremendous tax advantages in the  importation or exportation of art in Hong Kong, doing business in Hong Kong is made easier by the fact that English is commonly spoken and that Hong Kong adheres to international standards of business law, with a great degree of transparency in transactions. Moreover, in contrast to Shanghai or Beijing, the logistics of obtaining shipments in and out of Hong Kong do not typically involve lengthy turnaround times.

When exporting artwork from Hong Kong, buyers must ensure to complete and submit an export declaration in Hong Kong, as well as an import declaration in the destination country, where import duties and taxes are typically chargeable in the destination country. Where the buyer is shipping the artwork to the same country that the seller originally exported it to Hong Kong from, it may be possible for the buyer to avoid payment of import customs duty in the destination country under a “returned goods relief” procedure, as long as the seller can provide the buyer with the relevant proof of original export.

There are many factors contributing to the strength of China’s position in the international art market, including its beneficial tax considerations, remarkable auction revenue, a newfound interest in art within China as either an investment or because of national identity and a global interest in contemporary Chinese artists.  With offices in Shanghai and Beijing, these are issues encountered frequently here at Sheppard Mullin. Overall the future of the Chinese art world looks optimistic, and it is clear that the impact of the art fair culture, especially vis-à-vis ART HK, has a crucial role to play in this continued growth.

Copyright © 2011, Sheppard Mullin Richter & Hampton LLP.

ASHHRA 47th Annual Conference & Exposition Sept. 10-13, 2011, Phoenix, AZ

We are pleased to inform you the American Society for Healthcare Human Resources Administration’s 47th Conference & Exposition is taking place on September 10-13, 2011 in Phoenix, Arizona.

 

 

 

Why Should YOU Attend the ASHHRA Conference?  

Educational Programs

  • Enhance your health care business knowledge
  • Advance your leadership capabilities
  • Strengthen your role as a change agent
  • Gain knowledge of the hottest trends in health care HR
  • Network with your peers

Valuable Resources

  • A variety of take-away tools, best practices and policies
  • Networking opportunities with other HR practitioners nationally and regionally
  • Exposure to more than 150 suppliers helping to advance health care HR products and services

Hottest Products & Services

  • More than 150 exhibitors showcasing products that can help you solve problems within your organization
  • Networking and knowledge sharing on state-of-the-art services in health care HR

Smart Investment

  • Take-away tools and resources in health care HR
  • Focused learning on leadership and strategic business knowledge
  • Sessions designed around five leadership competencies
  • Partnership opportunities with top health care HR leaders

    18.5* Recertification Credit Hours

    Earn up to 18.5* Recertification Credit Hours, which includes 17.0 Strategic Business, and 1.5 California Specific Credit Hours.  Check out the “Schedule ” tab to see the learning sessions and secure your spot!

    *The 18.5 general recertification credits include the 6.0 hours of the Pre-conference Learning Tracks on Sept. 10, 2011 in addition to the 12.5 recertification credit hours for Full Conference attendance on Sept. 11-13, 2011. The 17.0 Strategic Business Credit Hours include 6.0 hours of the Pre-conference Learning Tracks on Sept. 10, 2011 in addition to the 11.0 strategic business credit hours for Full Conference attendance on Sept. 11-13, 2011.

    These recertification credit hours are pre-approved for PHR, SPHR and GPHR recertification through the HR Certification Institute. For more information about certification or recertification, please visit the HR Certification Institute website at www.hrci.org.

     Two NEW Learning Tracks at the

    ASHHRA 47th Annual Conference & Exposition

     

    NEW!
    Non-Hospital (NH)
    Learning Track

    NHThe Non-Hospital Track is a new learning track this year at the ASHHRA annual conference.  ASHHRA is seeking to fully understand the needs of HR practitioners who work in a non-hospital setting.  We realize that HR issues and concerns might differ from hospitals, and we want to become the primary source for information, tools, and resources to help members address the challenges faced in non-hospital facilities. 

    If you work at a non-hospital facility setting like:

    • Long-term Care facility
    • Acute Care facility
    • Clinic
    • Treatment center
    • Hospice center

    ASHHRA has created a special learning track that is designed to help address common issues that you may face in your organization.  The Non-Hospital sessions are offered during each learning session time and are indicated by “NH/NH.”

    NEW!
    Advisory Board Company Learning Track

    The Advisory BoardThis track is a continuation of an ongoing collaboration between the Advisory Board Company and ASHHRA, to educate heath care human resources (HR) executives and advance the health care HR field at-large. Two divisions of the Advisory Board Company are represented at the conference.  The HR Investment Center serves HR executives through best practice research and implementation support and has directly embedded a portion of their national member meeting into this year’s conference to help executives optimize their time and travel. The Talent Development division provides comprehensive leader development services and is presenting content from some of their most popular workshops.  This track will help to support the health care HR field with more substantive knowledge, expertise, and best practices for health care organizations.

    For more information about the HR Investment Center, Talent Development partnerships, or any other Advisory Board Company offering, please visitwww.advisory.com or contact Jordan English at englishj@advisory.com

    Click below for the learning sessions
    in this new track.

Eastern Population of Gopher Tortoise Eligible for Endangered Species Act Protection

Recently posted in the National Law Review an article about The United States Fish & Wildlife Service (USFWS) has released its listing decision for the eastern population of gopher tortoise by Ivan T. Sumner of Greenberg Traurig, LLP.

The United States Fish & Wildlife Service (USFWS) has released its listing decision for the eastern population of gopher tortoise. The USFWS has determined that listing the eastern population of the tortoise as Threatened under the Endangered Species Act (ESA) is warranted, however, it is precluded from doing so at this time due to higher priority actions and a lack of sufficient funds to commence proposed rule development. The western population is already listed as Threatened and will continue to be protected under the ESA. In the interim period of time the USFWS  will place the eastern population of the tortoise on its candidate species list until sufficient funding is available to initiate a proposed listing rule. The USFWS did not provide any time estimate on that front. Candidate species do not receive any statutory protection under the ESA. The gopher tortoise in Florida is still protected under Florida laws and policies implemented  by the Florida Fish and Wildlife Conservation Commission.

©2011 Greenberg Traurig, LLP. All rights reserved.

California's Green Chemistry Rulemaking Renewed

Published in the National Law Review on July 21, 2011 an article by Gene Livingston of  Greenberg Traurig, LLP about  California’s Department of Toxic Substance Control’s announcement of the new target date for new draft regulations to implement California’s Green Chemistry Law.

The new Director of California’s Department of Toxic Substance Control, Debbie Raphael, announced that mid-October is the new target date for new draft regulations to implement California’s Green Chemistry Law. The law called for regulations to be in place by January 1, 2011. However, universal opposition last year to the previously proposed regulations rendered that date impossible. Raphael, demonstrating political acumen, has the support of the legislative authors of the law to take the time needed “to get it right.”

Raphael promised to meet with stakeholders between now and mid-October to inform the rulemaking process, and after the draft regulations are released to seek comments from the Green Ribbon Science Panel at its November 14-15, 2011 meeting on the scientific aspects of the draft regulations. Then, the Director and her staff will produce regulations to launch the formal rulemaking proceeding.

Raphael laid out the principles that will guide the development of the regulations. They have to be “practical, meaningful, and legally defensible.” Those principles are easily embraced by political leaders, business interests, and environmentalists. There is something for everyone. The challenge will be getting consensus on what is practical but still meaningful with numerous aspects of the regulations, starting, for example, with selecting chemicals of concern, prioritizing the products containing chemicals of concern, describing the life cycle factors to assess existing chemicals and products and their possible alternatives, and imposing regulatory mandates, ranging from labels to bans of products.

The resolution of these aspects and others in the regulations will determine whether the green chemistry program sinks of its own weight, stifles innovation, drives up the cost of products, eliminates products in the California market, or becomes a model for other states, stimulates innovation, expands sustainable product development, results in fewer toxic products, and less toxic waste.

The green chemistry regulations can affect every manufacturer selling products in California as well as their suppliers, distributors, and retailers. They need to be aware of the rulemaking activities occurring in California during the next six months, a time period that will be critical as DTSC seeks to write regulations that are indeed practical, meaningful, and legally defensible.

©2011 Greenberg Traurig, LLP. All rights reserved.

Evaluating Insurance Policies After Japan’s Earthquake

Posted on July 14, 2011 in the National Law Review by Risk Management Magazine of Risk and Insurance Management Society, Inc. (RIMS) information about an essential first step is to review insurance coverages for losses caused by natural catastrophes.

Shock and tragedy were the emotions most felt throughout Japan when the March earthquake and tsunami ravaged the nation. But companies doing business there have since moved on to planning mode, looking for ways to mitigate their losses, both those already suffered and the inevitable ones to come from similar exposures in the future.

An essential first step is to review insurance coverages for losses caused by natural catastrophes. Of particular importance is the potential availability ofcontingent business interruption insurance coverage for lost sales to Japanese customers or lost supplies from Japanese producers.

Property insurance policies obviously cover direct property damage caused by natural disasters. But those same policies also cover other types of business losses. Time element coverage pays for the lost profits when damaged property affects a policyholder’s day-to-day operations. The amount covered generally depends on the time it takes to resume normal business operations. Time element coverage can be triggered by damage either to the policyholder’s property or a third party’s property, and the most common kinds are business interruption, extra expense and contingent business interruption.

Business Interruption

The purpose of business interruption coverage is to restore the policyholder to the financial position it was in before the property damage occurred. To recover these losses, the lost profits, at a minimum, must relate to the event that caused the policyholder’s property damage. Once the insured demonstrates covered property damage, the measure of the loss generally is the difference between expected profits during the recovery period after the event and actual profits during that period, less any unrelated losses.

Perhaps the only recent U.S. event comparable to Japan’s earthquake is Hurricane Katrina. In Consolidated Cos. v. Lexington Ins. Co., the Fifth Circuit Court of Appeals ruled that business interruption losses resulting from Hurricane Katrina were covered without requiring proof to a level of specificity that the loss stemmed solely from damage to the policyholder’s property as a result of the hurricane. The insurance carrier argued that the policyholder had to prove what its likely performance would have been had Katrina taken place but not damaged the policyholder’s property, reasoning that, even absent damage to the policyholder’s property, profits would have been reduced because of the generally depressed economic conditions following the hurricane. Instead, the court concluded that the loss should be calculated as if Katrina had not struck at all.

Coverage for this interdependent business interruption loss can extend to locations that are distant from the damaged property if the policyholder can show that the undamaged facility operated in concert with the damaged one. An example would be a policyholder’s remote facility outside of Japan that cannot receive inventory because of damage to the policyholder’s manufacturing plant in Japan.

Extra Expense

Extra expense coverage aims to cover additional costs the policyholder incurs to minimize or avoid interruption of its business. Examples of such coverage are: additional utility costs needed to resume business operations; additional costs to store business equipment; moving costs to relocate to temporary facilities; and costs expended for the temporary repair or replacement of property. Most policies also contain a related coverage, similar to extra expense, typically called expense to reduce loss coverage, to reimburse additional costs incurred to mitigate property damage.

Contingent Business Interruption

Many policies protect against profits lost when a policyholder’s supplier or customer cannot conduct business because of property damage “of the type” covered under the policyholder’s policy. This coverage would provide, for example, recovery to a manufacturer of computers outside of Japan that suffers lost profits as a result of a supplier’s inability to provide required components because of damage to the supplier’s Japanese facility. Similarly, a policyholders’ profits affected by property damage to the facilities of a Japanese customer are recoverable. Covered costs also include losses incurred when a civil authority prevents access to the policyholder’s facilities, or when damage to property in the vicinity of the insured property prevents ingress to, or egress from, the policyholder’s facility.

John Banister, Erica Dominitz, Barry Fleishman, Helen Michael, Carl Salisbury and Caroline Spangenberg are all partners at Kilpatrick Townsend & Stockton.

Risk Management Magazine and Risk Management Monitor.  Copyright 2011 Risk and Insurance Management Society, Inc. All rights reserved.

IRS Defends Discretion to Withhold Section 1256 Exchange Designation for ISOs

Recently posted at the National Law Review by William R. Pomierski of  McDermott Will & Emery an article about the IRS defending its decision not to designate independent system operators as qualified board or exchange:

The IRS defended its decision not to designate independent system operators asqualified board or exchange (QBE) principally on the grounds that, as a matter of law, it is not required to designate any exchanges as QBEs under Category 3 of Section 1256 Contracts.

In Sesco Enterprises, LLC (Civ. No. 10-1470, D.N.J. Nov. 16, 2010), the Internal Revenue Service (IRS) defended its discretion to refrain from extending qualified board or exchange status under Code Section 1256 to U.S. Federal Energy Regulatory Commission (FERC)-regulated independent system operators.  The district court dismissed the taxpayer’s claim that the IRS acted arbitrarily and capriciously when it refused to classify electricity derivatives that traded on independent system operators as “Section 1256 Contracts.

Section 1256 Contracts in General

For federal income tax purposes, a limited number of derivative contracts are classified as Section 1256 Contracts.   Absent an exception, Section 1256 Contracts are subject to mark-to-market tax accounting and the 60/40 rule.  The 60/40 rule characterizes 60 percent of the net gain or loss from a Section 1256 Contract as long-term and 40 percent as short-term capital gain or loss.  Corporate taxpayers often view Section 1256 Contracts as tax disadvantageous, relative to economically similar derivatives that are not taxed as Section 1256 Contracts, such as swaps, unless the business hedging or some other exception is available.

Section 1256 Contract classification is limited to regulated futures contracts, foreign currency contracts, nonequity options, dealer equity options and dealer securities futures contracts, as each is defined in the Internal Revenue Code.   Unless a derivative falls within one of these categories, it is not a Section 1256 Contract, regardless of its economic similarity to a Section 1256 Contract.

Except for foreign currency contracts, Section 1256 Contracts are limited to derivative positions that trade on or are subject to the rules of a qualified board or exchange (or QBE).  QBE status is extended only to national securities exchanges registered with the U.S. Securities and Exchange Commission (SEC) (a Category 1 Exchange); domestic boards of trade designated as contract markets by the U.S. Commodities Futures Trading Commission (CFTC) (a Category 2 Exchange); orany other exchange, board of trade or other market that the Secretary of the Treasury Department determines has rules adequate to carry out the purposes of Code Section 1256 (a Category 3 Exchange).

Category 1 and Category 2 Exchange status is automatic.   Category 3 Exchange status, however, requires a determination by the IRS.  In recent years, Category 3 Exchange designation has been extended to four non-U.S. futures exchanges offering products in the United States: ICE Futures (UK), Dubai Mercantile Exchange, ICE Futures (Canada) and LIFFE (UK).

Sesco Challenges IRS Discretion to Withhold Category 3 Exchange Designation

According to its website, the taxpayer in Sesco (Taxpayer) is an electricity and natural gas trading company. The facts of the case indicate that it traded electricity derivatives (presumably INCs, DECs, Virtuals and/or FTRs) on various independent system operators or regional transmission organizations regulated by the FERC (collectively, ISOs).  Because ISOs are not regulated by the SEC or the CFTC, they cannot be considered Category 1 or Category 2 Exchanges for purposes of Code Section 1256.  To date, no ISO has been designated as a Category 3 Exchange by the IRS.

According to the facts in Sesco, the Taxpayer took the position on its return that derivatives trading on ISOs were Section 1256 Contracts eligible for 60/40 capital treatment.  The IRS denied Section 1256 Contract status on audit.  Somewhat surprisingly, a footnote in Sesco suggests, without any further discussion, that the IRS agreed with the Taxpayer’s position that these electricity derivatives qualified as “regulated futures contracts” under Code Section 1256 except for satisfying the QBE requirement.

During the examination process, the Taxpayer apparently requested a private letter ruling from the IRS that the relevant ISOs were Category 3 Exchanges.   According to the district court, “The IRS refused, asserting that the request for a QBE determination must be made by the exchange itself.”  The Taxpayer then asked one of the ISOs to request Category 3 Exchange status, but the ISO declined to do so.  Taxpayer then filed suit challenging the IRS’s adjustments and asserted that the IRS “acted arbitrarily and capriciously and abused its discretion when it refused to make a QBE determination except upon request from the ISO.”  In essence, the Taxpayer was attempting to force the IRS to designate the ISOs at issue as QBEs.

The IRS defended its decision not to designate the ISOs as QBEs principally on the grounds that, as a matter of law, it is not required to designate any exchanges as QBEs under Category 3.   After briefly considering the wording of Code Section 1256 and the relevant legislative history, the court agreed with the IRS position and dismissed the case on procedural grounds (lack of jurisdiction).

Observations

Although the District Court’s decision in Sesco may be of little or no precedential value due to the procedural aspects of the case, the decision nevertheless is important in that it reflects what has long been understood to be the IRS’ position regarding Category 3 Exchange status, which is that Category 3 Exchange status is not automatic and requires a formal determination by the IRS.  Sesco also confirms that the IRS believes QBE classification can only be requested by the exchange at issue, not by exchange participants.

Unfortunately, Sesco does not address the separate question of whether the IRS could have unilaterally designated the ISOs at issue as QBEs without the participation of the exchanges.  Sesco also raises, but does not address, the issue of whether derivatives traded on exchanges that are not “futures” exchange can be considered “regulated futures contracts” for purposes of Code Section 1256.  These are critical questions that will become more relevant in the near future as the exchange-trading and exchange-clearing requirements imposed by the Dodd-Frank derivatives reform legislation begin to take effect.

© 2011 McDermott Will & Emery

Bill Allowing More Offshore Drilling Introduced to Congress

Posted today at the National Law Review by Sabrina Mizrachi of Greenberg Traurig, LLP – news on the Infrastructure Jobs and Energy Independence Act introduced in Congress yesterday……

The Infrastructure Jobs and Energy Independence Act was introduced on May 12, 2011, and seeks to allow more offshore drilling in order to reduce U.S. reliance on imported fuels and create jobs. The bill was introduced by a bipartisan group of four congressmen, Democrats Jim Costa of California and Tim Walz of Minnesota in collaboration with Pennsylvania Republicans Tim Murphy and Bill Shuster.

The bill contains no new taxes or increase of existing taxes, and would allow drillers to reach natural-gas reservoirs that could fuel industry in the U.S. for 63 years and the U.S. oil industry for 80 years, and also create 1.2 million jobs per year.

©2011 Greenberg Traurig, LLP. All rights reserved.