Category: Regulatory

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

US Labor Department considers development of data tool to combat pay discrimination

Posted in the National Law Review on August 14, 2011 an article by U.S. Department of Labor regarding is considering the development of a new data tool to collect information on salaries, wages and other benefits paid to employees of federal contractors and subcontractors.

Public invited to comment during early stage of development

WASHINGTON — The U.S. Department of Labor’s Office of Federal Contract Compliance Programs is considering the development of a new data tool to collect information on salaries, wages and other benefits paid to employees of federal contractors and subcontractors. The tool would improve OFCCP’s ability to gather data that could be analyzed for indicators of discrimination, such as disparities faced by female and minority workers. To provide an opportunity for the public to submit feedback, the department published an advance notice of proposed rulemaking in the Aug. 10 edition of the Federal Register.

OFCCP enforces Executive Order 11246, which prohibits companies that do business with the federal government from discriminating in employment practices — including compensation — on the basis of sex, race, color, national origin or religion. Last year, the agency announced plans to create a compensation data tool in the department’s fall 2010 regulatory agenda. In addition to providing OFCCP investigators with insight into potential pay discrimination warranting further review, the proposed tool would provide a self-assessment element to help employers evaluate the effects of their compensation practices.

“Today, almost 50 years after the Equal Pay Act became law, the wage gap has narrowed, but not nearly enough,” said Secretary of Labor Hilda L. Solis. “The president and I are committed to ending pay discrimination once and for all.”

The Labor Department’s Bureau of Labor Statistics reports that in 2010 women were paid an average of 77 cents for every dollar paid to men. In addition to the gender gap, research has shown that race- and ethnicity-based pay gaps put workers of color, including men, at a disadvantage. Eliminating compensation-based discrimination is a top priority for OFCCP.

“Pay discrimination continues to plague women and people of color in the workforce,” said OFCCP Director Patricia A. Shiu, a member of the president’s National Equal Pay Enforcement Task Force. “This proposal is about gathering better data, which will allow us to focus our enforcement resources where they are most needed. We can’t truly solve this problem until we can see it, measure it and put dollar figures on it.”

The notice poses 15 questions for public response on the types of data that should be requested, the scope of information OFCCP should seek, how the data should be collected, how the data should be used, what the tool should look like, which contractors should be required to submit compensation data and how the tool might create potential burdens for small businesses. The proposal will be open to public response for 60 days, and the deadline for receiving comments is Oct. 11. To read the proposal or submit a comment, visit the federal e-rulemaking portal at http://www.regulations.gov.

In addition to Executive Order 11246, OFCCP’s legal authority exists under Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974. As amended, these three laws hold those who do business with the federal government, both contractors and subcontractors, to the fair and reasonable standard that they not discriminate in employment on the basis of sex, race, color, religion, national origin, disability or status as a protected veteran. For general information, call OFCCP’s toll-free helpline at 800-397-6251. Additional information is also available at http://www.dol.gov/ofccp/.

© Copyright 2011 U.S. Department of Labor

Department of State Releases September 2011 Visa Bulletin

Recently posted in the National Law Review an article by Eleanor Pelta, Eric S. Bord, A. James Vázquez-Azpiri, and Lance Director Nagel of Morgan, Lewis & Bockius LLP regarding DOS recent Visa Bulletin which sets out per country priority date cutoffs that regulate the flow of adjustment of status (AOS) and consular immigrant visa applications.

The U.S. Department of State (DOS) has released its September 2011 Visa Bulletin. The Visa Bulletin sets out per country priority date cutoffs that regulate the flow of adjustment of status (AOS) and consular immigrant visa applications. Foreign nationals may file applications to adjust their status to that of permanent resident, or to obtain approval of an immigrant visa application at an American embassy or consulate abroad, provided that their priority dates are prior to the cutoff dates specified by the DOS.

What Does the September 2011 Bulletin Say?

EB-1: All EB-1 categories remain current.

EB-2: Priority dates remain current for foreign nationals in the EB-2 category from all countries except China and India.

The relevant priority date cutoffs for Indian and Chinese nationals are as follows:

China: April 15, 2007 (no movement)
India: April 15, 2007 (no movement)

EB-3: There is continued backlog in the EB-3 category.

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

China: July 15, 2004 (forward movement of one week)
India: July 8, 2002 (forward movement of five weeks)
Mexico: November 22, 2005 (forward movement of three weeks)
Philippines: November 22, 2005 (forward movement of three weeks)
Rest of the World: November 22, 2005 (forward movement of three weeks)

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 static and unchanged. 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 September 2011 Visa Bulletin in its entirety, please visit the DOS website at http://www.travel.state.gov/visa/bulletin/bulletin_5542.html.

Copyright © 2011 by Morgan, Lewis & Bockius LLP. All Rights Reserved. 

 

Proposed HIPAA Reporting Requirement May Lead to Increased Compliance Costs and Enforcement Action

Recently posted in the National Law Review an article by Nancy C. Brower and Elizabeth H. Johnson of  Poyner Spruill LLP about HHS’ notice of proposed rulemaking (NPRM) that would allow individuals to obtain an “access report” from HIPAA .  

 

 

On May 31, 2011, the Office of Civil Rights (OCR) of the U.S. Department of Health and Human Services (HHS) issued a notice of proposed rulemaking (NPRM) that would allow individuals to obtain an “access report” from HIPAA covered entities reporting virtually every instance of access to their electronic protected health information (ePHI), including all access by individual employees. The proposed access report must reflect the full name of every person or entity that accessed an individual’s ePHI (if maintained in a designated record set) in the prior three years.

An express purpose of this proposal is to allow individuals to identify situations in which a member of a covered entity’s workforce inappropriately accessed their ePHI. Individuals can then file a complaint with the OCR claiming improper employee access to ePHI.

In a recent case, the OCR entered into a $865,000 settlement with the University of California at Los Angeles Health Systems (UCLAHS) after investigating celebrity complaints of potential inappropriate ePHI access by UCLAHS employees. The investigation led to OCR allegations that UCLAHS employees repeatedly accessed ePHI of many patients, including several celebrity patients, when they did not have any job-related need to access the data, and that UCLAHS failed to implement security controls to reduce the risk of impermissible access, failed to provide Security Rule training, and failed to apply appropriate sanctions against workforce members who violated UCLAHS policies and procedures.

In the NPRM, OCR stated that it believes the degree of access logging required in the new access report is currently being captured and stored by covered entities’ electronic information systems because OCR interprets HIPAA’s audit controls standard (45 C.F.R. § 164.312(b)) and information system activity review implementation specification (45 C.F.R. § 164.308(a)(1)(ii)(D)) to require that all such access be logged, including “view” or “read only” access. However, this interpretation of the Security Rule is much broader than many had believed, and the NPRM has already fallen under criticism as a result. If the new rule is implemented as proposed, many covered entities will incur significant unexpected costs related to systems modifications, data storage (access logs must be retained for three years), training, privacy notice revision and redistribution and response to individual requests.

Business associates will have to undertake a similar degree of implementation to provide covered entities with access logs relevant to the access report, and covered entities will need to consider updating their business associate agreements to reflect this requirement. Individual privacy complaints filed with covered entities and OCR may well increase if this new rule is adopted, either because covered entities will fail to completely or timely provide the access report, or because individuals reviewing their access report will find real or (more likely) perceived cases of inappropriate access to their records.
© 2011 Poyner Spruill LLP. All rights reserved.

Unclaimed Property Audits: No Laughing Matter

Posted on August 8, 2011 in the  National Law Review an article about several  states’ increased focus on unclaimed property and companies needing to be proactive in monitoring and improving their unclaimed property compliance practices.   This article was written by Marc J. Musyl, Micah Schwalb and Sarah Niemiec Seedig of Greenberg Traurig, LLP

Failure to Comply with Unclaimed Property Laws Can Cost a Company Millions in Interest and Penalties Alone

Many states continue to turn to unclaimed property as a source of revenue in the face of budget shortfalls. During the last two years, some state regulators have pursued non-traditional types of unclaimed property and state legislatures have revised their unclaimed property statutes to reduce dormancy periods, effectively causing companies to remit more unclaimed property in a shorter time frame. In New York, for example, the legislature lowered dormancy periods from five to three years for a number of different asset classes typically held by financial institutions.

Acting upon provisions in the Dodd-Frank Act, the SEC recently proposed to expand rules that would require brokers and dealers to escheat sums payable to security holders. Failure to comply with these laws can mean millions of dollars in interest and penalties for a company, which can negatively impact a company’s bottom line. For example, a growing number of life insurers are being audited by multiple states to assess their compliance with unclaimed property laws. One state regulator estimated that these life insurer audits could transfer “north of $1 billion” from the audited life insurers into the pockets of consumers, in the form of benefit payments, and revenue to the states, in the form of unclaimed property, interest and fines.

Unclaimed Property and State Audits

Unclaimed property laws require the remittance of certain types of property to the state for safekeeping if a business is unable to contact the owner of that property after a specified period, known as the dormancy period. Each state has its own set of laws that set forth the types of property subject to escheat, the dormancy period for each category of property, and reporting rules. Examples of items that can constitute unclaimed property include unused gift cards, uncashed payroll checks, uncashed stock dividend checks, abandoned corporate stock, and abandoned trust funds.

States have the ability to audit companies to determine their compliance with the unclaimed property laws. If an audit reveals improperly held or abandoned assets, states can seize the property, hold it in trust for a rightful owner, and impose costs, fines, and interest against the offending entity. In severe cases, the interest and fines can exceed the amount of unclaimed property at issue. These audits are often conducted by third-party auditors paid on a contingency basis, thus creating an incentive for them to maximize the unclaimed property uncovered. What’s more, the lack of a statute of limitations on escheat in most jurisdictions can lead to decades of accumulated unclaimed property liabilities.

35 States: How Does an Audit Get So Large?

Typically, an audit begins when a state engages a third-party auditor and provides a company with notice that it is under audit. The third-party auditor, being paid on a contingency basis, can expand its compensation by adding additional states to the audit. If only one state has authorized an unclaimed property audit, the thirdparty auditor only receives a percentage of the unclaimed property that was required to be reported to that state. However, if 20 states have authorized the audit, the third-party auditor now receives a percentage of the unclaimed property that should have been reported to 20 states, significantly increasing the auditor’s overall compensation.

This snowball effect is exactly what happened to some life insurers, and what could happen to any company. For example, the State of California initiated anaudit of John Hancock in 2008. This audit was undertaken by Verus Financial L.L.C. Fast forward three years to 2011, and Verus has now been authorized by 35 states and the District of Columbia to investigate and audit numerous insurance companies. These audits center around life insurers’ claims handling processes. The Social Security Administration publishes a Death Master File, updated weekly, which can be used to verify deaths. Insurers have been using the Death Master File to find dead annuity holders in order to stop payments. On the flip side, the insurers have not been using the Death Master File to find deceased policy insureds in order to pay the policy beneficiaries. The states and Verus have seized upon this disparate use of the Death Master File in their investigation of whether the funds should have been paid out to beneficiaries, in the form of benefit payments, or the states, in the form of unclaimed property.

Why Should I Be Concerned?: John Hancock as an Example

As a result of the Verus audit discussed above, John Hancock reportedly negotiated a global resolution agreement with 29 states which took effect June 1. As part of John Hancock’s settlement with the State of Florida, John Hancock will pay over $2.4 million in investigative costs and legal fees to Florida, and will establish a $10 million fund to pay death benefits and interest owed to beneficiaries. The amounts owed to beneficiaries that cannot be located will be turned over to Florida’s unclaimed property division. In addition, John Hancock has agreed to change its claims-handling procedures. Throughout the process, John Hancock has maintained that it has not violated the law. Given the number of insurance companies currently under audit, news of further settlements should be expected in the future.

In light of success with life insurers, recent legislative changes and continued state budget crunches, it is reasonable to expect an expansion of audits to other industries. It is widely estimated that a significant percentage of companies are not in full compliance with unclaimed property laws. There is no statute of limitations in most jurisdictions, as mentioned above, so the look-back period can be fairly lengthy and cover periods for which the company no longer has adequate records. The auditor may estimate the unclaimed property liability for such periods, which can lead to a company paying more than it would have otherwise owed. Further, interest and penalties can be severe. For example, in California interest is calculated by state statute at 12% per annum from the date the property should have been reported.

Taking Control of Unclaimed Property Compliance

As a result of the states’ increased focus on unclaimed property, companies need to be proactive in monitoring and, if necessary, improving their unclaimed property compliance practices. As a preliminary step, companies should determine whether or not they are currently in compliance with the unclaimed property laws. Many states have voluntary compliance programs for companies that are out of compliance. Oftentimes, by entering into a voluntary disclosure agreement with the appropriate authorities, a company can retain control of the process, limit the look-back period (remember, there is often no statute of limitations!), and limit the penalties and/or interest that may be owed for non-compliance. Typically, these voluntary programs are not available to companies once they have been selected for audit. Analyzing a target’s unclaimed property liability exposure should also be part of the due diligence process in a potential acquisition. Attention to unclaimed property compliance now can save valuable company resources later.

 

Healthcare Alert: U.S. Announces Process for $3.8B in CO-OP Funds

Recently posted in the National Law Review an article by Mark E. Rust of Barnes & Thornburg LLP about the announcement that Medicare and Medicaid Services (CMS) will begin accepting applications for Consumer Oriented and Operated Plan (CO-OP) Start-Up Loans and Solvency Loans on Oct. 17, 2011 :

According to a recently released Federal Opportunity Announcement (FOA), TheCenter for Medicare and Medicaid Services (CMS) will begin accepting applications for Consumer Oriented and Operated Plan (CO-OP) Start-Up Loans and Solvency Loans on Oct. 17, 2011. Section 1322 of the Patient Protection and Affordable Care Act (PPACA) establishes the CO-OP program to foster the creation of nonprofit health insurance issuers. The CO-OP program will dispense $3.8 billion in Start-Up Loans and Solvency Loans to providers and buyers who sponsor new insurers regionally.

The FOA is subject to change pending the CO-OP final rule. Comments on the proposed CO-OP rule are due on Sept. 16, 2011.

The CO-OP program is designed to foster the creation of new consumer-governed, private, nonprofit health insurance issuers, known as CO-OPs. CO-OPs will offer plans under the Affordable Insurance Exchanges (Exchanges) by Jan. 1, 2014. Generally, CMS will provide Start-Up Loans for all costs associated with developing the CO-OP, and Solvency Loans for all state registered reserves (Loans) to CO-OP applicants in each state. The loans are awarded for the purpose of CO OP development and meeting state solvency requirements. The FOA provides general detail regarding the basis upon which loans are awarded.

FOA Application Timeline

Under the FOA, CO-OP applicants must immediately submit a Letter of Intent indicating intent to apply for joint Start-Up Loans and/or Solvency Loans. The CMS underscores the time urgency of application because the agency expects to provide notice of loan awards by Jan. 12, 2012 so that CO OP applicants can be prepared to accept contracts in late 2013. Because of this deadline, the first round of applications are due by Oct. 17, 2011.

Successful CO-OP applications receive a Notice of Award and a Loan Agreement. CO-OP applicants may request reconsideration of loan application to CMS within 30 days of receiving determination notice. CMS notes that redetermination results in a final decision that is not subject to further administrative review or appeal.

FOA CO-OP Loan Application Criteria

Generally, CMS will look for efficiencies and evaluate whether the business plan and budget is sufficient, reasonable, and cost effective to support activities proposed in the CO-OP application. CMS will review applications on a base total of 100 points weighted from five general criteria including: (1) statutory preferences (16 points); (2) project narrative (4 points); (3) business plan (62 points); (4) government and licensure (10 points); and (5) feasibility study (8 points). The feasibility study must be supported by an actuarial analysis.

FOA Loan Details

Both Loans are non-recourse and provided at a low interest rates. Start-Up Loans will be prepaid five years from startup and charged an interest rate equal to the average interest rate on marketable Treasury securities of similar maturity minus one (1%) percentage point (provided that interest shall not be less than 0 percent) on the amount of the drawdown. Solvency Loans will be repaid in 15 years and charged an interest rate equal to the average interest rate on marketable Treasury securities of similar maturity minus two (2%) percentage points (provided that the interest shall not be less than 0 percent) on the amount of the drawdown.

© 2011 BARNES & THORNBURG LLP

 

 

 

 

 

 

 

It's Not Easy Being Green: Understanding and Avoiding the Pitfalls of Green Marketing

Recently posted in the National Law Review an article by Anne E. Viner of Much Shelist Denenberg Ament & Rubenstein P.C. regarding the idenfication of “green” products and services:

A current trend among businesses is to identify their products and services as “green,” “environmentally safe,” “ozone friendly” or otherwise good for the environment. Companies do this to show that they are good stewards of the Earth and to attract customers who are interested in purchasing products that are “environmentally friendly.” But what does that phrase—or similar terminology—really mean? What sort of information must a business have in order to support these kinds of claims? Not surprisingly, there are a number of federal and state regulations, rules and guidelines that govern green marketing.

The Federal Trade Commission (FTC) Act prohibits deceptive representations in advertising, labeling, product inserts, catalogs and sales presentations. If statements concerning the environmental benefits of a product or service cannot be substantiated, they may be found to be deceptive by the FTC. Customers, competitors and environmental citizen groups often monitor green marketing and can file administrative complaints with the FTC if a company’s claims are misleading. Such complaints not only hurt businesses monetarily (legal expenses, administrative penalties, etc.), but can also damage the goodwill that the environmental claim was attempting to establish.

Federal Guidance

To help businesses determine when green marketing claims are acceptable and when they have gone too far, the FTC and the United States Environmental Protection Agency (EPA) have developed guidelines to ensure that environmental marketing claims do not mislead consumers. Advertising, labeling, promotional materials, presentations and other forms of marketing that run afoul of the guidelines created by the FTC and EPA can result in such conduct being declared unlawful under the FTC Act.

The following guidelines apply broadly to all environmental marketing efforts—whether they are consumer-focused claims or business-to-business claims directed at suppliers, affiliated companies, distributors or other customers:

  • Clearly identify whether the advertised environmental benefit is with the product itself, the packaging, a service, or some other portion or component of the product, service or packaging. For example, if a box of aluminum foil is labeled “recyclable” without further elaboration, this claim would be considered deceptive if any part of either the box or the foil cannot be recycled.
  • Avoid overstatements of environmental benefits. For example, a package might be labeled “50% more recycled content than before” after the manufacturer upped the amount of recycled material from 2% to 3%. Although the claim is technically true, it gives a false impression that the amount of recycled material was significantly increased.
  • Be ready to substantiate any comparisons between products. For example, if an ad claims that a package creates “less waste than the leading national brand,” the advertiser must be able to substantiate the comparison with calculations comparing the relative solid waste contributions of the two packages. If it cannot, the ad runs afoul of the FTC Act and may create liability.

The guidelines created by the FTC and EPA also address the following specific environmental claims:

  • Avoid general, unqualified terms (such as “environmentally friendly” and “green”) that cannot be quantified and may convey a wide range of meanings to customers. The broader the term (a brand name like Eco-Safe, for example), the more likely it will be found deceptive by the FTC.
  • Reliable, scientific evidence must support claims that a product or package is degradable, biodegradable or photodegradable, as well as compostable or made with recycled, pre-consumer or post-consumer products. For example, if a shampoo is advertised as “biodegradable” with no qualifications, the manufacturer must have reliable scientific evidence that the product, which is customarily disposed of in sewer systems, will break down and decompose into elements found in nature in a short period of time. These specific terms have precise environmental meanings, and the guidelines give numerous examples of acceptable and deceptive uses of them.

The Guidelines in Action

Assume that a manufacturer wants to identify its entire product line of plastic buckets as being “made of recyclable material.” However, only one type of bucket in the line is made of post-consumer plastic and the post-consumer content averages just 20% annually. How can the manufacturer properly advertise the recycled content of its bucket line? According to the FTC and EPA guidelines, it is deceptive to identify the entire line as “green” or as being “made of recycled materials.” These broad, unquantifiable terms should also be avoided when advertising the one type of bucket that actually is made from post-consumer plastic. However, it is acceptable to use the 20% annual average of recycled material in marketing that particular bucket type. Such averaging is permissible, provided the company’s claims can be substantiated with scientific evidence.

The FTC Act and related guidance is just one example of regulations that are potentially applicable to green marketing claims. The EPA has established additional regulations and guidance under its Consumer Labeling Initiative and EPA Environmentally Preferable Procurement Program. The International Organization for Standardization also has developed environmental labeling criteria for products sold worldwide. Many states have their own environmental disclosure and marketing requirements as well.

Given the numerous requirements associated with environmental marketing, along with the potential risks of being found deceptive, it really isn’t easy being green. So, before your business makes any environmental claims about its products or services, carefully consider how you will state the environmental benefits, whether they can be supported with scientific evidence and what regulations may govern your claims.

© 2011 Much Shelist Denenberg Ament & Rubenstein, P.C.  

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.

ALJ Upholds OIG’s Eight-Year Exclusion of Company Owner

Posted recently in the National Law Review an article by Meghan C. O’Connor of von Briesen & Roper, S.C. regarding OIG’s use of its exclusionary authority against individuals:

 

In yet another example of the OIG’s use of its exclusionary authority against individuals, an Administrative Law Judge (ALJ) upheld the OIG’s exclusion ofMichael D. Dinkel, the owner and President of a diagnostic imaging company. Dinkel has been excluded from participation in all Federal health care programs for a period of eight years.

The OIG has the authority to exclude individuals and entities from Federal health care programs for presenting or causing to be presented claims for items or services that the individual or entity knows or should know where not provided as claimed, or are otherwise false or fraudulent.

According to the OIG’s press release, Dinkel and his company, Drew Medical, Inc., submitted approximately 9,500 false claims worth $1.6 million to theMedicare and Medicaid programs for services related to venography, a radiology procedure. The OIG found that no venography services had actually been performed. Instead, claims were submitted to Medicare and Medicaid for a corresponding procedural code for MRI and CT procedures with contrast. Prior to Dinkel’s exclusion, a $1,147,564 civil False Claims Act settlement had been entered into with Dinkel and his company.

The ALJ found that Dinkel had a duty “to understand Medicare and Medicaid billing requirements and apply them scrupulously to the claims that he caused to be presented.” Furthermore, Dinkel’s failure to ensure his company properly claimed reimbursement “constituted reckless indifference to the propriety of the claims he cause to be presented.”

The ALJ’s full decision is available by request from the OIG.

©2011 von Briesen & Roper, s.c

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.

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