Category: Uncategorized

TCPA Consent Medley: Third New Decision Enforcing TCPA Consent Provision in Consumer Agreement Has “Robocallers” Humming

After a long period of quiet on the issue, TCPAland has seen three swift decisions on good-Reyes (Reyes v. Lincoln Auto. Fin. Servs., 861 F.3d 51 (2d Cir. 2017), as amended (Aug. 21, 2017)) all aligning to enforce contractual TCPA consent provisions. First, Navient scored a big win, but that was within the Second Circuit so it didn’t make much of a stir. But then a real breakthrough: the Chief Judge of the Northern District of Alabama held that TCPA consent provisions in consumer agreements could not be revoked–the first such ruling from within the Eleventh Circuit. And now the trifecta. A court within the Middle District of Florida–seemingly the most consumer-friendly TCPA jurisdiction in the country as of late– granted summary judgment on a TCPA claim to a Defendant today holding that a consumer cannot stop robocalls after agreeing to receive such calls as a term in a written contract.

Woah.

The case is Medley v. Dish Network, Case No. 8:16-cv-2534-T-36TBM, 2018 U.S. Dist. LEXIS 144895 (M.D. Fl. Aug. 27, 2018) and it represents the first decision out of the Middle District of Florida to apply Good Reyes and hold that TCPA consent is irrevocable in certain circumstances. As shown below, Medley took no prisoners in distinguishing and declining to follow decisions that had held otherwise.

After first determining that the contractual consent provisions survived Plaintiff’s bankruptcy discharge because Medley failed to include her debt to Dish on its schedules, the Court deftly articulated the governing rule of Good Reyes as follows:

“Although voluntary and gratuitous consent could be revoked under the common law, which was recognized by the Eleventh Circuit in Osorio, the Second Circuit explained that consent could ‘become irrevocable when it is provided in a legally binding agreement, in which case any attempted termination is not effective.’”

Medley at *29

The Medley court next tips its hat to the decision in Few, citing the Northern District of Alabama decision for the proposition that where a “plaintiff g[i]ve[s] consent to be called ‘as part of a bargained-for exchange and not merely gratuitously, she was unable to unilaterally revoke that consent’” (Medley at *30) before remarking simply: “This Court agrees.” Id. 

The Court goes on to find that “it is black-letter contract law that one party to an agreement cannot, without the other party’s consent, unilaterally modify the agreement once it has been executed” and “[n]othing in the TCPA indicates that contractually-granted consent can be unilaterally revoked in contradiction to black-letter law.” Medley at *30. How sweet is that?

The Medley court also distinguished Gager v. Dell Financial Services, LLC, 727
F.3d 265, 270-71 (3d Cir. 2013), Target National Bank v. Welch, No. 8:15-cv-614-T-36, 2016 WL 1157043 (M.D. Fla. Mar. 24, 2016) and Patterson v. AllyFinancial, Inc., No. 3:16-cv1592-
J-32-JBT, 2018 WL 647438 (M.D. Fla. Jan. 31, 2018) as cases involving application consents and opposed to contractual consent provisions. Medley also noted that the consent clause in Patterson did not apply to the type of calls being made in that case, a rather solid basis to distinguish and decline to follow the decision.

The Court also takes issue with the reasoning in Ammons v. Ally Financial, Inc.,
No. 3:17-cv-00505, 2018 WL 3134619 (M.D. Tenn. June 27, 2018)–refusing to apply Good Reyes despite contractual consent terms in an automotive finance agreement–and declines to follow it. In Medley’s view Ammons over reads Osorio and under analyzes Patterson and Welch. 

Accordingly the court concludes that Defendant is entitled to summary judgment and sums up matters succinctly in this clean-as-a-whistle conclusion:

“[T]he Court finds that in the absence of a statement by Congress that the TCPA alters the common-law notion that consent cannot be unilaterally revoked where given as part of a bargained for contract, the Court will decline to do so.”

Medley at *36.

Notably, as was the case in Harris, the contract in Medley did not include a revocation provision and was simply silent on the issue of whether consent could be revoked. As in Harris the Medley court–correctly–interpreted that silence to mean that consent could not be revoked at all.

Since many will ask, Medley was decided by the Hon. Charlene Honeywell who is no stranger to TCPA claimants appearing before her. With Medley she as certainly made her TCPAland mark.

And with Few and Medley working in their favor Defendants seeking to enforce contractual TCPA consent provisions suddenly have a lot to be optimistic about. But this is TCPAland and, in the words of the Grand Duchess, its best to never get too comfortable.

Copyright © 2018 Womble Bond Dickinson (US) LLP All Rights Reserved.

ARTICLE BY

Eric Troutman
Womble Bond Dickinson (US) LLP

CMS Proposes to Overhaul the Medicare Shared Savings Program

On August 9, 2018, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule to overhaul the Medicare Shared Savings Program (MSSP). The proposal, titled “Pathways to Success,” would make significant changes to the accountable care organization (ACO) model at the heart of the program. The proposed changes include a restructuring of the current ACO risk tracks, updating spending benchmarks, increased ACO flexibility to provide care, as well as changes to the electronic health records requirements for ACO practitioners.

Background

There are currently 561 Shared Savings Program ACOs serving over 10.5 million Medicare fee-for-service (FFS) beneficiaries. Under the MSSP, ACOs are assessed based on quality and outcome measures, and by comparing their overall health care spending to a historical benchmark. ACOs receive a share of any savings under the historical benchmark if they meet the quality performance requirements.

Currently, the MSSP allows ACOs to participate in one of three “tracks.” Track 1 is a “one-sided” model, meaning that participating ACOs share in their savings, but are not required to pay back spending over the historical benchmark. Track 2 and Track 3 are “two-sided” models, meaning that participating ACOs share in a larger portion of any savings under their benchmark, but may also be required to share losses if spending exceeds the benchmark. Currently, the vast majority of ACOs participate in Track 1.

Restructuring the Tracks

CMS proposes retiring Track 1 and Track 2, creating a BASIC track, and renaming Track 3 the ENHANCED Track. CMS describes the BASIC track as a “glide path” that will help ACOs transition to higher levels of risk and potential reward.  To that end, the BASIC track contains five levels that ACOs would transition through over the course of a five year contract period, spending a maximum of one year at each level. The first two years would involve upside-only risk, with a transition to increasing levels of financial risk in the remaining three years. Current Track 1 ACOs will be limited to one-year of upside-only participation before taking on downside risk. This is a substantial acceleration from the current Track 1 Model, which permits ACOs to avoid downside risk for up to six years.

Finally, the proposed rule draws a distinction between low revenue ACOs and high revenue ACOs. Low revenue ACOs (typically composed of rural ACOs and physician practices) would be permitted to spend two 5-year contract periods on the BASIC track. High revenue ACOs (typically composed of hospitals) would be permitted only one 5-year contract period on the Basic track.

Source: Proposed Rule: Medicare Program; Medicare Shared Savings Program; Accountable Care Organizations–Pathways to Success

Updating the Historical Spending Benchmarks

Every year, an ACO’s spending is comparing to its historical benchmark to determine the ACO’s participation in any shared savings or losses. Under the proposed rule, the benchmark methodology will incorporate regional FFS expenditures beginning in the first contract period. Also, the historical benchmark will be rebased at the beginning of each 5-year contract period. Adjustments to the benchmark related to regional expenditures will be capped at 5% of the national Medicare FFS per capita expenditure. According to CMS, these changes will improve the predictability of historical benchmark setting and increase the opportunity for ACOs to achieve savings against the historical benchmark.

Expanding ACO Flexibility in Beneficiary Care

The proposed rule contains several changes to the MSSP aimed at increasing the flexibility of ACOs to provide cost-effective care to their assigned beneficiaries. For example, to support the ACO’s coordination of care across health care settings, ACOs will be eligible to receive payment for telehealth services furnished to prospectively assigned beneficiaries even when they would otherwise be prohibited based on geographic prerequisites. The proposed rule also expands the Skilled Nursing Facility (SNF) 3-Day Rule Waiver to all ACOs in two-sided models. This waiver permits Medicare coverage of certain SNF services that are not preceded by a qualifying 3-day inpatient hospital stay.

Finally, the proposed rule permits ACOs in two-sided models to reward beneficiaries with incentive payments of up to $20 for primary care services received from ACO professionals, Federally Qualified Health Centers, or Rural Health Clinics.

Changing Electronic Health Record Requirements

Currently, one of the quality measures for which ACOs are assessed relates to the percentage of participating primary care providers that successfully demonstrate meaningful use of an electronic health records system for each year of participation in the program. The proposed rule eliminates this measure. Instead, CMS proposes to adopt an “interoperability criterion” that assesses the use of certified electronic health record technology for initial program participation and as part of each ACO’s annual certification of compliance with program requirements.

Commentary

CMS’s proposal is not surprising in light of CMS Administrator Seema Verma’s recent comments about upside-only ACOs. At an American Hospital Association annual membership meeting this past spring, Administrator Verma is quoted as saying:

[T]he majority of ACOs, while receiving many waivers of federal rules and requirements, have yet to move to any downside risk.  And even more concerning, these ACOs are increasing Medicare spending, and the presence of these ‘upside-only’ tracks may be encouraging consolidation in the market place, reducing competition and choice for our beneficiaries.  While we understand that systems need time to adjust, our system cannot afford to continue with models that are not producing results.

Though the rule is only a proposal at this time, the above comments illustrate that CMS is serious about requiring providers to be more financially accountable for the care of their patients. And the agency is clear-eyed about the short-term impact of the proposal, estimating that more than 100 ACOs will exit the MSSP over the next 10 years if the proposal is finalized.  The agency nevertheless believes that the new program would be attractive to providers due to its simplicity (as compared to the current program) and the new opportunity it offers clinicians to qualify as participating in an Advanced Alternative Payment Model (APM) when they reach year 5 of the BASIC track. APMs are an important concept under the Quality Payment Program (QPP) that was ushered in by the Medicare Access and CHIP Reauthorization Act of 2015. Clinicians participating in an Advanced APM are exempt from reporting under the QPP’s Merit-based Incentive Payment System (MIPS) and are eligible for certain financial incentives. The fates of the MSSP and the QPP are thus intertwined, and the co-evolution of the programs is at a critical stage, especially in light of CMS’s July release of a proposed rule modifying the QPP. We will continue to report on the developments of both of these programs.

 

©1994-2018 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

Are You Ready for the Next Downturn? Ninth Circuit “Cramdown” Cases Affecting Real Estate Lenders

Plan Approval in a Multi-Debtor, Single-Plan Context

In In re Transwest Resort Properties, Inc., the Ninth Circuit addressed the Chapter 11 reorganization plan approval process where a single plan was proposed for multiple affiliated debtor entities whose cases were being administered jointly. Generally, for “cramdown” plans, the Bankruptcy Code requires that at least one class of impaired creditors vote in favor of a plan for it to be approved. In Transwest, a mezzanine lender who was the sole creditor for two of the five debtor entities and whose loan would be extinguished under the single, jointly administered plan, argued that impaired class approval had to occur on a per debtor basis, and that since it was the only impaired class member for two of the debtors, its votes against the plan in those debtor cases barred confirmation (as there were no impaired classes of creditors in those cases voting in favor of the plan). The bankruptcy court, the district court, and the Ninth Circuit rejected that position, holding instead that impaired class approval applied on a per plan basis, and that the votes of the impaired class of creditors of the other three debtors established consent from an impaired class across all debtors, and supported plan confirmation. The Ninth Circuit is the first circuit-level court to address this issue, and the lower bankruptcy courts remain split on the issue.

Potential Impact

Lenders, particularly mezzanine lenders, who lend to one or more isolated borrowing entities within a corporate group of debtor entities may not have the voting control in the plan confirmation process they assume exists to block “cramdown”, and should factor that reality into their risk assessments.

“Cramdown” Value = Replacement Value (even if it’s less than foreclosure value)

In In re Sunnyslope Housing Limited Partnership, the Ninth Circuit, in an en banc opinion, addressed how a secured creditor’s interest should be valued in the context of a “cramdown,” i.e. where the debtor seeks to retain and use creditor’s collateral in the reorganization plan and the value of that collateral is to be determined based on the proposed use of the property. Valuation of the property in the “cramdown” context was critical to how much the secured creditor would recover under the proposed plan, given that amount of its secured claim would be determined by the value of the property. The Sunnyslope case presented a highly unusual circumstance where the foreclosure value of the apartment complex collateral was significantly higher than its replacement or use value due to the existence of low-income housing covenants that would be extinguished in a prospective foreclosure.

Despite the higher foreclosure value supported by the secured creditor, the Ninth Circuit affirmed application of the replacement value standard for determining the secured creditor’s present value of its claim under the plan. In doing so, the Ninth Circuit affirmed prior precedent holding that only a property’s replacement value – to be determined in light of its “proposed disposition or use” – could be utilized for determining the amount of a secured claim in the cramdown context. In applying its replacement value standard in Sunnyslope, the Ninth Circuit confirmed that the highest and best use of collateral may not dictate the value of a creditor’s secured claim, even where the replacement value, as determined by the collateral’s anticipated use or disposition, is lower than its foreclosure value.

Potential Impact

Lenders facing a potential “cramdown” of its secured claim, based on present value of its claim against real property, should carefully analyze the potential difference between a property’s foreclosure value and its replacement value and adjust expectations accordingly.

© 2010-2018 Allen Matkins Leck Gamble Mallory & Natsis LLP

This post was written by Michael R. Farrell of Allen Matkins Leck Gamble Mallory & Natsis LLP.

EPA Proposes Affordable Clean Energy Rule

On August 21, 2018, the Environmental Protection Agency (EPA) issued a proposed rule pursuant to section 111(d) of the Clean Air Act (CAA) that would establish emission guidelines for states to develop plans to limit carbon dioxide (CO2) emissions from existing fossil-fired power plants.  The proposed Affordable Clean Energy (ACE) rule would replace the 2015 Clean Power Plan (CPP), which EPA is proposing to repeal (in a separate rulemaking) on the grounds that the CPP exceeded the agency’s authority under the CAA.

Core elements of the proposed ACE rule include: (1) a determination of the best system of emission reduction (BSER) for CO2 emissions from coal-fired power plants; (2) a list of “candidate technologies” states can use when setting CO2 performance standards for affected plants; (3) a new preliminary applicability test for determining whether a physical or operational change made to a power plant may be a “major modification” triggering New Source Review (NSR); and (4) new implementing regulations for establishing emission guidelines under CAA section 111(d).

Section 111(d)

EPA is proposing the ACE rule pursuant to section 111(d) of the CAA.  This section directs EPA to promulgate regulations establishing a federal-state process for setting standards of performance limiting emissions from existing sources for pollutants not otherwise regulated in other specified sections of the CAA.  Implementing section 111(d) is a three-step process.  First, EPA issues a “guideline” for states to use in developing compliance plans that include standards of performance for stationary sources within a particular source category.  The guideline identifies what EPA determines is the BSER for the relevant sources within the source category.  Second, each state submits a plan to EPA that includes standards of performance for the covered sources in the state.  Third, EPA approves or disapproves of the state plans.  If a state fails to submit an approvable plan, the CAA requires EPA to impose a federal plan.

Proposed BSER Determination

EPA is proposing to define BSER for CO2 emissions from existing coal-fired power plants as heat-rate efficiency improvements based on a range of “candidate technologies.”  This “inside the fence” BSER determination reflects a different approach than what was used in the CPP.  The CPP determined the BSER for power plants based on reductions achievable not only through inside-the-fence measures such as heat rate improvements but also through shifting of generation from higher-emitting to lower-emitting or zero-emitting plants.  As noted above, EPA has proposed to find that such an “outside-the-fence” approach to determining BSER exceeds the agency’s authority under the CAA.

EPA has identified a list of the “most impactful” heat rate improvement measures.  EPA is proposing that this list serve as the “candidate technologies” or “checklist” of BSER technologies, equipment upgrades, and best operating and maintenance practices for coal-fired power plants.  These candidate technologies are:

  • Neural Network/Intelligent Sootblowers

  • Boiler Feed Pumps

  • Air Heater and Duct Leakage Control

  • Variable Frequency Drives

  • Blade Path Upgrade (Steam Turbine)

  • Redesign/Replace Economizer

  • Improved Operating and Maintenance Practices

States would consider the above technologies in establishing standards of performance for existing coal-fired power plants.  EPA is proposing that performance standards will set a specific allowable emission rate expressed on a pound CO2 per MWH-gross rate for each affected unit based on the application of the appropriate candidate BSER technologies to each unit.

EPA explains in the proposed rule that it does not have sufficient information to make a BSER determination with respect to heat rate improvements at natural gas-fired simple‑cycle turbines or combined cycle turbines.  The agency is soliciting comment on this issue.  Previously, EPA determined that heat rate improvement measures at natural gas‑fired combustion turbines would not be considered BSER because such measures cannot provide meaningful reductions at reasonable cost.

State Compliance Plans

The proposed rule would provide each state with broad discretion in establishing specific performance standards for particular plants.  The proposal also allows state plans to rely on emission averaging and trading among affected coal‑fired units at a particular plant.  However, EPA has proposed that state plans should not be allowed to incorporate averaging and trading among different plants, such as a state-wide or interstate cap-and-trade program.  Nor will any credit be given for CO2 emissions reductions achieved through increased generation of renewable energy or gas-fired generation not covered under the section 111(d) regulatory program.  The proposed rule explains that such an approach would be inconsistent with EPA’s proposed “inside-the-fence” interpretation of BSER under section 111.

Permitting Under NSR Program

EPA is proposing revisions to the NSR permitting program to make it easier for power plants to adopt heat rate improvements without triggering NSR obligations.  The NSR program is a preconstruction permitting program.  An NSR permit is required not only before construction of a new major stationary source; it is also required before modifying an existing major source if the modification will result in a significant emissions increase of any NSR-regulated pollutant.  Projects that cause a significant increase in annual emissions may trigger onerous NSR permitting requirements, which include installation of state-of-art emission control technologies, prescriptive air quality modeling, and extensive public notice and comment procedures.

To avoid widespread triggering of NSR permitting requirements from heat rate improvement projects undertaken by affected coal‑fired plants, EPA is proposing to amend the NSR regulations to include an hourly emissions increase test.  Under the proposed revisions, a non-excluded physical or operational change to an electricity generating unit would only trigger NSR if the change resulted in an increase in the unit’s maximum hourly emissions rate under procedures proposed in the ACE rule, as well as a significant emission increase in annual emissions under the current NSR regulations.

As drafted, the proposed maximum hourly emission increase test would be available to any electricity generating unit, including natural gas-fired units that would not be subject to regulation under section 111(d).

States with approved NSR programs would have the option but would not be required to adopt the hourly emission increase test ultimately promulgated as part of the NSR provisions in their SIPs.  For those states with delegated NSR programs that are acting on behalf of EPA, the NSR permitting process would have to include any changes that are ultimately made to the federal NSR provisions as they would be administering the federal program.

EPA is proposing that the potential revisions to the NSR permitting program are severable from the rest of the ACE rule.

Implementing Regulations for Emission Guidelines under Section 111(d)

The proposal revises the general implementing regulations for section 111(d) that govern how EPA issues emission guidelines, and how and when states develop and submit their plans.  These changes would apply for all future section 111(d) rules.  Proposed changes include the following:

  • Timing:  The proposal updates timing requirements regarding submission of state plans and EPA action on those state plans.

    • State submissions:  EPA is proposing to provide states three years to develop state plans.  The existing implementing regulations provide nine months.

    • EPA action:  The proposal would allow EPA 12 months to act on a complete state plan submittal.  The existing implementing regulations provide four months.

    • Federal plan:  The proposal would allow EPA two years to issue a federal plan after a finding of a state’s failure to submit an approvable plan.  The existing implementing regulations provide six months.

  • Criteria for state plans:  The proposal has completeness criteria for state plans that include administrative materials and technical support for state implementation of the plan.  EPA would have six months to determine completeness and would make that determination by comparing the state’s submission against the completeness criteria.

  • Variance provisions:  The proposal provides greater flexibility to states to adopt plans that include variances from the EPA guidelines that will allow, among other things, states to take into account the remaining useful life of the unit and other relevant factors in establishing a performance standard for a particular affected unit.

Next Steps

EPA will take comment on the proposal for 60 days after publication in the Federal Register and will hold at least one public hearing.  Depending on the exact date of Federal Register publication, this means comments will be due to EPA sometime in late October 2018.

Impacts of EPA Proposal

According to EPA, the proposed ACE rule would reduce the compliance burden by up to $400 million per year when compared to the CPP.  EPA estimates that the ACE rule could reduce overall 2030 CO2 emissions by up to 1.5% from projected levels without the CPP.

 

© 2018 Van Ness Feldman LLP
This post was written by Kyle W. Danish and Stephen C. Fotis  of Van Ness Feldman LLP.

California Supreme Court Holds That High Interest Rates on Payday Loans Can be Unconscionable

On August 13, 2018, the California Supreme Court in Eduardo De La Torre, et al. v. CashCall, Inc., held that interest rates on consumer loans of $2,500 or more could be found unconscionable under section 22302 of the California Financial Code, despite not being subject to certain statutory interest rate caps.  By its decision, the Court resolved a question that was certified to it by the Ninth Circuit Court of Appeals.  See Kremen v. Cohen, 325 F.3d 1035, 1037 (9th Cir. 2003) (certification procedure is used by the Ninth Circuit when there are questions presenting “significant issues, including those with important public policy ramifications, and that have not yet been resolved by the state courts”).

The California Supreme Court found that although California sets statutory caps on interest rates for consumer loans that are less than $2,500, courts still have a responsibility to “guard against consumer loan provisions with unduly oppressive terms.”  Citing Perdue v. Crocker Nat’l Bank (1985) 38 Cal.3d 913, 926.  However, the Court noted that this responsibility should be exercised with caution, since unsecured loans made to high-risk borrowers often justify their high rates.

Plaintiffs alleged in this class action that defendant CashCall, Inc. (“CashCall”) violated the “unlawful” prong of California’s Unfair Competition Law (“UCL”), when it charged interest rates of 90% or higher to borrowers who took out loans from CashCall of at least $2,500.  Bus. & Prof. Code § 17200.  Specifically, Plaintiffs alleged that CashCall’s lending practice was unlawful because it violated section 22302 of the Financial Code, which applies the Civil Code’s statutory unconscionability doctrine to consumer loans.  By way of background, the UCL’s “unlawful” prong “‘borrows’ violations of other laws and treats them as unlawful practices that the unfair competition law makes independently actionable.”  Citing Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163, 180 (1999).

The Court agreed, and found that an interest rate is just a term, like any other term in an agreement, that is governed by California’s unconscionability standards.  The unconscionability doctrine is meant to ensure that “in circumstances indicating an absence of meaningful choice, contracts do not specify terms that are ‘overly harsh,’ ‘unduly oppressive,’ or ‘so one-sided as to shock the conscience.”  Citing Sanchez v. Valencia Holding Co., LLC, 61 Cal.4th 899, 910-911 (2015).  Unconscionability requires both “oppression or surprise,” hallmarks of procedural unconscionability, along with the “overly harsh or one-sided results that epitomize substantive unconscionability.”  By enacting Civil Code section 1670.5, California made unconscionability a doctrine that is applicable to all contracts, and courts may refuse enforcement of “any clause of the contract” on the basis that it is unconscionable.  The Court also noted that unconscionability is a flexible standard by which courts not only look at the complained-of term, but also the process by which the contracting parties arrived at the agreement and the “larger context surrounding the contract.”  By incorporating Civil Code section 1670.5 into section 22302 of the Financial Code, the unconscionability doctrine was specifically meant to apply to terms in a consumer loan agreement, regardless of the amount of the loan.  The Court further reasoned that “guarding against unconscionable contracts has long been within the province of the courts.”

Plaintiffs sought the UCL remedies of restitution and injunctive relief, which are “cumulative” of any other remedies.  Bus. & Prof. Code §§ 17203, 17205.  The question posed to the California Supreme Court stemmed from an appeal to the Ninth Circuit of the district court’s ruling granting the defendant’s motion for summary judgment.  The California Supreme Court did not resolve the question of whether the loans were actually unconscionable.

 

Copyright © 2018 Womble Bond Dickinson (US) LLP All Rights Reserved.
For more litigation news, check out the National Law Review’s Litigation Type of Law page.

National Aging and Law Conference

Save The Date for NALC 2018!

Save the date for the National Aging and Law Conference in historic Old Town Alexandria, Virginia. NALC 2018 will be held at the Crowne Plaza Old Town Alexandria, on October 24-26, 2018.

For the fifth year, the ABA Commission on Law and Aging is proud to host the National Aging and Law Conference. The 2018 National Aging and Law Conference will focus on a theme of Advocating for Aging with Dignity.

Registration Brochure

Online Registration Now Open

Mail Order Form Registration

Register by Phone

800-285-2221
Monday – Friday
9:00 AM – 6:00 PM Eastern

Pre-Conference Information and Registration

Ground Transportation

This year’s conference will be at the Crowne Plaza Old TownAlexandria, about 3 miles directly south of Reagan National Airport (the hotel offers shuttle service to and from DCA.)

Crowne Plaza Old Town

901 N. Fairfax Street

Alexandria, VA  22314

(703) 683-6000

The group rate is $165 plus tax, reservations can be made by calling 877-666-3243. The group rate code is G6U.  

Ground Transportation

The Crowne Plaza Old Town Alexandria offers FREE shuttle service to and from Ronald Reagan Washington National Airport.  The shuttle runs about every 30 minutes, picking up at the airport at 15 and 45 minutes after the hour, and at the hotel on the hour and half-hour.  The airport terminal is being expanded, the pickup location for airport shuttles will change as work progresses, it is best to ask at the information desk for the pickup location for hotel shuttles.

This nearest Metro (subway) station to the hotel is Braddock Road.  The distance from the Braddock road station to the hotel is 8/10ths of a mile, about a 20-minute walk.  You can avoid this walk by exiting the Metro at Washington National Airport, and taking the hotel shuttle.

A taxi from the airport to the hotel will cost between $15 and $20 each way.

Last Minute Extension, Discrimination & Due Process: Attorneys Fight for Victims of Hurricane Maria

The stakes were very high: Puerto Rican refugees, victims of Hurricane Maria were about to become homeless as FEMA planned to cancel its Temporary Shelter Assistance program.  Thousands of refugees living in hotels and motels would find themselves evicted, many having nowhere to go.  A telephonic hearing and a last minute ruling required FEMA to continue the program, but the legal battle continues.  Offering insight on the issues at hand are attorneys Craig de Recat and Justin Jones Rodriguez of the law firm Manatt, Phelps & Phillips, who, along with Eve Torres of Manatt, LatinoJustice and the Law Offices of Hector E. Pineiro, are working hard to ensure the victims of Hurricane Maria receive the proper assistance and due process they deserve under the law, holding FEMA accountable to their responsibilities to individuals who have already lost so much.

FEMA announced plan to terminate the Transitional Sheltering Assistance program for victims of Hurricane Maria on June 30th.  The previously mentioned partners filed a lawsuit and emergency motion for a Temporary Restraining Order, a move that would fend off the evictions and compel FEMA to continue providing rent subsidies.  After a telephone conference that evening, Federal Judge Leo Sorokin issued a temporary restraining order to provide shelter throughout the weekend and through the 4th of July holiday.  On July 2nd, another hearing was held with Judge Hillman, who issued a TRO extending the program for a longer stretch of time.

Discrimination in FEMA’s Response Efforts A Major Issue in Litigation

Justin Jones Rodriguez, an attorney with Manatt, said: “we had a hearing on August first and the judge recognized there were some unanswered questions, particularly about our discrimination claim.”  The hearing on August 1st extended the TSA program until the end of August, and allows evidence to be gathered and testimony to be given and considered.  That said, Rodriguez says,  “We believe the facts are clear here that hurricane victims after Harvey in Texas are treated one way and hurricane victims in Puerto Rico after Maria were treated a very different way. “  Craig de Recat, also with Manatt, compares FEMA treatment of Hurricane Maria victims with the FEMA treatment of Hurricane Harvey, pointing out that Puerto Ricans hold a dual nationality, but are US citizens nonetheless, and are entitled to FEMA relief.   He says:

The facts are abundantly clear and even confirmed by FEMA in its post-incident report, showing that they did not treat Puerto Rican refugees, including these individuals that are in the continental United States in the same way they treated Harvey Refugees.  Harvey Refugees had a  much quicker response, a much more robust response, were promised financial aid for a longer period of time and an assurance that they were going to be given personal individual case management support to help the individuals and their families.

One way this discrimination case is laid out is the complaint is through comparison of Presidential tweets on the respective tragedies.  The complaint points to a tweet on September 30, 2017 from President Trump that says:  “Puerto Ricans ‘want everything to be done for them.’”  Roughly two weeks later, President Trump sent out a tweet that said FEMA and other disaster relief could not stay in Puerto Rico “forever!”  In comparison, two weeks after Hurricane Harvey hit Texas and after the President had visited the state, he tweeted: “After witnessing first hand [sic] the horror & devastation caused by Hurricane Harvey, my heart goes out even more so to the great people of Texas.”  The complaint goes into greater detail, comparing the response of FEMA on several levels as being discriminatory against the victims of Hurricane Maria, everything from the initial rate of individual grant denials being double in response to Hurricane Maria than for Hurricane Harvey, and pointing out that even though Hurricane Maria destroyed more homes in Puerto Rico than Hurricane Harvey did in Texas, the relief has overwhelmingly been provided to Texans–of the 60,000 households provided housing assistance by FEMA, over 54,000 of the affected households receiving relief were devastated by Harvey–not Maria.

FEMA Failed to Provide Appropriate Due Process

Another claim against FEMA is their failure to provide the victims of Hurricane Maria with due process under the law.  De Recat points out that if FEMA Is going to pull services, they have a responsibility to provide the individuals affected with information on how to appeal that decision.  He says:  “If FEMA is saying, we are not going to give you financial assistance or we’re not going to help you anymore, then those individuals should be provided with knowledge of how they can appeal that decision. That is a fundamental due process right that all Americans have and that is not being given to these people. They’re just given a summary determination without any right or knowledge of their right of appeal.”

Making a comparison again, to Hurricane Harvey victims, Rodriguez points out that FEMA had provided case management services to victims of Hurricane Harvey, ensuring each individual and family had a place to go when the TSA program terminated. However, victims of Hurricane Maria were not given the same level of attention.  Rodriguez says, “Case management services consisted of a published toll free telephone number posted for them to call, which we’ve received reports that it wasn’t working.”

The case continues, and attorneys representing the Hurricane Maria victims remain dedicated to seeking a legal solution and holding FEMA to the appropriate standard.  Rodriguez, when asked about his involvement, says simply, “It’s the right thing to do. When Latino Justice reached out to me I was happy to jump on board as an individual.  It would be dishonest  for me to say that I’m not motivated by the fact that I’m a Hispanic American and the way that these Puerto Rican individuals are being treated by the administration is unjust and unconstitutional.”  de Recat says it is a privilege to represent the victims of Hurricane Maria and to stand with them against this injustice.  He says, “when we have opportunities like this to step in and help the disenfranchised or the least powerful of our community, then that is part of our obligation, our duty as practicing lawyers within the profession, and I don’t mean to sound corny, but It is a privilege to represent these people and to stand by them and for them. And that is personally enormously rewarding.“

A decision is expected in this case by August 31st.

Copyright ©2018 National Law Forum, LLC.

Register Now! 2018 NAMWOLF Annual Meeting & Law Firm Expo

The Mission of NAMWOLF:

Promote diversity in the legal profession by fostering successful relationships among preeminent minority and women owned law firms and private/public entities.

The Vision:

Achieve equity in legal opportunity through minority and women owned law firms.

Join NAMWOLF Members at the 2018 Annual Meeting & Law Firm Expo at the Hyatt Regency in Chicago, September 26-29th.

Learn more about the event and register here.

The Agenda for the 2018 NAMWOLF Annual Meeting & Law Firm Expo is here.

 

Congress Enacts New Law to Control Foreign Investments in the U.S.

President Trump signed into law the Foreign Investment Risk Review Modernization Act (FIRRMA) to modernize the CFIUS review process to address 21st century national security concerns today. Congress enacted FIRRMA as Title XVII of the Fiscal Year 2019 National Defense Authorization Act, HR 5515.

Background and Rationale for the New Law

The Committee on Foreign Investment in the United States (CFIUS) is an inter-agency committee led by the Treasury Department to review transactions that could result in control of a U.S. business by a foreign person (referred to as “covered transactions”) in order to determine the effect of such transactions on the national security of the United States. CFIUS operates pursuant to section 721 of the Defense Production Act of 1950 (the “Exon-Florio” amendment), as later amended by Congress and as implemented by Executive Order.

For many years, CFIUS has worked to police national security concerns arising from investment in the U.S. by foreign companies and entities. Two transactions in the last few years have made the issue of foreign investment in the U.S. (and the role of CFIUS) notorious: first, the Dubai Ports World controversy in 2006 involving the sale of port management businesses in six major U.S. seaports to a company based in the United Arab Emirates and, second, the 2012 effort by a Chinese-owned company to purchase land for a windfarm next to a U.S. military weapons testing facility in Oregon. Current law governing CFIUS was last updated more than a decade ago, and its jurisdiction has been increasingly perceived as too limited.

Many government and private industry observers have come to believe that the CFIUS review process is neither designed to, nor sufficient to, address modern threats to national security. Their perception was that China and others have cheated the system, exploited the gaps in its authorities, and have structured their investments in U.S. businesses to evade scrutiny. In short, their view was that many transactions that could pose national security concerns often escaped review altogether.

For example, in introducing the bipartisan FIRRMA in late 2017, Sens. Dianne Feinstein (D-CA) and John Cornyn (R-TX) asserted that:

To circumvent CFIUS review, China will often pressure U.S. companies into arrangements such as joint ventures, coercing them into sharing their technology and know-how. This enables Chinese companies to acquire and then replicate U.S.-bred capabilities on their own soil. China has also been able to exploit minority-position investments in early-stage technology companies to gain access to cutting-edge IP, trade secrets, and key personnel. It has figured out which dual-use emerging technologies are in development and not yet subject to export controls.

Substantive Changes in CFIUS Law

To counteract these new threats, FIRRMA is intended to strike a balance between giving CFIUS additional authority that it needs to address modern national security issues without unduly chilling foreign investment in the American economy and slowing American economic growth in the process. The new law refashions the authority of CFIUS to allow it to reach additional types of investments like minority-position investments and overseas joint ventures. Plus, it creates a new streamlined filing process to encourage notification of potentially problematic transactions. The provisions of FIRRMA make the following changes:

  • FIRRMA expands CFIUS jurisdiction to cover minority investments, any change in a foreign investor’s rights regarding a U.S. business, and any device or scheme designed to evade CFIUS, as well as the purchase, lease, or concession of certain real-estate by or to a foreign person.

  • FIRRMA recognizes the authority of CFIUS to review non-controlling, non-passive investments, especially those involving critical technology and critical infrastructure

  • FIRRMA for the first time recognizes the authority and responsibility of CFIUS to protect against the exposure of sensitive personal data as part of its national security jurisdiction.

  • FIRRMA allows CFIUS to include in the review process any emerging and critical technologies and sets reporting requirements for them.

  • FIRRMA expands CFIUS’s ability to unilaterally choose to initiate a review in the case of a breach of a prior agreement with CFIUS and with respect to covered transactions that have not been submitted to CFIUS for review.

FIRRMA modifies the definition for covered transaction to include “other investments” by a foreign person in a U.S. business that owns, operates, manufactures, supplies, or services to critical infrastructure, produces critical technologies, or maintains or collects sensitive personal data of U.S. citizens. The “other investments” provisions is designed to capture small investments that might not otherwise fall within CFIUS jurisdiction because they lack the previously-required threshold of “control.”

Procedural Changes

Among the procedural changes is that FIRRMA establishes a new expedited process for securing CFIUS clearance by filing a five-page “declaration” (instead of a lengthier written notice). After reviewing such a declaration, CFIUS may direct the parties to submit a full notice.

Any party to a covered transaction may choose to follow the declaration approach, but a declaration is mandatory for any “foreign person in which a foreign government has, directly or indirectly, a substantial interest.” This requirement may be waived by CFIUS if the foreign government does not direct the foreign business and the foreign business has previously cooperated with the Committee. CFIUS may also choose to require a mandatory declaration where a U.S. business that controls critical infrastructure, technology, or sensitive personal data is a party to the transaction.

The new legislation also is intended to improve information-sharing with U.S. allies and partners and provides needed additional resources to the panel while maintaining safeguards to ensure that CFIUS would review transactions only when necessary.

Effective Date

Effective immediately, FIRRMA increases the filing and review schedule to 45 days and the investigatory phase to a second 45 day period. The act permits CFIUS to extend the investigation period by another 15 days in “extraordinary circumstances.” The legislation also adds an additional 15 days to the President’s current 15-day review period in extraordinary cases. Thus, relatively complex CFIUS cases may routinely begin to take 105 days (45+45+15) following initiation, instead of the previous 75 days (assuming that the parties do not withdraw and refile their notice).

Certain other provisions of FIRRMA have a delayed effective date (which is the earlier of 18 months following enactment or 30 days after CFIUS determines that it has sufficient resources). For example, the delayed date applies to the expansion of “covered transactions” to include real estate located in important ports or near sensitive US government facilities such as military installations. The delayed date also applies to CFIUS’s expanded jurisdiction with respect to “other investments” in U.S. business that own critical infrastructures or technologies or that maintain sensitive personal data of U.S. citizens.

 

© 2018 Schiff Hardin LLP
This post was written by William M. Hannay of Schiff Hardin LLP.

Court Cites Supreme Court’s China Agritech Decision In Decertifying TCPA Class Action

The Northern District of Illinois recently granted a motion to decertify a class of TCPA plaintiffs in light of the U.S. Supreme Court’s decision in China Agritech, Inc. v. Resh, 138 S. Ct. 1800 (2018), which held that the equitable tolling doctrine does not apply to successive class actions. See Practice Mgmt. Support Servs., Inc. v. Cirque du Soleil, Inc., No. 14-2032, 2018 WL 3659349 (N.D. Ill. Aug. 2, 2018). In doing so, the court observed that plaintiffs can no longer “wait out” a statute of limitations and then “piggy back on an earlier, timely filed class action.” Id. at *1.

The Cirque du Soleil case was the “third successive action filed against defendants by the same counsel … based on the same fax transactions.” Id. at *1. The plaintiff alleged that defendants had advertised theatrical shows by transmitting faxes that lacked proper opt-out instructions. Id.The plaintiff filed the case in 2014 and asserted TCPA claims arising from faxes that defendants had allegedly sent in 2009. Id. at *2. Thus, it was undisputed that the plaintiff had not filed the case within the applicable four-year limitations period. Id.

The defendants moved for summary judgment and argued that the claims were time-barred. See id. at *2. But the court denied that motion in light of the controlling rule in the Seventh Circuit at the time, which was that the “commencement of the original class suit . . . toll[ed] the running of the statute of limitations for all purported members of the class”—regardless of whether the class members subsequently filed an individual action or yet another class action. Id. Earlier this year, the court granted the plaintiff’s motion for class certification. Id.

A few months later, however, the Supreme Court’s decision in China Agritech abrogated the prior Seventh Circuit rule by drawing “a clear distinction between successive individual suits and successive class actions.” Id. at *3. The China Agritech court explained that previous Supreme Court case law on the subject ‘“addressed only putative members who wished to sue individually after a class-certification denial.”’ Id. (quoting China Agritech, 138 S. Ct. at 1806). The cases “did not ‘so much as hint[] that tolling extends to otherwise time-barred class claims.”’ Id.(same).

The Cirque du Soleil defendants then moved to decertify the class and argued that the plaintiff’s class claims were untimely in light of the China Agritech holding. Id. at *1. The court granted that motion, finding that a “straightforward application of China Agritech . . . does not permit the maintenance of a follow-on class action past the expiration of the statute of limitations.” Id. at *3. “Allowing the same counsel to litigate three successive class actions over nine years,” the court explained, “is exactly the abuse of tolling that China Agritech seeks to prevent.” Id. at *6. Accordingly, the court decertified the class, leaving the plaintiff with only its individual claim on its own behalf.

 

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