Category: Uncategorized

House Financial Services Committee passes bill to ease restrictions on bank small-dollar loans

Earlier this week, by a party-line 34-26 vote, the House Financial Services Committee passed H.R. 4861, a bill seemingly intended to ease restrictions on short-term, small-dollar loans made by depository institutions.  The bill is part of the efforts of House Republicans to provide greater regulatory relief to banks than would be provided by S. 2155, the banking bill passed by the Senate last week.  We expect that Jeb Hensarling, who chairs the House Committee, will attempt to make the bill part of a final banking bill.

H.R. 4861 would nullify the FDIC’s November 2013 guidance on deposit advance products, which effectively precludes FDIC-supervised depository institutions from offering deposit advance products.  (The FDIC supervises state-chartered banks and savings institutions that are not Federal Reserve members.)  We had been sharply critical of that guidance, as well as the OCC’s substantially identical guidance as to national banks.  However, in October 2017,  just hours after the CFPB released its final rule on payday, vehicle title, and certain high-cost installment  loans (CFPB Rule), the OCC rescinded its guidance on deposit advance products.  Because the FDIC has not yet followed suit, H.R. 4861 would remove a regulatory impediment to state-chartered banks and savings institutions offering one form of small-dollar lending to their customers.

H.R. 4861 would require the federal banking agencies to promulgate regulations within two years “to establish standards for short-term, small-dollar loans or lines of credit made available by insured depository institutions.”  The standards must “encourage products that are consistent with safe and sound banking, provide fair access to financial services, and treat customers fairly.”  The regulations would preempt any state laws “that set standards for [such loans or lines of credit]” and would override the CFPB Rule for insured depository institutions that become subject to H.B. 4861 regulations.  (Insured and uninsured credit unions would gain relief from the CFPB Rule even before regulations are adopted.)

Presumably, the “standards” under H.B. 4861 regulations could include interest rate standards.  Thus, federal banking agencies supportive of short-term, small-dollar loans could authorize interest rates higher than the insured depository institutions could otherwise charge under applicable federal law.  Unfortunately, as it is currently drafted, H.R. 4861 could be interpreted to allow the banking agencies to establish rate limits that are more restrictive than the limits that currently apply under federal law.  Accordingly, we would hope that the final bill will clarify that it does allow the federal banking agencies to impair existing rate authority under applicable federal law, including Section 85 of the National Bank Act, Section 27 of the Federal Deposit Insurance Act, and Section 4(g) of the Home Owners’ Loan Act.

Copyright © by Ballard Spahr LLP
This article was written by Jeremy T. Rosenblum of Ballard Spahr LLP
 For more Finance news, follow @NatLawFinance

Massachusetts to Require CGL and PL Coverage for All “Marijuana Establishments”

In regulations finalized just before the March 15, 2018, deadline, the Massachusetts Cannabis Control Commission (CCC) has included a provision requiring the maintenance of liability insurance or an escrow account to cover potential liabilities. This applies to all Marijuana Establishments, which include marijuana cultivators, craft marijuana cooperatives, marijuana product manufacturers, marijuana retailers, independent testing laboratories, marijuana research facilities, marijuana transporters and “any other type of licensed marijuana-related businesses,” except for medical marijuana treatment centers, which are already subject to a comprehensive regulation scheme, including a similar requirement.

Provisions

Under the new regulations, Marijuana Establishments must obtain and maintain general liability coverage with minimum limits of at least $1 million per occurrence and $2 million aggregate, and product liability insurance coverage of $1 million per occurrence and $2 million aggregate, with a maximum deductible of $5,000 per occurrence. 935 CMR 500.105(10)(a).

In the event that a Marijuana Establishment is unable to obtain the required coverage, upon providing documentation of the unavailability of coverage, the requirement may be met by the deposit of $250,000, or some other amount approved by the CCC, into an escrow account. 935 CMR 500.105(10)(b).

Any new applicant will be required to provide a description of its plan to obtain the required insurance coverage or otherwise meet the requirements of this regulation as part of the application process. 935 CMR 101(c)(5).

This insurance requirement is one of several designed to ensure the financial responsibility of marijuana businesses in the Commonwealth, including a requirement that applicants detail the amounts and sources of capital resources available to them, and a requirement that a license applicant provide documentation of a bond or other resources held in an escrow account in an amount sufficient to adequately support the dismantling and winding down of a Marijuana Establishment pursuant to 935 CMR 500.101(1)(a).

Synopsis

The recreational marijuana business regulations were approved on March 9, 2018, after extensive hearings and public input. The regulations must be signed by the Secretary of the Commonwealth and published in the Massachusetts Register, which is expected to take place on March 23, 2018. The regulations become effective upon publication.

Massachusetts voters approved the legalization of recreational marijuana via ballot in November 2016. The CCC plans to begin accepting applications on April 1, 2018, and recreational marijuana sales are expected to begin on July 1, 2018. Existing medical marijuana treatment centers have been given priority for licensure in towns and cities where the number of licenses is limited, see MGL c. 94G, § 5(c), and already will have these coverages in place. However, as applications will be reviewed on a rolling basis, we would expect to see the number of businesses seeking this coverage only increasing.

 

© 2018 Wilson Elser
This post was written by Kara Thorvaldsen of Wilson Elser.

Are Foreign Lost Profits Really Lost?

On January 12, 2018, the Supreme Court granted certiorari to review the Federal Circuit’s lost profits decision in WesternGeco LLC v. ION Geophysical Corp., 791 F.3d 1340 (Fed. Cir. 2015), marking the first step toward defining the scope of recovery for damages in the form of lost foreign sales. Under the Patent Act, damages are governed by § 284, which provides:

Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court.

While § 284 allows patent owners to recover lost profits and reasonable royalties, the statute is silent as to whether these damages should encompass overseas losses (i.e., from foreign sales or contracts), which could play an important and substantial role in elevating damages – especially for patent holders with international contracts and services.

Background

WesternGeco LLC (“WesternGeco”) is a wholly-owned subsidiary of Schlumberger Limited, a worldwide provider of reservoir drilling and processing technology in the oil and gas industry. Relevant to this case, WesternGeco LLC provides reservoir monitoring and imaging services to help perform seismic surveys. ION Geophysical Corp. (“ION”) offers similar services as WesternGeco and is a competitor.

In 2009, WesternGeco sued ION for patent infringement under 35 U.S.C. § 271(f)(1)-(2). Specifically, 35 U.S.C. § 271(f) provides:

  1. Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention . . . in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent . . . shall be liable as an infringer.
  2. Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial noninfringing use . . . knowing that such component is so made or adapted and intending that such component will be combined outside of the United States . . . shall be liable as an infringer.

The district court found for WesternGeco, awarding it $93,400,000 in lost profits and $12,500,000 in reasonable royalties as damages. On appeal, however, the panel majority reversed the district court’s award of lost profits, observing that the “presumption against extraterritoriality is well-established and undisputed.” Moreover, the Federal Circuit previously stated in Power Integrations v. Fairchild Semiconductor, “[Our patent laws] do not thereby provide compensation for a defendant’s foreign exploitation of a patented invention, which is not infringement at all.” In effect, the majority held that “[u]nder Power Integrations, WesternGeco cannot recover lost profits resulting from its failure to win foreign service contracts.”

WesternGeco’s Petition

WesternGeco filed two petitions for certiorari. Based on the first petition, the Supreme Court vacated the Federal Circuit’s opinion in light of Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923 (2016). On remand, however, the Federal Circuit reinstated its opinion and judgment as to lost profits. As a result, WesternGeco filed a second petition for certiorari on February 17, 2017, which presented the following question:

Whether the court of appeals erred in holding that lost profits arising from prohibited combinations occurring outside of the United States are categorically unavailable in cases where patent infringement is proven under 35 U.S.C. § 271(f).

In its petition, WesternGeco argued that the majority panel “applied the presumption against extraterritoriality in such a duplicative manner [that] defeat[ed] Congress’ intent in enacting § 271(f).” Therefore, the decision “effectively eliminate[d] lost profit damages where infringement is found under § 271(f), limiting patent owners only to a reasonable royalty.” WesternGeco also distinguished its case from Power Integrations, by arguing that “Power Integrations dealt with infringement under § 271(a)” and therefore “reflects no comparable congressional judgment to target certain extraterritorial conduct.”

In an amicus curiae brief submitted on behalf of the United States, the Solicitor General urged the Court to hear this case, stating that the Federal Circuit’s “approach systematically undercompensates prevailing patentees like petitioner, whose transnational business suffered when respondent infringed petitioner’s patents within the United States.”

In addition, WesternGeco argued that allowing patentees to recover lost profits from international sales would be consistent with copyright law, which has been found by several circuits to permit parties to recover foreign damages so long as those damages are directly linked to a domestic predicate act of infringement.

Implications

Although the Supreme Court, in its 2007 opinion in Microsoft Corp. v. AT&T Corp., previously “[r]ecogniz[ed] [that] § 271(f) is an exception to the general rule that [U.S.] patent law does not apply extraterritorially,” the Court ultimately “resist[ed] giving the language . . . an expansive interpretation.”

Patent holders should be aware that the Supreme Court’s decision in WesternGeco may present an opportunity to expand the scope of damages claims to encompass international losses caused by infringement in the United States.

 

© Copyright 2018 Brinks, Gilson & LioneBrinks, Gilson & Lione.
This post was written by Jeffrey J. Catalono and Judy K. He of Brinks, Gilson & Lione.
Read more Intellectual Property News at the Intellectual Property Page.

A Blockchain Alternative for Accredited Investors

One of the biggest issues with modern capital markets is that they often constrain investors from investing in exciting new technologies. For all of the concern over the Dotcom Bubble two decades ago, investors did have the opportunity to invest in firms like Amazon, Priceline, or Google that would ultimately come to dominate the new industry.

Today’s investors are largely shut out of areas ranging from the sharing economy (Uber and Lyft) to space travel (SpaceX and Virgin Galactic). This is even more true with bleeding edge technologies like blockchain – the bookkeeping system that underlies Bitcoin and other digital currencies. While investors can buy currencies like Bitcoin, owning the currency itself does not give an investor an ownership share in firms that benefit from the rapid growth in the space. The leaders in the industry like Coinbase are private and do not generally accept capital from outside investors.

All of this may start to change if an early stage company called Causam eXchange has its way. Causam is focused on using blockchain on the backend of the electricity financial transactions business. The specifics are a bit technical, but the firm essentially is looking to enable real-time buying and selling of electricity, especially by business users who want clean electricity and battery storage.

Like many startups, Causam wants to raise capital to take their initial business model and rapidly expand it. What’s different is the way the firm wants to do that. Most companies raising capital outside of the public stock markets either raise venture capital or issue private placements through what are called 144 offerings. These offerings are restricted to accredited investors and usually feature intermediary broker salesmen and steep trading costs.

Causam’s model is different. The firm is offering stock to 1,000 accredited investors through an SEC compliant private placement model – but it is selling that stock via a public blockchain called the Ethereum Network and pricing the stock in Ether – a digital currency that is second in market capitalization to Bitcoin. Causam’s stock will have a secondary market, and because it is done through a public blockchain, buyers and sellers can interact directly without the need for expensive middlemen or brokers.

Causam’s investment security launched on March 8 and is termed a “Blockchain Instrument for Transferable Equity” (or BITE) Tokenized Security Offering. The firm is selling 3,000,000 tokens at 0.0040 Ether per tokenized security.

Normally, none of this would be worth significant attention from the broader investor and legal industry. In Causam’s case though, because the firm is pioneering a new way to raise capital, it’s worth watching. If Causam is successful in raising capital through this avenue, it could start to fundamentally change the way many private firms sell stock.

The public equity markets have gotten much more expensive to issue equity on thanks to rules like Sarbanes Oxley (SOX), and venture capital is still largely a California phenomenon limited to a select few in vogue industries. If a small energy industry company can change the way we think about raising capital and give investors a stake in one of the hottest areas of the new economy with an actual ownership piece in a firm, then that is worthy of note. A revolution in capital raising could be coming, and Causam may have just fired the first shot. Smart investors and their advisors should pay attention.

© Fairfield University Dolan School of Business

GSA Unveils Plan for Commercial Online Shopping Portal

Following instructions from Congress to create a new online shopping system leveraging existing commercial practices, the General Services Administration (“GSA”), in coordination with the Office of Management and Budget (“OMB”), has released an implementation plan (“Plan”) to begin e-commerce purchases by 2019.  As discussed in a previous blog post, GSA’s Plan is a first step toward implementing Section 846 of the National Defense Authorization Act for FY 2018, which requires GSA to develop “e-commerce portals” – essentially online shopping sites – for commercially available off-the-shelf (“COTS”) item procurements.

Section 846 sets out three phases for the e-commerce program.  Phase I requires the development of a plan for implementing the commercial e-commerce portals program, including initial recommendations regarding “changes to, or exemptions from, [existing procurement] laws.”  Section 846(c)(1).  GSA’s announcement completes Phase I.  GSA will now proceed to Phase II, which will involve market analysis, “communications with potential e-commerce portal providers on technical considerations of how the portals function,” and consideration of impacts on other procurement programs.  Section 846(c)(2).  Significantly, at the conclusion of Phase II, GSA and OMB will be required to submit a report identifying “recommendations for any changes to, or exemptions from, laws necessary for effective implementation of this section,” as well as a report on “considerations pertaining to non-traditional Government contractors.”   Id.

GSA’s release of the Plan comes two months after it held a town hall to discuss options for the e-commerce program. The Plan emphasizes that this type of “stakeholder engagement . . . has deepened the knowledge of the commercial practices, the industry perspective, and the intersection of Federal acquisition laws and regulations.”  As GSA and OMB now move forward with Phase II of the program, they will likely again seek public input on their plans.

Possible Structure of e-Commerce Portals

GSA’s Plan identifies three potential types of e-commerce portals, each with different cost incentives and ordering structures.

  • E-Commerce Model:  Under this model, a vendor would use its existing online platform to sell its own proprietary or wholesale products to the government.  The vendor would be responsible for pricing and delivery.
  • E-Marketplace Model:  This model would create online marketplaces managed by a contractor, through which both proprietary products and the products of other vendors could be sold to the government.  Vendors would be responsible for fulfilling orders, although GSA held open the possibility that portal providers could be required in certain cases to fulfill orders.
  • E-Procurement Model:  This model calls for a contractor to provide an online marketplace – a so-called “portal of portals” – through which other vendors could then sell goods to the government.  The marketplace provider would not sell goods and would not be responsible for fulfilling orders.

GSA noted that under an E-Commerce model, competition may be “limited,” with “little to no horizontal price comparison.”  But under either an E-Marketplace or E-Procurement model, competition would increase.  An E-Marketplace model would promote “increased competition” by providing “access to both proprietary and third-party products.”  Meanwhile, an E-Procurement model would “allow[] for a larger supplier pool and horizontal price comparisons.”  GSA observed that the E-Procurement model contemplates “tiered subscription fees” that “generally increase as the volume of transactions on the platform increase,” although transaction fees could be capped.

GSA stated that it anticipates using an “appropriate mix” of these three models.  GSA also commented that it “anticipates a direct contractual relationship only with commercial e-commerce portal providers [and not with the suppliers that sell through the portal providers].”  At the same time, however, GSA stated that it “may consider” using an indefinite-delivery indefinite-quantity (“IDIQ”) type of contracting vehicle “that allows GSA to have a relationship with both a portal provider and suppliers that sell on the portal platform, if such strategy might generate greater efficiencies for products that are identified as suitable for the program.”  Observers should expect more information regarding the proposed contract structure of the commercial e-commerce portal program, as it is not clear from this brief reference how this proposal would align with current GSA practices.

Recommended Legislative Changes

In addition to setting out a Plan for e-commerce portals, GSA also issued an accompanying legislative proposal recommending that Congress make a variety of changes to help GSA and OMB implement the e-commerce mandate of Section 846.  Notably, GSA stated that its three-year timeline is contingent on Congress implementing these recommendations.

First, GSA proposed raising the micro-purchase threshold to $25,000 for purposes of the e-commerce portals program, an increase from the current thresholds of $5,000 for the Department of Defense and $10,000 for civilian agencies.  In theory, this proposed increase of the micro-purchase threshold to $25,000 is intended to promote commercial buying practices, as purchases beneath the micro-purchase threshold are exempt from many Government-specific requirements.

Second, GSA also proposed that Congress amend Section 846 to streamline certain statutory competition requirements.  Specifically, GSA proposed an amendment stating that procurements using Section 846 procedures would be deemed competitive, “so long as participation is open to all responsible sources and orders and contracts using these procedures result in the lowest overall cost alternative.”

Finally, GSA proposed that Congress amend the term “commercial e-commerce portal” in Section 846 to mean

[A] commercial solution providing for the purchase of commercial products aggregated, distributed, sold, or manufactured via an online portal.  The term does not include an online portal managed by the Government for, or predominantly for use by, Government agencies, unless such portal is designed for the purpose of accessing multiple other e-commerce portals, including commercial portals, via a single view for the purchase of commercial products.  (proposed amendment emphasized).

This revision appears to be aimed at broadening the definition of “commercial e-commerce portal” to encompass the “portal of portals” concept embodied by the E-Procurement model, discussed above.

Three-Year Plan for Phasing in e-Commerce Portals

GSA’s Plan sets out a three-year schedule for developing this new system.  Among other things, for Fiscal Year 2018 GSA plans to:

  • Conduct research and have meetings with stakeholders in industry and within government.
  • Determine what types of items would be “in-scope” for purchase on e-commerce portals.
  • Develop “options for an initial proof of concept.”

GSA’s effort to determine what items are “in-scope” is somewhat ambiguous.  It could be read to suggest that certain COTS items may be excluded from e-commerce portals, though it may also reflect GSA’s “phased approach for implementation” and the possibility of a product or category based phase-in.  For Fiscal Year 2019, GSA further plans to

  • Assess the impact of e-commerce portals on the Multiple Award Federal Supply Schedules, the National Supply System, small businesses, socioeconomic programs, and other preference programs.
  • Develop data ownership and cybersecurity rules.
  • Conduct an acquisition for an initial rollout of e-commerce portals.
  • Test the e-commerce systems with “a limited audience.”

Finally, in 2020, GSA plans to

  • Expand and scale rollout of the e-commerce systems.
  • Make final policy recommendations.
© 2018 Covington & Burling LLP

Why does it Matter if the NRA Used Russian Money to help Donald Trump’s Election?

The old saying goes, that “when you have a hammer, everything looks like a nail.” And as a campaign finance lawyer, I have to remind myself that not every story is a money in politics story. But the more I look at the 2016 election and what transpired, campaign finance is at the heart of the scandal.

To wit, this January, McClatchy reported that the FBI is allegedly investigating whether a Russian banker named Aleksander Torshin (who’s also wanted on criminal charges in Spain for unrelated matters) may have funneled money into the National Rifle Association (NRA) for the benefit of the candidacy of Donald Trump in 2016. At this point, all this is just a press report. We don’t have confirmation of this investigation.

In March, Politico reported that the Federal Election Commission (FEC) is investigating whether there really was any Russian money running through the NRA in the 2016 presidential election. This comes on the heels of Oregon Democratic Senator Ron Wyden asking similar questions to the NRA.

Illegal Political Sources

But why would this be so significant if the story of rubles flowing through the NRA is correct? For one, such spending by a foreigner in an American election is totally illegal under American law. Indeed foreign electoral spending has been barred since 1966 amendments to the Foreign Agents Registration Act (FARA). And with a Special Counsel actively indicting people for their roles in the 2016 election, this could become part of that criminal probe.

We Were Warned

Second, if the NRA-Russia-Trump nexus is borne out by the facts, then it will vindicate warnings from Supreme Court Justices and campaign finance reformers who said inviting secretive corporate money into our politics would provide cover for illegal foreign spending in American elections.

This caution was part of Justice John Paul Stevens’ dissent in Citizens United. He was leery of the possibility that inviting corporations into U.S. elections could invite foreign influence. As he wrote, “[u]nlike voters in U.S. elections, corporations may be foreign controlled.” He also noted the absurdity of giving equal protection to foreign speakers in this context: it would be like “accord[ing] the propaganda broadcasts to our troops by ‘Tokyo Rose’ during World War II the same protection as speech by Allied commanders.”

This warning that dark money could hide foreign money was particularly pronounced from transparency advocates among campaign finance reformers. In 2016, the FEC tried to promulgate new rules to clarify reporting requirements. But the FEC deadlocked and no new rules were finalized.

Without Clear Transparency Rules Dark Money Flourished

In the absence of new clear rules from the FEC, or Congress for that matter, dark money has increased. As I described in the law review article Dark Money As a Political Sovereignty Problem, since 2010, over $800 million in “dark money” has been spent in federal elections. Because of the dark money problem, often we don’t know what we don’t know about corporate money in politics—including whether it is from an illegal foreign source.

There is a data chart showing $183.8 million in dark money in 2016; $177.7 million in dark money in 2014; $308.6 million in dark money in 2012 and $135.6 million in dark money in 2010.

The growth of dark money is often blamed on the Supreme Court’s 2010 decision, Citizens United v. FEC. Paradoxically, Citizens United upheld the constitutionality of disclosure of the underlying sources of money in politics by a vote of 8 to 1. But regulators did not take up the Supreme Court’s open invitation to improve disclosure laws after Citizens United, thereby allowing dark money to metastasize like a cancer on our democracy.

How Dark Money Gets Dark

Here’s how dark political money works. Say you have a company that wants to exercise its Citizens United rights, but it doesn’t want to tell the public. That company gives the money to a politically active 501(c)(4) social welfare organization or 501(c)(6) trade association. Then that nonprofit buys political ads in a federal election. The FEC doesn’t require the nonprofit to reveal where it got the money. Even if the company is publicly traded, there is no SEC rule that requires the company to tell investors that they are spending money in politics. For even more secrecy, money can also be routed through a shell corporation like an LLC to make tracing the money even more difficult.

The Allegation

The reporting by McClatchy (and others) alleges that NRA’s Institute for Legislative Action (ILA), a 501(c)(4) arm of the NRA, that does not disclose its donors, received money from the Russian banker Torshin. We don’t know if that happened.

We do know how the NRA spent its money. In 2016, the NRA expended $54,398,558 in outside political spending. The NRA spent $31 million of that money to support Mr. Trump’s candidacy. According to Open Secrets.org, showing $183.8 million in dark money in 2016; $177.7 million in dark money in 2014; $308.6 million in dark money in 2012 and $135.6 million in dark money in 2010.

It is outlandish to think that the NRA would wittingly or unwittingly violate American campaign finance law? At this point we don’t know if they have done anything wrong. However, the NRA has a long history of fighting campaign finance regulations. In 2010 when the Congress was on the verge of passing the DISCLOSE Act which would have brought transparency to money in politics post-Citizens United, lobbyists for the NRA got a legislative carve out so that new disclosure would not apply to them.

The NRA was also center stage in litigation against the last big federal campaign law, the Bipartisan Campaign Reform Act (better known as BRCA or McCain-Feingold). In 2002, the NRA and one its PACs, National Rifle Association Political Victory Fund were plaintiffs challenging the constitutionality of BRCA. This case was consolidated into the case that became McConnell v. FEC, a case that ended up upholding the constitutionality of BRCA, including its campaign finance disclosure requirements. Moreover, in 2001 the NRA was held liable for campaign finance violations from the 1978 and 1982 elections.

Conclusion

Like so many aspects of the multiple investigations into what really happened in the 2016 election, the public has no idea what will ultimately be revealed. Reading the news has become like a live action spy novel. It is possible further investigation will only exonerate the NRA and the Russian banker. But one strain to keep an eye on is whether any foreign money helped elect a U.S. president. Did I mention that’s completely illegal?

 

© Copyright 2018 Brennan Center for Justice at New York University School of Law

D.C. Circuit Amends Opinion on EPA’s Definition of Solid Waste Rule

On March 6, 2018, the United States Court of Appeals for the District of Columbia Circuit (the D.C. Circuit) issued a ruling amending its July 7, 2017 opinion on challenges to the U.S. Environmental Protection Agency’s (EPA or Agency) 2015 rule on the Definition of Solid Waste (DSW) (the 2015 Rule). See American Petroleum Institute v. EPA, No. 09-1038 (D.C. Cir. 2018) (API Opinion). The 2015 Rule revised a DSW Rule promulgated by EPA in 2008 (the 2008 Rule). See KEAG Bulletin No. 2014-98, dated December 17, 2014. Both industry and environmental groups challenged the 2015 Rule. SeeKEAG Bulletin No. 2017-12, dated July 13, 2017. In the D.C. Circuit’s 2017 opinion, the court upheld some aspects of the 2015 Rule and vacated others. Id.

Following the issuance of the court’s 2017 opinion, petitions for rehearing were filed by the American Petroleum Institute, EPA, environmentalists, and other industry groups. API Opinion at 2. After reviewing the petitions, the court amended its decision in three ways: (1) it severed and affirmed EPA’s removal of the spent catalyst bar from the vacated portions of the Verified Recycler Exclusion (VRE), (2) it vacated “Legitimacy” Factor 4 in its entirety, and (3) it clarified the regulatory regime that replaces the now-vacated Factor 4. Id.

With respect to spent petroleum catalysts, the court granted industry’s request to exclude these catalysts from strict hazardous waste regulation for third‑party recyclers. In its original opinion, the court vacated the VRE from the 2015 Rule, and reinstated the Transfer-Based Exclusion (TBE) from the 2008 Rule. See KEAG Bulletin No. 2017-12, dated July 13, 2017. Spent catalysts were excluded from RCRA under the VRE, but not in the TBE. Id. In the court’s reconsideration of whether spent catalysts should be granted an exclusion, the court cited EPA’s various statements on catalysts and found that EPA’s revised containment standard, which the court upheld despite eliminating other aspects of the VRE, is sufficient for spent catalysts to be included in the TBE. Id. at 6-8.

Legitimacy Factor 4 is one of the four criteria the EPA applies to determine if recycling of hazardous secondary materials is legitimate and not sham recycling. Factor 4 requires that a recycled product be comparable to or lower in contaminant levels than a legitimate product or intermediate, and if the former contains higher levels of contaminants, it requires additional procedures and tests (a.k.a., the “toxics along for the ride” test). Id. at 8; see also KEAG Bulletin No. 2017-12, dated July 13, 2017. In its original opinion, the court found those additional procedures to be unauthorized under RCRA and vacated Factor 4 “insofar as it applies to all hazardous secondary materials via § 261.2(g),” which is the section of the RCRA rules that defines sham recycling. See KEAG Bulletin No. 2017-12, dated July 13, 2017. Nevertheless, Factor 4 still applied to those specific exclusions in which it was specifically included. Id. In its amended opinion, the court vacated Legitimacy Factor 4 under all circumstances, even those written into specific exclusions. API Opinion at 9.

Finally, the court clarified the effect of its vacating Factor 4. Id. at 9-10. The net result is that (1) the 2015 version of Factor 4 is vacated (in its entirety); (2) the 2015 change making the legitimacy factors applicable to all exclusions remains; (3) Factor 3 remains mandatory per the 2015 changes; and (4) the 2008 version of Factor 4, which requires only that the factor be “considered,” replaces the now-vacated 2015 version. Id. at 10.

 

©2018 Katten Muchin Rosenman LLP
This post was written by Danny G. Worrell of Katten Muchin Rosenman LLP.

Report: New Internal Oversight Division within USCIS to be Established

The Washington Post has reported that USCIS is establishing an internal oversight division. The new division’s purpose, in part, would be to monitor more closely officers who are too lenient in assessing applications for permanent residence and citizenship, including overlooking negative factors such as misdemeanors and the receipt of government benefits (e.g., food stamps). Employees of USCIS would be encouraged to report any such observed “misconduct” by other staff to the new office, which would report directly to Director Francis Cissna.

Establishing this division follows changes Cissna recently made to the USCIS mission statement. That revised statement emphasizes ensuring that benefits are not provided to those who do not qualify, moving away from prioritizing customer (i.e., applicant) satisfaction.

A USCIS spokesman said the agency has no official announcement to make regarding any reorganization at this time, but did not deny such a division is being considered.

 

Jackson Lewis P.C. © 2018
This post was written by Forrest G. Read IV of Jackson Lewis P.C.

Podcast: Thought Leadership Marketing With National Law Review’s Jennifer Schaller

Lawyers sell their knowledge and know-how. But how does one demonstrate what they know or that they are a player in a particular field? Jennifer Schaller joins us on the Legal Marketing 2.0 podcast to discuss content marketing, and in particular, thought leadership marketing.

Shownotes

Our guest, Jennifer Schaller, is the Managing Director and co-founder of the National Law Review on-line edition. She started her career as an insurance coverage attorney and most recently, served as in-house counsel. She’s also held marketing and business development roles and she brings that uniquely varied background to our conversation. Twitter: twitter.com/JeniSchaller

Do you see a trend in law firms producing more content?

Firms used to have newsletters that focused on firm news, but now they are understanding that offering knowledge in the form of thought leadership content is much more valuable. Law firms are now producing more high-end, well written content than in the past. Firms are also beginning to understand SEO concepts more which encourages them to write longer pieces that go deeper into topics.

Do you find that the strategy behind content is lacking?

It depends on what the goals are and if there’s a structure behind the content marketing strategy. If it’s just people writing stuff, it tends to be more scattered and goals are less likely to get accomplished consistently. It takes a collaborative effort and people need to keep goals in mind for each piece of content produced.

What exactly is content marketing?

It’s ultimately thought leadership marketing  in which you are sharing your knowledge and expertise through content. Develop content around common client questions in order to provide useful information. If clients see that you’re answering questions that they have, they are more likely to find you online and want to work with you.

How does content play a role in the relationship between attorneys and in-house counsel?

Content can be the deciding factor when in-house counsel is choosing an outside firm. When choosing the right attorney or law firm in-house counsel may base their decision off of not only the attorney bio and level of expertise, but the content that the attorney has published.

When your name is attached to great content that is relevant and specific to your practice area, it helps you stand out and connects with those looking for the type of knowledge that you offer.

How do attorneys share what they know in a particular field?

You have to begin with the end in mind. Consider who you want your audience to be and then cater the topics you write about to these clients and prospects. Start by thinking about the questions people are asking you, considering the geographic region you’re targeting, or writing for the audience within your industry.

Also, remember that it’s more important to have the right people reading your content rather than a lot of the wrong people.

How can lawyers get started with thought leadership marketing?

Lawyers can get started by taking small parts of their briefs or whatever they’re already researching daily and centering blog posts around these topics. From there, it’s essential to create an editorial calendar and decide how often you want to post each month.

There is also the opportunity for law firms who already have a content marketing strategy to optimize it for semantic search. They can do this effectively by tying content with social media and enhancing different parts of their law firm’s website.

© Copyright 2018 Good2BSocial
This article was written by Kayla Johnson of Good2bSocial

6 Steps Law Firms Must Take to Prevent Sexual Harassment

One would think that with everything we know today, and the age of the internet, situations where offensive jokes, name-calling, sexual contact, slurs, intimidation, or even mockery would not be an issue, but it’s as alive as ever before. With our focus on the most recent sexual misconduct allegations and bias on a woman in any position, how could this be?

It goes without saying that there have always been “unwritten” rules within any and every company, however, when an incident occurs, which is to blame? The harasser or the company? How was it handled? Is there a system in place? Who is liable if someone decides to sue?

Of course, as an attorney, you know the answer is, “it depends.” But let’s get to the basics before we start picking apart any one particular situation.

Being a bystander can no longer be an action blamed on ignorance. It shouldn’t take a #metoo campaign to open the eyes of all citizens in the United States, and everywhere else in the world. These grotesque situations are plastered all over every platform from social media to the news, yet, they occur every day in different environments while others sit and ignore the signs.

If you think you do not need to evaluate behaviors and practices in your law firm because everything is fine, you need to let your complacency be a warning sign.

Just because you don’t see sexual harassment occurring, that doesn’t mean it does not exist. In fact, if there’s anything that the scandals recently taking over the news have indicated, it’s that the most damaging and vitriolic instances of sexual harassment can go unnoticed for extended periods of time. The potential for inappropriate behavior in a law firm is considerable, for many reasons. According to the U.S. Department of Labor, only thirty-five percent of practicing lawyers are women; by comparison, the percentage of women serving as paraprofessional and support staff is enormous. These statistics reveal a power dynamic in law firms defined by men in supervisory positions over women, which is a tried and true recipe for sexual harassment.

According to experts who have studied the issue and surveyed law firm employees, seventeen percent of female attorneys and twelve percent of support staff have been sexually harassed in the past year. Of those victims, six out of ten took no action out of fear of personal or career-related retribution. In many cases, the harasser was also a mentor of the victim, creating even more of a dysfunctional dynamic. This speaks to the imbalance of power inherent in a majority of instances of workplace sexual harassment; all too often, the victim is silenced for fear of having any adverse ramifications backfire on themselves instead of their harasser.

Another factor contributing to the high rate of sexual harassment in law firms is the mistaken impression that lawyers are somehow above the law. Because lawyers have a higher level of education on these issues, they can often engage in the inappropriate behavior despite the belief that they are “too smart” to ignore the rules. Similarly, victims may hesitate to report harassment because they work in a law firm; if someone steps over the line, someone in the firm will address it, right?

Harassment takes on many forms within a law firm. A quick Google search yields countless tales of behavior that is just totally unacceptable in a law firm or any other work environment. Professionals experiencing harassment have reported conduct ranging from a superior rubbing the victim’s shoulders in the middle of a meeting, to bringing a female associate to a hearing and telling her to dress provocatively to distract the judge or opposing counsel, to making crude innuendos about a co-worker’s body and their personal sex life.

It is crucial to remember that, although workplace sexual harassment is disproportionately directed against women, anyone in any workplace could be susceptible to unwelcome advances, remarks, or actions and is entirely entitled to seek out resources to address any harassment they might experience. It is also important to remember that witnessing sexual harassment and ignoring it means you are condoning the problem and, consequently, complicit in its continuation–especially if you know what you are seeing is undeniably over the line. So what can you do to confront and reduce sexual harassment in your law firm?

Here are a few best practices designed to minimize the risk of harassment:

  1. Create a Clear Sexual Harassment Policy

There is no excuse for a law firm not to have a comprehensive sexual harassment policy, regardless of the size of the firm. By establishing clear and unambiguous standards of conduct, you will be well-positioned to take action if needed. Having a clear outline of your firm’s sexual harassment policies is also the best way to be proactive about protecting your employees from experiencing uncomfortable, or even dangerous, situations in your workplace. A firm that prioritizes their employees’ safety and well-being is bound to have a considerably higher degree of company morale than one that makes minimal or no efforts to do so.

  1. Provide Mandatory Training for all Employees

We’re talking about real training, not some VHS tape made in 1983. Real sexual harassment training should cover all of the more nuanced situations that take place in day-to-day interactions, and it should take care to ensure that employees remained active and engaged throughout, ensuring that the information is taken in by all who undergo it. This can be done via gamification, a discussion panel-style gathering, or requiring the completion of questionnaires or quizzes to move along the training. Comprehensive training will not only help prevent employees from misbehaving but will also let potential victims know when to report inappropriate conduct.

  1. Establish an Open-Door Policy for Victims

Victims need to know they can talk to someone about potential harassment both confidentially without fear of retribution. If your firm is large enough, have a team of three people (at least one of whom is a woman) meet with anyone who has a potential harassment claim. It is imperative that victims of sexual harassment be met with compassion and understanding when they decide to come forward, whatever the resulting course of action might be.

  1. Objectively Evaluate Your Company Culture

Acknowledging your work environment may not be what you believe it to be can be tough because nobody likes to admit it when they make mistakes. But the only way of finding out whether you are part of the problem is to take a long hard look at your company culture and identify potential problems. If you are not able to evaluate yourself objectively, do not be afraid to seek outside counsel for help. If there are problems, focus on fixing them instead of making excuses for past failures. The priority is that all employees within the company, regardless of age, race, sexual identity or orientation, disability, or genetic information feel supported and protected by their employer, even if securing this assurance means revising existing company policies and procedures.

  1. Take Swift and Decisive Action

Your sexual harassment policy should define the proper steps to take when someone files a complaint. It is crucial that you follow those steps without deviation, not only to protect yourself but also to let everyone in the firm see you take harassment seriously. It is easy to stress the ideological importance of protecting employees from distressing or dangerous interactions and situations. However, acknowledgment is not enough; action must be taken immediately, intelligently, and firmly following harassment claims to show employees that, when it comes to their well-being, your firm will put its money where its mouth is.

  1. Lead by Example

The prevention of sexual harassment in any workplace must begin at the top. If you or any other partners are exempt from the documented course of action and policies following any harassment allegations, you are telling everyone that the rules don’t apply to you. Not only does this undermine your credibility with potential victims, but others will believe that once they reach a certain level, the rules don’t apply to them either. Power is not given to be abused, and it must be evident to all employees that authority will not be taken advantage of, at any level,  at the expense of their safety and comfort.

Conclusion

Sexual harassment in the legal field is a real problem that people are finally starting to address, but the topic is a difficult one for numerous reasons. However, a professional who’s made it through the LSAT, law school, and bar examinations knows better than virtually anyone else that difficulty is no excuse for complicity. Instead of trying to avoid or skirt around the issue, be proactive and address it professionally, thoroughly, and responsibly. Nobody should be made to feel uncomfortable or unsafe where they work, and it is first and foremost the responsibility of an employer to establish a safe environment within their firm. It’s that simple.

© Copyright 2018 PracticePanther
This article was written by Jaliz Maldonado of PracticePanther
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