The possibility of self-driving cars on our roads is prompting both excitement and anxiety. Advocates point to the possibility of increased safety, lower pollution, even less congestion. Critics aren’t sold on many of the supposed advantages.
So, what happens when driverless vehicles start hitting our roads? As with so many innovations, there are likely to be pluses and minuses.
Let’s consider safety. The United States Department of Transportation estimates that roughly 95% of road accidents are caused by human mistakes; driving too fast for conditions, not paying attention to the road, or illegal maneuvers such as driving through red lights. Given human tendencies to get distracted, one would expect that autonomous vehicles will be safer.
Autonomous vehicles are outfitted with sensors and cameras, which enable them to “see” their surroundings and react to traffic and pedestrians. Companies working on these vehicles have been testing these vehicles in simulated settings as well as on real roads. There is much to tout about their safety aspects: they’re not distracted like humans, they obey speed limits and traffic signs, they don’t drive fatigued.
But driving in traffic has turned out to be more challenging than expected, and a few well-publicized accidents – one involving a Tesla and one an Uber vehicle that killed a pedestrian – have prompted concerns the self-driving technology is not ready for prime time. In particular, that sensors and cameras may not be able to react in real-time to cope with humans who behave like, well, humans.
More choices or less?
“We’re moving to a future where people don’t own cars,” says Dr. Daniel Sperling, director of the Institute of Transportation Studies at the University of California, Davis. “You’ll have a subscription service, maybe, that emphasizes smaller vehicles, or you might want a cheaper service where it’s a van,” he adds.
Dr. Alain Kornhauser, director of the program in transportation at Princeton University, agrees to a point, saying privately owned cars are not likely to vanish completely — especially in rural areas, where getting a driverless taxi may be more challenging. Still, he says, the number of people who own cars — and the number of cars owned per family — will drop sharply.
In many cities with ridesharing services like Lyft or Uber, owning a vehicle has become less urgent. Autonomous vehicles could multiply ridesharing options.
But what if you’re in a rural area without these services? Should rural communities consider investing in self-driving vehicles as a form of public transport? What if you’re in a major city but can’t afford to either own an autonomous vehicle or even subscribe to the service?
There’s also the question of what happens to public transport as self-driving vehicles increase. Will we continue to support and improve the infrastructure for public transportation?
Public transport systems in the U.S. are not as robust as in some European nations. One of the main concerns for Seleta Reynolds, General Manager of Department of Transportation for Los Angeles, is managing access for people in different parts of Los Angeles because she understands how much that can impact one’s financial well-being.
“You can get to about 12 times as many jobs in an hour in a car as you can by transit in L.A.,” she said.
If autonomous vehicles end up reducing access, the financial and social impact could ripple across communities.
Then there is the question of what autonomous vehicles will do to people who drive for a living. According to the U.S. Bureau of Labor Statistics, more than 2.5 million people earn their living from driving – employed as tractor-trailer truck drivers, taxi and delivery drivers, and as bus drivers. If those jobs disappear, that could represent a potential loss of employment equal to what we saw during the Great Recession of 2008.
Many of the people driving vehicles for a living are classified as low-skilled workers. It will be difficult for such unemployed workers to quickly find new work, and the cost of re-training them could be high.
Autonomous vehicles have the potential to spur a massive and exciting paradigm shift. But there are darker clouds on the horizon too. The question is: will we be able to manage the changes wrought by self-driving vehicles in a positive way?
Under the HSR Act, parties involved in proposed mergers, acquisitions of voting securities, unincorporated interests or assets, or other business combinations (e.g., joint ventures, exclusive license deals) that meet certain thresholds must report the contemplated transactions to the FTC and the Antitrust Division of the U.S. Department of Justice (“DOJ”) unless an exemption applies. The parties to a proposed transaction that requires notification under the HSR Act must observe a statutorily prescribed waiting period (generally 30 days) before closing. Under the revised thresholds, transactions valued at $94 million or less are not reportable under the HSR Act.
A transaction closing on or after the date the revised thresholds become effective may be reportable if it meets the following revised criteria:
Size of Transaction Test
The acquiring person will hold, as a result of the transaction, an aggregate total amount of voting securities, unincorporated interests, or assets of the acquired person valued in excess of $376 million;
or
The acquiring person will hold, as a result of the transaction, an aggregate total amount of voting securities, unincorporated interests, or assets of the acquired person valued in excess of $94million but not more than $376 million, and the Size of Person thresholds below are met.
Size of Person Test
One party (including the party’s ultimate parent entity and its controlled subsidiaries) has at least $188 million in total assets or annual sales, and the other has at least $18.8 million in total assets or annual sales. If the acquired party is not “engaged in manufacturing,” and is not controlled by an entity that is, the test applied to the acquired side is annual sales of $188 million or total assets of $18.8 million.
The full list of the revised thresholds is as follows:
Original Threshold
2019 Threshold
2020 Revised Threshold (Effective 30 days after publication in the Federal Register)
$10 million
$18 million
$18.8 million
$50 million
$90 million
$94 million
$100 million
$180 million
$188 million
$110 million
$198 million
$206.8 million
$200 million
$359.9 million
$376 million
$500 million
$899.8 million
$940.1 million
$1 billion
$1,799.5 million
$1,880.2 million
The filing fees for reportable transactions have not changed, but the transaction value ranges to which they apply have been adjusted as follows:
Filing Fee
Revised Size of Transaction Thresholds
$45,000
For transactions valued in excess of $94 million but less than $188 million
$125,000
For transactions valued at $188 million or greater but less than $940.1 million
$280,000
For transactions valued at $940.1 million or more
Note that the HSR dollar thresholds are only part of the analysis to determine whether a particular transaction must be reported to the FTC and DOJ. Failure to notify the FTC and DOJ under the HSR Act remains subject to a statutory penalty of up to $43,280 per day of noncompliance.
Revised Thresholds for Interlocking Directorates
Section 8 of the Clayton Act prohibits one person from simultaneously serving as an officer or director of two corporations if: (1) the “interlocked” corporations each have combined capital, surplus, and undivided profits of more than $38,204,000 (up from $36,564,000); (2) each corporation is engaged in whole or in part in commerce; and (3) the corporations are “by virtue of their business and location of operation, competitors, so that the elimination of competition by agreement between them would constitute a violation of any of the antitrust laws.”1
Section 8 provides several exemptions from the prohibition on interlocks for arrangements where the competitive overlaps “are too small to have competitive significance in the vast majority of situations.”2 After the revised thresholds take effect, a corporate interlock does not violate the statute if: (1) the competitive sales of either corporation are less than $3,820,400 (up from $3,656,400); (2) the competitive sales of either corporation are less than 2 percent of that corporation’s total sales; or (3) the competitive sales of each corporation are less than 4 percent of that corporation’s total sales.
The revised dollar thresholds for interlocking directorates of $38,204,000 and $3,820,400 will be effective upon publication in the Federal Register; there is no 30-day delay as there is for the HSR thresholds.
1 15 U.S.C. § 19(a)(1)(B).
2 S. Rep. No. 101-286, at 5-6 (1990), reprinted in 1990 U.S.C.C.A.N. 4100, 4103-04.
The Final Rule substantially narrows the scope of waterbodies subject to regulation under the Clean Water Act—notably removing interstate streams as a separate jurisdictional category; excluding ephemeral streams and water features; requiring rivers, streams and other natural channels to directly or indirectly contribute flow to a territorial sea or traditional navigable water; and excluding wetlands that are not adjacent to another non-wetland jurisdictional water. Further, the Agencies confirm that groundwater is not subject to regulation under the Clean Water Act and, consequently, that surface water features connected only via groundwater likewise are not jurisdictional. In support of this narrower scope, the Agencies explain that states and tribes retain the authority to regulate non-jurisdictional waters within their authority, provided those states and tribes deem such regulation appropriate.
The Final Rule replaces the definition of “waters of the United States” adopted under a 2015 Obama-era “WOTUS Rule” (the “2015 WOTUS Rule”), which was formally repealed by the Agencies on October 22, 2019. As explained in previous Van Ness Feldman alerts, the 2015 WOTUS Rule expanded federal control over several types of waterbodies, particularly with respect to tributaries, adjacent waters, and wetlands. 2015 WOTUS Rule has been subject to numerous legal challenges. These challenges resulted in a patchwork regulatory regime where application of the 2015 WOTUS Rule was enjoined from implementation in 28 states, while the remaining 22 states were subject to the more expansive regulatory definition of the “waters of the United States.”
The Agencies have described the Final Rule as providing “consistency, predictability, and clarity,” as well as appropriately recognizing state and tribal regulatory authority. The Final Rule pulls from three Supreme Court opinions in United States v. Riverside Bayview Homes (Riverside Bayview), Solid Waste Agency of Northern Cook County v. United States (SWANCC), and Rapanos v. United States (Rapanos) to adopt a unifying legal theory to define “waters of the United States” based on sufficient surface water connections with downstream traditional navigable waters and territorial seas. In adopting a unifying interpretive approach, the Agencies explicitly eliminate the case-specific application of their previous interpretation of Justice Kennedy’s significant nexus test in what was called their “Rapanos Guidance.”
Under the Final Rule, the overall categories of jurisdictional and excluded waters, in many ways, are similar to the existing regulatory scheme. As a practical matter, however, the Final Rule substantially narrows the scope of waterbodies subject to regulation under the Clean Water Act. The Agencies classify jurisdictional and excluded waters as follows:
The Agencies will primarily rely on states and tribes to regulate non-jurisdictional waters within their authority, provided those states and tribes deem such regulation appropriate.
Among the Final Rule’s most significant changes from the 2015 WOTUS Rule’s definition of federally regulated waters of the United States are the exclusions of ephemeral streams and wetlands that are not adjacent to another non-wetland jurisdictional water. Another notable element is the Agencies’ confirmation that groundwater is not subject to regulation under the Clean Water Act and, consequently, that surface water features connected only via groundwater likewise are not jurisdictional.
The Final Rule also provides definitions for key terms and offers guidance on their intended application of the regulated and non-regulated categories of waters. Key issues addressed by the Agencies include:
“Tributary” is defined as a river, stream, or similar naturally occurring surface water channel that contributes surface water flow to a territorial sea or traditional navigable water in a typical year directly or through another jurisdictional water. A tributary must be perennial or intermittent in a typical year. The Agencies also explain that a tributary does not lose its jurisdictional status if it contributes surface water flow to a downstream jurisdictional water in a typical year through a channelized non-jurisdictional surface water feature, through a subterranean river, culvert, dam, tunnel or similar artificial feature, or through a debris pile, boulder field or similar natural features. Tributaries include ditches that relocate a tributary, were constructed in a tributary, or are constructed in an adjacent wetland and have surface flow to the downstream jurisdictional water.
Certain delineation determinations will require the presence of the necessary jurisdictional features in a “typical year,” i.e., defined as “when precipitation and other climatic variables are within the normal periodic range (e.g. seasonally, annually) for the geographic area of the applicable aquatic resource based on a rolling thirty-year period.”
Ditches are not included as a separate category of jurisdictional waters, but instead are included in the definition of tributary. Ditches that are constructed in, or that relocate, a tributary or that are constructed in adjacent wetlands are included as a tributary and are jurisdictional if the flow in the ditch is perennial or intermittent during a typical year and that flow reaches a traditional navigable water or territorial sea. The Preamble notes that the majority of ditches used to drain surface and shallow subsurface water from croplands are expected to be non-jurisdictional.
Lakes, ponds and other impoundments do not lose their jurisdictional status if they contribute surface water flow to a downstream jurisdictional water through a culvert, dike, pipe, spillway, tunnel or other artificial feature or through a natural feature such as a debris pile or boulder field. However, lakes, ponds and impoundments that are connected downstream to jurisdictional waters only by diffuse stormwater runoff or directional sheet flow over upland areas are not jurisdictional. An ecological connection between a lake, pond or impoundment is insufficient to establish federal jurisdiction.
An impoundment must have a surface water connection to a downstream jurisdictional water in order to be regulated. The downstream surface water connection does not need to be natural but may be through any manner of artificial features (tunnels, culverts, spillways, etc.). However, lakes, ponds and impoundments that lose water only through evaporation, underground seepage or consumptive use are no longer considered jurisdictional waters.
Adjacent wetland are defined as wetlands that either: (i) abut a territorial sea, traditional navigable water, or regulated lake, pond, or impoundment; (ii) are inundated by flooding from one of these jurisdictional waters; (iii) are physically separated from one of these waters by a natural berm, bank, dune or similar natural feature; or (iv) are physically separated from one of these waters by an artificial dike, barrier or other structure, including a road, that allows for a direct hydrologic surface connection with the regulated water in a typical year (such as through a culvert, flood or tide gate, pump or similar feature). Application of these categories still requires further context to the relevant connections. For example, the Agencies explain that a subsurface connection through porous soils is insufficient to establish jurisdiction over a wetland separated by an artificial structure, such as a dike. Likewise, if the surface flow between the wetland and the abutting jurisdictional water across, or through, a dike or other artificial barrier only occurs after a 100-year storm event, this would not be sufficient to establish jurisdiction because the surface water connection would not occur once during a typical year. Finally, the Final Rule eliminates the prior definition of “adjacent”—which had included the terms “bordering, contiguous, or neighboring.” The elimination of the prior “adjacent” definition further limits the regulatory reach over wetlands under the Final Rule.
For each category of regulated waters, the Preamble in the Final Rule provides guidance on how the Final Rule will be implemented. Issues of implementation also are addressed in an “Implementation Statement” that was concurrently issued by the Agencies.
Lawsuits challenging this Final Rule are expected, likely resulting in continuing uncertainty, and, potentially, a further state-by-state patchwork of regulation, until these cases ultimately are addressed by the Supreme Court. For now, however, project and resource developers should carefully consider how the Final Rule may affect their permitting obligations for proposed development and work in or near waterbodies and wetlands.
Law firms and the businesses that surround them have hit the ground running in 2020, with tons of announcements, big moves by law firms and innovation across the entire field. Read on for a small taste of some of the exciting developments in the legal industry.
Hiring and Law Firm Moves
Patent preparation and prosecution law firm, Harrity & Harrity, LLP recently announced the firm had added four new patent attorneys: Joseph Lentivech, Patrick Hansen, McCord Rayburn, and Bret Tingey; as well as two new law clerks: Sara Ko and Abigail Troy.
Joseph Lentivech is based in Mobile, Alabama, and returns to Harrity & Harrity to practice after his service as an Administrative Patent Judge at the United States Patent Trademark Office (USPTO). His practice focuses on the prosecution of patent applications in electrical and computer technologies, encompassing telecommunications and computer hardware and software. Patrick Hansen will be based in the Raleigh office, and has experience representing petitioners and patent owners in post-grant proceedings, with specialization in patent applications for electrical, computer and mechanical technologies. McCord Rayburn has international patent experience, coordinating inbound national state patent application filings for foreign corporations, and he will work out of the law firm’s Charlotte office. Bret Tingey focuses on patent preparation and prosecution in mechanical and electrical technology, with extensive experience writing memos and briefs in IP litigation–including some submitted to the US Supreme Court–and he will be based in Raleigh. Law Clerks Sora Ko and Abigail Troy both have experience in patent preparation and prosecution before the USPTO and will work out of Harrity & Harrity’s DC office.
Paul Harritiy, a partner in the firm, called the group “superstars” and says, “we are excited for this group to join our team and assist the firm in continuing to provide excellent customer service to our Patent 300 clients.”
Lipson Neilson started off 2020 by announcing it has added nationally-recognized Surety & Fidelity Law attorneys Phillip G. Alber, Jeffrey M. Frank, Omar J. Harb, and Jessica L. Wynn, all four previously with Alber Frank PC law firm. Alber will head up a new Lipson Neilson office in Grosse Pointe, Michigan, and Frank, Harb and Wynn will be based in the firm’s Bloomfield Hills, Michigan office.
Jeffrey Neilson, a co-founder of the firm, says, “They’re a tremendous and immediate asset to our firm in the area of Surety & Fidelity Law and bring significant expertise in other areas of law and litigation as well. I think their decision to move to Lipson Neilson is a good indication of our reputation, our work and our culture.”
In a move that will strengthen the firm’s healthcare and corporate practices, Manatt announced that Paul A. Carr-Rollitt has joined as a healthcare partner in the Los Angeles office. Carr-Rollitt focuses his practice on corporate healthcare concerns, and his healthcare transaction experience includes mergers and acquisitions, joint ventures, reorganizations, affiliations, public offerings, and private equity transactions. His practice includes advising non-traditional and traditional health care entities, and his advice is legal, business-oriented, and incorporates strategy as well as policy concerns. Bill Bernstein, the leader of Manatt Health, calls Carr-Rollitt a “perfect fit” with Manatt’s growing practice. Bernstein says,“He brings with him an excellent roster of clients and has a national healthcare practice, which encompasses both payers and providers.”
On his end, Carr-Rollitt says Manatt’s blending of strategy with legal advice is an approach he’s always appreciated. “I am excited to be part of a firm that has a strong understanding of and commitment to the future of the healthcare industry and to work with some of the most forward-thinking professionals from coast to coast,” he says.
Last week, Katten announced that Mitchel C. Pahl has joined its Employee Benefits and Executive Compensation practice as a partner in the New York office. Pahl’s practice concentrates on employee benefits and executive compensation in private and public company M&A’s. He has also been involved in high-profile corporate transactions in a variety of industries including real estate, health care, and financial services. Additionally, he has advised clients on the operation and design of qualified retirement plans, equity incentive plans, and other compensation arrangements, as well as on negotiating executive employment agreements and separation packages.
Kate Ulrich Saracene, Katten partner and leader of the firm’s Employee Benefits and Executive Compensation practice, praises Pahl’s decades of experience across complex transactions. “Mitch also brings new capabilities to Katten with his focus on qualified retirement plans, benefit plans for non-profits and experience working with ESOPs,” says Saracene. “With the addition of Mitch, we’ve achieved our goal of building a full-service employee benefits and executive compensation practice, able to advise any type of client on any type of plan or transaction.”
Cornerstone Research started off 2020 by naming Dr. Yesim C. Richardson as President. In a departure for the organization, Richardson will share leadership with CEO Rahul Guha, who also took on his role on January 1, 2020. The duo succeeds Michael E. Burton, who had served in both roles since July of 2014.
Yesim Richardson
After a period of succession planning, the organization decided it made the most sense to divide the responsibilities of the CEO and President, and have two individuals fill those roles instead of combining them. “At this stage in our history,” says Dr. Guha, “we believe splitting the CEO and president responsibilities ensures the most effective leadership structure for our future.” Prior to her appointment as President, Dr. Richardson served on Cornerstone Research’s board of directors, and has been active on firm governance committees. In her new role as president, she will focus on talent strategies and service delivery, and continue to consult and support Cornerstone Research experts on litigation matters and other consulting questions. “Cornerstone Research has always lived its values . . .we have been guided by our commitment to deliver top-quality work to our clients, provide exceptional support to our experts, and develop pathways to leadership for our outstanding staff,” says Richardson. “We have enhanced the way we run the firm to support this commitment even more fully. I am proud and grateful to partner with Rahul as we look ahead to the continued growth and success of this extraordinary company.”
Porter Wright announced last week that Deb Boiarsky was promoted into the firm’s Chief Operating Partner position. This development comes after the firm has grown, with two new offices and a 30-percent partner increase across the firm. Boiarsky focuses her practice on employee benefits–specifically ERISA and IRS compliance–but in her role as the Chief Operating Partner, she will work with firm leadership to oversee day to day operations at the firm with an eye towards strategy and securing firm growth and development. Bob Tannous, managing partner of Porter Wright and the former Chief Operating Partner, indicates that a business mentality is key to success in this role. “Deb is known for being measured and considerate,” he points out, “and for fostering strong relationships in and outside of the firm.”
Law Firm Innovation and Developments
Kluk Farber, a female-founded law firm in New York and Los Angeles, has partnered with Vivvi Early Learning, a provider of employer-sponsored on and near-site child care, to provide children aged six weeks to five years access to near-site back-up care. Vivvi has worked in a variety of industries with employers to provide childcare for employees, including hospitality, media, and advertising. Partnering with companies who understand childcare is a major pain point for their employees, and their solution can increase employee morale while lowering turnover and absenteeism.
Kluk Farber, already a progressive leader in the legal industry for providing flex-time and supporting work-life balance, entered into this partnership acknowledging that the way child care is traditionally set up is not ideal for working families. “Being a female in law is not an easy feat to begin with, but having a family and achieving work-life integration? That’s nearly impossible,” she says. “We learned of Vivvi’s transformational work through the NYC female founder community, and knew instantly that it was a resource we needed to integrate immediately.”
Norton Rose Fulbright advised on the development and implementation of the world’s first consumer-ready digital fiat currency, assisting NZIA Limited to create the currency for the Central Bank of the Bahamas. The currency, known as “Sand Dollars” is a central bank digital currency_or CBDC–and is part of Project Sand Dollar. Sand Dollars will be issued by the state’s central bank, and are the same as legal tender, backed by the government and used by the public. The currency went live in digital wallets in December of 2019 and was used locally immediately after, as local businesses were onboarded through banks and other financial institutions. Now, the sand dollars are basically, legally, the same as cash.
The Bahamas was one of the first areas to develop a CBDC, and the island nation will benefit in a variety of ways; including inclusion in the financial system of unbanked and improved expenditure and tax systems. Norton Rose Fulbright Vancouver-based partner, John Kim, commented: “The innovative nature of Project Sand Dollar required us to provide equally innovative solutions to our client. Our input resulted in a system that would not only meet the requirements of current financial and regulatory regimes but actually leverage them to provide a CBDC solution that enables people to conduct more secure and instant transactions.”
Paige Justus
Fortis Law Partners will now offer legal guidance on estate planning practice, assisting clients with asset-protection strategies, gift planning, and tax reduction. Paige K. Justus, a senior corporate associate with the firm, will head the practice, which will also assist clients with wealth protection strategies, wills, living trusts, powers of attorney, guardian designations for minor children and healthcare declarations. Along with individual estate planning strategies, the estate planning practice group will work with nonprofits desirous of obtaining tax-exempt status assistance.
Legal Technology and Industry Developments
Embroker, Inc, a digital insurance company, announced the Lawyers’ Professional Liability platform, ideal for both large and small law practices. This platform allows law firms across a variety of sizes to secure and enroll in legal malpractice insurance quickly, efficiently and affordably.
Embroker CEO Matt Miller says the new Embroker platform can leverage technology to improve a traditionally onerous process. “They [attorneys] only have to spend a few minutes on each year and receive a quote from an A+ rated insurance provider,” Miller says. “By leveraging Embroker technology, our overhead is less intensive than the traditional decades-old model, and we are also able to provide lower rates that are going to be very attractive.”
Embroker will target law firms with 1-10 attorneys nationally, as these are traditionally most impacted by the onerous process of purchasing malpractice insurance without large staffs. The platform is currently available in 31 states, with approval pending in other states as the product is offered nationwide.
Lex Mundi recently released its Global M&A Trends Report, featuring insights from almost 70 Lex Mundi member firms from all over the world. Each of these firms shared insights on mergers and acquisitions within their purview, focusing on key concerns facing M&A practitioners, deal activity by segment, and 2020 predictions. The report indicated that due diligence and deal structure rank highly, with 18% and 14% of member firms respectively ranking those issues as major areas of concern. Matters of cybersecurity and data privacy are spurring concerns in due diligence, as buyer companies are working to mitigate risk across cyber, anti-corruption, and data privacy.
Despite global disruptions such as trade wars, Brexit, and economic instability, the majority of Lex Mundi Member firms (as much as 60%) indicated they expected M&A activity to remain the same in 2020; with the top industries such as energy and power, financial services, manufacturing, technology, healthcare, and life sciences seeing heavy activity.
Last week Jennifer Schaller moderated a panel at the 27th Annual Marketing Partner Forum in Miami, Florida on Client Journey Mapping for Law Firms. In conjunction with the discussion on Client Journey Mapping, the National Law Review is conducting a survey on elements of client journey mapping, and we will be analyzing and writing up the results. The survey is still open, so please consider taking a few minutes to add your insights. All responses are completely confidential.
That’s it for now. More to come as 2020 progresses!
News that multiple cases of the newly-identified 2019 Novel Coronavirus have reached the United States have prompted employers to think about employee safety and ways to address disease prevention in the workplace. Although, according to the Occupational Safety and Health Administration (OSHA), “most American workers are not at significant risk of infection” at this time, the situation is evolving, and it is never too early for employers to consider how they can address employee concerns, help prevent an outbreak, or address one if it occurs. Employers should also be aware of legal pitfalls that they may encounter when attempting to protect their employees from the virus.
The following addresses some of the key questions employers may have regarding the Coronavirus threat.
What is the Coronavirus and How Is It Transmitted?
At this point, relatively little is known about the 2019 Novel Coronavirus, more commonly known as the “Coronavirus.” According to the CDC, the initial reports of the illness originated in Wuhan, China, where people likely contracted the virus from animals at a seafood and animal market. Experts now believe that the virus is spreading from human-to-human when an infected person coughs or sneezes, similar to the spread of a cold or flu. However, it is still too early to know how easily the virus is transmitted between people.
What Are the Primary Symptoms of the Coronavirus?
In the confirmed cases of Coronavirus thus far, affected individuals have reported mild to severe respiratory symptoms, fever, cough, shortness of breath, and breathing difficulties. In severe cases, the virus has led to pneumonia, kidney failure, and, in at least 100 deaths (presently, all in China), as of the time of this writing. The CDC believes at this time that symptoms may appear within two to fourteen days after exposure. However, some infected individuals have shown little to no symptoms.
How Can Spread of the Coronavirus Be Prevented?
Because there is presently no Coronavirus vaccine available, the CDC is recommending standard precautions to avoid the spread of respiratory viruses, such as washing hands with soap and water for at least 20 seconds, or, if soap is not available, using hand sanitizer; avoiding close contact with people who are sick; staying at home when you are sick; and disinfecting frequently touched objects and surfaces.
What If My Employees Travel to China For Business?
As of January 27, 2020, the CDC has issued a level 3 health travel notice (the highest threat level) recommending that people avoid all nonessential travel to China.
Employers whose employees travel to and from China should keep in mind the following:
Consider whether to limit business travel to affected areas. While the current CDC travel notice does not specifically define “nonessential travel,” the General Duty Clause of the Occupational Safety and Health Act (OSHA) requires employers to furnish “employment and a place of employment which are free from recognized hazards that are causing or likely to cause the death or serious physical harm to … employees.” Although the Occupational Safety and Health Administration (also referred to as OSHA) has not promulgated specific standards covering the Coronavirus, requiring employees to engage in nonessential business travel to China (or any other areas in which the risk of contagion is heightened) could create risk under the General Duty Clause, particularly in light of the CDC warning against nonessential travel. For that reason, employers whose business may involve travel to China (or other areas that become subject to travel restrictions or otherwise experience an increase in the spread of the virus) should consider other available options for employees for the duration of the threat, such as videoconferencing.
By the same token, employers should also be prepared to respond to employees who may express concerns about traveling to affected areas due to the virus. While an employer generally has broad discretion to decide the duties and requirements of a job and to discipline employees who fail to fulfill those requirements, as a practical matter employers may wish to consider offering employees reasonable alternatives to such travel.
Finally, while employers may implement restrictions on work-related travel to affected areas, employers should tread more carefully when attempting to police personal, non-work-related travel. That said, recent decisions in the Seventh, Eighth, and Eleventh Circuits have held that the disability discrimination protections of the ADA donot apply where an employer takes an employment action based on the potential for an employee to become ill and disabled in the future. Specifically, the Eleventh Circuit found no liability under the ADA where an employer terminated an employee who requested time off to travel to Ghana to visit family because of the perceived risk that the employee would contract the Ebola virus, due to recent outbreaks of the disease in neighboring countries. While courts have tended to take this view, it is worth noting that the EEOC has argued on at least one occasion that an employer acting on a potential future health condition may be viewed as “regarding” an employee as disabled as long as the condition otherwise qualifies as a disability under the law. For this reason, employers should consider the risks with imposing a ban on personal, non-work-related travel to affected areas.
Provide relevant safety information to employees. Employers whose employees travel to affected areas should provide information to their employees about how the Coronavirus is transmitted, its symptoms, and how to avoid exposure – utilizing trusted and reputable sources such as the CDC. Employers would be well advised to also provide these employees with resources and contact information for local health departments and the CDC.
Understand that employee travel may be interrupted. The Chinese government has closed transit within and out of Wuhan and certain other areas of the Hubei Province. Hong Kong has also imposed certain restrictions on travel to and from the Chinese mainland. The United States is also re-routing passengers from Wuhan, China to certain designated airports (including Chicago O’Hare, Atlanta, New York JFK, Los Angeles, and San Francisco) for enhanced screening. While screening for common viruses usually takes several hours, officials have indicated that those suspected of having the Coronavirus could be delayed for up to a day if additional screening is needed.
What Should I Do if an Employee Has Recently Traveled to China or Otherwise May Have Been Exposed to the Coronavirus?
Employers should remember that the Americans with Disabilities Act (ADA) places certain restrictions on the kinds of inquiries that can be made into an employee’s medical status. Specifically, the ADA prohibits employers from making disability-related inquiries and requiring medical examinations, unless (1) the employer can show that the inquiry or exam is job-related and consistent with business necessity, or (2) where the employer has a reasonable belief that the employee poses a direct threat to the health or safety of the individual or others that cannot otherwise be eliminated or reduced by reasonable accommodation.
According to Pandemic Preparedness Guidance published in 2009 by the Equal Employment Opportunity Commission (EEOC) in the midst of the H1N1 influenza outbreak, whether a particular outbreak rises to the level of a “direct threat” depends on the severity of the illness. Employers should look to the most up-to-date assessments being made by the CDC or other public health authorities, as they relate to the employer’s location, to determine the severity level of an illness and, in turn, whether an employee who potentially has been exposed to the illness may constitute a “direct threat.” Employers should not rely on speculation or unofficial information when making determinations about whether there is a direct threat. At the moment, the CDC is not classifying the Coronavirus as a pandemic and has not issued a heightened threat level for the United States. However, the situation continues to rapidly evolve and we will provide updates should additional guidance be released by the CDC or other public health officials on this important issue.
All this being said, employers should keep in mind the following when it comes to employees who have traveled to affected areas:
Employers need not wait until an employee returning from travel develops symptoms to inquire about exposure to the Coronavirus. Inquiring about whether an employee has traveled to an affected area or about possible exposure to a contagious illness during such travel would not constitute a disability-related inquiry. However, as discussed below, the extent to which an employer may act on the information received will depend on the most recent information available from the CDC or other public health officials. Further, employers inquiring into whether employees have traveled to affected areas should do so of all employees known or believed to have recently traveled, rather than directing such inquiries only to employees of certain races, ethnicities, or national origins. Finally, employers should be mindful to keep confidential all medical-related information received from an employee, in accordance with the ADA.
Under certain circumstances, employers may require employees who have traveled to areas affected by serious health threats to stay home. If the CDC or other local public health officials recommend that people who visit specified locations remain at home for several days until it is clear they do not have illness symptoms, an employer may require an employee who traveled to an affected area to remain out of work for the suggested period of time. While presently the CDC states that individuals who may have been in close contact with someone with the Coronavirus may continue with their daily activities so long as they are not showing any symptoms, employers should continue to monitor the CDC website for further developments. In the absence of a CDC directive that employees who have traveled to affected areas stay at home, an employer who is considering requiring such employees to remain home, they should consult with counsel.
What Other Things Should Employers Be Thinking About When it Comes to the Coronavirus?
Employers may – and should – send employees home if they exhibit potential symptoms of contagious illnesses at work. The EEOC has said that sending an employee home who displays symptoms of contagious illness would not run afoul of the ADA’s restrictions on disability-related actions because: (i) if the illness ultimately turns out to be relatively mild or “run of the mill” (such as seasonal influenza), then it would not have constituted a covered disability in the first place; and (ii) if the illness does turn out to be severe (such that it may constitute a disability under the law), then the actions would be warranted under a direct threat analysis. In either case, an employer can send an employee home who is displaying symptoms of contagious illness, even if this is against the employee’s wishes. Employers should also consider making clear in their policies that employees who have symptoms of a potential contagious illness must not report to work while they are sick.
Determine whether the FMLA or other leave laws may apply. An employee who is experiencing a serious health condition or who requires time to care for a family member with such a condition may be entitled to take unpaid leave under the federal Family and Medical Leave Act (FMLA) or state-law analogues. Employees may also be eligible for leave as a reasonable accommodation under the ADA or related state or local law, if the underlying condition constitutes a qualifying disability. However, employees generally are not entitled to take FMLA or reasonable accommodation leave to stay at home to avoid getting sick (though an exception may exist where a preexisting medical condition is likely to be worsened by exposure to a contagious disease). Furthermore, employees in certain jurisdictions may be entitled to paid sick leave if needed to care for themselves or a sick family member in the event of an illness, or if their workplace or a child’s school or day care is closed due to a public health emergency.
Consider whether OSHA requirements may apply. While, as noted above, OSHA has not promulgated specific standards covering the Coronavirus, it has issued a notice indicating that employers should be aware of the following general standards to which employers may be subject under OSHA:
General Duty Clause: As discussed above, the OSHA General Duty Clause requires employers to furnish “a place of employment which [is] free from recognized hazards that are causing or likely to cause the death or serious physical harm to … employees.” To that end, there are some readily achievable steps that employers can take to prevent the spread of the Coronavirus (and other contagious illnesses) within the workplace, such as: providing hand sanitizer to employees, ensuring that surfaces and eating areas are disinfected regularly, and encouraging employees who are sick to stay home. Employers also may start to consider certain policy changes they may wish to implement in response to the Coronavirus should the situation become more severe in the U.S., such as allowing employees to work from home.
Personal Protective Equipment: OSHA requires that protective equipment, clothing, and barriers be provided whenever it is necessary to prevent employees from being exposed to environmental hazards. Employers are required to assess the workplace, determine if hazards are present, and if so, select and have employees use protective equipment. Employers whose employees may encounter individuals infected with the Coronavirus, such as those in the healthcare and travel industries, should begin to consider what protective equipment would be necessary to protect its workforce should the virus begin to spread within the United States.
Recordkeeping and Reporting Requirements: OSHA requires that certain employers keep a record of certain work-related illness and injuries (often referred to as an OSHA Form 300 log). While there is a regulatory exemption for recording instances of the standard cold and flu, OSHA has deemed the 2019 Novel Coronavirus a recordable illness when a worker is infected on the job. In addition, certain employers may be subject to reporting requirements under state and local law if they have a reasonable belief that a significant disease is present in the workplace.
Employers in Higher-Risk Industries: While, again, OSHA has yet to issue any standards or controls specific to Coronavirus, employers operating in industries where employees may be at a potential increased risk of exposure should prepare for the possibility that heightened requirements may be put in place. In the past, OSHA has issued such guidance for employers in industries such as healthcare, airlines, and mortuary services, such as during the MERS outbreak in 2015.
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Information about the Coronavirus is constantly developing, so employers also should continue to refer to the CDC, WHO, and OSHA websites for the latest on appropriate precautions, including changes to travel notices. Of course, we will continue to monitor this situation and report on any updates as they develop.
On January 16, 2020, the U.S. Department of Agriculture (USDA) announced the issuance of a Request for Information (RFI) to assist with the creation of its new program called Higher Blends Infrastructure Incentive Program (HBIIP). A USDA Rural Development project, HBIIP is designed to expand the availability of domestic ethanol and biodiesel by incentivizing the expansion of sales of renewable fuels. Requesting feedback from all interested parties, this RFI solicits information on options for fuel ethanol and biodiesel infrastructure, innovation, products, technology, and data derived from all HBIIP processes and/or science that drive economic growth, promote health, and increase public benefit. With an approaching deadline for comment submissions by January 30, 2020, thus far, only three parties have submitted comments to USDA.
DOE Announces Launch Of The 2020 Tibbetts Awards Program
On January 21, 2020, the U.S. Department of Energy’s (DOE) Small Business Innovation Research (SBIR)/Small Business Technology Transfer (STTR) Programs Office announced the launch of the U.S. Small Business Administration’s (SBA) Tibbetts Awards. The Tibbetts Awards recognize companies, organizations, and individuals exemplifying the best of the best in the SBIR and STTR programs. Named after the founder of the SBIR program, Roland Tibbetts, the awards also help DOE to document the economic, technical, and societal benefits from SBIR/STTR funding. Nominees can consist of an individual, a company, or an organization that promotes the mission and goals of the SBIR/STTR programs. The mission and goals include:
Stimulation of technological innovation;
Work with small businesses to meet federal development needs;
Encouragement of diverse participation in innovation and entrepreneurship;
Increase of private sector commercialization of innovations derived research and development (R&D); and
Foster technology transfer through cooperative R&D between small businesses and research institutions.
Nominations are open through February 21, 2020, and can be submitted via this website.
EU Funds Project To Develop Biobased Ropes For Aquaculture
On January 17, 2020, the European Union (EU) announced a new innovative project called BIOGEARS that will be funded under the European Maritime and Fisheries Fund (EMFF). The project focuses on the development of biobased gear solutions for the creation of an eco-friendly offshore aquaculture sector using a multitrophic approach and new biobased value chains. With the aim to address the gap of biobased ropes for offshore aquaculture, which is currently manufactured with 100 percent non-recyclable plastics, BIOGEARS will create a biobased value chain under the EU Bioeconomy Strategy framework. The European Bioeconomy Strategy aims to accelerate the deployment of a sustainable and circular European bioeconomy to maximize its contribution towards the 2030 Agenda and its Sustainable Development Goals (SDG), as well as the Paris Agreement. With the goal of increasing aquaculture marketable products, BIOGEARS uses an Integrated Multi-Trophic Aquaculture (IMTA) approach by integrating seaweed with mussel production. The BIOGEARS project’s intention is to develop biobased ropes that are tough, durable, and fit-for-purpose while still able to biodegrade in shorter time and managed by local composting facilities.
As part of the project, all project partners will participate in a BLUE LAB to enhance cooperation and enable tracking of innovation of the new biobased materials developed. Project coordinator, Leire Arantzamendi, expressed her hopes of boosting more eco-friendly mussel and seaweed production stating that BIOGEARS “will generate three rope prototypes with a highly reduced carbon footprint along the value chain.” The project will focus on the Atlantic Basin.
The next step will be for the withdrawal agreement to be ratified by the European Parliament, which is scheduled for January 29. If this vote is passed, the UK will leave the EU on January 31, 2020. The UK will then enter an ‘implementation period,’ during which all EU laws will continue to apply in the UK, while the UK and the EU negotiate their future relationship. This implementation period is scheduled to end on December 31.
Drug prices continue to be a hot button issue in American politics. While many of the Trump Administration’s efforts to curb increasing drug prices stalled in 2019, a number of state legislatures have adopted drug price transparency laws in recent years. Since 2015, Vermont, Nevada, California, Maryland, Louisiana, New York, Oregon, Colorado, Connecticut, Maine, Texas, and Washington have all adopted drug pricing transparency laws. These laws are designed to incentivize manufactures to lower drug prices by requiring them to report information about drug price increases and their justification for how drug prices are set. We have been tracking and summarizing these laws, and you can find our summary here.
Below is a brief overview of the trends that we’re seeing in state drug price transparency laws.
State Laws Requiring Manufacturer Reporting on Drug Price Increases. The most prevalent type of drug price transparency laws requires manufacturers to report an extensive amount of information about drug price increases. Generally, states require manufacturers to report the information to a state government agency (e.g., Oregon), but other states (e.g., California) require manufacturers to provide advance notice of drug price increases to purchasers. Generally, reporting requirements are triggered when the wholesale acquisition cost (WAC) increases over a certain dollar threshold or when the net increase of the WAC increases a certain percentage over the course of a year.
State Laws Requiring Manufacturer Reporting for Specific Drugs Identified by the State or Certain Types of Drugs. Several states (e.g., Connecticut and Vermont) authorize an independent board to compile a list of drugs on which the state spends significant dollars and/or for which the WAC has increased significantly over the past year or past five years. Manufacturers of the drugs identified by the board are required to report certain information about the drugs’ costs and pricing. The reporting requirements in other state laws are specific to certain types of drugs. For example, Nevada’s drug price transparency law initially applied only to forms of insulin and biguanides, which are essential for diabetes treatment. In 2019, Nevada expanded the law to apply to prescription drugs essential for asthma treatment as well.
State Laws Requiring Pharmacy Benefit Managers (PBMs) to Disclose Manufacturer Rebates. These laws place accountability for drug price increases on PBMs by requiring them to disclose the amount of rebates they negotiate and retain from manufacturers.
Disruptionware is defined by the Institute for Critical Infrastructure Technology (ICIT) as a new and “emerging category of malware designed to suspend operations within a victim organization through the compromise of the availability, integrity and confidentiality of the systems, networks and data belonging to the target.” New forms of disruptionware can be a more crippling form of cyber-attack than other more “garden-variety” malware and ransomware attacks. This is the case since, as the ICIT notes, disruptionware not only attempts to encrypt and deny users access to their data, but works as a “layered attack” designed to “disrupt operations and production in manufacturing or industrial environments (as well as infrastructure) in order to achieve some other strategic goal.”
Disruptionware has “consumed” many traditional cyber-attacks, making them part of the disruptioware “toolkit.” These techniques include cyber-attacks such as ransomware, “wipers,” “bricking capabilities,” automated components, data exfiltration tools and network reconnaissance tools. (See ICIT report for further definitions.) Today, the rise of disruptionware is a new and even more chaotic form of cyber warfare attack – it not only attempts to encrypt and deny users access to their data, but disruptionware works to “disrupt operations and production in manufacturing or industrial environments (as well as infrastructure) in order to achieve some other strategic goal.”
Additionally, generalized forms of ransomware attacks – designed to block access to the victim’s computer systems until money is paid – are continuing to represent a more prevalent threat to government agencies, healthcare providers and educational institutions. Ransomware was so destructive on its own that the FBI recently issued a Public Service Announcement (PSA) warning about such “high-impact” attacks on critical private and public sector institutions. Underscoring the FBI’s announcement, another publication has noted the rise of ransomware attacks since the beginning of 2019 finding that there have been at least 621 reported successful ransomware attacks against U.S.-based corporations. Of these attacks, at least 491 were targeted against healthcare providers, while another 68 of the attacks were directed at county and municipal institutions, and 62 of the attacks were focused on school districts.
According to the FBI, hospitals and health care institutions are the primary targets of these high-impact ransomware attacks because of the critical role they play in providing lifesaving services, and the fact that these institutions usually do not have the luxury of taking time to restore backups in order to get their networks working again and running safely and securing after an attack. Above and beyond the costs associated with paying the ransom and restoring computer networks and systems, ransomware attacks on hospitals and health care providers have proven especially damaging because they affect the ability of the targeted healthcare providers to deliver critical health care services to patients. Perhaps even more disturbingly, many of the victim companies reported losing data even when they paid the ransom demanded by the hackers. Nevertheless, according to the blog “knowbe4,” it was predicted that ransomware payments alone by victim companies will have exceeded $11.5 billion in 2019 – representing an increase of almost 30% over the approximately $8 billion paid in 2018.
Along with the rise of disruptionware and high-impact ransomware, hackers are also now using new and diverse techniques to launch multiple forms of cyber-attacks including, among other things, an increased use of new Remote Desktop Protocol (RDP) attacks, as well as leveraging various software vulnerabilities to infect organizations through backdoor channels. Unfortunately, few businesses are hardening their IT infrastructure against these new types of extremely damaging cyber-attacks. RDP attacks are becoming far more common because of the simplicity of many users’ login credentials, while companies are not doing enough to “whitelist” exclusively acceptable computer software and applications to prevent security holes caused by numerous software vulnerabilities in unsecured and sometimes untested software applications.
The FBI’s PSA serves as a warning to businesses that they should have a plan in place to respond efficiently and appropriately in the event of high impact ransomware and disruptionware attacks. Such plans should include, among other things, clear designations of responsible individuals (both inside and outside the company), procedures for contacting law enforcement, and the business having a firm understanding of what their data is as well as a good understanding of its importance in the overall business plan. Finally, businesses need a current and workable Disaster Recovery Plan for getting the organization up and running again as quickly as possible if there is a cyber-attack. Businesses would be wise to review how their systems are backed up, as reliable and readily accessible backups are often critical in allowing ransomware or disruptionware victims to try and resume normal business operations as quickly as possible.
You are curious about the percentage of Serbo-Croatian, Hmong, Sephardim or Ashanti blood that runs through your veins. Or maybe you hope to find a rich great-aunt near death, seeking an heir.
How much is this worth to you? Two hundred bucks? That makes sense.
But what about other costs:
– like sending your cousin to prison for life (and discovering that you grew up with a serial killer)?
– like all major companies refusing to insure you due to your genetic make-up?
— like ruining your family holidays when you find that your grandfather is not really genetically linked to you and grandma had been playing the field?
– like pharma companies making millions using your genetic code to create new drugs and not crediting you at all (not even with discounts on the drugs created by testing your cells)?
– like finding that your “de-identified” genetic code has been re-identified on the internet, exposing genetic propensity for alcoholism or birth defects that turn your fiancé’s parents against you?
How much are these costs worth to you?
According to former FDA commissioner Peter Pitts, writing in Forbes, “The [private DNA testing] industry’s rapid growth rests on a dangerous delusion that genetic data is kept private. Most people assume this sensitive information simply sits in a secure database, protected from hacks and misuse. Far from it. Genetic-testing companies cannot guarantee privacy. And many are actively selling user data to outside parties.” Including law enforcement.
Nothing in US Federal health law protects the privacy of DNA test subjects at “non-therapeutic” labs like Ancestry or 23andMe. Information gleaned from the DNA can be used for almost anything. As Pitts said, “Imagine a political campaign exposing a rival’s elevated risk of Alzheimer’s. Or an employer refusing to hire someone because autism runs in her family. Imagine a world where people can have their genomic building blocks held against them. Such abuses represent a profound violation of privacy. That’s an inherent risk in current genetic-testing practices.”
Genetic testing companies quietly, and some would argue without adequate explanation of facts and harms which are lost in a thousand words of fine print that most data subjects won’t read, push their customers to allow genetic testing on the customer samples provided. Up to 80% of 23andMe customers consent to this activity, likely not knowing that the company plans to make money off the drugs developed from customer DNA. Federal laws require labs like those used by 23andMe for drug development to keep information for more than 10 years, so once they have it, despite rights to erasure provided by California and the EU, 23andMe can refuse to drop your data from its tests.
Go see the HBO movie starring Oprah Winfrey about medical exploitation of the cell lines of Henrietta Lacks, or better yet, read the bestselling book it was based on. Observe that an engaging, vivacious woman who couldn’t afford health insurance was farmed for a line of her cancer cells that assisted medical science for decades and made millions of dollars for pharma companies without any permission from or benefit to the woman whose cells were taken. Or any benefit to her family once cancer killed her. Companies secured over 11,000 patents using her cell lines. This is the business model now adopted by 23andMe. Take your valuable data under the guise of providing information to you, but quietly turning that data into profitable products for their shareholders’ and executives’ benefit. Not to mention that 23andMe can change its policies at any time.
As part of selling your genetic secrets to the highest bidder, 23andMe is constantly pushing surveys out to its customers. According to an article in Wired, 23andMe Founder Ann Wojcicki said, “We specialize in capturing phenotypic data on people longitudinally—on average 300 data points on each customer. That’s the most valuable by far.” Which means they are selling not only your DNA information, but all the other data you give them about your family and lifestyle.
This deep ethical compromise by 23andMe is personal for me, and not because I have sent them any DNA samples – I haven’t and I never would. But because, when questioned publicly about their trustworthiness by me and others close to me, 23andMe has not tried to explain its policies, but has simply attacked the questioners in public. Methinks the amoral vultures doth protest too much.
For example, a couple of years ago, my friend, co-author and privacy expert Theresa Payton noted on a Fox News segment that people who provide DNA information to 23andMe do not know how such data will be used because the industry is not regulated and the company could change its policies any time. 23andMe was prompt and nasty in its response, attacking Ms. Payton on Twitter and probably elsewhere, claiming that the 23andMe privacy policy, as it existed at the time, was proof that no surprises could ever be in store for naïve consumers who gave their most intimate secrets to this company.
[BTW, for the inevitable attacks coming from 23andMe and their army of online protectors, the FTC endorsement guidelines require that if there is a material connection between you and 23andMe, paid or otherwise, you need to clearly and conspicuously disclose it.]
Clearly Ms. Payton was correct and 23andMe’s attacks on her were simply wrong.
Guess what? According to the Wall Street Journal, 23andMe sold a $300 MM stake in itself to GlaxoSmithKline recently and, “For 23andMe, using genetic data for drug research ‘was always part of the vision,’ according to Emily Drabant Conley, vice president and head of business development.” So this sneaky path is not even a new tactic. According to the same WSJ story, “23andMe has long wanted to use genetic data for drug development. Initially, it shared its data with drug makers including Pfizer Inc. and Roche Holding AG ’s Genentech but wasn’t involved in subsequent drug discovery. It later set up its own research unit but found it lacked the scale required to build a pipeline of medicines. Its partnership with Glaxo is now accelerating those efforts.”
And now 23andMe has licensed an antibody it developed to treat inflammatory diseases to Spanish drug maker Almirall SA. “This is a seminal moment for 23andMe,” said Conley. “We’ve now gone from database to discovery to developing a drug.” In the WSJ, Arthur Caplan, a professor of bioethics at NYU School of Medicine said “You get this gigantic valuable treasure chest, and people are going to wind up paying for it twice. All the people who sent in DNA will be paying the same price for any drugs that are developed as anybody else.”
So this adds another ironic dimension to the old television adage, “You aren’t the customer, you are the product.” You pay to provide your DNA – the code to your entire physical existence – to a private company. Why? Possibly because you want information that may affect your healthcare, but in all likelihood you simply intend to use the information for general entertainment and information purposes.
You likely send a swab to the DNA company because you want to learn your ethnic heritage and/or see what interesting things they can tell you about why you have a photic sneeze reflex, if you are genetically inclined to react strongly to caffeine, or if you are carrier of a loathsome disease (which you could learn for an additional fee). But the company uses the physical cells from your body not only to build databases of commercially valuable information, but to develop drugs and sell them to the pharmaceutical industry. So who is the DNA company’s customer? 23andMe and its competitors take physical specimens from you and sell products made from those specimens to their real customers, the drug companies and the data aggregators.
These DNA processing firms may be the tip of the spear, because huge data companies are coming for your health information. According to the Wall Street Journal,
“Google has struck partnerships with some of the country’s largest hospital systems and most-renowned health-care providers, many of them vast in scope and few of their details previously reported. In just a few years, the company has achieved the ability to view or analyze tens of millions of patient health records in at least three-quarters of U.S. states, according to a Wall Street Journal analysis of contractual agreements. In certain instances, the deals allow Google to access personally identifiable health information without the knowledge of patients or doctors. The company can review complete health records, including names, dates of birth, medications and other ailments, according to people familiar with the deals.”
And medical companies are now tracking patient information with wearables like smartwatches, so that personally captured daily health data is now making its way into these databases.
And, of course, other risk issues affect the people who provide data to such services. We know through reporting following the capture of the Golden State Killer that certain genetic testing labs (like GEDMatch) have been more free than others with sharing customer DNA with law enforcement without asking for warrants, subpoenas or court orders, and that such data can not only implicate the DNA contributors but their entire families as well. In addition, while DNA testing companies claim to only sell anonymized data, the information may not remain that way.
Linda Avey, co-founder of 23andMe, concedes that nothing is foolproof. She told an online magazine, “It’s a fallacy to think that genomic data can be fully anonymized.” This articles showed that researchers have already re-identified people from their publicly available genomic data. For example, one 2013 study matched Y-chromosome data with names posted in places such as genealogy sites. In another study that same year, Harvard Professor Latanya Sweeney re-identified 84 to 97 percent of a sample of Personal Genome Project volunteers by comparing gender, postal code and date of birth with public records.
A 2015 study re-identified nearly a quarter of a sample of users sequenced by 23andMe who had posted their information to the sharing site openSNP. “The matching risk will continuously increase with the progress of genomic knowledge, which raises serious questions about the genomic privacy of participants in genomic datasets,” concludes the paper in Proceedings on Privacy Enhancing Technologies. “We should also recall that, once an individual’s genomic data is identified, the genomic privacy of all his close family members is also potentially threatened.” DNA data is the ultimate genie, that once released from the bottle, can’t be changed, shielded or stuffed back inside, and that threatens both the data subject and her entire family for generations.
And let us not forget the most basic risk involved in gathering important data. This article has focused on how 23andMe and other private DNA companies have chosen to use the data – probably in ways that their DNA contributing customers did not truly understand – to turn a profit for investors. But collecting such data could have unintended consequences. It can be lost to hackers, spies or others who might steal it for their own purposes. It can be exposed in government investigations through subpoenas or court orders that a company is incapable of resisting.
So people planning to plaster their deepest internal and family secrets into private company databases should consider the risks that the private DNA mills don’t want you to think about.
