Category: Uncategorized

2020 Inflation Adjustments Impacting Individual Taxpayers

Last month, the IRS released the 2020 inflation adjustments for several tax provisions in Rev. Proc. 2019-44. The adjustments apply to tax years beginning in 2020 and transactions or events occurring during the 2020 calendar year.  A select group of key provisions relative to trusts and estates are identified below.

Income Tax of Trusts and Estates

The taxable income thresholds on trusts and estates under Section 1(e) are:

If Taxable Income is: The Tax is:
Not over $2,600 10% of the taxable income
Over $2,600 but not over $9,450 $260 plus 24% of excess over $2,600
Over $9,450 but not over $12,950 $1,904 plus 35% of excess over $9,450
Over $12,950 $3,129 plus 37% of excess over $12,950

The alternative minimum tax exemption amount for estates and trusts under Section 55(d)(1)(D) is:

Filing Status Exemption Amount
Estates and Trusts ((§55(d)(1)(D)) $25,400

The phase-out amounts of alternative minimum tax for estates and trusts under Section 55(d)(3)(C) are:

Filing Status Threshold Phase-out
Estates and Trusts ((§55(d)(3)(C)) $84,800

Estate and Gift Tax

For an estate of a decedent dying in 2020, the basic exclusion amount, for purposes of determining the Section 2010 credit against estate tax, is $11,580,000.

The Section 2503(b) annual gift tax exclusion for gifts made in 2020 is $15,000 per donee.

For an estate of a decedent dying in 2020 that elected to use the Section 2032A special valuation method for qualified property, the aggregate decrease in value must not exceed $1,180,000.

For gifts made to a non-citizen spouse in 2020, the annual gift tax exclusion under Section 2523(i)(2) is $157,000.

Additionally, recipients of gifts from certain foreign persons may be required to report these gifts under Section 6039F if the aggregate value of the gifts received in 2020 exceeds $16,649.

For an estate of a decedent dying in 2020 that elect to extend the payment of estate tax under Section 6166, the 2% portion for determining the interest rate under Section 6601(j) is $1,570,000.

2020 Penalty Amounts

In the case of failure to file a return, the addition to tax under Section 6651(a)(1) is not less than the lesser of $215 or 100% of the amount required to be shown on the return.

The penalties under Section 6652(c) for certain exempt organizations and trusts failing to file returns, disclosures, etc., which are required to be filed in calendar year 2020, are:

Returns Under §6033(a)(1) (Exempt Organizations) or §6012(a)(6) (Political Organizations)
Scenario Daily Penalty Maximum Penalty
Penalty on Organization (§6652(c)(1)(A))  $20 Lesser of (i) $10,500 or (ii) 5% of gross receipts for year
Penalty on Organization with Gross Receipts Greater than $1,049,000(§6652(c)(1)(A))  $105 $54,000
Penalty on Managers (§6652(c)(1)(B)(ii))  $10 $5,000
Public Inspection of Annual Returns and Reports (§6652(c)(1)(C))  $20 $10,500
Public Inspection of Applications for Exemption and Notice of Status (§6652(c)(1)(D))  $20 No limits

Returns Under §6034 (Certain Trust) or §6043(b) (Terminations, etc., of exempt organizations)
Scenario Daily Penalty Maximum Penalty
Penalty on Organization or Trust (§6652(c)(1)(A)) $10 $5,000
Penalty on Managers (§6652(c)(2)(B)) $10 $5,000
Penalty on Split Interest Trust (§6652(c)(2)(C)) $20 $10,500
Split Interest Trust with Gross Income Greater than $262,000 (§6652(c)(2)(C)(ii)) $105 $54,000

Disclosure Under §6033(a)(2)
Scenario Daily Penalty Maximum Penalty
Penalty on Tax-Exempt Entity (§6652(c)(3)(A)) $105 $54,000
Failure to Comply with Demand (6652(c)(3)(B)(ii)) $105 $10,500

 

© 2020 Davis|Kuelthau, s.c. All Rights Reserved

ARTICLE BY Mark G. Kmiecik of  Davis Kuelthau.
For more IRS Guidance & Regulatory Updates, see the National Law Review Tax Law section.

2020 Predictions for Data Businesses

It’s a new year, a new decade, and a new experience for me writing for the HeyDataData blog.  My colleagues asked for input and discussion around 2020 predictions for technology and data protection.  Dom has already written about a few.  I’ve picked out four:

  1. Experiential retail

Stores will offer technology-infused shopping experience in their stores.  Even today, without using my phone, I can experience a retailer’s products and services with store-provided technology, without needing to open an app.  I can try on a pair of glasses or wear a new lipstick color just by putting my face in front of a screen.  We will see how creative companies can be in luring us to the store by offering us an experience that we have to try.  This experiential retail type of technology is a bit ahead of the Amazon checkout technology, but passive payment methods are coming, too.  [But if we still don’t want to go to the store, companies will continue to offer us more mobile ordering—for pick-up or delivery.]

  1. Consumers will still tell companies their birthdays and provide emails for coupons (well, maybe not in California)

We will see whether the California Consumer Privacy Act (CCPA) will meaningfully change consumers’ perception about giving their information to companies—usually lured by financial incentives (like loyalty programs, coupons, etc. or a free app).  I tend to think that we will continue to download apps and give information if it is convenient or cheaper for us and that companies will think it is good for business (and their shareholders, if applicable) to continue to engage with their consumers.  This is an extension of number 1, really, because embedding technology in the retail experience will allow companies to offer new (hopefully better) products (and gather data they may find a use for later. . . ).  Even though I think consumers will still provide up their data, I also think consumer privacy advocates try harder to shift their perceptions (enter CCPA 2.0 and others).

  1. More “wearables” will hit the market

We already have “smart” refrigerators, watches, TVs, garage doors, vacuum cleaners, stationary bikes and treadmills.  Will we see other, traditionally disconnected items connect?  I think yes.  Clothes, shoes, purses, backpacks, and other “wearables” are coming.

  1. Computers will help with decisions

We will see more technology-aided (trained with lots of data) decision making.  Just yesterday, one of the most read stories described how an artificial intelligence system detected cancer matching or outperforming radiologists that looked at the same images.  Over the college football bowl season, I saw countless commercials for insurance companies showing how their policy holders can lower their rates if they let an app track how they are driving.  More applications will continue to pop-up.

Those are my predictions.  And I have one wish to go with it.  Those kinds of advances create tension among open innovation, ethics and the law.  I do not predict that we will solve this in 2020, but my #2020vision is that we will make progress.

Copyright © 2020 Womble Bond Dickinson (US) LLP All Rights Reserved.

For more on data use in retail & health & more, see the National Law Review Communications, Media & Internet law page.

Real Estate Developer Rights When Cities Demand Too Much [PODCAST]

ANTHONY DE YURRE

Welcome to Land Development in the 305, a podcast featuring news, observations, and analysis on the redeveloping and reshaping of the Miami skyline. My name is Anthony De Yurre, I’m a partner in Bilzin Sumberg’s Land Development and Government Relations Practice Group, and I have with me today, my partner and chair of our department, Stanley B. Price. On my side, I focus most of my day on transit-oriented development, large scale mixed-use projects, and P3 development with government infrastructure. Stan, why don’t you tell us a little bit about yourself and your practice?

STANLEY B. PRICE

Thank you, Anthony. I have practiced for 45 years as a zoning attorney, and I had the privilege of being an assistant county attorney for ten years in charge of zoning in Miami-Dade County. I’ve been in private practice since 1981, and as you indicated, my practice is almost exclusive land development regulations, planning, and governmental law.

ANTHONY DE YURRE

So today, Stan, we’re very glad to have you here with us. We’re going to talk about a very important case in Florida. The decision of Koontz v. Saint Johns River Water Management District is a 2013 case that essentially requires municipalities to follow the constitutional rule of law and reigns in some aggressive requirements that were made on behalf of property owners in order to try to move forward with a particular project they had. Tell us a little bit about your view on the significance of the Koontz case.

STANLEY B. PRICE

The Koontz case is a seminal case in that it provides protection to property owners and the bane of every zoning attorney is standing in front of a public hearing and asking the local government to respond to exaction requests, money for a park, money for a school program, and the like. That practice used to be legalized extortion, but the Koontz case has changed that procedure, and the Supreme Court has recognized a constitutional condition — a principle which applies to Koontz. I think it’s important to understand the background of Koontz and it goes back to the taking jurisprudence of Penn Central Railroad in the 1970s where the Supreme Court indicated that as long as government takes property and gives you an equal compensation in that case in terms of transferred development rights, there is no governmental taking. We fast forward many years later to the Nollan case out of California. The Nollan case was a situation where a property owner was remodeling a house along the ocean in California, and the California Coastal Commission required him, as a condition of getting the permit to remodel his home, to grant a public easement through his property to the beach for the use of the general public. The Supreme Court rejected that concept. They said this is nothing more than an appropriation of private property and found that to be a regulatory taking. A few years later, in the Dolan case, the Dolan case involves the construction of a store, and as part of the condition of approval, the local government required the property owner to build a bike path and other improvements which bore no reasonable relationship to the project. The Court held and has become the framework of the Koontz case that before a government can impose a burden on a property owner, there has to be a rational nexus between what is being asked for and the request must be in conformity with the impact caused by the property. Fast forward to 2013 and the Koontz case, which was authored by Justice Alito. Justice Alito seemed to get in the head of every zoning attorney who practiced in the United States, and he recognized that a zoning hearing is nothing but authorized extortion. And he used those terms in the case and indicated that it is inappropriate for a government, exact donations from a private property owner, which have no conceptual reality to what is the impact is. The property owner owned a 13-acre parcel of property. It was designated wetlands under the local plan. The property owner came forward with a plan to development uplands three-and-a-half acres which were not wetlands by definition and the state agency said well if you want to develop that, we only want you to develop one acre, or if you develop the three-and-a-half acres we want you to give us $150,000, so we can nourish wetlands several miles from the property.

ANTHONY DE YURRE

Stan, that is literally the definition of extortion. Which is why I think the court uses such strong language, and we’re all thankful they did. And what is also interesting is that you know when you talk about constitutional rights what we see in the news nowadays, we will talk about you know First Amendment rights, religious freedom rights, things of that nature. But people just seem to gloss over the fact that this country was founded on property rights, and that is really one of the biggest issues that we deal with on a daily basis, upholding constitutional property rights. I guess it just does not get the same headline attention that the other constitutional protections do, but without that and particularly the Koontz case, you know, it really goes to the heart and fabric of what ownership in the United States is all about.

STANLEY B. PRICE

When the Koontz case was decided, I was going through a zoning process in a town in Northeast Dade to build a religious facility, and the city manager came to me and said: “I want you to donate $100,000 for town beautification and I want you to pave a roadway several blocks from your synagogue.” And my client was obviously very upset. I was very upset. We waited. The Koontz case came out. I brought the Koontz case to a meeting, and I said, do you want to be the picture in the dictionary for the Koontz case. They dropped their demands immediately, and we were able to develop the property.

ANTHONY DE YURRE

And you know what is interesting about that is that really is a great anecdote about the importance of constantly staying on top of all the latest case law that comes out. Whether it is our local jurisdiction here in Miami-Dade County, at the State of Florida level, at a federal level, and even at the Supreme Court level, you know? I think that of the almost 20 members of our department each mention an anecdote about a matter we had at hand that was pressing and because we specifically monitored case laws that came out, just like you did in this instance with the Koontz case, we were able to win the day and really,  you have to practice this type of law, you have to do land development, you have to do zoning, it has to be focused, and you cannot be a jack-of-all-trades, so to speak. You really have to be focused in that particular field and stay at the cutting-edge and the tip of the spear with the case law.

STANLEY B. PRICE

What has occurred as a result of Koontz is that generally United States Supreme Court cases, while they are important on a national basis, usually don’t filter down to local governments. But in this instance, the Koontz case formed the foundation of the state legislature in Florida forming and creating section 70.45 of the Florida statutes which basically provides a cause of action for a property owner who feels that they have been aggrieved by an illegal exaction, which is defined as an exaction which has no correlation to the impact caused by the development. The statute is a very clean statute. It puts the burden of proof on the government, not on the property owner.

ANTHONY DE YURRE

Incredibly important.

STANLEY B. PRICE

Yes.

STANLEY B. PRICE

To show that there is a reasonable proportionality. The statute awards attorney’s fees for the prevailing party, which is very important. And what it does, it creates a cause of action that basically provides that you have rights that you did not have before. Generally, zoning decisions are handled by a petition for a certiorari. This creates a de novo action you can take if you are at a hearing, and you are concerned that these conditions will be egregious to your client. You could wait until after the hearing. You do not have to object at the hearing. And then you avail yourself by this statute. Now, what is important about this statute is that…

ANTHONY DE YURRE

Before you continue, I just want to jump in on something you noted, which is the fact that you get statutory attorney’s fees for this. And in the State of Florida, unless you have a contractual right to attorney’s fees or a statutory right to attorney’s fees, you are not awarded attorney’s fees for causes of action in the State of Florida. But even more so, it is important in the case where you are dealing with litigation with a government entity because remember, the government entity really has an unlimited resource of attorneys at their disposal. They really have very deep pockets with tax dollars, and so ultimately that is something that I think both of us have had experience with, and when a client looks at that and says, you know when I go up against the government, the problem is I have a finite amount of dollars, am I ever going to get that back because the expense might be significant in this case.

STANLEY B. PRICE

— and the way to developers, of course, by unnecessary litigation. What is interesting about section 70.45 is that there is – the government has tried to wave their liability by having applicants sign a waiver beforehand that they will not seek damages.

ANTHONY DE YURRE

Yeah, sure, of course.

STANLEY B. PRICE

This specifically indicates in the statute it cannot be waived. You can sign every contact you want, but it can’t be waived. Number two it requires you to file an action no earlier than 60 days but no later than 180 days, to make your claim. The government has the ability to respond, they must respond, and what they say cannot be used against them at a later time except as to attorney’s fees. And the government has the burden of showing that the unconstitutional condition basically is in proportion to the impact of the development.

ANTHONY DE YURRE

So we have 2013 Koontz comes out. Then we have the Florida statue. Where are we right now in more recent case law? Because obviously, this goes back again, as you mentioned, in Penn Central, Nollan, Dolan, then we have Koontz. Now we have the Florida statues. Tell us where we are today. In particular, I think it would be helpful to talk about the city of Venice and mandarin development as well.

STANLEY B. PRICE

The City of Venice case is an interesting case in that the cause of action accrued prior to the effective date of the Florida statute 70.45. So the rules of procedure were somewhat different, and a clever municipal attorney had the applicants sign a waiver of liability to say that this was an annexation case. This was not a zoning case. And he said if you want to be in next to our jurisdiction, you have to make a list of 15 things. One of which was to make what they call an extraordinary monetary contribution to the local government. The Court struck down that extraordinary contribution as an unconstitutional condition, and in addition, the Court held that you could not waive — a party cannot waive a constitutional right in writing and must — and it cannot be foreclosed from bringing such an action. A somewhat similar case was decided shortly thereafter in Manatee County. It really wasn’t a decision, but the property owner was asked to dedicate property far in excess of what the impact of his project would be, and the property owner filed an action, once again a pre 70.45 action — and many land-use cases take several years to go through the court system — and the county — the judge in the Manatee County case refused to grant summary judgment to the local government. And in fact, wrote in his order what the county was doing here was an unconstitutional condition because the proportionality test of Nollan and Dolan was not met. The parties subsequently settled this case, and the settlement is interesting in that Judge Hall, who was the judge in this case, wrote a 45-page opinion indicating that the property rights were trampled in a good way. What does this mean to our practice and the like? Number one, applicants for zoning hearings no longer have to be a punching bag and get up and play Let’s Make a Deal. You want door number one, door number two, or door number three? Those days are over. However, you still see the local government attempting to do this on a regular basis. Sophisticated local attorneys, municipal attorneys know the Koontz case and know about 70.45. Unfortunately, several jurisdictions do not know that. I had a case earlier today, which I had been on a conference call.

ANTHONY DE YURRE

I heard you through the wall, by the way.

STANLEY B. PRICE

Right.

ANTHONY DE YURRE

It was an interesting conversation.

STANLEY B. PRICE

I talk loud. This indicates that this government is going to be sued under the Civil Rights Act and under the equitable estoppel principles were withdrawing a building permit for no basis whatsoever. Koontz is a tremendous weapon for a municipal attorney, a zoning attorney to know how far your client can be pushed and when you can push back. And I urge everyone to look at the statute and the decision of the Supreme Court, and it will make you feel good that Justice Alito may have been one time a zoning attorney.

ANTHONY DE YURRE

Well, Stan, I really appreciate your insight and walking us through the importance of Koontz and the pertinent Florida statutes. I think that we can’t forget that the constitutional right to this country was founded on really are those that pertain to property and it applies to everyone in this country from the largest developer on down to the apartment complex owner or the owner of the smallest condo unit and a micro-unit perhaps. It really defends people equally. Thank you all again for joining us on our podcast. Stan Price, again, chair of our department, thank you very much for your time in this podcast. Thank you for listening to us, and if you want more on this and other land development related topics, you can visit us at Bilzin.com and also subscribe to our new Miami blog at Newmiamiblog.com. We publish all the latest case law and other decisions that are pertinent to land use, zoning, and development in Miami-Dade County and as well as the State of Florida. Thank you.

STANLEY B. PRICE

Thank you, Anthony.

ANTHONY DE YURRE

Thank you, Stan.

© 2020 Bilzin Sumberg Baena Price & Axelrod LLP

More on zoning laws & development on the National Law Review Real Estate law page.

What Do Colleges and Universities Need to Know About the Executive Order and Title VI?

On Dec. 11, 2019 President Trump issued an Executive Order (EO) stating that, “It shall be the policy of the executive branch to enforce Title VI [of the Civil Rights Act of 1964] against prohibited forms of discrimination rooted in anti-Semitism as vigorously as against all other forms of discrimination prohibited by Title VI.”

This has created a good bit of confusion, with media outlets reporting that the EO “redefines” Judaism as a nationality or ethnicity. Not so. So what does the EO do? What, if anything, is new about it? And how will it affect U.S. colleges and universities that receive federal funding?

Title VI prohibits discrimination on the basis of race, color and national origin in programs and activities that receive federal funding. Applying Title VI to Jewish students is not new. National origin discrimination has been interpreted for years to include discrimination against those who have shared ancestry or ethnicity, to protect religious groups such as Jews, Sikhs and Muslims.

What is new is that the EO directs executive branch agencies and departments charged with enforcing Title VI to consider the International Holocaust Remembrance Alliance’s (IHRA) definition of anti-Semitism when investigating allegations of anti-Jewish discrimination (i.e., when they review an Office of Civil Rights (OCR) complaint).

The IHRA definition, which has been adopted by the U.S. State Department, provides that:

Antisemitism is a certain perception of Jews, which may be expressed as hatred toward Jews. Rhetorical and physical manifestations of antisemitism are directed toward Jewish or non-Jewish individuals and/or their property, toward Jewish community institutions and religious facilities[.]

The definition includes a list of non-exhaustive examples of anti-Semitism, which the EO also directs agencies to consider. For example: “[m]aking mendacious, dehumanizing, demonizing, or stereotypical allegations about Jews as such or the power of Jews as collective—such as . . . the myth about a world Jewish conspiracy or of Jews controlling the media, economy, government or other societal institutions.”

Examples also include discrimination against Jewish individuals who support Israel, e.g., “[a]ccusing Jewish citizens of being more loyal to Israel, or to the alleged priorities of Jews worldwide, than to the interests of their own nations” or “[d]enying the Jewish people their right to self-determination, e.g., by claiming that the existence of a State of Israel is a racist endeavor[.]”

In other words, discriminatory conduct directed at Jewish students who support Israel may constitute anti-Semitism.

Some argue the EO conflicts with the First Amendment, although the EO expressly states that agencies “shall not diminish or infringe upon any right protected under Federal law or under the First Amendment.” Simply put, neither Title VI nor the EO limits speech (or even hate speech); it limits conduct. The perpetrator’s speech may be used as evidence of discriminatory intent.

Universities and colleges will need to carefully consider the impact of the EO in reviewing student complaints.

© 2020 BARNES & THORNBURG LLP

For more on Title VI, see the National Law Review Civil Rights type-of-law section.

Redesigned 2020 IRS Form W-4

The IRS has substantially redesigned the Form W-4 to be used beginning in 2020.

New employees first paid wages during 2020 must use the new redesigned Form W-4.  In addition, employees who worked for an employer before 2020 but are rehired during 2020 also must use the redesigned 2020 Form W-4.

Continuing employees who provided a Form W-4 before 2020 do not have to furnish the new Form W-4.  However, if a continuing employee who wants to adjust his/her withholding must use the redesigned Form.

IRS FAQs for Employers

The IRS has issued the following FAQs for employers about the redesigned 2020 Form W-4:

  • Are all employees required to furnish a new Form W-4?

No, employees who have furnished Form W-4 in any year before 2020 do not have to furnish a new form merely because of the redesign. Employers will continue to compute withholding based on the information from the employee’s most recently furnished Form W-4.

  • Are new employees first paid after 2019 required to use the redesigned form?

Yes, all new employees first paid after 2019 must use the redesigned form. Similarly, any other employee who wishes to adjust their withholding must use the redesigned form.

  • How do I treat new employees first paid after 2019 who do not furnish a Form W-4?

New employees first paid after 2019 who fail to furnish a Form W-4 will be treated as a single filer with no other adjustments.  This means that a single filer’s standard deduction with no other entries will be taken into account in determining withholding.  This treatment also generally applies to employees who previously worked for you who were rehired in 2020 and did not furnish a new Form W-4.

  • What about employees paid before 2020 who want to adjust withholding from their pay dated January 1, 2020, or later?

Employees must use the redesigned form.

  • May I ask all of my employees paid before 2020 to furnish new Forms W-4 using the redesigned version of the form?

Yes, you may ask, but as part of the request you should explain:

 »   they do not have to furnish a new Form W-4, and

 »   if they do not furnish a new Form W-4, withholding will continue based on a valid form previously furnished.

For those employees who furnished forms before 2020 and who do not furnish a new one after 2019, you must continue to withhold based on the forms previously furnished.  You may not treat employees as failing to furnish Forms W-4 if they don’t furnish a new Form W-4. Note that special rules apply to Forms W-4 claiming exemption from withholding.

  • Will there still be an adjustment for nonresident aliens?

Yes, the IRS will provide instructions in the 2020 Publication 15-T, Federal Income Tax Withholding Methods, on the additional amounts that should be added to wages to determine withholding for nonresident aliens. And nonresident alien employees should continue to follow the special instructions in Notice 1392 when completing their Forms W-4.

  • When can we start using the new 2020 Form W-4?

The new 2020 Form W-4 can be used with respect to wages to be paid in 2020.

Additional Information

This Publication includes the income tax withholding tables to be used by automated and manual payroll systems beginning in 2020 regarding both (i) Forms W-4 from 2019 or earlier AND (ii) Forms W-4 from 2020 or later.

  • IRS FAQs on the 2020 Form W-4

Jackson Lewis P.C. © 2020

More on IRS Forms & Regulations on the National Law Review Tax Law page.

The U.S. Patent and Trademark Office Takes on Artificial Intelligence

If the hallmark of intelligence is problem solving, then it should be no surprise that artificial intelligence is being called on to solve complex problems that human intelligence alone cannot. Intellectual property laws exist to reward intelligence, creativity and problem solving; yet, as society adapts to a world immersed in artificial intelligence, the nation’s intellectual property laws have yet to do the same. The Constitution seems to only contemplate human inventors when it says, in Article I, Section 8, Clause 8,

“The Congress shall have Power … To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

The Patent Act similarly seems to limit patents to humans when it says, at 35 U.S.C. § 100(f),

“The term ‘inventor’ means the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention.”

In fact, as far back as 1956, the U.S. Copyright Office refused registration for a musical composition created by a computer on the basis that copyright laws only applied to human authors.

Recognizing the need to adapt, the U.S. Patent and Trademark Office (PTO) recently issued notices seeking public comments on intellectual property protection related to artificial intelligence. In August 2019, the PTO issued a Federal Register Notice, 84 Fed. Reg. 166 (Aug. 27, 2019) entitled, “Request for Comments on Patenting Artificial Intelligence Inventions.” On October 30, the PTO broadened its inquiry by issuing another Notice, 84 Fed. Reg. 210 (Oct. 30, 2019) entitled, “Request for Comments on Intellectual Property Protection for Artificial Intelligence Innovation.” Finally, on December 3, 2019, the PTO issued a third notice, extending the comment period on the earlier notices to January 10, 2020. All of the notices can be downloaded from the PTO’s web site.

The January 10, 2020 deadline for public comments on the issues raised in the notices is fast approaching. This is an important topic for the future of technology and intellectual property, and the government is plainly looking at these important issues with a clean slate.

© 2020 Vedder Price

For more on patentable inventions, see the Intellectual Property law section of the National Law Review.

New USCIS Policy Guidance Alters Criminal Sentence Evaluation, Clarifies Definition of “Good Moral Character”

U.S. Citizenship and Immigration Services (USCIS) recently adopted new policy guidance altering the way immigration officers evaluate criminal sentences and make good moral character determinations. These changes may impact a foreign national’s eligibility for certain immigration benefits, including admissibility as a visa holder, permanent resident, or naturalized citizen.

USCIS’s recent policy guidance changes include the following:

Post-Sentencing Charges

What changed?

USCIS incorporated into policy Attorney General William Barr’s recent decision in Matter of Thomas and Thompson that, for immigration purposes, the relevant term of imprisonment or sentence for a criminal act will generally be the original sentence imposed by a state court.

What’s the impact?

Where a state court order subsequently modifies, clarifies, or vacates the original sentence, the new term of imprisonment or sentence will only be relevant for immigration purposes if the change was due to a procedural or substantive defect in the underlying criminal proceeding. If such a change was based on other considerations—such as rehabilitation or the avoidance of immigration consequences—the original sentence will still be considered for purposes of immigration decisions.

DUI Convictions

What changed?

USCIS also incorporated into policy the attorney general’s decision in Matter of Castillo-Perez that two or more convictions for driving under the influence (DUI) during the relevant lookback period may affect a foreign national’s good moral character determination.

What’s the impact?

Convictions for multiple DUIs will likely prompt an assessment by USCIS to determine whether the foreign national is a “habitual drunkard,” which would statutorily preclude him or her from possessing good moral character under the immigration regulations. Further, evidence of rehabilitation subsequent to two or more DUI convictions is insufficient on its own to rebut the presumption that a foreign national lacks the required showing of good moral character. Rather, the foreign national must provide evidence that good moral character was sustained for the entire lookback period, even at the time of the DUI convictions.

Conditional Bars for Unlawful Acts

What changed?

USCIS expanded its policy guidance to provide examples of unlawful acts that may prevent a foreign national from meeting the good moral character requirement for certain immigration benefits. The agency also emphasized the discretion of immigration officers to determine if the commission of an unlawful act reflects negatively on a foreign national’s moral character, and whether there were any extenuating circumstances involved.

What’s the impact?

Immigration officers may look to an expanded list of unlawful acts recognized as a bar to good moral character, including but not limited to:

  • failure to pay or file taxes;
  • false claim to U.S. citizenship;
  • falsification of records;
  • unlawful registration to vote; and
  • unlawful voting.

© 2020, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

For more USCIS policy guidance, see the National Law Review Immigration Law page.

Federal Court Issues Eleventh-Hour TRO to Enjoin Enforcement of California’s Controversial New Independent Contractor Law for 70,000 Independent Truckers

On January 1, 2020, California’s new independent contractor statute, known as AB 5, went into effect.  The law codifies the use of an “ABC” test to determine if an individual may be classified as an independent contractor.

The hastily passed and controversial statute has been challenged by a number of groups as being unconstitutional and/or preempted by federal law, including ride-share and delivery companies and freelance writers.

Just hours before AB 5 went into effect, a California federal court in San Diego enjoined enforcement of the statute as to some individuals – approximately 70,000 independent truckers, many of whom have invested substantial sums of money to purchase their own trucks and to work as “owner-operators.”

In the lawsuit, the California Trucking Association (“CTA”) has alleged that the “ABC” test set forth in AB 5 is preempted by the Federal Aviation Administration Authorization Act of 1994 (“FAAAA”).

The CTA asserts that the FAAA preempts the “B” prong because it will effectively operate as a de facto prohibition on motor carriers contracting with independent owner-operators, and will therefore directly impact motor carriers’ services, routes, and prices, in contravention of the FAAA’s preemption provision.

The CTA further contends that the test imposes an impermissible burden on interstate commerce, in violation of the Commerce Clause of the U.S. Constitution.  The CTA asserts that the test would deprive motor carriers of the right to engage in the interstate transportation of property free of unreasonable burdens, as motor carriers would be precluded from contracting with a single owner-operator to transport an interstate load that originates or terminates in California.  Instead, motor carriers would be forced to hire an employee driver to perform the leg of the trip that takes place in California.

©2020 Epstein Becker & Green, P.C. All rights reserved.

Five Suggestions for Elder Care If You or Your Elderly Parents Have “One Foot on the Banana Peel”

Shana and I recently had a new client, “Jane,” that came to see us because she was concerned about her elderly parents. Both are in their 90s and although they are still living independently, she is noticing both a physical and cognitive decline in both.  She described them as having “one foot on the banana peel,” recognizing that they are one fall or illness away from no longer being able to maintain their current lifestyle.

As with many of our clients, they are resistant to making any changes and she is worried about what will happen. Jane lives a distance from her parents, works full time, and has her own teenage children. She came to us for assistance in understanding what she can do to help them. Here are five suggestions we made for her:

1. Changes to Powers of Attorney and Health Care Proxy

Jane’s parents’ existing legal documents have each other as primary agents and neither is able to act in that capacity. Jane is handling their bill paying and taking them to MD appointments and it will be easier for her to continue this role with the appropriate legal documents naming her as the primary agent.

2. Financial Planning

Jane’s parents have limited liquid assets and own their home. Their monthly income does not cover their expenses, so they are drawing from those assets every month. This plan will not work long term if either needs to hire a caregiver to help them at home due to the high cost. We helped Jane to understand the realities of paying for care and the limited coverage of Medicare. We also explained the criteria for Medicaid eligibility, the application process and the problem with using Medicaid to pay for home care. We stressed the importance of Jane and her parents exploring alternative living situations that may better meet their needs while they still had funds and ensuring that they found a facility that would allow them to spend down to Medicaid when their funds are exhausted.

3. Home Evaluation

Jane’s parents live in a bi-level home with stairs to enter and Jane is very concerned about their safety. We recommended a home evaluation to determine what modifications can be done to the home to make it safer. These modifications can be simple such as a tub bench, so they don’t have to step over the tub to get into the shower or more complex such as a stairlift or emergency alert system.

4. Medication Management

Jane’s parents have multiple medical conditions and each takes many medications. They often forget to take their medications or take them incorrectly. This is a very serious issue and often leads to unnecessary hospitalization which can precipitate a downward spiral. We discussed a variety of options, including a visiting nurse and an automatic medication dispenser.

5. Take a Deep Breath

As with all our clients, Jane loves her parents and wants what is best for them. However, her vision of what is best for them doesn’t necessarily coincide with their vision. As a caregiver-child myself, I can very much relate to her frustration of having a clear idea of what will improve an elderly parent’s quality and/or quantity of life and having that parent refuse to make a change. Sometimes small changes are acceptable and they can make a difference and prolong stability. But very often the best we can do is to plan for the emergency and know we have done the best we can.

©2020, Norris McLaughlin & Marcus, P.A., All Rights Reserved

For more on caring for elderly relations, see the National Law Review Family Law, Divorce & Custody type-of-law section.

Limiting Junk Fax Class Actions: Online Fax Services Outside Scope of TCPA FCC Rules

 

On December 9, 2019, the Federal Communications Commission (“FCC”) issued a declaratory ruling In the Matter of Amerifactors Financial Group, LLC (“Amerifactors”) concluding that modern faxing technologies are not within the scope of the Telephone Consumer Protection Act (TCPA).  The Amerifactors ruling, which follows the express language of the TCPA, determines that faxes received via an online fax service as electronic messages are effectively email and therefore are not faxes received on a “telephone facsimile machine” under the statute. This narrows the scope of the TCPA to traditional fax machines and will make it more difficult for attorneys to certify classes of fax recipients under the TCPA, ideally curbing the plethora of TCPA Fax class action lawsuits.

Amerifactors Background

In 2017, Amerifactors filed a petition for an expedited declaratory ruling asking the FCC to “clarify that faxes sent by “online fax services” are not faxes sent to “telephone facsimile machines”[1] therefore, outside of the scope of the TCPA. While faxing has declined in usage significantly, many of those who still receive faxes do so through cloud-based services that send the document via an attachment to an email.  At the time of Amerifactors’ declaratory filing, they were defending a class action suit with claims that Amerifactors violated the TCPA by sending unsolicited fax messages, the bulk of which were sent to consumers from online fax services.

FCC Ruling and Logic

In the Amerifactors ruling, the FCC explained that faxes sent by online fax services do not lead to the “specific harms” Congress sought to address in the TCPA’s Junk Fax Protection Amendment and concluded that “a fax received by an online fax service as an electronic message is effectively an email.”

Unlike printed fax messages that require the recipient to supply paper and ink, the FCC concluded consumers can manage faxes sent by online fax services the same way they manage their email by blocking senders or deleting incoming messages without printing them, short-circuiting many of the specific harms envisioned by the original legislation.  With online fax services, there is no phone-line that is occupied and therefore unavailable for other purposes, and no paper or ink used that must be supplied by the recipient.  Clarifying legislative intent, the FCC stated:

“The House Report on the TCPA makes clear that the facsimile provisions of the statute were intended to curb two specific harms: “First, [a fax advertisement] shifts some of the costs of advertising from the sender to the recipient. Second, it occupies the recipient’s facsimile machine so that it is unavailable for legitimate business messages while processing and printing the junk fax.”

In many ways, the FCC ruling in Amerifactors demonstrates FCC recognition of the changes in faxing technology.  Steven Augustino of KelleyDrye[2], one of the attorneys who represented Amerifactors,  points out that the language we use now does not match the technology that has largely replaced traditional faxing technology, instead offering a short-hand that has roots in an earlier era—and that references dead technologies.  Augustino says:

“Amerifactors argued that the term “faxing” has outlived the actual technology of faxing, much in the same way that we still dial a telephone even though no one has a rotary telephone, or we “cc” people on emails but we aren’t using carbon copies.  In many ways, saying ‘I sent a fax’ is similar to that, the term has outlived the technology that has supported it.”

There is reason to believe that this is the first of many declaratory rulings on fax matters under the TCPA.  As of November 2019, there are thirty-six petitions in front of the FCC, and six of those petitions specifically address “junk” faxing rules.  These petitions represent a variety of faxing issues, such as consent and the definition of an advertisement.   The declaratory ruling in Amerifactors and the FCC’s reasoning related to technological changes will likely impact the FCC’s rule-making on similar issues.

Implications for Future TCPA Fax Class Action Lawsuits

According to Douglas B. Brown of RumbergerKirk, one of the attorneys who represented Amerifactors in the FCC’s declaratory ruling:

“While the traditional fax machine has faded out of today’s business communications, online fax services provide secure communications that are critical to providing consumers with secure information about their finances, health and other important matters. The FCC’s ruling allows for these communications to continue without interference from debilitating class-action lawsuits.”

Per Samantha Duke of RumbergerKirk who also represented Amerifactors:

“First, according to the Hobbs Act, federal district courts are bound to enforce the FCC’s rules, regulations, and orders relating to the TCPA. Thus, this declaratory ruling may impact all fax class actions filed in the district courts in the country.”

The Amerifactors ruling requires a closer look at how faxes are being received complicating how class actions are certified under the TCPA.  Per Duke:

“The Amerifactors ruling now makes the method by which the fax was received key to determining whether any particular unsolicited facsimile violates the TCPA. This individualized determination will most certainly complicate any attempt to certify a TCPA-fax class action as the question of whether the facsimile was sent to an online fax service will predominate over any common issue.”

In short, unless a fax comes through an old-school fax machine, it’s outside the reach of the TCPA per the FCC’s Amerifactors ruling.

[1] See Petition for Expedited Declaratory Ruling of Amerifactors Financial Group, LLC, CG Docket Nos. 02-278, 05-338, at 2 (filed July 13, 2017) (Petition).

[2] Amerifactors Financial Group, LLC was represented by Rumberger, Kirk & Caldwell, PA attorneys Douglas B. Brown and Samantha Duke, along with attorney Steven A. Augustino of Kelley Drye & Warren LLP.

Copyright ©2019 National Law Forum, LLC

For more on the TCPA and FCC Regulations, see the National Law Review Communications, Media & Internet law section.