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Feuding Business Partners in Private Companies: Considering Arbitration to Resolve Partnership Disputes

It is common for private company co-owners to have disagreements while they operate their business, but they typically work through these disputes themselves. In those rare instances where conflicts escalate and legal action is required, business partners have two options—filing a lawsuit or participating in an arbitration proceeding. Arbitration is available, however, only if the parties agreed in advance to arbitrate their disputes. Therefore, before business partners enter into a buy-sell contact or join other agreements with their co-owners, they will want to consider both the pros and the cons of arbitration. This post offers input for private company owners and investors to help them decide whether litigation or arbitration provides them with the best forum in which to resolve future disputes with their business partners.

Arbitration is often touted as a faster and less expensive alternative to litigation with the additional benefit of resulting in a final award that is not subject to appeal. These attributes may not be realized in arbitration, however, and there are other important factors involved, which also merit consideration. At the outset, it is important to emphasize that arbitrations are created by contract, and parties can therefore custom design the arbitration to be conducted in a manner that meets their specific needs. The critical factors to be considered are: (i) speed—how important is a quick resolution to the dispute, (ii) confidentiality—how desirable is privacy in resolving the claims, (iii) scope—how broad are the claims to be resolved, (iv) expense—how important is it to limit costs, and (v) finality—is securing a final result more desirable than preserving the right to appeal an adverse decision.

Speed—Prompt Resolution of Dispute

Arbitrations generally resolve claims more promptly than litigation, but that is not always the case as arbitration proceedings can drag on if the arbitration is not subject to any restriction on when the final hearing must take place. One way to ensure that an arbitration will promptly resolve the dispute, however, is to require an end date in the arbitration agreement. Specifically, the parties can state in their arbitration provision that the final arbitration hearing must take place within a set period of time, perhaps 60 or 90 days of the date the arbitration panel holds its first scheduling conference. The arbitrators will then set a date for the final hearing that meets this contractual requirement. Similarly, in the arbitration provision, the parties can also specify the length for the hearing (no more than 2-3 days), and they can also impose limits on the extent of discovery, including by restricting the number of depositions than can be taken.

If securing a prompt resolution of a dispute with a business partner is important, this result can be assured by requiring that all claims are arbitrated, particularly if the parties specify in the arbitration provision that the final hearing must take place on a fast track basis.

Confidentiality—Arbitration Conducted Privately

Litigation takes place in a public forum and, as a result, all pleadings the parties file, and with only rare exceptions, all testimony and other evidence presented at any hearings and at trial will be available to the public. Therefore if a business partner wants to avoid having future partnership disputes subject to public scrutiny, arbitration provides this protection. But looking at this from another perspective, a minority investor may want to decline to arbitrate future claims against the majority owner if the owner is sensitive to adverse publicity. The threat of claims being litigated in a public lawsuit may provide the investor with leverage in the negotiation and settlement of any future claims the investor has against the majority owner.

Scope of Dispute—How Much Discovery Required

Determining the scope of a future dispute with a business partner is difficult to do at the time that business partners enter into their contract when any future claims are unknown. The downside arises in the arbitration context, because one of the parties may desire broad discovery of the type that is permitted in litigation, which may be necessary to defend against certain types of contentions, such as claims for fraud, personal injury and other types of business torts. In an arbitration proceeding, discovery is typically more restricted, and it may further be limited by the arbitration provision, which caps the number of depositions and narrows the scope of document discovery. Under these circumstances, the defending party (the respondent) may be hamstrung by these discovery limitations in defending against the claimant’s allegations in arbitration.

To avoid prejudice to the respondent from restrictions on discovery in arbitration, the parties may decide to agree that not all claims between them would be subject to arbitration. For example, the parties could agree that all claims related in any way to the value and purchase of a departing partner’s interest in the business would be subject to arbitration, but that other claims of a personal nature (e.g., claims for discrimination, wrongful termination) would be litigated in court rather than arbitrated. This splitting of claims in this manner may not be practical, but is something to be discussed by the parties when they enter into their agreement at the outset.

Expense of Dispute Resolution

As discussed above, business partners can limit the expense of resolving future claims between them by requiring a fast track arbitration hearing and also by limiting the scope and the extent of allowed discovery. For example, if the parties require a final arbitration hearing to take place in 90 days after the initial scheduling conference, limit the hearing to two days and permit no more than three fact witness depositions per side. They will have likely achieved a significant reduction of the cost of resolving their dispute.

The issue of cost requires additional analysis, however, because if the parties are not of equal bargaining power, the partner with more capital may not agree that arbitration is the best forum to resolve disputes with a less solvent partner. The wealthier partner may believe that he or she would prevail over the less well-capitalized partner in a “war of attrition.” This factor may be so significant that it causes the wealthier partner to reject the arbitration of future disputes in favor of resolving of all future claims by or against the other partner through litigation.

Finality of Arbitration Awards

There is no right of an appeal in arbitration and the grounds for attacking an arbitration award in a court proceeding after the arbitration concludes are narrow and rarely successful. This finality element may thus be an important factor in selecting arbitration as the forum for resolving partnership disputes with the goal of ending the dispute without having it linger on.

There is another concern here, however, that also bears considering. The conventional wisdom among trial lawyers is that arbitrators are prone to “split the baby” by not providing a strict construction of the written contract or the controlling statute at issue. Instead, the belief is that arbitrators are inclined to include something for both sides in the final award in an attempt to be as fair as possible, which results in mixed bag outcome. That has not been my personal experience, but it is true that if the arbitration award is not fully consistent with the contract or a governing statute, there is no right to appeal the decision. The bottom line is that, at the end of the arbitration, the parties will have to live with the result, and there is no available path to challenge an unfavorable/undesired outcome.

Conclusion

The takeaway is that arbitration is not a panacea. It can be structured to take place faster and more cost-effectively than a lawsuit, and it will also be held in private and not be subject to public scrutiny. But, business partners also need to consider other factors in arbitration, such as specific limits on discovery that may be problematic and the finality of the arbitrators’ decision, which may not be viewed as fully consistent with the partners’ contract or in strict accordance with the applicable law. To the extent that business partners do opt for arbitration, they should craft the arbitration provision to make sure its terms closely align with their business goals.

ARTICLE BY Ladd Hirsch at Winstead.

For more on business conflict resolution, see the National Law Review Corporate & Business Organizations law section.

The Intersection of Libel Law and Politics

Libel Commentary

Since its beginning, the American Republic has debated sedition, free speech, and protection of reputation. After we cut our British roots we ensured our right to criticize our leaders, the politicians who control our government. The British crown demanded loyalty of its printers, but American courts would not tolerate such prosecutions as the notion of a truly free press emerged.

Today, we are witnessing an intense intersection of politics and libel law unlike anything we’ve seen since the 1960s. Politicians are suing for libel damages and being sued. The current overlap of politics and libel includes a push by the president of the United States to change libel law. Those who seek change, including President Trump, say they want to make it easier for plaintiffs to prevail and collect damages. Careful what you wish for, though, because such change would ease the path for plaintiffs seeking to collect damages from public officials such as Donald Trump.

Heading into the 2020 election, the Trump campaign filed three lawsuits in a 10-day period against mainstream media.

Legal scholars and pundits have opined that Trump’s pending libel complaints against The New York Times, The Washington Post, and CNN are weak or even dead on arrival. These analysts point out that Trump’s campaign is seeking damages due to political opinions, which are protected speech under the First Amendment.

As a life-long public figure and now public official, Trump (his re-election campaign is the plaintiff) must prove that the media defendants acted with actual malice, that is, reckless disregard for the truth or that they published information knowing it was false. The actual malice standard is well established through the First Amendment by a unanimous U.S. Supreme Court in New York Times v. Sullivan in 1964.

Win or lose in court, the president’s libel lawsuits also are political messaging, dramatic actions that complement his anti-press rhetoric. The stories about the libel suits are arguably more effective than the libel suits themselves in the president’s battles to discredit the mainstream press. In addition to political messaging, libel claims – even when they fail in court — can be a form of punishment.

Historical Context

Presidential involvement in libel litigation is rare, but not unprecedented. President Theodore Roosevelt was irritated by published allegations of corruption in the sale of the Panama Canal. He pushed the Justice Department to prosecute publisher Joseph Pulitzer and other newspapermen for criminal libel. Courts later quashed indictments.

After his presidency, Roosevelt was sued for libel by a New York political figure (William Barnes) who objected to being called corrupt by Roosevelt. The jury trial, in Syracuse in 1915, was grist for Dan Abrams’ book “Theodore Roosevelt for the Defense.” The jury ruled in Roosevelt’s favor; he seemed to thrive in legal combat, the book says.

Fifteen years ago, there was speculation about the prospect of President George W. Bush suing the National Enquirer. The Enquirer published a report based on unnamed sources who claimed that pressures of the job led Bush to drink, even though he said he gave up alcohol on his 40^th birthday.

“The president would be exceptionally ill-advised to file suit over this story, even if he knows . . . it’s false,” wrote First Amendment lawyer Julie Hilden in 2005.

She suggested such a suit would likely fail because its “actual malice” claim appeared to be weak. Plus, she warned, the suit would expose the president to civil discovery. Bush did not sue.

After the 1964 election, Republican presidential candidate Barry Goldwater successfully sued Fact Magazine and its publisher for an article questioning Goldwater’s mental fitness to hold office (Goldwater v. Ginzburg). Federal courts found that Goldwater’s complaint met the actual malice standard, awarding $75,000. The U.S. Supreme Court, in 1970, declined to hear the case.

Trump’s Track Record

In seven earlier speech-related cases filed by Donald Trump or his companies before he became president, four were dismissed on the merits, two were voluntarily withdrawn, and one was an arbitration won by Trump by default. These findings were compiled by Susan E. Seager, a First Amendment attorney who teaches media law at University of Southern California. Indeed, this appears to be a way of life for the highly litigious Trump, who has been involved in approximately 4,000 legal battles over the past 30 years, both as a plaintiff and defendant. An exhaustive analysis by USA Today detailed those seven libel cases where he initiated the lawsuits and seven more where he was named defendant. These don’t even include the threats of suits, the so-called “I’ll sue you” effect that can too often chill speech.

A common thread of these cases is the pursuit of jumbo damages. Trump alleged $5 billion in damages (in New Jersey state court) because author Timothy O’Brien and his book publishers cast doubt on the size of the real estate mogul’s wealth. Trump lost after five years of litigation but assessed the outcome this way to The Washington Post: “I spent a couple of bucks on legal fees but they spent a whole lot more. I did it to make [O’Brien’s] life miserable, which I’m happy about.”

Judicial Nominations

Judicial appointments are a priority for the Trump Administration. Interestingly, a judge nominated by the president in 2018 dismissed (with prejudice) a case filed by a Republican congressman.

On August 5, 2020, U.S. District Court Judge C.J. Williams of the Northern District of Iowa dismissed Congressman Devin Nunes’ defamation complaint against Esquire writer Ryan Lizza and its publisher. The judge said published criticism of Nunes (R-CA) was not actionable (Devin G. Nunes v. Ryan Lizza and Hearst Magazine Media, Inc).

Interestingly, part of this recent case deals directly with President Trump and his tweets. I’ll quote Judge Willliams’ opinion regarding Trump’s tweet that “Obama had my ‘wires tapped’ in Trump Tower:”

First, to the extent defendants assert President Trump “made up” the tweet,

the statement is not of an concerning plaintiff (Nunes). Second, plaintiff has

not alleged that the statement is false. Third, even if the statement is factually inaccurate, the statement that plaintiff’s theory about surveillance of the Trump campaign “began” with President Trump’s tweet is not defamatory.

Other Political Cases

Sarah Palin, John McCain’s vice-presidential running mate in 2008, sued The New York Times for defamation, claiming that a 2017 editorial maliciously associated her with a mass shooting that injured Congresswoman Gabrielle Giffords (D-AZ). A federal judge dismissed her case, but a 3-0 panel of the U.S. Second Circuit Court of Appeals reversed, thus reviving the case (Sarah Palin v. The New York Times).

Besides the characters involved – and the reversal in federal court – this case is interesting because The New York Times published a correction: “An earlier version of this editorial incorrectly stated that a link existed between political incitement and the 2011 shooting of Representative Gabby Giffords. In fact, no such link was established.”

To prevail, Palin – a public figure — must show that the newspaper acted with actual malice.

Meanwhile, a former contestant on “The Apprentice,” Summer Zervos sued President Trump in 2017 claiming she was defamed because candidate Trump said her allegations of his sexual misconduct in 2007 were lies. In 2019, a 3-2 majority of a New York State appeals court rejected the argument from Trump’s counsel that a sitting president cannot be sued in state court (Zervos v. Trump).

In addition to its spotlight on the Supremacy Clause, the Zervos lawsuit also examines the boundaries of opinion-as-defense in defamation disputes. Trump’s lawyers argue that his campaign rhetoric and opinions are protected by the First Amendment.

Nicholas Sandmann, a student at Covington Catholic High School in northern Kentucky, alleged that he was defamed by news coverage and social media sharing of accounts of his encounter near the Lincoln Memorial with a Native American activist in early 2019. Sandmann sued The Washington Post for $250 million; NBC and CNN for $275 million each. CNN and The Washington Post settled for undisclosed terms.

Are media rattled by all this litigation? Yes, I think that’s pretty apparent. How could they not be in this anti-press environment? Libel claims are part of a general, overarching criticism of press, reporting the news, and media prerogatives.

From a bottom-line standpoint, media must pay for legal defense. Newspaper publisher McClatchy — a defendant in one of Congressman Devin Nunes’ myriad libel suits — filed for bankruptcy in February. The Poynter Institute for journalism published commentary in 2019 that McClatchy could hire 10 reporters for the money it would spend on the Nunes lawsuit.

A small newspaper in Iowa (Carroll Times Herald) won a libel case but created a GoFundMe appeal in 2019 because the legal defense drained its resources. Response to the solicitation — mainly small donations, from across the country — was impressive.

Most certainly the Sandmann cases have drained considerable resources from some of the most noted media companies in the country as those out-of-court settlements show.

Non-political Cases

We also see a flurry of high-dollar claims not directly related to political speech.

On August 14, the unanimous North Carolina Supreme Court upheld a jury’s libel decision against the Raleigh newspaper (Beth Desmond v. The News & Observer Publishing Company). The Ohio private liberal arts Oberlin College is appealing the whopping $44 million in damages awarded to a local bakery stemming from an alleged shoplifting attempt by three African American students (Gibson’s Bakery v. Oberlin College). Rolling Stone paid dearly for its flawed article about a campus rape at the University of Virginia.

Is libel law likely to change?

Fundamental change is not likely in the near future. Justice Clarence Thomas suggested it’s time for the Supreme Court to examine/roll back the New York Times v. Sullivan standard created in 1964. The premise is that current strict standards intended to protect free speech and free press make it nearly impossible for public figures and public officials to prevail in libel cases.

Justice Thomas’ colleagues on the Court have not publicly joined him in urging review of Sullivan.

Libel cases are percolating in federal and state courts that eventually could ripen for Supreme Court review. The Roberts Court has been protective of speech, including commercial and political speech, such as:

Citizens United v. FEC, 2010 (political contributions)
Snyder v. Phelps, 2010 (picketing at funerals)
Sorrell v. IMS Health, 2011 (data mining, drug marketing)
Reed v. Town of Gilbert, 2015 (sign regulations cannot be based on content)
Matal v. Tam, 2017 (trademarks)

We all can be grateful that American libel law does not mirror British libel law, where the burden of proof is on the defendant rather than the plaintiff. Surely by now we have all seen the clickbait coverage of actor Johnny Depp’s libel case against The Sun (Johnny Depp v. News Group Newspapers) for its 2018 reportage of his contentious divorce, which included a headline calling him a “wife beater.”

American libel law is not British libel law. And we need to keep it that way.

© Aimee Edmondson, PhD

Article by Aimee Edmondson, PhD E.W. Scripps School of Journalism at Ohio University and National Law Review Guest Contributor.

For more on free speech, see the National Law Review Constitutional Law section.

U.S. Senate Subcommittee on Investigations Recommends Regulation of the Art Market & Other Headlines

U.S. Senate Subcommittee’s Report Recommends Art Market Regulations

As part of its investigation into the effectiveness of sanctions against foreign persons and entities, the Permanent Subcommittee on Investigations of the United States Senate issued a report focused on lack of regulation and pervasive secrecy in the art market. Specifically, the report notes that the art industry is considered the largest legal industry in the United States that is not subject to the requirements of the Bank Secrecy Act, which mandates detailed procedures aimed at preventing money laundering and requires businesses to know their customers’ identity. The report further observes that under the unwritten rules of the art market, a large number of art sales happen through intermediaries, with purchasers and sellers frequently not inquiring into each other’s identities and sellers not asking about the origin of the purchase money. Art advisers are frequently reluctant to reveal the identity of their clients for fear of losing the business.

The 147-page report sets forth a case study of how the art market was used to evade sanctions imposed on Russia. Brothers Arkady and Boris Rotenberg, billionaire business tycoons and long-time friends of Vladimir Putin, were among a number of Russians placed under U.S. sanctions in 2014 as part of an effort to punish Putin and his associates for the annexation of Crimea. It is illegal for U.S. companies to do business with sanctioned persons, but there are no specific laws in place obliging a buyer or seller in a transaction for the sale of art to identify themselves. The Subcommittee’s report concludes that the Rotenbergs took advantage of the lack of transparency required in art transactions, successfully evading the sanctions imposed on them. It is alleged that through the use of shell companies and a Moscow-based art adviser and dealer, they hid their identities and purchased more than $18 million in art from U.S. dealers and auction houses while under sanction.

Of significance to all art market participants, the Senate Subcommittee’s report recommends, among other things, that Congress should amend the Bank Secrecy Act to add businesses handling transactions involving high-value art. While the term “high-value” is not defined, the report cites the recent European Anti–Money Laundering (AML) legislation, which requires businesses handling art transactions valued at €10,000 to comply with AML laws, including the Know Your Customer rule. The report further recommends that the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury issue a comprehensive guide on the steps auction houses and art dealers should take to ensure that they are not doing business with sanctioned individuals or entities.

Legislation will be necessary to amend the Bank Secrecy Act to apply to the art market. In fact, a bill proposing to do exactly that was previously introduced and is presently pending, proposing to regulate antiques dealers only in connection with transactions over $10,000.

U.S. Senate Permanent Subcommittee on Investigations: The Art Industry and U.S. Policies that Undermine Sanctions
Artnet: A Hard-Hitting New Senate Report Details How Art Dealers and Auction Houses Have Undermined U.S. Sanctions Against Russia

White Supremacist Scientist’s Skull Collection to Be Reexamined by University

Last year, a group of students at the University of Pennsylvania presented findings that a collection of skulls kept by the university include crania from at least 55 enslaved individuals. The collection was the work of Samuel George Morton, a now-discredited physician, who used the skulls to come up with pseudoscientific justifications for slavery. Discovery Magazine has touted him as the “founding father of scientific racism.” After facing calls for the skulls to be repatriated or buried, the university moved the collection to storage. Repatriation may be difficult since little is known about the skulls’ origin other than that Morton obtained them from Cuba.

Outdoor Art Serves the Public until New York’s Museums Reopen

New York Governor Andrew Cuomo announced that New York City’s museums can reopen beginning August 24. In the meanwhile, New York City’s tourism and marketing division has put together a list of outdoor and open-air art available for viewing by the public throughout all five boroughs.

Two Museums Fear Their Gauguins May Be Fakes

Fabrice Fourmanoir, a Gauguin enthusiast, investigator and collector who exposed the J. Paul Getty Museum’s Gauguin sculpture as a fake has now set his astute gaze on paintings at the National Gallery of Art in Washington D.C. and the Museum of Fine Arts in Boston. Fourmanoir has alleged that both paintings are not Gauguins and were instead commissioned and sold by a Parisian art dealer. The museums are considering a scientific examination of the paintings to confirm their origin and authenticity.

The Art Newspaper: Two U.S. museums plan to investigate their Gauguins after art sleuth says they are fake

EUROPE

Raphael’s True Cause of Death Revealed

Scientists have dispelled the myth that Renaissance painter Raphael, noted by historians as having had many trysts, died of the sexually transmitted disease syphilis. A new study conducted at the University of Milan Bicocca has concluded that the artist likely died instead from a pulmonary disease similar to pneumonia. Raphael’s physicians subjected him to bloodletting, a process wherein blood is drawn from a patient to rid the body of disease. As physicians of that period did not typically practice bloodletting for lung ailments, it is suspected that Raphael’s doctors failed to properly diagnose his symptoms. Moreover, it has been determined that rather than aiding in his recovery, the bloodletting likely contributed to and quickened his death. Raphael died in 1520 in Rome at the age of 37.

Selfie Menace Continues

Security camera footage has confirmed that an Austrian tourist broke two toes off of a sculpture by famed neoclassical sculptor Antonio Canova. The damage occurred at the Gipsoteca Museum in Possagno, when the tourist sat on a sculpture of Paolina (Pauline) Bonaparte, Napoleon’s sister, to take a selfie. The perpetrator surrendered to authorities. The work damaged was an original plaster cast model dating back to 1804, the marble version of which is kept at the Galleria Borghese in Rome. Artnet previously assembled a round-up of tragic cases of art being damaged by tourists angling for better selfies.

The Art Newspaper: Snap! Tourist takes a selfie on a 19th-century Canova sculpture—and breaks off two toes
The Art Newspaper: After CCTV footage is released, tourist who damaged Canova sculpture turns himself in
Artnet: Here Are 9 Shocking Times People Destroyed Art While Taking Selfies, Ranked by Severity

Building Decorated by Picasso Demolished, Triggering Protests

Despite ongoing protests, the Norwegian government has begun tearing down the Y-block office building in Oslo, part of its governmental headquarters in the city damaged in the 2011 terrorist attack by Anders Breivik, who detonated a car bomb. Prior to any demolition of the Y-block building, Picasso’s The Fishermen, a sand-blasted 250-ton section of the building’s facade, and The Seagull, a 60-ton floor-to-ceiling drawing in the building’s lobby, were removed and relocated. Opponents of the demolition argue that the Y-block building’s brutalist architecture should be preserved, and that Picasso’s works and the building “belong together.” They also argue that the demolition is, in essence, a symbolic completion of what Breivik wanted, to erase the symbols of democracy. Construction of the new governmental headquarters is expected to be completed in 2025.

The Guardian: Protests as Norway begins tearing down building adorned with Picassos
The Observer: Oslo’s Picasso Murals Are Being Relocated Despite Protest

Ancient Greek Architecture Likely Catered to the Handicapped

New research conducted at California State University suggests that the stone ramps featured on many ancient Greek temples were primarily built to accommodate the disabled and mobility impaired. While these ramps may have served other purposes, such as enabling transportation of materials, they were featured most prominently in quantity and size at temples dedicated to Asclepius, the Greek god of healing. As these sites drew in many visitors with disabilities, illnesses and ailments, who would have had difficulty navigating stairs, it is now thought that the ramps were specifically crafted to assist these guests.

Artnet: Ancient Greeks Installed Ramps on Temples to Improve Access for Disabled People, New Research Suggests

Croatian Museums and Historic Sites Can’t Catch a Break

After the coronavirus forced churches, galleries and museums throughout Croatia to close, in March 2020, a 5.3 magnitude earthquake rocked the country, damaging its largest Gothic-style cathedral and many other landmarks, including the Archaeological Museum in Zagreb. The strongest earthquake recorded in the country in almost 150 years made many buildings structurally unsound, and museum owners began storing works in their facility basements. On July 24, 2020, that was no longer an option when a severe storm hit Zagreb, leading to massive flooding. As water surged into their basements, The Archaeological Museum and Museum of Decorative Arts, among others, struggled to protect their collections. The full extent of the damage from the storm is not yet known, but expected to be significant.

The Art Newspaper: The unluckiest museums in the world? Croatia faces string of natural disasters
The Art Newspaper: Zagreb Cathedral’s spire damaged in major earthquake

Restoration Plans for Notre Dame by Traditional Methods Finalized

After discussing the issue for more than a year, the decision was made to reconstruct the roof and spires of the renowned Notre-Dame de Paris cathedral to resemble their appearance prior to the April 2019 fire. Despite calls from French President Emmanuel Macron to rebuild these features in a contemporary style, they will be constructed using the original material and traditional methods to the extent possible. In addition to the roof and spires, the vault will need to be repaired and three of the cathedral’s gables will have to be dismantled and rebuilt. After this work is completed, the building’s statues, which fortunately were removed just days prior to the fire, will be returned. The reconstruction of Notre Dame is scheduled to be completed in 2024.

The Art Newspaper: Where we are now with the restoration of Notre Dame after the rejection of modern architectural gestures

ARTICLE BY Jana A. Slavina Farmer and Nicole Haimson at Wilson Elser Moskowitz Edelman & Dicker LLP.

For more art world news, see the National Law Review Entertainment, Art & Sports law section.

Asset Protection for Doctors and Other Healthcare Providers: What Do You Need to Know?

As a doctor or other healthcare professional, you spend your career helping other people and earning an income upon which you rely on a daily basis—and upon which you hope to be able to rely in your retirement. However, working in healthcare is inherently risky, and a study published by Johns Hopkins Medicine which concluded that medical malpractice is the third-leading cause of death in the United States has led to a flood of lawsuits in recent years. As a result, taking appropriate measures to protect your assets is more important now than ever, and physicians and other providers at all stages of their careers would be well-advised to put an asset protection strategy in place.

What is an asset protection strategy? Simply put, it is a means of making sure that you do not lose what you have earned. Medical malpractice lawsuits, federal healthcare fraud investigations, disputes with practice co-owners, and liability risks in your personal life can all put your assets in jeopardy. While insurance provides a measure of protection – and is something that no practicing healthcare professional should go without – it is not sufficient on its own. Doctors and other healthcare providers need to take additional steps to protect their wealth, as their insurance coverage will either be inadequate or inapplicable in many scenarios.

“In today’s world, physicians and other healthcare providers face liability risks on a daily basis. In order to protect their assets, providers must implement risk-mitigation strategies in their medical practices, and they must also take measures to shield their wealth in the event that they get sued.”

What Types of Events Can Put Healthcare Providers’ Assets at Risk?

Why do doctors and other healthcare providers need to be concerned about asset protection? As referenced above, medical professionals face numerous risks in their personal and professional lives. While some of these risks apply to everyone, it is doctors’ and other medical professionals’ additional practice-related risks – and personal wealth – that makes implementing an asset protection strategy particularly important. Some examples of the risks that can be mitigated with an effective asset protection strategy include:

Medical Malpractice Lawsuits – All types of practitioners and healthcare facilities face the risk of being targeted in medical malpractice litigation. From allegations of diagnostic errors to allegations of inadequate staffing, plaintiffs’ attorneys pursue a multitude of types of claims against healthcare providers, and they often seek damages well in excess of providers’ malpractice insurance policy limits.
Contract Disputes and Commercial Lawsuits – In addition to patient-related litigation, medical practices and healthcare facilities can face liability in other types of civil lawsuits as well. By extension, their owners’ assets can also be at risk, as there are laws that allow litigants to “pierce the corporate veil” and pursue personal liability in various circumstances.
Federal Healthcare Fraud Investigations – Multiple federal agencies target healthcare providers in fraud-related investigations. From improperly billing Medicare or Medicaid to accepting illegal “kickbacks” from suppliers, there are numerous forms of healthcare fraud under federal law. Healthcare fraud investigations can either be civil or criminal in nature, and they can lead to enormous fines, recoupments, treble damages, and other penalties.
Drug Enforcement Administration (DEA) Audits and Inspections – In addition to healthcare fraud investigations, DEA audits and inspections present risks for healthcare providers as well. If your pharmacy or medical practice is registered with the DEA, any allegations of mishandling, diverting, or otherwise unlawfully distributing controlled substances can lead to substantial liability.
Liability for Personal Injury and Wrongful Death in Auto and Premises-Related Accidents – In addition to liability risks related to medical practice, doctors, other practitioners, and healthcare business owners can face liability risks in their personal lives as well. If you are involved in a serious auto accident, for example, you could be at risk for liability above and beyond your auto insurance coverage. Likewise, if someone is seriously injured in a fall or other accident while visiting your home (or office), you could be at risk for liability in a personal injury lawsuit in this scenario as well.

To be clear, an asset protection strategy mitigates the risk of losing your wealth as a result of these types of concerns—it does not mitigate these concerns themselves. The means for addressing medical practice-related concerns is through the adoption and implementation of an effective healthcare compliance program.

Are Asset Protection Strategies Legal?

One of the most-common misconceptions about asset protection is that it is somehow illegal. However, there are various laws and legal structures that are designed specifically to provide ways for individuals and businesses to protect their assets, and it is absolutely legal to use these to your full advantage. Just as you would not expect your patients to ignore treatment options that are available to them, you are not expected to ignore legal tools and strategies that are available to you.

What are Some Examples of Effective Asset Protection Tools for Doctors and Other Healthcare Providers?

Given the very real liability risks that doctors and other healthcare providers face, for those who do not currently have an asset protection strategy in place, implementing a strategy needs to be a priority. With regard to certain issues, asset protection measures need to be in place before a liability-triggering event occurs. Some examples of the types of tools that physicians, healthcare business owners, and other individuals can use to protect their assets include:

1. Maximizing Use of Qualified Retirement Plans

Qualified retirement plans that are subject to the Employee Retirement Income Security Act (ERISA) can offer significant protection. Of course, obvious the limitation here is that these assets placed in a qualified plan will only be available to you in retirement. However, by maximizing your use of a qualified retirement plan to the extent that you are preserving your assets for the future, you can secure protection for plan assets against many types of judgments and other creditor claims.

2. Utilizing Nonqualified Retirement Plans as Necessary

If you operate your medical practice as a sole proprietor, then you are not eligible to establish a qualified retirement plan under ERISA. However, placing assets into a nonqualified retirement plan can also provide these assets with an important layer of protection. This protection exists under state law, so you will need to work with your asset protection attorney to determine whether and to what extent this is a desirable option.

3. Forming a Trust

Trusts are the centerpieces of many high-net-worth individuals’ asset protection strategies. There are many types of irrevocable trusts that can be used to shield assets from judgment and debt creditors. When you place assets into an irrevocable trust, they are no longer “yours.” Instead they become assets of the trust. However, you will still retain control over the trust in accordance with the terms of the trust’s governing documents. Some examples of trusts that are commonly used for asset protection purposes include:

Domestic asset protection trusts (DAPT)
Foreign asset protection trusts (FAPT)
Personal residents trusts
Irrevocable spendthrift trusts

4. Offshore Investing

Investing assets offshore can offer several layers of asset protection. Not only do many countries have laws that are particularly favorable for keeping assets safe from domestic liabilities in the United States; but, in many cases, civil plaintiffs will be deterred from pursuing lawsuits once they learn that any attempts to collect would need to be undertaken overseas. Combined with other asset protection strategies (such as the formation of a trust or limited liability company (LLC)), transferring assets to a safe haven offshore can will provide the most-desirable combination of protection and flexibility.

5. Forming a Limited Liability Company (LLC) or Other Entity

If you are operating your medical practice as a sole proprietor, it will almost certainly make sense to form an LLC or another business entity to provide a layer of protection between you and any claims or allegations that may arise. However, even if you have a business entity in place already—and even if you are an employee of a hospital or other large facility—forming an LLC or other entity can still be a highly-effective asset protection strategy.

6. Utilizing Prenuptial Agreements, Postnuptial Agreements, and Other Tools

Depending on your marital or relationship status, using a prenuptial or postnuptial agreement to designate assets as “marital” or “community” property can help protect these assets from your personal creditors (although debts and judgments incurred against you and your spouse jointly could still be enforced against these assets). Additionally, there are various other asset protection tools that will be available based on specific personal, family, and business circumstances.

7. Gifting or Transferring Assets

If you have assets that you plan to give to your spouse, children, or other loved ones in the future, making a gift now can protect these assets from any claims against you. Likewise, in some cases it may make sense to sell, transfer, or mortgage assets in order to open up additional opportunities for protection.

Ultimately, the tools you use to protect your assets will need to reflect your unique situation, and an attorney who is familiar with your personal and professional circumstances can help you develop a strategy that achieves the maximum protection available.

ARTICLE BY Dr. Nick Oberheiden of Oberheiden P.C.

For more articles on healthcare providers, see the National Law Review Health Law & Managed Care section.

PFAS Water Cleanup…Have You Bought Yourself a Multi-Million Dollar Superfund Issue?

The last two years have seen an incredible uptick in activity with respect to PFAS regulations, and media coverage of PFAS continues to fuel the fires from the public, non-government organizations and environmental groups for additional action to be taken. The EPA continues its process of determining Maximum Contaminant Levels for PFAS. The FDA is examining the ways that it might regulate PFAS levels in both food and food packaging. Meanwhile, states, bombarded with constituent outcries and under pressure to take action to fill the gap until the EPA and FDA finish their regulatory review processes, quickly enact drinking water limits for PFAS and ban PFAS-containing products, such as children’s toys and food packaging.

As states continue setting drinking water limits for PFAS and in preparation for the EPA’s final determination of a Maximum Contaminant Level for PFAS in drinking water, many water utilities are beginning to evaluate the steps needed to come into compliance with existing or anticipated water regulations. Comprehensive compliance programs are being created and costly well testing sites are being built to determine PFAS content at various points along the waterways for drinking water sources. At water treatment facilities, expensive water filtration systems are being installed to remove as many PFAS as possible from drinking water sources. With water utilities coming under fire in the litigation world for PFAS issues, these steps may curtail the short-term issues and costs associated with PFAS litigation.

However, the long-term impact of the remediation steps that water treatment facilities ae taking may only be pushing litigation costs further down the road, not eliminating them. In addition, little considered Superfund laws may be triggered through PFAS water filtration that could end up costing water treatment facilities tens or hundreds of millions of dollars in cleanup costs.

CERCLA and PFAS

Under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), once a substance is designated as “hazardous” by the EPA, the Act gives the EPA considerable power to designate sites containing such substances as Superfund sites and force parties responsible for the pollution to pay for the cleanup of the site. Without a designation of a substance as “hazardous” (and therefore a site as a Superfund site), the EPA may either pay for the cleanup of the site itself or attempt to pursue, through time-consuming and costly litigation, the property owner for the costs of cleanup.

One of the most closely watched developments in the PFAS world is whether the EPA will make the determination that PFAS are “hazardous” under CERCLA. Although the EPA has promised its determination soon and various lawmakers are pressuring the EPA to make a determination in the near future, it is still uncertain as to when the EPA will issue its final regulations.

In the meantime, however, water utilities are under increasing pressure to filter out PFAS from drinking water. These PFAS are typically deposited in landfills. Out of sight, out of mind? Not exactly, when it comes to PFAS. As the quantity of PFAS accumulate in landfills, if the EPA makes a determination that PFAS are “hazardous” substances under CERCLA, the EPA could immediately designate landfills full of PFAS as Superfund sites and take action to pursue parties to pay for the cleanup. Water utilities could therefore be at significant risk of having to pay for Superfund site cleanup.

Further, in some instances, water utilities may have previously been involved with Superfund site cleanup for other reasons and believed the site issues to be fully remediated. However, since PFAS have not yet been classified as “hazardous”, Superfund sites were never tested for PFAS. Should the EPA determined that PFAS are “hazardous” under CERCLA, the EPA will have the right to reopen previously closed Superfund sites for further testing and remediation specific to PFAS, even if parties deemed responsible for the pollution already paid millions of dollars to clean up the site for other contaminants.

Water utilities in particular must pay special attention to PFAS developments under CERCLA. Proactive planning is needed to determine alternate means of disposing of or eliminating PFAS from water sources. Failure to enact forward-thinking strategies may very well end up costing water utility companies tens of millions in unexpected and unwanted costs if they fail to do so.

ARTICLE BY John Gardella at CMBG3 Law.

For more on EPA PFAS regulation, see the National Law Review Environmental, Energy & Resources law section.

Leveraging Technology to Meet Your Marketing Needs During COVID-19

Technology plays a vital role in our everyday lives and has vastly improved the way we communicate to friends, family, and colleagues alike. During these unprecedented times, technology has played an even greater role, including using it for law firm marketing efforts. While a pandemic has certainly ceased much of our normal lives, below are four ways you can use technology to keep your marketing and public relations efforts alive.

Live Stream on Social

Many social media platforms, such as Twitter, Facebook, and Instagram feature a live stream option, allowing users to broadcast directly from their home in real time. A great way to use this tool is to host Q&A sessions to discuss trending topics related to your practice area. Consider promoting the Q&A 2 to 3 weeks prior and allow people the option to submit questions ahead of time via direct message or email.

Webinars

Since most states have implemented stay-at-home orders, nearly every in-person event has been cancelled for the foreseeable future. However, that doesn’t mean presentations, seminars, or lectures aren’t possible to conduct. One of the main benefits of hosting a webinar is the ability to present from wherever and have your attendees tune-in from anywhere. Use this opportunity to adapt your presentation to be more visually appealing to a broader audience and incorporate a few real-life examples to keep your audience engaged. Be sure to also promote your webinar 2 to 3 weeks prior to maximize attendance. Additionally, for lawyer-attended webinars, consider getting your presentation CLE-certified as an added incentive for lawyers to fulfill their required CLE hours.

Newsletters & Email Blasts

If you have an up-to-date contact list, distribute a newsletter or email blast detailing how your company is helping those affected by COVID-19. This is a great way to communicate with your network and offer valuable information. Additionally, by using distribution platforms such as MailChimp and Constant Contact, you can view your newsletter/email blast’s performance analytics, including how many people viewed your content and which links were clicked the most. If you don’t have an up-to-date contact list, use this time to create or update one.

Google Analytics

This free feature offered by the search engine giant allows users to collect website traffic information and identify the number of unique monthly visitors, among other data. Since Google Analytics tracks data in real time, you’re consistently informed of how your website is performing against your competitors. You can also generate weekly reports to pinpoint relevant keywords and search terms embedded in your URLs that drive people to your site. With this information, you can better understand the behavior of your customers, and update text or content on the backend of your website to improve your ability to reach your target audience.

ARTICLE BY Shania Jackson at Berbay Marketing & Public Relations Firm.

For more marketing for law firms, see the Law Office Management section on the National Law Review.

Federal Court Strikes Down Portions of Department of Labor’s Final Rule on COVID-19 Leave, Expands Coverage

On August 3, 2020, the United States District Court for the Southern District of New York struck down portions of the DOL’s Final Rule regarding who qualifies for COVID-19 emergency paid sick leave under the Emergency Paid Sick Leave Act (“EPSLA”) and the Emergency Family and Medical Leave Expansion Act (“EFMLEA”), collectively referred to as the Families First Coronavirus Response Act (“FFCRA”).

Of particular importance to retail employers, the Court invalidated two provisions of the DOL’s Final Rule pertaining to: (1) conditioning leave on the availability of work and (2) the need to obtain employer consent prior to taking leave on an intermittent basis.

Neither the EPSLA nor the EFMLEA contains an express “work availability” requirement. The EPSLA grants paid leave to employees who are “unable to work (or telework) due to a need for leave because” of any of six COVID-19-related criteria. FFCRA § 5102(a). The EFMLEA similarly applies to employees “unable to work (or telework) due to a need for leave to care for . . . [a child] due to a public health emergency.” FFCRA § 101(a)(2)(A). In its Final Rule, the DOL concluded that these provisions do not reach employees whose employers “do not have work” for them, reasoning a work-availability requirement is justified “because the employee would be unable to work even if he or she” did not have a qualifying condition set forth in the statute.

In rejecting the DOL’s interpretation, the Court stated that “the agency’s barebones explanation for the work-availability requirement is patently deficient,” given that the DOL’s interpretation “considerably narrow[s] the statute’s potential scope.” Under the Court’s interpretation, employees are entitled to protected leave under either the EPSLA or EFMLEA if they satisfy the express statutory conditions, regardless of whether they are scheduled to work during the requested leave period.

The Court also rejected part of the DOL’s interpretation that employees are not permitted to take the protected leave on an intermittent basis unless they obtain their employer’s consent. As an initial matter, the Court upheld the DOL’s interpretation that employees cannot take intermittent leave in certain situations in which there is a higher risk that the employee will spread COVID-19 to other employees (i.e., when the employees: are subject to government quarantine or isolation order related to COVID-19; have been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19; are experiencing symptoms of COVID-19 and are taking leave to obtain a medical diagnosis; are taking care of an individual who either is subject to a quarantine or isolation order related to COVID-19 or has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19).

In those circumstances, the Court agreed that a restriction on intermittent leave “advances Congress’s public-health objectives by preventing employees who may be infected or contagious from returning intermittently to a worksite where they could transmit the virus.” Therefore, in those situations, employees are only permitted to take the protected leave in a block of time (i.e., a certain number of days/weeks), not on an intermittent basis. As a result, the Court upheld the DOL’s restriction on intermittent leave “insofar as it bans intermittent leave based on qualifying conditions that implicate an employee’s risk of viral transmission.”

The Court, however, rejected the requirement that employees obtain their employer’s consent before taking intermittent leave in other circumstances (i.e., when an employee takes leave solely to care for the employee’s son or daughter whose school or place of care is closed). In doing so, the Court ruled that the DOL failed to provide a coherent justification for requiring the employer’s consent, particularly in situations in which the risk of viral transmission is low. The Court’s opinion brings the EPSLA and EFMLEA in line with the existing FMLA, which does not require employer consent.

It is unclear if the DOL will challenge the Court’s decision or revise its Final Rule to bring it in compliance with the Court’s opinion. Regardless, the Court’s decision takes effect immediately and retail employers should be mindful of this ruling and revisit their COVID-19 leave policies.

ARTICLE BY Robert T. Quackenboss, Tyler S. Laughinghouse and Katherine P. Sandberg.

For more on the FFCRA, see the National Law Review Labor & Employment law section.

COVID-19: FTC Acts Fast, Lambasts Missing Masks

Section 5 of the Federal Trade Commission Act (15 U.S.C. Section 45(a)) provides worthwhile remedies for the types of unfair competition that intellectual property practitioners find quite familiar, and practitioners should give them due consideration. Selling COVID-19 masks you don’t have provides a good example.

In a case filed in early July (FTC press release) the FTC took a Staten Island business to task, along with its owner, for claiming that masks, respirators and other “PPE’s” (personal protection equipment) was “in stock” and “would ship the next day” (Complaint). The website “supergooddeals.com” continues to lead off with its signature slogan, “Pay Today, Ships Tomorrow” (https://supergooddeals.com/; also accessed by the author on July 31, 2020).

Apparently starting in March 2021, supergooddeals.com began selling PPE. According to the FTC complaint, the website claimed that the desired masks were “IN STOCK” (complaint paragraphs 19 and 20). The FTC complaint gives no indication as to whether or not the “in stock” claim was accurate, but instead pleads the examples of several consumers who never received masks, and numerous complaints to which supergooddeals.com never responded.

The FTC complaint also implies that to the extent that some orders may have been shipped, they were shipped on terms that were far less favorable than supergooddeals.com advertised, and when shipments never arrived (or perhaps were never sent) supergooddeals.com failed to give buyers the opportunity to change their mind, or offer a refund or any modification in price terms (e.g. Complaint paragraphs 29-31).

Supergooddeals.com also apparently attempted to conceal their failures (worse verbs could be applied) by producing shipment labels carrying the promised shipping date, but for packages that either would never ship, or shipped much later than the labelled date. Supergooddeals.com apparently didn’t realize that when a business creates its own USPS shipping labels, “An electronic record is generated on the ship date indicating that your package has been mailed and the Postal Service is expecting to see your package that day.” Click-N-Ship Field Information Kit

(For those of us that may merely be tardy, the same USPS webpage suggests mailing the package on the next business day. Checking for a friend.)

The FTC also asserted MITOR (“Mail, Internet, or Telephone Order Merchandise,” 16 CFR Part 435) which defines the terms in the name, defines unfair and deceptive practices in context, requires certain activities, and lists some exceptions (including, for reasons known only on K Street, “orders of seeds and growing plants”).

So, the alleged infractions include:

Advertising a delivery date that you know you cannot meet,
Advertising items that you don’t have in stock
Producing a false mailing label in an attempt to prove the shipping date, and
Failing to cancel orders when requested or provide prompt refunds

The Federal Trade Commission Act has worthwhile remedies for such activities, and as the Complaint indicates (paragraphs 58 and 59) the FTC plans to seek them against supergooddeals.com.

So, the people get their money back from supergooddeals.com and all’s well that ends well. Right?

Not exactly. The FTC Act offers no private right of action in these circumstances. The Fair Debt Collection Practices Act (FDCPA) 15 USC Section 1692(d) which is generally under the Federal Trade Commission, provides private remedies in the consumer debt arena, but a private party otherwise has no right to the remedies sought against supergooddeals.com under the FTC Act.

At this point, however, the intellectual property (“IP”) practitioner may have an extra arrow up his or her sleeve: Section 43(a) of the Lanham Act (15 USC 1125(a)) if—IF—the parties can be defined as competitors in the section 43(a) sense.

FTC § 5(a)

Lanham Act § 43(a)

Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful.

(1)Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which—

Anchor (A)

is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or

Anchor (B)

in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities,

shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

The Lanham Act applies to false representations (etc.) about goods and services in interstate commerce, but plaintiffs attempting to stretch section 43 (a) too far have been turned down e.g., Radiance Found., Inc. v. NAACP, 786 F.3d 316 (4th Cir., 2015) (The Radiance Foundation, an African American influenced pro-life organization, criticized the NAACP over the NAACP position on abortion. The NAACP issued a cease and desist letter and the Radiance Foundation filed a declaratory judgment complaint arguing that neither trademark infringement nor dilution had occurred. The NAACP counterclaimed under (inter alia) section 43(a). The Fourth Circuit held that for a number of reasons, including the lack of competing goods or services in the section 43(a) sense, the NAACP did not have a trademark remedy in these circumstances.)

Supergooddeals.com certainly dealt (and continues to deal) in “goods” in the sense of section 43(a). Nevertheless, the “hundreds of” consumers listed in (e.g.) paragraph 26 of the FTC complaint don’t have a section 43(a) remedy against supergooddeals.com because such customers are not “competitors” of supergooddeals.com in the sense required by section 43(a). Stated more formally, for individual defrauded customers, the answer to, “whether a legislatively conferred cause of action encompasses a particular plaintiff’s claim” is “no.” (Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 132 (2014). (“A consumer who is hoodwinked into purchasing a disappointing product may well have an injury-in-fact cognizable under Article III, but he cannot invoke the protection of the Lanham Act—a conclusion reached by every Circuit to consider the question.”)

Does Pat Peoples have any Silver Lining here? Well, yes. In addition to a possible contractual remedy, most states have some form of general “unfair competition is illegal” statute as well as consumer protection remedies.

For the time being, however, these defrauded consumers have Uncle Sam on their side, and when “Uncle” sues he usually gets the job done.

ARTICLE BY Philip Summa and Summa PLLC.

For more FTC PPE Actions see the National Law Review Coronavirus News section.

Legal News: Law Firm Hires, Professional Recognition and Legal Innovation

With plenty of adjustments and creativity, the legal industry churns into August. The legal industry has shown remarkable ingenuity as law firms adapt to the challenges of COVID-19 and the ancillary impact of the pandemic. Below we highlight some law firm hires, law firm innovations and accolades, and legal technology news.

Law Firm Hires and Lateral Attorney Moves

Labor and employment lawyer Ryan McCoy rejoined Norton Rose Fulbright as a partner. McCoy split the past seven years between Baute Crochetiere Hartley & Velkei and Alston & Bird, previously spending eight years as part of Norton Rose Fulbright’s dispute resolution and litigation practice from 2005 until 2013.

McCoy represents clients from the healthcare, pharmaceutical, retail, insurance, transport and insurance industries, focusing his practice on wage and hour class actions, discrimination suits, wrongful termination and retaliation, commercial litigation, and complex insurance coverage. He has also defended clients before the American Arbitration Association in wage and hour violations, sexual harassment, pregnancy discrimination, disability discrimination as well as meal and rest period disputes.

“Ryan impressed us as a young lawyer, and we are thrilled to have him return in his prime. The client demand for employment and labor law seems to be at an all-time high during this unusual time for businesses,” said Shauna Clark, Norton Rose Fulbright’s U.S. head of employment and labor.

“I am delighted to return to Norton Rose Fulbright and collaborate once again with these talented lawyers. The firm’s unmatched global reach and wide range of offerings will benefit my clients significantly,” McCoy said.

Patent attorney Pierre R. Yanney joined Bressler, Amery & Ross law firm as a principal in its Corporate and Commercial Transactions Practice Group. Previously, Yanney was a principal at Baker & Hostetler law firm.

Mr. Yanney focuses his practice on all aspects of patent law, ranging from patent litigation, opinions and counseling, to Patent Office prosecution, and has experience in handling a wide range of technologies including RFID, cellular systems, medical electronics and devices, signal processing, communication systems, electronic tolling, and elevator control systems. Yanney has prosecuted more than 2,000 patent applications and written more than 100 patent opinions, in addition to arguing several cases before the U.S. Court of Appeals for the Federal Circuit and the Patent Trial & Appeal Board.

“I’m excited to welcome Pierre Yanney to our New York office. Pierre is known for the breadth and depth of his IP experience. It’s rare that you come across someone like Pierre who can write a patent application, get it allowed at the Patent Office, and also litigate patents in district court. His talents and business insights will be a positive addition to our active Corporate and Commercial practice,” said Bressler New York Managing Principal, Mark Knoll.

Labor and employment attorney Scott Nelson joined Hunton Andrews Kurth as a partner in the law firm’s Houston office. Nelson previously was a partner at Seyfarth Shaw LLP, and led Baker McKenzie’s domestic U.S. Employment Counseling and Litigation practice.

Nelson’s practice focuses on complex employment litigation, specifically wage and hour class and collective actions, ERISA litigation, and trade secret and restrictive covenant matters. He also counsels clients on employment law compliance, including international employment law issues, restrictive covenants, wage-and-hour matters, internal investigations, executive terminations, mass layoffs, employee policies, employee training and due diligence.

“Scott’s thorough understanding of the many complex issues our clients face and his impressive track record of experience handling ERISA litigation and advising on international employment law matters complement the strengths of our comprehensive labor and employment practice,” said Emily Burkhardt Vicente, co-chair of Hunton Andrews Kurth’s labor and employment group. “We are pleased to welcome him to the firm.”

Bergeson & Campbell attorney Timothy D. Backstrom passed away on July 24. Backstrom joined Bergeson & Campbell in 2007, and was an expert in the Federal Insecticide, Fungicide, and Rodenticide Act, also contributing to the law and regulation of fuel and fuel additives under the Clean Air Act.

“Tim was an incredibly gifted lawyer, respected by his peers, loved by his fellow colleagues here at Bergeson & Campbell, P.C., and a wonderful man, husband, and father. He is survived by his wife Lydia Cox Backstrom, his (step) son Christopher Blancato, his brother Paul Backstrom (Kathy), and his cousins Dan and Don Backstrom,” Bergeson & Campbell said in a statement following his death.

Backstrom grew up in Illinois and Wisconsin, later moving to the East coast to earn his undergraduate degree at the Massachusetts Institute of Technology. He earned his law degree at Yale Law School, and then went on to work for the U.S. Environmental Protection Agency’s Office of General Counsel on pesticide, toxic substances, and air quality issues for 25 years, developing a deep understanding of FIFRA.

“We will miss Tim’s uncompromising commitment to legal excellence, his passion for the law, his exuberance for any work composed by Gustav Mahler, and his unrelenting belief that the rule of law will ultimately prevail over the societal challenges we are now experiencing,” Bergeson wrote in a statement.

Law Firm Innovation

Winston & Strawn announced the formation of an Environmental, Social and Governance (ESG) Advisory Team, designed to help companies navigate their ESG profiles. The advisory board will be co-chaired by Winston & Strawn partners Mike Blankenship and Eric Johnson, and utilizes the firm’s experience across disciplines to oversee the ESG issues companies are facing during these challenging times. Blankenship identifies the correlation between successful businesses and their attention to ESG values, saying, “successful businesses are placing ESG principles at the forefront of their core values and leveraging those principles to chart a path for financial success and future growth to the benefit of all their stakeholders, including employees, customers, vendors, local communities, and stockholders.”

The team includes Chicago partners Mike Melbinger, Eleni Kouimelis, Cardelle Spangler, and Rex Sessions, of counsel Stephanie Sebor; New York partner Tara Greenberg, London partners Peter Crowther and Anthony Riley. The group will focus on ESG disclosure and messaging, Board oversight of ESG risks, shareholder activism, corporate governance and regulatory compliance. With an eye to these principles, the Winston & Strawn ESG team will “work closely with clients to develop and execute ESG-related initiatives that best fit their specific needs to the benefit of all of their stakeholders,” Eric Johnson says.

Hughes Hubbard & Reed law firm launched a coronavirus and CARES Act tracker that monitors enforcement actions across the country, targeting Paycheck Protection Program loan fraud, fraudulent COVID-19 cures, as well as violations of state and federal laws. Hughes Hubbard & Reed is monitoring coronavirus government agency filings, and will update the tracker frequently.

To date, Hughes Hubbard & Reed has identified 110 coronavirus and CARES act cases brought by the Department of Justice and Securities and Exchange Commission, with 12 state attorneys general bringing cases. Pennsylvania’s attorney general’s office has been the most active with COVID-19 related legal actions. Forty percent of cases involve alleged criminal violations, and 30 percent of coronavirus related cases include a suspension of securities trading by the Securities and Exchange Commission, with the number of cases growing steadily since April.

The tracker can be accessed here with detailed information on each case, including links to court filings and relevant statutes.

DLA Piper law firm received the 2020 Beacon of Justice Award from the National Legal Aid & Defender Association (NLADA), recognizing the growth of the firm’s pro bono practice focusing on the needs of immigrant children facing abuse, neglect and abandonment. The NLADA also recognized the firm’s collaboration with the American Bar Association to develop habeas corpus petition template pleadings and practice advisories for unaccompanied children.

“We are honored to play a role in advocating for the rights of vulnerable individuals and families seeking a better life in the US,” said Lisa Dewey, pro bono partner and director of New Perimeter, DLA Piper’s nonprofit affiliate that provides long-term pro bono legal assistance in under-served regions around the world. “I am proud of the dedication to serving immigrants that our lawyers have demonstrated through their pro bono service, and we look forward to continuing this important work.”

Jay Bender, a partner at the Birmingham, Ala. office of Bradley Arant Boult Cummings law firm, received the Alabama Commendation Medal from the Alabama Army National Guard for his work on the “Honoring American Veterans in Extreme Need Act of 2019” (HAVEN Act; H.R. 2938).

Bender was presented the award by Amy Quick Glenos, an of counsel attorney at Ogletree, Deakins, Nash, Smoak & Stewart, P.C., and a reserve component soldier and captain in the U.S. Army JAG Corps, Alabama Army National Guard, for which she also serves as trial counsel.

The HAVEN Act was signed into law last year, changing bankruptcy laws to protect disabled veterans experiencing financial hardship. Bender worked pro bono alongside other Bradley attorneys on the law, serving as co-chair of the Legislative Committee of the American Bankruptcy Institute Task Force on Veterans and Service Members Affairs – of which Mr. Bender is a founding member.

“We congratulate Jay on this prestigious recognition of his many years of work and unwavering commitment to protecting disabled veterans in financial distress and ushering the HAVEN Act into reality,” said Bradley Birmingham Office Managing Partner Dawn Helms Sharff. “This recognition is reflective of Jay’s outstanding work and the importance of this landmark law in helping disabled veterans and their families achieve financial stability.”

Tycko & Zavareei law firm won a $11 million settlement representing a healthcare whistleblower in a False Claims Act lawsuit. Jonathan Tycko of Tycko & Zavareei and Felix Gavi Luna of Peterson Wampold Rosato Feldman Luna law firm represented the whistleblower.

The settlement involved allegations that a testing laboratory owned by Cordant Health Solutions paid kickbacks to two major clients of the laboratory to encourage further testing referrals to the laboratory from those clients. The whistleblower, who was a former employee of Cordant, filed the lawsuit under the qui tam provision of the False Claims Act five years ago. Cordant agreed to pay the government $11,942,913 to settle the claims. The government awarded the whistleblower approximately $2.4 million, or 20 percent of the settlement amount.

“This settlement shows that the False Claims Act works,” Tycko said. “Through the qui tam provisions of that law, our client was able to bring the kickbacks to the attention of the government in a way that led to both criminal and civil remedies. We are proud and humbled to represent brave whistleblowers, such as the individual who brought this case.”

“We are grateful for how seriously the U.S. Attorney’s Office, and all the government lawyers and investigators who have worked on this matter, took our client’s allegations, and for the work they did to reach this settlement,” said Luna.

Bryan Cave Leighton & Paisner recently announced that Denver associate, Ivan London, was recently elected to serve on the Board of Advisors for Western Energy Alliance. Comprised of 300 member companies, the Western Energy Alliance focuses on environmentally responsible exploration and production of oil and gas in the region. The Western Energy Alliance supports policies to encourage investment and job growth in the region. London’s practice with Bryan Cave focuses on regulation in energy, environmental and with other natural resource matters.

Legal Technology Innovations

At the end of July, Clariviate Plc announced an agreement to combine with CPA Global, a global leader in IP software and tech –enabled services. The transaction will be all-stock with an enterprise value of approximately $6.8 billion. The transaction is expected to go through regulatory approvals, is expected to close fourth quarter of 2020. By combining efforts, CPA Global and Clarivate will provide an IP solution that provides market-leading software, data, technology and services throughout the IP lifecycle, from academic research to IP portfolio management.

Jerre Stead, CEO of Clarivate indicates the company’s share similar core values and expects the partnership to lead to more innovation. He says, “This is a transformative combination with a strong strategic fit between the two companies. It will create a full-service IP organization which will provide customers with a wide range of products and services to help them make faster and smarter critical decisions.” Simon Webster, the CEO of CPA Global, echoes the sentiment, calling the move “a natural next step.” He says, “The fit between our respective product offerings across the innovation and IP lifecycle, the commonality of our vision for the future of the industry, and the alignment of both companies’ cultures and values makes for an extremely exciting future for our customers, employees and shareholders alike.”

Leading accounting firm BDO USA, LLP launched Athenagy, a business intelligence platform for legal professionals, designed to provide the legal department with transparency and critical insight throughout the litigation cycle. Athenagy is designed to integrate with Relativity®One and can provide critical insight into where data lives and what it does through the steps of a legal hold, providing information to legal professionals.

Daniel Gold, managing director of BDO Managed Services practice, says “Athenagy solves persistent problems that legal departments face when it comes to managing their data. By providing transparency and detailed analytics throughout the data lifecycle, Athenagy is empowering legal professionals to make better, more informed decisions at every step of the e-discovery process, and beyond.”

That’s it for now. We’ll have more soon.

ARTICLE BY Eilene Spear and Rachel Popa at The National Law Review / The National Law Forum LLC.

For more legal industry news, see the Law Office Management section of the National Law Review.

Debunking Five Business Development Myths to Help You Achieve Success

Business development, marketing and public relations initiatives can be intimidating to even the most-seasoned legal veteran. The idea of creating a successful plan seems daunting, much less the prospect of executing, maintaining and measuring the plan’s performance metrics. The steps to effective business development are rooted in creating visibility and thought leadership that successfully position both you and your firm within the marketplace and that translate into new clients and business referrals.

Here are five business development myths that make creating and executing a successful business development plan seem impossible. It is important to remember that most attorneys did not go to law school or begin their legal practices with the aspiration of becoming a seasoned marketer. However, it is possible to become successful at business development by reevaluating how you measure success and how you focus your efforts — and debunking these myths.

Myth #1- There Is a “One Size Fits All” Marketing & Business Development Plan

Each individual’s marketing and business development plan should be customized to highlight not only their unique strengths but also to incorporate their priorities, experience, capabilities and commitment level. For example, if you’re more extroverted, your plan could include large networking events or speaking engagements. If the idea of speaking to a group of strangers is intimidating, then perhaps your plan includes writing articles or providing your expertise in small roundtable discussions. Additionally, before creating a business development plan, each individual needs to evaluate factors like where they are in their career, what their short-term and long-term goals are, and what they need to get out of their business development initiatives to be considered effective.

Myth #2- Being Successful at Business Development Means You Are a “Rainmaker”

There is often a stigma that the successful business developer is defined as a rainmaker. Business development success should be measured on an individual level and not compared to the firm as a whole or measured against any other attorney’s business development contribution. There are too many factors for each person and their experiences and circumstances to label only the rainmaker as successful. Just like a law firm requires many layers of expertise to run smoothly, there are different levels of contributors to business development, and each level should be valued and encouraged if individuals are participating to the best of their ability and expanding their business development experience.

Myth #3- New Clients Are the Only Measure of Business Development Success

While the obvious end goal of all business development initiatives is more business which equals more billing and revenue, signing new clients is not the only measure of successful business development. Expanding your network to broaden the exposure of your expertise is a fundamental part of a successful business development plan. Often, attorneys get too focused on cultivating the relationship with a potential client and miss opportunities to connect with valuable referral sources, thus limiting their network.

There are also other business development initiatives that can be measured as successful beyond singing a new client- including getting a bylined article published, being honored with a significant award or ranking, or being quoted in the press. Each of these things help to create an integrated and effective business development plan that sets up the foundation for long-term success.

Myth #4- Executing Your Plan Needs to Be Done Alone

Simply because your business development plan “belongs to you” doesn’t mean you have to execute it on your own. Working with someone to hold you accountable is crucial to the process. This is not to say you need to immediately run out and find a business development coach to be successful, but you do need someone to discuss which initiatives are working in your plan and identify any challenges you’re facing. This should include regular check-in meetings to make sure your plan is progressing the way you’d like and to ensure your goals are being achieved. It also includes evaluating the success, or lack thereof, of initiatives and adjusting or revising goals to be more effective.

Having a mentor or aspirational influence is also a helpful tool for both planning and execution. While you don’t have to model your plan to mirror someone else’s, there is value in knowing where you’d like to be and seeing someone else achieving that level of success. A mentor will serve in a more interactional role, but if that model doesn’t fit with your personality or your business, identifying with a person or people whose success you would like to emulate is helpful when crafting a strategy and long-term goals in your business development plan.

Myth #5- Business Development Is a Fancy Term for Networking

Many people declare they don’t need a business development plan because they are “active” within their industry and regularly attend events. Event attendance is a piece of a larger initiative that creates a successful and measurable business development plan. Often, attorneys put all their marketing eggs in one basket. They become frustrated when those efforts are unsuccessful and give up. An integrated approach is key to being successful in business development. This includes not only networking but also incorporating other things like writing, ranking and honors, digital strategy, and public relations.

It’s easy to focus on client work and push business development initiatives to the side or add them to a to-do list. The idea behind breaking down these common myths is to empower everyone to feel they can create a manageable business development plan, use the tools and resources they need to execute these plans successfully, and to execute these plans with short-term and long-term goals that are easily achieved. Business development does not need to be intimidating, overwhelming or time-consuming if your plan is personalized to highlight your strengths, comfort level and readiness. The goal of business development is not just to meet people and hope they’ll hire you, but to create lasting impressions through initiatives and actions that enhance your visibility and position you as a thought leader.

ARTICLE BY Evyan O’Keefe at Jaffe PR.

For more on law firm business, see the National Law Review Law Office Management section.

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Confidentiality—Arbitration Conducted Privately

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Myth #1- There Is a “One Size Fits All” Marketing & Business Development Plan

Myth #2- Being Successful at Business Development Means You Are a “Rainmaker”

Myth #3- New Clients Are the Only Measure of Business Development Success

Myth #4- Executing Your Plan Needs to Be Done Alone

Myth #5- Business Development Is a Fancy Term for Networking

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