Russian Invasion of Ukraine Triggers Global Sanctions: What Businesses Need to Know

The Russian invasion of Ukraine has triggered swift international retribution. Global powers—including the European Union (EU), the United Kingdom (UK) and the United States (US)—have announced sanctions as the crisis in Europe escalates. As governments expand these sanctions, businesses dealing in Russia or with the Russian government are urged to take immediate steps to ensure compliance. This On the Subject outlines the scope and applicability of these sanctions in each major jurisdiction.

IN DEPTH

EUROPEAN UNION

Targeted Sanctions on Entities and Individuals

In addition to the sanctions against Russia already in place following its annexation of the Crimean Peninsula, cyberattacks and human rights abuses (which were extended until 31 July 2022, and will likely be extended again), the Council of the European Union imposed restrictive measures on 21 February 2022, on five additional individuals (Aleksei Yurievich Cherniak, Leonid Ivanovich Babashov, Tatiana Georgievna Lobach, Nina Sergeevna Faustova and Aleksandr Evgenevich Chmyhalov) for actively supporting actions and implementing policies that undermine or threaten the territorial integrity, sovereignty and independence of Ukraine. The designated persons are members of the State Duma of the Russian Federation, and they were elected to represent the illegally annexed Crimean Peninsula and the City of Sevastopol on 19 September 2021, as well as the head and deputy head of the Sevastopol electoral commission.

On 23 February 2022, following a joint press statement of the Presidents of the European Commission and Council, the European Union extended the existing sanctions framework to cover all of the 351 members of the Russian State Duma who voted for the recognition of Donetsk and Luhansk as independent entities. The European Union also extended sanctions on an additional 27 high-profile individuals and entities who have played a role in undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.

The restrictive measures include asset freezes, a European Union-wide travel ban and a prohibition from making funds available to the listed individuals and entities. Pursuant to European Union asset freezes, all funds and economic resources that belong to, are owned, held or controlled by a designated person are frozen. “Ownership” is triggered by a party holding more than 50% of proprietary rights in an entity or a majority interest in that entity. Therefore, entities owned by designated individuals will also be affected by the targeted sanctions.

Economic Restrictions

The European Union also imposed various economic restrictions on the Donetsk and Luhansk regions, specifically:

  • An import ban on goods from those regions;
  • An export ban on certain goods and technologies;
  • A prohibition on tourism services; and
  • A restriction on trade investments related to certain economic sectors.

Financial Restrictions

Notably, the European Union also imposed a sectoral prohibition to finance the Russian Federation, its government and its Central Bank in the hope of limiting the financing of escalatory and aggressive policies.

Germany also put on halt the certification process for the North Stream 2 pipeline, which is meant to deliver natural gas directly from Russia to Germany. The pipeline is owned by a subsidiary of Gazprom.

Applicability of EU Sanctions

The sanctions announced on 21 February and 23 February have been published in the Official Journal of the European Union and take effect immediately. New sanctions are directly applicable in all EU Member States, with existing penalties in place at a Member State level in relation to any breaches.

EU sanctions are broad in scope and apply to any person inside or outside the territory of the European Union who is a national or is incorporated under the laws of a Member State, as well as any legal person in respect of any business done in whole or in part within the European Union. Likewise, any events taking place within the territory of the European Union, including its airspace and on board any aircraft or vessel under the jurisdiction of a Member State, would be subject to the EU sanctions.

Further Developments

In a statement on 24 February, EU President Ursula von der Leyen announced that the European Union will present a further “package of massive, targeted sanctions” aimed at strategic sectors of the Russian economy in response to Russia’s continued escalation of the conflict. The new measures will block Russia’s access to technologies and markets that are key for Russia, freeze Russian assets in the European Union and stop the access of Russian banks to European financial markets. The further measures could include Russia being removed from SWIFT (the Society for Worldwide Interbank Financial Telecommunication), which is the worldwide communication system used by banks.

The European Union may also expand the sanctions to target those who “provide support or benefit from the Russian government” as a response to Belarus support for Russia.

UNITED KINGDOM

UK Prime Minister Boris Johnson announced a “first barrage” of sanctions against Russia with the designation of five Russian banks and three high-net-worth Russian individuals. The sanctions have been imposed pursuant to the recently amended Russia (Sanctions) (EU Exit) Regulations 2019 (SI 2019/855).

  • Designated entities: IS Bank, Rossiya Bank, PJSC Promsvyazbank, JSC Genbank and JSC Black Sea Bank Development and Reconstruction.
  • Designated individuals: Gennady Timchenko, Boris Rotenberg and Igor Rotenberg.

Similar to the EU sanctions, any assets held in the United Kingdom by the individuals concerned will be frozen, and the individuals will also be banned from travelling to the United Kingdom. There will also be a prohibition on all UK individuals and entities from having any dealings with the designated entities and individuals.

Further Developments

The UK government stated it will further extend targeted sanctions to the Russian politicians who voted to recognise the independence of Donetsk and Luhansk and economic restrictions currently applicable to the Crimean Peninsula to the Donetsk and Luhansk regions. On 23 February, Prime Minister Boris Johnson warned London bank chiefs to expect tougher sanctions on Russia if the crisis in Ukraine escalates.

The UK government is likely to follow the European Union lead with respect to additional and broader sanctions (i) seeking to curtail Russia’s ability to raise funds in UK markets, prohibiting a range of high-tech exports and further isolating Russian banks from the global economy; (ii) targeting the Russian financial sector and trade; and (iii) prohibiting Russia from issuing foreign debt on UK markets.

In line with previous statements from the UK government, on 24 February Prime Minister Boris Johnson announced it will take measures to exclude Russian Banks from London’s financial system “stopping them from accessing sterling and clearing payments through the UK” and limiting the amount of money the Russian nationals will be able to deposit in their UK bank accounts.

UNITED STATES

The US sanctions announced immediately after the beginning of the current crisis effectively prohibit US persons from engaging in any economic activity with the breakaway Donetsk and Luhansk “republics.” This includes investment, exports to and imports from these regions. US President Joe Biden subsequently announced a new set of sanctions aimed at cutting off Russia from western financing and targeting high-net-worth Russian individuals.

Targeted Sanctions

The United States imposed new sanctions against two banks and three individuals who are the sons of three previously sanctioned President Putin inner circle members.

  • Sanctioned entities: Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank (VEB) and Promsvyazbank Public Joint Stock Company (PSB), along with 42 of their subsidiaries.
  • Sanctioned individuals: Denis Aleksandrovich Bortnikov, Petr Mikhailovich Fradkov and Vladimir Sergeevich Kiriyenko.

As mentioned above, the fathers of the newly sanctioned individuals are already subject to US sanctions. These new sanctions aim to prevent the previously sanctioned individuals from transferring their assets to family members to evade sanctions. Any entities owned 50% or more by sanctioned individuals will also be sanctioned entities.

The United States has also subjected Nord Stream 2 AG, the Swiss company building the Nord Stream 2 natural gas pipeline from Russia to Germany, to sanctions.

Financial Restrictions

In addition to targeted sanctions, the United States adopted Directive 1A under Executive Order 14024. This directive expands existing sovereign debt prohibitions applying to “US financial institutions” to cover participation in the secondary market for bonds issued after 1 March 2022, by the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation or the Ministry of Finance of the Russian Federation. These restrictions previously applied only to participation in the primary market for this debt.

“US financial institutions” is defined broadly and includes all US entities and their foreign branches which engage in activities as “depository institutions, banks, savings banks, money services businesses, operators of credit card systems, trust companies, insurance companies, securities brokers and dealers, futures and options brokers and dealers, forward contract and foreign exchange merchants, securities and commodities exchanges, clearing corporations, investment companies, employee benefit plans, dealers in precious metals, stones, or jewels, and US holding companies, US affiliates, or US subsidiaries of any of the foregoing.”

Further Developments

During his speech on 22 February, President Biden announced that more measures would be imposed in the event of Russia’s invasion of Ukraine, including additional sanctions targeting Russia’s biggest banks and export control measures. Considering President Putin’s launch of military operations in Ukraine, it is expected that the United States and its allies will announce “further consequences” for Russia on 24 February.

GLOBAL

Canada, Japan and Australia have also announced sanctions against Russia in response to the Ukraine crisis, including targeted sanctions against Russian individuals and financial institutions, and an import/export ban of goods on the Donetsk and Luhansk regions. Canada and Japan also implemented new prohibitions on dealings in Russian sovereign debt.

IMPACT ON BUSINESS 

If you or your company have dealings with Russian entities or individuals:

  • Immediately conduct a thorough review of your business agreements to ensure you have no dealings directly or indirectly with designated individuals or entities, and if there is any connection to designated people, promptly seek out legal advice;
  • Ensure you have robust sanction compliance measures to screen third parties which may be subject to sanctions; and
  • Monitor the developing situation and seek out legal advice if concerned about potential breaches.
© 2022 McDermott Will & Emery

Securities Litigation: An Emerging Strategy to Hold Companies Accountable for Privacy Protections

A California federal judge rejected Zoom Video Communications, Inc.’s motion to dismiss securities fraud claims against it, and its CEO and CFO, for misrepresenting Zoom’s privacy protections. Although there have been a number of cases challenging inadequate privacy protections on consumer protection grounds in recent years, this decision shifts the spotlight to an additional front on which the battles for privacy protection may be fought:  the securities-litigation realm.

At issue were statements made by Zoom relating to the company’s privacy and encryption methods, including Zoom’s 2019 Registration Statement and Prospectus, which told investors the company offered “robust security capabilities, including end-to-end encryption.” Importantly, the prospectus was signed by Zoom’s CEO, Eric Yuan. The plaintiffs, a group of Zoom shareholders, brought suit arguing that end-to-end encryption means that only meeting participants and no other person, not even the platform provider, would be able to access the content. The complaint alleged that contrary to this statement, Zoom maintained access to the cryptographic keys that could allow it to access the unencrypted video and audio content of Zoom meetings.

The plaintiffs’ allegations are based on media reports of security issues relating to Zoom conferences early in the COVID-19 pandemic, as well as an April 2020 Zoom blog post in which Yuan stated that Zoom had “fallen short of the community’s  ̶ ̶  and our own  ̶ ̶  privacy and security expectations.”  In his post, Yuan linked to another Zoom executive’s post, which apologized for “incorrectly suggesting” that Zoom meetings used end-to-end encryption.

In their motion to dismiss, the defendants did not dispute that the company said it used end-to-end encryption.  Instead, they challenged plaintiffs’ falsity, scienter, and loss causation allegations – and all three attempts were rejected by the court.

First, as to falsity, the court did not buy the defendants’ argument that “end-to-end encryption” could have different meanings because a Zoom executive expressly acknowledged that the company had “incorrectly suggest[ed] that Zoom meetings were capable of using end-to-end encryption.”  Thus, the court found that the complaint did, in fact, plead the existence of materially false and misleading statements. The court also rejected the defendants’ argument that Yuan’s understanding of the term “end-to-end encryption” changed in a relevant way from the time he made the challenged representation to his later statements that Zoom’s usage was inconsistent with “the commonly accepted definition.” The court looked to Yuan’s advanced degree in engineering, his status as a “founding engineer” at WebEx, and that he had personally “led the effort to engineer Zoom Meetings’ platform and is named on several patents that specifically concern encryption techniques.”

Lastly, the court rebuffed the defendants’ attempt at undermining loss causation, finding that the plaintiffs had pled facts to plausibly suggest a causal connection between the defendants’ allegedly fraudulent conduct and the plaintiffs’ economic loss. In particular, the court referenced the decline in Zoom’s stock price shortly after defendants’ fraud was revealed to the market via media reports and Yuan’s blog post.

That said, the court dismissed the plaintiffs’ remaining claims, as they related to data privacy statements made by Zoom or, in general, by the “defendants,” unlike the specific encryption-related statement made by Yuan. The court found that the corporate-made statements did not rise to the level of an “exceptional case where a company’s public statements were so important and so dramatically false that they would create a strong inference that at least some corporate officials knew of the falsity upon publication.” Because those statements were not coupled with sufficient allegations of individual scienter, the court granted the defendants’ motion to dismiss those statements from the complaint.

© 2022 Proskauer Rose LLP.
For more articles about business litigation, visit the NLR Litigation section.

GDPR Privacy Rules: The Other Shoe Drops

Four years after GDPR was implemented, we are seeing the pillars of the internet business destroyed. Given two new EU decisions affecting the practical management of data, all companies collecting consumer data in the EU are re-evaluating their business models and will soon be considering wholesale changes.

On one hand, the GDPR is creating the world its drafters intended – a world where personal data is less of a commodity exploited and traded by business. On the other hand, GDPR enforcement has taken the form of a wrecking ball, leading to data localization in Europe and substitution of government meddling for consumer choice.

For years we have watched the EU courts and enforcement agencies apply GDPR text to real-life cases, wondering if the legal application would be more of a nip and tuck operation on ecommerce or something more bloody and brutal. In 2022, we received our answer, and the bodies are dropping.

In January Austrian courts decided that companies can’t use Google Analytics to study their own site’s web traffic. The same conclusion was reached last week by French regulators. While Google doesn’t announce statistics about product usage, website tracker BuiltWith published that 29.3 million websites use Google Analytics, including 69.5 percent of Quantcast’s Top 10,000 sites, and that is more than ten times the next most popular option. So vast numbers of companies operating in Europe will need to change their platform analytics provider – if the Euro-crats will allow them to use site analytics at all.

But these decisions were not based on the functionality of Google Analytics, a tool that does not even capture personally identifiable information – no names, no home or office address, no phone numbers. Instead, these decisions that will harm thousands of businesses were a result of the Schrems II decision, finding fault in the transfer of this non-identifiable data to a company based in the United States. The problem here for European decision-makers is that US law enforcement may have access to this data if courts allow them. I have written before about this illogical conclusion and won’t restate the many arguments here, other than to say that EU law enforcement behaves the same way.

The effects of this decision will be felt far beyond the huge customer base of Google Analytics.  The logic of this decision effectively means that companies collecting data from EU citizens can no longer use US-based cloud services like Amazon Web Services, IBM, Google, Oracle or Microsoft. I would anticipate that huge cloud player Alibaba Cloud could suffer the same proscription if Europe’s privacy panjandrums decide that China’s privacy protection is as threatening as the US.

The Austrians held that all the sophisticated measures taken by Google to encrypt analytic data meant nothing, because if Google could decrypt it, so could the US government. By this logic, no US cloud provider – the world’s primary business data support network – could “safely” hold EU data. Which means that the Euro-crats are preparing to fine any EU company that uses a US cloud provider. Max Schrems saw this decision in stark terms, stating, “The bottom line is: Companies can’t use US cloud services in Europe anymore.”

This decision will ultimately support the Euro-crats’ goal of data localization as companies try to organize local storage/processing solutions to avoid fines. Readers of this blog have seen coverage of the EU’s tilt toward data localization (for example, here and here) and away from the open internet that European politicians once held as the ideal. The Euro-crats are taking serious steps toward forcing localized data processing and cutting US businesses out of the ecommerce business ecosystem. The Google Analytics decision is likely to be seen as a tipping point in years to come.

In a second major practical online privacy decision, earlier this month the Belgian Data Protection Authority ruled that the Interactive Advertising Bureau Europe’s Transparency and Consent Framework (TCF), a widely-used technical standard built for publishers, advertisers, and technology vendors to obtain user consent for data processing, does not comply with the GDPR. The TCF allows users to accept or reject cookie-based advertising, relieving websites of the need to create their own expensive technical solutions, and creating a consistent experience for consumers. Now the TCF is considered per-se illegal under EU privacy rules, casting thousands of businesses to search for or design their own alternatives, and removing online choices for European residents.

The Belgian privacy authority reached this conclusion by holding that the Interactive Advertising Bureau was a “controller” of all the data managed under its proposed framework. As stated by the Center for Data Innovation, this decision implies “that any good-faith effort to implement a common data protection protocol by an umbrella organization that wants to uphold GDPR makes said organization liable for the data processing that takes place under this protocol.” No industry group will want to put itself in this position, leaving businesses to their own devices and making ecommerce data collection much less consistent and much more expensive – even if that data collection is necessary to fulfill the requests of consumers.

For years companies thought that informed consumer consent would be a way to personalize messaging and keep consumer costs low online, but the EU has thrown all online consent regimes into question. EU regulators have effectively decided that people can’t make their own decisions about allowing data to be collected. If TCF – the consent system used by 80% of the European internet and a system designed specifically to meet the demands of the GDPR – is now illegal, then, for a second time in a month, all online consumer commerce is thrown into confusion. Thousands were operating websites with TCF and Google Analytics, believing they were following the letter of the law.  That confidence has been smashed.

We are finally seeing the practical effects of the GDPR beyond its simple utility for fining US tech companies.  Those effects are leading to a closed-border internet around Europe and a costlier, less customizable internet for EU citizens. The EU is clearly harming businesses around the world and making its internet a more cramped place. I have trouble seeing the logic and benefit of these decisions, but the GDPR was written to shake the system, and privacy benefits may emerge.

Copyright © 2022 Womble Bond Dickinson (US) LLP All Rights Reserved.
For more articles about international privacy, visit the NLR Cybersecurity, Media & FCC section.

When Board Conflict Crosses the Line…

Elected officials are, naturally, sometimes at the center of conflict and division within their board.  Conflict is to be expected.  However, what happens when board members take action to freeze out a minority board member from information that he or she needs to do his or her respective job?  The use of information-control tactics against minority members on a board, impeding their ability to receive that information necessary to perform his or her duties is problematic – and it may be unconstitutional.\

Elected officials have duty to be informed. Palm v.Centre Tp., 415 A.2d 990, 992 (Pa. Commw. Ct. 1980):

It is the duty of a school board member, a commissioner, a councilman, or a supervisor to be informed. Supervisors are not restricted to information furnished at a public meeting. A supervisor has the right to study, investigate, discuss and argue problems and issues prior to the public meeting at which he may vote. Nor is a supervisor restricted to communicating with the people he represents. He is not a judge. He can talk with interested parties as does any legislator.

This responsibility extends beyond the contours of the public meeting and what is discussed at those meetings.

Elected officials have protections under the First Amendment. The Third Circuit has historically recognized that a public official’s right to free speech under the First Amendment will be violated when the retaliatory conduct of her peers interferes with her ability to adequately perform her elected duties. See Werkheiser v. Pocono Tp., 780 F.3d. 172, 182 (3d Cir. 2015); Monteiro v. City of Elizabeth, 436 F.3d 397, 404 (3d Cir. 2006).

To avoid entering the territory of this kind of interference, everyone can play a role in ensuring the government functions adequately and that Board members’ rights, duties, and privileges are protected.  Board division, when gone too far, can cross constitutional lines.  To avoid walking that line, there are things that everyone can do to make for a well-functioning Board or meeting:

  • Managers can stay neutral and ensure that every board member is kept up to date on significant municipal operations and projects.
  • Solicitors can host a meeting with the board to educate the board on laws pertaining to their position, such as a municipal code and the Pennsylvania Sunshine Act.
  • Board members can foster respect for fellow board members and learn how to communicate so that each board member can participate in healthy debate on contentious issues.  Enacting policies related to meeting decorum can be helpful, but they need to be enforced evenhandedly.

For more tips for handling divisiveness among a board, see the December 2021 article on “Tips for Handling Board Conflicts” in the Pa Township News.

©2022 Strassburger McKenna Gutnick & Gefsky
          

Reform Bill Proposal to Article 8 of The Federal Law of Cinematography in Mexico

A proposal was published in the Gazette of the Chamber of Senators on February 9, 2022, to reform Article 8 of the Federal Law of Cinematography, signed by María del Carmen Escudero Fabre together with other members of the PAN Parliamentary Group.

The intention of the proposed bill is to reform Article 8 of the Federal Law of Cinematography, which may guarantee access to audiovisual material exhibited in movie theaters for people who suffer from some degree of visual disability.

The explanatory memorandum of the proposal states that the General Law for the Inclusion of Persons with Disabilities establishes that the denial of reasonable adjustments constitutes a discriminatory act on the grounds of disability, a provision expressly prohibited in the first article of the Constitution.

It further details that it is necessary to recognize that people who suffer from disability may face difficulties when exercising their rights, such as access to health, work, education, transportation, communications, to culture, tourism, among others, being the responsibility of the State to design a normative framework that allows its access in equitable conditions.

The bill’s author comments that this would be an advancement for Mexicans with some degree of visual impairment, with the understanding that auditory stimuli can be used to compensate for visual ones and build the ideas of the spectators based on them, and that access to educational and recreational material for this group continues to be a challenge under the current legislation.

She continues that for this reason and being aware of the difficulties faced by a person with any type of disability, efforts like this can help reduce barriers found in society, highlighting the importance of adapting places, services, and information, so they are accessible to this sector of the population, ensuring their full inclusion and participation.

The bill proposes that films should be shown to the public in their original version, dubbed and subtitled in Spanish, under the terms established by the Regulations. Those classified for children and educational documentaries must be shown dubbed and always subtitled in Spanish.

This proposal may be unfeasible, since the Federal Law of Cinematography cannot govern by itself in the field corresponding to the Federal Law of Copyright. Forcing audiovisual works in certain categories to be exhibited dubbed, eliminating the possibility of being exhibited in their original language, would constitute a limitations of copyrights, which should be regulated, where appropriate, by the law of the matter, in accordance at all times, to what is established in international treaties that Mexico is a part of.

The protection of copyright and related rights comes from various international treaties considered by the court as human rights treaties, so the proposal would not only constitute a direct violation of the LFDA but of various treaties as well.

The control of conventionality is understood as the tool that allows countries to specify the obligation to guarantee human rights in the internal sphere through the verification of the conformity of national norms and practices with the American Convention on Human Rights and its Jurisprudence. Therefore, the reform to our fundamental law of June 10, 2011 on human rights, orders that the interpretation of the norms related to this subject be carried out in accordance with the Constitution of Mexico and the international treaties that the nation has signed in this matter, observing at all times the pro homine principle.

There are specific treaties that deal with limitations to Author’s Right, such as the Marrakesh Treaty, but what the Legislator intends to reform is not a specific case.

To conclude, this reform would create a direct impediment to access to culture and education, since forcing people to appreciate certain genres of audiovisual productions only in Spanish and not in their original languages, would also create direct harm to those who seek to expand their knowledge and learning of new languages and cultures.

© 2005-2022 OLIVARES Y COMPAÑIA S.C.
Article By Luis C. Schmidt with OLIVARES
For more articles on the arts, visit the NLR Entertainment, Art & Sports section.

February 2022 Legal News Roundup: Women in Law, Promotions & More

Happy belated Valentine’s Day from the National Law Review team. Please read on for new legal industry hires, promotions and awards.

Firm Recognition & Awards

Much is included on the 2022 Top Workplaces USA list, which recognizes organizations with a people-centered culture.

“At Much, our culture centers on people: our employees, our clients, and our community partners,” said Managing Partner Mitchell Roth. “We work each day to support a collaborative, kind, and service-oriented environment, so to be recognized for our culture on a national level is a tremendous honor.”

The rankings are based on employee feedback from a survey administered by Energage, an employee engagement technology partner. The survey gauged various aspects of workplace culture, including  alignment, execution, connection, and more.

Womble Bond Dickinson is one of the Best Places to Work for lesbian, gay, bisexual, transgender and queer (LGBTQ+) workplace equality, earning a perfect score of 100 percent on the 2022 Corporate Equality Index (CEI).

The survey is administered by the Human Rights Campaign, and acts as a benchmarking tool to track how businesses are adopting equitable workplace policies, practices and benefits for LGBTQ+ employees. Womble Bond Dickinson earned perfect scores every year since 2015.

“We are honored to be named one of the HRC’s Best Places to Work for LGBTQ+ Employees once again,” said Betty Temple, Chair & CEO of Womble Bond Dickinson (US) LLP. “We at Womble Bond Dickinson have worked hard to promote diversity and inclusion. These efforts include earning Mansfield Rule 4.0 Certification. The goal of the Mansfield Rule is to boost the representation of historically underrepresented lawyers—including LGBTQ+ attorneys—in law firm leadership, partner promotions and lateral hires by broadening the pool of candidates considered for these opportunities. We have much more work to do, but we are proud to be recognized for the progress we have made.”

Lawdragon recognized Foley & Lardner partners Daniel Kaplan, John (Jack) Lord, Jr., and Rachel Powitzky Steely on its 2022 edition of 500 Leading U.S. Corporate Employment Lawyers, an annual recognition of the nation’s top advisors on workforce issues. Lawdragon selected the honorees based on submissions, editorial vetting and journalistic research.

Lawdragon said that this year’s honorees “specialize in defending corporations in everything from wage and overtime claims to trade secret disputes, while helping companies maintain global workforces throughout a pandemic.”

Law firm Hiring & Additions

Varnum LLP expanded its intellectual property practice with the addition of Timothy D. Kroninger. Joining the firm’s Detroit office as an associate, Mr. Kroninger focuses his practice on copyright law, trade secret law, patent and trademark prosecution and more. He also has experience in drafting design patent applications, as well as participating in United States Patent and Trademark Office (USPTO) trademark opposition proceedings.

Beyond his practice at Varnum, Mr. Kroninger works as a supervising attorney in the Trademark and Entrepreneur Clinic at University of Detroit Mercy College of Law. There, he instructs law students on copyright registration, drafting corporate documents, and protection of trademarks.

Beveridge & Diamond PC elected four new principals: Eric Christensen, located in Seattle; Allyn Stern, located in Seattle; Michael Vitris, located in Austin; and Gus Winkes, located in Seattle. Mr. Christensen practices in energy law, assisting companies and consumers in navigating the legal and regulatory landscape. Ms. Stern, former U.S. EPA regional counsel, helps clients develop environmental compliance strategies. Mr. Winkles practices in a variety of fields, providing solutions-oriented legal representation in the areas of enforcement defense, regulatory compliance, and contaminated site cleanup. Mr. Vitris, former litigation attorney with the Texas Commission on Environmental Quality, defends companies in class actions and environmental mass torts.

“Each of these Principals’ talents, skills, and expertise deepen and enhance B&D’s dynamic regulatory compliance and litigation practice as environmental and energy law continue to evolve,” said firmwide managing principal Kathy Szmuszkovicz. “They’ve proven their ability to deliver top-notch service to clients and to serve as thought-leaders at a particularly exciting time in our practice. We look forward to their continued success and contributions in their new roles.”

Barnes & Thornburg LLP added five new attorneys and legal professionals across various offices. Associate William Choi  joined the firm’s Los Angeles office, and associate Albert D. Farr joined the New York office. Mr. Choi focuses his practice on product liability and complex civil litigation, and he is well-versed in all aspects of pretrial case management. Likewise, Mr. Farr practices in transactional tax law, counseling multinational strategic and private equity clients on transaction tax structuring, tax diligence and more.

Furthermore, legal professionals Amit Datta, Al Maloof, and Soyoung Yang joined Barnes & Thornburg’s Chicago, Indianapolis, and Washington D.C. offices, respectively. Dr. Datta, a business transaction advisor, provides targeted legal advice and strategic insight for European clients conducting business in the U.S. Mr. Maloof, a client relationship specialist, provides strategic consultation among the firm’s government services, compliance and regulatory attorneys. Ms. Yang, a legal fellow, aids attorneys and clients on matters related to international trade, customs and the supply chain.

William L. Nimick  joined the Construction Litigation and Counsel practice group at Goldberg Segalla LLP. An experienced litigator, Mr. Nimick is located in the firm’s Raleigh office, where he counsels insurers, contractors, subcontractors and corporate entities in liability claims including but not limited to property damage, personal injury and construction defects.

Previously, Mr. Nimick worked as a civil litigator across North Carolina, representing clients in areas such as wrongful death, workers’ compensation, and subrogation. Specifically he  handled subrogation claims such as motor vehicle accidents, product liability lawsuits and large fire losses.

Women in the Legal Industry

Angela Bowlin of Frilot LLC law firm has accepted a position serving on the International Association of Defense Council (IADC), an organization for attorneys who represent corporate and insurance matters. Ms. Bowlin focuses her practice on mass torts and class actions, with experience in asbestos and other toxic tort cases.

“I am honored to have been selected as a member of IADC and look forward to working on the many important committees related to the law and its many facets,” said Ms. Bowlin.

Nicole Archibald joined Foley Hoag LLP as their Director of Legal Recruiting. Ms. Archibald will work alongside the Foley Hoag team to attract and promote a diverse group of attorneys to help the firm achieve its diversity and inclusion goals.

“We’re very pleased to welcome Nicole to Foley Hoag, and are confident that she will be a great asset to the firm and its culture. Her considerable prior experience as a director of recruiting, legal search consultant and practicing litigator will prove a valuable asset as we look to 2022 and beyond. Our executive committee, practice leaders, hiring committee and I are excited to begin working with Nicole to attract new talent and strengthen our market-leading practices,” said Foley Hoag Co-Managing Partner Kenneth Leonetti.

“I look forward to collaborating with Foley Hoag’s management, department chairs and practice leaders, and hiring committee to develop, implement and execute proactive recruiting initiatives to further the firm’s hiring goals and strategic growth plan,” said Ms. Archibald.

Norton Rose Fulbright appointed New York partner Robin Adelstein as the Co-Head of Commercial Litigation, joining Houston partner Andrew Price. Ms. Adelstein brings extensive experience in litigating complex commercial disputes and advises companies with respect to antitrust issues regarding mergers, joint ventures and more.

“Robin has long been respected as a leader within the firm as our Global and US Head of Antitrust and Competition, and she is a highly-recognized practitioner in her field. I look forward to seeing the great work that our commercial litigation group will do under Robin’s and Andrew’s leadership,” said Jeff Cody, Norton Rose Fulbright’s US Managing Partner.

“Our firm has a longstanding reputation for advising clients on their most complex and significant matters. It is an honor to head Norton Rose Fulbright’s commercial litigation group along with Andrew; I am proud to be leading such a talented group of lawyers,” said Ms. Adelstein.

Article By Rachel Popa, Hanna Taylor, and Chandler Ford of The National Law Review / The National Law Forum LLC

For more on the business of law and legal news, click here to visit the National Law Review.

Copyright ©2022 National Law Forum, LLC

Fitness App Agrees to Pay $56 Million to Settle Class Action Alleging Dark Pattern Practices

On February 14, 2022, Noom Inc., a popular weight loss and fitness app, agreed to pay $56 million, and provide an additional $6 million in subscription credits to settle a putative class action in New York federal court. The class is seeking conditional certification and has urged the court to preliminarily approve the settlement.

The suit was filed in May 2020 when a group of Noom users alleged that Noom “actively misrepresents and/or fails to accurately disclose the true characteristics of its trial period, its automatic enrollment policy, and the actual steps customer need to follow in attempting to cancel a 14-day trial and avoid automatic enrollment.” More specifically, users alleged that Noom engaged in an unlawful auto-renewal subscription business model by luring customers in with the opportunity to “try” its programs, then imposing significant barriers to the cancellation process (e.g., only allowing customers to cancel their subscriptions through their virtual coach), resulting in the customers paying a nonrefundable advance lump-sum payment for up to eight (8) months at a time. According to the proposed settlement, Noom will have to substantially enhance its auto-renewal disclosures, as well as require customers to take a separate action (e.g., check box or digital signature) to accept auto-renewal, and provide customers a button on the customer’s account page for easier cancellation.

Regulators at the federal and state level have recently made clear their focus on enforcement actions against “dark patterns.” We previously summarized the FTC’s enforcement policy statement from October 2021 warning companies against using dark patterns that trick consumers into subscription services. More recently, several state attorneys general (e.g., in Indiana, Texas, the District of Columbia, and Washington State) made announcements regarding their commitment to ramp up enforcement work on “dark patterns” that are used to ascertain consumers’ location data.

Article By: Privacy and Cybersecurity Practice Group at Hunton Andrews Kurth

For more cybersecurity legal news, click here to visit the National Law Review.
 
Copyright © 2022, Hunton Andrews Kurth LLP. All Rights Reserved.

SEC Issues Two Whistleblower Awards for Independent Analysis

On February 18, the U.S. Securities and Exchange Commission (SEC) announced two whistleblower awards issued to individuals who provided independent analysis to the SEC which contributed to a successful enforcement action. One whistleblower received an award of $375,000 while the other received $75,000.

According to the award order, the whistleblowers “each voluntarily provided original information to the Commission that was a principal motivating factor in Enforcement staff’s decision to open an investigation.”

Through the SEC Whistleblower Program, qualified whistleblowers, individuals who voluntarily provide original information which leads to a successful enforcement action, are entitled to a monetary award of 10-30% of funds recovered by the government.

A 2020 amendment to the whistleblower program rules established a presumption of a statutory maximum award of 30% in cases where the maximum award would be less than $5 million and where there are no negative factors present. The SEC notes that this presumption did not apply to the two newly awarded whistleblowers. According to the SEC, the first whistleblower unreasonably delayed in reporting their disclosure and the second whistleblower only provided limited assistance.

In the award order, the SEC justifies its decision to grant the first whistleblower a larger award than the second. According to the SEC, the first whistleblower’s disclosure included high quality about an issue which “was the basis for the bulk of the sanctions in the Covered Action” whereas the second whistleblower’s disclosure did not touch on this pivotal issue. Furthermore, the first whistleblower provided significant ongoing assistance to the SEC staff while the second whistleblower did not.

Since issuing its first award in 2012, the SEC has awarded approximately $1.2 billion to 247 individuals. Before blowing the whistle to the SEC, individuals should first consult an experienced SEC whistleblower attorney to ensure they are fully protected under the law and qualify for the largest award possible.

Article By Mary Jane Wilmoth of Kohn, Kohn & Colapinto. Geoff Schweller also contributed to this article.

For more whistleblower and white collar crime legal news, click here to visit the National Law Review.

Copyright Kohn, Kohn & Colapinto, LLP 2022. All Rights Reserved.

New, Immigration-Friendly Mission Statement for USCIS

USCIS has changed its mission statement again – this time to adopt a more immigration-friendly stance.

In 2018, USCIS, under the Trump Administration, changed its mission statement to align with President Donald Trump’s focus on enforcement, strict scrutiny, and extreme vetting. The statement did not emphasize customer satisfaction, i.e., the satisfaction of petitioners, applicants, and beneficiaries. The change in emphasis was stark and did not go unnoticed. Instead, the mission statement focused on protecting and serving the American people and ensuring that benefits were not provided to those who did not qualify or those who “would do us harm ….” The 2018 statement did not speak of the United States as a “nation of migrants” and it focused on efficiency while “protecting Americans, securing the homeland, and honoring our values.”

The new 2022 USCIS mission statement reflects President Joe Biden’s belief that “new Americans fuel our economy as innovators and job creators, working in every American industry, and contributing to our arts, culture, and government.” Accordingly, he has issued executive orders directing the various immigration agencies to reduce unnecessary barriers to immigration. The 2022 mission statement also reflects President Biden’s directions and USCIS Director Ur M. Jaddou’s “vision for an inclusive and accessible agency.” Director Jaddou “is committed to ensuring that the immigration system . . . is accessible and humane . . . [serving] the public with respect and fairness, and lead with integrity to reflect America’s promise as a nation of welcome and possibility today and for generations to come.”

According to Director Jaddou, USCIS will strive to achieve the core values of treating applicants with integrity, dignity, and respect and using innovation to provide world-class service while vigilantly strengthening and enhancing security. On February 3, 2022, Director Jaddou, along with her deputies, briefed the nation on the agency’s efforts to improve service at USCIS. The leaders of the agency made clear that USCIS knows it must continue to eliminate backlogs, cut processing times, reduce unneeded Requests for Evidence and interviews, eliminate inequities in processing times across service centers and improve the contact center, among other things, to achieve its goals. Using streamlining and technological innovation, USCIS hopes to make itself much more consumer-oriented.

Article By Forrest G. Read IV of Jackson Lewis P.C.

For more immigration legal news, click here to visit the National Law Review.

Jackson Lewis P.C. © 2022

Agriculture Groups Sue FDA on Chlorpyrifos Ban

  • As previously reported, the Environmental Protection Agency (EPA) published a final rule on August 30, 2021 that revoked all tolerances for the pesticide chemical chlorpyrifos on raw agricultural commodities; the rulemaking was driven by toxicity concerns, primarily concerning exposure in children. The tolerances are set to expire on February 28, 2022, effectively banning the use of chlorpyrifos on food crops. In light of the expiration, FDA published a guidance document to assist food producers and processors that handle foods which may contain chlorpyrifos restudies.
  • In October of 2021, agriculture stakeholders submitted formal written objections and a request to stay the tolerance revocations to EPA. More than 80 stakeholders signed the document, arguing that significant harms would result from banning chlorpyrifos and urging the agency to stay implementation of the rule until objections were formally addressed by EPA.
  • Agriculture stakeholder groups are now seeking a court injunction against EPA’s ban on chlorpyrifos. On February 10, 2022, agricultural trade groups representing thousands of members filed a lawsuit against EPA before the Eight Circuit Court of Appeals, alleging that the agency ignored its own scientific findings regarding 11 high-benefit and low-risk crop uses for chlorpyrifos and that the revocation will cause irreparable damage. It remains to be seen how EPA will respond to the lawsuit.

Article By Food and Drug Law Practice Group at Keller and Heckman LLP

For more food and drug legal news, click here to visit the National Law Review.

© 2022 Keller and Heckman LLP

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