The National Law Forum

Export Sanctions List: Know Your Customer

If your company sells products to customers or distributors located in foreign countries during this time of sanctions and export controls, you should consider the surprising case of Cobham Holdings Inc. a cautionary tale.

The U.S. Treasury Department’s Office of Foreign Asset Control (“OFAC”) publishes a sanctions list of foreign individuals and entities to which U.S. companies may not sell goods or services without first obtaining an export license. OFAC may fine the U.S. companies that violate these sanction regulations. Prudent companies check the OFAC sanctions list before selling products to foreign customers. In fact, many companies have purchased software that searches the sanctions list for prohibited individuals and entities. If your foreign customer is not found on the sanctions list, your company is free to sell products to that customer.

That’s what Cobham Holdings Inc. thought, but on November 27, 2018 they settled a case with OFAC that involved sales to a foreign customer that was not on the sanctions list. Cobham agreed to pay a fine of $87,507 for exporting approximately $745,000 worth of silicon switches to Almaz Antey Telecommunications LLC in Russia between 2014 and 2015 when that entity was not named on OFAC’s list of “Specifically Designated Nationals and Blocked Persons”. Cobham used software to search for OFAC sanctions, the customer came up clean, and Cobham shipped the goods.

Cobham used the software to search for “Almaz Antey Telecom” but not “Almaz Antey.” If it would have searched for the latter, there were numerous hits for entities under the Almaz Antey umbrella, including the entity allegedly responsible for providing the missile that shot down Malaysia Airlines Flight MH17 over Ukraine in 2014. Upon further investigation, OFAC determined that Almaz Antey owned 51% of Almaz Antey Telecommunications LLC. As a result, OFAC initially informed Cobham that it would face potential fines up to $1.9 million.

Cobham was able to reduce the potential fine by agreeing to utilize new and improved screening software, along with a business intelligence tool and new internal checks for high risk transactions. Given that companies now know (or should know) of the potential pitfalls of using these software solutions as a stand-alone procedure, OFAC may not be so generous to the next company to run afoul of its sanctions and export controls through negligence or inadvertent software errors.

This case highlights not only the dangers of exclusively relying on software solutions to search the combined sanctions list, but the inherent risk of the vast number of related entities and the difficulty of understanding their ownership structure. Even if your customers come up clean on the sanctions search, if they are owned more than 50% by a sanctioned entity, then the transaction is still prohibited. Best efforts must be used to ensure that neither the foreign customer nor its majority owner is on the OFAC sanctions list, and a simple software solution or minimal approach may not be enough. A thorough analysis of all relevant facts and information related to your customers and sanctioned entities is vital to ensure your company will not run into the same snare as Cobham.

This post was written by Stephen R. Lundeen of Ryan T. Siehr of von Briesen & Roper, s.c.

Read more legal news at the National Law Review.

Los Angeles Living Wage Ordinance Amended With Annual Increases

Any employer working with the city of Los Angeles should be aware of recent amendments to the Los Angeles Living Wage Ordinance, which lays out annual cash wage increases, time off and health benefits.

The Los Angeles Living Wage Ordinance (LWO) applies to city contractors and ensures that employees working on city contracts are paid the city’s set living wage (which consists of a cash wage rate and an employer’s health related benefits contribution) and are provided with time off as required by the LWO (at least 96 compensated hours off and 80 uncompensated hours off).

Effective October 15, 2018, the city amended the ordinance to require employer contractors to pay their non-airport employees the following wage going forward:

On July 1, 2019, the wage rate for an Employee shall be no less than $14.25 per hour.
On July 1, 2020, the wage rate for an Employee shall be no less than $15.00 per hour.
July 1, 2022, and annually thereafter, the hourly wage rate paid to an Employee to be adjusted.

In addition to the above base wage, employers must provide health benefits of at least $1.25 per hour to employees towards the provision of health care benefits for employees and their dependents.

For example, if an employer does not currently provide an employee with health benefits as provided in Section 10.37.3 of this article, the employee must be paid an additional wage rate of $1.25 per hour for a total of $14.50 per hour (based on the current $13.25 per hour base rate).

Employers working with Los Angeles Airport Employees must comply with separate wage rates. Effective July 1, 2018 (and adjusted annually thereafter), airport employees must be paid at minimum $13.75 per hour in cash wages and $5.24 per hour in health benefits, for a total economic package of $18.99. The term “total economic package” is not defined in the ordinance. However, it is traditionally interpreted to mean “health related” benefits. “Health related” is defined liberally to include vacation time, health insurance, sick pay, etc.

Because the LWO’s wage rate increases annually, California employers thinking about entering into collective bargaining agreements should consider including flexible language around the annual rate increase.

This post was written by Michael Lee and Barnes & Thornburg LLP.

26th Annual Marketing Partner Forum in January 2019

In January 2019, Marketing Partner Forum descends upon The Ritz-Carlton, Laguna Niguel in Dana Point, California for a three-day summit on law firm marketing and business development designed for the industry’s top business professionals and rainmakers. Conveniently situated near John Wayne Airport, Orange County (SNA), Laguna Niguel is the ideal backdrop to launch a new era of industry-leading content focused on profitability and client development in a dynamic and competitive legal services market.

Why You Should Attend:

Marketing Partner Forum is designed for client development partners, rainmakers, and the senior-most legal marketing and business development leaders across the profession.
Our content reflects the experience and sophistication of our international audience in terms of rigor, ambition and scope.
Attendees can engage venerable thought leaders both within and outside of the legal industry.
Our program offers ample networking opportunities and the stunning scenery, golf course, spa and hiking trails at one of California’s most idyllic resorts.
Participants can take advantage of our law firm partner conference track, consisting of several compelling sessions designed specifically for legal practitioners.
We have also created a brand new solo & small law firm track, with sessions designed for business development executives & partners alike.
Finally, attendees can interact directly with senior clients and network for new business;
Refresh & reflect at our Wednesday Welcome Luncheon and Friday Bloody Mary Brunch;
And depart the event with practical takeaways to share with peers and firm leadership.

Please Save the Date! Online registration now open.

Information about our conference venue and nearby airports is available here.

For questions about this event, please call 1-800-308-1700

Learn more and register here.

Adequacy of Explanation Remains Key Area of PTAB Reversal

In Vivint, Inc. v. Alarm.com, Inc., the Federal Circuit reversed a claim construction by the Patent Trial and Appeal Board (“PTAB”) which “suggest[ed] the opposite” of the teachings of the patents at issue, and gave guidance to practitioners on when the Board’s reliance on expert testimony entitles the Board’s construction to deference. The Court’s non-precedential opinion is consistent with a string of recent decisions stressing the PTAB’s obligation to adequately explain its decisions.

Vivint’s patents are directed to systems and methods for remotely monitoring home equipment, such as an HVAC system. “Communication device identification codes” are assigned to the user’s remote devices, and the system notifies a particular user in case of the equipment’s malfunction through “message profiles” (e.g., settings to notify different users if a malfunction occurs during the day versus at night). The Board construed “communication device identification codes” as “something ‘capable of uniquely identifying communication devices,’” which the Board found included either a device ID or a serial number of a device (variables from one of Vivint’s patent’s figures), but excluded phone numbers and email addresses.

The Federal Circuit reversed the Board’s construction, pointing out that Vivint’s patents did not define “communication device identification codes,” and that the exclusion of phone numbers or email addresses as identification codes “defie[d] the patents’ teachings” which “expressly [taught] that a phone number can uniquely identify a . . . communication device.” The Court explained:

Even assuming [the Board’s construction] is correct, however, the Board’s conclusion that a phone number or email address cannot uniquely identify a communication device defies the patents’ teachings. For example, both patents explain that a mobile identification number refers to a device in the same way that a phone number refers to a cellular phone, i.e. a communication device. . . . But the Board’s construction suggests the opposite. . . . That the ’123 patent includes “Device ID” and “Serial Number” variables in a particular figure, for example, suggests these variables might also be used to identify communication devices. It does not suggest that phone numbers and email addresses cannot also do so.

The Court also rejected Vivint’s assertion that the Board’s construction was “entitled to deference because it relied on extrinsic evidence,” Vivint’s expert testimony. The Court found that the Board’s construction was “without reference to any extrinsic evidence,” finding that although “[t]he Board did credit Vivint’s expert,” it did so “only in applying its construction . . . to the prior art.” As further support, the Court pointed to the Board’s statement that its construction was “[b]ased on [its] review of the claims and Specification of the ’601 patent.”

Takeaways:

Vivint clarifies for practitioners that expert testimony applying a construed term may not constitute a factual finding entitled to deference on appeal, as opposed to expert testimony that is cited in support of the proper construction itself. This distinction may be especially impactful in view of the Court’s “substantial evidence” standard of review for findings of fact, which is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”

Vivint is also in line with a string of recent Federal Circuit decisions stressing the PTAB’s obligation to “set forth a sufficiently detailed explanation of its determinations both to enable meaningful judicial review and to prevent judicial intrusion on agency authority.” Rovalma, S.A. v. Böhler-Edelstahl GmbH & Co. KG, 856 F.3d 1019, 1024 (Fed. Cir. 2017). See, e.g., Icon Health & Fitness, Inc. v. Strava, Inc., 849 F.3d 1034, 1042-48 (Fed. Cir. 2017) (finding Board’s adoption of petitioner’s brief did not “transform [the petitioner’s] attorney argument into factual findings or supply the requisite explanation that must accompany such findings”); In re Van Os, 844 F.3d 1359, 1361 (Fed. Cir. 2017) (Board’s finding that it would have been intuitive to combine prior art lacked the requisite reasoning because “[a]bsent some articulated rationale, a finding that a combination of prior art would have been ‘common sense’ or ‘intuitive’ is no different than merely stating the combination ‘would have been obvious.’”); Emerson Elec. Co. v. SIPCO, LLC, No. 2017-1866, 2018 U.S. App. LEXIS 24499, at *1 (Fed. Cir. Aug. 29, 2018) (non-precedential) (“Because the Board did not adequately explain its reasoning on a point that was central to its analysis and its conclusion on that point was contrary to another Board opinion on nearly identical facts, we vacate the Board’s determination as to the appealed claims and remand for further proceedings.”). Practitioners preparing an appeal strategy would do well to keep in mind the Court’s focus on the PTAB’s obligation to fully explain its determinations.

Citation: Vivint, Inc. v. Alarm.com, Inc., ___ F.3d ___, 2018 U.S. App. Lexis 35817 (Fed. Cir. Dec. 20, 2018).

This post was written by Jafon Fearson and James Naughton of Brinks Gilson & Lione.

Get a Head Start in 2019 – Leveraging Your Cyber Liability Insurance

As 2019 begins, companies should seriously consider the financial and reputational impacts of cyber incidents and invest in sufficient and appropriate cyber liability coverage. According to a recent published report, incidents of lost personal information (such as protected health information) are on the rise and are significantly costing companies. Although cyber liability insurance is not new, many companies lack sufficient coverage. RSM US LLP, NetDiligence 2018 Cyber Claims Study (2018).

According to the 2018 study, cyber claims are impacting companies of all sizes with revenues ranging from less than $50 million to more than $100 billion. Further, the average total breach cost alone is $603.9K. This does not include crisis services cost (average $307K), the legal costs (defense = $106K; settlement = $224K; regulatory defense = $514K; regulatory fines = $18K), and the cost of business interruption (all costs = $2M; recovery expense = $957K). In addition to these financial costs, reputational impact stemming from cyber incidents can materially set companies back for a long period of time after the incident.

Companies can reduce risk associated with cyber incidents by developing and implementing privacy and security policies, educating and training employees, and building strong security infrastructures. Nevertheless, there is no such thing as 100% security, and thus companies should consider leveraging cyber liability insurance to offset residual risks. With that said, cyber liability coverages vary across issuers and can contain many carve-outs and other complexities that can prevent or reduce coverage. Therefore, stakeholders should review their cyber liability policies to ensure that they understand the terms and conditions of such policies. Key items to evaluate can include: coverage levels per claim and in the aggregate, retention amounts, notice requirements, exclusions, and whether liability arising from malicious third party conduct are sufficiently covered.

While cyber liability insurance will not practically reduce risk or a cyber incident, it is increasingly a critical component of a holistic risk mitigation strategy given the world we live in.

This post was written by Alaap B. Shah and Daniel Kim from Epstein Becker & Green, P.C.

Senate Approves Nominations of Three Key Environmental Posts

In the last hours of the 115th Congress, the Senate on January 2, 2019, approved the nominations of three individuals to serve in key environmental posts:

Alexandra Dapolito Dunn — EPA Toxics Office: The Senate approved the nomination of Alexandra Dunn to serve as the Assistant Administrator of the U.S. Environmental Protection Agency’s (EPA) Office of Chemical Safety and Pollution Prevention (OCSPP). Ms. Dunn had been serving as the administrator for EPA Region 1. She previously was executive director and general counsel for the Environmental Council of the States (ECOS). Prior to joining ECOS, Ms. Dunn served as executive director and general counsel for the Association of Clean Water Administrators. Ms. Dunn also has extensive experience in environmental education, having served as dean of Environmental Law Programs at the Elisabeth Haub School of Law at Pace University. In addition, she has taught at the Columbus School of Law, Catholic University of America, and, most recently, as an adjunct associate professor of law at the American University’s Washington College of Law. Ms. Dunn received a B.A. in political science from James Madison University and a J.D. from the Columbus School of Law. More information on Ms. Dunn’s confirmation hearing is available in our blog item Senate EPW Committee Holds Hearing on Nomination of Alexandra Dunn to Lead OCSPP.

Mary Neumayr — CEQ: The Senate also approved the nomination of Mary Neumayr to head the White House’s Council on Environmental Quality (CEQ). Ms. Neumayr currently serves as chief of staff for the CEQ. Prior to joining CEQ in March of 2017, she served in a variety of positions with the Committee on Energy and Commerce in the U.S. House of Representatives, including Deputy Chief Counsel, energy and environment in 2017; Senior Energy Counsel from 2011 to 2017; and Counsel from 2009 to 2010. Ms. Neumayr also served as Deputy Counsel for environment and nuclear programs at the U.S. Department of Energy from 2006 to 2009, and Counsel to the Assistant Attorney General for the environment and natural resources division at the U.S. Department of Justice from 2003 to 2006. Prior to her government service, Ms. Neumayr was in private legal practice from 1989 to 2003. She received her B.A. from Thomas Aquinas College and her J.D. from the University of California, Hastings College of the Law.

Kelvin Droegemeier — OSTP: Finally, the Senate also approved Kelvin Droegemeier to serve as the director of the White House Office of Science and Technology Policy (OSTP). A meteorologist from the University of Oklahoma, Mr. Droegemeier previously served as Oklahoma Governor Mary Fallin’s secretary of science and technology. He was also previously on the National Science Board for 12 years during the George W. Bush and Barack Obama administrations.

This post was written by Lynn L. Bergeson, Christopher R. Bryant and Margaret R. Graham of Bergeson & Campbell, P.C.

Fourth Circuit Expands Title IX Liability for Harassment Through Anonymous Online Posts

The Fourth Circuit recently held that universities could be liable for Title IX violations if they fail to adequately respond to harassment that occurs through anonymous-messaging apps.

The case, Feminist Majority Foundation v. Hurley, concerned messages sent through the now-defunct app Yik Yak to the individual plaintiffs, who were students at the University of Mary Washington. Yik Yak was a messaging app that allowed users to anonymously post to discussion threads.

Because of the app’s location feature, which allowed users to see posts within a 5 mile radius, the Court concluded that the University had substantial control over the context of the harassment because the threatening messages originated on or within the immediate vicinity of campus. Additionally, some of the posts at issue were posted using the University’s wireless network, and thus necessarily originated on campus.

The Court rejected the University’s argument that it was unable to control the harassers because the posts were anonymous. It held that the University could be liable if it never sought to discern whether it could identify the harassers.

The dissent encouraged the University to appeal the decision stating that “the majority’s novel and unsupported decision will have a profound effect, particularly on institutions of higher education . . . Institutions, like the university, will be compelled to venture into an ethereal world of non-university forums at great cost and significant liability, in order to avoid the Catch-22 Title IX liability the majority now proclaims. The university should not hesitate to seek further review.”

This post was written by Kathleen E. Dion of Robinson & Cole LLP.

Read more about college and university legal news on the National Law Review’s Public Education Page.

The E-2 Visa: A Potentially Useful Tool in Cross-Border M&As

Changes to corporate structure, including mergers and acquisitions, can have enormous implications for the U.S. immigration status of key workers and potential new hires. When a U.S. company is acquired or formed because of a merger, and is majority-owned by a foreign entity or foreign national from an E-2 country, the E-2 Investor Visa may be available. In addition, the E-2 visa provides protections to cross-border investment between the two countries and the option to resolve investment disputes through international arbitration.

Who Can Use the E-2 Visa?

Typically, the E-2 visa is available to the principal investor as well as managerial, executive, or essential-skilled employees with the same nationality as the E-2 country, and the nationality of the majority owners of the E-2 company. To qualify, E-2 applicants must show they are actively investing or have invested a substantial amount of capital in a bona fide enterprise. An E-2 visa, issued for five years at the U.S. consulate overseas, allows an E-2 spouse to work and any E-2 children under 21 to study in the United States.

What Must the E-2 Visa Applicant Show?

The E-2 applicant, who submits the application directly to the E-2 visa offices at the pertinent U.S. consulate overseas, must include evidence of: 1) ownership; 2) nationality; 3) the substantial investment at risk explaining the path of the E-2 investment funds; 4) the corporate documentation of the E-2 company — in the cross border M&A transaction, this includes the purchase of the acquisition or the formation of the newly-merged company, evidencing 50 percent or more ownership by treaty national or nationals; 5) the applicant’s qualifications to direct and operate the E-2 company; 6) a detailed and complete business plan if the newly-formed U.S. company has existed for less than a year; and any other evidence the U.S. consulate requires.

How Does the U.S. Government Determine an Investment Is ‘At Risk’?

General E-2 visa processing considerations for founders, principal investors, or employees (those to be transferred from overseas or new hires) are to ensure that the substantial investment be one that is “at risk.” This means the capital must be subject to partial or total loss if investment fortunes reverse. Further, the E-2 applicant must show irrevocable commitment of funds to the U.S. E-2 company. The U.S. immigration rules allow the placement of funds in escrow pending approval of the E-2 visa with a legal mechanism that irrevocably commits funds but also protects investors if the E-2 application is denied. Commercial investments must be active (not passive), entrepreneurial, and cannot be made in nonprofit institutions.

What Constitutes a ‘Substantial’ Investment?

To establish that an investment is substantial, the U.S. Department of State uses a relative proportionality test that considers the amount of qualifying capital invested weighed against the total cost of purchasing or creating the E-2 company; the amount of capital normally considered sufficient to ensure the investor’s financial commitment to the success of the E-2 company; and the magnitude of investment to support the likelihood that the investor will successfully develop and/or direct the E-2 company. Thus, the lower the cost of the E-2 company, the higher, proportionally, the investment must be to be considered “substantial.” The E-2 investment cannot be marginal to only support the E-2 principal. The January 2017 Buy American, Hire American executive order is now an oft-cited requirement in E-2 investment applications. The E-2 investment must show the potential for hiring Americans and inducing economic growth in the area of the E-2 investment.

Conclusion

The U.S. government is more closely vetting immigration applications, and work visas like the E-2 in particular. To determine whether the E-2 visa may be the right option in light of a cross-border M&A, it is critical that foreign nationals consult with their immigration counsel.

This post was written by Maria Mejia-Opaciuch of Carlton Fields Jorden Burt, P.A.

Read more immigration news at the National Law Review’s Immigration Type of law page.

Connecticut’s Pay Equity Law Prohibits Salary History Inquiries

As of January 1, 2019, Connecticut employers are prohibited from inquiring about prospective employees’ wage or salary histories. Connecticut’s new pay equity law is intended to promote equality in pay and close the wage gap. Under the new law, employers—defined as entities having “one or more employees”—are also prohibited from using a third party to inquire about any applicant’s wage or salary history. Employers may still inquire about the components of an applicant’s compensation structure—for example, retirement benefits or stock option plans—but they may not inquire about the value of any individual component.

Nothing in the law prevents an employer from verifying salary information if a prospective employee voluntarily discloses such information. Additionally, the law does not apply where a federal or state law “specifically authorizes disclosure or verification of salary history” in the employment context.

A private right of action exists for violations of the law, and a prospective employee can potentially recover compensatory damages, attorneys’ fees and costs, and punitive damages. A two-year statute of limitations applies.

In light of this new law, Connecticut employers should revise their employment applications to remove any requests for candidates’ salary histories. Employers that have hiring policies and/or hiring scripts should revise these documents to remove any questions about salary histories. Further, employers may want to affirmatively state that it is the employer’s policy not to make such inquiries. Connecticut employers may also want to ensure that any employees involved in interviewing candidates are trained on the new law and understand that they should not be asking about salary history information. Finally, employers may want to verify that any third parties they are using to help screen candidates are aware of and in compliance with the new law.

This post was written by Kelly M. Cardin of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

Read more employment updates on the National Law Review’s employment law page.

New Jersey Appellate Panel Countenances Beach Easement Condemnations for Federal Funding

A New Jersey appeals court recently upheld the Township of Long Beach’s exercise of eminent domain to acquire beachfront access easements in the consolidated appeal of Twp. of Long Beach v. Tomasi, N.J. Super. App. Div. (per curiam) – the latest chapter in a series of disputes between coastal New Jersey municipalities and owners of beachfront property within those municipalities.

The Township of Long Beach sought federal funding pursuant to the “Sandy Act,” which authorizes the Army Corps of Engineers (“Army Corps”) to protect the New Jersey shoreline through beach replenishment and dune construction projects funded either in whole or in part by the federal government. See Disaster Relief Appropriations Act, 2013 (Sandy Act), Pub. L. No. 113-2, 127 Stat. 4. In order to obtain such federal participation and funding, the township was required to comply with conditions set forth in the Army Corps’ engineering regulations, including the requirement that participating municipalities provide “reasonable public access rights-of-way” to the beach, defined as “approximately every one-half mile or less.” U.S. Army Corps of Engineers, ER 1105-2-100, Planning Guidance Notebook 3-20 (2000); see also N.J.A.C. 7:7-16.9.

As the township’s shoreline did not have the required public access, it resolved to obtain public access easements in various locations to achieve compliance with the Army Corps and NJDEP regulations such that it would be eligible for inclusion in an ongoing shoreline protection project undertaken by those entities. Accordingly, the township passed appropriate resolutions authorizing it to condemn and acquire via eminent domain four public access beach easements, including a ten-foot-wide strip of land along the defendants’ properties. After unsuccessfully negotiating with the defendants to purchase the easements, the township initiated condemnation proceedings in the Superior Court, giving rise to the Tomasilitigation.

In September 2017 the trial court entered summary judgment in favor of the township and held that it had properly exercised its eminent domain power in acquiring the beach easements for public use. The defendants appealed and sought reversal based on their contention that the township was unable to establish either necessity or proper public purpose for the condemnations. More specifically, the defendants argued that reasonable beach access already existed in the township such that there was no necessity to condemn the easements under the Public Trust Doctrine or otherwise; and that the stated impetus for the condemnations, i.e. seeking federal funding, could not constitute a viable public purpose.

On December 20, 2018, the two-judge appellate panel issued its decision affirming the lower court and rejecting both of the defendant-appellants’ primary arguments. The court noted its “limited and deferential” review of municipal exercises of eminent domain power, cited the traditionally broad conceptual scope of public use, and held that the township’s undertaking to protect its shoreline – including conforming to state or federal requirements to obtain project funding – was a proper public use or purpose.

There are several relevant takeaways from the Tomasi decision, though they should be understood with an important caveat. The court resolved the narrow question before it without engaging in a comprehensive or detailed legal analysis and as a result, land use practitioners and municipal personnel should be cautious not to overstate the holding in this brief unpublished opinion. Nevertheless, the Tomasi decision is significant based on its factual distinctions from more traditional beach easement litigations.

Specifically, the easements at issue in Tomasi were for perpendicular access to the beach and ocean rather than for dune construction. Though both dune construction and access easements relate to shore protection, the former directly enable and contribute to such protection, whereas the latter are merely incidental to it. In that sense, the Tomasi easements are arguably less justifiable than dune construction easements in the eminent domain context – and the defendants in Tomasi appeared to base their public purpose-driven arguments on precisely that premise. However, the court evidently did not find the above-described “direct vs. incidental” distinction meaningful and rejected the defendants’ argument, finding that pursuing federal funding for shoreline protection was a sufficient public purpose for eminent domain purposes.

Under the facts of this case, that is a logically defensible outcome, as the township’s acquisition of the access easements was a de-facto prerequisite for constructing dunes and otherwise protecting its shoreline area, per the Army Corps and NJDEP regulations. Accordingly, a possible implication for future cases is that the precise nature of the condemnation easement in question will not necessarily be dispositive, and the focus of a reviewing court’s inquiry instead will be whether such an easement is ultimately necessary to effectuate the contemplated shoreline protection program.

It is unclear if this premise informed the court’s decision in Tomasi. To the extent that it may have, it would be valuable for municipalities, property owners, and land use practitioners to know that the court employs a functional analysis in evaluating public use / purpose in eminent domain cases. Similarly, but conversely, it would be equally valuable for those stakeholders to know that the court did not equate access easements with dune construction easements but rather expanded the scope of eminent domain by permitting condemnation for easements which are merely incidental to shore protection.

Accordingly, the ambiguity in this space following the Tomasi decision is worth monitoring, both in that litigation as the Supreme Court considers whether to hear a (presently unfiled but) likely forthcoming appeal, and in future cases with similar or slightly different facts. Though its implications are presently limited, the Tomasi case clearly stands for the proposition that beach access condemnation easements to obtain federal funding for shore protection projects are permissible exercises of municipal eminent domain power.

This post was written by Kyle J. Campanile of Giordano, Halleran & Ciesla, P.C.

The National Law Forum

Export Sanctions List: Know Your Customer

Like this:

Los Angeles Living Wage Ordinance Amended With Annual Increases

Like this:

26th Annual Marketing Partner Forum in January 2019

Like this: