The National Law Forum

Think Twice about DEA (Drug Enforcement Administration) Voluntary Surrender

It can be an intimidating experience to be sure… A DEA agent or Diversion Investigator, on an unscheduled visit to your office, confronts you with a KASPER, a KBML complaint or some other state regulatory action and alleges violations of the Controlled Substances Act. The DEA Agent then asks you to sign DEA Form 104. This form, which is titled “Voluntary Surrender of Controlled Substances Privileges,” is placed in front of you while the agent explains why you should sign it immediately, rather than face potential action to revoke your DEA and other adverse consequences. The DEA Agent tells you that you are already in deep, deep trouble (of a vague and unspecified nature), and that the simple act of signing this form can make your troubles go away and prevent federal action. Also, he tells you that all you have to do to get the number back is to reapply! Hold on…this is not the full story! This scenario is becoming a harsh reality and common situation for physicians, pharmacists, nurse practitioners, and PAs.

The truth is that signing any voluntary surrender will create multiple problems for providers including the loss of Medicare and Medicaid participation among other things that have the potential to destroy medical practices and livelihoods. Providers should know, for instance, that the DEA’s final rules, codified at 21 C.F.R. §§ 1301.52(a) and 1301.62(a), state that signing this form and handing it to a DEA employee will result in immediate loss of prescribing privileges for controlled substances in schedules II through V. When a voluntary surrender is executed, the DEA does not have to investigate further or bring any sort of charges – the signed form is akin to agreeing to a criminal sentence by bypassing an arrest, arraignment and trial, with the consequences being immediate forfeiture of a provider’s ability to prescribe any controlled substances. Make no mistake – the form may say “voluntary,” but it is in the best interest of the DEA to make the form as much the opposite as possible.

When a provider signs the form, there are three important things that happen – the provider’s surrender becomes officially “voluntary,” no matter how much that provider was pressured into signing; the provider’s signature officially resolves any governmental concerns that led to the provider being asked to sign, essentially proving the government’s case for them; and the signature creates a waiver of any right to an administrative hearing that could prevent the loss of the provider’s DEA registration. In other words, signing the form essentially is an irrevocable action.

There are other consequences beyond the immediate loss of the registration number. Once a DEA registration number is lost, it becomes excruciatingly difficult to regain. The proceedings will likely take between 18 months and two years, with the DEA opposing the provider at every step. All the while, the provider has no DEA registration and can’t prescribe controlled substances, rendering practice potentially impossible.

Also, when the form is signed, the DEA reports it to Medicare and Medicaid, which mot likely results in termination of participation. Understandably, Medicare and Medicaid do not want to pay for a provider’s services when he or she can not provide the full spectrum of care that includes prescribing controlled substances. Additionally, signing the form may trigger administrative and disciplinary action like civil monetary penalties or loss of medical staff privileges. Essentially, one signature has the potential to destroy a provider’s entire livelihood.

The DEA agent, of course, will do his or her level best to convince you that this is your best possible legal action. The DEA Agent’s intent is far from giving the provider the full story. The only advice that a provider should be accepting is legal advice from her or his attorney. When a provider confronts a DEA Agent, particularly in an unscheduled visit, the first thing a provider should do is contact an attorney before making any decisions as to how to proceed, whether the DEA is requesting consent to a search or a surrender of controlled substance prescribing privilege. Above all, do not sign anything without the advice your attorney. Tell the DEA Agent that you will have to consult with your attorney before signing any voluntary surrender or making any statements. The DEA Voluntary Surrender Form 104 is not a simple matter, whatsoever!

ARTICLE BY Lisa English Hinkle of McBrayer, McGinnis, Leslie and Kirkland, PLLC

What You Need to Know About the FCC’s July 10th Declaratory Ruling on the Telephone Consumer Protection Act (TCPA)

A sharply divided FCC late Friday issued its anticipated TCPA Declaratory Ruling and Order (the “Declaratory Ruling”). This document sets forth a range of new statutory and policy pronouncements that have broad implications for businesses of all types that call or text consumers for informational or telemarketing purposes. While some of its statements raise interesting and in some cases imponderable questions and practical challenges, this summary analysis captures the FCC’s actions in key areas where many petitioners sought clarification or relief. Certainly there will be more to say about these key areas and other matters as analysis of the Declaratory Ruling and consideration of options begins in earnest. There will undoubtedly be appeals and petitions for reconsideration filed in the coming weeks. Notably, except for some limited relief to some callers to come into compliance on the form or content of prior written consents, the FCC’s Order states that the new interpretations of the TCPA are effective upon the release date of the Declaratory Ruling. Requests may be lodged, however, to stay its enforcement pending review.

Scope and Definition of an Autodialer

An important threshold question that various petitioners had asked the FCC to clarify was what equipment falls within the definition of an “automatic telephone dialing system” or “ATDS.” The TCPA defines an ATDS as:

equipment which has the capacity—

(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and

(B) to dial such numbers. 47 U.S.C. § 227(a)(1) (emphasis added).

Two recurring points of disagreement have been: (1) whether “capacity” refers to present or potential capacity, i.e., whether it refers to what equipment can do today, or what some modified version of that equipment could conceivably do tomorrow; and (2) whether “using a random or sequential number generator” should be read to limit the definition in any meaningful way.

Stating that a broad definition would be consistent with Congressional intent and would help “ensure that the restriction on autodialed calls not be circumvented,” the FCC concluded that “the TCPA’s use of ‘capacity’ does not exempt equipment that lacks the ‘present ability’ to dial randomly or sequentially.” Rather, “the capacity of an autodialer is not limited to its current configuration but also includes its potential functionalities.”

The Declaratory Ruling stated that “little or no modern dialing equipment would fit the statutory definition of an autodialer” if it adopted a less expansive reading of the word “capacity.” But as for whether any “modern dialing equipment” does not have the requisite “capacity,” the agency declined to say:

[W]e do not at this time address the exact contours of the “autodialer” definition or seek to determine comprehensively each type of equipment that falls within that definition that would be administrable industry-wide…. How the human intervention element applies to a particular piece of equipment is specific to each individual piece of equipment, based on how the equipment functions and depends on human intervention, and is therefore a case-by-case determination.

Indeed, although the Declaratory Ruling insisted that this interpretation has “outer limits” and does not “extend to every piece of malleable and modifiable dialing equipment,” the only example that that Declaratory Ruling offered was anything but “modern”:

[F]or example, it might be theoretically possible to modify a rotary-dial phone to such an extreme that it would satisfy the definition of “autodialer,” but such a possibility is too attenuated for us to find that a rotary-dial phone has the requisite “capacity” and therefore is an autodialer.

Finally, the FCC majority brushed off petitioners’ concerns that such a broad definition would apply to smartphones—not because it would be impossible to read that way, but because “there is no evidence in the record that individual consumers have been sued….”

Commissioner Pai’s dissent expressed concern that the FCC’s interpretation of the ATDS definition “transforms the TCPA from a statutory rifle-shot targeting specific companies that market their services through automated random or sequential dialing into an unpredictable shotgun blast covering virtually all communications devices.” He also noted that even if smartphone owners have yet to be sued, such suits “are sure to follow…. Having opened the door wide, the agency cannot then stipulate restraint among those who would have a financial incentive to walk through it.”

Commissioner O’Rielly took issue with the FCC’s “refusal to acknowledge” the other half of the statutory definition, specifically that equipment “store or produce telephone numbers to be called, using a random or sequential number generator.” 47 U.S.C. § 227(a)(1). “Calling off a list or from a database of customers … does not fit the definition,” he explained. And as for the reading of the word “capacity,” the Commissioner stated that the FCC majority’s “real concern seems to be that … companies would game the system” by “claim[ing] that they aren’t using the equipment as an autodialer” but “secretly flipping a switch to convert it into one for purposes of making the calls.” He explained that even if there had been examples of this in the regulatory record, “this could be handled as an evidentiary matter. If a company can provide evidence that the equipment was not functioning as an autodialer at the time a call was made, then that should end the matter.”

Given the breadth of the FCC’s purported interpretation of ATDS, which clashes with the views of a number of courts in recent litigation and is replete with ambiguity, this portion of the Declaratory Ruling will most certainly be challenged.

Consent and Revocation of Consent

The Declaratory Ruling addressed the question of whether a person who has previously given consent to be called may revoke that consent and indicated that consumers have the ability to revoke consent in any “reasonable manner.” As dissenting Commissioner Pai noted, this can lead to absurd results if consumers are entirely free to individually and idiosyncratically select their mode and manner of revocation, particularly for any such oral, in-store communication. The Commissioner’s dissent asked ruefully whether the new regime would cause businesses to “have to record and review every single conversation between customers and employees….Would a harried cashier at McDonald’s have to be trained in the nuances of customer consent for TCPA purposes?……the prospects make one grimace.”

FCC Petitioner Santander had sought clarification of the ability of a consumer to revoke consent and alternatively, to allow the calling party to designate the methods to be used by a consumer to revoke previously provided consent. In considering the TCPA’s overall purpose as a consumer protection statute, the FCC determined that the silence in the statute on the issue of revocation is most reasonably interpreted in favor of allowing consumers to revoke their consent to receive covered calls or texts. The Declaratory Ruling found comfort both in other FCC decisions and in the common law right to revoke consent, which is not overridden by the TCPA. The Declaratory Ruling stated that this interpretation imposes no new restriction on speech and established no new law.

The FCC noted that its prior precedent on the question of revocation was in favor of allowing consumer revocation “in any manner that clearly expresses a desire not to receive further messages, and that callers may not infringe on that ability by designating an exclusive means to revoke.” Stating that consumers can revoke consent by “using any reasonable method,” the FCC determined that a caller seeking to provide exclusive means to register revocation requests would “place a significant burden on the called party.” The Declaratory Ruling contains no serious discussion of the burdens placed on businesses by one-off individual revocations. The FCC majority also rejected the argument that oral revocation would unnecessarily create many avoidable factual disputes, instead stating that “the well-established evidentiary value of business records means that callers have reasonable ways to carry their burden of proving consent.”

Reassigned Number “Safe Harbor”

There is perhaps no issue that garners more frustration among parties engaged in calling activities than potential TCPA liability for calls to reassigned numbers. No matter how vigilant a caller is with respect to compliance, under the FCC’s preexisting and now expanded statements, it is impossible to eliminate the risk of exposure short of not calling anyone. As explained in Commissioner O’Rielly’s Separate Statement: “numerous companies, acting in good faith to contact consumers that have consented to receive calls or texts, are exposed to liability when it turns out that numbers have been reassigned without their knowledge.” This portion of the Declaratory Ruling will also most certainly be subject to challenges.

While relying on a number of flawed assumptions, the FCC: (1) rejected the sensible “intended recipient” interpretation of “called party”; (2) disregarded the fact that comprehensive solutions to addressing reassigned numbers do not exist; (3) adopted an unworkable and ambiguous “one-call exemption” for determining if a wireless number has been reassigned (a rule that constitutes “fake relief instead of a solution,” as explained by Commissioner O’Rielly); and (4) encouraged companies to include certain language in their agreements with consumers so that they can take legal action against consumers if they do not notify the companies when they relinquish their wireless phone numbers.

First, the FCC purported to clarify that the TCPA requires the consent of the “current subscriber” or “the non-subscriber customary user of the phone.” It found that consent provided by the customary user of a cell phone may bind the subscriber. The FCC declined to interpret “called party” as the “intended recipient,” as urged by a number of petitioners and commenters and held by some courts.

Second, the FCC quickly acknowledged and then set aside the significant fact that there exists no comprehensive public directory of reassigned number data provided by the carriers. Instead, it seemed flummoxed by the purported scope of information accessible to companies to address the reassigned number issue. The FCC suggested that companies could improvise ways to screen for reassigned numbers (e.g., by manually dialing numbers and listening to voicemail messages to confirm identities or by emailing consumers first to confirm their current wireless phone numbers) and explained that “caller best practices can facilitate detection of reassignment before calls.” Ignoring the reality of TCPA liability, the FCC explained that “[c]allers have a number of options available to them that, over time, may permit them to learn of reassigned numbers.” (emphasis added).

Third, the FCC purported to create an untenable “one-call exemption.” The Declaratory Ruling explained “that callers who make calls without knowledge of reassignment and with a reasonable basis to believe they have valid consent to make the call should be able to initiate one call after reassignment as an additional opportunity to gain actual or constructive knowledge of the reassignment and cease future calls to the new subscriber. If this one additional call does not yield actual knowledge of reassignment, we deem the caller to have constructive knowledge of such.”

One potentially helpful clarification made was the determination that porting a number from wireline to a wireless service is not to be treated as an action that revokes prior express consent, and thus the FCC stated that that prior consent may continue to be relied upon so long it is the same type of call for which consent was initially given. The FCC agreed with commenters who had observed that if a consumer no longer wishes to get calls, then it is her right and responsibility to revoke that consent. Unless and until that happens, however, the FCC stated that a caller may rely on previously provided consent to continue to make that same type of call. Valid consent to be called as to a specified type of call continues, “absent indication from the consumer that he wishes to revoke consent.” As wireline callers need not provide express consent to be autodialed, any party calling consumers would have to still be aware of the nature of the called number to determine whether appropriate consent to be called was present.

Finally, the FCC – which claims to be driven by consumer interests throughout its Declaratory Ruling – makes the suggestion that companies should require customers, through agreement, to notify them when they relinquish their wireless phone numbers and then initiate legal action against the prior holders of reassigned numbers if they fail to do so. “Nothing in the TCPA or our rules prevents parties from creating, through a contract or other private agreement, an obligation for the person giving consent to notify the caller when the number has been relinquished. The failure of the original consenting party to satisfy a contractual obligation to notify a caller about such a change [of a cell phone number] does not preserve the previously existing consent to call that number, but instead creates a situation in which the caller may wish to seek legal remedies for violation of that agreement.”

Treatment of Text Messaging and Internet-to-Phone Messaging

The Declaratory Ruling also addressed a number of issues that specifically affect text messaging under the TCPA. First, the FCC addressed the status of SMS text messages in response to a petition that asked the FCC to make a distinction between text messages and voice calls. The FCC reiterated that SMS text messages are subject to the same consumer protections under the TCPA as voice calls and rejected the argument that they are more akin to instant messages or emails.

Second, the FCC addressed the treatment of Internet-to-phone text messages under the TCPA. These messages differ from phone-to-phone SMS messages in that they originate as e-mails and are sent to an e-mail address composed of the recipient’s wireless number and the carrier’s domain name. The FCC explained that Internet-to-phone text messaging is the functional equivalent of phone-to-phone SMS text messaging and is therefore covered by the TCPA. The FCC also found that the equipment used to send Internet-to-phone text messages is an automatic telephone dialing system for purposes of the TCPA. In so doing, the FCC expressly rejected the notion that only the CAN-SPAM Act applies to these messages to the exclusion of the TCPA.

Finally, the FCC did provide some clarity as to one issue that had created significant confusion since the adoption of the current TCPA rules in 2012: whether a one-time text message sent in response to a consumer’s specific request for information constitutes a telemarketing message under the TCPA. The specific scenario that was presented to the FCC is one confronted by many businesses: they display or publish a call-to-action, they receive a specific request from a consumer in response to that call-to-action, and they wish to send a text message to the consumer with the information requested without violating the TCPA and the FCC’s rules.

The FCC brought clarity to this question by finding that a one-time text message does not violate the TCPA or the FCC’s rules as long as it is sent immediately to a consumer in response to a specific request and contains only the information requested by the consumer without any other marketing or advertising information. The FCC explained that such messages were not telemarketing, but “instead fulfillment of the consumer’s request to receive the text.” Businesses may voluntarily provide the TCPA disclosures in their calls-to-action, as the FCC noted in the Declaratory Ruling, but a single text message to consumers who responded to the call-to-action or otherwise requested that specific information be sent to them would not be considered a telemarketing message and, as such, would not require the advance procurement of express written consent.

Limited Exemptions for Bank Fraud and Exigent Healthcare Calls and Texts

The TCPA empowers the agency to “exempt . . . calls to a telephone number assigned to a cellular telephone service that are not charged to the called party, subject to such conditions as the Commission may prescribe as necessary in the interest of the privacy rights [the TCPA] is intended to protect.” 47 U.S.C. § 227(b)(2)(C). In March 2014, the FCC invoked this authority to grant an exemption from the TCPA’s prior express consent requirement for certain package-delivery related communications to cellular phones, requiring that for such communications to be exempt, they must (among other things) be free to the end user.

The Declaratory Ruling invoked that same provision and followed that same framework in granting exemptions for “messages about time-sensitive financial and healthcare issues” so long as the messages (whether voice calls or texts) are, among other things discussed below, free to the end user. Oddly, the Declaratory Ruling referred to these two types of messages as “pro-consumer messages,” showcasing an apparent view that automated/autodialed calls are “anti-consumer” by default.

The FCC first addressed a petition from the American Bankers Association (ABA), seeking an exemption for four types of financial-related calls: messages about (1) potential fraud or identity theft, (2) data security breaches, (3) steps to take to prevent identity theft following a data breach, and (4) money transfers. After analyzing the record before it regarding the exigency and consumer interest in receiving these types of communications, and finding that “the requirement to obtain prior express consent could make it impossible for effective communications of this sort to take place,” the FCC imposed the following very specific requirements in addition to the requirement that the messages be free to the end user: (1) the messages must be sent only to the number provided by the consumer to the financial institution; (2) the messages must state the name and contact information for the financial institution (for calls, at the outset); (3) the messages must be strictly limited in purpose to the four exempted types of messages and not contain any “telemarketing, cross-marketing, solicitation, debt collection, or advertising content;” (4) the messages must be concise (for calls generally one minute or less, “unless more time is needed to obtain customer responses or answer customer questions,” and for texts, 160 characters or less); (5) the messages must be limited to three per event over a three-day period for an affected account; (6) the messages must include “an easy means to opt out” (an interactive voice and/or key-press activated option for answered calls, a toll-free number for voicemail, and instructions to use “STOP” for texts); and (7) the opt-out requests must be honored “immediately.”

The FCC then addressed a petition from the American Association of Healthcare Administrative Management (AAHAM) seeking similar relief for healthcare messages. Relying on its prior rulings regarding the scope of consent and the ability to provide consent via an intermediary, the FCC stated that (1) the “provision of a phone number to a healthcare provider constitutes prior express consent for healthcare calls subject to HIPAA by a HIPAA-covered entity and business associates acting on its behalf, as defined by HIPAA, if the covered entities and business associates are making calls within the scope of the consent given, and absent instructions to the contrary”; and, (2) such consent may be obtained through a third-party when the patient is medically incapacitated, but that “ just as a third party’s ability to consent to medical treatment on behalf of another ends at the time the patient is capable of consenting on his own behalf, the prior express consent provided by the third party is no longer valid once the period of incapacity ends.”

The FCC also granted a free-to-end-user exemption for certain calls “for which there is exigency and that have a healthcare treatment purpose”: (1) appointment and exam confirmations and reminders; (2) wellness checkups; (3) hospital pre-registration instructions; (4) pre-operative instructions; (5) lab results;(6) post-discharge follow-up intended to prevent readmission; (7) prescription notifications; and (8) home healthcare instructions. The FCC specifically excluded from the exemption messages regarding “account communications and payment notifications, or Social Security disability eligibility.”

The Declaratory Ruling imposed mostly the same additional restrictions on free-to-end-user health-care related calls as it did with free-to-end-user financial calls: (1) the messages must be sent only to the number provided by the patient; (2) the messages must state the name and contact information for the healthcare provider (for calls, at the outset); (3) the messages must be strictly limited in purpose to the eight exempted types of messages, be HIPAA-compliant, and may not include “telemarketing, solicitation, or advertising content, or . . . billing, debt-collection, or other financial content”; (4) the messages must be concise (for calls generally one minute or less, and for texts, 160 characters or less); (5) the messages must be limited to one per day and three per week from a specific healthcare provider; (6) the messages must include “an easy means to opt out” (an interactive voice and/or key-press activated option for answered calls, a toll-free number for voicemail, and instructions to use “STOP” for texts); and (7) the opt-out requests must be honored “immediately.”

Service Provider Offering of Call Blocking Technology

A number of state Attorneys General had sought clarification on the legal or regulatory prohibitions on carriers and VoIP providers to implement call blocking technologies. While declining to specifically analyze in detail the capabilities and functions of particular call blocking technologies, the FCC nevertheless granted the request for clarification and stated that there is no legal barrier to service providers offering consumers the ability to block calls – using an “informed opt-in process” at the individual consumer’s direction. Blocking categories of calls or individual calls was seen as providing consumers with enhanced tools to stop unwanted robocalls.

Service provider groups, which expressed concern that any blocking technology could be either over or under-inclusive from an individual consumer’s perspective, were provided the assurance that while both the FCC and the FTC recognize that no technology is “perfect,” accurate disclosures to consumers at the time they opt-in for these services should suffice to allay these concerns. The Declaratory Ruling also noted that consumers are free to drop these services if they wish, and encouraged providers to offer technologies that have features that allow solicited mass calling, such as a municipal or school alerts, to not be blocked, as well as to develop protocols to ensure public safety calls or other emergency calls are not blocked.

ARTICLE BY Laura H. Phillips & Eduardo R. Guzman of Drinker Biddle & Reath LLP

Legal Bloggers: Strategies for Increasing Your Readership

So you have a blog. Great! Everyone – from legal marketers to managing partners – has probably told you that writing a regular blog will establish you as a thought leader and drive business development.

Unfortunately, it’s not that easy. Finding a blog on the Internet is akin to picking out a needle from a haystack.

Just because you write it doesn’t mean they will read it. For your blog to attract readers, you need to give it a push. And that means coming up with a solid distribution strategy.

Let’s look at potential channels that could send readers to your blog.

Organic Search

You can bet that your target audience will be using search engines – Google, Bing, etc. – to find articles and blogs. Understanding topics and keywords that people search for should be the first step in blog writing.

Use Google Trends and Google News to mine for topics. Then research which keywords people are using to search for your topic. Google’s keyword planner provides data on how many searches are conducted every month. For example, if you’re writing about Title IX, are people using search phrases like “title IX discrimination on campus” or “gender equality in education”?

Once you determine the best keywords, integrate them into your blog – naturally. Don’t overuse phrases again and again. Instead, choose five or six phrases and sprinkle them throughout your blog.

Next, give consideration to your title tag. This is separate from the headline on your blog post. The title tag is what is known as a “meta” field and is accessible on the back end of most content management systems (WordPress, Drupal, etc.). Select one prominent keyword phrase that has relatively high search volume, along with high relevancy, to use in your title tag. Search engines use title tags to index your blog posts. Your title tag is also what search engines use to designate your posts in their results pages.

And don’t forget about “domain authority.” Domain authority is a third-party metric that indicates how well search engines will rank a website in search results. Hosting your blog on your firm website (as opposed to building a brand-new site for your blog) will most likely provide higher authority for your blog.

Email Subscriptions

Have a way for readers to sign up for email alerts that are triggered when you put up a new blog post. This type of “opt-in” automated program delivers your blog to engaged readers – that is, potential leads.

If your blog focuses on various practice areas or industries, creating sign-up categories will help you target your readers with relevant content. As an example, Kirton McConkie recently launched a multi-practice blog that provides email sign-up options by category.

Subscription-Based Legal Syndication Sites

Sites like the National Law Review, JD Supra and Mondaq repost blogs on their websites. These online resources are hubs for general counsel, attorneys and reporters to find information on legal topics. Subscribers can join for free, while contributors pay monthly or annual fees to have their content included.

These types of sites have an added benefit for blog authors: They also use social media and email marketing tactics to deliver your content, creating additional visibility.

Social Media

It goes without saying that social media has the potential to reach an enormous pool of readers. But getting the attention from the right people on social media is a daunting task. Sending out a tweet linking to your blog can be like putting a message in a bottle and throwing it into the ocean. Fortunately, there are a few best practices to help you get additional visibility.

First, decide which social media platforms you’re going to use based on the audience you want to attract. Every social network has a unique culture and demographic characteristics. Don’t waste your time chasing a crowd that’s not relevant – for instance, Snapchat users are not interested in legal blogs.

Once you’ve identified one or two social platforms, search for influencers in your topic area. These influencers will frequently write about and share relevant content and will have high follower and engagement metrics. Start engaging with these people. Don’t bombard them with requests to share your blog, but show interest in their content and join in conversations. Also, sprinkle links to your blog into your social stream. Just be careful not to make it all about you.

LinkedIn Posts

Use the LinkedIn “Publish a Post” feature to repurpose your blogs on your profile. It’s a simple way to expand your reach on LinkedIn. Not only are posts searchable on LinkedIn, but they also are pushed out through LinkedIn’s email notification program.

Blog Directory Sites

Setting up your blog’s RSS feed to relevant blog directory sites like AllTop’s legal section and ABAJournal blogs will drive readers to your blog. Track visits from these sites in the “Referral” section of your Google Analytics dashboard to measure the effectiveness of these visitors.

Guest Authors

nvite thought leaders with high online visibility to write guest posts for your blog. These authors will have followers who read their content. If they post to your site, they will help you share their post through their social media channels, which again drives visits to your website.

It may be difficult to recruit guest bloggers. If you find that is the case, try to provide benefits to writers, such as prominent links back to their websites.

Other Digital Marketing Initiatives

Leverage all your digital marketing channels by including a link to your blog in your electronic communications – email signature lines, client alerts, invoices, etc. Add a link to your blog in all your social media profiles – LinkedIn, Twitter, Google+ and Facebook.

As with all digital marketing initiatives, measurement and tracking are key steps for identifying tactics that work and tactics that don’t. Review your Google Analytics or other analytics-tracking platform regularly. Understanding which topics resonate with your readers will inform your content strategy as you go forward.

ARTICLE BY Melanie Trudeau of Jaffe

Do’s and Don’ts of Documentation – Employment Litigation

As many of you know, proper documentation is critical in almost every aspect of managing your employees. Documentation is often the difference between a defense verdict and a multi-million dollar jury award. But don’t just document to document – poor documentation is worse than no documentation at all. Instead, document with purpose. Here are my top five do’s and don’ts of documentation.

The Do’s

1. Do Establish Clear Performance Expectations. I like to start out formal documentation with a clear statement of what the employer’s performance expectations are for the employee. This statement of the performance expectations will guide every aspect of the documentation and set the standards upon which current deficiencies are noted and future performance will be measured. It should be obvious, but make sure an employee is not hearing these performance expectancies for the first time in formal documentation of a performance problem. If that is the case, you have bigger problems than poor documentation. Instead, the performance expectancies need to be consistent with the employee’s job description and the tasks actually assigned to the employee. Consistent, clear and well-written performance expectations are critical if you want an employee to succeed in changing his performance.

2. Do Focus on the Facts. Provide the employee with a clear statement of the facts. A clear statement of the facts focuses solely on what you know happened, and does not include any speculation or unverified information. For the purpose of a disciplinary action, the fact that an employee reported to work two hours late is sufficient. You do not need to include the speculation that the employee had been out drinking the night before because he has a weekly poker game at the local watering hole. Stick to the facts because this might have been the one night the employee missed the poker game to care for his sick child.

3. Do Review Patterns of Problem Behavior. When an employer takes the time to actually perform written documentation of a performance or behavior problem, it typically is not the first time the employee has had the problem. Instead of ignoring all of the previous instances, list in detail every occasion when the employee has exhibited the problem behavior. Be sure to include what steps were taken each time these problems came to light – did the supervisor talk to the employee, was the employee reprimanded (formally or informally), was the employee warned or suspended. Include the pattern to show that you considered these previous instances when taking the current action.

4. Do Write a Specific Plan. Include in your documentation a specific plan for the employee to improve. List out the criteria the employee must meet, and a time frame for meeting each expectancy. The more specific and objective the criteria, the easier it is to measure improvement. Be sure to include in your documentation that failure to meet the criteria will result in further disciplinary action, up to and including termination.

5. Do Follow-up. Documentation is only valuable if you follow-up. For example, if you place an employee on a formal 6-month corrective action plan, but never follow-up, the corrective action plan is void. The best practice is to have specific criteria with specific time frames, and have a formal review during those exact timeframes. Don’t delay!

The Don’ts

1. Don’t Generalize. The most difficult cases to defend are those in which the employee is terminated for “not being a team player” or any other trendy cliché. Such generalizations have no place in formal documentation. You must provide specific examples of problematic behavior. Fail to do so, and you may “be left holding the bag.”

2. Don’t Diagnose Why the Employee Is Performing Poorly. New lawyers are taught to focus on the what, when, where, and why when asking a witness questions. When documenting poor performance, don’t diagnose the “why.” Even if you suspect the employee’s divorce, financial situation or social life is affecting his performance, avoid the urge to put such a diagnosis in the formal documentation. Understand that it is entirely proper to offer employee assistance or other benefits to employees that have personal problems, but it is not appropriate to include such personal problems in formal documentation.

3. Don’t Include Your Mental Impressions and Editorial Comments. A common mistake made by inexperienced supervisors is to include their mental impressions in the performance documentation. What do I mean? Say an employee is written up for failure to follow supervisor’s instructions. Instead of simply stating exactly what the supervisor told the employee, the supervisor will state something like “I thought my directions were clear.” If you have to editorialize what was said, it probably was not as clear as you thought. State the facts, and avoid commenting on those facts.

4. Don’t Embellish, Stretch the Truth or Call It Something It is Not. There is nothing worse than documentation where an employer overstates what took place. Minor embellishments tend to take on a life of their own, often becoming the driving force behind the disciplinary action when the truth was sufficient. Now you are left defending a lie. Worse yet, don’t call “dishonesty” a “fraud” and don’t accuse an employee of “stealing” when they made a mistake. Call it as you see it and nothing more.

5. Don’t Apologize. I cringe reading a disciplinary document where a supervisor says, “I am sorry I have to do this.” No, you’re not! You are doing your job, and you are doing the documentation because the employee is not doing their job. If you have to apologize for something, then formal documentation is obviously not warranted.

Practical Take Away

Documentation is an important aspect of managing relationships with your employees. You will be much better served by shifting your approach to documentation from quantity to quality. Trust me, you would much rather defend one or two well-written documents than twenty-five poorly written ones. So, go forward and document with purpose.

ARTICLE BY Jason S. Ritchie of Holland & Hart LLP

Beer-Maker Puts an End to Brewhaha: Anheuser Busch Agrees to Settle Second of Two Class Action Lawsuits over Beer Origin Disclaimers

Anheuser Busch recently agreed to settle a consumer class action over Beck’s Beer labeling that we previously reported on with regard to the uptick in consumer class actions proceeding past the pleading stage in the Southern District of Florida. Marty et al. v. Anheuser-Busch Cos., 13-cv-23656-JJO (S.D. Fla.). Anheuser-Busch’s decision to settle the Beck’s suit is not surprising, given that the company had agreed in January of this year to settlement of a sister suit commenced in Florida state court over the labeling of Kirin beer (Suarez et al. v. Anheuser-Busch Cos. LLC, 2013-33620-CA-01 (Fla. Cir. Ct.)), as we also previously reported.

According to the motions for approval, the settlement terms appear to be almost identical. Under the terms of both deals, consumers who bought Kirin or Beck’s during the respective class periods (back to October 2009 for Kirin and May 2011 for Beck’s) are entitled to obtain partial refunds varying from ten cents a bottle to $1 for a twelve pack, with the refund capped at $50 per household for those whose reimbursements are supported by proofs of purchase and $12 per household for those without. Neither settlement is subject to a capped total settlement fund amount.

Both settlements also include five year injunctions, with Anheuser-Busch agreeing to inclusion of the phrase “Brewed Under Kirin’s Strict Supervision by Anheuser-Busch in Los Angeles, CA and Williamsburg, VA” more prominently on Kirin products, packaging and website, and Beck’s agreeing to the inclusion of either “Brewed in USA” or “Product of USA” on Beck’s products, packaging and website. (The Kirin injunction also requires Anheuser-Busch to refrain from using the term “import” or “imported” with reference to Kirin beer.) In both settlements, Anheuser-Busch agreed not to oppose seven figure motions for class counsel fees — $1,000,000 in the Kirin suit and $3,500,000 in the Beck’s suit.

What’s notable about both settlements is that the phrases Anheuser-Busch agreed to include on its products, packaging and product websites already appeared on the products. This fact was central to Anheuser-Busch’s failed motion to dismiss the Amended Complaint in the Beck’s suit, in which they argued that a reasonable consumer could not be deceived as to the beer’s origin because that fact was printed on the product itself. The judge, however, sided with Plaintiffs on the issue, finding that (1) a reasonable consumer could be deceived because the disclaimer was difficult to read and blocked by the packaging (the judge specifically noted that the statement was printed on a metallic background, which could be obscured by light, while the packaging submitted to the Alcohol Tobacco Tax and Trade Bureau (“TTB”) was printed on a matte background); (2) product statements referencing German “Purity Laws” might be misleading to the average consumer, even if true; and (3) product statements referencing German “Quality” were not “puffery” as a matter of law.

Notably, the injunction Beck’s agreed to addresses only the first of these issues, and we have to wonder whether the judge’s decision on the motion to dismiss would have been different had the disclaimers appeared more prominently or on the matte background approved by the TTB. These two settlements certainly serve as a warning for nationwide sellers to consider the more prominent display of the products’ origin on products and packaging, if the product labeling is potentially obscured.

ARTICLE BY Lawrence I Weinstein, Alexander Kaplan & Jennifer L Jones of Proskauer Rose LLP

Disparaging Marks: The Washington Redskins Made a Foul Play

Related to our recent blog post on immoral marks, U.S. trademark law also prohibits registration of trademarks that consist of “matter which may disparage … persons, … institutions, beliefs, or national symbols.” This Section of the Lanham Act is central to the long-running controversy over the name of the well-known professional football team, theWashington “Redskins,” which some critics label as a racial epithet. Although the team name has been in use since 1933 and was first registered in 1976, at a climactic point in the controversy last year theTrademark Trial and Appeal Board (TTAB) ordered those registrations to be cancelled pursuant to this Section. TTAB held that “redskins” is a racial slur that was disparaging to “a substantial composite” of Native Americans at the time of registration. Just today, on July 8, a federal judge upheld this decision, not only affirming that the marks violate Section 2(a) of the Lanham Act, but also that Section 2(a) itself does not violate the First Amendment.

The saga over the trademark registrations began when a group of Native American petitioned to cancel the federal registrations for the Washington Redskins’ name. The litigation has continued for over two decades as the case (and a companion case) bounced around the TTAB, the district court, and the D.C. Circuit. Most recently, the owner of the registrations, Pro-Football Inc., appealed last year’s TTAB order cancelling its registrations to the District Court for the Eastern District of Virginia.

In today’s ruling, the District Court held that the Native American challengers met the legal requirements to prove that the marks indeed “may disparage” a substantial composite of Native Americans at the time of their registration. Additionally, the Court addressed the major issue of whether Section 2(a) of the Lanham Act violates the First Amendment by restricting protected speech. The Court held that it did not, because cancelling the federal registrations under Section 2(a) does not implicate the First Amendment, as the cancellations do nothing to burden, restrict or prohibit Pro-Football’s ability to use the marks in commerce. Indeed, a federal registration is not required in order for one to use trademarks in commerce, and thus nothing in Section 2(a) impedes the ability of members of society to discuss unregistered marks. In addition, the Court found that the federal registration program is government speech (as opposed to commercial or private speech) and is thus exempt from First Amendment scrutiny.

The saga is not over, however, until Pro-Football exhausts its appellate options. Even then, assuming today’s decision stands, will the team adopt a new name that is eligible for federal trademark registration? Not likely. Pro-Football can still rely on its long-standing common law rights in the mark, stemming back to its first use in 1933. The only thing the team will lose is its ability to enjoy the benefits of federal registration, including the ability to use the coveted ® symbol.

ARTICLE BY Beth A. Seals of Squire Patton Boggs (US) LLP

Federal Trade Commission: Start with Security

On June 30, 2015, the Federal Trade Commission (FTC) published “Start with Security: A Guide for Businesses”(the Guide).

The Guide is based on 10 “lessons learned” from the FTC’s more than 50 data-security settlements. In the Guide, the FTC discusses a specific settlement that helps clarify the 10 lessons:

FTC_FederalTradeCommission-Seal

Start with security;
Control access to data sensibly;
Require secure passwords and authentication;
Store sensitive personal information securely and protect it during transmission;
Segment networks and monitor anyone trying to get in and out of them;
Secure remote network access;
Apply sound security practices when developing new products that collect personal information;
Ensure that service providers implement reasonable security measures;
Implement procedures to help ensure that security practices are current and address vulnerabilities; and
Secure paper, physical media and devices that contain personal information.

The FTC also offers an online tutorial titled “Protecting Personal Information.”

We expect that the 10 lessons in the Guide will become the FTC’s road map for handling future enforcement actions, making the Guide required reading for any business that processes personal information.

ARTICLE BY Julia Jacobson & Jennifer S. Geetter of McDermott Will & Emery

Sunlight is the best disinfectant: SEC charges oil company for fraud on EB-5 investors

In a recent action, SEC v. Luca International Group, LLC et al. (“SEC v. Luca“), the Securities and Exchange Commission (SEC) has charged a California-based oil and gas company and its CEO with violations of securities laws in connection with a $68 million Ponzi scheme and affinity fraud. The target of the fraud was the Chinese American community. Additionally, a portion of the funds raised by the defendants came from EB-5 investors seeking green cards through the EB-5 Program. The SEC issued both a press release and cease and desist order this week in connection with this most recent action. We think that this case highlights two important and relevant points for our readership, and that the SEC exposing the defendant schemers/fraudsters in SEC v. Luca is good for the EB-5 industry and integrity of the EB-5 program.

Prosecution efforts are going global– government agencies in Hong Kong and China assisted the SEC’s efforts

Now more than ever before, the SEC is on the path to closing down actors in the EB-5 context that engage in deception and fraud. We are in a new era of enforcement, with the SEC becoming more familiar with the EB-5 Program. We think that this enforcement trend will move at an even faster clip as the SEC and United States Citizenship and Immigration Services (USCIS) become more agile in cooperating and responding to credible allegations of fraud.

EB-5 regional centers and issuers need to put into place sound and workable policies to ensure that marketing practices are in line with securities laws. Note that in SEC v. Luca, there was cooperation with the SEC and two foreign agencies, namely the Hong Kong Securities and Futures Commission and the China Securities and Regulatory Commission. Enforcement and prosecution efforts in this context are going global. Regional centers and issuers should ensure that any offshore sales efforts are in compliance with the laws of the countries in which sales activities are performed.

Overlooked federal and state investment adviser registration requirements

SEC v. Luca is a reminder that investment adviser requirements may apply broadly in EB-5 transactions and require federal or state registration by regional centers, issuers and/or EB-5 deal facilitators. In SEC v. Luca, the SEC asserted that the defendants acted as “investment advisers” within the meaning of Section 202(a)(11) of the U.S. Investment Advisers Act of 1940 (“Advisors Act”) [15 U.S.C. Section 80(b)-2(a)(11), but had no registrations with the Commission. Confusion over investment adviser registration requirements is a commonplace problem in the EB-5 space. In SEC v. Luca, the defendants were in the business of providing investment advice concerning securities for compensation. According to the SEC, these key facts triggered registration requirements under the Advisers Act.

We will soon be providing an extensive alert with regulatory advice to EB-5 regional centers and issuers on the applicability of both federal and state investment adviser registration requirements. The applicability of such requirements should be made on a case-by-case with qualified securities counsel. There is no “one size fits all” advice. States have their own considerations in interpreting investment adviser registration requirements. And the SEC has its own interpretive guidance on the parameters of the registration requirements of the Advisers Act apply.

Conclusion

The egregious pattern of unlawful behavior by the defendants in SEC v. Luca included deceit in the marketing process, fraud in offering materials, comingling and misappropriation of funds, and violation of registration requirements. These are issues not just in the EB-5 context, but with private placements generally. Affinity fraud is also common in private placements.

EB-5 stakeholders should be aware that we are seeing a visible uptick in securities related prosecutions. No issuer, regional center or deal facilitator is immune from scrutiny. The SEC and USCIS are also working together more nimbly with foreign securities agencies. Sound policies, securities compliance and meaningful due diligence by experts are important in EB-5 offerings.

Sunlight is the best disinfectant. This adage is true for the EB-5 program. Stakeholders who promote a transparent and strong EB-5 program should applaud the SEC’s efforts.

ARTICLE BY Douglas Hauer of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Twitter Terrorism: Criminals Choose the Hack Attack

In what appears to be yet another brazen demonstration of capability following an earlier hijack of government social media sites, a group calling itself the Syrian Electronic Army (SEA) recently hacked into the U.S. Army’s main news and public information website, positing its own message for website visitors: “Your commanders admit they are training the people they have sent you to die fighting.” In response, the Army was forced to shut down the site to implement additional security measures to protect its systems.

Earlier this year, two of the U.S. military’s Central Command social media websites on YouTube and Twitter were similarly attacked and compromised. There, organization profile images were replaced by those of ISIS supporters on the official Twitter page, and two ISIS propaganda videos were uploaded to the Central Command YouTube account. Over the past several years, SEA has initiated similar attacks on the Twitter accounts of the BBC, The New York Times, 60 Minutes and the Associated Press.

Business Concerns

While the U.S. government reported that none of the internal systems were compromised and that there was no loss of classified information, the attacks have certified the anxiety of many business leaders over the potential vulnerability of their own companies, and highlight the concerns regarding the lack of knowledge or ability to prevent such attacks. Recent surveys have confirmed that risks associated with social media, whether through external portal access or internal sabotage, are among the top concerns facing businesses in 2015.

Without question, social media has become a crucial advertising vehicle for thousands of businesses around the world. The number of Facebook, Twitter, LinkedIn and other social media users continues to grow at an exponential rate, allowing businesses access to many new customers and clients every day. The ability to maintain control over these new electronic profiles, however, has become increasingly difficult as the perpetrators become more skilled and the targets more prized. In one particularly publicized account in 2013, social media hackers changed the Twitter account name of a premiere fast-food company to that of its chief competitor and posted multiple offensive tweets. Thereafter, damage control was all that could be done.

Businesses in 2015 have become enthralled by virtually unlimited access to customers and business partners via online platforms. Unfortunately, many have focused on the potential profits arising from such undertakings without sufficient consideration for the problems that too frequently arise from the use of such platforms. Social media has become the soft underbelly of many growing businesses eager for success but unaware of its vulnerabilities. In addition to direct attacks, courthouses nationwide have been flooded by lawsuits tied to the use and regulation of social media sites. The governance of employee use of social media, ownership of content and retention of information gathered through social media are generating more litigation every day. While increased exposure may be the incentive, preventative medicine will likely prove integral to long-term success.

Such “preventative medicine” includes not only the appropriate policies and procedures on access to and use of social media, but also an understanding of the vulnerabilities created by using these online platforms. Most importantly, organizations must train their employees on these issues. Defending itself from perils arising out of social media starts at the first line of defense – the user.

ARTICLE BY Scott Sweeney & Ian A. Stewart of Wilson Elser Moskowitz Edelman & Dicker LLP

FCC’s Enforcement Bureau Commends PayPal for Modifying its User Agreement

We previously advised that the FCC’s Enforcement Bureau, in an unusual move, on June 11 published a letter it sent to PayPal warning that PayPal’s proposed changes to its User Agreement that contained robocall contact provisions might violate the TCPA.

These proposed revisions conveyed user consent for PayPal to contact its users via “autodialed or prerecorded calls and text messages … at any telephone number provided … or otherwise obtained” to notify consumers about their accounts, to troubleshoot problems, resolve disputes, collect debts, and poll for opinions, among other things. The Bureau’s letter highlighted concerns with the broad consent specified for the receipt of autodialed or prerecorded telemarketing messages and the apparent lack of notice as to a consumer’s right to refuse to provide consent to receive these types of calls.

On June 29, prior to the revisions coming into effect, PayPal posted a notice on its blog stating: “In sending our customers a notice about upcoming changes to our User Agreement we used language that did not clearly communicate how we intend to contact them.” PayPal clarified that it would modify its User Agreement to specify the circumstances under which it would make robocalls to its users, including for important non-marketing reasons relating to misuse of an account, as well as to specify that continued use of PayPal products and services would not require users to consent to receive robocalls.

The FCC’s Enforcement Bureau immediately put out a statement commending PayPal for its decision to modify its proposed contact language, noting that these changes to the User Agreement represented “significant and welcome improvements.” The Bureau’s very public actions on this matter signal to businesses everywhere of the need to review existing “consent to contact” policies. Certainly the FCC’s yet to be released Declaratory Ruling on TCPA matters that was voted on during a contentious FCC Open Meeting on June 18 may also invite that opportunity.

ARTICLE BY Laura H. Phillips of Drinker Biddle & Reath LLP

The National Law Forum

Think Twice about DEA (Drug Enforcement Administration) Voluntary Surrender

Like this: