Tag: government

H.R. 3684: Infrastructure Investment and Jobs Act

On November 5, the U.S. House of Representatives approved a $1.2 trillion infrastructure spending bill that will make historic investments in core infrastructure priorities including roads and bridges, rail, transit, ports, airports, the electric grid, and broadband.

The legislation, titled the Infrastructure Investment and Jobs Act (“IIJA”), will have major implications for states and municipalities of all sizes, as well as the entities involved in responding to governments’ needs for hard and cyber infrastructure.

Improvements to roadways, ports and mass transit are the focus of the legislation and the majority of the funding is targeted at these traditional hard infrastructure projects. U.S. Senator Rob Portman (R-OH) has championed the massive infrastructure bill and pushed for its passage.

This weekend, Senator Portman noted the massive impact the IIJA will have on Ohio, highlighting the bill’s bridge investment program which will award competitive grants to certain governmental entities to improve the condition of bridges. “This additional federal funding means we are one step closer to a solution for the Brent Spence Bridge,” Portman said.

The Brent Spence Bridge, which connects Cincinnati, Ohio with Covington, Kentucky has one of the busiest trucking routes in the nation. Questions about its safety and long shutdowns for repair have long concerned area residents as well as the business owners responsible for the more than $400 billion of freight which passes over the bridge every year.

While hard infrastructure priorities like bridge maintenance, port modernization, freight rail, and highway improvements account for a majority of the new spending appropriated by the bill (which totals $550 billion over five years), a sizable portion is dedicated to the expansion of broadband networks and the improvement of cybersecurity.

The new cybersecurity grant program and record-setting investments in broadband development could be game changing for state and local leaders wishing to modernize and protect their communities in these ways.

The U.S. Senate approved the IIJA in August 2020. Friday’s vote means the infrastructure bill will now move to the desk of President Joe Biden, who has indicated a bill signing ceremony will happen soon. Answers to questions about the billions of dollars in new infrastructure grants and programming are below.

Question: How will the money be distributed? 

Answer: The IIJA contains formulaic allocations of funds as well as earmarks and competitive grants. Some categories and sub-categories contain both non-competitive and competitive grants.

  • NON-COMPETITIVE FUNDING ALLOCATION PROCESSES
    • Formulas dictated by the bill are based on criteria like state population, or, potentially for specific items, users (ex: transit funds potentially determined by ridership)
    • Once the money is directed to the states, the local bureaucrats are able to make the important decisions about which projects deserve the funding.
    • States can also decide to allocate some of the funding to the county or city governments within their state
  • EARMARKS AND COMPETITIVE GRANT PROCESSES
    • Earmarks override state plans for how infrastructure funds should be spent. “Earmarks come out of the money that the state was going to get anyway.”
    • Localities must compete for Competitive Grants via an application process. The U.S. Department of Transportation’s Discretionary Grant Process is officially outlined on their website.
    • Generally, the award of competitive grants can be influenced by advocates who confer with decisionmakers in the Executive Branch about the merits of certain proposals.

Question: Which projects will qualify for funding?

Answer: The bill details specific funding streams for the specific projects included in its provisions. Categories of projects included in the $550 billion in new spending are below.

  • Roads, Bridges, & Major Projects: $110B — Funds new, dedicated grant program to replace and repair bridges and increases funding for the major project competitive grant programs. Preserves the 90/10 split of federal highway aid to states.
  • Passenger and Freight Rail: $66B — Provides targeted funding for the Amtrak National Network for new service and dedicated funding to address repair backlogs. Increases funding for freight rail and safety.
  • Safety and Research: $11B — Addresses highway, pedestrian, pipeline, and other safety areas (highway safety accounts for the bulk of this funding).
  • Public Transit: $39.2B — Funds nation’s transit system repair backlog, which includes buses, rail cars, transit stations, track, signals, and power systems. This allocation also includes money to create new bus routes and increase accessibility to public transit for those with physical mobility challenges.
  • Broadband: $65B — Funds grants to states for broadband deployment and other efforts to address access issues in rural areas and low-income communities. Expands eligible private activity bond projects to include broadband infrastructure.
  • Airports: $25B — Increases Airport Improvement grant amounts for runways, gates, & taxiways and authorizes a new Airport Terminal Improvement program.
  • Ports and Waterways: $17.4B — Provides funding for waterway and coastal infrastructure, inland waterway improvements, port infrastructure, and land ports of entry through the Army Corps, DOT, Coast Guard, the GSA, and DHS.
  • Water Infrastructure: $54B — Provides a $15 billion for lead service line replacement and $10 billion to address PFAS in water, in addition to other items.
  • Power and Grid: $65B — Funds grid reliability and resiliency projects and support for a Grid Development Authority; critical minerals and supply chains for clean energy technology; key technologies like carbon capture, hydrogen, direct air capture, and energy efficiency; and energy demonstration projects from the bipartisan Energy Act of 2020.
  • Resiliency: $46B — Funds cybersecurity projects to address critical infrastructure needs, flood mitigation, wildfire, drought, coastal resiliency, waste management, ecosystem restoration, and weatherization.
  • Low-Carbon and Zero-Emission School Buses & Ferries: $7.5B — Funds and authorizes the adoption of low-carbon and zero-emission school buses, including through hydrogen, propane, LNG, compressed natural gas, biofuel, and electric technologies. Provides support for a pilot program for low emission ferries and rural ferry systems.
  • Electric Vehicle Charging: $7.5B — Funds alternative fuel corridors and a national build out of electric vehicle charging infrastructure. The federal funding will have a particular focus on rural and/or disadvantaged communities.
  • Reconnecting Communities: $1B — Provides dedicated funding for planning, design, demolition, and reconstruction of street grids, parks, or other infrastructure (funding is especially targeted at infrastructure which is deteriorating due to age).
  • Addressing Legacy Pollution: $21B — Funds to clean up brownfield and superfund sites, reclaim abandoned mine lands, and plug orphan oil and gas wells, improving public health and creating good-paying jobs.

Article By Katherine M. Caprez of Roetzel & Andress LPA

For more legislative and legal news, read more from the National Law Review.

©2021 Roetzel & Andress

Can’t Hold Macklemore and Ryan Lewis Liable for Copyright Infringement Says Fifth Circuit

In 2017, a New Orleans Jazz Musician, Paul Batiste’s (“Batiste”), sued the world-renowned duo Macklemore and Ryan Lewis (“Macklemore”) alleging the duo copied eleven of his songs. Batiste v. Lewis, 2019 U.S. Dist. LEXIS 69130, 2019 WL 1790454 (E.D. La., Apr. 23, 2019). Batiste claimed Macklemore had, without permission, digitally sampled Batiste’s songs, and as a result, Macklemore’s hits, “Can’t Hold Us,” “Thrift Shop,” “Neon Cathedral,” “Same Love,” and “Need to Know” were based on or derivatives of Batiste’s copyrighted musical works. The district court disagreed after finding Batiste failed to sufficiently prove Macklemore had “access” to Batiste’s music and that Macklemore’s songs were strikingly similar to Batiste’s. Additionally, the district court held Batiste liable to pay Macklemore’s attorney fees pursuant to 17 U.S.C. § 505.

Batiste appealed and on September 22, 2020, the Fifth Circuit affirmed the lower court’s decision. See Batiste v. Lewis, Nos. 19-30400, 19-30889, 2020 U.S. App. LEXIS 30346 (5th Cir. Sep. 22, 2020). The Fifth Circuit agreed Batiste did not sufficiently prove Macklemore had access to Batiste’s works and failed to show substantial similarity between the competing works. Furthermore, the Fifth Circuit upheld the attorneys’ fees award, to the tune of $125,000, in favor of Macklemore.

Batiste argued Macklemore must have had access as a result of Batiste’s songs being “widely disseminated” through radio stations, record stores, and live performances at local nightclubs. Citing to evidence of “meager sales in only a handful of local stores” and “sparse” streaming and downloads, the court disagreed with Batiste and found the dissemination of his music was “quite limited.” The court further noted that Batiste’s songs did not become available to stream until after Macklemore had released most of their hit songs. Because Batiste failed to prove Macklemore had actual or constructive access, he was then tasked with proving “strikingly similarity” in order to prevail on his infringement claim since a “probative similarity can make up for a lesser showing of access.” In that regard, the Court found Batiste fell flat and did not “even try to meet the striking-similarity standard.”

Considering the objective unreasonableness of Batiste’s claims, his history of litigation misconduct, and his pattern of filing pugnacious copyright infringement actions, the court upheld the district court’s award of attorneys’ fees to Macklemore.

Accordingly, copyright infringement plaintiffs should think twice before filing suit capriciously and without first objectively evaluating the strength of their “access” and “similarity” proofs. The more access a defendant had to plaintiff’s copyrighted works the less similarity is required for a finding of infringement, and vice-versa, however, proof of both is ideal.

COPYRIGHT © 2020, STARK & STARK
ARTICLE BY Gene Markin of Stark & Stark
For more, visit the NLR Intellectual Property section.

Former JUUL Employee Seeks Injunction Against Pre-Employment NDA

On June 4, 2020, a former employee of electronic cigarette maker JUUL Labs, Inc., filed a complaint in California District Court seeking to enjoin JUUL’s enforcement of a non-disclosure agreement (“NDA”) she was required to sign as a condition of her employment. The former employee, Marcie Hamilton, alleges in her complaint that JUUL required her to sign an NDA prohibiting her from disclosing “essentially, everything related to JUUL” (emphasis in original) prior to beginning her employment. She further alleges that the “terrorizing effect” of the NDA, which JUUL requires all of its employees to sign prior to beginning their employment, unlawfully precludes employees from “blowing the whistle” to government or law enforcement agencies about suspected illegal activity, in violation of California law.

As alleged in the complaint, the JUUL NDA requires employees to “hold in strictest confidence” and not disclose, among other things, JUUL’s customers, products, markets, and any “information disclosed by the Company to [the employee] and information developed or learned by [the employee] during the course of employment.”  Employees are prohibited from disclosing such information to “any person, firm, or corporation, without written authorization from the Company’s Board of Directors.”  Having no temporal limit, the prohibition “lasts forever.”  According to the complaint, JUUL relies on these NDAs to prevent employees from providing relevant information in ongoing government investigations, as well as administrative and judicial actions, into the use of JUUL’s products by minors and the health dangers of its products, more broadly.

Ms. Hamilton alleges that the NDA’s prohibition on disclosing seemingly any information about JUUL whatsoever to any entity whatsoever violates California Labor Code § 1102.5(a). Section 1102.5(a) prohibits employers from making, adopting, or enforcing a rule, regulation, or policy that “prevent[s] an employee from disclosing information to a government or law enforcement agency,” or to “any public body conducting an investigation, hearing, or inquiry,” if the employee reasonably believes the information discloses a violation of law. Ms. Hamilton also alleges that the NDA violates California Government Code § 12964.5. Section 12964.5 was enacted in response to the #MeToo movement and prohibits employers from requiring employees to sign any document that “purports to deny the employee the right to disclose information about unlawful acts in the workplace, including, but not limited to, sexual harassment.”  Ms. Hamilton alleges that in violating these and other California statutes, the NDA has caused “ongoing and irreparable public harm.”  In her lawsuit, she seeks a finding that the NDA is unenforceable and an order enjoining JUUL from attempting to enforce it against her, as well as other forms of relief.

Employers’ Use of NDAs to Intimidate and Muzzle Employees

Unfortunately, NDAs like the one JUUL requires employees to sign as conditions of their employment are not uncommon. To the contrary: large corporations – and powerful individuals – often require employees to sign similar NDAs as conditions of their employment in an effort to stymy competition, insulate themselves from prosecution, and even protect themselves from public embarrassment. As Ms. Hamilton points out in her complaint, former Hollywood producer and convicted rapist Harvey Weinstein used similar pre-employment NDAs to prevent victims of his sexual abuse from reporting it to law enforcement. See Edward Helmore, “Harvey Weinstein lawsuit: attorney general says ‘we have never seen anything as despicable,’” (February 12, 2018).

Disgraced restauranteur Mike Isabella likewise used draconian NDAs to prevent his employees from reporting sexual harassment in his restaurants, including by prohibiting employees from disclosing any “details of the personal and business lives of Mike Isabella, his family member, friends, business associates and dealings” – seemingly without any employment-related purpose whatsoever. In that case, an employee’s breach of the NDA carried with it an unconscionably high penalty of $500,000 per breach, plus attorneys’ fees expended by the company as a result of the breach. See Maura Judkis and Time Carman, “Mike Isabella’s restaurants used nondisclosure agreements to silence sexual harassment accounts, lawsuit alleges.” (April 3, 2018).

Not all states have statues like California’s, which expressly prohibit employers from restricting employees’ ability to disclose information about suspected violations of law to government or law enforcement agencies. But many states nevertheless uphold a clear public policy against doing so. If you signed an NDA as a condition of your employment and want to blow the whistle about any type of illegal conduct by your employer, consider consulting with an employment attorney to determine whether the agreement prohibits you from providing information about violations of law to government or law enforcement agencies and, if so, whether it may be unenforceable.

©Katz, Marshall & Banks, LLP

For more on non-disclosure agreements, see the National Law Review Labor & Employment law section.

Best Practices for Commercial Property Owners/ Operators: Phase One of Reopening the Economy

The Federal Coronavirus Task Force issued a three-stage plan last week to reopen the economy, where authorities in each state – not the federal government – will decide when it is safe to reopen shops, schools, restaurants, movie theaters, sporting arenas and other facilities that were closed to minimize community spread of the deadly virus. Once phase one is adopted in certain states, businesses that reopen will need to be prepared to take certain precautions to meet their common law duty to provide and maintain reasonably safe premises.

Phase One

The first stage of the plan will affect certain segments of society and businesses differently. For example, schools and organized youth activities that are currently closed, such as day care, should remain closed. The guidance also says that bars should remain closed. However, larger venues such as movie theaters, churches, ballparks and arenas may open and operate but under strict distancing protocols. If possible, employers should follow recommendations from the federal guidance to have workers return to their jobs in phases.

Also, under phase one vulnerable individuals such as older people and those with underlying health conditions should continue to shelter in place. Individuals who do go out should avoid socializing in groups of more than 10 people in places that don’t provide for appropriate physical distancing. Trade shows and receptions, for example, are the types of events that should be avoided. Unnecessary travel also should be avoided.

Assuming the infection rate continues to drop, then the second phase will see schools, day care centers and bars reopening; crowds of up to 50 permitted; and vacation travel resuming. The final stage would permit the elderly and immunologically compromised to participate in social settings. There is no timeline prescribed, however, for any of these phases.

Precautionary Basics

Once businesses are reopened during phase one, there are several common sense and intuitive safety practices that business owners/operators must absolutely ensure are in place to meet their common law duty to provide a reasonably safe environment for those present on their premises.

The guidelines issued by the CDC are the core protocols that form the baseline for minimal safety precautions: persistent hand washing, use of masks/gloves and strict social distancing.

Additional Measures

Given the highly infectious nature of the virus, the fact that it is capable of being transmitted by asymptomatic people who are nonetheless infected, and the apparent viability of transmission through recirculated air or via HVAC systems without negative pressure (per a recent report from China about transmission from one restaurant customer to several others via the air circulation system), there is nothing that reasonably can be adopted that will effectively and readily ensure that a business is completely free of someone who is infected and capable of spreading the virus.

As such, additional measures are advisable beyond the CDC protocols, such as robust cleaning/hygienic regimens/complimentary wipes and hand sanitizer for common areas, buttons and handles; and the necessary protections for employees who interact with the public (e.g., shielding and protective gear for checkout clerks at the supermarket or lobby desk/check-in personnel in hotels and office buildings). In addition, it would not be unreasonable or unduly intrusive to check the temperatures (via no-touch infrared devices) of those entering the premises. In the absence of available portable, instant and unobtrusive virus testing methods, temperature readings are the most practical and reasonable precautionary measure beyond the CDC baseline deterrents.

Conscientious and infallible implementation of maintenance, housekeeping and hygiene protocols for the commercial, hospitality, retail and restaurant industries also will be critical to mitigate potential liability claims for negligently failing to provide an environment reasonably safe from the spread of coronavirus.

Advisability of Warnings

Aside from conspicuously publicizing – via posted signage or announcements – the CDC guidelines relating to persistent hand washing, use of masks/gloves and strict social distancing, the need to warn of the potential for – or a history of – infections generally is not considered to be necessary or essential unless there is an imminent threat of a specific foreseeable harm.

Unless there is a specific condition leading to a cluster of infections within a particular property (unlikely given the ubiquity of the disease and community spread, but the reporting would be to the CDC or local health authorities in such an instance), or an isolated circumstance that can be identified to be the source of likely infections to others who proximately were exposed, there is no need or obligation under existing law or regulatory guidelines to report generally that someone who tested positive for the virus may have been on a particular property.

Moreover, unless the business is an employer who administers a self-funded health plan (who are thus charged with the duty to maintain “protected health information”), businesses that are not health providers are not subject to HIPAA; as such, concerns about HIPAA violations are misplaced to the extent that the identity of someone who is infected is somehow disclosed or otherwise required to be disseminated by a business not otherwise charged with the duty to maintain “protected health information.”

A Coordinated Approach

While the CDC’s guidelines are important, they are not exclusive. Businesses planning to reopen also should consider regulations and guidelines from a number of other sources, including OSHA and state and local departments of public health.

© 2020 Wilson Elser

For more on reopening the economy, see the National Law Review Coronavirus News section.

White House Eliminates Top Cybersecurity Position

On May 15, the White House announced that it was eliminating the position of Cybersecurity Coordinator at the National Security Council, the highest position at the White House devoted to Cybersecurity. While not unexpected, this move is significant.

Symbolically, eliminating this senior position arguably send a signal that this Administration is less focused on cybersecurity as a priority.

Functionally, it means there will be no single person in the White House accountable to the President and the National Security Advisor on cyber issues.

Administratively, and perhaps most significantly, the White House’s ability to coordinate cybersecurity among the agencies, arbitrate disputes, and set direction for policy initiatives government-wide will likely be degraded.

While the White House is explaining the move by saying it will streamline management, increase efficiency, reduce bureaucracy and raise accountability, in the short run at least it seems likely to sow some confusion and increase the criticism of federal cybersecurity policy that has already gone on for several years.

Putting it Into Practice: Any hopes companies harbored for increased clarity and leadership from the Administration on cybersecurity seem to be fading. Companies will have to spend more time monitoring the cybersecurity initiatives and requirements of individual agencies, which will likely become less coordinated going forward.

Copyright © 2018, Sheppard Mullin Richter & Hampton LLP.

Administration’s Regulatory Agenda Signals Continued Push to Align Visa Programs With “Hire American” Goals

On December 14, 2017, the Office of Information and Regulatory Affairs (OIRA) released the Fall 2017 Unified Agenda of Regulatory and Deregulatory Actions, which is a report on the rulemaking efforts U.S. administrative agencies intend to pursue in the near- and long-term.

If enacted, several items in the agenda have the potential to impact employers’ immigration programs. The relevant proposals include the following items:

  • U. S. Citizenship and Immigration Services (USCIS) is proposing to issue a rule that would eliminate the ability of certain H-4 spouses to obtain employment authorization documents (EADs).
  • USCIS is proposing to issue a rule (originally introduced in 2011) that would establish an electronic registration system for H-1B petitions that are subject to the annual quota (H-1B cap filings). DHS notes that the rule is “intended to allow USCIS to more efficiently manage the intake and lottery process” for these petitions. USCIS notes that this rule may include a provision for a modified selection process, as outlined in the Buy American and Hire American Executive Order, such that “H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.”
  • USCIS is proposing to issue a rule that would revise the definitions of “specialty occupation,” “employment,” and “employer-employee relationship” in the H-1B context. USCIS notes that the purpose of these changes would be to “ensure that H-1B visas are awarded only to individuals who will be working in a job which meets the statutory definition for [H-1B eligibility].” The rule may also contain provisions regarding the payment of appropriate wages to H-1B visa holders.
  • The Department of State is proposing and finalizing several rules that would enact various modifications to the exchange visitor (J-1) program. These changes include arrangements relating to the administration of the J-1 program, provisions to help ensure the safety and well-being of foreign nationals who enter the U.S. as exchange visitors, and efforts to reinforce the cultural exchange and public diplomacy aspects of the program. Changes may also include an expansion of the types of jobs that are prohibited under the summer work travel category.
  • As a “long term action,” U.S. Customs and Border Protection (CBP) is proposing a rule that would clarify the criteria for admission to the United States as a temporary visitor for business (B-1) or pleasure (B-2). CBP also notes that the proposed revisions would “make the criteria [for entry as a temporary visitor] more transparent.”
  • Immigration and Customs Enforcement (ICE) is proposing to issue a rule that would effectuate a comprehensive reform of the practical training options (OPT) available to nonimmigrant students. The proposed provisions include increased oversight over the schools and students participating in the program. The stated purpose is to “improve protections of U.S. workers who may be negatively impacted by employment of nonimmigrant students.”

Employers may want to keep in mind that although the abstracts listed in the agenda seemingly have the potential to impact many areas of the immigration system, it is premature to draw conclusions about the effect of these proposed changes without first seeing the text of the rules themselves—none of which have been released, and some of which may not even be drafted. Additionally, both the agenda itself and the timing for the rules, are aspirational; in prior years, only a select number of proposals have actually turned into rules, and ever fewer have actually followed the stated timelines. As noted previously, for example, a proposed regulation on the electronic registration system for H-1B quota petitions was originally introduced in 2011, but no further action occurred.

Should a proposed rule actually be issued, the agencies must conform to the notice-and-comment protocols of the Administrative Procedure Act. Effectively, this requires the agency to issue a proposed rule that explains the agency’s plan to accomplish a certain goal or address a problem.  This is followed by a comment period, during which time any interested parties can submit comments about the proposed rule. Prior to issuing the final rule, the agency must review all comments and indicate its reasoning for either modifying the rule on account of a comment or explain why the proposed comment does not merit a revision to the rule. Rulemaking is typically a prolonged process that takes a minimum of several months to accomplish. In other words, a proposed rule (which is different than most of the abstracts found in this agenda, which only state the intent to issue a rule) would be the first step in what could be a complex and lengthy rulemaking process that may take many months before promulgation of any final rule.

Finally, employers may want to take note that many of the administration’s prior attempts to enact changes to the immigration system have been subject to lengthy and robust legal challenges. Any such litigation on a proposed rule could increase the timeline for implementation, assuming the rule survives the legal challenge at all.

In summary, although the agenda provides some insight into the goals of the administration on employment-based immigration, the publication of the agenda itself does not alter the status quo.

© 2017, Ogletree, Deakins, Nash, Smoak & Stewart, P.C

This post was written by Jacob D. Cherry of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

For more information check out the National Law Review’s Immigration page.

Trump Continues Focus on State Prosecutorial Experience in United States Attorney Nominations

On June 29, 2017, President Donald Trump made his second group of nominations of prospective United States Attorneys. With the eight lawyers he nominated earlier in June, this group brings the current number of Trump’s United States Attorney nominations to seventeen – around 20% of the total number of positions. The nine lawyers he nominated last week are:

  • Kurt Alme, the President and General Counsel of the Yellowstone Boys and Girls Ranch Foundation, to be the United States Attorney for the District of Montana.

  • Donald Q. Cochran, a Professor of Law at Belmont University College of Law, to be the United States Attorney for the Middle District of Tennessee.

  • Russell M. Coleman, a member of the Frost Brown Todd law firm, to be the United States Attorney for the Western District of Kentucky.

  • Bart M. Davis, the Majority Leader in the Idaho State Senate since 2002, to be the United States Attorney for the District of Idaho.

  • Halsey B. Frank, an Assistant United States Attorney for the District of Maine, to be the United States Attorney for the District of Maine.

  • J. Cody Hiland, the District Attorney in Arkansas’s 20th Judicial District, to be the United States Attorney for the Eastern District of Arkansas.

  • D. Michael Hurst, Jr., the director of the Mississippi Justice Institute and General Counsel for the Mississippi Center for Public Policy, to be the United States Attorney for the Southern District of Mississippi.

  • William C. Lamar, an Assistant United States Attorney in the Northern District of Mississippi, to be the United States Attorney for the Northern District of Mississippi.

  • R. Trent Shores, an Assistant United States Attorney in the Northern District of Oklahoma, to be the United States Attorney for the Northern District of Oklahoma.

So far, thirteen of Trump’s seventeen nominees have come from states with two Republican Senators where the “blue slips” approving Presidential nominations are likely easier to come by. Thirteen of Trump’s nominees are also from small or medium districts as DOJ categorizes them. Small and medium districts are those with fewer personnel resources (especially given the DOJ hiring freeze currently in effect), so adding Presidentially-appointed United States Attorneys to these districts will free up the acting United States Attorneys (career prosecutors who were already in the office) to return to prosecuting cases and other matters – no small addition in offices that may only contain twenty or thirty lawyers.

This batch of Trump nominees is very similar to his initial group, as well as similar to the Obama nominees as a whole:

  • Trump’s first batch of nominees had around 26 years of legal experience on average. Reverting to the mean, Trump’s seventeen nominees as a whole average around 23 years of legal experience – the same as the average Obama nominee.

  • Sixteen of the seventeen Trump nominees have prior state or federal prosecutorial experience (everyone but Idaho’s Bart Davis), compared with the more than 80% of Obama nominees who had prosecutorial experience prior to nomination. Eleven of Trump’s nominees have federal prosecutorial experience, consistent with the approximately 60% of Obama nominees who served as federal prosecutors prior to nomination.

  • Two of Trump’s seventeen nominees are former Congressional staff members: Donald Coleman for current Senate Majority Leader Mitch McConnell of Kentucky, and D. Michael Hurst, Jr., for former Representative Chip Pickering of Mississippi and for the House Judiciary Committee. This is also consistent with the Obama nominees, of which around 10% had service as staffers on the Hill. These types of relationships are thought to be helpful when issues involving DOJ are being decided by Congress.

Despite the similarities, Trump continues to emphasize state prosecutorial experience in a way that Obama did not. While less than a third of the Obama nominees had state prosecutorial experience, over half of Trump’s nominees to this point do. Furthermore, three of Trump’s nominees are elected District Attorneys; while three of Obama’s more than 100 total United States Attorney nominees had prior service as an elected District Attorney, none were serving in that capacity at the time of nomination. As noted before, studies have shown that violent crime is more often addressed by state courts than by federal courts. Trump’s continued focus on lawyers with state prosecution experience is still in keeping with his recent executive order emphasizing DOJ efforts to fight violent crime.

A couple of stray observations:

In 2015, Donald Cochran wrote a research paper for the American Journal of Trial Advocacy about how Malcolm Gladwell’s teachings in his book The Tipping Point can be helpful to lawyers during jury trials, which probably upped his “cool factor” among the law students he taught.

Shortly after Trump’s inauguration, Halsey Frank wrote an editorial in the southern Maine newspaper The Forecaster arguing in part that “President Trump is appointing some able people” – a nifty coincidence, that (or maybe an indicator he thought he might get the nomination?).

And a final note: This batch of nominees puts the pace of Trump’s United States Attorney nominations slightly ahead of Obama’s – Trump began July 2017 with seventeen nominations, while at the end of June 2009 Obama only had nine. Given that Obama finished July 2009 with nineteen total United States Attorney nominations, it is not unlikely that Trump’s nominations will continue to move along somewhat more quickly than Obama’s, at least in the short to medium term.

This post was written by Ripley Rand of  Womble Carlyle Sandridge & Rice, PLLC.

President’s FY18 Budget Proposes Historic Cuts to EPA Funding and Staffing

On May 23, 2017, the White House unveiled the full version of President Trump’s proposed budget for fiscal year (FY) 2018 entitled “A New Foundation for American Greatness.”  As signaled in the President’s “skinny budget” released earlier this year, the proposed budget would fund the U.S. Environmental Protection Agency (EPA) at $5.7 billion — a more than 30 percent decrease from the current funding of nearly eight billion.  EPA’s congressionally enacted budget has remained relatively flat since 2000, other than a significant boost in 2010 to $10.3 billion.  The proposed FY18 budget also calls for an EPA staffing level of 11,611 — a thirty year low.  The proposed decreased staffing level equates to a 20 percent reduction in the overall EPA workforce, which would eliminate approximately 3,000 employees.  A portion of the staff cuts would come from programs proposed for elimination, including the Center for Corporate Climate leadership, the Coalbed Methane Outreach group, and greenhouse gas reporting programs.  Some of the staff cuts may be accomplished by early retirement and lump sum voluntary separation payment incentives.  On June 1, 2017, EPA Acting Deputy Administrator Mike Flynn sent an e-mail to EPA employees providing preliminary details and next steps on early retirement and separation incentive offers.  Employees who accept offers will leave EPA by early September 2017.

Funding for state and tribal assistance grants (STAG) and other funds for state and regional initiatives is markedly decreased or zeroed out in the proposed budget, with cuts totaling $482 million, or 45 percent below the current enacted levels.  According to the Environmental Council of the States, which represents state departments of environment, STAG monies support approximately 27 percent of state departments of environment annual budgets.

In the area of federal enforcement, the Office of Enforcement and Compliance Assurance’s (OECA) budget would decrease by nearly 25 percent below current funding.  This decrease would reduce civil and criminal enforcement by 18 and 16.5 percent, respectively.  Funding for laboratory and forensics costs that support enforcement cases, including monitoring, would decrease by over 40 percent.  The corresponding reduction in enforcement efforts is likely to result in increased litigation from environmental advocates, particularly for matters governed by the Clean Air Act and the Clean Water Act which authorize citizen suits.

The budget requests $65 million for chemical risk review and reduction efforts under the Toxic Substances Control Act (TSCA), an increase of nearly $3.8 million from the current level.  EPA’s budget document notes that TSCA fee collections, set to begin in the second quarter of FY18, will fund approximately 53 full-time employees to support the chemical review process that were previously funded by federal appropriations. This small boost in funding may not be sufficient enough to support the implementation of “new TSCA,” however, and the implementation could still result in delays.

skinny budget donald trumpThe President’s budget provides $99.4 million in appropriated funding to support EPA’s pesticide registration review and registration program, including implementation.  This amount would decrease funding by $20.4 million from current enacted levels.  In addition to budget appropriations, EPA’s pesticide program is supported by Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) maintenance fees and Pesticide Registration Improvement Act (PRIA) registration application fees.  These fees combined typically generate approximately $40-45 million in additional funding per year. Congress is currently considering the reauthorization of PRIA, which would increase application fees.  Together, however, the total amount of funds available to operate the pesticide program (appropriations and industry fees) have declined over the past years and present a threat to the pesticide program’s ability to meet application review deadlines.

EPA Administrator Pruitt’s Back-to-Basics agenda includes addressing hazardous waste clean-up of the sites that have remained on the Superfund National Priorities List for decades.  In spite of this priority action item, the proposed budget would fund the Hazardous Substance Superfund Account at $762 million, $330 million below the 2017 level.  Instead of relying on the Superfund account to finance remediation, EPA instead would use existing settlement funds to clean up hazardous waste sites.

EPA’s Office of Water’s overall funding would decrease by nearly 20 percent. The Clean Water and Drinking Water State Revolving Funds (SRF) funding levels would remain funded at current levels. The SRFs support states’ administration of their drinking water and surface water programs and related infrastructure projects.  Steep cuts to STAG grants, and zeroing out of the Section 319 Nonpoint Source program and regional initiatives like the Great Lakes and Chesapeake Bay programs will be felt at the state level. The Section 319 program targets nonpoint source pollution, including runoff from agricultural working lands. States use 319 program funds to support watershed improvement projects and incentivize voluntary installation of best management practices on farms (e.g., grass waterways and buffers).

EPA’s FY18 Budget in Brief provides more details on proposed budget allocations and priorities.  The President’s budget is likely to face steep opposition in Congress, which has until September 30, 2017, to pass a budget for FY18, although this timeline will likely be extended through the use of continuing resolutions.  The House is slated to finish its work on appropriation bills before the July 4, 2017, holiday break, which should provide more insights on how much influence the President’s budget will have with appropriations leadership.

This post was contributed by the Government Regulations practice group at Bergeson & Campbell, P.C.

Business and Employee Groups Oppose Merger of OFCCP with EEOC

President Trump’s 2018 budget, released on May 23, proposes to merge the Office of Federal Contract Compliance Programs (OFCCP) with the Equal Employment Opportunity Commission (EEOC) by the end of FY 2018.  The proposed merger purports to result in “one agency to combat employment discrimination.”  The Trump administration asserts that the merger would “reduce operational redundancies, promote efficiencies, improve services to citizens, and strengthen civil rights enforcement.”

Both business groups and employee civil rights organizations have opposed the measure, albeit for different reasons.  The OFCCP is a division of the U.S. Department of Labor, while the EEOC is an independent federal agency.  Although both deal with issues of employment discrimination, their mandates, functions and focus are different.  The OFCCP’s function is to ensure that federal government contractors take affirmative action to avoid discrimination on the basis of race, color, religion, sex, national origin, disability and protected veteran status.  The OFCCP, which was created in 1978, enforces Executive Order 11246, as amended, the Rehabilitation Act of 1973, as amended, and the Veterans’ Readjustment Assistance Act of 1975.  The EEOC administers and enforces several federal employment discrimination laws prohibiting discrimination on the basis of race, national origin, religion, sex, age, disability, gender identity, genetic information, and retaliation for complaining or supporting a claim of discrimination.  Its function is to investigation individual charges of discrimination brought by private and public sector employees against their employers.  The EEOC was established in 1965, following the enactment of Title VII of the Civil Rights Act of 1964.

Business groups oppose the OFCCP’s merger into the EEOC due to concerns that it would create a more powerful EEOC with greater enforcement powers.  For example, the OFCCP conducts audits, which compile substantial data on government contractors’ workforces, while the EEOC possesses the power to subpoena employer records.  Combining these tools could provide the “new” EEOC with substantially greater enforcement power.  Civil rights and employee organizations oppose the merger, believing that overall it would result in less funding for the combined functions currently performed by each agency.

The budget proposal is consistent with the Trump administration’s goal to reduce costs and redundancies through a reorganization of governmental functions and elimination of executive branch agencies.  In light of opposition from both employers and employees, however, the measure lacks a powerful proponent; as a result, it is unlikely that the administration will succeed in effecting a combination, at least as it is currently proposed.

This post was written by Salvatore G. Gangemi of Murtha Cullina.

“Hello, Newman" Government Continues to Litigate Reversed Insider Trading Convictions

Barnes & Thornburg LLP Law Firm

The U.S. Attorney for the Southern District of New York, Preet Bharara, has decided not to go down without a fight. Following a Second Circuit panel’s reversal of Bharara’s signature achievement, the insider-trading convictions of former hedge fund managers Todd Newman and Anthony Chiasson, the U.S. Attorney’s office has petitioned the court for rehearing and rehearing en banc. The Securities and Exchange Commission has also weighed in on the U.S. Attorney’s side, arguing in an amicus brief that the panel seriously erred in its decision. Meanwhile, in other cases, particularly outside the Second Circuit, the Justice Department, and the SEC have argued strenuously that the Second Circuit’s panel decision should not be followed.

In the Second Circuit, the battle lines are being drawn. Bharara’s office has asked both the panel and the full Second Circuit to rehear the case. The US Attorney’s office has argued that the panel erred by imposing two requirements that are purportedly contrary to law– first, that a tipper act for a “personal benefit” of financial consideration, or something at least akin to monetary gain; and second, that the tippee know that the tipper supplying the inside information acted for such a benefit. The SEC has concurred with this assessment, elaborating on Newman’s conclusion that evidence of friendship between tipper and tippee is insufficient to prove the “personal benefit” necessary for tipping liability. The Commission contends that this contradicts Dirks v. SEC, the Supreme Court’s seminal insider trading decision. Both the U.S. Attorney and the SEC contend that, if Newmanremains the law, it will seriously threaten the integrity of the securities markets, and government regulators will be dramatically limited in their ability to prosecute “some of the most common, culpable, and market-threatening forms of insider trading.”

In opposition, Newman and Chiasson, along with various law professors, the criminal defense bar, and even Marc Cuban, have argued that the Second Circuit panel got it right when it imposed an important, objective outer bound to an otherwise amorphous illegal activity. The defendants even engaged in ad hominem criticism of Bharara, analogizing him to a “Chicken Little” complaining that the sky is falling, or more precisely, a “petulant rooster whose dominion has been disturbed.” Those supporting the opinion assert that any perceived difficulty created by the decision can, and should, be rectified by Congress.

Even as the Newman case continues forward, its repercussions are being felt within the Second Circuit and beyond. In the Southern District alone, at least a dozen defendants, who were convicted or pleaded guilty underpre-Newman law, have argued that their cases need to be revisited in light of Newman. No court yet has agreed with that argument, but most of these motions remain pending.

Outside the Second Circuit, the Government is looking to ring-fence the Newman decision and limit its applicability elsewhere. Federal prosecutors, for example in North Carolina, have argued that Newman is not the law in the Fourth Circuit and therefore should not be followed. Meanwhile, defendants in other jurisdictions are invokingNewman in pending, and even resolved, insider trading matters, both civil and criminal.

Defendants are even arguing Newman’s applicability within the SEC’s administrative courts – with success. In In re Peixoto, an SEC administrative proceeding related to Herbalife, the Commission voluntarily dropped its case against Peixoto after Newman. Other cases in the agency’s courts (including against SAC founder Steven Cohen) remain on holding pending final resolution of Newman. And in In re Ruggieri, the administrative law judge said that he would require the SEC to demonstrate the Newman standard of “personal benefit.”

Clearly, the Newman saga has not reached its conclusion, but the fall-out already demonstrates what a momentous decision the Second Circuit panel made.

ARTICLE BY

Brian E. Casey
OF
Barnes & Thornburg LLP