Tag: legislation

U.S. House and Senate Reach Agreement on Uyghur Forced Labor Prevention Act

On December 14, 2021, lawmakers in the House and Senate announced that they had reached an agreement on compromise language for a bill known as the Uyghur Forced Labor Prevention Act or “UFLPA.”  Different versions of this measure passed the House and the Senate earlier this year, but lawmakers and Congressional staff have been working to reconcile the parallel proposals. The compromise language paves the way for Congress to pass the bill and send it to President Biden’s desk as soon as this week.

The bill would establish a rebuttable presumption that all goods originating from China’s Xinjiang region violate existing US law prohibiting the importation of goods made with forced labor. The rebuttable presumption would go into effect 180 days after enactment.  The compromise bill would also require federal officials to solicit public comments and hold a public hearing to aid in developing a strategy for the enforcement of the import ban vis-à-vis goods alleged to have been made through forced labor in China.

This rebuttable presumption will present significant challenges to businesses with supply chains that might touch the Xinjiang region.  Many businesses do not have full visibility into their supply chains and will need to act quickly to map their suppliers and respond to identified risks.  Importers must present detailed documentaton in order to release any shipments that they think were improperly detained, a costly and time-consuming endeavor.  Notably, the public comment and hearing processes will guide the government’s enforcement strategy, providing business stakeholders an opportunity to contribute to an enforcement process that could have implications for implementation of the import ban more broadly.

China’s Xinjiang region is a part of several critical supply chains, lead among them global cotton and apparel trade, as well as solar module production.  According to the Peterson Institute:

Xinjiang accounts for nearly 20 percent of global cotton production, with annual production greater than that of the entire United States. Its position in refined polysilicon—the material from which solar panels are built—is even more dominant, accounting for nearly half of global production. Virtually all silicon-based solar panels are likely to contain some Xinjiang-sourced silicon, according to Jenny Chase, head of solar analysis at Bloomberg New Energy Finance. If signed into law, the bill will send apparel producers and the US solar industry scrambling to find alternative sources of supply and prices are bound to increase.

Article By Ludmilla L. Kasulke and Rory Murphy of Squire Patton Boggs (US) LLP

For more legal news and legislation updates, click here to visit the National Law Review.

© Copyright 2021 Squire Patton Boggs (US) LLP

Tribal Cannabis Tourism and Current Status of Federal Legislation Impacting the Cannabis Industry

As Tribes expand their economic endeavors into the cannabis industry, the growth of cannabis tourism is a natural development. Below, we offer details on how cannabis tourism could support Tribal governments’ economic development efforts. We also provide an update on the status of pending federal legislation that could bring positive impacts to the cannabis industry.

Cannabis Tourism

With the pandemic continuing to take a toll on the tourism industry, many U.S. states and territories are exploring ways to help that industry recover. One potential savior for tourism is cannabis. As states went into varying levels of lockdown in early 2020, businesses deemed “nonessential,” including recreational facilities, gyms, bars, restaurants, etc. were forced to shut down. However, early into lockdown, cannabis was deemed “essential” in California, a designation other states with functional cannabis markets quickly adopted. In total, nearly 30 states, along with the District of Columbia and Puerto Rico, deemed cannabis businesses essential. This triggered some major changes in the industry, including:

With all of these changes, cannabis tourism has developed into a potentially rewarding industry that Tribal governments might be able to cultivate as part of efforts to recover economic losses suffered by their tourism and other businesses

What is Cannabis Tourism?

Cannabis tourism is most generally characterized as a destination-based industry that attracts tourists because cannabis is legal in that location. But the industry can take many forms. For example, tourists might visit a dispensary to learn more about the development of cannabis crops, stay at a “bud and breakfast,” tour a cannabis farm or growing facility, or dine at a restaurant with cannabis-infused dishes. Cannabis tourism can also have a positive knock-on effect for many other Tribal businesses.

How can Tribes Participate?

Interested Tribes can create specific cannabis-centered tourist destinations. One example is opening a farm or growing facility that is similar to a wine vineyard, where consumers can tour the facility and sample the products. This concept would serve multiple functions in that the farm would supply dispensaries while providing a tourism destination that would benefit hotels, restaurants, and the local economy.

Another route is to add cannabis tourism into existing tourism infrastructure. Tribes can take advantage of their land base and natural resources by offering cannabis hikes or camping expeditions, where participants are able to experience nature while partaking. Tribes with resort properties can offer CBD-infused massages at their spa, include CBD and hemp products at their gift shops, or offer travel packages designed for cannabis tourists. The idea behind this approach is to utilize the Tribe’s existing tourism infrastructure to provide new cannabis tourism options.

Federal Cannabis Legislation Update

The following is an update on pending federal legislation that would impact the cannabis industry. Summaries of previous cannabis legislative developments are provided in past articles..

The Democrats control both the House and the Senate (with Vice President Harris acting as the tie-breaking vote in the 50-50 Senate) but passing any cannabis legislation in the current Congress might prove difficult. The filibuster rules require 60 votes for a bill to pass the Senate, so any cannabis legislation would need relatively strong bipartisan support.

The future of federal cannabis law remains unclear, but Tribes interested in the cannabis industry can start taking steps now to establish the necessary framework to support this new area of Tribal economic enterprise.

Article By Robert A. Conrad and Laura E. Jones of Van Ness Feldman LLP

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

© 2021 Van Ness Feldman LLP

Don’t Use “Build Back Better” to Sabotage the False Claims Act

Congress is on the verge of setting a dangerous precedent.  As part of the Build Back Better Act, it has added two provisions equivalent to a “get out of jail free card” for Big Banks that violate federal law when they hand out billions in federal mortgage-related benefits.   The two provisions create exemptions to False Claims Act liability by creating blanket immunity from liability when banks fail to exercise due diligence, violate FHA housing regulations, or even directly violate federal laws such as the Truth in Lending Act.

It is obvious why banks want to have their federally sponsored mortgage practices immunized from exposure to the False Claims Act (“FCA”).  The FCA works remarkably well and is widely recognized as “the most powerful tool the American people have to protect the government from fraud.”   The law has directly recovered over $64.450 billion in sanctions from fraudsters since Congress modernized it in 1986.  During the debates on the massive trillion-dollar infrastructure laws enacted or debated this year, corporate lobbyists have been extremely active in successfully preventing Congress from adding any new anti-fraud measures to protect taxpayers from fraud.  As part of these efforts, they targeted the False Claims Act as enemy #1 and already have blocked one key amendment needed to close some weaknesses in that law.

With the Build Back Better Act, these corporate lobbyists have taken their opposition to effective anti-fraud laws to a higher level.  Instead of trying to repeal the FCA, they are simply exempting Big Banks from liability under that law in two new programs.  It is obvious why the Big Banks want the exemption from FCA liability.  As a result of illegal or irresponsible lending and foreclosure practices, such as those that fueled the 2008 financial collapse, banks have had to pay billions in sanctions to the United States.

Two words explain why the FCA is “the most powerful tool” protecting taxpayers from fraud:  Whistleblowers and sanctions.  If you accept federal taxpayer monies, you are required to spend that money according to your contractual agreement or the law.  The FCA’s first secret weapon is whistleblowers.  The law encourages whistleblowers, known as qui tam “relators,” to report violations of the FCA.  Whistleblowers disclosures trigger the overwhelming majority of FCA cases, and the law incentivizes employees to risk their careers to serve the public interest. The second secret weapon is how you prove liability.  Second, when an institution accepts federal monies (such as banks that operate various federally sponsored loan programs), liability can attach if the institution acts in “deliberate ignorance of the truth” when spending federal dollars.  Similarly, if payments are made with “reckless disregard of the truth,” liability can attach.  In other words, corporations (including banks) that accept federal money must ensure that these monies are spent as required by law, regulation, or contract.  Safeguards must be in place to prevent fraud.  If a bank does not have adequate compliance programs to protect against fraud, it cannot plead ignorance when the law is broken and taxpayers are ripped off.

These two key elements of the False Claims Act are precisely what the banking lobby is attempting to undermine through the Build Back Better Act.  The tactics employed by the Big Banks are somewhat devious.  They are doing an end-run around the False Claims Act by exempting themselves from having to engage in any due diligence when spending billions in federal dollars.  The banks are seeking to add language to the Build Back Better Act that will immunize themselves from liability under the False Claims Act when they make payments in “reckless disregard” to the legality of those payments.  The immunities they are seeking legalize “deliberate ignorance” in the use of taxpayer money, in complete defiance of the False Claims Act. Thus, whistleblowers who report these frauds will be stripped of protections they have under the False Claims Act, and the federal government will have no effective way to recover damages from these frauds.

What language in the Build Back Better Act creates an exemption to False Claims Act liability?

Two highly technical provisions are deeply buried within the 2135 pages of the Build Back Better Act’s legislative text. The provisions are sections 40201 and 40202 of the Build Back Better Act.  These two sections establish helpful programs that will provide needed financial support to first-generation homebuyers.  Section 40201(d)(5) would provide $10 billion in down payment assistance. Section 40202(f) would give an interest rate reduction on new FHA 20-year mortgage products to first-time homeowners with a potential value of $60 billion.  But the banking lobby has corrupted these otherwise well-meaning programs. The exemptions obtained by the banks are incubators for massive fraud.  It permits the Big Banks to escape any liability when they abuse the generosity of taxpayers and dole out billions to unqualified individuals.

How do the exemptions work?  To qualify for these taxpayer-financed benefits, an applicant simply has to “attest” that they are first-time/first-generation homebuyers.  That would be the end of the inquiry a bank would need to approve making a payment from the billions allocated in these two programs. Anyone could simply stroll into a bank and “attest” to being such a first-time homebuyer and would thereafter qualify for the federal benefits.  The banks would not be required to do any diligence of their own to confirm the borrower’s eligibility.  Willful ignorance would be legalized.  Reckless disregard in the handling of taxpayer monies would be permitted under this law.  Safeguards, such as requiring banks to adhere to the Truth in Lending Act, which requires verification of a borrower’s statements, would not apply.

Under Sections 40201(d)(5) and 40202(f), banks will not be held liable once they are lied to, even if the bank has reason to know that the borrower is not eligible for the federal payout.  Banks can spend taxpayer money even if the information on an applicant’s loan application directly contradicts the borrower’s attestation that they are a first-time homeowner.  Given the lack of any compliance standards, the temptation to engage in fraud in these programs will be overwhelming.

Permitting banks to escape liability under the False Claims Act opens the door to paying billions of dollars in benefits to unqualified persons.  Such payments rip off the taxpayers and severely hurt all honest first-generation homebuyers denied benefits.  For every fraudster who benefits from this program, an honest homebuyer will be left in the cold due to the reckless disregard of the banks.

Congress should never use a back-door procedure to undermine the False Claim Act, as it sets a dangerous precedent.  It is a devious way to undermine America’s “most effective” anti-fraud law.  Instead of undermining the False Claims Act by granting immunities to Big Banks, Congress should be strengthening anti-fraud laws to protect the taxpayers and ensure that the trillions of dollars spent on COVID-19 relief programs and infrastructure improvement are lawfully spent in the public interest.

Copyright Kohn, Kohn & Colapinto, LLP 2021. All Rights Reserved.
For more articles about banking and finance, visit the NLR Financial, Securities & Banking section.

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

Is a Moratorium on Mergers During the Pandemic a Bridge Too Far?

In an interview with Politico’s Leah Nylen and Betsy Woodruff Swan, Rep. David Cicilline (D-R.I.) explained that he wants the next coronavirus relief package to include a moratorium on mergers while the U.S. economy struggles to face the pandemic. According to the report, the Rhode Island Congressman’s proposal would allow deals “only if a company is already in a bankruptcy or is otherwise about to fail.” Any other deals would be on hold at least until the national pandemic declaration is lifted.

In prepared remarks, Rep. Cicilline’s stated: “As millions of businesses struggle to stay afloat, private equity firms and dominant corporations are positioned to swoop in for a buying spree.” The remarks continued: “This is not complicated. Our country can leave room for merger activity that is necessary to ensuring that distressed firms have a fresh start through the bankruptcy process or through necessary divestitures while also ensuring that we do not undergo another period of rampant consolidation.”

These comments were part of the Congressman’s presentation for an event run by the Open Markets Institute (OMI), which recently said that it favors “an immediate ban on all mergers and acquisitions by any corporation with more than $100 million in annual revenue, and by any financial institution or equity fund with more than $100 million in capitalization.” The OMI claims the ban should remain in place during the current economic and health crisis.

According to the OMI, the ban is necessary because enforcement agencies are partially shut down and unable to effectively evaluate mergers. The OMI believes the ban will help “prevent a wholesale concentration of additional power by corporations that already dominate or largely dominate their industries, especially in ways that may significantly worsen the crisis that now threatens America’s health, social, and economic systems. The history of the Panic of 2008 and the subsequent Great Recession instructs us that such a massive, uncontrolled consolidation will result in the unnecessary firing of millions of employees, the unnecessary bankrupting of innumerable independent businesses, a dramatic slowing of innovation in vital industries such as pharmaceuticals, and a further concentration of power and control dangerous both to our democracy and our open commercial systems.”

Piles of Cash

The organization says that private equity firms and corporations “sit today atop vast piles of cash” and can readily swallow up distressed companies.

Rep. Cicilline and the OMI are rightfully concerned about an uptick in unlawful mergers stemming from the pandemic and should be commended for proactively raising the issue. History has demonstrated that well-capitalized firms will use economic downturns and the consequent drop in company valuations to acquire struggling rivals. And antitrust enforcers are certainly not operating at full capacity given current health and safety guidelines.

Even so, a moratorium on mergers seems like an overcorrection. Most mergers are lawful. While we can debate their overall effectiveness, since 2015, federal antitrust authorities have made second requests in less than 3% of qualifying transactions. And lawful mergers can lead to lower prices, higher quality, and increased innovation, as well as providing liquidity events.

Given these realities, lawmakers should craft legislation that aims to preserve the integrity of the pre-pandemic oversight process. This presumably can be achieved by giving regulators the power to slow down the merger review process when necessary. A resolution along these lines would seem to strike a better balance between protecting against rampant, unlawful consolidation and permitting lawful mergers to proceed.

© MoginRubin LLP

ARTICLE BY Timothy Z. LaComb of MoginRubin.
For more on COVID-19 related legislation, see the National Law Review Coronavirus News section.

Sticks and Stones May Break Bones, But Words May Constitute Unlawful Discrimination

In recent months, there have been several news stories about the legal implications of inappropriate and/or offensive language in our society, generating discussion about whether such language is, or should be, unlawful in certain circumstances.  This past fall, the Massachusetts Legislature held a committee hearing on a widely-publicized bill which sought to penalize the use of “bitch,” by imposing a fine of up to $200 for any person who “uses the word ‘bitch’ directed at another person to accost, annoy, degrade or demean” another person.

While this proposed legislation, fraught with Constitutional issues involving the exercise of free speech, was largely decried and gained no traction, it does highlight an important question: In what circumstances may offensive and demeaning comments constitute unlawful discrimination?  In fact, in January, Chief Justice John Roberts, during oral arguments in Babbe v. Wilkie, asked the hypothetical question whether the phrase “OK Boomer” would qualify as age discrimination.

The answer to Chief Justice Robert’s question is not a bright-line “yes” or “no.” Context matters. For example, in connection with a hostile work environment claim, one of the central legal issues is whether the conduct in question was severe or pervasive. As a general rule, a single, isolated comment will not be actionable as creating a hostile work environment, but in some instances, it may. See Augis Corp. v. Massachusetts Comm’n Against Discrimination, 75 Mass. App. Ct. 398, 408-409 (2009) (noting that a supervisor who calls a black subordinate a f***ing n***** “has engaged in conduct so powerfully offensive that the MCAD can properly base liability on a single instance”).

Courts do not impose a numerosity test. Rather, the legal analysis is focused on whether the discriminatory comments “intimidated, humiliated, and stigmatized” the employee in such a way as to pose a “formidable barrier to the full participation of an individual in the workplace.” See Thomas O’Connor Constructors, Inc. v. Massachusetts Comm’n Against Discrimination, 72 Mass. App. Ct. 549, 560–61(2008); Chery v. Sears, Roebuck & Co., 98 F. Supp. 3d 179, 193 (D. Mass. 2015) (noting that, in the context of a hostile work environment based upon race, “[i]t is beyond question that the use of the [“N” word] is highly offensive and demeaning, evoking a history of racial violence, brutality, and subordination”).

Similarly, in the context of a disparate treatment claim (e.g., allegations that employee was terminated based on unlawful age bias), evidence that the decision-maker referred to the employee as a “Boomer” should not be evaluated in a legal vacuum. Rather, this evidence may be presented to the jury as just one piece of a “convincing mosaic of circumstantial evidence” from which a fact-finder could properly determine that the termination decision was driven by discriminatory animus based upon age. See Burns v. Johnson, 829 F.3d 1, 16 (1st Cir. 2016).

So, while sticks and stones may break bones, words also do harm and depending upon the circumstances, may result in legal claims and liability.

© 2020 SHERIN AND LODGEN LLP

For more on Free Speech, see the National Law Review Constitutional Law section.

Growing Number of States Enact Drug Pricing Transparency Laws

Drug prices continue to be a hot button issue in American politics.  While many of the Trump Administration’s efforts to curb increasing drug prices stalled in 2019, a number of state legislatures have adopted drug price transparency laws in recent years.  Since 2015, Vermont, Nevada, California, Maryland, Louisiana, New York, Oregon, Colorado, Connecticut, Maine, Texas, and Washington have all adopted drug pricing transparency laws.  These laws are designed to incentivize manufactures to lower drug prices by requiring them to report information about drug price increases and their justification for how drug prices are set.  We have been tracking and summarizing these laws, and you can find our summary here.

Below is a brief overview of the trends that we’re seeing in state drug price transparency laws.

  • State Laws Requiring Manufacturer Reporting on Drug Price Increases.  The most prevalent type of drug price transparency laws requires manufacturers to report an extensive amount of information about drug price increases.  Generally, states require manufacturers to report the information to a state government agency (e.g., Oregon), but other states (e.g., California) require manufacturers to provide advance notice of drug price increases to purchasers.  Generally, reporting requirements are triggered when the wholesale acquisition cost (WAC) increases over a certain dollar threshold or when the net increase of the WAC increases a certain percentage over the course of a year.
  • State Laws Requiring Manufacturer Reporting for Specific Drugs Identified by the State or Certain Types of Drugs. Several states (e.g., Connecticut and Vermont) authorize an independent board to compile a list of drugs on which the state spends significant dollars and/or for which the WAC has increased significantly over the past year or past five years.  Manufacturers of the drugs identified by the board are required to report certain information about the drugs’ costs and pricing.  The reporting requirements in other state laws are specific to certain types of drugs.  For example, Nevada’s drug price transparency law initially applied only to forms of insulin and biguanides, which are essential for diabetes treatment.  In 2019, Nevada expanded the law to apply to prescription drugs essential for asthma treatment as well.
  • State Laws Requiring Pharmacy Benefit Managers (PBMs) to Disclose Manufacturer Rebates.  These laws place accountability for drug price increases on PBMs by requiring them to disclose the amount of rebates they negotiate and retain from manufacturers.

©1994-2020 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

ARTICLE BY Rachel E. Yount of Mintz.
For more drug pricing transparency developments see the National Law Review Biotech, Food & Drug law page.

Proposed Washington State Law Would Create 32-Hour Workweek

New legislation recently introduced in the Washington State Legislature seeks to implement a 32-hour workweek for nonexempt Washington-based workers. If the proposal were to become law, employers would be required to pay overtime compensation to nonexempt employees whose workweeks exceed 32 hours.

Senate Bill (SB) 6516 proposes to amend RCW 49.46.130, the Washington law that establishes a 40-hour workweek in the state. Because the proposal would amend but not replace the existing law, the current exemptions would remain applicable—and none have been amended by the proposed bill. Instead, the bill’s proposed changes merely—but monumentally—revise the references in RCW 49.46.130 from a 40-hour workweek to a 32-hour workweek.

The lead cosponsor of SB 6516 is Washington State Senator Joe Nguyen. In several interviews, Senator Nguyen seems to view the proposal as a “conversation” starter and a “concept” to begin discussing. Because it appears to be a preliminary measure, we do not expect the proposal to pass, but, we will continue to follow SB 6516 closely and provide legislative updates as necessary.

© 2020, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

For more on workweek hour legislation, see the National Law Review Labor & Employment law page.

House Committee Releases Framework for Comprehensive Climate Legislation

In early 2019, House of Representatives leadership directed each House committee to examine policies within its legislative jurisdiction to address the complex challenges of global climate change. In addition, House leadership created a Select Committee on the Climate Crisis, which would work with standing committees who have jurisdiction, such as the Energy and Commerce Committee, to deliver climate policy recommendations. Standing committees with jurisdiction, as well as the Select Committee, have been holding hearings, moving legislation, and asking the public for ideas and input since the 116th Congress convened in January of 2019.

As a result of these efforts, last week Democratic leadership of the House Energy & Commerce Committee announced their intention to release comprehensive climate change legislation—the Climate Leadership and Environmental Action for our Nation’s (CLEAN) Future Act. The Committee Democrats released a 15-page memorandum outlining the parameters, goals, and timeline for the Committee’s work on the forthcoming bill (the “Legislative Framework”). Comprehensive draft legislative text is expected to be released by the end of January. The Committee also announced its intentions to proceed with legislative action on some bills already introduced. The Committee’s Energy Subcommittee marked up nine such bills on January 9 and reported them for consideration by the full Committee.

Committee Democrats intend the forthcoming bill to create a process to vet and deliberate policies that would address the climate challenge.  It will provide an opportunity to analyze, debate, and refine policies proposed in the Legislative Framework.  At the press announcement, Committee Chair Frank Pallone (D-NJ) stated he intends to engage in the process on a bipartisan basis and hopes that Republicans will participate in the Committee’s forthcoming legislative efforts.

This alert examines the potential implications of the proposed legislation and provides a comprehensive breakdown by industry sector of the first major set of climate-related policy recommendations from the House Energy & Commerce Committee that could result in formal legislative action in over a decade.

Policy Recommendations

According to the Legislative Framework, the CLEAN Future Act would establish programs and policies aimed at achieving net-zero, economy-wide greenhouse gas (GHG) emissions by 2050. The legislation will be the product of a months-long fact-finding effort by the Committee, which has held fifteen climate-related hearings since the beginning of the 116th Congress and has solicited stakeholder input from the environmental community, environmental justice advocates, labor advocates, industry representatives, and the public. In addition, the legislation will incorporate numerous bills previously introduced by Democrats during this Congress.

The CLEAN Future Act is also notable for what it is not expected to include – a carbon tax or a cap-and-trade program. Committee Chairman Frank Pallone has stated that the CLEAN Future Act can achieve its goals without a carbon tax and that such a policy is outside the Committee’s jurisdiction in any event (the House Ways and Means Committee maintains jurisdiction over all tax-related matters). Jurisdictional boundaries also mean that the CLEAN Future Act does not include some additional provisions under the jurisdiction of other committees, such as energy technology research and development, agriculture, or potential tax-related policies.

Finally, the CLEAN Future Act would not remove any of the Environmental Protection Agency’s (EPA) existing authorities under the Clean Air Act to regulate GHG emissions, but rather would augment those authorities as discussed in the summary of the Legislative Framework, below.

Next Steps

The House Energy & Commerce Committee Leadership said they expect to release draft legislative text for the CLEAN Future Act by the end of January. In the interim, the Committee will continue to hold hearings and markups on smaller, sector-specific legislation that may be included in the broader CLEAN Future Act.

Other House committees are also working on climate policy. The House Select Committee on the Climate Crisis is set to release a suite of legislative recommendations in March to inform the development of climate change legislation considered by other Committees that have authority to legislate as well as conduct oversight. Last year, the House Science, Space, and Technology Committee, which has jurisdiction over the Department of Energy (DOE) research programs, approved a series of bills aimed at increasing and improving energy technology innovation. The House Natural Resources Committee introduced legislation in December 2019 that aims to achieve net-zero GHG emissions from public lands and waters by 2040. In addition, the House Ways and Means Committee released a discussion draft in November 2019 for the Growing Renewable Energy and Efficiency Now (GREEN) Act. The GREEN Act would extend and expand existing tax incentives that promote renewable energy and increase energy efficiency. If a carbon tax proposal emerges for Congressional consideration, it would come from that Committee as well.

Congressional Republicans and the White House have thus far opposed the kind of legislative and regulatory mandates contemplated for the CLEAN Future Act, instead offering support for policies that promote energy innovation through funding of research and development programs at DOE. In the Senate, the Energy and Natural Resources Committee, led by Chairman Lisa Murkowski (R-AK), is currently developing a comprehensive legislative package focused on energy innovation that could be voted on and readied for full Senate consideration in the first half of 2020.

It is possible that a set of climate-related bills that have been approved by other Committees could receive a House vote as a smaller legislative package this year, particularly as Speaker of the House Nancy Pelosi (D-CA) has committed to bringing climate change legislation for a vote on the House floor in 2020. Some candidates for inclusion in such a package are bills that were reported out of the House Science, Space, and Technology Committee that would reauthorize DOE research programs for wind, solar, geothermal, battery storage, and carbon capture and storage.

Even if the entirety of the CLEAN Future Act does not receive a vote in this Congress, entities in affected industries, states, and localities should consider participating in the public process to shape the bill because it is intended to lay down a marker for policies that Democrats are likely to pursue if they prevail in the Presidential election and gain additional seats in Congress.

Specific Elements of the CLEAN Future Act Described in the Legislative Framework

     Title I: National Climate Target for Federal Agencies

The CLEAN Future Act would direct all federal agencies to use existing authorities to achieve economy-wide net-zero GHG emissions by 2050. The bill would take a technology-neutral approach and direct the EPA to evaluate each agency’s plans, make recommendations, and report on progress each year.

     Title II: Power Sector

The CLEAN Future Act would establish a Clean Electricity Standard (CES) requiring all retail electricity suppliers to supply 100 percent clean energy by 2050. The Legislative Framework states that the CLEAN Future Act would incorporate elements of two separate CES bills, one introduced by Senator Tina Smith (D-MN) (S. 1359) and Congressman Ben Ray Lujan (D-NM) (H.R. 2597) and another currently being developed by Energy & Commerce Committee member Diana DeGette (D-CO). The CES under the CLEAN Future Act would allow suppliers to buy and trade clean energy credits, purchase them via auction, or pay an “alternative compliance payment.” As outlined, the CES would provide a limited pathway for continued use of coal and natural gas-fired power by authorizing fossil fuel generators with carbon intensities lower than 0.82 metric tons of CO2 (after any carbon capture) to receive partial credit. An outstanding issue is whether and how existing hydropower would be credited in the CES.

The bill would also direct the Federal Energy Regulatory Commission (FERC) to: (1) reform energy markets to reduce barriers to integration of clean resources—including energy storage systems and distributed energy resources—and (2) consider climate impacts in reviewing proposed new natural gas pipelines. It also mandates RTO and ISO membership for all electric providers and proposes reforms to the Public Utility Regulatory Policy Act of 1978 (PURPA) to promote energy storage deployment and “non-wires solutions,” as well as protecting qualifying facilities’ right-to-contract. Transmission, demand response, transformer reserves, and many other policies affecting the power sector are also addressed in the summary of the legislation.

     Title III: Buildings and Efficiency

According to the Legislative Framework, the CLEAN Future Act would establish targets for model building energy codes for use by states and localities, leading to a requirement of zero-energy-ready buildings by 2030.

     Title IV: Transportation

The CLEAN Future Act would direct EPA to set increasingly stringent GHG emission standards for light-, medium-, and heavy-duty vehicles. The bill would also provide support for the development of electric vehicles (EVs) and EV-charging infrastructure, a top priority for House Democrats. The Legislative Framework anticipates provisions for shifting to lower carbon transportation fuels, including for aviation and shipping.

     Title V: Industry

The CLEAN Future Act would establish a “Buy Clean Program” that sets carbon intensity performance targets for construction materials and other products used in federally-funded projects. The legislation would also extend eligibility of DOE’s Section 1703 Loan Guarantee Program to industrial decarbonization projects. Finally, the bill would establish a technology commercialization program for carbon capture and utilization and a prize for direct air capture technologies.

     Title VI: Environmental Justice

The CLEAN Future Act would codify Executive Order 12898 established by President Clinton, which requires federal agencies to integrate environmental justice into their missions. The bill would also introduce environmental justice considerations into the approval of state plans for air pollution regulation and disposal of hazardous waste.

     Title VII: Super Pollutants (Short-Lived Pollutants)

The Legislative Framework also describes provisions that would address short-lived climate pollutants, which account for 20 percent of U.S. GHG emissions on a carbon dioxide-equivalent basis. For example, the legislation would direct the oil and gas sector to reduce methane emissions 65 percent below 2012 levels by 2025, and 90 percent below 2012 levels by 2030. The bill would also prohibit routine flaring for new sources and limit routine flaring for existing sources to 80 percent below 2017 levels by 2025—with a complete phase-out of the practice by 2028. The bill would further direct EPA to regulate emissions from liquefied natural gas facilities and offshore oil and gas operations.

     Title VIII: Economy-wide Policies

Other provisions planned for the bill include energy efficiency programs, State Climate Plans, a National Climate Bank, and workforce training programs.

Regarding State Climate Plans, the bill would set a national climate standard of net-zero GHG emissions in each state by 2050 and grant states flexibility in developing policy plans to meet the standard. Each state plan would be subject to EPA approval. Funding for existing climate-related grant programs and funding for state initiatives are expected to be a significant part of this section of the legislation.

Regarding the National Climate Bank, the bill would incorporate previously introduced legislation, the National Climate Bank Act (H.R. 5416), aimed at mobilizing public and private capital to provide financing for low- and zero-emissions energy technologies, climate resiliency, building efficiency and electrification, industrial decarbonization, grid modernization, agriculture projects, and clean transportation. The bill would require the Bank to prioritize investments in communities that are disproportionately affected by the impacts of climate change.

© 2020 Van Ness Feldman LLP

For updates on the CLEAN Future Act, follow the National Law Review Environmental, Energy & Resources law page.

No Copyright Case Too Small: Content Creators Rejoice or Casual Infringers Beware?

An office jokester emails a funny meme she copied off Google to a colleague. A tourist snaps a picture of a painting in an art gallery and posts it to his travel blog. A teacher prints copies of a recently published Internet article and distributes to his class. A teen reposts his friend’s Instagram picture on his own social media page. To these casual infringers, no harm has been done and there’s certainly no reason to “make a federal case out of it.” But to the copyright owners, these small acts of infringement mean something. Perhaps not enough to justify the expense and time required for a federal claim, but action may be worth pursuing on a smaller scale.

Enter the pending CASE Act, intended to protect the “creative middle class,” and a potential boon to small businesses and individual content creators, while simultaneously presenting a threat to the “micro-infringements” committed by the ordinary person throughout the day. Last week, the US House of Representatives approved the Copyright Alternative in Small-Claims Enforcement Act of 2019 (CASE Act) by a landslide 410-6 vote. The bill is intended to create a Copyright Claims Board within the US Copyright Office that would hear copyright claims of up to $15,000 per work infringed, with statutory damages capped at a total of $30,000.

If passed by the Senate, the CASE Act is likely to be a welcome avenue for graphic designers, bloggers, photographers, authors, vloggers, and other individual and small business copyright owners to protect their works. Currently, pursuing copyright infringement litigation is limited to filing suit in federal courts, the cost of which can be prohibitive for many small businesses. The proposed Copyright Claims Board provides a more affordable avenue—effectively, a copyright small claims court—to enforce copyright ownership.

Supporters say that small businesses have long needed a more efficient and affordable means to enforce their copyrights. To this point, much of the unauthorized exchange and use of Internet-based works or smaller-scale copyrighted works has been difficult to police. In fact, June Besek, the executive director of the Kernochan Center for Law, Media and the Arts at Columbia Law School, recently told the ABA Journal that many infringers knowingly exploit copyrighted material because they are confident they will never be challenged. (Anyone remember the flagrant use of Napster and LimeWire by teens in the late 1990s and early 2000s to illegally download music—excuse me, “file share”—with little fear of repercussions for their “small-scale” acts of infringement?). A number of organizations, including the American Bar Association, have expressed support for the CASE Act.

But that support, while widespread, is not universal. The American Civil Liberties Union opposes the proposed CASE Act on the grounds that it will stifle free speech and the open sharing of information. Other critics say that by lowering the threshold for infringement claims, lawmakers also are opening the door for “copyright trolls” to file nuisance infringement claims with the Copyright Claims Board. And many are less than keen on the idea that inadvertently unanswered copyright infringement complaints could cost ordinary Americans up to $30,000 in default judgments per proceeding—perhaps a small sum to a business, but potentially life-changing to many individuals—with very limited ability to appeal, under the currently proposed language of the Act.

Notably, as currently written, the small-claims tribunal established under CASE will be entirely voluntary, meaning the complaining party can elect to use the Copyright Claims Board, and the defending party may choose to opt out. But critics point out that the opt-out window is only 60 days long, and easily could be missed by an unwitting defendant.

Next, the Senate will consider the CASE Act, but observers believe it will pass with bipartisan support. The final language of the Act may be somewhat different from its current form, so stay tuned for more updates as the CASE Act makes its way through the legislature.

What the proposed CASE Act could mean for you:

Would-be plaintiffs (or defendants) appearing before the proposed Copyright Claims Board are encouraged to do so with licensed legal representation. Some have suggested that this small claims court format will allow parties to represent themselves without needing to incur the fees of legal representation. However, it is important to remember that, though the monetary stakes may be lower than in federal court, the complex legal nuances of copyright law, not to mention jurisdiction, service, discovery, evidence, joinder of parties, and expert testimony, remain the same and are best addressed by experienced legal counsel.

Owners of large copyright portfolios may find the CASE Act to allow greater leeway in defending their works against smaller-player infringers. Businesses with larger portfolios may wish to take stock of their protected works and develop an enforcement strategy, taking into account this more accessible avenue for enforcement.

Smaller companies or individual content creators, too, may find the proposed CASE Act to provide the freedom to assert their copyrights more aggressively than they have done previously. These companies and individuals also are encouraged to take stock of their copyright portfolios, and consider setting up infringement alerts through their legal representatives or third party vendors in order to take a more offensive stance.

On the opposite side of the court room, copyrighted work users are cautioned to think carefully about their use of protected works. Businesses and schools may want to consider updating policies on use and distribution of protected works, with a more conservative mindset. The relative ease of filing suit with the Copyright Claims Board may give rise to a more litigious “creative middle class.” And while the damages may be smaller-scale, the attendant legal costs may not be, and damages from multiple suits may add up quickly.

 

Copyright © 2019 Womble Bond Dickinson (US) LLP All Rights Reserved.

ARTICLE BY Kristin Lamb of  Womble Bond Dickinson (US) LLP.
For more copyright infringement regulation, see the National Law Review Intellectual Property law page.