Same-Sex Marriage and ERISA in the Windsor Era
The Supreme Court’s landmark ruling in United States v. Windsor,1 invalidating Section 3 of the Defense of Marriage Act (DOMA) , marks a dramatic shift in our legal system’s treatment of same-sex couples. By invalidating Section 3′s restriction on federal government recognition of same-sex marriage, Windsor returns the determination of spousal status to the states and ensures equal treatment for state-law-recognized same-sex spouses with respect to employee benefits matters, including pension survivor benefits, qualified domestic relations orders, the tax treatment of health and welfare benefits, plan rollovers, and more.
Ponzi Schemes and Banks: Positive Trends in Tort Law
The financial crisis brought with it the exposure and collapse of hundreds of Ponzi schemes,1 many of them headline news over the past five years. Scrambling to recover their lost investments, defrauded investors have turned to the courts. And with the shell companies run by the Ponzi scheme perpetrators typically bankrupt, victim-investors have pointed the finger elsewhere: at the banks where the perpetrators held accounts. The logic goes (according to these investors) that whatever tort the Ponzi schemer committed, the bank was liable for aiding and abetting by way of the banking services that it provided. Plaintiffs have also attempted to hold banks liable on other tort-based theories such as negligence, conspiracy, and conversion.
The Elephant in the Room: Contingency Fees and the Future Of Coupon Settlements After In re HP Inkjet Printer Litigation
In class action litigation, attorneys’ fee awards are the bane of defendants’ existence, the salt in the open wound. Defendants have to pay for their own counsel, and then, if they elect to resolve a case via settlement, they are on the hook not only for the costs of settlement, but plaintiffs’ fees as well!
The way to avoid this result is to eschew class settlements. Indeed, many companies openly espouse a “never settle” philosophy, and for good reason. The reputational hit to a company-turned-defendant is often substantial, especially in consumer cases. Many consumers believe that a settlement reflects a tacit admission of wrongdoing by the company or an acknowledgement that a product is, in fact, somehow defective. Companies rightly factor these intangible costs into their analyses when making strategic litigation decisions. When a company obtains a dismissal of a class lawsuit or defeats class certification, it feels like what it is: a victory, a degree of vindication.
PART II of II A Policyholder’s Guide to Insurance Coverage for “Cyber” Events
Insurance policies are as varied as the risks they address, from ordinary commercial general liability coverageto more exotic coverages such as political risk insurance or warranty and indemnity contracts. However, with respect to the risks commonly associated with a “cyber event,” three traditional coverage types are relevant: liability insurance, property insurance, and crime/fidelity insurance.
Recent State Tax Developments for Pass-Through Entities: Nexus Over Nonresident Owners and Apportionment of Income
It is critical for the owners of pass-through entities and their advisers to continually monitor changes in the complex and evolving world of state and local taxation. These changes can become a trap for the unwary and expose pass-through entities and their owners to unnecessary tax liability and penalties. The complexities in this area of the law are compounded when pass-through entities operate in multiple states and their owners reside in various other states. Compared with resident owners over which a state has jurisdiction because of their physical presence in the state, nonresident owners of pass-through entities are presented with more difficult issues. Thus, owners of multistate pass-through entities must continually keep themselves apprised of changes in the law of not just their state of residence, but also each state in which the pass-through entities operate.
Chinese Investment in the U.S.: Outbound Funds Expand in Reach, Size
Mark Greenfield and Karen Corliss of Blank Rome LLP analyze the history and current trends of Chinese investment in U.S. companies, noting strong growth in the number, size and sectoral spread of Chinese activity. They detail substantial benefits that both economies derive, but also warn of particular challenges resulting from the rivalry of the two countries.
Policy Perspectives on Tax Refunds: An Economic Analysis of Government-Sponsored Debit-Card Refunds
State and federal governments have broadly expanded the use of information technology in handling tax refunds. In this article, John Friedman, assistant professor of public policy at the Harvard Kennedy School, details and analyzes the economic implications of several programs that offer tax refunds on debit cards. He concludes that, while government can certainly cut its own costs by switching to debit cards, the use of these cards is not costless to taxpayers. However, if taxpayers are to have the option of receiving their refunds via debit card, Professor Friedman argues that debit cards do not present a compelling case for the government’s, rather than the private sector’s, provision of this service.
Third Circuit Extends New Source Review ‘Past Violation’ Rulings
The U.S. Court of Appeals for the Third Circuit in United States v. EME Homer City Generation LP augmented the consensus of other appellate courts that Prevention of Significant Deterioration violations under the Clean Air Act are one-time and not continuing and cannot be raised in an enforcement proceeding as a collateral attack on the [...]
The FDIC’s Hedgehog Strategy May Hold The Key To Cross-Border Resolution
The ancient Greek Archilochus said that “the fox knows many things, but the hedgehog knows one big thing.” When it comes to dealing with the next Lehman, it appears that the Federal Deposit Insurance Corporation (FDIC), like the hedgehog, has settled on its one big thing.
This big idea is the “single point-of-entry” (“SPOE”) strategy that the FDIC plans to implement under Title II (Orderly Liquidation Authority) of the Dodd-Frank Act – the statute that empowers the FDIC to appoint itself as receiver for a failed, “systematically important financial institution” (“SIFI”).
Q&A with ACC Value Champions 2013: Borden Ladner Gervais and Healthcare Insurance Reciprocal of Canada (HIROC)
The Association of Corporate Counsel’s Value Challenge recognizes legal service innovations that deliver exceptional value and efficiencies to clients. A collaboration between Borden Ladner Gervais LLP and Healthcare Insurance Reciprocal of Canada (HIROC) is one of this year’s success stories. This innovation came about largely through the efforts of John Morris, National Practice Group Leader for [...]
Use of Online Data in the Big Data Era: Legal Issues Raised by the Use of Web Crawling and Scraping Tools For Analytics Purposes
The Forgotten Art: Advocacy on Behalf of Corporate Victims of Federal Crimes
White-collar criminal practitioners have numerous skills and employ them in many different contexts. In the realm of white-collar practice, however, one discipline goes largely unpracticed: corporate victim advocacy.
Victim advocacy is a valuable tool for achieving important objectives for corporations harmed by white-collar crimes. It is also an opportunity for white-collar practitioners to demonstrate their versatility in providing value to corporate clientele. The corporate client may be pleasantly surprised to learn that white-collar counsel is not necessarily limited to performing reactive and expensive damage control but can also, through victim advocacy, proactively achieve positive results including recovery of corporate assets.
Cybersecurity Insurance to Mitigate Cyber-Risks and SEC Disclosure Obligations
Long a concern of information security specialists, the potential for material economic losses from internet-based intrusion has finally struck a chord in the investment community. Reports of a serious, nearly decade long, external penetration into information intended for only the most senior executives at Nortel Networks Ltd. has been one of the few public examples in which a company’s overall value has been compromised. In response to this risk for publicly traded companies, the Securities and Exchange Commission has issued informal guidance (“SEC Guidance” or “Guidance”) outlining cybersecurity disclosure obligations, requiring registrants to disclose their vulnerabilities and cyber-incidents and their cybersecurity plans, including what form of insurance, if any, they have.
Defending 1933 Act Claims: Rewriting The Playbook After Fait v. Regions Fin. Corp.
Representing a defendant, especially an issuer, in Securities Act litigation has always been a daunting task. All that a plaintiff has needed to plead and prove a prima facie claim under Sections 11 or 12(a)(2) is that the plaintiff purchased a registered security and that the underlying registration statement or prospectus, respectively, contained a misstatement or omission of material fact. “Claims under sections 11 and 12(a)(2) are … Securities Act siblings with roughly parallel elements, notable … for … the in terrorem nature of the liability they create.” Issuers in particular “are subject to ‘virtually absolute’ liability under section 11 … .”
Anti-Corruption Due Diligence in Mergers and Acquisitions: Are Enforcement Authorities Moving Toward a More Flexible Approach?
With increasing enforcement scrutiny on mergers and acquisitions in the past decade, companies that are planning on expansion continue to be baffled about what is required for pre-and post-acquisition anti-corruption M&A due diligence. The FCPA Unit of the Department of Justice’s most significant advisory opinion on this issue, DOJ Opinion Procedure Release 08-02 (“the Halliburton opinion”), issued in 2008, seemed to set very high standards for integrating an acquisition target into the acquirer’s anti-corruption program. Five years later, with FCPA enforcement at an all-time high and no indications that it is likely to recede, global companies planning expansion must view corruption risk as a significant vulnerability when considering business opportunities in emerging markets. Until recently, it seemed logical to assume that the Halliburton opinion formed the base from which all companies had to start to satisfy themselves that their M&A due diligence would pass muster with law enforcement authorities should they inadvertently acquire a corruption problem.
Thirty Two Days and Thirty Two Minutes
While the Chapter 11 process is typically an arduous process for a company’s management, a pre-negotiated plan can, when the circumstances are right, permit for a smooth and efficient reorganization—capturing whatever benefits of Chapter 11 are necessary for the business and emerging quickly without incurring the sometimes significant costs of Chapter 11 and preventing the harm that can result from a business languishing in bankruptcy court.
Q&A with ACC Value Champions 2013: Axiom Law and Mondelēz International
Axiom and Mondelēz International have been named one of this year’s Association of Corporate Counsel (ACC) Value Champions as part of the annual ACC Value Challenge. This distinction is awarded to in-house legal departments and law firms recognized for implementing client service models that deliver results while keeping efficiency high and legal costs low. Mondelēz [...]
Bringing Light to the Dark Data Abyss: The Science of Data Discovery
Managing discovery can be a tricky business. Some companies get into trouble because they understand so little about it that they simply do not know where to begin. Others think they understand everything there is to know and attempt to manage it all themselves.
Understanding the data you have and where it resides is important for any company, but it is also important to know when to call in the experts. There is a scientific approach to collecting data for discovery, and the courts know this, which is why they prefer you do not attempt collection on your own.
How to Avoid Enforcement Actions for Unfair or Deceptive Acts and Practices
“Happy, Happy, Happy” is the phrase used by that towering philosopher Phil Robertson, from the TV show Duck Dynasty. You can be sure no bankers utter that phrase whenever a regulatory agency first breathes a word about possible Unfair or Deceptive Acts or Practices (UDAP) issues. But, you can be equally sure that federal agency enforcement attorneys and safety and soundness staff frequently use Phil’s phrase. After all, they “know” that banks want to quickly resolve UDAP issues and are unlikely to engage in litigation.
End the Summer Associate Sideshow (and start treating them like the almost-lawyers they are)
Today’s typical summer associate program is a creature of the decades-old traditional law practice. Not unlike other aspects of that tradition, while it was born out of well meaning principles (most significantly: “attract the best and the brightest”), it has now lost its way.
The vast majority of summer programs exist in an odd vacuum—like a scene out of the Great Gatsby that’s playing out for the summers on the main stage, while below the surface the rest of the firm is toiling away as (extremely well paid) miners working under vastly different conditions.