9th Circuit Holds TILA Bars Rescission Suits Filed More Than 3 Years After Consummation
In McOmie-Gray v. Bank of America (9th Cir. Feb. 8, 2012), the Ninth Circuit Court of Appeals held that under the Truth in Lending Act (“TILA”), “rescission suits must be brought within three years from consummation of the loan, regardless whether notice of rescission is delivered within that three-year period.” It ruled that the three year period in the Act is an absolute limitation on rescission actions and that the one year period for bringing claims applies only to damages actions and does not extend the time to file a claim for rescission even where the borrower has sent the Bank a written notice of rescission within three years of loan signing or “consummation.” To learn more about the facts in this case and the Court’s decision, please click here to read the Alert published by the Commercial Litigation Client Service Group and the Financial Institutions Client Service Group on March 6, 2012.
How Long Should You Retain Data? Recent Developments May Add Confusion Not Clarity
Businesses have always collected information about their customers, but with the explosion of on-line commerce the quantity of information collected has ballooned. One question that necessarily arises for almost any business is deciding how long it will keep the data it collects. Businesses are aware that future developments in technology will improve the usefulness (and value) of the data that is currently in their possession. Retaining consumer data, however, raises a number of legal risks which are often difficult to quantify in light of the changing regulatory and litigation landscape. For a discussion of how recent developments add to the legal complexity, please click here to read the Bulletin published by the Data Privacy & Security Team on March 16, 2012.
Supreme Court Weakens EPA’s Enforcement Regine
The United States Supreme Court handed landowners a major victory against the United States Environmental Protection Agency (EPA) in its unanimous decision in Sackett v. EPA, No. 10-1062. The decision announced March 21, 2012, held that Clean Water Act compliance orders can be challenged in court under the Administrative Procedures, undercutting EPA’s historic practice of using compliance orders to, in the words of the Court, “strong-arm” parties into voluntary compliance. To learn about the case and the Court’s decision, please click here to read the Alert published by the Environmental Client Service Group on March 22, 2012.
SEC and FINRA Issue Guidance on Broker Dealer Branch Inspections
Broker-Dealers who face inspections from regulators should take heed of recent guidance provided by the two principal securities regulatory agencies. The regulators are the Financial Industry Regulatory Authority (“FINRA”) and the SEC’s Office of Compliance Inspections and Examinations. Their jointly issued “National Examination Risk Alert” offers guidance on policies and procedures that broker-dealers should consider for branch office inspection programs. To learn more, please click here to read the Alert published by the White Collar Defense & Investigations and Securities Litigation & Enforcement Client Service Groups on December 13, 2011.
State Taxation of Former Residents’ Retirement Income
Recently, the New York State Department of Taxation and Finance issued an Advisory Opinion regarding whether New York State may impose income tax on distributions from a nonqualified deferred compensation plan made to a former resident. The opinion, consistent with federal law, concluded that New York State may not impose tax on these retirement payments. To read more about the Advisory Opinion, please click here for the Alert published by the Employee Benefits and Executive Compensation Client Service Group on December 28, 2011.
Reminder Regarding Information Reporting For Corporate Actions That Affect Stock Basis
Issuers of securities who undertook an “organizational action” in 2011 that affected the basis of such securities are required to file an information return reporting such action. The Information Return for actions taken in 2011 was due to be filed January 17, 2012 for actions taken in 2011. For more information on timing of returns for actions in 2012 and subsequent years, please click here to read the Tax Advice and Controversy Client Service Group Bulletin published December 30, 2011.
CPSC Opens Business Registration for New Consumer Product Safety Information Database
The new Consumer Product Safety Information Database is now available online on a trial basis, and will launch officially in March at www.SaferProducts.gov. The Database allows a broad range of people to file so-called “reports of harm” informing the CPSC about an incident or concern that the submitter believes is an indication a product is unsafe or potentially hazardous. To read more the database, please click here to see the Alert published by the Retail Team on February 3, 2011.
IRS Reverses Course — Breast Pumps and Other Lactation Supplies are Now Deductible Medical Expenses Subject to Reimbursement under FSAs, HRAs and HSAs
In Announcement 2011-14, the Internal Revenue Service concluded that breast pumps and supplies that assist lactation are medical care under Section 213(d) of the Internal Revenue Code and can therefore be reimbursed under a health flexible spending arrangement. To learn more about this announcement, please click here to read the Feburary 22, 2011 Alert published by the Employee Benefits & Executive Compensation Client Service Group.
Patent Reform Act of 2011
On January 25, 2011, The Patent Reform Act of 2011 was introduced by Senator Leahy (D-VT) with bipartisan support. The Bill is the latest installment of Congress’ attempts to pass patent legislation reform, following the Patent Reform Act of 2009 and other bills in recent years, all of which died in Congress. To learn more, please click here to read the February 22, 2011 Bulletin published by the Intellectual Property Client Service Group.
Wide-Open House Budget Debate Moves Toward Finish Line
The House continues to work towards completing a major budget bill to fund the federal government for the remainder of the 2011 fiscal year. Of the hundreds of amendments which have been offered and voted upon, major energy and environment-related amendments would reverse a law that requires the federal government to pay the legal costs of some environmental plaintiffs, de-fund the White House climate czar’s office, prevent an EPA appeals board from revoking air permits for oil exploration in the Arctic, and de-fund the EPA’s greenhouse gas emissions registry. To read more about the proposed amendments and other energy updates, please click here to see the February 18, 2011 Energy Update.
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SEC Issues Final “Say-on-Pay” and “Golden Parachute” Rules
On January 25, 2011, the Securities and Exchange Commission released its final “say-on-pay” and related golden parachute rules to implement the provisions of Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. For a summary of the rules, please click here to read the Bulletin published by the Corporate Finance and Securities Group on January 27, 2011.
SEC Issues Proposed Rules for “Conflict Minerals” Disclosure
The Securities and Exchange Commission has issued proposed rules to implement the “conflict minerals” disclosure requirements in Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Section 1502 amended the Securities Exchange Act of 1934 (the “Exchange Act”) by adding Section 13(p). Section 13(p) requires the SEC to promulgate disclosure rules concerning the use of certain minerals that originate in the Democratic Republic of the Congo or its adjoining countries (the “DRC countries”). For more information on the proposed rules, please click here to read the Client Alert published by the Corporate Finance and Securities Client Service Group on January 3, 2011.
When All Appropriate Inquiry Isn’t Enough: Court Highlights the Significance of Other Factors in the Bona Fide Prospective Purchaser Defense
Anyone who has been involved in a real estate transaction relating to commercial or industrial property has likely dealt with conducting “All Appropriate Inquiry” into the site, which generally includes the preparation of a Phase I Environmental Site Assessment and may include Phase II sampling work. All Appropriate Inquiry (“AAI”) is one necessary component of the “bona fide prospective purchaser” (“BFPP”) defense established under the 2002 Brownfields amendments to Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”). The BFPP defense is intended to protect property owners from liability for contamination that clearly occurred prior to their period of ownership. However, conducting AAI is not the only prerequisite to establishing a BFPP defense. The BFPP requirements beyond AAI are highlighted in Ashley II of Charleston, LLC v. PCS Nitrogen, et al., 2010 U.S. Dist. LEXIS 104772 (D.S.C. Sep. 30, 2010), one of the first cases to address in detail the BFPP defense. To learn more about this case, please click here to read the Client Alert published by the Environmental Client Service Group on January 3, 2011.
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President Signs Sweeping Financial Reform Bill: What our Non-Bank Public Companies Need to Know Now
On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act. Included in the reform legislation — aimed primarily at the reform of financial institutions – are provisions that will apply to all publicly traded companies, including provisions relating to “say on pay” shareholder votes, proxy access, executive compensation disclosure and compensation committees. For more information on these and other provisions of the Act, please see the Bulletin published by the Corporate Finance and Securities and Employee Benefits Client Service Groups on July 22, 2010.
Private Fund Investment Advisers Registration Act of 2010: New Law Changes Regulatory Framework for Alternative Investment Managers
On July 21, 2010, President Obama signed into law the financial reform package known as the Dodd-Frank Wall Street Reform and Consumer Protection Act, which contains the Private Fund Investment Advisers Registration Act of 2010 (the “Private Fund Act”). The Private Fund Act changes the regulatory framework that governs investment advisers managing private fund investments, including private equity funds, hedge funds and certain real estate funds. For more information on the Private Fund Act, please see the client Alert published by the Alternative Investments Group on July 29, 2010.
Department of Labor Clarifies FMLA Definition of “Son or Daughter,” Confirming Benefit Eligibility of Non-Traditional Families
Under the Family and Medical Leave Act, eligible employees may take up to 12 weeks of job-protected leave upon the birth of a son or daughter, the placement of a son or daughter for adoption or foster care, or to care for a son or daughter with a serious health condition. Pursuant to the statute, the term “son or daughter” not only includes children with whom a parent has a biological or legal relationship, but the children of individuals standing “in the place of a parent.” For more information on the clarification of the definition of the term “son or daughter”, please see the client Alert published by the Labor & Employment Client Service Group on July 19, 2010.
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Regulations Issued on Preexisting Condition Exclusions, Annual and Lifetime Limits, Rescissions and Patient Protections under Health Care Reform
On June 22, 2010, the Departments of Labor, Treasury and Health & Human Services issued regulatory guidance under the Patient Protection and Affordable Care Act regarding prohibitions on preexisting condition exclusions, annual and lifetime limits and rescissions, as well as guidance regarding certain patient protections. These rules are generally effective for plan years beginning on or after September 23, 2010 (January 1, 2011 for calendar year plans). For more information on the rules, please see the Bulletin published by the Employee Benefits & Executive Compensation Client Service Group on June 30, 2010.
Grandfathered Plan Regulations Provide Vital Compliance Information for Employer-Sponsored Health Plans
On June 14, 2010, the Departments of Labor, Treasury and Health & Human Services issued much-anticipated guidance on how a group health plan maintains or loses its status as a grandfathered plan under the Patient Protection and Affordable Care Act. A grandfathered plan is generally one that was in effect on March 23, 2010. Because grandfathered plans are exempt from many of the Act’s requirements, maintaining a plan’s grandfathered status has important plan design and cost implications. Please read the Employee Benefits & Executive Compensation Group’s Bulletin published June 16, 2010, for more information on the interim final regulations.
Supreme Court Expands Time Period for Filing Title VII Disparate Impact Charges
In Lewis v. City of Chicago, the US Supreme Court ruled that the period in which to file an EEOC charge alleging that an employment practice has a disparate impact commences anew whenever that practice is applied, not when that practice was first adopted. The Lewis decision sharpens the dilemma created by last summer’s Ricci v. DeStefano decision, which held that an employer’s changing an employment practice based on its fear of possible disparate impact claims could be a basis for disparate treatment claims. For more information on the decision, please see the Labor & Employment Group’s client Alert published June 1, 2010.
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Senate Adopts Corporate Finance and Executive Compensation Provisions in Financial Reform Bill
On May 27, the Senate released the text of the financial reform bill that was passed the prior week. The bill, known as the “Restoring American Financial Stability Act of 2010″ or the “Act,” would result in sweeping reforms to the financial industry. However, it also contains a number of significant provisions that would affect corporate governance and executive compensation at public companies, as well as Regulation D private placements, whistleblowers and beneficial ownership reporting. This Corporate Finance and Securities Bulletin outlines some of the more important provisions of the Act.
Click here for a complete copy of the Bulletin.
FTC Extends Deadline for Identity Theft Red Flags Rule to December 31, 2010
The Federal Trade Commission announced that it will further delay enforcement of the “Red Flags” Rule through December 31, 2010, while Congress considers legislation that would affect the scope of entities covered by the Rule. The announcement does not affect other federal agencies’ enforcement of the original November 1, 2008 deadline. As a result, the extension does not apply to banks and other financial institutions that are covered by the Red Flags which were separately issued by the Federal Reserve, FDIC, Treasury Department, or National Credit Union Administration. This Antitrust, Franchise & Consumer Client Bulletin discusses the announcement.
Click here to read the complete Bulletin.
Agencies Issue Interim Rules on Dependent Health Care Coverage of Children to Age 26
On May 10, the Internal Revenue Service, the Department of Labor and the Department of Health and Human Services jointly issued interim final regulations addressing the provision of dependent coverage of children to age 26 under the Patient Protection and Affordable Care Act, as amended.
Click here for a copy of the Employee Benefits & Executive Compensation Client Bulletin regarding the new regulations.
Third Circuit Rules Secured Lender Not Entitled to Credit Bid at Sale of Collateral Under a Cramdown Plan
On March 22, 2010, the Third Circuit in a split decision joined the Fifth Circuit in holding that a debtor may sell its assets under a plan of reorganization without permitting a secured lender to credit bid by offsetting its secured claim against the purchase price. This decision may have major implications for secured lenders and may lead to more contested confirmation hearings and litigation over valuation. For more information, please read the Client Alert published by the Bankruptcy, Restructuring and Creditors’ Rights Client Service Group on March 30, 2010.
Summary of the Federal Reserve Board’s Final Gift Card Rules
On March 23, 2010, the Federal Reserve Board issued its final rule, a summary and analysis of the final rule, and the official staff interpretation of the final rule in connection with Title IV of the CARD Act. The Final Rules are comparable to the proposed rules that were issued in November, and follow the gift card related provisions set forth in the CARD Act. For a brief summary of key provisions of the Rules, please read the Client Alert published by the Financial Institutions Client Service Group on March 29, 2010.
Proposed Amendments to the Federal Sentencing Guidelines Emphasize the Importance of Having an Effective and Compliant Records Management Program – What Every Business Needs to Know
In January, the United States Sentencing Commission published proposed changes to the Federal Sentencing Guidelines. Public hearings on the proposed amendments were held in March. The Commissioners are to take final action on the proposals in April. The amendments will be effective in November, unless Congress intervenes. A major focus of the proposed amendments is on the document retention component of records management. For a discussion of the proposed changes, please read the Client Alert published by the Records Management Team on March 24, 2010.
SEC Approves Rule Changes Regarding Executive Compensation and Corporate Governance
On December 16, 2009, the SEC approved rule changes that would expand proxy statement disclosures relating to executive compensation and corporate governance. Additionally, Chairman Shapiro confirmed that the SEC expects to act on the controversial proxy access proposal (which was discussed in a June 22 Client Bulletin) in early 2010.
For more information, please read the client alert published by Bryan Cave LLP’s Corporate Finance and Securities Client Service Group on December 17, 2009.
Preparing for the 2010 Proxy Season
As public companies turn their attention to the preparation of their annual reports and proxy materials, we want to highlight several developments for the 2010 season.
For more information, please read the client alert published by Bryan Cave LLP’s Corporate Finance and Securities Client Service Group published December 8, 2009.
New (Temporary) 50% Bank Payroll Tax in The United Kingdom
The Government announced yesterday that between December 9, 2009 and April 5, 2010, the award of bonuses to bank employees will render the bank liable to a new “bank payroll tax”.
For more information, please read the client alert published by Bryan Cave LLP’s Tax Advice and Controversy Client Service Group (London) on December 10, 2009.
EPA Finalizes Mandatory Reporting Rule for Greenhouse Gas Emissions
Approximately 10,000 facilities must begin monitoring greenhouse gas (“GHG”) emissions pursuant to federal law beginning on January 1, 2010. On September 22, 2009, the U.S. EPA issued its final rule to require mandatory reporting of GHG emissions within nearly all sectors of the economy. This rule was developed in response to a Congressional mandate and provides the first comprehensive national system for reporting emissions of carbon dioxide and other GHG emission sources in the United States. EPA announced its proposed rule on March 10, 2009.
For more information, please read the client alert published by Bryan Cave LLP’s Environmental Client Service Group on September 29, 2009.
FDIC Issues Final Statement of Policy on Investor Qualifications for Failed Bank Acquisitions
On July 2, 2009, the Board of Directors of the Federal Deposit Insurance Corporation issued for public comment a proposed Statement of Policy that sets forth the qualifications for private equity investors in failed bank acquisitions.
For more information, please read the client alert published by Bryan Cave LLP’s Financial Institutions Client Service Group on September 24, 2009.