Monthly Archives: February 2012

California District Court Holds That Motor Carrier Exemption Preempts Meal And Rest Period Claims In Trucking Industry

By Michael Kun and Aaron Olsen

Plaintiffs seeking to bring state law wage-hour class actions against employers in the trucking industry have run into a significant road block in California.  For the second time in a year, a United States District Court has held that claims based on California’s meal and rest period laws are preempted by federal law.

In Esquivel et al. v. Performance Food Group Inc., the plaintiffs claimed the defendant scheduled their delivery routes such that the plaintiffs were unable to take duty-free meal periods.  The defendant argued that the Federal Aviation Administration Authorization Act (“FAAA”) preempted California’s meal and rest period laws.  Judge Nguyen of the U.S. District Court for the Central District of California agreed with the defendant and dismissed the plaintiffs’ complaint with prejudice.  This decision comes only months after the Southern District of California’s October 2011 ruling in Dilts v. Penske Logistics, LLC, also holding that California’s meal and rest period laws are within the preemptive scope of the FAAAA.  Both courts found that the length and timing of meal and rest periods are “directly and significantly related to such things as the frequency and scheduling of transportation” such that requiring off-duty meal and rest periods at specific times would interfere with competitive market forces within the industry.

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A Tale of Two Trademark Appeals

In Clic International Inc. v. Convenience Food Industries (Private) Ltd., 2011 FC 1338, Clic International appealed a decision of the Registrar to expunge its trademark. The mark, which was used in association with the company’s line of canned fava beans, consisted of LAZIZA and an accompanying palm-tree design. Under s. 45 of the Trade-marks Act, a trademark may be expunged at the request of a third party if the owner cannot demonstrate use within the last three years. Here, Convenience Foods made the s. 45 request to the Registrar.

Before the Registrar, Clic attempted to show use of its trademark with evidence of the word LAZIZA on a can of fava beans. However, the Registrar noted that Clic had not used the accompanying palm tree logo (which was part of the trademark). The “evidence of modified use” did not constitute “use” for the purposes of s. 45, as far as the Registrar was concerned, and the trademark was expunged.

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Ohio Statehouse Update: Week in Review — February 17, 2012

1. Contract to study the Ohio Turnpike approved

The Ohio Controlling Board has approved a $2.85 million Department of Transportation contract with KPMG Corporate Finance, LLC of Austin, Texas to evaluate options for leveraging the Ohio Turnpike and interstate rest areas. According to the contract, KPMG will identify and evaluate a range of potential options for the turnpike that include maintaining the status quo, public ownership with partial private operation, or private operation through a long-term lease concession.

KPMG will also provide the department with a technical evaluation of the potential opportunities with rest area privatizations. The firm was chosen from 14 firms that responded to the department’s RFP posted in August 2011. 

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HEALTH REFORM: CMS Issues Proposed Rule Relating to Manufacturer Rebates and Reimbursement Amounts for Outpatient Prescription Drugs Dispensed to Medicaid Beneficiaries

This issue of Implementing Health & Insurance Reform summarizes and discusses some issues raised by the proposed rule (“Proposed Rule”) that the Centers for Medicare & Medicaid Services (“CMS”) published on February 2, 2012, to implement changes to the Medicaid Drug Rebate Program (“MDRP”) and to reimbursement limits for outpatient drugs covered by Medicaid.

In Part 1, we discuss proposals relating to the MDRP that would change the manner in which pharmaceutical manufacturers calculate Average Manufacturer Price (“AMP”) and Best Price for Medicaid-covered outpatient drugs and the manner in which rebates that manufacturers pay on prescriptions of those drugs dispensed to Medicaid beneficiaries are calculated. The topics covered include: the sales and price concessions manufacturers would include in their calculate AMP calculations, as well as those that would be excluded; the alternate methodology manufacturers would use to calculate AMP for so-called “5i” drugs not generally dispensed in retail community pharmacies; the calculation of Medicaid rebates for line extensions of other drugs; and new reporting obligations for manufacturers. CMS is accepting comments on the Proposed Rule until April 2, 2012.

See right or click here to download the full alert (PDF).

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Arnstein & Lehr Welcomes Four Attorneys to Growing Chicago and Coral Gables Offices

The Chicago-based law firm of Arnstein & Lehr LLP is pleased to announce the addition of attorneys David Newman, Erik Jarmusz and Elizabeth Anne Thompson to the firm’s Chicago office and Amanda Shear to the firm’s Coral Gables office.

“David, Erik, Elizabeth and Amanda bring depth and breadth of experience to their respective practices,” said Ray Werner, Managing Partner of Arnstein & Lehr. “We look forward to the contributions each attorney will make in expanding our capabilities for clients as we continue to grow strategically in the Chicago and Coral Gables markets. We are pleased to welcome them to the team.”

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First Circuit Limits SOX Whistleblower Protection to Employees of Public Companies

By: Christina Fletcher

Confronting an issue of first impression, the U.S. Court of Appeals for the First Circuit recently held that the “whistleblower” protections of the Sarbanes-Oxley Act of 2002 (“SOX”) cover only employees of public companies, and do not extend to the employees of a public company’s contractors or subcontractors which are themselves private companies. Lawson v. Fidelity Management & Research LLC, et al., No. 10-2240 (1st Cir. Feb. 3, 2012) (pdf). This holding provides private-company employers with a potentially strong defense to claims of retaliation against employees. However, it should be anticipated that Congress may revisit the scope of the protections and ultimately expand them in response to Lawson.

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Nauris Grigals on possible out of court legal protection proceedings institute exclusion from the Insolvency Law, "Dienas Bizness"

In February 16 issue of newspaper “Dienas Bizness” Nauris Grigals, TARK GRUNTE SUTKIENE attorney at law, expresses his opinion on possible out of court legal protection proceedings institute exclusion from the Insolvency Law. He emphasises that such a step would be too drastic and there are other means to resolve the issues related to this process.

Click here to read the publication (available in Latvian).

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Arnstein & Lehr elevates 13 attorneys

Arnstein & Lehr LLP is pleased to announce that four attorneys have been elevated to equity partner and nine associates elevated to partner in the firm’s Chicago, Miami and West Pam Beach offices.

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Final Extensions Provided for Retirement Plan Fee Disclosures and PPACA Summary of Benefits Coverage

On February 2, 2012, the U.S. Department of Labor (“DOL”) issued final regulations under Section 408(b)(2) of ERISA.  As a result, there is a new due date of July 1, 2012 by which certain service providers must make compensation disclosures to responsible plan fiduciaries of defined benefit and defined contribution plans (such as pension and 401(k) plans).  This provides an extension of the April 1, 2012 due date issued under prior guidance.  The regulations set forth the types of information that must be disclosed so that the plan fiduciaries can assess the reasonableness of the compensation paid for necessary services and identify potential conflicts of interest in order to avoid a prohibited transaction with respect to the arrangement (and penalties which would result).   Plan fiduciaries should be in contact with their service providers to obtain these disclosures as soon as possible.  Time will be needed to analyze the information received, and to ensure that existing contracts/arrangements are reasonable. Disclosures are also required reasonably in advance of the dates contracts/arrangements are entered into, renewed or extended.  This extension also further extends the due date for the participant-level disclosures that plan fiduciaries of participant-directed individual account plans such as the 401(k) plan are required to make to participants under Section 404(a) of ERISA so that the participants have the information they need to sufficiently manage their individual accounts.  The new due date for these disclosures is no later than August 30, 2012 (which was May 31, 2012 under prior guidance) and the issuance of the first quarterly participant statements to include required information is now November 14, 2012.

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FTC Warns That Background Searches via Mobile App May Violate the Fair Credit Reporting Act

by Jeffrey M. Landes, Susan Gross Sholinsky, Steven M. Swirsky, and Jennifer A. Goldman

On January 25, 2012, the Federal Trade Commission (“FTC”) sent warning letters to three companies that market, in total, six mobile phone applications (“Apps”) that provide users with background check reports. In the warning letters, the FTC states that the Apps may violate the Fair Credit Reporting Act (“FCRA”). According to a press release issued by the FTC on February 7, 2012, the FTC cautioned the Apps’ marketers that, if they have reason to believe that the background reports provided will be used for employment screening, housing, credit, or other similar purposes, both the users of the Apps and the marketers of the Apps must comply with the FCRA.

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