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Pillsbury attorney Julia Judish provided commentary on the U.S. Supreme Court’s recent ruling in Encino Motorcars, LLC v. Navarro that vacated a Ninth Circuit ruling after holding that Department of Labor Fair Labor Standards Act regulations were not entitled to deference because they were issued without adequate explanation. In Attys React To High Court’s Auto Service Advisers OT Ruling, Judish stated:

“The Encino Motorcars decision will have little direct effect on the scope of FLSA overtime exemptions. The FLSA question presented in Encino — whether service advisers at auto dealerships are eligible for overtime — is unresolved. On remand, the Ninth Circuit will decide that question. The decision’s significance lies in its holding that an agency’s published regulations are not entitled to deference if the regulation departs from the agency’s long-standing prior interpretations, and if the agency has not published an explanation and analysis of its changed interpretation. Other published regulations may be subject to similar challenges.”

The Encino decision is but yet another recent decision calling into question whether deference is to be given to an agency’s rulemaking. The Chevron deference debate continues.

At the age of 21, in 1861, Oliver Wendell Holmes, Jr. and many of his friends enlisted in the Massachusetts Infantry after the outbreak of the Civil War. He saw the worst of the war, and was nearly killed several times and suffered two grave wounds. By 1864, at the end of his enlistment, he had had his fill of it. Yet his experience left an indelible mark on him, as it did on most of his contemporaries, and he was grateful for the opportunity to serve his county in these great battles. Throughout his long life, he would recall where he was, on a day 50 or 60 years before, when the anniversaries of such battles as Balls Bluff and Antietam triggered his memories. Continue Reading ›

A recent U.S. Court of Appeals for the Second Circuit ruling is an important decision for corporations with foreign operations. In 2011, the U.S. Court of Appeals for the Second Circuit, in Kiobel v. Royal Dutch Petroleum Co., 642 F.3d 591 (2nd Cir. 2011), held that the Alien Tort Statute (ATS) does not regulate corporate conduct because customary international law does not recognize corporate liability, and therefore the litigation against the defendant could not proceed in the federal courts on the basis of the ATS.  The defendant was alleged to have violated environmental human rights in the Nigeria. That ruling was very controversial, and  an appeal was made to the U.S. Supreme Court, which upheld that ruling, but on different grounds. The Court held that the ATS is subject to a presumption against the extraterritorial application of domestic statutes, and that presumption had not been overcome by the plaintiffs. Other circuit have issued rulings which disagreed with the Second Circuit, but the original Kiobel decision is still the law of the circuit.

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In The “Panama Papers” and the Secret World of Shell Corporations, my colleagues Carolina Fornos, Mark Hellerer, Maria Galeno, Joseph Jean, Alexander Hardiman, William Sullivan, Nancy Fischer, Nora Burke and Danielle Vrabie, discuss a leak of 11.5 million documents from a law firm in Panama that may implicate politicians, criminals, and celebrities in sheltering of fortunes in offshore tax havens through the use of shell companies. Financial institutions and others may need to consider whether they are implicated by these events, assess the risks and how to minimize exposure, if any, and whether insurance coverage is available.

Additional Source: FinCEN’s First GTOs of 2016 Directed at U.S. Title Insurance Companies and “All Cash” Purchases

Photo:  Sellchi Kusunoki, Bunch of Papers, Taken Oct. 16, 2011 – Creative Commons

A company’s ability to contest in federal court what it views as unfair oversight by a federal government regulatory committee is still subject to obstacles posed by the “standing doctrine” by which access to the courts is limited to cases and controversies actually needing resolution. A recent example of this is the case of R. J. Reynolds Tobacco Company, et al. v. U.S. FDA, et al. On January 15, 2016, the U.S. Court of Appeals for the District of Columbia Circuit reversed the district court’s ruling and summary judgment for the plaintiffs and issuance of an order dissolving the U.S. Food and Drug Administration  committee and enjoining use of the FDA committee’s report on the safety of menthol cigarettes due to alleged unlawful conflicts of interest relating to three of the FDA committee’s members.  The Court of Appeals vacated the district court’s order, holding that the plaintiff tobacco companies lacked standing to complain at this time because the FDA has not yet issued a final rule for regulation of the at-issue cigarettes, although it was acknowledged that three committee members had testified in lawsuits against tobacco-products manufacturers and were paid substantial fees for doing so.

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In FinCEN Targets “All Cash” Real Estate Deals in Manhattan and Miami, my colleagues Carolina Fornos, Maria Galeno, Mark Hellerer, Caroline Harcourt, and I discuss the federal Financial Crimes Enforcement Network’s (FinCEN) first Geographic Targeting Orders (GTOs) of 2016 issued on January 13. The GTOs are directed exclusively at U.S. title insurance companies and their subsidiaries and agents, requiring them, for a temporary period, to identify the individuals behind any entity that is used to purchase high-end residential real estate in Manhattan and Miami-Dade County, Florida, on an “all cash” basis. We discuss the immediate impact of these GTOs on these companies and what the GTOs may mean for others.

Photo:  Arturo Donate, The skyline that never sleeps… Taken July 31, 2010 – Creative Commons

Owners of some farms subject to EPA’s Spill Prevention, Control, and Countermeasures (SPCC) Regulation will be relieved to hear that some relief from the rigid requirements is here. EPA’s SPCC Regulation applies to nearly everyone—including farms—who manages “oil” in regulated quantities in locations where, due to the location of the oil storage facilities, any spill or release of that oil in harmful quantities could reasonably be expected to be discharged into the navigable waters of the United States in violation of the CWA. The SPCC Regulation requires the preparation of an SPCC plan that complies with 40 C.F.R. § 112.7, and can trigger training and plan certification by qualified engineers. For some farms, this is a burdensome and expensive compliance requirement.

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