FinCEN recently issued interpretive guidance to clarify that it views certain activities involving convertible virtual currencies as money transmission services under the Bank Secrecy Act and FinCEN regulations. If your business involves creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies, you may be subject to FinCEN’s registration, reporting, and recordkeeping requirements.

On March 29, the Federal Housing Finance Agency (FHFA) proposed consideration of new regulation on lender-placed insurance. The FHFA specifically requested public input concerning sales commissions and reinsurance activities, but indicated that it plans a broader review of issues relating to the market for lender-placed insurance. Lender-placed insurance has long raised regulatory and litigation concerns, and the prospect of new FHFA regulation impacting Fannie Mae and Freddie Mac is an issue lenders will want to consider.

Given the recent news about alleged political bias at the Internal Revenue Service against certain conservative groups, this article, written in 1998 by Pillsbury partner Jeffery Yablon, provides a timely analysis on allegations of bias by the IRS and considers how existing tax rules can be made less vague and subjective.

The U.S. Department of Labor has issued model notices for informing existing employees and new hires of health coverage options which will be available through the new marketplace of state and federally supported health insurance exchanges. To comply and distribute the appropriate notice to current employees by the October 1, 2013, deadline an employer needs to have determined whether its plans provide minimum value and are affordable to the recipient employee under the employer shared responsibilities provisions of the Affordable Care Act (“ACA”). The Department of Labor also released an updated model notice for informing plan participants of COBRA health care continuation coverage rights.

The staggered deadlines for filing Biennial Ownership Reports by noncommercial radio and television stations remain in effect and are tied to each station’s respective license renewal filing deadline.

This Broadcast Station Advisory is directed to radio and television stations licensed to communities in Arizona, Idaho, Maryland, Michigan, Nevada, New Mexico, Ohio, Utah, Virginia, Washington, D.C., West Virginia, or Wyoming, and highlights the upcoming deadlines for compliance with the FCC’s EEO Rule.

This was also published in Law360 on May 14, 2013.

Rule 10b5-1 trading plans are in the limelight due to investigations initiated by U.S. Attorney’s Offices and the SEC into possible abuses by corporate executives of such plans. Now, more than ever, companies and their boards of directors should review and strengthen their insider trading policies concerning Rule 10b5-1 trading plans.

The Consumer Financial Protection Bureau’s civil investigative demand (“CID”) authority has recently presented significant compliance difficulties for companies that have received requests for information relating to an investigation commenced by the CFPB. Among other things, this Alert points out procedural hurdles that CIDs present to targeted companies, and provides suggestions for companies and persons when responding to a CID.¹

The Employee Retirement Income Security Act of 1974 (“ERISA”) requires participant-directed retirement plans to provide participants with in-depth disclosures of the plan’s fees, expenses, and investment performance on an annual basis. The deadline for distributing this year’s annual fee disclosures is fast approaching. Many plans have a bundled service arrangement with a single benefit provider, such as a mutual fund provider or insurance company, that has access to all of the necessary information and is responsible for producing and distributing the annual disclosures to plan participants. However, for those plan administrators who have to produce the required participant disclosure document themselves, now is the time to organize the disclosure production process and prompt service providers for any missing disclosure updates.

This issue of the newsletter examines the impact of the Stormwater Remediation Fee in Maryland and the Regional Congestion Relief Fee in Virginia, effective on July 1, on residential and commercial property owners.

In its April decision in Genesis Healthcare Corp. v. Symczyk, the U.S. Supreme Court buttressed employers’ efforts to “pick off” named plaintiffs in collective actions for unpaid wages brought under the Fair Labor Standards Act (“FLSA”) with early offers of judgment that would satisfy only the named plaintiff’s individual claims. Whether this strategy will work for employers, however, depends ultimately upon how the lower courts interpret this opinion.

What exactly is the ‘"best" solution for an international business needing to handle and transfer personal data across borders?

Allison Leopold Tilley, Pillsbury Partner, discusses key takeaways from the "The Pitfalls of Integration in an M&A" panel at Pillsbury's Spring 2013 Liquidity Summit, which was held March 21, 2013 in Menlo Park, CA.

• Assignment of Paired AM Stations Denied by the FCC



• Use of Illegal Cell Phone Jammers Leads to Fines in Excess of $125,000

Gabriella A. Lombardi, Pillsbury Partner, discusses key takeaways from the "Nuts and Bolts of Preparing for an M&A and IPO Exit" panel at Pillsbury's Spring 2013 Liquidity Summit, which was held March 21, 2013 in Menlo Park, CA.

As they have done each quarter since 2006, Pillsbury partners Fred Brodie and Leo Milonas look back on the previous quarter and highlight a few products of the Appellate Division's work.

Pillsbury partner Allison Leopold Tilley discusses how companies can build relationships with potential acquirers and other takeaways from the M&A Panel at the law firm’s Spring 2013 Liquidity Summit, held March 21 in Menlo Park, CA.

Pillsbury partner Jorge A. del Calvo comments on the VIX Index and other key takeaways from the IPO Panel discussion at the law firm’s Spring 2013 Liquidity Summit, held March 21, 2013 in Menlo Park, CA.

This webcast looks at the compliance and regulatory risks of doing business in China, and will discuss:

• Challenges and risks of doing business in China’s heavily regulated economy
• US anti-corruption enforcement efforts in China and new local anti-corruption laws
• Other common challenges that US compliance departments might encounter in China, such as intellectual property related risks, varying standards of legal protection for employees, etc.

An updated version of this article was published in Law360 on May 7, 2013.

On April 9, the U.S. Court of Appeals for the 5th Circuit issued an order upholding an arbitration award against a video game developer and granting a publisher a perpetual license in the developer’s game due to the developer’s fraudulent conduct and egregious breach of a video game development agreement. The appellate ruling issued in New Orleans came in the case of TimeGate Studios, Inc. v. Southpeak Interactive, LLC, which originated in the U.S. District Court for the Southern District of Texas.

On April 18, the U.S. Supreme Court unanimously affirmed a Second Circuit decision dismissing the tort claims of Nigerian nationals against international oil companies for alleged complicity with the Nigerian Government in committing human rights abuses during the 1990s. The majority decision in Kiobel v. Royal Dutch Petroleum Company, et al. applied the presumption against extraterritorial application to the Alien Tort Statute (“ATS”) to bar claims seeking relief for alleged violations of international law occurring outside the United States, but left crucial questions regarding corporate liability unresolved.

This article also appeared on Law360 on April 24, 2013.

Following the U.S. Supreme Court’s decision favoring arbitration clauses in AT&T Mobility LLC v. Concepcion, the Ninth Circuit Court of Appeals held in Kilgore v. KeyBank, N.A. that the Federal Arbitration Act (“FAA”) preempts the California Broughton-Cruz rule that prohibited arbitrating claims for injunctive relief under California’s Unfair Competition Law. Then, on rehearing en banc, the Ninth Circuit again enforced the arbitration agreement, but without reaching the broader preemption issue.

“The $2.6 billion deal to lease San Juan’s Luis Muñoz Marín International Airport to a private consortium is being watched by bankers and industry officials keen to import a business model that is widely used in Europe and Asia. —The Wall Street Journal

For a copy of this publication, please click the link in the adjacent "Download" section.

China is the world’s second largest economy, with an annual growth rate of more than eight percent and a rapidly growing middle class. Foreign investment into China routinely exceeds US$100 billion a year. Businesses from all over the world must have a China strategy to remain competitive and succeed in the global marketplace.

China is the world’s second largest economy, with an annual growth rate of more than 8 percent and a rapidly growing middle class. Foreign investment into China routinely exceeds US$100 billion a year. Businesses from all over the world must have a China strategy to remain competitive and succeed in the global marketplace.

In UPMC Braddock v. Harris, the U.S. District Court for the District of Columbia upheld the U.S. Department of Labor’s Arbitration Review Board decision treating hospitals as government subcontractors subject to the equal opportunity clauses traditionally required to be flowed-down to federal government subcontractors, because those hospitals provided medical services to federal employees enrolled in an HMO plan offered by a federal agency. This court decision strikes new ground by incorporating affirmative action obligations into a subcontract by operation of law, even where the prime contract at issue expressly purported to exempt the hospitals from such coverage. In light of this decision, many hospitals (and other vendors) that traditionally have not considered themselves “subcontractors” subject to federal affirmative action requirements may now be subject to Department of Labor (“DOL”) enforcement, depending on the nature of the services they provide to federal prime contractors.

In this monthly column, Pillsbury partner Eric Fishman examines contract issues faced by in-house counsel.

Pillsbury has built a preeminent Japan practice by nurturing relationships of mutual trust with the Japanese business people we represent. Based in firm offices in Tokyo, London, Abu Dhabi, San Francisco, New York, Houston, Los Angeles and Washington, DC, the Japan practice is largely dedicated to assisting Japanese companies and their affiliates outside of Japan. This overview brochure practice area capabilities, representative work, and more.

“Doing Business in the U.S.” is a practical, introductory guide for non-U.S. businesses interested in doing business in the United States. The guide, authored by numerous Pillsbury attorneys, is an initiative of the firm’s China Practice Group, and the authors frequently use Chinese business or Chinese regulations as examples. However, the book may also be useful for other non-U.S. businesses.

In this article, Pillsbury communications counsel John Hane argues that “unless it can find a way to make all of the other players in the television industry smaller, the FCC should throw off archaic broadcast ownership regulations that skew the market against the only television service that is free to Americans who don’t want to pay.”

To recognize Tax Day, partner Jeffery Yablon has compiled a collection entitled “101 Tax Quotes for Tax Day.” The quotes presented are from the 10th edition of his book As Certain As Death: Quotations About Taxes, which will be published by Tax Analysts in 2015.

In Teed v. Thomas & Betts Power Solutions, LLC, the 7th Circuit in an opinion written by Judge Posner held that, absent a good reason to withhold liability, a purchaser of assets was subject to successor liability for Fair Labor Standards Act (“FLSA”) claims and other federal labor and employment laws, even if the successor disclaimed liability when it acquired the assets.

The Pension Benefit Guaranty Corporation (PBGC) has proposed regulatory safe harbors waiving the obligation of financially sound defined benefit pension plans and the companies that maintain them from the duty to report certain events that signal an increase in a plan’s financial risk. The regulations would also revise many existing reportable event waivers. In recognition of the significant effect that pension liabilities can have on creditworthiness, many credit agreements refer to unwaived reportable events when defining the events of default. Finalization of the PBGC’s proposed changes could change the borrower’s risk of default under existing agreements.

The SEC has provided guidance to publicly reporting companies on how to use popular social networking sites, such as Facebook and Twitter, consistent with federal securities laws.

On March 20, 2013, the U.S. Supreme Court held in a 7-1 decision that Clean Water Act permits are not required for stormwater runoff from logging roads. The decision in Decker v. Northwest Environmental Defense Center defers to the Environmental Protection Agency’s long-standing interpretation of its Industrial Stormwater Rule and reverses a Ninth Circuit decision that would have resulted in NPDES permit requirements for countless new sources.

Companies that conduct business in the United Kingdom should review their existing anticorruption programs in light of the U.K. Bribery Act.

This advisory is one of a series prepared by Pillsbury's China Practice on questions frequently asked by our clients doing business in China. In June 2012, we published an advisory on personal data protection in China in which we also suggested some best practices. Here, we are updating that advisory to reflect new regulations adopted in the past six months.

This Alert describes the recently issued guidance (the “Guidance”) from the U.S. banking agencies instructing regulated domestic and foreign banks, subsidiaries and affiliates on implementing an acceptable infrastructure to comply with their safety and soundness responsibilities when engaging in leveraged lending. The effective date for the Guidance is May 21, 2013.

This article discusses recent developments from the Federal Reserve Board and the Federal Deposit Insurance Corporation regarding the preparation of living wills for bank holding companies and banks required to comply by July 1, 2103 or December 31, 2013.

Trial counsel know, or should know, that effective courtroom graphics are a necessary ingredient to a successful trial strategy. But the key word is effective, since confusing or off-putting graphics can do more harm than good. We therefore worked with five trial graphic experts, Paul Endo at Think Twice, Anthony Falzon at TrialGraphix, Kevin Hout at Fulcrum Legal Graphics, Ralph Mongeluzo at Resonant Legal Media, and Chris Ritter at The Focal Point to get their insights as to how trial counsel can most effectively plan and execute a trial graphics strategy.

The U.S. Supreme Court, in Standard Fire Insurance Co. v. Knowles, resolved the debate between the plaintiffs’ bar and defense bar regarding whether a class representative’s stipulation that damages would not exceed $5 million could defeat federal jurisdiction under the Class Action Fairness Act of 2005. In a common sense opinion, the high court concluded that the class representative’s stipulation does not act as a bar to federal jurisdiction under CAFA because it is not binding on the other class members.

In Comcast Corporation, et al. v. Behrend, the US Supreme Court reversed two lower courts in concluding that the Plaintiffs failed to satisfy Rule 23(b)(3) because their expert’s report did not establish that damages could be measured on a class-wide basis. In reaching this conclusion, the Court held that evidentiary proof satisfying Rule 23(b)(3) is required to certify a class.

• Delay in Providing Access to Public Inspection File Leads to Fine



• FCC Fines Broadcaster for Antenna Tower Fencing, EAS and Public Inspection File Violations

The next Children’s Television Programming Report must be filed with the FCC and placed in stations’ public inspection files by April 10, 2013, reflecting programming aired during the months of January, February, and March 2013.

The next Quarterly Issues/Programs List (“Quarterly List”) must be placed in stations’ public inspection files by April 10, 2013, reflecting information for the months of January, February, and March 2013.

The U.S. District Court for the District of Rhode Island has vacated its 2010 summary judgment decision in Ashland Inc. v. GAR Electroforming, 729 F. Supp. 2d 526 (D.R.I. 2010), just days after receiving an amicus memorandum by the United States in support of a motion to vacate filed by United Technologies Corporation (UTC).

On March 7 and 8, 2013, President Obama took two important steps to further U.S. export control reform. First, the President notified Congress of the proposed transfer of certain items relating to aircraft and gas turbine engines from the jurisdiction of the State Department’s International Traffic in Arms Regulations (ITAR), which govern the export of military products and technology, to the Commerce Department’s Export Administration Regulations (EAR), which governs the export of commercial products and technology. The President also issued an Executive Order reallocating regulatory authorities under the Arms Export Control Act (AECA) to facilitate the shifts in jurisdiction.

TV, Class A TV, and certain LPTV stations licensed to communities in Michigan or Ohio must begin airing pre-filing license renewal announcements on April 1, 2013. License renewal applications for these stations and in-state TV translator stations are due by June 3, 2013.

Full power commercial and noncommercial radio stations and LPFM stations licensed to communities in Arizona, Idaho, New Mexico, Nevada, Utah, or Wyoming must begin airing pre-filing license renewal announcements on April 1, 2013. License renewal applications for these stations, and for in-state FM translator stations, are due by June 3, 2013.

This Broadcast Station Advisory is directed to radio and television stations licensed to communities in Delaware, Indiana, Kentucky, Pennsylvania, Tennessee, or Texas and highlights the upcoming deadlines for compliance with the FCC’s EEO Rule.

The staggered deadlines for filing Biennial Ownership Reports by noncommercial radio and television stations remain in effect and are tied to each station’s respective license renewal filing deadline.

Despite all of the jokes to the contrary, lawyers as a professional group are remarkably charitable. Unlike plumbers, doctors, electricians, pharmacists, and the myriad of other regulated professionals who enjoy a government-granted monopolistic right to provide services to the public, many lawyers—especially those at large firms—regard themselves as having an obligation to provide services at no cost to worthy individuals and causes. This is known as “pro bono” work, a shortening of the Latin phrase pro bono publico—“for the public good.”

Hiring a lawyer for a general counsel role – either in-house or by retaining outside counsel to perform that role – can benefit organizations in countless ways. Unlike outside attorneys who are consulted on a piecemeal basis, corporate or general counsel are very familiar with the organization’s operations, leadership, and goals. Because they are often privy to and included in discussions of key business decisions and developments, they can ground their legal advice on a thorough understanding of the organization and its history. That intimate connection to the organization’s business life, however, operates as a double-edged sword. As some court decisions illustrate, the regular inclusion of general counsel in business communications can strip communications with corporate counsel of the presumption that they are protected by attorney-client privilege.

On January 16, 2013, an unprecedented gathering of thought leaders occurred, bringing together senior claim advisors from some of the leading insurance brokers, law firms, consultants, and forensic accountants. The purpose of the meeting was to catalogue and analyze the most significant coverage issues currently being confronted by businesses as a result of Superstorm Sandy. The most salient issues discussed are memorialized in this report.

On March 1, 2013, President Obama ordered the implementation of across-the-board cuts – sequestration – primarily directed to military and domestic discretionary spending because the White House and congressional leaders could not agree to an alternative. The Balanced Budget and Emergency Deficit Control Act of 2011 requires this sequestration, which means that the executive branch must implement $85 billion in cuts over the remaining months of Fiscal Year 2013. This alert provides background on the expected cuts and how the sequestration may affect contractors. Notably, the sequestration is separate from the continuing resolution funding the federal government that ends on March 27, 2013. If Congress does not act to fund discretionary spending for the remainder of Fiscal Year 2013, then the government will shut down. We have also prepared pointers for federal contractors in the event of a shutdown.

2012 may have been coming to a close, but the last week of November proved a new start and pivotal moment for the UK’s nuclear energy programme.

One of the issues that distinguishes U.S. law from English law is the concept of an implied contractual duty of good faith. While U.S. law has embraced this concept, it was believed that English law had not. However, as a result of the recent decision of Yam Seng PTE Ltd v International Trade Corp Ltd (2013) EWHC 111 (QB), English law now appears to have been brought considerably closer to that of the U.S. and other EU legal systems in that an implied duty of good faith will be part of English contract law in certain circumstances.

Although characterized by some as an unexpected blow to defendants, the U.S. Supreme Court’s decision in Amgen Inc. v. Connecticut Retirement Plans and Trust Funds, No. 11-1085, 568 U.S. __ (2013) (“Amgen”) should have little effect on most securities class actions. The Court in Amgen held that plaintiffs need not prove materiality of alleged misrepresentations at the class certification stage. But because class certification decisions in securities fraud class actions rarely turned on considerations of materiality, Amgen will have little effect on the status quo in class certification. The Court’s decision rests on the fraud-on-the-market presumption of reliance announced in Basic v. Levinson, 485 U.S. 224 (1988) (“Basic”). Notably, four justices questioned this theory’s ongoing viability. Thus, Amgen’s most significant take-away is the uncertain future of the theory that serves as securities plaintiffs’ gateway to class certification.

The U.S. Supreme Court’s recent decision in Gabelli v. Securities Exchange Commission (Feb. 27, 2013) rejects an attempt by the Securities and Exchange Commission to extend a statute of limitations by invoking a “discovery rule.” The SEC had proposed that, in an action by the SEC to impose a civil penalty for securities fraud, the time to bring an action should not begin running until the fraud was discovered, or reasonably could be discovered by the SEC. The Supreme Court rejected the SEC’s view.

The broad expansion of onshore oil and gas production in the nation’s numerous shale formations has created an expansion of federal, state and local laws to address the environmental issues associated with this production. The new drilling techniques being employed to capture oil and gas from the nation’s shale formations, primarily hydraulic fracturing and horizontal drilling, are subject to a wide array of environmental laws to protect groundwater, surface water, the atmosphere and sensitive natural resources such as wetlands and wildlife. This article highlights some of the most important federal environmental regulations being developed to address these impacts.

Pillsbury attorney, Bob Robbins presented on Regulation D Offerings and Private Placements and Offers, Sales and Resales of Securities Under Section 4[a](1-1/2) and Rule 144A at The American Law Institute Continuing Legal Education conference on March 14-16, 2013.

Pillsbury attorney, Bob Robbins presented on Regulation D Offerings and Private Placements and Structuring Best Efforts Offerings and Closings Under Rule 10b-9 at The American Law Institute Continuing Legal Education conference on March 14-16, 2013.

Pillsbury attorney, Bob Robbins presented on Regulation D Offerings and Private Placements and Securities Offerings to Employers Consultants and Advisors Under Rule 701 at The American Law Institute Continuing Legal Education conference on March 14-16, 2013.

Pillsbury attorney, Bob Robbins presented on Regulation D Offerings and Private Trading Platforms for Restricted Securities at The American Law Institute Continuing Legal Education conference on March 14-16, 2013.

Pillsbury attorney, Bob Robbins presented on Regulation D Offerings and Private Placements and Installment Payments in Public and Private Offerings at The American Law Institute Continuing Legal Education conference on March 14-16, 2013.

Pillsbury attorney, Bob Robbins presented on Regulation D Offerings and Private Placements in Mergers and Acquisitions at The American Law Institute Continuing Legal Education conference on March 14-16, 2013.

Pillsbury attorney, Bob Robbins presented on Regulation D Offerings and Private Placements at The American Law Institute Continuing Legal Education conference on March 14-16, 2013.

Pillsbury attorney, Bob Robbins presented on Regulation D Offerings and Due Diligence in Private Placement Offerings at The American Law Institute Continuing Legal Education conference on March 14-16, 2013.

Pillsbury attorney, Bob Robbins presented on Fundamentals of Securities Regulation and Ethics and Professional Responsibility for Attorneys in Securities Transactions at The American Law Institute Continuing Legal Education conference on March 14-16, 2013.

Pillsbury attorney, Bob Robbins presented on Regulation D Offerings and Private Placements and Offerings Under Regulation S at The American Law Institute Continuing Legal Education conference on March 14-16, 2013.

Pillsbury attorney, Bob Robbins presented on Regulation D Offerings and Rescission Offers Under Regulation D at The American Law Institute Continuing Legal Education conference on March 14-16, 2013.

This also appeared in Competition Law360, International Trade Law360, Private Equity Law360, Securities Law360 and White Collar Law360 on March 1, 2013.

Until a few years ago, private equity firms enjoyed relative insulation from regulatory scrutiny of overseas acquisitions and the operations of multi-national portfolio companies. No longer is that the case. Spurred by the unfounded belief that PE firms are not invested in compliance or the conduct of their portfolio companies, the DOJ and SEC are now training their attention on how PE firms exert oversight and control over their portfolios, with a particular emphasis on FCPA issues. PE firms should prepare for this new scrutiny by taking proactive measures to demonstrate both their awareness and their commitment to earning profits on a level playing field. Most importantly, PE firms must recognize that these efforts are not about appeasing regulators, but go directly to maximizing return on investment.

The goal of this publication is to provide our clients and the industry with probing insights into recent legal developments affecting transportation finance and leasing. It will be published at least annually.

A Financial Industry Regulatory Authority (“FINRA”) hearing panel held that FINRA’s own rules prohibiting judicial class action waivers in broker-dealer customer arbitration agreements are preempted by the Federal Arbitration Act and unenforceable. Once this decision becomes final, it will likely change the landscape of broker-dealer arbitrations. Many other broker-dealers will adopt a judicial class action waiver in their customer arbitration agreements and end decades of securities class action lawsuits, which generally provide little benefit to class members.

• FCC Takes Action against Intentional Interference and Unlicensed Operations



• FCC Assesses $25,000 Fines for Unresponsiveness

This also appeared in Class Action Law360, Corporate Law360 and Securities Law360 on February 28, 2013.

Proxy season is upon us and the plaintiffs’ bar is demonstrating its resourcefulness by bringing a third wave of shareholder litigation. This new wave, which has not crested yet, consists of a return to derivative shareholder suits but no longer concerning say-on-pay votes. Instead, these lawsuits are focused on “gotcha” allegations that companies issued stock options or restricted stock units to executives in amounts that exceed the limits of those companies’ stock plans. These lawsuits are easily preventable with careful planning by Compensation Committees and their in-house and outside counsel to ensure that all stock grants and executive compensation proposals are in compliance with the company’s stock plan.

A major development in antitrust law over the last 25 years has been the adoption and increased enforcement of antitrust laws by jurisdictions around the world, and particularly the prosecution of international price-fixing cartels. While cartel enforcement was once pursued almost solely by U.S. regulators and in U.S. courts, today any large-scale cartel activity typically attracts the attention of regulators from several countries. For example, a cartel in the vitamins market led to enforcement actions by authorities in the U.S., Canada, the EU, Korea, Australia, Brazil and Mexico. Investigations in markets ranging from marine hose to air cargo have involved different combinations of the same cast of characters, as well as others such as Japan and New Zealand.

Introduction

June 1, 2011 marked the beginning of a four-year cycle during which all commercial and noncommercial radio and television stations in the United States will come under special scrutiny by the Federal Communications Commission (“FCC” or “Commission”) as the FCC considers whether to renew each station’s license to broadcast.

Successor agencies to California’s dissolved Redevelopment Agencies (“RDAs”) continue to wind down the operations of the former RDAs under the supervision of oversight boards pursuant to Assembly Bill X1 26 (“AB 26”) as modified by Assembly Bill 1484 (“AB 1484”). Successor agencies are currently addressing several issues for the first time relating to enforceability of contracts, the distribution of agency funds, and the future of properties formerly owned by RDAs. This advisory explains the current state of successor agencies and how successor agencies are dealing with issues raised by the wind-down process.

In response to a deluge of cases involving parties’ attempts to enforce oral modifications of contracts, the New York Appellate Division, First Department recently reiterated that contractual provisions requiring amendments to be in writing will trump any oral modifications or past practices by the parties. This ruling indicates the importance of finalizing in writing any changes—no matter how minor—to agreements between parties when those agreements contain “no oral modification” clauses.

On January 10, 2013 the Financial Industry Regulatory Authority (“FINRA”) issued a voluntary Interim Form for funding portals (the “Interim Form”). The Interim Form is designed for prospective crowdfunding portals under the Jumpstart our Business Startups Act (the “JOBS Act”), which was enacted on April 5, 2012. Title III of the JOBS Act, which relates to crowdfunding, requires the Securities and Exchange Commission (the “SEC”) and FINRA to promulgate rules before crowdfunding portals can commence operations. The Interim Form permits companies that intend to become funding portals under Title III of the JOBS Act to voluntarily submit to FINRA information regarding their business. FINRA expects that the information received will help it develop rules specific to crowdfunding portals.

On February 7, 2013, the California Supreme Court issued a unanimous opinion in Harris v. City of Santa Monica. The California high court upheld the “mixed-motive” defense in cases brought under California’s Fair Employment and Housing Act (“FEHA”). The court’s decision is viewed by many as a compromise decision, but it does raise the bar for what a plaintiff employee must prove in order to prevail, and also limits the relief available even when the employee meets the new higher burden.

In January, President Obama signed the National Defense Authorization Act for Fiscal Year 2013 (“NDAA”), which includes numerous new procurement policies directed at contractors and how they bid on and perform government contracts. This alert highlights key provisions that will affect most contractors.

Financial businesses operating in the European Union will need to consider implementing stricter anti-money-laundering and anti-terrorism-financing controls or face a potential fine of up to 10 percent of their annual revenue, if the proposed rules issued on 5 February by the European Commission are adopted.

The old adage that crime does not pay rings particularly true in the aftermath of two pieces of recent legislation aimed at raising the penalties for trade secret theft: the Theft of Trade Secrets Clarification Act and the Foreign and Economic Espionage Penalty Enhancement Act.

New listing standards for publicly traded companies require board compensation committees composed of directors that satisfy new independence standards by the first annual meeting after January 15, 2014, or, if earlier, October 31, 2014. The listing standards also require board charters to grant compensation committees, or independent directors setting executive compensation, the power to retain their own advisers by July 1, 2013. Compensation committees, or independent directors setting executive compensation, that retain advisers must evaluate adviser conflicts of interest by July 1, 2013.

This analysis updates a previous memo and incorporates advice we have received from the Federal Reserve Board (“FRB”) and the Federal Deposit Insurance Corporation (“FDIC”) regarding the preparation of living wills for bank holding companies and banks required to comply by July 1, 2103 or December 31, 2013.

On January 25, 2013, the Department of Health and Human Services published the much-anticipated Omnibus Final Rule (the “Final Rule”), which, with respect to business associates and their subcontractors, conforms HIPAA’s Privacy and Security Rules to a number of changes brought about by the HITECH Act, implements a number of regulatory changes seen in HHS’s proposed rule-making, and modifies a number of other proposed regulatory changes.

Employers have routinely asked employees who sign separation or settlement agreements to agree that they will not encourage or assist other employees in filing lawsuits or charges, subject to the caveat that the employee may of course testify truthfully in response to legal process. Until recently, field offices of the U.S. Equal Employment Opportunity Commission regularly approved settlement agreements that included such provisions. Now, however, the EEOC has targeted these kinds of provisions. The agency adopted a new national Strategic Enforcement Plan (“SEP”) on December 17, 2012, instructing its field offices to reject such provisions as impermissible barriers to the EEOC’s investigation and enforcement efforts. In light of the new enforcement drive, employers should review their standard release agreements to ensure they will pass muster under the EEOC’s new initiative.

What if you could buy a 50-inch television, mount it anywhere in your house, and receive dozens of channels on it for free and without any futzing around? What if most or all broadcast signals, in their native form, were easily receivable on tablets and smartphones?

The Second Department in Biscone v. JetBlue Airways Corporation recently dismissed airline passengers’ tort claims against an airline based on the failure to provide food, water and facilities during an 11-hour tarmac delay, on the basis that federal law preempts most private causes of action relating to the provision of air carrier services. While airlines still may face enforcement actions and incur civil penalties, the Second Department’s decision signals that New York state courts are following the majority of federal courts that have broadly interpreted the degree to which federal aviation laws preempt state law claims. Given that most delay-related private lawsuits are multimillion-dollar class actions, this decision is a positive development for domestic and international air carriers that operate flights in the United States.

Delivering Success Across Industries:This 28-page brochure highlights some of the significant matters handled by Pillsbury litigators in 2012, including cases on behalf of some of the nation's leading companies in the manufacturing, technology, financial services, energy, real estate, consumer, healthcare, and public policy industries.

• FCC Assesses $8,000 Fine for EAS Equipment Installation Problems
• Notice of Violation Issued against FM Station for a Variety of Reasons

On January 8, 2013, the U.S. Supreme Court held unanimously in L.A. County Flood Control District v. NRDC that the flow of polluted stormwater from an improved portion of a navigable waterway into an unimproved portion of the same waterway is not a discharge of pollutants under the federal Clean Water Act. The Court’s decision reaffirms its 2004 holding in South Florida Management District v. Miccosukee Tribe of Indians¹ and overturns a Ninth Circuit ruling that could have significantly altered the permitting and enforcement scheme for stormwater and flood control, particularly for engineered structures conveying water within a single water body. The Court declined NRDC’s call for it to address broader questions relating to liability for stormwater pollution under Clean Water Act permit terms and focused only on the narrow discharge issue on which it granted review.

In two significant transmission orders, the Federal Energy Regulatory Commission (“FERC”) adopted guidelines for allocating capacity on new merchant and participant-funded transmission projects and proposed reforms to streamline interconnection for small generators.

The Supreme Court of California, in Aryeh v. Canon Business Solutions, Inc., resolved the “lingering uncertainty over the timing of accrual and the applicability of continuing-wrong accrual principles” to claims brought under California’s unfair competition law. It concluded that “the UCL is governed by common law accrual rules to the same extent as any other statute.” However, it also noted that labeling the cause of action as a UCL claim is not dispositive; instead, it is “‘the nature of the right sued upon’ and the circumstances attending its invocation [that] control the point of accrual.”

On January 14, 2013, the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) held that an offeror had standing to challenge the exclusion of its proposal from a competition even prior to a competitive range, despite the offeror’s submission of an incomplete proposal. In Orion Technology, Inc. v. United States, the Federal Circuit clarified that a disappointed offeror that has been eliminated from a competition can show that it has standing as an “interested party.”

Energy partners Robert A. James, Michael S. Hindus and Philip J. Tendler, counsel Julie Hutchings Mayo and senior associate Stella Pulman have contributed to the Getting the Deal Through series for several years. In this second edition of our pieces, we present the thought leadership of Pillsbury lawyers across the entire fuel spectrum—oil and gas on one hand, and nuclear, renewable, gas and coal power generation on the other—and across the private and public-private partnership (PPP) approaches to project development and finance for infrastructure as well as energy facilities.

The U.S. energy and infrastructure sectors have undergone dramatic change since 2006, the year of Pillsbury’s first contribution to the GTDT publications. Natural gas production and reserves have increased largely from shale and other unconventional sources, which have reinvigorated the petrochemical sector; challenged the prospects of power generation from coal, nuclear and renewable sources; and turned talk of LNG imports into talk of potential exports and gas as a more widespread transportation fuel. Oil production has increased in the Midwest, which faces obstacles for new and increased means of transportation, and the federal agencies regulating offshore oil leases and safety have been completely transformed after the Macondo accident. Power generators must as ever monitor the changing political drivers of policymakers and agencies, with higher renewable procurement standards being more concentrated in the Northeast and the West Coast and new generation projects often needing to coordinate with plans for greater local and regional transmission. A common thread is the greater need for investments in infrastructure of all types, including private finance and PPPs to cope with the constraints on public funding.

On January 11, 2013, the Department of Energy (“DOE”) issued its response to the recommendations of the Blue Ribbon Commission on America’s Nuclear Future regarding next steps for spent nuclear fuel management and disposal in the United States. As expected, the DOE “strategy” sets out “broad steps” to be taken in the future, rather than near-term actions. Indeed, most of DOE’s recommendations will require new legislation prior to implementation.

On New Year’s Day 2013, to avoid the so-called “fiscal cliff,” Congress passed the American Taxpayer Relief Act of 2012 (“2012 Act”). The 2012 Act raises taxes on some taxpayers while retaining most of the provisions enacted by the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA,” generally referred to as the “Bush tax cuts”) and the two-year extension of EGTRRA enacted at the end of 2010. Most of the changes introduced by the 2012 Act relate to income tax; however, there are important changes to the gift, estate, and generation-skipping transfer tax provisions as well.

On December 20, 2012, President Obama signed into law H.R. 4367, eliminating the requirement that ATM operators post notice of a service fee on or at their ATM equipment, while retaining the requirement that a notice be posted on the ATM screen or that a paper notice be issued from the ATM. The bill was avidly pursued by ATM industry groups, retail trade associations, banking and credit union groups and others to combat what are perceived as frivolous class actions for failure to post redundant fee disclosures.

On February 11, 2013, revised thresholds for the Hart-Scott-Rodino Act (“HSR”) will take effect. The thresholds determine whether parties involved in proposed mergers, consolidations, or other acquisitions of voting securities, assets, or unincorporated interests must notify the Federal Trade Commission (“FTC”) and the Antitrust Division of the Department of Justice (“DOJ”) of a proposed transaction and comply with a mandatory waiting period before the transaction can be consummated.

This Broadcast Station Advisory is directed to radio and television stations licensed to communities in Arkansas, Kansas, Louisiana, Mississippi, Nebraska, New Jersey, New York, and Oklahoma and highlights the upcoming deadlines for compliance with the FCC’s EEO Rule.

The staggered deadlines for filing Biennial Ownership Reports by noncommercial radio and television stations remain in effect and are tied to each station’s respective license renewal filing deadline.

TV, Class A TV, and certain LPTV stations licensed to communities in Indiana, Kentucky, and Tennessee must begin airing pre-filing license renewal announcements on February 1, 2013. License renewal applications for these stations and in-state TV translator stations are due by April 1, 2013.

Full power commercial and noncommercial radio stations and LPFM stations licensed to communities in Texas must begin airing pre-filing license renewal announcements on February 1, 2013. License renewal applications for these stations, and for in-state FM translator stations, are due by April 1, 2013.

In December 2012, Jan Philipp Albrecht, a Rapporteur for the European Parliament, released a draft report (the ‘‘Report’’) on the European Commission’s proposed EU Data Protection Regulation (the ‘‘Draft Regulation’’), which is intended to replace the existing legislative framework that has been in place in the European Union since 1995 (see analysis at WDPR, February 2012, page 4).

1. Applications for Renewal of License: The three-year long license renewal cycles for broadcast stations in radio services (AM, FM, FM Translator), which began on June 1, 2011, and for television services (television, Class A, LPTV, TV Translator), which began on June 1, 2012, continue in 2013. The date on which a station's license renewal application is due depends on the state or territory in which its community of license is located. All licensees should familiarize themselves now with the dates associated with this important filing, including the dates on which public notice announcements must air in advance of the license renewal filing; the filing date itself, which is approximately four months before the date of license expiration; and the dates on which post-filing announcements must air.

Many creative business models enable users to acquire virtual goods or virtual currency and then use those virtual items to participate in an activity that may give them a chance to win something or acquire virtual items through some element of chance. James G. Gatto, a Partner at Pillsbury Law, discusses the legal issues presented by virtual goods and the secondary market, which by its very nature implies that virtual items are far from valueless.

On November 20, 2012, the IRS, DOL and HHS jointly issued proposed regulations under the Affordable Care Act building on existing HIPAA regulations of wellness programs. The new proposed regulations provide clearer guidance and greater flexibility in some areas, but leave many questions unanswered. Earlier, the Eleventh Circuit Court of Appeals affirmed a decision that a wellness program surcharge is exempt under the ADA "bona fide benefit plan" safe harbor.

Companies that manufacture and sell products to Abu Dhabi’s state companies involved in power, water and petroleum may require their employees to access such facilities in order to provide installation, after-sales and maintenance services. Such access requires a security pass issued by the Critical National Infrastructure Authority (CNIA) of Abu Dhabi. The application procedures for receiving this security pass have recently become substantially more stringent.

• FCC Issues Multiple Forfeitures for Unauthorized Marketing of Transmitters
• FCC Proposes $35,000 in Fines for Unauthorized Radio Operations

Public companies with PRC-based auditors are facing a worrisome accounting “slope” rather than a “cliff” on December 31, 2012. If the Public Company Accounting Oversight Board (PCAOB) is not able to finish its international inspections in China by December 31, it is possible, although not certain, that the PCAOB will begin the process of deregistering member firms located in the PRC.

On December 7, 2012, the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) issued its first decision determining that government contractors need to challenge any obvious errors, improprieties, or ambiguities on the face of a solicitation amendment before award (extending its previous rule that such challenges to the initial solicitation generally must be challenged before award). In COMINT Systems Corp. & Eyeit.com, Inc., JV v. United States, the Federal Circuit found that Comint missed an opportunity to challenge an obvious – or patent – error in an amendment to the solicitation. By signing the amendment and waiting until after award to protest the allegedly problematic amendment, the government contractor waived any right to challenge the terms of the amendment to the solicitation.

Although 2012 did not bring a major prosecution, it was not without note-worthy events. The UK Serious Fraud Office (SFO), on top of the withdrawal of previous Bribery Act guidance and the publication of new guidelines in October, has put out new supplemental guidance on self-reporting financial crimes. These new guidelines require companies that self-report to the SFO to submit full details of their internal investigations into any wrongdoing, as well as supporting evidence such as emails, documents, banking or financial evidence, and witness statements. These requirements may appear onerous, but they underscore the significance that the SFO attaches to self-reporting and the detailed focus they expect businesses to display in dealing with compliance and wrongdoing.

The Commodity Futures Trading Commission has issued new “know your customer” and external business conduct rules to give effect to certain provisions of Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Under these rules, major dealers in swaps and derivatives (“Swap Dealers”) will be required to, among other things, conduct diligence on counterparties, verify their status as “eligible contract participants” and ensure that swap recommendations are suitable for them. In addition, these rules impose heightened duties on Swap Dealers that trade with employee benefit plans subject to Title I of the Employee Retirement Income Security Act of 1974, governmental plans as defined in ERISA Section 3, endowments, state and federal agencies, and other protected counterparties (“Special Entities”).

Although the U.S. Supreme Court in AT&T Mobility LLC v. Concepcion found that the Federal Arbitration Act preempted California’s Discover Bank rule, which invalidated class action waivers in arbitration agreements in consumer adhesion contracts, California’s Second Appellate District has split on whether Concepcion applies to a similar California rule established in Gentry. One division of the District has followed the lead of the federal courts in California and found that Concepcion overruled Gentry. Another division has taken a contrary and unsupportable view. This debate within the Second Appellate District will be resolved when the California Supreme Court decides Iskanian.

On December 3, 2012, the U.S. Securities and Exchange Commission (SEC) began administrative proceedings against five leading accounting firms which could result in their being barred from auditing U.S.-listed Chinese companies. The ultimate outcome is months if not years away, but this is certain to send a chill through an already-chilled market.

• FCC Punishes the Operators of an Unlicensed FM Station
• FCC Investigates Antenna Structure Violations

The 22nd edition of Pillsbury's Newsletter: Perspectives on Real Estate features articles on energy consumption data reporting (AB1103 and 531), construction and risk management, new foreign tax withholding forms, chapter 9 and public-private partnerships.

In welcome news for private equity (“PE”) funds, a recent district court opinion determined that two PE funds and their bankrupt portfolio company were not a “controlled group” and thus the PE funds were not responsible for pension liabilities at the portfolio company. The decision, Sun Capital Partners III, LP v. New England Teamsters and Trucking Industry Pension Fund, explicitly rejected a prior Pension Benefit Guaranty Corporation (“PBGC”) ruling on the same question and illuminated best practices for structuring future PE fund investments.

Proposition 39 was passed by 60.1 percent of the California electorate on the November 6th, 2012 statewide ballot. As a result, most multistate businesses must apportion income to California using a single-sales factor method of apportionment for taxable years beginning on or after January 1, 2013.

TV, Class A TV, and certain LPTV stations licensed to communities in Arkansas, Louisiana, and Mississippi must begin airing pre-filing license renewal announcements on December 1, 2012. License renewal applications for these stations and in-state TV translator stations are due by February 1, 2013.

By December 31, 2012, all deferred compensation arrangements in which payment is contingent on employee action, such as execution of a release of claims, must either include payment-timing restrictions that comport to IRS Notice 2010-80 or satisfy an exemption from section 409A of the Internal Revenue Code (the “Code”). Employers should review all deferred compensation arrangements, especially employment agreements, severance agreements, and change-in-control agreements that require employees to execute a release of claims, non-compete covenant, or non-solicitation covenant.

Commercial nuclear companies that export goods and services from the United States have long pointed to the U.S. nuclear export control system as a major competitive disadvantage as they compete with their counterparts in nuclear supplier nations such as the Russian Federation, Japan, the Republic of Korea (ROK) and France.

In the wake of the devastating earthquake and tsunami that crippled Japan’s Fukushima Daiichi nuclear power facility in March 2011, the international nuclear industry not only has studied the incident and begun to apply lessons learned, but also has actively provided supplies and assistance to support the recovery efforts of Tokyo Electric Power Co. (TEPCO). Within days of the disaster, experts from the nuclear industries of the United States and other countries arrived in Japan and began to assist TEPCO with recovery measures. In addition to sending expert volunteers, the industry has contributed a wide array of critical supplies, including safety equipment, radiation-monitoring devices and robotic surveillance systems.

Recent months and the EU January announcement have seen very major data protection law changes that affect not just UK or EU companies but any companies (particularly US) which are deemed to be caught by “processing” EU data.

Most upstream oil and gas projects in Abu Dhabi are joint investments between two or more international oil companies (IOCs). We anticipate that new investment opportunities, such as those expected following the expiration of the existing onshore concession in 2014, will likely also be awarded to consortia. Therefore, IOCs and national oil companies (NOCs) seeking to approach the Abu Dhabi government may wish to do so jointly.

• FCC Takes Action against Illegal Jamming Devices

• Unlicensed Transmitter Gets Renter into Trouble

This also appeared in Intellectual Property Law360, International Trade Law360 and Public Policy Law360 on November 14, 2012.

With the relaxation of sanctions regimes around the world in 2012, Myanmar (also known as Burma) offers opportunities for both small businesses and the largest and most recognized companies around the world. Large or small, companies are finding that Myanmar’s intellectual property (IP) laws generally do not recognize their trademarks and other property. It is necessary to take steps locally to establish and protect IP rights. Implementation of a strategy for protective measures should be at the top of the list of actions for companies considering entry into this opening market.

Superstorm Sandy has caused immense damage to the East Coast, with losses estimated in the tens of billions. Those affected face significant challenges as they begin the process of recovering from severe flood and wind damage, utility outages, impaired access, disrupted supply and customer chains, and extended business interruption. As companies turn to their insurance carriers for assistance, we offer this guidance, gleaned from our experience in representing corporate policyholders on their insurance coverage claims arising from scores of natural disasters.

A raft of new regulations mandated by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) are just coming into effect and will substantially restructure the swaps and derivatives markets, with implications even for end users exempt from some major provisions.

The FCC released its long-awaited Notice of Proposed Rulemaking (NPRM) to begin the process of auctioning and repurposing broadcast television spectrum for mobile broadband use. Comments are due on December 21, 2012, and reply comments are due on February 19, 2013.

Jeffery Yablon authored an article that was published in Tax Notes, the leading publication for tax professionals. Entitled "Presidential Quotes About Taxes," the article presents quotes from the 10th edition of his book, "As Certain As Death: Quotations About Taxes." The individuals quoted are all past presidents.

On October 9, 2012 President Obama issued an Executive Order (“E.O.”) implementing several provisions of the Iran Threat Reduction and Syria Human Rights Act of 2012 (“Iran Threat Reduction Act”). Most significantly, the E.O. applies to foreign subsidiaries of U.S. persons for the first time most of the sanctions rules that apply to U.S. persons or persons in the United States. Further, the E.O. makes the U.S. parent subject to penalties for violations of the subsidiary. However, such penalties will not apply where the U.S. parent divests or terminates business with the subsidiary by February 6, 2013. It will be important for U.S. companies with non-U.S. subsidiaries to assess whether these affiliates are engaging in prohibited activities vis-à-vis Iran and determine whether U.S. parent needs to take action prior to the divestment date.

As noted in our Alert on Oct. 1, 2012 and presaged by the withdrawal of previous guidance, new rules published Oct. 9 by the UK Serious Fraud Office (SFO) have opted for stricter language. The SFO now says that it will prosecute under the Bribery Act based primarily on the statute itself rather than on previous, more lenient and somewhat subjective guidance principles issued after the new law was introduced in July 2011. The newly announced policy had been predicted by many observers based on promises to tighten up enforcement made by the current director, David Green QC, on his appointment this past May. The new rules cover the SFO’s approach to corporate hospitality, facilitation payments and self-reporting. 

The National Labor Relations Board (“NLRB”) recently issued its first two rulings on employer social media policies and its first ruling on an employee’s termination due to posts on Facebook. These rulings are significant for all employers – not just those with unionized workforces – because they provide guidance regarding what social media behaviors will be deemed protected activity under the National Labor Relations Act (“NLRA”) and, therefore, what employers can and cannot regulate in their policies and practices.

Co-head of Pillsbury's energy industry team Rob James and project finance partner Phillip Tendler discuss project finance—collateral, how security interests are perfected and prioritized, liens, enforcement of collateral, bankruptcy, foreign exchange, repatriation, foreign investment and ownership restrictions, insurance and natural resources.

September 30 was the last day for California Governor Edmund G. Brown, Jr. to sign or veto bills passed by the State Legislature during its 2011-2012 Regular Session. Governor Brown signed several bills of interest to California employers, including an overhaul of the Workers’ Compensation system, elimination of the Fair Employment and Housing Commission, new laws requiring accommodation of employees’ religious dress and grooming practices, restrictions on access to employees’ social media accounts, expanded state law protections for whistleblowers, and new rules governing employees’ rights to inspect their personnel files.

On September 5, 2012, the Financial Industry Regulatory Authority, or FINRA, issued Regulatory Notice 12-40, which notified FINRA members of the December 3, 2012 effective date for FINRA Rule 5123, captioned “Private Placements of Securities.

The next Quarterly Issues/Programs List (“Quarterly List”) must be placed in stations’ public inspection files by October 10, 2012, reflecting information for the months of July, August, and September 2012.

The next Children’s Television Programming Report must be filed with the FCC and placed in stations’ public inspection files by October 10, 2012, reflecting programming aired during the months of July, August, and September 2012.

Exposure to network and data security breaches has grown exponentially in recent years, and the market for insurance to cover this risk has grown just as fast. With policies sold under names like "cyberinsurance," "privacy breach insurance" and "network security insurance,” the market for this coverage often seems chaotic, with premiums and terms varying dramatically from one insurer to the next. So before buying or renewing a cyberinsurance policy, it is crucial to understand what you are being offered and how to bargain for what you need.

Headlines:

• FCC Follows Up a $25,000 Fine With a $236,500 Fine
• Two Tower Owners Fined for Fading Paint

The United Arab Emirates and the Emirate of Abu Dhabi do not have any domestic laws to protect foreign investors from nationalization or expropriation, but the UAE is a signatory on a number of bilateral investment treaties and international conventions. Investment protection and legal recourse are important factors to consider when reviewing any investment opportunity. Governing law and dispute resolution provisions in oil and gas sector agreements have developed over time.

On September 20, 2012, the Government of India notified the public that it has undertaken a series of reforms relating to foreign investments in the country, including allowing foreign airlines to hold up to 49 percent foreign direct investment ("FDI") in Indian airlines. This decision, coupled with significant cuts on the taxes on overseas corporate borrowers, may lure foreign investors toward India, although Indian airlines face formidable financial pressures. The move comes at a time of renewed focus on liberalizing airline ownership laws in the U.S. and Europe.

This Broadcast Station Advisory is directed to radio and television stations licensed to communities in Alaska, American Samoa, Florida, Guam, Hawaii, Iowa, the Mariana Islands, Missouri, Oregon, Puerto Rico, Saipan, the Virgin Islands, and Washington, and highlights the upcoming deadlines for compliance with the FCC’s EEO Rule.

Full power commercial and noncommercial radio stations and LPFM stations licensed to communities in Colorado, Minnesota, Montana, North Dakota, and South Dakota must begin airing pre-filing license renewal announcements on October 1, 2012. License renewal applications for these stations, and for in-state FM translator stations, are due by December 1, 2012.

TV, Class A TV, and certain LPTV stations licensed to communities in Alabama and Georgia must begin airing pre-filing license renewal announcements on October 1, 2012. License renewal applications for these stations and in-state TV translator stations are due by December 1, 2012.

The U.S. Treasury Department is preparing a Proposed Rule to clarify, and potentially expand, requirements for financial institutions to conduct customer due diligence and assess beneficial ownership. FinCEN (Financial Crimes Enforcement Network) has announced a Roundtable Discussion on October 5, 2012 in New York. Requests to attend must be made no later than September 28 with space limited. FinCEN published its Advance Notice of Proposed Rulemaking on March 5, 2012 and closed comments on June 11, 2012. For Financial Institutions seeking input on this important rulemaking, the October 5th Roundtable offers a strategic opportunity to influence the Proposed Rule.

Creating value isn’t easy. Creating value through strategic outsourcing is no exception. Whether the scope is regional or global, there is no single deal structure, delivery model or sourcing process that works in every situation. Pillsbury Global Sourcing tailors our approach to fit your business’ unique circumstances and goals.

The Court of Appeals of the State of California, Second Appellate District has ruled that because the default interest provisions of a promissory note were included within the acceleration clause of a promissory note, the default rate was not triggered when the promissory note matured by its terms. Based on this ruling, default interest provisions in promissory notes should provide that the default interest rate applies not only following a default or acceleration of the maturity date, but also after the scheduled maturity date.

The Securities and Exchange Commission (SEC) issued final conflict minerals reporting rules on August 22, 2012. These rules have significant implications for public companies across many industries and are likely to result in substantial compliance costs. This advisory summarizes the final rules and suggests actions that reporting companies should take to ensure timely compliance.

On April 5, 2012, the Jumpstart Our Business Startups Act (the JOBS Act) was signed into law by President Obama with strong bipartisan support. The JOBS Act directed the Securities and Exchange Commission (SEC) to amend Rule 506 of Regulation D under the Securities Act of 1933 to permit general solicitation or general advertising in unregistered offerings made under Rule 506, provided that all purchasers of the securities are accredited investors. The SEC proposed rules on August 29, 2012 to implement that requirement.

Gas development has become a top priority for Abu Dhabi in recent years due to growing domestic electricity demand. Unlike oil exploration and production, for which there is essentially no legislative framework, gas development is subject to Abu Dhabi’s Natural Gas Ownership Law of 1976, which grants the Emirate ownership of all natural gas and requires ADNOC majority participation in all gas projects.

On June 29, 2012, Governor Chris Christie signed into law Senate Bill 1928, a bill approved by both the New Jersey Assembly and Senate on June 25, 2012. Among other things, S.B. 1928 requires that certain stored value cards be redeemable for cash starting September 1, 2012.

When it comes to selecting legal counsel for China-related matters, there is no need to reinvent the wheel. Whether you are a Western executive doing business in China, or a Chinese executive seeking to expand or raise capital overseas, you will benefit from selecting lawyers with proven track records and established credentials.

Trouble, in the form of adverse changes in financial conditions or the property marketing environment, sometimes strikes urban real estate development projects during the period between construction contract signing and completion of procurement and construction activities. In many cases, the course of action that will maximize value for all stakeholders is to allow the work to continue. Project completion will result in improvement to a base level and more security from casualty risks, as well as satisfaction of the conditions from a seller or redevelopment agency to drawdown of the land rights. But if financing for that continuation is not available, or if prospects for selling or leasing the improved property appear sufficiently bleak, the developer may reluctantly determine that the construction contracts and work should be suspended for some period of time or terminated altogether.

Despite the U.S. Supreme Court’s 2011 decision in AT&T Mobility LLC v. Concepcion regarding the enforceability of arbitration agreements under the Federal Arbitration Act, plaintiffs in California have creatively argued that the FAA does not preempt certain state laws that expressly permit class actions. That position recently took another hit when a California Court of Appeal concluded that “the FAA preempts the CLRA’s anti-waiver provision because the provision acts as an obstacle to the FAA’s intention of enforcing arbitration agreements according to their terms.” Instead of proceeding with her class action claims in court, the plaintiff may be required to arbitrate her claims on an individual basis as provided in the contract she signed.

New decision makes each insurer responsible for loss if any part occurred during policy period, and bars allocation of damage to the insured.

The estate and gift tax laws under the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, are scheduled to sunset on December 31, 2012. These laws provide opportunities to transfer assets to your desired beneficiaries at a tax cost that is significantly lower than under any prior tax laws. Higher income tax rates are also expected in the coming years. If you are interested in taking advantage of the current tax laws, we encourage you to contact a professional advisor as early as possible for tax planning. As the end of 2012 approaches, advisors and valuation experts are likely to be very busy as many individuals will be making gifts, either outright or in trust, and engaging in other tax planning.

In its recent decision in Harris v. Superior Court (Liberty Mutual) (B195121), California's Second District Court of Appeal muddied the waters that the state's Supreme Court had sought to clarify regarding the administrative exemption. It is widely anticipated that the case will make its way to the California Supreme Court again, but at least for now employers should be cautious and conservative in their use of the administrative exemption.

Wells Fargo has won a pair of precedent-setting victories connected to the passage of the Dodd-Frank Act, which are important to all financial institutions that issued, and have recently been considering redeeming, trust preferred securities. Many trust indentures contain "Capital Treatment Event" clauses that are very similar to those interpreted in these cases. The orders of a federal judge indicate that President Obama's signing of the Dodd-Frank Act in 2010 constituted a "Capital Treatment Event" that might entitle similarly situated banks to redeem their trust preferred securities, regardless of the timing of any so-called optional redemption date, so long as all other requirements are met.

Headlines:

• FCC Assesses $68,000 in Fines for Unauthorized STL Operations
• EAS Failures Lead to $8,000 Fine

Senate Bill 226 was enacted in 2011 to streamline review of infill development projects under the California Environmental Quality Act (CEQA), directing the Natural Resources Agency to adopt standards for eligible projects by January 1, 2013. On July 27, 2012, the agency issued proposed S.B. 226 guidelines for public comment, due September 10, 2012. If adopted, the proposed guidelines promise substantially faster and simpler approval of infill projects, eliminating repetitive review of issues already addressed in planning-level evaluations. However, it remains to be seen whether local governments will conduct the detailed planning-level reviews and adopt “uniformly applicable development policies or standards” as needed to realize the benefits of streamlining.

As part of the wider Retail Distribution Review, the Financial Services Authority recently launched a consultation which follows its August 2011 Policy Statement outlining its proposed ban on commission payments by product providers to platform providers and cash rebates to consumers. Tim Wright, a Partner at Pillsbury Winthrop Shaw Pittman LLP, reviews the new rules proposed by the FSA.

While most broadcasters have only seen a demonstration of the FCC’s new online Public Inspection File database, they must begin to use it in just one week’s time. Advance preparations and a good understanding of the filing requirements are needed to minimize the impact of this dramatic shift in the FCC’s rules on television broadcasters’ operations.

The staggered deadlines for filing Biennial Ownership Reports by noncommercial radio and television stations remain in effect and are tied to each station’s respective license renewal filing deadline.

This Broadcast Station Advisory is directed to radio and television stations licensed to communities in California, Illinois, North Carolina, South Carolina, and Wisconsin, and highlights the upcoming deadlines for compliance with the FCC’s EEO Rule.

This advisory is directed to television stations with locally-produced programming whose signals were carried by at least one cable system located outside the station’s local service area or by a satellite provider that provided service to at least one viewer outside the station’s local service area during 2011. These stations may be eligible to file royalty claims for compensation with the United States Copyright Royalty Board. These filings are due by Tuesday, July 31, 2012 at 5:00pm (EDT).

TV, Class A TV, and certain LPTV stations licensed to communities in Florida, Puerto Rico, and the Virgin Islands must begin airing pre-filing license renewal announcements on August 1, 2012. License renewal applications for these stations and in-state TV translator stations are due by October 1, 2012.

Full power commercial and noncommercial radio stations and LPFM stations licensed to communities in Iowa and Missouri must begin airing pre-filing license renewal announcements on August 1, 2012. License renewal applications for these stations, and for in-state FM translator stations, are due by October 1, 2012.

The Supreme Court’s decision in National Federation of Independent Business v. Sibelius upholding the Patient Protection and Affordable Care Act (PPACA) leaves in place the market reforms and tax provisions that have become effective under health care reform over the last two years and gives a green light to the continued implementation of these measures. All health plan sponsors and administrators should continue to take action to comply with these requirements as they become effective. Employers whose plans fail the PPACA’s minimum standards of coverage or affordability should consider restructuring their benefits to avoid heavy penalties.

• Long-Term Violation of an FCC Order Leads to $25,000 Forfeiture
• FCC Issues $10,000 Fines for Obstruction Lighting Violations

In implementing Section 952 of the Dodd-Frank Wall Street Reform and Protection Act of 2010, the Securities and Exchange Commission (SEC) adopted final rules requiring national securities exchanges to adopt listing standards regarding the independence of compensation committee members, the committee’s retention of compensation advisers, the committee’s consideration of the independence of any advisers and the disclosure of any conflicts of interest of any advisers.

Since the inception of the video game age, game developers have looked to successful games for inspiration. In some cases this has resulted in the creation of sub-genres of games serving the same niche markets while in other cases it has led to nearly identical games being made available by different entities. The latter situation is what led the owner of the renowned game Tetris to file suit against Xio Interactive Inc. over its game Mino. Mino is a falling block game which incorporates gameplay rules similar to Tetris, as well as utilizing a similar playing area and geometric block combinations.

This is an article by Fred Brodie and James Haddad regarding New York's proposed UCC Amendments.

The recent opinion of the Federal Circuit in In re Bill of Lading Transmission and Processing System Patent Litigation, – F.3d – (Fed. Cir. Jun. 7, 2012)("In re Bill of Lading"), addresses in substantial detail the requirements for adequately pleading claims for direct infringement (including the direct infringement that is a necessary prerequisite for pleading indirect infringement), inducing infringement, and contributory infringement.

With the unprecedented popularity of social media, individuals have increasingly been willing accomplices in undermining their own privacy. Few would have predicted that millions of people would voluntarily log onto the Internet and share detailed private information about themselves, their friends, family and employers. Users of social media have implemented varying privacy safeguards from unrestricted blogs to Facebook posts limited to a customized list of friends. Even those who seek privacy, however, must contend with a growing practice by employers and others of requesting access to password-protected social media accounts. Social media users have lost jobs and educational opportunities as a result of the increased scrutiny of these private postings. Maryland recently became the first state to enact a law prohibiting this practice; several other states and the U.S. Senate and House have similar legislation under review.

On May 30, 2012, the State Board of Equalization (“SBE”), approved pro-posed amendments to the California Code of Regulations, Title 18, section 1684 (“Proposed Regulation”). The Proposed Regulation attempts to provide guidance as to the meaning of the broadened statutory definition of “retailers engaged in business in this state.” The statutory definition now includes retailers who are members of “commonly controlled groups,” as well as retailers who enter into agreements with “a person or persons in this state” who meet certain minimum thresholds.

Bankruptcy and insurance law frequently intersect and sometimes conflict. This article addresses the most important of these intersections, including the ability of a debtor to satisfy insured claims by the assignment of coverage proceeds in bankruptcy, the treatment of D&O insurance in bankruptcy, a debtor’s non-payment of a deductible or self insured retention (“SIR”) as a defense to coverage, “buy back” agreements and coverage-in-place settlements in bankruptcy, the ability of insurers and/or debtor-affiliates to obtain third-party releases, insurer insolvency and potential gaps in coverage, and paid-loss retrospective policies and a bankruptcy estate’s bad faith claims. As discussed throughout, this is an area of law that is quickly developing and where several issues remain unsettled.

• FCC Fines Noncommercial Educational Station $12,500 for Ads
• Public Inspection File Violations Lead to Three Short Term License Renewals
• Main Studio Violations and Unauthorized Operations Garner $21,500 Fine

The 2012 Summer Olympic and Paralympic Games in London offer a unique opportunity for companies to promote their businesses through entertainment of customers or clients at the various game venues. Has the UK Bribery Act 2010 put a damper on these time-honored business practices and the manner and methods by which business organisations seek to obtain and retain business?

Directorship of the UK Serious Fraud Office ("SFO") passed this month to David Green QC. Mr. Green joins the SFO from private practice, where he was a barrister specializing in serious crime. He also previously served as the first director of the UK's Revenue and Customs Prosecutions Office. Mr. Green has taken office promising, in remarks to the Financial Times, to "rebalance the relationship between prosecution and civil settlement" and focus on "strategically significant cases". This would suggest a departure in approach from that of Richard Alderman, Mr. Green’s predecessor.

This Client Alert was republished in Law360 on May 11, 2012.

The Northern District of California continues the series begun by the Seventh Circuit in Sterk v. Redbox Automated Retail LLC, against class actions brought under the federal Video Privacy Protection Act and seeking lucrative liquidated damages simply because a "video tape service provider" retains records of customers' video purchases and rentals past the one-year cut-off.

The U.S. Equal Employment Opportunity Commission (“EEOC”) recently issued an Enforcement Guidance on employers’ use of arrest and conviction records in hiring, as well as published a final rule clarifying the “reasonable factors other than age”(“RFOA”) defense under the Age Discrimination in Employment Act (“ADEA”). Both the Guidance and the new regulations demonstrate the EEOC’s focus on requiring employers to demonstrate the legitimate, job-related basis for employment actions.

The obligation to preserve potentially relevant documents when litigation is reasonably anticipated is well-settled and, through case law over the past few years, well-known. However, the scope of that obligation is not clear. Should the concept of proportionality apply to preservation obligations? And, if so, how do you apply it?

A Bloomberg Law search reveals that more than 1,000 lawsuits have been brought in the past decade for breaches of settlement agreements. To craft a settlement that has staying power, and to avoid buyer’s remorse, both clients and their counsel should learn how to avoid the most common settlement traps.

This discussion is being provided to our clients and friends to analyze the challenges presented in this difficult economic environment when an FDIC-insured institution experiences a capital difficulty and is directed by the Banking Regulators¹ to restore the institution's capital adequacy.² In the past four years, the FDIC has closed approximately 400 insured institutions—as of January 1, 2012, the FDIC has indicated that there were over 800 banks on its "problem bank list." The difficulties experienced by many of these institutions are summarized in this analysis— and may provide useful guidance when attempting to resolve capital issues in the next few years.

• The FCC's $10,000 fines for items missing from the public inspection file continue
• License cancellation no obstacle to FCC proposing $18,000 fine against former broadcaster

The U.S. government would like companies to offer useful technologies and services that enable free communication in Syria and Iran but will also target those who are involved in the direct or indirect provision of goods, services, or technology “likely to be used to facilitate computer or network disruption, monitoring, or tracking that could assist in or enable serious human rights abuses.” This challenging balance is the goal of the “GHRAVITY” sanctions introduced by Executive Order effective April 23, 2012. Technology and telecom companies are faced with a number of compliance questions.

Much has been written about the Bribery Act’s new strict liability corporate offence of failure to prevent bribery and the advisability of having in place a comprehensive anti-bribery policy adopted and enforced by senior company management as the only recognized defence available against the spectre of criminal prosecution and potentially unlimited fines. However, it is not just the criminal prosecutors at the Serious Fraud Office (SFO) but the regulators of the financial services industry in the UK at the Financial Services Authority (FSA) who will be reviewing the adoption and implementation of adequate internal management procedures to combat corporate corruption.

The Jumpstart Our Business Startups Act (JOBS Act or Act), which was signed into law on April 5, 2012, could improve substantially the fundraising prospects for private funds. Elimination of the prohibition against general solicitation and general advertising will increase exposure for private funds and, consequently, the pool of prospective investors. Although the JOBS Act and rules to be adopted in connection with the Act will in some ways revolutionize private offerings, it is important for private funds to keep in mind the restrictions on U.S. private offerings that are unaffected by the JOBS Act.

In a highly anticipated decision, on April 12 the California Supreme Court in Brinker Restaurant Corp. v. Superior Court held that employers are not obligated to ensure that nonexempt employees take their meal breaks. However, the court's guidance on the timing of breaks will come as a surprise to many employers, and the court also left the door open for more class action lawsuits.

Introduction

Ten years after adoption of the Bipartisan Campaign Reform Act (“BCRA”) of 2002, popularly known as “McCain-Feingold,” Congress’ and the FCC’s interest in political broadcasting and political advertising practices remains undiminished. Broadcast stations must ensure that a broad range of federal mandates are met, providing “equal opportunities” to all candidates using the stations facilities, affording federal candidates for public office “reasonable access” and treating all candidates for public office no less favorably than the station treats its most favored advertisers. Accordingly, it is imperative that broadcasters be very familiar with what is expected of them in this regulatory area, that they have adequate policies and practices in place to ensure full compliance, and that they remain vigilant to legislative, FCC, and FEC changes in the law.

The Departments of Labor, Health and Human Services and Treasury (the “Departments”) have issued administrative guidance giving group health plans a one-year period of relief from enforcement penalties for the failure to provide a complete or timely Summary of Benefits and Coverage (“Summary”). The Departments have also extended temporary relief to group health plans that have delegated the responsibility to provide the Summary to another entity, such as a third-party administrator. In light of this guidance, employers that maintain group health plans are advised to review their vendor contracts to clarify who is responsible for providing information for the Summary, drafting it and distributing it to participants.

On March 20, the Supreme Court reversed the Federal Circuit in the long-awaited Mayo Collaborative Labs v. Prometheus Laboratories, Inc. decision, striking down Prometheus’ patents on the grounds that the claims too broadly preempt the use of natural correlations between levels of drug metabolite and pharmaceutical effect. While the claims were written to include additional steps, such as an administration step, the Court held these steps were insufficiently integrated into the process as a whole and failed to transform the process into an inventive application of a natural phenomenon. The holding in Mayo clarifies the “law of nature” exclusion under a “preemption test” and has broad implications in determining patent-eligible subject matter in the fields of diagnostic testing, personalized medicine, and biotechnology.

On February 2, 2012, the Department of Labor (“DOL”) released the final regulations under Section 408(b)(2) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) requiring certain retirement plan service providers to disclose fee-related information to plan fiduciaries. These new disclosure obligations are intended to assist retirement plan fiduciaries in assessing the “reasonableness” of the contract or arrangement in connection with the ERISA section 408(b)(2) prohibited transaction exemption. The final regulations are effective for all applicable service provider arrangements as of July 1, 2012 (including new and existing arrangements). Plan fiduciaries and retirement plan service providers should begin reviewing service agreements now to ensure timely fee and compensation disclosure in compliance with the new regulations.

When a multinational company implements product deployment, research, sales expansion and manufacturing on an international basis, it may want a unified approach to compensation incentives covering both U.S. and other foreign executives. This means a U.S. citizen or resident who works outside the U.S. and is in an incentive program designed by a non-U.S. employer can face surprising, often serious tax problems. A non-U.S. citizen who is assigned to the U.S. but stays in their home country incentive plan may also have U.S. tax problems. And now, new issues are arising from the U.S. Foreign Account Tax Compliance Act.

For multinational companies, it is increasingly common to move key employees in and out of different countries – a practice that can trigger a variety of issues. New regulations proposed in February offer some relief for companies with an international workforce, as they indicate that most non-U.S. pension plans will be treated by the U.S. as “deemed compliant” with Foreign Account Tax Compliance Act (FATCA). But multinational employers still have reasons to look closely at pension-based U.S. tax liabilities affecting mobile employees.

Just over a year after it was filed, Chevron Corporation and other oil companies won dismissal of a putative privacy class action filed after the California Supreme Court's decision in Pineda v. Williams-Sonoma Stores, Inc. The complaint alleged that oil companies collecting consumers' ZIP codes at the gas pump violated California's Song-Beverly Credit Card Act. The Los Angeles Superior Court disagreed, deeming the plaintiff's argument that the Act applies to the oil companies' fraud prevention efforts "absurd." The gas pump case had already inspired a new California law permitting anti-fraud ZIP code collection.

In our January 2011 article, King Charles II Meets the Digital Age: Can an Email Chain Satisfy the Statute of Frauds, we discussed the English High Court judgment in Golden Ocean Group Ltd v Salgaocar Mining Industries PVT Ltd ("SMI"), [2011] EWHC 56 (Comm) and its guidance for parties negotiating contracts via email as to the enforceability of a contractual guarantee under section 4 of the Statute of Frauds 1677. That judgment analysed, amongst other things, whether 21st-century methods of communication constitute an "agreement, memorandum or note in writing and signed" and more specifically, whether a guarantee might be unenforceable because it was "agreed" upon, if at all, only in a lengthy chain of email correspondence. The Court of Appeal has now had occasion to consider argument on whether an enforceable contract of guarantee can arise from a series of electronic communications, judgment at [2012] EWCA Civ 265.

This Broadcast Station EEO Advisory is directed to radio and television stations licensed to communities in Delaware, Indiana, Kentucky, Pennsylvania, Tennessee and Texas, and highlights the upcoming deadlines for compliance with the FCC’s EEO Rule.

Full power commercial and noncommercial radio stations and LPFM stations licensed to communities in Michigan and Ohio must begin airing pre-filing license renewal announcements on April 1, 2012. License renewal applications for these stations, and for in-state FM translator stations, are due by June 1, 2012.

The staggered deadlines for filing Biennial Ownership Reports by noncommercial radio and television stations remain in effect and are tied to each station’s respective license renewal filing deadline.

TV, Class A TV, LPTV, and TV translator stations licensed to communities in Maryland, Virginia, West Virginia, and Washington DC must begin airing pre-filing license renewal announcements on April 1, 2012. License renewal applications for these stations are due by June 1, 2012.

Much has been written about the Bribery Act’s new strict liability corporate offence of failure to prevent bribery and the advisability of having in place a comprehensive anti-bribery policy adopted and enforced by senior company management as the only recognized defence available against the spectre of criminal prosecution and potentially unlimited fines. However, it is not just the criminal prosecutors at the Serious Fraud Office (SFO) but the regulators of the financial services industry in the UK at the Financial Services Authority (FSA) who will be reviewing the adoption and implementation of adequate internal management procedures to combat corporate corruption.

Following the U.S. Supreme Court’s decision favoring arbitration clauses in AT&T Mobility LLC v. Concepcion, the Ninth Circuit Court of Appeals has now held in Kilgore v. KeyBank, N.A. that the Federal Arbitration Act (“FAA”) preempts the California Broughton-Cruz rule that prohibited arbitration of claims for injunctive relief under California’s Unfair Competition Law. The Ninth Circuit also rejected the plaintiffs’ claim that the arbitration clause was unconscionable, noting that the clause was conspicuous and contained an opt-out provision.

• Inadequate Sponsorship ID Ends with $44,000 Fine
• Unattended Main Studio Fine Warrants Upward Adjustment
• $16,000 Consent Decree Seems Like a Deal
  
  

Click below to download a completed, edited and abridged version of the Leahy-Smith America Invents Act (AIA) Legislative History. We have provided a Table of Contents and the document can be searched using “Ctrl F” to find specific keywords and references.

On October 14, 2010, the U.S. Department of Labor released final regulations detailing a plan administrator’s fiduciary responsibilities regarding disclosure of plan and investment-related information, including fee and expense information, to participants and beneficiaries of participant-directed individual account plans such as 401(k) plans. Because the final regulation is promulgated under the general fiduciary provisions of section 404(a) of the Employee Retirement Income Security Act of 1974, as amended (ERISA), it applies generally to all participant-directed plans, not just those that intend to meet the ERISA section 404(c) plan requirements. Based on the final rules, as amended, sponsors of calendar year plans must begin providing this information to participants no later than August 30, 2012.

On February 2, the Department of Labor (“DOL”) released the final regulations under Section 408(b)(2) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). These rules require certain retirement plan service providers to disclose fee-related information to plan fiduciaries for the service provider arrangement to meet the “reasonableness” requirements of the section 408(b)(2) prohibited transaction exemption.

Software licenses are copyright licenses. The license specifies the extent to which “copying” is permitted under the license. In this article, we address various bankruptcy issues related to computer software, computer software licenses and other intellectual property assets. First, we provide basic background applicable to licensor/licensee bankruptcies. Second, we discuss the Intellectual Property Bankruptcy Protection Act of 1988 (Bankruptcy Code Section 365(n), including identification of risk and potential strategies for minimizing those risks. Third, we consider issues relating to the assumption of technology licenses by debtor-licensees. Fourth, we provide an overview of benefits and risk of working with a financially troubled licensor. Fifth, we discuss the necessity of perfecting security interests. Lastly, we discuss the dischargeability of copyright infringement judgments (and other IP infringement judgments) in bankruptcy.

Declining to enforce an arbitration clause on the grounds that the class action waiver effectively would preclude plaintiffs from enforcing their rights under the Sherman and Clayton Acts, the Second Circuit distinguished the U.S. Supreme Court’s recent pro-arbitration decisions in Stolt-Nielsen, Concepcion and CompuCredit, and instead relied on Green Tree Financial Corp. and other earlier U.S. Supreme Court decisions.

This article summarizes various legislation introduced in Congress that would make it easier for smaller companies to raise capital and would lessen the regulatory burden on those companies.

The U.S. Supreme Court, enforcing an arbitration clause, found that the “right to sue” language and the references to “court” and “action” in the federal Credit Repair Organizations Act were a “commonplace” means of referring to a cause of action but did not express the contrary congressional command needed to override the pro-arbitration philosophy reflected in the Federal Arbitration Act.

On February 27, 2012, revised thresholds for the Hart-Scott Rodino Act (“HSR”) will take effect. The thresholds determine whether parties involved in proposed mergers, consolidations, or other acquisitions of voting securities, assets, or unincorporated interests must notify the Federal Trade Commission (“FTC”) and the Antitrust Division of the Department of Justice (“DOJ”) of a proposed transaction and comply with a mandatory waiting period before the transaction can be consummated.

The Indian Supreme Court’s decision in the Vodafone case brings to an end the long saga that has kept global investors on edge about the taxation of foreign acquisitions in India. Against settled principles of the taxation of cross-border acquisitions, the Indian tax authorities had taken a highly aggressive position that would have subjected a sale of stock of a non-Indian corporation by and between two non-Indian residents to Indian taxation. Vodafone’s win sends a positive signal about India’s legal climate to global investors. However, the Indian government is considering new laws that may undo some of this decision’s clarity.

• Failure to Refresh Tower Paint Garners $8,000 Fine
• FCC Levies $25,000 Fine for Failure to Respond
• $85,000 Consent Decree Terminates Investigation Into Unauthorized Transfers of Control

Numerous municipalities in California and elsewhere are struggling financially. Indeed, Harrisburg, Pennsylvania, and Central Falls, Rhode Island, have both recently filed for Chapter 9 protection. State governments may have neither the economic reserves nor the political will to bail out troubled cities and counties. These circumstances have raised the focus on Chapter 9 as a tool for reorganizing municipality debt obligations and have deepened the debate between states and their municipalities about the best strategies for addressing a fiscal crisis.

Recent federal court decisions regarding the application of the criminal enforcement provisions of the Migratory Bird Treaty Act (MBTA) to the operations of oil and gas exploration and production facilities have resulted in conflicting interpretations of the Act. These decisions are significant for the oil and gas industry as well as other industries whose operations can impact migratory birds.

The recent decision of the Court of Appeal for England and Wales in Towers v. Premier Waste Management Limited [2011] EWCA Civ 923, discussed in our recent article, serves as a timely reminder to directors of English companies of the importance of understanding and observing the duties owed to a company of which they are a director. It is worthwhile reminding ourselves of the general duties set out in the Companies Act 2006.

As the euro crisis deepens both sides of the "Merkozy" couple are full of gloom, and with due cause as this year could see the partial or complete collapse of the currency.

The Third Circuit confirmed that, while the merchant’s printing of a partial credit card expiration date on the customer’s receipt violated the Fair and Accurate Credit Transactions Act, the merchant’s interpretation of Section 1681c(g)(1) of FACTA had been objectively reasonable. The court also recognized that "[t]hese are issues of first impression among the federal courts of appeals."

On January 3, President Obama signed into law the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (a title strongly influenced by current political issues). This act, sponsored as H.R. 2845 by Representative Bill Shuster (R-Pa.), brings sweeping changes to the nation’s pipeline safety law, imposing a variety of new design, construction, testing, operation, maintenance, and emergency response requirements for the nation’s 2.3 million miles of pipelines for natural gas, petroleum, and hazardous liquids.

In a recent announcement regarding a company whose employees were convicted of breaching UN sanctions on Iraq through company contracts, the director of the United Kingdom's Serious Fraud Office emphasised that shareholders who receive the proceeds of crime can expect civil action against them to recover the money—even if, as in this case, the shareholder was totally unaware of any illegal behavior. Shareholders and investors are obligated to satisfy themselves as to the business practices of the companies they invest in.

Senior officials in the Department of Justice’s Foreign Corrupt Practices Act Unit have long touted the position that individuals who engage in criminal conduct on behalf of corporate entities will be targeted alongside the entities themselves. Two major cases confirm that the enforcement effort against individuals is increasing. A recent significant Second Circuit decision and the indictment of eight individuals related to the Siemens corruption probe—all of whom were citizens of foreign countries—establish new standards for guilty knowledge and the jurisdictional reach of the FCPA respectively.

On January 4, 2012, the Securities and Exchange Commission (SEC) released a National Examination Risk Alert addressing investment adviser use of social media. Investment advisers should have policies regarding the use of social media, and the SEC outlined specific factors that need to be addressed by these policies. The SEC’s guidance could be particularly important given the “crowdfunding” legislation Congress is currently considering.

On December 29, 2011, the California Supreme Court issued a ruling upholding sweeping changes to California redevelopment law. The court upheld Assembly Bill (AB) X1 26, which dissolves all redevelopment agencies in California, while invalidating ABX1 27, which would have allowed redevelopment agencies to continue by making required payments to the state’s education fund. This ruling means that, effective immediately, all redevelopment agencies in California must begin the dissolution and winding-up process as required by ABX1 26.

• Failure to Monitor and Repair EAS Equipment Nets $8,000 Fine
• Fines for Late-filled License Renewals Continue
• $25,000 Fine for Failure to Answer FCC Correspondence

New York employers must soon, for the first time, provide employees the annual wage statements required under the state Wage Theft Prevention Act (“WTPA”), which took effect on April 12, 2011. The WTPA requires all employers to issue such notices every January. The start of a new calendar year also provides an opportunity for New York employers to review their payroll practices to confirm that they are in full compliance with the detailed payroll requirements found in the New York Labor Law and the various industry-specific wage orders issued by the New York Department of Labor (“NYDOL”).

By enacting House Bill 3328, the Texas Legislature added a new Subchapter S to Chapter 91 of the Texas Natural Resources Code. The new law directed the Texas Railroad Commission (hereinafter "Commission") to promulgate new rules requiring the disclosure of the composition of the hydraulic fracturing fluids used in wells for which drilling permits are issued by the Commission on or after February 1, 2012, when the new rules take effect.

In this article, Pillsbury Environment, Land Use & Natural Resources senior associate William A. Wilcox, Jr. and partner Jeffrey A. Knight address the impact of the National Environmental Policy Act (NEPA) on public-private ventures (PPVs). They demonstrate that early planning and coordination is essential in order to make use of opportunities to streamline and expedite the NEPA review process for PPV projects while ensuring adequate protections against legal challenges.

• Malfunctioning Monitor Costs Broadcaster $10,000
• FCC Fines Tower Owner $13,000 For Lighting and Ownership Issues

Employers collect a substantial amount of personal information about their employees. Companies need to be aware of their obligations under the profusion of data protection laws and regulations that govern the collection, use and transfer of personal information. This is an especially daunting task for companies that have operations subject to the laws of multiple jurisdictions, as requirements vary widely from country to country and even from state to state. In this article, Executive Compensation & Benefits partner Scott Landau and associate Bradley Benedict summarize some basic concepts executives, inside counsel and human resource managers should consider under current data privacy laws.

In response to recent investigations into companies that went public through reverse merger transactions, the Securities and Exchange Commission (SEC) has approved new rules proposed by NASDAQ, NYSE Amex and the New York Stock Exchange (NYSE) that call for, among other things, a “seasoning” period following the reverse merger.

In the face of significant airline opposition, the U.S. Department of Transportation ("DOT") has introduced a series of new rules designed to enhance passenger rights and "to improve the air travel environment for consumers." The new rules could have profound effects well beyond the immediate need for airlines, airports, and travel agents to make fundamental systems and programming changes, and to train appropriate employees. Prospects for increased DOT enforcement actions loom large on the horizon, especially for extended tarmac delays. Indeed, on November 14, 2011, the Department announced its first fine for alleged violations of its tarmac delay rules. While DOT said the $900,000 fine against American Eagle represents the largest civil penalty to be paid by an airline in a consumer protection case not involving civil rights violations, it was actually significantly less than the maximum possible amount: $16.7 million, with $250,000 credit given for the airline’s travel vouchers and frequent flyer awards to affected passengers.

The recent death sentence imposed on the former president of Shanghai Pharmaceutical Group reminds the market that China is serious about its crackdown on corruption. Chinese law prohibits corrupt payments in the commercial as well as the government-related context, and international businesses are well advised to keep in mind China’s prohibitions on commercial bribery.

Understanding fee-shifting and the legal expenses insurance available in England, as well as the role of lawyers’ conditional fee agreements permitted under English rules, can be central to a business’s risk management strategy if it is exposed to either defending or bringing litigation in England.

This Client Alert is being sent to our clients and friends to share our views regarding the conclusions set forth in an article published by Bloomberg on November 2, 2011, that warned that the $63 billion bridge loan market was jeopardized by the proposed regulations recently published by several of the federal financial service agencies. Among other things, the article warned that the functioning of that market segment runs afoul of the proposed Volcker Rule limitations on proprietary trading by covered financial holding companies and their affiliates—including the requirement that a bank hold notes for a minimum of 60 days in order to avoid the proprietary trading prohibition (and thereby incur a host of capital requirements and significantly increase its risk exposure).

The FDIC and Federal Reserve Board (“FRB”) have issued regulations that require bank holding companies with assets over $50 billion (including foreign banking organizations (“FBOs”) with US operations) to prepare and submit so-called “living wills” describing how such entities would be resolved under the federal Bankruptcy Code. In addition—and not to be overlooked—the FDIC has issued a companion regulation requiring a depository institution with over $50 billion in assets to prepare a living will detailing the resolution of the depository institution under the receivership authority of the Federal Deposit Insurance Act (the “FDI Act”). Depending upon the size and complexity of covered entities, the regulations establish time frames for submission of a living will—with the largest entities being required to submit by July 1, 2012 and smaller entities being required to submit their living wills by December 2013.

The DC Circuit has vacated and remanded the Federal Aviation Administration’s (FAA) no hazard determinations for 130 wind turbines in Nantucket Sound, finding that the FAA failed to follow its own handbook in determining whether the proposed turbines would have a “substantial adverse effect” on air navigation.

• Cable Operator Subject to $25,000 Fine for EAS and Signal Leakage Violations
• Late-filed Renewals Garner $26,000 Fine
  
  

A recent ruling by the United States Court of Appeals for the Seventh Circuit affirmed the invalidity of a trust indenture between a tribal corporation and bond trustee that was not approved by the National Indian Gaming Commission ("NIGC"). However, the Seventh Circuit granted the trustee leave to amend its complaint to assert equitable claims, remanding the case for the district court to determine if other bond documents could support a waiver of the tribal corporation’s sovereign immunity, and whether the trustee has standing to sue for the return of funds to the bondholder.

On October 26, 2011, the SEC adopted a new rule requiring SEC-registered advisers to hedge funds and other private funds with at least $150 million in private fund assets under management to report information to the Financial Stability Oversight Council (FSOC) to enable it to monitor risk to the U.S. financial system. The information which must be reported to the FSOC on Form PF will remain confidential, and not accessible to the general public.

Numerous municipalities in California and elsewhere are struggling financially. Indeed, Harrisburg, Pennsylvania and Central Falls, Rhode Island have both recently filed for Chapter 9 protection. State governments may have neither the economic reserves nor the political will to bail out troubled cities and counties. These circumstances have raised the focus on Chapter 9 as a tool for reorganizing municipality debt obligations and has deepened the debate between states and their municipalities about the best strategies for addressing a fiscal crisis.

At first glance, Southern Peru Copper Corporation (Southern Peru) and its special committee (Committee) appeared to do what they were supposed to do when considering a controlling stockholder transaction—form a special committee of disinterested, sophisticated directors, engage separate, independent financial and legal advisors, request a fairness opinion and obtain super-majority stockholder approval. So why did the Chancellor of the Delaware Court of Chancery (Court) hold that the transaction was unfair and award $1.3 billion in damages—one of the largest derivative monetary awards in the Court’s history? This Advisory discusses In re Southern Peru Copper Corporation Shareholder Derivative Litigation¹ and suggests specific practices that a special committee should consider when evaluating a controlling stockholder transaction.

Effective September 1, 2011, the Texas Legislature enacted the Public and Private Facilities and Infrastructure Act (the Act) for the purpose of enabling private investment in public facilities and infrastructure. The Texas Facilities Commission (the Commission) recently adopted Public-Private Partnership Guidelines (the Guidelines) setting forth the application requirements for qualifying projects and the review criteria and processes by which applications will be evaluated. The Guidelines are intended to provide certainty to the process of proposing and negotiating public-private partnerships (PPPs), which in turn should result in additional development opportunities to private parties while better utilizing and developing the State of Texas’ (the State) real estate assets and providing the State with non-tax revenue sources.

Last week, the Small Business Administration (SBA) issued a pair of proposed rules that would amend SBA's regulations to implement provisions of the Small Business Jobs Act of 2010, Public Law 111-240 (the Jobs Act). The first of the proposed rules, issued on October 5, 2011, is aimed at increasing the protections afforded to small business subcontractors.¹ The second proposed rule, issued on October 7, 2011, is aimed at maintaining small business size and status integrity.² Together, the proposed rules will substantially enhance the protections afforded to small business prime and subcontractors.

California law directs the Contractors’ State License Board, no later than January 1, 2012, to begin processing applications by limited liability companies for contractors’ licenses. The Board has recently provided guidance on the licensing requirements for LLCs, which differ from those for other types of business organizations.

On September 21, the Internal Revenue Service (IRS) issued Announcement 2011-64, describing a new “Voluntary Classification Settlement Program” (VCSP) that will allow employers to reclassify independent contractors as employees for employment tax purposes on a prospective basis. Under the VCSP the employer will pay a fixed settlement amount in satisfaction of prior year employment tax liabilities for the reclassified workers, and the IRS will agree not to audit the employer’s prior year employment tax returns with respect to those workers.

In recent months, the owners of radio stations throughout the country have received letters from representatives of Mission Abstract Data, L.L.C., d/b/a DigiMedia (“MAD”), encouraging them to enter into patent license fee agreements with the company. MAD’s letter points out that it has sued some of the nation’s largest radio group owners. Undoubtedly, MAD will use the monies derived from the license fee agreements to help fund the current litigation as well as to demonstrate the “legitimacy” of its patent holdings. This Advisory is intended to provide radio stations with important background information on the case and to identify factors that may come into play as station owners consider the risks, as well as the options, available to them.

The California Environmental Quality Act is a cornerstone of the state’s environmental protection program, requiring public agencies to review the impacts of both private development and public infrastructure projects. However, developers and local governments have long complained that costly and time-consuming environmental impact reports and ensuing litigation can jeopardize even environmentally desirable projects, such as infill development and renewable energy. On October 4, the Governor signed the last of three “streamlining” bills intended to address these concerns.¹ Hailed by some as promoting jobs, attacked by others as undercutting CEQA, these bills actually offer only limited benefits, under such restrictive conditions that few projects will qualify. Thus their effect on project development likely will be less than advocates claim and critics fear, while their effectiveness at generating jobs remains to be seen.

Beginning January 1, 2012, California Civil Code Section 1714.43 will require retail sellers and manufacturers doing business in California to disclose their efforts to eradicate slavery and human trafficking from their direct supply chains for tangible goods offered for sale. The new law will apply to retail sellers and manufacturers having $100 million or more "in annual worldwide gross receipts." Former Governor Schwarzenegger signed Senate Bill 657, the "California Transparency in Supply Chains Act," on September 30, 2010.

The California Energy Commission (CEC) recently issued revised draft regulations setting the implementation schedule for its energy use disclosure program under AB 1103. Under the implementation schedule, commercial real estate owners must disclose energy benchmarking data starting on: July 1, 2012, for buildings with more than 50,000 square feet; January 1, 2013, for buildings with 10,001-49,999 square feet; and July 1, 2013, for buildings with 5,000-10,000 square feet.

Energy team co-leader Rob James and Finance partner Philip Tendler, chapter co-authors, discuss project finance—collateral, security interests, liens, bankruptcy, offshore accounts, foreign investment, ownership restrictions, health/safety laws, and PPPs.

Headlines:

• Low Power Broadcaster’s Defiance Results in $7,000 Upward Adjustment
• Unauthorized Post-Sunset Operations Lead to $4,000 Fine for AM Station

Without a huge expansion of nuclear energy production, it is clear to India’s business and political leaders that the economic miracle of 9 percent growth cannot be sustained. The real question for India is whether it will be able to select from among the widest choice of global industry suppliers in building its nuclear facilities.

On September 13, 2011, the U.S. Department of Labor (“DOL”) in Technical Release 2011-03 (the “Release”) released interim guidance on how plan administrators may use electronic media to deliver the newly required fee disclosures for participant-directed plans. Plan administrators of 401(k) plans and other applicable individual account plans should carefully review this guidance and determine how they can electronically distribute the fee disclosure information to participants and beneficiaries given the parameters specified in the Release.

Recent remarks by the English High Court in the insolvency case Green (Liquidator of Stealth Construction Limited) -v- Ireland [2011] EWHC 1305 (Ch) suggest that in some circumstances, and at least in the context of fast-moving real property transactions, an exchange of emails may well satisfy the requisite formalities for creation of a binding and enforceable contract.

A California state court addressed for the first time whether a borrower can state claims under California law based on allegedly fraudulent Option ARM loan disclosures. While noting possible proof problems with plaintiffs’ case, the Fourth District Court of Appeal held that plaintiffs sufficiently alleged that loan documents inadequately disclosed negative amortization of Option ARM loans featuring “teaser” rates.

In August 2011, the Chinese government finalized the long-anticipated national security review mechanism for the purpose of regulating inbound merger and acquisition transactions in some sensitive and important industries. The PRC Anti-Monopoly Law enacted in 2008 already contained references to national security review. This time, the security review procedure is formalized. Even though the security review might not be interminable, ongoing and pending M&A transactions subject to security review will likely take a longer time to complete. Some even fear that national security review may kill some deals.

On August 22, the Departments of the Treasury, Labor, and Health and Human Services (the “Agencies”) published long-awaited proposed regulations on the new Summary of Benefits and Coverage (“SBC”) that all group health plans (including grandfathered plans) will be required to distribute, effective March 23, 2012. Plan administrators must deliver this four-page (front and back) SBC to plan participants in addition to already-required disclosures such as the summary plan description. These proposed regulations provide standards that will govern the SBC, including who provides and receives the SBC, when the SBC must be provided, and how the SBC must be formatted and distributed. This client alert summarizes the proposed requirements for sponsors of group health plans. Plan administrators and insurance providers of group health plans should review these requirements now to prepare for timely provision of the SBC.

San Francisco Superior Court sustains craigslist, Inc.’s demurrer to plaintiff Norman Gonor’s class action alleging violations of California’s Song-Beverly Credit Card Act in connection with online transactions involving credit cards.

After more than a decade of heated debate, the .xxx Top Level Domain (i.e., domain names ending in .xxx rather than .com) is about to launch, and a critical “sunrise period” for trademark owners opened today, September 7.

Hurricane Irene has caused immense damage to the East Coast with loss estimates in the billons. Those affected face many challenges as they begin the recovery process, including impaired utility services, water damage, accessibility problems and supply-chain disruptions. Fortunately, many corporate policyholders have insurance coverage available to assist in the aftermath of this tragic event. Taking a few proactive steps will help maximize that coverage.

An update on the “on-sale bar”: In August Technology Corp. v. Camtek, Ltd., -- F.3d -- (Fed. Cir. Aug. 22, 2011) the Federal Circuit holds that subsequent events can turn a prior “non-offer” into an “offer” that invalidates a patent.

Headlines:

• Late-Filed License Application Garners $7,000 Fine
• FCC Fines Noncommercial Broadcaster $5,000 for Alien Ownership Violation

On June 14, Governor John Kitzhaber signed into law Oregon Senate Bill 756, which amends Oregon’s gift card law to prohibit selling a gift card that does not give the cardholder the option to redeem it for cash when the balance on the card is less than $5 and the card has been used for at least one purchase.

On August 30, 2011, New York City Mayor Michael Bloomberg signed a new law intended to make it more difficult for New York City employers to reject proposed accommodations of employees’ religious practices as an “undue hardship.”

The Centers for Medicare & Medicaid Services (CMS) announced on August 23 a new Bundled Payment Initiative designed to help improve care for patients during their hospital stays and after they have been discharged and reduce Medicare expenditures. The Initiative is another attempt by Medicare to incentivize providers by giving them an opportunity to have some “skin in the game.” Authorized by the Patient Protection and Affordable Care Act, the Initiative provides for four broadly defined models of care in which providers or conveners of providers work together by linking payments for multiple services that patients receive during an episode of care. The Initiative is intended to provide hospitals, physicians and health care organizations with new incentives to coordinate care, improve quality of care, deliver services more efficiently and generate savings under the Medicare program.

The Presidio Parkway Project, California’s first public-private partnership (“P3”) to move forward under legislation enacted in 2009, is expected to proceed after a California appellate court denied a request to enjoin the project. Filed on August 8, the decision upheld a lower court ruling dismissing a claim that the project did not meet the requirements of California’s P3 transportation authorization statute.¹ This is significant not only for the Presidio Parkway Project, but also because the legislation applicable to this project is the blueprint for structuring eight other pending transportation projects with a total estimated cost of $25 billion.²

On August 15, the Second Circuit Court of Appeals issued a decision regarding the copyright “first sale doctrine” that may have far-reaching influence on the activities of U.S. copyrights owners, possibly causing the largest and most prestigious of them to move offshore their manufacturing and publishing operations. See John Wiley & Sons, Inc. v. Kirtsaeng, (2d Cir. Aug. 15, 2011).

Given the great interest in “the cloud” from a business perspective, as well as Microsoft’s popularization of the concept with its "To the Cloud!” advertising campaign, it’s no wonder that many game providers are looking to the cloud as the next viable and profitable gaming platform. The cloud movement not only provides economic incentives through various subscription and pay-to-play models, but also helps defeat piracy by locking down game code and other intellectual property from potential thieves.

The FCC has announced that full payment of all applicable Regulatory Fees for Fiscal Year 2011 must be received no later than September 14, 2011.

On Friday, August 5, 2011, the U.S. Senate completed passage of legislation reinstating the air transportation excise taxes imposed on airline passengers, and President Obama signed the bill (the “Extension Act”) over the weekend. The Extension Act creates problems in dealing with the two-week period during which the tax had expired, but fortunately the Internal Revenue Service has provided some helpful guidance and relief.

Headlines:

• FCC Increases Fine to $25,000 for Main Studio and Public File Violations
• FCC Reaffirms $10,000 Public File Violation Against Student-Run Noncommercial FM Station

2012 Update: With the release of the final service provider fee disclosure regulations under ERISA Section 408(b)(2) on February 2, 2012, the effective date for compliance with the service provider fee regulations was extended to July 1, 2012. Accordingly, the original text of this Advisory is out of date and has been removed. For updated information on the final service provider fee disclosure regulations and new deadlines, see Final Rules Issued on Retirement Plan Fee Disclosures—Compliance Required by July 1. For updated information on the final participant fee disclosure rules and new deadlines, see Labor Department Issues Final Regulations on Fee Disclosures for Participant Directed Plans updated February 18, 2012.

The Franchise Tax Board (“FTB”) will begin implementing California’s recently-enacted Voluntary Compliance Initiative for reporting Abusive Tax Avoidance Transactions (“ATATs”) and certain offshore financial arrangements (“OFAs”) on August 1, 2011.¹

On July 19, the U.S. Federal Trade Commission and the Antitrust Division of the Department of Justice published the most comprehensive changes in decades to the Premerger Notification and Report Form ("HSR Form") required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The Final Rule expands in some ways and limits in others the information that parties contemplating certain mergers, acquisitions, and joint ventures must include in their HSR filings. In addition, the new rule expands the universe of documents that parties must now submit with their HSR Forms. The Final Rule is scheduled to go into effect on August 18, 2011.

California's Second District Court of Appeal, affirming the trial court's dismissal of Jessica Bower's class action complaint, concluded that Bower alleged "at the most a conjectural or hypothetical injury, not an injury in fact" by claiming she was deceived when she was told she had to pay the advertised sale price for a cell phone plus tax on the phone's retail value. The Bower decision helps define when a consumer has alleged an injury under California's consumer protection statutes and confirms that Regulation 1585(b)(3)"reflects California's general policy imposing sales tax on the retailer and permitting the retailer to collect sales tax reimbursement from the consumer.”

The Departments of Labor, Treasury and Health and Human Services have amended the interim final rule issued in July 2010 regarding internal claims and appeals and external review requirements under the Patient Protection and Affordable Care Act ("PPACA").¹ The Department of Labor has also published a related technical release providing additional guidance and revised model determination notices. These amendments may require updates to the claims procedures included in summary plan descriptions of affected plans.

• FCC Fines FM Broadcaster an Extra $5,000 For Inaction
• Inaccurate Tower Ownership Information Ends in $3,000 Fine

Lawrence L. Hoenig, Tax Controversy partner at Pillsbury, authored this article, which focuses on employment tax audits. He recommends 10 steps companies can follow to reduce employee misclassification and tax/labor exposure. This article was featured in the summer 2011 issue of The Construction User.

The Internal Revenue Service issued new proposed regulations on June 23 relating to the deduction for employee compensation in excess of $1,000,000. The proposed regulations clarify (i) the requirement to set forth in the plan document the maximum number of shares to which options and stock appreciation rights may be granted to each individual covered employee and (ii) the application of the transition rule to stock-based compensation for privately held corporations that become publicly held.

Pillsbury is monitoring the progress of the proposed America Invents Act (AIA) legislation being considered in the U.S. House of Representatives. Northern Virginia partner Patrick A. Doody recently presented his analysis of the proposed legislation.

On June 20, 2011, the U.S. Supreme Court handed down its much-anticipated decision in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. __ (2011). In reversing the Ninth Circuit’s certification of an immense plaintiff class, the Court clarified the class certification standards in ways that will be helpful to defendants.

On May 16, 2011, the Supreme Court in CIGNA Corp. v. Amara held that ERISA section 502(a)(1)(B) does not give a court authority to change the terms of a pension plan due to a misleading summary plan description ("SPD"), or to enforce the terms of an SPD as if it were part of the plan. Instead, that section provides a remedy only to enforce the actual terms of the formal plan documents. While this narrow holding gives some comfort to plan sponsors by putting to rest the notion that an SPD that conflicts with the terms of the plan could ever be controlling, the decision then opens a door for plaintiffs to seek equitable relief for inadequate or misleading disclosure in an SPD.

On April 7, 2011, the U.S. Department of Justice petitioned the District Court for the Northern District of California to allow the Internal Revenue Service to serve a "John Doe" summons on U.S. affiliates of HSBC Holdings plc, seeking to determine whether U.S. residents are using accounts at the bank's facilities in India to evade U.S. taxes. The District Court signed the proposed order the same day. The John Doe summons allows the IRS to obtain the names of U.S. taxpayers with accounts at HSBC in India without having to identify the account holders.

• FCC Fines FM Broadcaster for Excessive Power and RF Radiation Levels
• Forfeiture More Than Triples After Consent Decree Default

Introduction June 1, 2011 marks the beginning of a four-year cycle during which all commercial and noncommercial radio and television stations throughout the United States will come under special scrutiny by the Federal Communications Commission (“FCC”), as it considers whether to renew each station’s license to broadcast.

Top-ranked IT and outsourcing lawyer Michael Murphy, nationally recognized outsourcing lawyer Joshua Konvisser and Pillsbury senior counsel Yusuf Safdari, along with Nishith Desai and Joseph Chan, explain U.S. bankruptcy law principles and issues most relevant to customers of insolvent outsourcing service providers. The authors provide a comparison of those principles with the insolvency frameworks in India and China in order to put customers in the best position to navigate the complexities of local insolvency laws. This article originally appeared in the PLC Cross-border Outsourcing Handbook 2011/12

In a dispute between a company and a bank acting as its financial adviser over the proper construction of their contract and determination of the fees due, a finding of estoppel required the bank to charge fees according to a lower transaction cost estimate provided shortly before closing rather than in line with the earlier contract’s higher fee provisions. The Court of Appeal for England and Wales found that a shared assumption based on the estimate operated to prevent the bank from relying on a different construction of the disputed fee agreement. Thus, while the bank won on the contract construction issue, it lost due to subsequent extra-contractual statements made in the course of dealings.

Headlines:

• FCC Begins to Move on Pending Video News Release Complaints
• Failure to Monitor Tower Lighting Results in $12,000 Penalty

On April 8, Johnson & Johnson (J&J) entered into a Deferred Prosecution Agreement (DPA) with the U.S. Department of Justice (DOJ) to resolve issues arising from improper payments made by wholly owned subsidiaries to various government officials in Greece, Poland and Romania. Settlements were also entered into with the U.S. Securities and Exchange Commission (SEC), the UK Serious Fraud Office (SFO) and the Government of Greece. The agreements evidence a high level of international cooperation and coordination among the governments and investigative and prosecutorial agencies, and include separate but significant penalties.

Whilst the idea of creating a “Patent Box” in the UK (i.e., a special taxing regime for income arising from patents) is nothing particularly new, the UK Chancellor has recently announced that a detailed consultation document on the pending regime will be published in May 2011. Companies, particularly those involved in R&D and manufacturing, who wish to make use of this preferential UK tax band should, therefore, very much “watch this space” and consider how they may participate in the looming consultation.

Proposed rules were published in the Federal Register last week pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act to regulate the incentive-based compensation arrangements (“Incentive Arrangements”) for nearly all financial institutions operating in the United States having assets in excess of $1 billion, including broker/dealers and investment advisors.

In a recent decision, the New York Court of Appeals concluded that an online library's alleged acts outside of New York, involving infringing copying and distribution over the Internet of copyrighted works, constituted a direct injury to a New York copyright holder for purposes of satisfying jurisdiction over the out-of-state library under New York's long-arm statute. Penguin Group (USA) Inc. v. American Buddha, 2011 BL 75585 (N.Y. March 24, 2011). The court determined the injury occurred at the location of the principal place of business of the copyright holder rather than the place of the alleged infringing act. Central to its finding was the court's emphasis on the ubiquitous nature of the Internet and "unique bundle of rights" held by a copyright owner.

In states that have not conformed, or do not automatically conform, to the Internal Revenue Code changes made by the Patient Protection and Affordable Care Act (“PPACA”), the value of health benefits provided to adult children may be considered income for state income tax purposes unless the child also meets the applicable state definition of a tax dependent. California has now enacted conforming legislation, retroactive to the effective date of PPACA, making the federal income exclusion applicable for California state income tax purposes and thus eliminating the need to report imputed income for adult children’s benefits.

Senior Counsel Les Nicholson, former General Counsel of the U.S. Government Service Administration and former Executive Vice President and General Counsel of Chevy Chase Bank, and Real Estate Associate Alex Phipps, discuss the questions facing borrowers in the wake of the recent economic recession and its effects on banking industry. The lawyers outline what happens to a bank once it fails and provide advice on action to take, should your bank fail. This article originally appeared in the Spring 2011 issue of the American College of Real Estate Lawyers Papers.

Co-Chair of the Health Care Industry team and top-ranked health care lawyer Gerry Hinkley, along with Counsel Allen Briskin, principal author of the Markle Connecting for Health Common Framework: Model Contract for Health Information Exchange, and Associate Benjamin Wiles, outline the Centers for Medicare and Medicaid Services (CMS) Proposed Rule's effects on the legal entity structure of accountable care organizations.

On March 29, 2011, the Internal Revenue Service released much-needed interim guidance on W-2 reporting of employee health care costs. The notice gives commonsense answers to frequently asked questions on the calculation of reportable costs and extends transition relief to certain small and mid-size employers, as well as employers that contribute to multiemployer plans or maintain certain self-insured plans.

The impact of the new Bribery Act 2011 (the “Act”) will extend far beyond UK shores. In his capacity as Chair of the British American Business Law Forum, London-based Pillsbury partner Rafi Azim-Khan recently chaired a briefing with the Director of the UK Serious Fraud Office (“SFO”), Richard Alderman, who provided valuable insight into the enforcer’s priorities. Along with the Ministry of Justice's guidance on the Act released today, we look briefly at the key points that companies should note and take action on before July 1, 2011.

• Florida FM Translator Fined $13,000 for Unauthorized Operations
• Latest Public Inspection File Violation Nets Upwardly Adjusted Fine
• Failure to Monitor Inactive Tower Results in $6,000 Penalty

The twice-delayed implementation of the Bribery Act 2010 to allow further development of guidance by the Ministry of Justice, and additional time for companies to develop adequate anti-corruption policies and procedures, appears close to resolution with the issuance of what some have called "weakened" enforcement procedures. Regardless of whether any tinkering might provide relief to some, it appears clear the new statutory regime will have real teeth should the prosecutors choose to grind them.