Friday, February 27, 2015

Mediation And Arbitration Section: Go Get Me The Money! Part 2

By Charles W. Ross

As a mediator, I avoid asking about a party's "best number" because most parties consider this information to be private and strategic. Although communications with the mediator during private caucuses are confidential in Florida mediations, parties may fear that the mediator will inadvertently signal the "best number" to the other side and thereby harm the chances of achieving settlement. If the mediator raises this issue, it may place the lawyer and client in an awkward position and make them uncomfortable about declining a mediator's request.  

Another reason that asking for a best number is dangerous lies in the honest recognition that, in most cases, the party's articulated best figure is not completely truthful. Most parties hold back some amount to allow for "wiggle room" at the end of the negotiations, and I do not want to put lawyers or clients in the difficult position of losing face when additional changes are essential to reaching a negotiated settlement.

Further, if the parties reveal their anticipated numbers, especially early in the process, it can be discouraging to both the parties and the mediator. Because these targeted figures almost never succeed, they can cast a negative pall over the mediation and cause parties and their counsel to give up too soon. Patience and persistence are extraordinarily important to successful mediating, and "best number" dialogues do not favor those objectives.  

The last reason I believe that "bottom line" figures should not be disclosed to a mediator is that an experienced mediator will almost always discern the actual settlement numbers toward the end of the process without being told. The negotiation process, and information exchanged both privately and to the other side, will generally predict a settlement range without any need for revealing best numbers.  

Mediation can often bridge the final settlement divide when parties perceive the progress they have achieved, the benefits of settlement, and the relatively small gap remaining as compared to the distance they traveled to reach it. This effort is not enhanced by a consideration of "best numbers," especially those formulated early in the process, and I believe a mediator can work more effectively without knowing such information.
  
Having expressed my views, I certainly do not want to be perceived as telling lawyers or their clients how to negotiate at mediation. It is my hope, however, that these observations, as seen from the neutral's point of view, may be of some value as you pursue mediated settlements in the future.

Read "Go Get Me The Money! Part 1."

Wednesday, February 25, 2015

Military And Veterans Affairs: Remembering The Legacy Of Private Felix Longoria Of Three Rivers, Texas

By Luis E. Viera

After World War II, there were few causes with greater relevancy to post-war America than the saga of Private Felix Longoria, a Mexican-American and World War II hero from Three Rivers, Texas. 

Today, few remember what is termed the Longoria Affair, which was one of the earliest post-war civil rights struggles for veterans.

Like so many brave Americans, Private Longoria left behind a wife and child to serve a greater cause for a great country and people. And like so many others, he paid the ultimate price: On June 15, 1945, Private Longoria, while on the Island of Luzon in the Pacific Theatre, was killed by a Japanese sniper.

When Private Longoria’s remains were returned in 1949, his widow, Beatrice, sought to have the wake services at the local funeral parlor. The owner of the funeral home allegedly refused Beatrice a wake service for her Mexican-American husband because he believed “the whites would not like it.” The Texas of 1949 was a Texas where strict racial lines ― often enforced through violence ― existed. 

After this dispute, Beatrice took action, and her protests ― aided by the late Dr. Hector Garcia of the American G.I. Forum ― caught the attention of then Sen. Lyndon Baines Johnson.  Johnson, a man whose conscience on racial and social justice would not be fully exhibited until he became president, had the remains of Felix Longoria buried with his fellow heroes in Arlington National Cemetery. On February 16, 1949, Sen. Johnson and his wife joined the Longoria family for the Arlington funeral.

The Longoria Affair is a story of many heroes. But there are many heroes bearing names we may never know. As one of Private Longoria’s family members once remarked, “How many Felix Longoria cases must have gone unheard of?”

Indeed, one of the injustices that prompted President Harry S. Truman to desegregate the military were stories of African Americans ― returning home from heroic World War II service ― being attacked in Jim Crow states for violating local customs. Many of the great names in the civil rights movement ― such as Medgar Evers ― were World War II heroes who returned to seek a more compassionate nation. 

This past July, I took my 7-year-old son, Luis Jr., on a trip that I had been planning since I found out I was going to become a father: to Washington, D.C.  While in D.C., I took my son to Arlington National Cemetery and visited, among others, the grave of Private Longoria. He rests there along with other Americans who, while in their youth, gave all for humanity in World War II.  Few today know the symbolic significance of this man’s legacy.

While at Arlington, I told Luis Jr. about our family’s experiences in this country ― how his grandparents and great grandparents fled Communist Cuba in 1960 and how, without patriots like Private Longoria, we would have never been free.

Longoria’s story has a unique connection to the values of the HCBA’s Military & Veterans Affairs Committee. I am proud to support this committee as it allows us to, in our time, do right by today’s returning veterans who, like Felix Longoria, have overlooked needs. And these are needs created by their heroic service to us.  

In honoring those who serve, we should pay special attention to the story of Private Longoria. Here, the poor in spirit and those who mourned and thirst for righteousness were peacemakers and were ultimately comforted. 

Monday, February 23, 2015

Professionalism And Ethics Committee: Mentoring Pioneer Receives Inaugural Professionalism Award

By Katelyn Mae Desrosiers

The Thirteenth Judicial Circuit’s Committee on Professionalism honored Deborah Werner with its inaugural Thirteenth Judicial Circuit Professionalism Award in October at the HCBA’s 18th Annual Bench Bar Conference Membership Luncheon. The Professionalism Committee had sought nominations to recommend a member of The Florida Bar practicing within the Thirteenth Judicial Circuit for at least 15 years and meeting the following nomination criteria: an attorney who has consistently demonstrated honesty, integrity, fairness, courtesy, and an abiding sense of responsibility to comply with the standards and rules of professionalism in the practice of law and who has earned the highest respect among local lawyers and judges for his or her commitment to professionalism.

Werner has served the legal community for more than 30 years, focusing her practice on probate, trust administration, estate planning, elder law, and real estate transactions. She has been an active member in the Hillsborough Association for Women Lawyers (HAWL), including helping found HAWL’s Mentoring Program that pairs attorneys with students at Stetson and Thomas Cooley law schools. She has received numerous professionalism awards, serves as a guest lecturer at local law schools and universities, and sits on several boards, including the HAWL Board of Directors, the Tampa Bay Estate Planning Council, and the Alzheimer’s Association Board of Directors. When asked whether the Professionalism Committee found the right person to present its first award to, the Honorable Claudia Isom replied: “Deb stood out head and shoulders above the rest of us because Deb, before the rest of us even understood the mentorship movement, was there advocating for HAWL to be involved in mentoring, serving as a professional role model, bringing young lawyers into her office, giving them the opportunity to see how she practiced law and giving them the opportunity to network with other attorneys.”   

In 1998, the Florida Supreme Court issued an Administrative Order directing the chief judge of each circuit to create and maintain a Circuit Committee on Professionalism. Following that administrative order, the Thirteenth Circuit created its Professionalism Committee, which is made up of members of the judiciary and representatives of the circuit’s voluntary bar associations and sections, committees, and divisions of the Hillsborough County Bar Association.  This year, the Professionalism Committee, operating under the direction of Executive Chair the Honorable Ashley B. Moody, decided it should issue its own professionalism award.  When asked why the legal profession needs to issue another professionalism award, the Honorable Lamar E. Battles responded: “One of the biggest issues facing our profession today is professionalism. Any time we can recognize it and encourage it and get out there and try to bring attention to it, then that’s worth doing.”

The Professionalism Committee plans to issue the award annually with the hope that it will continue to promote professionalism within the circuit by recognizing and honoring those attorneys possessing the qualities the award is designed to embrace.

Friday, February 20, 2015

Real Property, Probate And Trust Law: Fannie And Freddie Reform And The Future Of Mortgage Finance

By Michelle Garcia Gilbert

Congress charted Fannie Mae (Federal National Mortgage Association, or FNMA) in 1938 as part of the New Deal and Freddie Mac (Federal Home Loan Mortgage Corporation, or FHLMC)  in 1970 as corporations chartered by the federal government but owned by private shareholders. They were created for the public policy purpose of making home ownership affordable for the lower and middle class and other underserved Americans.  

In theory, these government-sponsored enterprises (GSEs) purchase mortgages from lenders and package them into mortgage-backed securities, which they either keep as investments or sell to institutional investors, thus providing liquidity and increased credit.  

In practice, they have dominated the mortgage finance market based on the illusion of a government guarantee. In the 1990s, they promoted low down-payment mortgages to low- and middle-income families, and they loosened underwriting guidelines, which contributed to the housing bubble. In the early 2000s, Wall Street increased trading of loans  often non-GSE, riskier  loans  that were securitized, which also contributed to the bubble. By 2005, the GSEs, which were losing market share, loosened underwriting guidelines even further and took on even more risk without increased capital reserves.

As the bubble began bursting in 2008, some in Congress wanted the GSEs to take on more risk, but U.S. Treasury officials, alarmed by continued devaluation of GSE loan portfolio, GSE weak capital reserves, potential investor sell-off, and impact on global markets, persuaded the GSEs to consent to conservatorship in September 2008. The Housing and Economic Recovery Act, enacted in July 2008, created the Federal Housing Finance Agency, the GSEs’ conservator since 2008.

Fannie and Freddie dominate the secondary mortgage market: They have more than $5.6 trillion in obligations and owned about 61 percent of all new residential mortgage loans in the United States in 2012. Only $5.2 billion in residential mortgage-backed securities were issued without government support in the same time period.

Freddie and Fannie received a $188 billion bailout from the Treasury, which has been paid back. They continue to be profitable, and, along with the Federal Housing Administration (FHA), own nearly 90 percent of all residential mortgages.

Both ends of our political spectrum agree that GSE reform is required: Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va., introduced a bill in June 2013 that would replace the GSEs with federal insurance for mortgage, similar to FDIC-insured bank deposits. A government insurance program assuages the concerns of consumer and trade groups, which prefer the status quo, about the availability of mortgages, the mission of Fannie and Freddie.

On the other end are advocates of a free market system. They propose winding down the GSEs while legislating the definition of a prime loan that would be the standard for a private finance market.

Almost everyone agrees that something needs to be done with the GSEs and recognizes that this will be a complex undertaking in our housing and financial markets. Work on GSE reform is ongoing, though serious housing reform will not occur until after national elections.

Thursday, February 19, 2015

Tax Issues For Marijuana Businesses

By Adam R. Maingot and Brian R. Harris

Thirty-four states and the District of Columbia have passed laws permitting the use of marijuana in some form. Although Amendment 2 recently failed this November, the Florida Legislature passed the Compassionate Medical Cannabis Act of 2014 (MCA) in June, which permits non-euphoric, low Tetrahydrocannabinol (THC) and high Cannabidiol (CBD) cannabis. States can authorize medical marijuana, but it remains illegal at the federal level. The Controlled Substances Act (CSA) federally criminalizes all forms of cultivation, distribution, and possession of schedule I controlled substances, including marijuana. Operating and servicing marijuana-related businesses therefore implicate numerous federal and state banking and taxation concerns. 

For example, section 280E of the Internal Revenue Code instructs that no deduction or credit shall be allowed for any amount paid or incurred in relation to a trade or business that involves trafficking a schedule I substance. 21 U.S.C. § 801, et seq. Thus, while other businesses can deduct payroll, rent, utilities, and other business expenses, medical marijuana businesses generally cannot. The initial court decisions applying section 280E have generally favored the government. See Olive v. Commissioner, 139 T.C. 2 (2012). However, the scope of section 280E generally does not apply to the cost of goods sold.

The inability to deduct these operating expenses could result in marijuana businesses effectively being taxed at a higher rate than the top corporate income tax bracket of 35 percent. The disallowance of these deductions can in turn impact other tax provisions, including basis for depreciation calculation (§ 167), capitalization (§ 263A), cost allocation (§ 460), inventory (§ 471), and others.

Corporations that distribute medical marijuana or otherwise promote medical marijuana might desire to seek tax-exempt status under section 501(c)(3), which applies to those organized for charitable, scientific, or educational purposes. The IRS has ruled that because manufacturing and distributing marijuana remains illegal at the federal level, organizations whose purpose is to advocate and engage in activities that contravene federal law do not serve a substantial nonexempt federal purpose and do not qualify for an exemption under section 501(c)(3). IRS Priv. Ltr. Rul. 2012-24-036 (Mar. 19, 2012).

These tax issues also impact individuals. Notably, individuals are generally entitled to deduct unreimbursed medical expenses that exceed 10 percent of their adjusted gross income on their federal income tax returns. However, the IRS has determined that individuals may not deduct controlled substances as medical expenses. IRS Pub. 502 (2013). For individuals who own marijuana businesses, the inability of the business to deduct operating expenses might increase the individual's base for computing self-employment taxes.

Other issues abound, including obligations under the Bank Secrecy Act (BSA) to report marijuana-related business activity, state sales tax treatment of medical marijuana sales, and whether attorneys can ethically advise clients on operating a business that is legal under state law but remains illegal under federal law. Although medical marijuana laws provide new business opportunities for savvy entrepreneurs, the evolving legal and tax environment leaves many questions unanswered for the both the owners and their advisors.

Tuesday, February 17, 2015

Workers' Compensation Case Law Update

By Anthony V. Cortese

Cases involving claimant’s attorney’s fees are before the Florida Supreme Court and should be decided soon. While these appeals are pending, practitioners must still monitor appellate rulings on other subjects, some of which will be addressed below.  

Oral argument was recently heard on the leading case on attorney’s fees, Castellanos v. Next Door Co., which has been joined with Diaz v. Palmetto General Hospital and Richardson v. Aramark for consideration. Resolution of this issue will determine the future of benefits for injured workers under the act. Absent a finding in favor of injured workers on this issue, many believe the only opportunity for justice for injured workers would be a ruling affirming the decision in Padgett v. State of Florida that the entire act is unconstitutional and should not prevent an injured worker from pursuing a civil action in tort against an employer.

In another case on claimant’s attorney’s fees, the First District affirmed a denial of attorney’s fees under section 57.105, Florida Statutes, in a workers’ compensation claim but reversed the denial of costs. Phillip Lane v. Workforce Business Solutions, 2014 WL 5836805 (Fla. 1st DCA Nov. 12, 2014). However, in Juan Rivas v. Oasis Outsourcing, 147 So. 3d 670 (Fla. 1st DCA 2014), the court reversed a ruling, refusing to grant a medical-only fee to be paid by the employer/carrier to the claimant’s counsel by agreement of the parties after initial litigation.

There were also two very important recent decisions on general releases and settlements.  In Flores-Orellana v. Circle-K, 2014 WL 4629209 (Fla. 1st DCA Sep. 16, 2014), a settlement agreement in a labor case was used to try to deny benefits in a workers’ compensation case. After workers’ compensation litigation was initiated, under the facts of the case, the settlement agreement was set aside in the labor case, and the carrier reinstated workers’ compensation benefits. The judge of compensation claims then refused to grant a hearing in the workers’ compensation case and was reversed on the basis that the right to have claims adjudicated is a clear, indisputable right. The mediation settlement agreement was not set aside in Taylor v. CVS and Gallagher Bassett, 2014 WL 5420690 (Fla. 1st DCA Oct. 27,2014); it was held enforceable when it contained an agreement to sign a “general release/separation of employment,” even though the parties later disagreed on the language of the general release. The lesson of these cases is do not sign settlement agreements that are not clear and specific.

In Hancock v. Suwannee Cnty. Sch. Bd., 2014 WL 5487123 (Fla. 1st DCA Oct. 31, 2014), the court ruled that the claimant cannot be required to pay the employer/carrier’s IME doctor a fee to have a videographer at an IME. The two-dismissal res judicata rule was clarified and limited in Moreno v. Palm Beach Cnty. Sch. Bd., 146 50. 3d 530 (Fla. 1st DCA 2014). The right to an advance of $2,000 was clarified and upheld in Bonner v. Miami Dade Public Sch., 148 So. 3d 152 (Fla. 1st DCA 2014).

The ruling in Guerra v. C.A. Lindman, Inc., 146 So. 3d 527 (Fla. 1st DCA 2014), clarified the limitations on appointment of an expert medical advisor, ruling that the only issues that can be submitted to an advisor are issues where there is current conflicting evidence of a “disagreement in the opinions of the health care providers” regarding an issue in dispute.

Friday, February 13, 2015

Marital And Family Law: The Pitfall Of International Love

By Sema Yildirim

It is important for family law attorneys to be aware of the potential federal support requirements that arise when a U.S. citizen marries a foreign national. Under the U.S. Citizenship and Immigration Services’ application process, a U.S. citizen who marries a foreign national is required to execute an I-865 affidavit of support to obtain lawful permanent residence for the foreign spouse. In this affidavit, the U.S. citizen must promise to “provide support to maintain the sponsored alien at an annual income that is not less than 125 percent of the Federal poverty line during the period in which the affidavit is enforceable.” 8 U.S.C.S. § 1183a. (1)(A) (2014). Currently, this means an obligation of paying $1,216 per month to the estranged or former spouse should the marriage fail.

Under section 1183a(e), the affidavit may be enforced by the sponsored alien, the U.S. government, or state or local administrators, and its enforceability survives divorce. Iannuzelli v. Lovett, 981 So. 2d 557, 559 (Fla. 3d DCA 2008). Few know that the support obligations under the federal I-865 affidavit may never terminate unless the alien spouse: (i) becomes a citizen of the United States; (ii) has worked, or can be credited with, 40 qualifying quarters of coverage under title II of the Social Security Act; (iii) ceases to hold the status of an alien lawfully admitted for permanent residence and departs the United States; (iv) obtains a new grant or adjustment of status in a removal proceeding; or (v) dies. 8 C.F.R. § 213a.2(e)(2)(i) (2014).

It will come as a relief to those who have lost their international love that courts have held that the affiant is not bound to pay the sponsored spouse 125 percent of the federal poverty level for a lifetime if that sponsored spouse “is earning or is capable of earning that amount or more,” and therefore has no need for continued support. Ainsworth v. Ainsworth, 2004 WL5219037 (M.D. La. May 27, 2004). Therefore, if a former foreign national spouse seeks payment under the affidavit via a court action, the court has the discretion to impute income to that spouse if he or she is unemployed or underemployed. In addition, since the I-865 affidavit is an enforceable contract and courts have held that “the duty to mitigate, or avoid, damages is a basic tenant of contract law,” the party seeking relief has a duty to mitigate damages. Stump v. Stump, 2005 WL1290658 (N.D. Ind. May 27, 2005). But that duty may be satisfied where the foreign spouse is not currently employed but has made reasonable efforts to be self-sufficient. Id. 

It is impossible to discuss all of the legal implications that your clients can face when they marry and/or divorce a foreign national, so consultation with an immigration attorney is highly recommended.

Hillsborough County Circuit Court Judicial Vacancy

The Thirteenth Circuit Judicial Nominating Commission announces a vacancy on the Hillsborough County Circuit Court created by the resignation of Judge Charles Ed Bergmann. The commission is now accepting applications for one circuit court judge position. To be appointed, applicants must be residents of Hillsborough County, registered voters, and members of The Florida Bar for the past five years.

Applications can be downloaded from The Florida Bar's website. Applicants will be asked to provide their names, addresses, telephone and fax numbers, and email addresses to facilitate communication with the commission.

Applicants must submit a fully completed original and one copy of the application, along with a photograph attached to the original and to the copy, and one redacted copy of the application, along with a photograph attached to the redacted copy to Terri Gaffney, chair, Thirteenth Circuit Judicial Nominating Commission, 1311 N. Westshore Blvd., Suite 101, Tampa FL 33607, no later than 5 p.m. March 2. Incomplete applications will not be considered. Please remember to include the new Form 6.

In addition to the original and copies, applicants are requested to provide one electronic unredacted (PDF) copy of the application and one electronic redacted (PDF) copy of the application. The electronic applications may be submitted on a USB flash drive or CD Rom. Any material redacted by the applicant must be limited to exempt or confidential information pursuant to Chapter 119, Florida Statutes, Florida’s Public Records Law.

For candidates who have an application pending in the selection process created by the appointment of Judge Matt Lucas to the District Court of Appeal, please submit just the signature pages signed with the current date.

Applicants and the public will be advised in subsequent press releases of dates of commission meetings relating to filling this vacancy. The commission will submit the names of nominees for this vacant judgeship to Governor Rick Scott by April 13. 

A list of members of the Thirteenth Circuit Judicial Nominating Commission is available from The Florida Bar’s website. Questions should be directed to Terri Gaffney, chair, Thirteenth Circuit Judicial Nominating Commission, at (813) 287-1159 or terri@overstreetwealth.com.

Wednesday, February 11, 2015

Trial & Litigation Section: Judicial Conference Approves Amended Rule 37(e) On Lost ESI

By Jaret J. Fuente

The Judicial Conference recently approved a proposed amendment to Rule 37(e) intended to establish greater uniformity in the ways federal courts respond to the loss of electronically stored information (ESI) and to address reports of costly over-preservation of ESI undertaken for fear of sanctions. The proposed amended rule provides:

(e) Failure to Preserve Electronically Stored Information. If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court:

(1) upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or


(2) only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation may:


(A) presume that the lost information was unfavorable to the party;


(B) instruct the jury that it may or must presume the information was unfavorable to the party; or


(C) dismiss the action or enter a default judgment.


Under the proposed amended rule, when addressing a lost ESI dispute, a court first determines whether reasonable steps were taken to preserve the lost ESI. This includes consideration of the resources that were available and the proportionality of the efforts to preserve the ESI, as well as a party’s litigation sophistication.  

If ESI is lost because a party failed to take reasonable steps to preserve it, then the focus shifts to whether the ESI can be restored through additional discovery. If it cannot, and if a court finds a party is prejudiced by the loss, then pursuant to subsection (e)(1), the court may order measures no greater than necessary to cure the prejudice. If a court finds that the party that lost the ESI acted with the intent to deprive another party of the information’s use in the litigation, however, then pursuant to subsection (e)(2), the court may presume the lost information was unfavorable to the party, instruct the jury accordingly, or dismiss the action or enter a default judgment.  

Subsection (e)(2)’s “intent to deprive” requirement is similar to a bad-faith standard, which, as the advisory committee noted, is more appropriate, in part, because negligently lost ESI may be favorable or unfavorable to the party that lost it. The advisory committee further noted that permitting an adverse inference for negligence creates incentives to over-preserve, often at great cost, the avoidance of which was one of the goals for amending the rule. In addition, subsection (e)(2) resolves a circuit split on when a court may give an adverse-inference instruction for the loss of ESI, which some circuits permit on a showing of negligence or gross negligence, while others require a showing of bad faith.  

The proposed amendment is now pending Supreme Court review. If it is adopted and submitted to Congress before May 2015, the proposed amendment should become effective in December 2015.  

Tuesday, February 10, 2015

Securities Law: Tips For Selecting A FINRA Arbitration Panel

By Eric E. Ludin

The Financial Industry Regulatory Authority’s (FINRA) system for appointing its panels begins with providing the attorneys with a vast quantity of material about the potential arbitrators. Based on this information, the attorneys must rank the arbitrators in order of preference or strike them. This article suggests some guidelines that you can use to tackle the task of selecting your panel.

The parties’ attorneys are provided with a detailed Arbitrator Disclosure Report. The meatiest section of the disclosure report is the list of awards signed by the arbitrator. These detailed awards can be found on the FINRA.org website once you have the case number provided in the disclosure report. The awards usually include a description of the facts and issues presented in each case, the amount of the claimant’s demand, and the ultimate result. 

Being armed with this information, are you necessarily in a better position to determine whom to select? If so, what would you look for in selecting the trier of fact?

Peter King, an experienced securities defense lawyer with the Tampa firm of Wiand Guerra and King, says that he looks for lots of zero awards hoping this shows a predisposition to favor the respondents. He also looks for experienced panel members. These people, he says, have a context for the evidence they hear. They might be able to judge that the evidence, even if bad for the broker, is not necessarily egregious. 

King also likes to see lawyers on the panel, at least as the chair. He says lawyers can better control the flow of evidence. He also likes to see more than one lawyer on the panel when there are multiple legal issues to resolve. 

Claimant’s securities attorney David Anton, of the Anton Legal Group, says he normally prefers not to have lawyers on the panel. Since FINRA rules provide that the panel is not required to follow the state or federal rules of evidence, he says lawyers will be more likely to want to do so. Having the burden of proof, claimants do not want to be limited to only entering evidence that would be admitted in court. 

Anton looks for experienced panel members who have a history of favorable claimant’s awards. Most significantly, Anton likes to select arbitrators who believe in social justice. He will focus on their work history and look for attorneys from academia or arbitrators who have held social jobs such as educators. 

Securities attorneys will spend many hours reviewing the award history and biographical information about each potential arbitrator. Since the awards list the names of the attorneys involved in each case, you can contact those lawyers to learn more about their experience. 

The selection process can be the most critical phase of the arbitration. Therefore, it is worth the time and effort to drill down into the massive quantity of information to make the best decisions possible.

Monday, February 9, 2015

Intellectual Property Law: Florida Supreme Court Interprets IP Licenses

By Dineen Pashoukos Wasylik

It’s not often that the Florida Supreme Court weighs in on issues affecting intellectual property cases. However, this summer, the court answered an important certified question from the Eleventh Circuit regarding patent licenses in a decision likely to affect not only patent licensing but also copyright and trademark licensing. The certified question was: “Does Florida recognize a ‘bright-line rule’ to distinguish an assignment of a license agreement from a sublicense?” MDS (Canada) Inc. v. Rad Source Technologies, Inc., 143 So. 3d 881, 882 (Fla. 2014). The court answered the question in the negative and instead held the interpretation of a license to be a mixed question of law and fact that depends on the language of the license agreement, the substance of the interest actually transferred, and whether the licensee retained any substantial rights in the license agreement.

Assignment Versus Sublicense – Why Does It Matter?

The case in federal court arose from a dispute between a patent owner and its licensee.  The license contract prohibited the licensee from assigning the patent license to a third party without the owner’s written consent but allowed the licensee to grant sublicenses without consent. The licensee sold off the portion of its business that used the patent to a third party, but the owner refused to consent to assignment, so the licensee and its buyer entered into a “sublicense agreement” granting the buyer all of the rights under the license agreement, minus one day. When the three parties later had a dispute about a related product, the licensee sued for breach of the license’s non-compete clause, and the owner counterclaimed that the “sublicense” breached the assignment clause of the contract, invalidating the non-compete.

The federal district court ruled the buyer had entered into a prohibited assignment, and the Eleventh Circuit certified the contract interpretation question. Citing Florida contract law governing real property transactions from the 1930s, the Eleventh Circuit reasoned that the form of an assignment is immaterial and that the court should instead determine its legal effect. MDS (Canada) Inc., 143 So. 3d at 885. The dissent argued in favor of a bright line rule that distinguished an assignment from a sublicense when the licensee transfers less than the entire interest, even by one day.

The State Law Contract Analysis

The Florida Supreme Court cautioned against relying on precedent in the real property context, pointing out that the physical limitations of subleases in real property do not apply to intellectual property, where rights can be simultaneously licensed to numerous parties. The court instead embraced the reasoning set out by the U.S. Supreme Court and Federal Circuit in other patent cases and held that courts interpreting patent licenses have to discern the meaning of the license based upon its plain language and the parties’ intent.

This case-by-case analysis is likely to apply to license agreements in all intellectual property fields. In interpreting licenses, the courts will use state contract law principles to determine the scope and meaning.

Thursday, February 5, 2015

Immigration Law: Making A Difference In Our Community

By Maria del Carmen Ramos

When I think of Florida (and the Tampa Bay area in particular), I think of beaches and palm trees. Beaches and palms trees, to me, are symbols of peace and serenity. They also remind me of my childhood in Puerto Rico, carefree times when I was unburdened by all the responsibilities of adulthood. The guest speakers at our November section lunch, however, painted a much different picture of Florida.

Lurking behind our tranquil Bay area community lies a little-known secret. Tampa Bay is a den for human trafficking. Did you know that Florida ranks as high as third (by some measures) for this rapidly growing crime that most people would prefer not to talk about? Each year, countless men, women, and children are forced against their will into trafficking ― a modern-day version of slavery. They are bought, sold, and discarded in our own backyard. Initially, it was hard not to get discouraged at the thought that children are being bought and sold in the very same community where I raise mine.

But any thoughts of despair quickly gave way to hope as I learned of extraordinary efforts by local attorneys — Stacie B. Harris, Brent A. Woody, Jenay E. Iurato, and Sophia Lynn, among others — to make our communities safe. For instance, Stacie Harris, an assistant United States attorney, was named prosecutor of the year in large part due to her success prosecuting human trafficking cases, including securing the first life sentence for sex trafficking (one of only 10 in the country). Brent Woody, a local attorney, launched the West Florida Center for Trafficking Advocacy to assist trafficking survivors. And Jenay Iurato and Sophia Lynn both provide legal assistance to human trafficking survivors. In fact, Jenay recently received the Luis “Tony” Cabassa Award for her human trafficking advocacy. Efforts by local attorneys — including Stacie, Brent, Jenay, and Sophia — to fight human trafficking in our community are nothing short of impressive. 

As I thought of our guest speakers, I couldn’t help but be reminded of a favorite quote of mine by Ralph Waldo Emerson: “The purpose of life is not to be happy. It is to be useful, to be honorable, to be compassionate, to have it make some difference that you have lived and lived well.” There is no question Stacie, Brent, Jenay, and Sophia (and others fighting human trafficking) are honorable and compassionate people who are truly making a difference in our community — albeit with little fanfare. They are also an inspiration to the rest of us. If I learned one thing from our November luncheon, it is (at the risk of sounding trite) that you should never underestimate the difference one person can make in the lives of others. If enough of us focus on “living well,” I am confident that our community can return to the peaceful and serene place many of us hope it to be.

Tuesday, February 3, 2015

Health Care Law: Chilled To The Marrow - The Legal Ramifications Of Remuneration Of Stem Cell Donors

By Erica Mallon

The lack of bone marrow or hematopoietic stem cell (HSC) donors is a continuing problem across the globe. Currently only four out of 10 patients in need of a transplant will ever find a matching donor. One possible but controversial idea to increase the donor pool is through donor financial incentives; however, there is a question of whether remuneration is legal under the National Organ Transplant Act (NOTA).

Bone marrow or HSC transplants are used to treat patients with life-threatening blood cancers, diseases that result in bone marrow failure, and other immune system or genetic diseases.  There are two methods to donate: apheresis or traditional bone marrow extraction. Under the traditional method, patients undergo general anesthesia, and marrow is extracted from the hip. With the apheresis method, donors remain awake while blood is removed, the stem cells are extracted, and the blood is returned to the body. 

Although NOTA explicitly prohibits remuneration for HSC donation using the traditional method, it is unclear whether NOTA covers the apheresis method. In 2012, the Ninth Circuit held in Flynn v. Holder that individuals who donate HSC via apheresis may be remunerated. Flynn v. Holder, 665 F.3d 1048, 1059 (9th Cir. 2011). The Flynn plaintiffs developed a pilot program to incentivize HSC donors through the provision of $3,000 in the form of a scholarship, housing subsidy, or donation to a charity of the donor’s choice. I. Glenn Cohen, Selling Bone Marrow — Flynn v. Holder, 366 New Eng. J. Med. 296, 296 (2012). 

The plaintiffs initially set forth two arguments: (1) NOTA’s ban on selling HSC violates substantive due process protections of the Constitution because when an individual needs a transplant to survive and another individual is willing to supply it for a fee, the government cannot interfere with the transaction, and (2) NOTA violates the Equal Protection Clause of the Fourteenth Amendment of the Constitution because there is no rational basis for permitting remuneration for blood, sperm, and ova while prohibiting it for HSC. Flynn, 665 F.3d at 1053. The district court rejected both arguments on those grounds, and the Ninth Circuit affirmed. Cohen, supra note 4 at 1055-56. The courts identified several rational bases for prohibiting the sale of HSC, including that poor people could be coerced into donating; the rich would be advantaged; and that donors would be incentivized to provide inaccurate medical history to appear healthier and desirable. Id.

On appeal, the Ninth Circuit considered a third argument: that the term “bone marrow” does not include stem cells obtained through the apheresis process. Id. It is on this ground that the Ninth Circuit ruled for the plaintiffs. Flynn, 665 F.3d at 1057. The court determined that Congress could not have intended to address the apheresis process because it did not exist at the time NOTA was passed. Id.

The attorney general declined to petition the Supreme Court to review the Flynn v. Holder decision. However, in 2013, the Health Resources and Services Administration issued a proposed rule to explicitly incorporate apheresis-extracted HSC in NOTA’s definition of “bone marrow.” 42 CFR § 121. As of the time of this writing, the final rule had not been issued but was expected in December 2014.

It is unclear how many groups or institutions have taken advantage of this loophole to provide some form of remuneration to HSC donors. However, should the final rule indicate that HSC are explicitly included in the NOTA ban on remuneration, the point will be moot, for now, and donor remuneration for any method of stem cell donation will be prohibited.