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Posts Tagged ‘supreme court’

When the Midas Touch Does Not Protect You From Your CLE Obligations

Posted on: March 15th, 2018

By: Jonathan M. Romvary

Image result for law books

As part of every attorney’s ongoing duty of competence, each jurisdiction requires attorneys to attend Continuing Learning Education classes each year. The failure to attain the minimum required credit hours for substantive and ethical topics may result in fines, suspension or worse. Multi-jurisdictional attorneys have a further obligation to remain in compliance with each of their jurisdiction’s varying CLE obligations.

Recently, the general counsel for TBC Corp., the parent company of car parts companies Midas and National Tire & Battery, got a two-year stayed suspension from the Board of Professional Conduct of the Supreme Court of Ohio for practicing out-of-state despite prior suspensions from the state for failing to comply with his CLE obligations. The decision arises out of charges that the general counsel engaged in unauthorized practice in Florida while under suspension in Ohio.

In 2009, Marciak was hired as general counsel for Florida-based TBC Retail Group and later promoted to senior vice president, general counsel and secretary of TBC Corp. As General counsel, Marciak oversaw a team of in-house attorneys managing litigation and was otherwise in a legal position requiring him to have a current license to practice. Despite his legal work in Florida, Marciak did not obtain a certification as an “authorized house counsel” until December of 2015.

Marciak’s problems began when a former employee of TBC filed a bar complaint with the State of Florida in 2015 alleging Marciak was being engaged in the unauthorized practice of law, resulting in disciplinary  action. The same employee thereafter filed a bar complaint with the State of Ohio alleging violation of their local rules, including the practice of law in another jurisdiction while suspended.

According to the court’s records, Marciak was suspended from the practice of law in Ohio in 2007 and sanctioned in 2009 and 2011 for failing to comply with his Ohio CLE credits. According to the Court Marciak failed to certify his compliance with Ohio’s biennial CLE compliance reporting for seven years. Further, Marciak only obtained the Florida certificate as authorized house counsel after the initial bar complaint was filed against him. Ultimately, the Ohio Supreme Court entered the two-year stayed suspension, saying that Marciak did not represent a future risk to the public and was attending and presenting at CLE classes. However the court warned that if Marciak failed to remain in full compliance, the stay would be immediately lifted and he would be required to serve the entire two-year suspension.

Despite receiving a stayed suspension, the lessons from Marciak’s natter is clear: every lawyer must familiarize themselves with the rules of the court and professional rules of conduct for the jurisdiction in which you practice and any other states in which you might practice law.

If you have any questions or would like more information, please contact Jonathan Romvary at [email protected].

Head In the Cloud – United States Supreme Court Takes On Application of Domestic Warrant To Information Stored Internationally

Posted on: March 9th, 2018

By: Glenn M. Kenna

Image result for search warrantThe Supreme Court is set to decide a vital question this term – Can the government use a warrant served in the United States to obtain emails stored abroad?  The United States Government says it can, Microsoft disagrees.  The Case is United States v. Microsoft Corporation, in which the Supreme Court heard oral argument on February 27, 2018.

To understand the nature of the conflict a little back story is necessary.  Congress passed a law in 1986, the Electronic Communications Privacy Act (ECPA).  Part of title II of the ECPA, 18 USC § 2703, allows law enforcement agencies to issue warrants, so called Section 2703 Warrants, to discover electronic communications stored in an “electronic communications system.”  In other words, the government can serve a warrant on an email service provider, such as Microsoft, and obtain emails stored on Microsoft’s servers.

In the Microsoft case, the Government did exactly that.  It served a warrant on Microsoft in Redmond Washington to discover electronically stored communications in connection with an ongoing investigation into a crime allegedly committed in the United States.  The issue at the heart of the dispute is that the warrant sought the contents of communications stored on servers in Ireland.  In response to the warrant, Microsoft turned over domestically stored information (in this case certain metadata about the emails) but refused to turn over the contents of the communications stored abroad.  A legal battle between the Government and Microsoft has ensued, ultimately leading to the Supreme Court granting cert.

In the ongoing dispute between Microsoft and the Government, Microsoft contends that the Government’s attempt to enforce the warrant is an extraterritorial act, i.e. and attempt by the Government to enforce Untied States Law abroad.  It further asserts that complying with the warrant could run afoul of the law in the country where the information is stored.  The United States’ position is that, should the ECPA not apply to information stored abroad, every service provider would simply move their servers out of the United States – taking the communications beyond the reach of US law enforcement agencies.  Moreover, it reasons, Microsoft can access the information domestically regardless of where the information is stored, which the government contends does not require the application of the ECPA abroad.

The ECPA pre-dates the internet.  Email as we know it today did not exist in 1986.  The drafters of the ECPA could not have imagined a world where people stored their entire lives on remote servers, or a world where those servers could be located anywhere across the globe.  Those are issues with which courts continue to struggle, including the Supreme Court in this case.

It remains to be seen how the Court will rule in the Microsoft case, or if Congress will act to modernize the ECPA before the Court’s decision (indeed, a bipartisan group of senators has introduced the CLOUD act to address the issues raised in the Microsoft case.)  What is clear, however, is that Microsoft represents just one small part of an ongoing clash between law and technology.  While not at issue directly in the Microsoft case, the dispute also raises the question, what right do we have in the privacy of our electronic worlds?

If you have any questions or would like more information, please contact Glenn Kenna at [email protected].

Non-Pennsylvanians Can Sue Pa. Businesses for Out of State Transactions Under the Pennsylvania Unfair Trade Practices Consumer Protection Law

Posted on: March 2nd, 2018

By: Erin E. Lamb

Related imageCitizens from outside Pennsylvania can now sue Pennsylvania businesses for transactions that occurred outside the commonwealth, under the Pennsylvania Unfair Trade Practices Consumer Protection Law (UTPCPL). The Pennsylvania Supreme Court, in a unanimous ruling, affirmed such to the U.S. Court of Appeals for the Third Circuit in the class action suit Danganan v. Guardian Protection Services. The Third Circuit had certified the question to the Supreme Court of Pennsylvania. Previously, the District Courts within the Third Circuit had held repeatedly that the UTPCPL only applied to Pennsylvania business regarding Pennsylvania transactions.

Plaintiff Jobe Danganan sued Pennsylvania-based UTPCPL under the UTPCPL after he continued to be billed for a home security system in a Washington, D.C., house aft he had moved and after he had cancelled the contract. The district court ruled against him and he appealed to the Third Circuit.

Danganan argued that the language of the UTPCPL, specifically the terms “person,” “trade” and “commerce,” did not denote a specific geographic requirement, according to the Supreme Court’s opinion written by Chief Justice Thomas G. Saylor. The Court agreed. “Respecting the specific terms employed by the UTPCPL, we agree with appellant’s observation that the plain language definitions of ‘person’ and ‘trade’ and ‘commerce’ evidence no geographic limitation or residency requirement relative to the law’s application,” Saylor said. However, the law does state that it applies to conduct that “directly or indirectly affect[s] the people of this commonwealth.” Saylor, writing for the Court, did away with that clause by stating “that phrase does not modify or qualify the preceding terms. Instead, it is appended to the end of the definition and prefaced by ‘and includes,’ thus indicating an inclusive and broader view of trade and commerce than expressed by the antecedent language.”

Saylor also said the statute is meant to be construed liberally as it covers an expansive breadth of conduct. “In this respect, we recognize, as we previously have, the wide range of conduct the law was designed to address, including equalizing the bargaining power of the seller and consumer, ensuring the fairness of market transactions, and preventing deception and exploitation, all of which harmonize with the statute’s broad underlying foundation of fraud prevention,” Saylor said.

This has far-reaching implications for Pennsylvania’s businesses, particularly in the context of class actions like the one at issue in this case. (Its application to a certain global telecommunications conglomerate that is the largest broadcasting and cable television company in the world by revenue certainly springs to mind.)

If you have any questions or would like more information, please contact Erin Lamb at [email protected].

Second Circuit Joins Seventh Circuit In Holding That Title VII Prohibits Discrimination On Basis Of Sexual Orientation

Posted on: March 1st, 2018

By: Bill Buechner

The Second Circuit which covers New York, Connecticut and Vermont, has issued an en banc decision holding that Title VII prohibits discrimination on the basis of sexual orientation. Zarda v. Altitude Express, 2018 U.S. U.S. App. LEXIS 4608 (2d Cir. Feb. 26, 2018). The Seventh Circuit issued an en banc decision almost a year ago reaching the same conclusion.

The 10-3 decision is very lengthy and includes various concurring and dissenting opinions. The Second Circuit cited four primary grounds for its holding. First, the Court concluded that sexual orientation discrimination is merely a subset of sex discrimination, and that an employer cannot discriminate against an employee based on sexual orientation without reference to the employee’s sex. Second, the Court concluded that “but for” the employee’s sex, the employee would not have been terminated. In other words, the male employee was terminated because he is attracted to men, whereas a female employee who is attracted to men would not have been terminated. Third, the Court concluded that sexual orientation discrimination constitutes gender stereotyping that is unlawful under Price Waterhouse.  Finally, the Court concluded that sexual orientation discrimination constitutes association discrimination that is already prohibited by Title VII.

As previously discussed here, in Evans v. Georgia Regional Hospital, 850. F3d 1248 (11th Cir. 2017), the Eleventh Circuit re-affirmed prior circuit precedent and held that Title VII does not prohibit discrimination on the basis of sexual orientation.  The Eleventh Circuit subsequently declined to hear the case en banc, and the Supreme Court denied the plaintiff’s petition for certiorari in that case.

The Zarda decision increases the likelihood that other circuits (perhaps including the Eleventh Circuit) will revisit whether Title VII prohibits sexual orientation discrimination, and also increases the possibility that the Supreme Court may eventually decide to resolve this issue.  In the meantime, employers should monitor federal case law developments in their jurisdiction and keep in mind that the EEOC has taken the position that Title VII prohibits discrimination on the basis of sexual orientation.

If you have any questions or would like additional information, you may contact Bill Buechner at [email protected].

Supreme Court Declines to Hear Data Breach Standing Case

Posted on: February 23rd, 2018

By: Amy C. Bender

The ongoing issue of when a plaintiff has grounds (“standing”) in data breach cases saw another development this week when the U.S. Supreme Court declined to weigh in on the debate.

CareFirst, a BlueCross BlueShield health insurer, suffered a cyberattack in 2014 that was estimated to have exposed data of 1.1 million customers. Affected customers filed a federal class action lawsuit in the District of Columbia claiming CareFirst failed to adequately safeguard their personal information. CareFirst asked the court to dismiss the case, arguing that, since the customers had not alleged their stolen personal data had actually been misused or explained how it could be used to commit identity theft, the customers had not suffered an injury sufficient to give them standing to sue and the court therefore lacked jurisdiction to hear the case. The court agreed with CareFirst and dismissed the case. Notably, in this particular breach, CareFirst maintained the hackers had not accessed more sensitive information such as the customers’ Social Security or credit card numbers, and the court found the customers had not alleged or shown how the hackers could steal the customers’ identities without that information. In other words, the mere risk to the customers of future harm in the form of increased risk of identity theft was too speculative.

The customers appealed this decision, and the appellate court reversed, finding the district court had read the customers’ complaint too narrowly. The appellate court reasoned that the customers actually had asserted their Social Security and credit card numbers were included in the compromised data and that they had sufficiently alleged a substantial risk of future injury.

In response, CareFirst filed a petition with the Supreme Court asking it to review the appellate decision. This would have been the first pronouncement on this issue from the high court in a data breach class action lawsuit, a move long-awaited by lower courts, lawyers, and their clients in order to gain more clarity on the application of prior decisions like Spokeo in the specific context of data breach litigation. However, the Supreme Court denied the request (without explanation, as is typical).

As we have reported here and here, courts continue to grapple with the contours of standing in data breach cases. We will continue to monitor and report on developments in this still-evolving area of the law.

If you have any questions or would like more information, please contact Amy Bender at [email protected].