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FMG Law Blog Line

Archive for February, 2014

FTC Approves New COPPA Safe Harbor Program

Posted on: February 28th, 2014

By: Matt Foree

To protect the privacy of children online, Congress enacted the Children’s Online Privacy Protection Act (“COPPA”), which provides rules for operators of commercial websites and online services directed to or knowingly used by children under 13.  Specifically, the rules require those entities to provide notice and obtain permission from parents before collecting a child’s personal information.  COPPA required the Federal Trade Commission (“FTC”) to issue and enforce regulations concerning children’s online privacy.  The FTC issued new, stricter rules under COPPA on December 19, 2012, which went into effect on July 1, 2013.

The COPPA law directs the FTC to approve certain safe harbor programs to achieve compliance with the Act.  The FTC states that COPPA’s safe harbor provision “provides flexibility and promotes efficiency in complying with the Act by encouraging industry members or groups to develop their own COPPA oversight programs.”  Furthermore, the FTC notes that website operators that participate in a safe harbor program “will, in most circumstances, be subject to the review and disciplinary procedures provided in the safe harbor’s guidelines in lieu of formal FTC investigation and law enforcement.”

The FTC recently approved the kidSAFE Seal Program as a safe harbor program after determining that the program met COPPA’s criteria, including that the program provides “the same or greater protections for children” as those contained in the COPPA Rule.  To date, six safe harbor programs have been approved by the FTC.

Operators of commercial websites and online services that are directed to or knowingly used by children under 13 should consider the approved safe harbor programs as a way to achieve COPPA compliance.  For additional information regarding COPPA, see our previous blog post here.

America’s Favorite Pastime – Litigation?

Posted on: February 28th, 2014

By: Frank Hupfl

While the rest of baseball reports to spring training in Florida and Arizona, three former minor league baseball players initiated an FLSA lawsuit against Major League Baseball in a California Federal Court last week.  In their Complaint, the players allege that the MLB violated the FLSA by failing to pay minimum wage and overtime to players for working more than 40 hours in a workweek.

In contrast to the high-dollar salaries and lucrative endorsement deals normally associated with professional athletes, minor league baseball players typically earn between $3,000 and $7,500 for a five-month season.  According to the plaintiffs’ Complaint, minor league players typically work more than 50 hours per week and are not paid at all for spring training, offseason instructional leagues, or the year-round conditioning work that teams require.  If true, the plaintiffs likely earned less than the federal minimum wage.  The MLB, on the other hand, is likely to argue that any compensation issue was negotiated and subject to the Minor League Uniform Player Contract that all players sign.  Further, the MLB may argue that the players are exempt under the FLSA.

The plaintiffs are currently seeking class-action status for their claims.  If successful, their suit could potentially involve thousands of minor league players and significant damages for the MLB.

The Questions That “Presence” Presents

Posted on: February 28th, 2014

By: Katie Dod 

The Supreme Court recently further defined when law enforcement may enter a home pursuant to the consent of one resident of the home without violating the constitutional rights of other residents.  It has long been established that the police may enter a home and conduct a search with the consent of any resident, or even reasonably perceived resident, of the home.  United States v. Matlock, 415 U.S. 164 (1974); Illinois v. Rodriguez, 497 U.S. 197 (1990).  In 2006, the Supreme Court narrowed this rule by deciding that police could not enter and conduct a search upon the consent of one resident when the other resident was present and objecting to the search.  Georgia v. Randolph, 547 U.S. 103 (2006).

The Court recently provided further clarity about the extent to which a co-resident’s objection can preclude a search of the home in the case of Fernandez v. California, No. 12-7822. 

In Fernandez, a robbery suspect was believed to be in a home from which police heard a woman screaming.  The police knocked and when the woman, Rojas, opened the door it appeared she had been the victim of domestic violence.  Soon thereafter, Fernandez appeared and denied the police access to the home.  At this time police arrested Fernandez for suspicion of abusing Rojas.  About an hour later, the police obtained oral and written consent by Rojas to search the home at which time incriminating information was located.  A divided court refused to suppress this evidence finding the search constitutional and the consent granted by Rojas to be effective.  The key distinction made by the Court between Randolph and Fernandez was the presence (or lack thereof) of the objecting resident.  In Randolph, both residents were present and were providing conflicting instructions to the officers.  In Fernandez, at the time of Rojas’s consent, Fernandez had already been arrested.  The Court affirmatively rejected Fernandez’s argument that his initial objection precluded a consent search after his departure via arrest.  The Court noted that such a holding would raise several unworkable issues such as the length of time an objection would be valid (could it last for years), how the police would be notified of the previous objection (would a sign need to be posted on the front door), and how the police would determine the current residency status of the objector so as to determine if the objector actually had a legal right to object.  While Fernandez provides some clarity to officers about the constitutionality of various searches performed without full consent of all residents, as the dissent points out, questions remain unanswered.  How long must the objecting resident be absent before a constitutional search can occur?  Could the police knock on the door and obtain consent the minute the objector left the driveway?  What if the objecting resident is still in the home, but is away from the door and does not hear the renewed request for consent and therefore does not object?  Would the fact that the objector is in the home but out of ear shot be sufficient to render him/her “present” such that his/her prior objection precluded a consent search?

The answers to these questions have implications not only for criminal cases to the extent unconstitutional searches result in suppressed evidence, but also in a civil context as an unconstitutional search can form the basis of a costly private lawsuit.  The Court clearly limited the application of Randolph through the Fernandez case, but it is never advisable to be the case which tests how narrow the Randolph holding is or how broad the Fernandez holding is.  In the absence of a more complete definition of “presence,” officers should still proceed with caution in situations when not all residents consent to a search.

House Bill 874 Introduced to Allow Third-Party Financing of Solar Power

Posted on: February 21st, 2014

By: Bobby Baker

Representative Mike Dudgeon (R-Johns Creek) introduced HB 874, the Solar Power Free-Market Financing and Property Rights Act of 2014, which will eliminate the legislative barrier to business and residential consumers using third-party financing to install solar power.  Currently Georgia law prohibits consumers from financing solar power through the use of third-party financing options or leasing arrangements.  Currently, Georgia consumers may only purchase and install solar power generation.

HB 874 only applies to financing of solar technology, and no tax credit or incentives are provided in the legislation.  The legislation updates Georgia law to eliminate anti-competitive legal barriers to allow individual consumers to develop solar energy generation.  A hearing before the House Energy, Utilities & Telecommunications Committee is scheduled for February 20.

Georgia’s Insurance Prompt Payment Law Invalid

Posted on: February 21st, 2014

By: Jonathan Kandel 

Last week, a federal appeals court found a portion of Georgia’s Insurance Prompt Payment law was preempted by the federal Employee Retirement Income Security Act (ERISA) and, therefore was invalid. The law at issue, which is known as the Insurance Delivery Enhancement Act of 2011 (IDEA), regulated employee health insurance.

As background, there are generally two ways that employers provide health insurance to employees. One way is for an employer to contract with an insurance company for a group plan, where the insurer pays claims. The other way is for an employer to provide “self-funded” or “self-insured” insurance, where the employer pays claims.

Since 1999, Georgia has had “prompt pay” laws that require accident and sickness insurers to respond to a claim – either by paying or denying the claim – within 15 days of receiving the claim. IDEA attempted to expand Georgia’s “prompt pay” laws to impose the same requirement on employers that provide “self-funded” or “self-insured” insurance. Historically, “self-funded” insurance has been regulated by ERISA, which has its own requirements for processing and paying claims.

IDEA was supported by doctors in Georgia (and the Medical Association of Georgia), who have been quarreling with insurance companies for several years over timely payment of claims. Groups representing doctors have argued that the law is necessary to protect doctors and patients because doctors are unable to expand their practices to reach areas that need care when payment on their bills is delayed.

The Eleventh Circuit Court of Appeals concluded that IDEA was expressly preempted by ERISA because the law relates to “self-funded” employee insurance. Specifically, the court noted that the time requirements under IDEA “fly in the face of one of ERISA’s main goals,” which is to allow employers to establish a uniform set of standard procedures for processing and paying claims. If IDEA took effect, the court explained, employers offering “self-funded” insurance would be forced to comply with different timeliness requirements in different states, which is inconsistent with ERISA.

The ruling, however, has no impact on Georgia’s “prompt pay” laws requiring accident and sickness insurers to respond to claims within 15 days.