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Archive for October, 2020

Proposed Executive Order Regarding Design of Federal Buildings Stirs Up Architecture Community

Posted on: October 29th, 2020

By: Matt Foree

Earlier this year, a draft Executive Order was leaked to an architectural publication and quickly spread across the architecture community. The Executive Order, entitled “Making Federal Buildings Beautiful Again,” discussed guidelines for the design of Federal buildings. The Executive Order criticized the abandonment of traditional, classical designs in favor of the adoption of mid-century modernism, including brutalism, for Federal buildings. The draft Order went as far as to say that the criticized designs “ranged from the undistinguished to designs the public widely considered uninspiring, inconsistent with their surroundings and the architectural heritage of a region, and even just plain ugly.” The Executive Order specifically called out for criticism recent Federal buildings including the new San Francisco Federal building, the Austin U.S. Courthouse, and the Wilkie D. Ferguson, Jr. U.S. Courthouse in Miami (see photo), claiming that these buildings have “little aesthetic appeal.”

The draft Executive Order proposed making “Federal buildings beautiful again” through encouragement of classical and traditional architectural styles. Among other things, the Executive Order set forth a policy in which special regard for the classical architectural style is preferred for applicable Federal public buildings. It stated that in the National Capital Region and for all Federal courthouses the classical architectural style shall be the preferred and default style absent special extenuating factors necessitating another style. Additionally, the Executive Order established a Committee on the Re-Beautification of Federal Architecture and its responsibilities, which included a report recommending updates to the Guiding Principles of Federal Architecture.

The draft Executive Order created a stir within the architectural community. The American Institute of Architects (“AIA”) issued an immediate response. The AIA expressed strong and unequivocal opposition to the draft Executive Order, noting that it would dictate a specific architectural style for Federal courthouses and certain other Federal buildings. The AIA stated, “we always work with the communities to assess the most appropriate architecture for projects within those communities. A one-size-fits-all mandate simply ignores needed input from impacted parties.” The AIA asserted that “it does not, and never will, prioritize any type of architectural design over another.” Furthermore, it noted that there are many examples of beautiful and innovative buildings in all styles of architecture, including the styles explicitly mentioned in the draft executive order Classicist, Brutalist, Spanish Colonial. America has proven uniquely able to incorporate, modify, and advance architectural traditions from a variety of other eras and places. Furthermore, it stated that the community should continue to have the right and responsibility to decide for itself what architectural design best fits its needs. Finally, the AIA closed by reiterating its staunch opposition to the proposed Executive Order, imploring, “Please ensure that this order is not finalized or executed.”

The latest salvo in the debate was provided by the publication of the results from a survey suggesting that the public prefers traditional designs for U.S. courthouses and office buildings. The National Civic Arts Society, a non-profit organization on whose behalf the survey was conducted, claimed that in a survey conducted among over 2000 Americans of various demographic groups that “Americans strongly prefer a more traditional look when it comes to the architecture of U.S. courthouses and federal office buildings.  Furthermore, the group stated that “the data suggests that the character and historical influence of the style may have an impact on preferences.” More information about the results of that survey can be found here

The proposed Executive Order has yet to be signed.

If you have questions or would like more information, please contact Matt Foree at [email protected].

No Entry Without a Mask: Coverage for Discrimination?

Posted on: October 26th, 2020

By: Mallory Ball

More businesses are requiring masks or face coverings to protect their patrons and employees from COVID-19. Unfortunately, with the face-covering requirements, businesses are vulnerable to liability claims from patrons alleging they have been discriminated against by requiring them to wear a face covering. The allegations of discrimination may also include humiliation or mental injury as a result. In order to trigger coverage under the standard commercial general liability policy, the discrimination must fall within Coverage A (bodily injury) or Coverage B (personal and advertising injury). Even if the claims trigger coverage under Coverage A or B, there could be an exclusion under the policy that precludes coverage for the alleged discrimination.  

Depending on the jurisdiction and the policy, there might not be coverage for the discrimination claims. The general definition of bodily injury under the standard commercial general liability policy is “bodily injury, sickness or disease, including death resulting from any of these.” In some jurisdictions, mental injury is considered bodily injury. Thus, claims of discrimination with humiliation or mental injury in those jurisdictions might qualify as bodily injury. For the jurisdictions that do not consider mental injury as bodily injury, claims for mental injury resulting from discrimination probably would not trigger coverage under Coverage A of the standard commercial general liability policy. But, if the policy’s definition is broadened to include mental anguish, mental injury and/or humiliation, then there could potentially be coverage for the discrimination claims. Likewise, because discrimination is not one of the offenses in the general definition of personal and advertising injury, the discrimination claims would not fall under Coverage B. However, if the definition is broadened to include discrimination as one of the offenses, then there could potentially be coverage under the policy. Even if the claims do trigger coverage under Coverage A or B, some commercial general liability policies include a virus exclusion that might preclude coverage for discrimination claims arising from a face-covering requirement due to the coronavirus. Depending on the jurisdiction, other exclusions could apply as well such as for claims arising from the actual or alleged release or dispersal of pollutants.

With the increase in COVID-19 cases and winter around the corner, the face covering requirements are likely to remain in place for months. Although claims of alleged discrimination for not being allowed to enter a business without a face covering may increase as well, they are unlikely to be covered depending on the terms of the policy and the jurisdiction at issue.

If you have questions or would like more information, please contact Mallory Ball at [email protected].

Additional Information:

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients. Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments. For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER:  The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19.  The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement.  We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG.  An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such.  We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.**

Economic Damages May Now Be in Play for Construction Defect Claims Alleging Express Misrepresentation

Posted on: October 23rd, 2020

By: Matthew Wachstein

The recent New Jersey Supreme Court decision in Sun Chemical put defense counsel on notice of the potential for valid Consumer Fraud Act (“CFA”) claims to arise in cases involving allegations of express misrepresentation regarding the sale of defective products. Sun Chemical Corporation v. Fike Corporation, 2020 N.J. LEXIS 880 (N.J. July 29, 2020). Previously, almost all such claims were subsumed by New Jersey’s Product Liability Act (“PLA”). N.J. Stat. §2A:58C-2. This development is particularly worrisome to litigants facing similar allegations – including product manufacturers sued for construction defect claims as their exposure may now include treble damages and attorneys’ fees in addition to the enumerated recovery permitted under the PLA.

Prior to Sun Chemical, the trend of the courts was towards preclusion of CFA claims where the essence of a claim stemmed from harm caused by an allegedly defective product. As stated by the Court in Sinclair, where “[t]he language of the PLA presents a clear legislative intent that, despite the broad reach we give to the CFA, the PLA is paramount when the underlying claim is one for harm caused by a product. Sinclair et. al. v. Merck & Co. Inc., 195 N.J. 51, 66 (2008). There, the heart of the claim was the alleged harm caused by Merck’s prescription drug, and therefore, the CFA did not apply. The rationale of the various court holdings that preceded and followed Sinclair was in part to ensure that the right to recover economic damages provided by the CFA was not extended to PLA claims. In enacting the CFA, the Legislature specifically provided for such a right to recovery of damages; that was not the case under the PLA.

With the backdrop of that ongoing trend, the Third Circuit Court of Appeals presented the New Jersey Supreme Court with a question of law regarding the interplay between the CFA and PLA in Sun Chemical. The facts at issue involve the sale/installation of an explosion suppression system by Fike Corp in Sun Chemical’s facility. Sun Chemical alleged that a fire occurred on the first day the suppression system was operational. Id. at 11-12. Moreover, the suppression system’s alarm was inaudible, resulting in an explosion that caused injuries to seven employees of Sun Chemical and damage to its facility. Id. In its complaint, Sun Chemical included a single allegation under the CFA based on certain affirmative misrepresentations made by Fike Corp. directly related to the performance of its suppression system. The Court held that the CFA claim was therefore valid, and could proceed even in the same pleading as a PLA claim. 

Although the holding in Sun Chemical eliminated an almost automatic preclusion of plaintiffs’ ability to raise CFA and PLA theories of liability in one pleading, the exception carved out by the Court was narrowly defined. In particular, the Court limited the type of CFA claims brought in a PLA action to those “alleging express misrepresentations – deceptive, fraudulent, misleading, and other unconscionable commercial practices – [which] may be brought in the same action as a PLA claim premised upon product manufacturing, warning, or design defects.” Sun Chemical, 2020 at 30. In such instances, “the PLA will not bar a CFA claim alleging express misrepresentations.” Id.  

While the decision in Sun Chemical is a diversion from the previous trend in New Jersey and may open the door for the inclusion of more CFA claims in cases involving product defects, all is not lost for defense litigants. The threshold question required to properly assert such a claim includes a showing of express misrepresentation and/or fraud to sustain a CFA claim. However, the lessons from Sun Chemical provide a clear warning to practitioners that the days of reliance on the PLA as a shield to CFA claims is no more. The Sun Chemical decision reinforces the need for construction industry manufacturers to use best practices when making representations about their products.

If you have questions or would like more information, please contact Matthew Wachstein at [email protected].

Central Bank Digital Currency: Oxymoron or Near Reality?

Posted on: October 22nd, 2020

By: Peter Dooley

In a sharp change of course and softening of rhetoric, Federal Reserve Chair Jerome Powell gave a speech on Monday, October 19th at the International Monetary Fund’s Annual Meeting in which he left the door open to the creation of a digital currency backed by the central bank in the near future. The idea of a central bank digital currency, which has been given the catchy abbreviation CBDC, is not a novel idea, but the consistent reluctance of the U.S. Federal Reserve to wade more than ankle-deep into the world of digital currencies makes Powell’s comment particularly noteworthy. The Federal Reserve’s prior hesitancy has quickly given way to comments about “carefully and thoughtfully evaluating the potential costs and benefits of a central bank digital currency for the U.S. economy and payments system.”

This movement towards further exploration of digital currencies is not just a policy stance change for the Federal Reserve, but it also feels odd due to the origin of digital currency and the underlying blockchain technology. A digital currency backed by the U.S. government is a far cry from the origins of blockchain, Bitcoin, and the de-centralized unregulated wild-west conditions that birthed most cryptocurrencies around today. Regardless of the loss of outlaw appeal, the potential benefits that a centralized digital currency could bring in terms of speed of international payments, increases in efficiency of record storage and verification, and the general increase in cyber-security and privacy for which blockchain and digital currencies may be too advantageous for governments to pass up.

The U.S. is not alone in its efforts either as nations such as Canada, Sweden, China, and Japan are already in the experimentation phase with their own government back digital currencies. Despite the newfound love for digital currencies, the Federal Reserve continues to make it clear that a potential digital currency would not be “a replacement for cash, and current private-sector digital forms of the dollar, such as commercial bank money.” Experimentation will be important, but a larger source of delay is likely to be in drafting the extensive regulations surrounding the digital currency while simultaneously assuring that these regulations and payment processes are consistent with International Monetary Fund agreements and other international frameworks and treaties.

A U.S. CBDC is in no way a sure thing, but these statements showing interest and experimentation with the likes of MIT give reason to believe that the Federal Reserve is seriously warming up to digital currencies. In addition, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) recently decided to further regulate and place sanctions on payments of malware ransoms through digital currencies and this move further illustrates the federal government’s new desire to stake its claim in this sector. These first of their kind sanctions are explained in detail in the recent blog post of Caitlin Tubbesing. While it’s also not likely that we will have one of the first CBDC’s in circulation, the Federal Reserve’s shifting tone lends further credence to the idea and provides reason for optimism in wide-scale implementation of blockchain and digital currencies on a national level in the not too distant future.  

As governments and businesses continue to increase involvement in the sector of blockchain and digital currencies, it is important to stay up-to-date and vigilant for any ways this could affect your company’s cyber-security and policies and procedure in general.

If you have questions or would like more information, please contact Peter Dooley at [email protected].

Is Qualified Immunity at Risk in the Coming Supreme Court Term?

Posted on: October 22nd, 2020

By: Phil Savrin

The year 2020 has been tumultuous and unpredictable in many ways.  Momentarily lost in the shuffle between the ongoing pandemic and the upcoming presidential election are the cries from some sectors of the community to “defund” police departments or alternatively shift funding priorities from law enforcement to more community-oriented programs. These calls grew to a crescendo in the aftermath of the high-profile deaths of George Floyd in Minnesota and Breonna Taylor in Kentucky.

In the midst of the emotionally laden protests, some rational voices called once again for the abolition of qualified immunity, the legal doctrine that protects public officials from being sued for damages unless they violated clearly established law. The main purpose of the immunity is to allow government employees to use their discretion reasonably in discharging their public duties without fear of civil liability. In the law enforcement context, for example, we would not want police officers to weigh whether they will be sued for damages when swift action is necessary to protect the public from harm. This means that police officers can be immune from civil suits even if they used excessive force, provided that the unlawfulness of the force was not clearly established in the law.

The recent calls to abolish qualified immunity have come from different sectors of society based on a belief that members of the public need to be compensated whenever unnecessary force is used by the police whether or not it was clearly unlawful. They argue that allowing compensation through damages, no matter the circumstances involved, would operate as a disincentive for unlawful conduct instead of operating with virtual impunity. The counterargument is that egregious uses of force are not protected by qualified immunity and removing the defense would result in reduced police interactions across the board thereby increasing the risk of harm to the public. After all, there is generally no requirement that police use any force at all even in the face of an immediate need to protect others from criminal activities.

Because qualified immunity is a doctrine created by the courts, it can be abolished in one of two ways:  reversal of precedent by the Supreme Court or by Congressional legislation. Early efforts to introduce bills in Congress to abolish the doctrine have appeared to peter out but there is at least one justice on the Supreme Court who has voiced a concern about the existence of qualified immunity. Periodically, Justice Thomas has written separate opinions noting his “growing concern” with the doctrine because it has evolved beyond the immunities that were in place in 1871 when Congress passed 42 U.S.C. § 1983 that allowed civil suits to be brought for constitutional violations. Court watchers were expecting there to be a landmark decision during the 2019 Term when multiple petitions for review of qualified immunity decisions were the subject of multiple court conferences only to have them all denied toward the end of the term. The lone dissenter was none other than Justice Thomas who reviewed the history of immunities and opined that the Supreme Court should take a closer look at the continuation of the qualified immunity defense. Baxter v. Bracey, 140 S. Ct. 1862 (2020).

Because no other justices joined Justice Thomas’ dissent in Baxter, it can be inferred that they have little interest in overturning the firmly-established precedent and that it will take legislation from Congress to alter the course of the doctrine. These circumstances can change with vacancies opening up on the Supreme Court and changes in the office of the President and congressional leaders. For the time being, however, the doctrine lives on.

If you have questions or would like more information, please contact Phil Savrin at [email protected].