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Massachusetts SJC Expands Rights of Property Owners in Eminent Domain Cases

Posted on: May 26th, 2021

By: Marc Finkel

In a landmark ruling involving the rights of property owners under the Massachusetts “quick take” eminent domain statute (M.G.L. c. 79), the Supreme Judicial Court (“SJC”) recently determined that the “quick take” statute allows for a property owner to challenge the validity of the taking while also accepting a pro tanto (partial) payment from the government entity for the taking.  In the case, Abuzahara v. City of Cambridge, 486 Mass. 818 (2021), the City of Cambridge took Plaintiff’s property by eminent domain through exercise of M.G.L. c. 79.  This caused for the immediate transfer of ownership of the property from the property owner to the government entity without a prior determination of property valuation made by a court. 

M.G.L. c. 79 ordinarily requires either an offer of settlement or a pro tanto payment be made to the property owner within 60 days of the taking of the property by the government entity.  Under the statute, the property owner may also challenge the legal validity of the taking within three years from when the right to damages has vested.  Prior to the SJC’s decision in Abuzahra, it was not clear whether the aggrieved property owner could accept a pro tanto payment for the property and still simultaneously challenge the validity of the taking.

The City of Cambridge offered plaintiff in Abuzahra a pro tanto payment of $3,700,000.00 for property it took pursuant to M.G.L c. 79.  Plaintiff opted to challenge the lawfulness of the taking as permitted under the statute, and, also, made a demand for receipt of the pro tanto payment.  The City of Cambridge refused to turn over the pro tanto payment to plaintiff, and, instead, deposited the pro tanto payment amount in a separate savings account while the lawfulness of the taking was decided.  Ultimately, the SJC found that plaintiff was entitled to both the pro tanto payment from the City of Cambridge while also maintaining the right to challenge the taking in the Trial Court where such simultaneous rights are not expressly prohibited by the “quick take” statute.  

The SJC noted in its decision the importance that eminent domain statutes be strictly construed to protect an individual’s property rights.  Accordingly, by permitting a plaintiff to recover a pro tanto payment while simultaneously allowing a plaintiff to challenge the legality of the taking, the SJC found that the legislative purpose of M.G.L. c. 79 is met.  Specifically, as discussed by the SJC, “the statutorily mandated pro tanto payment ensures that property owners receive some initial recourse following the deprivation of their property, and also incentivizes taking authorities to exercise their significant eminent domain powers with discretion.”  Id.   

Abuzahra is a significant decision that strengthens the rights of property owners as contemplated by M.G.L. c. 79.  As this decision required the SJC to undertake its role in interpreting statutes and resolving ambiguities, it will be interesting to follow what, if anything, the Massachusetts Legislature does with the statutory framework of M.G.L. c. 79 in light of Abuzahra.   

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

Massive Unemployment Fraud Brings Some Taxpayers Another Nasty Pandemic Surprise

Posted on: March 9th, 2021

By: Barry Miller

Last spring FMG reported that the pandemic was making accountants attractive targets for hackers. Extended tax deadlines and stimulus checks keyed to tax information created the incentive for fraud. This year, Krebs on Security warns that “The Taxman Cometh for ID Theft Victims.”

The issue arises from another pandemic-related issue—massive unemployment insurance fraud. Krebs article notes that hacker stole more than $11 billion from California alone that by appropriating the information of California residents who were entitled to those benefits. Now California’s system shows that those benefits were paid, although the proper payee never received them.

And those benefits are taxable.

Which means that by January 31 thousands of people across the county received 1099-G forms reporting that they had received taxable benefits. California is not alone. AARP reports the unemployment fraud total across the county to be $36 billion.

The Internal Revenue Service issued guidance to taxpayers in a January 28 bulletin, advising those who received unexpected 1099-G forms to contact the state agency that issued and request a revised form. “Taxpayers who are unable to obtain a timely, corrected form from states should still file an accurate tax return, reporting only they received,” said the IRS.

The Insider advises those who received a 1099-G showing fraud to make sure they file a federal return by April 15, reporting only actual income received, and file a corrected form 1099-G after receiving it. Forbes gives more detailed suggestions, including reporting insurance fraud to employers and the state unemployment agency, the Federal Trade Commission, and the three major credit bureaus.

For more information, please contact Barry Miller at [email protected].

CDC Issues Relaxed Alternatives to Previous Quarantine Guidelines

Posted on: December 2nd, 2020

By: Margot Parker

Today, the Centers for Disease Control and Prevention (CDC) announced new quarantine guidelines for people exposed to Covid-19, reducing the previous two-week quarantine time to seven to ten days in asymptomatic cases.

While a 14-day quarantine is still “the best way to reduce the risk of spreading Covid-19,” the CDC said it is approving “two acceptable alternatives.” First, if a person has not developed any symptoms, their quarantine can end ten days after being exposed to the virus. Further, if the asymptomatic person tests negative for the coronavirus, quarantine can end even sooner at seven days. The CDC notes the sample for the negative test result should be collected within 48 hours of the final quarantine day. 

The CDC’s quarantine recommendations apply to those deemed “close contacts” of Covid-19 patients, defined as someone “who was within 6 feet of an infected person for a cumulative total of 15 minutes or more over a 24-hour period starting from 2 days before illness onset” or who received a positive test result.

The new guidelines are based on CDC models showing a minimal one to five percent risk of spreading the virus to others using seven to ten-day quarantine periods in asymptomatic people. Public health officials believe the shortened alternatives may promote greater compliance among the public while reducing the economic and public health burden caused by a longer quarantine. 

Notably, local health officials can adjust the CDC’s recommendations to fit the situations of their jurisdictions, and the CDC encourages people to monitor their own symptoms for a full 14 days after exposure, regardless of the length of quarantine. 

If you have questions or would like more information, please contact Margot Parker 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.**

A Temporary Reprieve for New Jersey Employers: Delay and Changes to the Amended New Jersey WARN Act

Posted on: July 21st, 2020

By: Stephanie Greenfield

Six months ago, prior to the COVID-19 pandemic in the United States, New Jersey became the first state in the nation to pass a law obligating employers to provide severance to employees affected by a mass layoff.  On January 21, 2020, New Jersey Governor Phil Murphy amended the existing New Jersey Worker Adjustment and Retraining Notification Act (NJ WARN Act). The new amendments, originally scheduled to go into effect on July 19, 2020, require that employers provide severance to each laid-off employee in the amount of one weeks’ pay for each year of employment. Previously under the NJ WARN Act, employers were only obligated to provide severance in connection with a covered mass layoff only if they failed to comply with the required 60-day notice. The new law will ultimately make it drastically more expensive for companies to conduct a large- scale reduction in force in New Jersey.

The significant changes to the NJ WARN Act include:

  • Expanded Notice Requirement: An employer that has 100 or more employees must provide at least 90 days’ notice before the first employee is discharged as part of a mass layoff, termination of operations, or transfer of operations. The existing NJ WARN Act requires only 60 days’ notice.
  • Mandatory Severance Requirement: In addition to notice, employers must provide discharged employees with “severance pay equal to one week of pay for each full year of employment.” Under the existing NJ WARN Act, an employer is only required to pay severance as a penalty if it fails to provide the required notice.
  • Lower Threshold for Mass Layoffs: The threshold for a “mass layoff” was lowered to 50 employees (even if they did not amount to 33% of the workforce). 
  • Expanded Counting and Coverage of Part-Time Employees: Employers must include part-time employees in both the 100-employee (for a covered employer) and 50-employee (for a termination of operations or a mass layoff) thresholds. Further, part-time employees are entitled to 90 days’ notice and severance just like full-time employees.
  • Expanded Statewide Definition of “Establishment”: The definition of “establishment” was expanded to include a group of all of the employer’s locations in New Jersey.

When the law was passed, the state and nation had no way of knowing that, in a matter of weeks they would be facing a national health crisis. Given the massive labor disturbance and resulting economic impact caused by COVID-19, New Jersey amended the NJ WARN Act once again, effective April 14, 2020. The NJ WARN Act now exempts from coverage any mass layoffs resulting from a natural disaster or national emergency (such as COVID-19), and delays the effective date of the amendments that were originally scheduled to take effect on July 19. These exclusions are retroactive to March 9, 2020, and, thereby, exclude any otherwise covered mass layoff from that date forward. This change permitted New Jersey employers to breathe easier, especially those implementing furloughs and layoffs due to the pandemic.

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

CARES Section 18006 Encourages Schools to Retain Staff to the “Greatest Extent Practicable”

Posted on: April 27th, 2020

By: Tia Combs

As many schools around the country make the final decision to remain closed for the school year, it may be tempting to cut back on staff to save money for what is predicted to be a historic budget shortfall next year. However, the wisdom of that move may be lost when districts consider legislation recently passed by Congress.

On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES” Act”). The lengthy piece of legislation gives financial benefits to seven primary groups: 1) individuals, 2) small businesses, 3) mid-size and larger companies, 4) hospitals and public health facilities, 5) children and families, through federal safety net programs, 6) state and local governments, and 7) providers of educational services.

Of particular interest to educational institutions is the Education Stabilization Fund. The fund provides over $30 billion dollars to educational institutions. Roughly $16.5 billion of the fund is allocated for distribution to elementary and secondary schools through the Elementary and Secondary School Emergency Relief Fund and the Governor’s Emergency Education Relief Fund. Distribution of these funds are contingent on the educational institutions fulfilling certain labor and employment related requirements. 

In particular, pursuant to Section 18006 of the Act states:

A local educational agency, State, institution of higher education, or other entity that receives funds under “Education Stabilization Fund,” shall to the greatest extent practicable, continue to pay its employees and contractors during the period of any disruptions or closures related to Coronavirus.

For K-12 educational institutions, this means that they must continue to pay employees and see that contractors (and their employees) are paid to the greatest extent possible and be prepared to explain any failure to do so.  Many state educational agencies have given advised local districts to do what they can to retain workers. For example, the Indiana Department of Education has advised districts: 

In the application for the CARES Act funding, the LEA must attest that it has been paying all employees and contractors during the closure or disruptions related to the coronavirus, or that it will begin doing so immediately. If LEAs are not able to attest to this fact, then it must provide a reasonable explanation beyond reasons related to cash flow (as tuition support has not been reduced) in order to be eligible for the CARES Act funding. IDOE considers the employees and contractors to include, but is not limited to, the following positions: teachers, administrators, counselors, social workers, nurses, paraprofessionals, bus drivers, custodians, food service, and administrative staff.

In light of Section 18006, districts considering staffing reductions should make those decisions in consultation with legal counsel so that the district’s ability to receive these federal funds is preserved.

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