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Jeff Bezos Just Challenged Amazon’s Retail Rivals To Match Its $15 Minimum Wage – Is Bezos’ Challenge Checkmate or Checkout For the Push To Increase Minimum Wage?

Posted on: April 15th, 2019

By: Brad Adler and Matthew Jones

Five months ago, in November, 2018, Amazon raised its minimum wage to $15/hour. Now, Amazon’s leader is challenging his competitors in the retail sector to do the same.  In a letter to shareholders that was submitted to the SEC on April 11, 2019, Jeff Bezos stated “Today I challenge our top retail competitors (you know who you are!) to match our employee benefits and our $15 minimum wage… Do it! Better yet, go to $16 and throw the gauntlet back at us. It’s a kind of competition that will benefit everyone.”

Bezos’ aggressive challenge comes in the midst of an undercurrent of momentum for an increase in both federal and state minimum wage laws. That momentum seems to be leading to some changes at the state level. For instance, on January 1, 2019, California’s minimum wage was increased to $12/hour for companies with 26 or more employees. Likewise, Maine increased its minimum wage from $10,00 to $11.00 in 2019 and Massachusetts raised its minimum wage rate from $11.00 to $12.00.

So what effect, if any, will Bezos’ challenge and the state movements have on the federal minimum wage? Currently, the federal minimum wage is $7.25/hour, which is significantly lower than the minimum wage rate in many states (including Arizona, Arkansas, Colorado, Connecticut, Florida, Illinois, Maryland, New York and New Jersey). Just recently, the House Education and Labor Committee passed the “Raise the Wage Act,” which proposes to increase the federal minimum wage to $15/hour over the next six years. Most commentators believe that the likelihood that this bill will become law is very low, but it nevertheless is a reminder to all of the stakeholders, including employers, that the issue of minimum wage isn’t going away anytime soon.

Of course, not everyone takes kindly to the billionaire’s $15/hour challenge. In response to the challenge, Walmart’s executive vice president of corporate affairs Dan Bartless tweeted out: “Hey retail competitors out there (you know who you are) how about paying your taxes?”

If you have any questions or would like more information, please contact Brad Adler at [email protected] or Matthew Jones at [email protected].

Cooperation: A Policyholder’s Duty…or Downfall?

Posted on: April 12th, 2019

By: Marc Finkel

A policyholder’s duty to cooperate with its insurer is one of the most significant commitments made in the relationship between an insurer and its insured. It goes without saying that the consequences can be dire for an insurer when this commitment is broken. However, a potential remedy is possible when insurers are caught in the predicament of facing surprise exposure due to a policyholder’s failure to cooperate and adequately updating the insurer as to claims in litigation. This is illustrated in the recent case Ironshore Specialty Insurance Co. v. Conemaugh Health System Inc. et al., 2019 U.S. Dist. LEXIS 45690, currently being litigated in the Western District of Pennsylvania.

In that case, Ironshore defeated Conemaugh’s attempt to dismiss an insurance coverage dispute that began when Conemaugh, a large regional health care provider in western Pennsylvania, was found liable for a $19,000,000.00 award in a medical malpractice action. Ironshore, an excess insurer for Conemaugh, routinely requested updates from Conemaugh and Conemaugh’s defense counsel concerning the status of the underlying malpractice action. Ironshore was informed that the underlying matter was potentially “problematic” for Conemaugh, but Ironshore was never informed of the potential for a verdict that would trigger excess coverage under the Ironshore policy. Furthermore, Ironshore was not informed of the trial date or that there had been ongoing pre-verdict settlement discussions which would have required participation from Ironshore.

The underlying medical malpractice action was ultimately settled with a contribution from Ironshore that was subject to a “continued reservation of rights, including its right to recoup.” In denying Conemaugh’s motion to dismiss, the Court found that the Ironshore policy’s Cooperation Clause unambiguously required Conemaugh to “cooperate” with Ironshore by “making available all such information and records as [Ironshore] would reasonably require” upon Ironshore’s election to associate in the “investigation, settlement, or defense” of the underlying claim against Conemaugh. The Court further found that Ironshore’s allegations of receiving inadequate information concerning the status of the underlying claim, despite having made repeated requests for such information from its insured, was enough to allege a breach of the Cooperation Clause, thereby preserving Ironshore’s right to seek a claw back of the share it paid to settle the malpractice action.

In the coverage dispute, Ironshore positioned itself to potentially recover part or all of its contribution to the settlement proceeds from Conemaugh by taking the following steps beginning during the pendency of the underlying litigation: (1) making a clear and express election of its rights to associate; (2) regularly requesting reasonable updates from its insured; and (3) reserving its rights to seek recoupment as part of the underlying settlement agreement. The court recognized these efforts as solid bases for limiting Ironshore’s exposure by virtue of questionable cooperation by its insured.

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

Georgia General Assembly Passes Waiving Sovereign Immunity for Certain Claims

Posted on: April 11th, 2019

By: William J. Linkous, III

For the second time in recent years the Georgia General Assembly has passed legislation waiving sovereign immunity for certain claims against the State, and against local governments. In 2016, then-Governor Deal vetoed a bill that waived sovereign immunity in specific circumstances on the grounds the waiver was too broad. This year, the General Assembly enacted HB 311, sponsored by Rep. Andy Welch (R-McDonough). The bill must be signed by Governor Kemp within 40 days for it to become law.

HB 311 contains an initial section waiving sovereign immunity for claims seeking declaratory or injunctive relief to remedy an injury in fact caused to an aggrieved person by the state, a state governmental entity, or an officer or employee in his or her official capacity in violation of a state statute, the Georgia Constitution, or the United States Constitution. The bill provides a list of exceptions to the waiver, including claims for monetary relief, attorneys’ fees, or expenses of litigation except as provided in O.C.G.A. § 9-15-14, claims brought in federal court, and claims brought by inmates in penal institutions.

The more interesting provisions of the bill for local government attorneys and officials are the provisions that apply to counties, municipalities, and consolidated governments. The bill would add new provisions found in O.C.G.A. §§ 36-80-50 to 36-80-56 which would waive sovereign immunity as to any claim brought by an aggrieved person in the superior courts of Georgia against counties, municipalities, and consolidated governments or entities relating thereto, or against an officer or employee thereof in his or her official capacity seeking declaratory or injunctive relief in certain circumstances. Those circumstances include (1) challenges to local ordinances, rules, and policies under the U.S. or Georgia constitutions, state statutes, or rules or regulations; (2) remedies to injuries in fact, or imminent threats thereof, of an aggrieved person of a local government, officer, or employee acting without lawful authority, beyond the scope of official power, or in violation of the U.S. or Georgia constitutions, state statutes, rules or regulations, or local ordinances other than zoning ordinances; and (3) remedies to injuries when the injury is related to the award of a proposed agreement with a local government or an officer of employee thereof.  Under category (3), suit must be filed within 10 days from the date that the award is made public.

The provisions relating to local governments also provide a similar list of exceptions to the waiver list for the state. The bill provides that it shall be narrowly construed and shall not alter or amend any other immunities nor any other requirements for filing suit. The bill contains provisions limiting liability for officers and employees in their individual capacities and discouraging suit against employees individually, and it will be interesting to see how those provisions interact with official immunity if the bill is signed into law. The bill also contains a provision prohibiting such suits until 30 days after notice is mailed to the local government providing notice of the claim. If the bill becomes law, this 30-day provision may be a stumbling block to litigants who wish to proceed immediately to a temporary restraining order upon an injunctive relief or declaratory judgment claim. Moreover, such suits cannot be filed later than 90 days after providing the notice. The bill also provides for waiver of sovereign immunity for claims of breach of contract by local governments.

The bill also provides for waiver in quiet title actions and also provides for immediate appeals for judgments, orders, or rulings denying or refusing to grant immunity to one or more parties based upon sovereign, official, qualified, or any other immunity.  However, only one immediate appeal is allowed.

It will be interesting to see whether the bill is signed into law, and if so the implications it will have on local government litigation.

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

McKinney Due Process Analysis Alive and Well in the Eleventh Circuit

Posted on: April 9th, 2019

By: Dana Maine

This will be a short blog: “The question before us is whether a litigant in this Circuit has a substantive-due-process claim under the Due Process Clause of the Fourteenth Amendment when the alleged conduct is the unlawful application of a land-use ordinance. The answer to that question is a resounding ‘no’ – an answer that this Court delivered in McKinney v. Pate, 20 F.3d 1550 (11th Cir. 1994), 24 years ago and has affirmed ever since.”  Hillcrest Property, LLP v. Pasco County, 915 F.3d 1292 (11th Cir. 2019).  The opinion is a good read for land use practitioners in all circuits.

As for people interested in Georgia law, note that the Georgia Supreme Court has followed the legislative vs. administrative/adjudicative distinction from the federal law in the 2017 trilogy of land use cases – City of Cumming v. Flowers, 300 Ga. 820 (2017), Schumacher v. City of Roswell, 301 Ga. 635 (2017), Diversified Holdings, LLP v. City of Suwanee, 302 Ga. 597 (2017).

For assistance with this or any other local government matter, please contact Dana Maine, [email protected], or any other member of our National Government Practice Group, a list of which can be found on our website – www.fmglaw.com.

 

FINRA Seeks To Simplify Non-Party Discovery

Posted on: April 9th, 2019

By: Greg Fayard

In January 2019, the Financial Industry Regulatory Authority (FINRA) proposed changes to its rules to give non-parties more time to respond to discovery requests and witness orders from arbitration panels. Currently, non-parties only have 10 calendar days from service by U.S. mail to respond or object to document subpoenas or witness/document production orders. Often times, the person responsible for responding to the non-party subpoena or arbitration order receives the subpoena or order after the 10 days have elapsed. When that happens, the non-party has waived its opportunity to object to the subpoena or order, subjecting it to potential sanctions or disciplinary action. To avoid such prejudice to non-parties, FINRA is recommending changes to its rules to give non-parties 15 calendar days (instead of 10) upon receipt (not service) of the order or subpoena. Receipt will include overnight mail, overnight delivery service like FedEx, hand delivery, e-mail or facsimiled documents. Importantly, under the proposed rule changes, service of discovery requests on non-parties by U.S. mail would be excluded. Lastly, FINRA seeks to codify rule changes to reflect how it currently processes and informs arbitration panels regarding non-party objections to subpoenas and orders.

The purpose of FINRA’s proposed rule changes is to provide better due process to non-parties, eliminate the problem of delays with U.S. mail, and to codify FINRA’s current protocols for non-party discovery.

The FINRA rules impacted by the proposed changes are 12512, 12513, 13512 and 13513. The new rules have to be approved by the Securities and Exchange Commission. If approved, FINRA will announce an effective date of the rule changes in a future regulatory notice.

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