Law Firm News

---

Law Firm News

Firm Name

News Title

News

News Date

25383 matches |  22177-22183 displayed

1  3166 3167 3168 3169 3170  3627

---

Wolf Block Schorr & Solis

Supreme Court Clarifies Standard for etaliation Claims Under Title VII
On June 22, 2006, the Supreme Court of the United States ruled in Burlington Northern and Santa Fe Railway Co. v. White that the scope of Title VII's anti-retaliation provision reaches beyond workplace-related or employment-related retaliatory actions and that an individual may maintain a retaliation claim if the conduct would be materially adverse to a reasonable employee or applicant. Specifically, conduct is retaliatory within the purview of Title VII if it would dissuade a reasonable worker from making or supporting a charge of discrimination.

07-01-2006

---

Wolf Block Schorr & Solis

OFCCP Releases Guidance on Compensation
On June 16, 2006, the Office of Federal Contract Compliance Programs (OFCCP) published two documents interpreting the nondiscrimination requirements of Executive Order 11246 as they apply to systemic compensation discrimination.

07-01-2006

---

Thelen, Reid, Brown, Raysman & Steiner, LLP

Delaware Supreme Court's Disney Decision -- Guidelines for Directors
Delaware Supreme Court's Disney Decision -- Guidelines for Directors

07-01-2006

---

Thelen, Reid, Brown, Raysman & Steiner, LLP

Appeals Court Abrogates McMullan Presumption -- Schedule Extension No Longer Raises Presumption of Government-Caused Delay
The ""McMullan presumption"" is a legal rule created by the Armed Services Board of Contract Appeals in Robert McMullan & Son, Inc., ASBCA 19023, 76-1 BCA ¶11728 (Jan. 22, 1976). Under McMullan, the government’s grant of a time extension based on a claimed delay raised a rebuttable presumption that the government caused the delay. However, the U.S. Court of Appeals for the Federal Circuit has abrogated this rule by concluding that the presumption is logically inconsistent and contrary to the Contract Disputes Act. England v. Sherman R. Smoot Corp., 388 F.3d 844 (Fed. Cir. 2004).

Smoot involved a request for equitable adjustment based on the cumulative effects of 51 days of delay caused by allegedly differing site conditions and design and construction changes in a project at the Washington Navy Yard. The government’s project engineer recognized the additional time as fully compensable, but the contracting officer stated that only 21 days were the fault of the government. The parties subsequently executed bilateral modifications providing for some equitable adjustments in the contract price for changes identified under Smoot’s request for equitable adjustment. Although these modifications contained certain release language, compensation was for less than 51 days of delay.

The government later proposed a ""complete equitable adjustment"" for ""a 51 day time extension"" at no change to the contract price. Smoot refused to sign this modification, and the government instead issued a unilateral modification extending the contract completion date by 51 days based on Smoot’s request for equitable adjustment. Smoot revised its request for equitable adjustment to recognize the partial compensation provided under prior modifications, requested a final decision on the claim and appealed the Contracting Officer’s ""deemed denial"" to the Armed Services Board of Contract Appeals.

At the board, Smoot argued that the government, through the project engineer, had agreed all 51 days of delay were compensable and that the contracting officer had recognized at least some of the days by paying Smoot under prior modifications. The board concluded that the government was not contractually bound by the project engineer’s letter but nevertheless was responsible for the delay based on the board’s application of the ""McMullan presumption.""

According to the board, the government’s unilateral contract modification granting the time extension was issued ""after all the material facts of the delays had taken place and after deliberate consideration."" Pursuant to McMullan, the board found this raised a rebuttable presumption that the government caused the delay. The board found that the government had failed to rebut this presumption and ruled that Smoot had established the delay was compensable. The government appealed to the U.S. Court of Appeals for the Federal Circuit.

In examining this aspect of the board’s decision, the Court discussed the McMullan presumption as follows:

[T]he McMullan presumption is logically inconsistent. There are three potential causes of delay in performance of a contract: the contractor's actions, the government's actions, and forces outside the control of both parties. A delay in a construction contract is excusable if it arises from either the government's action or external forces. [footnote omitted] Thus, the mere grant by the government of a contract extension does not indicate that the government is at fault; rather, one of a number of other events external to the government could be responsible. In such a situation, a presumption that the government is responsible for the delay is unwarranted, and nothing in the Federal Acquisition Regulations supports such a presumption.

More importantly, the court found the McMullan presumption to be contrary to the Contract Disputes Act. In reaching this determination, the court analyzed the dispute considerations involved in the creation and application of the McMullan presumption before the Contract Disputes Act and compared them with the congressional considerations underlying the express provisions of the Contract Disputes Act. Specifically, the Court examined 41 USC §605 (a), which states in relevant part:

Contractor claims. All claims by a contractor against the government relating to a contract shall be in writing and shall be submitted to the contracting officer for a decision. All claims by the government against a contractor relating to a contract shall be the subject of a decision by the contracting officer.... The contracting officer shall issue his decisions in writing, and shall mail or otherwise furnish a copy of the decision to the contractor. The decision shall state the reasons for the decision reached, and shall inform the contractor of his rights as provided in this Act. Specific findings of fact are not required, but, if made, shall not be binding in any subsequent proceeding. [emphasis added]

In addition, the court analyzed 41 USC §609 (a) (3), which requires that an appeal in court will be ""de novo."" The court reasoned it had held in Wilner v. U.S., 24 F.3d 1397 (Fed. Cir. 1994) that this language required it to give ""no deference"" to final decisions of a Contracting Officer under the Contract Disputes Act – resulting in there being no presumption of correctness of such decisions. The court concluded that this also applied to contracting officer decisions made before a dispute, stating:

Congress made it clear in the CDA that any findings of fact by a contracting officer in a final decision are not binding in any subsequent proceeding. Although, by its terms, the CDA only applies to contracting officers’ final decisions, in light of the policies underlying the CDA, we see no basis for drawing a distinction between an interim and a final decision of a contracting officer. Apart from finality, the interim decision here is indistinguishable from a final decision.

The court also noted that Wilner had reached the same conclusion with regard to cases in the Court of Federal Claims by overruling J.D. Hedin Construction Co. v. U.S., 171 Ct. Cl. 70, 347 F.2d 235 (1965), which had held, before the passage of the Contract Disputes Act, that an interim decision of a Contracting Officer was entitled to a presumption of correctness. Thus, the court in Smoot concluded:

[W]e hold that the McMullan presumption is contrary to the CDA and is no longer good law. Since the decision of the Board rested upon the presumption, it is vacated. We remand the case to the Board for a determination of the merits of Smoot's claim, but without the benefit of any presumption arising from the decision of the contracting officer extending the completion date of Smoot's contract.

McMullan effectively shifted the burden of proof from a contractor to the government in establishing liability for delay claims. Smoot returns this burden to the contractor. Accordingly, contractors must ensure they fully, accurately and contemporaneously document all material changes, differing site conditions or other claimable events; appropriately analyze the impact of such events on the contract schedule; and, promptly notify the government of any delays in order to ensure they can carry their burden of proof in establishing government responsibility for claimed delays.

07-01-2006

---

Sullivan & Worcester LLP

The Supreme Court Declines to Review Key Case Defining Patentable Subject Matter
The U.S. Supreme Court declined to review the appeals court decision in Laboratory Corporation of America Holdings v. Metabolite Laboratories, Inc., upholding claims to methods of diagnosing vitamin deficiency by measuring levels of a naturally-occurring substance in patients. LabCorp Corporation of America Holdings (LabCorp) had licensed a patent from Metabolite Laboratories, Inc. (Metabolite) that claimed diagnosing vitamin B12 and folic acid deficiencies by correlation with elevated levels of a naturally-occurring amino acid called homocysteine. When LabCorp refused to pay royalties for the use of a new test that they believed did not infringe the patent's claims, Metabolite sued LabCorp for infringement and breach of the license agreement. The District Court held that LabCorp did infringe the patent. On appeal, LabCorp argued that the relationship in nature between homocysteine levels and vitamin deficiency was well known, that the 'correlating' required by the patent ""would occur automatically in the mind of any competent physician"", and that such mental processes have long been considered outside the scope of patentable subject matter. However, the Federal Circuit upheld the trial court decision that the step of correlating homocysteine levels with vitamin deficiency was patentable.

The Supreme Court, in a 5 to 3 vote (the Chief Justice not participating), decided not to grant LabCorp's appeal, which leaves the original trial court's decision intact. Justices Breyer, Stevens, and Souter dissented from the decision not to hear the case, urging that the patent should have been ruled invalid because the claims amounted to ""no more than an instruction to read some numbers in light of medical knowledge.""

The Supreme Court's refusal to hear the case leaves intact the decision upholding claims to disease diagnosis based upon correlation to levels of naturally-occurring substances in the body.

The opinion can be found at http://www.supremecourtus.gov/opinions/05pdf/04-607.pdf.

07-01-2006

---

Nixon & Peabody, LLP

Second Circuit Decision on Water Transfers Containing Pollutants
On June 13, 2006, the U.S. Court of Appeals for the Second Circuit affirmed the need for the City of New York to obtain a National Pollutant Discharge Elimination System (""NPDES"") permit, pursuant to the Clean Water Act (CWA), for one of the tunnels used to transport water from the Catskill Mountains to New York City, but remanded the matter to the lower court for recalculation of the civil penalty amount.1 The decision is the latest in a long-running case that raises interesting questions about the need for CWA permits and the role of the federal government versus the states in CWA matters.

Case history

The City of New York operates the 18-mile Shandaken Tunnel (tunnel) as part of its drinking water system which moves water from the Catskills to the city. As it brings water to the city, the tunnel empties into the Esopus Creek (the creek), a ""navigable"" water for purposes of the CWA. The water discharged from the tunnel contains higher turbidity than the receiving creek. The creek is a trout stream used for fly-fishing and other recreational activities. In March 2000, the Catskill Mountain Chapter of Trout Unlimited and other citizen environmental groups (Trout Unlimited) brought a citizen suit under the CWA, alleging that the city discharge from the tunnel violated 33 USC § 1311 (a), which prohibits the discharge of any pollutant without an NPDES permit.

After the citizen suit was filed, the District Court for the Northern District of New York dismissed the case, holding that the discharge from the tunnel did not constitute an addition of a pollutant to the creek under the CWA (33 USC § 1362 (12)). The plaintiffs appealed to the Second Circuit. Noting that the CWA’s definition of a ""discharge of a pollutant"" means ""any addition of any pollutant to navigable waters from any point source,"" the Second Circuit reversed the district court. It found that, under the CWA, ""addition"" meant the introduction of pollutants into navigable water from the ""outside world."" In its ""Catskill I"" decision, the Second Circuit remanded the case to the district court.

On remand, in October 2001, the district court reversed its initial decision, concluding that the discharge of water containing pollutants from one body of water into another is an addition of a pollutant under the CWA needing a permit. In addition, due to NYC’s untimely delay in applying for a permit after the Catskill I decision, the district court imposed a penalty of $5.749 million. The city subsequently appealed on two grounds: (1) whether discharging natural turbidity into the creek constituted the addition of a pollutant; and (2) whether the penalty assessed was too high. Trout Unlimited, in a cross appeal, said the decision should stand but that the penalty was too low.

Major legal outcomes

The city sought reconsideration in light of two intervening legal developments: (1) a Supreme Court decision regarding the need for an NPDES permit under similar circumstances;2 and (2) EPA’s issuance of an agency interpretation addressing the applicability of the NPDES permit requirement to water transfers such as the one in the Catskill case. The city again argued that no addition of pollutants to navigable waters had occurred. The court reiterated its analogy of two separate pots of soup and one ladle. The separate pots of soup represent two individual water bodies. Transferring liquid from one pot to the other using a ladle, or the tunnel, is an interbasin transfer that involves an ""addition"" of pollutants requiring an NPDES permit. In contrast, the court pointed out, scooping a ladle full of soup from one pot and returning it to that same pot represents an intrabasin transfer that does not require an NPDES permit.

The Circuit Court also rejected the city’s ""unitary water"" theory, which posited that all navigable waters of the United States constitute a ""single water body."" The Second Circuit expressed concern that this type of interpretation could lead to seriously polluted water being discharged into a pristine body of water without a CWA permit.

The city also presented a ""holistic"" argument, which was addressed in EPA’s 2005 agency interpretation, arguing that, under the CWA, states control all ""quantity-of-water"" issues. The city argued that each state can allocate its water resources and allow such resources to be transferred to different areas as it sees fit. Agreeing that the CWA gives each state the right to allocate water ""quantity"" within its borders, the Second Circuit pointed out, however, that the CWA clearly covered ""quality-of-water"" discharge issues and rejected this argument.

Finally, the court stressed that, when states or the EPA issue CWA permits, there is a large degree of flexibility that can be built into such permits. The court stated that this flexibility could allow the city to continue to operate the tunnel. Specifically, it pointed out that, within the permit, the city could be given a schedule through which the turbidity issue could be resolved in an orderly manner.

The Second Circuit did discover a calculation error in the district court’s penalty assessment. Due to a change in the CWA’s maximum penalty amount during the time the case was pending, the district court’s calculation of the statutory maximum was $524,000 too high. Because there was no way to determine how the district court would have factored the lower maximum penalty into its calculation, the Second Circuit remanded the penalty portion of the district court’s decision.

Practical implications

Entities that could be affected by this decision include (1) municipalities that transfer water through CWA navigable waters; (2) property owners who discharge stormwater that may have picked up pollutants on or off their property but which are not covered by a discharge permit; and (3) owners and operators of dams that withdraw water and then discharge some or all of it to another water body.

1 Catskill Mountain Chapter of Trout Unlimited, Inc.; Theodore Gordon Flyfishers, Inc.; Catskill-Delaware Natural Water Alliance, Inc.; Federated Sportsmen’s Clubs of Ulster County, Inc.; and Riverkeeper, Inc., vs. City of New York and New York City Department of Environmental Protection, and Joel A. Miele, Sr., Commissioner of the Department of Environmental Protection v. State of New York, New York State Department of Environmental Conservation, and Erin M. Crotty, Commissioner of the New York State Department of Environmental Conservation. U.S. Court of Appeals for the Second Circuit. Docket No. 03-7203(L); 03-7253 (XAP), June 13, 2006.

2 South Florida Water Management District v. Miccosukee Tribe of Indians, 541 U.S. 95 (2004).

07-01-2006

---

Manatt, Phelps & Phillips, LLP

United States Takes Tougher Stand Against Counterfeiting With New Legislation
Recently, the U.S. Congress passed and U.S. President George W. Bush signed into law the “Stop Counterfeiting in Manufactured Goods Act” (the “Act”), which substantially strengthens federal criminal law combating counterfeiting in the United States.

Congress found that the U.S. economy is losing approximately $200 billion and tens of thousands of jobs annually because of counterfeit goods. The lawmakers determined that the ongoing counterfeiting of goods also poses a widespread threat to public health and safety. Thus, strong criminal remedies against counterfeiting were needed.

The Act aims to defeat counterfeiting in two ways:

First, it strengthens U.S. laws against trading in counterfeit labels and packaging. Trafficking in counterfeit goods and services was already illegal. However, the Act closes a loophole that previously allowed for the shipment of falsified labels, stickers, patches, packaging, etc., which could later be attached to phony products, without penalty. The new law amends the definition of “counterfeit mark” to include trademarks applied to labels or packaging, instead of just marks used on or in connection with goods and services themselves.

Second, the Act toughens penalties for counterfeiting and gives law enforcement new tools to combat it. Courts are now obligated to order the forfeiture and destruction of all counterfeit products that are part of a criminal investigation. Likewise, convicted counterfeiters are automatically required to forfeit the equipment used in their operations, and to pay restitution, in the form of profits and any other assets derived from counterfeiting activities, to the owners of the marks and other affected victims.

The Act also amends the definition of “traffic” as used in connection with the prohibition against trafficking in counterfeit goods. The term “traffic” now includes the motive of commercial advantage or private financial gain in the transport, transfer or other disposal of goods or services. The new definition encompasses trafficking in sound recordings and music videos of live musical performances, trafficking in counterfeit labels for phonorecords and computer programs, and bootlegging.

Congress directed the U.S. Sentencing Commission to review and amend federal sentencing guidelines applicable to those convicted of counterfeiting under the new law. The review and amendment is expected to be completed by September 2006.

The United States is working with other nations and the World Trade Organization to promote strong intellectual property laws. The federal government is simultaneously collaborating with private businesses and organizations to raise awareness of, and to attempt to defeat or at least mitigate, counterfeiting. The passage of the Act marks the most aggressive effort in U.S. history to prevent counterfeiting. The Act not only makes it easier to prosecute counterfeiters, but allows for harsher penalties, and may help supplement private, civil anti-counterfeiting efforts.

07-01-2006

---

25383 matches |  22177-22183 displayed

1  3166 3167 3168 3169 3170  3627