On February 1, 2012, the New York Times ran an editorial advocating that cameras be permitted to broadcast U.S. Supreme Court oral arguments.  The Times suggested that broadcasting oral argument would kindle interest in our judicial system.  It would also enhance the reputation of the legal system by exposing more people to the process.  This would be a reality show addressing many of the most important topics of the day.  To debate such topics on the biggest of all stages, the most prominent court in human history, is for a lawyer akin to playing in the Super Bowl.

The Times observed that recently the Supreme Court of Britain started to broadcast arguments in its court.  The U.S. Supreme Court, however, has steadfastly refused such public viewing of its deliberations.  To address the Supreme Court’s failure to embrace this change, Sen. Richard Durbin has sponsored the Cameras in the Courtroom Act of 2011.  This Act would force the Supreme Court to televise its hearings.  Senator Durbin argues the Act would create greater transparency, accountability, and understanding of our judicial system.  It would also be very interesting.

The selfish benefit to lawyers, however, would be that they would get to watch replays of their own private Super Bowl of lawyers.  They could bring their grandchildren around the fire, turn on the big screen, and say, “kids, see where Gramps argued about pendent jurisdiction back in 2012—those were the days.”

Todd McMurtry is a Cincinnati attorney practicing at Dressman Benzinger LaVelle psc.

Importantly, the owner-contractor agreement requires the contractor to give the owner written notice of any delay that could affect the contract price.  The contractor has 15 days after it becomes aware of a changed condition to provide the written notice. Despite this provision, the contractor fails to provide the owner with any written notice of the delay. But with the owner’s obvious knowledge of the delay, common sense might tell you that a court would never enforce the notice provision. This is not the case. Courts are increasingly requiring that contractors strictly comply with contractual notice provisions, even in situations like the above.

Recently in SNC-Lavalin American, Inc. v. Alliant Techsystems, Inc., the Western District of Virginia faced this exact situation. The contractor strongly urged that the court award delay damages because the owner’s actual notice made the contract’s written notice requirement unnecessary. However, the court rejected the contractor’s argument, holding that the contract’s notice provisions were unambiguous. In order to receive damages for delay, the contractor had to give the owner written notice within 15 days after becoming aware of the situation. The provision did not make an exception for actual notice in its written notice requirement. Thus, despite the owner’s actual notice, the contractor still should have complied with the written notice procedures.

Although this case comes from Virginia, wise construction parties would heed its warning. Recently, in both published and unpublished opinions, Ohio has upheld similar notice provisions to the detriment of non-compliant contractors. In Dugan & Meyers Construction Co. v. Ohio Department of Administrative Services, the Ohio Supreme Court faced a similar situation. The contract at issue required that the contractor request an extension of time in writing.  The request had to come within 10 days after the occurrence of a condition necessitating an extension time. The contractor did not comply with the notice requirement, and was forced to argue that the owner had actual notice – much like the contractor in SNC-Lavalin American. The Ohio Supreme Court rejected this argument, upholding the unambiguous notice provision.

In summary, these cases tell us that the failure to comply with contractual notice procedures – a seemingly simple mistake – may turn detrimental. More broadly, these cases teach project participants that they cannot sign a contract and forget about it until a dispute arises. Increasingly courts are upholding sticky provisions. Therefore, project participants need to know what is in their contracts. And, more importantly, contractors need to comply with these contracts.

Kelly Gindele is a Cincinnati attorney practicing at Dressman Benzinger LaVelle psc.

Long v. Tommy Hilfiger U.S.A., Inc., — F.3d —- (3d Cir. 2012) (decided January 24, 2012), involved what may appear to be, at least at first blush, trivial facts and a provision of the Fair and Accurate Credit Transactions Act (FACTA) that prohibits a person who accepts credit cards from printing “the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of sale or transaction.”  Congress enacted FACTA in 2003 to prevent identify theft and, to this end, consumers may recover actual or statutory damages as well as punitive damages from willful violators of the Act.  If a FACTA violation is negligent but not willful a consumer-plaintiff may only recover actual damages, i.e., the amount necessary to compensate the consumer-plaintiff for a proven injury or loss resulting from the violation.   

The merchant-defendant in Long argued that the receipt at issue, which identified the credit card expiration date as “EXPIRY: 04/  ,” did not violate the statute because it only contained part of the expiration date, namely the month and not the year.  The federal appellate court rejected the merchant’s argument noting that, if this argument were accepted, a merchant could redact only a single digit from an expiration date printed on the credit card receipt and still comply with FACTA.  The court also pointed out that, if different merchants redacted differed parts of the expiration date, it may be possible to piece together the entire expiration date from multiple receipts.  For these reasons, the court determined that the merchant’s position was inconsistent with Congress’s goal of preventing identify theft by enacting FACTA.

 While the court concluded that the merchant’s printing of the month of the credit card expiration date on the customer’s receipt was a FACTA violation, it also went on to state that dismissal of the customer’s lawsuit – which sought damages for a willful violation of FACTA – was appropriate.  The court said that even though the merchant’s interpretation of FACTA was erroneous it “was at least objectively reasonable” in part because no court of appeals had yet considered the interpretation of FACTA offered by the merchant and the case therefore presented an issue of first impression.  For these reasons, the Long court concluded that the customer’s complaint was properly dismissed because it failed to state a claim for a “willful” FACTA violation.

 Although the merchant in the Long case ultimately won, the victory must have been expensive.  After all, the customer-plaintiff commenced his lawsuit against the merchant on December 29, 2009 and two years passed before the merchant (who was represented by two law firms) finally prevailed in the appellate court.  The opinion also puts businesses on notice that the issuance of credit card receipts that reveal even a portion of a credit card expiration date is a violation of FACTA.  Thus the very existence of the Long opinion will dilute the effectiveness of the “objectively reasonable” defense asserted by the merchant (which was successful in that case because, among other reasons, at the time no court of appeals had yet considered the issue) in future cases involving similar facts.  Consequently, the Long case may come to be used as ammunition by savvy consumers and their attorneys asserting claims for willful violations of FACTA against unwary merchants who print part of a credit expiration date on a receipt.  Merchants can best guard against this prospect by making all efforts to strictly comply with FACTA.     

Christopher Markus is a Northern Kentucky attorney practicing at Dressman Benzinger LaVelle psc.

The Ohio Department of Administrative Services has posted proposed regulations at http://ocr.ohio.gov/Home.aspx. The regulations governing selection of a design build firm were proposed in November 2011 and were the subject of a public hearing in December 2011. Final regulations are expected by February 2012. Proposed regulation 153:1-6-02 addresses the methodology for making a best value selection of a design build firm. The text of the proposed regulation can be found here: http://ocr.ohio.gov/Portals/0/pdf/BestValueRule_11182011.pdf

In summary, the proposed regulation establishes a two step process for selection of a design build firm comprised of a qualifications phase and proposal phase. Qualifications criteria include (1) competence to perform the project; (2) firm’s availability to perform the work; (3) quality of past performance; (4) use of licensed design professional; (5) financial responsibility; (6) history of diversity inclusion; and (7) other qualifications consistent with the scope of the project.

The public authority has the discretion to convene an evaluation committee to assist in choosing the best value design build firm. Once the qualification criteria and evaluation committee are finalized, the regulation provides for the release of the request for qualifications. During this phase, the public authority will answer questions posed by interested applicants. From the pool of applicants, the evaluation committee is to create a short list of three firms. If fewer than three qualified firms apply, the public authority may consider one or two firms.

Once a short list is finalized, the public authority can move on to the request for proposal phase and then the determination of best value. These topics will be addressed in a later article.

Todd McMurtry is a Cincinnati attorney practicing at Dressman Benzinger LaVelle psc.

The proposed regulations would implement the Physician Payment Sunshine Act, which requires drug, medical device, and other manufacturers to annually report payments made to physicians and teaching hospitals in excess of $10 for consulting, research, speaking, entertainment, travel, or food.  

According to CMS, the provision was devised in an effort to prevent conflicts of interest between physicians and the medical device/pharmaceutical industries, and to ensure transparency for patients. To that end, the data collected will be posted on a website in a “clear and understandable format.”

In addition, Group Purchasing Organizations (GPOs) that arrange for the purchase of drugs or medical supplies are also subject to the law.

The law requires qualifying entities to begin to report data to HHS on March 31, 2013. It originally called for an effective date of January 1, 2012, but CMS proposed delaying data collection until the final regulation is released later this year.

HHS will levy a penalty of anywhere from $1,000 up to $10,000 for each undisclosed payment, with a $150,000 per year cap.  But a knowing failure to disclose can result in penalties between $10,000 and $100,000, with a $1 million cap.  This may lead to some interesting situations – how does not prove, or disprove, a knowing failure to disclose?

The Sunshine Act explicitly preempts any existing State mandatory reporting statutes. 

The recipients of the payments – physicians and teaching hospitals – are not required to review or correct the data before it is reported publicly.  

HHS will accept public comments on the proposed rule until February 17.

James Dietz is a Northern Kentucky attorney practicing at Dressman Benzinger LaVelle psc.

Whistleblower actions allow private citizens to file lawsuits on behalf of the government if the whistleblower has knowledge of healthcare fraud against the government.  If the government is successful in recovering money, the whistleblower is entitled to a portion of the recovery.  Civil cases of healthcare fraud do not always involve an intent by a healthcare provider to defraud the government.  To the contrary, technical violations of the Anti-Kickback Statute or the Stark law, such as employing a physician without a written employment agreement, can lead to severe penalties under the False Claims Act. 

Healthcare fraud and abuse has been a top priority for the DOJ in the past few years.  Since January of 2009, the DOJ has recovered over $6.6 billion in federal healthcare dollars, which is more than in any other three-year period in the history of the DOJ.  

See the full article at: http://www.mainjustice.com/2011/12/19/doj-news-release-3-billion-in-false-claims-act-recoveries-in-fy-2011/

David Dirr is a Northern Kentucky attorney practicing at Dressman Benzinger LaVelle psc.

The conventional wisdom is that the way to secure the highest quality at the lowest price is to maximize completion pressure. This leads to selection based on a single criterion – price – which in turn requires that each competitor bid on the same scope and requirements.

Currently an architect prepares drawings and specifications in isolation. The assumption is that the architect will develop the best design absent a dialogue with those responsible for construction. Contractors then submit bids based on the design documents. This step assumes that those documents fully convey the building requirements in an understandable fashion.

Both assumptions are significantly flawed as this process sharply restricts the ability of the project team to communicate. Key decisions are made at the beginning of the project based on limited understanding. In contrast, integration of the project delivery team overcomes these shortcomings in the traditional delivery model, and paves the way for a dramatic elimination of waste.

Joseph Cleves is a Cincinnati attorney practicing at Dressman Benzinger LaVelle psc.

An employer and employee can agree to submit most job-related disputes, including claims for wrongful discharge and discrimination, to binding arbitration.  Some employers view arbitration as a faster, less expensive alternative to court, and prefer to have their case decided by an arbitrator rather than a potentially sympathetic jury.  Those employers who prefer arbitration over traditional litigation should be aware of the Sixth Circuit Court of Appeals’ recent decision in Hergenreder v. Bickford Senior Living Group, 656 F.3d 411 (6th Cir. 2011).

In Hergenreder, the Sixth Circuit considered whether an employee gave up her right to a jury trial on her claim for discrimination under the American with Disabilities Act even though she did not sign an agreement consenting to arbitration.  The employer, Bickford Senior Living Group, argued that the arbitration language was included in its Dispute Resolutions Procedure (“DRP”), which was referenced in its handbook.  Bickford argued that every employee received a copy of its handbook.  For her part, the employee argued that she had never seen the DRP, let alone sign a document agreeing to its terms.  Importantly, Bickford’s handbook, like most, contained a disclaimer that it was not a contract.

The Sixth Circuit held that the employee was not bound by the arbitration language.  The court held that there was not an offer and acceptance of the DRP.  And while the handbook did reference the DRP, the court held that the handbook itself was not a contract.    

The decision in Hergenreder makes clear that employers in states in the Sixth Circuit (Michigan, Ohio, Kentucky and Tennessee), who want to force employees to arbitrate employment disputes and waive their right to a jury trial, need to have employees sign a document that states they will submit all claims to arbitration.  A handbook that mentions arbitration is likely not enough.  There must be some evidence that the employee knew of the limitation and willingly accepted it. 

Kevin Hoskins is a Cincinnati attorney practicing at Dressman Benzinger LaVelle psc.

“It is our job to anticipate the legal issues that our clients will be facing related to social media and the unprecedented technological change in today’s world,” said DBL Managing Partner Gerald Benzinger. “Hospitals face privacy concerns when dealing with electronic records and HIPAA. Banks must protect client data and address security concerns posed by hackers. A family business has to be properly insured to protect itself from cyber-risk. DBL’s Digital Workplace Team pools the knowledge and experience within our firm to counsel corporate clients on the inherent risks of this evolving and necessary technology.”

DWT will assist employers by completing audits and evaluating current practices, implementing preventive programs and keeping companies abreast of new developments. The following are some of the services that DBL will offer.

Corporate Readiness
Employers face ever-growing concerns that arise from the use of social media and other technology. Companies must address workplace efficiency and implement practices to avoid possible governmental penalties or even litigation. DWT will assist employers by:

• Developing and training on comprehensive social media policies to address productivity, electronic communication, equipment use, and other employment and labor implications.
• Addressing regulations related to digital media that arise from the NLRB, EEOC, BWC and other governing bodies.
• Evaluating remote workforce practices for wage and hour laws, workplace safety, labor laws, competition and trade secret concerns.
• Understanding geoprivacy concerns in businesses due to growing utilization of GPS technology.

Workplace Technology
With the advent of cloud computing, increased use of third party services/ equipment and multiplying privacy concerns, DWT will address the impact of technology in the workplace by:

• Auditing and reviewing websites and other technology media for copyright, trademarks, privacy policies and terms of use.
• Evaluating privacy vulnerabilities with employee and client data, inadvertent disclosures, online data publishing and other privacy issues.
• Reviewing agreements related to licensing, product acquisition, hosting, e-commerce, cloud computing and other technology contracts and services.

Litigation Avoidance and Preparation
While every effort is given to reduce corporate risk, there have been a growing number of recent legal complaints related to digital media and workplace practices. DWT is equipped to represent employers in a variety of case issues including:

• Addressing E-discovery related to employer and personal computing use, including smart phones.
• Minimizing cyber-liability that arises from infringement of intellectual property, security breaches, and other concerns that may result from online technology.
• Limiting defamation and libel concerns that arise from social media.

For more information about DBL’s Digital Workplace Team, please contact Kelly Schoening at 859-426-2145 or visit dbllaw.com.