http://www.crowell.com/Global/RSS.aspxThe latest Newsletters from Crowell & Moring.In K-Lak Corp. v. U.S. (Aug. 3, 2010), the Court of Federal Claims determined that it has jurisdiction to consider the claims that the Air Force had improperly decided to remove a requirement for credit reports from the 8(a) Program and instead had procured the reports through a GSA schedule in order to obtain lower prices. The court explained that, for purposes of determining its bid protest jurisdiction, the definition of "procurement" is broad and encompasses the agency's initial process of determining its needs. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15499/2/2010 12:00:00 AMOn August 30, the U.S. Court of Appeals for the Federal Circuit issued an en-banc decision affirming the International Trade Commission's ("ITC") holding that the "patent misuse" doctrine did not prevent U.S. Philips Corporation ("Philips") from enforcing its patent rights against Princo Corporation and Princo America Corporation (collectively "Princo").  The court's decision, Princo Corp. v. International Trade Comm'n, No. 2007-1386 (Fed. Cir. Aug. 30, 2010) confirms the narrow scope of the patent misuse doctrine, and underscores the broad protection afforded patent holders when licensing their patents.  The case also highlights the challenges that can arise when reconciling intellectual property and antitrust law. Background Philips and Sony Corporation had entered into a joint venture in which the companies developed technology used in recordable compact discs ("CD-R") and rewritable compact discs ("CD-RW").  The companies then generated technical standards to ensure that discs made by other manufacturers would also be compatible with machines ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15509/2/2010 12:00:00 AMThe United States Court of Appeals for the Third Circuit recently held that a chapter 11 debtor owing retiree health, life insurance, and other benefits must comply with the restrictions set out in section 1114 of the Bankruptcy Code before seeking to modify or terminate the retiree benefits during the bankruptcy case, even if the debtor had the unilateral right to terminate the benefits under the governing agreement.  The decision in IUE-CWA v. Visteon Corporation (In re Visteon Corp.), No. 10-1944 (3d Cir. July 13, 2010), diverges from the majority of courts and creates a circuit split by disagreeing with the Second Circuit's holding in In re Chateaugay Corp., 945 F.2d 1205 (2d Cir. 1991), that the debtor's prepetition contractual rights trumped the section 1114 requirements. This landmark case may have significant ramifications to debtors with substantial retiree benefit obligations seeking to file for bankruptcy in the Third Circuit, which ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15479/1/2010 12:00:00 AMOn August 30, the U.S. Court of Appeals for the Ninth Circuit issued its long-awaited decision in Uhm v. Humana, Inc., No. 06-35672. This decision could have important ramifications for litigation involving Medicare Advantage and Part D plans, particularly because it is one of the few Circuit Court decisions addressing Medicare preemption since Congress revised the preemption statute in 2003. The case involved a lawsuit brought by Medicare beneficiaries against a Medicare Part D provider.  The plaintiffs alleged that the provider made oral and written misrepresentations in marketing the plan. When the plaintiffs did not receive their desired prescription drug coverage by the expected date, the plaintiffs filed a lawsuit in the U.S. District Court for the Western District of Washington claiming breach of contract, violation of state consumer protection statutes, unjust enrichment, fraud, and fraud in the inducement. The district court dismissed all the claims, concluding that CMS regulations ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15489/1/2010 12:00:00 AMThe Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), which became law at the end of July, contains new incentives for whistleblowers as well as enhanced whistleblower protections. These whistleblower provisions apply beyond the financial services industry, impacting public and private companies across all industries. 1. New Whistleblower Incentives for Reports to the SEC and the CFTC Section 922 of the Dodd-Frank Act amends the Securities Exchange Act to create a significant financial incentive for whistleblowers who voluntarily provide "original information" to the Securities and Exchange Commission (SEC) that leads to the recovery of more than $1 million in monetary sanctions. Qualified whistleblowers shall be awarded 10 to 30 percent of the collected monetary sanctions, with the specific amount within this range determined in the discretion of the SEC. "Original information" must be "derived from the independent knowledge or analysis of the whistleblower" and must not be known ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15468/31/2010 12:00:00 AMOn August 23, 2010, the United States Bankruptcy Court for the Southern District of New York ruled on an issue of first impression under chapter 15 jurisprudence. The foreign representative of JSC BTA Bank ("BTA Bank") filed a motion for contempt and to stay arbitration proceedings against Banque International de Commerce - BRED Paris, succursale de Geneve, Switzerland ("BIC-BRED"). The motion sought to hold BIC-BRED in contempt for willful violation of the automatic stay that came into effect upon entry of the Court's order recognizing BTA Bank's reorganization proceedings in Kazakhstan. The arbitration proceeding related to BIC-BRED's attempt to collect from JTA Bank on a $20 million loan. After the foreign representative's motion was filed, the Swiss arbitrator entered an award in favor of BIC-BRED and against BTA Bank. As a result, the Court found the motion to stay the arbitration proceedings was moot and limited its decision to the ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15438/30/2010 12:00:00 AMThe Directorate of Defense Trade Controls (DDTC) has finally put to rest a long-festering interpretive question arising out of the International Traffic in Arms Regulations'(ITAR) 124.5(b)(9) license exemption, which previously permitted certain exports of technical data "sent by a U.S. corporation," but did not specifically address hand-carries. The revised exemption (75 Fed. Reg. 52625 (Aug. 27, 2010)), nearly identical to the November 2009 proposed rule, expressly authorizes hand-carried technical data exports meeting the limitations of the rule - including exports of technical data stored on laptops. The amended license exemption permits exports of technical data (including classified data), in any media or format, when sent or taken by a U.S.-person employee of a U.S. corporation or U.S. government agency, to a U.S. person employed by the same corporation or to a U.S. government agency located outside the United States. The exemption only applies if: (1) the data will be "used ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15448/30/2010 12:00:00 AMIn Morris-Griffin Corp. v. C & L Servs. Corp. (Aug. 16, 2010), the U.S. District Court for the Eastern District of Virginia found that a subcontract between a small business prime contractor and its large business subcontractor was unenforceable because it violated the SBA's size regulations and limitations on subcontracting. After finding that the two companies were affiliated and that the large business subcontractor was seeking to enforce a subcontract under which it was entitled to greater than 50% of the costs incurred for personnel, the court concluded that the prime had falsely certified that it was a small business and that its contract awarded under an 8(a) set-aside had been "conceived in fraud," noting further that such set-asides "are susceptible to finagling." http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15458/30/2010 12:00:00 AMThe District of Columbia recently issued the final regulations implementing the Accrued Sick and Safe Leave Act of 2008 ("ASSLA" or "the Act"). When the ASSLA went into effect on November 13, 2008, two key questions remained unanswered: 1) which employees are covered under the Act; and 2) when do employees begin to accrue and access leave under the Act? The final regulations answer these questions by clarifying the definition of "employee," especially for those who do not consistently work in the District of Columbia, and confirming that only "employees" (the definition of which was clarified) are eligible to accrue and access paid leave under the Act. As we reported when the ASSLA went into effect (click here for the Client Alert detailing the key provisions of the ASSLA), the Act requires employers to provide a minimum amount of paid sick and "safe" leave hours to their employees based on ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15428/26/2010 12:00:00 AMThis summary of key lawsuits affecting managed care is provided by the Health Care Group of Crowell & Moring LLP. If you have questions or need assistance on managed care law matters, please contact Art Lerner or any member of the health law group. Please click to view the full Crowell & Moring Managed Care Lawsuit Watch archive. Cases in this issue: Borrero v. United Healthcare of New York, Inc. Louisiana Appeals Court Approves $262 Million Class Action Settlement Between A Subsidiary of Coventry Health Care Inc. and Several Health Providers Palmyra Park Hospital, Inc. v. Phoebe Putney Memorial Hospital Saltzman v. Independence Blue Cross City of New York v. Group Health Inc., et al. Ingenix v. Ham Woodley v. Aetna Health Inc. Peterson v. First Health Life & Health Ins. Co.   Borrero v. United Healthcare of New York, Inc. No. 02-20080 (11th Cir. July 6, 2010) The Eleventh ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15418/25/2010 12:00:00 AMIn the "Report on Allegation of Unsatisfactory Conditions Regarding Actions by the Defense Contract Management Agency, Earned Value Management Center" (July 28, 2010 http://www.dodig.mil/Audit/reports/fy10/apo/D-2010-6-002.pdf), the DoD Inspector General recommended that the Defense Contract Management Agency "prohibit joint surveillance reviews or other joint activities with a contractor" in order to avoid compromising DCMA's "independence" and to take action to increase DCAA "participation" in Earned Value Management Systems audits. While DCMA did not concur in many of the recommendations in the IG report, if the IG recommendations were adopted they would inevitably be applicable to other contractor "systems" issues, make it more difficult for contracting officers to resolve systems issues raised by DCAA, and have a decidedly negative impact on compliance and contract administration activities in the procurement process. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15398/20/2010 12:00:00 AMOn August 19, 2010, the FTC and DOJ jointly issued the final version of the revised Horizontal Merger Guidelines, marking the end of a revision process initiated in September 2009. Following a series of workshops and dozens of public comments, the agencies issued draft revised guidelines in April 2010, which drew further comments from the public. The latest round of public comments and agency review prompted minor revisions to the April 2010 draft guidelines, noted below.  The revised Guidelines describe a more flexible, fact-specific inquiry, as opposed to the more structured methodology outlined in the prior 1992 Guidelines. The new Guidelines incorporate four major changes from the 1992 version:  Reduced Emphasis on Market Definition. The revised Guidelines make clear that merger review “need not start with market definition.” While the principles of market definition are preserved, the revised Guidelines now explicitly allow for the assessment of a transaction’s competitive effects ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15408/20/2010 12:00:00 AMOn August 5, 2010, the Federal Circuit in PAI Corp. v. U.S. affirmed the lower court's determination that contracting officers have an obligation to mitigate "significant" OCIs, but that the FAR does not require "mitigation of other types of conflicts, such as apparent or potential non-significant conflicts."  The Federal Circuit also held that contracting officers have broad discretion to determine whether an OCI is "significant" and that FAR 9.504(a) does not require that contracting officers document their initial identification and evaluation of potential conflicts. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15388/18/2010 12:00:00 AMThe financial reform law that Congress passed recently includes comprehensive new reporting requirements for publicly held companies that are also mine operators, or that have subsidiaries that are mine operators. The new law will take effect on or before August 20, 2010. Section 1503 of the Dodd-Frank Act requires covered companies to report to the Securities and Exchange Commission ("SEC") certain enforcement actions taken by the Mine Safety and Health Administration ("MSHA"), such as significant and substantial ("S&S"), unwarrantable failure and flagrant violations, closure orders for failure to abate or for an imminent danger, and pattern of violation notices and orders. Companies must also disclose, for the period of the report, the total number of fatalities, the total amount of assessed penalties and information about their cases pending before the Federal Mine Safety and Health Review Commission. All of this information must be reported on the SEC's Form 10-Q and ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15368/17/2010 12:00:00 AMOn August 13, 2010, the Federal Trade Commission issued several proposed changes to the Notification and Report Form companies must complete when notifying transactions subject to the Hart-Scott-Rodino Act. In addition to simplifying certain hyper-technical reporting requirements, the FTC's proposed revisions would create three new or expanded disclosure obligations. Specifically, the proposed rules would: (1) require all parties to provide additional business documents related to the transaction; (2) expand and modify the parties' revenue reporting obligations; and (3) require disclosure of additional information regarding "associated" entities. Production of Additional Documents. The proposed rules would expand the list of documents that parties must submit in connection with an HSR notification to include: (i) offering memoranda or similar materials (that are routinely provided now under current HSR practice, however, the proposed changes would require them to be provided even if not prepared by or for officers and directors); (ii) certain materials created ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15378/17/2010 12:00:00 AMIn Menominee Indian Tribe v U.S., the DC Circuit holds, contrary to some BCA and CFC decisions, that the six-year statute of limitation on contractor claims of the Contract Disputes Act is not jurisdictional, but rather "a claims-processing rule." As a result, instead of filing late being an absolute bar, the court remands the case for the district court to determine whether equitable tolling should be applied in the particular circumstances. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15358/12/2010 12:00:00 AMToday, the Directorate of Defense Trade Controls published a proposed rule (75 Fed. Reg. 48625 (Aug. 11, 2010)) that would soften considerably the longstanding policy of requiring authorized foreign recipients of ITAR controlled technical data (or defense articles) to obtain express authorization for its employees who are dual or third country nationals to have access to the controlled information. State recognizes its prior policy implicates human rights issues and has caused significant concern for companies (and governments) of major allies such as Canada and the United Kingdom where employment laws strictly limit use of citizenship and nationality data. The proposed rule, if adopted in its current form, would not signal a complete retreat. It would cover only those bona fide, regular employees of the foreign end user or consignee, and only those located in the same physical territory as the end user is located or the consignee operates. Furthermore, the ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15348/11/2010 12:00:00 AMOn August 6, 2010, Customs & Border Protection (CBP) published a final determination (75 Fed. Reg. 47609) that Avaya’s Unified Communication Solution was substantially transformed in the United States based upon the totality of the circumstances including installation of the Communication Manager software and the extensive effort at the installation site to integrate the largely foreign hardware components into a working system. CBP rejected Avaya’s assertion that the installation location of software that provides the functionality of a system or hardware could be the sole determinant of substantial transformation under CBP’s prior precedent, as the origin of the software has also been an important factor, and noted here that most of the software development had occurred at Avaya’s Colorado facility, although some ongoing software development now occurs abroad. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15338/10/2010 12:00:00 AMWhile we await the President's promise to reform the export control system and specifically to address (and perhaps abandon) the outmoded "specifically designed for military use" criteria for determining commodity jurisdiction, the Department of State has taken a baby step to streamlining and making more transparent the current process. On August 4, 2010, the Directorate of Defense Trade Controls ("DDTC") published (75 Fed. Reg. 46843) a final rule formally adopting the DS-4076 Commodity Jurisdiction ("CJ") Determination Request Form, revised from the earlier draft version available through D-TRADE. The new rule requires electronic submission of CJ requests (after a 30-day transition period). While the new form is similar to the earlier version, there are some differences that suggest DDTC is continuing its efforts to address more appropriately commercial products that may have been modestly modified for use in a military platform or system. Perhaps most importantly, the form (and introductory statement ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15328/9/2010 12:00:00 AMIn AMEC Earth & Envtl., Inc. (Dec. 22, 2009), GAO sustained a protest of a contract award by the Coast Guard for construction services because the agency had engaged in unequal discussions. GAO concluded that, while FAR § 15.306 establishes that the agency must, at a minimum, address "significant weakness and deficiencies" during discussions, if the agency opts to conduct broader discussions than the minimum, it must do so in an equal fashion and may not rely on the minimum threshold in the FAR to excuse disparate treatment. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15318/6/2010 12:00:00 AMOn August 4, 2010, the Federal Trade Commission approved a proposed consent order with Intel. This settlement resolved FTC allegations that Intel violated Section 5 of the FTC Act when it used de facto exclusive dealing arrangements and market share deals to induce original equipment manufacturers to forgo purchasing non-Intel central processing units ("CPUs") and graphics processing units ("GPUs"). The FTC complaint also alleged that Intel engaged in predatory engineering practices to exclude competitors. According to the FTC, the proposed consent order is designed to renew competition and prevent Intel from suppressing CPU and GPU competition in the future. To that end, the FTC imposed detailed restrictions on Intel's licensing, engineering and commercial practices. More specifically, the consent decree requires Intel: To assure foundry owners that third parties have appropriate "have made" rights under Intel's licensing agreements To modify change in control provisions of its intellectual property licenses to ensure ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15308/4/2010 12:00:00 AMOn July 29, 2010, President Obama signed the supplemental appropriations bill which contained a provision amending the Clean Contracting Act of 2008 -- the legislation that gave rise to the Federal Awardee Performance and Integrity Information System ("FAPIIS"). As a result of the new language ("the Administrator shall post all such information, excluding past performance reviews, on a publicly available Internet website"), information in FAPIIS must be made available to the public, except for past performance reviews. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15298/3/2010 12:00:00 AMOn July 22, 2010, the International Court of Justice (ICJ), the principal judicial organ of the United Nations seated in The Hague (The Netherlands), ruled that Kosovo's 2008 declaration of independence and secession from the Republic of Serbia over the latter's objection did not violate international law. The ICJ ruling, adopted by 10 votes to four, was issued in the form of a non-binding Advisory Opinion following a request from the UN General Assembly initiated by Serbia in late 2008. The ICJ found that international law, including relevant UN law and practice, contains no prohibition of declarations of independence. Therefore, the adoption on February 17, 2008 of the declaration of independence by the "Provisional Institutions of Self-Government of Kosovo," acting as representatives of the people of Kosovo, did not violate any applicable rule of international law. Given the narrow scope of the question posed to it, the ICJ refrained from ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15277/23/2010 12:00:00 AMOn July 15, 2010, the Department of Homeland Security issued an interim rule which mirrors a DoD rule, restricting contractors from acting as lead system integrators in the acquisition of DHS major systems if they have direct financial interests in the development or construction of individual systems or elements of any system that they integrate. Effective immediately, the rule contains several exceptions and also provides detailed definitions of lead system integrators and direct financial interests. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15287/23/2010 12:00:00 AMThe Ministry of Justice has this week announced that the UK Bribery Act 2010 ("the Act") will come in to full force in April 2011. The Government has commented that: "The Act will ensure the UK is at the forefront of the battle against bribery and pave the way for fairer practice by encouraging businesses to adopt anti-bribery safeguards." When the Act comes in to force next year it will: Introduce a strict liability corporate offence of failing to prevent bribery by persons working on behalf of, or associated with, a business. A business has a complete defense if it can demonstrate that it has "adequate procedures" in place that should have prevented bribery. Make it a criminal offence to give, promise or offer a bribe and to request, agree to receive or accept a bribe either at home or abroad. The measures cover bribery of a foreign public official ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15267/22/2010 12:00:00 AMIn Turner Constr. Co. v. U.S., the Court of Federal Claims effectively reversed a decision by the GAO in which it had found an organizational conflict of interest resulting from intermittent acquisition negotiations between a subcontractor of the awardee and the parent of a company that assisted the Army Corps of Engineers in preparing the solicitation and evaluating proposals, negotiations that resulted in a post-award acquisition. The Army had followed the GAO recommendation and had disqualified the original awardee, Turner, but the Court concluded that the agency had erred by relying upon the GAO decision because that decision was irrational in light of the fact that GAO had applied the wrong standard of review and “[GAO] overturned the CO’s determination without highlighting any hard facts that indicate a sufficient alignment of interests" between the two companies. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15257/21/2010 12:00:00 AMSummertime is finally here, in our summer round up of all things health and safety and employment-related we cover: the government's move to review health and safety legislation; the vexing issue of liability for social events; e-communications in a health and safety prosecution; REACH; and some interesting developments in the courts and guidance from the HSE. Happy reading and remember to take care of your own personal health and safety in the sun… by the pool…at the barbeque….at the airport… The Young Review Almost immediately the new government came into power David Cameron commissioned a Review of Health and Safety by Lord Young, who himself describes Health and Safety law as a "music hall joke". Lord young was formerly Trade and Industry Secretary in a former Conservative regime and held a number of other cabinet posts in the 1980s. Mr Cameron has pledged to take on "compensation culture", as this ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15247/20/2010 12:00:00 AMIn Appeal of Colonna's Shipyard, Inc. (June 24, 2010), the ASBCA confirmed, consistent with recent CFC decisions in Todd Construction, L.P. v. U.S., 88 Fed. Cl. 34, 235 (2008), that it has jurisdiction to review claims challenging inaccurate past performance evaluations under the Contract Disputes Act. Thus, the way is clear for contractors to challenge DOD past performance evaluations in either forum. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15237/19/2010 12:00:00 AMEarlier today, the U.S. Senate passed the conference report for H.R. 4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act. In a little-discussed piece of this sweeping financial reform legislation, Congress authorized the creation of two new bounty programs that will provide substantial monetary awards to whistleblowers who provide information that leads to an enforcement action with monetary sanctions exceeding $1,000,000 imposed by either the Securities and Exchange Commission (SEC) (Sec. 922) or the Commodity Futures Trading Commission (CFTC) (Sec. 748). These bounty hunter provisions, which are expected to be signed into law by President Obama next week, are broadly drafted and could have far-reaching application to cases involving accounting fraud, disclosure violations, and the Foreign Corrupt Practices Act. The provisions are similar to qui tam provisions of the False Claims Act, which provide a bounty for whistleblowers who provide information about government procurement fraud, and the SEC bounty ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15227/15/2010 12:00:00 AMIn Global Ship Sys., Inc. v Dept. of Homeland Sec'y (CBCA June 25, 2010), the board held that a settlement payment owed by the government could be offset against a debt owed by the contractor on a separate contract, even though the settlement agreement expressly required the CO to "request" that the payment be made to Global's designated bank account. More explicit language is required to overcome the government's general right of offset. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15207/13/2010 12:00:00 AMOn July 12, 2010, the California Supreme Court resolved an issue of first impression in Clayworth v. Pfizer, finding that the pass-on defense is not available under California law to defendants accused of price-fixing. In a unanimous decision, the Court held that for private antitrust litigation under California’s Cartwright Act, it is no defense that the plaintiff passed on its damages to its customers. The case has far-reaching effects for defendants in defending against antitrust claims brought under California law.  In antitrust litigation, the pass-on defense involves an attempt by a defendant to show that a direct or intermediary purchaser plaintiff has passed on an alleged price overcharge to an indirect purchaser and therefore suffered either no damages or limited damages. Federal antitrust law does not provide for the pass-on defense under the U.S. Supreme Court’s holding in Hanover Shoe, Inc. v. United Shoe Machinery Corp., and Clayworth v. Pfizer ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15217/13/2010 12:00:00 AMOn July 8, 2010, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council, which have responsibility for the development and maintenance of the Federal Acquisition Regulations ("FAR") System, issued an interim rule requiring that covered federal contractors disclose information about the compensation paid to their five most highly compensated executives, and to the highest paid executives of their first-tier subcontractors. The interim rule, effective July 8, 2010, also requires covered federal contractors to report information about certain first-tier subcontracts. The information that such contractors must disclose in accordance with the interim rule will be available on a free, public website maintained by the Office of Management and Budget ("OMB"). Additional details regarding the interim rule may be found in the bullet analysis: Reporting Requirements For Executive Compensation And First-Tier Subcontract Awards. The stated objective of the interim rule is to "empower the American taxpayer with information that may ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15197/12/2010 12:00:00 AMOn July 8, 2010, the Civilian Agency Acquisition Council and Defense Acquisition Regulations Council issued an interim rule requiring that, subject to several exceptions and limitations, contractors report executive compensation, first-tier subcontract awards, and executive compensation information for first-tier subcontractors. The government will make this information public via the USASpending.gov website. The interim rule revises the FAR Subpart 4.14, and changes it from "Reporting Subcontract Awards" to "Reporting Executive Compensation and First-Tier Subcontract Awards." Under the revised Subpart 4.14, all solicitations and contracts of $25,000 or more, except classified solicitations and contracts and solicitations and contracts with individuals, must contain a new clause, 52.204-10. Contracting officers must modify existing ID/IQ contracts, including FSS contracts and GWACs, on a bilateral basis to include the clause for future orders, if the value is $25,000 or more, except classified contracts and contracts with individuals. The interim rule applies to all businesses, regardless of ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15187/9/2010 12:00:00 AM Other sections of this issue: Privacy & Data Protection | ISP-Liability & Media Law | Contracts & E-Commerce | Electronic Communications & IT EU Commission adopts new standard contractual clauses for the transfer of personal data The Belgian Act on surveillance cameras of March 21, 2007 (the “Act”), which already entered into force on June 10, 2007, provides for a transitional period with respect to surveillance cameras that had already been installed before its entry into force. With respect to these cameras, the Act holds that controllers only have to comply with the obligations under the Act at the latest three years after that date. The Belgian Data Protection Authority therefore made an appeal to the controllers in order to comply by June 10, 2010. The Belgian Act on surveillance cameras of March 21, 2007 (the “Act”), which already entered into force on June 10, 2007, provides for a ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15147/1/2010 12:00:00 AM Other sections of this issue: Privacy & Data Protection | ISP-Liability & Media Law | Contracts & E-Commerce | Electronic Communications & IT European Commission launches public consultation on net neutrality On the ARCEP (L’Autorité de Régulation des Communications Electroniques et des Postes) Conference in Paris, Neelie Kroes, the Commissioner responsible for the Digital Agenda, has announced that the European Commission will launch a public consultation on the issue of network neutrality. Her intention is to report back to the European Parliament before the end of the year whether regulatory action on net neutrality is necessary. The main issues in the net neutrality debate The debate over net neutrality originated in the U.S. where it has become an important regulatory issue and where the question of whether the U.S. Federal Communications Commission can mandate it, has already reached the courts. In Europe, the debate is still at an earlier ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15157/1/2010 12:00:00 AM Other sections of this issue: Privacy & Data Protection | ISP-Liability & Media Law | Contracts & E-Commerce | Electronic Communications & IT Validity of domestic online gaming monopolies confirmed by the ECJ EU countries can restrict online gambling to a single publicly controlled operator if their aim is to combat fraud and protect the consumer from addiction, Europe's highest court said on Thursday 3 June 2010, dealing a blow to the multi-billion euro online betting industry seeking to break domestic monopolies. The European Union Court of Justice (ECJ) issued rulings on two separate challenges involving online gambling in the Netherlands.  The first ruling concerns proceedings opposing Ladbrokes to De Lotto. De Lotto is a Dutch non-profit-making foundation holding a license for the organization of sports-related prize competitions, the lottery and number games in The Netherlands. It is also the exclusive operator allowed to offer games of chance via ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15167/1/2010 12:00:00 AM Other sections of this issue: Privacy & Data Protection | ISP-Liability & Media Law | Contracts & E-Commerce | Electronic Communications & IT Articles New obligations for Internet access providers EU Council agrees on action plan to implement the concerted strategy to combat cybercrime New obligations for Internet access providers On 6 April 2010, the Belgian legislator has adopted a new Act which modifies the Act of 13 June 2005 on Electronic Communications. Internet access providers (“IAPs”) will henceforth be subject to additional obligations when customers terminate their Internet access subscription. The new obligations will be further detailed in a code of conduct, which is currently being drafted by the sector itself. - New obligations With the Act, the Belgian legislator adds new obligations for IAPs to the Belgian Act on Electronic Communications of 13 June 2005. The new obligations relate to the termination of Internet access subscriptions by ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15177/1/2010 12:00:00 AMAs discussed in our May 12, 2010 Labor & Employment Law Alert, in March 2010, President Obama signed into law both the Patient Protection and Affordable Care Act ("PPACA") and the Health Care and Education Tax Credit Reconciliation Act ("HCERA"), which supplemented and modified PPACA (this Alert will refer to these two laws collectively as "Health Care Reform" or "Health Reform Laws"). As we noted in our May 12 Alert, Health Care Reform is an on-going process with compliance requirements developing over time, and the pace of those developments has proven to be quite impressive. To date, in just over 3 months since PPACA was signed into law, the Department of Health and Human Services ("HHS"), Department of Labor ("DOL"), and Department of the Treasury ("Treasury") have jointly issued interim final rules on the following four major provisions of Health Care Reform: Requirement to Cover Older Children: As discussed in ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15126/30/2010 12:00:00 AMOn June 28, 2010, the U.S. Supreme Court issued an opinion striking down as unconstitutional the provision of Sarbanes-Oxley that controls the removal procedures of members of the Public Company Accounting Oversight Board ("PCAOB" or the "Board") . Free Enterprise Fund v. Public Company Accounting Oversight Bd., 561 U.S. __ (2010), No. 08-861. In a 5-4 opinion, Chief Justice John Roberts, writing for the majority, determined that the current structure of the PCAOB failed to provide sufficient authority to the President to remove Board members who function as "inferior officers" of the United States. Sarbanes-Oxley, however, remains "fully operative as a law" according to the majority opinion. Created by Congress as a part of the Sarbanes-Oxley Act ("SOX") in 2002, the PCAOB is a government entity that has the power to inspect, investigate, and sanction registered accounting firms in disciplinary proceedings. Registered firms include all accounting firms (foreign and domestic) ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15136/30/2010 12:00:00 AMOn June 25, 2010, the Department of Commerce, Bureau of Industry and Security ("BIS"), issued an interim final rule (75 Fed. Reg. 36481), significantly modifying and relaxing certain regulations regarding encryption items under the Export Administration Regulations ("EAR"). Among the most significant reforms, the new rule: Replaces the current "product-by-product" authorization scheme for less sensitive and mass market encryption items with a company-based authorization scheme that will operate like a bulk license for such products; Removes the 30-day delay and review requirement for exporting less sensitive encryption items and classifying most mass market encryption items; Creates an annual self-classification reporting requirement for less sensitive and most mass market items, in place of the prior semi-annual post-export sales and distribution reporting requirement; Expands the scope of encryption technology eligible for License Exception ENC to permit broad exportation except to countries of the highest concern; and Removes "ancillary cryptography" from control under ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15106/29/2010 12:00:00 AMIn Kemron Envtl. Servs., Inc. v. U.S. (May 27, 2010), the Court of Federal Claims dismissed the contractor's complaint that the government issued an unfair, inaccurate, and unreasonable evaluation of its performance, finding that the contractor had failed to meet a jurisdictional prerequisite required by the Contract Disputes Act: that it file a "claim" with the contracting officer. Though the contractor engaged in a series of written and electronic communications with various individuals at the agency expressing its disagreement with its past performance evaluation, the Court concluded that none of the communications constituted (1) "a written demand seeking . . . other contract relief[] . . . as a matter of right" (2) "submitted to the contracting officer for a decision." http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15116/29/2010 12:00:00 AMOn June 24, 2010, the U.S. Supreme Court issued its opinion in a closely watched "F-cubed" securities action. F-cubed refers to foreign investors who buy shares of a foreign company on a foreign exchange, and then attempt to assert securities claims against that foreign company in U.S. courts. The leading case on whether U.S. courts have jurisdiction over these types of actions was Morrison v.National Australia BankLtd., 547 F.3d 167 (2d Cir. 2008). In that case, the Second Circuit affirmed dismissal of the plaintiffs' claims because the defendant's actions that directly caused the plaintiffs' losses did not occur within the United States. The U.S. Supreme Court has now affirmed that decision, but for different reasons. Five Justices joined the majority opinion, and three other Justices concurred in the judgment. (Justice Sotomayor took no part in the consideration or decision of the case, and Justices Breyer and Stevens wrote concurring opinions. ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15076/28/2010 12:00:00 AMOverview The United States Supreme Court yesterday issued its long-awaited decision in Bilski v. Kappos, 561 U.S. ___ (2010). Although this case was expected to be a vehicle for a definitive pronouncement on the patentability of so-called "business methods," the Supreme Court decided the case on much narrower grounds, leaving the broader question unanswered. Specifically, the Supreme Court agreed with the United States Court of Appeals for the Federal Circuit that the particular invention at issue, directed to a method for managing risk in commodities markets, was unpatentable. However, rather than relying on the "machine-or-transformation" test that the Federal Circuit erroneously determined was the exclusive test for deciding whether a claimed "process" qualified as patentable subject matter, the Supreme Court found the invention at issue unpatentable under its own precedent rejecting the patentability of abstract ideas. More interestingly, by a slim 5-4 majority the Supreme Court refused to find business ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15096/28/2010 12:00:00 AMOver a dissent that evoked the words of President Lincoln out of fear that the basic right of litigants to defend themselves has been infringed, the Federal Circuit majority ruled in M. Maropakis Carpentry, Inc. v. U.S. (June 17, 2010) that it had no jurisdiction over the contractor's defense of excusable delays to the agency's liquidated damages claim because the contractor had not filed a fully compliant CDA "claim" and proceeded to grant summary judgment for the agency without even giving the contractor the chance to fix this jurisdictional "defect." Contractors will now be required, therefore, to consider carefully all anticipated (and currently asserted?) defenses to government claims (e.g., breach or other government actions that might excuse a default termination) to determine whether they must be recast, formalized, and properly submitted under CDA procedures -- with attendant cost and, likely, delay in dispute resolution. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15086/25/2010 12:00:00 AMWhen Must a Company Pay for Time Spent Donning and Doffing Uniforms? Even If Time Spent Changing into a Uniform Is Itself Non-Compensable, Does Changing Clothes Mark the Start of a "Continuous Workday"? Companies that require their employees to wear uniforms or protective equipment face a number of complicated issues: Is time spent donning and doffing required uniforms and equipment compensable under the Fair Labor Standards Act ("FLSA")? If so, can the subject be negotiated with a different result through a collective bargaining agreement ("CBA")? What if the workforce is not represented by a union? In the end, does the donning of required uniforms or equipment qualify as a "principal activity" under the Portal to Portal Act, such that subsequent time (even if spent waiting to be engaged or traveling to the worksite) must be paid? The Department of Labor's Wage and Hour Division ("WHD") has wrestled with these questions ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15066/23/2010 12:00:00 AMIn an important decision, the United States Supreme Court today clarified the legal standard for halting actions in environmental cases. In Monsanto Co. v. Geertson Seed Farms, the Court determined that a nationwide permanent injunction on the planting of Roundup Ready alfalfa (RRA) ordered by a lower court and upheld by the Ninth Circuit was improper. Justice Alito wrote the opinion for a seven-Justice majority. For the second consecutive term, the Supreme Court reversed an injunction affirmed by the Ninth Circuit, and the Court again stressed the extraordinary nature of injunctive relief, even for environmental injuries. As it did in last year in Winter v. Natural Resources Defense Council, Inc., 129 S.Ct. 365 (2008), the Court in Monsanto emphasized that a plaintiff must demonstrate that it has satisfied four tests or prerequisites before an extraordinary injunction can be granted. In Monsanto, a group in non-governmental organizations sought to overturn a ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15056/21/2010 12:00:00 AMOn Thursday the Supreme Court took a first step towards defining the rights of public employees in the digital age when it unanimously held that a police department's review of an employee's on-the-job text messages was "reasonable" within the scope of the Fourth Amendment. This decision has implications for practitioners across a range of substantive areas of practice, from privacy and e-discovery to employment law. In Ontario v. Quon, No. 08-1332, Quon, a Ontario, California police officer, used a pager issued to him by the police department to send and receive text messages, some of which were sexually explicit, during his work hours. Quon routinely exceeded the allocated minutes of usage under the department's plan with its wireless carrier, and the department undertook an audit of Quon's text messages to determine the cause and whether the department or Quon should pay for the overages. Quon sued the department alleging that ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15046/19/2010 12:00:00 AMOn June 8, 2010, DoD issued an interim rule, intended to prevent competitively awarded contracts for new technology from becoming noncompetitive efforts long-term. The interim DFARS provisions require that contract line item purchases and contract options must be limited to the minimum number of initial or additional prototype items that will allow for timely competitive solicitation and award of a follow-on development or production contract for those items; that the term of the contract line item or contract option cannot be longer than 12 months; and that the dollar value of the work to be performed pursuant to the contract line item or contract option may not exceed three times the dollar value of the work previously performed under the contract or $20 million, whichever is less. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15036/18/2010 12:00:00 AMThe Supreme Court invalidated today almost 600 decisions issued by the two members of the National Labor Relations Board (NLRB) who served for a 27-month period beginning in December, 2007. The Court, in a 5-4 opinion, ruled that the two member panel did not constitute a "quorum" authorized to decide cases under Section 3(b) of the National Labor Relations Act. Section 3(b) is the statutory provision that sets forth the familiar three member panel quorum provisions used by the NLRB in deciding cases. The majority opinion was authored by Justice Stevens, and joined by Chief Justice Roberts, and Associate Justices Scalia, Thomas and Alito. Justice Kennedy, joined by Justices Ginsburg, Breyer and Sotomayer, dissented, agreeing with the government's proposed reading of the statutory provision. The practical effect of New Process Steel will be significant. The NLRB now has four members, as a result of two recess appointments made by President ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15026/17/2010 12:00:00 AMIn Donley v. Lockheed Martin Corp. (June 10, 2010) (litigated by Crowell & Moring), the Federal Circuit affirmed the ASBCA's decision that a CAS-covered contract that was completely repriced with full disclosure after a change in accounting was not "affected" by the change and was not subject to price adjustment to reflect the impact of the change -- an argument that could also preclude price adjustments on task orders that are negotiated without reliance on cost accounting information under CAS-covered IDIQ contracts. The Court rejected the Justice Department's arguments that the repriced contract was "affected" by the change either because it had been modified rather than completely terminated and re-awarded or because the PCO's agreement to a new price constituted an impermissible "waiver" of the ACO's exclusive right to determine the impact of an accounting change. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15016/16/2010 12:00:00 AMOn June 7, 2010, the Department of Commerce issued a proposed rule implementing 2009 legislation to reauthorize and improve the Defense Production Act. In addition to reauthorizing the use by designated federal agencies of priority ratings on contracts or orders, requiring contractors (and potentially their subcontractors and vendors) to give priority to those contracts or orders over other contracts or orders, the proposed rule "clarifies" the standards and procedures for issuing a rated contract/order and establishes new procedures by which an agency may allocate scarce materials, services, and facilities to promote the national defense or to respond to a national emergency. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=15006/14/2010 12:00:00 AMThe Justice Department announced on May 25, 2010, a settlement with EMC for $87.5 million related to allegations that the company had fraudulently induced GSA to enter into a Schedule contract by misrepresenting the company's commercial pricing practices and that the company had engaged in an illegal kickback scheme whereby it paid consulting companies fees each time those companies recommended that government agencies purchase an EMC product. As discussed more in depth in our blog, this settlement, which contains some unique terms, is one of several to come out of the group of False Claims Act cases filed by two relators in 2004 against IT companies alleging that "referral fees," "influencer fees," and similar arrangements with system integrators and "alliance partners" violated the Anti-Kickback Act and resulted in false claims. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14986/10/2010 12:00:00 AMIn U.S. ex rel. Crennen v. Dell Marketing L.P. (Apr. 27, 2010), the District Court of Massachusetts dismissed with prejudice a False Claims Act complaint alleging that ten IT vendors who hold GSA Schedule contracts had misrepresented and certified falsely that their products, which are listed for sale on the GSA Advantage! website, complied with the Trade Agreements Act. The relator failed to present evidence that the government had purchased any TAA non-compliant products through GSA Advantage!, and the court held that posting a false statement on a website in the expectation that a claim will be submitted does not trigger liability without pleading a claim or a "planned" claim. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14976/8/2010 12:00:00 AMOn May 26, 2010, FINRA proposed for comment new rules to require registration of certain "back-office" operations personnel, including examination and continuing education requirements.1 The rules would expand the universe of personnel requiring registration and impact firms in a number of significant ways. According to FINRA, these new requirements are needed to help ensure that investor protection mechanisms are in place in all areas of firms' businesses that could harm a customer, a firm, the integrity of the marketplace or the public. FINRA appears to be responding to Madoff and recent scandals involving back-office shortfalls. It is following the trend of expanding regulatory focus beyond the front-office by heightening scrutiny over supervisory systems and oversight related to operational functions (e.g., custody, record-keeping, accounting, account maintenance, prospectus delivery, valuation and stock loan). The comment period expires on July 12, 2010. Who Would Be Covered? The requirements would not apply to all ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14966/7/2010 12:00:00 AMIt is that time of year again – the World Cup starts in less than a month, and then there is Wimbledon, test matches and all the other events planned for the summer season of sport. We discuss below strategies for avoiding red cards for unauthorised absences and other own goals. World Cup fever is taking hold again in the UK. Surveys from previous tournaments showed that employees were not averse to calling in sick to watch a match. This year, the Xpert HR survey of 100 HR Directors reveals that 63% of organisations have already made provision for employees to watch games during the World Cup, possibly to address this problem, although a survey of employers generally indicates that not all businesses have taken the lead that perhaps HR professionals have. Only one of England's group stage matches falls in the traditional working day, so the problem looks reduced ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14946/2/2010 12:00:00 AMIn related decisions filed on April 29, the Court of Federal Claims effectively precluded contractors from recovering any costs for unfunded post-retirement benefits (primarily retiree medical and life insurance) in connection with business segment closings, absent a specific contract provision promising to indemnify the contractor for the unfunded liability. In Raytheon v. U.S., the court held that benefits covered by so-called 401(h) subaccounts in the contractor's pension plan (a relatively uncommon situation) are not "pension benefits" and, therefore, are not subject to the segment-closing provisions of CAS 413; in Gen. Elec. Co. v. U.S., the court held that pay-as-you-go benefit plans covering retired employees and dependents (by far the more common situation) are not subject to the provisions of CAS 413 requiring "segment closing" adjustments for pension costs. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14956/2/2010 12:00:00 AMAll federal prime contractors who enter into contracts of $100,000 or more, and subcontractors who enter into contracts of greater than $10,000, arising from a solicitation issued by the government on or after June 21, 2010, must post a notice at each of their workplaces informing employees of their rights under the National Labor Relations Act ("NLRA"). A final rule, issued by the Department of Labor on May 20, 2010, implements Executive Order 13496, signed by President Obama on January 30, 2009, to supplant the Bush-era "Beck Notice," and mandates the language of the notice.  The poster details employees' rights with respect to union activity, and provides examples of unlawful conduct by employers and unions in violation of those rights. Click here for the full text of the final rule. Contractors should take appropriate action to ensure they are in compliance with this new posting requirement. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14745/24/2010 12:00:00 AMGAO in DGR Assocs., Inc.(May 14, 2010), relied on "unambiguous" statutory language instead of a contrary 2009 opinion letter from DoJ's Office of Legal Counsel to hold that a procuring agency must first consider whether the conditions for a HUBZone set-aside exist before proceeding with an 8(a) set-aside. With this decision, GAO falls into line with (and cites with approval) the recent Court of Federal Claims decision, Mission Critical Solution v. U.S (Mar. 2, 2010), appeal docketed (Fed. Cir. Apr. 2, 2010), to the effect that set-asides to HUBZone contractors are mandatory whenever the criteria in 15 U.S.C. 657a are met. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14735/21/2010 12:00:00 AMWith a broad exclusion for commercial items contracts, on May 19, 2010, DoD issued an interim rule, effective immediately, implementing section 8116 of the FY2010 Defense Appropriations Act, prohibiting the use of appropriated funds for contracts, task/delivery orders, or bilateral modifications in excess of $1 million unless the contractor agrees not to enforce or enter into agreements with employees or independent contractors that require arbitration of certain civil rights claims or numerous tort actions arising out of or relating to sexual harassment. Effective as of June 17, 2010, no appropriated funds may be expended unless the contractor certifies that it requires each covered subcontractor to meet the same conditions with respect to any employee/contractor performing work on the subcontract. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14725/19/2010 12:00:00 AMIn DynaLantic Corp., GAO denied a protest based on an allegation that the awardee in a small business set-aside procurement proposed a flight training device simulator that did not comply with the nonmanufacturer rule because the awardee procured the simulators from another country. GAO explained that the protester had concurrently filed a size protest with SBA, which determined that the awardee did comply with the nonmanufacturer rule because it transformed the simulators from a COTS product to a specific product solicited, and that SBA's decision was binding on GAO because SBA has "conclusive authority" to determine the size status of offerors. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14715/18/2010 12:00:00 AMIn U.S. ex rel. Folliard v. CDW Tech. Servs., Inc. (D.D.C. Apr. 19, 2010), the federal District Court in D.C. granted in part and denied in part the defendants' motion to dismiss a qui tam suit filed by a competing reseller which alleged that they had violated the False Claims Act by listing products not compliant with the Trade Agreements Act on their GSA Schedule contract and NASA Solutions for Enterprise-Wide Procurement ("SEWP") contract. As discussed further on our Blog, the court dismissed the allegations with respect to the GSA Schedule because the relator did not allege that the government had purchased non-compliant products, but it found the complaint sufficient with respect to the SEWP contract because it did so allege. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14705/17/2010 12:00:00 AMOn May 13, 2010, the FAR Councils published an advance notice of proposed rulemaking, FAR Case 2009-004, Enhancing Contract Transparency, seeking industry input on amending the FAR to enable public posting of "the text of contracts and task and delivery orders . . . . without violating statutory and regulatory prohibitions against disclosing protected information belonging to the Government or contractors." The ANPR observes that (i) "it may not be practical to apply FOIA procedures before posting in every case"; (ii) the "Councils are looking into methods for identifying the types of information that should not be posted or released to the public, as well as means for electronic processing and posting, and development of provision or clause requirements for successful offerors to provide a redacted copy of the contract"; and (iii) the "Councils are also requesting suggestions for how best to protect the types of information through redacting, locating ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14695/13/2010 12:00:00 AMHealth care reform has been the subject of much public debate and, in many cases, misinformation both about the actual content of the new laws and the ways in which the laws are to be applied and interpreted. Regardless of your point of view, it is clear that health care reform will have a significant impact, not only on the health insurance industry but also on employment and employee benefit issues generally. The Patient Protection and Affordable Care Act ("PPACA"), signed into law by President Obama on March 23, 2010, was then supplemented and modified, less than one week later, by the Health Care and Education Tax Credit Reconciliation Act ("HCERA"). This Alert will refer to these two laws collectively as "Health Care Reform" or "Health Reform Laws." Despite their length and extraordinary depth of detail, the Health Reform Laws leave open a host of issues that will have to ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14685/12/2010 12:00:00 AMTwo recent opinions by federal district courts in New York highlight the ongoing tension between U.S. discovery rules and foreign "blocking statutes" and privacy laws. These two cases continue a trend of U.S. courts ordering parties to produce discovery materials located outside the U.S. even when such production might violate foreign laws. These cases have important implications for anyone who litigates in U.S. courts for or against parties that maintain documents or electronically stored information outside the U.S. In Gucci America, Inc. v. Curveal Fashion, 2010 WL 808639 (S.D.N.Y. Mar. 8, 2010), the court ordered a third-party Malaysian bank, United Overseas Bank Malaysia ("UOB"), to produce certain documents regarding the defendant's Malaysian bank accounts even though UOB argued that production would violate Malaysian banking secrecy laws. UOB submitted a legal opinion from a Malaysian attorney in defense of its position, but the court nonetheless decided that the disclosure was warranted. ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14665/11/2010 12:00:00 AMOn March 22, 2010, the United States Court of Appeals for the Third Circuit held that a debtor is permitted to sell a secured lender's collateral free of its liens without allowing the lender to credit bid when the sale is pursuant to a chapter 11 plan of reorganization. In re Philadelphia Newspapers, LLC, 599 F.3d 298 (3d Cir. 2010). This decision undermines the settled expectations of secured lenders of their absolute right to credit bid their liens at a bankruptcy auction sale under a plan of reorganization. Philadelphia Newspapers, LLC, et al. (the "Debtors") filed a plan of reorganization (the "Plan") which proposed to sell the Debtors' assets at a public auction free and clear of the liens of the secured lenders (the "Lenders") while precluding the Lenders from credit bidding their secured claim in exchange for the Debtors' assets. The Bankruptcy Court ruled that the bid procedures proposed ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14675/11/2010 12:00:00 AMVarious legislative changes came into effect in April 2010, many of which we have covered in previous e-lerts (please let us know if you would like further copies), but for ease, here is a quick summary of the key issues:- The standard rates of statutory maternity pay, statutory paternity pay and statutory adoption pay will increase to £124.88 per week, or 90% of the person's average weekly earnings if less than £124.88. New regulations come into force providing for additional paternity leave and pay to parents of babies born (and adoptive parents notified of a match) on or after 3 April 2011. Eligible employees (usually fathers, but including all partners including civil partners and same sex partners) will have the right to take up to 26 weeks' paternity leave, if the mother (or primary adopter) returns to work early. Part of the leave will be paid if taken during the ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14625/9/2010 12:00:00 AMOn March 31, 2010, the Office of Federal Procurement Policy (OFPP) in OMB issued a proposed policy letter to provide guidance to the Executive Branch regarding when work must be reserved for Federal employees, whether that work is "inherently governmental" (100% of which must be reserved), or "closely associated with governmental functions" and "critical functions" (some portion of which must be reserved). The recently-appointed Administrator of OFPP, Daniel Gordon, made clear at an April 26 ABA meeting that the purpose of the draft guidance is to "rebalance" the Federal government's relationship with contractors, who are, according to Administration, currently filling jobs that should be reserved for Federal employees. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14645/6/2010 12:00:00 AMThis summary of key lawsuits affecting managed care is provided by the Health Care Group of Crowell & Moring LLP. If you have questions or need assistance on managed care law matters, please contact Art Lerner or any member of the health law group. Please click to view the full Crowell & Moring Managed Care Lawsuit Watch archive. Cases in this issue: United States v. McMillan Sacred Heart Health Systems v. Humana Military Healthcare Midwest Special Surgery v. Anthem Insurance Cos. Baker County Medical Services Inc. v. Aetna Health Management Spring E.R., LLC v. Aetna Life Insurance Company Monteleone v. United Concordia Companies Cotton v. Starcare Medical Group   United States v. McMillan No. 08-31148 (5th Cir. Mar. 11, 2010) The Court of Appeals for the Fifth Circuit held that Barry Scheur, owner, president and CEO of the HMO The Oath, and Robert McMillan, the Vice President, COO, and CFO ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14655/6/2010 12:00:00 AMOn 4 May 2010, the European Commission published its awaited draft regulations and guidelines for the assessment of co-operation agreements between competitors. Currently, guidance for horizontal co-operation is provided by two block exemption regulations, Commission Regulation (EC) No. 2659/2000 on research and development (R&D) agreements ("R&D BER"), Commission Regulation (EC) No. 2658/2000 on specialisation agreements ("Specialisation BER"), and the accompanying horizontal guidelines. The block exemption regulations exempt research and development as well as specialisation and joint production agreements from the EU's general ban on restrictive business practices laid down in Article 101 (1) of the Treaty on the Functioning of the European Union ("TFEU"), provided they meet all conditions set out in the regulations. The horizontal guidelines provide an elaborated analytical framework for the assessment of the most common types of horizontal co-operation agreements (including certain concerted practices) and are therefore of the highest practical importance. The European Commission has ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14635/5/2010 12:00:00 AMOn 29 April, the Advocate General of the European Court of Justice (ECJ) issued an Opinion that legal privilege does not extend to in-house or foreign (e.g., US) lawyers in the context of EU antitrust investigations. The Advocate General also appeared to cast doubt on the scope of privilege for EU-qualified outside counsel. This Opinion, issued in the appeal of the landmark case Akzo and Akcros v Commission, affirms existing EU case law. The Opinion is not binding on the ECJ, which will issue its judgment within 3 to 6 months. In most cases, however, the ECJ follows the Opinion of the Advocate General. If the ECJ follows this Opinion, advice from in-house and foreign lawyers will not be protected from disclosure to the European Commission and could be seized in the context of so-called "dawn raids", and used by the Commission to build its cases. Indeed, it is common ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14575/3/2010 12:00:00 AMAfter a lengthy back-and-forth at GAO, the protestor finds relief at the Court of Federal Claims with the award to its competitor for storage space being set aside. The court found in Metro. Van and Storage, Inc. v. U.S. (Apr. 16, 2010) that the awardee did not meet the technical requirements of the RFP that it have a minimum of storage space under firm commitment and refused to brush off these problems as contract administration issues. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14585/3/2010 12:00:00 AMA Second Circuit panel has invited an en banc or full court review of a "reverse exclusionary settlement payments" case that may ultimately reach the Supreme Court. The case is Arkansas Carpenters Health and Welfare Fund v. Bayer A.G., Nos. 05-2851-cv(L) and 05-2852-cv(CON) (2d. Cir. Apr. 29, 2010). The opinion is attached. 1. Reverse Exclusionary Settlement Payments The Drug Price Competition and Patent Term Restoration Act of 1984 - commonly known as the "Hatch-Waxman Act" - enables generic manufacturers to enter the market for a particular drug before the branded manufacturer's patent has expired through the filing of a pre-expiration challenge. At the same time, the Hatch-Waxman Act considers the pre-expiration challenge as infringing activity that could be the basis for the branded manufacturer suing the generic competitors. Hatch-Waxman litigation frequently settles with the branded manufacturer (the patent holder) paying the generic competitor (the alleged infringer) in exchange for an ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14595/3/2010 12:00:00 AMIn an important decision for special servicers, Judge Hellerstein of the U.S. District Court for the Southern District of New York denied Appaloosa Investment LP's motion to intervene in special servicer CW Capital Asset Management LLC's foreclosure proceeding against Stuyvesant Town and Peter Cooper Village. Appaloosa sought to intervene to protect their investment of approximately $750 million in interest-only certificates, arguing that CW Capital is conflicted as a result of its dual role as special servicer and controlling certificate holder under the securitization documents. Attorneys for Appaloosa argued that the foreclosure action was not in the best interests of all certificate holders, as required by CW Capital's role as special servicer, but rather in the best interests of CW Capital alone in its role as controlling certificate holder. As a result, Appaloosa's attorneys argued, Appaloosa had a right to intervene in the foreclosure action as a defendant to protect its ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14605/3/2010 12:00:00 AMLast Friday, April 30, 2010, the United States Sentencing Commission finalized significant revisions to the Federal Sentencing Guidelines. These changes directly implicate the relationship between a corporation's chief compliance officer and the board of directors and the manner in which a corporation should respond to the discovery of criminal conduct. For the first time, the Sentencing Guidelines now allow a corporation to receive a three level downward departure in sentencing for maintaining an effective compliance and ethics program, even where high level or substantial authority personnel are involved in the offense. However, the following conditions must be met: the individual(s) with "operational responsibility for the compliance and ethics program" (usually the chief compliance officer) must have had "direct reporting obligations" to the governing authority (usually the board of directors) or an appropriate subgroup thereof (e.g., an audit committee of the board of directors); the compliance and ethics program must have ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14615/3/2010 12:00:00 AMIn an April 27, 2010 decision with important implications for reinsurance arbitrations, Stolt-Nielsen S.A., et al. v. AnimalFeeds Int'l Corp., the United States Supreme Court held that it is inconsistent with the Federal Arbitration Act ("FAA") to impose class arbitration on parties where the applicable arbitration clause is silent on the issue. The litigation in Stolt-Nielsen arose from a shipping contract known as a "charter party." The charter party contract (between shipping companies and their customer AnimalFeeds) was a highly standardized contract containing an arbitration clause that did not address class arbitration. After AnimalFeeds learned of a Department of Justice investigation of the shipping companies, it brought a class action suit against the shipping companies in federal court asserting antitrust claims of alleged price fixing. The suit was consolidated with similar actions, including one in which the Second Circuit Court of Appeals eventually determined that the claims were arbitrable. The ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14755/3/2010 12:00:00 AMI attach our most recent newsletter and hope that you find the articles of interest. This edition strikes me in particular as having a number of diverse issues which simply goes to show the challenges that face all practitioners in the area of health, safety and environment.    Case roundup Conciliating times? New figures released recently by ACAS show that the number of businesses and employees trying to avoid employment tribunal claims continues to rise. The monthly number of calls to the ACAS helpline offering a pre-claim conciliation (PCC) service has almost doubled since September 2009. ACAS expects the rise to continue. The PCC service was launched in April 2009 alongside the new ACAS Code of Practice on Disciplinary and Grievance Procedures. The service aims to settle workplace issues without a tribunal hearing. ACAS estimates that over 5,000 tribunal claims have been avoided already. Corporate manslaughter trial Cotswold Geotechnical Holdings ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14565/1/2010 12:00:00 AMToday, 30 April, the UK antitrust regulator, the Office of Fair Trading ('OFT'), announced that it was partially abandoning its case against various supermarkets and dairy firms in relation to the exchange of pricing information. As a result, the OFT will return GB£ 50 million in agreed penalties paid by parties that had reached "early resolution" settlements. The OFT has altogether abandoned its case against Morrisons, one of two supermarkets that did not settle. The OFT will retain approximately GB£ 70 million in agreed penalties in relation to the remaining aspects of the case, and is likely to impose significant further penalties on Tesco, the other supermarket that contested the OFT's case. In September 2007, the OFT issued a statement of objections alleging that in 2002 and 2003, 5 supermarkets and 5 diary processors had colluded in relation to the retail prices of milk, cheese and butter by exchanging commercially ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14554/30/2010 12:00:00 AMEarlier this week, the Ninth Circuit issued its long-anticipated en banc opinion in Dukes v. Wal-Mart. Dukes v. Wal-Mart Stores, Inc., __ F.3d. __, 2010 WL 1644259 (9th Cir. April 26, 2010). The six-judge majority affirmed the trial court's decision to certify a nationwide Title VII class action against Wal-Mart Stores, Inc. Beyond the simply breathtaking result and practical implications of the decision in the Dukes case -- approval of a class action involving up to 1.5 million current and former employees -- the opinion provides another wake-up call to all large employers regarding the risks they face in 2010 and beyond as they administer pay, promotion, and performance management systems that will be characterized by plaintiffs as involving subjectivity and discretion. Dukes, following on the heels of the Lilly Ledbetter Fair Pay Act in January 2009 and renewed attention at the federal level to the Paycheck Fairness Act, underscores ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14544/29/2010 12:00:00 AMOn April 22, 2010, the Department of Defense issued proposed amendments [insert link: http://edocket.access.gpo.gov/2010/pdf/2010-9210.pdf] to the Defense Federal Acquisition Regulation Supplement ("DFARS") implementing section 207 of the Weapons Systems Acquisition Reform Act of 2009 ("WSARA"), which requires DoD to provide "uniform guidance and tighten" existing regulations governing organizational conflicts of interest ("OCI"). The deadline for submission of comments is June 21, 2010. DoD is proposing to use these new rules for all DoD procurements. Instead of being located in Part 9 (relating to contractor qualifications, responsibility, and eligibility), where the current OCI rules can be found, these new rules would be located in Part 3 (relating to improper business practices and other integrity issues). The drafters of the proposed rules have attempted to capture core concepts established by decisional law from the U.S. Government Accountability Office ("GAO") and the U.S. Court of Federal Claims ("CFC"). The basic policy reflected in ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14534/28/2010 12:00:00 AMIn Infiniti Info. Solutions, LLC v. U.S., the Court of Federal Claims set aside an 8(a) award made by HUD because the agency acted arbitrarily by claiming that a vendor's Small Disadvantaged Veteran Owned status was simply a "preference" when it was actually a requirement. Additionally, the Court determined that HUD improperly issued a statement of work to the vendors in contravention of SBA regulations that allow only for informal assessments of participants' capabilities. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14514/27/2010 12:00:00 AMOn April 26, 2010, the United States Department of Justice ("DOJ") announced the appointment of 15 new Assistant United States Attorneys and 20 FBI Special Agents to "aggressively" pursue domestic and international intellectual property crimes. The announcement reflects the DOJ's continued focus on IP crimes, following the establishment earlier this year of the DOJ's Task Force on Intellectual Property, after Vice President Biden's summit on intellectual property rights. In short, the DOJ is not simply declaring that IP crimes are a priority – it is devoting significant time and resources to the prosecution of IP crimes such as trade secrets theft, computer hacking, piracy and counterfeiting. In making the announcement, Acting Deputy Attorney General Gary G. Grindler, chair of the DOJ's Task Force on Intellectual Property, reassured companies and intellectual property rights holders in the United States that the increase in enforcement personnel is part of the government's commitment to ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14524/27/2010 12:00:00 AMOn 20 April 2010 the European Commission adopted the new block exemption regulation and guidelines for vertical agreements. The new rules will enter into force on 1 June 2010. A one year transition period applies to existing agreements. The new rules are intended to take into account market developments during the past decade, such as the increased concentration of the retail sector and the growth of online sales. The guidelines also contain new sections on specific market practices in the retail sector, such as up-front access payments and category management. The new BER for the first time introduces a 30% market share threshold for the buyer. The current BER exempts vertical agreements provided the market share of the supplier does not exceed 30% (except in case of exclusive supply for which the market share of the buyer needs to be taken into account). As from 1 June 2010 both the ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14504/26/2010 12:00:00 AMOn April 19, 2010, the United States Department of Justice ("DOJ") issued its first FCPA Opinion Procedure Release of 2010, and the first since August 2009. The Release was requested by a U.S. company ("the Company") (a "domestic concern" within the meaning of the FCPA) which had entered into a contract with a U.S. government agency to design and build a facility in a foreign country. This contract required the Company to hire individuals to work at the facility as directed by the U.S. government agency. Pursuant to the contract and at the request of the foreign country, the U.S. government agency directed the Company to hire a local individual as the Facility Director. However, this individual was simultaneously serving as a paid officer for an agency of the foreign country's government, and was therefore a "foreign official" under the FCPA. DOJ opined that it would not pursue an enforcement ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14494/23/2010 12:00:00 AMTo implement the provisions of Executive Order No. 13494, Economy in Government Contracting, the FAR Council has proposed changes to the labor relations cost principle, FAR 31.205-21, expressly to disallow the costs of activities to persuade employees to exercise or not to exercise their collective bargaining rights, such as the costs of preparing and distributing materials, legal and consultant fees, costs of meetings (including salaries of attendees), and planning and conducting activities by managers, supervisors, or union representatives during working hours. Comments on the proposed rule are due June 14, 2010. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14484/22/2010 12:00:00 AMThe Fourth Circuit recently ruled that an employee who signed a general release of all federal, state and local claims in connection with his separation from his employer was subsequently barred from bringing a qui tam action under the False Claims Act (FCA). United States ex rel. Radcliffe v. Purdue Pharma, No. 09-1202, __ F.3d __ (4th Cir. 2010). The court held that where the federal government was aware of the fraudulent conduct prior to the filing of the qui tam action, the federal interest served by enforcing releases outweighed the need to provide incentives to individuals to bring qui tam claims. This case related to Purdue Pharma's allegedly fraudulent marketing of the drug OxyContin to the government between 1996 and 2005. The relator in this case, Mark Radcliffe, was a former Purdue Pharma sales representative. During his employment, he contacted the federal government anonymously and disclosed concerns regarding Purdue ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14464/21/2010 12:00:00 AMOn April 20, 2010, the Consumer Product Safety Commission's ("CPSC") notice of a proposed rule interpreting the term "children's product" was published in the Federal Register. The Consumer Product Safety Improvement Act of 2008 ("CPSIA") provides several new legal requirements and standards applicable to "children's products." The CPSIA defines "children's product" as "a consumer product designed or intended primarily for children 12 years of age or younger," and sets forth four factors relevant to the determination of whether a product is a "children's product." The proposed rule provides the following interpretation of the "children's product" definition: The phrase "designed or intended primarily" is interpreted to apply to products intended "mainly for children 12 years old or younger." (emphasis added) The statutory definition applies to those products "that children will physically interact with . . . based on the reasonably foreseeable use and misuse of such product." The CPSC uses the ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14474/21/2010 12:00:00 AMOn April 13, 2010, the FAR Councils issued a final rule implementing an executive order that encourages federal agencies to use project labor agreements--defined as pre-hire collective bargaining agreements with one or more labor unions that establish the terms and conditions of employment for a specific project--for federal construction contracts, when the total cost to the government is $25 million or more. If an agency determines that such agreements would "[a]dvance the Federal Government's interest in achieving economy and efficiency in Federal procurement producing labor-management stability, and ensuring compliance with laws and regulations governing safety and health, equal employment opportunity, labor and employment standards, and other matters," it must insert a solicitation and/or contract provision requiring prime contractors and subcontractors (if engaged in construction services) to negotiate a project labor agreement with one or more labor unions for the term of the construction contract. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14434/20/2010 12:00:00 AMYesterday, the Supreme Court granted certiorari in the case of Costco v. Omega1, a copyright dispute that could have profound implications for the ability of manufacturers engaged in global trade of IP-intensive goods to manage distribution of their goods in multiple markets. Specifically, should the Supreme Court reverse the lower court’s ruling, the practical effect will be that U.S. copyright owners whose goods are manufactured and first sold overseas may lose the right to control whether, at what price, and under what other conditions those goods subsequently are resold and imported into the United States. This would make market segmentation and destination pricing – which are strategically critical for many manufacturers of IP-intensive goods – substantially more difficult. Although the question before the Court is limited to interpretation of a provision of the Copyright Act, a broadening of the first sale rule could spill over into the patent area, affecting ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14444/20/2010 12:00:00 AMToday, the FTC and DOJ jointly issued their proposed revision of the Horizontal Merger Guidelines. The Guidelines, which have not been updated in more than a decade, outline how the agencies evaluate the likely competitive impact of proposed mergers and acquisitions and assess whether to challenge individual transactions. This proposed revision is intended to more accurately reflect the agencies' current policies and practices, and further reflects the Obama administration's more aggressive approach to antitrust enforcement. As expected, the agencies' proposal includes several material changes to the existing Guidelines. In particular, the proposed revisions provide for a flexible fact-specific inquiry into the merits of the transaction, eliminating the current, structured methodology. The Guidelines focus extensively on methods for directly determining competitive effects, and significantly decreases the role and importance of market definition. As examples, the Guidelines indicate that the agencies will look at actual effects arising from consummated mergers (but the ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14454/20/2010 12:00:00 AMThe Bribery Act 2010 received the Royal Assent as part of the "wash up" procedure that allows bills before parliament at the time of dissolution to become law where all parties are satisfied that the legislation is fit for purpose. It is not yet in force and is unlikely to be so for some time during the hiatus caused by the General Election and the range of underlying issues that need to be resolved before it can be fully introduced. The new Act brings in a much simplified approach to proving bribery and represents what the sponsoring Government Minister referred to as a "gold standard" piece of legislation which is more onerous than that of most other countries around the globe, including those who are signatories to the OECD convention. As well as being a significant departure from the previous law, it also risks criminalising much behaviour which would previously ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14414/16/2010 12:00:00 AMYesterday, Sen. Frank R. Lautenberg (D-NJ) introduced S. 3209, the Safe Chemicals Act of 2010 (S. 3209 or The Safe Chemicals Act) to reform and modernize TSCA. Sen. Lautenberg's legislation builds upon the Kid-Safe Chemicals Act of 2008. The Safe Chemicals Act includes provisions that contain concepts similar to those utilized by the European Union's legislation concerning the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH), but does not contain some of the more structured mandates of the EU legislation. One of the most significant provisions in the Safe Chemicals Act is that manufacturers must demonstrate existing and new chemicals meet the safety standard of "reasonable certainty of no harm." The bill defines this standard as "a negligible risk of any adverse effect on the general population or a vulnerable population" from aggregate and cumulative exposure to a chemical or mixture of chemicals. Should EPA determine that a manufacturer has ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14424/16/2010 12:00:00 AMIn Rapiscan Sys., Inc. (Mar. 15, 2009), a case handled by C&M, GAO sustained a protest of the award of a purchase order under a Federal Supply Schedule ("FSS") solicitation when the awardee's FSS contract did not include one of the solicitation's required line items. Although the awardee priced the non-FSS item at $0, GAO concluded that the micro-purchase exception did not apply, because the vendor's quotation also stated that the non-FSS item's price (which exceeded the $3,000 micro-purchase threshold) was included in the price of an FSS item. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14404/15/2010 12:00:00 AMThe Departments of Labor, Treasury and Health and Human Services have issued a Federal Register notice requesting public comment on a series of questions concerning new Section 2718 of the Public Health Service Act, enacted as part of the Patient Protection and Affordable Care Act which became law on March 23rd. The questions involve new requirements requiring reporting of individual and group market expense ratio information by insurance carriers, payment of rebates to enrollees if an issuer's clinical and quality improvement expense ratios do not satisfy statutory thresholds and establishment of key definitions required for administration of the new requirements. Another provision conditions qualification of certain non-profit health insurers for special tax deductions on the insurer maintaining a specified ratio of claim services reimbursement to total premium revenue. The notice seeks public comment on a broad range of questions about current industry and state regulatory practices bearing on the subjects ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14394/14/2010 12:00:00 AMIn response to the recent revision to the travel cost rule at FAR 31.205-46(b) and (c), which now limits allowable airfare costs to the lowest airfare available to the contractor, DCAA issued guidance on March 22, 2010, that identifies the "lowest airfare available" as that available to the contractor through direct negotiation with airlines or travel agents. The guidance advises that contractors' policies and procedures should provide for (a) documented, advance planning of travel that considers nonrefundable airfares and lower airfares negotiated with airlines, travel service providers, and credit card companies and (b) obtaining quotations from competing airlines or travel service providers. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14384/12/2010 12:00:00 AMCongress has enacted, and the President signed into law on March 23rd the Patient Protection and Affordable Coverage Act of 2010. On March 30th, Congress passed and the President signed amendments to the Act in the Health Care and Education Reconciliation Act of 2010. Our comprehensive title by title summary of the reform legislation is now available. Click here to view or download a PDF. This summary was prepared by Crowell & Moring attorneys Christine Rinn, Arthur Lerner, John Brennan, Beth Newsom, David O'Brien, Michael Paddock, Robert Roth, Barbara Ryland, Kathleen Stratton, Chandra Westergaard, Kristina Pisanelli, Amy Lee, Matt Fornataro, Kathryn Almar, Jacinta Alves and Elliot Golding. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14374/9/2010 12:00:00 AMOn April 8, Representative Edward Markey (D-Mass.), chairman of the House Energy and Commerce Subcommittee on Energy and Environment, called for a ban on many applications of the antimicrobial chemical triclosan, which has widespread use in such diverse products as liquid soap, hand sanitizer, cosmetics, socks, workout clothes, and toys. He simultaneously announced plans to introduce legislation that would accelerate the evaluation and regulation of substances such as triclosan that may harm the human endocrine system. Pressured by a steady stream of press reports and new "studies" flagged by environmental interest groups, triclosan is only the latest of what is fast becoming a "hit list" of chemical targets. Chairman Markey's call for a ban of triclosan occurred in conjunction with the release of correspondence from the Environmental Protection Agency (EPA) and Food and Drug Administration (FDA) that revealed concerns about the possible health effects of the substance. In particular, the ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14994/9/2010 12:00:00 AMOn April 6, 2010, CMS issued a final rule that revises regulations governing the Medicare Advantage program and the Part D prescription drug benefit program. The proposed rule was issued on October 22, 2009. Click here for our summary on Crowell.com. According to CMS, the final rule strengthens beneficiary protections, ensures that plan offerings to beneficiaries include meaningful differences, improves plan payment rules and processes, strengthens various program participation and exit requirements, improve data collection for oversight and quality assessment, implement a new Part D formulary policy, and clarify or add other important program requirements. The final rule also includes a dispute and appeals process for risk-adjustment data validation. The final rule will be published in the Federal Register on April 15, 2010, but is available now at http://www.federalregister.gov/inspection.aspx#special http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14354/7/2010 12:00:00 AMOn February 25, David Bodenheimer of Crowell & Moring testified at a House Armed Services Subcommittee hearing on private sector views on DoD information technology and cybersecurity initiatives, where he underscored the importance of real public-private partnerships because "the Defense Department and industry will either succeed together -- or fail separately." In his testimony, he also emphasized the private sector's need for (1) liability protection similar to the SAFETY Act coverage for contractors supporting DoD cyber initiatives; (2) effective, two-way information sharing between DoD and the private sector; (3) dispute resolution mechanisms to assure prompt due process before DoD pulls the plug on a contractor's connection to the information network; and (4) clear, firm, and consistent cybersecurity standards so that contractors do not face a kaleidoscope of conflicting requirements. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14364/7/2010 12:00:00 AMIn United Technologies Corp. v. DoD, the DC Circuit set aside a DCMA decision to release under FOIA certain Corrective Action Requests (CARs) from DCMA regarding alleged problems with Sikorsky and Pratt & Whitney manufacturing processes. Although the court found that the competitive harm that could result from their competitors using that information to discredit Sikorsky and Pratt & Whitney in the marketplace is not the type of harm that Exemption 4 was designed to protect, the court nonetheless found that the information was not releasable because DoD had not rebutted Sikorsky and Pratt & Whitney's argument that the CARs disclosed proprietary information regarding their manufacturing processes that would allow their competitors to improve their own manufacturing and quality control systems to the competitive detriment of Sikorsky and Pratt & Whitney. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14344/5/2010 12:00:00 AM Other sections of this issue: Privacy & Data Protection | ISP-Liability & Media Law | Contracts & E-Commerce | Electronic Communications & IT EU Commission adopts new standard contractual clauses for the transfer of personal data The European Commission has adopted on February 5, 2010, a Decision that updates the standard contractual clauses for the transfer of personal data to processors established outside the European Economic Area in countries that are not recognized as offering an 'adequate level of data protection'. With respect to international transfers of personal data to countries outside of the European Economic Area, Directive 95/46/EC on the protection of individuals with regard to the processing of personal data and on the free movement of such data provides that transfers to such third countries of personal data, which are undergoing processing or are intended for processing after transfer, may take place only if the third country ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14304/2/2010 12:00:00 AM Other sections of this issue: Privacy & Data Protection | ISP-Liability & Media Law | Contracts & E-Commerce | Electronic Communications & IT New guidance from the European Court of Justice (“ECJ”) on the application and interpretation of the legislation on ISP-liability In its recent ruling of 23 March 2010, the Google Adwords case, the ECJ interpreted the provisions of Directive 2000/31 setting out the conditions under which Internet service providers ("ISP’s") can be held liable for infringements of intellectual property rights committed by users of their service. The Court provided guidance on these issues before referring the case back to the national court. Further guidance from the ECJ can be expected in the Sabam/Scarlet case, which the Brussels Court of Appeal referred for a preliminary ruling to the ECJ. Court of Justice of the EU, Google vs. Louis Vuitton In its recent ruling of 23 March 2010, known ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14314/2/2010 12:00:00 AM Other sections of this issue: Privacy & Data Protection | ISP-Liability & Media Law | Contracts & E-Commerce | Electronic Communications & IT Articles European Commission to take a more coherent approach to (online) gaming Meaning of "All Reasonable Endeavours" European Commission to take a more coherent approach to (online) gaming After years of ad hoc rulings by the European Court of Justice and several hints from the European Parliament and the EU Council in that sense, the EU Executive body finally seems to be planning a more systematic and pan-European approach to gaming and betting in the Internal Market. On 11 February 2010, Internal Market Commissioner Michel Barnier announced that the European Commission "does not exclude" alternative solutions to individual infringement procedures against member states on gambling. Little over a year ago, the European Parliament and the EU Council of Ministers had already called upon theEuropean Commission to ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14324/2/2010 12:00:00 AM Other sections of this issue: Privacy & Data Protection | ISP-Liability & Media Law | Contracts & E-Commerce | Electronic Communications & IT European Commission accepts commitments from Rambus in 'patent ambush' case On 9 December 2009, the European Commission adopted a decision that makes legally binding commitments offered by Rambus which put a cap on royalty rates for certain of Rambus’ patents on “Dynamic Random Access Memory” (DRAM) chips. Most standard setting organizations have rules that require participants to disclose patents and patent applications that are essential to the standard prior to its adoption, and to license patents incorporated into the standard on terms that are fair, reasonable and non-discriminatory (FRAND). The transparency created by such disclosure is intended to foster competition for incorporation into the standard between different technologies. The FRAND requirements ensure that royalties charged for essential patents do no impede adoption of the standard. A ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14334/2/2010 12:00:00 AMIn McCarthy/Hunt, JV (Feb. 16, 2010) and B.L. Harbert-Brasfield & Gorrie, JV (Feb. 16, 2010), GAO found that the awardee had both an "unequal access to information" and a "biased ground rules" OCI when a firm, which was negotiating to acquire the awardee's design subcontractor, had performed procurement planning and development services for the procurement at issue, including preparation of design documents, plans, specifications, and cost estimates. GAO presumed prejudicial impact from the OCIs and recommended that the Army Corps of Engineers eliminate the awardee from the competition because (i) the awardee could have had access to helpful information beyond what was disclosed in the solicitation (e.g., the agency's unstated priorities, preferences, and dislikes), and (ii) the competition could have been skewed in favor of the awardee by virtue of the fact that the entity negotiating to acquire the awardee's design subcontractor played a role in preparing the solicitation requirements. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14284/1/2010 12:00:00 AMPresident Obama has filled two of the three vacancies at the National Labor Relations Board with recess appointments. Joining union-side labor lawyer William Pierce is Craig Becker. Becker is a long-time senior lawyer for the SEIU, and has been a staff attorney with the AFL-CIO since 2004. Becker's appointment has generated enormous controversy. Senate Republicans unanimously joined business groups in opposing the nomination. The principal reason is concern that Becker's views on labor law are outside the historical mainstream. Sen. John McCain (R-Az.) described Becker's appointment as "clear payback by the Administration to organized labor." There has been plenty of speculation about the effect of these appointments on the labor law landscape. Here's what can be said with certainty. Becker is a widely published academic, having served a stint as a law professor at UCLA. His writings are highly critical of current interpretations of key provisions of labor law. Becker ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14294/1/2010 12:00:00 AMThe Fraud Enforcement and Recovery Act of 2009 was just the beginning of dramatic changes to the False Claims Act (FCA). Two recent developments significantly erode the FCA's protections against qui tam actions that are parasitic or mere fishing expeditions. In particular, they may make it more difficult for defendants to dispose of such cases at the motion to dismiss stage, thereby increasing the costs of defending such suits. Delegation of Authority To Issue Civil Investigative Demands When Congress enacted the Fraud Enforcement and Recovery Act of 2009 ("FERA"), it gave the Attorney General the authority to delegate to the "designee" of his choosing the right to issue Civil Investigative Demands (CIDs). By a Final Rule published on March 24, 2010, all U.S. Attorneys were delegated the authority to issue CIDs. The Attorney General had already previously delegated to the Assistant Attorney General for the Civil Division the Attorney General's ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14273/31/2010 12:00:00 AMPresident Obama signed the Patient Protection and Affordable Care Act ("PPACA") on March 23, 2010. Thus, the clock started running on one of the most urgent requirements imposed by that Act -- that Medicare and Medicaid overpayments be "reported and returned" within 60 days after they are "identified." PPACA §6402(a). This new requirement, which is but one aspect of the program integrity provisions in section 6402(a), applies to providers, suppliers, Medicaid managed care organizations, Medicare Advantage organizations, and PDP sponsors, and requires the return of any "funds that a person receives or retains under [Medicare] or [Medicaid] to which the person, after "corresponding" reconciliation, is not entitled…." Because the obligation to report and return overpayments became effective upon enactment, overpayments that were "identified" on or before the effective date (March 23, 2010) must be reported and returned by May 22, 2010. The new law does not define, and thus leaves ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14253/30/2010 12:00:00 AMOn March 25, 2010, OMB issued amended guidance on implementation of the Buy American provision of the American Recovery and Reinvestment Act of 2009, 75 Fed. Reg. 14323, effective immediately, which (1) changed the threshold that applies to international agreements from $7,430,000 to $7,804,000; (2) added Chinese Taipei (Taiwan) as a party to the WTO Government Procurement Agreement; and (3) added the Canada/US Agreement on Government Procurement, effective February 16, 2010. That agreement, among other things, opens up certain Recovery-Act funded programs of the Rural Utilities Service, Ag Dept., DoE, HUD, and EPA to Canadian iron, steel, and manufactured goods. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14263/30/2010 12:00:00 AMPerhaps one of the most interesting takeaways from SIA's Annual Conference last Fall was the perception that senior DDTC management understood certain provisions of the International Traffic in Arms Regulations (ITAR) served no particular useful purpose. This morning, DDTC published in the Federal Register a proposed rule to eliminate one such provision, the longstanding requirement in Section 126.8 to obtain approval (or in some cases to notify DDTC) of certain proposals to sell or manufacture abroad significant military equipment, acknowledging that the limited benefit of this advance approval /notice did not justify the compliance burden on industry. Let's hope this proposed rule can be quickly finalized (the comment period runs until May 28, 2010) and that further changes along these lines are in store. One potential issue with this proposed rule is it will eliminate the definition of "proposal and presentation" which has been useful in interpreting other ITAR provisions ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14233/29/2010 12:00:00 AMIn Resource Conservation Group, LLC v. United States (Mar. 1, 2010), the Federal Circuit found that the Court of Federal Claims had jurisdiction to adjudicate a protest involving a Navy solicitation to lease its own real property to another party. GAO and CFC had each dismissed the protest, but the Federal Circuit held that, although there was no jurisdiction under the bid protest provision inserted by the Administrative Dispute Resolution Act because the Navy's attempt to lease its own property was not a government procurement, the Tucker Act's pre-ADRA, implied-in-fact contract jurisdiction for nonprocurement protests survived because ADRA did not otherwise provide a remedy for such disputes. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14243/29/2010 12:00:00 AMLost in much of the political fanfare surrounding healthcare reform is that, for the first time, a regulatory pathway for the approval of biosimilar medicines was created when President Obama signed healthcare reform legislation into law. While the European Union has had a regulatory pathway for biosimilars since 2006, the United States, which is by far the world's largest potential market for biosimilars, has not--until now. The Senate Healthcare Reform Bill that was signed by the President this week will be unchanged by any pending House of Representative amendments. The biosimilar regulatory pathway is now law.The biosimilar regulatory pathway is based on the innovator's or "reference product's" prior FDA approval and determination of safety, purity and potency. Biosimilar applications will be reviewed by the same FDA division as the reference product. To be approved, the application must satisfy two standards: Biosimilar-requires analytics demonstrating that product is "highly similar", preclinical, clinical ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14213/26/2010 12:00:00 AMIn Perot Sys. Govt. Servs., Inc. (Jan. 21, 2010), GAO affirmed GSA's rejection of the protester's quote on the basis that Perot quoted rates it was negotiating with GSA for a five-year extension of its FSS contract that were higher than its current, GSA-approved rates. GAO made clear that, even if an RFQ's language about pricing appears to allow the quotation of non-approved rates, it must be read in a manner consistent with FAR Part 8.4, which requires vendors in FSS purchases to quote schedule prices that are published and that have been determined to be fair and reasonable by GSA. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14223/26/2010 12:00:00 AMThis summary of key lawsuits affecting managed care is provided by the Health Care Group of Crowell & Moring LLP. If you have questions or need assistance on managed care law matters, please contact Art Lerner or any member of the health law group. Please click to view the full Crowell & Moring Managed Care Lawsuit Watch archive. Cases in this issue: In Re Higgins Peoria Day Surgery Center v. OSF HealthCare System Nieto v. Blue Shield of California Life & Health Ins. Co. Nationwide Children’s Hospital, Inc. v. D.W. Dickey & Son, Inc. Employee Health and Welfare Plan McHenry v. PacificSource Health Plans, et al. Speegle v. Harris Methodist Health System & Harris Methodist Fort Worth Nationwide Children's Hospital Inc. v. D.W. Dickey & Son, Inc. Employee Health and Welfare Plan Smith v. Florida Healthy Kids Corp.   In Re Higgins No. 051-0252, Feb. 5, 2010 (F.T.C. consent decree) ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14183/25/2010 12:00:00 AMOn March 23, 2010, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council issued a final rule amending the FAR to implement the Federal Awardee Performance and Integrity Information System ("FAPIIS"). The stated purpose of the rule, as required by section 872 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, is to significantly enhance the government's ability to evaluate for responsibility determinations the business ethics and performance of prospective contractors competing for federal business. Once it becomes effective on April 22, 2010, this rule will have a significant impact on the types of information contractors must disclose. Moreover, contracting officers will have an obligation to consider many new types of information in making responsibility determinations prior to awarding federal contracts over the simplified acquisition threshold. Vendor Reporting and Certification For solicitations issued after April 22, 2010, agencies must insert a new implementing clause (FAR ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14203/25/2010 12:00:00 AMThe GSA Multiple Award Schedule Advisory Panel presented its Final Report to the new GSA Administrator on March 10, 2010, addressing five areas: price reduction clause and task/delivery order competition, price reasonableness, disclosure, contract type, and program evaluation and review. The Final Report recommends, inter alia, that the Price Reduction Clause be eliminated from services contracts and, in its place, procedures be implemented to obtain "meaningful competition" at the task order level. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14173/24/2010 12:00:00 AMCongress has enacted, and President Obama has signed, major health reform legislation. A link to the enacted legislation, and to the pending amendments that have been approved by the House and are awaiting action by the Senate, can be found at http://www.speaker.gov/newsroom/legislation?id=0361. We will soon post a summary and analysis of the new legislation. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14193/24/2010 12:00:00 AMIn another sign that the government is increasing its focus on suspension and debarment, a February 2010 Department of Homeland Security IG report (http://www.dhs.gov/xoig/assets/mgmtrpts/OIG_10-50_Feb10.pdf) found that DHS has been reluctant to apply existing procedures against poorly performing contractors and recommended that DHS develop policies to determine whether to refer them to the suspension and debarment official when their contracts have been terminated for default or are being considered for default. DHS management concurred with the recommendation and will now require that contracting officers provide any determination of nonresponsibility to the S/D official when the determination is based in whole or part on the contractor's (1) lack of satisfactory performance record under DHS contracts; (2) lack of satisfactory record of integrity and business ethics; or (3) inability to qualify or ineligibity under applicable laws and regulations. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14163/23/2010 12:00:00 AMIn a memorandum dated March 10, 2010, President Obama directed the heads of all executive departments and agencies to expand their use of recovery audits, now called “Payment Recapture Audits,” in order to identify and reclaim from contractors the funds associated with improper payments (e.g., duplicate payments, payments for services not rendered, overpayments, and payments to fictitious vendors) and has also directed OMB to develop guidance within 90 days for carrying out the requirements of the memorandum. He points approvingly to use of professional and specialized auditors whose compensation is tied to their findings of such overpayments. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14153/22/2010 12:00:00 AMIn General Dynamics One Source, LLC, GAO rejected TSA's jurisdictional challenge, holding that Congress revoked TSA's exemption from GAO protests effective June 22, 2008, and that TSA's Phase II solicitation issued in December 2008 could not relate back to the exemption that previously existed for the Phase I competition. On the merits, GAO sustained the protests due to TSA's failure to evaluate price realism when (1) the awardee proposed mismatched staffing approaches in the technical and cost proposals, and (2) the awardee's proposed staffing depended upon hiring incumbent staff at rates well below current incumbent salaries. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14133/19/2010 12:00:00 AMIn a decision that should resolve finally nearly 40 years of disagreement between contractors and the government about the definition of Independent Research and Development (IR&D), the Federal Circuit has held in ATK Thiokol Inc. v. U.S. (Mar. 19, 2010), that R&D effort must be "specifically required" by the terms of a contract in order to be excluded from the definition of allowable IR&D costs, endorsing the contractors' argument that effort that is "implicitly" required in order to perform the contract or "necessary" to perform but not explicitly required by the contract is allowable IR&D. In addition, and perhaps even more important, the decision acknowledges more generally in its analysis of the distinction between direct and indirect costs that "CAS 402 gives the contractor considerable freedom in the classification of particular costs, so long as the contractor maintains consistency in making that determination." http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14143/19/2010 12:00:00 AMTwo recent opinions by federal district court judges who are well respected experts in the field of e-discovery have launched a firestorm of commentary on the subject of appropriate sanctions for spoliation of evidence. In January, U.S. District Court Judge Shira Scheindlin, author of the landmark opinions on e-discovery in the Zubulake case, issued an opinion Pension Committee of the Univ. of Montreal Pension Plan, et al. v. Banc of America Securities LLC, et al., 2010 U.S. Dist. LEXIS 4546 (S.D.N.Y. Jan. 15, 2010), which has received a great deal of attention from commentators speculating that the bar has been raised with respect to parties’ obligations to preserve, collect and produce electronically stored information (“ESI”). In Pension Committee, Judge Scheindlin held that the following conduct supported a finding of gross negligence: failure to issue a written litigation hold order; failure to identify all of the key players and ensure that ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14123/16/2010 12:00:00 AMIn Energy Systems Group (Feb. 26, 2010), GAO found that the agency had acted reasonably in excluding the protester from the competition because of concerns about a biased ground rules organizational conflict of interest ("OCI") when protester had previously prepared a feasibility study in anticipation of a potential sole-source award upon which the agency relied to develop approximately 80% of the requirements for the competitive procurement at issue. GAO rejected protester's arguments that (i) at the time protester prepared the feasibility study, a competitive procurement was not anticipated and, therefore, the study could not affect an unanticipated competition; (ii) protester was unaware that the feasibility study might be incorporated into the requirements for the competitive procurement; and (iii) the feasibility study was released to all prospective offerors. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14113/15/2010 12:00:00 AMThe ASBCA decision in States Roofing Corp. (Jan. 19, 2010) reminds us that contemporaneously tracking the costs of preparing and negotiating REAs can be critical to recovering them from the government as contract administration costs. The ASBCA found that the contractor's REA proposal efforts included in-house labor, legal, and accounting costs that were properly classified as contract administration costs, but found inter alia that personnel did not track those efforts separately from other contract work and the contractor's post-hoc allocations were unreliable - leading the ASBCA to use a "jury verdict" approach and award less than 12% of the contractor's claim. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14103/12/2010 12:00:00 AMOn March 2, 2010, the SBA issued a proposed rule, with comments due in sixty days, aimed at implementing the statutory goal that 5% of federal contracting dollars go to women-owned small businesses ("WOSBs"). This rule provides for set-aside procurements for contracts under certain dollar thresholds ($5 million for manufacturing contracts and $3 million for other contracts) for WOSBs in the 83 identified industries in which they are underrepresented, a significant increase from the 4 industries identified in the 2008 proposed rule. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14093/11/2010 12:00:00 AMOn March 3, DoD issued a notice of, and requested comments on, proposed rules levying information security requirements for safeguarding unclassified "DoD information" and reporting security breaches when contractors and subcontractors may have such information "resident on or transiting" their information systems. The proposed rule not only mandates that contractors "shall provide adequate security to safeguard DoD information," but also (1) requires flowdown to subcontractors; (2) establishes extreme standards in some areas (e.g., "best level of security and privacy available"); (3) incorporates National Institute of Standards and Technology (NIST) standards in some areas, but not others; and (4) acknowledges that the contractor will still need to comply with all other applicable security standards, such as "CPI, PII, For Official Use Only, Privacy Act, ITAR, EAR, and HIPAA." http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14083/8/2010 12:00:00 AMWhen is sharing of investment strategies collusion? This question seems to be at the center of an inquiry by the Antitrust Division of the Department of Justice in connection with investment strategies shorting the value of the Euro. Recent press reports indicate that the Department of Justice has sent requests to several hedge funds in connection with their trades relating to the Euro. These requests were sent the same day the Wall Street Journal reported that portfolio managers of several large hedge funds attended an exclusive "idea dinner," where they predicted that the Euro's value - which already fell from $1.51 in December to $1.35 in late February - will likely reach parity with the dollar. The dinner was one of several informal dinners that New York-based research and brokerage firm Monness, Crespi, Hardt & Co. holds from time to time to allow managers to network and discuss trading ideas. ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14073/5/2010 12:00:00 AMOn February 17, DOD issued a class deviation implementing the prohibitions of the "Franken Amendment" to the 2010 Defense Appropriations Act restricting the use of arbitration clauses in employment contracts and will consider comments received within two weeks of publication date in the formulation of an interim rule incorporating the clause into the DFARS (http://www.acq.osd.mil/dpap/policy/policyvault/USA000476-10-DPAP.pdf). Under the new DFARS clause, 252.222-7999, which is only applicable to new non-commercial contracts or orders in excess of $1 million that utilize funds appropriated by the FY10 Act, contractors agree (1) not to enter into any agreement with any of its employees that require, as a condition of employment, that the employee agree to resolve through arbitration certain types of employment disputes; (2) not to enforce such clauses in existing contracts; and (3) for contracts awarded after June 17, 2010, to require covered subcontractors to comply with these requirements. http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14053/4/2010 12:00:00 AMOn March 2, 2010, Daiso Holding USA Inc., Daiso Seattle LLC and Daiso California LLC ("Daiso") reached a consent agreement with the U.S. Consumer Product Safety Commission ("CPSC") filed in the U.S. District Court for the Northern District of California. Daiso allegedly failed to comply with federal laws prohibiting excess levels of lead and phthalates in various toys and children's products. Daiso is also alleged to have failed to meet other federal requirements enforced by the CPSC on children's products. Prior to entering into the current decree, Daiso had received Letters of Advice from the CPSC in connection with violations found during port inspections. Some of these prior violations occurred prior to the enactment of the Consumer Product Safety Improvement Act of 2008 (CPSIA). Under the CPSIA, it is illegal to import, manufacture, distribute or sell products designed or intended primarily for children 12 and younger containing more than 300 ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14063/4/2010 12:00:00 AMRegence Group v. TIG Specialty Ins. Co., No. 07-1337-HA (D. Or.) The United States District Court in Oregon has issued two related orders that could have significant implications with respect to the sharing of information between ceding companies and their reinsurers. In the instant case, Regence Group ("Regence") filed suit against its insurer, TIG Specialty Insurance Company ("TIG"), seeking a declaration that TIG was obligated to pay defense and indemnity costs related to three underlying lawsuits. Two of the underlying suits involved RICO claims against Regence and other entities and the third case dealt with similar state law claims brought against Regence by a physicians group (the "underlying litigation"). During the course of the declaratory judgment action, Regence issued subpoenas to TIG's reinsurers (and one reinsurer's counsel), seeking a variety of documents that go to the heart of the reinsurance relationship, including (1) documents related to TIG's reinsurance contracts that ...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=14763/4/2010 12:00:00 AM