SUMMARY

The Massachusetts Attorney General’s Office (“AGO”) recently issued an Advisory that provides guidance on how it will interpret and enforce the state’s Independent Contractor Law. The law presumes that an individual is an employee, and an employer must satisfy each part of a stringent three part test to establish that the individual is instead an independent contractor: (1) the individual must be free from the employer’s control; (2) the individual must perform work outside of the usual course of business of the employer; and (3) the individual must be engaged in an independently established trade, occupation, profession or business. 

SUMMARY

Until now, most small tax-exempt organizations, defined as those with gross receipts of $25,000 or less per year, have not been required to file an annual information return with the Internal Revenue Service (the “IRS”). 

However, small tax-exempt organizations must now file an annual electronic information return – the Form 990-N, also known as the e-Postcard. This requirement covers all tax periods beginning after December 31, 2006. The e-Postcard must be filed no later than the 15th day of the 5th month following the end of the organization’s tax year. For example, an organization whose tax year ends December 31 must submit the e-Postcard by the following May 15.

SUMMARY

Despite the fact that securities fraud lawsuits involving auditors are said to be relatively few in number as a percentage of total new filings and new filings are below the historical average, auditors often come to be added as defendants, particularly in high-profile cases.1 In the past few years, for example, auditors have been named as parties in the five proceedings with the largest total dollar value settlements to date -- Enron, WorldCom, Cendant, Tyco and AOL Time Warner -- and in several other well-known actions including Global Crossing, Parmalat and Delphi. With the majority of all cases historically alleging accounting irregularities and over 90% of last year’s filings reportedly containing alleged misrepresentations in financial documents, suits against auditors are never far off.

This article reviews first the role of the auditor and reminds counsel of the benefits of understanding and educating the court regarding the role of the auditor, namely that the auditor does not prepare a company’s financial statements; rather, the auditor opines on the fair presentation of management’s financial representations based on the auditor’s testing those representations. This article then surveys three areas of law germane in suits against auditors: (1) scienter requirements with respect to auditors; (2) the scope of primary liability and “scheme” liability with respect to auditors; and (3) “one firm” theories asserted against international audit firms.

SUMMARY

Yesterday, Massachusetts made an award of treble damages mandatory for all violations of the Commonwealth’s wage and hour laws, including the wage payment statute and the overtime and minimum wage laws. The legislation is a reaction to a 2005 Supreme Judicial Court ruling, which had limited treble damage awards to situations involving “willful misconduct” by the employer. Under the new law, treble damages are required even if the employer made an inadvertent error or acted in good faith.

SUMMARY

The Prescription Drug Marketing Act was enacted in 1988 to establish, among other things, a system for tracking drugs through the manufacturing and marketing processes. implementing regulations regarding these pedigree provisions for prescription drugs have been delayed for years. The Food and Drug Administration has issued it’s own stay on implementation, and a recent lawsuit by prescription drug distributors over the scope of the pedigree requirements has contributed to the delay as well.

The resulting lack of clear of federal criteria for prescription drug pedigrees has created an opportunity for states to pass their own pedigree laws, leading to a patchwork of diverse, often conflicting, state standards. Prescription drug distributors find it increasingly difficult to comply with the multitude of state laws, thus the time is ripe for federal action to create uniform pedigree requirements.

SUMMARY

The U.S. Citizenship and Immigration Services (USCIS) announced today that it has received H-1B petitions in excess of both the regular 65,000 annual cap and the 20,000 limit for beneficiaries with a U.S. advanced degree. It will conduct a random selection process among all filings received by April 7, 2008 to determine which petitions will be processed. The “lottery” for US advanced degree petitions will be conducted first, and any petitions not selected will be included in the lottery for the 65,000 limit.

SUMMARY

Employers that require their employees to submit disputes to arbitration need to be aware of the U. S. Supreme Court’s recent decision in Hall Street Associates, L.L.C. v. Mattel, Inc. Although the case did not involve an employment dispute, the decision puts limits on the terms of arbitration agreements, including those used in the employment context.

SUMMARY

Included In This Update:

• United States Supreme Court Holds Food, Drug and Cosmetic Act Preempts State Law Claims Against Medical Device that Received Premarket Approval from Food and Drug Administration
• Massachusetts Appeals Court Decertifies Class of Mouthwash Purchasers Due to Differences Among Purchasers’ Exposure to, and Reliance on, Allegedly Deceptive Advertisements
• Massachusetts Superior Court Refuses to Certify Class of Buyers/Lessees of Vehicles that Included Twenty-Three Distinct Jacks, Finding Lack of Common Factual Issues, Predominance of Common Over Individual Issues and Superiority of Class Action Method of Adjudication Over Individual Claims
• Massachusetts Appeals Court Holds Alleged Failure to Warn Was Not Proximate Cause of Injury Because Plaintiff Did Not Read and Heed the Warnings that Were Provided
• Massachusetts Appeals Court Holds Failure to Move for Dismissal Within Reasonable Time Waives Pleaded Defense of Insufficient Service of Process

For more information about the Product Liability and Complex Tort Practice Group, please contact Dave Geiger.

SUMMARY

While marking products to indicate that they are patented is necessary to maximize your patent rights, a recent case highlights the importance of marking the products accurately.

SUMMARY

"Crossing the Chasm: A New Health System for the 21st Century" has been cited thousands of times in the effort to bring transformational change to the American healthcare system. Published by the Institute of Medicine in 2001, the report describes a “chasm” between the circumstances of today and the possibilities of the future.

SUMMARY

Health Canada released a draft guidance this week which would allow approval of “subsequent entry biologics” (SEB) based on an abbreviated complement of clinical data, provided the SEB is shown to be “similar” to a reference, approved biologic product.[1] While the U.S. continues to heatedly debate legislation which would create a pathway for abbreviated approval of biosimilars, or follow-on biologics, by the U.S. Food and Drug Administration (FDA), Canada is advancing its implementation of such a pathway with the release of the SEB draft guidance. The European Union has permitted approval of biosimilar products since 2005.

Like FDA guidance documents in the U.S., Health Canada guidance documents do not have the force of law in Canada. However, the draft guidance indicates that the Canadian Food and Drug Regulations will be amended to provide “a comprehensive legal basis” for the regulation of SEBs and that in the interim, the draft guidance will provide a flexible SEB regulatory framework. The Canadian Minister of Health also plans to publish additional guidance documents that will further elaborate information and data requirements for specific classes of SEBs. Public comments on the SEB draft guidance are due April 16. 

SUMMARY

One week before the expected onslaught of H-1B petition filings from employers, the U.S. Citizenship and Immigration Services (“USCIS”) issued an Interim Rule which is intended to the promote the “fair and orderly administration” of the FY 2009 annual limit on H-1B petition filings. The following are the highlights from the Interim Rule:

SUMMARY

Two recent developments, one by the Massachusetts Department of Environmental Protection (“MassDEP”) and one by ASTM International (“ASTM”), underscore the importance of addressing indoor air contamination that results when soil or groundwater contamination migrates as vapor.  On the regulatory side, MassDEP has emphasized its focus on this issue by issuing a flurry of draft guidance and procedures.  From an industry perspective, ASTM recently released a new industry standard for assessing indoor air contamination at properties that are the subject of real estate transactions.  As MassDEP’s draft standards are regulatory in nature and appear stricter than the ASTM standard, the ASTM standard may be of limited relevance here in Massachusetts.  However, it may serve to set the standard of care in states where Superfund regulations on this topic are not as detailed as those in Massachusetts.

SUMMARY

Key Members of the House Committee on Energy & Commerce have introduced bipartisan legislation which would create an abbreviated approval pathway for biosimilars or follow-on-biologics (FOBs). The Pathway for Biosimilars Act, H.R. 5629 introduced by Congresswoman Anna Eshoo (D-CA) and committee ranking member Joe Barton (R-TX), enhances the prospects for congressional action in 2008, following Senate HELP Committee action last year on S. 1695, a comparable bipartisan bill introduced by Senators Kennedy, Enzi, Clinton and Hatch. 

SUMMARY

The Legislature is reviewing the proposed $1 billion life sciences incentive program. In addition, Gov. Deval Patric has placed "permit streamlining" at the top of his agenda, moving various development project through an expedited review process.

SUMMARY

Yesterday, the U.S. Environmental Protection Agency published its long-anticipated formal determination on California's request to waive federal preemption of its automobile emissions standards for greenhouse gas emissions ("GHGs"). Although the ultimate fate of the EPA's determination will almost certainly be decided by the courts, the dispute between California and the EPA highlights the tension between state and federal efforts to regulate GHGs.

SUMMARY

Last week, the U.S. Supreme Court held that employees need not file a formal charge with the Equal Employment Opportunity Commission (“EEOC”) before bringing suit against their employer for age discrimination. In Federal Express Corp. v. Holowecki, the Court concluded that a group of employees could proceed in court on their claims under the Age Discrimination in Employment Act (“ADEA”) even though none had a filed a formal charge of discrimination with the EEOC. Instead, the Court found that documents filed by one of the employees with the EEOC, which identified the employer and set forth general allegations of age discrimination, constituted a “charge”, despite that the employer had no notice of the filing.

SUMMARY

The Supreme Court’s decision last week in Sprint/United Management Co. v. Mendelsohn, opens the door to the introduction in discrimination cases of so-called “me, too” evidence — testimony by non-party employees who also claim to have been discriminated by the employer defendant. The decision allows the admission of such testimony even when the non-parties claim discrimination at the hands of persons who played no role in the adverse employment decision challenged by the plaintiff.

SUMMARY

This article was originally published in the ACEF Newsletter.

A good term sheet sets up the business for success. While we do include a variety of terms that may be useful at various times, everyone needs to recognize that the principal reason for a term sheet is to outline the participants’ understanding, not necessarily to set up a plan to enforce in court every right at every time.

When it comes time to negotiate terms, I encourage angel investors and entrepreneurs to keep these points in mind:

• How is everyone going to make money from the deal?
• How do you want to do the next round of financing because there will almost certainly be another round?
• What is your exit strategy?

Success and prosperity is a good theme; there are ways to draft the documents along those lines.

For purposes of this discussion, I will exclude valuation as a separate topic, recognizing its extreme importance and complexity and that it is more a business than legal issue.

SUMMARY

Originally published February 2007

As was recently reported in these pages, many New England technology companies are hiring, creating an increasingly tight labor market.  When competition for workers heats up, litigation often ensues, as employers seek to send a strong message to both their competitors and employees that they are serious about protecting their interests.

 Each hiring event is unique, but the following guidelines can help tech companies avoid common pitfalls as they recruit and hire new employees.