Foley Hoag LLP

SUMMARY

The Affordable Care Act (§ 9008, as amended by § 1404 of the Reconciliation Act), established an annual fee that will be imposed on covered entities that manufacturer or import branded prescription drugs.

The Department of Treasury recently issued guidance on this new annual fee, available at http://www.irs.gov/pub/irs-drop/n-10-71.pdf . The guidance describes a proposed methodology for calculating the fee, how the IRS will use the methodology to provide covered entities with a preliminary 2011 fee calculation, and solicits public comments. Comments must be submitted by June 2, 2011.

IRS Form 8947, which is referenced in the guidance, is available at http://www.irs.gov/pub/irs-pdf/f8947.pdf

SUMMARY

A year and a half has passed since Congress sought to make document productions and associated pre-production privilege review less costly and less burdensome with the passage of Federal Rule of Evidence 502. In this column, we examine the new rule, describe what parties can do to maximize their protection under the rule, and highlight the potential risks the rule has left unaddressed.

SUMMARY

Foley Hoag LLP publishes this quarterly Update concerning developments in Product Liability and related law of interest to product manufacturers and sellers.

Included In This Update:

• First Circuit Affirms Summary Judgment for Vinyl Chloride Suppliers, Holding Sophisticated User Doctrine Only Required Analysis of Decedent’s Employer’s Knowledge of Product’s Risks, Not Whether Suppliers Reasonably Relied on Employer to Transmit Warnings to Employees

• First Circuit Reverses Summary Judgment for Beryllium Suppliers, Holding Jury Could Find Plaintiff Reasonably Did Not Know Likely Cause of Her Harm Until Limitations Period and Sophisticated User Doctrine Does Not Apply Because Jury Could Find Plaintiff’s Employer Did Not Know Particulars of Beryllium Risk

• Massachusetts Federal District Court Finds Jurisdiction Over Complaint Against Fetal Gender Detector Manufacturer and Distributor, Holding Counsel’s Affidavit Showed Amount in Controversy Exceeded Jurisdictional Minimum Under Class Action Fairness Act and Plaintiffs Alleged Defendant Had Opportunity to Cure Warranty Breach as Required for Magnuson-Moss Act Jurisdiction

• Massachusetts Federal District Court Remands Asbestos Failure-to-Warn Claims to State Court, Holding Defendants Demonstrated No Colorable Federal Contractor Defense Where They Did Not Show Government Prescribed Content of Warning Rather Than Simply Remaining Silent

• Massachusetts Superior Court Holds Order Requiring Nursing Home to Disclose Non-Party Patient’s Medical Records Relevant to Litigation Does Not Violate Health Insurance Portability and Accountability Act (HIPAA) or Massachusetts Unfair or Deceptive Practices Statute

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

SUMMARY

Foley Hoag LLP publishes this quarterly Update concerning developments in Product Liability and related law of interest to product manufacturers and sellers.

Included In This Update:

• Massachusetts Supreme Judicial Court Holds Sale Terms Mandating Individualized Arbitration of Claims Violate Public Policy of Unfair and Deceptive Practices Statute Favoring Classwide Resolution of Small-Value Consumer Claims
• Massachusetts Federal District Court Holds Requirement that Electronic Documents be Produced as Kept in Usual Course of Business Requires Production of Files in “Native” Format But Does Not Require Producing Party to Scan Electronic Documents for Optical Character Recognition, Refuses to Require Blanket Production of Electronic Documents’ Metadata
• Massachusetts Federal District Court Holds Plaintiffs’ Pharmaceutical Causation Experts’ Opinions Admissible Because Based on Extrapolation of Collective Epidemiological Study to Drug at Issue, Evidence of Biological Plausibility and Adverse Event Reports
• Massachusetts Federal District Court Denies Certification of Putative Class of Consumers and Third-Party Payors Alleging Fraudulent Marketing of Drug Because Causation Could Not Be Demonstrated by Classwide Statistical Evidence and Hence Common Issues Regarding Marketing Would Not Predominate Over Individual Issues of Causation
• Massachusetts Federal District Court in Actions Alleging Off-Label Promotion of Drug Dismisses Fraud Claims For Failure to Allege Physicians’ Reliance on a Particular Misrepresentation, Refuses to Dismiss Fraudulent Concealment Claims as Duplicative of Failure-to-Warn Claims Because of Scienter Requirement of Fraudulent Concealment

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

SUMMARY

Foley Hoag LLP publishes this quarterly Update concerning developments in Product Liability and related law of interest to product manufacturers and sellers.

Included In This Update:

• United States Supreme Court Holds State Law Failure-to-Warn Claims Involving Prescription Drugs Not Preempted by FDA Approval of Warnings Absent Clear Evidence FDA Would Have Rejected Plaintiff’s Proposed Warning
• First Circuit Holds Class Action Fairness Act Requires Removing Defendant To Demonstrate “Reasonable Probability” That Amount In Controversy Exceeds $5 Million
• First Circuit Holds “Home State” Exception to Federal Jurisdiction Under Class Action Fairness Act Does Not Require Consideration of Citizenship of Class Members in Other Class Actions Arising Out of Same Factual Nucleus
• Massachusetts Supreme Judicial Court Holds “Light” Cigarettes Class Action Not Preempted by Cigarette Labeling and Advertising Act Based on United States Supreme Court Ruling, Not Subject to Chapter 93A Because FTC Consent Decree Did Not Affirmatively Permit Defendant’s Statement
• Massachusetts Federal District Court Dismisses Putative Class Action Against Manufacturer of Recalled Heartworm Medication Based on Economic Loss Rule and Plaintiff’s Inability to Show Compensable Loss Where She Received Product’s Expected Benefit

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

SUMMARY

Trade secrets can be a valuable component of an intellectual property (IP) portfolio, whether as a complement to patents or as an alternative. Companies benefit from an IP portfolio that matches the unique benefits of trade secrets and patents to the types of information they seek to protect. Trade secret protection can be available immediately, without going through a government agent, whereas a patent is available only after an application to and approval by the government. And unlike patents, trade secrets provide IP protection of potentially infinite duration. Trade secret protection is also available for a broad array of information for which patents are not available.

SUMMARY

Delaware has added two new sections to the General Corporation Law, effective August 1, 2009. While the legislature appears to be concerned about improving shareholder access to proxy materials, the effect of these changes may not be clear for a while.

SUMMARY

By an amendment effective August 1, 2009 to section 213(a) of its General Corporation Law, Delaware has provided a way for corporate boards to avoid a problem sometimes referred to as “empty voting.” The purpose of the change is to better align shareholders’ voting rights with their actual economic interests.

SUMMARY

Effective August 1, 2009, Delaware has amended section 145(f) of the Delaware General Corporation Law to address the problem created by the Delaware Chancery Court’s recent decision in Schoon v. Troy Corp., 948 A.2d 1157 (Del. Ch. 2008).

SUMMARY

Excerpt:

Q: In the course of doing this year's audit, our independent auditor found a problem with our previously issued financial statements. What do we do now?

A: You need to know more. You do not have to restate your financial statements unless they are materially wrong, although bear in mind that the Securities and Exchange Commission (SEC) has said that materiality can be “qualitative” as well as “quantitative.” See Staff Accounting Bulletin No. 99.

Work through the potential issues and determine what, if anything, needs to be restated. Be sure that your independent auditor considers possible accounting alternatives to a restatement, like a cumulative catch-up. Also, you need to understand why the problems occurred; evidence of fraud, for example, will surely call for additional action. Once you have reason to believe that there is a material error, you should shut down trading in the company's securities by insiders. You may also have to suspend outstanding shelf registration statements, if there are any.

Other questions include:

• Okay, after reviewing everything, the Audit Committee has indeed concluded that some of our previously issued financial statements should no longer be relied on. And, it looks like we are going to be delayed in filing our Annual Report on Form 10-K. What do we do?
• What if we cannot file our periodic reports within the Rule 12b-25 grace period?   
• What happens when my periodic reports are late?
• What else do I need to be thinking about during this process?

SUMMARY

Foley Hoag LLP publishes this quarterly Update concerning developments in Product Liability and related law of interest to product manufacturers and sellers.

Included In This Update:

• United States Supreme Court Holds Federal Cigarette Labeling and  Advertising Act Does Not Preempt State Law Claim Alleging Unfair and  Deceptive Advertising of "Light" Cigarettes
• Massachusetts Supreme Judicial Court Affirms Denial of Certification  of Nationwide Class Based on Lack of Opt-Out Rights Under Massachusetts  Law, Affirms Denial of Statewide Class Based on Dissimilarities Among  Class Members as to Statute of Limitations Defense
• Massachusetts Federal District Court Holds Class Counsel Fees in  Claims-Made Settlements Will Be Awarded By Reference to Value of  Benefits Actually Claimed By Class Members, Rather than Maximum Possible  Benefits
• Massachusetts Federal District Court Dismisses Claims Against  Missile System Manufacturer Because United States Army's Successful  Assertion of State Secrets Privilege Over System's Technical  Specifications and Other Information Prevented Manufacturer from  Presenting Fair Defense
• Massachusetts Superior Court Grants Summary Judgment For Crane  Manufacturer Because Crane Owner's Discarding of Allegedly Defective  Components Prevented Plaintiff From Proving Claims

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

SUMMARY

As a corporate decision maker, you are responsible for enhancing profitability, improving your organization’s effectiveness and achieving ongoing business success. Our goal is to develop a relationship with your organization, so we can become a partner in your efforts. As part of our relationship, we provide counsel on ongoing business matters, as well as for extraordinary issues that unexpectedly arise. We strive to apply our experience and legal skills in a way that adds maximum value to your enterprise.

We began our business practice working exclusively with U.S.-based companies but, over decades of serving our clients’ needs, we’ve grown along with them. Today, our clients reflect the increasing importance and influence of globalization; and our work often requires a global perspective and understanding of multinational issues.

SUMMARY

Excerpt:

Q: My company just filed a Chapter 11 bankruptcy reorganization proceeding. Our financial statements are a mess. We need to save every penny. Is the company excused from filing 10–Qs, 10–Ks and 8–Ks while we're in bankruptcy?

A: Unfortunately, no. Being in bankruptcy does not excuse you from making regular SEC filings.

Other questions include:

• Well, if we have to make some filings, is there some way I can appeal for relief to the SEC?
• If the SEC lets us modify our reporting requirements, what's "normal"? In other words, what's the least we are likely to be permitted to file? After we come out of Chapter 11, do we immediately have to be in full compliance? Any grace period?  
• While we are in bankruptcy, what's the effect of modified reporting on short-form registration statements, like S–8 and S–3? And can my officers and directors, and holders of privately purchased stock, still rely on Rule 144 if we are filing modified reports, or is that not possible?

SUMMARY

Excerpt:

Q: Has the situation on Wall Street made the current climate untenable for companies seeking funding?

A: No. While the threshold may be higher and funding sources more difficult to identify, they are still available. It depends on the company, its industry, its business model, its overall health and its operations. Creative companies will look for ways to raise capital in unconventional ways, or to make existing resources stretch longer than originally planned. But it is definitely an investor friendly environment, in which the lenders and venture capitalists who have money to put to work can be more selective and more demanding about the prices and other terms they can extract from issuers.

Other questions include:

• What are the industries likely to maintain their health and the activity during this time? Where do you see deals happening?
• What about debt financing? I heard that debt markets were completely closed.
• How is the crisis affecting due diligence? What should I expect to encounter?
• Where do IP assets fit into today’s dealmaking climate?
• I read that M&A is very slow. Is that true?

SUMMARY

On Wednesday, October 22, 2008, the Federal Trade Commission issued an Enforcement Policy Statement that it will delay some elements of enforcement of recent “Red Flags” regulations until May 1, 2009, instead of the original November 1, 2008 date.

SUMMARY

In light of the turmoil currently affecting the world securities markets, on Thursday, October 16, 2008, NASDAQ announced that it has temporarily suspended enforcement of its rules requiring listed companies to maintain a minimum bid price of $1.00 and a specified minimum market value of publicly held shares. The suspension applies to shares of common stock, as well as other securities, including preferred stock, American Depository Receipts and limited partnership interests... (continues)

SUMMARY

Foley Hoag LLP publishes this quarterly Update concerning developments in Product Liability and related law of interest to product manufacturers and sellers.

Included In This Update:

• Massachusetts Federal District Court Grants Summary Judgment Against Failure-to-Warn Claim Involving Wall Heater Because Danger was Open and Obvious, and Against Design Defect Claim for Lack of Expert Testimony

• Massachusetts Federal District Court Remands Pharmaceutical Failure-to-Warn Claim to State Court, Holding Defendant’s Argument that Claim Challenged FDA’s Authority to Approve Warning Raised Preemption Defense Rather than Demonstrated that Claim Arises Under Federal Law

• Massachusetts Appeals Court Holds Employer’s Corporate Parent Cannot Be Held Vicariously Liable for Employer’s Allegedly Negligent Conduct Toward Employee Under Respondeat Superior Theory Where Suit Against Employer was Dismissed With Prejudice

• Massachusetts Appeals Court Reverses Judgment for Plaintiff on Chapter 93A Claims Based on Inadequate Notice Where Trial Court Did Not Construe Complaint to Allege Chapter 93A Claims Until First Day of Trial

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

SUMMARY

Borrowers Need to Monitor Whether to Elect Prime Rate rather than LIBOR under Credit Facilities

U.S. Companies that borrow under bank credit facilities that provide for the borrower to elect payment of interest at either a LIBOR-based rate (sometimes called a "Eurodollar" loan) or a Prime Rate-based rate (sometimes called a "Base Rate" loan) need to be aware of a significant development resulting from the recent turmoil in the world’s credit markets...

SUMMARY

Foley Hoag LLP’s interdisciplinary team counsels and protects the interests of its clients facing new realities, challenges and risks framed by today’s tumultuous economic and market conditions. By maintaining an active and engaged dialogue with our clients during this period of economic distress, our lawyers are better able to adapt to the changing legal needs of clients affected in the short term. More importantly, our immersion in their businesses and industries enables our lawyers to provide sound, strategic counsel to protect our clients’ interests in the longer term. The Economic Crisis Team delivers forward-thinking advice, focusing on long-standing core, integrated strengths of the firm.

Topics include:

• Financial investigations, enforcement proceedings and litigation
• Federal and state securities regulation
• Deal-making, corporate finance and investment restructuring
• Bankruptcy, corporate reorganization and financial disputes

SUMMARY

Foley Hoag LLP publishes this quarterly Update concerning developments in Product Liability and related law of interest to product manufacturers and sellers.

Included In This Update:

• Massachusetts Supreme Judicial Court Holds Motor Vehicles’ Failure to Comply with Applicable Safety Regulations Constitutes Injury For Purposes of Unfair or Deceptive Practices Statute Even Where Plaintiffs Suffer No Physical Injury or Financial Loss; Also Adopts Heightened Pleading Standards
• Massachusetts Federal District Court Remands Asbestos Failure-to-Warn Claims to State Court Where Affidavits Failed to Demonstrate Colorable Federal Contractor Defense
• Massachusetts Federal District Court Upholds Removal of Asbestos Failure-to-Warn Claims to Federal Court Under Federal Officer Removal Statute Because Defendant Established Colorable Military Contractor Defense
• Massachusetts Federal District Court in Tractor Back-Over Case Grants Summary Judgment Against Failure-to-Warn Claims Because Plaintiff Did Not Read Warnings, Grants Summary Judgment Against Punitive Damages Claims, Finds Genuine Issues of Fact Regarding Design Defect Claim
• First Circuit Enforces Contractual Provision Relieving Manufacturer in Commercial Case of Liability for Negligent Design, Manufacture and Advertising of Goods
• Massachusetts Federal District Court Holds Medical Journal’s Interest in Confidentiality of Peer Review Process Outweighs Defendant’s Need for Discovery of Communications Between Journal Editors and Authors

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