Legislative and Regulatory Update
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In This Issue [No.102] October 30, 2004
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To keep you informed about the latest Legislative and Regulatory information manupatra.com publishes this e-roundup highlighting the recent changes brought about by the Notifications/Acts/Bills /Ordinances etc.
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Cases
Source: Westlawinternational.com
Criminal Justice: Improbability of drug defendants' accounts could not be basis for denial of safety valve
Two drug defendants made the proffer of information required for the application of the safety valve exception to statutory minimum sentences. They participated in interviews with the government, provided an account of their involvement in the offense, which addressed all essential points, indicated a willingness to answer all questions, and did so answer. The government did not present evidence that the proffers were incomplete or untruthful, but merely asserted that they were improbable. To deny the safety valve because of a perceived improbability of a defendant's proffer-perceptions would introduce a degree of arbitrariness that would be inconsistent with the federal sentencing regime.
U.S. v. Alvarado-Rivera
Torts: Claims against hospital that performed drug test sounded in negligence rather than medical malpractice
Claims brought by discharged employee against hospital that performed drug tests for employer sounded in negligence rather than medical malpractice. The employee claimed that the hospital's drug test incorrectly indicated that she had used methamphetamine. The hospital was not providing the employee with health care services by performing the drug test as was required for a medical malpractice claim. Therefore, the employee was not required to file a health care affidavit and the two-year statute of limitations for malpractice actions did not apply.
Meekins v. St. John's Regional Health Center, Inc.
Government: Judicial candidate could not use purported new middle name
An independent candidate for judicial office in an Ohio county was not entitled to use, on the general election ballot, the new middle name, which he purportedly acquired by common-law name change. The name change would avoid an unfavorable result in the use of an abandoned name or would secure an advantage from the deceptive use of a new name. The candidate had already run unsuccessfully in six elections using his original middle name, his middle initial, or no middle name or initial. The purported new middle name was the same as the last name of the county auditor and four judges in the county in which the candidate was seeking judicial office.
State ex rel. Miller v. Cuyahoga Cty. Bd. of Elections
Litigation: Venue of challenge to provisional ballot procedure was proper in district outside state capital
Venue of an action against Michigan's Secretary of State, alleging that Michigan's intended provisional ballot procedure would violate the Help America Vote Act (HAVA), was proper in the Eastern District of Michigan, notwithstanding that the state capital, where the election directives were drafted, was located in the Western District of Michigan. The Secretary had an obligation to perform official duties throughout the State, and thus "resided in" the Eastern District. Furthermore, it was not proper to transfer venue to the Western District for the convenience of the parties and witnesses. No inconvenience resulting from litigating in the State's more populous district reasonably could be claimed by a state official who had a mandate to administer elections throughout the State and operated an office in each of its counties.
Bay County Democratic Party v. Land
Estate Planning and Probate: Exemplary damages could be awarded in action to recover trust funds misappropriated by former trustee
An action in which a successor trustee of a supplemental care trust sought to recover trust funds misappropriated by a former trustee, was legal in nature and, thus, exemplary damages could be awarded. The former trustee allegedly breached his fiduciary duty and negligently made improper loans from trust corpus and failed to file required annual accountings with the court. Although actions by beneficiaries against existing trustees are generally considered equitable, when a trustee is under a duty to pay money immediately and unconditionally, the action to recover that money is legal.
Peterson v. McMahon
Government: Election statute governing withdrawal of candidates was unconstitutional
An election statute governing the withdrawal of candidates was declared unconstitutional. The statute, which provided that the "The Department of State may in its discretion allow such a candidate to withdraw after the 42nd day before an election" if the candidate gives written notice that he or she will not accept the office, was an unconstitutional delegation of legislative power to the Department of State, as it contained no standards to guide the Department in the exercising its discretion. As the unconstitutional sentence could not be severed from the rest of the subsection, the entire subsection was unconstitutional.
Department Of State, Division Of Elections v. Martin
Labour and Employment: Employee's action to recover deducted wages was preempted by ERISA
An employee's action, in which the employee sought to recover wages that his employer had deducted from the employee's pay in an attempt by the employer to recover payments that the employer alleged had been improperly paid to the employee under an employee sickness and accident disability benefit plan, was preempted by the federal Employee Retirement Income Security Act (ERISA), even though the state wage payment and deduction statutes under which employee sought relief did not directly address ERISA or any sort of benefit plan. The disability benefit plan met the definition of an employee benefit plan under ERISA. The preemption language of ERISA was broad and sought to preempt state laws that even "relate to" employee benefit plans. If the state statutes were applied to address the employee's grievances regarding benefits from the disability benefit plan, such application of the statutes would serve to regulate and "relate to" an employee benefit plan.
Cox v. SBC
Energy and Utilities: FERC properly based mandatory licensing jurisdiction on finding of river's navigability
A finding by the Federal Energy Regulatory Commission (FERC) that a river was "navigable," for purposes of the Federal Power Act, was supported by substantial evidence, and thus FERC's assertion of mandatory licensing jurisdiction over a 19th century hydroelectric project on the river was proper. A FERC-sponsored canoe expedition on the river was accomplished with few problems, relatively easy portages, and a minimum of difficulty.
Knott v. F.E.R.C.
Government: Connecticut Governor was not immune from subpoena regarding impeachment investigation
The Governor of Connecticut was not categorically immune, on separation of powers principles, from the legal obligation to testify before the Connecticut House of Representatives' Select Committee of Inquiry, pursuant to a subpoena from the Committee in connection with the Committee's investigation of whether grounds existed for impeaching the Governor. The Connecticut Supreme Court issued a full opinion explaining its reasoning, after having earlier issued a truncated opinion when it heard, on an expedited basis, the appeal by the Office of the Governor from a trial court's denial of the Office's motion to quash the Committee's subpoena.
Office of Governor v. Select Committee of Inquiry
Government: Requiring provisional-ballot voters to furnish numerical identifiers to poll workers was reasonable
A state's requirements for provisional-ballot voters comported with the Help America Vote Act (HAVA). The state required that first-time voters who registered by mail without providing documentary proof of I.D. and who received provisional ballots due to their continued failure to present such proof at the polling place had to orally provide a numerical identifier, i.e. a driver's license number or the ending digits of their social security numbers, to poll workers by the close of polling. This requirement was reasonable. The state's interest in fraud prevention outweighed the possibility that a small number of provisional ballots would not be counted because the voters were unable to furnish the numerical identifiers on time.
The League of Women Voters v. Blackwell
Labor and Employment: Evidence supported finding claimant was concurrently employed
Substantial evidence supported an ALJ's finding that a workers' compensation claimant, who sought workers' compensation benefits from the discount store that employed claimant, was concurrently employed as a tax consultant by a tax preparation firm, as would entitle the claimant to combine the wages earned from all employers as if earned from the employer liable for compensation. The discount store knew that the claimant worked for the tax preparation firm, and a letter from the claimant's manager at the tax preparation firm acknowledged that the claimant worked under a contract for hire with the tax preparation firm. Although the bulk of the claimant's work for the tax preparation firm was during the federal income tax period from mid-January to mid-April, the claimant was on-call for the tax preparation firm during the rest of the year, and she received compensation from the tax preparation firm for her efforts throughout the year.
Wal-Mart v. Southers
Family Law: preponderance of evidence was State's burden of proof for determining whether termination of parental rights was in child's best interest
A preponderance of the evidence, and not clear and convincing evidence, was the burden of proof that the State bore at a hearing to determine whether the termination of a mother's parental rights, after a finding that she was unfit, was in the best interests of the child. The Supreme Court rejected the State's assertion that "sound discretion" was the burden of proof. Sound discretion did not identify a standard of proof, but merely identified the deference due the trial court in its evidentiary findings. The Supreme Court rejected the mother's claim that clear and convincing proof, which is the burden of proof in determining parental unfitness, also applied to the best-interests determination. Once the trial court found that the mother was unfit, the mother's liberty interest in preserving the family relationship ceded to the child's interest in a stable and secure home. Furthermore, a clear and convincing evidence standard would unduly interfere with the State's parens patriae interest in protecting the child's welfare.
In re D.T.
Labor and Employment: Evidence did not support wrongful termination claim based on employee's complaints of allegedly illegal billing practices
A former employee could not recover against her employer and the employer's parent for wrongful termination based on her complaints regarding allegedly illegal billing practices conducted by another, under the limited exception to the employment-at-will doctrine. The employee was only ordered to summarize the reports that were generated by the billing department, which she did not refuse to do. However, the employee did have a legally sufficient claim based on the employer's order that she concoct a story regarding an office manager's accounting practices in order to provide sufficient grounds for the termination of the office manager who had filed a sexual harassment claim. The employee refused to do so. Therefore, her termination could have been based on her refusal to commit perjury. However, remand was required for a new trial because a single broad-form jury question that included all theories of liability, three of which were legally insufficient, rendered it impossible to determine whether liability was imposed solely on one of the insufficient theories.
Laredo Medical Group Corp. v. Mireles
Government: Absentee ballots for special general election were void
Absentee ballots sent to voters by the Board of Elections for a special general election for county legislature, based solely upon the voters' absentee ballot applications for the prior regular general election and without regard to whether the voters had applied for an absentee ballot for the current election, were void. By sending absentee ballots to voters who had not applied for them, the Board failed to determine if the voters were qualified to cast absentee votes in the special election, as required by statute. Even if the error was not intentional, and voter reliance on the Board's mistake was understandable, counting such votes would effectively relieve election officials of their obligation to adhere to the law.
Gross v. Alban County Board of Elections
News
Forcible marriages would soon be a crime
According to recent statistics, almost 1,000 cases of suspected forced marriages have been dealt with since 2000, mainly involving links to south Asian countries. Therefore the UK government is trying to make forcible marriages a specific offence, to help young people coerced into relationships. In addition, they are also planning to raise the minimum age that a foreigner can enter the UK as a spouse from 16 to 18. Further, the Home and Foreign Offices will establish a joint forced marriage unit to combat the problem. At present, those guilty of forcing someone into marriage can be prosecuted for kidnap, false imprisonment or rape.
Restructuring of Royal Dutch and Shell
The Royal Dutch and Shell Group have announced a new restructuring plan, which aims at combining the separate Dutch and English companies into a single group, Royal Dutch Shell. The new group will not only have a single board and chairman, but also a separate chief executive, accountable to one group of share holders, with greater improved controls and risk assessment.
Daimler Chrysler has recently announced that it is currently under investigation by the Securities and Exchange Commission over alleged violations of the Foreign Corrupt Practices Act, which bars US Companies from bribing foreign officials and requires compliance controls. The allegations came to light when a fired employee filed a whistleblower complaint with the Department of Labor under the Sarbanes-Oxley Act. Without putting a dollar figure on the company's possible exposure, the automaker disclosed the investigation in its third-quarter earnings statement.
Continuing Investigation by the Securities and Exchange Commission
Company accused of supporting bids
New York Attorney General Eliot Spitzer has recently accused Marsh & McLennan Co. of supporting bids for its client’s insurance contracts. The case is likely to be settled by payment of a fine of $500 million. The settlement will most likely include disgorgement of some of the commissions that the insurance giant received from other insurance companies for steering business their way, which Spitzer is demanding. In addition to a suit, civil class-action suits and other private litigation are also expected which could drive the total costs to Marsh to well over $1 billion.
Record number of false applications to UK Universities
The Universities and Colleges Admissions Service has recently claimed that it has detected over 1,000 fake qualifications in 2004, more than twice the usual number. Further they said that they had received 480,000 applications, amongst which many applications came from people giving the same home address. The cancelled applications especially included groups of 200 from China and Pakistan. The Universities and Colleges Admissions Service has further reiterated that “it does not make any admission decisions; this is purely the responsibility of the relevant university or college. But, there may be cases where a university or college may inform them of concerns and in such cases, they carry out all the relevant investigations as regards the applications. In cases, if there is clear evidence of fraud the applications will be cancelled.”
Importing of cheaper drugs despite a federal ban
Missouri Governor Bob Holden has lately announced that his state would be joining Illinois and Wisconsin in a program to import cheaper prescription drugs from Canada and Europe, despite a federal ban on the imports. The I-SaveRx program has been launched this month to offer consumers in participating states savings of up to 50% on approximately 100 medications. At a press conference Governor Holden further reiterated that “The federal government’s refusal to stand up to the drug companies has penalized our citizens for too long. This is a program that will not only help Missourians, but will also help force a change in drug policies in this country.”
Beware of the ingredients contained in any food product
In a recent development, the Vegetarian Society has warned veggies to look closely at food labels because some sweets might contain ingredients made from animals. Recently there were cases where some red-coloured goodies (referred to as carmine or E120 on food labels) that looked vegetarian, included colouring made from crushed cochineal beetle shells. They further added that some chewy sweets included gelatine, which was made from boiling animal parts.
Guidelines for Investor Protection Fund/Customer Protection Fund at Stock Exchanges
Circular No. MRD/DoP/SE/Cir-38/2004 Dated 28.10.2004: In the view of the fact that the Stock Exchanges were following varying practices with respect to the setting up, management of and the disbursements from the IPF/CPF, SEBI, after a due consultative process with the public, has issued the guidelines for Investor Protection Fund/Customer Protection Fund at Stock Exchanges, so as to insure the uniformity.
Phase II, Sitapura near Jaipur Notified as Special Economic Zone
Notification No. 112/2004-NT Dated 18.10.2004: Vide the said notification Phase II, Sitapura Special Economic Zone at Jaipur, was specified as a "special economic zone", with effect from 19th day of October, 2004.
Entry of Regional Rural Banks into Insurance Business
Circular No. RPCD.CO.RRB.BC.No.51/03.05.33(G)/2004-05 Dated 27.10.2004: This circular addressed the issue of permitting Regional Rural Banks to insurance business. RBI has now decided to permit RRBs to undertake insurance business as corporate agent without risk participation subject to their fulfilling of certain terms and conditions. First and foremost, the RRB should have a positive net worth and the bank should have complied with the prudential norms on income recognition, asset classification, provisioning, investment norms, exposure norms. Also, the bank should have a good track record as regard to conduct and should be complying with the IRDA regulations.
Mid-term Review of Monetary and Credit Policy for the Year 2004-05
Dated 26.10.2004: This mid-term review of Monetary and Credit Policy for the Year 2004-2005, consisted of three parts - (I) Mid-term Review of Macroeconomic and Monetary Developments in 2004-05; (II) Stance of Monetary Policy for the Second Half of 2004-05; and (III) Financial Sector Reforms and Monetary Policy Measures.
Closure of Inter-Bank Cheque Clearing System in Mumbai
Circular No. PAD.MRO.CH.No.3214/12.02/2004-05 Dated 19.10.2004: As, most of the inter-bank transactions in Mumbai is now being settled on the Real Time Gross Settlement (RTGS) System platform, hence, the Inter-Bank Cheque Clearing System in Mumbai has become virtually redundant, and so would be closed with effect from 1st of November, 2004.
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