Epstein Becker Green Obtains Dismissal of Discrimination Suit Against Charitable Organization
On May 1, 2013, Epstein Becker Green obtained a summary judgment victory in the U.S. District Court for the Southern District of New York on behalf of a client, one of the largest not-for-profit charitable organizations in New York City. The litigation was brought by the former Chief Financial Officer ("CFO") of the client who alleged that his termination for performance issues was unlawfully motivated by age and gender bias, as well as retaliation for engaging in a protected activity relating to an adverse employment action. The former CFO filed a charge with the Equal Employment Opportunity Commission, which was dismissed, and subsequently commenced litigation in federal court. The plaintiff's complaint asserted violations under Title VII of the Civil Rights Act of 1964, the New York State Human Rights Law, the New York Executive Law, and the New York City Human Rights Law.
The District Court dismissed the case in its entirety based upon the undisputed evidence, which demonstrated that the plaintiff was terminated for legitimate non-discriminatory reasons. In his decision, Judge Vincent Briccetti noted that there was insufficient evidence from which a reasonable jury could infer discrimination.
Kenneth J. Kelly and Diana Costantino Gomprecht led the Epstein Becker Green defense team in this litigation. Forbes v. Lighthouse International, 11 CV 7065, 2013 WL 1811960 (S.D.N.Y. May 1, 2013).
Epstein Becker Green Convinces Plan Review Committee to Overturn Termination of Participating Physician Group Services Agreement
On April 29, 2013, Epstein Becker Green achieved a major victory when the Plan Review Committee of L.A. Care Health Plan ("L.A. Care") found that L.A. Care's termination of the Participating Physician Group Services Agreement ("Agreement") with Epstein Becker Green client Accountable Health Care ("AHC") was procedurally unfair.
L.A. Care terminated the Agreement under a "without cause" provision and did not contend that AHC was in breach of the Agreement. Under Potvin v. Metropolitan Life Ins. Co., 22 Cal.4th 1060 (2000), California provides a common law fair hearing right to health care providers even in the event of a "without cause" termination. Arbitrary decisions and the denial of fair procedure are prohibited by Potvin. Contractual provisions allowing termination "without cause" are unenforceable to the extent that they do not provide fair procedure. Under Potvin, the termination of a provider's agreement must be both substantively rational and procedurally fair.
Epstein Becker Green argued on behalf of AHC that L.A. Care acted contrary to its own Fair Hearing Procedure and the legal principles of Potvin by issuing a notice of termination of the Agreement prior to the fair hearing and a decision by the Plan Review Committee, even though, at the hearing, L.A. Care argued that its decision was based on a cease-and-desist order against AHC that was filed by the California Department of Managed Health Care. Although the Fair Hearing Procedure provides that the hearing process must precede any issuance of a notice of termination under a provider contract, the termination notice and related correspondence made clear that L.A. Care had already reached a decision to terminate the Agreement at the time that the notice was provided to AHC. In addition, the notice failed to include the specific reasons for the termination, a description of any policies and procedures, or any other criteria used in making the determination, as required by the Fair Hearing Procedure.
The Plan Review Committee voted unanimously in finding that the L.A. Care termination notice was procedurally unfair because it was inconsistent with the requirements of the Fair Hearing Procedure and had been issued prior to the completion of the fair hearing process.
The Epstein Becker Green team representing AHC included Los Angeles attorneys David Jacobs, Paul C. Burkholder, and J. Susan Graham.
Epstein Becker Green Achieves Twin Victories in Investment Banking Bonus Arbitrations
Epstein Becker Green obtained awards dismissing the claims of nine investment bankers in two arbitrations for bonuses totaling more than $10 million in January and April 2013. Our client, an investment banking firm, had decided as a result of the 2008 crash to award "provisional" bonuses in December 2008 that were subject to adjustment, depending on the firm's then-undetermined audited year-end financial results. Because the firm lost several billion dollars and had to borrow TARP-like funds from the government to maintain its capital requirements, the directors reduced the provisional awards by 90 percent across the board.
The bankers commenced two arbitrations before FINRA for the unpaid balances, claiming breaches of contract and detrimental reliance, on the basis that their particular business units did not contribute to the firm's loss. The firm defended by arguing that, because the bonuses were discretionary, it could properly place decisive weight on its overall performance. Further, the firm argued that the bankers' reliance argument was undermined by layoffs and hiring freezes globally in the financial services industry—a fact confirmed in the bankers' internal emails.
The two panels independently awarded "zero" to the two groups of bankers and dismissed all of the claims. Kenneth J. Kelly and Diana C. Gomprecht led the Epstein Becker Green defense team in both cases.
Epstein Becker Green Wins Dismissal of Lawsuit Seeking Millions in Reimbursement of IRS Penalties, Interest, and Investment Losses
On February 25, 2013, the Supreme Court of the State of New York, New York County, dismissed on summary judgment a complaint brought by an individual whose $35 million deduction for tax shelter losses was disallowed and who sought reimbursement of more than $5 million in Internal Revenue Service ("IRS") penalties, interest on unpaid income tax, and investment losses against an Epstein Becker Green client, a trust company. The plaintiff claimed that our client, among other things, committed a fraud, breached fiduciary duties, and negligently handled his accounts by participating in the tax shelter.
The plaintiff had founded a highly successful video game company and had income of $35 million in 2001 that he wanted to shelter from taxes. He engaged accountants and advisors, and a lawyer from a prominent law firm, who together devised a complex investment structure to create paper losses that involved, among other things, engaging a trust company (Epstein Becker Green's client) simply to administer a pooled investment trust and to handle related paperwork. The structure involved borrowing $35 million from a foreign bank. After the IRS determined the loan to be a sham and the investment losses artificial, it disallowed the loss deductions, and the plaintiff had to pay $13 million in back taxes, $2 million in interest, and $1.3 million in penalties. The lawyer was jailed for tax fraud and the foreign bank entered into a deferred prosecution agreement and paid fines. Having settled with the law firm and several other participants in the shelter, the plaintiff sued our client and the foreign bank that made the "sham" loans.
After extensive discovery of all the sponsors and participants in the tax shelter scheme, the court dismissed the complaint. It held that, because the plaintiff knew or should have known that the tax shelter was risky and because he was complicit in the scheme, he could not have reasonably relied on any alleged fraudulent statements by any of the defendants. Moreover, the proximate cause of the disallowance and the penalties was not the bank's or trust company's actions, but the plaintiff's own participation in a transaction of "doubtful illegality." Hence, all of the plaintiff's breach of contract and fiduciary duty theories were rejected. The court appropriately placed the loss on the plaintiff who stood to benefit from the shelter, and not on anyone else.
Epstein Becker Green attorneys Kenneth J. Kelly and Lori A. Jordan were on the litigation team in New York. Salt Aire Trading LLC v. Enterprise Bank and Trust Corp., S.Ct., N.Y. Co. Index No. 603798/07 (2/25/13).
Epstein Becker Green Represents Medical System in Asset Purchase of St. Joseph's Medical Center in Maryland
On November 30, 2012, Epstein Becker Green client University of Maryland Medical System ("UMMS") signed an asset purchase agreement to acquire Saint Joseph's Medical Center ("St. Joseph's"), a 263-bed nonprofit, regional medical center located in Towson, Maryland, from Catholic Health Initiatives ("CHI"). UMMS also committed to capital improvements and programmatic development at St. Joseph's. The transaction took effect on December 1, 2012.
Epstein Becker Green's representation of UMMS in this matter included, among other things:
- providing assistance in due diligence;
- transitioning Saint Joseph's compliance efforts;
- counseling on antitrust matters and helping procure an early termination of the Hart-Scott-Rodino review period; and
- assisting in-house counsel in evaluating and negotiating disclosure schedules and transition matters.
The Epstein Becker Green team representing UMMS included Patricia M. Wagner, Ross K. Friedberg, and Colin G. McCulloch.
Epstein Becker Green Successfully Closes Sale of Four Brooklyn Apartment Buildings
On November 2, 2012, Epstein Becker Green negotiated, on behalf of Brookdale Hospital and its affiliates, the complex sale of a real estate portfolio consisting of four apartment buildings in Brooklyn, New York, which were previously owned by the hospital. The sale price was $22 million. The portfolio was bought by a group of Brooklyn multifamily investors. This transaction required the approval of the New York State Attorney General's office, since it involved the selling of property owned by a not-for-profit entity.
The Epstein Becker Green team representing the hospital and its affiliates included attorneys included Eric L. Altman, Jay E. Gerzog, and Tamar R. Rosenberg.
Epstein Becker Green Wins Dismissal of Leave and Wage Claims Against Senior Living Center
On July 31, 2012, Epstein Becker Green, on behalf of a senior living center, succeeded in obtaining a dismissal of a claim of retaliation under the District of Columbia Family and Medical Leave Act ("DCFMLA") and summary judgment on a claim under the D.C. Wage Payment Collection Law ("DCWPCL") brought in the District of Columbia Superior Court by the plaintiff, a former employee of the center. See Tisdale v. 1330 OPCO LLC, d/b/a Residences at Thomas Circle, No. 2011 CA 009761 B (D.C. Superior Court, July 31, 2012).
In an 18-page decision, Judge Natalia M. Combs Greene made several significant findings:
- On a matter of first impression under the DCFMLA, the Court held that an employee who has not yet met the minimum eligibility requirements for DCFMLA leave has no rights under the statute. Accordingly, the plaintiff, who requested DCFMLA leave that would have begun before she met the minimum eligibility requirements, did not engage in protected activity and could not state a claim for retaliation under the DCFMLA. The Court adopted the analysis of this question under the similar provisions of the federal FMLA by the U.S. Court of Appeals for the Sixth and Eleventh Circuits.
- The Court also found that the plaintiff could not state a claim for equitable estoppel because, even if the senior living center failed to provide timely notice that she was ineligible pursuant to D.C. regulations, she had conceded that she was ineligible and did not allege that she took any action in reliance on the center's silence.
- Finally, on another matter of first impression, the Court held that a handbook provision stating that involuntarily terminated employees were not entitled to be paid for unused accrued paid time off ("PTO") hours, to which the plaintiff was deemed to have agreed, did not violate a provision of the DCWPCL that prohibits modification of its provisions by private agreement. In so doing, the Court held that as an employer is not required to offer paid leave, it is free to set limitations on payment for such leave. Such a limitation does not violate the DCWPCL's provisions governing when wages are due but merely establishes what wages will be due on termination.
The Epstein Becker Green attorneys representing the senior living center included Frank C. Morris, Jr., and Brian Steinbach of the Washington, D.C., office.
Epstein Becker Green Closes Affiliation of County Hospital System with Community Health Network
Epstein Becker Green attorneys successfully closed the affiliation of Howard Regional Health System, a county hospital system based in Kokomo, Indiana, with client Community Health Network, Inc., one of Indiana's largest health care systems. The affiliation became effective on July 1, 2012, with Community Howard Regional Health, Inc., becoming the newest member of the CHNw Network of hospitals across central Indiana. Epstein Becker Green acted as transaction counsel.
The Epstein Becker Green team was led by Joel C. Rush and Katherine R. Lofft and included Daniel E. Gospin; Gretchen Harders; Julia E. Loyd; David E. Matyas; Colin G. McCulloch; Tamar R. Rosenberg; Patricia M. Wagner; and Alan B. Wynne.
Epstein Becker Green Persuades California Court to Deny Certification of Misclassification, Meal Period, and Rest Period Claims Against Restaurant Client
After more than five years of litigation, a Los Angeles Superior Court has denied a motion for certification of a class action against Epstein Becker Green client Joe's Crab Shack Restaurants on claims that its managers were misclassified as exempt and denied meal and rest periods in violation of California law. The Epstein Becker Green team, which was led by Michael S. Kun, argued on behalf of the defendant that the plaintiffs' claims could not be certified for class treatment because, among other things, individualized inquiries would need to be conducted because managers' experiences differ from restaurant to restaurant, position to position, and day to day.
In denying the plaintiffs' class certification motion, Judge Charles Palmer found that the plaintiffs had not established adequacy of class representatives, typicality, commonality, or superiority. In addition, Judge Palmer noted that handling this case as a class action would require every individual member to prove whether or not he or she spent more than half his or her time on exempt managerial tasks, which would be time-consuming and burdensome for the court. This ruling also emphasized a defendant's due process right to provide individualized defenses to class members' claims.
Epstein Becker Green Achieves Victory for Franchising Client in Arbitration
On May 11, 2012, Epstein Becker Green won a substantial victory for its client Aaron's, Inc. (f/k/a Aaron's Rents, Inc.), a furniture and appliance leasing company, in a case brought by The Modish Corporation, a four-store franchisee. The franchisee claimed that an Aaron's Advertising Fund was not reaching the customer base and that there were substantial limitations on the maximum dollars that could be collected by Aaron's from the franchisee for use in the Ad Fund.
The case was tried to a single arbitrator. The Epstein Becker Green team argued on behalf of Aaron's that the franchisor was clearly within its rights under the franchise agreements when it withdrew funds up to an established cap for use in the Ad Fund and implemented a plan utilizing such funds for media buys reaching the markets surrounding each of the franchisee's stores. Establishing these facts relied upon specific arguments related to the parties' expectations upon entering into the agreement, and required extensive analysis of the relevant markets, advertising purchases, and overall marketing strategy actually implemented by Aaron's. The arbitrator found for Aaron's on all counts, ruling that Aaron's interpretation of the franchise agreement was sound and that its implementation of the Ad Fund was reasonable, effective, and efficient. The Epstein Becker Green team included Elisabeth M. Koehnemann and John B. Sivertsen of the Atlanta office.
Second Circuit Affirms Dismissal of Defamation/Breach of Contract Suit Against EBG Medical School Client
In a decision having significance for universities and medical schools, the U.S. Court of Appeals for the Second Circuit upheld the dismissal of a complaint for defamation, discrimination, and breach of contract brought by a medical doctor whose employment was terminated by Mt. Sinai School of Medicine. The plaintiff, a Chinese medical doctor who primarily engaged in cancer research, was accused by one of his subordinates of improperly manipulating research data. After a lengthy formal investigation conducted by a panel of his peers confirmed the allegations, the Dean discharged him, and the dismissal was upheld by a different peer review panel.
The doctor alleged that he was defamed by both the subordinate and the peers, but the court held that all statements made before or during the investigation were qualifiedly protected under the "common interest" privilege, and that the plaintiff had failed to sufficiently allege malice overcoming the privilege. Also, the court held that the plaintiff failed to offer sufficient proof that the dismissal was motivated by anti-Chinese animus, despite comments made about the plaintiff's Chinese medical school training, culture, and background.
Most important for academic institutions, the court reaffirmed the rule in New York that a professor cannot bring a breach of contract law suit arising from discipline, termination, or denial of tenure when such decisions involve peer review decisions under university policies, since such decisions involve weighing the institution's values as well as the individual's contractual rights. Such claims may be brought only by a mandamus-type proceeding where court review of the determination is based on an "arbitrary and capricious" standard.
The Epstein Becker Green team included Kenneth J. Kelly and Jennifer M. Horowitz of the New York office. Chao v. The Mount Sinai Hospital, et al., Index No. 11-1328-cv (2d Cir. 4/17/12).
Epstein Becker Green Enjoins Landlord from Terminating Clients' Gas Station Lease
Epstein Becker Green successfully prevented a landlord from terminating the commercial lease of clients Shell Oil Company and Motiva Enterprises LLC (collectively, "Shell/Motiva") at a gasoline service station in Suffolk County, Long Island. On Sept. 3, 2011, Shell/Motiva received a notice indicating that the landlord intended to terminate the lease within 30 days because of Shell/Motiva's allegedly unlawful use of the leased premises as a gasoline refilling station with a convenience store. (The certificate of occupancy permits the leased premises to be used as a gasoline refilling station with a garage.) On Sept. 30, 2011, Epstein Becker Green, on behalf of Shell/Motiva, immediately requested a temporary restraining order, which was granted that day. EBG subsequently filed a motion, on behalf of Shell/Motiva, seeking a "Yellowstone injunction" to stop the landlord from terminating the lease and ejecting Shell/Motiva from the leased premises.
On March 23, 2012, the Suffolk County Supreme Court granted the motion for a Yellowstone injunction. The court found that Shell/Motiva had met the criteria for the injunction, including demonstrating that they have the desire and ability to cure the alleged default. Additionally, the court pointed out that the landlord acknowledged that Shell/Motiva had already stopped using the leased premises as a convenience store. Based on the clear and unambiguous language of the lease, the court also rejected the landlord's argument that Shell/Motiva had an affirmative obligation to restore the automobile repair shop operation, which had been discontinued several years ago.
The EBG team representing Shell/Motiva consisted of New York Litigation attorneys William A. Ruskin and J. William Cook.
Epstein Becker Green Obtains Dismissal of ERISA Action Against Health Care Benefits Companies
On March 13, 2012, Epstein Becker Green obtained the dismissal of an action brought by a chiropractic practice group against Aetna Inc. and certain subsidiaries alleging that the defendants breached fiduciary duties imposed by ERISA and tortiously interfered with the practice's patients by not paying for chiropractic treatment they claimed was covered by their patients' employee health benefit plans. Chief Judge Carol Amon of the U.S. District Court in Brooklyn held that although pleaded as such, the breach of fiduciary duty claims were in actuality claims for benefits, and that such claims could be brought only against the benefit plans themselves or the named plan administrator. Since none of the defendants was a plan administrator, but merely rendered "third-party administrator" or claims processing services, they could not be sued under ERISA.
The court also held that if any of the defendants owed any fiduciary duties arising under ERISA, such duties ran to the plans themselves, and plan participants, such as plaintiffs' patients, could not assert such fiduciary breach claims in order to recover any money to cover their own medical expenses.
Lastly, the court held that the plaintiffs' state law claim for interference with the practice's business necessarily included analyzing the patients' claims for benefits, which in turn would involve interpretation of the terms of the benefit plans, and as a result would require examination of rights and obligations created by ERISA. Accordingly, the court held that ERISA preempted the state law claim and the claim was dismissed.
The EBG team representing the defendants was New York Litigation attorneys Kenneth J. Kelly and Diana C. Gomprecht. Staten Island Chiropractic Assoc., PLLC v. Aetna, Inc., 09-CV-2776(CBA) (E.D.N.Y. 3/12/12).
Epstein Becker Green Obtains Defense Verdict in Pregnancy Discrimination and Retaliation Jury Trial in San Francisco
This case was brought by a former employee of one of Epstein Becker Green's clients, On Lok, inc., which is a nonprofit organization that serves the Bay Area's elderly population ("Organization"). The plaintiff filed a lawsuit after her employment was terminated when she was seven months pregnant and shortly before her anticipated maternity leave was expected to begin. She claimed pregnancy discrimination and retaliation in response to her request for leaves of absence under the California Family Rights Act and the California Pregnancy Disability Leave Law among other related causes of action.
The Epstein Becker Green defense team, including Steven Blackburn, successfully demonstrated that the termination decision was not motivated by the plaintiff's pregnancy or request for leave, but instead by the plaintiff's misconduct related to an incident that was reported to and thoroughly investigated by the Organization's management shortly before the termination decision. The court allowed the Epstein Becker Green defense team to introduce favorable historical data regarding the Organization's treatment of employees who requested pregnancy-related leaves of absence during the 10 years preceding the plaintiff's termination. Additionally, at the defense team's request, the court allowed a special jury instruction regarding the "business judgment rule," which stated that the jury's role was not to second-guess the Organization's business decision, but it should instead determine whether the plaintiff's pregnancy or request for leave was a motivating reason for the termination decision.
Within a few hours of commencing deliberations, the jury returned a verdict in favor of the Organization. During post-trial interviews, the jurors indicated that the business judgment rule was critical to their decision.
Matthew Goodin also assisted the Epstein Becker Green defense team in preparing for the trial.
Epstein Becker Green Closes $152 Million Sale of Health Care System
Epstein Becker Green attorneys successfully closed the sale of client Moses Taylor Health Care System, a hospital system based in Scranton, Pennsylvania, to Community Health Systems, Inc., one of the nation's largest for-profit hospital systems. The sale became effective on January 1, 2012. CHS agreed to pay the sale price of $152 million and commit to, among other things, invest at least $60 million in Moses Taylor's operations.
Epstein Becker Green acted as transaction, regulatory, and antitrust counsel.
The Epstein Becker Green team was led by Doug Hastings and Dale C. Van Demark and included George B. Breen; Michelle Capezza; Ross K. Friedberg; J. Andrew Lemons; Stephanie G. Lerman; Katherine R. Lofft; Julia E. Loyd; Kara M. Maciel; David E. Matyas; Colin G. McCulloch; Jonah D. Retzinger; Tamar R. Rosenberg; Jordan B. Schwartz; Patricia M. Wagner; and Alan B. Wynne.
Epstein Becker Green Wins Dismissal of Service Personnel's Tip Pool Claims Against Restaurant
Epstein Becker Green obtained summary judgment, on behalf of a restaurant client ("Restaurant"), from Judge Colleen Kollar-Kotelly of the U.S. District Court for the District of Columbia. See Arencibia v. 2401 Restaurant Corporation d/b/a Marcel's Restaurant, No 1:09-cv-00165-CKK-DAR (D.D.C. Dec. 21, 2011). The plaintiffs, several service personnel, had brought a multifaceted challenge under both the FLSA and District of Columbia law to the method by which the Restaurant operated a tip pool.
In a 31-page decision, Judge Kollar-Kotelly made several significant findings:
- The maître d' was not a manager and, therefore, properly participated in the tip pool; what controlled was his actual authority, not what the employees may have perceived his authority to be. Accordingly, the Court found that two possible instances where the maître d' allegedly terminated or disciplined an employee were irrelevant.
- The fact that a director of sales received a commission from part of a service charge, the rest of which went to a tip pool, did not make her a participant in the tip pool. Alternatively, the Court found that she had sufficient interaction with customers in arranging and planning private parties to be included in the tip pool, even though she did not serve food or perform hosting duties.
- Allegations of improper notice of, and arbitrary modifications to, the operation of the tip pool were rejected by the Court. By doing so, the Court, in what appears to be a matter of first impression, held that the Department of Labor's tip pool regulations do not require any particular percentage method, or preclude adjustments based on good performance or customer-directed tips. Therefore, it was sufficient that the restaurant simply notified the employees that all their non-cash tips went into the tip pool and did not retain any of the tips for any other purpose. Neither federal nor District of Columbia law required disclosure of the formula underlying the dispersal of tips in the pool.
- A claim that one of the plaintiffs was terminated for making complaints about the operation of the tip pool was rejected by the Court. In so doing, the Court held that a request for a meal break or on premises meal did not raise a compensation issue protected under the FLSA.
The Epstein Becker Green team representing the Restaurant included Frank C. Morris, Jr.; Brian Steinbach; and Kathleen M. Williams of the Washington, D.C., office.
Epstein Becker Green Assists Client in $5 Billion Acquisition of Medical Therapy Company
A team of Epstein Becker Green attorneys represented Apax Partners LLP ("Apax"), a private-equity firm, as health care regulatory counsel in an acquisition of Kinetic Concepts Inc. ("KCI"). The purchasers included Apax and two Canadian pension funds. The deal, valued at more than $5 billion, closed on November 4, 2011.
The Epstein Becker Green team was led by Mark E. Lutes of the Washington, DC, office, and included Daniel G. Gottlieb, Benjamin S. Martin, Lesley R. Yeung, J. Andrew Lemons, James A. Boiani, Shawn M. Gilman, Amy F. Lerman, Julie E. Loyd, and Adam C. Solander.
Epstein Becker Green Successfully Negotiates Medicaid Managed Care Program Contract for Client Based in Puerto Rico
In October 2011, Epstein Becker Green represented Triple-S Management Corp. ("Triple-S") in the negotiation of a contract with the Puerto Rico Health Administration ("ASES") to administer the Medicaid managed care ("Mi Salud") program in five out of nine regions in Puerto Rico. Failure to reach an agreement on the terms of the contract would have left over 800,000 people without coverage, beginning November 1, 2011. Triple-S agreed to step in and assume these regions of the Mi Salud program after contractual issues between ASES and the current MCO contractor could not be resolved.
The Epstein Becker Green team representing Triple-S included Philip D. Mitchell of the Newark office and Jane L. Kuesel and Joseph J. Kempf, Jr., of the New York office.
Epstein Becker Green Obtains Dismissal of Drug Suit
On October 5, 2011, Epstein Becker Green obtained summary judgment on behalf of its client Sunovion Pharmaceuticals ("Sunovion") after oral argument before the Hon. Stefan R. Underhill in a U.S. District Court in Bridgeport, Connecticut, in the case of Swoverland v. GlaxoSmithKline.
The plaintiff alleged that his use in combination of Sunovion's Lunesta, a sleep aid, and GlaxoSmithKline's ("GSK's") Paxil, an anti-depressant, caused depression, erratic behavior, and suicidal ideation, which resulted in an unsuccessful attempt to kill both himself and his daughter. As a result of the incident, plaintiff was sentenced to prison and forfeited his position as a prison guard. Epstein Becker Green defended the case on the basis that Sunovion had adequately warned of the drug's potential risks and that there was no causal connection between any alleged failure to warn and the treating physician's prescription of the drug.
In granting summary judgment to Sunovion, the court reaffirmed Connecticut's adherence to the "learned intermediary doctrine," which provides that adequate warnings to a prescribing physician makes it unnecessary for a manufacturer of a prescription drug to warn patients directly. Further, the court rejected plaintiff's assertion that the learned intermediary doctrine should not apply in this case either because Lunesta directly advertised to the patient or over promoted the product. The court held that there was no factual basis in the record to support the application of either of these exceptions to the learned intermediary doctrine and that, as a matter of law, Connecticut did not recognize these exceptions.
The Epstein Becker Green team that represented Sunovion included New York attorneys William A. Ruskin and Victoria M. Sloan.
Epstein Becker Green Successfully Represents Fox News Network in Discrimination Lawsuit
U.S. District Judge Richard Leon granted an Epstein Becker Green client, Fox News Network, summary judgment on August 25, 2011, in a lawsuit alleging age discrimination, gender discrimination and retaliation under Title VII brought by the U.S. Equal Employment Opportunity Commission on behalf of Fox News reporter Catherine Herridge. U.S. District Judge Richard Leon found that the commission failed to make sufficient claims in the complaint of retaliation or show that Herridge suffered any material harm.
"Indeed, it is hard to imagine how a reasonable employee would be dissuaded from engaging in protected activity if that employee were still able to secure not only a multi-year employment contract, but also a multi-year raise!" Leon wrote in the opinion.
Fox News Network was represented by Epstein Becker Green attorneys Frank Morris, Jr.; Barry Asen; and Ronald M. Green.
Epstein Becker Green Assists Client in Acquisition of Home Medical Equipment Supplier
Epstein Becker Green attorneys represented Apria Healthcare, Inc., a home medical equipment supplier ("Apria"), in a $26 million transaction to acquire the assets of Praxair Inc., a home medical equipment supplier and medical/industrial gas company. The deal closed on March 7, 2011. The success of the acquisition resulted in expanding wanApria's national presence in the home health care industry.
The Epstein Becker Green team representing Apria included members of the Health Care and Life Sciences, Corporate Services, and Labor and Employment practices.
Epstein Becker Green Negotiates Divestiture of Fleet Management and GPS Tracking Provider to Industry Competitor
On February 8, 2011, Epstein Becker Green's Corporate Services Group served as counsel in a divestiture transaction for Intergis, LLC. The fleet management consulting and GPS tracking provider sold substantially all of its assets to Telogis, Inc., a Delaware corporation located in Alisa Viejo, CA. The purchase price remains confidential.
This deal was challenging due to the complexity of the technologies and contractual relationships involved. Intergis provided GPS tracking services and fleet management and routing management services to a wide variety of companies, relying on vehicle fleets for the execution of their business objectives. A Delaware limited liability corporation and portfolio company of Columbus Nova, Intergis relied on contractual relationships with wireless subcontractors (KORE Telematics), as well as wireless service companies (AT&T), to provide wireless GPS service to its end users. Thus, the negotiation with third parties played a significant role in finalizing the terms of this transaction. Telogis has been a parallel competitor of Intergis, providing similar services to a different market segment, and their union of business efforts is expected to create significant synergies in the GPS tracking marketplace.
The Epstein Becker Green team was supervised by Robert D. Reif, with negotiations led by Lisa J. Matyas, who was assisted by Gretchen Harders, Peter A. Steinmeyer, and Paul C. Burkholder.
Epstein Becker Green Obtains Dismissal of Claims Seeking to Limit Health Plan Access to Information
On January 31, 2011, Epstein Becker Green obtained a dismissal of a case brought by two plaintiffs -- a state psychological association and an individual psychologist -- seeking broad limitations, through the application of the patient-psychologist privilege, on the information that a health benefits plan could seek from or concerning insureds to establish the medical necessity of initial or continued mental health treatment. The New Jersey court found that neither plaintiff had a direct injury or associational or third-party standing and questions of privilege needed to be determined in the sort of case-by-case approach that precluded the granting of broad, general relief against the health benefits plan or those providing administrative or utilization management review services to the plan.
The Epstein Becker Green team representing those providing administrative or utilization management review services to the plan included New Jersey Litigation attorney James P. Flynn.
Epstein Becker Green Wins Dismissal of Servers' Wage and Tip Claims Against Restaurant
On January 14, 2011, Epstein Becker Green helped one of its restaurant clients, the Brasserie Ruhlmann, obtain summary judgment "in its entirety" in a lawsuit brought by former waiters, bussers, and runners ("Plaintiffs"). Similar to many such wage and hour cases currently being litigated in the hospitality industry, Plaintiffs sought to invalidate the restaurant's tip pool with assertions that captains and the banquet coordinator performed managerial functions and, thus, were not "tip eligible." If Plaintiffs had succeeded, they would have also invalidated the restaurant's "tip credit" system of compensating service employees, potentially resulting in significant minimum wage and overtime liability. Plaintiffs made further claims for tips during their initial training period, alleged "spread of hours" violations, and alleged uniform maintenance violations.
In a sweeping 17-page Memorandum Opinion and Order, Judge Swain of the U.S. District Court, Southern District of New York, found, among other things, that "captains and banquet coordinators had regular interactions with customers in connection with core restaurant functions." Accordingly, the Court held that the restaurant had properly treated the plaintiffs as tip eligible. After careful scrutiny, the restaurant's wage and hour practices were completely vindicated by the Court. Garcia v. La Revise Assocs. LLC, 08 cv 9356 (SDNY 2011).
Epstein Becker Green developed a strategy to elicit admissions from the Plaintiffs in discovery that, together with declarations and selected documents, provided the basis for Judge Swain's decision. This case resulted in a total victory for the restaurant and is the first reported decision to hold that the position of banquet coordinator was tip eligible.
This win was achieved by Epstein Becker Green's Labor and Employment Hospitality and Wage and Hour practice groups and, particularly, attorneys Douglas Weiner and Dean L. Silverberg.
Epstein Becker Green Successfully Represents Sibley Memorial Hospital in Affiliation with Johns Hopkins Health System
On November 1, 2010, Sibley Memorial Hospital ("Sibley") became a member subsidiary of the Johns Hopkins Health System ("JHHS"), joining the Johns Hopkins Hospital, Johns Hopkins Bayview Medical Center, Howard County General Hospital, and Suburban Hospital. Epstein Becker Green represented Sibley in the transaction, and represented both JHHS and Sibley with respect to the required certificate of need approval from the District of Columbia.
The Epstein Becker Green team was led by Doug A. Hastings, and included Clifford E. Barnes, Patricia M. Wagner, Julia E. Loyd, and Ross K. Friedberg.
Epstein Becker Green Closes Venture Capital Investment
On August 13, 2010, Epstein Becker Green closed an investment by its client Radius Ventures in a company called HealthSense, Inc. (http://www.healthsense.com). HealthSense provides technology solutions for the future of aging services. The deal involved a venture capital investment of $4 million.
Radius Ventures was represented by Epstein Becker Green attorneys including Robert D. Reif, in the Washington, DC, office, and Purvi Badiani Maniar, in the New York office.
Epstein Becker Green Helps Health Insurance Carrier Obtain Reversal of Premium Rate Disapprovals
On August 6, 2010, Epstein Becker Green helped its client Fallon Community Health Plan, Inc. ("FCHP") obtain the reversal of the Massachusetts Division of Insurance ("Division") disapproval of certain of FCHP's premium rate increases. The Division had previously disapproved all premium rate increases filed by FCHP and other health insurance carriers for small business and individual customers that exceeded 7.7 percent – which was 150 percent of the New England Medical CPI for 2009. FCHP and the other affected health insurance carriers filed administrative appeals of the Division's disapprovals of their premium rates. The Massachusetts Attorney General's Office intervened in the administrative hearings on behalf of consumers' interests. Epstein Becker Green, which along with local counsel represented FCHP, presented documentation and testimony justifying FCHP's rates from actuaries, provider contracting executives, and other witnesses.
After examining the evidence, the presiding hearing officers reversed the Division's disapprovals of FCHP's premium rates, finding, among other factors, that FCHP had made reasonable efforts to keep costs down through provider contracting, and utilization control and cost containment programs. The presiding hearing officers also adopted EBG's arguments that the Division's reliance on Medical CPI to reject premium rates was flawed. As a result of the reversals, FCHP was able to implement its filed rate increases through the end of 2010.
Epstein Becker Green and its attorneys Jesse M. Caplan, George B. Breen, and Robert E. Wanerman of the Washington, D.C., office served as co-counsel, along with local counsel Bowditch & Dewey, in representing FCHP.
Epstein Becker Green Obtains Protective Order
On April 6, 2010, Epstein Becker Green achieved a big win for its client, the Mount Sinai School of Medicine (the "Medical School"). Defense counsel representing Kentile Floors, a defendant in an asbestos personal injury litigation, subpoenaed the Medical School seeking all of the research records and personal correspondence of Dr. Irving Selikoff, a now deceased former member of the Medical School's faculty. Dr. Selikoff's work is world renown as he was the first to identify the link between asbestos exposure and disease. Defense lawyers have striven for years to discredit Dr. Selikoff's research in the asbestos litigation. The Medical School is constantly fending off these subpoenas and dealing with related litigation. Other research institutions face similar challenges and have expressed the concern that a court ruling requiring the Medical School to produce the private correspondence and memoranda of a faculty member not otherwise involved in the underlying litigation would have a chilling effect on the willingness of other scientists whose research would benefit public health or enhance workplace safety. Epstein Becker Green successfully fought back this latest effort and was rewarded with an excellent and strongly worded decision that provides most significantly that the:
expense Mt. Sinai would incur as a result of such a broad interpretation of the subpoena could well discourage other institutions from conducting vital health and safety research. Other scholars in the laboratory may fear that their unpublished notes, observations and ideas could be released to the public as a result of litigation. Although a scholar's right to academic freedom is not absolute, it should factor into a court's analysis on whether forced disclosure of documents in permissible (see, In R.J. Reynolds Tobacco Co., 136 Misc.2d supra at 287).
The Epstein Becker Green team that represented the Medical School included New York attorneys William A. Ruskin and Victoria M. Sloan.
Epstein Becker Green Obtains Dismissal of Major Claims in ‘Excessive Force' Suit
EBG's litigation team obtained a dismissal of the major claims in an "excessive force" lawsuit brought in federal court by a New York Post newspaper photographer against a major hospital after the reporter was arrested by special patrolmen employed by the hospital. The photographer refused an order to leave the hospital's property (the steps leading to a hospital building) where he was waiting to photograph a celebrity who was planning to visit his brother, a patient. The Court held that, because the First Amendment did not give the photographer the right to enter private property, the order to leave was valid. When he refused, the officers had the right to exercise their state-granted power to arrest him for trespass and resisting arrest. The Court also determined based on video footage captured by several surveillance cameras and the photographer's own audio recording of the incident that there was no genuine issue of material fact and that the officers as a matter of law did not use excessive force, even though the photographer sustained a shoulder injury. Kalfus v. The New York and Presbyterian Hospital, et al., 07 Civ 11455(DAB) (3/31/10).
The Epstein Becker Green team representing the client-hospital included New York Litigation attorney Kenneth J. Kelly.
Epstein Becker Green Negotiates Very Favorable Settlement of False Claims Act Case
On February 2, 2010, Epstein Becker Green attorneys successfully executed a very favorable settlement for their client, AtriCure Inc., in a False Claims Act (FCA) case that began with a qui tam relator's charges filed in 2007. AtriCure is a developer and manufacturer of cardiac surgical ablation devices.
This case presented sophisticated claims relating to alleged improper off-label promotion. This is an issue that has become a high priority for Department of Justice enforcement of which both drug and device manufacturers and distributors should be aware.
The settlement, based on an ability-to-pay methodology accepted by the government, requires AtriCure to pay total of $3.8 million, plus interest, periodically over five years; resolves issues of potential FCA and common law violations relating to the marketing practices of AtriCure's surgical ablation devices; and includes AtriCure's declaration that the company and its employees haven't engaged in any wrongdoing or illegal activity. The settlement agreement has been approved and resolves a related qui tam matter, which Epstein Becker Green attorneys have been handling, regarding AtriCure's marketing of the devices. (Epstein Becker Green also represents AtriCure in a related and ongoing private securities class action.) Additionally, AtriCure signed a corporate integrity agreement with the Office of Inspector General of the U.S. Department of Health and Human Services.
The Epstein Becker Green team that represented AtriCure was led by Stuart M. Gerson, a leading litigator and national authority on the FCA.
Epstein Becker Green Successfully Secures Dismissal of Complaint Alleging Breach of Fiduciary Duty
Epstein Becker Green attorneys successfully moved for dismissal of a complaint seeking more the $2.4 million arising from an alleged breach of contract and negligence against Epstein Becker Green client 1740 Advisers Inc. Plaintiffs were two limited-purpose mutual fund trusts and their investment advisor, Diversified Investment Advisors, Inc. Plaintiffs alleged that 1740 Advisers breached its contracts to act as subadvisor for the funds, and acted negligently, by making certain purchases and redemptions of Enron commercial paper during the fall of 2001, just prior to Enron's collapse. The redemptions, which were made just a few days before the maturity dates for the commercial paper, were later alleged by the Enron bankruptcy trustee to be avoidable as improper preferences under several sections of the Bankruptcy Code. Plaintiffs sued 1740 Advisers, after plaintiffs settled with the bankruptcy trustee following years of litigation, for the settlement amount plus attorneys' fees. 1740 Advisers moved to dismiss the complaint.
Epstein Becker Green prevailed with the arguments that the allegations in the complaint were too conclusory to state a claim for breach of contract as to the purchases of the Enron paper in light of 1740 Adviser's contractual discretion to invest on behalf of plaintiffs within specified parameters. As to the sales of the paper back to Enron on the eve of its collapse, Epstein Becker Green contended, and the Court agreed, that 1740 Advisers had discretion to make trades on behalf of Diversified and the funds, and nothing in the complaint showed that 1740 Advisers abused that discretion – even though other entities who sold paper back prior to maturity were ultimately denied summary judgment on their safe harbor claims. The negligence claim was also dismissed as duplicative of the contractual obligations.
The motion was prepared by Epstein Becker Green attorneys Kenneth J. Kelly and Aime Dempsey.
Epstein Becker Green Achieves Victorious Result in Union Election
On December 1, 2009, Epstein Becker Green, on behalf of its client, won a significant victory in a union election in Massachusetts. The client is an office equipment transportation and leasing company.
The NLRB-conducted election was the result of a petition filed by the Teamsters seeking to represent a bargaining unit made up of all drivers. Epstein Becker Green helped to design and implement a coordinated election strategy aimed at increasing the knowledge of the drivers regarding union representation, as well as combating the union's statements while emphasizing the benefits already enjoyed by the drivers. The drivers ultimately voted against union representation.
The Epstein Becker Green team included Mark M. Trapp of the Chicago office.
Epstein Becker Green Successfully Defends Client in Whistleblower Case
On October 21, 2009, Epstein Becker Green won a jury trial for its client Nycomed US Inc. ("Nycomed"), in a whistleblower case alleging violation of the New Jersey Conscientious Employee Protection Act. The case, Severine v. Doak Dermatologics, et al., was tried in New Jersey Superior Court – Essex County.
The case was brought by a former sales representative of Nycomed's predecessor, Bradley Pharmaceuticals and Bradley subsidiary Doak Dermatologics. Plaintiff claimed retaliation and retaliatory discharge arising from his complaints about anti-Semitic and racist comments allegedly made to him by a co-worker, and the co-worker's alleged discarding of a competitor's drug samples in violation of FDA regulations. Prior to trial, the court had granted partial summary judgment to Nycomed dismissing several of the plaintiff's claims including all of the plaintiff's claims against the co-worker, and granted summary judgment to Nycomed on its counterclaims for fraud, fraudulent misrepresentation, and negligent misrepresentation arising from plaintiff's false statements on his resume and application.
The trial lasted six days and the jury returned its verdict for Nycomed in less than two hours.
The EBG team was led by attorneys Maxine Neuhauser and Denise Merna Dadika, and included attorney Jennifer Barna and paralegal John Cullen, all of the Newark office.
Epstein Becker Green Scores Big Jury-Trial Victory
On October 15, 2009, Epstein Becker Green scored a jury-trial victory for one of its clients in a disability discrimination case tried in federal court in Portland, Oregon.
The case was brought by an insulin-dependent diabetic man who had worked for a telecommunications company as an installer of telecommunications equipment. He had his diabetes well regulated in normal circumstances, but under the rigors of the conditions that his job imposed, he suffered wide swings in his blood sugar levels that left him vulnerable to unrecognized cognitive impairment and sudden unconsciousness. After suffering one such episode, the plaintiff sought to swap jobs with another employee, who formerly had worked as an installer. Alternatively, he sought an accommodation that guaranteed to him two days off between changes in the shift that he would be assigned to work; the company had provided that accommodation to him for a period of a few months but discontinued it.
The defense successfully showed that the plaintiff had failed to prove that his condition constituted a disability, within the meaning of the Americans With Disabilities Act, because he fully managed his diabetes in normal conditions and faced limitations only in extraordinary conditions (albeit ones that he would face with some frequency in his particular job). The defense also successfully demonstrated that the accommodations that the plaintiff wanted were not reasonable, since one (a shift-change restriction) had been tried and failed, while the other (a job swap) resulted in placing two individuals into jobs for which each required extensive additional training.
Thirty minutes after retiring to deliberate, the jury returned its verdict for the company.
The Epstein Becker Green team was led by John Houston Pope of the New York office, and included former EBG attorneys Tracey A. Cullen and Beth Citron.
Epstein Becker Green Successfully Assists Client in $2.6 Billion Acquisition
Epstein Becker Green attorneys successfully assisted their client, Dainippon Sumitomo Pharma Co., Ltd., in conducting health regulatory due diligence and negotiating a purchase agreement to be used in connection with the client's acquisition of Sepracor, a publicly-traded international pharmaceutical manufacturer. The purchase was valued at approximately $2.6 billion. This deal enables Dainippon, a Japanese pharmaceutical manufacturer, to expand its products into the U.S. market. The deal closed on October 14, 2009.
The EBG team was co-led by attorneys Wendy C. Goldstein in the New York office and Robert D. Reif in the Washington, DC office, and included Amy Dow in the Chicago office, Daniel E. Gospin in the Newark office, and Benjamin S. Martin, Alaap B. Shah, and Constance A. Wilkinson in the Washington, DC office.
Epstein Becker Green Closes Key Step in Complex Health-System Deal
On October 1, 2009, the University of Maryland Medical System (UMMS) and the Upper Chesapeake Health System (UCH) closed a key step in a complex, multi-phased deal, which is expected to result in a full merger by 2013. The transaction will infuse hundreds of millions of dollars into the community served by UCH, which expects significant growth due to the decision by the Base Realignment and Closure Commission to transfer thousands of jobs to Harford County, Maryland. The funds will be used to expand inpatient and ambulatory services and assist UCH in its physician recruitment efforts through UMMS' close relationship with the University of Maryland School of Medicine. For UMMS, the affiliation will help further its goal of creating a statewide network of care, already consisting of nine hospitals, that encompasses community-based health providers, tertiary health providers and cutting-edge medical research. The first step in the transaction occurred in June, when UMMS acquired a minority interest in the UCH system then held by St. Joseph Medical Center. Epstein Becker Green, which has been transaction counsel to UMMS for over a decade, represented UMMS in the transaction.
The Epstein Becker Green team was led by Dale C. Van Demark and included Patricia M. Wagner in the Washington, DC office.
Epstein Becker Green Stops Union's Enforcement of Collective Bargaining Agreement
On August 11, 2009, Epstein Becker Green won a substantial victory for its client, an alcoholic-beverage distributor. A collective bargaining agreement with a Teamsters local union said that the movement of freight to and from the distributor's warehouse would be performed by the distributor's union-represented drivers. The distributor later signed a distribution agreement whereby it became the exclusive distributor in Metropolitan New York for Diageo, a major a wine and spirits supplier of brands including Smirnoff Vodka, Cuervo Tequila, Captain Morgan Rum, Johnnie Walker, Goldschlager, Bailey's Irish Cream and Seagram's Canadian Whiskey. For six months, the distributor's drivers picked up the supplier's products. However, the supplier changed to a national "delivered pricing" plan that included delivery to the distributor's warehouse, and the distributor's drivers were no longer needed to pick up products covered by the plan.
The union filed a grievance against the distributor and took the matter to arbitration. The arbitrator ruled that the distributor violated the collective bargaining agreement by allowing employees other than its own to pick up the supplier's products. The distributor then filed an unfair labor practice charge against the union with the NLRB. The NLRB ruled that the union violated Section 8(e) of the National Labor Relations Act by seeking arbitration to enforce its collective bargaining agreement with the object of forcing the distributor to cease doing business with the supplier. The union appealed the NLRB's decision.
In Local 917, International Brotherhood of Teamsters v. National Labor Relations Board, the U.S. Court of Appeals for the Second Circuit ruled that the union engaged in unlawful activity by proceeding to arbitration to obtain the re-assignment of work that historically was done by employees it represented, but outside the distributor's control. The Court also ruled that the union's effort to enforce the collective bargaining agreement amounted to a secondary boycott in violation of Section 8(e). The Court noted that the union's position was "anti-competitive" because it would have either precluded the distributor from doing business with the supplier entirely or obligated the distributor to breach its contract with the supplier.
The distributor was represented by Epstein Becker Green attorneys Allen B. Roberts and Donald S. Krueger of the New York office.
Epstein Becker Green Negotiates Landmark Settlement for Westchester County
Epstein Becker Green attorneys successfully negotiated a landmark settlement agreement for their client, Westchester County, in an action that was started in 2006 by the Anti-Discrimination Center of Metro New York, Inc. ("ADC"). The ADC sued the county under the federal False Claims Act ("FCA"), claiming that the county hadn't properly desegregated, or analyzed the impact of race on housing in, various Westchester neighborhoods despite taking money for federal housing aid.
Epstein Becker Green, which has served for many years as Westchester County's outside counsel with respect to complex litigation, civil rights, and employment cases, was asked to represent the county in this large-scale FCA litigation. As part of the settlement, the county agreed to spend $60 million to build or acquire affordable housing in mostly white communities and to market that housing to minority tenants and buyers. The county has seven years to complete the building and/or acquisition of the housing. The settlement agreement has been submitted to the county's Board of Legislators for ratification.
Epstein Becker Green attorney Stuart Gerson, a leading litigator and national authority on the FCA, served as lead counsel for Westchester County in the settlement. His team included attorneys Matthew T. Miklave and Michael A. Kalish.
Epstein Becker Green Convinces Circuit Court to Affirm Dismissal of Medicare Secondary Payer Act Action
On July 29, 2009, Epstein Becker Green attorneys won a significant victory in the defense of its client, Empire Blue Cross and Blue Shield. In Woods v. Empire Health Choice, Inc., the plaintiff claimed that under the Medicare Secondary Payer Act ("MSP"), the defendant was primarily liable for the payment to health care providers for covered services received by individuals with health care coverage from both Medicare and the defendant, but that the defendant allegedly paid for such services with Medicare funds. The plaintiff did not allege that any of the claims at issue were for services he had received; rather, they involved services provided to others. It was the plaintiff's contention that the MSP is a qui tam statute. (In an action brought under a qui tam statute, the plaintiff, called a "relator," does not have to be personally harmed by the allegedly unlawful acts of the defendant or have had any dealings whatsoever with the defendant. The relator brings an action on behalf of the U.S. Government, which is the actual injured party.) Plaintiff's argument relied heavily on two prior Second Circuit decisions that had analogized the MSP to a qui tam statute. Because of those decisions, the law in the Second Circuit seemed to suggest that the MSP might be a qui tam statute.
The U.S. Court of Appeals for the Second Circuit agreed with Epstein Becker Green's arguments that the MSP: (i) is not a qui tam statute, and (ii) only provides individuals with a traditional private right of action that requires a plaintiff to have individual standing based on a personal injury caused by an alleged violation of the MSP. The ruling that the MSP is not a qui tam statute is now the controlling law in the Second Circuit.
The decision in this case is favorable for payors and providers who bill, or are reimbursed by, Medicare for services that arguably are covered by primary payors. The Court's ruling clearly bars individuals who have not been injured from trolling for alleged violations of the MSP and bringing burdensome and costly suits against payors, providers, and Medicare intermediaries. It is notable that the Court could have side-stepped the qui tam issue and simply affirmed the dismissal of the plaintiff's case on procedural grounds.
The Epstein Becker Green team representing Empire Blue Cross and Blue Shield consisted of Washington, DC attorney Daly D.E. Temchine and New York attorney Aime Dempsey.
Epstein Becker Green Obtains $1 Million Judgment for Client in Corporate Dispute
On July 15, 2009, Epstein Becker Green succeeded in obtaining a judgment of more than $1 million for its client. The dispute concerned shareholders of a close corporation.
In 1985, EBG's client received from his brother a gift of stock representing a 70 percent interest in a "Subchapter-S" corporation that his brother utilized to own and manage New York City apartment buildings. Our client set aside the certificate for 20 years. In 1986, the NY Secretary of State dissolved the corporation for failure to pay franchise taxes. The brother waited 90 days and incorporated another entity with the same name as the dissolved corporation and continued business as usual, including buying a building in Harlem in 1987 and selling the other properties in 1988. EBG's client was unaware of these activities. The brother died in 2001, and his wife sold the Harlem building in 2005 for a $1.2 million profit.
In 2006, our client found the stock certificate and asked the wife for his share of the $1.2 million profit. She refused to pay, arguing that our client owned stock only in the first corporation, but the building was bought and sold by the second corporation. Our client sued.
After a bench trial, the New York Supreme Court in Manhattan granted EBG's client 70 percent of the profit from the sale, ruling that the second corporation was a mere continuation of the first. More importantly, the judge agreed with Epstein Becker Green's position that to allow the wife to prevail would encourage shareholders to avoid paying franchise taxes and, when faced with dissolution, merely reincorporate for a few dollars. Such schemes violate public policy.
This case was challenging because the brother had been dead for eight years, our client had no knowledge of the brother's business (neither did the wife), corporate records were non-existent, the wife's son had destroyed all other records of the real estate sale at issue, and most of the corporate activities occurred 20 years ago. Fortunately, Epstein Becker Green found and deposed the lawyer who represented the brother in the 1980s. The lawyer testified that there was no need to transfer title of the first corporation's property to the second corporation in 1986 since "they were the same corporation" and that it was the brother's practice not to pay franchise taxes when it was just as easy and cheaper to reincorporate.
The Epstein Becker Green team representing the client included New York Litigation attorney Kenneth J. Kelly.
Epstein Becker Green Obtains Dismissal of Letter of Credit Action
On July 2, 2009, Epstein Becker Green obtained a dismissal of a suit for $6 million against its client, China Construction Bank Corporation ("CCBC"), one of the largest banks in the People's Republic of China, arising from a letter of credit issued by CCBC. The suit, which was brought in New York Supreme Court, raised novel issues relating to the liabilities of parties to relatively rare "transfer" of letter of credit transactions.
A letter of credit (or "L/C") is used as a financing tool in international trade when an exporter does not want to rely on the creditworthiness of an importer. The L/C is a promise by the importer's bank (the "issuer") that it will pay the exporter of merchandise (the "beneficiary") the price of the merchandise on the receipt of export documents of title showing merely that the goods have been shipped, whether or not the underlying sales actually transaction is performed. Sometimes the exporter's bank will, with the issuer's express permission, "transfer" the L/C to "secondary beneficiaries," who are usually the exporter's subcontractors, to pay them for their part of the manufacture of the merchandise. The issuer will ultimately be responsible for the entire L/C payment if all parties to the transaction follow the international rules governing L/C transactions.
The transaction here involved a shipload of iron ore to be exported from Venezuela to China and a L/C that CCBC had designed as "transferable." The beneficiary of CCBC's L/C directed its New York bank ("Bank M") to transfer $6 million of the $12 million L/C to the steamship owner to pay for the shipping costs. In order to be paid the $6 million, all the steamship owner had to do was fax a "certificate of readiness" to Bank M stating that the vessel had arrived in port to pick up the ore. The owner did just that.
Unfortunately, the exporter seems to have gone out of business and breached the sales contract; there was no ore to be loaded. Nevertheless, under L/C law, because the "certificate of readiness" was all Bank M had specified was needed to obtain payment, Bank M had to pay $6 million unless there were flaws in the documents presented to it. Bank M refused to pay on the transferred L/C. The steamship owner sued CCBC and Bank M for failing to honor the L/C, asserting that because Bank M was CCBC's agent when it transferred the L/C and the owner had established the requirement of the certificate of readiness and presented a proper certificate, CCBC was therefore liable for $6 million.
In a lengthy opinion that explained, in detail for the first time in New York, the rights and obligations of the diverse various parties to "transferred" letters of credit, the court accepted EBG's arguments and granted CCBC's motion for summary judgment dismissing the steamship owner's claim against CCBC, while holding Bank M liable for $6 million. Applying the L/C rules of the International Chamber of Commerce, the court held that Bank M, as the transferring bank, could not bind CCBC by the transfer even though CCBC's L/C expressly permitted transfers. This is because the terms of the transferred L/C varied from the original L/C and Bank M exceeded its authority in transferring the L/C so as to require a certificate of readiness. AP Marine Ltd. v. China Construction Bank Corp., N.Y. Co. Index No 602-517/08.
Kenneth J. Kelly, Victoria Sloan and Jian Hang represented CCBC in the litigation.
Epstein Becker Green Closes Sale of 14 Nursing Homes
On June 30, 2009, Epstein Becker Green closed the sale of 14 nursing homes by Arkansas-based Golden Living to Capital SeniorCare Ventures, LLC. The Heritage Company affiliates will be the new operators for each facility. Capital SeniorCare Ventures is an affiliate of Baltimore, Maryland-based Capital Funding Group, Inc. The purchase price was not disclosed.
The Epstein Becker Green attorneys representing Golden Living included Robert D. Reif in the Washington, DC office, and Alan B. Wynne in the Atlanta office.
Epstein Becker Green Closes Asset Acquisition
Epstein Becker Green attorneys represented eHealth Partners, LLC, in its acquisition on June 26, 2009 of certain technology/IP and other assets from California-based eHealth Technology, Inc. The purchase price was not disclosed.
eHealth Partners is a fast-growing health care information technology services company focused on serving payers nationwide.
Epstein Becker Green attorneys representing eHealth Partners, LLC included Robert D. Reif in the Washington, DC office.
Epstein Becker Green Is Victorious in Major Environmental Dispute
On June 22, 2009, after an six-week bench trial in the U.S. District Court for the District of New Jersey, Epstein Becker Green won a resounding victory for its client, Reichhold Inc. This case addressed claims relating to the cleanup of a contaminated chemical plant site formerly owned by Reichhold, which is located in Carteret, New Jersey. The case was brought pursuant to the federal CERCLA and New Jersey Spill Act statutes, as well as a 1994 settlement agreement between the parties.
Defendant United States Metals Refining Co. ("USMRC"), which owned the site prior to Reichhold, had argued that the settlement agreement prohibited Reichhold from bringing the claims in the instant lawsuit. The Court rejected USMRC's argument and held that, because virtually all of Reichhold's claims constituted "New Environmental Obligations" under the settlement agreement, they were actionable. The Court also dismissed every defense to liability raised by the defendant, including the defense that Reichhold's claims were time-barred.
In its Final Judgment, the Court awarded Reichhold $1,209,719 for investigation and cleanup costs that Reichhold had incurred while addressing metals contamination caused by USMRC's industrial operations. The Court also entered a declaratory judgment requiring USMRC to pay certain of Reichhold's future cleanup costs.
Reichhold's success at trial was attributable, in part, to its being able to discredit the expert testimony of USMRC's experts. In conjunction with an aerial photogrammetrist, USMRC's environmental engineering expert used historical aerial photographs of the site taken over a 60-year period to develop computer-generated surface contour maps that purported to depict Reichhold's excavation and fill activities at the site over time. Because of these topographical maps, USMRC's experts argued that Reichhold had caused extensive metals contamination at the site in the 1960's and 1970's by using contaminated fill in low lying areas of the property. On the basis of the cross-examination of defendants' experts by Epstein Becker Green attorneys William A. Ruskin and Sheila A. Woolson, the Court rejected the experts' testimony and held that the conclusions based on the photogrammetry performed were unconvincing. Consequently, the Court placed no reliance on the cut and fill evidence presented. In contrast, the Court accepted the testimony of Reichhold's witnesses that Reichhold had not disposed of any metals containing contamination at the site.
In addition to William A. Ruskin and Sheila A. Woolson, the Epstein Becker Green litigation team included Victoria M. Sloan.
Epstein Becker Green Obtains Major Victory in ADA Accessibility Lawsuit Involving More than 2,800 Hotels Nationwide
On March 25, 2009, Epstein Becker Green obtained a very significant ruling from the U.S. District Court for the District of Columbia for one of the leading hotel companies in the world. Two prominent disability advocacy groups and three individual plaintiffs filed a lawsuit claiming that more than 2,800 hotels operating under the company's brands violated the public accommodations accessibility requirements of the Americans with Disabilities Act ("ADA"). The plaintiffs sought extensive and expensive retrofits to every hotel, as well as changes to the company's central reservations system. Epstein Becker Green filed a motion to dismiss which resulted in the case being limited to only four out of the more than 2,800 hotels original targeted and a dismissal of the claim relating to the reservations system.
In dramatically limiting the case's scope, the court issued several important rulings. First, the court held that advocacy organizations do not have standing to bring lawsuits under Title III of the ADA for injuries that they suffered as a result of disability discrimination against others. Second, the court held that to have standing to bring suit on behalf of members, the advocacy organizations must -- at the outset of the case -- identify: the members; which establishments they visited; what accessibility barriers they encountered; and whether they would return to the establishment were it not for the accessibility barriers. Third, the court held that the organizations' standing to bring the suit on behalf of their members was limited to the scope of the members' standing. Fourth, the court held that the members only had standing to sue for hotels for which they had actual knowledge of accessibility barriers absent a corporate-wide common design and for which they claimed a specific and imminent desire to return. These legal principles are not only relevant to nationwide ADA Title III cases against hospitality companies, but also to such cases brought against retailers, restaurants, and other businesses that have multiple locations.
The hotel company was represented by Washington, D.C. attorney Frank C. Morris, Jr., Director of the Firm's Disability Practice Group.
Epstein Becker Green Attorneys Obtain a Defense Verdict in Retail Race Discrimination and Defamation Suit
On March 9, 2009, Epstein Becker Green attorneys obtained a defense verdict in favor of their retail jewelry store client. In Singleton v. Ben Bridge Jeweler, Inc., Plaintiff, an African American male, sued Ben Bridge in a federal court in Houston, alleging that he was denied an opportunity to purchase a $5,000 Rolex watch because of his race, in violation of 42 U.S.C. §§ 1981 and 1982. Plaintiff also alleged defamation concerning statements made by a sales associate.
Plaintiff presented evidence at trial that, on March 18, 2007, he and his girlfriend visited a Ben Bridge store to buy a Rolex watch. A sales associate who assisted Plaintiff told him she needed to obtain the key to the case that contained the Rolex watch. The sales associate, in fact, had the key on her person, but wanted the assistance of another sales associate. When the second sales associate arrived, Plaintiff and his girlfriend testified that the sales associate stated "Rolex! Where did you get the money?!" Plaintiff also alleged the sales associate used racial language towards him and then escorted Plaintiff and his girlfriend out of the store. The sales associates denied Plaintiff's version of events, and the store defended its actions based on store protocol.
The Court dismissed Plaintiff's defamation claim because Plaintiff failed to plead and prove special damages. With respect to the claim of retail race discrimination, the jury found in favor of the Ben Bridge, concluding that Plaintiff did not intend to purchase a Rolex watch - an essential element of Plaintiff's §§ 1981 and 1982 claims.
It should be noted that Plaintiff utilized two Caucasian testers to prove he was treated less favorably. These testers testified during discovery that they were shown more expensive watches by one sales associate without the assistance of another sales associate. Ben Bridge was successful in excluding the testimony of these testers on the ground that they were not similarly-situated to Plaintiff.
Ben Bridge was represented by attorney Greta Ravitsky of the Houston office.
Epstein Becker Green Succeeds in Appeal of Contract Case
Epstein Becker Green successfully represented Aramarine Brokerage, Inc., a wholesale insurance broker, for the appeal of a trial court's judgment that dismissed Aramarine's complaint and awarded more than $1.3 million on the insurer's counterclaim in a breach of contract case. Aramarine was represented by another law firm at the trial court level. On January 23, 2009, the U.S. Court of Appeals for the Second Circuit held in Aramarine Brokerage, Inc. v. OneBeacon Insurance Co. that: (i) the trial court applied the wrong law; and (ii) under the applicable Pennsylvania law, although Aramarine's oral agreement was not performable within one year, the agreement did not need to be set forth in a written and signed document as is required in New York. The Court of Appeals reinstated the complaint, vacated the judgment for damages, and remanded the case for trial.
The Epstein Becker Green team representing Aramarine on the appeal included New York Litigation attorneys Kenneth J. Kelly and Jennifer M. Horowitz.
Epstein Becker Green Closes $10 Million Sale of Dental Managed Care Companies
On December 31, 2008, Epstein Becker Green attorneys successfully closed the sale of their clients Dominion Dental USA, Inc. and its subsidiaries ("Dominion"), which operate dental managed care companies, to Capitol Blue Cross, a leading health insurer in Central Pennsylvania and the Lehigh Valley. Dominion offers dental benefit plans in Delaware, Maryland, Pennsylvania, Virginia, and Washington, DC. The transaction, valued at $10 million, will add approximately 400,000 new members to the Capital BlueCross dental plan.
The EBG team representing Dominion included Washington, DC Health Care and Life Sciences and Corporate Services attorney Robert Reif.
Case Settled Favorably After Class Certification Denied
Epstein Becker Green's Labor and Employment attorneys secured a significant victory in a wage hour collective and class action, when they successfully opposed class certification at an early stage of litigation. The Complaint, filed in July 2008 in the US District Court for the Southern District of New York, alleged a collective action for overtime violations of the Fair Labor Standards Act ("FLSA") and a parallel Rule 23 class action for alleged violations of New York State labor law.
However, a close examination of the facts revealed the need for individual analysis of each claim, thus, defeating the utility of class certification. Further, the individual plaintiff's theory of recovery and factual overgeneralizations inflated the claim by 100 percent. Once the case was limited to a single plaintiff and the claim was reduced to a monetary amount in line with reasonable calculations of potential exposure, the lawsuit was promptly settled on favorable terms. The client successfully concluded this potentially complex litigation before discovery and motion practice in a cost-effective manner.
Epstein Becker Green's Labor and Employment team was led by Senior Trial Counsel Douglas Weiner.
Epstein Becker Green Succeeds in Limiting Discovery to Collective Action's Opt-in Plaintiffs
In a recent wage hour collective and class action, Epstein Becker Green's Labor and Employment attorneys successfully limited discovery to the opt-in plaintiffs identified by their Court filings. The Complaint was filed in June 2008 in the US District Court for the Southern District of New York and alleged misclassification of independent contractors in a collective action for overtime violations of the Fair Labor Standards Act ("FLSA") and a parallel Rule 23 class action for alleged violations of New York State labor law. Upon being served with the Complaint, Epstein Becker Green's client needed sufficient time to identify, locate and analyze vast sets of records to evaluate potential exposure and defend the lawsuit.
At the initial scheduling conference, plaintiffs' attorneys advised the judge that they intended to file a motion for class certification as early in the litigation as possible. Epstein Becker Green attorneys opposed the motion as premature, and sought an opportunity to assess the opt-in plaintiffs' claims with a view toward engaging in substantive settlement negotiations on the basis of the facts and claims of the identified plaintiffs. Persuaded by the possibility of settlement, the Court did not allow the plaintiffs' class certification motion to proceed. If the case could be limited to the opt-in plaintiffs, and those claims reduced to a monetary amount in line with reasonable calculations of potential exposure, the lawsuit could be settled on favorable terms. By setting the sequence of proceedings at the Court's initial schedule, Epstein Becker Green's client successfully gained time to engage in settlement negotiations before costly motion practice delayed the possible resolution of the matter.
Epstein Becker Green's Labor and Employment team was led by Senior Trial Counsel Douglas Weiner.
Jury Rules for Epstein Becker Green in Defamation Trial
Epstein Becker Green attorneys obtained a jury verdict on November 19, 2008, dismissing a defamation action brought by a former executive against one of New York City's largest hospitals. The action was in federal court in Central Islip, New York.
The plaintiff had been the hospital's Executive Vice President for finance, billing and collections, information technology and strategic planning. He had left the hospital's employ in 2000. Thereafter, the New York Attorney General ("AG") investigated billing for Medicaid patients for services rendered at part-time clinics operated by the hospital and alleged that the hospital fraudulently overbilled the State. The overbilling allegations were settled for more than $75 million in 2005.
As part of the settlement, the AG filed a civil complaint alleging that the hospital had engaged in Medicaid fraud and that certain named individuals, including the plaintiff, were principals in perpetrating the fraud. In addition, the AG required that the hospital provide the AG with a written apology for "misconduct" of unnamed "former executives." The AG announced the settlement in a press release on his office's Web Site, which quoted the apology and linked to the complaint—which, unlike the apology, identified plaintiff by name.
The next day, the AG's press release was reported in the press and plaintiff's name was mentioned in connection with the apology. The plaintiff's then-current employer, another hospital, fired him on the spot, stating publicly that he was fired because of the AG's allegations.
Epstein Becker Green's client was then sued for defamation as a result of the AG's public dissemination of its apology. We defended on the ground that the re-publication of the alleged defamation by the AG did not constitute publication by the hospital. Plaintiff argued that because some of the language of the apology had been drafted by the hospital during negotiations, the publication should be considered at least a joint publication. The jury decided, however, that the hospital's involvement in the drafting process did not constitute a publication by the hospital, and as a result, the plaintiff did not prove a viable defamation claim.
The Epstein Becker Green team included New York attorney Kenneth J. Kelly.
Federal Court Stops HHS from Applying "Least Costly Alternative Policy" to Covered Pharmaceuticals
On October 16, 2008, Epstein Becker Green won a significant case for its plaintiff-clients, a Medicare beneficiary and the manufacturer of an inhalation drug. In Hays v. Leavitt, the U.S. District Court for the District of Columbia ruled in favor of the plaintiffs and permanently enjoined the Secretary of Health and Human Service ("Secretary") from implementing coverage policies that would have based Medicare reimbursement for a covered inhalation drug on the "least costly alternative."
The plaintiffs had challenged four local coverage determinations that set the Medicare reimbursement rate based on the "least costly alternative" policy in the Medicare Program Integrity Manual instead of using the formula in 42 U.S.C. § 1395w-3a, which directs the Secretary to set the reimbursement for such drugs at 106% of the average sales price for that drug as reported quarterly to the Secretary.
The court rejected the Secretary's argument that the provision in 42 U.S.C. § 1395y(a) prohibiting payment for items and services that are "reasonable and necessary" also authorized him to make payment determinations. Instead, the court applied the standard taken from Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843 (1984) and concluded that Congress had expressly addressed both coverage and reimbursement for covered drugs in the statute, that the language of § 1395y(a) was limited to coverage and did not authorize the Secretary to determine reimbursement using a formula that deviated from the comprehensive language of § 1395w-3a. The court found that the phrase "reasonable and necessary" refers to items and services, and not to expenses for those items and services. In determining that the Secretary had exceeded his statutory authority, the court noted that "[i]f the Secretary had broad discretion to determine what expenses are reasonable and necessary under section 1395y(a), the Secretary may re-write these formulas to her liking whenever she believes they provide for an unreasonable or unnecessary expense simply by stating that any payment of expenses above her desired payment amount are barred as unreasonable or unnecessary under section 1395y(a)."
The Epstein Becker Green team was composed of Washington, DC attorneys Stuart M. Gerson and Robert E. Wanerman, with assistance from John F. Benevelli of EBG Advisors.
Epstein Becker Green Obtains Dismissal of Putative Class Action
On October 6, 2008, Epstein Becker Green attorneys were successful in obtaining a dismissal of a putative class action against their clients, major health insurance companies. The suit was filed in the Southern District of New York against many major health care payors and their respective subrogation and collection service vendors.
Early on, Epstein Becker Green attorneys recognized that their clients were on the path of becoming needlessly embroiled in the politics, maneuvering and complexities of a multi-defendant class action. Therefore, the attorneys made a bold proposal to their clients: File a Motion to Dismiss immediately and before any conferences with the Court, the plaintiffs, and counsel for the co-defendants took place. The clients expressed appropriate concerns about whether the Court might consider the motion to be premature, and the potential risks of proceeding independently of the other defendants, but approved Epstein Becker Green's proposal.
Three days before the first conference with the Court, Epstein Becker Green attorneys filed a Motion to Dismiss with prejudice and also a served a Rule 11 Notice Letter on plaintiffs' counsels with the Motion. At the conference, plaintiffs' counsel consented to a dismissal with prejudice, and the Court granted the Motion to Dismiss. Epstein Becker Green attorneys stayed in the courtroom out of caution, and persuaded the Court that no discovery should be directed to their clients. Thus, Epstein Becker Green's clients successfully avoided the eventual blizzard of discovery that was served on the other defendants, and the vigorous debating and disagreeing among the counsel of those defendants regarding strategy and tactics.
The Epstein Becker Green Litigation team that represented the major health insurance company clients included Washington, DC, attorney Daly D.E. Temchine.
Federal Court Grants Epstein Becker Green's Motion to Dismiss RICO Suit
On September 2, 2008, Epstein Becker Green attorneys secured an important victory for their clients, Northern Leasing Systems and several of its officers, when a New York federal court granted their motion to dismiss a suit alleging violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"). Northern finances leases of credit card terminals to retail businesses. In Serin v. Northern Leasing Systems, the plaintiffs defaulted on their respective lease agreements and were sued by Northern in state court. Plaintiffs alleged in this federal action that these collection suits were groundless and constituted criminal extortion, which is a "pattern of racketeering activity" under RICO.
The U.S. District Court held that, even assuming the plaintiffs' claims that the collection suits were groundless (which Northern denied), bringing or even threatening a lawsuit was not the use of an "unlawful means" to obtain an unlawful end, which is the essence of criminal extortion. The Court further rejected the argument that a claimed abuse of judicial process, standing alone, is not extortion. The Court also dismissed plaintiffs' claim that Northern's alleged deceptive practices in entering into leases constituted a violation of New York's consumer fraud statute, General Business Law §349, since the plaintiffs were admittedly small businesses and not consumers.
The EBG Litigation team that represented Northern included New York shareholder Kenneth J. Kelly.
Epstein Becker Green Successfully Defends Medical Center in Federal False Claims Act Suit
On August 29, 2008, Epstein Becker Green attorneys secured an important victory for their client, a major New York academic medical center. In the case brought by a qui tam relator after the U.S. Government declined to proceed against the client, the relator alleged that the medical center's billing practices violated the Federal False Claims Act. After a 17 day trial, the jury returned a verdict dismissing all of the relator's claims.
This was a closely watched litigation, especially in light of the Supreme Court's Allison Engine decision earlier in the year. This success highlights EBG attorneys' ability to defend health care clients who become enmeshed in whistleblower litigation brought by or on behalf of the U.S. Government.
The EBG team that represented the medical center was led by Stuart M. Gerson and James S. Frank.
Epstein Becker Green Wins Discrimination Suit Dismissal
On August 6, 2008, Epstein Becker Green won a significant victory for Verizon New York Inc. ("Verizon"), when following a three-day trial, the New York State Division of Human Rights ("SDHR") dismissed the lawsuit on all grounds. In Levine v. Verizon New York, Inc., the plaintiff alleged discrimination on the basis of race, color and gender, as well as retaliation for exercising rights protected by the New York State Human Rights Law. The plaintiff, a former Central Office Technician, worked for Verizon or its predecessors from about 1989 until her termination in April 2006 following a workplace altercation with her supervisors and an investigation into her absence without approval.
Following a June 29, 2007 probable cause determination, trial was held over three days in February and March 2008. At the conclusion of the third day of trial, an Administrative Law Judge ("ALJ") closed the record over Verizon's objection as it had not been permitted to call to the stand three additional and had not completed the cross-examination of the plaintiff due to SDHR time limitations. On May 6, 2008, the ALJ issued a decision (amended two days later) recommending that the SDHR dismiss the complaint in its entirety, as the Plaintiff failed to offer sufficient evidence to support her claims. Neither party filed objections to the decision. The SDHR adopted the ALJ's recommendation and dismissed the case on all grounds. The Plaintiff has 60 days to appeal.
Verizon was represented by EBG Labor and Employment attorney Matthew Miklave, a Member of the Firm in both the New York and Stamford offices.
Epstein Becker Green Attorneys Obtain Voluntary Dismissal of Collective Action Lawsuit
EBG Labor and Employment attorneys scored a big victory when they obtained a voluntary dismissal of a collective action lawsuit brought against their client, a catering company. In June 2008, certain employees of the caterer filed a class action FLSA lawsuit in the U.S. District Court, Southern District of New York. The lawsuit alleged wage and hour overtime violations by the caterer. The employees claimed unpaid overtime, plus a "20% service charge" pursuant to World Yacht, a recent state court decision interpreting a New York law. The FLSA claim was the basis of federal jurisdiction. However, when the employer promptly paid the small amount of overtime wages due, there was no continuing basis for federal jurisdiction. Prior to even filing an Answer, on July 30, 2008, EBG attorneys persuaded the employees' attorneys that the lawsuit had no merit. The employees' attorneys then agreed to voluntarily dismiss the lawsuit before their first court appearance.
The L&E team representing the caterer was led by Senior Counsel Douglas Weiner.
Epstein Becker Green Closes Sale of Pennsylvania Nursing Homes
Epstein Becker Green successfully closed an asset sale for its client, the owner of nursing homes in Pennsylvania. In the transaction, the client sold certain nursing home assets to a new operator and landlord.
The EBG team representing the Pennsylvania nursing home owner included Washington, DC Health Care and Life Sciences and Corporate Services attorney Robert Reif and Atlanta Real Estate attorney Alan Wynne.
Epstein Becker Green Helps Convince New York's Highest Court to Limit Whistleblower Class
On July 1, 2008, Epstein Becker Green helped its hospital client convince New York's highest court to sharply limit the class of employees protected by New York's health care whistleblower law (Labor Law section 741). In the case of Reddington v. Staten Island University Hospital and North Shore Long Island Jewish Health System, the Director of the hospital's International Patient Program alleged that the hospital terminated her employment in retaliation for translating and relaying alleged complaints of certain international patients. The hospital asserted that, because the Director did not "perform health care services," she could not maintain her section 741 claim.
The New York Court of Appeals ruled in favor of the hospital, noting that the Director was not within the class of employees protected by Labor Law section 741. As a result of this decision, employees who work in the health care field who do not personally render medical treatment or use professional judgment must rely on a more stringent whistleblower statute, Labor Law section 740, which requires that an employee's belief of a violation prove correct, that the health and safety of the public at large be endangered, and that an employee bring his claim in court within one year of the alleged retaliatory action.
The Epstein Becker Green team representing the hospital included New York Litigation attorney Kenneth J. Kelly.
Epstein Becker Green Attorneys Succeed in Blocking Hospitals' Collection Actions
In June 2008, Epstein Becker Green secured an important victory for a major California health plan, Kaiser Permanente, when the California Superior Court in Los Angeles granted an injunction prohibiting Prime Healthcare System, Inc. and its affiliated hospitals and collection agency from pursuing collection actions against Kaiser members. On May 1, 2008, Prime had sent over 3,700 letters to Kaiser members demanding payment and threatening collection action against the members. Kaiser obtained a temporary restraining order and later a preliminary injunction prohibiting Prime from pursuing Kaiser's members for the claims at issue. The Superior Court found, adopting the arguments and even some of the language from EBG's brief, that Prime's activities constituted sharp and fraudulent business practices in violation of California's prohibition against unfair competition. Prime later conceded that its efforts in sending thousands of collection notices to Kaiser's members on a single day were an attempt to leverage Prime's position in its other lawsuits against Kaiser and force Kaiser into settlement on terms that were less than favorable to Kaiser. EBG's immediate and effective response and successful outcome prevented Prime's efforts to bully Kaiser into an unfavorable settlement and served to protect Kaiser's members from Prime's actions.
The EBG team representing Kaiser was led by Los Angeles Litigation attorneys David Jacobs and Susan Graham.
Epstein Becker Green Attorneys Finalize $3 Million Stock Investment
Epstein Becker Green attorneys helped their client, Radius Ventures, Inc., finalize a $3 million investment in preferred stock and warrants in Management Health Solutions, Inc.
The EBG team representing Radius Ventures, Inc. included Washington, DC Health Care and Life Sciences and Corporate Services attorney Robert Reif.
Epstein Becker Green Closes Deal for Acquisition of Nursing Homes in Indiana
Epstein Becker Green attorneys successfully closed a $15 million transaction for their client, Capital SeniorCare Ventures, an affiliate of Capital Funding Group, for the acquisition of four nursing homes in Indiana. The transaction had a number of challenges, particularly on the real estate side, including uncleared title issues.
The EBG team included Washington, DC Health Care and Life Sciences and Corporate Services attorney Robert Reif and Atlanta Real Estate attorney Alan Wynne.
Louisiana Trial Court Affirms Denial of Class Certification in Louisiana Toxic Tort Action
In a sweeping decision issued on April 14, 2008, a trial judge in Louisiana affirmed a Special Master's recommendation to deny class certification for plaintiffs alleging that pipe-cleaning operations on a commercial real-estate owner's property caused radioactive material that resulted in serious personal injuries to homeowners. Epstein Becker Green Litigation attorneys played a key role in obtaining the denial of class certification sought by plaintiffs in this Louisiana toxic tort action. The trial judge's decision went well beyond a discussion of the numerosity requirement of class certification, which was the Special Master's sole basis for recommending that no class be certified. Rather, the trial judge examined all of the class certification requirements and found that plaintiffs had failed to meet virtually all of them.
The EBG Litigation team representing the defendant property owner included New York attorney William A. Ruskin.
Epstein Becker Green Wins Dismissal in Agricultural Chemical Litigation With Broad Application of 'Economic Loss' Rule
Epstein Becker Green Litigation attorneys in New York prevailed in obtaining summary judgment on behalf of a manufacturer of agricultural chemical products by persuading the New York state court to adopt a broad application of the "economic loss rule" to bar a third-party claim that alleged that a herbicide applied to corn and alfalfa failed to provide appropriate weed control (herbicide non-performance).
In the case, a farmer alleged that an improper herbicide application by the herbicide applicator caused his reduced corn yield during the 2002 growing season. The herbicide applicator then launched a third-party action against EBG's client, the manufacturer of the herbicide products, with claims for indemnification, contribution, breach of contract, breach of warranty and strict products liability. The Cortland County Supreme Court dismissed the claims. Adopting Epstein Becker Green's argument, the court held that the plaintiff's alleged damages, were "economic" losses that solely concerned a bargain struck between the two primary parties under a contract, so the third-party action was barred.
According to EBG Litigation attorney William Ruskin, counsel for the manufacturer, "To our knowledge, there are no prior reported cases in New York that have applied the economic loss rule to bar a claim for alleged herbicide non-performance under similar circumstances, which makes this case a significant precedent."
Epstein Becker Green Wins Significant Victory in Protecting Employer's Confidentiality, Trade Secrets
On February 29, 2008, Epstein Becker Green Labor and Employment attorneys won a significant victory for their client, a food service company. The Arizona Superior Court granted their motion for a temporary restraining order ("TRO") and granted their request for a third-party neutral computer expert to investigate the defendants' computer systems to determine the extent of the misappropriation and disclosure of trade secrets. This was a significant victory for our client because it ordered the defendants to cease using and disclosing highly confidential information that was being used to harm our client in the Arizona marketplace, and allowed extensive discovery of the defendants' post-employment activities with respect to our client's confidential and trade secret information.
The EBG L&E team that represented the food service company was composed of Washington, DC attorneys Kara M. Maciel and Mark M. Trapp.