BLT: June 2019

 

Featured Articles

Business & Corporate

Community Engagement and Investment: Supporting Your Client's Sustainability Initiatives

Sustainability is about the long-term well-being of society—an issue that encompasses a wide range of aspirational targets, including the sustainable development goals (SDGs) of the 2030 Agenda for Sustainable Development adopted by world leaders that went into effect on January 1, 2016. Among other things, the SDGs include ending poverty and hunger; ensuring healthy lives and promoting well-being for all; ensuring inclusive and equitable quality education and promoting lifelong learning opportunities for all; and promoting sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all. The goals listed above are based on the recognition that society in general is vulnerable to a number of significant environmental and social risks, including failure of climate-change mitigation and adaptation, major biodiversity loss and ecosystem collapse, man-made environmental disasters (e.g., oil spills), failure of urban planning, food crises, rapid and massive spread of infectious diseases, and profound social instability.

Business & Corporate

It’s Final: National Bank Act Does Not Preempt California Requirement to Pay Interest on Escrow Accounts

The U.S. Supreme Court declined to review the decision of the Ninth Circuit Court of Appeals in Lusnak v. Bank of Am., N.A., 833 F.3d 1185 (9th Cir. 2018), which effectively overturned a national bank regulation preempting state mortgage escrow laws. At issue was California Civil Code Section 2954.8(a), which requires financial institutions to pay two-percent interest per year on funds held in mortgage loan escrow accounts. The Ninth Circuit found a way around a 2004 preemption determination by the Office of the Comptroller of the Currency, the division of the U.S. Treasury which regulates national banks, set forth in 12 C.F.R. § 34.4(a)(6), which states, “[a] national bank may make real estate loans . . . without regard to state law limitations concerning . . . [e]scrow accounts, impound accounts, and similar accounts.”

Business & Corporate

#MeToo Backlash Contradicts Research on Gender Bias

The backlash to #MeToo has significant potential to further diminish opportunities for women at work, as some men claim to be fearful of engaging in mentoring and other relationships important to career advancement. In but one example, a survey reported that “65% of men say it’s now ‘less safe’ to mentor and coach members of the opposite sex.” Some survey respondents expressed concern that the work environment has become too sterile and that women are not being held accountable for their work because managers fear being accused of gender bias.

Business & Corporate

The Equality Act: Replace a Tenuous Judicial Status Quo with a Permanent Legislative Solution to Ensure Workplace Opportunity for LGBTQ2+ People

There has been much recent media attention around the Equality Act, especially after it passed in the U.S. House of Representatives on May 17, 2019. The act has been heralded as a first-of-its-kind bill and comes at a time when, according to the New York Times, “departments across the Trump administration have dismantled policies friendly to gay, bisexual and transgender individuals, like barring transgender recruits from serving in the military or formally rejecting complaints filed by transgender students who are barred from restrooms that match their gender identity.” Recently, the Department of Justice filed an amicus brief opposing protections for LGBTQ individuals in the trio of cases now before the U.S. Supreme Court that will decide whether Title VII already prohibits sexual orientation and gender identity discrimination.

Business & Corporate

The View from Section 2605(g): RESPA’s Causation Condition

Since President Gerald Ford signed it into law on December 22, 1974, the Real Estate Settlement Procedures Act (RESPA)[2] has been amended to cover many diverse yet related “real estate” subjects. In its present iteration, only sections 2605(g) and 2609 deal with mortgage escrow accounts, with much of RESPA’s escrow-themed jurisprudence centering on the former.[3] Despite its sparsity,[4] this precedent’s perusal reveals the popularity of a peculiar interpretation of section 2605(g) within the federal judiciary[5]—namely, “[]though . . . [it] does not explicitly set this out as a pleading standard,” section 2605(f) impliedly requires a showing of pecuniary damages in order to state a claim under section 2605’s every subpart, including its escrow-centric section 2605(g).[6] As a result of this extrapolation’s increasing sway, another weapon for use by the many subject to RESPA’s positive commands and plain prohibitions has been forged, one too often unexploited by defendants and forgotten by plaintiffs.

Business & Corporate

Cold Water Poured on Action Claiming Improper Dilution of Shareholder Rights: David Xiaoying Gao v. China Biologic Holdings

In the recent decision David Xiaoying Gao v. China Biologic Holdings, Inc. (Dec. 10, 2018), the Grand Court of the Cayman Islands considered the following issues: 1. the propriety of issuing new shares to dilute the voting power of existing shareholders; 2. the extent to which it is possible for a beneficial owner of shares (i.e., not the registered shareholder) to enforce rights attaching to those shares; 3. whether a registered shareholder is able to assert an equitable claim in respect of impropriety which occurred before he or she became a registered shareholder; and 4. whether the right to pursue a claim relating to shares is assignable independently of the shares themselves.

Business & Corporate

Clarifying an Otherwise Final Award: An Exception to the Functus Officio Doctrine

Functus Officio is a Latin term meaning that once the purpose of the task at hand is completed, there is no further force or authority to undertake any further measures. When applied to arbitrations, the term means that once a final arbitration award has issued, there is no further authority for the arbitration panel to modify the award for any reason or to clarify the same. The rationale behind the rule is a belief that it is necessary to prevent a reexamination of issues by a nonjudicial officer where there might have been further outside communication or undue influence post-hearing. However, in a recent decision, General Re Life Corporation v. Lincoln National Life Insurance Company, 2018 U.S. App. Lexis 33340 (2d Cir. 2018), the Second Circuit joined the Third, Fifth, Sixth, Seventh, and Ninth Circuits in holding that an exception to this doctrine exists.

Business & Corporate

Requisite Disclosures for Enforceable Advance Conflict Waivers

On August 30, 2018, the California Supreme Court rendered a long-awaited decision in Sheppard, Mullin, Richter & Hampton, LLP v. J-M Manufacturing Co., Inc.[1] Primarily, the case considers what disclosures are required under California law to make a client’s “advance” conflict waiver enforceable. The decision also addresses when a dormant client is a “current” client and the extent to which a law firm may be entitled to payment for legal services rendered even in the face of a violation of the Rules of Professional Conduct.

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