Source: http://www.nelfonline.org/docket/archives/06-2006
Timestamp: 2019-04-21 06:39:51+00:00

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The issue in this case is whether knitters and sewers who make children’s clothing in their homes for sale by Fleece on Earth (“FOE”) in Chittenden, Vermont, are independent contractors or FOE’s employees under Vermont’s unemployment compensation statute. Believing the home workers are independent contractors, FOE has not paid unemployment contributions, which would only be required for employees. After a review triggered when one of the home knitters sought unemployment benefits after losing her full-time job as a respite care provider, the Vermont Department of Labor (“DOL”) assessed FOE for unemployment contributions for all of the home workers on the basis that they are FOE’s employees. FOE appealed the assessment, arguing that the knitters and sewer are independent contractors under the three-part “ABC” test set forth in the Vermont statute. Unemployment contributions do not have to be paid for independent contractors. Part A of the test requires a showing by the employer that the service provider “has been and will continue to be free from control or direction over the performance of such services.” The DOL’s Employment Security Board (“ESB”) ruled that FOE failed Part A because it supplies the home workers with designs and yarn and pays for products that substantially meet its requirements, thereby controlling what the workers make.
FOE has appealed to the Vermont Supreme Court, where NELF has filed an amicus brief supporting FOE’s position. NELF argues, on behalf of itself and co-amicus National Federal of Independent Business Legal Foundation, that the ESB fatally confused control of results with control over performance. Freedom from the latter is the proper test under the law and, based on the factual record, FOE clearly meets its burden. While FOE tells the home workers what to make, they do the work on their own schedules, with their own tools, and in their own way. NELF also points out in its brief that if, as the ESB has ruled, control over the results of the work performed were the test, there could be no independent contractor status in Vermont. Businesses will always specify the results of the work for which they have hired an independent contractor. When it enacted the ABC test, the Vermont Legislature defined independent contractor status and did not abolish it altogether. Thus, the ESB’s interpretation should also be reversed on the ground that it is contrary to the Legislature’s intent and would have the effect of depriving Vermont of the important services provided by independent contractors in all sectors of Vermont’s economy. This case is currently scheduled for argument in the fall of 2006.
The issue in this case was whether a company that has filed a timely application for renewal of a now-expired National Pollution Discharge Elimination System (“NPDES”) permit, may continue to operate and discharge pollutants under the expired permit’s terms until the relevant government agency, which was the Environmental Protection Agency (“EPA”) before 2001 and the Maine Department of Environmental Protection (“DEP”) thereafter, has issued a new permit. For over twenty years International Paper (“IP”) operated its paper mill in Jay, Maine, under a 1985 NPDES permit while waiting for the EPA and more recently the Maine DEP to issue a new permit. (As contemplated by the Clean Water Act (“CWA”), the EPA has delegated its NPDES permitting authority to the DEP.) It has done this pursuant to an EPA regulation and a specific provision of the federal Administrative Procedures Act which provide that, where a legally sufficient application for the renewal of a permit has been made to the responsible agency, the permittee may continue operating under the terms of its existing permit until the agency issues a new permit. Nevertheless, the plaintiffs brought this action against IP in the Maine federal District Court. The plaintiffs claimed both that the delegation by the EPA to the Maine DEP cancelled IP’s right to operate under its expired 1985 permit and that the continuation regulations should not be interpreted to mean that a permittee can continue to operate for over twenty years under an expired permit. Plaintiffs asked the District Court to order that IP immediately cease operations pending the issuance of a new permit and pay penalties for its operation after its permit allegedly expired due to delegation. IP moved to dismiss plaintiffs’ complaint on the ground that there is no language limiting the continuation regulations in the manner plaintiffs alleged and that the act of delegation had no impact on those regulations. IP also pointed out that the Maine DEP has issued a proposed permit for IP on which the public comment period had recently ended, and that it was likely that a final permit would issue in the near future thus rendering the matter moot.
NELF filed an amicus memorandum in support of IP in the District Court. In its memorandum, NELF supported IP’s argument that delegation of permitting authority to Maine did not invalidate IP’s ability to operate under its 1985 permit. NELF also argued that a contrary interpretation would expose any business that operates under NPDES permits, no matter how important its operation may be to the local and/or regional economy, to the risk that it may have to close down if a federal or state agency doesn’t renew its permit in time. Given the backlog at the EPA, which makes timely renewal of NPDES permits unlikely, this does not make sense from the policy perspective. Finally, NELF pointed out that the plaintiffs’ real complaint is with the regulations that permit continuation (which were held to be valid in Natural Resources Defense Council, Inc. v. U.S. Environmental Protection Agency, et al., 859 F.2d 156 (D.C. Cir. 1988)) and that they have no valid cause of action against IP.
On March 28, 2006, the District Court granted IP’s motion and dismissed the complaint.
United States v. Charles Johnson, et al.
NELF’s participation as an amicus curiae in this appeal to the United States Court of Appeals for the First Circuit follows naturally from NELF’s representation of the defendant in this civil case, Charles Johnson, as an amicus curiae in connection with the petition for certiorari to the United States Supreme court in Rapanos v. United States.
Mr. Johnson, members of his family and the family business were sued in 1999 by the Environmental Protection Agency (“EPA”) (which enforces Army Corps of Engineers regulatory authority over wetlands) in the United States District Court for the District of Massachusetts. The EPA based its complaint on alleged filling activity in wetlands associated with the creation and maintenance of cranberry bogs located in Carver, Massachusetts that are used in the family business. Mr. Johnson is a 73 year-old cranberry farmer who purchased his first cranberry bog in 1958 and currently farms, with his son, approximately 140 acres of cranberry bogs. Using standard techniques in the industry, Mr. Johnson has created substantial new wetland acreage out of former uplands since the 1950s. The activities about which the EPA complains occurred largely in the early 1980s and include Mr. Johnson’s impoundment of a stream to create an artificial pond to control water levels in the bogs. The EPA alleges that these activities occurred in areas that were “formerly marshy.” Although the Johnsons’ property is not adjacent to navigable waters, the District Court granted partial summary judgment against the defendants on liability based on the EPA’s arguments for the “Hydrological Connection Rule” which is described in the Rapanos summary, and granted summary judgment on remedy, requiring the Johnsons to pay a $75,000 civil penalty.
In its amicus brief, which was filed on June 30, 2005, NELF urged the First Circuit to adopt the Fifth Circuit’s interpretation of the Clean Water Act, which limits Army Corps’ regulatory authority to wetlands actually adjacent to national navigable waterways. The First Circuit issued a sharply divided decision on February 13, 2006, affirming the lower court’s judgment against the Johnsons. The First Circuit has stayed en banc review until after the Supreme Court has issued its decision in Rapanos.
When Warren petitioned the U.S. Supreme Court for certiorari, NELF filed an amicus brief in support, arguing that the legal test applied by the SJC to determine whether the flow of water through Warren’s dams results in an “addition,” and thereby a “discharge,” was erroneous under Section 401(a) of the CWA. NELF pointed out that by resting its decision on the ownership status of the water as it passed through the dams, the SJC failed to condition a discharge under the CWA on an actual addition to the waters at issue. In addition, the SJC’s reasoning would lead to absurd results, e.g., it would mandate a finding that an addition has occurred even where a dam’s operation reduces the volume of water in a river, since even a smaller volume of water reentering the river would still be an “addition to the waters of the United States.” Finally, NELF pointed out that the SJC’s test contradicted the Supreme Court’s teaching in South Florida Water Management District v. Miccosukee Tribe, 541 U.S. 95, 109 (2004) that the simple redeposit of the same water back into the body of water from which it came does not constitute an addition—and therefore cannot be a discharge—under the CWA. After the Supreme Court granted certiorari, NELF filed an amicus merits brief in support of S.D. Warren. In this brief NELF argued that, contrary to the SJC’s finding, river water passing through a hydroelectric dam never loses its status as waters of the United States.
On May 15, 2006, the Supreme Court issued a decision rejecting Warren’s appeal. Although the Court agreed with NELF that the SJC’s reasoning was incorrect and that the exercise of private control does not denationalize national waters, it nonetheless upheld the SJC’s decision on the ground that, under § 401(a), an “addition” is not required for there to be a “discharge.” Rather, the Court construed “discharge” according to its ordinary English usage, which the Court found to be a “flowing or issuing out.” On this basis the Court found that the operation of Warren’s dams (and all other hydroelectric dams) did raise the potential for a discharge, and thus Warren was required to obtain DEP water quality certification before it could renew its federal license.
Whitney v. Wal-Mart Stores, Inc.
The issue in this case was whether the Maine Human Rights Act (“MHRA”), which prohibits employment discrimination based on a physical or mental disability, requires that a plaintiff must show a “substantial limitation on a major life activity” in order to prove a disability. This is the standard under the federal Americans with Disabilities Act (“ADA”); it is also the standard adopted under state anti-discrimination statutes in 43 of the 50 states. The question arises under Maine law because, unlike the federal statute, Maine’s statutory definition of disability does not expressly contain this requirement.
The Maine Human Rights Commission (“MHRC”) promulgated a regulation in 1985 bringing Maine into line with the ADA by requiring a plaintiff to prove a substantial limitation on a major life activity. However, that regulation was attacked in this case as invalid and ultra vires because it allegedly exceeded the Maine Legislature’s intent in the MHRA. The case involved a current employee of Wal-Mart in Maine, who has brought suit under the MHRA claiming that the company discriminated against him when it failed to accommodate his medical condition. He had been in a position that Wal-Mart said required 48-52 hours of work per week and did not allow two consecutive days off during one week. The employee presented Wal-Mart with a physician assistant’s note indicating that, as a result of high blood pressure and heart disease, he could not work more than 45 hours per week and required two consecutive days off each week. Because these limitations did not match the requirements of his position, Wal-Mart required him to give up that job. The company offered him another less stressful job, which he took. The plaintiff then sued in Maine state court under the MHRA. Wal-Mart removed the matter to federal court, which certified to the Maine Supreme Judicial Court (“SJC”) the question whether the plaintiff must meet the “substantial limitation” requirement in order to prevail in his suit under Maine law.
In an amicus brief filed on July 1, 2005, NELF, together with co-amici the Maine Chamber of Commerce and others, urged the SJC to uphold the MHRC “substantial limitation” requirement, which would align Maine with the majority of other states and federal law. Amici argued that the majority position preserves a reasonable balance between an employee’s right to non-discriminatory treatment and an employer’s right to protect its own economic interests by making reasonable employment decisions. Amici also argued that upholding the MHRC’s “substantial limitation” regulation would advance the economically desirable goals of national uniformity and predictability of results in employment matters while a rejection of the regulation would create a disincentive for businesses to remain or locate in Maine.
On April 11, 2006, the Maine SJC sided with the plaintiff, deciding 4-3 that the MHRA does not require a showing of substantial limitation on a major life activity to establish a disability. The Court concluded therefore that the MHRC’s regulation was invalid as ultra vires.
Macomber v. Travelers Property and Casualty Corp.
This was an interlocutory appeal to the Connecticut Supreme Court (“Supreme Court”) of the Connecticut Superior Court’s certification of a nationwide class action. The gravamen of the plaintiff’s complaint is her claim that the defendant liability insurer, Travelers Property and Casualty Corporation (“Travelers”), paid less than it had represented for the annuity it purchased to fund her structured settlement of a claim arising from an automobile accident. Specifically, the plaintiff alleged that, unbeknownst to her, because Travelers used a captive annuity company, it received a rebate on the commission it otherwise would have had to pay when it bought the annuity. After the Superior Court dismissed the complaint on the ground that, even if what she alleged were true, the plaintiff had not been damaged by Travelers’ conduct since she had received the settlement she bargained for, the plaintiff appealed. The Supreme Court reinstated her claim and remanded the matter, finding that there were theories under which she might be able to recover (e.g., if she had known that Travelers was going to receive a rebate, she might have bargained for a higher settlement or, because Travelers paid slightly less for the annuity, she might have overpaid her contingency legal fee). In reversing the dismissal, the Supreme Court held that Travelers had no affirmative duty to disclose what it would be paying for the annuity and that, in order to prove her case, plaintiff (and anyone else in her position) would have to prove exactly what type of representation was made to her by Travelers, whether her reliance was reasonable, and how she had been damaged by it. Upon remand, the Superior Court certified the case as a nationwide class action, despite the Supreme Court’s clear language that individualized proof would be required for each plaintiff. The Superior Court also did not consider that class certification might be unwarranted because different legal standards and statutes of limitation would likely apply to claims based on settlements signed in various states.
In compliance with Connecticut procedure, Travelers appealed the Superior Court’s decision to the Supreme Court. NELF joined with the Connecticut Business and Industry Association and the American Insurance Association in filing an amicus brief in support of Travelers, arguing that the Superior Court ignored the Supreme Court’s clear holding that individualized proof is essential and also failed to consider the choice of law issues that alone appear sufficient to preclude class certification.
On April 4, 2006, the Supreme Court reversed the class action certification and remanded the matter to the Superior Court. Although the Supreme Court agreed with the amici that the plaintiff had failed to establish the common factual and legal elements that would support a class action, it refused to rule definitively that the case was inappropriate for class certification. The Court noted that the trial court’s decision in favor of class certification had been based on its review of only thirty of Travelers’ voluminous structured settlement files. The Court expressly disapproved of the trial court having based its decision on such a small sample of the potentially relevant files. For this reason, it did not preclude the plaintiff from trying on remand to create a better record in support of class action certification.
Superadio v. BabyLove and Mscisz v. KDS Securities Corp.
In these two appeals, the Massachusetts Supreme Judicial Court (“SJC”) requested amicus briefs on the question whether an out-of-state attorney not admitted to practice law in Massachusetts who represents an out-of-state party in a Massachusetts arbitration engages in the unauthorized practice of law. In both cases, the prevailing party in an arbitration in Massachusetts was represented by an attorney who was not admitted in the state. The losing party in each case sought to vacate the arbitral award on the ground, inter alia, that the winners’ attorneys were not authorized to practice law in Massachusetts.
NELF filed an amicus brief in support of the out-of-state party in each case arguing that a party’s choice of counsel in an arbitration should be upheld, even if the attorney is not admitted in Massachusetts, so long as the attorney is admitted elsewhere and is otherwise competent to undertake the representation. NELF argued that this open approach to arbitration recognizes the reality of today’s fluid multi-jurisdictional economy in which many, if not most, companies and many individuals transact business in a number of different states, and where arbitrations often occur pursuant to specific arbitration provisions that the disputing parties have agreed to in advance. Where, as was the case in these appeals, a party has made an informed choice of competent counsel, respecting that party’s freedom to retain counsel of its choice in the arbitration even when counsel is not admitted in the forum state does not offend the forum state’s interest in protecting its citizens from unscrupulous or incompetent legal representation. In its brief NELF noted that this open approach to multi-jurisdictional practice in arbitration has been adopted by the ABA in its Model Rule of Professional Conduct 5.5 (2002) and that ABA Model Rule 5.5 is currently under consideration for adoption in Massachusetts.
On March 28, 2006, the SJC issued its decision in this case. Because the adoption of Model Rule 5.5 is still under active consideration, the Court declined to decide the question on which it had sought amicus input and that NELF had briefed. Noting, however, that it did not need to reach the question in order to decide the appeal, the Court held that even if the out-of-state attorneys in these matters had been engaged in the practice of law while representing their clients in the arbitrations, it would not provide a basis for overturning the arbitrators’ decisions. With respect to an aspect of the case that had not been addressed by NELF, the SJC also held that, absent contrary language in an arbitration provision, arbitrators have the power to impose monetary sanctions for a party’s discovery violations.

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