News Alerts and Newsletters
Temporary Window to Exclude 100% of Capital Gains on Qualified Small Business Stock (11.2010)
11.1.2010 Newsletter (HTML) (PDF)
The recently enacted Small Business Jobs and Credit Act of 2010 (the 2010 SBJCA) includes a number of important tax provisions relating to small business growth. One important provision amends Section 1202 of the Internal Revenue Code of 1986, as amended (the Code), to permit the exclusion of 100% of any gain realized on the sale of certain "qualified small business stock" (QSB Stock) acquired between September 28, 2010 and December 31, 2010. This Client Alert summarizes the existing tax rules and the changes to these rules made by the 2010 SBJCA. (Note: the requirements to qualify as QSB Stock are listed at the end of this Client Alert.)
Changes to the Accredited Investor Definition (9.2010)
9.8.2010 Newsletter (HTML) (PDF)
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) became law on July 21, 2010. One important impact of the Dodd-Frank Act is an immediate change to the definition of “accredited investor” under the Securities Act of 1933 and Rule 501 of Regulation D. Those companies and individuals involved in private placements of securities should pay particular attention to the change.
Washington's MTCA - No Intent Required. Court affirms judgment against DOT for arranging the disposal of contaminated groundwater into the Thea Foss Waterway (8.2011)
8.1.2011 Newsletter (HTML) (PDF)
In 1986, during construction of a highway in Tacoma, Washington, the Washington State DOT installed a drainage pipe to help stabilize the road bed. It turned out that this pipe was draining significant amounts of polluted groundwater into the Thea Foss Waterway, which is a portion of the Commencement Bay Superfund Site. DOT allowed this pipe to continue to discharge pollution for 17 years, long after it recognized that it was polluting the Waterway. The cost to DOT to sever the pipe and stop the ongoing contamination of the Waterway was less than $50,000. The cost to clean up the Waterway has exceeded $116 million.
Manufacturer-Arranger Liability Under State and Federal Superfund Laws: An update on strategies for maintaining private contribution and cost-recovery actions against manufacturers of dry cleaning materials and equipment (3.2011)
3.3.2011 Newsletter (HTML) (PDF)
In 2010, a number of decisions from the U.S. District Courts in California highlighted the difficulty in bringing private contribution/cost-recovery actions against the manufacturers of dry cleaning materials and equipment under state and federal Superfund laws. We focused on one particular case, Hinds Investments L.P. vs. Team Enterprises Inc., 2010 WL 922416 (E.D. Cal. March 12, 2010) in a May 2010 Newsletter. The Hinds Investments case represented an emerging line of precedent involving dry cleaning manufacturers and suppliers, and the evaluation of "arranger" liability and "intent to dispose" following the U.S. Supreme Court's decision in BNSF v. United States, 129 S.Ct. 1870 (2009).
The Pleading Threshold in Environmental Cleanup Cases (Twombly, Iqbal, and What to Do) (8.2010)
8.24.2010 Newsletter (HTML) (PDF)
Long gone are the days of pleading a claim by simple recitation of the elements. In CERCLA and State Superfund cases, the level of detail required in a complaint is evolving. The general rule of thumb: the more specific facts included, the less vulnerable to attack a complaint will be.
Attorney-Client Privilege Applies to Environmental Consultants (8.2010)
8.16.2010 Newsletter (HTML) (PDF)
The Ninth Circuit recently held that a corporation’s attorney-client privilege extends to communications between corporate counsel and outside consultants who are “functional employees.” See United States v. Graf, No. 07-50100, slip op. at 9605, 9622 (9th Cir. July 7, 2010). This ruling provides new protections for companies addressing sensitive environmental matters.
Mercury Emissions: The Next Challenge for Coal-Powered Electric Generation Plants (8.2010)
8.3.2010 Newsletter (HTML) (PDF)
The next cast of the regulatory net over coal-powered electric generation facilities will target mercury emissions. While coal power plants in 31 Eastern states are facing proposed EPA regulations limiting SO2 and NOx emissions, EPA is also working on mercury emission regulations covering coal and oil-fired power plants. The mercury emission rules are scheduled for publication by March 2011.
Municipal Discharger of Stormwater Runoff Liable under CERCLA: Ruling affirms arranger liability for stormwater contamination (6.2010)
6.9.2010 Newsletter (HTML) (PDF)
Each year billions of gallons of municipal stormwater runoff are discharged to the Nation’s waters. Those discharges often contain significant loadings of key contaminants: PCBs, PAHs, heavy metals. In many instances, such municipal discharges have caused or contributed to sediment contamination requiring remediation under CERCLA. On June 7, United States District Court Judge Robert J. Bryan issued an order finding that the Washington State Department of Transportation (“WSDOT”) was liable to EPA under CERCLA for arranging the disposal of contaminated stormwater runoff into the Thea Foss Waterway directly adjacent to downtown Tacoma, Washington.
EPA Is Considering CERCLA Financial-Responsibility Requirements for Several Industries (6.2010)
6.4.2010 Newsletter (HTML) (PDF)
The Environmental Protection Agency (“EPA”) continues to add to the list of industries which may become subject to financial-responsibility requirements under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), Section 108(b), 42 U.S.C. § 9608. Previously, on July 28, 2009, EPA identified facilities within the hardrock mining industry as the first class of facilities that would be subject to financial-responsibility requirements under CERCLA. Identification of Priority Classes of Facilities for Development of CERCLA Section 108(b) Financial Responsibility Requirements, 74 Fed. Reg. 37,213 (July 28, 2009).
United States v. Apex Oil Co.: The Seventh Circuit Holds that RCRA Provides Remedies that Cannot Be Discharged in Bankruptcy (5.2010)
5.28.2010 Newsletter (HTML) (PDF)
Courts have long struggled with the issue of whether a debtor’s liability for the remediation of contaminated property is a debt that can be discharged in bankruptcy. In a relatively recent case, United States v. Apex Oil Co., 579 F.3d 734 (7th Cir. 2009), the Seventh Circuit provided more clarity on the issue of whether an obligation to comply with a cleanup order under the Resource Conservation and Recovery Act (“RCRA”) is a “claim” that can be discharged in bankruptcy.
Manufacturer-Arranger Liability Under State and Federal Superfund Laws: Strategies for maintaining private contribution and cost-recovery actions against manufacturers of dry cleaning materials and equipment (5.2010)
5.19.2010 Newsletter (HTML) (PDF)
A recent decision from the U.S. District Court for the Eastern District of California highlights the complexities involved with private contribution and cost-recovery actions under state and federal Superfund laws against the manufacturers of dry cleaning materials and equipment, particularly in light of U.S. Supreme Court precedent on "arranger" liability in BNSF v. United States, 129 S. Ct. 1870 (2009).
EPA Announces Plan to Regulate Coal Ash: Agency’s proposal defers decision on whether to treat coal ash slurry as a hazardous waste (5.2010)
5.11.2010 Newsletter (HTML) (PDF)
In the early morning of December 22, 2008, the problems of coal ash management burst on the political scene. The earthen wall of a coal ash pond collapsed at the Tennessee Valley Authority’s Kingston Power Plant. The catastrophe released a flood of 5.4 million cubic yards of coal slurry waste. The flood wiped out houses, filled the nearby Emory and Clinch Rivers, and covered nearly a one-half square mile of land up to 10 feet deep with sludge. The sludge contained a variety of toxic materials, including mercury, cadmium, arsenic, and other trace metals. Within weeks, the regulatory process swung into action. The U.S. Senate held hearings on January 8, 2009. In her confirmation testimony on January 14, EPA director-nominee Lisa Jackson promised early regulatory action to address coal ash disposal sites.
Local Regulation and Federal Tax Incentives Promote Energy Efficiency in Commercial Buildings (4.2010)
4.30.2010 Newsletter (HTML) (PDF)
Energy use in buildings is the second largest source of Seattle’s greenhouse gas (“GHG”) emissions, behind transportation. Seattle has placed building efficiency at the fore of its efforts to help meet short and long-term efficiency and GHG emission reduction goals. Policies implemented by the city to work towards efficiency goals include: (1) local building energy efficiency benchmarking and disclosure requirements, and (2) federal tax incentives.
EPA Issues National Greenhouse Gas Standards on Autos. Despite legal uncertainty, EPA's action sets in motion imminent regulation on broad sectors of the economy, apart from any legislation Congress may enact. (4.2010)
4.2.2010 Newsletter (HTML) (PDF)
On April 1, 2010, the U.S. Environmental Protection Agency ("EPA") and the Department of Transportation's National Highway Safety Administration promulgated a final joint rule establishing corporate average fuel economy ("CAFE") standards and greenhouse gas ("GHG") emissions limits for new light-duty cars and trucks sold in the U.S. The joint rule is the product of a White House-brokered agreement announced last May, in which the major automakers, infused with federal bailout money, acquiesced to the imposition of new nationwide mileage standards. The joint rule is significant, as it could mean an estimated 40 percent improvement in fuel economy by virtue of fleet average requirements of 35.5 miles a gallon by 2016. Because GHG emissions will be "subject to regulation" after the effective date of the joint rule for light-duty cars and trucks, the joint rule will effectively trigger EPA to regulate GHG emissions from stationary sources. The potential impacts of such regulation on stationary sources are discussed below.
Working with Environmental Consultants: Best Practices for Preserving Attorney-Client Privilege and Work Product Protection
3.23.2010 Newsletter (HTML) (PDF)
One issue often confronted by clients and their lawyers is whether the attorney-client privilege and work-product doctrine will apply to work performed by an environmental consultant hired on behalf of a client. The issue stems from a general rule that voluntary disclosure of privileged information to a third party acts as a waiver of the privilege.
Department of Ecology Seeks Public Comment on Wetland Mitigation Bank Rule
3.13.2009 News Alert (PDF)
Proposed rule is intended to encourage wetland mitigation banking by providing an efficient, predictable statewide framework for the certification and operation of banks.
After an 8-year process, including a 5-year pilot program and an extensive advisory group effort, the Washington State Department of Ecology proposed for public comment a new rule for purposes of establishing wetland mitigation banks. Ecology’s proposed rule (Chapter 173-700 WAC), including supporting materials, is available at: http://www.ecy.wa.gov/laws-rules/activity/wac173700.html.
EPA Proposes Mandatory GHG Reporting Rule (3.10.2009)
3.10.2009 News Alert (PDF)
Proposed reporting requirements are designed to cover all sectors of the U.S. economy, laying the foundation for the development of a comprehensive cap-and-trade system.
The U.S. Environmental Protection Agency today made available a pre-publication draft of its proposed rule for imposing mandatory reporting requirements for greenhouse gas (GHG) requirements on “large emission sources.” The proposed rule has not yet been published in the Federal Register, but a public comment period will be open until at least May 10, 2009 (60 days after publication).
NEPA Lawsuit Seeks to Block Tar Sands Project (2.18.2009)
2.18.2009 News Alert (PDF)
On the eve of President Obama’s scheduled visit to Ottawa, a look at how the Sierra Club and the Indigenous Environmental Network are challenging a proposed tar sands project in Utah’s Uintah Basin
UPDATE: Deadline for Posting Notice of Employee Rights Under the National Labor Relations Act Extended a Second Time to April 30, 2012
1.9.2012 News Alert (HTML) (PDF)
Last fall we issued an update alerting you that the National Labor Relations Board ("NLRB") had issued a rule which will require nearly all private sector employers (both union and non-union) to post a notice informing employees of certain rights under the National Labor Relations Act ("NLRA").
Update: Deadline for Posting Notice of Employee Rights Under the National Labor Relations Act Extended to January 31, 2012
10.21.2011 News Alert (HTML) (PDF)
Earlier this fall we issued an update alerting you that the National Labor Relations Board ("NLRB") had issued a rule which will require nearly all private sector employers (both union and non-union) to post a notice informing employees of certain rights under the National Labor Relations Act ("NLRA").
Make Room On Your Crowded Company Bulletin Board: Most Employers Must Post Notice of Employee Rights Under the National Labor Relations Act by November 14
9.9.2011 News Alert (HTML) (PDF)
Many state and federal laws require employers to post notices advising their employees of their rights under such laws. The National Labor Relations Board ("NLRB") has now joined the club by issuing a rule which will require nearly all private sector employers (both union and non-union) to post a notice informing employees of certain rights under the National Labor Relations Act ("NLRA"). This rule applies to all employers covered by the NLRA, the federal law which applies to all private employers engaged in interstate commerce above a prescribed minimum dollar amount, which varies by industry.
New Ninth Circuit Decision Emphasizes Employer Obligations In Disability Accommodation Cases
8.30.2010 News Alert (HTML) (PDF)
Last week the United States Court of Appeals for the Ninth Circuit (i.e., which includes Washington) issued a decision in the matter of EEOC v. UPS Supply Chain Solutions. The decision is a reminder that employers dealing with requests for accommodation should be patient, seek information through the interactive process, and consider new or additional accommodations if initial efforts fail. The decision is also a reminder that, at least here in Washington, it is increasingly difficult for disability discrimination lawsuits to be dismissed before trial.
Ninth Circuit Clarifies Independent Contractor Test
7.29.2010 News Alert (HTML) (PDF)
Employers face various risks and penalties if they misclassify employees as independent contractors. With the Department of Labor's announcement that it has made enforcement of misclassification of independent contractors a top priority in 2011, it is more important than ever for employers to correctly classify their workers. A Ninth Circuit decision announced earlier this week made that task somewhat easier by clarifying the standard that applies when analyzing whether a worker is an independent contractor for purposes of most federal statutes governing employment. Under the standard announced by the court, the key factor is "the hiring party's right to control the manner and means by which the product is accomplished."
Employment Law Updates
6.23.2010 News Alert (HTML) (PDF)
(1) U.S. Supreme Court Gives Public Employer the Green Light to Search Employee’s Text Messages; and (2) U.S. Department of Labor Clarifies (and Expands) Definition of “Son or Daughter” for Purposes of FMLA Leave
The Patient Protection and Affordable Care Act: What Do Employers Need To Know Today?
4.5.2010 News Alert (HTML) (PDF)
As you have no doubt seen, heard and read in many places, President Obama recently signed the final (at least for now!) version of the sweeping healthcare legislation known as the Patient Protection and Affordable Care Act or “PPACA.” The legislation is almost 3,000 pages long and contains more than 400,000 words, and will undoubtedly lead to tens of thousands more pages of regulations in the coming months and years.
President Obama Signs New Law Extending COBRA Subsidy
12.30.2009 News Alert (PDF)
President Obama recently signed a new law extending eligibility for the federal COBRA premium subsidy established by the American Recovery and Reinvestment Act of 2009 (please see our February 20, 2009 News Alert for a summary of the original subsidy).
E-Verify To Go Into Effect September 8, 2009
9.8.2009 News Alert (PDF)
Effective today, September 8, 2009, all federal contractors must comply with a new rule that requires them, in specified circumstances, to enroll in the federal E-Verify system. E-Verify is an internet-based system operated jointly by the Department of Homeland Security ("DHS") and the Social Security Administration ("SSA") for the purpose of enabling employers to determine whether employees are legally authorized to work in the United States. The system works by allowing employers to compare information from an employee's Form I-9, Employment Eligibility Verification, against SSA and Department of Homeland Security databases. According to DHS, more than 141,000 employers are already enrolled in the program, with over 7 million queries run through the system in fiscal year 2009 (as of August 8, 2009).
The New Haven Firefighters Case – Supreme Court Establishes New Standard For Balancing Disparate Impact Against Disparate Treatment (7.1.2009)
7.1.2009 News Alert (PDF)
Earlier this week the United States Supreme Court issued its long-awaited decision in the case of Ricci v. DeStefano. The Court held that the City of New Haven, Connecticut violated Title VII when it refused to certify results of a promotional examination after it learned that the test results, in combination with the City's promotion rules, meant that no African-American candidates were eligible for promotion. The political and societal implications of the Court's decision will be debated for some time. We write today to brief our clients and friends about the immediate implications of this decision for employers covered by Title VII.
Governor Gregoire Signs Sweeping Domestic Partner Legislation (5.20.2009)
5.20.2009 News Alert (PDF)
Earlier this week Governor Chris Gregoire signed into law domestic partner legislation that will amend myriad state laws and provide registered domestic partners with many rights and benefits that have previously been reserved for married couples. It is important for employers to recognize that the new law effectively provides state-registered domestic partners with “spouse” and “ family member” status under various existing laws, including Washington's Family Care Act, Military Family Leave Act, Family Leave Act, Family Leave Insurance Act, and under other employment-related laws regarding industrial insurance, unemployment compensation, and wages. The new law will take effect July 26, 2009, unless groups seeking to repeal the law obtain enough signatures before then to get a referendum on the November ballot. Washington employers should act with all due speed to be prepared if the law goes into effect at the end of July.
Swine Flu Update - Tips for Managing the Workplace (5.1.2009)
5.1.2009 News Alert (PDF)
As you are undoubtedly aware, earlier this week, U.S. health officials declared a public health emergency due to the spread of Swine Influenza (“swine flu”) in the U.S. The World Health Organization raised the influenza pandemic alert to phase 5, out of 6, urging all countries to activate their pandemic preparedness plans. As of today, state public health authorities have reported 16 probable cases of swine flu in Washington. Employers must be prepared to address employee concerns about the illness and distribute credible information.
Employee Health Plan Update: New COBRA and CHIP Requirements (3.27.2009)
3.27.2009 News Alert (PDF)
As most of you know by now, Congress recently amended the COBRA rules to establish a federal subsidy for certain COBRA premiums for people who suffer an involuntary job loss between September 2008 and December 2009. Our February 20 News Alert provided a fairly detailed explanation of those changes and what they mean for employers. In today’s News Alert we provide more information about the new model COBRA notices that were published last week by the U.S. Department of Labor (“DOL”) and which must be used by employers to explain the new federal subsidy program. If you use a third-party COBRA administrator to manage these issues, the following details may not be important. But if you have responsibility for COBRA administration, you need to be familiar with the notice details that are provided below.
COBRA Premium Subsidy: Immediate Action Required (2.20.2009)
2.20.2009 News Alert (PDF)
You need to understand and be prepared to take the actions outlined in this News Alert in order to comply with the Stimulus Act changes to COBRA Continuation of Coverage. Please download for a list of action items and overview of the new provisions.
Managing HR Issues In An Economic Downturn: Don't Let Down Your Defenses! (2.12.2009)
2.12.2009 News Alert (PDF)
By now it is quite obvious the recession is here to stay, at least for the near term. Many businesses are aggressively seeking ways to reduce their expenses and become more efficient. Because payroll and benefits expenses are among the most significant cost components in most businesses, many cost reductions at employers around the country will involve either a reduction in the number or a reduction in the amount of work hours or benefits for employees who remain on the payroll. We offer some reminders about how best to manage HR issues in an economic downturn.
The First New Employment Law of 2009: President Obama Signs Lilly Ledbetter Fair Pay Act (1.29.2009)
1.29.2009 News Alert (PDF)
At a ceremony in the East Room of the White House today, President Obama signed the Lilly Ledbetter Fair Pay Act of 2009 ("Ledbetter Act"), making a workplace law the first one signed by the new President.
Washington Supreme Court Muddies Economic Loss Rule (11.2010)
11.12.2010 Newsletter (HTML) (PDF)
The Washington Supreme Court recently issued two decisions that inject substantial uncertainty into how courts interpret contractual obligations—and duties that may arise outside of the boundaries of a contract.
Modifying Donor Restrictions on Funds: Can it be Done? (3.23.2010)
3.23.2010 News Alert (PDF)
Many charitable organizations receive gifts upon which the donor has put restrictions. A restriction may come in the
form of an endowment with a spending limitation (e.g., income only), a limitation on the use of the gift (e.g., nursing
scholarships), or both. Directors or trustees of charitable organizations have a duty under applicable law to abide by
a donor’s intent and restrictions regarding the use of a gift.
Good Governance for Tax-Exempt Organizations - Guidance from the IRS (9.2.2009)
9.2.2009 News Alert (PDF)
As many tax-exempt public charities have likely discovered, reporting for the revised Form 990 and understanding the IRS's views on good governance is not an easy task. Many organizations are now developing policies and practices as a result of the new governance section in the revised Form 990. On June 23, 2009, the new IRS TE/GE Commissioner Sarah Hall Ingram confirmed the IRS's commitment to oversee the governance practices of tax-exempt nonprofit organizations. Commissioner Ingram stressed that a well-governed organization is more likely to be a tax-compliant organization and that good governance is an effective tool for managing the risk of noncompliance. Commissioner Ingram's speech emphasized the following:
New IRS Reporting Requirements as of January 1, 2011 (1.2011)
1.5.2011 Newsletter (HTML) (PDF)
If you own rental real estate, the paperwork you must file with the IRS will increase beginning January 1, 2011. Following passage of the Small Business Jobs Act, new information reporting requirements for taxpayers owning rental properties have been adopted. A landlord must now issue a Form 1099 to any unincorporated service providers to whom it pays $600 or more in a year. This new law is expected to increase federal tax revenue by $2.5 billion or more in the next ten years.
Comments Sought Now: ADA Proposed Rulemaking Affecting Website Accessibility (12.2010)
12.29.2010 Newsletter (HTML) (PDF)
Until January 24, 2011, interested parties have the opportunity to comment on proposed federal regulation that will affect whether and how the Americans With Disabilities Act (“ADA”) applies to websites. This proposed regulation potentially affects any business or institution that uses the Internet to communicate with the public.
Further Update: Temporary Federal Estate Tax Reform (3.2011)
3.2011 News Alert (PDF)
On December 17, 2010 President Obama signed into law important reforms to the federal estate tax, gift tax and generation-skipping tax, effective for 2011 and 2012 and, to a limited extent, for 2010
Temporary Federal Estate Tax Repeal? (1.2010)
1.2010 News Alert (PDF)
Current Law (Maybe). On January 1, 2010, the federal estate tax was repealed for decedents dying during 2010, under the “sunset” provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001. In 2011, the federal estate tax will return with a $1,000,000 exemption, down from $3,500,000. Its rates will range from 41% to 55%, instead of the 2009 45% flat rate.
Washington's Estate Tax (4.2009)
4.2009 News Alert (PDF)
Stand-alone Tax: In February 2005 Washington’s old revenue sharing-based “pick up tax” was struck down by its Supreme Court; in May 2005 the Washington Legislature adopted a new “stand-alone” Washington estate tax, independent of the federal estate tax. The lifetime exemption for the Washington estate tax is $2,000,000 and was not affected by the 2009 increase in the federal estate tax exemption to $3,500,000..
Estate Planning Techniques for the Low Interest Rate Environment (4.2009)
4.2009 News Alert (PDF)
Interest rates are at historic lows. Many gift transfers are valued using “Applicable Federal Rates” (“AFRs”) or a general discount rate, referred to as the “Section 7520 rate”, published by the Internal Revenue Service. The AFRs decline with prevailing interest rates. This Alert discuses estate planning techniques that these low interest rates help or hurt.
Conclusions: Meeting the Estate Tax Challenges (4.2009)
4.2009 News Alert (PDF)
How to shelter the maximum amount from federal estate tax (current exemption, $3,500,000) and Washington estate tax (current exemption, $2,000,000) without triggering a tax on the death of the first spouse. How to minimize estate taxes on the death of the surviving spouse, despite uncertainty about future law changes. How to make sure that adequate assets are available to maintain your (and your survivor’s) lifestyle, given investment losses.
Prospects for Permanent Estate Tax Reform (2.2009)
2.2009 News Alert (PDF)
Current Law: The federal estate tax exemption increased to $3,500,000 on January 1, 2009. The federal estate tax rate is a flat 45%. The federal estate tax will be temporarily repealed for one year in 2010. Beginning in 2011, the federal estate tax exemption will be $1,000,000. The federal gift tax exemption of $1,000,000 will not change. The Washington estate tax exemption of $2,000,000 also will not change. Its rates range from 10% to 19%, although it is a deduction from the federal estate tax.