Blogroll Archives - Samuels Yoelin Kantor LLP

Federal Court Enjoins Government from Enforcing the Corporate Transparency Act

December 9, 2024 by Michael Walker

The Corporate Transparency Act (CTA) was passed in an effort to combat financial crimes by and through companies. To do so, the CTA regulates “reporting companies,” or any corporation, LLC, or other similar business entity that is created or registered to do business in the U.S. by filing registration documents with the secretary of state or other similar office. The CTA contains a reporting requirement with a filing deadline of January 1, 2025, for all businesses that were formed before January 1, 2024. This reporting requirement mandates “reporting companies” to submit a report to FinCEN (the “Financial Crimes Enforcement Network,” an arm of the Department of the Treasury) that includes information regarding the companies’ owners and officers. Failure to comply with this reporting deadline may be met with significant penalties, such as fines and jail time.

The passage of the CTA has been met with push-back from courts and lawmakers, who argue that the reporting requirements and procedures have not been properly publicized or clarified for companies to meet the January deadline. Additionally, the reporting requirements of the CTA have been challenged in several federal district courts, including Texas Top Cop Shop, Inc., v. Garland, 2024 WL 4953814 (E.D. Tex.), a cased decided by the U.S. District Court for the Eastern District of Texas on December 3, 2024.

In Texas Top Cop Shop, Inc., the plaintiffs successfully argued that the reporting requirements of the CTA substantially threaten plaintiffs with irreparable harm that outweighs any damage that an injunction would have on the government. The court agreed that the CTA’s reporting requirements cause damage to plaintiffs in two different forms. The first being the expenditure of resources and time to prepare the required report. The second is revealing confidential business information under threat of criminal punishment, which the court agreed could be a First, Fourth, Ninth, and Tenth Amendment violation.

In reaching this decision, the Texas court held that the CTA, together with the administrative rules that implement the CTA, are likely unconstitutional as outside of Congress’s power. Hence, the court held that the plaintiffs carried their burden to show a substantial likelihood of success on the merits, and therefore, granted plaintiffs request for a preliminary injunction.

This means that for now, the government cannot enforce the reporting requirements of the CTA and therefore, the January 1 filing deadline is technically on hold.

In addition, on its CTA website, the government stated: While this litigation is ongoing, FinCEN will comply with the order issued by the U.S. District Court for the Eastern District of Texas for as long as it remains in effect. Therefore, reporting companies are not currently required to file their beneficial ownership information with FinCEN and will not be subject to liability if they fail to do so while the preliminary injunction remains in effect. Nevertheless, reporting companies may continue to voluntarily submit beneficial ownership information reports.

How should businesses proceed? In response to the court’s decision to grant a preliminary injunction, on December 5, 2024, the government responded with notice that they are going to appeal the Texas court’s decision, upon which the court’s decision could be reversed or upheld. Given the uncertain nature of the CTA reporting requirements, companies that qualify as a “reporting company” may want to consider voluntarily filing their report to FinCEN if they have not done so yet.

– Michael D. Walker, SYK Partner, and Josepheen Strauss, SYK Law Clerk

New Oregon Center for Behavioral Health and Aging Announced

November 4, 2024 by Victoria Blachly

Portland State University, together with Oregon Health & Science University, just launched OCEBHA: Oregon’s Center of Excellence in Behavior Health & Aging (oregonbhi.org/center-for-excellence). The focus of the center is “to address the behavioral health needs of Oregon’s aging population by improving access to services and supports.”

With involvement from the PSU Institute on Aging, PSU School of Social Work, OHSU-PSU School of Public Health, OHSU School of Medicine, and OHSU School of Nursing, let’s hope for greater education, awareness, and a pipeline of professionals dedicated to improving the lives of our aging Oregonians.

Details are few, but you can sign up for their newsletter to stay informed.

Clause for Concern: How Consumers May Unknowingly Click Away Their Right to Sue

October 7, 2024 by Adriana G. Cunha

In today’s digital age, many of us have signed up for various online services without giving much thought to the fine print of the Terms and Conditions. If you have signed up for Uber Eats or Disney+, chances are you scrolled right past the binding arbitration provision which can limit your ability to sue Uber Technologies, Inc., or The Disney Company in Court. While many individuals struggle to envision a scenario where they would want to engage either of these corporate entities in litigation, some users of these apps have discovered that they unknowingly waived their right to a trial when they accepted the terms of service.

A recent case involving a married couple from New Jersey has once again brought attention to the powerful impact of arbitration clauses in “terms of service” agreements. A Husband and Wife were involved in a devastating car accident during an Uber ride in March 2022, which left them with significant physical and psychological injuries. Despite their efforts to sue Uber, a New Jersey appellate court ruled that they were bound by an arbitration agreement they had previously accepted when ordering food on Uber Eats, effectively blocking them from pursuing a trial, even though the meal delivery app is a service separate from the ride-sharing platform. This decision overturned a prior lower court ruling, which had argued that Uber’s pop-up notification did not adequately inform users about the arbitration clause. The appellate court, however, sided with Uber, and found that the terms were valid and enforceable.

A similar matter involving Disney made headlines this summer. In 2023, a Disney Parks guest died after suffering an allergic reaction from food served on the premises, and her widower later filed a wrongful death lawsuit against the corporation. Lawyers for Walt Disney Parks and Resorts tried to get the case thrown out of court and sent to arbitration, pointing to the binding arbitration clause embedded in the Terms and Conditions for Disney+, for which the widower had received a free trial years earlier. In August 2024, Disney reversed course and waived their right to arbitration, with their lawyers citing a desire to “put humanity above all other considerations.” The court ultimately did not make any determinations on the merits of Disney’s arguments.

Both cases underscore the growing trend of companies using arbitration clauses to shield themselves from public lawsuits. As arbitration clauses become more common, and more legal precedent supports their enforcement, individuals may find it increasingly difficult to take companies to court, even in severe cases involving personal injury or death. Consumers should be proactive and get informed before accepting the terms of service without first reading the fine print. If you have questions about the Terms and Conditions of a service you are contemplating signing up for, consider contacting an attorney before clicking “accept.”

– Adriana G. Cunha, Associate

Navigating Oregon’s Leave Updates: SB 1515 Explained

June 27, 2024June 5, 2024 by Brooke Eide

It is no secret that the implementation of Paid Leave Oregon (PLO) over the last year has created many questions for employers and employees alike. To clear up some of these questions, the Oregon State Legislature passed SB 1515. Here’s what you need to know about the changes SB 1515 brings to PLO and other leave policies.

First, SB 1515 caps the amount of leave an employee can take under PLO in a benefit year to 14 weeks. These 14 weeks can include 12 weeks of leave for family leave, medical leave, or safe leave and an additional two weeks of leave for pregnancy, childbirth, or a related medical condition. This cap is lowered from the 18-week cap previously issued under PLO.

Second, SB 1515 provides clarity on how PLO may be used in conjunction with other leave policies starting July 1, 2024. Employers may create an internal policy, or establish a policy via collective bargaining, that specifies the order in which employees may take different types of available leave. Under any policy, Oregon Family Leave Act (OFLA) leave must be provided in addition to PLO, meaning that the two cannot be taken concurrently. However, SB 1515 does not allow recipients of worker’s compensation time loss benefits or unemployment benefits to also receive PLO benefits at the same time.

Third, SB 1515 expands the amount of wage replacement an employee can receive while on paid leave. At a minimum, employers must allow employees to receive benefits under PLO and any accrued but unused paid time off at the same time so employees can receive up to full wage replacement while taking leave under PLO. Alternatively, employers may choose to allow employees to receive PLO and employer provided benefits that exceed 100% of the employees’ regular wage.

Fourth, SB 1515 revises the protected reasons for taking leave under the OFLA. OFLA will no longer cover leave for a worker’s own serious health condition, leave to care for a family member, excluding a sick child, with a serious health condition, or leave to bond with a new child. Instead, each of these protected reasons for leave will be covered exclusively by PLO starting on July 1, 2024. If you have an employee who is already approved to take leave for one of these reasons under OFLA, or who has requested leave for one of these reasons, Oregon Bureau of Labor and Industries (BOLI) requires employers to provide that employee with notice that their leave will not be protected by OFLA as of July 1, 2024. In addition, the employer must inform the employee that their leave may be covered by PLO and provide applicable contact information to the employee. OFLA will continue to cover leave related to a child’s illness, bereavement leave, and leave for any pregnancy-related disability.

Fifth, SB 1515 adjusts time off allowed under OFLA. An additional two weeks of leave will be temporarily provided to employees engaging in the fostering or adoption process. These additional two weeks are only available to employees until December 31, 2024. Starting January 1, 2025, leave associated with the foster and adoption process will be considered as a protected reason for leave under PLO. SB 1515 also caps the amount of time employees can take off for bereavement leave under OFLA. Bereavement leave will be capped at two weeks per family member and four weeks total per year. Thus, if an employee has more than one family member pass in a 12-month period, they will be allowed to take two weeks of protected, unpaid leave per family member with up to four weeks in that 12-month period.

Looking forward, employers will want to review their current leave policies and HR practices to ensure they are compliant with the changes of SB 1515. Employers and employees can also anticipate updated regulations from BOLI that may provide further clarification to the changes outlined above. Should you have any questions about the changes of SB 1515 contact your employment attorney.

Wendy Williams: Planning to Avoid a Guardianship

March 4, 2024 by Victoria Blachly

TV host and personality, Wendy Williams, has been in the news recently for her challenging health issues, marital drama, and legal woes, after a bank froze her bank accounts due to concerns about whether she needed a protective proceeding/guardianship due to her mental and physical ailments.

Her team recently revealed Ms. Williams has dementia, and rumors abound that it may be alcohol related. A new Lifetime four-part docuseries, Where is Wendy Williams, chronicles the sad tale.

Note that Ms. Williams is only 59-years old, so she likely never expected to face such cognitive challenges that require legal planning and preparation. While she did have a Power of Attorney that identified who should manage her finances, were she to be incapacitated, the court got involved and made a determination that the nominated fiduciary was not the best person suited for that job, and appointed someone else to be her guardian for financial decision making.

Other options that could have been taken to protect herself and her assets include setting up a Trust, where a successor trustee would take over, once she became incapacitated. Naming a professional third-party professional trustee, trust company or bank may have been a better option for Ms. Williams, and may have resulted in a different ruling with the court in New York.

Nobody wants to think of the worst case scenario when discussing their future, but an excellent estate planner will help you talk through your options to bring peace of mind: Plan for the worst and hope for the best!

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