Articles

"Written Federal Tax Advice - Regulation and Risks," a presentation for the Oregon/Washington Tax Institute.

"Written Federal Tax Advice - Regulation and Risks," a presentation for the Oregon/Washington Tax Institute.

A recent unanimous Alaska Supreme Court decision, Geneva Woods Pharmacy Inc. v. Thygesen, Opinion No. 6255 (April 25, 2008), serves as a reminder to employers of the financial risks of improperly classifying employees as “exempt” from state or federal overtime pay requirements and of failing to maintain accurate records of hours worked for nonexempt employees. Properly classifying employees can be especially tricky where, as in Geneva Woods Pharmacy, an employee is properly classified as exempt under federal law, but is nonexempt under state law.

The Washington Department of Ecology (“Ecology”) is taking steps to clarify how state and local jurisdictions should incorporate climate change and greenhouse gas emissions into the environmental reviews they are required to do under the State Environmental Policy Act (“SEPA”). Over the next several months, Ecology will convene a working group that includes business representatives to recommend changes to SEPA and provide guidance to government agencies.

"Written Federal Tax Advice - Regulation and Risks," a presentation for the Oregon/Washington Tax Institute.

Washington's Domestic Partnership Registration Act has undergone a number of important changes that dramatically expand the rights and responsibilities of registered domestic partners in Washington.

The subprime mortgage crisis is unique in America’s array of economic downturns. There have been banking crises on Wall Street (most recently, the Savings and Loan scandal) and real estate and mortgage crises on Main Street, but this crisis is on both. It spans the entire mortgage industry and reaches across the globe.

With the waning value of the U.S. dollar, an emerging trend among foreign investors is to acquire U.S. real estate. Consistent with this inbound investment trend, a number of Canadians are purchasing U.S. recreational property.

Various ownership arrangements are available for acquiring and holding U.S. real estate. Since each investor is unique, selecting the optimal ownership arrangement will depend on a number of factors, including the owner's intended use of the property, duration of intended ownership, plans for future disposition to family members, etc.

On 7 April 2008, the Washington Court of Appeals issued its decision in Polygon Northwest Co. v. American National Fire Ins. Co. et al., concerning trigger-of-coverage, contribution, and allocation of damages between multiple primary and excess insurers on the risk in a construction defects case.

On 11 March 2008, the Ninth Circuit Court of Appeals issued its opinion in Trans-Tec Asia v. M/V Harmony Container.

In the last decade, Wall Street used the process of securitization to revolutionize the financing of home mortgages, making credit available to millions of borrowers with less-than-stellar credit. But the failure to properly assess the credit risk associated with these loans led to well over $100 billion in losses at Wall Street firms. Who will be held responsible?

The continued increase in lawsuits rooted in the nonprime crisis and the current regulatory proposals intended to address this crisis will significantly impact how and to whom residential mortgage brokers can make loans. Although compensation and licensing are issues in some of these suits and proposals, underwriting methods continue to be one of the most-significant areas of focus for brokers, the lawyers hired to represent them and the lawmakers charged with regulating them.

Oregon is well known for its statewide land-use planning program, heralded by many as protecting agricultural and environmental interests from against urban sprawl.

In Seattle, landmark designation is prescribed by the Landmarks Preservation Ordinance, which is essentially unchanged since its enactment in 1977.

The first of a series of measures intended to address climate change in Washington passed the legislature and will be sent to Governor Christine Gregoire for signature. The bill, SB 6309, would require all new passenger cars, light duty trucks and medium duty passenger vehicles sold in Washington to have a label disclosing comparative greenhouse emissions. The labeling requirement would take effect beginning with the model year 2010 vehicles.

One of Washington Governor Christine Gregoire’s must-have climate change bills is headed for her signature following passage on March 5 of HB 2815 by the state Senate. Passage came after a vigorous 90-minute debate that turned back several efforts to amend the bill. The measure sets out a number of steps that are intended to begin addressing reductions in the emissions of greenhouse gases (“GHG”) in Washington. The legislation follows Gov. Gregoire’s executive order and legislation adopted last year mandating reductions in the state’s GHG emissions to 1990 levels by 2020, to 25 percent of 1990 levels by 2035 and 50 percent of 1990 levels by 2050.

Municipalities in the state of Washington which impose a business and occupation (“B&O”) tax were handed a big victory on February 19, 2008, when the United States Supreme Court denied certiorari of the Supreme Court of Washington’s ruling in Ford Motor Company v. City of Seattle, et al. 160 Wn.2d 32, 156 P.3d 185 (2007). By refusing to hear the appeal by Ford Motor Company (“Ford”), the U.S. Supreme Court has, again, refused to restrict Washington cities from collecting unapportioned gross receipts tax that some argue is unconstitutional. The denial of certiorari allows assessments against Ford in the amount of $402,000 by the city of Seattle, and $1.3 million by the city of Tacoma.

In the 2007 regular session, the Oregon Legislature adopted ORS 314.258, requiring any person that is an “authorized agent” to withhold and pay to the Oregon Department of Revenue (the “Department”) a portion of the consideration received in a “conveyance” of an Oregon “real property interest” when the transferor is an out-of-state individual or corporation (the “2007 Act”).

On Wednesday, March 12, 2008, Washington House Speaker Frank Chopp signed Substitute Senate Bill 6807 which affects boarding home providers’ ability to withdraw from the Medicaid program. The legislation had been approved by both houses of the legislature earlier this week. The bill has now been sent to Gov. Christine Gregoire for signature.

On March 13, 2008, House Financial Services Committee Chairman Barney Frank and Senate Banking Committee Chairman Chris Dodd announced proposed legislation designed to further combat the rising tide of mortgage foreclosures by allowing the Federal Housing Administration ("FHA") to insure and guarantee refinanced mortgages in exchange for significant write-downs by mortgage holders and lenders.

In January 2008, we reported that the legislature was considering Senate Bill 6385, which would have significantly changed the landscape regarding construction defect claims available to owners of residential properties in Washington. Specifically, the bill created a reasonable care standard for construction professionals, including contractors and design professionals, involved in the construction or improvement of residential property.

On 6 March 2008, the Oregon Supreme Court rendered its decision in Goddard v. Farmers Ins. Co. of Oregon, holding that any punitive damage award for an insurer’s bad faith failure to settle a third-party claim within policy limits must ordinarily be limited to four times the amount of compensatory damages. Under the "due process" clause of the United States Constitution, "excessive" punitive damages are prohibited. However, courts have generally held that the determination of “excessiveness” is case-specific and hinges on several non-quantifiable factors. The Goddard case, therefore, represents a potentially significant step towards greater predictability for insurers’ punitive damages exposure.

On 20 March 2008, the U.S. Court of Appeals for the Ninth Circuit rendered its decision in New Hampshire Ins. Co. v. C’Est Moi, Inc., addressing the maritime insurance doctrine of Uberrimae Fidei, or the duty of the assured and insurer of utmost good faith, for the second time in as many months.

The recent and highly publicized fall of Bear Stearns provides a dramatic cautionary tale in the unfolding sub-prime crisis. The chronology of events surrounding Bear Stearns’ demise closely tracks economic developments in the broader U.S. sub-prime lending industry.

The Washington State Legislature ended its regular session on March 13, 2008. The big news for employers this year is in the arena of expanded leave of absence rights for employees. Employers should pay careful attention to two new state laws that guarantee leaves of absence to employees under specific circumstances. Both of these new state leave laws apply to all employers, regardless of the size of the employer’s workforce.

A summary of eight copyright law cases.

The so-called subprime mortgage crisis is the hottest topic around. Staggering bank losses related to defaulted or risky mortgages are being splashed daily across the news.

On January 31, 2008, the U.S. Department of Health and Human Services’ Office of Inspector General (“OIG”) and the Health Care Compliance Association (“HCCA”) released a report entitled, “Driving for Quality in Long-Term Care: A Board of Directors Dashboard.” The OIG’s focus is preserving governmental health programs and operations by “protecting them against fraud, waste, and abuse” through a nationwide network of audits, investigations and inspections. Accordingly, when the OIG issues a report involving the long-term care industry, facilities should take notice.

It’s timely on Valentine’s Day to remind foreign nationals in H-1B and other nonimmigrant classifications who have found someone to love and to marry, that the timing of when they choose to marry may affect the immigration status of their prospective spouse. The considerations are particularly important for those with an application for adjustment of status to permanent residence pending, or those who plan to file one. Due to immigration quotas and anomalies of immigration law, marrying before receiving a green card can enable the spouse to join in the process, but waiting until after receiving a green card can prevent the spouse from joining the applicant in the United States for years.

On February 13, 2008, President Bush signed into law H.R. 5140, the Economic Stimulus Act of 2008 (“Act”). The Act is designed to stimulate the slowing United States economy by providing a series of benefits to both individuals and businesses.

Under immigration law, the H-1B program allows U.S. employers to hire foreign nationals in "specialty occupation" positions that require a bachelor's degree or the equivalent. Under current law, there is a cap on the number of new H-1B petitions that will be granted during each federal fiscal year (“FY”). This year, current trends suggest that employers who do not mail their petitions on March 31, 2008, will be out of luck for what is considered the H-1B “lottery.”

Recent changes in the law give businesses more flexibility to set retail prices.

This article first appeared in the Portland Business Journal.

The Washington Legislature has been active during the 2008 Regular Session with respect to issues concerning homeowners, developers and the construction industry. Three bills in particular have received considerable attention from citizens, industry leaders and lobbyists: the condominium conversion bill, the vesting bill for development projects, and the homeowners’ bill of rights.

Responding to increasing pressure from the financial sector and lawmakers, on December 18, 2007, the Federal Reserve released a lengthy proposal that is expected to significantly impact a wide array of mortgage lending practices. The new regulations are expected to be enacted largely as proposed, but a three-month public comment period may have some influence on the details.

Washington’s Climate Advisory Team (“CAT”) has released its 88-page draft report of recommendations to address climate change and reduction of greenhouse gases, together with a longer report discussing recommendations for preparing and adapting to climate change. Although the draft reports were issued on December 21, 2007, the CAT is soliciting public comment only until January 10, 2008, after which the drafts will be finalized and submitted to the Governor Christine Gregoire by the February 7, 2008, deadline set in last year’s executive order.

In the past few months, numerous mortgage lenders have closed their doors. Several others have announced substantial layoffs, resulting in a massive decrease in industry employment. Some analysts predict this will continue for the next several months, if not longer. One result of this is that lawsuits have been filed against mortgage lenders based on violations of the Worker Adjustment and Retraining Notification (W.A.R.N.) Act.

This article was first published in Scotsman Guide Residential Edition.

Senate Bill 1011, passed by the 2007 Oregon Legislature (codified as Chapter 723, Oregon Laws 2007), addresses deficiencies in the growth management and urban growth boundary (“UGB”) expansion processes in the Portland metropolitan area. Existing state laws governing UGBs are based on a land hierarchy protecting farm and forest land. As a result, urban growth boundary additions have sometimes been pushed into areas where development is not cost-effective because of lack of proximity to other urbanized areas and the high cost of providing infrastructure, and this system has not always protected the most important farm and forest land. SB 1011 addresses this problem by establishing a system to designate where urban expansion will and will not occur on land outside UGBs over a 40-50 year period.

Addressing the construction industry, Lane Powell Shareholder Leah C. Lively explains the definition of harassment, shows why business owners should care about eradicating harassment from the workplace, and offers concrete tips for protect a business from a harassing environment.

This article first appeared in BUILDERnews.

The United States Supreme Court dealt a significant blow to investor lawsuits in a decision issued on January 15, 2008. In Stoneridge Investment Partners v. Scientific-Atlanta, Inc. (06-43), the Supreme Court curbed the ability of shareholders to recover damages from “secondary” parties, which could include investment banks, lawyers, accountants, consultants, and other parties.

The United States Supreme Court dealt a significant blow to investor lawsuits in a decision issued on January 15, 2008. In Stoneridge Investment Partners v. Scientific-Atlanta, Inc. (06-43), the Supreme Court curbed the ability of shareholders to recover damages from “secondary” parties, which could include investment banks, lawyers, accountants, consultants and other parties.

In a widely-anticipated decision, the Supreme Court yesterday refused to expand the implied private right of action for securities fraud under Section 10(b) to include investor claims for so-called “scheme” liability against those who advise or do business with securities issuers. In Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., No. 06-43 (U.S. January 15, 2008), the Court held that Section 10(b) does not permit investors to recover from a “secondary” party that allegedly participates in a fraudulent scheme with an issuer, unless that party violates a duty to disclose in doing so, or the investors relied on that party’s public misstatements or acts.

We are now three weeks into the New Year and that means its time to ensure that your business is current on new laws that went into effect on January 1 (or in late 2007). This article contains a summary of 19 new laws affecting employers in Oregon.

Sen. Brian Weinstein (D-41, Mercer Island) has introduced Senate Bill 6385, which would add a new section to the Construction Defects statute, RCW 64.50 et seq. Rep. Brendan Williams (D-22, Olympia) introduced a companion bill, HB 2837, in the House of Representatives. Sen. Weinstein recently offered a substitute version of the bill. This bill, as revised on January 24, creates a reasonable care standard for all construction professionals involved in the construction of any improvement on real property.

On January 28, 2008, President Bush signed into law the first expansion of the Family Medical Leave Act (“FMLA”), which modifies FMLA leave available to families of military service members. Section 585 of the National Defense Authorization Act (“NDAA”), H.R. 4985, amends the FMLA by adding two qualifying events for families of military service members.