Cypen & Cypen
APRIL 1, 2010
Stephen H. Cypen, Esq., Editor
1. FLORIDA SUNSHINE LAW DOES NOT REQUIRE THAT ATTENDEES BE PERMITTED TO SPEAK: Keesler sought review of a final summary judgment in favor of Community Maritime Park Associates, Inc. In granting summary judgment, the trial court found that Section 286.011(1), Florida Statutes, the Florida Sunshine Law, gave Keesler the right to be present but not to speak at CMPA meetings. (There was no dispute that CMPA was subject to the requirements of the Sunshine Law.) The issue was not whether CMPA should give citizens an opportunity to speak and provide input at its meetings, but rather whether the Sunshine Law provides citizens the right to speak at public meetings. The Sunshine Law provides that all meetings of any board or commission of any state agency or authority or of any agency or authority of any county, municipal corporation or political subdivision at which official acts are to be taken are declared to be public meetings open to the public at all times, and no resolution, rule or formal action shall be considered binding except as taken or made at such meeting. The board or commission must provide reasonable notice of all such meetings. A 1969 Florida Supreme Court case considered constitutionality of the Sunshine Law, and stated in dicta that members of the public have the right to be present and to be heard. However, in 1983, the Florida Supreme Court again discussed the rights of the public to participate in public meetings, and concluded nothing in that decision gave the public the right to be more than spectators; the public had no authority to participate in or to interfere with the decision-making process. Because Keesler failed to point to any case construing the phrase "open to the public" to grant the public the right to speak, the appellate court was not inclined broadly to construe the phrase as granting such right. In affirming , the appellate court agreed with the trial court that the remedy Keesler was seeking was more appropriately left to the legislative process or to the local public officials to whom the CMPA board members are accountable. Keesler v. Community Maritime Park Associates, Inc., 35 Fla. L. Weekly D538 (Fla. 1st DCA, March 10, 2010).
2. U.S. CORPORATE PENSION FUNDS SHED RISK; PUBLIC FUNDS EMBRACE IT: Although corporate and public pensions are facing similar challenges, they are responding in radically different fashion. The typical U.S. defined benefit pension plan saw the value of its assets fall by approximately 19% from 2008 to 2009 before the recovery that began in March-April last year. Declines were largest among corporate funds at almost 20%, while public fund asset values fell 17% and assets held by endowments and foundations declined in value by about 19%. Overall, the value of assets in portfolios of U.S. defined benefit plans declined to $5.9 Trillion in 2009 from $7.2 Trillion in 2008. A new report from Greewich Associates provides comments from U.S. institutional investors on trends in investment strategy, asset allocation and rising expectations.
3. NO CELEBRATION FOR THIS ANNIVERSARY: Ten years ago last week the dot-com bubble burst, marking beginning of a “lost decade” for U.S. stocks as measured by the Wilshire 5000 index, according to pionline.com. From March 24, 2000, when the Wilshire 5000 reached its then-peak of 14,751.64, through March 23, 2010 when it closed at 12,287.44, the index produced an annualized -0.32% total return including dividends reinvested. We would be remiss -- and perhaps too modest -- if we did not paraphrase from our March 2000 Newsletter, Item 32, entitled “TAKE THE MONEY AND RUN?”:
Ahem. The previous “lost decade” was during the Great Depression, when the Standard & Poor’s 500 Index produced a total return of -0.37% annualized for the ten years ended February 28, 1941. One other point of interest: during the ten years, Large-Cap Value (2.79%) outperformed Large-Cap Growth (-4.05%) and Small-Cap Value (9.47%) outperformed Small-Cap Growth (-0.94%).
4. SEC WILL EVALUATE FUNDS’ USE OF DERIVATIVES: The U.S. Securities and Exchange Commission’s staff is conducting a review to evaluate use of derivatives by mutual funds, exchange-traded funds and other investment companies. The review will examine whether and what additional protections are necessary for those funds under the Investment Company Act of 1940. Pending the review's completion, staff has determined to defer consideration of exemptive requests under the Investment Company Act to permit ETFs that would make significant investments in derivatives. The staff's decision will affect new and pending exemptive requests from certain actively-managed and leveraged ETFs that particularly rely on swaps and other derivative instruments to achieve their investment objectives. The deferral does not affect any existing ETFs or other types of fund applications. Registered investment companies enable investors to purchase shares in a portfolio of securities. ETFs are similar to traditional mutual funds, and, like those funds, may seek to track an underlying benchmark or securities index or be actively managed. Unlike traditional mutual funds, shares of an ETF can be traded throughout the day on a securities exchange. In addition, leveraged ETFs are index-based ETFs that seek to deliver multiples or inverse multiples of daily performance of the selected index using swaps and other derivatives. (Got that? Obviously, Lehman Brothers didn’t.) Release 2010-45 (March 25, 2010).
5. APPLICANT FOR CONNECTICUT FIREARM RENEWAL PERMIT STATED PROCEDURAL DUE PROCESS CLAIM: Kuck applied to the Connecticut Department of Public Safety to renew his permit to carry a firearm. DPS requested that Kuck provide a U.S. passport, birth certificate or voter registration card in support of his renewal application. Kuck objected to the requirement, arguing that he had submitted proof of citizenship when he first applied for a permit in 1982, and, over the subsequent 25 years, had never before been asked to provide such proof with a renewal application. He claimed that the DPS requirement was arbitrary, designed to harass, and, in any event, not authorized by state law. When he ultimately refused to provide the requested documents, DPS denied his renewal application. Kuck then filed an appeal with the Board of Firearms Permit Examiners, seeking a hearing on whether his refusal to submit a proof of citizenship provided just and proper cause for denial of his application. However, his appeal hearing was not scheduled to occur for eighteen months, during which time he was deprived of a permit to carry a firearm. After Kuck filed the instant suit, he finally received his hearing. Shortly before the hearing, he provided a voter registration roll supporting his citizenship and residency status; as a result, his renewal application was granted. Despite this resolution, he continued to seek damages from various state officials under 42 U.S.C. § 1983 for alleged violations of his due process and First Amendment rights. (Notably, at time of his renewal application, Kuck was Secretary of the Board of Firearms Permit Examiners.) The United States District Court dismissed Kuck’s complaint. Kuck’s principal claim was a procedural due process challenge alleging that DPS -- in tandem with the Board of Firearms Permit Examiners -- had a practice of improperly denying permits, unnecessarily prolonging appeals that follow and then quietly resolving disputes at the last minute. In addition, Kuck claimed that his firearm permit appeal was deliberately delayed by state officials in retaliation for his outspoken criticism of DPS and Board of Firearms Permit Examiners practices, in violation of his First Amendment rights. The appellate court concluded that Kuck had stated a procedural due process claim. However, it remained to be seen whether Kuck had named, or will be able to name, appropriate defendants for the case to proceed. While he attempted to amend his complaint to add additional defendants (including the Governor), the motion was denied as futile by the district court. The appellate court remanded so that the district court may consider, in the first instance, whether any relief was available to Kuck or any putative class in light of the proposed amended complaint. Kuck v. Danaher, Case No. 08-5363 (U.S. 2d Cir., March 23, 2010).
6. “DONNING AND DOFFING” NOT COMPENSABLE: Bamonte, a police officer employed by City of Mesa, Arizona, challenged the district court's entry of summary judgment in favor of the City. He contended that the City violated the Fair Labor Standards Act by failing to compensate police officers for the donning and doffing of their uniforms and accompanying gear. (The City, like most other municipalities, requires its police officers to wear certain uniforms and related gear, usually including trousers, a shirt, a nametag, a clip-on or velcro tie, specified footwear, a badge, a duty belt, a service weapon, a holster, handcuffs, chemical spray, a baton, and a portable radio. Wearing body armor is optional, although officers are required to have body armor available.) Because officers had the option of donning and doffing their uniforms and gear at home, the district court determined that such activities were not compensable pursuant to FLSA. The appellate court agreed that such activities were not compensable pursuant to FLSA, and affirmed the district court's judgment. The relevant inquiry is not whether the uniform itself or the safety gear itself is indispensable to the job -- they most certainly are -- but rather, the relevant inquiry is whether the nature of the work requires the donning and doffing process to be done on the employer's premises. In addition, a 2006 Department of Labor memorandum regarding compensability of the donning and doffing of uniform and gear at home is consistent with this analysis. That memorandum provides a rational and consistent approach regarding compensability of the donning and doffing of uniforms and related gear. The appellate court readily acknowledged and applauded the many law enforcement officers who put their lives on the line daily to ensure continued safety of our communities. The ruling in no way should be interpreted as denigrating the vital role these officers fill in the rubric of society. Nevertheless, the court’s analysis of the governing statutes, as informed by the DOL interpretation, precedent and other analogous cases led the court to conclude that the donning and doffing of police uniforms and related gear are not compensable activities in this case. Bamonte v. City of Mesa, Case No. 08-16206 (U.S. 9th Cir., March 25, 2010). See previous items on this subject at C&C Newsletter for July 12, 2007, Item 6 and C&C Newsletter for December 8, 2005, Item 2.
7. ALASKA EMPLOYEES WANT RETURN TO DB PLAN: Alaska public employees who want the state to return to a traditional pension plan told concerned legislators that the state will face a troubled future as it begins to lose its trained workforce. According to JuneauEmpire.com, employees addressed an informal panel of legislators interested in returning to a traditional defined-benefit plan, instead of the 401(k)-style contribution plan they now have. Legislators who fought bitter battles over Senate Bill 141 several years ago -- when the new Tier IV plan for the Public Employees Retirement System and the Tier III plan for the Teachers Retirement System were implemented -- would like to avoid reopening the divisive issue. Many of those testifying said they and their colleagues will leave for a better place with better security. At the time the new provisions were enacted, the public was told that changing the retirement systems would save money. "The Alaska public was told it would stop the bleeding, but it opened the wound," said one legislator describing SB 141 as the worst piece of legislation he had seen in his ten years in the Legislature. A previous piece on the Alaska situation is at C&C Newsletter for May 28, 2009, Item 1.
8. SHERIFF’S UNILATERAL GENERAL ORDER ON HEALTH INSURANCE DID NOT CONSTITUTE CONTRACT: Carlucci challenged the trial court's final summary judgment, ruling that General Order 328.0, as amended by the Sheriff, did not constitute a vested and enforceable contract entitling employees with twenty years of service with the Orange County Sheriffs Office to a fully paid lifetime health insurance policy. The OCSO employed general orders to provide employees with information and to establish internal guidelines and procedures. In 1998, the Sheriff implemented a policy to defray cost of health insurance for longer-tenured retirees by amending General Order 328.0 to provide that full-time employees who retired after 20 years of service would retain their health insurance at the Sheriff’s cost. General Order 328.0 further provided that the Sheriff expressly reserved the exclusive right unilaterally to amend or cancel written directives. Carlucci did not challenge the Sheriff’s right unilaterally to amend or rescind any general order, including General Order 328.0. However, Carlucci did seek to enforce General Order 328.0 as creating a contractual right to payment of health insurance coverage. The lower court reasoned that policy statements in an employment manual do not give rise to enforceable contract rights unless there is specific language expressing the parties' explicit, mutual agreement that the manual constitutes a separate employment contract. Further, even assuming that General Order 328.0 should be interpreted as a contract, the trial court concluded that the claim still failed as a matter of law because the general order was not implemented as a result of any offer or acceptance and no mutual assent existed between the Sheriff and OCSO employees. Finally, the trial court rejected the contention that discontinuing health insurance payment violated Article I, section 10 of the Florida Constitution, which prohibits laws in impairment of contract, because the Sheriff did not pass a law when he amended General Order 328.0 and his unilateral decision was not quasi-legislative action. On appeal, the trial court’s judgment was affirmed. Carlucci v. Demings, 35 Fla. L. Weekly D626a (Fla. 5th DCA, March 19, 2010).
9. FLORIDA WORKERS COMP CLAIMANT ENTITLED TO STATUTORY PRESUMPTION: Martz challenged an order of the Judge of Compensation Claims denying compensability of his heart condition and hypertension. Specifically, he claimed the JCC erred by finding that he had failed to satisfy the disability requirement of Section 112.18(1), Florida Statutes, with respect to his heart disease. Martz responded to a call, and afterwards experienced elevated blood pressure and an irregular heart rate. He underwent diagnostic tests that revealed he had atrial fibrillation, which is considered heart disease, and also that he had essential hypertension. Section 112.18(1), Florida Statutes, affords certain categories of public employees totally or partially disabled by tuberculosis, heart disease or hypertension a rebuttable presumption that the condition was suffered in line of duty. The JCC found the facts above insufficient to establish that Martz was totally and permanently disabled by atrial fibrillation. The JCC concluded that Martz was not actually incapacitated from performing his work activities as a result of his atrial fibrillation. The JCC reasoned that Martz's hospitalization for evaluation, diagnosis and treatment for atrial fibrillation did not equate to total or partial disability, as required by section 112,18(1). In reversing, the appellate court noted that the trial court did not have benefit of the recent opinion in which the appellate court found that claimant had established disability under facts remarkably similar to those in the instant case. Here, as there, the claimant suffered an irregular heart beat from a firefighting call. It required hospitalization and treatment due to his atrial fibrillation condition, medical testimony established he was disabled from performing his firefighter duties while hospitalized due to his condition. Consequently, Claimant was temporarily disabled as a result of his atrial fibrillation, and satisfied the disability requirement of Section 112.18(1), Florida Statutes. Martz v. Volusia County Fire Services/County of Volusia Risk Management, 35 Fla. L. Weekly D593 (Fla. 1st DCA, March 17, 2010).
10. LAWYER SUES OVER FILM MIX-UP: A former South Carolina lawmaker is suing HBO and Showtime, claiming they promoted his low-budget comedy about Appalachia, called “The Hills Have Thighs,” only to show a soft-core pornographic movie with the same title. Speaking to the New York Times, James “Bubba” Cromer said the mistake defamed him and caused emotional distress, according to his lawsuit against HBO and Showtime seeking damages. Late one evening the Columbia lawyer saw “The Hills Have Thighs” was set to make its television debut on The Movie Channel, which is owned by Showtime. The listing included the description of his movie and the names of its actors. And even though it was 1:30 in the morning (and Cromer had to be in court at 8:30 A.M.), he called the cast, his friends and family to tell them to set their digital recorders. He also announced the movie premier to his 4,000 friends on Facebook. When the appointed hour arrived, there was a surprising plot twist: a set of thighs that made Cromer realize it was not his movie. Instead of his “hysterical Appalachian comedy,” it showed a film directed by a longtime cult favorite and director of exploitation films with plenty of skin and risque turns on popular movie titles, such as the “The Da Vinci Coed” and “The Witches of Breastwick.” The movie was also subsequently shown with the wrong listing on Cinemax, owned by HBO. Cromer has not spoken with makers of the wrong version of “The Hills Have Thighs,” and did not indicate why he had not included them in his suit. We are wondering if the movie features Joe Thighs-Man.
11. OXYMORON: Why do we drive on a parkway and park on a driveway? I dunno, why do we?
12. FABULOUS RANDOM THOUGHTS: Why is it that during an ice-breaker, when the whole room has to go around and say their name and where they are from, I get so incredibly nervous? Like I know my name, I know where I'm from; this shouldn't be a problem....
13. SIMPLE BUT BRILLIANT...QUOTES FROM WILL ROGERS, PROBABLY THE GREATEST POLITICAL SAGE THIS COUNTRY HAS EVER KNOWN: If you find yourself in a hole, stop digging.
14. QUOTE OF THE WEEK: “The only way I’m not going to be Governor next year is at the ballot box. The only way that I’ll be leaving office before that is in a box.” New York Governor David Paterson, determined to run in the next election for Governor, following rumors he may step down soon. Box, please.
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