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Cypen & Cypen
NEWSLETTER
for
SEPTEMBER 10, 2009

Stephen H. Cypen, Esq., Editor

1.            ADA AMENDMENTS ACT OF 2008 NOT RETROACTIVE: 

Lytes sued his former employer, alleging it refused to accommodate his disability and then terminated his employment, in violation of the Americans With Disabilities Act of 1990.  A district court granted summary judgment to the employer because it concluded no reasonable jury could find Lytes was disabled when the alleged discrimination occurred.  While Lytes’s appeal was pending, the ADA Amendments Act of 2008 became law.  The U.S. Court of Appeals held the Amendments did not apply retroactively, and, applying the pre-Amendments ADA, affirmed the judgment of the district court because, based upon record evidence, no reasonable jury could find Lytes was disabled when he was refused accommodation and discharged.  By delaying the effective date of ADAA, Congress clearly indicated the statute would apply only from January 1, 2009 forward.  If Congress intended merely to “clarify” ADA, then its decision to delay the effective date would make no sense; it would needlessly have left ADA unclear for the more than three months between enactment of ADAA on September 25, 2008 and its going into effect on January 1, 2009. Nothing on the face of the statute indicates Congress intended this peculiar scenario.  Lytes v. DC Water and Sewer Authority, Case No. 08-7002 (U.S. D.C. Cir., July 21, 2009).

 2.            FEMALE LAWYERS WITH MASCULINE NAMES MAY HAVE A BETTER SHOT AT JUDGESHIPS!:

  Women lawyers with masculine-sounding first names have better odds of becoming a judge than their counterparts with feminine names, at least in South Carolina, according to the ABA Journal.  The study finds that changing a woman’s name from something feminine, such as Sue, to a gender-ambiguous name such as Kelly increased the odds of becoming a South Carolina judge by about 5 percent.  Changing the name Sue to a predominantly male name such as Cameron tripled the odds of becoming a judge, and changing it to Bruce (huh?) increased the odds by a factor of five.  Besides Bruce (huh? again), Kelly and Cameron, male-sounding first names of South Carolina judges included Barney, Dale, Leslie, Jan and Rudell.  We would be curious to know what newly-minted U.S. Supreme Court Justice Sammy Sotomayor thinks about the situation

 3.            NEW MOM SHOULD HAVE WORKED OUT BREAST-PUMPING BREAKS WITH EMPLOYER: 

The Supreme Court of Ohio recently reviewed a grant of summary judgment in favor of Allen’s employer on a discrimination complaint arising out of the Ohio Fair Employment Practices Act, as amended by the Pregnancy Discrimination Act.  Allen’s discretionary appeal sought review of the issue of whether Ohio law prohibits an employer from discriminating against a female employee because of or on the basis of lactation.  The Ohio District Court of Appeals ruled that Allen had failed to establish a prima facie case of sex discrimination on the basis of pregnancy, and concluded that Allen’s termination did not violate Ohio public policy against discrimination on basis of pregnancy.  The appellate court ruled that Allen was simply and plainly terminated as an employee at-will for taking an unauthorized, extra break.  The Supreme Court of Ohio affirmed.  The record demonstrated that Allen admitted in her deposition that for approximately two weeks she had taken breaks without her employer’s knowledge or authorization to do so, and that her supervisor had told her she was being terminated for failure to follow directions.  Legitimate, nondiscriminatory reasons in Ohio law for termination of employment include insubordination.  The record failed to provide a basis from which a jury could conclude that the employer’s articulated legitimate, nondiscriminatory reason for Allen’s termination -- failure to follow directions -- was a pretext for discrimination based on Allen’s pregnancy or a condition related to her pregnancy.  The lone dissenter felt that Ohio’s working mothers who endure the uncomfortable sacrifice of privacy that almost necessarily accompanies their attempt to remain on the job and nourish their children deserve to know whether Ohio’s pregnancy-discrimination laws protect them.  The dissenter would hold that clear public policy justifies an exception to the employment-at-will doctrine for women fired for reasons relating to lactation, and that Allen deserves an opportunity to prove her claim before a jury.  Allen v. totes/Isotoner Corp.,Case No. 2008-0845 (Ohio, August 27, 2009).  Incidentally, the five-judge majority comprised three males and two females; the dissenter was male, and one female justice did not participate.  Actually, after reading item 2 above, we should have said “male-sounding” and “female-sounding” first names.  

 4.            FIRST AMENDMENT MAY NOT PROTECT RATINGS FIRMS: 

As we predicted not too long ago (see C&C Newsletter for July 23, 2009, Item 2), suits against rating against rating agencies may be the next wave of litigation.  Two institutional investors have brought a class action to recover losses stemming from liquidation of notes issued by a Structured Investment Vehicle.  The investors sued eight defendants, including Moody's and Standard & Poor's.  The institutions alleged thirty-two claims of common law fraud, negligent misrepresentation, negligence, breach of fiduciary duty, breach of contract and related contract claims, unjust enrichment, and aiding and abetting.  A United States District Judge has now rejected the rating agencies’ argument that they are entitled to immunity under the First Amendment and even if they could be held liable, their ratings are nonactionable opinions.  It is well-established that under typical circumstances, the First Amendment protects rating agencies, subject to an "actual malice" exception, from liability arising out of their issuance of ratings and reports because their ratings are considered matters of public concern.  However, where a rating agency has disseminated its ratings to a select group of investors rather than to the public at large, the rating agency is not afforded the same protection.  Here, the institutions plainly alleged that the SIV's ratings were never widely disseminated, but were provided instead in connection with a private placement to a select group of investors.  In addition, an opinion may still be actionable if the speaker does not genuinely and reasonably believe it or if it is without basis in fact.  The institutions sufficiently pled that the rating agencies did not genuinely or reasonably believe that the ratings they assigned to the notes were accurate and had a basis in fact. Finally, disclaimers in the Information Memoranda that a credit rating represents a rating agency's opinion regarding credit quality and is not a guarantee of performance or a recommendation to buy, sell or hold any securities, are unavailing and insufficient to protect the rating agencies from liability for promulgating misleading ratings.  Abu Dhabi Commercial Bank v. Morgan Stanley & Co. Incorporated, Case No. 08 Civ. 7508 (S.D. NY September 2, 2009).

 5.            PRESIDENT ANNOUNCES NEW INITIATIVE FOR RETIREMENT SAVINGS:  

In his weekly address on September 5, 2009, President Barack Obama announced new steps to make it easier for American families to save for retirement.  These new initiatives will complement the president’s major legislative proposals to boost participation in IRAs and match retirement savings.  The new initiatives will: 

  • Expand opportunities for automatic enrollment in 401(k) and other retirement savings plans, 
  • Make it easier for more than 100 million families to save a portion or all of their tax refunds,
  • Enable workers to convert their unused vacation or other similar leave into additional retirement savings, and
  • Help workers and their employers better understand available options for tax-favored retirement saving through clear, easy-to-understand language. 
Together, these steps will expand the range of choices for workers who want to save and will make saving easier for millions of Americans.  Readers can access a fact sheet that outlines the new initiatives for retirement savings at http://www.whitehouse.gov/assets/documents/Retirement_Savings_Fact_Sheet.pdf.


 6. MANDATORY RETIREMENT WRONGFULLY IMPOSED ON HOUSE COUNSEL: 

A U.S. District Judge has ruled that Boehringer Ingelheim Pharmaceuticals Inc. violated the Age Discrimination in Employment Act by forcing Robert Raymond, chief patent counsel and vice president for intellectual property, to retire at age 65 in 2004.  The law allows companies to institute mandatory retirement policies starting at age 65 for employees who are so-called bona fide executives or high policymaking employees for at least two years before retirement.  To qualify, the employee must be among a handful of executives who manage a significant number of other workers or a large volume of the company's business.  Boehringer promoted Raymond to the vice president position two years before the forced retirement.  The Judge wrote that  Raymond's position was not one of great corporate influence and he reported no higher than general counsel.  The Judge found that back pay is only appropriate until November 1, 2006, two years after Raymond's forced retirement, and front pay or reinstatement was inappropriate.  However, she awarded no damages, concluding it would be speculative at best to quantify Raymond's loss, according to law.com

 7.            “CORRECTION” ON FRS INVESTMENT DEBACLE STORY: 

We recently reported that the Florida State agency that invests the Florida Retirement System assets lost a $250,000,000 bet on a huge Manhattan real estate deal (see C&C Newsletter for September 3, 2009, Item 12).  We forgot to mention that in connection with said 2007 investment the State Board of Administration also paid $16,780,948 in fees, making the total loss $266,780,948.  Oh, and one other thing:  the four genii who analyzed and recommended the investment received bonuses for that year.

 8.            CITY IN CHAPTER 9 ENTITLED TO REJECT CBA: 

City in Chapter 9 bankruptcy proceedings was entitled to reject collective bargaining agreement, as (a) the agreement burdens the estate, (b) the equities, after careful scrutiny, balance in favor of rejection and (c) reasonable efforts to negotiate a voluntary modification had been made, but were not likely to produce a prompt and satisfactory solution.  In Re City of Vallejo, Case No. 08-26813 (Bankr. ED Cal, August 31, 2009).  We relied on Chuck Carlson for this one. 

 9.            STIMULUS DOLLARS ENABLE LOCAL HIRING OF NEW POLICE OFFICERS:   

Several Miami-Dade municipalities will share more than $15 Million in federal funds as part of American Recovery and Reinvestment Act of 2009.  The Miami Herald reports that the $1 Billion COPS Hiring Recovery Program grew out of that Act.  The COPS program allows communities to hire police officers by funding entry-level salaries and benefits packages for full-time officers for three years.  The City of Miami was awarded the maximum, $11 Million to fund 50 officers, which was the highest amount in Florida.  Other cities receiving funding include North Miami Beach ($1.6 Million), North Miami ($734,000), Miami Springs ($491,000), Miami Shores ($436,000 ), Opa-Locka ($336,000) and North Bay Village ($224,000). 

10.            PLAINTIFFS IN 1933 SECURITIES ACT AND 1934 SECURITIES EXCHANGE ACT MAY BE COMBINED IN SAME CLASS: 

In an opinion of interest to both plaintiff and defense counsel, the U.S. Court of Appeals for the Second Circuit ruled that plaintiffs suing under the Securities Act of 1933 and the Securities Exchange Act of 1934 may co-exist within the same plaintiff class even if allegations of misrepresentation underlying the '33 act and '34 act claims differ.  According to a law.com review of the case, the appellate decision will likely have the effect of enlarging the size of plaintiff classes in securities class actions, as well as increasing the number of claims that defendants will be subject to in class actions.  Defendants’ primary opposition to class certification related to Federal Rule of Civil Procedure 23's “typicality” requirement, that the parties seeking certification show that each class member’s claim arises from the same course of events and each class member makes similar arguments to prove defendants’ liability.  To defeat a motion for certification, defendants would have had to show that there was a fundamental conflict among class members.  However, the circuit court rejected the argument that there was a fundamental conflict among class members, and disagreed that success of the ‘34 Act plaintiffs necessarily precluded recovery by the ‘33 Act plaintiffs and vice-versaLoftin v. Bande, Case No. S 07-4017 and 07-4025 (U.S. 2d Cir., July 22, 2009).

11.            AN OLD FARMER’S ADVICE: 

Words that soak into your ears are whispered...not yelled.

12.            IDIOSYNCRASIES OF OUR LANGUAGE: 

What do you do when you see an endangered animal eating an endangered plant?

13. QUOTE OF THE WEEK: 

“Success is not the key to happiness.  Happiness is the key to success.”  Albert Schweitzer

Copyright, 1996-2009, all rights reserved.

Items in this Newsletter may be excerpts or summaries of original or secondary source material, and may have been reorganized for clarity and brevity. This Newsletter is general in nature and is not intended to provide specific legal or other advice.


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