PLDO Law Blog

Stay In Compliance: Avoid the "I-9 Fine"

As an employer, your organization presently verifies employment eligibility of prospective new hires using Form I-9, Employment Eligibility Verification, published by the U.S. Citizenship and Immigration Services ("CIS"). As of January 22, 2017, employers must use CIS' updated version of Form I-9, or face a penalty of up to $2,000 for a first time violation and up to $10,000 per violation if your organization has previously been sanctioned for improperly screening applicants. Ensuring use of the latest form is quite straightforward: the most-current Form I-9 has the date "11/14/2016" printed at the bottom left of each page, and can be downloaded from the CIS website by following this link: https://www.uscis.gov/i-9. Lastly, CIS' rules for storage and retention of Forms I-9 have not changed, so employers should continue to follow those procedures for all previous and future forms. PLDO will continue to monitor and report on news and information to support your organization. For further information on this issue or other business and employment law matters, contact attorneys Joel K. Goloskie and William E. O'Gara at 401-824-5100 or email jgoloskie@pldolaw.com and wogara@pldolaw.com. We welcome your comments, questions and suggestions.

The "Who, What, When and Where" of Trademark Protection

Individuals and business owners are faced with a number of options when considering whether, where and when to formally protect the name of their business, products and services and the logos they use in connection therewith. The answers depend on the circumstances unique to each business, and it is important for owners to assess of the pros and cons of each option before filing for trademark protection.

Delaware Chancery Court Decision Highlights Shareholders' Rights & Obligations for Information

Public companies are required to provide, on a regular basis, extensive information about their businesses and financial condition. All of that information is readily available to shareholders and others. Conversely, similar information regarding private companies is generally not available, even to its shareholders. For that reason, the laws of virtually every state give private company shareholders limited rights to receive non-public information regarding a private company in which they own an equity interest.

Deadline Nears for Medical Marijuana Patients and Caregivers to Tag Their Plants under New Law

Medical Marijuana patients and caregivers have until April 1, 2017 to have all their plants tagged in accordance with the Rhode Island Department of Business Regulations' (DBR) Medical Marijuana Program - Final Rules and Regulations that became effective on January 1, 2017. The law requires all medical marijuana patients and caregivers who elect to grow medical marijuana to purchase plant tags for each plant that they grow from the DBR.

Rhode Island Department of Business Regulations Adopts Final Rules and Regulations for Cannabis Cultivator Licenses

On December 12, 2016, the Rhode Island Department of Business Regulations ("DBR") filed its Medical Marijuana Program Final Rules and Regulations with the Rhode Island Secretary of State affecting cannabis entrepreneurs interesting in obtaining a cannabis cultivator license. The newly adopted regulations are a result of public comment received from November 7, 2016 through December 7, 2016 regarding the agency's Emergency Regulation 1- Licensed Cultivators, published in October and operative through December 31, 2016. The DBR's final rules and regulations will take effect on January 1, 2017 and will supersede the emergency regulations. Rhode Island cannabis cultivator licenses permits growers to cultivate and sell medical marijuana to dispensaries. The final rules and regulations reflect important changes that applicants and those contemplating starting applications must be aware of to meet the regulatory requirements of the DBR to obtain licensed cultivator status. The Concise Explanatory Statement summarizes the public comments and what action was taken by the DBR.

Are you Covered by a "Sufficiently Specific" Indemnity Clause?

In a recent Rhode Island Superior Court case, the court once again addressed the question of whether a contractual indemnity clause was "sufficiently specific" to be enforceable. The case arose out of a situation wherein a nursing home had contracted for a landscaping company to provide ice management and snow removal services for the nursing home's walkways and parking lots. With regard to one particular snow storm, the company performed plowing, sanding, shoveling, and ice melting services at the nursing home on the day of the storm. Then, the following day, the landscaper returned to the nursing home, but failed to apply any ice melt. Unfortunately, a pedestrian slipped and fell on ice that had formed on the nursing home's walkway. The pedestrian filed suit against the nursing home, who then filed an action against the landscaping company based upon the indemnity clause it had in its contract with the company. The court determined that the harm that was suffered by the pedestrian was a direct result of the landscaper's failure to provide the ice melt services. The court further determined that the indemnity clause, which held the landscaper liable for a "breach of any contractual duty," was sufficiently specific to cover the circumstances of the case. The court determined that the landscaping company was required to indemnify the nursing the home.When drafting indemnification clauses, it is important to remember that such clauses have to be "sufficiently specific," and that courts are instructed to construe the clause against the party alleging the right to contractual indemnity. In many cases, courts have determined that the use of generalized language did not cover the circumstances of the case. Accordingly, a party seeking contractual indemnity would be wise to specifically set forth the specific parameters of an indemnification clause to the greatest extent possible. This may avoid a court construing general terms against a party when it seeks to be indemnified, as well as the unpredictable results that might follow. For more information on this issue or other legal matters, contact Attorney Patrick J. McBurney at 401-824-5100 or email pmcburney@pldolaw.com. We welcome your comments, questions or suggestions.

Nursing Home Laws Create Extra Challenges - Vigilance is Key to Compliance

In 1987, the Nursing Home Reform Act ("NHRA") was passed to ensure that residents of nursing homes would receive quality care at all times in order to achieve and maintain their "highest practicable" physical, mental and psychosocial well-being. With the law came significant challenges for nursing home owners to stay in compliance with the NHRA and state regulations regarding resident care, admission and reimbursement. For instance, nursing homes are subject to a certification process, which includes unannounced surveys such as resident interviews at irregular intervals at least once every 15 months. State authorities may also conduct more targeted surveys or investigations in response to complaints against nursing homes. If a survey or investigation reveals that a nursing home is out of compliance, the nursing home may be subject to penalties or other actions depending upon whether a deficiency subjects a resident to immediate jeopardy. The penalties or sanctions may also be different depending upon whether the deficiency that has been discovered is an isolated incident or part of a pattern or a widespread practice. The complexity of the NHRA can lead to misunderstanding and miscommunications. Ever-changing state and federal regulations can add an extra burden for nursing home owners to stay in compliance. Owners must be vigilant and stay on top of new developments in multiple areas like the admission process, care planning, accommodating resident preferences, Medicare and Medicaid distinctions, reimbursement practices and transfer/discharge procedures. To help nursing home owners through the maze, PLDO Managing Partner Gary R. Pannone and health care attorney Jillian N. Jagling have co-authored an advisory, Challenges for Nursing Homes, that provides details of compliance issues faced by nursing homes. The article also includes an outline of "myth vs. reality" in this complex area of the law. If you have questions or would like more information, please contact attorneys Pannone or Jagling at 401-824-5100 or email gpannone@pldolaw.com or jjagling@pldolaw.com. We welcome your comments, questions and suggestions.

New Law and Regulations Bring Changes for Issuers of Public Debt in RI

Rhode Island's Public Finance Management Board (PFMB), the agency tasked with overseeing public debt in the State, approved amendments to its rules and regulations in response to recent statutory changes that will impact future borrowing by state agencies and local governments. The amendments also broaden PFMB's oversight and advisory duties to a wider array of public financing instruments and a larger group of governmental entities. One of the major changes to the statute and regulations is the imposition of a fee, payable to PFMB by the lead underwriter or purchaser of debt of "all state departments, any city or town, any state, municipal and regional authorities, agencies, boards, commissions, public or quasi-public corporations, and fire districts and other special districts." Previously, the fee was only required for debt issued by state agencies, while municipal issuers and special districts were exempt from the fee unless they requested the advice or assistance of PFMB. Additionally, the fee is now required for issuances of taxable debt and re-fundings whereas, prior to the amendments, only the issuance of new money tax-exempt debt would trigger the fee. The rate of the fee will remain unchanged at one-fortieth of one percent (1/40%) of the issued principal amount of the issue. Furthermore, the amendments have added potential penalties of up to $250 per day for issuers who fail to submit the requisite report of proposed debt (no later than thirty days prior to the sale) and report of final sale (within thirty days after closing). Issuers are also now required to submit annual reports to PFMB within ninety days after the end of each fiscal year, which describe the issuer's outstanding debt and use of bond proceeds during that year. The amendments also explicitly broaden PFMB's oversight over additional types of debt instruments-including Grant Anticipation Revenue Vehicles (GARVEE) bonds or notes, various types of conduit debt, and financing leases-and now explicitly authorize supervision over additional governmental entities, such as fire and special districts. Finally, the amendments require PFMB to undertake a biennial debt affordability study and grant the Board authority to issue non-binding advisory opinions. For more information on these changes or other matters concerning public or 501(c)(3) financing, contact attorney David DiSegna at 401-824-5100 or ddisegna@pldolaw.com.We welcome your comments, questions and suggestions.

New RI Identity Theft Protection Act Requires Businesses Adopt Cybersecurity Measures

It is not uncommon these days to open the newspaper to reports of businesses fallen victim to cyber attacks. But, while front page news tends to focus on security breaches of companies of the "fortune 500" caliber, cyber attacks waged upon small family and middle market businesses actually occur with greater frequency. In an article published in 2015 by SEC Commissioner Luis A. Aguilar, "The Need for Greater Focus on the Cybersecurity Challenges Facing Small and Midsize Businesses," the author notes that the FBI reports that ransomware attacks, standing alone, cost companies around the world more than $1 billion between October 2013 and June 2015. While companies of all sizes have lost money to such schemes, small and medium-sized businesses are believed to be the biggest targets.

RI Superior Court Reverses Zoning Board Decision that Licensed Growing of Medical Marijuana Violated Local Zoning Ordinances

The Rhode Island Superior Court recently reversed a South Kingstown Zoning Board decision after the Board erroneously found that a licensed medical marijuana grow operation constituted "agricultural products manufacturing" and was not allowed in the Town's commercial zoning district. Carlson v. Zoning Bd. of Review of S. Kingstown, No. WC-2014-0557, 2016 R.I. Super. LEXIS 134 (R.I. Super. Ct. Nov. 25, 2016). In his decision, Rhode Island Superior Court Judge Bennett Gallo noted that the Zoning Board's decision ignored the plain meaning of the Town's zoning ordinance and constituted "an exercise in tortured reasoning."

According to the facts of the case, the Appellant, Jordan Carlson, maintained a medical marijuana grow operation, licensed under the Edward O. Hawkins and Thomas C. Slater Medical Marijuana Act, R.I. Gen. Laws ยง 21-28.6-1, et seq., in a former movie theater located in the Commercial Downtown (CD) zoning district in South Kingstown, Rhode Island. In March 2014, the Town Building and Zoning Official, Jeffrey O'Hara, learned of Carlson's operation after the South Kingstown Police and Fire Departments responded to a fire alarm at the property. As a result, O'Hara sent Carlson a Notice of Violation which provided that the use of the property constituted "Agricultural Products Manufacturing" in violation of Section 301 and Use Code 74.1 of the South Kingstown Code of Zoning Ordinances. Carlson appealed the violation to the South Kingstown Zoning Board of Review, claiming inter alia that the cultivation of marijuana did not constitute Agricultural Products Manufacturing-which the Town Ordinances failed to define-but instead qualified as agricultural activity which are permitted in all zones pursuant to State law.

In September 2014, after a public hearing on the appeal, the Zoning Board issued a written decision denying Carlson's appeal. The Zoning Board's decision relied heavily on statements made by O'Hara, who testified he never actually entered the building and issued the violation based solely on the police reports and the assumption that yielding usable marijuana from cultivated marijuana plants involved a procedure complex enough to constitute manufacturing. Accordingly, the Zoning Board found that the marijuana cultivation constituted Agricultural Products Manufacturing. Carlson subsequently appealed to the Rhode Island Superior Court.

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