Business Law Section
News from the Section
CA High Court Issues Decision in Meal Breaks Case
Recently the California Supreme Court issued its highly anticipated decision in Brinker v. Superior Court, answering some of the most litigated issues in connection with California’s meal break requirements. The most important issue decided by the court is whether employers are required to provide non-exempt employees the opportunity to take a 30-minute meal break, or whether employers must ensure that employees comply and perform no work for a full 30-minute period. The court held that an employer satisfies its obligations if it “relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted 30-minute break, and does not impede or discourage them from doing so.” The court specifically held that “an employer must relieve the employee of all duty for the designated period, but need not ensure that the employee does no work.” More than three years in the making, the case represents a generally favorable result for employers and provides much needed certainty in California wage & hour law. This update was prepared by the BLS Agribusiness Committee; for information on the Committee, please contact its Chair Sam Zanutto.
Disclosure of Information to CFPB May Not Waive Privilege
The Consumer Financial Protection Bureau (CFPB) proposed a rule providing that the disclosure of information to the CFPB in the course of its supervisory or regulatory processes will not waive privilege over such information. Ordinarily, by statute, a financial institution does not waive the attorney-client privilege by producing information required by its regulators. 12 U.S.C. § 1828(x). However, in creating the CFPB, the Dodd-Frank Act neglected to specify whether the CFPB would be included within this statutory protection. In January, the CFPB announced its view that, even absent any legislative change, the financial institutions that it regulates would not waive privilege by disclosing information in response to the CFPB's requests. The CFPB has stated that its new proposed rule is intended to provide "further assurances" that privilege will not be waived through such disclosure. The proposed rule is open for public comment, and can be found on Consumer Financial Protection Bureau.This summary was prepared by the BLS Consumer Financial Services Committee; for information on the Committee, please contact its Chair William Webb.
Searching for Consensus on Online Privacy
The latest privacy frameworks put forth by President Obama and the Federal Trade Commission are part of a decade long struggle to achieve a consensus on consumer privacy in the internet age. In February, the White House announced a plan to establish a Consumer Privacy Bill of Rights. The administration also addressed efforts of the Digital Advertising Alliance (DAA) which permits consumers to opt-out of behavioral targeting and is enforced by the Better Business Bureau’s National Advertising Review Council as “an example of the value of industry leadership as a critical part of privacy protection going forward.” In March, the FTC released its final report “Protecting Consumer Privacy in an Era of Rapid Change.” The report called for improved privacy disclosures, for data brokers to use a centralized website to “identify themselves, and to disclose how they collect and use consumer data” and what choices consumers have with respect to their data. The FTC also indicated that it would be conducting further study of mobile privacy disclosures and tracking by internet service providers and other large platforms. This review was prepared by the BLS Cyberspace Committee’s Bennet Kelley.
SEC Guidance on Failure to Make Say-on-Pay Disclosure
The SEC’s Division of Corporation Finance staff noted at a recent conference that many public company issuers forgot to comply with SEC rules requiring companies to report the frequency of their “say-on-pay” votes. Failure to report can, among other things, threaten a company’s Form S-3 eligibility status. In 2011, SEC rules required public companies to conduct their first shareholder advisory vote on whether shareholders should be provided the opportunity to vote on executive compensation every one, two, or three years. Because the votes are advisory only, companies have the ultimate right to determine the say-on-pay vote frequency after the shareholder vote. The decision may be disclosed in the Form 8-K filed to report the vote results or in a Form 8-K/A amending the prior report. Alternatively, disclosure may be made on a Form 10-Q or 10-K filed by the prescribed deadline. If the vote results are disclosed on a Form 10-Q or 10-K, the frequency decision must be reported on a new Form 8-K. (www.sec.gov/divisions/corpfin/guidance/8-kinterp.htm, see Q.121A.04). The delayed disclosure is designed to provide a company with enough time to make its frequency decision, and for a shareholder to make a proposal for the next meeting if the shareholder recommendation was not adopted. This update was brought to you by the BLS Corporations Committee.
Legislative Day Held by financial institutions committee and consumer financial services committee in sacramento
Members of the Financial Institutions and Consumer Financial Services Committees of the BLS met on April 10th at the State Capitol. Kevin Gould, Senior V.P., Director of State Government Relations for the California Bankers Association, spoke with the group first and then answered questions centered on the CBA’s views of the Governor’s proposal to merge the California Department of Financial Institutions and the Department of Corporations. Mark Farouk, the Chief Consultant for the Assembly Banking and Finance Committee spoke next. He was followed by Jan Owen, the Commissioner of the Department of Corporations. Ms. Owen described the Governor’s proposal to streamline government agencies that is pending before the Little Hoover Commission and then answered questions. The last speaker of the morning was Mark LeForestier, with the California Attorney General’s Office regarding mortgage lending legislation. Over lunch, the committee members and guests Mr. Edwin Chow, the Regional Director of the CFPB, spoke about the agencies current priorities including those related to the payday lending industry. Sign up to receive notice of future events by selecting to receive e-bulletins from the Business Law Section’s Financial Institutions Committee and/or the Consumer Financial Services Committee on your State Bar profile. Further instructions are listed below.
Insolvency Law Committee Publishes Article on Prosecution of Alter Ego Claims
The April 2012 issue of the Business Law News includes an article written by Gary Kaplan (Farella Braun + Martell) and Tom Phinney (Parkinson Phinney), both members of the Insolvency Law Committee, concerning a number of recent developments relating to the prosecution of alter ego claims. In particular, the article discusses the impact of the Ninth Circuit decision Ahcom Ltd. v. Smeding, 623 F.3d 1248, 1250-52 (9th Cir. 2010), which held that bankruptcy trustees do not generally have standing to pursue “alter ego” claims against a corporate debtor’s principals. The case overruled a number of lower court cases that had held that alter ego claims are property of a bankruptcy estate. The article also discusses a number of recent developments regarding alter ego claims in the context of trusts. In particular, the article discusses the impact of (1) Goodrich v. Briones (In re Schwarzkopf), 626 F. 3d 1032 (9th Cir. 2010), in which the Ninth Circuit upheld the use of an alter ego theory, as well as a fraud theory, by a bankruptcy trustee to gain access to the assets of two irrevocable trusts, and (2) Greenspan v. LADT, LLC, 191 Cal.App. 4th 486 (2010), in which a California appellate court upheld the use of California Civil Procedure Code § 187 to add a trust, as well as the individual owner and two other companies, to a judgment.
Watch your mailbox for the next issue of the Business Law News and this update by the Insolvency Law Committee!
13TH Annual Water Tour
The BLS Agribusiness Committee’s annual Water Tour will be held on Friday May 18th and will focus on the east side of the San Joaquin Valley, providing a legal overview and tour of Kings River Dam operations and the California Department of Fish and Game Fish Hatchery. Given the diverse and valuable crops produced within the east side of the San Joaquin Valley and the creative water management tools used to manage the local water supply, you do not want to miss this exclusive inside view from the trenches. The cost for the program is $50 per person, and qualifies for 3.0 hrs of general MCLE credit. Tour departs from and ends in Fresno. RSVPs required. For more information please contact Sam Zanutto.
Business Law Section 2012 "Hot Topics" Teleseminar Series
The Section’s 2012 "Hot Topics" teleseminar series continues this month providing cutting edge updates in Business Law. Scheduled through May, the teleseminars take place on Wednesdays, and provide 1 hour of participatory MCLE credit. You must register in advance in order to participate. Section members can enroll for the reduced price of $20 per teleseminar (more than 50% off the regular price).
Click HERE to register for one or more of these upcoming teleseminars. When registering, remember to use the coupon code BLS-2012-Hot-Topic to receive your Section membership discount.
Did you miss any of the webinars in the Business Law Hot Topics Series? You can access past programs by going to www.calbar.org/online-cle and then clicking on “Business Law”. Please note that it may take 1-2 weeks for past programs to show up in the catalog.
- 2012 Hot Topics in Insurance Law including risks presented by a cyber attack and the insurance coverage.
- 2012 Hot Topics in Privacy for Commercial Lawyers including tips on drafting contract provisions to address security and privacy requirements.
- 2012 Hot Topics in Corporations discussed Benefit Corporations and Flexible Purpose Corporations.
- 2012 Hot Topics in Insolvency Law (1 hour Legal Specialization Credit in Bankruptcy Law) followed the Supreme Court's decision in Stern v. Marshall, addressing the turmoil in bankruptcy court jurisdiction.
- 2012 Hot Topics in Health Law on how to prepare your clients for an agency inspection, a HIPAA audit, or a government investigation after receiving a subpoena or surprise site visit.
- 2012 Hot Topics in Corporations featuring a presentation on the Benefit Corporation and Flexible Purpose Corporation, being tested in California and other states.
- 2012 Hot Topics in Insolvency Law which focuses on bankruptcy practice following the Supreme Court's decision in Stern v. Marshall.
2012 Hot Topics in Health Law
Wednesday, April 25, 2012, 12 noon - 1 p.m.
Business Law Section, Health Law Committee
A presentation on how to prepare your clients for an agency inspection, a HIPAA audit, or a government investigation after receiving a subpoena or surprise site visit. With the increased scrutiny directed to the health care industry in 2012, your clients cannot afford to be unprepared.
Speakers: Michelle Knowles, Esq., A-Med Health Care; Craig Garner, Craig Boyd Garner APC, and Julie A. Simer, Buchalter Nemer, PLC
2012 Hot Topics in Cyberspace Law
Wednesday, May 2, 2012, 12 noon - 1 p.m.
Business Law Section, Cyberspace Law Committee
A presentation on recent developments in cyberspace law, including federal and state legislation dealing with privacy and e-commerce, and a review of important cases in copyright, patent, privacy, and other areas affecting cyberspace.
Speakers: Steven Davis, Davis & Leonard LLP and Jack Lerner, USC Gould School of Law
2012 Hot Topics in Franchising
Wednesday, May 9, 2012, 12 noon - 1 p.m.
Business Law Section, Franchise Law Committee
A presentation on new developments in the area of franchising and distribution, including the FTC's new Business Opportunity Rule, information about California's new Commissioner of Corporations, a discussion of new cases affecting franchising (from California and elsewhere), and other topics of interest.
Speakers: David Edward Holmes, Esq. and Brian Cole, Law Offices of Brian H. Cole
2012 Hot Topics in Nonprofit Law
Wednesday, May 16, 2012, 12 noon - 1 p.m.
Business Law Section, Nonprofit Organizations Committee
A presentation on topics such as how nonprofits can comply with California and IRS requirements to avoid criminal and IRS liability for raffles, as well as fundraising in California, California's charity solicitation disclosure laws, the role of the California Attorney General and California AG's Registry of Charitable Trusts, and laws and regulations relating thereto.
Speakers: Joel S. Corwin, Law Offices of Joel S. Corwin and Claudia M. Morehead, The Morehead Firm, PLC
2012 Hot Topics in Consumer Financial Services
Wednesday, May 23, 2012, 12 noon - 1 p.m.
Business Law Section, Consumer Financial Services Committee
A presentation on mobile banking and mobile payments in the existing regulatory framework, providing information on consumer privacy protection, identity theft, fraud, and security, as well as risk management, including third party risk management and delivery of disclosures and advertising requirements in the mobile environment.
Speakers: Veronica McGregor, Jones Day, Obrea Poindexter, Morrison & Foerster LLP, Anne McEvilly, Aldrich Bonnefin & Moore PLC, and Martha King, Law Offices of Martha King, PC
2012 Hot Topics in Business Tax and Mergers & Acquisitions
Wednesday, May 30, 2012, 12 noon - 1 p.m.
Business Law Section, Partnerships and Limited Liability Companies Committee
A presentation on two important topics facing businesses: (i) taxes as they relate to businesses; and (ii) an update on the fiduciary duties of managers, including the fiduciary duties of managers of insolvent companies. With respect to the topic of taxes, there will be a discussion regarding the Foreign Bank and Financial Accounts Report (“FBAR”) and the 2012 IRS Offshore Voluntary Disclosure Program. As a corollary to the discussion of the FBAR as it relates to businesses, the recently issued Foreign Account Tax Compliance Act (“FATCA”) regulations will also be addressed. Regarding the topic of fiduciary duties, we will be addressing what duties are owed by managers to unpaid creditors of financially troubled California companies. We will also discuss how the case Berg & Berg Enterprises, LLC v. Boyle applies to California limited liability companies
Speakers: Nina Hong, Pachulski Stang Ziehl & Jones LLP and Marianne Man, The Tax Counsel
Connect 12
Stay connected with what is happening in the diverse areas of business practice by attending a monthly meeting of one or more Standing Committees of the Section. Your interest and presence would be welcome. So, if you want to attend one or more meetings in April, consult the meeting calendar below and contact the appropriate person for more information.
Agricultural Law Sourcebook Available
Ten years in the making, the Agricultural Law Sourcebook CD, produced by the Agribusiness Committee, is now available for purchase. The Sourcebook contains a wide variety of forms in Microsoft Word format (68 in all), including real estate purchase agreements, leases, easements, intellectual property agreements, loan documents, farm labor contracts, crop purchase agreements, crop loss settlements and more. Every effort has been made by the Committee to present current and relevant material. The Agricultural Law Sourcebook reflects input from experienced transactional attorneys who practice in the agricultural arena throughout the State of California. Practitioners may find many of the templates to be adaptable to other areas of practice that extend beyond the scope of ranching and farming. Priced at $35 for Business Law Section members and $95 for non-members, the Sourcebook is available on CD through the State Bar Sections Bookstore website. Get your copy now (new window).
Cyberspace Law Committee Primer Provided to Legislators Now Available for Free Download
This year the BLS Cyberspace Committee officially released and presented to lawmakers Cyberspace Law and Policy: A Primer for State Policymakers, a publication designed to brief California state legislators and others on relevant cyberspace law issues. The Primer was drafted by various Committee members and advisors and covers topics such as privacy policies, spam, spyware, “phishing,” behavioral advertising, radio frequency identification devices (RFID), the Communications Decency Act, and social networking. The Cyberspace Law Committee Primer is now available to the public.
Prior “Essentials of Business Law” and “Focus On The Economy” Webinars Now Available Online
Did you miss any of the webinars in the Essentials of Business Law Series? You can access great programs such as “Essentials of IP in Business Law,” “Essentials of the New Consumer Financial Protection Laws: What They Mean For Your Law Practice,” Essentials of Cyberspace Law: User-Generated Content, Privacy, and Advertising,” and “Essentials of Small Business Workouts and Bankruptcy” simply by going to www.calbar.org/online-cle and then clicking on “Business Law”. Additionally, all of 2009's “Focus on the Economy” series is available free to BLS members in the Members Only Area (new window).
Save money with CEB
Continuing Education of the Bar, California (CEB) is extending some special discount offers to our section. As a member of the Business Law Section, you're eligible for:
- 10% off selected CEB print or online books
- A rebate on your section dues that can be applied to the cost of a CEB Gold CLE Passport or a CLE program ticket
A complete list of the products eligible for a discount is available on a CEB web page accessible through our Members Only Area. Information about the section dues rebate program can be found on the CEB Web site (new window) .
Contact Us
Business Law Section
The State Bar of California
180 Howard Street
San Francisco, CA 94105-1639
415-538-2570
FAX 415-538-2368