Posted on

CTA On Hold in the US, But . . .

Spoiler Alert: Federal Court Enjoined Implementation and Enforcement!

Additional Spoiler Alert: NY LLC Transparency Act Unaffected (so far)!

The US Federal Corporate Transparency Act (CTA) * was enacted into law in January of 2021, in an effort to bolster the ability of law enforcement and intelligence agencies, as well as financial institutions to be better able to identify and prevent the use of empty shell holding companies to disguise the movement of illicit funds (e.g., money laundering, financing terrorism, drug trafficking, etc.). The CTA requires certain business entities to report and file beneficial ownership information with the Financial Crimes Enforcement Network (FinCEN).

New York State has enacted a similar statute, which was amended on March 1, 2024. The New York LLC Transparency Act (NYLTA) was originally enacted on December 22, 2023, and amended by Chapter Amendment on March 1, 2024 [New York Limited Liability Company Law, Sections 1106-1108, effective January 1, 2026], requires limited liability companies (LLCs) that are or have been formed under New York law or are or wish to be qualified and authorized to do business in the State of New York to provide information to the New York Department of State disclosing the LLCs beneficial owners.  While there are certain exemptions and exclusions under both the Federal and New York State laws, there are some other key differences. The NYLTA:

Becomes effective January 1, 2026, not 2025 as the Federal law provides, and any LLC formed in or qualified to do business in New York after January 1, 2026, has 30 days from formation (or qualification) to file.  If your LLC was formed or qualified to do business in NYS before January 1, 2026, you will have until January 1, 2027, to make your initial filings.
Applies only to LLCs, not any other types of businesses, such as corporations, limited partnerships or statutory trusts.
On December 3, 2024, a federal district court in the Eastern District of Texas, Sherman Division, issued an order granting a nationwide preliminary injunction: (1) enjoining enforcement of the CTA, as well as the implementation of the reporting requirements applicable to beneficial ownership information;  and (2) staying all deadlines required to comply with the statute’s reporting requirements.  You can read the amended order granting the injunction here: Texas Top Cop Shop, Inc., et al. v. Merrick Garland, Attorney General of the United States (E.D. Tex., No. 4:24-cv-00478). The Department of Justice, on behalf of the Department of the Treasury, is appealing the ruling, but in the meantime FinCEN must comply with the order while it is still in effect.

Although this means that until the litigation is resolved or the injunction is lifted, companies otherwise required to file will not be subject to any liability if they fail to do so. That said, any company that wants to voluntarily file their beneficial ownership information reports may do so.

IMPORTANT NOTE: Although the NYLTA doesn’t come into effect until January of 2026, the Federal injunction does not appear to affect the NY Statute.

With thanks to James (“Jamie”) Ballard for keeping me up to date.

Stay tuned!

* (Public Law 116-283, Title LXIV of the National Defense Authorization Act for Fiscal Year 2021 (Division F) and is part of the Anti-Money Laundering Act of 2020 (AML Act). The substantive provisions of the CTA can be found in Sections 6401, 6402 and 6403 (this latter section adds § 5336 to Title 31 of the United States Code establishing the Beneficial Ownership Information Reporting Requirements).

Posted on

Marketing Sweats: Covering the Legal Bases

Recently, I had the honor and privilege of being interviewed by Misty Klobucher and Tim Leesman, both Principals of Simantel, a full service advertising, marketing and integrated communications agency based in Peoria, Illinois.  Misty regularly hosts a podcast called “Marketing Sweats” and I was more than happy to spend some time with them answering questions and providing insights on the subject of, as the title suggests,  “Marketing Law: How We Cover Our Legal Bases”

Feel free to enjoy all or as much as you can bear!

Thank you Misty, Tim and Simantel, “The Agency of  And.”

 

Posted on

SXSW South by Southwest Conference

As some of you already know, South by Southwest ®(SXSW) is one of the world’s premier events showcasing music, film and interactive media. This internationally-recognized event has live panels, special events, cinema and combines entertainment and educational activities in a conference and festival atmosphere.  The event takes place annually in Austin, Texas in the United States – this year between March 8th and 16th, 2024.

I have made a proposal to participate by making a presentation entitled “Legal Implications of AI: The Good, the Bad and the Ugly” and voting by the online community is now live!  That allows the public to help the organizers decide on ideas that are the most creative, innovative, and relevant for 2024.  Starting today and until August 20th (11:59 PM PT), you can see my proposal and vote using this link: Legal Implications of AI: The Good, the Bad and the Ugly.  I hope you will vote to include my presentation in the event.

My objective is to make the presentation interactive and entertaining, including some potentially innovative uses of AI to make the point. What do I want to talk about? First, how does current law deal with the film, television, music, art, literary industries – what are the challenges and the opportunities. Second, how can celebrities, sports figures, creative artists and talented professionals protect themselves while also exploiting the evolving technology. Of course, last but not least, is it too soon to start regulating AI? If so, what are we waiting for? If not, how do we even suggest regulation when we can’t predict where we are going?

I won’t pretend to have all the answers, but I will try to provide an enlightening, stimulating and thought provoking presentation – and yes, entertaining!  Again, I would appreciate your vote:  Legal Implications of AI: The Good, the Bad and the Ugly.

Posted on

Season’s Greetings

This is the time of year when season’s greetings, holiday and new year’s wishes, regardless of religion, culture, ethnic background or heritage, usually fills the air.  In past years, we have spent lots of time and attention on shopping for gifts, sending cards, attending or hosting parties, dinners and gaining the 10 pounds we resolve to lose every new year.  Some join a swelling tide of well-wishers, holiday revelers, frosty noses, red cheeks and smiling faces. We traditionally gather together with family, friends, loved ones and colleagues –  often planning travel and vacations and taking a break from work and school.

This year, much like last year, but unlike any others, we continue to face challenges unthinkable and unimaginable less than two years ago. We have and continue to suffer tragic losses, we continue to confront anxiety and fear, we continue to pray for our most vulnerable. Many were often helpless to be near loved ones, unable to hold their hands or be there during moments when it mattered most. This has also been a year in which natural disasters and catastrophic events have contributed to the despair, forcing us to confront tragic loss of life and devastation to homes and property.

This past year, adding to the raging pandemic is our growing frustration and often a sense of helplessness – it seems each time we think we are turning the corner, we feel outwitted by a tiny organism – a virus known as COVID-19. We argue over mask mandates and social distancing, whether to vaccinate or not to vaccinate and it sometimes feels like we are on different sides. The differences aren’t trivial and yes, they are most often very real. But they aren’t what really matters.

Once again, I prefer to focus on what is best in all of us, rather than what we argue about. Another year in which we witnessed heroic self-sacrifices from our health care workers, first responders, emergency search and rescue personnel, as well as our finest and our bravest – not just in our nation, but around the world.  So many dedicated, selfless people across the diverse fabric of our communities –  communities that have transcended borders. People from across nations, from around the globe, coming to the aid of those in need –  in places they have never been, helping people they don’t know.

Ordinary people performing extraordinary feats of kindness, tirelessly giving of themselves for long, sometimes thankless hours to save lives, feed the hungry, shelter the homeless, provide clothing and rebuild damaged houses and give comfort to so many in need.  Let’s also not forget those medical researchers, clinicians and volunteers who are still engineering medical miracles and who continued to work tirelessly to prevent this virus from outwitting us.  While we never know what the future holds, nor what “normal” might look like in the months and years ahead, we can change the way we handle and deal with it – together.

I know the news media spends more time reporting how these difficult times have brought out the worst in some of us. But quietly and usually without fanfare, you can see more examples of how these adversities are bringing out the best in us – just stop and look around you. They are my inspiration to try harder to live up to that ideal, rather than any headlines.

So not surprisingly, this time of year my thoughts turn gratefully to those people and relationships who have helped to enrich my life, personally and professionally and to those who have helped make this world better. There really aren’t words to adequately express my appreciation, so I’ll just say “thank you” and trust you will understand all that is behind those two simple words.

Wishing all of you, your families, friends and loved ones a meaningful holiday season and a wonderful new year filled with health, happiness, prosperity and peace!

Posted on

US 5th Circuit Court of Appeals Issues Emergency Stay Blocking New COVID-19 Rules

Last Thursday (4 November 2021) we reported on the U.S. DOL’s announcement of new employer COVID-19 vaccine mandates (see US Department of Labor Announces Emergency COVID-19 Employer Requirements .

Yesterday (6 November 2021), a three judge panel of the United States Court of Appeals for the Fifth Circuit, granted an emergency stay prohibiting enforcement of the rules for now, saying they raise “grave statutory and constitutional issues.”   The order, temporarily blocks implementation of the new rules and the Court ordered the U.S. Government to file papers by Monday afternoon in an effort to ensure swift consideration of the request to issue an injunction against the vaccine mandate and corresponding testing requirements under the new rules.

Click here to read the 5th Circuit Court of Appeals Emergency Stay Order (November 6, 2021).

Stay tuned!

 

Posted on

US Department of Labor Announces Emergency COVID-19 Employer Requirements

NEWS RELEASE

Today, the United States Department of Labor issued a press release announcing an emergency temporary standard to protect workers from coronavirus.

These requirements are intended to implement the COVID-19 vaccine directive announced by President Biden and will apply to employers with 100 or more employees.

The standards will require companies subject to the rules to ensure that:

  • Each vaccinated employee provides proof (type and date) of vaccination status (e.g., immunization record from a health care provider or pharmacy; CDC Covid-19 vaccination card; immunization records from a governmental authority; or other official documentation);
  • Employees who are not vaccinated must produce a negative COVID-19 test at least weekly and wear a mask (face covering) in the workplace;
  • An employee who is vaccinated but unable to provide documentary proof, must provide the employer with a written, signed and dated statement attesting to the fact they were successfully and properly vaccinated; and
  • Employees are given paid time off in order to obtain a Covid-19 vaccination and, if necessary, sick leave to recover from any side effects.

There are also separate rules requiring every staff member in health facilities that receive Medicare and Medicaid reimbursements to be vaccinated and health workers and federal contractors  have until January 4, 2022 to obtain either their second dose of the Pfizer/BioNTech or Modernavaccine or a single dose of the Johnson & Johnson vaccine.

The new rules do not require employers to provide or pay for tests, unless a collective bargaining agreement that applies to the employer requires them to do so.

The standards were published in the US Federal Register this morning and you can read a copy or download the regulations in PDF form here: COVID-19 Vaccination and Testing; Emergency Temporary Standard.

As always, if you have questions or want more information about this or any other Legal Bytes posting, don’t hesitate to contact me, Joe Rosenbaum, or any of the Rimon lawyers with whom you regularly work.

 

Posted on

20 Years Ago on September 10th . . .

On September 10th, 20 years ago, 2,606 people in the New York metropolitan area went to sleep in preparation for their jobs, meetings, interviews or visits to the World Trade Center in the morning.

Another 246 people went to sleep in preparation for their morning flights, most bound for Los Angeles and some heading to San Francisco. That night, another 125 military personnel, contractors and workers went to bed, knowing they had to get to the Pentagon early to get to work the next day.

There were 343 Firefighters of the New York City Fire Department (including a Chaplain and two paramedics) who went to sleep on September 10th, as well as 23 police officers of the New York City Police Department and 37 police officers of the Port Authority of New York and New Jersey Police Department.

There were 8 emergency medical technicians and paramedics from private emergency medical services, 3 New York State Court Officers and 1 Patrolman from the New York Fire Patrol, all of whom went about their normal routine that evening of September 10th, going to bed as they normally would. Some were scheduled for routine morning patrols or shifts at work, while others knew they might be called on to respond to any emergency that might need some extra help.

None of them saw past 10:08 am Eastern time on Sept 11, 2001.

Of the 2,977 people who died in the initial attacks on September 11th, 2,605 were U.S. citizens. There were also 372 non-U.S citizens, from over 90 countries who perished that day. They were from the United Kingdom, the Dominican Republic, India, Greece, South Korea, Canada, Japan, Columbia, Jamaica, Philippines, Mexico, Trinidad and Tobago, Ecuador, Australia, Germany, Italy, Bangladesh, Ireland, Pakistan and Poland.

So tonight before you go to sleep in preparation for your life tomorrow, kiss those you love, hold your children a little tighter, call that friend or relative you figured you can call tomorrow and never take even one moment of your life or the lives of those you hold dear, for granted.

In one single moment life may never be the same.  For those left behind by the nearly 3,000 souls that perished that day, it can never be the same.

It will never be the same for any of us.

Posted on

SEC Adds Chinese Government Interference to Required Risk Reporting

Debbie Klis, a Rimon partner based in Washington, DC, has published a post on the Rimon IM Report noting that just yesterday (26 July 2021) a senior SEC official advised that Chinese companies listed on stock exchanges in the United States, must disclose the potential risks associated with the Chinese government interference as part of their normal reporting requirements.

You can read the entire post Chinese Companies Listed on US Exchanges Must Disclose Potential Risk Associated with Potential Government Interference.

You can also learn more about Debbie and her practice here:  Bio: Debbie A. Klis and if you want to obtain more information, feel free to contact Debbie A. Klis directly. Of course you can always contact me, Joe Rosenbaum, or the Rimon Law lawyer with whom you regularly work.

Posted on

SCOTUS Reins In FTC Enforcement Powers

Today (April 22, 2021) the U.S. Supreme Court dealt a significant blow to the practice by the Federal Trade Commission (“FTC”) of imposing restitution requirements on violators of the Federal Trade Commission Act (“Act”).

In a unanimous decision written by Justice Stephen G. Breyer, the Court held that §13(b) of the Act was never intended, nor affords the FTC the authority to obtain restitution or require bad actors in the commercial marketplace to disgorge any monies they may have received as a consequence of their bad acts.

Although the Supreme Court agreed the FTC could enforce the Act through its own administrative proceedings under §5 of the Act, it held that the 1970 addition to the Act that authorized the FTC to seek injunctive relief to stop activities prohibited by the Act, did not also authorize a claim for court-ordered monetary relief.

In this particular case, the lower court granted the FTC’s request for a permanent injunction against the defendant for certain deceptive payday lending practices, but also relied on §13(b) of the Act to require the bad actor (defendant) to disgorge and pay US$1.27 billion in restitution. The defendant appealed to the Ninth Circuit Court of Appeals which rejected defendant’s argument that monetary relief is not within the Commission’s authority to enforce the Act.

The U.S. Supreme Court disagreed, holding that nothing in the statute explicitly authorizes the FTC to obtain court-ordered monetary relief under §13(b) and the structure and history of the Act precludes a finding that such relief available to the Commission.  This is a significant holding that clearly limits the FTC’s power to seek court-ordered monetary relief under §13(b) of the Act, from those alleged to be in violation of the Act.

You can read and download a copy of the decision in the case right here AMG Capital Management, LLC, et al., Applicants v. Federal Trade Commission, Certiorari to the United States Court of Appeals for the Ninth Circuit, No. 19-508 (Argued January 13, 2021; Decided April 22, 2021).

As always, if you want to know more about the information in this posting or if you have any questions, contact me, Joe Rosenbaum, or any of the lawyers at Rimon Law with whom you regularly work.

 

 

Posted on

U.S. Supreme Court Decides Oracle’s Copyright Infringement Case in Favor of Google

Google’s Copying of Oracle’s JAVA Code is a Non-Infringing Fair Use
– Eric C. Cohen, Special Counsel, Rimon, P.C.

In a decision ending almost 10 years of litigation, the U.S. Supreme Court held today that the incorporation of about 11,500 lines of Oracle’s Java Application Programming Interface (“API”) code into Google’s Android operating system is a fair use, and thus does not infringe Oracle’s copyright in its Java operating system. It did not decide the issue of whether the API code is copyrightable.

The facts in the case are fairly straightforward. To create the Android platform, Google programmers wrote millions of lines of new code, but because Google wanted all other programmers, already familiar with Java, to be able to work with its new Android platform, it copied roughly 11,500 lines of code from the Java SE program.” (Slip opinion at 3) The Court noted “Google copied that portion of the Sun Java API that allowed programmers expert in the Java programing language to use the “task calling” system that they had already learned,” (Slip opinion at 8) including code that labels and organizes tasks within the program.

The Court considered the fair use provision of the Copyright Act (17 U.S.C. § 107), and although questions of fair use necessarily involves findings of fact—the province of a jury—the ultimate question of whether those facts constitute fair use is a legal question for judges to decide de novo.* Application of the fair use doctrine includes consideration of four factors: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use on the potential market for and or value of the copyrighted work.

Considering the nature of the copyrighted work first, the Court held that the declaring code was “inextricably bound” with the idea of organizing tasks and with the use of specific commands that Oracle did not claim violated its copyright. The Court concluded this factor “points in the direction of fair use.” (Slip opinion at 24) Turning to the purpose and character of the use, the Court found Google’s use of the Java API sought to create new products – also favoring fair use. As to the amount and substantiality of the portion used, the Court noted that Google copied 11,500 lines of code out of about 2.86 million lines in the Sun Java API code, or about 0.4%. “The ‘substantiality’ factor will generally weigh in favor of fair use where, as here, the amount of copying was tethered to a valid, and transformative, purpose.” (Slip opinion at 29)

With respect to the “market effects” of Google’s use of the Java API, the Court noted the market for Java was primarily laptops and desktops and previous efforts to adapt Java for use in mobile phones had largely been unsuccessful. Google’s economic expert testified that Android was not a market substitute for Java’s software because the products operate on very different devices – presumably because Android was developed in order to operate efficiently on mobile devices, with far less processing speed and memory than desktop and laptop computers on which Java was designed to function. Considering the effect of programmers widespread knowledge of Java, the Court concluded that if they allowed enforcement of Oracle’s copyright claim it would effectively limit future creativity of new programs, a principle inconsistent with the basic creativity objectives of the Copyright Act.
You can read and/or download the entire Supreme Court decision right here:  2021.04.05 Oracle v Google SCOTUS Opinion Decision No. 18-956.

Need to know more about this decision and its implication. Need help, feel free to contact Eric C. Cohen directly. As always you can contact me, Joe Rosenbaum or any of the lawyers at Rimon Law with whom your regularly work.

* The Court cited its own decision in Markman v. Westview Instruments, Inc., 517 U.S. 370, 376 (1996)—a patent case—for the proposition that the Seventh Amendment does not include the right to have a jury resolve a fair use defense. This holding may become fairly significant for its potential application to the issue of obviousness in patent cases.