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Since 1908, Mitchell Silberberg & Knupp LLP (MSK) has proven its ability to understand the complex, demystify the mysterious, and define the unknown. With more than 130 lawyers and offices in Los Angeles, New York, and Washington D.C., MSK is often distinguished as a “go-to” firm by industry and legal insiders, and has extensive experience in a variety of practice areas, including Entertainment & IP Litigation, Labor & Employment, Motion Picture, Television & Music Transactions, Immigration, Corporate Securities, Regulatory, Tax, Trusts & Estates, Real Estate and International Trade. Relentlessly innovative, our lawyers have developed groundbreaking legislation, established influential precedents, and shaped the legal landscape. For more information, visit www.msk.com.

CALIFORNIA’S MANDATORY ARBITRATION AGREEMENT BAN STOPPED IN ITS TRACKS
Arbitration agreement resolution of commercial disputes on a desk.

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Written by Alfredo Ortega

Last week, the U.S. District Court for the Eastern District of California granted a request for a preliminary injunction to prohibit the State of California from enforcing Assembly Bill 51 (AB 51) as to arbitration agreements governed by the Federal Arbitration Act (FAA).  AB 51 generally bars conditioning employment or employment-related benefits on the signing of an arbitration agreement covering claims under the California Fair Employment and Housing Act or the Labor Code.  The U.S. Chamber of Commerce and other business organizations filed this lawsuit, Chamber of Commerce of the U.S.A. v. Becerra, seeking to have AB 51 declared preempted by the FAA. The preliminary injunction will remain in place until the case is resolved on the merits.

For now, employers may continue to require employees to sign mandatory arbitration agreements (as long as they are subject to the FAA).  We will continue to keep an eye on the Chamber of Commerce case and will apprise you of any updates.

New Revisions to the CCPA
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By Susan Kohn Ross

The California Consumer Privacy Act (“CCPA”) took effect on January 1, 2020. In October 2019, the California Attorney General (“CA AG”) published proposed regulations. In the lead up to January 1, 2020, the CA AG repeatedly made the point that those subject to the CCPA should plan for compliance with its broad principals by the first of the year, while admitting enforcement would not start until the regulations were final, meaning July 1, 2020. As part of this process, the CA AG advised he did not expect there to be significant changes to the regulations between October and July. However, upon receiving comments to those October proposed regulations, he changed his mind and on February 7, 2020 revised regulations were issued. A subsequent notice on February 10, 2020 corrected the earlier publication, which omitted certain updates.

To be clear, some of the changes were long awaited (such as what the “Do Not Sell My Personal Data” button looks like), while others were unexpected (such as the change to the training requirement by raising the level of records from four million to ten million). This Alert will summarize the key proposed changes. (more…)

New USPTO Guidelines for Electronic Filings and Specimens
Trademark, Patent, USPTO, TTAB, TEAS, Email

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By Alesha M. Dominique and Dima S. Budron

On February 15, 2020, the United States Patent and Trademark Office’s (USPTO) new rules will go into effect (84 Fed. Reg. 37081) requiring applicants, registrants, and parties to a proceeding before the Trademark Trial and Appeal Board (TTAB) to provide their own email address to receive USPTO correspondence, and file all trademark submissions electronically using the Trademark Electronic Application System (TEAS), with limited exceptions.  In addition, the new rule amends the requirements for specimens in accordance with the Trademark Act and precedential case law.

Requirement to Provide Applicant, Registrant and Party Email Address

As of February 15, 2020, applicants, registrants, and parties to a proceeding before the TTAB, will be required to provide and maintain their own valid email address for receipt of correspondence from the USPTO.  This requirement is in addition to the attorney address that is already required.  The applicant’s, registrant’s, or party’s email address will be publicly displayed along with other contact information already available in the USPTO’s public database. (more…)

SEC Commissioner Hester Peirce’s Provocative Crypto Proposal
Financial technology concept. Fintech. Crypto currency. Electronic money. Cashless payment. Modern Monetary Theory.

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By Mark T. Hiraide

In an unusual and courageous move last week, SEC Commissioner Hester Peirce (aka “Crypto Mom”) urged the Securities and Exchange Commission to adopt a rule that would exempt the sale of tokens or cryptocurrencies from most provisions of the federal securities laws. It’s courageous in its scope and unusual because she (and her staff) drafted the proposed rule leaving the SEC few excuses to avoid considering it.

If adopted by the SEC, the rule will allow anyone to conduct initial coin offerings (ICOs) of tokens intended to be used to develop a decentralized or functional network, provided, that “Network Maturity” occurs within three-years. “Network Maturity” is defined by the proposed rule as when the network is either (i) no longer controlled by a single group or (ii) is functional, as demonstrated by the ability of token holders to use tokens for the transmission and storage of value, to prove control over the tokens, to participate in an application running on the network or in a manner consistent with the utility of the network. (more…)

New Executive Order Addresses E-Commerce and Counterfeit Goods
Close Up Of Woman At Home Looking Up Information About Medication Online Using Laptop

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By Susan Kohn Ross

 

On January 31, 2020, President Trump issued Executive Order 13904 (“EO”) entitled “Ensuring Safe & Lawful E-Commerce for U.S. Consumers, Businesses, Government Supply Chains, and Intellectual Property Rights.” It begins by stating that e-commerce is “being exploited by traffickers to introduce contraband into the United States, and by foreign exporters and United States importers to avoid applicable customs duties, taxes and fees.” The types of malfeasance cited are counterfeit goods, narcotics (specifically synthetic opioids, such as fentanyl), and other contraband, plus, of course, protection of the revenue. The focus of the EO is on express consignment operators, carriers, hub facilities, international posts, customs brokers and e-commerce platform operations (the “Regulated Parties”). Anyone who participates in the “introduction or attempted introduction” of parcels containing contraband can be held accountable with accountability taking the form of both civil and criminal consequences, as appropriate. The EO goes on to state that CBP’s suspension and debarment procedure will form the framework through which these actions will be carried out. Suspension and debarment apply in the context of doing business with the government, such as government contracts, subcontracts, grants, loans and other assistance programs.

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New Travel Restrictions for New Yorkers
Freedom Tower, Manhattan, New York

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Department of Homeland Security Suspends New York Residents From Enrolling in Global Entry and Other Trusted Traveler Programs

By Benjamin Lau and Susan Kohn Ross

New York residents may no longer be able to enroll (or re-enroll) in Global Entry and other Trusted Traveler Programs, according to recent action by the Department of Homeland Security (“DHS”).

On February 5, 2020, Acting Homeland Security Secretary Chad Wolf announced DHS was suspending enrollment in Global Entry, NEXUS, SENTRI, and FAST for all New York state residents.  This announcement does not affect residents of other U.S. states and jurisdictions who may continue to use, enroll or re-enroll in these programs.  No information was provided regarding how long the suspension would be in effect, although the way the DHS letter to New York state officials was worded makes it seems further discussions between DHS and those officials may be possible.  The stated reason for the restriction is New York’s denial of access to DHS of its Department of Motor Vehicle data for immigration enforcement and criminal history/involvement purposes.  An open question remains as to whether grounds exist to bring court action or some other form of legal challenge given DHS invoking law enforcement considerations as the basis for its actions. (more…)

USCIS Releases New Form I-9, Effective Today
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By Benjamin Lau and Frida Glucoft

On January 31, 2020, the USCIS issued a new Form I-9, Employment Eligibility Verification with edition date 10/21/2019. The form is effective immediately. The new Form I-9 is available on the USCIS website at https://www.uscis.gov/i-9.

The form includes the following updates:

Revisions related to the List of Acceptable Documents on Form I-9:

  • Added the Consular Report of Birth Abroad (Form FS-240) to List C. Employers completing Form I-9 on a computer will be able to select Form FS-240 from the drop-down menus available in List C of Sections 2 and 3. E-Verify users will also be able to select Form FS-240 when creating a case for an employee who has presented this document for Form I-9.
  • Combined all the certifications of report of birth issued by the Department of State (Form FS-545, Form DS-1350, and Form FS-240) into selection C #2 in List C.
  • Renumbered all List C documents except the Social Security card. For example, the employment authorization document issued by the Department of Homeland Security on List C changed from List C #8 to List C #7.

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IRS Penalties Assessed Against Your Client May Not Be Valid
Auditor Examining Documents With Magnifying Glass At Table

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Written by Robin C. Gilden 

Internal Revenue Code section 6751(b) provides that no penalty shall be assessed under the Code unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination, or such higher level official as the Secretary of the Treasury may designate.  This section defines penalty as any addition to tax or any additional amount.  The requirement for prior written approval does not apply to penalties for failure to file a return or pay tax, or to penalties that are automatically calculated through electronic means, but does apply to negligence and substantial understatement penalties, as well as the “responsible party” penalty for failure to withhold or remit payroll taxes.

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China – U.S. Phase 1 Deal: Is It Enough?
USA and Chinese flags on mountain signpost.

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By Susan Kohn Ross

China and the U.S. signed the so-called Phase 1 deal on January 15, 2020. Much has been said in the general press and elsewhere about this deal. What does it really accomplish for international traders?

First, there is nothing said about the tariffs imposed by either the U.S. or China. White House briefers did say the tariff on the goods on List 4A would be reduced soon, and a pre-publication version of the proposed Federal Register notice was published on January 16, 2020. It can be found here. Those tariffs will be reduced from 15% to 7.5% on February 14, 2020. When it came to the tariffs China has imposed, no one has any idea what specifically will happen, only that given the commitments made by China, those tariffs will have to come down. Exactly when is anyone’s guess. (more…)

Tax Act Simplifies the Private Foundation Excise Tax on Investment Income
Taxpayer's desk and excise documents to import and export industrial goods for the purpose of maximizing profits for large business organizations.

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Written by David Wheeler Newman

Tax legislation that was included in the massive spending bill signed by the President included provisions affecting the charitable sector.  We previously reported on one provision involving the reviled nonprofit parking tax and on another provision granting temporary tax benefits for donations targeting disaster relief.  Another provision will be good news for private foundations and their advisors.

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