Author: JGL Law

Maryland Recognizes Constitutional Right to Counsel at Initial Appearance Hearings

Anyone who has ever watched an episode of “Law & Order” can tell you that as a criminal defendant, you have the right to an attorney, and if you cannot afford an attorney, one will be provided for you by the state.

These are the rights as outlined by the Supreme Court in Miranda v. Arizona.[1] However prior to today, September 25, 2013, that right did not extend to a defendant’s initial hearing after being arrested in the state of Maryland.

In a 4-3 decision, the Maryland Court of Appeals held in DeWolfe v. Richmond, No. 34, September Term, 2011 (decided September 25, 2013) that Article 24 of the Maryland Declaration of Rights guarantees an indigent defendant the right to state-furnished counsel at an initial appearance before a District Court Commissioner.[2]

The case initially came before the Court of Appeals in 2011. On January 24, 2012 the Court determined on statutory grounds that, under the State Public Defender Act,[3] defendants were entitled to representation at an initial appearance before a Commissioner. In response to this decision, amid concerns about the cost of having attorneys on call 24/7, the General Assembly passed, and the Governor signed into law, emergency measures on May 22, 2012 which specifically noted that “Representation is not required to be provided to an indigent individuals at an initial appearance before a District Court Commissioner.”[4] The Court’s opinion today held that there was a constitutional right – not just a statutory right – to state-furnished counsel at an initial appearance before a Commissioner, effectively overriding the 2012 emergency measures.

What is an initial appearance?

 After someone is arrested and processed at the police station, they are then brought before a judicial officer for an initial appearance. Most people assume this means they are brought before a judge. Although a first appearance may be before a judge, the general practice throughout Maryland is that District Court Commissioners preside over initial appearances. Commissioners are judicial officers, appointed by the Chief Judge of the District Court of Maryland. Although often well-versed in the law, there is no requirement that a Commissioner be a lawyer or have any familiarity with Maryland law.[5] There are more than 240 District Court commissioners around the state, available 24 hours a day, 365 days a year.

At an initial appearance, the Commissioner determines whether there is probable cause for the defendant’s arrest if the arrest occurred without a warrant. If there is no probable cause – for the arrest or for any of the charges listed – the defendant is released with no limiting conditions. If the Commissioner finds there is probable cause, they then must determine whether a person is eligible for pretrial release or should remain incarcerated.

The Commissioner may decide to release a defendant on their own recognizance,[6] or they may impose a bail amount that the defendant must pay before they are released, to ensure there is some incentive for them to appear at later court dates. The Commissioner may also determine that the defendant should have “no bail,” and remain incarcerated until a further bail hearing before a judge. If the Commissioner decides not to release the defendant, the defendant must be presented to a Judge immediately. If Court is not in session, the defendant must be presented to a Judge at the next opportunity when Court is in session. More often than not, the Judge upholds the bail set by the Commissioner at this later bail review hearing.

What are the arguments against counsel at the initial appearance?

 The dissenting judges, including newly-appointed Chief Judge Mary Ellen Barbera, made several valid points against declaring the right to counsel at an initial appearance before a Commissioner a constitutional right. The Court noted that pursuant to Maryland Rule 4-216(c), there is a presumption at the hearing before the Commissioner that a defendant will be released on personal recognizance or bail unless the Commissioner determines that there are absolutely no conditions of release that can be imposed that will ensure the appearance of the defendant at a later proceeding, the safety of the victim, or community at large. This means that, unless there is a solid showing that there is no way the defendant will appear later on, or is a danger to himself or others, the Commissioner should release the Defendant with minimal conditions.

Importantly, and a focus of the dissenting opinion, the initial hearing before a Commissioner is just that – initial. There is ample opportunity for judicial review of the Commissioner’s decision, and the initial appearance does not result in a final determination of incarceration: “The very fact of speedy review of the Commissioner’s preliminary determination, by a judge at a formal court proceeding where defense counsel can argue against the Commissioner’s initial bail decision, negates any realistic concern about unfair procedural process.” DeWolfe v. Richmond, No. 34, September Term, 2011 (decided September 25, 2013) (Barbera, C.J. dissenting).

What is the effect of this ruling?

             It will be intriguing to see what the practical effect of this ruling is, given that over half of the bail review hearings before a judge—where defendants were already afforded the right to counsel—uphold the Commissioner’s decision. Certainly, it will have a huge effect on the already short-handed Public Defender’s Office in terms of staffing and scheduling needs to cover the additional 177,000 annual hearings they are now required to attend.[7] As for the ultimate cost of this holding to the taxpayers, estimates range from $28 million to hundreds of millions of dollars that will be needed to fund additional coverage at initial appearance hearings by State’s Attorneys, Public Defenders, and other court personnel.

Kathy:  Jeremy, I know a large part of your practice involves whistleblower law.  Do you have any thoughts or advice to pass along on this topic to our readers?

Jeremy:  The federal government takes the issue of fraud very seriously.  The federal False Claims Act (FCA) and its state law counterparts are one way the government curbs the theft of our tax dollars.  In short, the FCA is a bounty program where persons who blow the whistle on fraud get to keep a percentage of the money that the government ultimately recovers – usually between 10% and 25% of the funds obtained.

If a company receives money through government contracts or government programs like Medicare and Medicaid, then they have potential FCA exposure.  And because FCA complaints are filed under seal, the government investigates the claims in secret without the company’s knowledge.  Normally, the government will ask for records under the guise of a Medicare audit or a DOL investigation and a company may not know that they have potentially crippling FCA exposure.  Because of the potential for massive liability, companies need to work with counsel to quickly identify any potential fraud, eliminate it, and fully comply with the government’s investigation even if the investigation is seemingly innocuous.  Similarly, employees who discover fraud should immediately seek the advice of an attorney whose practice focuses on FCA prosecution.  The FCA has numerous provisions which can entirely eviscerate otherwise viable claims if they are not carefully complied with.

Kathy:  Similarly, I know your practice has focused on employee handbooks and company policies.  You must have some wisdom for employers on best practices in this area of employee relations and policy.

Jeremy:  The best advice I have for employers can be expressed in a single sentence – draft and implement clearly articulated policies and consistently follow them.  I have seen so many instances where employers either don’t have written policies at all or simply don’t follow the ones that they have.  This creates problems for employers involved in discrimination actions because state and federal courts in Virginia, Maryland, and the District have almost uniformly held that failure to follow established procedures creates a strong inference of pretext.  In short, courts can assume that if an employer doesn’t follow its own policies, that they are doing so for some wrongful reason.  On the other hand, when employers can point to a clear policy that was followed to the letter, courts put the burden on the employee to overcome the non-discriminatory reasons stated for taking adverse action.  For these reasons, employers must draft clear, concise, and consistently followed employment manuals.

Kathy:  Jeremy, I have seen a tremendous increase in complaints and concerns about workplace bullying.  What are your thoughts on this trend?  Any thoughts on mitigation or prevention?

Jeremy:  Bullying of any kind, whether in schools or the workplace, is an issue that Americans are becoming increasingly sensitive to.  People are simply no longer tolerating this type of behavior and employers should do the same.  Now, although state and federal law has not yet caught up with public opinion, it soon will.  As such, employers should be proactive by amending their policies to include no-tolerance bullying and harassment provisions.  Like I said earlier, employers who have clearly articulated policies that they consistently follow are far less likely to find themselves involved in lengthy and expensive litigation.  It makes my job easier and far less costly for my clients when I can point to a specific policy that an employee was aware of, violated, and was promptly terminated for violating.

Kathy:  And finally, Jeremy, can you fill us in on any updates on some of the key regulatory agencies.  What is the climate at the Deportment of Labor and some of the other employment related government agencies? Is there a lot of investment in compliance oversight? Will this have any impact on local employers?

Jeremy:  Employment-centric government agencies are understaffed and underfunded.  These agencies, like many private employers in today’s economic climate are forced to do more with less.  Complaints brought before the EEOC and the DOL are taking longer to be investigated and resolved than ever before.  Unfortunately, this means that local businesses can find themselves involved in a single administrative proceeding for many months or years.  Employers need to implement a wholesale approach – evaluate the allegations, investigate their merit, vigorously defend, provide all necessary assistance to the investigators, and use the situation as a way to prevent future compliance issues.

But, as I said earlier, employers have to remember that an administrative investigation could be a harbinger of things to come.  For example, a DOL investigation for unpaid wages on a federal construction contract could be a front for all FCA action.  And, of course, EEOC charges ultimately lead, if not resolved to court.  Indeed, court is vastly more expensive and risky for employers than an administrative proceeding, which can typically be settled for pennies on the dollar for what the first few months of heavy litigation will cost.

Kathy:  Thank you so much, Jeremy, for all the great information and mid-year employment law update!

*This interview was conducted by Kathy Long and originally published in the Fall, 2013 edition of the Belmont News, the Belmont County Club Community Association Magazine.

This past term, the Supreme Court in University of Texas Southwestern Medical Center v. Nassar held that retaliation claims under Title VII are required to be decided by what is known as the “But For” causation standard.[1]  So, if an employee reports illegal discrimination or harassment based on race, sex, or other Title VII protected conduct and suffers retaliation, the Supreme Court held that the employee must show that “but for” engaging in protected activity (reporting the illegal conduct), the employee would not have suffered the adverse action (such as termination).[2]

It is not good enough that the retaliation for engaging in the protected activity was one of several “motivating factors” for the adverse action.

In a direct claim for discrimination or harassment under Title VII, the courts have held, that a plaintiff need only prove that illegal discrimination or harassment was a “motivating factor” for an adverse action against the employee.[3]  This is commonly known as the “mixed motive” causation standard.  For example, under the mixed motive standard, if an employee suffers discrimination in the work place that results in a demotion (i.e., a “tangible employment action”), and the employer claims the demotion was the result of poor work performance, the employee ultimately needs to prove that illegal discrimination was just one motivating factor, even if the employer also had legitimate non-discriminatory reasons for the demotion.[4]

As a practical matter, the standard applied to a claim is extraordinarily important.  It is much easier to show that illegal motivation may have been one of many factors contributing to the adverse job action, as opposed to the “but for” cause, to the exclusion of other causes.

So, if the “but for” standard applies to retaliation claims under Title VII, what standard applies to retaliation claims under the False Claims Act?[5]  At least one court has now held that the “but for” standard applies to retaliation claims under the False Claims Act because the causation language in § 3730(h) of the FCA is very similar to that used in Title VII.[6]

In United States ex rel. Schweizer v. Océ N. Am., Inc., Judge Lamberth acknowledged the DC Circuit has “endorsed the mixed-motive interpretation, finding that the plaintiff may succeed by showing that the adverse action was ‘motivated, at least in part, by the employee’s engaging in that protected activity.’”[7]  Yet, Judge Lamberth did not apply the standard explicitly adopted by the DC Circuit.[8] The court’s rationale was that the Supreme Court decided Nassar after the DC Circuit decided both Schweizer and United States ex rel. Yesudian v. Howard University.[9] And as the language of the retaliation provision in the FCA closely resembles the language of the retaliation provision in Title VII, the court opined that the DC Circuit, faced with the same question now, would apply the “but for standard” to retaliation claims under the FCA.[10]  In the court’s eye, both the Title VII retaliation provisions, and the FCA retaliation provision should be interpreted to use the same standard because both state that the employer cannot retaliate against the employee “because of” engaging in protected activity.   The court explains as follows:

“The combined lesson of Nassar and Gross is clear: where Congress has given plaintiffs the right to sue employers for adverse actions taken against them by their employers because of X, plaintiffs may succeed only by showing that X was a but-for cause of the adverse action, not merely one of several motivating factors. Notwithstanding the circuit’s statements to the contrary in this case, because the False Claims Act’s retaliation provision includes the same key language as the Title VII retaliation provision recently interpreted by the Supreme Court in Nassar, and the ADEA discrimination provision interpreted in Gross, the Court must apply the same heightened causation standard here. To succeed on her claim, a plaintiff must show that retaliation for protected activities was a but-for cause of the adverse action.”[11]

Does this mean a plaintiff will never be able to prove retaliation under this standard?   NO.  We know this because in this case, despite adopting the tougher standard, Judge Lamberth allowed the retaliation claim to go forward and denied summary judgment.  In the court’s view there were genuine disputes of material fact as to whether the plaintiff’s reports of fraud led to her termination.[12]   Further, the court analyzed the standard under the earlier version of Section (h).   Although the new version uses the same “because of” language as the prior version, the scope and intent of the provision was certainly expanded in the amended version. Also, this is just the beginning of what will undoubtedly be a developing area of case law.  Other district courts and circuits may differ in their views as to the proper standard to be applied in future cases.

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Jay P. Holland, Esq.

Jay Holland is a Shareholder in the Firm, and heads the Firm’s Labor, Employment and Whistleblower practice.

On Wednesday, the U.S. Court of Appeals for the Fourth Circuit ruled in Bland v. Roberts that clicking the “Like” button on Facebook®[1] qualifies as constitutionally protected speech.[2] This ruling extended First Amendment protection to the “Like” button.

The Fourth Circuit reasoned that when a Facebook user clicks the “Like” button, Facebook is publishing a substantive statement about the user. The court determined that there is no distinction for constitutional purposes between physically writing out a message and simply clicking a button which results in the publication of a message.

The Fourth Circuit in Bland was not delving into the inner workings of a seventh grade social feud, but was ruling on the use of Facebook as protected political speech. Six former employees of the Hampton, Virginia Sheriff’s Office brought suit against Sheriff B.J. Roberts, arguing that they were not reappointed because they had supported Roberts’ opponent during the November 2009 election. During the course of the campaign, two of the former employees “liked” Adams’ campaign Facebook page and posted messages of support on the page.

The court ruled that not only is clicking the “Like” button considered pure speech, but doing so is symbolic expression. The thumbs-up “liking” symbol conveys to others on Facebook the user’s support for the page that was “liked.” In this way, the “Like” button is the 21^st-century equivalent to displaying a political sign in one’s yard, which the Supreme Court has held is protected speech.[3]

Though Facebook has been around since 2004,[4] the Fourth Circuit is the first federal court to hold that Facebook “Likes” are protected constitutional speech. The ruling overturns an April 24, 2012 decision by the Eastern District of Virginia, which had held that “[s]imply liking a Facebook page is insufficient” and that “liking” a Facebook page “is not the kind of substantive statement that has previously warranted constitutional protection.”[5]

It has been reported that some 1.11 billion people use Facebook.[6] For those who continue to withstand the allure, the “Like” button on Facebook, represented by an easily clickable thumbs-up icon, allows Facebook users to inform other users that they like a post, article, page, or picture posted on the site. Businesses, organizations, and campaigns, as was the case here, can also have their own Facebook pages, which users can “like.” For instance, when one of the former employees “liked” Adams’ campaign Facebook page, a link to the Adams’ campaign page appeared on the former employee’s personal Facebook profile. The employee’s profile was also listed on the campaign page’s “People [Who] Like This” list, which all Facebook users can access. This simple click is constitutionally protected speech in this Circuit.

While the Bland ruling expands the type of speech that is protected by the First Amendment, it’s worth noting that not all speech is constitutionally protected. The classic example is falsely yelling “Fire!” in a crowded theater, which has been held to be speech that can be limited because the circumstance of the speech creates a clear and present danger[7] Other types of speech that do not typically receive First Amendment protection include: defamation,[8] perjury,[9] obscenity,[10] child pornography,[11] blackmail,[12] inciting imminent lawless action,[13] true threats,[14] and solicitation to commit crimes.[15] Schools also have broad powers to limit students’ speech, which includes restricting what can be published in student newspapers[16] and prohibiting speech that causes substantial disruptions.[17]

The Fourth Circuit’s decision has important implications, as many individuals today choose to express their political opinions on social media websites, often doing so by simply “liking” Facebook pages, “endorsing” users on LinkedIn®[18] or “re-tweeting” another’s speech on Twitter. The Supreme Court has held that the First Amendment provides broad protection to political expression, and the Fourth Circuit in Bland makes clear that government employers cannot retaliate against employees for political expression conveyed simply by clicking the “Like” button.

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Alyse Prawde is a law clerk at Joseph, Greenwald & Laake, P.A. She is currently a third-year law student at the University of Maryland Carey School of Law, where she serves as the Executive Articles Editor of the Maryland Journal of International Law. Email: aprawde@jgllaw.com

Veronica Nannis is a partner and the litigation practice group manager at Joseph, Greenwald & Laake, P.A. She focuses on complex, civil litigation, including business disputes, employment litigation and False Claim Act cases. You can “endorse” her on LinkedIn or email her at: vnannis@jgllaw.com

So, you’re starting a new business.  Congratulations! If you’re like most new business owners, one of your first “executive” decisions will be deciding whether your business should operate as an entity (corporation, limited liability company, etc.) and, if so, which one?   First, the bad news.  You won’t find the correct answer in a book and neither will your lawyer. Each case is different and your specific circumstances must be evaluated independently to insure that you make the best decision for your particular business. 

The good news is that, for the vast majority of new businesses, the decision isn’t that complicated, especially if you involve your attorney and your certified public accountant early in the process. While there may be additional choices, depending on your particular business and where it will be located, your decision will likely come down to one of the following business structures: C corporation, S corporation, limited liability company, or none of the above, in which case you will operate, by default, as either a sole proprietor if you are a single owner or a partnership if there are multiple owners.

Over the next few posts, we will discuss how each of these business structures operates as well as the relative advantages and disadvantages of each.  In this post, we will start with the sole proprietorship. If you are a single owner and operate your business without forming an entity, you are a sole proprietorship.  This is true even if you use a separate trade name for your business.  The primary benefits of a sole proprietorship are simplicity of operation and minimal startup costs.   Since there is no entity, there is nothing to file and no filing fees.  Likewise, there are no operational agreements and no need to deal with the niceties of your typical business entity like corporate titles, by laws, and documented annual meetings. Finally, since there is no separate entity, there is no separate tax return.  The income or loss of your business will be reported on your personal tax return.

The main disadvantage of a sole proprietorship is that you will be personally liable for all the debts of the business.  This means that your personal assets will be at risk.  In addition, with a few exceptions, proprietorships do not enjoy favorable tax benefits when compared to corporations and limited liability companies. Given the personal liability associated with operating as proprietorship, especially when compared to the relatively small costs involved with forming and maintaining a separate entity, it is rare that you will not be well advised to operate as an entity.  However, this is not to say that there may not be circumstances were operating as a proprietorship makes sense, especially where the risk of personal liability can be greatly reduced, for example by obtaining and maintain the appropriate level of liability insurance.  And it certainly does not mean, contrary to what you hear on those “incorporate for a $1.00” ads on the radio, that operating as a proprietorship is the equivalent of committing financial suicide. 

Again, while it will be rare, there may be cases where operating as a proprietorship will make sense for you.  The key is to make sure you understand and appreciate the risks of doing so and, where possible, that you have taken steps to minimize those risks.

Kathy:  Every year brings new legislation that impacts American employers and employees.  Are there any game-changing laws that have been passed or that are on the horizon for 2013?

Jeremy:  Obviously, much of the country is still reacting to the Supreme Court’s decision rendering the Defense of Marriage Act (DOMA) unconstitutional.  Many employers are now wondering what impact, if any, this decision will have on them and their workforce.  Looking to capitalize on the momentum from the decision, the Senate Committee on Health, Education, Labor, and Pensions (HELP) is now considering a bill that would prohibit employment discrimination based on sexual orientation.  The Employment Non-Discrimination Act (ENDA) of 2013 would entitle homosexual applicants and employees to the same protections and remedies afforded under Title VII of the Civil Rights Act that are currently available to victims of race, gender, age, and disability discrimination, to name a few.  Should ENDA become law, employers will need to immediately train decision-makers and human resources staff in the Act’s intricacies in order to remain Equal Employment Opportunity compliant – something that good counsel can help with.

Although experts have always disagreed about the effects of a federal minimum wage increase, the Senate HELP Committee is also considering a bill that would raise the federal minimum wage from $7.25 to $10.10, in $.95 increments, over a three-year period. Although a Republican controlled House likely spells doom for the proposed increase, the debate highlights an important issue – federal and state laws require, very simply, that all employees be compensated for all hours worked.  Employers that don’t pay their employees correctly stand to face not only regulatory penalties, but also civil liability.  Aside from hefty legal bills, judgments in these cases can be staggering because provisions of the FLSA and the Act’s state law counterparts allow for liquidated (double) and even treble (triple) damages.  Because of the prohibitive impact of failing to comply, employers should, in conjunction with counsel, conduct regular audits of their workforce to ensure that employees are correctly classified as exempt or non-exempt and are being properly compensated for all wages – regular or overtime – earned.

Kathy:  Now that we have talked about legislation, what about case law?  Have there been any decisions that have or will affect workplace relations?

Jeremy:  Although DOMA is the hot topic right now, most employers and employees are likely to be more practically impacted by two other Supreme Court decisions.  During its most recent term, the Court ruled in a landmark case, American Express v. Italian Colors, that under the Federal Arbitration Act, courts cannot invalidate a class action waiver on the ground that the cost of individually arbitrating a claim exceeds the potential recovery.  Practically speaking, this decision significantly and universally bolsters the strength of class action waivers and mandatory arbitration provisions in employment, credit card, and service provider contracts.  Large and small business owners who have yet to revise the contracts, terms, conditions, and agreements entered into with third parties in order to include arbitration clauses and class action waivers are unnecessarily exposing themselves to significant liability.  If your attorney has not already done so or, at very least, suggested this course, you need to immediately contact counsel that is willing to help protect your interests.

In Vance v. Ball State University, the Supreme Court held that an employee is a supervisor for purposes of vicarious liability under Title VII only if he is empowered by the employer to take tangible employment actions against the victim.  In plain English, supervisors can now only be held personally liable for discriminatory conduct if their employer has given them authority to hire, fire, demote, or suspend the victim of alleged discrimination.  Although this case is great for employers in Virginia, the Virginia Supreme Court in Van Buren v. Grubb recently held that state law claims for wrongful termination against public policy can be brought against individual supervisors.  Thus, employers need to be prepared for state law claims to be brought against individual managers, but, most importantly, both cases shows that employers need to audit their workforce by reviewing the responsibilities given to each employee in order to be best prepared for future litigation.

Kathy:  Jeremy, tell us a little bit about the changes in healthcare.  What is your take on how health care reform will impact employers?

Jeremy:  To the delight of many confused employers, the Administration recently extended the deadline for employers to comply with the Affordable Care Act to 2014.  That said, employers still have a new, comprehensive, and difficult regulatory scheme that they are eventually going to have to follow.  In the face of severe penalties for non-compliance, many employers are scrambling to figure out what kind and how much coverage they need to offer their employees under the ACA’s mandate.  Employers are asking me whether the ACA even applies to their businesses, whether it applies to all or just some of their employees, what exactly constitutes a full time employee under the Act, and, ultimately, what coverage must they offer and how much of the premiums must they pay.  These questions highlight the public’s general lack of knowledge of the specific requirements of the ACA, but also show that employers need guidance this year in order to ensure that they are best equipped to navigate the law’s potential minefields.

Kathy:  How about how healthcare changes will affect workers?

Jeremy:  It remains to be seen whether premiums will indeed go down for average Americans.  If they do, workers could save more than $1,000 each year in healthcare costs.  However, what will ultimately affect workers most is how employers plan to comply with the law.  For example, mega-employers like Wal-Mart or Target, who already employ a significant number of part time employees, are likely to cull their rosters to bring even more employees below the ACA mandate’s definition of full time employee.  Practically speaking, a full time employee could see their hours reduced from 40 to less than 30 so that their employer does not have to offer them health insurance.  Thus, some employees are going to lose twice – less hours AND no health insurance.  Sadly, others may simply be let go.

For many employers, though, such a drastic course could have far reaching implications for their public image.  Because of the potential for negative publicity, many employers will find it beneficial to offer ACA-compliant coverage, rather than attempting to avoid doing so by reducing hours or laying off workers en masse.  In that case, employers need knowledgeable counsel that can distill the ACA into its baseline options.  Indeed, a decision to offer employees coverage may also help a company’s bottom line.  Many employers may be pleased to learn that the minimum level of coverage required by the ACA is likely cheaper than what they currently offer their employees.

*This interview was conducted by Kathy Long and originally published in the Fall, 2013 edition of the Belmont News, the Belmont County Club Community Association Magazine.

If you own and drive a motor vehicle on the roads in the State of Maryland, you probably know that the law requires you to carry insurance on the vehicle.  But do you know how much and what kinds of coverage you are required to carry? The State of Maryland requires vehicle owners to carry the following coverage[1]:

• LIABILITY for the payment of claims for bodily injury or death arising from an accident up to $30,000 for any one person and up to $60,000 for any two or more person;
• PROPERTY DAMAGE LIABILITY for payment of claims for property of another damaged or destroyed in an accident of up to $15,000; and
• UNINSURED MOTORIST equal to the minimum amount of Liability Coverage;

In addition to the above, insurers in the State of Maryland are required to offer coverage for  medical, hospital and disability benefits known as Personal Injury Protection (PIP) up to a minimum of $2,500.  A vehicle owner can elect to waive this coverage, but we strongly recommend that you not do that.  PIP coverage, which is also sometimes referred to as “no-fault insurance,” is available to anyone who is injured in an automobile accident, even the person who caused the accident.  It pays for reasonable and necessary medical expenses that arise from a motor vehicle accident as well as 85% of income lost.

2013 ushered in many changes in the New Year, among them the legalizing of same-sex marriages in Maryland. Now, legally married same-sex couples in Maryland will receive the same benefits (and headaches) as their friends in heterosexual marriages, under the new Rev. Rule 2013-17.

On August 29, 2013, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) jointly announced Rev. Rule 2013-17 which treats legally married[1] same-sex couples as married for federal tax purposes. The new policy applies to all same-sex couples who were married in a jurisdiction that recognizes same-sex marriage, even if the jurisdiction they currently reside in does not recognize same-sex marriage.

The ruling applies anywhere marriage is a factor, including but not limited to filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA, claiming the earned income tax credit or child tax credit, and employees who purchased health insurance coverage from their employers.

Generally speaking this means that, beginning in the 2013 tax year, legally married same-sex couples must now choose either the “married filing jointly” or “married filing separately” status on their tax returns. Same-sex spouses that have not yet filed their 2012 federal income tax return will also have the option of filing as married or not married.

Many couples will see a benefit in the terms of their year-end refund. For instance, employees who purchased pre-tax employer-sponsored health insurance for their spouse can now treat that payment as tax free for federal income tax purposes. The participating employee can file a refund claim for the income taxes paid on those spousal coverage premiums.

Couples who were in same-sex marriages in the previous three (3) years may file amended returns and claim additional deductions/tax filing status. Generally, the statute for filing a refund claim is three years from the date of filing or two years from the date upon which the tax was paid, whichever is later. However, this may subject some spouses to the “marriage penalty” where married couples may end up with a higher tax bill as a result of filing jointly than if they filed as single people.

In addition, the new policy extends to retirement plans and estates. Same-sex surviving spouses will now be entitled to inherit the estate of their late husband or wife tax-free. Qualified retirement plans now “must treat a same-sex spouse as a spouse for purposes of satisfying the federal tax laws relating to qualified retirement plans.”

These new rules are equally as important to same-sex couples who are going through a separation. In any divorce, issues revolving filing status, claiming dependency exemptions for the minor children and distribution of retirement accounts undoubtedly arise.

After a separation, under the new rule, a same-sex spouse who has lived apart from their spouse for the last six (6) months of the taxable year, and provides more than half the cost of maintaining the household where the minor child resides, may be considered unmarried and may use the “head-of-household” filing status.

In addition, a same-sex spouse may be eligible to claim any minor children as dependents on their tax returns. Generally, the IRS will treat the parent who has the child for the majority of the time as the eligible parent for this deduction. If the child lives with both parents for an equal amount of time, the IRS will generally give the deduction to the parent with the higher adjusted gross income.

Prior to this ruling, same-sex couples faced potentially additional headaches regarding whether their spouse’s employer sponsored retirement plan would recognize their claim. The IRS has made it clear that not only must the plan treat a same-sex spouse as a spouse but that this new policy extends to qualified domestic relations orders as well. In the event that a domestic relations order assigns a participant’s retirement benefits to a spouse, the plan administrator must honor it.

For more information on this topic, please see:

TaxProfBlog.com

KPMG.com

The Supreme Court’s recent ruling in Vance v. Ball State University changed the landscape for employees claiming discrimination under Title VII, including sexual harassment.[1]  In Vance, the Court limited the definition of a “supervisor” to being a person who can “take tangible employment actions” against the employee, meaning a “significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.”[2]

So, it appeared that after Vance the only way an employer could be held vicariously liable for discrimination was if the harasser fell into this definition of a “supervisor.”

In a recent decision, however, the United States District Court for the District of Maryland noted that there could be instances where the employer can be held vicariously liable for sexual harassment conducted by non-supervisors.[3]  In Barcus v. Sears, the harasser did not have any of the powers necessary to qualify as an “employer” under Vance’s definition.[4] The Court noted that it would proceed with its analysis in this case under the assumption that the harasser was the plaintiff’s supervisor.[5] The Court reasoned that as “[t]he [Supreme Court’s] decisions in Ellerth and Faragher were premised on principles of agency, and the Ellerth Court noted that the law of agency sometimes extends liability to an employer for the conduct of an agent who acts with apparent authority even when the agent lacks actual authority.”[6]

The Barcus court continued by explaining what would constitute “apparent authority,” noting that “unusual cases may arise in which the victim was under the false impression that the perpetrator was a supervisor,” and in those instances “the employer may be vicariously liable for the sexual harassment if the victim reasonably but mistakenly believed that the perpetrator was a supervisor.”[7]  In this context, the Barcus court held that as a reasonable juror could find that the harasser had “held himself out” as the employee’s supervisor.[8]  The facts that contributed to this decision were: that the plaintiff reasonably, although mistakenly, thought the harasser was her supervisor; that the harasser “ran the store” from time to time, and the plaintiff believed he had the power to hire and fire her during those periods; and the harasser informed the plaintiff that he would help secure her transfer to another store.

This decision, if adopted by other courts, has the potential of being a game-changer for those cases when an employee alleging harassment reasonably but mistakenly believes that the alleged harasser possessed the power as defined by Vance. Under those circumstances, the employer may still be held vicariously liable for non-supervisory personnel.

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In the recent case of Little v. Schneider (August 22, 2013), the Maryland Court of Appeals unanimously reinstated a $2.874 million verdict issued for a plaintiff by a Harford County, MD jury. The jury found that Dr. Schneider (acting as a specialist in vascular surgery) negligently used the wrong size graft in attempting to perform an arterial bypass. This allegedly caused massive bleeding, leaving Ms. Little permanently paralyzed.

During the trial, Plaintiff’s attorney introduced evidence that the defendant physician was not certified. The immediate appellate court (Maryland Court of Special Appeals) for this and other reasons overruled the jury’s verdict and ordered a new trial.

The Maryland high court decided that while ordinarily the jury should not be advised as to whether the defendant physician is not board-certified, there are limits. The Court observed that the general rule in malpractice cases is to distinguish between appropriate examination of expert witnesses who provide opinions, and the examination of a fact witness (in this case the defendant physician) who merely testify “based solely on what she did and what she observed in her actual treatment of the patient.”

The reason behind this rule is that, generally, in a medical negligence suit, the defendant physician’s failure to pass a medical board certification exam (or in this case to even take the exam) has little relevance because “the fact of failure makes it neither more nor less probable that the physician complied with or departed from the applicable standard of care in the diagnosis or treatment of a particular patient for a particular condition.”

During the jury trial, the plaintiff called the treating physician, Dr. Schneider as an adverse witness in her own case. After the plaintiff’s attorney was finished examining Dr. Schneider, his own attorney, attempting to “bolster” his client’s qualifications “opened the door” to the plaintiff’s attorney attacking those qualifications with questions designed to inform the jury that Dr. Schneider was never board certified in vascular surgery, the specialty he was practicing when he injured the plaintiff.

According to the Court of Appeals opinion, Dr. Schneider’s attorney bolstered his qualifications over eleven (11) pages of trial transcript.

Previously, plaintiff’s attorney had been advised by the trial judge that he could not question Dr. Schneider about his lack of board certification in vascular surgery. After the extensive questions asked by Defendant’s attorney, Plaintiff’s attorney again asked the trial judge for an opportunity to question Dr. Schneider about his lack of board certification in vascular surgeon. This time, the trial court reversed its earlier ruling.

The plaintiff claimed that the doctor could not “have it both ways: his accomplishments and great deeds were no more relevant than his lack of board certification.”  The trial judge this time agreed, reversing his earlier ruling and allowing Ms. Little to inquire on the subject of Dr. Schneider’s lack of board certification in vascular surgery.

The Maryland High Court observed that since Dr. Schneider’s counsel attempted to paint a picture of Dr. Schneider as a “model of excellence in the field of vascular surgery and a great humanitarian, the trial judge became persuaded that he exceeded the basic background

information appropriate for accreditation of a fact witness.” Thus, the High Court ruled that “it was reasonable for the trial court to conclude that, by going outside the reasonable limits of accreditation, Schneider placed at issue the question of his excellence in the field of vascular surgery and “opened the door” to rebuttal inquiry on re-direct examination.” The Court further held: “The trial judge did not abuse his discretion in allowing Little to ask Dr. Schneider, on re-direct, about his lack of board certification in order to counter Schneider’s effort to cloak himself as the paragon of vascular surgeons.”

What can be taken away from this?  Although the opinion may ultimately have little practical effect when trying most medical malpractice cases, it is an interesting analysis and cautionary tale of what can happen when an attorney takes a chance and “opens the door” a little wider than was wise, thus allowing unpleasant, damaging evidence to march through.

You’ve made it to your car, coffee in hand, still rubbing the sleep out of your eyes to begin your commute to your office when suddenly up ahead you see something.   What is that?  Its huge, its yellow, it has flashing red lights and a huge stop sign attached to its side – oh yes, it is a SCHOOL BUS!

With children across Maryland returning to school this month, it’s a good time to remind drivers out there to slow down, be on the lookout, and come to a stop for buses loading and unloading school kids.  Sadly, according to the Maryland State Highway Administration’s website, an average of 7 school-age passengers are killed in school bus crashes each year, and 19 are killed getting on and off the bus. Most of those killed are children, five to seven years old.  They are hit in the Danger Zone around the bus, either by a passing vehicle or by the school bus itself.

In Maryland, it is illegal for a vehicle to pass a school bus with its red light flashing.[1]  You must stop your vehicle at least 20 feet from the front or rear of the bus, and you must remain stopped until the school vehicle resumes motion or the alternately flashing red lights are deactivated.[2]  Whether you are traveling on a two-lane roadway, a two-lane roadway with a center turning lane, or a four-lane roadway without a median separation, all traffic from both directions must stop.

Do you cringe and shake your head when you hear about an accident involving a school bus?  Do you say to yourself “really, how could someone run into the back of a BUS?!?!   Trust me, knowing the number of bus drivers our workers’ compensation and personal injury departments have represented over the years, it happens far too often.

The Pre-Litigation Discovery of Insurance Coverage Amendment Act of 2012 is now in effect in the District of Columbia and offers a new and powerful tool to Plaintiffs and their personal injury attorneys in settling claims for maximum value.

In January 2013, the Council for the District of Columbia amended the Compulsory/No-Fault Vehicle Insurance Act of 1982[1] to require pre-litigation disclosure of any insurance agreement under which certain persons may be liable to satisfy all or part of the claim or to indemnify or reimburse for payments made to satisfy the claim by insurance companies.  This was done in order to facilitate settlements and “reduce the amount of litigation” in the Superior Court of the District of Columbia.[2]

Once the claimant has made a written claim for compensation or damages concerning a vehicle accident, the Act requires an insurer to disclose the amount of its insured’s applicable limits of coverage, regardless of whether the insurer contests the applicability of the policy to the claim.

The claimant must also provide the insurer with the following information:

(1)   The date of the vehicle accident;

(2)   The name and last known address of the alleged tortfeasor;

(3)   A copy of the vehicle accident report, if any;

(4)   The insurer’s claim number, if available;

(5)   The claimant’s health care bills and documentation of the claimant’s loss of income, if any, resulting from the vehicle accident; and

(6)   The records of health care treatment for the claimant’s injuries caused by the vehicle accident.[3]

Additional documentation is required if the claim is brought by the estate of an individual or a beneficiary of the individual, whose death resulted from a vehicle accident.

Unlike Maryland’s similar statute requiring insurers to disclose policy limits,[4] the District’s new law does not require the claimant to document health care bills and loss of income of at least $12,500.00 in order for the insurer to be required to make the disclosure. Importantly, the insurer is required by the new law to respond in writing within thirty (30) days of receipt of the request.