Same Sex Marriage – SCOTUS Watch is On

September 30, 2014

U.S. Supreme Court Justices began private meetings yesterday, September 29, 2014, and the Justices could decide whether to take up the issue of same sex marriage rulings from 4 federal appellate court decisions. Currently, 36 states have laws allowing or prohibiting same sex marriage. Same sex marriages are allowed in 19 states and the District of Columbia. Judges in 14 states have struck down prohibitions to same sex marriage.

State Laws – Wikipedia

Five states (UT, OK, VA, IN, WI) filed Petitions for a Writ of Certiorari requesting the Supreme Court to review federal circuit decisions affirming district court decisions finding same sex marriage prohibitions unconstitutional. In addition to the states, 30 corporations, including Alcoa, Amazon, eBay, General Electric, Intel, NIKE, Pfizer, and Target, have filed requests that the Supreme Court should address same sex marriage laws and recognize same sex marriages nationwide.

Some of the recent decisions that SCOTUS could review, include:

  • Fourth Circuit – Bostic v. Schaefer, Nos. 14-1167, -1169, & -1173, 2014 U.S. App. LEXIS 14298 (4th Cir. 2014), aff’m Bostic v. Rainey, 970 F. Supp. 2d 456 (E.D. Va. 2014) (affirming grant of summary judgment to plaintiffs and enjoining enforcement of Virginia Marriage Laws at issue). [Petition for Writ of Certiorari filed Aug. 22, 2014]
  • Seventh Circuit – Baskin v. Bogan, Nos. 14-2386 & -2526, 2014 U.S. App. LEXIS 17294 (7th Cir. 2014) (affirming district courts in Wisconsin and Indiana which determined prohibitions on same sex marriages were unconstitutional). [Petition for Writ of Certiorari filed Sept. 9, 2014]
  • Tenth Circuit – Kitchen v. Herbert, 755 F.3d 1193 (10th Cir. 2014), aff’m Kitchen v. Herbert, 961 F. Supp. 2d 1181 (D. Utah 2013) (holding that Utah Code Ann. §§ 30-1-2, 30-1-4.1, and Utah Const. art. I, § 29 which defined marriage as between a man and woman and prohibited same sex marriage were unconstitutional). [Petition for Writ of Certiorari filed Aug. 5, 2014]
  • Tenth Circuit – Bishop v. Smith, No. 14-5003 & 14-5006, 2014 U.S. App. LEXIS 13733 (10th Cir. 2014), aff’m Bishop v. United States ex rel. Holder, 962 F. Supp. 2d 1252 (N.D. Okla. 2014) (holding same sex couples had standing to attack constitutionality of Okla. Const. art. 2, § 35 prohibition of same sex marriage). [Petition for Writ of Certiorari filed Aug. 6, 2014]

Recently, a Louisiana district court judge bucked the current trend of finding same sex legislation unconstitutional. This decision is Robicheaux v. Caldwell, No. 13-5090, 2014 U.S. Dist. LEXIS 122528 (D. La. 2014) (granting defendants’ motion for summary judgment and holding that Louisiana, under a rational basis standard of review, has a legitimate interest in defining the meaning of marriage through democratic process). This decision echoes the sentiment of the dissenting opinion in the Kitchens v. Herbert decision.

Timeline Banning & Legalizing Same Sex Marriage

The watch is now on; we shall see how SCOTUS decides to address or duck the issue.

U.S. Supreme Court Justices Back row (left to right): Sonia Sotomayor, Stephen G. Breyer,Samuel A. Alito, and Elena Kagan. Front row (left to right):Clarence Thomas, Antonin Scalia, Chief Justice John G. Roberts, Anthony Kennedy, and Ruth Bader Ginsburg

Restoring Public Access to Public Waters

September 2014

Utahns have a rich history of using their public waters (i.e., waters flowing in or impounded on rivers and streams) in place for a wide variety of purposes. Prior to the arrival of Mormon pioneers in 1847, Native Americans, mountain men and other intrepid souls fished Utah’s waters for sustenance and, at times, to avoid starvation. Consistent with the sentiments of Brigham Young and other early Utah leaders, these traditional uses of Utah’s rivers and streams continued following settlement and were even expanded to include commercial fishing and other commercial uses well into the twentieth century.

For example, from the 1860s well into the 1900s, several Utah rivers and streams served as highways of commerce to float forest products (e.g., railroad ties, saw timber, cord wood) from Utah’s mountains to mills and markets. Private sustenance and sport fishing of Utah’s public waters continues today, though severely impaired by limitations recently imposed by the State of Utah. And from territorial days through the present, Utah’s courts have recognized the public’s ownership of these waters, the public’s right to use these waters in place as it always has, and the State’s duty to protect and manage these waters and their uses in trust for the benefit of the public.

Unfortunately, in 2010 the Utah Legislature passed the ill-named Public Waters Access Act (Act) making thousands of miles of Utah rivers and streams, including more than 2,700 miles of established fisheries, off limits to the public. RBMN’s Craig Coburn and two other attorneys from other firms are serving as pro bono counsel to the Utah Stream Access Coalition (USAC) in two lawsuits to restore and preserve public access to these public waters.

In one of those lawsuits, the court has agreed with USAC that the public’s ownership of the Provo River and Utah’s other rivers and streams and the public’s right to use these waters in place are protected by the Utah Constitution. The only question remaining in this case – and one likely to be answered by the trial court this Fall – is whether the Act violates the State’s duty to protect and manage these waters and their use in trust for the benefit of the public.

In the second lawsuit, USAC has developed evidence regarding the commercial use of the Weber River from Holiday Park to Echo as a highway of commerce in the late 1800s and will ask the trial court to determine whether that evidence demonstrates that the Weber was ‘navigable’ at the time of statehood. If so, the State took title to the bed of the segment of the Weber River at issue at statehood in trust for the people and, as the public owns the water in the Weber, it has a right to use that water in place. And if the historical commercial use of the Weber establishes navigability, those same standards will apply to several other Utah rivers and streams.

Regardless of outcome, both cases are all but guaranteed to end up before the Utah Supreme Court. But though the road is hard and the outcome uncertain, USAC and its members and attorneys are committed to doing all they can to ensure that Utah’s rivers and streams – which the Utah Supreme Court once called ‘gifts of providence’ – are available to future generations to use and enjoy.

Avoiding Common Pitfalls of Estate Planning

September 2014

Estate planning is a process—not an event—often wrought with common and routine mistakes, the most common of which include the following:

  • no planning at all;
  • failure to coordinate insurance/retirement assets with an estate plan;
  • adding individuals to bank accounts;
  • transferring family home in joint tenancy with an adult child; and
  • no planning for a disabled/special needs child.

A properly drafted estate plan can help avoid these mistakes.

THE PROBLEM WITH DOING NOTHING

When a person dies without a will, the person is said to have died intestate. The laws of the state where the person lived at the time of death will apply, and those laws determine the liquidation and distribution of the estate. Many people do not have a favorable opinion of, or trust, politicians. Yet, when you do nothing, you are letting your state legislature draft your estate plan. Under intestacy laws your property could ultimately end up in the hands of unwanted beneficiaries or administrators. Would you want an ex-spouse to be responsible for receiving or administering your property? Creating a trust can solve this problem.

FAILURE TO COORDINATE INSURANCE/RETIREMENT ASSETS WITH AN ESTATE PLAN

A common misconception is that a will controls the distribution of assets upon death. However, a will only governs probate assets (i.e., assets not controlled by trusts, joint tenancy, and/or beneficiary designations.) Today, many assets get transferred without consideration of a will. For example, joint tenancy assets pass to the surviving joint tenant and life insurance, annuities, and IRAs/401(k)s are controlled by beneficiary designations. These assets, upon death of the owner, pass to the named beneficiary regardless of the provisions outlined in a will. So, if an individual designates only one child as a beneficiary in a life insurance policy, but prepares a will naming all children as equal beneficiaries, the beneficiary designation in the insurance policy trumps the directions in the will, potentially creating problems the deceased never intended, and which could have been avoided by coordinating insurance/retirement assets with an estate plan.

ADDING INDIVIDUALS TO BANK ACCOUNTS

Adding a person to a bank account subjects the account to that person’s creditors. For example, when a parent adds a child to his/her checking account in order to allow the child to manage the bills and expenses, the child becomes a co-owner of the account, and that account becomes subject to the child’s creditors. Creating a revocable trust can protect assets while still allowing another person to pay your bills.

TRANSFERRING THE FAMILY HOME IN JOINT TENANCY WITH AN ADULT CHILD

A parent conveying title of their home to an adult child as joint tenants to avoid probate court is a routine mistake for several reasons. (1) This transfer constitutes a taxable gift under IRS regulations. (2) The home becomes subject to the child’s creditors who can then potentially force the sale of the home. (3) The sale of the home results in potential capital gains tax to the child. A revocable trust can accomplish transfer of real property without the ensuing problems.

FAILURE TO PLAN FOR A DISABLED CHILD

If you have a disabled or special needs child, you should consider leaving the child’s inheritance in a specially drafted trust to protect the child while keeping the child eligible for public assistance. An inheritance could cause forfeiture of public assistance benefits to a special needs child. Through a supplemental needs trust a child’s inheritance can be managed by a selected family member without sacrificing Medicaid or SSI benefits.

CONCLUSION

Proper planning creates peace of mind, streamlines administration, and preserves your property for your family and future generations. With attention and regular checkups we are able to catch the mistakes described above (and more) and make the necessary changes to avoid unnecessary problems and costs.

Utah’s Petition for Writ of Certiorari in Kitchens v. Herbert – Same Sex Marriage

September 2014

In legal circles as in life, be careful what you wish for. The news is out that Utah has filed a Petition for a Writ of Certiorari in the same sex marriage case. Utah is requesting the United States Supreme Court to review the 10th Circuit’s ruling upholding the Utah district court’s decision that the Amendment 3 unconstitutional.

As you may know, Utah’s Amendment 3, Article I, Section 29 on [Marriage.] reads (1) Marriage consists only of the legal union between a man and a woman. (2) No other domestic union, however denominated, may be recognized as a marriage 070-416 or given the same or substantially equivalent legal effect.

In a surprising move to some, the plaintiffs in Utah’s same sex marriage case indicated that they intend to join in Utah’s request to have the 10th Circuit’s ruling reviewed. The Salt Lake Tribune reporter accurately noted: “victors rarely ask for a rematch.” The pundits have started weighing in on the chances of the United States Supreme Court accepting the case for discretionary review.

In a nutshell, the plaintiffs’ decision to join rather than oppose Utah’s petition should give the State and those who oppose same-sex marriage pause for thought. The reason that the plaintiffs have decided to join in the State’s request is that Amendment 3 and the arguments that Utah is advancing in its support represent the best case – in the plaintiffs’ view – to have the United States Supreme Court uphold the unconstitutionality of same sex marriage laws. As the articles discuss, other states and other federal circuits have similar challenges in the pipeline. For proponents of same sex marriage, Amendment 3 is one of the, if not the, least defensible laws percolating up through the federal circuits. The plaintiffs want to argue Amendment 3 is unconstitutional rather than some other state’s statute because it is an easier argument to make.

Appellate court decisions are an effective means to achieve favorable laws in many areas of the law and in industry and commerce. Savvy parties and legal advocates, however, carefully choose which cases to appeal and which to accept in defeat. Perhaps Utah will be successful, and as the pundits note, it is likely that Utah’s petition will be joined with another state or states similar to petition, meaning that the United States will be considering other same 070-460 sex marriage bans in conjunction with Amendment 3. Nonetheless, the plaintiffs’ decision to join Utah’s petition is a telling sign as to how Amendment 3 compares to other states’ laws.

Additional Articles:

http://www.sltrib.com/sltrib/news/58165963-78/court-marriage-state-utah.html.csp

http://www.sltrib.com/sltrib/politics/58263347-90/utah-marriage-state-court.html.csp

http://www.scotusblog.com/2014/08/same-sex-couples-to-support-court-review-on-marriage/.

Petitions for Writ of Certiorari – Utah Court of Appeals

Zack Peterson
August 2014, Updated September 2014

In any given year, the Utah Court of Appeals issues in excess of 300 published decisions and this number is often close to, if not in excess of, 400 opinions. This means that 200 parties in a given year leave Utah’s intermediate appellate court with a feeling of dissatisfaction.

The Court released its statistics for July and August of 2014, and the numbers continue to trend downward in the number of Writs being issued. In July and August, 26 petitions were filed, and the Court granted none of the petitions. Through the first two-thirds of 2014, the Court has granted about 7% of the petitions filed.

Over the last five years, about half of these displeased parties instruct their counsel to petition the Utah Supreme Court to review the court of appeals’ decision for correctness. Historically, roughly 20% of these petitions result in the Utah Supreme Court exercising its power of discretionary review. For those tracking these numbers, that equates to about 5% of the losing parties who are able to successfully lobby the Utah Supreme Court to review the Court of Appeals’ decisions.

How are the parties who are unsuccessful at the intermediate court faring in having their case heard at the Utah Supreme Court this year? Through the first half of 2014, the number of petitions for a Writ of Certiorari is about average or slightly above average; however, the Utah Supreme Court has only granted about 10% of the petitions. This rate is lower than the historical averages at roughly 20%. Perhaps the number of writs issued will increase in the second half of 2014.

The New and Improved Utah LLC

For many years the limited liability company (“LLC”) has been the entity of choice for entrepreneurs and small businesses. However, in the intermountain region the Wyoming and Nevada LLCs have been widely regarded as being more business friendly and having better asset protection characteristics than the Utah LLC. With the enactment of the Utah Revised Uniform Limited Liability Company Act1 (the “Act”), which went into effect on January 1, 2014, members of Utah LLCs now have access to similar protections and opportunities which were previously unavailable in Utah.

Utah LLCs formed after January 1, 2014 must follow the Act while preexisting Utah LLCs are given until January 1, 2016 to become compliant. However, because of the opportunities that exist under the Act most existing LLCs will want to opt-in to the new Act much sooner than 2016. This article identifies several of the most significant changes of which business owners should be aware.

Under the Act some of the most obvious changes apply to duration and formation. Under the Act Utah LLCs can now exist with no specific termination deadline,2 and formation of a LLC is now done by filing a Certificate of Organization.3 Existing LLCs will want to file an amendment to its Articles of Organization with a new Certificate of Organization. One benefit now available is that the identity of company managers is no longer required to be disclosed in the Certificate of Organization. Like members, managers of a LLC can now remain anonymous.

A major change under the Act is that LLC operating agreements can now be established orally or based on the conduct or habits of the members and mangers of the company.4 At first blush this may seem like a cost saving opportunity for the LLC. However, the practical effect is sure to cause headaches for the unwary. In the absence of a formal operating agreement, the actions of the members and managers of a LLC, including casual conversations regarding operations, can be construed to be the actual policy of the company and therefore bind the members to actions or results that were never intended. A history of company members not enforcing traditional business management principles can be construed as an implied agreement by the members allowing relaxed duties of management. With such an operating agreement, if a manager engages in practices that are detrimental to the company, but which go unchecked by the members over of period of time, despite a negative outcome to the company by the managers’ bad acts, the manager may have no liability (and subsequently the members will have no recourse) for the bad acts of the manager. Therefore the importance of a well thought out and properly drafted operating agreement is even greater than before. Similarly problematic will be the inclusion of new members. In the absence of a formal operating agreement (or ascension by a new member to an existing operating agreement) new members to a LLC will be construed as having adopted the existing oral, implied or written operating agreement without having signed or orally accepted the specific terms. If a company has less than a complete operating agreement now is the time to get one.

Under the new Act a “statement of authority” or “certificate of incumbency” can be filed, thereby providing documented evidence of authority to act on behalf of and bind a company with regard to transactions and transfers of real property.5 This can be useful to better define which manager or member(s) has the specific authority over certain duties or types of transactions.

Members of LLCs will be happy to learn that they now have the ability to be on equal footing with all other non-member creditors.6 Unfortunately, most existing operating agreements mimic the prior statute language, thereby listing the members as subordinate creditors to the company. Therefore it is recommended that companies amend existing operating agreements to provide members this benefit.

Under the Act manager fiduciary duties can be itemized and in some cases can even be limited. In the absence of such a limitation or itemization of fiduciary duties the whole panoply of fiduciary duties will apply.7 For closely held companies, the ability to limit fiduciary duties will be attractive to managing members. Of similar importance to LLC members is the improvement in the Act of the “charging order: as the exclusive remedy available to judgment creditors of LLC members.8 With this improvement, LLC members now have greater asset protection because their creditors have less ability to force the company to take certain actions or to make distributions contrary to the interests of the members.

Other beneficial changes under the Act involve provisions related to mergers, interest exchanges and conversions, and the improved ability to dissociate or even expel troublesome members.9 It is recommended that existing companies opt-in to the new statute with a new Certificate of Organization as soon as possible. A totally amended and restated operating agreement should likewise be adopted with an affirmative declaration to adopt the new Act, as well as to address the changes in the Act in a manner most favorable to the members. Such an agreement will better protect members from an implied agreement based on casual actions or conversations.

Taking the time to prepare a comprehensive operating agreement will not only allow a LLC to take advantage of the Act, but will help the members to address other relevant issues, such as enacting a comprehensive business succession plan, proper tax structure, accurately maintained capital accounts, whether the company should continue to operate as a LLC, and of course what impact the Affordable Care Act (“Obamacare”), with its 3.8% net investment income tax, will have on the company and its members. By taking advantage of the Act and addressing all relevant issues a company will be well prepared to succeed for years to come.

Click here to contact the Business Law Attorneys at Richards Brandt in Salt Lake City.


1 Utah Code Annotated § 48-3a-101 et seq. 2 Utah Code Annotated § 48-3a-104. 3 Utah Code Annotated § 48-3a-201. 4 Utah Code Annotated § 48-3a-102(16), 113. 5 Utah Code Annotated § 48-3a-302. 6 Utah Code Annotated § 48-3a-404(4). 7 Utah Code Annotated § 48-3a-112(4)(a)-(c). 8 Utah Code Annotated § 48-3a-503. 9 Utah Code Annotated § 48-3a-601.

Employee Record Retention and Destruction

January 2013

The beginning of a calendar year is a good time for employers to review their document retention status. All employers should establish and maintain a clear record retention policy identifying the location of records, a reasonable schedule of retention and destruction, and a records administrator.

Documents related to employee recruitment and selection, such as job advertisements, resumes, job inquiries and records of refusal to hire should generally be retained for one year. 29 U.S.C. § 626; 29 C.F.R. § 1627.3 (Age Discrimination in Employment Act). Once an employee is hired, EEOC regulations require employers to keep all personnel or employment records for one year. If an employee is involuntarily terminated, his/her personnel records must be retained for one year from the date of termination. 42 U.S.C. §2000e-8(c); 29 C.F.R. §1602.14 (Title VII of the Civil Rights Act of 1964). Separate personnel files should be maintained for each employee.

Employers must maintain pay and promotion records for a period of three years, and must keep all records that would explain the basis for employee wages for a period of two years. (EEOC Recordkeeping Requirements). Additionally, employers must keep a copy of all employee benefit plans and merit systems while in effect and for at least one year after termination of the plan.

Documents related to employee leaves of absence under the Family Medical Leave Act (FMLA) should be retained for three years. 29 U.S.C. § 2626; 29 C.F.R. § 825.500. Remember to keep medical records confidential and separate from the employee’s personnel file. I-9 Employment Eligibility Verification forms should be retained for three years from the date the record was made or a personnel action was taken, whichever is later. 8 U.S.C. §1324a(b)(3) (Immigration and Nationality Act). I-9 forms should also be stored securely and separately from the employee’s personnel file.

This touches on a few, but not all, federal statutes governing document retention. These are general guidelines only, and exceptions may apply. Once an employer is aware of a potential lawsuit or charge of discrimination, employers cannot destroy records related to the subject matter of the complaint for any reason until complete resolution of the matter has been reached, including any appeals.

Contact Mark McCarty or Kallie Smith if you need more information on employee record retention and destruction policies and practices.

The “Gang of 8” Senators Release the Border Security, Economic Opportunity and Immigration Modernization Act of 2013

Gang of 8 Senators

April 2013

After months of debate, negotiations and speculation, the “Gang of 8,” made up of eight Republican and Democratic senators charged with the task of composing an immigration reform bill, has released its much-anticipated proposal. On Wednesday, April 17, the 844-page bill (titled the “Border Security, Economic Opportunity and Immigration Modernization Act of 2013“) was filed in the Senate. The bill represents some significant compromises between the two major parties and reflects the changed political landscape surrounding immigration reform in the wake of last November’s election.

Here is a brief overview of some of the key provisions of the bill:

Border Security

The Department of Homeland Security must create, fund and implement a border security and fence plan. Within 10 years of the bill’s enactment, all employers in the United States must be using E-Verify. A visa exist system must be implemented at all international airports and seaports.

Jobs

The bill seeks to protect American workers from losing much-needed jobs to immigrants. The bill would not allow any work visas to be issued if the unemployment rate in a certain area is above 8.5 percent. Foreign students will get a “green card stapled to their diplomas.” The number of available H1-B visas will be nearly doubled. However, certain categories of family visas such as siblings and adult, married children of citizens will be eliminated.

The Guest Worker Program will be “modernized.” A new agricultural guest worker visa program will be established, which will allow some current undocumented agricultural workers to obtain legal status through an Agricultural Card Program.

Pathway to Citizenship

The bill proposes a long and arduous “pathway to citizenship” for the estimated 11 million people living in the United States illegally. No undocumented immigrant is eligible to apply for this temporary status until the border security measures are in place. Once the first security triggers are achieved, undocumented immigrants will be able to come forward, pass background checks, be fingerprinted, pay $2,000 in fines, pay taxes, prove gainful employment, and prove they have been in the U.S. since 2011, among other criteria. Those who have a serious criminal history or do not meet the above criteria will be deported.

Undocumented immigrants will not be eligible for federal benefits during this time, including benefits under “Obamacare.” Undocumented immigrants will have to prove they can support themselves and are not dependent on the government by verifying that they earn at least 25 percent above the poverty level and are gainfully employed.

Certain immigrants who were deported will be allowed to return to the United States if their spouse and children are still living in the United States.

The Dream Act

The bill contains a version of the Dream Act, which would allow young undocumented people whose parents brought them to the U.S. illegally or overstayed visas to be eligible for permanent residence in five years and citizenship immediately thereafter if they meet certain criteria.

The bill still has a long road ahead of it, and both conservatives and immigration reform proponents have already begun attacking the bill. However, many would agree that this is the closest the country has come in years to meaningful immigration reform. Let the debates begin!

Contact Barbara Melendez or Kristina Ruedas for more information.

Compliance with Immigration Law and the Value of an Independent Form I-9 Audit

February 2013

Over the last year, the national news has been populated with headlines addressing the fierce debate over immigration reform. Many may not realize that even before the 2012 presidential election, federal law enforcement agencies had begun paying increased attention to businesses’ compliance with immigration laws and regulations. In 2011 alone there were approximately 2,500 immigration-related audits of employee records, resulting in well over $6 million in administrative fines, and the number of audits performed each year is steadily increasing. The main targets for compliance auditing are the proper completion and storage of Form I-9s for every employee and the proper use of E-Verify to check employees’ immigration status. This article will discuss how the potential fines and disruption of company operations resulting from an audit can be greatly mitigated by conducting an independent I-9 audit before you are audited by the government.

The nation’s immigration laws and regulations apply to every U.S. employer, regardless of whether the employer employs immigrants or not, and the fines and penalties for violation of these laws will be assessed regardless of whether an employer employs immigrants. Every U.S. employer is prohibited from knowingly hiring an immigrant who is unauthorized to work or continuing to employ an immigrant once the employer discovers the immigrant is not authorized or is no longer authorized to work. The government only needs to establish the “knowing” element by a preponderance of the evidence, the easiest legal standard to meet, and knowledge will be inferred by notice of certain facts. An employer’s violation of immigration laws and regulations triggers substantial fines and penalties: between $375 and $3,200 for every incident of “knowingly” employing an immigrant not authorized to work (the fine increases for repeat offenders), between $110 and $1,100 for every failure to properly retain and present a Form I-9 for audit, debarment from federal contracts, and in some cases, criminal charges.

The Immigration and Customs Enforcement Agency (“ICE”) begins an I-9 audit of a company by presenting a “Notice of Intent” to inspect the company documents, which gives the employer 72 hours to gather the necessary documents and prepare for the audit. When ICE returns to the company after 72 hours, its officers demand production of Form I-9s for all current and terminated employees, a list of all current and terminated employees with hire and termination dates, copies of all quarterly wage and hour reports and/or payroll information for all current and terminated employees for the period of inspection, quarterly tax information, business information (valid licenses, etc.), proof of enrollment in E-Verify, and any communications with the Social Security Administration regarding mismatched identification numbers. Any delay in production of the above documents beyond the 72-hour period constitutes a violation of the retention requirements for Form I-9s.

ICE pursues companies regardless of size, industry, or geographic location. Oftentimes, these audits are triggered by a former or disgruntled employee who alerts ICE to possible infractions of the law. The availability of U visas, which grant legal status to immigrants who aid law enforcement and report crimes, also creates an incentive for some former employees to report possible violations of immigration law and regulation. Audits are taxing and expensive for a company that is not prepared to handle the audit expeditiously.

Because of the costs associated with government audits, measured in both potential fines and disruption of company operations, an independent audit conducted in preparation of a potential government audit has significant benefits. The purpose of an independent I-9 audit is to discover any evidence that could be used to fine the employer for “knowingly” hiring or continuing to employ an immigrant unauthorized to work; to recommend how to mitigate potential violations and keep current on best compliance practices; to check the efficiency of an employer’s re-verification system for I-9s; and to determine whether there is substantial evidence of an employer’s good faith efforts to comply with the verification system. An independent audit not only provides peace of mind for an employer, but also acts as a significant mitigating factor should a government audit reveal a mistake or inconsistency in documentation.

Please contact us for an internal review of your company’s immigration compliance or to address any other immigration or employment concerns.

Immigration Issues and Personal Injury Defense

Personal Injury Law Books & Gavel

Tanya N. Lewis Peters
February 2013

Regardless of the political issues currently swirling around immigration reform, it is important to have a grasp of basic immigration law principles when defending personal injury cases.

A few recent cases are illustrative of the effects that an undocumented worker’s status can have on claims of personal injury, plaintiff employment, or similar claims.

Hoffman v. NLRB, 122 S.Ct. 1275 (2002). In this case, the employer petitioned for review of, and the National Labor Relations Board (NLRB) cross-applied for enforcement of, an NLRB order awarding an undocumented worker backpay from date of his illegal termination until the employer discovered he was unauthorized to work. A panel of the Court of Appeals for the District of Columbia Circuit ordered enforcement. Following grant of a petition for rehearing en banc, the Court of Appeals again granted enforcement. On appeal, the U.S. Supreme Court, Chief Justice Rehnquist, held that federal immigration policy foreclosed the NLRB from awarding backpay to an undocumented worker who had never been legally authorized to work in the United States.

Madeira v. Affordable Housing Foundation, 315 F.Supp.2d 504 (S.D. New York 2004). Here, an injured undocumented worker’s status did not prevent him from recovering compensatory damages for defendants’ violation of New York’s Scaffold Law. His undocumented immigrant status was relevant to determining whether lost wages were appropriate and how much should be awarded.

Silva v. Wilcox, 223 P.3d 127 (Colo. Ct. App. 2009). Here, to the extent that a defendant is able to establish that a plaintiff immigrant is not authorized to be in the United States and has secured employment by violating the law or is in violation of the law in some other particular manner related to such employment, so that the plaintiff is unlikely to remain in this country throughout the period of claimed lost future income, the jury should be provided that information in determining whether to award damages for lost future wages.

During discovery, an attorney may wish to direct written discovery to the plaintiff that asks about citizenship and immigration status. During the deposition of a plaintiff believed to be an undocumented immigrant, potential questions to ask include: Are you a U.S. Citizen? Where were you born? What is your immigration status? Are you legally authorized to work in the U.S.? If so, how is that documented? Have you ever applied for Medicare or Medicaid? (Don’t assume they haven’t – a Medicare audit last year revealed that people living in the U.S. illegally had collected over $120 million in Medicare benefits as of 2012. This could trigger Medicare Secondary Payer Act issues in the future.)

You can also take the deposition of the employer. Always do this as a 30(b)(6), and always serve the notice as a Notice of Deposition Duces Tecum. You can also subpoena the documents beforehand using Rule 45. Ask them to provide a complete employee file, including hire documents. Define “hire documents” as the employment application, I-9 form, and any copies of documents inspected in conjunction with the I-9 form. (This is, of course, in addition to any wage loss documents you want to obtain, such as W2s, W4s, payroll information, etc.)

Using best practices in the handling and workup of these cases can minimize carrier/defendant exposure by putting you in the best position for pretrial motions, including motions in limine.

Of course, this raises the issue of what to do when defending a case and your client (defendant) is undocumented. For example, this problem arises when a driver hired by an employer turns out to be working illegally, and then causes an automobile accident while in the course and scope of his/her employment. First, try to exclude the defendant’s immigration status under Rule 401. Second, TXI Transportation v. Hughes, 306 S.W.3d 230 (Texas 2010) is extremely helpful. It held that neither the illegal immigrant status of a gravel truck driver, nor his use of a fake Social Security number to obtain his commercial driver’s license, was relevant to a negligent entrustment or hiring claim against the employer. It also held that the illegal immigrant’s status was inadmissible to impeach the driver’s testimony, and that erroneous admission of evidence relating to the driver’s immigration status was not harmless.

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