Original Story: bloomberg.com
Dave Stow, 71, strains to push the wheelchair carrying his 250-pound son, Bryan, up a series of ramps and into the basement of St. Joseph’s Catholic Church in Capitola, Calif., for its Friday fish fry. Bryan Stow is greeted by ladies who kiss him, men who hug him, and a 103-year-old woman who grabs his hand and asks if he is walking yet.
Four years ago, Bryan Stow was a strapping paramedic who spent his days off biking with his son and daughter. That was before March 31, 2011, when he and three friends made the mistake of wearing San Francisco Giants garb to an Opening Day game against the rival Los Angeles Dodgers at Dodger Stadium. They were harassed and threatened in the stands. Afterwards, two Dodgers fans beat Stow so savagely in a parking lot that doctors had to induce a coma to save him. He was hospitalized for seven months. A Fresno insurance defense lawyer is following this story closely.
The damage to Stow, 46, remains unmistakable. A scar runs from the left side of his forehead to the back of his head. On the right side, a shunt used to drain fluid from his brain protrudes from his skull. The thick black hair he once fussed over is now patchy and thin. Special stockings on his legs prevent life-threatening blood clots.
The beating of Stow drew national attention to sports hooliganism. It’s also brought to light a virtually unknown aspect of the legal system that cuts compensation to victims. In effect, Stow was sucker-punched twice: first by his assailant and then by his health insurer.
Although a Los Angeles Superior Court jury awarded Stow $18 million from the Dodgers and his assailants last year, he has yet to receive any money. And, in a bizarre twist, the Dodgers’ liability insurer, ACE Property and Casualty Insurance Company, stands to net $1.6 million from a side deal in the case.
“It is extremely frustrating for people who are sick, or dying, or who have loved ones who have died and are desperately in need of money.”
It’s all because Stow’s health insurer is entitled to a huge slice of the settlement, even before Stow is paid. A growing body of federal law, including a recent U.S. Supreme Court case, gives insurers power to recoup medical costs caused by a third party—in the face of state laws that specifically prohibit it. “This is what people pay premiums for,” says Stow’s ex-wife, Jacqueline Kain. “To worry about some insurance company taking what is his is absurd.”
The concept is known as subrogation. The modern version dates back to the American Revolution and was applied in areas such as property insurance. An insurer, for instance, might seek to be repaid by the maker of a faulty furnace that caused a fire in a building the company covered. In recent years, subrogation has mushroomed into a multibillion-dollar source of offsetting costs for private health insurers as well as Medicare and Medicaid. Medicare reaped nearly $2.5 billion last year, aided by a 2007 law that requires the federal insurer for the elderly to be notified of any legal settlements paid to its beneficiaries so it can subrogate the funds. A San Francisco insurance defense lawyer represents insurance companies in third-party personal injury actions.
Such medical liens have reduced and delayed compensation in several cases—from the thousands of patients who suffered heart attacks or strokes from diabetes drug Avandia to the 1,000 Montana residents sickened by asbestos from a mine. “It is extremely frustrating for people who are sick, or dying, or who have loved ones who have died and are desperately in need of money,” says Allan McGarvey, an attorney representing some of the asbestos victims.
The liens have spawned companies and law firms that identify cases and, representing the interests of medical insurers, pursue patients who have received court settlements. A unit of Xerox recovered more than $1 billion for health-care clients in a recent three year period. Optum, a company owned by insurance giant UnitedHealth Group, is a major player.
Insurers and employers say getting back money in these cases helps lower premiums for all members of a group plan. University of South Dakota law professor Roger Baron disagrees. He says research shows the recovered money does little to reduce insurance rates while increasing executive pay and shareholder payouts. “It would be wrong to think that the insureds benefit from subrogated recoveries, because they don’t,” says Baron, who has consulted for injured people facing health-care liens.
All but two states either ban subrogation outright or limit how much insurers can collect. Unfortunately, many employers provide health insurance as an employee benefit under the Employment Retirement Income Security Act, or ERISA, which is a federal law. Congress specifically designed ERISA to supersede any state statutes related to employee benefit plans. More than 90 percent of workers with medical coverage at the largest U.S. corporations are insured this way, according to the Kaiser Family Foundation. Hailed at its passage in 1974 for safeguarding employees’ pension plans, ERISA now helps deny or reduce compensation to workers injured through someone else’s negligence.
Stow received his health insurance through an ERISA plan. So did James McCutchen, a US Airways mechanic badly injured in a highway wreck in 2007. When US Airways demanded repayment of $66,866 it spent on his medical treatment—a figure slightly exceeding the $66,000 he netted in a settlement after paying his lawyer—McCutchen refused to pay. He argued that the US Airways lien was unfair because he had not been fully compensated for his injuries. A federal appeals court agreed, calling it a “windfall” for the airline. A Los Angeles insurance defense lawyer is reviewing the details of this case.
In 2013 the U.S. Supreme Court sided with US Airways, ruling that as long as the health plan’s contract with employees specifies that it can be reimbursed for medical costs in these situations, it has a legal right to collect. Most employees have no idea these provisions exist.
Stow and his family certainly didn’t. As a paramedic for American Medical Response, a subsidiary of Envision Healthcare, Stow dutifully paid a $334 monthly premium for the insurance coverage that was a perk of the job. After the attack, his family initially didn’t worry about the cost of his care, knowing he was insured.
Then Envision demanded repayment of the more than $3.4 million it paid for Bryan’s treatment. Bryan’s mother, Ann, couldn’t believe it. She asked her attorneys how the insurer “could get away with this,’’ she says. “The thing is, it is not illegal.”
Famous supporters have done their best to lighten the burdens that come with taking 56 pills each day.
The Stows had another surprise when they sued the Dodgers and the two assailants. During the civil trial last year, Envision quietly assigned its rights to the $3.4 million to the Dodgers’ liability insurer, ACE Casualty Insurance and Property, at the discounted price of $1.8 million.
The jury ordered the Dodgers to pay $13.9 million. The Dodgers’ insurance company, ACE, then sent a check to Stow’s lawyer, Thomas Girardi, deducting $3.4 million for the medical lien that they purchased at a discount. The maneuver would effectively allow the team’s insurer to realize $1.6 million from its lien deal.
“It’s disgusting,’’ says Girardi, who returned the check and is refusing to pay the lien. Stow’s legal team expects Ace to file a lawsuit to collect the $3.4 million. Given the Supreme Court decision, Stow faces an uphill fight. “The problem now is the law is pretty clear with the McCutchen case,” says one of Stow’s lawyers, Christopher Aumais. The “options are severely limited,” he adds.
Stow’s attackers are responsible for the other $4 million of the $18 million judgment, but no one expects they will ever pay. Louie Sanchez, who jumped out from behind a car, punched Stow from the back and kicked him in the head several times, pleaded guilty to one count of mayhem and was sentenced to eight years in prison. Co-defendant Marvin Norwood pleaded guilty to a count of assault and received four years of jail time.
Stow also owes his lawyers $3.6 million. And San Francisco General Hospital, where Stow was transferred from Los Angeles, has filed its own lien of $1.2 million for care not reimbursed by his health insurer, according to Stow’s lawyers.
Unless he wins his long-shot effort to nullify or reduce the multimillion-dollar insurance lien, Stow will be left with $5.8 million, far short of what he’s likely to need for a lifetime of care. An expert hired by the Stows pegged his future medical costs and rehabilitation at more than $30 million.
Envision says that “fortunately” its plan provided Stow with medical benefits. It didn’t comment on the sale of the lien to ACE. The Dodgers’ insurer said in a statement that “acquiring medical liens is common practice that is regulated by the health-care industry. By acquiring a lien, lien purchasers also acquire the risk of default on the lien.”
To accommodate Stow, volunteers built a cement ramp from the driveway to the front door the modest, single-family home near Santa Cruz, Calif., that his father and mother, Ann, bought for $43,000 in 1975. Famous supporters—from Pearl Jam’s Eddie Vedder to many current and former San Francisco Giants—have done their best to lighten the burdens that come with taking 56 pills each day to ward off seizures, pain, and other complications from the beating. On April 16, Stow is scheduled to throw out the first pitch at the home opener of the San Jose Giants, a minor league affiliate of the big league team. He’s been practicing with his dad in the backyard, and he plans to get up from his wheelchair and make his way onto the field using a walker. He will not throw from the mound. Sixty feet is an unthinkable distance now. But he will throw to the catcher. And he plans on tossing a strike.
Tuesday, April 28, 2015
Monday, April 13, 2015
STRICTER DRUNKEN BOATING LAWS TAKE EFFECT THIS SPRING
Original Story: detroitnews.com
Lansing — People taking their boats out on Michigan waterways after a few drinks will be subject to stricter alcohol limits — and penalties if they’re over those limits — with a package of new laws taking effect this spring.
The drunken boating laws are among several signed in recent months that will launch new programs or have other implications for Michigan residents. A Westchester County DWI lawyer represents clients facing criminal charges for operating while intoxicated.
The laws regulating drunken and drugged driving were updated in 2003, and new regulations kicking in for sport craft will bring more uniformity to the limits and penalties even when not in a car.
The legal alcohol limit while operating snowmobiles, watercraft and off-road vehicles while intoxicated will be lowered to 0.08 percent from 0.1 percent to match the state’s laws for drunken driving on the road. People under 21 would not be allowed to have alcohol in their system while operating any of these sport craft, and no one would be allowed to operate them with any amount of certain controlled substances in their body.
Rep. Dave Pagel, a Republican from Berrien Springs, was one of the sponsors of the legislation along with former Reps. Matt Lori and Andrew Kandrevas.
Pagel said it is common sense to have one state standard. “I think it sends a message that these are family activities” and people should practice them safely, said. A personal injury lawyer represents clients suffering from an injury caused by the negligent actions of others.
Here’s a look at some other laws taking effect this spring:
SCHOOL CYBERBULLYING
All of the state’s school districts and charter schools must add language addressing cyberbullying to their anti-bullying policies by the end of September. The law is an update to the 2011 Matt Epling Safe School Law. That law required school districts and charter schools to develop policies prohibiting bullying.
The update will require cyberbullying to be included in the definition of bullying and define it as any electronic communication that harms students directly or indirectly by interfering with their ability to participate in school, causes substantial emotional distress or places them in fear of physical harm. A Grand Rapids personal injury lawyer is following this story closely.
The update also requires school districts and charter schools to annually report bullying incidents to the state Department of Education.
FUNDRAISER LICENSE PLATES
Michigan drivers will soon be able to buy license plates that serve as a fundraiser for Be the Match, a program supporting bone marrow donation and transplants. Bone marrow transplants are often used to treat various leukemias and lymphomas, and other diseases.
Drivers will also be able to purchase license plates supporting veterans. Money from those plates will go to the Michigan Veterans Affairs Agency for its outreach efforts to local groups providing veteran services. Some money will also be put toward tuition support for members of the Michigan National Guard or the Children of Veterans Tuition Grant Program.
The plates are expected to be available in the fall. Drivers will have to pay $25, which will go to the associated funds, plus a $10 service fee for each plate.
ENTREPRENEUR-IN-RESIDENCE
An Entrepreneur-in-Residence project at the Michigan Strategic Fund will aim to make economic development programs and incentives more accessible. Up to 10 entrepreneurs-in-residence appointed by the Strategic Fund president will assist with improving outreach to small businesses, providing mentorship and more. The positions will not be compensated.
The search for entrepreneurs to join the project has begun. Anyone interested can reach out to the Michigan Strategic Fund.
BEAR HUNTING
Bears will now receive the same treatment as deer when it comes to damaging crops: If a bear is determined to cause damage, the Department of Natural Resources could issue a permit for hunting the bear outside of open season. Bear cubs and female bears with cubs less than 1 year old will be protected.
Lansing — People taking their boats out on Michigan waterways after a few drinks will be subject to stricter alcohol limits — and penalties if they’re over those limits — with a package of new laws taking effect this spring.
The drunken boating laws are among several signed in recent months that will launch new programs or have other implications for Michigan residents. A Westchester County DWI lawyer represents clients facing criminal charges for operating while intoxicated.
The laws regulating drunken and drugged driving were updated in 2003, and new regulations kicking in for sport craft will bring more uniformity to the limits and penalties even when not in a car.
The legal alcohol limit while operating snowmobiles, watercraft and off-road vehicles while intoxicated will be lowered to 0.08 percent from 0.1 percent to match the state’s laws for drunken driving on the road. People under 21 would not be allowed to have alcohol in their system while operating any of these sport craft, and no one would be allowed to operate them with any amount of certain controlled substances in their body.
Rep. Dave Pagel, a Republican from Berrien Springs, was one of the sponsors of the legislation along with former Reps. Matt Lori and Andrew Kandrevas.
Pagel said it is common sense to have one state standard. “I think it sends a message that these are family activities” and people should practice them safely, said. A personal injury lawyer represents clients suffering from an injury caused by the negligent actions of others.
Here’s a look at some other laws taking effect this spring:
SCHOOL CYBERBULLYING
All of the state’s school districts and charter schools must add language addressing cyberbullying to their anti-bullying policies by the end of September. The law is an update to the 2011 Matt Epling Safe School Law. That law required school districts and charter schools to develop policies prohibiting bullying.
The update will require cyberbullying to be included in the definition of bullying and define it as any electronic communication that harms students directly or indirectly by interfering with their ability to participate in school, causes substantial emotional distress or places them in fear of physical harm. A Grand Rapids personal injury lawyer is following this story closely.
The update also requires school districts and charter schools to annually report bullying incidents to the state Department of Education.
FUNDRAISER LICENSE PLATES
Michigan drivers will soon be able to buy license plates that serve as a fundraiser for Be the Match, a program supporting bone marrow donation and transplants. Bone marrow transplants are often used to treat various leukemias and lymphomas, and other diseases.
Drivers will also be able to purchase license plates supporting veterans. Money from those plates will go to the Michigan Veterans Affairs Agency for its outreach efforts to local groups providing veteran services. Some money will also be put toward tuition support for members of the Michigan National Guard or the Children of Veterans Tuition Grant Program.
The plates are expected to be available in the fall. Drivers will have to pay $25, which will go to the associated funds, plus a $10 service fee for each plate.
ENTREPRENEUR-IN-RESIDENCE
An Entrepreneur-in-Residence project at the Michigan Strategic Fund will aim to make economic development programs and incentives more accessible. Up to 10 entrepreneurs-in-residence appointed by the Strategic Fund president will assist with improving outreach to small businesses, providing mentorship and more. The positions will not be compensated.
The search for entrepreneurs to join the project has begun. Anyone interested can reach out to the Michigan Strategic Fund.
BEAR HUNTING
Bears will now receive the same treatment as deer when it comes to damaging crops: If a bear is determined to cause damage, the Department of Natural Resources could issue a permit for hunting the bear outside of open season. Bear cubs and female bears with cubs less than 1 year old will be protected.
DPS PILES UP STATE'S BIGGEST PENSION LIABILITY
Original Story: detroitnews.com
Cash-strapped Detroit Public Schools could be $81 million behind on its mandatory state pension contributions by July 1 if the district does not resume full payments soon, state officials say.
Michigan's largest school district has not made a payment since October, and has been building a delinquent balance with the Michigan Public School Employees Retirement System since October 2010, said Kurt Weiss, spokesman for the state's retirement services office. A Detroit employee benefits lawyer is following this story closely.
During the past 51 months, 60 percent of the time the Detroit school district has been an average of $7 million behind on Michigan retirement system payments, according to state records. The district is incurring $7,600 a day in interest penalties and a $78,000 monthly fee for its delinquency, Weiss said.
"DPS' largest historical balance is their current outstanding balance of $53 million," he said.
While DPS is behind on its payments, the $38 billion MPSERS serving 204,000 retirees statewide is not in danger of missing pension payments to Detroit schools retirees, Weiss said. Like an unpaid credit card, the interest penalties and monthly fees are added to the district's total balance owed to the state school retirement system.
Like other school districts in Michigan, Detroit Public Schools is saddled with a long-term liability toward the pensions and health care of existing and former employees. It consumes one in every seven dollars the district spends in its roughly $700 million annual operating budget.
Most charter schools — independent public schools sponsored mostly by universities — and the Education Achievement Authority, which runs 15 former Detroit schools, do not participate in the state pension plan.
The Snyder administration legally could withhold state aid from Detroit Public Schools to make up for the missed pension payments. But state officials have been reluctant to do so, privately fearing it would trigger a cash crunch for the Detroit school system and lead to payless paydays for employees, teachers walking off the job or a default on debt payments. A Detroit employee benefits lawyer is reviewing the details of this case.
In addition to pensions, the Detroit district is saddled with $56 million in annual debt service payments, most of which stem from a $300 million refinancing scheme former Emergency Manager Roy Roberts engineered in 2012 to roll several past debts into one repayment.
Roberts' successor says payment toward debt is made before all other creditors, to ensure the district doesn't default on the bonds.
"The debt has to be paid, so what results from that is you have a long list of creditors and you have vendors who are three and four months behind in receiving payments," said Jack Martin, who was emergency manager until January. An Encino CPA provides professional accounting services to clients with pension and profit-sharing plans.
The Detroit News first reported Feb. 19 that the Snyder administration is exploring ways to relieve the district of that debt burden. Snyder set aside $75 million in his School Aid budget for assisting Detroit and other financially distressed school districts.
But a Republican-controlled House committee eliminated the increased funding for distressed school districts in a budget plan approved Tuesday. A GOP-dominated Senate committee voted Wednesday for $8.9 million, more than doubling the existing $4 million fund for distressed schools.
"It's probably the thing that needs to be done, but it should be taken care of out of the general fund as opposed to on the backs of the other kids in the state," said David Martell, executive director of the Michigan School Business Officials.
Pension delinquencies
Detroit Public Schools is one of five school districts and a charter school that are behind on payments to the state's pension fund. They include:
Cash-strapped Detroit Public Schools could be $81 million behind on its mandatory state pension contributions by July 1 if the district does not resume full payments soon, state officials say.
Michigan's largest school district has not made a payment since October, and has been building a delinquent balance with the Michigan Public School Employees Retirement System since October 2010, said Kurt Weiss, spokesman for the state's retirement services office. A Detroit employee benefits lawyer is following this story closely.
During the past 51 months, 60 percent of the time the Detroit school district has been an average of $7 million behind on Michigan retirement system payments, according to state records. The district is incurring $7,600 a day in interest penalties and a $78,000 monthly fee for its delinquency, Weiss said.
"DPS' largest historical balance is their current outstanding balance of $53 million," he said.
While DPS is behind on its payments, the $38 billion MPSERS serving 204,000 retirees statewide is not in danger of missing pension payments to Detroit schools retirees, Weiss said. Like an unpaid credit card, the interest penalties and monthly fees are added to the district's total balance owed to the state school retirement system.
Like other school districts in Michigan, Detroit Public Schools is saddled with a long-term liability toward the pensions and health care of existing and former employees. It consumes one in every seven dollars the district spends in its roughly $700 million annual operating budget.
Most charter schools — independent public schools sponsored mostly by universities — and the Education Achievement Authority, which runs 15 former Detroit schools, do not participate in the state pension plan.
The Snyder administration legally could withhold state aid from Detroit Public Schools to make up for the missed pension payments. But state officials have been reluctant to do so, privately fearing it would trigger a cash crunch for the Detroit school system and lead to payless paydays for employees, teachers walking off the job or a default on debt payments. A Detroit employee benefits lawyer is reviewing the details of this case.
In addition to pensions, the Detroit district is saddled with $56 million in annual debt service payments, most of which stem from a $300 million refinancing scheme former Emergency Manager Roy Roberts engineered in 2012 to roll several past debts into one repayment.
Roberts' successor says payment toward debt is made before all other creditors, to ensure the district doesn't default on the bonds.
"The debt has to be paid, so what results from that is you have a long list of creditors and you have vendors who are three and four months behind in receiving payments," said Jack Martin, who was emergency manager until January. An Encino CPA provides professional accounting services to clients with pension and profit-sharing plans.
The Detroit News first reported Feb. 19 that the Snyder administration is exploring ways to relieve the district of that debt burden. Snyder set aside $75 million in his School Aid budget for assisting Detroit and other financially distressed school districts.
But a Republican-controlled House committee eliminated the increased funding for distressed school districts in a budget plan approved Tuesday. A GOP-dominated Senate committee voted Wednesday for $8.9 million, more than doubling the existing $4 million fund for distressed schools.
"It's probably the thing that needs to be done, but it should be taken care of out of the general fund as opposed to on the backs of the other kids in the state," said David Martell, executive director of the Michigan School Business Officials.
Pension delinquencies
Detroit Public Schools is one of five school districts and a charter school that are behind on payments to the state's pension fund. They include:
- Detroit: $52.7 million
- Flint: $11.8 million
- Pontiac: $3.8 million
- Muskegon Heights: $1.9 million
- Highland Park: $719,702
- New Branches School (Grand Rapids): $128,951
Monday, April 6, 2015
3 LINGERING QUESTIONS AFTER ELLEN PAO'S LOSS IN SILICON VALLEY TRIAL
Original Story: latimes.com
A San Francisco County Superior Court jury has spoken in a case that riveted Silicon Valley, but that doesn't mean all's over.
In a verdict delivered Friday, a jury found that Kleiner Perkins Caufield & Byers, one of the nation's most prominent venture capital firms, didn't discriminate against one its employees, Ellen Pao, and didn't fire her in retaliation for her protesting her treatment. The decision has left a number of uncertainties. A Memphis employment lawyer is following this story closely.
Will male-dominated Silicon Valley change its ways?
Not anytime soon, some fear.
“The outcome of the trial sends a message that women simply have to accommodate to such disappointing cultures,” said Bernice Ledbetter of the practitioner faculty of organizational theory and management at Pepperdine University.
But in the weeks leading up to the hearing of the case, some venture capitalists said the lawsuit put them on notice and that they were stepping up efforts to find ways to promote women. Only about 5% of decision-makers at venture-capital firms now are female, according to research firm PitchBook.
Chris Sacca, an angel investor in Uber and Instagram, said on Twitter Friday that the conversation about technology’s “deep gender discrimination problem” shouldn’t end with Pao’s loss. A Boston employment lawyer represents clients in gender discrimination, termination, and equal employment opportunity cases.
Meantime, Google, Facebook, Intel and other big tech companies have acknowledged the low representation of women and minorities in engineering roles and are implementing programs that they hope will improve their records.
Will women now suing Twitter, Facebook and others lose hope?
“It’s got to look like a more difficult proposition,” said Debra Katz, an attorney at Katz, Marshall & Banks.
The dynamics of a venture capital firm, with small staffs often on the road, differ from big organizations with more human resource department attention on hiring and promotion, so the new batch of cases won’t be carbon copies. But legal experts said Pao’s loss certainly offers a bar for what a jury needs to see to find bias.
“We don’t know ... whether the claims that she underperformed are valid, but it does send a reminder to women: You'd better work hard and make sure everyone around you knows the quality of your work and make sure that quality is unquestionable,” Ledbetter said.
Even though Pao lost, the publicity of the trial could encourage more lawsuits. Felicia Medina, an employment attorney in San Francisco, said she had recently heard from at least 10 women in tech with discrimination or harassment complaints, a significant uptick for her office. An Atlanta employment lawyer is reviewing the details of this case.
What’s next for Ellen Pao?
Pao is the interim chief executive of Reddit, a popular online bulletin board. In one conversation thread on Reddit on Friday, anonymous users bashed Pao and said the company should get rid of her.
Attorneys who’ve worked gender suits and women who’ve followed such cases said Pao can expect more criticism in the weeks to come.
“I suspect there will be quite a backlash against her,” said Melinda Briana Epler, chief executive of ChangeCatalyst, a San Francisco organization that supports women entrepreneurs. “People are likely to talk more and more about the reasons why she didn’t win the trial and stuff about the speculation that she’s just not a likable person is likely to come out more and more.”
As for Pao herself, she said “Now it’s time for me to get back to my career, my family and my friends.”
A San Francisco County Superior Court jury has spoken in a case that riveted Silicon Valley, but that doesn't mean all's over.
In a verdict delivered Friday, a jury found that Kleiner Perkins Caufield & Byers, one of the nation's most prominent venture capital firms, didn't discriminate against one its employees, Ellen Pao, and didn't fire her in retaliation for her protesting her treatment. The decision has left a number of uncertainties. A Memphis employment lawyer is following this story closely.
Will male-dominated Silicon Valley change its ways?
Not anytime soon, some fear.
“The outcome of the trial sends a message that women simply have to accommodate to such disappointing cultures,” said Bernice Ledbetter of the practitioner faculty of organizational theory and management at Pepperdine University.
But in the weeks leading up to the hearing of the case, some venture capitalists said the lawsuit put them on notice and that they were stepping up efforts to find ways to promote women. Only about 5% of decision-makers at venture-capital firms now are female, according to research firm PitchBook.
Chris Sacca, an angel investor in Uber and Instagram, said on Twitter Friday that the conversation about technology’s “deep gender discrimination problem” shouldn’t end with Pao’s loss. A Boston employment lawyer represents clients in gender discrimination, termination, and equal employment opportunity cases.
Meantime, Google, Facebook, Intel and other big tech companies have acknowledged the low representation of women and minorities in engineering roles and are implementing programs that they hope will improve their records.
Will women now suing Twitter, Facebook and others lose hope?
“It’s got to look like a more difficult proposition,” said Debra Katz, an attorney at Katz, Marshall & Banks.
The dynamics of a venture capital firm, with small staffs often on the road, differ from big organizations with more human resource department attention on hiring and promotion, so the new batch of cases won’t be carbon copies. But legal experts said Pao’s loss certainly offers a bar for what a jury needs to see to find bias.
“We don’t know ... whether the claims that she underperformed are valid, but it does send a reminder to women: You'd better work hard and make sure everyone around you knows the quality of your work and make sure that quality is unquestionable,” Ledbetter said.
Even though Pao lost, the publicity of the trial could encourage more lawsuits. Felicia Medina, an employment attorney in San Francisco, said she had recently heard from at least 10 women in tech with discrimination or harassment complaints, a significant uptick for her office. An Atlanta employment lawyer is reviewing the details of this case.
What’s next for Ellen Pao?
Pao is the interim chief executive of Reddit, a popular online bulletin board. In one conversation thread on Reddit on Friday, anonymous users bashed Pao and said the company should get rid of her.
Attorneys who’ve worked gender suits and women who’ve followed such cases said Pao can expect more criticism in the weeks to come.
“I suspect there will be quite a backlash against her,” said Melinda Briana Epler, chief executive of ChangeCatalyst, a San Francisco organization that supports women entrepreneurs. “People are likely to talk more and more about the reasons why she didn’t win the trial and stuff about the speculation that she’s just not a likable person is likely to come out more and more.”
As for Pao herself, she said “Now it’s time for me to get back to my career, my family and my friends.”
SALESFORCE CEO BENIOFF TAKES STAND AGAINST INDIANA ANTI-GAY LAW
Original Story: recode.net
Salesforce.com CEO Marc Benioff says he has canceled all his company’s events in the state of Indiana after its governor signed into law a bill that makes it legal for individuals to use religious grounds as a defense when they are sued by people who are lesbian, gay, bisexual or transgender.
And in an interview with Re/code, Benioff threatened the state with a “slow rolling of economic sanctions” if the law is not thrown out.
“We’ve made significant investments in Indiana. We run major marketing events and conferences there. We’re a major source of income and revenue to the state of Indiana, but we simply cannot support this kind of legislation,” Benioff said in a phone interview.
Gov. Mike Pence signed the bill, called the Religious Freedom Restoration Act today, and said in a statement that people of Indiana “feel their religious liberty is under attack by government action.” The bill, now a law, allows any person or corporation to cite religious beliefs as a defense when sued by a private party. The intent of the bill is to give companies and business owners legal cover if they don’t want to do business with same-sex couples. The MetroHealth Pride Clinic is devoted to serving the needs of the lesbian, gay, bisexual, and transgender community.
Benioff said that Salesforce employs between 2,000 and 3,000 people in the state, owing largely to its 2013 acquisition of ExactTarget, an email marketing company based in Indianapolis. Salesforce paid $2.5 billion for it, and Benioff later described the acquisition as a “perfect fit.”
Since 2007, ExactTarget has hosted its most important customer event, called Connections, in Indianapolis. Last year it drew 10,000 people and about $8 million in spending to Indianapolis. Salesforce announced it would move the event to New York in September. Benioff says there are other events that will be canceled as well. “We can’t bring our customers or our employees into a situation where they might be discriminated against,” he said. “We have a large number of employees and customers who would be impacted dramatically by this legislation. … I’m really just advocating on their behalf.”
Canceling events may be just the start. Benioff didn’t say what other actions he might take to protest the law and to try to get it reversed. But he said he hopes that other tech CEOs who have operations in Indiana will follow his lead.
“Gov. Pence says he wants to bring the tech industry to Indiana and to increase the number of tech-related jobs in his state, but he doesn’t seem to understand that a significant portion of the tech industry is gay,” Benioff said. “This is one of the most important industries in the country and he has been advocating for us to expand and invest in Indiana, but you can’t say that and then say you’re going to legalize discrimination like this. The tech industry is not going to support this kind of legislation and is going to react against it.” The MetroHealth Pride Clinic is committed to providing quality health care for all LGBT patients.
In his statement, Pence argued that the bill isn’t about allowing discrimination. He said it doesn’t apply to disputes between private parties unless a government action of some type is involved. The law is related to last year’s decision by the U.S. Supreme Court in the Hobby Lobby case establishing that private companies can’t be compelled by federal rules to provide access to contraception as part of their health-care plans.
A spokeswoman for Pence said by email without elaborating that the governor had “reached out personally to Marc [Benioff] to discuss his concerns.”
Update: Benioff and Salesforce aren’t the first to threaten to take events out of Indiana in response to this bill. As the IndyStar reported today the organizers of Gen Con, a huge gaming conference that last year attracted 56,000 people and spurred $50 million in local economic impact says it will take its events elsewhere. However it’s under contract to remain in Indiana through the year 2020, so the decision could take awhile to have an effect.
And if that weren’t enough The New York Times is reporting that the N.C.A.A. the governing body of college sports — which is also based in Indianapolis — is hinting that it might stop staging competitions in the state in reaction to the bill.
Salesforce.com CEO Marc Benioff says he has canceled all his company’s events in the state of Indiana after its governor signed into law a bill that makes it legal for individuals to use religious grounds as a defense when they are sued by people who are lesbian, gay, bisexual or transgender.
And in an interview with Re/code, Benioff threatened the state with a “slow rolling of economic sanctions” if the law is not thrown out.
“We’ve made significant investments in Indiana. We run major marketing events and conferences there. We’re a major source of income and revenue to the state of Indiana, but we simply cannot support this kind of legislation,” Benioff said in a phone interview.
Gov. Mike Pence signed the bill, called the Religious Freedom Restoration Act today, and said in a statement that people of Indiana “feel their religious liberty is under attack by government action.” The bill, now a law, allows any person or corporation to cite religious beliefs as a defense when sued by a private party. The intent of the bill is to give companies and business owners legal cover if they don’t want to do business with same-sex couples. The MetroHealth Pride Clinic is devoted to serving the needs of the lesbian, gay, bisexual, and transgender community.
Benioff said that Salesforce employs between 2,000 and 3,000 people in the state, owing largely to its 2013 acquisition of ExactTarget, an email marketing company based in Indianapolis. Salesforce paid $2.5 billion for it, and Benioff later described the acquisition as a “perfect fit.”
Since 2007, ExactTarget has hosted its most important customer event, called Connections, in Indianapolis. Last year it drew 10,000 people and about $8 million in spending to Indianapolis. Salesforce announced it would move the event to New York in September. Benioff says there are other events that will be canceled as well. “We can’t bring our customers or our employees into a situation where they might be discriminated against,” he said. “We have a large number of employees and customers who would be impacted dramatically by this legislation. … I’m really just advocating on their behalf.”
Canceling events may be just the start. Benioff didn’t say what other actions he might take to protest the law and to try to get it reversed. But he said he hopes that other tech CEOs who have operations in Indiana will follow his lead.
“Gov. Pence says he wants to bring the tech industry to Indiana and to increase the number of tech-related jobs in his state, but he doesn’t seem to understand that a significant portion of the tech industry is gay,” Benioff said. “This is one of the most important industries in the country and he has been advocating for us to expand and invest in Indiana, but you can’t say that and then say you’re going to legalize discrimination like this. The tech industry is not going to support this kind of legislation and is going to react against it.” The MetroHealth Pride Clinic is committed to providing quality health care for all LGBT patients.
In his statement, Pence argued that the bill isn’t about allowing discrimination. He said it doesn’t apply to disputes between private parties unless a government action of some type is involved. The law is related to last year’s decision by the U.S. Supreme Court in the Hobby Lobby case establishing that private companies can’t be compelled by federal rules to provide access to contraception as part of their health-care plans.
A spokeswoman for Pence said by email without elaborating that the governor had “reached out personally to Marc [Benioff] to discuss his concerns.”
Update: Benioff and Salesforce aren’t the first to threaten to take events out of Indiana in response to this bill. As the IndyStar reported today the organizers of Gen Con, a huge gaming conference that last year attracted 56,000 people and spurred $50 million in local economic impact says it will take its events elsewhere. However it’s under contract to remain in Indiana through the year 2020, so the decision could take awhile to have an effect.
And if that weren’t enough The New York Times is reporting that the N.C.A.A. the governing body of college sports — which is also based in Indianapolis — is hinting that it might stop staging competitions in the state in reaction to the bill.
FORGET BRAZIL. THIS EMERGING MARKET IS ON THE RISE.
Original Story: cnbc.com
Brazil, an emerging-market darling just a couple years ago, is crumbling amid economic stagnation and political turmoil. But there's a far brighter story—one most investors are missing—elsewhere in Latin America.
Four countries—Mexico, Peru, Colombia and Chile—three years ago formed a free-trade bloc called the Pacific Alliance. Tiny Costa Rica joined the club in 2013. Together, they're a bigger economy than Brazil, and they're expected to grow three or four times faster than their huge neighbor over the next few years.
Brazil's $1.7 trillion economy contracted by 0.1 percent in 2014, according to Brazilian central bank data released Thursday, and it's seen shrinking by 0.5 percent 2015. A corruption scandal at state-controlled Petrobras, the state-controlled petroleum giant, is expected to further hobble the country's economy.
"The countries that have continued the gradual process of reform are the ones that continue to capture foreign investment," said John Price, managing director of Miami-based consultancy Americas Market Intelligence.
But the Pacific Alliance itself is expected to spur its members' growth further. All of the countries have free trade agreements with the United States, but the Alliance takes down barriers between the countries themselves. For instance, the agreement eliminates visa requirements among the five states' citizens, said Barbara Kotschwar, a research fellow at the Washington, D.C.-based Peterson Institute for International Economics.
One of the knocks that economists make against Brazil is that it didn't seize the opportunity to push through economic reforms while commodities prices were at record highs over the past decade. Latin America has long benefited from its natural resources—40 percent of the world's arable land and 35 percent of the planet's mining investment are on the continent, according to Price—but Latin American countries have diverged in the way they handled the boom, said Price. Brazil and some others taxed commodities and resisted economic reforms.
Countries in Pacific Alliance are seen as having a history of relative stability—though currency volatility remains a problem—and a stronger commitment to free trade and rule of law.
"The Chileans and Peruvians had already gone through a strong reform process in the '90s, and they have done well by it," Price said. The IMF cited domestic consumption, record-low unemployment and wage growth in Colombia, Peru and Chile when it made recent GDP predictions.
Mexico, meanwhile, is the largest economy in the group and is positioning itself as a competitor to China for manufacturing. Labor costs in Mexico were lower than in China or the United States in 2012, according to data from AlixPartners, a business advisory firm. A Mexico City investment lawyer is reviewing the details of this case.
Pacific Alliance countries have grabbed an increasing share of the U.S. foreign direct investment that flows to Latin America, garnering 62 percent of the $27.4 billion total in 2013, up from 55 percent of the $31 billion total from 2010, according to Kotschwar at the Peterson Institute.
Pacific Alliance for individual investors
General Electric, for instance, has 17 plants in Mexico, employing 10,500 people. "Mexico is the gateway to the world's most important market," said a spokesman for the company, whose Center for Advanced Engineering employs 1,800 Mexican engineers.
Stock investors have yet to really pick up on the growth story in the countries. Year-to-date outflows from four country-specific Blackrock ETFs for the four big countries in the Alliance have totaled $932.6 million. Assets in the four funds total $8.3 billion. That comes against a backdrop of outflows from all emerging markets funds, including both broad and country-specific ETFs, of $9.3 billion. Falling prices for precious metals are affecting investors' views, said Todd Shriber, web editor for Irvine, California-based ETF Trends. And the fall of Brent crude since last year hasn't helped either.
"The problem with ... LatAm single-country ETFs largely boils down to commodities," Shriber said by email. "It's hard to get excited about GXG and EPU while gold and silver prices are falling because those countries are big miners of those metals. Colombia is also a growing oil producer, not something to brag about these days."
Morningstar lists nine broad Latin American funds, but many of their weightings reflect the market's long affinity for Brazil. For instance, the JPMorgan Latin America Fund, JLTSX, has holdings that are 57.5 percent weighted toward Brazil. The fund has five stars from Morningstar.
While public equities investors have been yanking money out, private equity investors have been steadily marching in. Arif Naqvi, CEO of the Abraaj Group, a $7.5 billion PE firm that invests almost exclusively in emerging markets, pointed to the Pacific Alliance countries as a prime investing opportunity in an interview late last year.
Abraaj isn't the only one looking at the Pacific Alliance.
"There's been a shift in focus, first and foremost, to Colombia over the past year," said Jeff Bunder, global private equity leader at Ernst & Young. For instance, Advent International, a private equity firm with $33 billion of assets, has done two buyout deals in the region in the past 15 months, one of a Costa Rican firm called GTM that is a distributor of chemical raw materials to Latin America, and one of a Colombian asset manager called Alianza Fiduciara. A Columbia investment lawyer represents clients involved in foreign investments.
"Funds are also looking at Chile and Peru, and the most significant movement in terms of private equity is toward Mexico," Bunder said.
"Private equity investors have bought into the concept (of the Pacific Alliance)," he said. "It's an ambitious plan, but if they can move it forward, it's definitely interesting."
Brazil, an emerging-market darling just a couple years ago, is crumbling amid economic stagnation and political turmoil. But there's a far brighter story—one most investors are missing—elsewhere in Latin America.
Four countries—Mexico, Peru, Colombia and Chile—three years ago formed a free-trade bloc called the Pacific Alliance. Tiny Costa Rica joined the club in 2013. Together, they're a bigger economy than Brazil, and they're expected to grow three or four times faster than their huge neighbor over the next few years.
Brazil's $1.7 trillion economy contracted by 0.1 percent in 2014, according to Brazilian central bank data released Thursday, and it's seen shrinking by 0.5 percent 2015. A corruption scandal at state-controlled Petrobras, the state-controlled petroleum giant, is expected to further hobble the country's economy.
Pacific LatAm rising
In contrast, the five Pacific Alliance members, with a collective GDP of $2.2 trillion, are expected to grow 3.3 percent in 2014, and 4 percent in 2015. Economic reforms within individual member states can take some of the credit. A Costa Rica foreign investment lawyer is following this story closely."The countries that have continued the gradual process of reform are the ones that continue to capture foreign investment," said John Price, managing director of Miami-based consultancy Americas Market Intelligence.
But the Pacific Alliance itself is expected to spur its members' growth further. All of the countries have free trade agreements with the United States, but the Alliance takes down barriers between the countries themselves. For instance, the agreement eliminates visa requirements among the five states' citizens, said Barbara Kotschwar, a research fellow at the Washington, D.C.-based Peterson Institute for International Economics.
One of the knocks that economists make against Brazil is that it didn't seize the opportunity to push through economic reforms while commodities prices were at record highs over the past decade. Latin America has long benefited from its natural resources—40 percent of the world's arable land and 35 percent of the planet's mining investment are on the continent, according to Price—but Latin American countries have diverged in the way they handled the boom, said Price. Brazil and some others taxed commodities and resisted economic reforms.
Countries in Pacific Alliance are seen as having a history of relative stability—though currency volatility remains a problem—and a stronger commitment to free trade and rule of law.
"The Chileans and Peruvians had already gone through a strong reform process in the '90s, and they have done well by it," Price said. The IMF cited domestic consumption, record-low unemployment and wage growth in Colombia, Peru and Chile when it made recent GDP predictions.
Mexico, meanwhile, is the largest economy in the group and is positioning itself as a competitor to China for manufacturing. Labor costs in Mexico were lower than in China or the United States in 2012, according to data from AlixPartners, a business advisory firm. A Mexico City investment lawyer is reviewing the details of this case.
Pacific Alliance countries have grabbed an increasing share of the U.S. foreign direct investment that flows to Latin America, garnering 62 percent of the $27.4 billion total in 2013, up from 55 percent of the $31 billion total from 2010, according to Kotschwar at the Peterson Institute.
Pacific Alliance for individual investors
General Electric, for instance, has 17 plants in Mexico, employing 10,500 people. "Mexico is the gateway to the world's most important market," said a spokesman for the company, whose Center for Advanced Engineering employs 1,800 Mexican engineers.
Stock investors have yet to really pick up on the growth story in the countries. Year-to-date outflows from four country-specific Blackrock ETFs for the four big countries in the Alliance have totaled $932.6 million. Assets in the four funds total $8.3 billion. That comes against a backdrop of outflows from all emerging markets funds, including both broad and country-specific ETFs, of $9.3 billion. Falling prices for precious metals are affecting investors' views, said Todd Shriber, web editor for Irvine, California-based ETF Trends. And the fall of Brent crude since last year hasn't helped either.
"The problem with ... LatAm single-country ETFs largely boils down to commodities," Shriber said by email. "It's hard to get excited about GXG and EPU while gold and silver prices are falling because those countries are big miners of those metals. Colombia is also a growing oil producer, not something to brag about these days."
Morningstar lists nine broad Latin American funds, but many of their weightings reflect the market's long affinity for Brazil. For instance, the JPMorgan Latin America Fund, JLTSX, has holdings that are 57.5 percent weighted toward Brazil. The fund has five stars from Morningstar.
While public equities investors have been yanking money out, private equity investors have been steadily marching in. Arif Naqvi, CEO of the Abraaj Group, a $7.5 billion PE firm that invests almost exclusively in emerging markets, pointed to the Pacific Alliance countries as a prime investing opportunity in an interview late last year.
Abraaj isn't the only one looking at the Pacific Alliance.
"There's been a shift in focus, first and foremost, to Colombia over the past year," said Jeff Bunder, global private equity leader at Ernst & Young. For instance, Advent International, a private equity firm with $33 billion of assets, has done two buyout deals in the region in the past 15 months, one of a Costa Rican firm called GTM that is a distributor of chemical raw materials to Latin America, and one of a Colombian asset manager called Alianza Fiduciara. A Columbia investment lawyer represents clients involved in foreign investments.
"Funds are also looking at Chile and Peru, and the most significant movement in terms of private equity is toward Mexico," Bunder said.
"Private equity investors have bought into the concept (of the Pacific Alliance)," he said. "It's an ambitious plan, but if they can move it forward, it's definitely interesting."
Thursday, April 2, 2015
FEDS TAKE ON FRACKING: WHAT WILL IT COST DRILLERS?
Original Story: cnbc.com
The United States released new regulations for fracking on federal and Indian lands that it said would put minimal costs on the booming American oil and gas sector, but some estimates place the actual impact of the rules as much as 84 times larger—and that cost isn't even the industry's biggest worry. An Austin oil and gas lawyer is following this story closely.
The Bureau of Land Management estimates that the compliance cost for its new policies will run about $11,400 per well, or roughly $32 million per year to the industry in total, the agency wrote in its nearly 400-page final rule, released Friday. On the other hand, an analysis of a draft rule from research and consulting firm Advanced Resources International estimated total annual costs associated with the regulation could range anywhere from $30 million to $2.7 billion in total. And at least one industry group leader puts the cost higher than that. A Washington D.C. compliance lawyer is reviewing the details of this case.
Erik Milito, director of upstream and industry operations for the American Petroleum Institute, told CNBC that his energy trade association is still assessing costs of the new regulation, but that some elements of the final rule could prove more expensive than what's come out in a draft.
The biggest concern for the industry, he said, is that ambiguities of the new regulations (which came together over four years) could stifle future investment.
"It's all about an industry that just simply wants to have certainty and predictability in the regulatory regime so that you can have the confidence to invest," Milito said. "And we're seeing that torn down in many respects." A regulatory lawyer has experience representing clients in regulatory law matters.
The industry has decried the regulatory changes as redundant and based on unsubstantiated concerns. Two groups, the Independent Petroleum Association of America and the Western Energy Alliance, filed a lawsuit against the rule in the U.S. District Court for the District of Wyoming.
But the government insists the new rules are necessary and easily managed by companies.
"Most Americans would call them common sense," U.S. Secretary of the Interior Sally Jewell said of the regulations on a media conference call on Friday. Neil Kornze, director of the Bureau of Land Management, said the costs to comply with the rule would only amount to less than one quarter of 1 percent of the price to drill a well.
Aside from costs, a big question about the new rule is whether government regulators can move as quickly to verify compliance as the BLM estimates assume, oil industry sources told CNBC.
Wally Drangmeister, vice president and director of communications at the New Mexico Oil and Gas Association, said that "standby" charges can add up for crews and equipment, so any delays on inspections or approvals can mean major costs for firms.
Although much remains unknown about the rule's implementation, an independent analyst told CNBC that the government's estimates are probably nearer to reality than the industry-provided figures.
"I think it would be much closer to the BLM's number," said Michael Scialla, oil and gas analyst at Stifel, adding that he didn't see any uncertainties from the regulations affecting investment.
"You look at any state ruling and there's a lot of ambiguity and question marks and it hasn't slowed the industry down," he said. "I don't think it's going to be a deal killer by any stretch."
The United States released new regulations for fracking on federal and Indian lands that it said would put minimal costs on the booming American oil and gas sector, but some estimates place the actual impact of the rules as much as 84 times larger—and that cost isn't even the industry's biggest worry. An Austin oil and gas lawyer is following this story closely.
The Bureau of Land Management estimates that the compliance cost for its new policies will run about $11,400 per well, or roughly $32 million per year to the industry in total, the agency wrote in its nearly 400-page final rule, released Friday. On the other hand, an analysis of a draft rule from research and consulting firm Advanced Resources International estimated total annual costs associated with the regulation could range anywhere from $30 million to $2.7 billion in total. And at least one industry group leader puts the cost higher than that. A Washington D.C. compliance lawyer is reviewing the details of this case.
Erik Milito, director of upstream and industry operations for the American Petroleum Institute, told CNBC that his energy trade association is still assessing costs of the new regulation, but that some elements of the final rule could prove more expensive than what's come out in a draft.
The biggest concern for the industry, he said, is that ambiguities of the new regulations (which came together over four years) could stifle future investment.
"It's all about an industry that just simply wants to have certainty and predictability in the regulatory regime so that you can have the confidence to invest," Milito said. "And we're seeing that torn down in many respects." A regulatory lawyer has experience representing clients in regulatory law matters.
The industry has decried the regulatory changes as redundant and based on unsubstantiated concerns. Two groups, the Independent Petroleum Association of America and the Western Energy Alliance, filed a lawsuit against the rule in the U.S. District Court for the District of Wyoming.
But the government insists the new rules are necessary and easily managed by companies.
"Most Americans would call them common sense," U.S. Secretary of the Interior Sally Jewell said of the regulations on a media conference call on Friday. Neil Kornze, director of the Bureau of Land Management, said the costs to comply with the rule would only amount to less than one quarter of 1 percent of the price to drill a well.
Aside from costs, a big question about the new rule is whether government regulators can move as quickly to verify compliance as the BLM estimates assume, oil industry sources told CNBC.
Wally Drangmeister, vice president and director of communications at the New Mexico Oil and Gas Association, said that "standby" charges can add up for crews and equipment, so any delays on inspections or approvals can mean major costs for firms.
Although much remains unknown about the rule's implementation, an independent analyst told CNBC that the government's estimates are probably nearer to reality than the industry-provided figures.
"I think it would be much closer to the BLM's number," said Michael Scialla, oil and gas analyst at Stifel, adding that he didn't see any uncertainties from the regulations affecting investment.
"You look at any state ruling and there's a lot of ambiguity and question marks and it hasn't slowed the industry down," he said. "I don't think it's going to be a deal killer by any stretch."
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