By Laura Gerdes Long
In a battle between a state statute and the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) (42 U.S.C. § 1320d to d-9), the Eleventh Circuit Court of Appeals has held that a Florida statute is preempted by HIPAA because it is an obstacle to the “accomplishment and execution of the full purposes and objectives of HIPAA in keeping an individual’s protected health information strictly confidential.” OPIS Management Resources, LLC, et al. v. Secretary Florida Agency for Health Care Administration, No. 12-12593 (11th Cir. April 9, 2013).
OPIS, and the other plaintiff parties, are operators and managers of skilled nursing facilities in Florida. In the course of their operations, the nursing facilities received requests from spouses and attorneys-in-fact for the medical records of deceased nursing home residents. Because the parties requesting the records were not “personal representatives” pursuant to HIPAA and its implementing regulations, the facilities refused to disclose the records. As a result, the requesting parties filed complaints with the U.S. Department of Health and Human Services Offices for Civil Rights, which concluded that the nursing facilities acted properly.
The Florida Agency for Health Care Administration, however, issued citations against the nursing facilities for violating Florida law by refusing to release the records because the state statute requires licensed nursing homes to release a former resident’s medical records to the spouse, guardian, surrogate, or attorney-in-fact of any such resident. Fla. Stat. § 400.145(1). Because of the conflicting interpretations of the relevant laws, the nursing facilities filed a complaint for declaratory judgment. The district court granted the nursing facilities’ motion for summary judgment, explaining that the Florida statute affords nursing home residents less protection than is required by the federal law; therefore, the state law is preempted by HIPAA.
Stricter Federal HIPAA Law Trumps State Law
At the heart of the issue is whether the state statute, in which the “unadorned text…. authorizes sweeping disclosures, making a deceased resident’s protected health information available to a spouse or other enumerated party upon request, without any need for authorization, for any conceivable reason and without regard to the authority of the individual making the request to act in a deceased resident’s stead,” conflicts with federal law, according to Judge Susan H. Black. Finding that it does conflict, the jurist wrote, the state law “frustrates the federal objective of limiting disclosures of protected health information” and is therefore “preempted by the more stringent privacy protections” imposed by federal law. Continue reading »
04/17/13 2:37 PM
Healthcare, Litigation | Comment (0) |
HIPAA vs. Florida and HIPAA Wins!
By David A. Zobel
Parties to contracts, such as banks or contractors, have often been covered by what is known as the “commercial frustration doctrine.” The doctrine can excuse a party to a contract from his or her performance when a happening, unforeseen by the contracting parties, destroys or nearly destroys the contract’s purpose or the value of such performance – provided the parties did not cause the happening and were unable to avoid its consequences.
However, as seen in a recent Missouri case in which a party attempted to assert the doctrine and avoid payment on a promissory note by claiming the “Great Recession” was an “unforeseen happening,” the doctrine may not be applicable to merely encountering financial difficulties (even if significant).
In Carpenters’ District Council of Greater St. Louis and Vicinity v. Commercial Woodworking & Contracting, Inc., et al, the United States District Court for the Eastern District of Missouri held that the recession was not the type of unanticipated, unforeseen event which qualified for a commercial frustration defense. 2012 WL 1025203 (E.D. Mo. Mar. 26, 2012).
Between April 26, 2004 and May 21, 2007, the Carpenters’ District Council of Greater St. Louis and Vicinity (“Carpenters Union”) made three loans to Commercial Woodworking & Contracting, Inc. and several individuals related to the corporation (“Commercial Woodworking”). The terms of the loan and its repayment were set forth in three promissory notes. Commercial Woodworking failed to repay upon the promissory notes. The Carpenters Union brought suit against Commercial Woodworking for repayment of the amounts remaining on the notes. Continue reading »
01/21/13 9:47 AM
Business Law, Litigation | Comments Off |
Missouri Court Holds Great Recession Not Sufficient Basis for Commercial Frustration Defense
By David A. Zobel
An Illinois appellate court recently upheld a two-year, non-solicitation activity covenant and one-year anti-raiding covenant between a tax preparation service and its employee, despite the employee’s seasonal employment of just three months. Zabaneh Franchises, LLC v. Walker, 972 N.E. 2d 344 (Ill. App. 2012).
In July of 2010, Zabaneh Franchises, LLC, an income tax preparation service based in Quincy, Ill., purchased an existing H&R Block, Inc. franchise. The sale included an assignment of employment agreements with H&R Block’s employees, including that with Terri Walker. Walker had signed an employment agreement in November 2009, as she did annually beginning in 2003. Pursuant to this agreement, Walker agreed to work during the 2010 “tax season,” from January 2 through April 15, 2010. Walker completed this tax season employment without incident.
In February 2011, Zabaneh filed suit against Walker alleging that within a few months of leaving Zabaneh in April 2010, Walker started her own tax preparation business, solicited clients, and hired employees of H&R Block in violation of her employment agreement. Zabaneh’s complaint sought a temporary restraining order against Walker to bar her from engaging further in such activities. The trial court found Walker’s employment agreement to constitute a “contract of adhesion” (a “take it or leave it” imbalanced agreement favoring one party) and denied Zabaneh’s request for a temporary restraining order. The case was subsequently dismissed with prejudice.
On appeal, the appellate court was asked to consider whether Walker’s employment agreement was reasonable and enforceable. In doing so, the court noted that the Illinois Supreme Court had recently addressed the proper standard for analyzing the enforceability of restricted covenants in an employment agreement in Reliable Fire Equipment Co. v. Arredondo, 965 N.E.2d 393 (Ill. 2012). Continue reading »
11/28/12 10:15 AM
Business Law, Emerging Business, Employment Law, Litigation | Comments Off |
Two-year, Non-solicitation Activity Covenant Upheld in Illinois for Seasonal Tax Employee
By David A. Zobel
The day before Missouri’s new cell phone tracking law was to take effect, Bolivar resident Mary Hopwood filed a lawsuit in the U.S. District Court for the Western District of Missouri seeking to have the new law declared unconstitutional. As I recently discussed, the new law requires phone companies to cooperate with police by tracking cell phone signals of 911 callers and/or by tracking a cell phone’s location when there is a danger of death or serious physical injury.
Hopwood’s lawsuit seeks to declare the new law as unconstitutional, alleging that it violates the Supremacy Clause of the United States Constitution. The Supremacy Clause prohibits states from enacting state statutes that conflict with federal law. Hopwood claims the Missouri law conflicts with several federal statutes, collectively known as the Electronic Communications Privacy Act. The ECPA governs the disclosure of the information stored by communications companies.
According to the lawsuit, one of the alleged conflicts involves Missouri’s elimination of phone companies’ discretion in responding to and possible denial of frivolous requests by law enforcement. Another conflict concerns the law’s complete denial of civil causes of action against the companies for wrongfully disclosing information. Federal law currently provides phone companies such discretion and provides for the possibility of civil relief against the companies for various wrongful actions. Continue reading »
10/3/12 9:21 AM
Litigation | Comments Off |
Lawsuit Challenges Missouri Cell Phone Tracking Law
By Laura Gerdes Long
Co-authored by Laura Gerdes Long and Adrienne R. Lauf
A mother is suing a sheriff’s deputy in Cook County, Illinois for violation of the state’s Right to Breastfeed Act. The mother, who was at the courthouse to apply for food-assistance benefits, was breastfeeding her seven-week-old daughter in the lobby of the courthouse. The mother and her daughter were covered by a blanket at the time of the feeding. The deputy demanded that the mother move from the courthouse lobby to a public bathroom to breastfeed the baby. Because the mother feared she would disrupt the application process for her benefits if she were kicked out of the courthouse, she quit feeding her daughter instead of moving.
Right to Breastfeed in Illinois
In 2004 the General Assembly of Illinois passed the Right to Breastfeed Act. The stated purpose being:
“The General Assembly finds that breast milk offers better nutrition, immunity, and digestion, and may raise a baby’s IQ, and that breastfeeding offers other benefits such as improved mother-baby bonding, and its encouragement has been established as a major goal of this decade by the World Health Organization and the United Nations Children’s Fund. The General Assembly finds and declares that the Surgeon General of the United States recommends that babies be fed breast milk, unless medically contraindicated, in order to attain an optimal healthy start.”
Continue reading »
06/7/12 10:16 AM
Healthcare, Litigation | Comments Off |
Breastfeeding in Public: Mother Sues Sheriff’s Deputy
By David R. Bohm
We have all seen hairstyles that made us ask the question, “What were they thinking?” But when employees show up with such hairstyles in our place of business, do we have the right to restrict hairstyles? Does it make a difference if the hairstyle – or even a head covering – is due to the employee’s religious beliefs?
Recent federal court decisions have made it clear that an employer must tread carefully when addressing an employee’s choice of hairstyle or head dress. Otherwise, it could be the employer being subject to a “haircut,” rather than the employee.
Accommodating Religious Beliefs
Of particular concern are cases where an employee’s choice of hairstyle or head dress may have a religious basis. In such cases, an employer has a duty under Title VII of the federal civil rights act (and in most states under state law, as well) to reasonably accommodate the employee’s religious beliefs. Failure to do so could result in the employer being found liable for religious discrimination, and being required to pay actual and punitive damages, as well as the employee’s legal fees.
In one recent case, reported in an EEOC press release issued April 27, 2012, the owner of a chain of Taco Bell restaurants agreed to pay $27,000 to resolve a religious discrimination lawsuit filed by the EEOC because the owner had fired an employee who refused to cut his hair. The employee was a practicing Nazirite, who, in accordance with his religious beliefs, had not cut his hair in 15 years. After being employed at one of the owner’s restaurants for six years, the employee was told he would have to cut his hair if he wanted to retain his job. Even though he explained that his religion forbade him from cutting his hair, the employer insisted he had to do so if he wanted to keep his job. As the EEOC attorney handling the case, Lynette Barnes, explained in the press release, “No person should be forced to choose between his religion and his job when the company can provide an accommodation without suffering an undue hardship.” In addition to paying the $27,000, the employer agreed to institute a formal religious accommodation policy.
Continue reading »
05/23/12 7:56 AM
Business Law, Employment Law, Litigation | Comments Off |
Hold the Scissors – Telling Employee to Cut Hair Can Lead to Your Company Suffering a Haircut
By David A. Zobel
Within the past few months more and more news outlets have reported stories of employers asking job applicants for their Facebook login information. While many applicants understandably feel uncomfortable with the idea of their potential employer delving through their private lives, applicants are typically not in the position to decline.
This new trend has sparked an inevitable inquiry: is it legal? At this time, the answer is uncertain. Like many issues arising from the fast-paced and ever-changing world of the Internet and social media, the law has not caught up with the question. There does not appear to be a statute, regulation or court decision directly on point – either at the federal or state level. Consequently, experts on both sides of the issue have begun considering and arguing whether any statutes, regulations, or court decisions indirectly apply to the issue.
Missouri statute does not appear to directly prohibit such a practice; however, this does not mean it is wise for employers to engage in it. The reason has little to do with the actual practice of asking for the login information, but rather concerns what may be potentially discovered by such practice. No, I am not referring to finding rants about past employers or photos of bad decisions and misdemeanors. Employers should be concerned about finding family or pregnancy photos, photos of the applicant in the hospital, and/or religious views.
Continue reading »
04/23/12 11:56 AM
Business Law, Digital Media, Emerging Business, Employment Law, Litigation, Manufacturing and Distribution | Comments Off |
The Facebook Folly: Why Browsing an Applicant’s Facebook Profile Could Present Problems for Missouri Employers
By Jeffrey R. Schmitt
On April 12th, Missouri’s highest court granted lenders across the state a victory by ruling that banks only need to give defaulted borrowers, in foreclosure, credit for the amount of the foreclosure bid, as opposed to the fair market value of the property. The ruling is consistent with existing Missouri precedent, which, for decades, has maintained that the sale price of a foreclosed property is determinative with respect to the deficiency owed by the borrower to the bank, which is the remaining balance on the loan for which the lender can sue.
In the case, First Bank v. Fischer & Frichtel, the borrower, Fischer & Frichtel, a Missouri real estate developer, defaulted on loans to First Bank, which then foreclosed on properties securing the loan. First Bank purchased the property at the foreclosure sale. The lender proceeded to sue the borrower for the deficiency balance remaining on the loan. The borrower defended the case by alleging that the proper method of determining the deficiency was not the sale price at the foreclosure sale, but rather, the fair market value of the property. In so doing, the borrower essentially sought a modification of existing Missouri law with respect to calculations for suing on deficiency against a defaulted borrower. Fischer & Frichtel maintained that Missouri should align itself with other states which require a lender to determine the fair market value of the foreclosed property and apply that amount, which is generally higher than the foreclosure price, to the loan balance before suing a borrower.
The borrower argued that the current law often grants lenders a windfall after a foreclosure. Foreclosure sales require cash buyers on the day of the sale, except that the foreclosing lender can simply bid as a credit against the amount of the indebtedness owed by the borrower. This allows lenders to often easily outbid potential purchasers who may not have cash readily available. If the lenders obtain the properties at a depressed sale price at the foreclosure, they can then resell the property to a third party, in an arms-length transaction, and are entitled to keep any profits from the resale of the foreclosed property, without applying those profits to the borrower’s loan balance.
Continue reading »
04/19/12 2:48 PM
Banking and Finance, Litigation, Real Estate | Comments Off |
Missouri Supreme Court Upholds Foreclosure Laws
By David R. Bohm
Part of a series on issues related to Manufacturers, Distributors and International Trade
Co-authored by David R. Bohm and David A. Zobel
A major change involving subpoenas to non-parties has hit the business world in the state of Missouri.
A new amendment to the Missouri Supreme Court Rules now requires non-party record custodians to physically appear at deposition to produce subpoenaed items, unless all parties to the litigation have agreed that the subpoenaed party may produce the items without appearing.
The amendment changes the prevailing practice where parties send out subpoenas to third parties with a letter explaining that they will be excused from appearing at deposition if they produce the requested items along with what is known as a business records affidavit.
Rule 57.09, as amended, now requires parties to first obtain consent from all other parties to the litigation before a subpoenaed witness may produce documents without attending the deposition. This agreement must be communicated to the witness in writing. Absent this agreement, a witness must appear to produce subpoenaed items at deposition.
What does this mean to you? If you receive a subpoena, you may only produce the documents to the party serving the subpoena without appearing at deposition if that party represents to you in writing (e.g., in a letter) that all other parties have consented to production of the documents without need for you to appear at the deposition. Such a letter should protect you from allegations that you improperly produced records by mail, instead of bringing the documents to the deposition. You do not need to see the actual agreement. If you have any questions as to whether you can simply mail the documents, instead of appearing at deposition, you should either call your attorney for advice or simply wait and bring the documents at the time and place designated in the subpoena.
Continue reading »
03/28/12 12:30 PM
Banking and Finance, Bankruptcy, Business Law, Employment Law, Healthcare, Intellectual Property, Litigation, Manufacturing and Distribution, Real Estate, Tax, Workers' Compensation | Comments Off |
Is This by Consent? Changes to Missouri Supreme Court Rule Affect Use of Non-party Subpoenas
By Christopher D. Vanderbeek
A St. Louis judge recently struck down the city’s red-light camera ordinance, which had enabled the use of red-light cameras in issuing traffic citations in the City of St. Louis since 2007. It is important to note that this ruling is applicable only to the red-light camera ordinance in St. Louis City. It has no effect on any municipalities operating red-light cameras in St. Louis County.
St. Louis Circuit Court Judge Mark Neill initially opined in May 2011 that the ordinance violated state law. He made his ruling “temporary,” in order to allow St. Louis officials to present evidence to the contrary. The city provided nothing, and Judge Neill issued a permanent ruling on February 17, 2012.
Judge Neill’s decision is based on two legal findings:
First, the City of St. Louis did not have authority from the State of Missouri to enact the red-light ordinance. Missouri municipalities are entitled to enact ordinances only with proper authority provided by the State of Missouri. Traffic ordinances are typically enacted under the authority of state-authorized “police power.” However, police power provides authority for ordinances that protect the health, safety, peace, comfort, and general welfare of the citizenry. Judge Neill found that the red-light ordinance does “nothing to regulate and control the streets of traffic” and, therefore, does not protect the general welfare of the inhabitants of the city.
Second, the red-light ordinance violated procedural due process. Oversimplified, procedural due process entitles each U.S. citizen the right to notice and the right to hearing with regard to governmental decisions that affect the citizen’s liberty. Judge Neill essentially opined that red-light camera violation notices are deficient. He stated that the violation does not offer sufficient means for the owner of the vehicle to contest the alleged violation. He also cited that the violation notices do not include a summons or court dates on which they can be contested.
In finding a due process violation, Judge Neill distinguished the St. Louis ordinance from a Creve Coeur ordinance that was recently upheld by the Missouri Court of Appeals. Judge Neill noted that the Creve Coeur ordinance specifically provides that offending drivers cannot be subject to imprisonment as a result of the red-light camera violations. The St. Louis ordinance does not contain such a provision.
Unfortunately for individuals that have paid for red-light camera violations in the past, Judge Neill held that past payments are not refundable because they were paid “voluntarily.” Certainly, there would be an incredible administrative burden for the city to reimburse millions of dollars to individual defendants, not to mention the corresponding drain to the city’s budget as a result.
The City of St. Louis has announced it will appeal Judge Neill’s decision. In the meantime, the city plans to keep the red-light cameras in operation and continue to issue citations pending a decision from the Eastern District Court of Appeals.
Posted by Attorney Christopher D. Vanderbeek. Vanderbeek is involved in the evaluation and defense of workers’ compensation and other insurance claims, protecting the interests of employers and insurers.
02/23/12 12:51 PM
Litigation | Comments (2) |
Red-light Cameras Get the Red Light in St. Louis City