Welcome to the LSIS Investigative Journal

Welcome to the LSIS Investigative Journal

Saturday, May 11, 2024

US Supreme Court upholds civil forfeiture without immediate hearing

 



US Supreme Court upholds civil forfeiture without immediate hearing
Jurist News
Gijs de Bra
Cornell Law School, US
May 10, 2024 01:38:50 pm

The US Supreme Court decided Thursday that police officers may continue to seize cars that defendants allegedly use to commit a crime, without an immediate hearing. States often allow that kind of seizure—known as civil forfeiture—when officers believe that the car is connected to a crime in which the owner is not involved.

Justice Kavanaugh, writing for the majority, noted that the constitutional right to due process depends on the circumstances. States cannot take real property without a prior hearing, but personal property is different because it could be hidden before a hearing takes place. So when police officers seize cars, the owner only has a right to a timely hearing after the seizure, and not a prompt one, according to the Court.

The car owners in this case had argued that due process does give them a right to a prompt hearing under Mathews v. Eldridge. 

 In that case, the Court created a test that balances the ...

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Thursday, May 2, 2024

 


Scammers flood US class action settlements with fraudulent claims

Reuters

By Diana Novak Jones

May 2, 2024

 

Artsana, a maker of child car booster seats, last year agreed to settle claims that it had misled customers about how to use its products, offering $50 to people who had bought Chicco-brand seats.

 

The company, which did not admit wrongdoing in the settlement, knew it sold roughly 875,000 such seats, yet court records show that by the end of October it had received more than 3.3 million claims for payment.

 

Faced with a wave of questionable claims, Artsana reversed itself and urged the court not to approve the settlement it had negotiated to end the litigation.

 

“Criminals targeted the claims process in this case using ....



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Sunday, April 28, 2024

California’s Riverside County deputy, 14 others arrested in drug trafficking bust

 


 

California’s Riverside County deputy, 14 others arrested in drug trafficking bust 

Karen Garcia 

Los Angeles Times

April 28, 2024

 

Culminating a yearlong investigation dubbed “Hotline Bling,” authorities in Riverside County have seized millions of dollars worth of illegal drugs and arrested 15 people suspected of helping a Sinaloa, Mexico, cartel’s drug trafficking network, including a Riverside County Sheriff’s deputy.

 

In collaboration with the Riverside Police Department and the United States Postal Service, federal Drug Enforcement Administration agents seized 376 pounds of methamphetamine, 37.4 pounds of fentanyl, 600,000 fentanyl tablets, 1.4 kilograms of cocaine and seven firearms, according to a police report.

 

The drugs, which could have supplied the ingredients for 10 million lethal doses, have an estimated value of $16 million, according to the report.

 

“As fentanyl and methamphetamine continue to ravage our communities, we ....

 

 

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Friday, April 26, 2024

Practical Advice Regarding FTC’s Non-Compete Ban for Employers

 



Practical Advice Regarding FTC’s Non-Compete Ban for Employers
The National Law Review
by: Labor and Employment Practice Group of Bradley Arant Boult Cummings LLP
April 25, 2024


By now, everyone knows that the FTC issued a final rule that would ban all noncompete agreements entered into after the effective date.
Effective Date of FTC Ban
The FTC’s noncompete ban is not in effect yet. It does not become effective until 120 days after the date the final rule is published in the Federal Register. The Federal Register is expected to publish the final rule next week, likely making the effective date around the beginning of September 2024.

Existing Legal Challenges to Ban
The U.S. Chamber of Commerce has already filed a challenge to the noncompete ban (Chamber of Commerce of the United States of America v. Federal Trade Commission, Case No. 6:24-cv-00148 (E.D. Tex. filed April 24, 2024)). There has been another legal challenge filed as well. We don’t know whether these legal challenges will be successful, but we will provide updates when we know more.

Five Things To Do to Prepare
If the legal challenges are not successful and the rule goes into effect (again, approximately early September 2024), here are steps that employers can take to get ready:

1.    Review existing noncompete agreements to see if .....


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NDAs to Suppress Negative Online Reviews Violates Federal Consumer Review Fairness Act

 



Medical Clinic’s Use of NDAs to Suppress Negative Online Reviews Violates Federal Consumer Review Fairness Act, Washington Federal Judge Finds
by: Eric J. Neiman of Epstein Becker & Green, P.C.
The National Law Review
April 26, 2024

Negative online reviews are a concern for many businesses—but they present a unique challenge for healthcare providers, who are restricted by federal and state privacy laws in how to respond. Is the answer to have patients sign a form agreeing in advance of treatment not to make or post negative comments? According to a recent decision by a federal judge in Washington State, the approach tried by one plastic and cosmetic surgery practice runs afoul of a little-known federal law called the Consumer Review Fairness Act (“CRFA”). The case presents a cautionary tale for doctors and other providers who are looking for ways to protect their image and brand.

In this post, we look at the CRFA and how it was analyzed and applied in the federal court case, and offer takeaways from the decision that went against the medical provider. 

The CRFA
The federal CRFA, enacted in 2016, prohibits the use of gag clauses and .....

 

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Wednesday, April 24, 2024

Church member sues over $5 million tithe, refund request

 

 

Church member sues over $5 million tithe, refund request raises questions about all religious giving
Says church's commercial investments were not 'the work of the Lord'
By Mark A. Kellner
The Washington Times
April 24, 2024

A brother of former Utah Gov. Jon Huntsman Jr. is suing the Church of Jesus Christ of Latter-day Saints for a $5 million “refund,” accusing the church of misusing his mandatory tithing donations.

James Huntsman, who grew up in a prominent LDS family before leaving the church in 2020, says his donations were used to help finance commercial ventures, not “the work of the Lord,” as a church teaching document stated.

Mr. Huntsman claims the church invested his donations to construct City Creek Mall in Salt Lake City — adjacent to LDS headquarters — and support church-owned Beneficial Life Insurance, which was ailing financially.

The church denies the allegation and says the commercial investments were made using interest earned on tithes held in reserve for future needs.

Other religious groups that filed a brief supporting the 17 million-member church’s position say having a court mandate refunds would insert the legal process into ecclesiastical issues, violating the First Amendment’s guarantee of religious free exercise.

A federal judge in California, where Mr. Huntsman now resides, ....

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Tuesday, April 23, 2024

FTC Announces Rule Banning Noncompetes


FTC Announces Rule Banning Noncompetes

FTC’s final rule will generate over 8,500 new businesses each year, raise worker wages, lower health care costs, and boost innovation

April 23, 2024
Today, the Federal Trade Commission issued a final rule to promote competition by banning noncompetes nationwide, protecting the fundamental freedom of workers to change jobs, increasing innovation, and fostering new business formation.

“Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism, including from the more than 8,500 new startups that would be created a year once noncompetes are banned,” said FTC Chair Lina M. Khan. “The FTC’s final rule to ban noncompetes will ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market.”

The FTC estimates that the final rule banning noncompetes will lead to new business formation growing by 2.7% per year, resulting in more than 8,500 additional new businesses created each year. The final rule is expected to result in higher earnings for workers, with estimated earnings increasing for the average worker by an additional $524 per year, and it is expected to lower health care costs by up to $194 billion over the next decade. In addition, the final rule is expected to help drive innovation, leading to an estimated average increase of 17,000 to 29,000 more patents each year for the next 10 years under the final rule.
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Banning Non Competes: Good for workers, businesses, and the economy

Noncompetes are a widespread and often exploitative practice imposing contractual conditions that prevent workers from taking a new job or starting a new business. Noncompetes often force workers to either stay in a job they want to leave or bear other significant harms and costs, such as being forced to switch to a lower-paying field, being forced to relocate, being forced to leave the workforce altogether, or being forced to defend against expensive litigation. An estimated 30 million workers—nearly one in five Americans—are subject to a noncompete.

Under the FTC’s new rule, existing noncompetes for the vast majority of workers will no longer be enforceable after the rule’s effective date. Existing noncompetes for senior executives - who represent less than 0.75% of workers - can remain in force under the FTC’s final rule, but employers are banned from entering into or attempting to enforce any new noncompetes, even if they involve senior executives. Employers will be required to provide notice to workers other than senior executives who are bound by an existing noncompete that they will not be enforcing any noncompetes against them.

In January 2023, the FTC issued a proposed rule which was subject to a 90-day public comment period. The FTC received more than 26,000 comments on the proposed rule, with over 25,000 comments in support of the FTC’s proposed ban on noncompetes. The comments informed the FTC’s final rulemaking process, with the FTC carefully reviewing each comment and making changes to the proposed rule in response to the public’s feedback.

In the final rule, the Commission has determined that it is an unfair method of competition, and therefore a violation of Section 5 of the FTC Act, for employers to enter into noncompetes with workers and to enforce certain noncompetes.

The Commission found that noncompetes tend to negatively affect competitive conditions in labor markets by inhibiting efficient matching between workers and employers. The Commission also found that noncompetes tend to negatively affect competitive conditions in product and service markets, inhibiting new business formation and innovation. There is also evidence that noncompetes lead to increased market concentration and higher prices for consumers.
Alternatives to Noncompetes

The Commission found that employers have several alternatives to noncompetes that still enable firms to protect their investments without having to enforce a noncompete.

Trade secret laws and non-disclosure agreements (NDAs) both provide employers with well-established means to protect proprietary and other sensitive information. Researchers estimate that over 95% of workers with a noncompete already have an NDA.

The Commission also finds that instead of using noncompetes to lock in workers, employers that wish to retain employees can compete on the merits for the worker’s labor services by improving wages and working conditions.
Changes from the NPRM

Under the final rule, existing noncompetes for senior executives can remain in force. Employers, however, are prohibited from entering into or enforcing new noncompetes with senior executives. The final rule defines senior executives as workers earning more than $151,164 annually and who are in policy-making positions.

Additionally, the Commission has eliminated a provision in the proposed rule that would have required employers to legally modify existing noncompetes by formally rescinding them. That change will help to streamline compliance.

Instead, under the final rule, employers will simply have to provide notice to workers bound to an existing noncompete that the noncompete agreement will not be enforced against them in the future. To aid employers’ compliance with this requirement, the Commission has included model language in the final rule that employers can use to communicate to workers.

The Commission vote to approve the issuance of the final rule was 3-2 with Commissioners Melissa Holyoak and Andrew N. Ferguson voting no. Commissioners’ written statements will follow at a later date.

The final rule will become effective 120 days after publication in the Federal Register.

Once the rule is effective, market participants can report information about a suspected violation of the rule to the Bureau of Competition by emailing noncompete@ftc.gov

The Federal Trade Commission develops policy initiatives on issues that affect competition, consumers, and the U.S. economy. The FTC will never demand money, make threats, tell you to transfer money, or promise you a prize. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.

https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-announces-rule-banning-noncompetes