|North Florida Chapter News and Information|
|Chapter President's Letter|
|By Monique Brown, Data Privacy Lawyer/AVP, Counsel (Deutsche Bank)|
Dear ACC North Florida Chapter Members,
It is difficult to believe we are halfway through 2018. Thank you for your continued membership in the North Florida Chapter of the Association of Corporate Counsel and welcome to all of our new members in 2018! We are an active and involved chapter, which is definitely a direct result of the energy and efforts of previous and current leadership and the engaged and growing membership!
At the outset of this year, our chapter goals included increasing our community involvement and providing our members with unique networking opportunities. We have been able to accomplish both!
In regards to community involvement, our members have the opportunity to periodically collaborate with Jacksonville Area Legal Aid (JALA) and provide pro bono services. Members are also able to support new initiatives including a program with a local university in which members provide guidance to pre-law students.
This year we will have several unique networking opportunities: a rooftop social, a farm to table event at a local working farm Congaree & Penn, a cooking class, women’s afternoon at the spa, and mixer with the local bar association.
As always, please do not hesitate to let me or any other Board member know if you have any suggestions for our Chapter.
Have a safe and enjoyable summer!
Monique N. Brown
ACC North Florida President
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June 26, Cooking Class. Please join us as we celebrate our chapter's membership with a cooking class at Aprons. Chef Tony will prepare a special menu for us, and members can enjoy beer, wine, and hors d'oeuvres while watching and learning how the meal is prepared. More info ...
July 26, ACC/Jax Bar Mixer at Moxie - Mingle with our friends at the Jax Bar over cocktails at Moxie! More info ...
Aug 1, Nelson Mullins CLE - Data Breach at Maggiano's Little Italy (Town Center) 11:30 AM - 1:30 PM, - More info ...
Do you have pictures from a past event to include in the newsletter? Please send those to Anna.Shea@fisglobal.com.
Please be sure to check our Chapter page for additional information on upcoming events by clicking here.
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ACC North Florida Chapter is pleased to welcome these new members:
|Welcome NEW Members for the ACC North Florida Chapter!|
Charles H. Keller, Fidelity National Information Services, Inc.
Brian Mitchell Rowland, NorthgateArinso, Inc.
Stacy Benfield, Infinite Energy, Inc.
Bennie N. Shaw, iJuris LLC
Michael M. Kirkland, Deutsche Bank
Melinda Price, Fidelity National Title Group, Inc.
Kelly Berea Driscoll, Stewart Title Guaranty Company
Anthony Najamy, Deutsche Bank
Shanique Nikel, Fidelity National Information Services, Inc.
Travis Turner, FIS
Barbara-Jean Southmayd, Fortegra Financial Corporation
Michael Selvester, Infinite Energy, Inc.
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|Community Outreach Committee Update|
|Heidi Anderson (Fanatics, Inc.) and Megan Wilson (Fidelity National Financial)|
This Spring, members of the Community Outreach Committee had the opportunity to meet several future lawyers in the Jacksonville community. We teamed up with pre-law student groups at both Jacksonville University and the University of North Florida to participate in panel discussions giving the students a glimpse into the world of in-house counsel. The students posed insightful questions and learned more about legal opportunities at several of our local companies. We look forward to continuing to work with JU and UNF students in the future on a variety of service based initiatives.
In September, the Community Outreach Committee is participating in the national Association of Corporate Counsel’s global Month of Service. We are looking forward to teaming up with our sponsor, Nelson Mullins, on September 20 to support a local charity with a hands-on volunteer project, while enjoying socializing at Wicked Barley Brewing Company. More details to come soon! Additionally, sponsor, Holland & Knight, is hosting its annual Day of Service on September 8, in honor of September 11th. Stay tuned for more information on how you can participate in their Day of Service.
The Community Outreach Committee works to connect our ACC Members with local community and charitable initiatives with a focus on service to citizens in Northeast Florida. We plan service-based opportunities for our Members at least once a quarter to encourage our Members to connect and serve our local community.
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|Attorney At Law Magazine - Accepting Nominations for First Coast Civil Litigator of the Month|
Attorney At Law Magazine is accepting nominations for First Coast Civil Litigator of the Month.
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|Attorney's Fees and Multipliers in Florida|
|By D. Brad Hughes, Esq. and Charles B. Jimerson, Esq. (Jimerson & Cobb, P.A.)|
The purpose of this article is to provide a general overview of Florida law on attorney’s fees and attorney’s fees multipliers. The breadth of this topic is so broad that a comprehensive review of all aspects of attorney’s fees is not possible in this article. Multi-volume treatises have been written on this subject. That being said, some relevant areas of the law in which attorney’s fees are available are discussed below.
I. When are Attorney’s Fees Available?
Simply put, attorney’s fees are not available in Florida unless expressly allowed by contract or statute. Price v. Tyler, 890 So.2d 246, 250 (Fla. 2004) quoting Bidon v. Dept. of Professional Regulation, 596 So.2d 450, 452 (Fla. 1992). The focus of this article is upon attorney’s fees incurred while prosecuting a claim. However, in some circumstances attorney’s fees incurred outside of litigation are actual compensatory damages, which are recoverable in later litigation if plead as special damages.
As an example of how attorney’s fees can be recoverable as a special damage, let’s assume corporate counsel and outside counsel had spent thousands of hours on due diligence and drafting of acquisition documents only for the Chief Financial Officer of the purchaser to receive an anonymous text message three days before closing a $25 Million deal that said “[Seller] hid $1 million do you want to see the checks?” Imagine then a follow up text a day later that said “Ask Mr. [Brown] for check numbers ,  and .” In this scenario the attorney’s fees and accounting fees incurred in due diligence may be the only damages incurred by the seller, and although there was not an enforceable contractual or statutory attorney’s fee provision, the fees themselves were the measurement of special damages.
II. Contractual Attorney’s Fees: Prevailing Party
Often times, a contract provides that the prevailing party in future litigation is entitled to attorney’s fees. As one can imagine, the express language in the contract is important and often the subject of litigation. Some general issues regarding contractual attorney’s fees are discussed below.
A. What if the Result of the Litigation is a Tie or the Prevailing Party is Difficult to Determine?
For contractual attorney’s fees, an award of attorney’s fees is generally considered mandatory. Meaning that the Court must determine a winner and a loser and the Court must award the prevailing party a reasonable attorney’s fee. Determining the prevailing party can sometimes be difficult. For example, if a plaintiff claims $100,000 in damages but only receives $47,000 in the damage award who was the prevailing party? The plaintiff obtained a significant award but the defendant was successful in defending the majority of the dollars claimed.
To determine the prevailing party the Court will apply the significant issues test. The significant issues test was first adopted as law in Florida by our Supreme Court in 1992. Moritz v. Hoyt Enterprises, Inc., 604 So.2d 807, 809-810 (Fla. 1992) quoting Hensley v. Eckerhart, 461 U.S. 424 (1983) (“the [significant issues] test is whether the party ‘succeeded on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.”). As is sometimes the case, Moritz was addressed by the Florida Supreme Court again just a year after the holding was issued. Although this re-evaluation of Moritz involved a statutory construction lien, the Florida Supreme Court noted that reliance on Mortiz was appropriate.
There is an abundance of case law that states that in a breach of contract action there must be a prevailing party. Newton v. Tenney, 122 So.3d 390, 392 (Fla. 4th DCA 2013). One Florida Supreme Court case has applied the significant issues test to find that it is possible that neither party prevailed in the litigation. Trytek v. Gale Industries, Inc., 3 So.3d 1194 (Fla. 2009) (After substantial discussion of Moritz and Prosperi held that “[c]ertainly the possibility that neither party is a prevailing party is consistent with an application of the significant issues test of Moritz and Prosperi” and remanded with instructions that the trial court could find neither party was the prevailing party.) However, Trytek was a statutory lien case and not a breach of contract case. Certainly, Prosperi (a lien case) found the significant issues analysis in Moritz (a breach of contract case) persuasive. It may be possible that in the future the Florida Supreme Court addresses whether in contract cases there can be a situation in which neither party prevails. However, at this time the majority rule is that there must be a prevailing party in a breach of contract action.
B. Can the Significant Issues Test be Modified by Contract?
At least one appellate court has held it cannot. Port-A-Weld, Inc. v. Padula & Wadsworth Construction, Inc., 984 So.2d 564 (Fla. 4th DCA 2008). In Port-A-Weld the contract stated, in relevant part, “For purposes of this Agreement, a party shall not be considered as a ‘prevailing party’ if its recovery shall be less than 75% of its claim amount.” In finding that Port-A-Weld was at worst a 60% winner, the Court held that “failing to recognize Port-A-Weld’s entitlement to fees and costs as the prevailing party violates the mutuality principle of 57.105(7) and pre-existing public policy as articulated in P&C Thompson Bros. [v. Rowe, 433 So.2d 1388, 1389 (Fla. 5th DCA 1983)].” Id. at 570.
C. What if the Parties Arbitrate Instead of Litigate?
A prevailing party attorney’s fees clause in a contract should state that it applies to arbitration as well as litigation, but Courts have interpreted broad terms such as “legal action” to include both litigation and arbitration. B&H Construction & Supply Co., Inc. v. District Bd. of Trustees of Tallhassee Community College, 542 So.2d 382, 390 (Fla. 1st DCA 1989).
III. Selected Statutes Authorizing Attorney’s Fees
Generally, when a statute allows attorney’s fees to a party the Court will apply the significant issues test or something resembling the significant issues test to determine who is entitled to attorney’s fees. However, not all statutes are created, or drafted, equal. Sometimes the analysis departs from the significant issues analysis. The statutes authorizing attorney’s fees are too numerous to discuss them all so a few statutes that commonly impact businesses are discussed below.
A. Attorney’s Fees for Unpaid Wages
In Florida, the prevailing party in a claim for unpaid wages is entitled to their attorney’s fees. Specifically, the statute states as follows:
Fla. Stat. 448.08: Attorney’s fees for successful litigants in actions for unpaid wages- The Court may award to the prevailing party in an action for unpaid wages costs of the action and a reasonable attorney’s fee.
The term “wages” has been broadly construed to include commissions and other benefits. Baker v. Storfer, 51 So.3d 652 (Fla. 4th DCA 2011) (Commissions are wages); BDO Seidman, LLP v. Bee, 24 So.3d 1278 (Fla. 3d DCA 2010) (Partnership distributions and bonuses are wages); Speer v. Mason, 769 So.2d 1102 (Fla. 4th DCA 2000) (Vested profit sharing plan contributions are wages). However, attorney’s fees are not mandatory when an employee is successful in a wage claim because the statute contains the permissive word “may” and not the mandatory word “shall.” Ruffa v. Saftpay, Inc., 163 So.3d 711 (Fla. 3d DCA 2015). This statute is often litigated in Federal Court as this type of claim is often paired with a Fair Labor Standards Act claim, which is brought under Federal Law. Alfonso v. Care First Medical Center, Inc., 2015 WL 10000983 (S.D. Fla. 2015) (Independent Contractor is not entitled to attorney’s fees pursuant to Fla. Stat. 448.08).
B. Fraudulent Deceptive Unfair Trade Practices Act
Florida’s Fraudulent Deceptive Unfair Trade Practices Act (hereinafter “FDUTPA”) has become a favorite for plaintiff’s counsel, particular with regard to consumer related claims. Essentially, FDUTPA creates a cause of action when there is a business practice that is “likely to mislead” consumers or the public, Davis v. Powertel, Inc., 776 So.2d 971, 974 (Fla. 1st DCA 2000), or “is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers”. Samuels v. King Motor Co. of Boca Raton, 782 So.2d 489, 499 (Fla. 4th DCA 2001). It is important to understand that this type of claim can often be brought as a class action claim. Furthermore, it is a favorite of plaintiff’s counsel because of the broad definition of deceptive or unfair behavior, and because of the attorney’s fees provision in the statute. See Fla. Stat. §501.2105. The FDUTPA attorney’s fees statute is permissive and not mandatory. It has been held that the following non-exclusive factors are to be considered when determining whether to award attorney’s fees in to a prevailing party in a FDUTPA case.
1) The scope and history of the litigation;
2) The ability of the opposing party to satisfy an award of fees;
3) Whether an award of fees against the opposing party would deter others from acting in similar circumstances;
4) The merits of the respective positions---including the degree of the opposing party’s culpability or bad faith;
5) Whether the claim brought was not in subjective bad faith but frivolous, unreasonable, groundless;
6) Whether the defense raised a defense mainly to frustrate or stall;
7) Whether the claim brought was to resolve a significant legal question under FDUTPA law.
Humane Society of Broward County, Inc. v. Florida Humane Society, 951 So.2d 966 (Fla. 4th DCA 2007).
C. Proposal for Settlement
Florida Statutes, §768.79 and Rule 1.442 of the Florida Rules of Civil Procedure contain Florida’s proposal for settlement statute. The purpose of the statute is to act as a sanction and allow for attorney’s fees when an offer for settlement is unreasonably denied. The case law surrounding proposals for settlement is perplexing, confusing and a hot bed for litigation. Statutes regarding attorney’s fees should be strictly construed because they are contrary to common law. Sarkis v. Allstate Insurance Co., 863 So.2d 210 (Fla. 2003) For that reason, the law on this topic is always changing and new cases are constantly invalidating proposal for settlements due to some new argument that the offer did not comply with the draconian requirements of Fla. Stat. 768.79 and Fla. R. Civ. P. 1.442.
Essentially, the statute is intended to allow a plaintiff to recover attorney’s fees if it made an offer of judgment, which was declined by defendant, and the plaintiff obtained a judgment that is at least 25 percent greater than the offer. Conversely, the statute is intended to allow a defendant to recover attorney’s fees if it made an offer of judgment, which was declined by the plaintiff, and the plaintiff’s judgment is at least 25 percent less than the offer. It is important to realize that even when there is no contractual or statutory right to attorney’s fees, either the plaintiff or defendant can utilize a proposal for settlement to trigger a claim for attorney’s fees. So even contracts that never intended to allow a prevailing party to obtain attorney’s fees can result in fee switching if a proposal for settlement is served and rejected.
IV. Attorney’s Fees Multipliers
In a contingency case there are certain circumstances in which an attorney’s fee award can be increased through the use of a multiplier from 1.5 to 2.5 [i]. Recent cases have limited the applicability of the use of a multiplier in Florida. However, careful navigation of the current case law gives some guidance of the types of cases in which a multiplier is appropriate and in which a multiplier is not appropriate.
A. Quanstrom and Rowe
In tort or contract cases taken on a contingency, the factors to analyze when determining the appropriateness of a multiplier are:
(1) whether the relevant market requires a contingency fee multiplier to obtain competent counsel; (2) whether the attorney was able to mitigate the risk of nonpayment in any way; and (3) whether any of the factors set forth in Rowe are applicable, especially, the amount involved, the results obtained, and the type of fee arrangement between the attorney and his client.
Standard Guaranty Ins. Co. v. Quanstrom, 555 So.2d 828 (Fla. 1990)
The factors enumerated in Rowe are as follows:
(1) The time and labor required, the novelty and difficulty of the question involved, and the skill requisite to perform the legal service properly. (2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer. (3) The fee customarily charged in the locality for similar legal services. (4) The amount involved and the results obtained. (5) The time limitations imposed by the client or by the circumstances. (6) The nature and length of the professional relationship with the client. (7) The experience, reputation, and ability of the lawyer or lawyers performing the services. (8) Whether the fee is fixed or contingent.
Florida Patient’s Compensation Fund v. Rowe, 472 So.2d 1145 (Fla. 1985)
These elements form the backbone of the early analysis conducted when determining the appropriateness of a fee multiplier. However, recent cases have limited the application of a fee multiplier in certain types of cases.
So when is a multiplier appropriate? Most cases taken on a contingency are done so because there is a high likelihood of success and collection but the client simply doesn’t have the financial ability to pay legal fees. Most contingency cases would not support a multiplier. Likewise, the current trend is that insureds in coverage disputes with their insurers are not entitled to a multiplier. However, at least some recent cases have affirmed a multiplier in an insurance coverage dispute. See e.g. Citizens Property Insurance Corp. v. Pulloquinga, 183 So.3d 1134 (Fla. 3d DCA 2015).
The gravamen of the cases reversing awards of fee multipliers reverse the award because there is evidence that a substantial number of attorneys are willing to take the case on a contingency. This has become the most important factor in determining whether a multiplier is appropriate. At least one court has held that a fee multiplier is appropriate when there is a large number of attorneys willing to take the case on contingency and settle for a small percentage of the amount due, the lack of willingness of attorneys to take the case to trial supports an award of a fee multiplier. TRG Columbus Dev. Venture, Ltd. v. Sifontes, 163 So.3d 548 (Fla. 3d DCA 2015).
[i] Some people argue this is 1.5 to 3.0 as a 3.0 multiplier is expressly authorized in Florida Patient’s Compensation Fund v. Rowe, 472 So.2d 1145 (Fla. 1985). However, the maximum multiplier seems to be limited to 2.5 in Standard Guaranty Ins. Co. v. Quanstrom, 555 So.2d 828 (Fla. 1990).
D. Brad Hughes is a partner at Jimerson & Cobb, P.A, and practices in various areas with a focus on business litigation, construction litigation, business torts, community association law and appeals. Prior to joining Jimerson & Cobb, Mr. Hughes gained extensive and diverse experience at a Jacksonville firm focusing its practice on business litigation. Mr. Hughes’ online profile can be found at https://www.jimersoncobb.com/attorneys/d-brad-hughes/
Charles B. Jimerson is an A-V rated, board certified lawyer whose practice focuses on business litigation, construction law, banking law and eminent domain law. Jimerson & Cobb, P.A. is an award winning law firm with a practice emphasis on litigation and specialized experience in the financial services, real estate development and construction, and manufacturing and distribution sectors. Jimerson & Cobb, P.A. has been named to the Jacksonville Business Journal’s 50 Fastest Growing Companies each year for the past four years, and in 2016 and 2017 was honored as one of the 50 fastest growing law firms in the country. Mr. Jimerson’s online profile can be found at: http://www.jimersoncobb.com/attorneys/charles-b-jimerson/
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|Will Florida Be 1st to Achieve Pay Equity?|
|By Allison Bekavac (Littler Mendelson, P.C.)|
According to a study published by the Institute for Women’s Policy Research, Florida is projected to achieve pay equity in 2038, five years ahead of any other state in the nation.[i] Currently, Florida’s pay gap ranks third lowest among states, trailing only New York and California.[ii] Still, some members of the Florida legislature attempted to strengthen equal pay laws and close the gap sooner than projected. The most recent attempt to introduce legislation to strengthen these laws fell flat when the proposed bills died in committee.[iii]
Nonetheless, Florida employers are governed by federal and state laws prohibiting pay discrimination on the basis of sex. The federal Equal Pay Act [iv] and the Florida Wage Discrimination Based on Sex statute [v] both prohibit wage discrimination on the basis of sex. In addition, employers not subject to the Fair Labor Standards Act [vi] are also subject to Florida’s Equal Pay Act, which goes farther than the aforementioned laws by prohibiting pay discrimination based on sex, race, or marital status. Florida’s Equal Pay Act also allows for greater damages, since employers that violate it are liable for compensatory damages, punitive damages, and reasonable attorney fees. [vii] Although there have been few reported cases brought under Florida’s Equal Pay Act, Florida federal courts have analyzed these claims using the Title VII McDonnell Douglas [viii] framework.[ix]
And yet, despite existing laws and the best efforts of many employers, women in Florida are still paid less than their male counterparts, earning $0.87 for every $1.00 earned by a man according to an April 2018 study published by the National Partnership for Women & Families.[x] This disparity is far better than most states, including Louisiana and Utah where women earn $0.70 for every $1.00 earned by a man.[xi] The wage gap is even larger for minority women.[xii] In fact, the study confirmed that the wage gap exists across all industries, occupations, and education levels.[viii] Even women with higher education levels than men are paid less.[xiv][xv]
An issue of broader concern is that experts have recognized that the wage gap exists in part due to race-based discrimination and unconscious bias.[xvi] Certainly, pay differences can exist for legitimate reasons such as seniority, merit, productivity, or other reasonable factors. However, employers should be proactive in determining whether differences in pay are legitimate or are due in part to actual discrimination or unconscious bias.[xvii] Tools such as implicit bias training and pay equity assessments [xviii] can aid employers in identifying and correcting the effects of unconscious bias in the workplace.[xix] Since employers are in the best position to eliminate the gender pay gap, it is important that they take the lead in advancing equal pay initiatives and eliminating illegitimate pay disparities within their companies.
Finally, while Florida is projected to achieve pay equity far ahead of any other state in the nation, at the current pace, pay equity is still two decades away.[xx] While being the first to achieve pay equity is good news for Florida employers and employees alike, employers should continue to monitor and stay alert for new and changing legislation that may impact interviewing, hiring, or pay decisions, as legislatures around the country work to enact new laws in an effort to achieve pay equity at a rate ahead of the current projections.[xxi]
[i] The Institute for Women’s Policy Research, Status of Women in the States Report: Projected Year the Wage Gap Will Close by State, #R476 (Mar. 2017).
[ii] National Partnership for Women & Families, America’s Women and the Wage Gap, Fact Sheet, at 1 (Apr. 2018).
[iii] Information about HB 393 is available at https://www.myfloridahouse.gov, and information about its senate counterpart, SB 594, is available at https://www.flsenate.gov.
[iv] 29 U.S.C. § 206(d). This provision is part of the Fair Labor Standards Act and therefore applies to all employers covered by the FLSA.
[v] FLA. STAT. § 448.07.
[vi] See FLA. STAT. § 448.07(4).
[vii] FLA. STAT. § 725.07.
[viii] See McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973).
[ix] See Benjamin v. Holy Cross Hosp., 2012 WL 1900026, at **2 (S.D. Fla. May 24, 2012); Soto v. Bank of Am., N.A., 2005 WL 2861116, at **11-12 (M.D. Fla. Nov. 1, 2005).
[x] National Partnership for Women & Families, America’s Women and the Wage Gap, Fact Sheet, at 1 (Apr. 2018).
[xii] See National Partnership for Women & Families, What’s the Wage Gap in the States?, (2018); see also National Partnership for Women & Families, Quantifying America’s Gender Wage Gap by Race, (Sept. 2017).
[xiii] National Partnership for Women & Families, America’s Women and the Wage Gap, Fact Sheet, at 2 (Apr. 2018).
[xv] For more information on the gender pay gap, visit https://statusofwomendata.org, a project of The Institute for Women’s Policy Research.
[xvi] National Partnership for Women & Families, America’s Women and the Wage Gap, Fact Sheet, at 3 (Apr. 2018).
[xvii] Harvard’s Project Implicit offers a series of free associations tests (IAT) designed to uncover a participant’s unconscious biases. More information can be found at https://implicit.harvard.edu/implicit.
[xviii] Littler Mendelson, P.C. offers a pay equity assessment. For more information, please visit https://www.littler.com/service-solutions/littler-pay-equity-assessment.
[xix] Maya Raghu & Caitlin Lowell, Employer Leadership to Advance Equal Pay: Examples of Promising Practices, National Women’s Law Center Report, (Mar. 2017).
[xx] Colin Wolf, Institute for Women’s Policy Research, Florida probably won’t close the gender wage gap until 2038, says study, (July 7, 2017).
[xxi] See Michael Lotito, WPI State of the States: Equal Pay, Paid Leave and Harassment Still Dominate, WPI Report (June 4, 2018).
About the author: Allison Bekavac is an associate in Littler’s Orlando office. She can be reached at email@example.com
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|Proceed With Caution: Navigating the Attorney - Client Privilege in the Corporate World|
|By N. Vincent Pulignano III (Nelson Mullins Riley & Scarborough LLP)|
It’s another Tuesday at the office when Jim, the CFO of your company, strolls into your office asking for legal advice. You, as General Counsel of the company, oblige and listen as Jim begins admitting to you that he has embezzled funds from the company, and he now wants to return the funds and pretend it never happened. How do you advise Jim?
The attorney-client privilege applies when a client requests, in confidence, legal advice from an attorney who is acting in his or her capacity as an attorney. The attorney-client privilege keeps communications between the attorney and the client private; however, this becomes more complicated in the corporate context when the client is a company. Which communications with which employees are protected? The U.S. Supreme Court attempted to answer this question in Upjohn Co. v. United States. The Court decided that the attorney-client privilege extends to any employee who is seeking legal advice on the company’s behalf (known as the “subject matter test”). In doing so, the Court rejected the “control group test,” which states that only upper-level employees are protected under the privilege.
The Florida Supreme Court has established a more rigorous, five-factor test to determine whether a company’s communications are protected by the attorney-client privilege. According to the court, a communication between corporate counsel and an employee is protected by the attorney-client privilege if:
(1) the purpose of the communication is to obtain legal advice;
(2) the employee made the communication at the direction of his or her superior;
(3) the superior’s purpose of the request was to obtain legal advice or services for the company;
(4) the communication’s content relates to the legal services being rendered, and its subject matter is within the scope of the employee’s duties; and
(5) the communication is distributed to only those who need to know its contents.
It is important to note that the availability of the attorney-client privilege to all employees depends largely on jurisdiction. While Florida has adopted its own version of the “subject matter test,” some states still follow the “control group test” and only allow communications with upper-level employees to be privileged.
Although the factors laid out by the Florida Supreme Court seem fairly straightforward, in-house and outside counsel may find themselves in situations that are not so clear-cut. In the corporate context, it is imperative that both in-house and outside counsel remain cognizant that their client is the company and not the individual seeking the legal advice.
Remembering that the client is the company is especially important when the employee’s interests do not align with the company’s. For instance, this issue can arise when in-house or outside counsel are conducting internal investigations. While determining whether an employee’s interests align with the company’s interests can be difficult for both in-house and outside counsel, in-house counsel inhabit a working environment that is less conducive to making this distinction. In-house counsel are on-site with the company and develop working relationships with many of its employees. Open-door policies and increasingly casual office environments encourage an even more friendly and transparent relationship. Further, in-house counsel play many roles, including business advisor, legal counselor, personal confidant, co-worker, and friend. When the employee’s best interests may be adverse to the company’s, it is crucial that in-house counsel play the right part.
In accordance with the Model Rules of Professional Responsibility, if an employee is asking counsel for advice that conflicts with the company’s interests, counsel should take these steps to ensure the employee is properly informed of the attorney’s role:
(a) Let the employee know that you represent the company and not the individual employee;
(b) Advise the employee to obtain individual representation if it is possible there is a conflict of interest;
(c) Clarify any misunderstanding the employee might have about the lawyer’s role in the situation; and
(d) Inform the employee of the implications this conflict has on the attorney-client privilege and ensure he or she is aware that the privilege belongs to the company. If there is a conflict of interest between the employee and the company, the employee may not be protected.
In the scenario stated at the outset, Jim certainly has a conflict of interest with the company. Accordingly, you should clarify that he is not your client, advise him to seek independent counsel, and let him know the attorney-client privilege will not apply to anything he discloses to you.
There are also a number of basic tips regarding the attorney-client privilege that counsel should keep in mind as they concurrently act as a legal and business advisor to their client. There may be a presumption when contacting outside counsel that the communication is for the purpose of obtaining legal advice. However, the importance of preserving the attorney-client privilege should not be overlooked, and all attorneys representing the client-company should follow these directives when communicating with its employees:
(1) Distinguish between legal and business advice whenever possible. Label communications appropriately and, when employees combine the two, separate them accordingly.
(2) Do not overuse the “ATTORNEY-CLIENT PRIVILEGED” label and compromise its integrity and credibility. Courts frown upon attempts to frivolously include irrelevant information under the privilege.
(3) Confirm that requests for legal advice are in accordance with the employee’s duties and that the requests came from a superior who also has intentions of obtaining legal advice for the benefit of the company.
(4) Limit distribution of communications regarding legal advice to only those employees who are absolutely necessary; be mindful of using reply all.
Sometimes maintaining the attorney-client privilege is out of the attorney’s control. This is especially true for outside counsel who interact with the client-company’s employees less frequently. A proactive way to ensure communications are protected is to inform employees about the attorney-client privilege and their role in preserving it. Here is what the employees need to know:
(a) When employees are seeking legal advice, they should label it as such. Again, do not abuse the label, but employees should make it clear when they are requesting business versus legal advice.
(b) If employees are unsure whether they are seeking business or legal advice, they should clarify this distinction with their superior. This is especially important in Florida where the court has emphasized the significance of ensuring that a lower-level employee’s purpose in making the legal request is in line with the upper-level employee’s.
(c) Advise upper-level employees to be clear when they want employees to seek legal advice.
(d) To avoid inadvertent waivers, ensure employees know to limit the number of employees involved in communications regarding legal advice to those with a need-to-know basis.
(e) Employees should be aware of the importance of confidentiality and where sensitive conversations take place. For example, they should avoid asking for or discussing legal advice at regular staff meetings, in the hallway, or at a restaurant.
The workplace can often be filled with conflicts and incompatible interests, and knowing how to deal with these issues as they arise can save the company time and money.
 Upjohn Co. v. U.S., 449 U.S. 383 (1981).
 Southern Bell Tel. & Tel. Co. v. Deason, 632 So. 2d 1377 (Fla. 1994).
 Id. at 1383.
Vincent Pulignano is an associate in Nelson Mullins Riley & Scarborough LLP's Jacksonville office where he practices in the areas of business and corporate law, mergers and acquisitions, securities law, and real estate capital markets. Vincent also assists the litigation team with legal research, drafting, and discovery issues arising under Florida law. Vincent can be reached at vincent.pulignano@ nelsonmullins.com
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|The Best Advice I Ever Gave|
|By Paul R. Hitchcock (Holland & Knight LLP)|
As an in-house counsel in a Fortune 250 company for over thirty years, my responsibilities over time ranged widely. But one of the most beneficial “services” that I feel I performed for my co-workers had nothing to do with my official areas of responsibility.
Too often, the life of a busy executive with a family consumes so much time that important things go undone. Of those things -- vitally important to a young parent -- and one of the most often undone, is estate planning.
Now, as in-house counsel, your client is the corporation. You are there to advise on business problems, and to the extent you can it’s usually best to avoid actually advising on personal legal matters. (Of course, if you’ve not taken the Florida Bar Exam you can always plead “not licensed in Florida.”) But you don’t have to give legal advice to remind your non-lawyer colleagues that having a will, and considering a trust for minor children, is just part of being a good parent.
I used to do this in the course of an annual compliance training program that my colleagues and I did for some departments. And, I would often throw it in at the close of a presentation I might be making to another department’s staff meeting.
My usual short “pitch” would be something along these lines: “Now, I’d like to take just a couple of minutes to raise something that has nothing to do with the company or your job. We all know that we need a will and perhaps other estate planning, too. But I know a lot of really fine people who have small children and just haven’t gotten around to that. It’s understandable. Of all the things that we feel we can postpone, estate planning goes to the top of the list. But here’s the thing. Without a will, some judge will decide who takes custody of your children. Without a trust, the money you leave your children will be spent by whoever the judge picks. Without a plan, your children will have total control of their money when they reach 18. Some 18 year-olds can handle that. Others can’t. We in the Law Department can’t provide those services to you, but we can refer you to really capable lawyers who do that all the time. I really encourage you to make sure you’ve done what you feel needs to be done. Believe me, it’s a great feeling when you know you’ve taken care of that.”
When talking with successful middle and upper managers, I would also always suggest talking with their lawyer about asset protection. We all know how litigious our society has become, but lots of business people just don’t feel personally exposed. Always careful not to give legal advice, just telling them that the owner of a vehicle in Florida is legally liable for the negligence of the driver – whether that’s a child, spouse, or friend – may convince them that that they should discuss with a lawyer how best to title their vehicles. Many people with substantial financial assets take comfort in the fact that they’ve purchased the highest auto insurance limits their company offers. They don’t stop to think about facing a multi-million dollar jury verdict. And, many people aren’t aware of the availability of very sizeable umbrella insurance policies.
Over the years, we serve our fellow employee “clients” in many ways, but those who listen to the advice to focus on their personal future are especially appreciative.
Paul R. Hitchcock is a senior policy advisor in Holland & Knight's Jacksonville office. He has more than 40 years of legal experience in the transportation industry, specifically in the freight rail arena. Mr. Hitchcock brings a pragmatic approach to counseling clients, which he developed during his lengthy career with CSX Corp., one of the largest railroad operators in the U.S. During his tenure at CSX's operating subsidiary, CSX Transportation, Mr. Hitchcock served as General Commerce Counsel, a vice president level position responsible for the company's commercial legal and regulatory matters.
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|2018 Legislative Amendments to the Florida Statutes|
|By James O. Birr, III, Esq. and Hans C. Wahl, Esq. (Jimerson & Cobb, P.A.)|
Each year the Florida Legislature proposes and votes on bills for amending the Florida Statutes. Bills that pass both the Florida House and Senate go before the Governor who decides which bills become law. In the 2018 legislative session, approximately 150 fewer bills were proposed, and 40 fewer bills ultimately passed, than in 2017. Nevertheless, Governor Scott signed into law several important amendments to the Florida Statutes. This article provides a cursory overview of a few of the more impactful 2018 amendments to the Florida Statutes.
Corporate Income Tax (House Bill 7093; Fla. Stat. § 220.13):
This law updates the Florida corporate income tax code by partially adopting the Federal Internal Revenue Code (IRC) of 2018. One distinction from the IRC is that, while federal law allows qualified property to be fully and instantaneously depreciated, Florida only allows the depreciation of qualified property based on a 7 year table. The corporate income tax rate remains at 5.5 percent.
Commercial Lease Sales Tax (House Bill 7087; Fla. Stat. § 212.031(1)(c) & (d)):
A slight tax benefit is available to those who lease commercial property. Rather than the 6 percent state level tax, sales tax for commercial rental payments is reduced to 5.7 percent. This tax is levied on the total rent or license fee charged for the property, which shall include base rent, percentage rents or similar charges.
Tax Credits for Commercial Leases (House Bill 7055; Fla. Stat. § 212.099):
This law is titled the “Florida Sales Tax Credit Scholarship Program for Commercial Leases,” and authorizes any tenant who pays a rental or license fee that is subject to the business rent tax to make a contribution to a nonprofit scholarship-funding organization. If the tenant decides to do so, he or she will receive a credit in the same amount to offset the tenant’s sales tax liability.
Worker’s Compensation (Senate Bill 376; Fla. Stat. § 112.1815):
Previously, first responders could not receive full worker’s compensation benefits for mental or nervous injuries unless they were accompanied with a physical injury. If the mental or nervous injury was unaccompanied by a physical injury, only medical benefits under Section 440.13, Florida Statutes, would be payable for the injury. However, if the mental or nervous injury was accompanied by a physical injury, then the first responder could also receive compensation for disability under Section 440.15, Florida Statutes. Effective October 1, 2018, the Florida Legislature created an exception to the physical injury requirement by defining Post-Traumatic Stress Disorder as a compensable “occupational disease” for first responders. First responders include firefighters, EMTs and law enforcement. With PTSD being a compensable occupational disease, first responders suffering from PTSD may now receive payment of medical expenses along with paid disability.
Primary Care Agreements (House Bill 37; Fla. Stat. § 624.27):
The Florida Legislature clarified that primary care agreements are not insurance and, therefore, not regulated by the Florida Insurance Code. A primary care agreement is a contract between a primary care provider and an individual patient in which the health care provider agrees to offer care services to the individual patient for an agreed-upon fee and period of time. This new law does not specify how much can be charged or what services can be provided under such agreements; rather, it merely amends Florida’s Insurance Code to make it clear that direct primary care agreements do not violate Florida’s insurance regulations.
Pharmacy Disclosure Requirements (House Bill 351; Fla. Stat. § 465.0244):
Pharmacies are now required to include a hyperlink on their websites that advises on the costs of prescriptions and whether a patient’s cost sharing obligation exceeds the retail price of a drug in the absence of prescription drug coverage. Pharmacies are also required to post notice at their businesses, and in the area where customers receive their prescriptions, stating this information is available on their websites.
Flood Insurance (House Bill 1011; Fla. Stat. § 627.7011):
Homeowners’ insurance policies must now disclose in bold 18-point font that hurricane insurance does not include flood insurance, even if hurricane winds and rain caused the flood to occur. The disclosure must also clarify that, without separate flood insurance coverage, the person being insured might have uncovered losses due to a flood.
Assisted Living Facilities (Senate Bill 7028; Ch. 2018-122, Florida Statutes):
Inspired by the loss of life at an assisted living facility in the aftermath of Hurricane Irma, this law now requires assisted living facilities to have backup power sources available. These facilities must have alternate power supplies capable of maintaining the inside temperature at 81 degrees or less for at least four days. The expected aggregate cost for Florida’s 3,000 assisted living facilities to comply with this law is approximately $243 million. To help offset these costs, the Florida Legislature created a small tax break for facilities that purchase electric generators.
Sales Tax Holidays (House Bill 7087; Fla. Stat. § 20.21).
This legislation reinstates one tax holiday and creates another. The legislature annually passes the Back to School Sales Tax Holiday. This year, the tax holiday provides for a three-day sales tax reprieve from August 3rd to August 5th. Certain items that cost $60 or less, such as clothing, footwear and bags are exempt from state sales tax and county discretionary sales surtaxes. Certain school supplies that cost $15 or less per item are also exempt. Unlike last year, personal computers that cost less than $750 are no longer exempt.
The second is the Disaster Preparedness Sales Tax Holiday, which provides for a seven-day sales tax reprieve from June 1st through June 7th for specific items related to disaster preparedness. Such items include reusable ice packs; portable self-powered light sources, such as candles and flashlights if under $20; any gas or diesel fuel container that sells for $25 or less; batteries that sell for $30 or less; radios that sell for $50 or less; and generators that sell for $750 or less.
Tax Abatement for Hurricane Damage (House Bill 7087; Fla. Stat. § 197.318):
This provides for an abatement of taxes for residential improvements damaged or destroyed by Hurricane Hermine, Hurricane Matthew, or Hurricane Irma. If a residential improvement was rendered uninhabitable for at least 30 days and caused by one of these hurricanes, the property owner can receive a tax abatement. The property owner must file an application with the local property appraiser by no later than March 1, 2019. That appraiser will then make a recommendation to the tax collector who will then calculate the damage differential and ultimate disaster relief credit pursuant to the parameters of this new law. If awarded, a refund will be given to the residential property owner in an amount equal to the disaster relief credit.
James O. Birr, III (Joby) is an AV-Preeminent rated, board certified lawyer whose practice focuses on business litigation and construction law. Jimerson & Cobb, P.A. is an award winning law firm with a practice emphasis on litigation and specialized experience in the financial services, real estate development and construction, and manufacturing and distribution sectors. Jimerson & Cobb, P.A. has been named to the Jacksonville Business Journal’s 50 Fastest Growing Companies each year for the past four years, and in 2016 was honored as the 28th fastest growing law firm in the country. Mr. Birr’s online profile can be found at: http://www.jimersoncobb.com/attorneys/james-o-birr/
Hans C. Wahl is Board Certified by the Florida Bar in Condominium & Planned Development Law. He joined Jimerson & Cobb in 2012, where his legal experiences encompass a broad spectrum of real estate, business, and commercial litigation matters. He currently represents various condominium and homeowners’ associations throughout Florida, handling everything from complex real estate issues to day-to-day legal needs. Mr. Wahl’s online profile can be found at https://www.jimersoncobb.com/attorneys/hans-c-wahl/
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|You Have Cyber Insurance, But Are You Really Covered? The Devil is in the Details|
|By Leslie Wickes (Adams and Reese LLP)|
“Cyber insurance” is not uniformly defined. Depending on context, it is used to describe first or third party insurance coverage for cyber events, such as data breaches, privacy violations, cyber extortion and other cybercrimes, loss of electronically-stored information, and social engineering fraud/phishing.
Coverage for first and third party losses from cyber events may include:
- Costs of outside computer forensics consultants to investigate event
- Cost to repair/replace affected property and software
- Cost to restore/replace/re-secure lost or damaged data
- Costs to notify affected parties
- Costs for call center services
- Costs to provide identity theft services/credit monitoring services to affected persons
- Credit card replacement costs
- Costs to negotiate and pay ransom
- Crisis management costs, including public relations expenses
- Regulatory fines and penalties
- Business interruption due to lack of access to services or data or damages to systems from malware or malicious code
- Third party contractual indemnity costs paid to customers and vendors
- Legal representation
- Third party defense costs
As the risks of doing business in a digital environment continue to evolve, so do the products designed to insure those risks. Policy language is not standard and most cyber insurance policy provisions have not been tested in the courts. Treat cyber insurance coverage like any other sophisticated contract negotiation and get outside advice, independent of your broker, before you purchase.
Here are some issues to keep in mind.
Representations in policy application materials. A policy application may ask broad questions about what data you maintain, where you maintain it, and who has access. An innocent failure to answer these types of policy questions accurately can be the grounds for denial or rescission of coverage. This issue has been raised in coverage actions between Cottage Health System, a non-profit network of hospitals, and its insurer, Columbia Casualty Company. Cottage Health made the claim under its $10,000,000 “NetProtect360” policy after a data breach in which more than 32,000 patient records were publicly disclosed on the Internet. The insured sought coverage for $4.125 million to settle a class action, $860,000 in costs to respond to the data breach and $168,000 in defense costs, as well as and potential fines arising out of a California Department of Justice investigation. According to the insurer, in the policy application Cottage Health misrepresented that it changed default software settings, regularly updated security patches and tracked unauthorized access to its systems. The insurer defended the class action, paid for the settlement of the class action and the regulatory fines, but reserved the right to deny coverage later and recover the amounts paid. In competing federal and state cases, the insurer now seeks rescission of the policy based upon the alleged misrepresentations in the policy application and return of all amounts paid, and Cottage Health seeks a declaration of coverage. See Cottage Health v. Columbia Cas. Co., No. 16CV 02310 (Cal. Sup. Ct.; May 31, 2016; Columbia Cas. Co. v. Cottage Health, No. 2:16-CS-2759 (C.D. Cal. May 31, 2016).
Retroactive dates and extended reporting periods. Depending on whether coverage is triggered by a claim or an occurrence, a cyber insurance policy will generally not cover a cyber event that occurs prior to the policy effective date or a claim made after the policy effective date. As cyber events may not be discovered for months, the “claim made” or “occurrence” coverage trigger and definitions of “effective date” and “reporting period” are important, especially for first-time buyers. To maximize coverage, the policy can incorporate a retroactive date to incept an earlier coverage date and an extended reporting period to provide additional time to report the claim after the policy expires.
Exclusion for failure to follow required or minimum acceptable practices. A cyber insurance policy may exclude coverage if the insured does not follow certain identified data security practices. The practices may be specifically described or may reference certain industry standards. If the insured does not follow or meet the applicable standards throughout the policy period, the insurer may later deny coverage for a cyber event. Columbia Casualty has invoked this required practices exclusion in its lawsuit against Cottage Health discussed above. Columbia Casualty claims that the exclusion applies because Cottage Health failed to “continuously implement” the security procedures and risk controls it promised to follow.
Exclusion for unauthorized collection of customer data. A cyber insurance policy may exclude coverage for losses related to data which the insured was not authorized to collect or share. This exclusion may prove problematic for businesses that collect personally identifiable information from social media or other sources without express authorization from the individual.
Exclusion for contractually assumed liability. An exclusion for contractually assumed liability can unintentionally limit coverage for a data breach. P.F. Chang’s engaged a credit card processor to process credit card payments from P.F. Chang’s customers. The processor’s standard agreement contained an indemnification clause in which P.F. Chang’s agreed to indemnify the processor for fees assessed because of a data breach at P.F. Chang’s. After P.F. Chang’s system was hacked, the credit card numbers of 60,000 customers were posted on the Internet. Pursuant to the agreement between MasterCard and the processor, MasterCard assessed the processor with PCI (Payment Card Industry) fees of $200,000. The processor sought indemnification from P.F. Chang’s. P.F. Chang’s made a claim under its cyber insurance policy with Federal Insurance Company, which denied the claim. In the subsequent coverage dispute, the court found there was no coverage because P.F. Chang’s obligation to indemnify the processor for the PCI fees was subject to the “contractually assumed” exclusion. See P.F. Chang’s China Bistro, Inc. v. Fed. Ins. Co., No. CV-15-01322-PHX-SMM (D. Ariz. May 31, 2016), appeal dismissed, No. 16-16141 (9th Cir. Jan. 27, 2017.)
; Leslie Wickes is the Partner-in-Charge of the Jacksonville office of Adams and Reese, LLP. Leslie represents insurance industry clients in matters involving transactions, regulatory issues and disputes.
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|What's on the Move in Moving Goods – New Developments in Transportation Contracts|
|By Lisa Taylor (McGuireWoods LLP)|
Lawyers in North Florida live in
"America's Logistics Center,"
one of the only centrally located East Coast regions offering all four pillars
of logistics: rail, air, maritime, and highway, served by three major railroads
and three major interstates. The entire
Southeastern market—with more than 50 million consumers—is accessible within an
8-hour drive. Virtually every company
has transportation and supply chain issues. Much has changed and will continue
to change in transportation contracts. This
article covers some of the legal and industry developments affecting supply
chains and their contracts for in-house counsel to consider.
1. Address Food
Safety Procedures. Sanitary Transportation of Human and Animal Food regulations (21 C.F.R. § 1.900 et seq.) ("STF Rules"),
became effective for larger
companies in April 2017 and for smaller businesses in April 2018. The STF Rules
implement the Food Safety Modernization Act of 2011 and address the design and
maintenance of transportation equipment, limiting adulteration, and operational
steps to prevent food from becoming unsafe during transportation. With few exceptions,
shippers, rail and motor carriers, loaders, receivers and brokers involved in
transporting covered food are subject to the STF Rules. Parties can assign
these responsibilities by contract. Companies
engaging other firms to perform transportation services, whether cargo owners,
logistics companies, or others (“shippers”), should update their contracts to address the STF Rules and
assign appropriate responsibilities to the carriers. Carriers should resist being assigned too
much of the burden for complying with the STF Rules.
2. Confirm Electronic
Logging Device Compliance. Federal
Motor Carrier Safety Administration (“FMCSA”) regulations began requiring
carriers to use electronic logging devices (“ELDs”) in December 2017 with active
enforcement of the regulations starting in April 2018. ELDs require carriers and their drivers to
track and record their hours of service electronically, rather than using paper
logs. Since it is a new rule, shippers may
want to update their transportation contracts to require assurance from the
carrier that it has deployed ELDs and complies with the ELD rules.
3. Cover CARB Rules:
The California Air Resources Board (“CARB”) continues to actively implement
emissions regulations on trucks. The Truck
and Bus Regulations (Title 13, California Code of Regulations, Section 2025),
adopted in 2012, applies
to most trucks and buses over 14,000 lbs. Trucks that transport cargo
going to or coming from California’s ports and intermodal rail yards are
subject to the drayage
truck regulations (Title 13, California Code of Regulations, Section
need to “verify” that each hired company is either in compliance with the
regulation or has reported compliance to CARB by requesting carriers to provide
their CARB certificate to ensure compliance or using the CARB online databases
to search for compliant carriers. If the carrier does not have a certificate
(since only California domiciled motor carriers are required to register with
California), CARB recommends that shipper obtain other documentation and a
statement from the carrier that they are aware of the CARB regulations and to demonstrate
the carrier’s compliance. CARB recently fined two logistics companies, Marten
Logistics $100,000 and Roadrunner Transportation Systems $52,250 for
“dispatching” non-compliant trucks into the State of California.
Counsel for shippers who engage motor carriers traveling in
the State of California should update their contracts for CARB compliance.
4. Stay Flexible on
Systems and Procedures. Shippers and
carriers are accelerating the implementation of new technologies for
dispatching, tracking, and invoicing transportation services to automate and
improve these processes. Shipping
contracts should be updated to reference a separate manual or procedures that
address processes and systems likely to change over time. The contract should
allow the parties to adopt new procedures from time to time without signing a
contract amendment. Counsel should
review contracts to make sure they do not reference processes or systems that
are no longer in use and to adopt provisions that accommodate protocols that
are likely to be changed.
5. Update Indemnity
to Comply with Anti-Indemnity Statutes.
Following the construction industry, motor carriers began lobbying states
to adopt legislation to render unenforceable those indemnity provisions in
shipper-carrier contracts that would have the carrier indemnify the shipper for
the shipper’s own negligence. Forty-five
states have now adopted some form of these statutes. Counsel should review transportation
contracts to eliminate potentially unenforceable provisions that require
carriers to indemnify shippers for claims caused by the shippers’ own
6. Monitor Autonomous
Vehicle Trends. Although it may be
many years before all vehicles on the road are driverless, some technologies on
the path to autonomous vehicles, such as collision avoidance, connected vehicles,
and autonomous operation, are already deployed.
Many vehicles now include collision avoidance systems like automatic
braking and lane departure notifications.
Truck platooning, a form of connected vehicle technology, is also in
operation. Platooning uses cruise control technology linking trucks by radar
and synchronized braking systems to close the distance between trucks to enhance safety, save energy, reduce emissions, and
increase highway capacity. In 2016, a
self-driving truck drove 120 miles on the interstate, and at least 5 states are
testing autonomous vehicles. The Jacksonville Transit Authority plans over the next 5 five
years to replace Skyway trains with autonomous transit shuttles, which are currently
operating on a test track. Autonomous vehicle technology is expected to reduce
In-house counsel should welcome reductions in the drain on
their companies from claims related to cargo loss, personal injury and property
damage from transportation accidents, should advocate for adoption of these
strategies, and should stay abreast of developments in autonomous vehicles.
7. Watch for Drones.
Another trend to watch is the use of
drones for package delivery. Amazon, UPS and others have conducted high-profile
demonstrations of drones delivering packages.
Preventing full scale drone deliveries are restrictions in the Federal
Aviation Administration regulations that require drones to be within the drone
operator’s line of sight at all times and prohibit drones from operating over other
people or cars. If the regulations change, safety and privacy concerns are addressed
and technology develops, drone deliveries may significantly change supply
chains. Counsel should keep an eye out for regulatory and technological developments
that may accelerate use of drones in transportation applications.
8. 3D Printing. Over time, one of the most transformative
technologies that may affect supply chains is 3D printing. 3D printing is a way to build objects by adding material in a
layer-by-layer fashion. Currently mostly used for prototypes, 3D printing is
expected to be used to manufacture industrial and consumer goods, particularly footwear, toys, ceramics,
electronics, and plastics. As 3D printing becomes common, it will be more
efficient to manufacture products much closer to the end consumer and will
drastically reduce the need for planes, trains and trucks.
shippers should consider how 3D printing might affect supply chain operations and
contracts while counsel for transportation providers should monitor this potentially
Time to Update
Transportation Contracts. In-house
counsel have so many topics to watch, contracts to update, and risk areas to
monitor. A business’s transportation and
supply chain operations are not typically hotbeds of innovation. However, the pace of change in those
operations is accelerating. Now is the time
to dust off your company’s transportation contracts and update them for these
and other new developments.
Lisa O. Taylor is the founder of the North Florida ACC Chapter and a partner with McGuireWoods LLP. Before rejoining McGuireWoods, Lisa was Assistant General Counsel of the publicly-traded transportation & logistics companies XPO Logistics and Pacer International. She advises on public company reporting and corporate governance matters and has extensive experience preparing and negotiating contracts related to transportation services, ecommerce facilities, equipment leasing, information technology, consulting and other issues. She has also handled many of the common challenges facing in-house counsel, including implementing contract management systems, managing outside counsel in multiple domestic and international locations, and overseeing portfolios of key corporate agreements.
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