In his recently-published book, Cybersecurity for Executives: A Practical Guide, Retired Brigadier General Gregory Touhill, now Deputy Assistant Secretary at the Department of Homeland Security Office of Cybersecurity and Communications, offers the following quote from Congressman Mike Rogers, Chairman of the House Intelligence Committee, on the state of cybersecurity: “There are two kinds of companies. Those that have been hacked, and those that have been hacked but don’t know it yet.”  What makes the quote particularly interesting? It is from 2011 – long before the headlines regarding Target, Ebay, and Adobe. Not to mention the recently reported efforts of Russian and Chinese hackers. In light of all these events, the question arises “how concerned should directors and officers be about cybersecurity?” Most experts would respond, “very.” 

In October 2011, the SEC Division of Corporate Finance issued its Disclosure Guidance on cybersecurity. The Guidance suggested several risk factor disclosures, including a discussion of material cybersecurity risks to a registrant’s business or operations, a description of cyber incidents experienced by the registrant, and a description of relevant insurance coverage.  A report prepared by the insurance brokerage firm Willis in August 2013, based on a review of 10-Ks and annual reports filed by the Fortune 1000, suggested that companies were describing the possibly material risks to their businesses in broad terms, but were not adequately disclosing actual cyber events or their cyber-related insurance coverage.  Notably, only a few months prior to the Willis report, SEC Chairman Mary Jo White asked her staff to brief her on current cybersecurity disclosure practices for publicly-listed companies, and to provide recommendations for further SEC action. 

Significantly, in a speech delivered in June 2014 at the NYSE “Cyber Risks and the Boardroom” Conference, SEC Commissioner Luis Aguilar suggested one source of guidance for boards regarding cybersecurity.  In February 2014, the National Institute of Standards and Technology (NIST), pursuant to an Executive Order from President Obama, released the first version of the Framework for Improving Critical Infrastructure.  The NIST Framework is intended to provide companies with a set of industry standards and best practices for managing their cybersecurity risks. In his speech at the NYSE conference, Commissioner Aguilar noted, “While the Framework is voluntary guidance for any company, some commentators have already suggested that it will likely become a baseline for best practices by companies, including in assessing legal or regulatory exposure to these issues or for insurance purposes.”   In concluding his speech, Commissioner Aguilar cautioned board members, “Given the heightened awareness of these rapidly evolving risks, directors should take seriously their obligation to make sure that companies are appropriately addressing those risks.”

The obvious takeaway from all of the above is that directors and officers (and their counsel) need to remain closely attuned to both current and future guidance from the SEC both in terms of meeting their obligations to address their company’s own cybersecurity and with respect to their disclosure and reporting obligations regarding cybersecurity.

Finally, anyone interested in understanding the latest developments in cybersecurity, data breaches, privacy law, and related insurance issues should consider attending DRI’s inaugural Data Breach and Privacy Law Seminar in Chicago on September 11-12, 2014. For more information and to register, go to: http://www.dri.org/Event/20140065

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The Seventh Circuit has issued an opinion in City of Greenville, Illinois, v. Syngenta Crop Protection LLC, which limits the presumption of public access to non-privileged documents filed with a court to only those documents that influenced or underpinned a judicial decision. 

In City of Greenville, environmental groups intervened to seek access to the defendant's internal emails and business deliberations that plaintiffs had filed in opposition to a motion to dismiss. A protective order entered by the district court did not apply to materials filed in connection with a dispositive motion. The Seventh Circuit refused to permit access to uncited documents that were not considered by the district court in ruling on the motion to dismiss explaining "the presumption of public access turns on what the judge did, not on what the parties filed."  Because the documents did not affect the district court's decision, the Seventh Circuit held they need not be disclosed to the public. 


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The Employment and Labor Law Committee is one of several DRI committees participating in DRI's inaugural Data Breach and Privacy Law Seminar, September 11-12, 2014 in Chicago.  Click here to sign up

It seems like every day when we open a newspapaer or turn on the TV, there is another report of a significant data breach, followed by customer outrage and lawsuits!  This seminar will offer presentations from data security and privacy professionals who are at the forefront of cutting-edge data security and privacy issues, as well as industry leaders who will provide valuable insight and practical experience.  I encourage you to attend.   

Attendees will learn from real world scenarios and obtain concrete takeaways to aid in understanding and navigating the field of data security, including presentations on topics such as: 

The "science" of cyber attacks

Industry standards for privacy and data protection

Theories of civil liability and data security breach

Technical requirements for the protection of health records

Effective strategies to respond to data breach incidents, including insurance coverage

Data security ethical issues

The seminar will be an excellent educational and networking opportunity for everyone who attends.  Our committee helped shape the topics and I know you will benefit from attending.

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On Monday, the Seventh Circuit affirmed two jury-selection decisions in a Section 1983 wrongful arrest lawsuit. In Marshall v. City of Chicago, No. 13-2771, 2014 WL 3892562 (7th Cir. Aug. 11, 2014), officers placed the plaintiff under arrest and took him into custody for constructively possessing a firearm while it was unlawful for him to do so. The plaintiff then sued for damages on the theory that the arrest was not supported by probable cause. The civil jury returned a defense verdict, and the plaintiff appealed. The decision is available here

On appeal, the plaintiff argued that the district court abused its discretion by denying his motion to excuse a prospective juror for cause on the grounds that she held a prior belief concerning the possession of firearms by convicted felons which made her unfit to serve. The Seventh Circuit wrote that a district court must apply a two-step process in determining which prior beliefs warrant for-cause dismissal: (1) does the prospective juror manifest a prior belief that is both material and “contestable,” meaning a rational person could question its accuracy and (2) if so, can the juror suspend that belief for the duration of the trial? The Seventh Circuit found that the bias alleged by the plaintiff was immaterial and that the juror’s exchanges with the trial court judge confirmed her ability to disregard her own prior experience and judge the case on the basis of the evidence brought before her.

Second, the plaintiff argued that the district court erred by refusing to agree to an ad hoc alteration of the parties’ agreed-upon jury selection procedures for the express purpose of ensuring that the petit jury would include jurors of a certain race. The parties had agreed, prior to trial, to try the case to a jury of eight, which would be selected from a venire of twenty. The order in which veniremen were called for voir dire was randomly assigned, with no knowledge of race, by the clerk’s office. Of the first fourteen veniremen called, none of the twelve whom were not excused for cause were black. At that point, a petit jury of eight (non-black) jurors had been selected. Counsel for the plaintiff, who is black, noticed that three of the six remaining veniremen were also black, and moved the court to expand the size of the petit jury to ten “in the hope of getting one of the persons of color on the jury.” The defendants objected and the court denied the plaintiff’s request. The Seventh Circuit wrote that it is established that a litigant has no right to a petit jury which contains members of his race or which fairly represents a cross-section of the community. It further wrote that a litigant does have a right to a jury venire composed of a fair cross-section of the community, but the plaintiff did not challenge the composition of the venire. And it wrote that the plaintiff also had a right to see that no state actor intentionally excluded any person from the petit jury on account of their race, but he did not claim that any state actor acted in such a way.

The Seventh Circuit affirmed the district court on both issues, finding the plaintiff’s arguments meritless and finding no abuse of discretion.


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Fracking: A Historical Research Perspective

Posted on August 14, 2014 07:44 by Taylor Hammel

The business of natural gas production has been booming over the last decade thanks to recent technological improvements, namely horizontal drilling coupled with hydraulic fracturing (commonly referred to as fracking). This has given energy companies the ability to extract unconventional natural gas from previously impermeable shale rock formations.

Natural gas is inexpensive, burns cleaner than coal, and America’s previously untapped, abundant supply will reduce dependency on foreign oil. States welcome the natural gas industry for the revenues it provides (as have some landowners) and the jobs it brings. To be sure, citizens from across the country flock to these jobs, while consumers appreciate the resulting lower utility bills.

But natural gas production is not without controversy, much of which centers around fracking and its potential impact on the environment. Increasingly, debates among the industry, politicians, environmental groups, landowners, and the public are playing out in legislatures and courts across the country.

Fracking: what it is and why it’s a big deal
Fracking is a drilling process that involves injecting a high pressure mixture of water, sand, and chemicals into rock formations to release trapped gas and increase the flow of it back to wells. Along with the sought-after gas, comes “flowback,” which “contains clays, chemical additives, dissolved metal ions and total dissolved solids (TDS).”

Critics of the oil and natural gas industry contend that flowback can lead to ground and surface water contamination, and seek the full disclosure of chemicals used in fracking fluid mixtures. Natural gas companies consider these mixtures trade secrets and worry about losing their competitive advantage in the marketplace should this information be disclosed.

Other environmental concerns include the storage and recycling of flowback and wastewater from drilling operations, the leakage of methane — the main ingredient in natural gas — from the supply chain into the atmosphere, and earthquakes related to fracking operations.

Industry & State Legislative Trends
As the industry matures and the natural gas boom continues in over thirty states, public scrutiny is increasing. Public officials and lawmakers have attempted to balance industry interests with those of the public as they undertake environmental impact studies and begin to implement guidelines and regulations. Clearly, the emerging trend is towards disclosure.

In 2011, the oil and natural gas industry responded to calls for transparency by creating FracFocus.org, a website that tracks hydraulically fractured wells across the country. Energy companies can voluntarily disclose the chemicals used in the fracking process, with the exception of those that are proprietary.

At the same time, states have responded in various ways. For example, North Carolina and Illinois have followed in the footsteps of Wyoming, the first state that required the disclosure of fracking chemicals to state regulators. Currently, such information is not shared with the public, but there is ongoing litigation in several states seeking to overturn this. As part of regulations implemented in 2013, California now makes reporting chemicals on FracFocus.org mandatory.

Other states have been more cautious. In New York, a non-legislative moratorium has been in place since 2008 while the state environmental and public health agencies complete an environmental impact review of fracking. Meanwhile, some municipalities have issued bans on fracking, with litigation on the rise to challenge them.

And though the debate surrounding fracking’s environmental impact has been polarizing in many states, progress has occurred. Just last year, the Center for Sustainable Shale Development (CSSD) formed in Pittsburgh, PA seeking to be a model for collaboration and compromise in developing natural gas production standards.

Trends at the Federal Level
Momentum has been building for more oversight of the natural gas industry at the federal level. In 2012, President Obama issued an executive order calling for a coordinated effort among the Department of Energy (DOE), Department of Interior (DOI), and the Environmental Protection Agency (EPA) to ensure the “responsible development” of the country’s oil and natural gas resources.

As a result, DOI released proposed draft rules in 2013 that would require energy companies operating on federal lands to publicly disclose the chemicals used in fracking. EPA is seeking public commentary until September 18, 2014 on its Advanced Notice of Proposed Rulemaking (ANOPR). It is asking for input on “the types of chemical information that could be reported and disclosed under [Section 8 of the Toxic Substances Control Act] and approaches to obtain this information on chemicals and mixtures used in hydraulic fracturing activities, including non-regulatory approaches.”

Later this year, EPA will release a two-year study on fracking’s potential impact on drinking water. By January 2015, air emissions from oil tanks, compressors, and other equipment used in fracking operations will be regulated under the Clean Air Act.

In the meantime, the U.S. Securities and Exchange Commission (SEC) has requested that energy companies disclose the chemicals used in fracking operations as well as efforts taken to reduce the environmental impact of fracking.

A Historical Research Perspective
The emerging trends toward disclosure, oversight, and litigation following this recent surge in unconventional natural gas production is similar to that of other major industrial developments. One lesson to be learned from these industries is that disclosure can result in increased public trust in fracking operations and in natural gas production overall. Additionally, proactive risk management of existing or potential environmental issues by the natural gas industry in tandem with state and federal regulatory agencies can prevent costly future cleanups and restoration projects.

So far, contamination claims related to fracking have been hard to assess due to remaining knowledge gaps. The jury is still out on the true environmental impact of fracking, but historical research can help answer fundamental questions such as what chemicals were in a watershed prior to the commencement of fracking operations or does a region have natural methane gas pollution?

This blog was originally posted to Taylor & Hammel LLC Blog on August 12. Click here to view the original entry. 

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Earlier this week, the ABA adopted a resolution encouraging all private and public sector organizations, including law firms, to adopt appropriate cyber security programs. An accompanying report cites the growing sophistication and frequency of cyber crimes. It notes, in particular, the importance of law firms to be proactive in protecting sensitive client information. According to the report, as many as 80 law firms were hacked in 2011 alone. The ABA’s report cites the ethical obligations of attorneys both to understand the risks of modern technology and to adequately protect client information. 


DRI is getting out in front of cyber risk issues. It is launching its first ever Data Breach and Privacy Law Seminar, September 11–12, at the Conrad Chicago. The seminar will address cyber risks, theories of liability for data breaches, preparing in-house response plans, insurance coverage for cyber crime, and other issues relating to data security. The seminar brochure provides registration details. Anyone involved in law firm or corporate risk management and any lawyer advising or representing clients on these issues should attend.

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“Julian Miller began the evening of October 24, 2003 at his mother’s wedding reception, and ended it in the back of a police cruiser with a broken jaw,” wrote Judge Rovner Tuesday for the Seventh Circuit, reversing in part the summary judgment decision below that had favored two officers. The decision in Miller v. Gonzalez, No. 11-2906, 2014 WL 3824318 (7th Cir. Aug. 5, 2014), can be found at the Seventh Circuit’s web site here

In Miller, while two officers were investigating a call about a stabbing, the plaintiff ran from them and was chased into a fenced-in yard. One officer jumped into the yard first, ordering the plaintiff to the ground with his gun drawn, and then the other officer jumped the fence and landed on the plaintiff’s head, breaking his jaw. The Seventh Circuit affirmed summary judgment for the first officer—who had been sued for not intervening to prevent the other officer from hurting the plaintiff—because he did not have a realistic opportunity to intervene.

But it reversed summary judgment for the second officer, finding a rational jury could determine that he deliberately inflicted the blow that broke the plaintiff’s jaw and that it would not be objectively reasonable to break the plaintiff’s jaw once he was subdued. It noted that the plaintiff claimed that he was motionless for at least ten seconds on his stomach, at gunpoint, with his arms outstretched, in an area illuminated by lighting visible to the second officer, before the second officer jumped the fence and landed on his jaw. The Seventh Circuit also noted that the second officer’s affidavit testimony about jumping the fence used different wording than his police report. And it noted that when the plaintiff told the officer, “You ain’t have to break my jaw,” the officer told him, “I told you not to run.” Deciding what inference to draw, wrote the Seventh Circuit, is the task of a fact finder.

In a brief dissent, Judge Cudahy stated that he would affirm summary judgment for both officers because the evidence presented by the plaintiff did not create a plausible story.

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A Massachusetts jury recently awarded a $14 million wrongful death verdict against a nursing home. Dollar amount aside, this verdict is staggering because it includes a $12.5 million punitive damages award, meaning the jury was trying to punish the facility for its alleged poor care. The facility admitted it failed to administer proper care to the decedent resident, but it rejected claims that the neglect led to the resident’s death.

Was there a way for the facility to avoid this trial, or at least avoid being slammed with a judgement that included punitive damages? Were documents available that may have substantiated the facility’s assertion that its negligence did not lead to the resident’s death? Perhaps early case resolution techniques could have been used to resolve this matter at the outset? This year’s DRI Nursing Home/ALF Litigation Seminar offers sessions that address these questions and more. Timothy Cesar, Brookdale Senior Living, Inc., and attorney Bradley Kelly will lead “Putting the ‘Ending’ in Defending Litigation and discuss how both sides to a dispute can best utilize early case resolution to their advantage. Similarly, during “Ancillary Evidence May Be the Key to a Successful Defense,” Tracey Maw, RN, MSN, will discuss how information collected by a facility beyond a resident’s formal chart may be harnessed to benefit a facility in litigation.

The 2014 Nursing Home/ALF Litigation Seminar will be held September 18–19, 2014, at the Swissôtel Chicago. Register today.

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We Want To Pump, Your Driver Health Up!

Posted on August 7, 2014 02:42 by M. Garner Berry


I’m not a health nut. But I am a pretty fit guy and do some form of exercise 3-5 days a week. However, I love to eat awesome food and the most awesome foods I’ve ever come across usually aren’t the most nutritious for you. 

But I know that to enjoy some meals like that every now and then and stay healthy for my family, I have to exercise and stay away from too many bad habits. As a result, I feel energized on a daily basis and am able to deal with the stresses of life we all face.

Transport Topics reported this past January on the CDC release of a survey that found 70% of longhaul truck drivers obese, 50% smoke and 14% have diabetes. The obesity and smoking alone was more than twice the rate of the general population. The study also found that 15% of the drivers surveyed showed some signs of sleep apnea, while 59% had some respiratory disturbance. And 34% of drivers admitted to nodding off or falling asleep while driving and 7% admitting to being drowsy every day.

Some within trucking industry advocate groups question whether driver health and fitness is really a safety issue that FMCSA should be concerning itself with. Rob Abbott with ATA stated “this very question played out in the hours-of-service rulemaking when the agency used presumed driver health benefits, not substantial safety benefits, to justify the rule change.”

Personally, I completely disagree. AND LET ME BE CLEAR…I do not agree that the HOS reg needed to be changed to begin with and think the FMCSA based the change on unreliable science. In my humble opinion, driver fatigue is not an hours-worked problem or even a problem of whether drivers are getting enough sleep. I believe that the majority of fatigue is resulting from overall driver health. Sure adequate sleep is important to not falling asleep at the wheel. But that is a drop in the bucket to the overall fatigue problem that is going on if you ask me.

I always love when someone I haven’t seen in a while tells me “you look good” because I get to respond with the wisecrack of “well I feel good!” But frankly it’s true. When you take care of yourself, even with minimal exercise and nominally healthy eating, you will feel better.

Many companies are fighting the driver health problem too. This year, Celadon, Con-way and Prime Inc. were recognized for their efforts in improving the health of their drivers by offering health and diet counseling and exercise facilities to their drivers. The companies have realized that keeping drivers healthy makes the drivers safer operators. And while not recognized, Melton Truck Lines is right there with them in fighting this fight. While these companies have no reason to know this, I have been following and keeping up with what they are doing for their drivers. I believe in being healthy and keeping your body a well-oiled machine. And I admire what these companies are striving for.

My Thoughts:
Typically, sleep apnea, or even just poor sleep generally, is a result of poor health and obesity. Not always, but for the most part it is the root cause. And when you’re unhealthy and suffer from sleep disturbance, well, you don’t sleep well and aren’t rested.

FMCSA has stated that a rulemaking effort on obstructive sleep apnea may be in the cards for 2014 or 2015. I don’t know what will happen or even what should happen. I admit this is a hairy issue and I am not a fan of increased regulation. But I am a fan of safety and defending safe companies and drivers.

With recent changes to med certification, companies taking steps to improve driver health, and accidents involving driver fatigue, it seems to me that we may have a perfect storm in the making to see some sort of extensive driver health regulations in the near future.

What do you think?

This blog was originally posted on August 6 on Loaded Up and Trucking. Click here to read the original entry. 

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Last month, the Philadelphia Bar Association Professional Guidance Committee issued Opinion 2014-6, which served as an important reminder that client names cannot be shared with third parties – even third-party payors – without the client’s consent.  The inquiring attorney had been paid a flat monthly retainer by a union to provide certain legal services to union members. When the union decided to terminate its arrangement with the inquiring attorney, it asked the attorney to provide a list of all union members who were current clients, ostensibly to notify them that legal services would be provided through another law firm going forward.

Notably, the inquiring attorney’s contract with the union did not require the attorney to provide the identity of union members or their families who were utilizing his or her legal services. Moreover, a union-issued pamphlet stated that the attorney providing legal services would have an attorney-client relationship with the member or dependent receiving legal services and stated that the attorney “shall maintain the confidentiality of the attorney-client relationship in accordance with the applicable professional standards.”

Opinion 2014-6 began by explaining the difference between privileged information (analyzed under the attorney-client privilege) and confidential information (analyzed under the ethical doctrine of confidentiality).  Whereas client names typically are not considered privileged information, they are confidential information that cannot ethically be shared with third parties unless allowed by Rule 1.6 (of Pennsylvania’s version of the Model Rules of Professional Conduct).

The Opinion noted that Rule 1.6 contains no exception allowing the attorney to provide a list of current clients to the union, even though the union was paying the lawyer to provide legal services to them. The Committee determined that the union’s desire to notify its members of the law firm change did not qualify as an implied authorization necessary to carry out the representation because all union members had already been notified by the union of the law firm change.

The Committee found additional support in Rule 1.8(f), regarding conflicts of interest with third-party payors, and in a union-issued pamphlet.  The Committee explained that Rule 1.8(f) requires attorneys who are paid by third parties to maintain the confidentiality of information protected by Rule 1.6.  Considering the requirements of Rule 1.8(f) and the union pamphlet language requiring attorneys to maintain client confidentiality, the Committee concluded that the requested disclosure of client names was impermissible.

The Committee provided some sage advice at the close of the Opinion, recommending that attorneys accepting payment from third parties should explain to their clients: (1) what information the attorney is required to disclose (and to whom) in exchange for the third party paying for legal services; (2) that the client has the right to allow, limit, or prohibit the attorney from providing otherwise confidential information to the third-party payor; and (3) that limiting or prohibiting the attorney from sharing confidential information with the third-party payor could result in the third party refusing to pay and the client being responsible for legal fees.  The Committee also advised that the attorney confirm the client’s informed consent on these issues in writing to avoid any confusion.  Good advice.

Russell Yurk is an AV-rated attorney with Jennings, Haug & Cunningham, LLP in Phoenix, Arizona. His practice focuses on professional liability, lawyer discipline, and complex civil litigation. Mr. Yurk serves as the Chair of DRI’s Lawyers' Professionalism and Ethics Committee and is an active member of the State Bar of Arizona’s Committee on the Rules of Professional Conduct and the Arizona Supreme Court’s Judicial Ethics Advisory Committee. He has spoken at more than 50 seminars on professional conduct and ethics and, in his spare time, he works as a replay official with the National Football League.  Mr. Yurk can be reached at (602) 234-7819 or rry@jhc-law.com. The views expressed herein are his own.


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