Publications

07.14.21 | Articles, Books & Journals

Will CIC Services Open the Floodgates to Tax Challenges?

New York Law Journal

Under the Anti-Injunction Act, 26 U.S.C. § 7421(a), taxpayers are barred from bringing suits “for the purpose of restraining the assessment or collection of any tax.”  Accordingly, a taxpayer wishing to challenge a tax provision is generally required either to pay the tax and bring a suit seeking a refund in federal district court or dispute an assessment in Tax Court. In this article, “Will CIC Services Open the Floodgates to Tax Challenges,” we analyze the Supreme Court’s recent decision in CIC Services, LLC v. Internal Revenue Service, which unanimously rejected the government’s invocation of the Anti-Injunction Act to preclude a challenge to an IRS Notice requiring both taxpayers and their advisors to disclose information regarding micro-captive insurance transactions.

Related Lawyer: Jeremy H. Temkin

07.08.21 | Articles, Books & Journals

Congress Requires DOJ To Report on Deferred Prosecution Agreements

New York Law Journal

In the wake of the financial crisis of 2008, federal white-collar criminal enforcement faced harsh criticism.  One of the chief targets of critics was the corporate Deferred Prosecution Agreement (DPA), under which a company is charged with criminal wrongdoing but not required to enter a guilty plea.  In this article, “Congress Requires DOJ to Report on Deferred Prosecution Agreements,” we discuss the practical and policy implications of a little noticed new provision which signals Congress’s heightened interest in the use of DPAs as an enforcement tool.

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

06.28.21 | Articles, Books & Journals

A Warning About ‘Upjohn’ Warnings: A Word of Caution for Individual Employees

New York Law Journal

When conducting an employee interview as part of an internal investigation, corporate counsel typically warns the employee that counsel represents the employer and not the employee—but what if corporate counsel does not provide such an Upjohn warning? In this article, we discuss the current state of the law as reflected in cases in which employees have challenged the use of statements made to corporate counsel, and observe that the remedy afforded to an employee who did not receive an Upjohn warning is often lacking.

Related Lawyers: Robert M. Radick, Rusty Feldman

06.15.21 | Articles, Books & Journals

Limited-Scope Representations in Civil Cases

New York Law Journal

Traditionally, when an attorney appears on behalf of a client in a matter, federal courts have required that the attorney represent the client in all respects. In civil cases, however, courts have begun to recognize the value of limited-scope representations—i.e., representations when an attorney represents a client for only a portion of a case. In this article, we analyze Judge Jed S. Rakoff’s recent decision in Villar v. City of New York where he authorized a limited-scope representation to allow an attorney to appear solely to assist the pro se plaintiff in settlement negotiations.

Related Lawyers: Edward M. Spiro, Christopher B. Harwood

06.09.21 | Articles, Books & Journals

Hey SIRI, Does the Fifth Amendment Protect My Passcode?

New York Law Journal

The application of the Fifth Amendment to law enforcement demands for cellphone passcodes has developed into a constitutional quagmire for the lower courts. With the Supreme Court resisting opportunities for specific guidance, right now the application of the right against self-incrimination to this overwhelmingly important modern technology depends heavily on the state or federal jurisdiction where a person is located. We explore the issue in this article: “Hey SIRI, Does the Fifth Amendment Protect My Passcode?”

Related Lawyers: Robert J. Anello, Richard F. Albert

05.20.21 | Articles, Books & Journals

Non-Willful FBAR Penalties: A (Temporary) Reprieve for Taxpayers?

New York Law Journal

For over a dozen years, the IRS and the DOJ have targeted the use of offshore accounts to evade U.S. income taxes. Last month, in testimony before Congress, IRS Commissioner Charles P. Rettig made it clear that this crackdown on offshore tax evasion will continue unabated. While most of the attention in this area focuses on the risk of criminal prosecution and substantial financial penalties faced by taxpayers who willfully violate their FBAR obligations, some FBAR violations are due to negligence or a good faith mistake, as opposed to willful conduct. In this article, we discuss the Ninth Circuit’s recent decision in United States v. Boyd, in which a split panel rejected the IRS’s imposition of non-willful FBAR penalties on a per-account basis, and instead limited the IRS to imposing a single $10,000 penalty per year. This important decision provides a useful roadmap for practitioners representing taxpayers as additional Courts of Appeal weigh in on the scope of non-willful FBAR penalties in the coming months.

Related Lawyer: Jeremy H. Temkin

05.12.21 | Articles, Books & Journals

Non-Disclosure Agreements and Insider Trading: The Second Circuit Clarifies the Scope of Criminal Liability

New York Law Journal

The law of insider trading, while derived from Section 10(b) of the Securities Exchange Act of 1934, has largely been defined and shaped by federal court decisions. In this article, we discuss two recent Second Circuit decisions which further define the scope of liability for insider trading. In United States v. Chow and United States v. Kosinski, the Court held that breach of a contractual non-disclosure obligation is equivalent to a breach of fiduciary duty for purposes of insider trading liability. We consider how these decisions may reflect a tension with mail and wire fraud case law, which resists treating a contract breach as a basis for criminal liability.

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

04.20.21 | Articles, Books & Journals

Thorny Issues Raised by Third-Party Discovery in Arbitration

New York Law Journal

Third-party discovery can raise thorny legal issues in arbitration, particularly where the third parties and the arbitrator are located in different jurisdictions. In this article, we analyze Judge Jed S. Rakoff’s recent decision in Broumand v. Joseph, a subpoena enforcement proceeding where out-of-state third parties successfully resisted arbitral subpoenas. Broumand flags key issues for practitioners seeking third-party discovery in arbitration.

Related Lawyers: Edward M. Spiro, Christopher B. Harwood

04.07.21 | Articles, Books & Journals

Congress Poised to End Use of Acquitted Conduct at Sentencing

New York Law Journal

For years, the defense bar has criticized courts’ ability to sentence defendants based on conduct for which a jury of their peers has acquitted them. As we explain in our latest article, although the Supreme Court has hesitated to review this arguably unconstitutional practice, Congress has taken up the torch with a new bipartisan bill that would ban it. The jury is still “out” on whether the bill will become law, but its introduction is a welcome sign of Congressional interest in preserving the jury’s crucial role as a bulwark of liberty.

Related Lawyers: Robert J. Anello, Richard F. Albert

03.18.21 | Articles, Books & Journals

Civil FBAR Penalty Litigation: No Reprieve for Taxpayers

New York Law Journal

In the dozen years since the UBS Deferred Prosecution Agreement, the government has aggressively pursued taxpayers who maintained undisclosed offshore accounts. While over 56,000 taxpayers have cured their historical non-compliance through Offshore Voluntary Disclosure Programs or Initiatives offered by the IRS, approximately 100 have faced criminal investigation and prosecution, while others were subject to IRS audits, which carry the risk of substantial civil penalties. In this article, I explore recent decisions by the United States Court of Appeals for the Third Circuit in Bedrosian v. United States and the Fourth Circuit in United States v. Horowitz and conclude that these and other cases reflect judicial antagonism to taxpayers’ attempting to avoid or limit civil penalties.

Related Lawyer: Jeremy H. Temkin

03.08.21 | Articles, Books & Journals

Where’s the Quid? DOJ Tests the Limits of Public Corruption Law

New York Law Journal

Proof of a “quid pro quo” is central to federal public corruption prosecutions. Recent high-profile cases have tended to focus on the “quo” part of the equation – the official act taken by a public official. Two recent federal prosecutions, in Ohio and Illinois, have drawn attention to the “quid” – the thing of value a public official receives in return for a corrupt official act. In this article, we consider what these two prosecutions may say about the outer limits of federal public corruption law.

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

02.17.21 | Articles, Books & Journals

The Federal Arbitration Act Precludes New York from Exempting Claims from Arbitration

New York Law Journal

The Federal Arbitration Act sets forth a national policy favoring arbitration. Through the enactment of Section 7515 of the NY CPLR, however, New York sought to exempt certain types of claims from arbitration, including claims alleging sexual misconduct under the New York State Human Rights Law. In this article, “The Federal Arbitration Act Precludes New York from Exempting Claims from Arbitration,” we discuss Southern District Judge Lewis J. Liman’s recent decision in Gilbert v. Indeed, Inc., concluding that Section 7515 is preempted by the FAA, and thus cannot be used to exempt from arbitration claims that otherwise would be arbitrable under the FAA.

Related Lawyers: Edward M. Spiro, Christopher B. Harwood

02.10.21 | Articles, Books & Journals

Congress’s Signing Bonus for Gensler: New Powers for His SEC

New York Law Journal

Not every incoming SEC Chair gets a welcome gift from Congress. While Wall Street has greeted Gary Gensler’s nomination with some trepidation, by contrast, as we describe in this article, “Congress’s Signing Bonus for Gensler: New Powers for His SEC,” legislators recently handed the SEC powerful new enforcement tools, in the form of longer statutes of limitations and new statutory disgorgement powers. Although defendants in SEC cases may challenge some applications of these new powers, the new law likely means a tougher road for those under SEC investigation as the Biden Administration takes charge in Washington.

Related Lawyers: Robert J. Anello, Richard F. Albert

01.21.21 | Articles, Books & Journals

Tax Defendants Reaping The Benefit of Booker

New York Law Journal

In United States v. Booker, 543 U.S. 220 (2005), the Supreme Court held that mandatory application of the Sentencing Guidelines was unconstitutional and that judges must consider statutorily mandated factors in deciding an appropriate sentence for each offender. In this article, we analyze recent data from the United States Sentencing Commission demonstrating that judges have become increasingly likely to exercise their discretion to sentence defendants convicted of tax offenses below the applicable Guidelines, but are also more likely to impose some period of incarceration than in the past.  While sentencing advocacy has always been especially important in tax cases, the data reflects the significant impact defense counsel can have on the sentences imposed and the substantial benefits defendants have reaped under Booker

Related Lawyer: Jeremy H. Temkin

01.15.21 | Articles, Books & Journals

When Does Company Counsel Also Represent a Company Founder?

New York Law Journal

When does counsel for a company also represent a senior executive? This important question has come up recently in the government’s prosecution of Theranos founder Elizabeth Holmes. In this article, we address a dispute between the government and Holmes concerning the admissibility at trial of communications between Holmes and outside company counsel. As we explain, the legal standard makes it difficult for the individual to demonstrate a personal attorney-client relationship with company counsel. 

 

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

12.15.20 | Articles, Books & Journals

Obtaining Discovery Relating To a Confidential Private Mediation

New York Law Journal

When parties engage in private mediation, they frequently assume that their mediation-related communications are not discoverable in litigation. In fact, while courts generally cloak court-sponsored mediation with a fair degree of confidentiality and permit discovery concerning the mediation only upon a heightened showing of need, there is conflicting caselaw whether the same rule applies to confidential private mediations. In our latest article, we discuss Southern District Judge Jesse M. Furman’s recent decision in Accent Delight International Ltd. v. Sotheby’s, concluding that the heightened standard of need should be applied to confidential private mediations.

Related Lawyers: Edward M. Spiro, Christopher B. Harwood

12.10.20 | Articles, Books & Journals

Days Seem Numbered for Circuit’s Controversial Insider Trading Decision

New York Law Journal

Days before Thanksgiving, in a notable about-face, the government agreed that the Supreme Court should vacate a Second Circuit panel’s controversial insider trading decision in United States v. Blaszczak, accepting that Blaszczak’s holding that a government regulatory agency’s confidential information can constitute protectible “property” had been undermined by the Supreme Court’s subsequent decision in the George Washington Bridge case. But vacating Blaszczak would also erase the panel’s more controversial holding that the “personal benefit” test for insider trading does not apply to cases brought under the Title 18 fraud statutes, which would have significantly broadened the reach of criminal insider trading laws. In our article, “Days Seem Numbered for Circuit’s Controversial Insider Trading Decision,” we analyze the defendants’ petitions for Supreme Court review in Blazsczak discuss the implications of the government’s change in position. 

Related Lawyers: Richard F. Albert, Robert J. Anello

11.19.20 | Articles, Books & Journals

Anticipating Justice Amy Coney Barrett’s Role in Tax Jurisprudence

New York Law Journal

On October 27, 2020, following a swift yet politically fraught confirmation, Amy Coney Barrett replaced the late Ruth Bader Ginsberg as the ninth sitting justice on the Supreme Court. In her brief tenure on the United States Court of Appeals for the Seventh Circuit, Justice Barrett wrote unanimous opinions in two civil tax cases. In my latest article, I discuss then-Judge Barrett’s decisions in A.F. Moore & Associates, Inc. v. Maria Pappas and VHC, Inc. v. Commissioner of Internal Revenue and conclude that, setting aside questions regarding the timing of Justice Barrett’s appointment and confirmation and concerns as to how she might impact high-profile, politically-charged cases, practitioners can look forward to Justice Barrett’s contributions to the development of tax jurisprudence for many years to come. 

Related Lawyer: Jeremy H. Temkin

11.10.20 | Articles, Books & Journals

The Supreme Court Will Interpret Another White-Collar Criminal Statute

New York Law Journal

Federal law prohibits obtaining information by “access[ing] a computer without authorization or exceed[ing] authorized access.” The meaning of the words “exceed[ing] authorized access” has led to a split in the Circuits which will be taken up by the Supreme Court in the present term. In our latest article, we discuss the split in the Circuits and conclude that the Supreme Court may take the opportunity in United States v. Van Buren to clarify how white-collar criminal statutes should be interpreted.

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

10.21.20 | Articles, Books & Journals

Remote Depositions: The New Normal

New York Law Journal

With the COVID-19 pandemic, parties have had to adjust their approach to litigation—including by conducting depositions remotely. In some instances, parties have resisted remote depositions, claiming that the complex nature of certain litigation is ill-suited for remote depositions. In this article, we discuss Southern District Magistrate Judge Stewart D. Aaron’s recent decision in Rouviere v. DePuy Orthopaedics rejecting objections to a remote deposition. We also highlight several considerations for remote depositions.

Related Lawyers: Edward M. Spiro, Christopher B. Harwood


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