News

307, 2019

A Scuffle at Arctic Man Shapes the Law of the Land

July 3rd, 2019|

Written by David Karl Gross

As most Alaskans have come to know, Arctic Man is an extreme race involving a skier and a snowmobile.  It is a uniquely Alaskan race that combines extreme conditions with the beautiful Alaska landscape. At the beginning of the race, the skier starts at the top of a mountain which drops 1,700 feet in less than two miles to the bottom of a narrow canyon. When the skier reaches the bottom, he joins up with his snowmobiling partner by grabbing a tow rope. Over the next two miles, the snowmobile pulls the skier uphill at speeds reaching up to 85 miles per hour.  Just before reaching the top, the skier drops the tow line and goes over the side of a second mountain, dropping another 1,200 feet to the finish line.  Typically, there are more than 10,000 spectators from around the world watching the race. 

During the 2014 Arctic Man, a scuffle broke out that has resulted in a change to the constitutional law of the land.  Here’s what happened:  Russell Bartlett was attending the 2014 Arctic Man as a spectator.  Late on the last day of the competition, after what was likely a long day of drinking, Mr. Bartlett got into a confrontation with a police officer, Sergeant Luis Nieves.  Mr. Bartlett claims that Sgt. Nieves became angry because Mr. Bartlett refused to speak to the officer and refused to answer his questions.  Later, Mr. Bartlett ran into another officer, Trooper Bryce Weight, who was interrogating some minors he suspected of drinking.  Mr. Bartlett intervened, telling the trooper he should not be talking to minors without their parents’ consent.  Because Mr. Bartlett positioned himself too close to Trooper Weight, and was allegedly being belligerent, the trooper pushed Mr. Bartlett away.  Sgt. Nieves saw this encounter and proceeded to arrest Mr. Bartlett for disorderly conduct.  During the arrest, Mr. Bartlett was slow to comply, so he was also charged with resisting arrest.  After the arrest, Sgt. Nieves is alleged to have said, “I bet you wish you would have talked to me now,” referring to the earlier incident where Mr. Bartlett refused to speak to him.

Eventually, the charges against Mr. Bartlett were dropped.  Thereafter, Mr. Bartlett filed a civil lawsuit claiming that the police officers had violated his First Amendment right to free speech.  He alleged that his protected speech was his refusal to speak with Sgt. Nieves earlier on the day of his arrest.  He contended that Sgt. Nieves arrested him in order to punish him for exercising his right not to speak.  The U.S. District Court for the District of Alaska dismissed the case on the basis that a claim for a constitutional deprivation of free speech arising out of an arrest cannot stand where there is probable cause for the arrest.  In other words, the court concluded that where a police officer has a reasonable basis to make an arrest, he cannot be held liable for depriving the person arrested of his or her constitutional right to free speech, even if there was a causal connection between the arrest and an attempt to stifle speech.  Because there was probable cause for Mr. Bartlett’s arrest, his constitutional claim was dismissed.

The case was appealed to the Ninth Circuit Court of Appeals, where the court disagreed with the lower court’s ruling.  The Ninth Circuit concluded that just because there is probable cause to make an arrest does not mean that the individual arrested cannot bring a claim for depriving a citizen of their constitutional right to free speech.  The case was appealed to the United States Supreme Court, who agreed to hear the case.

On May 28, 2019, the Supreme Court reversed the decision of the Ninth Circuit.  In so doing, the Court created a new standard for determining the viability of a constitutional claim based on the assertion that an arrest took place to stifle free speech.  In reaching its opinion, Justice Roberts, writing for the majority, reiterated the longstanding rule that in order for a plaintiff to succeed with such a claim, they must prove the absence of probable cause for arrest.  In other words, in order to prevail, a plaintiff will need to prove that the officer had no reasonable basis to make an arrest.  Justice Roberts then carved out an exception to this rule.  He concluded that if the plaintiff can present objective evidence showing that similarly-situated people would not have been arrested, the claim can proceed to trial, even if there was probable cause to arrest.

Justice Roberts provided an example to illustrate the application of this newly-created exception to the rule.  He described a situation where a person was engaged in protected speech when a police officer arrested that person, arguably in an effort to stifle the person’s speech.  If the basis for the arrest was that the person had jaywalked, and if it can be shown that no one else is ever arrested for jaywalking in that area, the constitutional claim can proceed, even if there was probable cause supporting the arrest.  Justice Roberts appeared to create this exception to avoid a situation where a police officer can manufacturer an arrest for the purpose of preventing speech.

Several of the other justices were not pleased with this exception to the general rule.  First, Justice Clarence Thomas argued that no such exception existed in the common law.  Specifically, he pointed out that claims for false imprisonment, malicious arrest, and malicious prosecution did not have the newly-created exception, but instead required a showing that no probable cause existed.  He went on to point out that the statutory cause of action for a deprivation of constitutional rights, as set forth in 42 U.S.C. § 1983, is supposed to be guided by the common law, yet the common law never envisions the newly-created exception.

In addition, Justice Sonia Sotomayor pointed out a practical problem with the new exception.  She provided examples illustrating how difficult it would be to prove that a similarly-situated person would not have been arrested, had they not been exercising their free speech, such as a police officer arresting a person who was recording police conduct on their iPhone, which is protected speech, because they had stepped onto the corner of the private property where the arrest was taking place. Justice Sotomayor queried how that person could prove that a similarly-situated person not recording would not have been arrested. She warned the lower courts to be careful in the manner they implement this exception because of her fear that the newly-created standard makes a constitutional claim far too difficult to prove.

With this, the law of the land has now been changed.  It is not clear whether this change in the law will be good or bad, or whether it will encourage or discourage illegal arrests, but Mr. Bartlett and Arctic Man can take some credit for creating this new law.  However, while Arctic Man can now claim to have altered this country’s constitutional law, it is unclear whether this notoriety makes Alaska or Arctic Man look great.  The decision of the court seems to portray the race in a very negative light.  Justice Roberts, in his written decision, describes the race as being known for not just extreme racing, but also “extreme alcohol consumption.”  He also calls the small town of Paxson, Alaska, which hosts many of the spectators and participants, as “one of the largest and most raucous cities in Alaska.”  The description of Mr. Bartlett’s conduct did not help, as his apparent disdain for police officers is typically not well received by the general public.  The court also leaves the impression that Alaska is the Wild West where everyone is intoxicated, minors are looking to steal kegs of beer, and police officers are routinely accosted and abused.  All in all, this does not paint a very good picture of Alaska.  Therefore, while I think it is novel to have Arctic Man serve as a backdrop to the evolution of our constitutional law, I wish Alaska would have been cast in a better light.

1306, 2019

The Rules Governing an Insurance Company’s Conduct

June 13th, 2019|

Written by David Karl Gross

No matter how safe or cautious you may be, the odds are high that you will eventually need to file an insurance claim.  The claim could be the result of a variety of situations; it could be a traffic accident due to a red light runner, perhaps a slip and fall in your home or business, or your home could suffer damage from an earthquake or fire.  When an unfortunate event occurs, your first action should be to contact your insurance company for assistance.  When you make the call, there is an expectation that the insurance company will jump into action.  Unfortunately, many people are disappointed by their insurer’s lack of responsiveness.

Luckily, there are rules in place requiring insurance companies to act in a certain manner.  These rules are found in the Alaska Claims Handling Regulations (3 AAC 26.010, et seq.), and are designed to set the minimum standards required of insurers in the first-party context.  (A first-party claim is a claim being made under a policy you have purchased.  A third-party claim is where you are seeking compensation under someone else’s policy.)  Being aware of these rules, or knowing where to find them, will help you understand what an insurer should do.

One of the first rules (3 AAC 26.040) deals with what the insurer must do when you put it on notice of a claim.  This rule states that when you tell the insurer about a claim (either by calling, emailing, faxing, writing, or on-line), it has 10 business days to inform you in writing that it has received the claim.  In the initial letter, the insurer is also required to provide you with the name of the adjuster that will be handling the claim, as well as contact information.  The insurer must also provide you with a claim number to track the claim and must specifically set forth the benefits you may be entitled to under the terms of the insurance policy.  If you make contact with an insurer, and if you ask a question that warrants a response, the insurer must respond to you within 15 business days, which prevents the insurer from unduly delaying the claim.

Once the insurance company begins its investigation of your claim, it must keep a detailed file, which includes all notes, work papers, statements, pictures, diagrams, and other such information. If the claim results in a lawsuit, all of the documentation in the file is discoverable (i.e., it must be provided to you), unless the material was prepared at the direction of a lawyer for the insurance company.  In other words, you will be able to have access to all of this information if a lawsuit is filed.

The insurer is required to let you know if the claim is being accepted or denied within 15 working days after receipt of the claim (3 AAC 26.040).  On occasion, there are exclusions or deadlines in the insurance policy that could allow the insurer to avoid coverage.  If the insurer is going to rely on one of these policy provisions to deny a claim, not only must they act fast (15 business days), but they are also required to provide you with a written denial of the claim, which must state the specific provisions, conditions, exclusions, and facts upon which the denial is based.  An adjuster cannot deny your claim over the telephone.

If only part of a claim is being denied, the insurer is required to pay you the portions of the claim it has no reason to dispute.  In other words, if you are injured in a car crash and you submit covered medical bills to your automobile insurance carrier for payment, an insurer is not allowed to delay the payment of the entire claim simply because it is challenging the reasonableness of one bill.  Instead, the insurer is obligated to promptly pay all undisputed bills.  Again, the idea behind this rule is to prevent an insurer from delaying the entire claim simply because one small part of it could be in dispute.

An insurance company is entitled to conduct a claim investigation, but any such investigation must be completed within 30 business days after you give written notification of the claim.  The only exception to this rule is if the insurer can demonstrate that the investigation cannot possibly be completed in the allowable timeframe after using due diligence.  If the insurer believes that additional time is needed, it is required to send you a letter outlining the reasons why additional time is needed and providing an estimate as to when the investigation will be complete.

If there are certain time limits in place, such as a statute of limitations, an insurer cannot delay your claim in an effort to avoid having to pay.  For example, if you make a claim 90 days before a statute of limitations runs, an insurer cannot delay the claim until after the statute of limitations has run and then contend that your claim is time barred.  Instead, the insurer must clearly notify you as to the time limits that might be expiring and the impact of missing a deadline.  This written notice must be given to you at least 60 calendar days (3 AAC 26.070) before the date the time limit will expire on.

If the insurer is required to pay your claim, it must do so promptly.  Payment should be made by a check that can be cashed at a bank located in the State of Alaska.  It is not proper for an insurer to issue payment with an out-of-state check, which will only delay the actual payment of the claim.

If it is determined that an insurer violated one or more of these rules, it will be deemed to have acted in an unfair and deceptive manner.  Such a finding can be used as evidence to establish bad faith if there is a lawsuit against the insurer for breaching the implied-in-law covenant of good faith and fair dealing, which is imbued in every insurance contract in Alaska.  In addition, if an insurer violates these rules, the Division of Insurance for the State of Alaska is authorized to order the insurer to cease and desist from such conduct, and if it refuses, to penalize the insurer in an amount up to $25,000.  If the insurer persists, the Division of Insurance can revoke the insurer’s license to conduct business in the State of Alaska and penalize the insurer an amount not to exceed $250,000. There are other rules that specifically deal with motor vehicle claims (3 AAC 26.080), property loss claims (3 AAC 26.090), worker’s compensation claims (3 AAC 26.100), and health insurance claims (3 AAC 26.110). 

If you are involved in a claim and you think your insurer has violated the above-stated rules, or is acting in a manner that is not in your best interests, it is always a good idea to have a lawyer examine the circumstances and to advise you if your claim is being handled properly.  The lawyers at Birch Horton Bittner & Cherot know the rules — inside and out – and stand ready to assist anyone who thinks that their insurer may not be playing by the rules.

606, 2019

A Deceased Judge Cannot Vote from the Grave

June 6th, 2019|

Written by:  David Karl Gross

The United States Supreme Court recently decided the issue of whether a deceased judge has the right to issue an official decision.  In Yovino v. Rizo, the Ninth Circuit Court of Appeals grappled with an issue related to the Equal Pay Act of 1963.  This issue was first decided by a three-judge panel, but then expanded to a full panel of 11 judges.  In order for the court to establish binding precedent, at least six judges needed to agree.

As it turns out, through varying concurring opinions, six judges did agree.  Judge Stephen Reinhardt, one of the six concurring judges, wrote the majority opinion.  Judge Reinhardt finished the opinion, officially filed it with the clerk, and was waiting for the official publication of the decision.  It would appear that the matter was final and that no further discussions were taking place.  Sadly, Judge Reinhardt passed away on March 29, 2018, eleven days before the opinion was actually published.  Therefore, at the time Judge Reinhardt’s majority opinion was issued by the Ninth Circuit, he was deceased.

The issue of whether Judge Reinhardt’s vote counted was critical to the outcome of the case. If Judge Reinhardt’s vote counted, there would be 6 of 11 judges in favor of the same outcome, and with a majority, the decision becomes precedential.  If Judge Reinhardt’s vote did not count, there would be a 5-to-5 tie and the decision would have no precedential value. The Ninth Circuit decided that Judge Reinhardt’s vote counted and added a footnote to the decision indicating that Reinhardt was deceased but that he “fully participated in the case” and that the opinion was final “prior to his death.”  The issue was appealed to the United States Supreme Court.

The Supreme Court issued a per curiam decision discussing the historical treatment of deceased judges.  The court pointed out that a judge has until the final publication of a decision to change his mind; therefore, the decision is not actually final until publication.  With this, Judge Reinhardt’s decision, and his vote, was not final until the decision was actually published on April 9, 2018.  Because Judge Reinhardt died before publication, his vote should not have counted, meaning that the Ninth Circuit’s decision in Yovino v. Rizo has no precedential value.  The court pointed out that “federal judges are appointed for life, not for eternity,” meaning that their authority as a judge ends at the moment their life ends.

2205, 2019

Legislative Update – Bills to Watch for Small Business Federal Government Contractors

May 22nd, 2019|

Written by:  Jonathan Cannon, Carissa Siebeneck Anderson, and Jon M. DeVore

This year, the 116th Congress has begun to take action on a number of issues relating to small businesses and government contracting. This post highlights some key areas that we are following at Birch Horton. These are: Expanding Contracting Opportunities for Small Business Act of 2019, The 809 Panel Report, and the Clarifying the Small Business Runway Extension Act.

The Expanding Contracting Opportunities for Small Business Act of 2019

Legislative Status. On January 17, 2019, the House passed the Expanding Contracting Opportunities for Small Business Act of 2019 (H.R. 190). This legislation passed with near unanimous bi-partisan support with a 415/6 vote count.[1]  The Bill has been referred to as the Senate Small Business and Entrepreneurship Committee, but they have yet to move on the proposed legislation.

Increase Caps for Certain Sole Source Awards. This Bill intends to help small disadvantaged businesses—HUBZones, Service-Disabled Veteran-Owned Small Businesses (SDVOSBs), women-owned small businesses (WOSBs), and economically disadvantaged women-owned small businesses (EDWOSBs)—obtain sole-source contracts. The legislation increases the dollar amount of sole-sourced contracts that can be awarded. Anticipated awards could now be up to $7 million for manufacturing procurements (replacing the current $5m limit, and $6.5m for qualifying women-owned businesses), and up to $4 million for other contract opportunities (replacing the $3m sole source cap for HUBZone or SDVOSB, and $4m for women-owned businesses). While the 8(a) sole source caps were not raised in the original Bill in the House, we understand that versions of the Senate bill do include similar provisions applicable to the 8(a) Program.

Option Years Would Be Excluded from Calculations. Perhaps the most significant proposed change is that new sole source maximums would no longer include option years. Instead, maximums apply only to the first contract year effectively doubling, tripling, or more, the maximum allowable sole source awards. There has been some confusion about the impact on 8(a) regulations, but the House bill does also remove option years from the 8(a) sole source cap calculation as well.[2]

This proposal has been met with mixed reviews by some in the SBA 8(a) Program because the change will likely increase competition for larger contracts that have been previously unavailable to individually-owned small businesses. The change will also potentially increase the size and overall number of sole source contracts, which could be good for all eligible businesses, including firms owned by Tribes, Alaska Native Corporations (ANCs) and Native Hawaiian Organization (NHO) owned firms.

Other Actions. Additionally, this new legislation mentions the need for the SBA Administrator to notify the respective legislative committees when it has established programs that certify small business owned and controlled by women and service-disabled veterans. Currently, contracting officers must obtain SBA verification of eligibility before awarding contracts. It is worth noting that SBA issued a recent proposed rule to create the statutorily-mandated WOSB/EDWOSB certification programs.[3] SBA has testified to Congress that the new certification program will likely not be fully implemented until January, 2021. The bill also requests a GAO report regarding WOSBs and SDVOSBCs.

Clarifying the Small Business Runway Extension Act

Legislative Status. Introduced in the House. On May 1, 2019 The House Small Business Committee approved by voice the “Clarifying the Small Business Runway Extension Act” (H.R. 2345).

Purpose. The “Clarifying the Small Business Runway Extension Act” requires the Administrator of the SBA to issue a final rule to implement the Small Business Runway Extension Act no later than December 17, 2019. This bill would ensure that the previously passed Runway Extension act would apply to and include the SBA, which was unclear from the original legislation. Passage of this bill would require the SBA to implement a transition plan within 90 days of enactment.

The original “Small Business Runway Extension Act” (H.R. 6330 115th Congress) changed the small business size calculation to a five-year average (replacing the three-year average that existed before the legislation passed). SBA responded to the legislation stating that it did not change the size calculation in the statute (as was likely intended by Congress), but SBA agreed to take the necessary steps to implement a similar five-year average into its regulations regarding size standards. This perceived legislative drafting error caused significant confusion.

Impact. Moving to a five-year average will have a significant impact on the number of eligible small businesses, which are based on either the number of employees or on gross receipts. The small business size thresholds determine eligibility for SBA resources, programs, and assistance including small business federal contracting opportunities. Supporters argued that the problem with the three-year period is that one strong year in such a small window could lead to a business being prematurely eliminated from the program. Extending the average to include five years should even out a company’s high and low years, to get a better long-term picture of small business size despite one booming contract year. The five-year average will also extend the time a growing business could remain a small business, as growth years will be averaged over previous smaller years.

The 809 Panel Results

In the 2016 NDAA (Public Law 114-92), Congress created in section 809 a panel with the purpose of “streamlining acquisition regulations.” The panel was responsible for reviewing acquisition regulations to streamline and improve the efficiency of the defense acquisitions process.

The results of this report were recently published was over 1000 pages of research with 98 recommendations of ways to streamline and improve the acquisition system. Of the recommendations, there were two points that were potentially alarming for small business contractors. These were Recommendations 75 and 80. Recommendation 75 addresses revising regulations, instructions or directives to eliminate non-value added documents or approvals that could allow the release of contract opportunities from 8(a) programs if the SBA failed to respond in 15 days. (Currently, SBA must approve an agency’s request to take a procurement opportunity out of the 8(a) Program.) Recommendation 80 dealt with preservation of preference for procuring commercial products and services for small business set-asides. Recent Office of Management and Budget directives regarding some of the recommendations indicates that the rule of “once an 8(a) contract, it shall stay an 8(a) contract” will not likely change.

Fortunately, it does not look like the Senate will adopt any of the panel’s recommendations into the report in the 2020 NDAA. While this may not be an immediate concern, it is worth noting that discussion has begun regarding a number of these issues.

 

[1]  This is notable since only 6% of bills introduced in the last Congress even got a vote, while half of the bills that did receive a vote became law.

[2] The confusion among commentators likely resulted from the inconsistent way in which the House legislation was written.  The sole source provisions regarding WOSB, HUBZone, and SDVOSBC were overtly replaced in the Bill, while “including options” language was stricken from Section 8 of the Small Business Act in one sentence in Sec. 2(d) of the House Bill in one sentence.

[3] See Women-Owned Small Business and Economically Disadvantaged Women-Owned Small Business-Certification (May 14, 2019), available at https://www.federalregister.gov/documents/2019/05/14/2019-09684/women-owned-small-business-and-economically-disadvantaged-women-owned-small-business-certification.  Comments on this proposed rule are due July 15, 2019.

1705, 2019

Ally Law Celebrates Its 30th Anniversary

May 17th, 2019|

Written by  David Karl Gross

Ally Law is proud to celebrate its 30th anniversary in 2019. Ally Law is a global network of law firms that allows its member law firms to fully serve their clients in today’s expanding global economy.  Many of these firms have worked together for years and have established close knit relationships.  BHBC is proud to be the Ally Law representative for Alaska.  As an Ally Law member, we can use our global contacts within Ally’s network to provide our clients with assistance when they need legal help in another country or region.  Even if our clients do not have an international problem, having Ally Law partners in the Lower 48 gives us the ability to team-up with outside firms to deal with issues in other jurisdictions.   These long-standing relationships allow us to serve  our clients’ needs, and avoid the  aggravation and uncertainty of locating competent out-of-state or international counsel.

It is not enough to understand the law in a theoretical way.  To be effective, excellent legal skills must be balanced by practical business sense and knowledge about the sectors in which our clients operate. The firms of Ally Law — individually and together — pursue opportunities to enhance their knowledge of your industry. BHBC and our Ally Law partners have significant experience in the healthcare, energy, technology, retail, real estate, and leisure sectors and are noted for our skills in labor and employment, mergers and acquisitions and business litigation.  Our collaborative approach to the law enhances our ability to fully serve our clients.

The motto of Ally Law is: “We get it.  We get it done,” which captures the spirit of Ally’s global network.  BHBC, and all of the firms belonging to Ally Law, share the goal of working hard to understand our clients’ needs and what should be done to solve the issues they  face.  BHBC’s participation in Ally Law expands our reach and increases our ability to offer greater assistance to our clients.  If you are faced with a problem or issue outside of Alaska or the United States, please call BHBC.  We will use our connections within Ally Law to provide you with the resources you need in an economical and effective manner.

There is a reason why Ally Law has been in existence for 30 years and has grown significantly over that period of time.  It allows local firms to have an intra-jurisdictional and international reach that they would otherwise not enjoy.  BHBC is proud to be a part of Ally Law and is happy to celebrate its 30th anniversary with our member partners.

105, 2019

Native Hawaiian Organizations Association Sponsors the 2019 Business Summit Conference

May 1st, 2019|

Written by:  Jon M. DeVore

The Native Hawaiian Organizations Association (NHOA) is sponsoring the 2019 Business Summit Conference on May 21-23, 2019, at the Prince Waikiki Hotel in Honolulu, Hawaii. The NHOA conference will focus on legislative, legal and business issues relevant to small businesses, including SBA 8(a) participants and small businesses owned by veterans, disabled veterans, and women engaged in the federal contracting industry. There are currently 66 Native Hawaiian Organizations that are 8(a) participants and joint ventures identified in the U.S. Small Business Administration (SBA) Profile that have offices and do business throughout the United States.

Jon DeVore, a shareholder in Birch Horton Bittner & Cherot’s Washington, D.C. office, will join other legal specialists and experts on a panel on May 23rd to discuss the Section 809 Panel’s recommendations related to federal procurement and specifically about how those recommendations might impact small business procurements. The Section 809 Panel was created by the U.S. Congress in a recent National Defense Authorization Act with the mission of reviewing and making recommendations on how federal procurement could be changed to be more efficient and cost effective. Subsequently, the Section 809 Panel has written three volumes of reports with sweeping proposals for change, including a recommendation that Congress eliminate most small business set-asides for Department of Defense acquisitions and replace the longstanding set-aside system with a meager five percent small business price preference. 

Among those attending the Conference may be government representatives, large businesses, and representatives of Alaska Native Corporation and Tribe small business companies. Participants will gain valuable insights and hear about real life experiences of working with the federal government and other businesses engaged in similar services.  The Conference provides a great opportunity to network with other people, businesses, contracting officers, government representatives and elected representatives in the local, State and Federal governments.