News & Legal Updates Archive

During the week of May 18, 2020, two committees in the Ohio General Assembly are expected to hear testimony regarding competing measures that would provide immunity from civil tort liability for certain professionals and businesses amid the coronavirus pandemic. Anyone across Ohio making heads or tails of the various national and statewide orders and best practices emerging in response to COVID-19 should pay attention.

Under the CARES Act, individuals may be eligible to receive a payment of up to $1,200 as an advance for a 2020 tax credit. These payments are all automatically mailed or directly deposited into individuals’ accounts, including retirees and Social Security recipients that are not required to file an income tax return. But what happens when the recipient is deceased? Guidance was recently released that if an individual receives an economic impact payment and the individual was deceased at the time of receipt, then the payment must be returned.

You have probably found yourself in this position at least once: There is a disagreement about whether something a contractor has been asked to do constitutes a change order or is within the base scope of work. The question then becomes, does the contractor have to perform the work before that dispute is resolved even if the owner does not issue a change order? 

Will your college or university open this fall? It may sound silly, but for many colleges and universities it’s a pressing question for students, faculty, staff, and alumni.

On Friday May 15, the United States House of Representatives passed a new stimulus bill, known as the Health and Economic Recovery Omnibus Emergency Solutions act (HEROES Act), in response to the COVID-19 pandemic. If passed by the Senate, the bill, estimated to be worth more than $3 trillion, will be the largest relief package in the country’s history. The sweeping legislation is intended to financially fuel the economy, similarly to the original CARES Act.

In two recently released notices and changes made by the Coronavirus Aid Relief and Economic Security Act (CARES Act), some of the rules regarding cafeteria plans, flexible spending accounts and dependent care reimbursement plans have been relaxed. Most of these changes are not required. Employers can choose to implement them or not. If implemented, they will require notifying employees and making plan amendments.

As employers across the country focus on getting back to work, the U.S. Department of Labor (DOL) continues its focus on the Families First Coronavirus Response Act (FFCRA). On May 7, 2020, the DOL updated its FAQs resource page with additional FFCRA guidance in Questions 89 - 93.

If your commercial lease does not contain an express force majeure provision, or otherwise contains an unclear force majeure provision (specifically regarding the payment of rent), then there are a few legal defenses to performance that may be raised by commercial tenants.

In response to the global COVID-19 crisis, Congress passed the most comprehensive (and expensive) recovery act in the history of the country. The Coronavirus Aid, Relief and Economic Security (CARES) Act will cost $2 trillion and is unprecedented in its scope. The rescue package will provide historic relief for American business with an array of new and expanded programs. McDonald Hopkins is using its multi-disciplinary approach to assess the CARES Act and to bring its full value to our clients.

Ohio’s Gov. Mike DeWine recently proposed $110 million in cuts to higher education – amounting to a 3.8% cut to all four-year and two-year state colleges and universities. Although this is slightly better than had been anticipated, before we begin to celebrate it is important to realize the real reckoning is coming next school year when all Ohio universities and colleges, both private and public, are facing enormous challenges for the fall. 

The Seventh Circuit issued an important decision regarding whether a plaintiff asserting claims under Illinois’s Biometric Information Privacy Act (BIPA) satisfies the requirements of Article III standing. Although the decision seemingly authorizes federal jurisdiction over certain BIPA claims, its disparate treatment of section 15(a) and 15(b) claims raises a number of practical questions regarding BIPA removals that actually may limit the number of BIPA claims that end up in federal court.

On May 7, 2020, the Department of Health and Human Services (HHS) announced an extension on the deadline for providers to accept or reject automatic payments of CARES Act Provider Relief Funds. The original 30 day deadline from receipt of payment has now been extended to give providers a total of 45 days to attest and accept the terms and conditions. If providers do not wish to accept the funds they still need to contact HHS and initiate returning the payments.

The U.S. Department of Education on Wednesday, May 6, released its long-awaited final regulations governing campus sexual assault under Title IX, the law prohibiting sex discrimination at federally funded institutions. McDonald Hopkins has compiled a list of the major changes Title IX requires to the way sexual assaults and harassment are dealt with on college and university campuses nationwide.

McDonald Hopkins represented GRAIL, a healthcare company whose mission is to detect cancer early, when it can be cured, in its $390 million Series D financing.

The CARES Act does not address whether deductions otherwise allowable under the tax code for payments of expenses such as rent, utilities, mortgage interest, and payroll costs and benefits paid to employees are permitted if funded with a Paycheck Protection Program loan that is subsequently forgiven. However, the IRS released Notice 2020-32 on April 30, 2020, and confirmed that such double-dipping will not be allowed.

The U.S. Patent and Trademark Office announced a new Prioritized Examination Pilot Program for qualifying applications and applicants.

The IRS has issued guidance allowing for additional time to pay 2019 federal income taxes and 2020 first quarter estimated taxes up to certain amounts. States have begun to follow suit with some following the federal government and others taking different approaches.

Employees returning to the office after weeks of remote work creates data privacy and cybersecurity challenges that businesses need to confront head on. These considerations are especially critical as many states and regulators are requiring employers to collect COVID-19 related health information. Below are 10 ways to combat potential cyber risks and stay #CyberSavvy while employees are returning to work.

This article on the sweeping and urget changes in the telehealth space has been updated to reflect the April 30, 2020, press release by the Centers for Medicare & Medicaid Services (CMS) announcing expanded Medicare payments and coverage for telehealth services.

One thing that hasn’t changed since the COVID-19 crisis hit? Directors and officers of corporations still have the same fiduciary duties that they had before the pandemic. What COVID‑19 has changed is what constitutes due care, and the impact of this is likely to be broadened by an enlargement of the parties who should be considered as fiduciary duties are discharged.

On April 30, Dr. Amy Acton, Director of the Ohio Department of Health, issued a new “Stay Safe Ohio” order that replaced the previous stay at home order and eased certain business operation restrictions. Although the order directs Ohioans to remain home, select businesses and operations in the state are permitted to reopen so long as all workplace safety standards and social distancing requirements are met.

In an op-ed published in Crain's Cleveland Business, McDonald Hopkins president Shawn Riley and member Miriam Rosen look at the legal and labor challenges to reopening the economy.

The Federal Reserve has announced the creation of the Main Street Lending Program. The Program is intended to assist smaller and medium-sized businesses that were sound financially before the COVID-19 pandemic and that need financing alternatives. Businesses that were unable to access Payroll Protection Program (PPP) funding or require additional funding after receiving a PPP loan may also access the Program.

There’s a new opportunity for gifts to charity from IRAs and qualified plans, but think fast and don’t forget about qualified charitable distributions.Congress and the president have given us a limited time offer to deduct cash gifts to public charities up to a total of 100% of adjusted gross income (AGI). The offer is good for gifts made in 2020.

In a recent interview with CNBC, Treasury Secretary Steven Mnuchin announced that businesses receiving loans of more than $2 million from government relief programs intended for small businesses will receive a full audit to ensure the loan was justified. Borrowers – not the banks that stewarded the loans – face criminal liability if they applied for funding that was not truly needed due to the coronavirus outbreak.

On April 21, 2020, the Food and Drug Administration announced its approval of the first at-home COVID-19 test pursuant to its Emergency Use Authorization authority.

On April 26, 2020, the Centers for Medicare & Medicaid Services (CMS) announced that it is reevaluating pending and future amounts that it will pay under its Accelerated Payment Program and is suspending its Advance Payment Program for Part B suppliers, effective immediately. CMS noted it has already approved almost 24,000 applications resulting in $40.4 billion of payments for Part B suppliers, including doctors, non-physician practitioners and durable medical equipment suppliers.  

The Centers for Medicare and Medicaid Services (CMS) issued a new payment ruling and announced that effective April 14, 2020, and through the remainder of the emergency period, Medicare will pay $100 under Part B for each COVID-19 clinical diagnostic laboratory test (CDLT) processed using “high-throughput” equipment, including but not limited to the following:

McDonald Hopkins is pleased to announce the attorneys and practice areas that have been recognized by Chambers USA 2020.

Ohio Gov. Mike DeWine announced, during his daily briefing on April 27, that he would begin reopening Ohio’s economy over the next two weeks. Certain businesses and services, including health care, will begin reopening as soon as Friday, May 1.

The Illinois Workers’ Compensation Commission approved a new emergency rule that would create a “rebuttable presumption” for any employee of an “essential business” diagnosed with COVID-19. This means that it is likely that employees will obtain workers’ compensation benefits if they are diagnosed with the COVID-19 virus and are working in an essential business.

In a bid to reopen the United States amidst economic fears, President Donald Trump unveiled the Guidelines for Opening Up America Again on Thursday, April 16. The roadmap is intended to provide governors with a gradual and phased approach to restoring normal activity in each state by reopening their economies, returning people back to work, and continuing to protect lives against the heath threats of COVID-19. 

Despite warnings from the Centers for Disease Control and Prevention to avoid reopening too early, many state officials are pushing forward with plans to reopen their states and economies as soon as this week. Although there are serious concerns about the health implications of reopening public businesses and easing social distancing requirements, many officials assert that, if states do not reopen sooner rather than later, the country will face unprecedented economic damage.

Congress has passed the Paycheck Protection Program and Health Care Enhancement Act, increasing the total amount available under the Paycheck Protection Program by $310 billion. Of that sum, $60 billion is set aside for loans to be made through small and very small community banks and credit unions. The bill also includes an increase of $10 billion for EIDL grants, $75 billion to help overwhelmed providers and hospitals, and $25 billion for coronavirus research,

Ohio's top ethics watchdog has issued an opinion that should help to clear up a question bemusing public officials and their legal counsel for as long as executive sessions have been used to discuss sensitive matters.  

The COVID-19 epidemic presents unique and unprecedented challenges for the commercial real estate industry. Landlords and tenants alike are scouring through their respective lease agreements reviewing whether contractual performance is excused under “force majeure” clauses, and what the respective remedies of the landlord may be in the event the tenant stops paying rent. In looking for creative solutions to funding problems, some landlords and tenants have looked at making business interruption insurance claims under their property insurance policies.    

Despite having generally similar provisions, certain states have further restricted the list of businesses that qualify as essential and implemented additional restrictions. The following article compares and identifies the differences between the stay-at-home orders in Florida, Illinois, Michigan and Ohio

As COVID-19 continues to spread, some states have doubled down on the enforcement of stay-at-home orders and have intensified restrictions on businesses. For example, Michigan Gov. Gretchen Whitmer recently provided guidance explaining that, under Michigan’s stay-at-home order, only limited construction projects are permissible.

The Internal Revenue Service has started direct depositing coronavirus relief funds into millions of bank accounts, but some of these funds are not arriving to the intended recipients.

It has been reported recently that some companies in Ohio are purchasing serological tests that detect antibodies, or proteins, found in the blood when the body responds to the virus that causes COVID-19. They plan to use the tests on staff and, in some cases, customers.

The CARES Act includes provisions affecting real estate borrowers, lenders, landlords and tenants. Much attention has been given to the forgiveness of loans made under the Paycheck Protection Program designed to keep workers employed but also to allow businesses to continue to make rent and mortgage payments. In addition, borrowers under federally backed residential loans can request forbearance for a period of, and a moratorium was placed on, some foreclosures.

As employers begin to cautiously prepare for a return to the physical workplace in the coming weeks, the Equal Employment Opportunity Commission (EEOC) is continuing to update its Technical Assistance Guidance on COVID-19 and the Americans with Disabilities Act (ADA). In a series of new questions and answers issued on April 17, 2020, the EEOC addresses some practical questions related to reasonable accommodations and adds a new section to its guidance on return to work issues.  

COVID-19 has impacted the commercial real estate market in many ways, including defaults on lease and loan payments by tenants and borrowers.  Landlords and lenders seeking to evict or judicially foreclose on defaulting tenants and borrowers may be hampered in their efforts as a result of state and local efforts to provide relief to financially stressed tenants and borrowers. 

With numerous private entities, major national health centers, and non-governmental organizations concentrating their efforts on developing and bringing to market diagnostics, treatments and preventatives to combat COVID-19, the issue of patent protection—and potential enforcement of patents—has also come to the forefront. 

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was signed into law, allocating roughly $349 billion in funds to certain qualifying businesses via the U.S. Small Business Administration issuing Paycheck Protection Program loans (each a “PPP Loan”).  As small businesses rush to obtain PPP Loans, lenders should pay careful attention to the following concepts that potentially will need to be addressed.

On April 3, the Small Business Association opened the window for guaranteed loans under the Paycheck Protection Program. These loans were authorized when Congress passed the Coronavirus Aid, Relief, and Economic Security Act, commonly known as the CARES Act, into law on March 26, 2020. 

The Small Business Reorganization of 2019, also known as the SBRA, signed by the president on August 23, 2019, enacted a new subchapter V of Chapter 11 of the Bankruptcy Code.  The purpose of the SBRA was to “streamline the process by which small business debtors reorganize and rehabilitate their financial affairs.” The goal is to address the fact that chapter 11 is too expensive and too impractical for most small and not so small businesses.  A sponsor of the legislation stated that the SBRA allows small business debtors “to file bankruptcy in a timely, cost-effective manner, and hopefully allows them to remain in business” which “not only benefits the owners, but employees, suppliers, customers, and others who rely on that business.”

The CDC has issued a one page guidance document, "Interim Guidance for Implementing Safety Practices for Critical Infrastructure Workers Who May Have Had Exposure to a Person with Suspected or Confirmed COVID-19" that concisely addresses some of the key concerns about how to keep essential infrastructure workers safe while attempting to operate during the coronavirus crisis. The new CDC guidance provides insight into one of the most pressing issues: What should an employer do in a potential employee exposure situation?    

Unlike in the Great Recession, the Federal Reserve is giving commercial real estate owners a much-needed lifeline as some owners collected only 27% of retail rents and 73% of multifamily rents for April. On April 9, the Fed announced a $2.3 trillion initiative including the Main Street New Loan Facility and Main Street Expanded Loan Facility

By now, COVID-19’s immediate and direct impacts on the business and legal communities are obvious and well known. However, the secondary affects on those industries will continue to ripple for months and years ahead. Among those is the likely surge in litigation funding that will result from the coronavirus fallout.