The saga of the U.S. Customs and Border Protection’s (CBP) ten-year effort to amend its interpretation of key components of the Jones Act continues. After failed attempts to expand the scope of the Jones Act’s prohibition on activities by non-coastwise endorsed vessels in 2009 and 2017, CBP recently published a notice of proposed modification and revocation of certain ruling letters interpreting the Jones Act (see https://liskow.sharefile.com/d-s45a327d7ae7441e9). Unlike its recent, unsuccessful efforts to amend its interpretations, the current proposal attempts to expand one prohibition while narrowing another.
New Final Regulations on Hardship Distributions from 401(k) and 403(b) Plans
Previous regulations on hardship distributions from 401(k) and 403(b) plans generally provided that a participant could receive an in-service distribution prior to reaching age 59½ if the participant had an immediate and heavy financial need. The determination of whether a participant had an immediate and heavy financial need was determined based on all relevant facts and circumstances. However, to simplify administration, the regulations provided for safe-harbor hardship withdrawals that were deemed to be an immediate and heavy financial need.
Late last month, the IRS published final regulations that significantly relaxed some of the requirements under the safe-harbor provisions. Some of the changes are mandatory and some are permissive. The changes are discussed in detail below.
Louisiana Investment Adviser Update
• Top 10 Advisers in Louisiana
• SEC Issues New Proxy Guidance for Advisers
Top 10 Louisiana Advisers
For this edition, I thought that we would look at the top ten SEC registered investment advisers within the State of Louisiana. The SEC publishes a comprehensive database that captures all information submitted by advisers in their Form ADV’s. There is a total of 55 advisers registered with the SEC in Louisiana. Using this data, we came up with a list of the top Louisiana registered investment advisers by assets under management (“AUM”) and by number of accounts. For purposes of these rankings, we excluded advisers that are: (i) headquartered out of state, (ii) did not provide advisory services to the public, or (iii) umbrella organizations for groups of unaffiliated advisers. For the ranking of advisers by number of accounts, we included a column showing the percentage of accounts that are held by individuals, who are not high net worth individuals (net worth >$2.1 million).
There is a lot of data that we did not publish. Let us know if there is a data summary that you would like to see.
Fifth Circuit Opens Door to Removal Following Involuntary Dismissal of Non-Diverse Defendant
When is a case removable to federal court? The general rule is that removability is determined at the time a case is filed. One exception is the so-called “voluntary-involuntary” rule, which permits removal only when the plaintiff’s voluntary action in state court creates federal jurisdiction. The textbook example is the voluntary dismissal of a non-diverse defendant who settled with the plaintiff. The textbook counterexample is when the non-diverse defendant is dismissed via contested motion—an involuntary dismissal. In Hoyt v. The Lane Construction Corporation, 927 F.3d 287 (5th Cir. 2019), the Fifth Circuit blurred the line between these categories and expanded the cases that can be removed to federal court.
Liskow & Lewis Secures Key Rulings in Class Action Litigation
Liskow & Lewis’ Shannon Holtzman, James Brown, and A’Dair Flynt recently secured several key rulings in a putative class action, successfully opposing a complex remand motion under the Tax Injunction Act and the Class Action Fairness Act (“CAFA”) and obtaining a dismissal with prejudice of the claims against Liskow’s clients in Robert J. Caluda, APLC, et al v. The City of New Orleans, Linebarger, Goggan, Blair & Sampson, L.L.P, and United Governmental Services of Louisiana, Inc., No. 19-2497, 2019 WL 3283138, 2019 WL 3291014 (E.D. La. July 22, 2019).
New Final Regulations Expand the Availability of HRAs
On June 13, 2019, the Department of Labor, the Department of Health and Human Services, and the Department of Treasury (the “Departments”), published final regulations which significantly broaden the types of health plans that may be integrated with a health reimbursement arrangement (“HRA”). More specifically, beginning January 2020, the finalized rules allow HRAs to be integrated with certain qualifying individual health plan coverage and/or Medicare. The final rules reverse current guidance which requires HRAs to be integrated with only qualifying group health plan coverage. Practically speaking, this means that employers, beginning in 2020, will be allowed to subsidize employee premiums in the individual health insurance market and/or Medicare using pre-tax dollars, provided certain conditions are met. The final rules also allow certain HRAs to reimburse participants for certain premiums paid for excepted benefits. To achieve these results, the final rules create two new types of HRAs.
Texas Supreme Court to Review $500 Million Verdict in Case Involving Formation of Partnership to Construct Crude Oil Pipeline
Last week the Texas Supreme Court granted review in Energy Transfer Partners, L.P. v. Enterprise Products Partners, L.P., a case concerning Texas partnership law. Energy Transfer Partners has garnered significant amicus support on both sides of the “v.” and has been closely followed by the energy industry.
SCOTUS Decides Dutra Group v. Batterton
Today the United States Supreme Court issued its decision in this landmark case concerning punitive damages. The six justices in the majority opinion reversed the Ninth Circuit and resolved a circuit split on this issue. The question presented was whether punitive damages may be awarded to a Jones Act seaman in a personal injury suit alleging a breach of the general maritime duty to provide a seaworthy vessel. Justice Alito wrote the majority opinion, joined by Chief Justice Roberts, Justices Thomas, Kagan, Gorsuch, and Kavanaugh. Justice Ginsburg dissented, joined by Justices Breyer and Sotomayor.
Supreme Court Holds State Wage and Hour Laws are Inapplicable to Offshore Drilling Platforms
In a decision that could have far-reaching implications, the United States Supreme Court issued a June 10 opinion holding that California’s wage-and-hour laws do not apply to workers on oil and gas platforms located in open water on the Outer Continental Shelf. The plaintiffs in Parker Drilling Management Services, Ltd. v. Newton, were offshore rig workers who filed a class action asserting that their employer violated California’s minimum wage and overtime laws by failing to pay them for stand-by time while they were on the drilling platform. Both parties agreed that the platforms were governed by the Outer Continental Shelf Lands Act (“OCSLA”), but they disagreed regarding whether the California’s wage-and-hour laws were incorporated into OCSLA and therefore applicable to workers on the platform. Continue Reading
Latest Guidance on Fiduciary Duties
The June 5 Releases
Today we focus on the new SEC interpretative release on the fiduciary duties of investment advisers and provide a brief summary of its contents (“The Fiduciary Duty Release”).[1] This Release is part of a package of new rules and interpretations adopted by the SEC on June 5, 2019. In total, there are four new rules and interpretations:
- Regulation Best Interest (“BI”);
- Form CRS, a new form for advisers and brokers;
- the Fiduciary Duty Release; and
- the Release on the “solely incidental” investment adviser exclusion.[2]
Together these four Releases total a mammoth 1336 pages and define and differentiate the duties owed by brokers and investment advisers.
