Banking and Finance Law Report : Banking & Finance Lawyer & Attorney : Porter Wright Morris & Arthur Law Firm : Bankruptcy, Commercial Lending

The Banking and Finance Law Report is pleased to share with you the launching of Porter Wright's latest blog – Employee Benefits Law Report– which we have created as a resource to help guide employers of all sizes through the complex administrative and legal challenges facing their employee benefit plans.

This blog – edited by my partners Ann Caresani and Rich Helmreich – will provide the latest information in a wide range of areas related to Employee Benefits including:

• ERISA and employee benefits litigation
• Health care reform
• Retirement plans
• Audits and correction
• Benefits issues related to mergers and acquisitions
• Employee Stock Ownership Plans (ESOPs)
• ERISA fiduciary compliance
• Health and Welfare Plans
• Nonqualified Deferred Compensation/Executive Compensation
• Tax-exempt/government employers

If you would like to subscribe to Employee Benefits Law Report and receive e-mails regarding blog updates, please visit the blog and enter your e-mail address. Alternatively, you may add www.employeebenefitslawreport.com to your RSS/XML feedreader.

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On June 30, 2011, the Eighth District Court of Appeals in Cuyahoga County, Ohio decided the case of JNT Properties, LLC v. KeyBank, Nat'l Assoc., which dealt with the calculation of interest on a commercial loan by what is known as the "365/360 method." The court held that KeyBank's interest calculation method for the loan was unintelligible because although a provision toward the top of the note contained a stated annual interest rate of a certain percentage, that provision was contradicted by another term in the note relating to calculation of interest.  Accordingly, lenders using the common "365/360 method" should ensure that their loan documents clearly and intelligibly describe the calculation of interest.

The case originated when JNT Properties filed a class action against KeyBank, alleging breach of contract based on KeyBank's use of the "365/360 method" for the calculation of interest. The promissory note in question stated that the "Initial Interest Rate" was 8.93%, but then elsewhere in the document stated as follows:

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Below are several of the latest posts from the Porter Wright blog network. They cover diverse topics ranging from the recent Wal-Mart Supreme Court decision to ensnarement and SEC witness immunity to nanotechnology inclusion in the National Defense Authorization Act.

Wal-Mart v. Dukes: Supreme Court Rejects "Expansive" Gender Bias Class Action In Absence of "General Policy of Discrimination"

The much-awaited decision of the United States Supreme Court is here. Dubbed by Justice Scalia as "one of the most expansive class actions ever," the Supreme Court unanimously reversed the decision of the Ninth Circuit Court of Appeals which had affirmed the certification of a class of approximately 1.5 million current and former female employees alleging discrimination in pay and promotion. Read more.

Discovering Ensnarement 

Ensnarement is a powerful defense in any patent case where the doctrine of equivalents is at issue. It's time for defendants to "discover" this under-utilized defense.    Despite litigating numerous doctrine of equivalents cases, I've only litigated one case where an ensnarement defense was vigorously asserted. Read more.

SEC Delegates Authority To The Director of the Division of Enforcement To Issue Witness Immunity

On Monday June 13, 2011, the SEC announced that it was amending its rules to delegate authority to the Director of the Division of Enforcement to issue witness immunity orders to compel individuals to give testimony or provide other information. This rule will go into effect for an 18-month period once it is published in the Federal Register. Read more.

FY 2012 National Defense Authorization Act: The Senate

On June 17, 2011, the Senate Committee on Armed Services announced that S. 1253, the National Defense Authorization Act for FY 2012 had been passed unanimously and had been reported out of Committee and sent on to the Senate for debate. S. 1253 provided $200 million in funding for the "Rapid Innovation Program" established by PL 111-383, the 2011 National Defense Authorization Act. $50 million of this is directed to the development of advanced materials, including nanomaterials, as described in S. Report 112-26. Read more.

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In mid-August the SEC’s new whistleblower rules will take effect (click here for the Final Rule).  The new rules explain and further define the requirements of a whistleblower program that has been in place since the Dodd-Frank Act took effect on July 21, 2010. In general, anyone who provides information to the SEC relating to a possible violation of the securities laws is entitled to an award if the following requirements are met:

• The information must be provided voluntarily, before the SEC asks for it;
• The information must be based on the whistleblower’s independent knowledge and not already known to the SEC or derived from public filings;
• Providing the information must lead to successful enforcement by the SEC or a federal court or administrative action; and
• The SEC must obtain monetary sanctions above $1 million.

Successful whistleblowers can receive an award of between 10 and 30% of the total monetary sanctions collected. The whistleblower program is a significant expansion of previous SEC whistleblower rules that only applied to insider-trading cases and were capped at 10% of the penalties collected (click here for the SEC press release). 

The whistleblower rules do not require the whistleblower to comply with the company’s internal compliance program, but do encourage such internal compliance. For example, a whistleblower who reports through the company’s internal compliance program is still eligible for an award if the company reports the information to the SEC, and the whistleblower receives credit for all information proved by the company, even information not initially reported by the whistleblower to the company.

Despite the expansive new rules, awards are not available for, among others, whistleblowers with a pre-existing contractual duty to report the violation, a person who obtains the information illegally, or an officer or director who gains the information through the company’s internal process for identifying violations.

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