Reuters reports that the former chief executive of Energy XXI Ltd agreed to settle civil charges that he failed to disclose to investors more than $10 million in personal loans obtained from company vendors and a candidate for the company’s board, the U.S. Securities and Exchange Commission said.

John D. Schiller Jr. didn’t admit or deny the charges, but he settled with the SEC by paying a $180,000 penalty and agreeing not to serve as an officer or director of a public company for five years, the SEC said.

The Reuters article explains: “The SEC alleged Schiller maintained an extravagant lifestyle using a leveraged margin account secured by his shares in the oil and gas producer. When oil prices tumbled in 2014 and he was faced with margin calls, Schiller accepted more than $7.5 million in personal loans from companies that did business with Energy XXI, the SEC claimed.”

Read the article.

The Tennessean reports that the U.S. Senate voted 70 to 23 on Thursday to confirm Paul Ney as the general counsel for the Department of Defense.

Ney, of Nashville, has worked for the past two years in the Tennessee attorney general’s office where he currently serves as chief deputy attorney general. In that role, he coordinated and supervised legal work for all of the office’s divisions, writes reporter Michael Collins

As Defense Department general counsel, he will be involved in issues involving personnel, conduct and other matters.

Read the Tennessean article.

A recent Armed Services Board of Contract Appeals decision confirmed that waiver defenses can defeat government demands for strict compliance with contract requirements, reports Cohen Seglias Pallas Greenhall & Furman.

Authors Maria L. Panichelli and Alissandra D. Young explain that the Board found in Appeal of American West Construction, LLC that the U.S. Army Corps of Engineers had effectively waived the right to enforce a construction contract specification.

“This meant that the government could not recover from the contractor the difference in the price it paid for the original specification and the lower amount spent by the contractor to perform the deviation,” they write. “In a world where the government often has the right to strictly enforce contract requirements and hold contractors financially responsible for any deviation, this decision is a big win for construction contractors.”

Read the article.

The Washington Post reports that tormer top executives at ITT Educational Services, the parent company of defunct ITT Technical Institute, have settled fraud cases with the Securities and Exchange Commission, avoiding a trial slated to begin Monday.

ITT chief executive Kevin Modany and former chief financial officer Daniel Fitzpatrick were chagred with civil fraud in 2015 for allegedly deceiving investors about high rates of late payments and defaults on student loans backed by the company, writes Danielle Douglas-Gabriel.

Although they didn’t admit or deny any wrongdoing, they agreed to pay penalties of $200,000 and $100,000, respectively. The agreement bars them from serving as officers and directors of public companies for five years.

Read the Washington Post article.

Energy giant Halliburton failed to act as two Muslim workers in North Texas were regularly harassed about their religion by supervisors and co-workers, the federal government alleges in a lawsuit.

Bloomberg Law reports the Equal Employment Opportunity Commission alleges Hassan Snoubar and Mir Ali were harassed and otherwise discriminated against because of their national origin. Snoubar is from Syria, and Ali is from India. Both worked for Halliburton Energy Services Inc. as operator assistants, the EEOC says.

Reporter Patrick Dorrian  writes: “The lawsuit continues the agency’s crackdown on employer practices or other workplace behaviors that target workers who are Muslim or Sikh, or of Arab, Middle Eastern, or South Asian descent. Eliminating such discrimination is one of the federal job rights watchdog’s top enforcement priorities.”

Read the article.

Government Executive reports that a former top legal adviser to the Immigration and Customs Enforcement bureau was sentenced to 48 months in prison for wire fraud and identity theft affecting aliens, the Justice Department announced on Thursday.

Reporter Charles S. Clark writes that “Raphael Sanchez, 44, of the ICE Office of Principal Legal Advisor based in the Pacific Northwest, had pleaded guilty in February to running a scheme to defraud aliens in various stages of immigration removal by using their personally identifiable information to open lines of credit and personal loans in their names. He would then manipulate their credit bureau files, transfer funds to himself and purchase goods for himself using credit cards issued in their names, [the Department of] Justice said.”

Sanchez admitted to using the agency’s computer database as well as paper files to steal the personal information.

Read the Government Executive article.

The U.S. Supreme Court handed a victory to President Trump after the high court upheld the third version of his travel ban in a 5-4 vote, barring almost all travelers from five Muslim countries, North Korea and government officials from Venezuela.

“This is a big win for President Trump,” says Dallas appellate attorney David Coale in a post on the website of Androvett Legal Media & Marketing. “The decision signals that so long as the president is acting in an area of traditional executive power, in a facially neutral way with regards to religion, he has a lot of power. This signals how things may go in later immigration litigation about border policy.”

Coale adds that the latest ruling is different from another immigration hot button involving asylum.

“This dispute turned on the force of a law about visas. The current immigration dispute involves asylum requests, which is a different set of statutes. So this case does not apply directly, but it does provide a road map for future litigation by making analogies to these laws.

“Both the majority and Justice Stephen Breyer’s dissent note the system of waivers and exemptions built into the president’s order. The majority says it shows that the order was drafted carefully; the dissent says that if the waivers and exemptions are not actually used, that can justify a challenge to the statute. So that may be the next round of litigation about these matters – whether the waivers and exemptions are in fact being applied as written.

“Also,” he noted, “the majority signals that it isn’t particularly interested in presidential ‘tweets.’ It mentioned them, but basically said they were not relevant to the legal issue at hand.”

The U.S. Supreme Court, winding down its nine-month term, will issue rulings this week in its few remaining cases including a major one on the legality of President Donald Trump’s ban on people from five Muslim-majority nations entering the country, reports Reuters.

“The nine justices are due to decide other politically sensitive cases on whether non-union workers have to pay fees to unions representing certain public-sector workers such as police and teachers, and the legality of California regulations on clinics that steer women with unplanned pregnancies away from abortion,” write Lawrence Hurley and Andrew Chung.

On the subject of collecting fees for union from non-members, the court’s conservatives indicated opposition during arguments on Feb. 26 to so-called agency fees that some states require non-members to pay to public-sector unions.

Read the Reuters article.

The Merrill Lynch unit of Bank of America Corp. agreed to pay a $42 million fine under a settlement with the U.S. Securities and Exchange Commission for misleading brokerage customers about which firms processed their trades, according to a Reuters report.

Reporters Lisa Lambert and Jonathan Stempel write that Merrill “fell far short of the standards expected of broker-dealers in our markets,” preventing customers from making informed decisions about their orders and broker-dealer relationships, according to Stephanie Avakian, co-director of the SEC enforcement division.

“The SEC said the masking ran from May 2008 to May 2013, and that Merrill kept it hidden after it ended. It said Merrill falsely told customers that more than 15.8 million orders worth over $141 billion had occurred in-house,” according to the reporters.

Read the Reuters article.

The Dallas Morning News is reporting that Dallas-based Texas Coastal Energy Company defrauded 80 oil and gas investors out of more than $8 million, according to a lawsuit filed Tuesday by the Securities and Exchange Commission, the stock market regulator.

The SEC alleges the company, its co-founder, Jefferey Gordon, and his sales representatives misrepresented the company’s finances, exaggerated a geologist’s background and inflated the reserves and expected production of its wells in Texas and Kansas, according to reporter Jeff Mosier.

“In an offering fraud, people who seek to steal investors’ hard-earned money will often use cold calls and inflated promises to carry out their schemes,” said Shamoil T. Shipchandler, director of the SEC’s Fort Worth regional office. “Their self-serving statements are no substitute for an investor’s due diligence.”

Read the Dallas News article.

By Richard Hunt
Hunt Huey PLLC

The latest iteration of the Web Content Accessibility Guidelines became effective with the publication of version 2.1. on June 5, 2018. The newest version adds an additional 17 success criteria for compliance with WCAG, 12 of which are part of success level 2, the level that has become a de facto standard for the ADA. I’ve shared my thoughts on how this may change the ADA litigation landscape elsewhere. In this blog I’d like to consider the deeper questions posed by this revision: Who gets to decide what discrimination means?

It is worthwhile to start with a look at the stated purpose of the ADA itself. The declaration of policy in 42 U.S.C. §12101 never uses the word “accessible” and refers to “access” only with respect to public services. The focus of the ADA is discrimination, and standards for accessibility are only part of Congress’ intent to “to provide clear, strong, consistent, enforceable standards addressing discrimination against individuals with disabilities.” (42 U.S.C. §12101(b)(2)).

The first of these standards concerned physical accessibility and took the form of the ADAAG, a set of construction requirements that are “as precise as they are thorough” according to the Ninth Circuit Court of Appeals. The original standards were replaced and expanded by the 2010 Standards now in effect, but a facility built when the old ADAAG were in effect still meets the requirements of the ADA. If you do it right the first time, you don’t have to keep re-doing it as standards for accessibility change.

This is notable because it is an example of the kind of compromise built into the ADA. Not making a facility accessible according to statutory standards is “discrimination” as defined in the ADA, but the statute was not intended to require that businesses perpetually update their physical premises as standards change. There are other compromises as well. The required door widths, slopes, and so forth are all based on what is accessible to most disabled individuals; not all. Those compromises were worked out over many years through the regulatory process with input from disability rights advocates, technical experts and the affected businesses. More recently adopted standards for ATM’s, movie theaters and the like were worked out the same way, balancing the degree of access with the cost of existing technology. In every case businesses were allowed lead times of many years to adapt to the new standards. No one was expected to become accessible overnight.

Until, that is, the Department of Justice decided that the internet should be accessible and that the ADA was the means to enforce that accessibility. DOJ prosecuted internet access cases long before it had begun work on accessibility standards for the internet, and then deep sixed regulations that were almost complete for political reasons. The business community, usually not anxious to be regulated, is now trying to persuade Congress to force DOJ to publish regulations in order to end the chaos brought on by a lack of standards.

In the meantime, we have the Web Content Accessibility Guidelines, now in version 2.1. They are published by the World Wide Web Consortium, a private organization made up of tech companies and academics from around the world. The Guidelines were developed with input from experts in accessibility, but not, it appears, members of the business community most affected by the Guidelines; that is, people who sell things on the internet or use web sites in support of ordinary physical businesses. The Guidelines were intended to be private and non-binding, so naturally they do not take into directly into account either the time or cost of implementation; after all, if there were no ADA a business could take as long as it needed to implement them, and could limit its implementation if cost were an issue. They are being used as government regulations without the process and compromises that such regulations ordinarily require.

This is not the fault of W3C of course. It is merely fulfilling its mission of providing web standards, with accessibility standards being just one such standard. It is disturbing though that an international NGO with no political or financial accountability has been delegated the job of regulating American business by the political paralysis of DOJ and the Congress and the willingness of the Courts to entertain website accessibility lawsuits. For businesses the only effective response is to assume that WCAG 2.1 will be the basis of a new round of lawsuits claiming that the definition of “discrimination” under the ADA was changed overnight by the publication of WCAG 2.1, and to begin updating their websites accordingly.

You can learn more at accessdefense.com or by contacting the author.

Image by Mike Mozart

Bloomberg is reporting that Citigroup Inc. agreed to pay a combined $100 million to 42 U.S. states to resolve a probe into fraudulent conduct tied to interest-rate manipulation that affected financial instruments worth trillions of dollars.

The states had alleged Citigroup misrepresented the integrity of the Libor benchmark to state and local governments, not-for-profit organizations and institutional trading counterparties, sometimes to protect the bank’s own reputation, reports Erik Larson.

“The accord is the latest development in probes by governments around the globe into manipulation of benchmark interest rates, one of the key scandals that led to a cultural overhaul of the industry over the past decade,” Larson writes. “Global fines have topped $9 billion. In October, Deutsche Bank paid 45 states $220 million in penalties and disgorgements to resolve U.S. and U.K. probes.”

Read the Bloomberg article.

A lawsuit accusing the U.S. Department of Veterans Affairs of failing to pay overtime to nurse practitioners and physician assistants since December of 2006 has been certified as a class action, according to a web post by Androvett Legal Media & Marketing. The certification is listed as an opt-in class, opening the door for more plaintiffs.

Class representatives Stephanie Mercier, Audricia Brooks, Deborah Plageman, Jennifer Allred and Michele Gavin brought the lawsuit on behalf of nurse practitioners and physician assistants from VA facilities across the country. Attorneys estimate as many as 10,000 VA employees nationwide ultimately could be represented in the class action.

According to the lawsuit, nurse practitioners and physician assistants were required to process electronic and computer patient records after work hours using VA facility computers, laptops and sometimes their own personal home computers without compensation. The work is vital to the treatment of patients and is considered mandatory by VA supervisors.

Provost Umphrey attorneys Michael Hamilton of the firm’s Nashville office and Guy Fisher in the Beaumont, Texas, office are among the attorneys working on the lawsuit along with counsel David Cook and Clement Tsao of Cincinnati’s Cook & Logothetis, LLC, Douglas Richards of Lexington, Kentucky and Robert Stropp of Mooney Green, P.C. in Washington, D.C.

“These are medical professionals who are taking care of our veterans,” said Hamilton. “If we aren’t paying them properly, what sort of statement does that make about the importance of caring for those who watched over us and our rights?”

“Ultimately, it’s about patient care,” said Cook. “We need to do our utmost for those who have put on the uniform and defended our rights. And, we can start by properly paying the medical professionals who care for them when they need it.”

Courthouse News Service reports that Education Secretary Betsy Devos need not provide full debt relief to more than 60,000 defrauded students, but she must stop collecting on their loans, a federal judge said in court Monday.

A proposed class of borrowers had asked U.S. Magistrate Judge Sallie Kim to revive an Obama-era policy that promised full debt forgiveness to students defrauded by the now-defunct, for profit Corinthian Colleges, according to reporter Nicholas Iovino.

Kim sided with the federal government’s position that returning to the “status quo” means delaying processing claims for debt relief, not going back to the Obama-era policy of forgiving all loan debt. She acknowledged that borrowers will still suffer harm to their credit and interest growing on their loans, even though she has ordered the government to stop collecting.

Read the CNS article.

A federal bank regulator that has fined Wells Fargo more than $500 million over its creation of unauthorized accounts and other consumer abuses has found evidence of sales practice problems at other large and midsize banks — but is refusing to name those institutions, reports the Los Angeles Times.

The Office of the Comptroller of the Currency found “bank-specific instances of accounts being opened without proof of customer consent” as part of a review of more than 40 banks spurred by the Wells Fargo scandal, according to reporter James Rufus Koren.

But an agency spokesman said the agency will not be naming the banks where it found potentially unauthorized accounts or providing details on banks’ specific conduct.

Read the LA Times article.

A former aide to embattled EPA director Scott Pruitt who has come under scrutiny for getting a significant pay bump has been hired to a position with the Oklahoma Workers’ Compensation Commission, reports KFOR-TV.

The commission voted unanimously to hire Sarah Greenwalt as the agency’s new general counsel.

“Greenwalt made headlines after she received a 52 percent raise, bringing her salary to $164,200 while at the Environmental Protection Agency before Pruitt reversed it amid public outcry,” according to the report.

Read the KFOR article.

The Washington Times is reporting that the Supreme Court over the next month is poised to upend the way the country picks representatives to Congress, decide whether the First Amendment protects people who refuse to do business with same-sex couples and rule on whether President Trump’s tweets can be used in court to derail his agenda.

Reporter Alex Swoyer sees the case for some blockbuster rulings that will signal to lower courts how they should treat the unorthodox Trump.

“The biggest test comes on the president’s travel ban. His opponents have begged the justices to hold Mr. Trump’s campaign-era tweets against him, saying his comments about Muslims taint the travel policy he announced once he took office,” writes Swoyer.

Read the Washington Times article.

Law firm partnerships fiercely guard against disclosing what they pay their principals, points out Bloomberg Law. But partners must disclose compensation when opting for a government appointment.

“Top partners at major law firms can earn between $3 million to $10 million, according to compensation experts, while even career government lawyers with long service records rarely make more than $250,000,” writes reporter Elizabeth Olson.

As an example, the article reports that Dan M. Berkovitz, a partner at Wilmer Cutler Pickering Hale and Door, listed $1.18 million in partnership income for 2017 and a few months of 2018. Berkovitz was recently appointed one of the Commodity Futures Trading Commission’s commissioners.

And Robert Khuzami created waves a few months ago when he disclosed $11.1 million in partnership income over about a year’s period as a partner in Kirkland & Ellis’s white-collar practice. He is a deputy attorney general in the Southern District of New York.

Read the Bloomberg article.

The new director of the Federal Trade Commission’s consumer protection unit, a watchdog with broad investigative powers over private companies, stands out even in an administration prone to turning over regulatory authority to pro-industry players, reports The New York Times.

Andrew M. Smith was part of the legal team that in 2012 defended AMG Services, the payday lender founded by the convicted racketeer Scott Tucker, whose predatory practices against impoverished borrowers eventually led to a $1.3 billion court-ordered settlement, the biggest in the commission’s history, , according to reporters Glenn Thrush and Jack Nicas.

Because of his representation of companies like Facebook, Uber and Equifax, banks, lenders and credit-reporting agencies — all companies with matters before the commission — he will have to recuse himself from dozens of cases.

Read the Times article.

A lack of familiarity with advertising rules can lead to a firm or an individual lawyer having their ad, website, etc., labeled as “noncompliant” by the State Bar of Texas Advertising Review Department, warns Bruce Vincent of Muse Communications.

That department reviews lawyer advertising for violations under the Texas Disciplinary Rules of Professional Conduct. Those who fail to remedy noncompliant communications may be the subject of an official complaint filed with the Bar’s Chief Disciplinary Counsel.

Vincent interviewed Gene Major, director of the State Bar Advertising Review Department and director of the Bar’s Attorney Compliance Division, about the state’s lawyer advertising landscape and the common mistakes that can lead to violations.

Major discussed some of the most common mistakes and violations he sees, possible penalties, and the use of mailing lists for marketing.

Read the article.