Tips for In-House Counsel

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In re Taylor: Attorneys May Not Rely Solely on “Default Management” Databases to Prepare Mortgage Bankruptcy Pleadings

By Andrew Erskine of Zuber & Taillieu

Attorneys and law firms handling mortgage foreclosure-related matters cannot rely solely on factual information contained in a “default management” database maintained for their client in preparing bankruptcy and other court pleadings, the U.S. Court of Appeals has concluded.. In a significant decision, the Third Circuit held that attorneys in federal… More...

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Accommodating Marijuana In The Workplace After Prop 19

By Jeremy J. Gray of Zuber & Taillieu

Even though California voted down Prop 19, what is the obligation of employers in California and elsewhere to accommodate an employee’s use of medical marijuana? INTRODUCTION The proliferation of state laws permitting the use of medical marijuana has added a new wrinkle the already vexing issue of accommodating employee disabilities. The right of employers to drug test employees is widely codified in statutory and case law, and practiced throughout the United States; as is the interrelated right to refuse to hire and/or terminate employees that test positive for illegal drugs. However, these rights to maintain a drug free workplace are colliding with the laws permitting medical use of marijuana. If an employee claims to have a disability that can be treated by using medical marijuana must an employer accommodate the use of an illegal drug, or, can the employer enforce its anti-drug policies and terminate the employee? More...

Hertz Corp. v. Friend: A Corporation's Principal Place of Business Is Its “Nerve Center”

By Josh Lawler of Zuber & Taillieu and Yuri Mikulka

The U.S. Supreme Court has resolved the issue of how to determine the “principal place of business” of multistate corporations for the purpose of diversity jurisdiction, defining as the corporation’s “nerve center.” The decision in Hertz Corp. v. Friend, 130 S.Ct. 1181 (2010), ends the “divergent and increasingly complex interpretations” of the phrase “principal place of business” applied by the various federal courts of appeals. The decision fundamentally changes how most lower courts will determine corporate citizenship for diversity purposes, enabling increased predictability and certainty for parties on both sides of litigation. More...

New FDIC Guidelines Offer Helpful Hints for Real Estate Workouts

By Michael J. Zerman of Zuber & Taillieu

On October 30, 2009, the Federal Deposit Insurance Corporation (“FDIC”), together with other federal regulatory agencies, adopted a “Policy Statement on Prudent Commercial Real Estate Loan Regulation.” (http://www.fdic.gov/news/news/press/2009). More...

IRS Liberalizes Rules for Restructuring Mortgages Held by REMICs

By Patrick Del Duca, H. Jacob Lager and Michael J. Zerman of Zuber & Taillieu

The Internal Revenue Service and the U.S. Department of Treasury recently published new guidance to provide more flexible and proactive options for restructuring securitized commercial loans held by Real Estate Mortgage Investment Conduits (REMICs). More...

U.S. v. Ruehle And Attorney-Client Privilege: An Executive’s Statements to Outside Counsel During Internal Investigation Not Privileged

By Yuri Mikulka

The Ninth Circuit has held that a corporate executive’s statements made to outside counsel hired to conduct an internal investigation and to report its findings to corporate auditors, are not protected by attorney-client privilege, even if the executive may not have received a proper Upjohn-type warning. More...

Parking Code Violations By A Landlord: A Tenant’s Opportunity to Re-Negotiate

By Michael J. Zerman of Zuber & Taillieu and Kevin I. Shenkman

In today’s difficult economic climate, some commercial tenants are paying closer attention to parking code violations that landlords and tenants may have overlooked for years. Such violations may be difficult for landlords to correct, but may support tenant claims for contractual damages, injunctive relief, lease termination and disgorgement of past profits. More...

Ashcroft v. Iqbal: Raising the Federal Pleading Standard for Plaintiffs and Providing a New Defense Tool for Corporate Defendants

By Yuri Mikulka

On May 18, 2009, the Supreme Court entered Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009), which in combination with Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), is one of the most significant decisions impacting the viability of all initial civil pleadings filed in federal courts. For decades, filing a civil complaint with “a short and plain statement of the claim” was deemed sufficient. Iqbal now requires plaintiffs to plead concrete facts at the outset, and instructs judges to dismiss lawsuits where the allegations seem implausible, as defined in context by judicial experience and common sense. This new “plausibility standard” serves as a powerful tool for defendants seeking early dismissal of litigation. More...

California Lenders Should Think Twice Before Exercising Remedies Under a Material Adverse Change Clause

By Michael J. Zerman of Zuber & Taillieu

The material adverse change (“MAC”) clause has become a common provision in real estate loan documents. This clause typically provides, in broad terms, that a material adverse change in the financial condition of the borrower, the secured property, or any guarantor will constitute an event of default, upon which the lender may accelerate the borrower’s obligations under the loan documents and exercise the lender’s other remedies, including foreclosure. More...

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