Commercial Litigation Update

Six months from the date of closing. That’s how long acquiring companies have under the newly announced Department of Justice (DOJ) Mergers and Acquisitions (M&A) Safe Harbor Policy to disclose misconduct discovered in the context of a merger or acquisition – whether discovered pre or post-acquisition.  And the acquiring company has one year from the date of closing to remediate, as well as provide restitution to any victims and disgorge  any profits.

Over the last two years, the DOJ has made clear its priority to encourage companies to self-disclose misconduct aiming to ...

Last week, blockchain analysis firm, Chainalysis, held its annual conference, Links 2023, in New York City, where private and public sector leaders met to discuss emerging issues impacting the blockchain, cryptocurrency, and digital asset space. The conference featured presentations from notable public and private sector leaders, including government regulators, enforcement bodies who investigate and assist in prosecuting virtual asset fraud, and executives from financial institutions.

The U.S. Department of Justice (“DOJ”) remains busy updating its policies relating to corporate prosecutions, evaluations of compliance programs, and voluntary disclosures. In a pair of speeches at March’s ABA White Collar Conference in Miami, Deputy Attorney General Lisa Monaco and Assistant Attorney General Kenneth Polite, Jr. returned to the Department’s revision of its Evaluation of Corporate Compliance Program (“ECCP”) by unveiling several significant policies, including those relating to a corporation’s access to and retention of employee electronic communications as well as a company’s compensation structure for executives and employees.

In response to a recent Department of Justice (DOJ) request that all DOJ components write voluntary self-disclosure policies and “clarify the benefits of promptly coming forward to self-report [as] a good business decision,” on January 17, 2023, Assistant Attorney General (AAG) Kenneth Polite, Jr. announced updates to the DOJ Criminal Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP). The updated CEP, policy 9-47.120, which was previously known as the Foreign Corrupt Practices Act (FCPA) Corporate Enforcement Policy, expands the applicability of the CEP to now apply to all corporate criminal matters handled by the DOJ’s Criminal Division. The updated CEP, which is effective prospectively only, offers new, significant, and concrete incentives to corporations to have effective compliance programs, to voluntarily disclose allegations of criminal misconduct (including that of its officers, directors and employees), to fully cooperate with the government’s investigation of alleged misconduct, and to timely and appropriately remediate the misconduct. In announcing the updated policy, AAG Polite stated, “Our number one goal in this area – as we have repeatedly emphasized – is individual accountability. And we can hold accountable those who are criminally culpable—no matter their seniority—when companies come forward and cooperate with our investigation.”

On November 24, 2022, New York’s Adult Survivors Act (“ASA”) (S.66A/A.648A) will go into effect and likely will usher in a tidal wave of litigation across the state. Employers will be impacted by the law, in addition to individuals, and the resulting litigation could span many years – particularly with the ongoing court delays related to the COVID-19 pandemic. As such, developing a proactive defense strategy for ASA claims and resolving potential insurance coverage issues in advance, is of vital importance as this date draws near.

Beginning on March 1, 2023, the statute of limitations for allegations under New York City’s Victims of Gender-Motivated Protection Law (“VGMVPL”) will be extended for two years to afford alleged victims of gender motivated violence a two-year lookback window to bring a civil action for claims that have been previously time barred. Individuals will have from March 1, 2023 to March 1, 2025 to commence a civil suit against such alleged wrongdoers and institutions where they may seek compensatory and punitive damages, injunctive and declaratory relief, attorney’s fees and costs, and such other relief as a court may deem appropriate under VGMVPL for participation in such crimes.

It has been four years since Congress enacted the Eliminating Kickbacks in Recovery Act (“EKRA”), codified at 18 U.S.C. § 220. EKRA initially targeted patient brokering and kickback schemes within the addiction treatment and recovery spaces. However, since EKRA was expansively drafted to also apply to clinical laboratories (it applies to improper referrals for any “service”, regardless of the payor), public as well as private insurance plans and even self-pay patients fall within the reach of the statute.

Recent legislation signed into law by President Biden on September 16, 2022 abolishes the statute of limitations for over a dozen federal civil causes of action relating to child sex abuse, continuing the trend throughout the country to reform statutes of limitations relating to child sex abuse. Known as the “Eliminating Limits to Justice for Child Sex Abuse Victims Act of 2022” (Public Law No. 117-176), the Act abolishes the previous ten-year statute of limitations to commence a civil action for any person who, as a minor, was the victim of any of the offenses enumerated in the Act, including forced labor, sex trafficking of children, sexual abuse of a minor, sexual exploitation of children, and transportation of minors to engage in sexual conduct. The Act became effective on September 16, 2022.

Building on attempts in recent years to strengthen the Department of Justice’s (DOJ’s) white collar criminal enforcement, on September 15, 2022, Deputy Attorney General Lisa Monaco announced revisions to DOJ’s corporate criminal enforcement policies. The new policies, and those that are in development, further attempt to put pressure on companies to implement effective compliance policies and to self-report if there are problems. Notably, the new DOJ policies set forth changes to existing DOJ policies through a “combination of carrots and sticks – with a mix of incentives and deterrence,” with the goal of “giving general counsels and chief compliance officers the tools they need to make a business case for responsible corporate behavior” through seven key areas:

Recent New York legislation will afford a class of sexual abuse victims the opportunity to sue their abusers, where they previously would have been time-barred. On May 24, 2022, New York Governor Kathy Hochul signed into law the Adult Survivors Act (“ASA”) (S.66A/A.648A), which creates a one-year lookback window for alleged survivors of sexual assault that occurred when they were over the age of 18 to sue their alleged abusers regardless of when the abuse occurred. The one-year window will begin six months from signing – on November 24, 2022 and will close on November 23, 2023. In 2019, New York extended the statute of limitations to 20 years for adults filing civil lawsuits for  certain enumerated sex offenses. However, that legislation only affected new cases and was not retroactive. In contrast, the ASA permits individuals who were over the age of 18 when any alleged abuse occurred to sue for civil damages regardless of the statute of limitations.

We are pleased to present Commercial Litigation Update, the newest blog from law firm Epstein Becker Green (EBG), which will offer engaging content about emerging trends and important developments in commercial and business litigation.

Commercial Litigation Update will feature thought leadership from EBG litigation attorneys and provide insightful and practical commentary and analysis on a wide range of timely litigation issues that affect businesses. Areas of interest will include trends and developments in antitrust, contract, defamation and product disparagement ...