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Man Pleads Guilty to False Workers Compensation Claim for Motorcycle Injury,

Workers compensation has been a boon to many employees. If a person’s primary – and probably only – form of income is the physical labor he or she can perform, an injury can be crippling for financial wellbeing as well. To compensate, many states have set up workers compensation to provide for a temporary disabled worker so that the worker can still have income until he or she is back on their feet. However, there are some who would abuse this generosity for selfish ends.

workers_compensationBoone Block of Clyde Park, Montana, worked for the state Department of Transportation. Block filed for workers comp, claiming that he had hurt his right knee while jumping out of a work truck. The Montana State Fund approved temporary total disability payments of $30,000 to pay for Block’s wages and medical treatment. Investigators received anonymous tips which lead to the discovery that Block had been injured in a motorcycle accident outside of work.  Boone Block has pleaded guilty. Block faces a three year suspended sentence and will pay a $3,000 fine.

Obtaining Workers Compensation

Workers compensation is obviously a life-saving benefit, as the benefit can pay for any medical bills acquired. As Block’s story shows though, if the employee abuses the system, it can backfire with significant damage to the employee. So are there any best practices to obtaining workers compensation without the shadow of fraud looming over the claim.

Check to See If Your Employer Is Covered

Not every employer is covered by workers compensation. Most states require an employer carry workers compensation if the employer has a certain number of employees. This number varies depending on the state – California requires that all employees be covered, while Georgia requires at least three employees before workers compensation is required – so check with an attorney first to determine if your employer is legally required to carry workers compensation.

One more note: the distinction between an independent contractor and an employee is very important if your state determines workers compensation based on the number of employees there are.

See a Doctor

Or better yet, see multiple doctors. Don’t worry about the cost; the workers compensation will put you back where you were before the accident – i.e. the cost of seeing these physicians will be covered. Blocks saw two doctors for his claim and it was approved, so this is a surefire way of affirming that you are indeed injured. The only mistake Blocks made was to lie to his doctors about how he was injured. That’s a no-no.

Document Everything

Broke your arm in a car accident while on a pizza delivery run? Crowbar pierced your leg while on the worksite? It might sound difficult, but try to obtain the names and contact information of any witnesses in the area. Not only will you need them to convince the state that you were injured on the job, but a credible witness will go a long way towards putting any investigation to rest. Even if you’re in no condition to go around collecting everyone’s names, you can ask a co-worker who was present to verify who was there.

Be Honest

There’s a difference between lying and being honest. It is possible to tell the truth without being honest. That’s not what happened with Block – he was just lying outright – but a lie by omission can harm your case just as much as an intentional lie. If you saw two doctors and one doctor said you were physically okay, you should disclose that doctor’s opinion to your attorney, even if the second doctor’s medical report is harmful to your case. Fraud is treated much more harshly, and scrutinized much further, in workers compensation cases than other types of cases.

Takata: Company Behind Airbag Crisis Files for Bankruptcy

Takata has literally been sued out of existence. The Japanese based company is filing for bankruptcy in Japan and the United States after a series of product liability suits left them $10 billion in debt. The 80 year old company was determined to be liable for faulty airbags. In one suit, Takata plead guilty to a criminal charge of wire fraud. A competitor, Key Safety Systems, purchased a few departments from Takata, but Takata retains most of its massive debt.

takataWhy is Takata Taking Such a Hard Hit?

Normally, product recalls are cause for concern for a supplier like Takata, but such recalls are not usually fatal. In 2008, Takata and Honda issued a recall of affected vehicles, ultimately totaling 42 million vehicles. Takata airbags would rupture, spraying shrapnel and metal bits at the occupants. In the United States, the airbags were allegedly the cause of 11 deaths and 100 injuries. The defective airbags and recall was bad for Honda and Takata, but survivable for such large companies.

Shortly after though, the New York Times published a story claiming that Honda and Takata knew about the defects since 2004. Instead of ceasing production of the airbags and informing federal regulators, as required, the automakers ordered their engineers to destroy the data showing the faulty airbags. The subsequent Congressional investigations, criminal charges, and civil suits lead to $125 billion in damages and legal fees. Takata settled or paid off most of it debts, but it is still $10 billion in the hole.

If the allegations are true, and Takata has pleaded guilty to some of them, the massive bills are certainly warranted. Companies cannot knowingly release a defective product into the market, cause 11 deaths and a hundred injuries, and expect to walk away without consequences. The penalty is severe though, as these suits and investigations will likely mean the end of Takata itself. Takata employees who were not involved in the design of the faulty airbags don’t deserve to lose their jobs, but unless the bankruptcy can preserve Takata itself, there may be subsequent layoffs.

Could Bankruptcy Save Takata?

With a company of Takata’s size, laying off hundreds of employees is a very real possibility. Fortunately, U.S. bankruptcy is not always the corporate death sentence it appears to be. Bankruptcy does not always mean that creditors will come in and take everything. There are different types of bankruptcy in the United States. These “Chapters” – named after a specific Chapter of the Bankruptcy Code, range from the typical liquidation usually associated with bankruptcy (Chapter 7), repayment plans (Chapter 13) and restructuring (Chapter 11). Takata has taken advantage of Chapter 11 and theoretically should be able to preserve some of its assets.

Chapter 11 bankruptcy is typically used by businesses looking to recover from the bitter taste of bankruptcy. As stated, Chapter 11 is about restructuring the business so that it becomes profitable again. This usually involves selling off parts of the company that are losing money and then refocusing the business on products and services that will allow the company to pay off its remaining debts. In exchange, creditors are expected to forgive and write-off some of the debt owed. Chapter 11 is meant to salvage a failing business, although some Chapter 11 filings can be converted into a Chapter 7, whereby the assets are sold off and the company is basically dead.

Takata has already begun restructuring its debts. The sale of key assets to Key Safety Systems is akin to chopping off an arm to save the rest of the body. Of course, the Takada family remains in control of the company. It might seem unusual that the people who crashed the business would be allowed to remain in control. Unlike Chapter 7 and Chapter 13 bankruptcy, where a neutral trustee is appointed by the bankruptcy court, in Chapter 11 the debtor is allowed to retain control of its finances. This might be appalling to the creditors and victims, but allowing a debtor to remain in control of the company is often the incentive that debtors need to file for a Chapter 11 bankruptcy. This might not feel just, but the expediency of repaying people is more important in the law.

Can’t Revoke Citizenship Due to “Immaterial Falsehoods,” SCOTUS Rules

What does it take to remove a person’s citizenship? With all the discussion today about crimes that illegal immigrants have committed, border walls, travel bans (but not a ban!), and tougher ICE enforcement, it might be helpful to get some clarity on some of the finer points of immigration law.

The Details of the Case

Divna Maslenjak was granted refugee status and became a U.S. citizen in 2007. Immigration officials later found out that Maslenjak had lied about her husband’s military status. Instead of fleeing Bosnian conscription, he had served as an officer in a Bosnian military unit, a unit that was later accused of war crimes. Federal prosecutors charged Maslenjak with obtaining her citizenship illegally by lying on her immigration papers.

Maslenjak argued that the lie was immaterial, but the judge instructed the jury that any false statement on her application was sufficient for a guilty verdict. The jury found her guilty and Maslenjak was stripped of her American citizenship. Maslenjak appealed to the Sixth Circuit and then to the Supreme Court, arguing that putting false statements on immigration documents should only result in revocation of citizenship if the lie was material to the application process. The Supreme Court ruled in favor of Maslenajk.

Justice Kagan provided an example that illustrates this point: Suppose that a man takes a painting illegally. One would assume that meant the man had stolen the painting from the art house, or used a fraudulent credit card to obtain the painting. Both of those would be material and would most likely result in the painting being returned to the art house from where it came. However, if the man ran a stop sign on his way to the art house to legally purchase the painting, then the crime, running a stop sign, would not be considered material to obtaining the painting.

citizenshipIs This Good or Bad For Immigrants?

Obviously, the purpose of this ruling is to make it more difficult for the federal government to take a person’s citizenship. It is legally impossible to remove a natural born citizen’s status unless the citizen voluntarily renounces citizenship. Similarly, there is currently only one way for a naturalized citizenship to lose citizenship after being granted citizenship status: if he or she was discovered to have lied during the application process. The Court’s ruling raises the bar slightly, as it requires at least a casual connection between the application process and the applicant’s false statement before citizenship can be removed.

The idea of a relationship between the offending behavior and the crime itself is not a new idea in the law. Most criminal laws require at least a causation between criminal intent and the physical act itself. In a murder case, it is not enough for the prosecution that the defendant intended for the victim to die and that the victim be dead. Instead, the defendant’s intentions must cause the defendant to take some action to harm the victim. For example, an employee could wish an employer to die and the employer could die of a heart attack the next morning. The employee would not be guilty because the wish for the employer to die never caused the employee to take an action against his boss. Without that causation, there is no crime.

The Court’s unanimous ruling extends this basic principle of criminal law to cover false statements made by naturalized citizens. This is not a high bar to clear though, and it’s likely that Maslenjak will still lose her second trial – claiming that your husband was fleeing a military that committed war crimes when in fact the husband was in the military that was allegedly committing war crimes is a very big lie to tell. This might be a small comfort to those afraid of losing their citizenship, but in an era where xenophobia might be at an all-time high, a small comfort is better than nothing.

Martin Shkreli Goes on Trial

The man who charged America $750 for Daraprim, an anti-AIDS pill, is going to trial.  However, Martin Shkreli is not on trial for raising the pills by 5,000%, but for defrauding shareholders. Shkreli is accused of using money from one hedge fund to pay deficits in a previous hedge fund. Between 2009 and 2014, Shkreli allegedly began a fund, took bad stock bets, started another fund, used the money from fund #2 to pay fund #1, and repeated the process numerous times before his rise to infamy turned the spotlight on him. Federal agents arrested Shkreli on December 19, 2015 for security fraud.

Shrekli is Not the First Pharma Executive to Face Trial, and Won’t Be the Last

Shkreli is not the first pharmaceutical executive to go on trial, although he is the most famous and hated one. Barry Cadden avoided charges of second-degree murder, but was found guilty of multiple fraud, conspiracy, and racketeering charges. Cadden allowed his business, New England Compound Company, to use expired ingredients and falsified logs to mislead regulators. As a result, people nation-wide were given tainted injections for back injuries. The tainted injections lead to an outbreak of fungal meningitis that affected more than 700 people. The scandal ultimately resulted in the deaths of 76 of those ill. Cadden has been sentenced to 9 years in prison.

shkreliShareholder’s Profits Above All Else Is Not a Sustainable Business Strategy

Shkreli often justified his decision to raise the price of Daraprim to such high marks by claiming that he was acting in the best interests of his shareholders. That claim sounds absurd in light of his upcoming trial, but it does raise a critical philosophy in our legal system: business executives have an absolute duty to act in the best interests of their shareholders, but owe nothing to the public at large. This ranking of interests is evident in Shkreli’s prosecution: raising prices to absurd levels has not resulted in any legal consequences for Shkreli, but blowing off his shareholders likely will. Even Cadden, who is being prosecuted for harming the public, is not liable for the deaths of consumers, but for lying to the government about the effects of his product.

Shkreli might believe that what he is doing is beneficial to his company, but these interests seem to be short-term gains only. The negative media attention and Congressional investigations were not expenses that Turing Pharmaceuticals, Shkreli’s former employer, wanted. Cadden lead NECC into Chapter 11 bankruptcy. In the long run, this kind of moral less pursuit of the company’s profit above all other considerations would appear to have dire effects on the long-term viability of the company itself. Companies should consider, not just the potential for short-term profits, but the long-term consequences as well. It might be considered smart business to take over an industry that people’s very lives depend on and then maximize that dependency for as much profit as possible. But then Americans shouldn’t be so shocked and outraged when men like Shkreli and Cadden abuse that system.

Dissent by Justice Gorsuch Ignores Legal Reality of Paternity Debate

Legal paternity has often conflicted with reality. Most state laws assume that the husband of a woman is the father of the child, regardless of whether that is biologically true. To be sure, this presumption is convenient – husbands don’t have to get tested whenever their wives become pregnant. However, this assumption has caused no shortage of legal headaches, as issues such as adultery, insemination, and the best interests of children often threaten to unravel the presumption. The debate over paternity has taken on new dimensions after the Supreme Court legalized same-sex marriage.

paternityIronically, Pavan vs. Smith doesn’t involve any fathers. Terrah and Marisa Pavan, a lesbian couple, married in 2011. Terrah gave birth to a child in Arkansas in 2015. Arkansas law requires that the biological mother, in this case, Terrah, be listed on the child’s birth certificate as the mother. The law also requires that the husband, if any, be listed as the father. Marisa requested that she be added to their new baby’s birth certificate as the child’s other mother because she was the legal spouse of Terrah. Arkansas’s Department of Health, the Department responsible for issuing birth certificates, refused, arguing that state law specifically called out “husbands” rather than “spouses” to be added to birth certificates. The Pavans sued, arguing that the law was discriminatory as it restricted a marital benefit to straight married couples only.

Arkansas argued that their law was legal because the statute was about the biological relationships of the children, not the marital status of the parents.  The Arkansas Supreme Court agreed and upheld the law. The Pavans appealed to the Supreme Court and the Court reversed the state Court in a 6-3 decision, with Justices Gorsuch, Alito, and Thomas dissenting. The majority ruled that the law was discriminatory as it withheld a marital benefit from same-sex couples – the legal presumption that the spouse of the biological mother is the child’s other parent. The Gorsuch minority dissented, agreeing with Arkansas that the birth certificate of the child was about the parental relationships of the child, not the marital status of the parents.

Where Does Justice Gorsuch Go Wrong?

The Gorsuch minority’s logic is fatally flawed. Although a birth certificate’s purpose is to declare the parental relationships of a child, Justice Gorsuch and the state of Arkansas ignore the law’s assumption that paternal relationships are based on marriage status. When marriage status is used as shorthand for a child’s parental relationships, then the birth certificate ceases to be strictly about biology. The biggest issue with Justice Gorsuch’s dissent is that he fails to even acknowledge this assumption. If a man who potentially has no blood relation to the child, but is allowed to be the child’s father because of his relationship with the child’s mother, there is no reason a woman cannot be allowed to be a child’s other parent based on her relationship with the mother.

Indeed, the legal fiction that is paternity is acknowledged by Arkansas’s statutes. According to Arkansas, if the biological mother, biological father, and the mother’s husband all agree that the father should be on the birth certificate instead of the husband, then the father’s name will be used instead. This exception shows that Arkansas itself recognizes that there may be cases where the husband is not the father. Of course, this is the exception rather than the rule, but this exception highlights that the birth certificate is about the law’s assumption about marital status, not just biology.

What’s Our Takeaway?

Of course, states like Arkansas maintains the presumption that husbands are legal fathers of their wives’ children because states want to maintain the institution of marriage. It would extremely disruptive to a married couple’s life if one spouse was raising children with a person outside the marriage. It is beneficial to children that their parents have a document that can prove their relationship to the child, but the reason children don’t have three or more parents is to preserve the ideal of dual parents raising a family.

There is no reason why either of those justifications can’t be applied to a lesbian marriage. It would disruptive to the Pavan’s marriage if Terrah was forced to be a single parent even though she is legally married to Marisa. Putting Marisa down as the other parent would allow her to take the baby to see the doctor or to fill out school forms without Terrah haven’t to carry all the burden of raising a child. The remedy is also easy: change all gender specific statutes to gender neutral statutes. The institution of marriage can be preserved, if judges like Gorsuch will preserve it.