House Bill 2386, known as the COVID-19 Disaster Emergency Business Interruption Grant Act, has passed in the Pennsylvania House of Representatives.  Bill 2386 establishes the “COVID-19 Disaster Emergency Business Interruption Grant Program” to provide funding for the continued operation of business during and after the COVID-19 emergency.  Bill 2386 was proposed in an effort to address the widespread denial of claims by insurers for business interruption losses as a result of the COVID-19 Emergency.  Business interruption insurance allows a business to file a claim to recoup lost income and associated costs as a result of physical damage to their property that stops operations.  Whether such insurance covers government mandated shut-downs and/or pandemics remains unclear as more fully discussed in our related blog The Battle Over Business Interruption Coverage.  Bill 2386 creates a program through which business owners can obtain assistance similar to if they were able to acquire it through their insurance provider.

According to the Bill, a business is eligible for the grant if it meets the following criteria:

(1) The business has submitted an insurance claim under a business interruption insurance policy and the insurance claim was denied prior to applying for a grant.

(2) The business demonstrates in its application that the business has been adversely impacted by the COVID-19 disaster emergency.

(3) The business is based in this Commonwealth and employs no more than 200 individuals.

Any business that receives a grant must remain open an not lay off any employees for the duration of the COVID-19 emergency, otherwise, the business will bear responsibility to repay the grant amount plus 10%.  Further rules and regulations will be promulgated by the Pennsylvania Department of Community and Economic Development, which will be responsible for implementation of the program.  Bill 2386 now heads to the Senate where its fate remains unclear.

SMGG is committed to remaining at the forefront of these emerging issues.  If you have questions regarding this or any other legal issue, contact Erica L. Laughlin, at elaughlin@smgglaw.com

The COVID-19 crisis has wreaked havoc on the food/beverage and hospitality industries, many of which have turned to their insurers seeking relief under commercial policies for the interruption to their business as a result of the pandemic and widespread government ordered closures.  Commonly referred to as “business interruption” coverage, many policies provide such coverage for the loss of business and related expenses stemming from physical loss or damage to the insured premises resulting from a covered loss.  In other words, a claimant must establish direct physical loss or damage to the insured premises, and that such damage was caused by a covered loss otherwise not excluded by the policy.

As lawsuits have begun to emerge, claimants are asserting that contamination from the coronavirus, which can survive on surfaces for extended periods of time, constitutes a physical loss.  Assuming the courts accept the presence or potential presence of the virus as physical damage, the next question is whether such damage was caused by a covered loss.  Following the SARS epidemic many insurers began excluding viral and bacterial losses from coverage.  While insurers are quick to point to such exclusions as a basis for the denial of coverage, claimants have countered by asserting that it was not the virus that caused business loss, but the orders of local governments exercising their civil authority mandating social distancing restrictions, closures and stay-at-home orders that caused the loss, which depending on policy language may be covered.

Certain policies extend coverage to loss of business that results from access to the insured property being prohibited by order of civil authority.  Civil Authority clauses, however, can vary in language, and some specify that such insurance is extended when access to the insured property is specifically prohibited by order of civil authority as the direct result of a covered cause of loss to property in the immediate area of the insured property, as opposed to the insured property itself.  As with any coverage dispute the language of the particular policy is critical.

There are currently widespread lobbying efforts underway seeking to extend coverage to losses attributable to the coronavirus regardless of whether an insured has pandemic coverage, which is typically a separate and often pricey additional rider.  See our related blog relative to the current proposed legislation in Pennsylvania “Pennsylvania Proposes Legislation Aimed Easing the Burden on Policyholders During COVID-19 Pandemic.”  Insurers respond that such efforts by the government would undermine the nation’s insurance system and result in such an immense volume of claims that it would require a massive federal bailout of the insurance industry to be able to provide such coverage.

It is unclear whether the government will take a position on the issue (and if so whether it would stand up to legal challenges) and/or how the courts will interpret business interruption clauses as cases seeking a declaration of coverage under these clauses become more prevalent.

SMGG is committed to remaining at the forefront of these emerging issues.  If you have questions regarding your policy and whether it provides coverage for business interruption claims, contact Erica L. Laughlin, at elaughlin@smgglaw.com, Chris Azzara, at cazzara@smgglaw.com, or Adam Tragone, at atragone@smgglaw.com.

Increased concerns over the rapid wide-spread development of the Coronoavirus has led to the unprecedented sweeping closure of business and industries throughout the country.  The loss of business as a result of mandated social distancing is wreaking havoc for business owners such as bars, restaurants and retailers who without a steady stream of income are bracing for expected financial challenges.  One potential source of relief may be insurance coverage provided for business interruption.

Business interruption coverage is intended to cover losses as a result of interruptions to a business’ operations as a result of natural disaster or other triggering event.  Such coverage may provide for payroll, taxes, lost revenues, rent, utilities or other expenses.  A similar form of coverage for contingent business interruption may be available to provide coverage for a loss of income due to a problem with a third party, such as a problem with a supplier or vendor.

There can be challenges associated with what constitutes a covered loss under such policies.  Some policies exclude economic losses if the physical use of the business property isn’t effected, while others specifically carry a viral, bacterial, or  biological agent exclusion from coverage.  A prudent business owner should engage in a careful review and analysis of policy language to determine what coverage may be available to provide relief.

For questions regarding insurance coverage and exclusions contact Ms. Erica L. Laughlin at Strassburger McKenna Gutnick & Gefsky elaughlin@smgglaw.com or 412-281-5423.

The novel cornoavirus (COVID-19) is reported as posing the greatest threat to the elderly population, especially those with pre-existing and compromised medical conditions.  Nursing homes, assisted living and long term care facilities are considered among the most at risk locations for transmission of the virus.  Medical and legal considerations are among the many challenges that must be given consideration by these facilities in taking appropriate steps to protect residents and comply with local and federal guidelines.

Just this week the American Healthcare Association (AHA) and the National Center for Assisted Living (NCAL) released guidelines meant to protect residents including measures related to enhanced infection control and prevention, increased monitoring for potential symptoms,  screening of staff, canceling group activities, implementing social distancing and widespread restrictions to visitation.  The Center for Disease Control and Centers for Medicare and Medicaid Services released similar guidelines.  Many states, including Pennsylvania, have requested that nursing facilities ban visitors with limited exceptions.  Just this week Governor Tom Wolf announced that all nursing homes in Pennsylvania should ban visitors in an effort to prevent the spread of the Cornoavirus.

Compliance issues, legal implications for failure to take appropriate action, liability concerns, operational issues and general advice in implementing appropriate protocols are just a few of the issues long-term care facilities now must prepare for and address in the face of the Cornoavirus.  For questions on local and national protocols, mandates, guidelines, and general legal advice contact Ms. Erica Laughlin of Strassburger McKenna Gutnick & Gefsky at elaughlin@smgglaw.com or (412) 996-7516.

By: Erica L. Laughlin[1]

NOTHING IN THIS DOCUMENT IS INTENDED OR SHALL BE CONSTRUED AS ADVICE TO PARTICIPATE IN, OR COUNSEL WITH RESPECT TO, CRIMINAL OR FRAUDULENT ACTIVITIES. POSSESSION, DISTRIBUTION AND SALE OF MARIJUANA IS A SERIOUS CRIME UNDER FEDERAL LAW, AND ENGAGING IN THOSE ACTIVITIES WITHOUT REGISTRATION UNDER THE PENNSYLVANIA MEDICAL MARIJUANA ACT, 35 P.S. §§ 10231.106 ET SEQ., IS A SERIOUS CRIME UNDER PENNSYLVANIA LAW. NOTHING HEREIN SHALL BE CONSTRUED AS ADVICE TO VIOLATE ANY SUCH LAW.

Under the Pennsylvania Medical Marijuana Act[2], every medical marijuana grower/processor and dispensary is required to utilize the ‘Seed-to-Sale’ Electronic Tracking System prescribed by the Department of Health.[3] On April 20, 2017, the Pennsylvania Department of Health selected MJ Freeway as the vendor for the required Medical Marijuana ‘Seed-to-Sale’ Electronic Tracking System.

The ‘Seed-to-Sale’ Electronic Tracking System was created to track medical marijuana from the planting of a seed until the plant is processed, sold to a dispensary, and then dispensed to a patient or caregiver. The system allows growers/processors and dispensaries to track inventory and the amounts of medical marijuana dispensed. The system will also monitor the prices paid by patients and caregivers for medical marijuana products.

The ‘Seed-to-Sale’ Electronic Tracking System further contains registries that offers patients, caregivers, and practitioners the opportunity to electronically register with the Pennsylvania Medical Marijuana Program and access useful information about the use and benefits of medical marijuana.

On April 20, 2017, Secretary of Health Karen Murphy stated that “this contract serves two important functions for the program: tracking medical marijuana from seed-to-sale; and creating a registry for patients, caregivers, and practitioners to participate in the program.”

SMGG intends to stay at the forefront of legal developments in this area.  For questions, please contact Erica L. Laughlin or David L. Pollack of Strassburger McKenna Gutnick & Gefsky at elaughlin@smgglaw.com; dpollack@smgglaw.com or (412) 281-5423.

[1] The author would like to recognize the significant contributions of John Scialabba, University of Pittsburgh Law School class of 2017, to this post.

[2] Codified at 35 P.S. §§ 10231.106 et seq.

[3] Codified at 35 P.S. § 10231.701.

by Erica L. Laughlin, Director[1]

NOTHING IN THIS DOCUMENT IS INTENDED OR SHALL BE CONSTRUED AS ADVICE TO PARTICIPATE IN, OR COUNSEL WITH RESPECT TO, CRIMINAL OR FRAUDULENT ACTIVITIES. POSSESSION, DISTRIBUTION AND SALE OF MARIJUANA IS A SERIOUS CRIME UNDER FEDERAL LAW, AND ENGAGING IN THOSE ACTIVITIES WITHOUT REGISTRATION UNDER THE PENNSYLVANIA MEDICAL MARIJUANA ACT, 35 P.S. §§ 10231.106 ET SEQ., IS A SERIOUS CRIME UNDER PENNSYLVANIA LAW. NOTHING HEREIN SHALL BE CONSTRUED AS ADVICE TO VIOLATE ANY SUCH LAW.

On October 26, 2016, the Pennsylvania Supreme Court amended Rule 1.2 of the Pennsylvania Rules of Professional Conduct[2] to include a new paragraph (e), which provides:  “[a] lawyer may counsel or assist a client regarding conduct expressly permitted by Pennsylvania law, provided that the lawyer counsels the client about the legal consequences, under other applicable law, of the client’s proposed course of conduct.”[3] The new amendment to the Pennsylvania Rules of Professional Conduct is significant, as lawyers are now able to freely advise clients who wish to participate in growing, dispensing, or consuming medical marijuana as provided by Pennsylvania’s Medical Marijuana Act[4] (the “Act”) without violating the Rules of Professional Conduct.

Previously, the Pennsylvania Rule of Professional Conduct 1.2 prevented a lawyer from counseling or assisting a client to engage in conduct that a lawyer knows to be criminal or fraudulent. However, with the new amendment in place, lawyers can engage in conversation with clients who potentially wish to grow or dispense medical marijuana, as provided by the Act, without disciplinary action.

While Pennsylvania law has begun to establish a regulated medical marijuana market in the Commonwealth, federal law still classifies marijuana as a Schedule I drug.[5] Schedule I drugs are defined as those with “no currently accepted medical use.” Under federal law, it is still unlawful to manufacture, distribute, or dispense marijuana.[6] While it is unlikely that the federal authorities would bring criminal or civil action against an individual acting in accordance with the Act under current (pre January 20, 2017) federal enforcement policies, it is not clear whether enforcement priorities will change in a Trump Justice Department. On the other hand, many are hopeful that as more state laws establish regulated medical marijuana markets, the federal government will change the classification and legalize medical marijuana.

SMGG intends to stay at the forefront of legal developments in this area.  For questions, please contact Erica L. Laughlin or David L. Pollack of Strassburger McKenna Gutnick & Gefsky at elaughlin@smgglaw.comdpollack@smgglaw.com or (412) 281-5423.

[1] The author would like to recognize the significant contributions of John Scialabba, University of Pittsburgh Law School class of 2017, to this post.

[2] Codified at Pa. R. Prof. Conduct 1.2.

[3] In re Amendment of Rule 1.2 of the Pa. Rules of Prof’l Conduct, DISCIPLINARY RULES DOCKET NO. 147 (Pa. Oct. 26, 2016).

[4] Codified at 35 P.S. §§ 10231.106 et seq.

[5] See 21 U.S.C.S. § 812.

[6] Controlled Substances Act Section 841(a)(1).

The Federal Government recently announced its refusal to reclassify marijuana from its current designation as a Schedule I drug alongside heroin and LSD, under the Controlled Substances Act.  Schedule I drugs are defined as those with “no currently accepted medical use”.   The Drug Enforcement Administration’s conclusion that marijuana’s therapeutic value has not been proven scientifically, continues to place the federal government at odds with Pennsylvania, the 24 other states, and the District of Columbia, which have passed laws allowing the use of medical marijuana to varying degrees.   This announcement comes just months after Pennsylvania legalized medical marijuana for specified serious health conditions.

While it is unlikely that the decision will greatly impact Pennsylvania’s program, which is already underway, the decision continues to create legal headaches in attempting to reconcile state and federal law.  Pennsylvania’s program will not protect individuals against federal prosecution, but it may be unlikely that the federal authorities would bring civil enforcement actions, criminal investigations and prosecutions against growers/processors, dispensaries, physicians, patients or caregivers acting in accordance with Pennsylvania’s Act.  The Department of Justice issued a recent press release noting eight enforcement priority areas, such as precluding the sale of marijuana to minors and preventing revenue from the sale of marijuana from gong to criminal enterprises.  As Pennsylvania continues to develop temporary regulations to implement its Act, it will likely be guided to take steps that protect the eight federal interests identified by the Department.

The DEA, which continues to face scrutiny for its refusal to recognize the use of marijuana for medical purposes has announced it will increase research to study marijuana’s proposed value as treatment for certain medical conditions.

SMGG intends to stay at the forefront of legal developments in this area.  For questions, please contact Erica L. Laughlin or David L. Pollack of Strassburger McKenna Gutnick & Gefsky at elaughlin@smgglaw.com; dpollack@smgglaw.com or (412) 281-5423.

On June 1, 2016, the PA Department of Health announced that it had begun the task of developing temporary regulations in order to implement the medical marijuana program in Pennsylvania.  Pennsylvania’s Medical Marijuana Act, which went into effect May 17, 2016, will enable Pennsylvania residents who are patients under a physician’s care for treatment of a serious medical condition as defined by the Act to receive medical marijuana without violating Pennsylvania Law.  The temporary regulations, which are required to be complete by November 17, 2016 under the Act, will further detail the application process to become a grower/possessor and dispensary of medical marijuana.

Individuals interested in obtaining an application to be a grower/processor or dispensary of marijuana will likely have to wait until the end of the year when the applications are expected to be made available, which will likely coincide with the temporary regulations taking effect.  The Department has indicated that the first temporary regulation will be for growers/processors so that those entities can begin to produce products.  The intent is to issue the remainder of the temporary regulations sequentially for dispensaries, physicians, patients and caregivers, and laboratories.

The temporary regulations will detail the program’s operation and application process, and are expected to be in place for two years until the time final regulations are promulgated.  The Department is seeking input from the public throughout the process, and individuals interested in providing feedback can participate in a survey available on Department’s website, which can be accessed at https://www.surveymonkey.com/r/B3H2JNF.

SMGG intends to stay at the forefront of legal developments in this area.  For questions, please contact Erica L. Laughlin or David L. Pollack of Strassburger McKenna Gutnick & Gefsky at elaughlin@smgglaw.com; dpollack@smgglaw.com or (412) 281-5423.

Background on the Act

On April 17, 2016, Pennsylvania Governor Tom Wolf signed Senate Bill 3, known as the Medical Marijuana Act, into law making Pennsylvania the 24th state to legalize the medical use of marijuana.

The Act, which will take effect May 17, 2016, legalizes the prescription and use of marijuana for persons with a “serious medical condition” in Pennsylvania.  Serious conditions have been defined by the Act to include: cancer, HIV/AIDS, ALS, Parkinson’s disease, multiple sclerosis, nerve damage, epilepsy, inflammatory bowel disease, neuropathies, Huntington’s disease, Crohn’s disease, post-traumatic stress disorder, intractable seizures, glaucoma, sickle cell anemia, chronic pain and Autism.

Employment Considerations

There are several key components in the Act that employers should be aware of.

 1.      An employer may not discriminate against an employee certified to use medical marijuana. 

This means that Pennsylvania employers may be liable for taking adverse employment actions against individuals certified to use medical marijuana, or from refusing to hire an individual on that basis.  The Act is silent, however, as to whether it affords protection to individuals certified outside of Pennsylvania to use medical marijuana.

2.      Nothing in the Act, however, requires an employer to accommodate the use of medical marijuana in the workplace.

Given the requirement of having a “serious medical condition,” individuals certified to use medical marijuana would likely also be covered under the Americans with Disabilities Act (“ADA”).  While employers do not need to accommodate the use of medical marijuana at work, employers may need to give certain consideration to appropriate accommodations under the ADA for persons authorized to use medical marijuana.

3.      The Act in no way limits an employer’s ability to discipline an employee for being under the influence of medical marijuana in the workplace or for working under the influence of medical marijuana if the employee’s conduct falls below the standard of care.

While protecting a patient from discrimination, the Act does not protect a patient under the influence of marijuana during the work day, or who does not perform up to the standards of the job.   Interpreting what constitutes “under the influence” and the “standard of care” of the position, will likely be hotly debated topics.

 4.      Nothing in the Act requires an employer to violate Federal law[1].  

For example, an employer would not be required to accommodate use of medical marijuana if such accommodation violates federal Department of Transportation regulations.

Safety Concerns

The Act does recognize concerns employers may face where their employees are performing safety-related tasks.  The Act prohibits individuals under the influence of marijuana from: (1) operating or being in control of chemicals which require a permit; (2) operating or being in control of high-voltage electricity or any other public utility; (3) performing duties at heights or in confined spaces; (3) performing any task the employer deems life-threatening to the employee or others; and (4) performing any duty which could result in a public health safety risk.

Additional Questions/Considerations

While the Act defines “under the influence” as having a blood alcohol content or more than 10 nanograms of marijuana per milliliter of blood in serum for purposes of the prohibitions against operating or controlling chemicals and electricity, the Act is silent as to the interpretation of “under the influence” for the remaining prohibitions.  This will likely be an area of debate.

Additional concerns could also arise for example, where someone has less than 10 nanograms of marijuana in their system, but appears impaired and under the influence.  Testing methods could also create additional issues.  For example, employers commonly test for drugs with urine tests.  The active ingredient in marijuana can show on a urine drug test days and even weeks after use resulting in a positive test.  A positive test reading may be a far from accurate indicator of whether someone is under the influence.  The Act provides little guidance on how to handle these issues.

It is important to note that the Act prohibits the use of marijuana in plant form, from being smoked, or ingested in edible form.  Possession of marijuana in those forms is still illegal, and as a result an employer may freely discipline an employee for possessing marijuana in such forms.

While there are many questions left unanswered by the Act, we expect to see additional developments in the upcoming months.  The Department of Health is expected to issue temporary regulations within 6 months of the Act taking effect, and must issue full regulations within 18 months of that date.   SMGG will continue to keep itself apprised of all developments in this area.

SMGG intends to stay at the forefront of legal developments in this area.  If you have questions about the law,  please contact Erica L. Laughlin and David L. Pollack, of Strassburger McKenna Gutnick & Gefsky, at elaughlin@smgglaw.com, dpollack@smgglaw.com or (412) 281-5423.

[1] Currently the federal government classifies marijuana as a Schedule 1 drug, meaning it’s perceived to have no medical value and a high potential for abuse.  Marijuana is still illegal under federal law, even in states that legalize it.  Despite federal prohibition, there has been a more relaxed approach to marijuana violations.  Mounting criticism of the federal government’s classification of marijuana, and its inconsistency with the growing number of states that have legalized medical marijuana have sparked wide spread demands for change.

 

In a  negligence action arising from the conduct of animals, generally the owner of the animal is the person who bears responsibility for injuries to others caused by his or her pet.   McCloud v. McLaughlin, 837 A.2d 541, 544 (Pa. Super. 2003).  Oftentimes however, when the animal owner is a tenant, the landlord is also named as a party to the litigation.  Although the standard for establishing liability is the same for attacks involving most domesticated animals, the most common case is the dog bite claim.  Liability against a dog owner or landlord is not absolute in Pennsylvania.  A claimant must still establish someone acted negligently.   In order to establish a cause of action for negligence against a landlord for injuries caused by a tenant’s dog, a plaintiff must establish that the landlord owed a duty of care to the plaintiff, breached that duty, and that the injuries were proximately caused by the breach.  Rosenberry v. Evans, 48 A.3d 1255, 1258 (Pa. Super. 2012).

An out-of-possession landlord is not responsible for attacks by animals kept by a tenant on leased property where the tenant has exclusive control over the premises.   Rosenberry, 48 A.3d at 1258.    A duty to use reasonable care to prevent injury will attach, however,  if the landlord has actual knowledge that the animal is dangerous and had the ability to remove the animal by retaking the premises.  Id.  Actual knowledge of a dog’s dangerous propensities is required before a duty can be imposed upon a landlord to protect against or remove an animal housed on rental property.  Id. at 1259.  Although constructive notice, or the idea that the landlord should have known about the dog’s alleged propensities, is not sufficient to establish liability, a landlord’s knowledge can be inferred from the facts and circumstances surrounding the case.  Palermo v. Nails, 483 A.2d 871, 873 (1984).

What is considered “dangerous” or “vicious propensities” has been defined to include “any act that might endanger the safety of the person and property of others in a given situation.” Rosenberry, 48 A.3d at 1261; citing, Groner v. Hendrick, 169 A.2d 302, 303 (1961); citing, Restatement Second of Torts Section 518(1).  Notably the law makes no distinction between an animal that is dangerous from viciousness or one that is dangerous from playfulness.  Rosenberry, 48 A.3d at 1261.  The animal’s mood or motivation from which it inflicts harm is immaterial.  Id.

A prudent landlord should be knowledgeable as to his or her tenants’ animals being housed on rental property, and take appropriate precautions should it be discovered that an animal has exhibited any action which could arguably be perceived as a dangerous or vicious propensity.

SMGG can help you navigate Pennsylvania’s dog law and animal claims from both a plaintiff and defense perspective.  If you have a question about a dog bite or animal claim, please contact Erica Laughlin of Strassburger McKenna Gutnick & Gefsky’s Litigation Practice Group in Pittsburgh at elaughlin@smgglaw.com or (412) 281-5423.