If you are an LGBT business owner, you may have considered becoming a certified LGBT-owned business through the National LGBT Chamber of Commerce’s LGBT Business Enterprise (LGBTBE) certification or another certifying organization.  These certifications are proof that your business is majority owned and controlled by one or more LGBT individuals.

You may think, how do I prove my LGBT status?  The National LGBT Chamber of Commerce provides a very detailed list of ways an individual may be able to prove LGBT status: https://www.nglcc.org/sites/default/files/LGBT%20Status%20Qualifiers.pdf .  

Just a few examples of potential evidence of LGBT status are: 

Of course, even if you meet the LGBT requirements of this certification, you must also show that the LGBT owner(s) actually own and control the business. This topic will be covered in a future blog.

If your company needs advice regarding diversity certifications, including LGBT certification, please contact Danielle Dietrich at 412-227-0284 or ddietrich@smgglaw.com.

The production of documents as large combined PDF (Portable Document Format) documents is the modern-day equivalent of a discovery data dump.  We have all experienced the receipt of several 1,000+ page PDF documents in response to discovery in a matter, with each PDF containing a combination of emails, meeting minutes, contracts, and other documents.  It is basically a large, unusable mess.  Attorneys have mechanisms through both federal and state rules at their fingertips to demand better.  

Forms of Production

Most data that attorneys seek in discovery is Electronically Stored Information (ESI).  The form of production of ESI could be native, near-native, imaged documents accompanied by load files containing searchable text and metadata (static electronic image in Tagged Image File Format (TIFF) or PDF file format, with extracted text from the document into a text file, and selected metadata and other non-apparent data into one or more separate load files), or simply imaged documents.  Inherent in any of those forms of production is that the documents are produced as ordinarily maintained.  A large PDF, combining a variety of documents, does not meet the definition.

Remember that, as the requesting party in both state and federal court in Pennsylvania, you can specify the form in which the ESI is to be produced. 

Under Federal Rule of Civil Procedure 34, a party is required to produce documents (1) “as they are kept in the usual course of business or must label them to correspond to the categories in the requests,” Fed. R. Civ. P. 34(b)(2)(E)(i), and (2) if a request does not specify a form of producing ESI, “in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms.” Fed. R. Civ. P. 34(b)(2)(E)(ii)

Under the Pennsylvania State Rule, a party requesting electronically stored information may specify the format in which it is to be produced and a responding party or person not a party may object. If no format is specified by the requesting party, electronically stored information may be produced in the form in which it is ordinarily maintained or in a reasonably usable form. Pa.R.C.P. No. 4009.1(b).

So start early by requesting the production in your desired format.  And continue to fight for that production.  

The Problem with Large PDF Productions

The production of multiple documents together in one PDF removes any ability to determine relationship, order, and sequencing of any of the documents contained within the PDF.  Loading a large PDF into database and then searching for information is cumbersome.  For example, if you locate one email at page 502 within a 1000+ page PDF, you can’t tag or utilize that document as a standalone document without first unitizing the PDF (breaking it down into its component documents).  That takes time and expense.  And you need instructions to unitize.  Those instructions come in the form of a load file, which is essentially the instruction manual for your data and provides information about which documents go together and other document organization. Further, documents produced in one large PDF have no useable metadata which would pertain to the underlying documents contained within the PDF. While all metadata isn’t always required for a case, as metadata may be critically relevant to your case or completely irrelevant, without at least basic system metadata, you lose all ability to utilize metadata in the sorting and organization of the discovery documents within your database.  See Sedona Conference Journal, Comment 12.a.on metadata. 

Most Importantly it Violates the Federal Rules!

A single large PDF combining multiple separate documents is not the way documents are maintained in the ordinary course of business.  A party who opts to produce documents as maintained in the usual course of business must actually produce the documents that way. A production of e-mails grouped together as a large document violates this obligation. And the courts are noticing:

Johnson v. Italian Shoemakers, Inc., 2018 WL 5266853, at *2 (W.D.N.C. Oct. 23, 2018) (awarding sanctions where party continued to produce e-mails as PDFs, “which is not how emails are maintained in the regular course of business”);

Spilker v. Medtronic, Inc., 2015 WL 1643258, at *5 (E.D.N.C. April 13, 2015) (party satisfied the requirements by providing “fully searchable documents, sortable by metadata fields, in a folder structure organized by custodian”); and

Abbott Labs. v. Adelphia Supply USA, 2019 WL 3281324, at *2 (E.D.N.Y. May 2, 2019) (the documents in question were scanned all together and produced as a single 1941-page PDF file. While the production of documents in one large PDF file was only one of the factors that Magistrate Judge Lois Bloom considered in recommending such harsh sanctions, attorneys should heed the message.) 

When facing litigation, your case will involve electronically stored information. Strassburger McKenna Gutnick & Gefsky has teamed with KLDiscovery as our preferred eDiscovery vendor and can assist you with the most up-to-date and efficient methods to manage discovery in your litigation. Gretchen Moore chairs the firm’s eDiscovery Committee and Litigation Practice Group.  She can be reached at gmoore@smgglaw.com or 412-281-5423.

In a 4-1 ruling today, the Pennsylvania Commonwealth Court declared the “Order of the Acting Secretary of the Pennsylvania Department of Heath Directing Face Coverings in School Entities” (“Masking Order”) void ab initio. The Masking Order, issued on August 31, 2021, directed each person inside a school building to wear a face covering, regardless of vaccination status. 

Challengers argued that the Acting Secretary exceeded her statutory authority and circumvented the requirements set forth in the Commonwealth Documents Law (“CDL”) and Regulatory Review Act (“RRA”) in issuing the Masking Order. The Commonwealth Court agreed. It held that the Masking Order was a regulation that had the force and effect of law because it was a “blanket rule that affects all School Entities in the Commonwealth.” As a regulation, its promulgation was required to be in conformance with the formal rulemaking requirements set forth in the CDL and RRA. These laws require, among other things, agencies to submit proposed regulations to the Independent Regulatory Review Commission for public and legislative comment and proscribe certain time periods pursuant to which proposed regulations either fail or become law. Because the Masking Order was not properly promulgated under the CDL and RRA, the Commonwealth Court decided in favor of Petitioners and deemed the order void ab initio.

The decision comes just two days after Governor Wolf announced that the choice to require face coverings in Pennsylvania’s public schools would likely revert to local leaders in January 2022. We recommend schools consult with their Solicitors about the potential for an appeal and whether or not any changes to their policies should be made at this time.

Should you have any questions regarding the impact of this decision, or need general education law advice, please contact Alan Shuckrow at ashuckrow@smgglaw.com or Kathy Clark a kclark@smgglaw.com.

Planned Residential Developments (PRDs) are a popular zoning classification across the Commonwealth, especially in the western Pennsylvania suburbs surrounding Pittsburgh. PRDs attract developers because they allow flexibility in the application of zoning requirements in exchange for large amounts of green space, or “common open space” and recreation. These flexibilities tend to allow for a higher density, different permissible kinds of housing units, and shorter setbacks than what would otherwise be permitted in the underlying zoning district. 

A review of Pennsylvania case law reveals little precedent in the area of PRDs. As a result, Pennsylvania municipalities are struggling to enact and administer ordinances that provide adequate protection for their residents while maintaining a level of flexibility for developers.  Even where PRD ordinances have been in place for years, local governing bodies do not always grasp the significance of PRDs and fail to provide appropriate scrutiny of proposed plans. 

PRDs are not like other zoning mechanisms. The governing body of the municipality has exclusive jurisdiction to hear and render final adjudications on PRDs.  PRDs have a tremendous impact on the zoning scheme of the enacting municipality because they represent a departure from traditional and underlying zoning requirements. The departures from the underlying zoning ordinance can be so vast that approval of a PRD is considered a change in the zoning map. 53 P.S. 10710. The significance of each approved PRD is indicative of the serious approval process that must be followed by the municipality.

First, the developer must apply for tentative approval, which requires a public hearing pursuant to public notice. 53 P.S. § 10708(a); 53 P.S. § 10908. After the hearing, the municipality must provide a written communication regarding its decision to grant, grant with conditions, or deny tentative approval. This decision must include conclusions and findings of fact related to the specific proposal. The Pennsylvania Municipalities Planning Code provides for particular considerations that must be addressed in the municipality’s written communication. These considerations include, but are not limited to, the extent to which the plan departs from zoning and subdivision regulations otherwise applicable to the subject property; the purpose, location and amount of the common open space in the development; and the relationship, beneficial or adverse, of the proposed development to the neighborhood in which it is proposed to be established. 53 P.S. § 10709(b). The tentative approval process is the main playing field for approval of a PRD and, as such, approval or denial of an application for tentative approval is appealable to a court of common pleas. 53 P.S. § 11002-A.

After receiving tentative approval, the developer must apply for final approval. The MPC does not require a formal public hearing for final approval, although the municipality’s ordinance may provide for one. Final approval may only be denied if the final development plan as submitted contains substantial variations from the successful tentative approval plan. Because of this standard, a stamp of final approval is often just a formality.

Recently, the Pennsylvania Commonwealth Court rendered two different decisions regarding the same proposed PRD in Indiana Township, Allegheny County. This case is called Gouwens v. Indiana Township Board of Supervisors.  The first decision was handed down in June of 2019 (“Gouwens I”). Gouwens I, — A.3d —-2019 WL 13040282 (Pa. Commw. Ct. 2019). The second decision was handed down in July of 2021 (“Gouwens II”). Gouwens II, — A.3d —-2021 WL 4075406 (Pa. Commw. Ct. 2021).  The Gouwens opinions constitute a clear signal from the Commonwealth Court that it considers the review of a PRD to be a serious process requiring careful scrutiny from the governing body. 

The Gouwens case involved a proposed 91 townhome unit PRD. The Township’s ordinance contained several specific mandatory criteria for approval of a tentative PRD.  One of those criteria was a “to create variety in the type, design and arrangement of housing units.”  The ordinance also required “[n]o less than 20% of the [PRD] shall be set aside for Common Open Space.” which was defined to mean space set aside for the “use or enjoyment of the residents.”  The proposed plan contained only townhomes, albeit several different models of townhomes. More so, much of the open space was characterized by steep slopes and stormwater facilities. The plan did not have any recreation features, and, by the admission of the developer, the common open space was “passive” in nature. Nonetheless, the Township’s Board of Supervisors granted tentative approval to the plan. Several neighboring property owners objected to tentative approval and contested it in court. 

Gouwens I emphasized the importance of the governing body’s written decision on tentative approval of a PRD. There, the Commonwealth Court vacated the lower court’s decision affirming the Board’s decision and remanded the case for the Board to “render findings of fact and explain how the Plan meets the purposes of a PRD …and explain the reasons that it granted tentative approval of the Plan as to all criteria …”  Gouwens I, at *8. 

The Commonwealth Court took this action because it could not “ascertain why the Board granted tentative approval of the Plan. The purpose of a board’s written decision is to enable a reviewing court and applicant to understand the reasons for the board’s decision and to show that the decision is reasoned and not arbitrary.” Gouwens I, at *3. The Court specifically took issue with the Board’s sweeping generalizations that the plan met certain ordinance criteria without more explanation.  This opinion by the Court supports the notion that a decision on a PRD must by descriptive and thoughtful because the approval of a PRD represents a change to the zoning map. If the approval of a PRD was arbitrary or capricious, it would create an unjustifiably high-density island in which the characteristics of the PRD are irrationally different from those permitted elsewhere in the underlying zoning district, akin to spot zoning. 

After the Commonwealth Court’s remand in 2019, the Board provided a revised written decision, which was again affirmed by the lower court and appealed to the Commonwealth Court.  Gouwens II reversed the lower court and finally shot down the proposed plan. 

Specifically, the Court rejected the developer’s position that multiple townhome models satisfied the ordinance’s requirement for a variety in the type of housing.  Moreover, the Court agreed with the residents that the plan lacked sufficient common open space and found that the Board had disregarded the plain language of its own ordinance in approving the plan. The Court wrote, “[g]iven the unique nature of a PRD and its character as a departure from traditional zoning requirements, a zoning board must ensure, prior to granting tentative approval, that the planned PRD does, in fact, meet the specific requirements in the locality’s zoning ordinance.” Gouwens II, at *3.

This decision discussed the broad powers of the municipality to carefully design a PRD ordinance to protect its residents while still promoting the flexibility and environmental goals of a PRD. Because a municipality has so much control over what goes into its ordinance, the municipality must strictly interpret its ordinance in a reasonable manner when it considers applications there under. Although a governing body is entitled to deference when interpreting its own ordinance, the faults of a bad ordinance cannot be corrected by arbitrary or unreasonable interpretations crafted to fit the will of the body. 

PRD ordinances and the developments they allow are unique and consequential, not to be taken lightly. These developments pose significant changes to a community and can either beneficially or adversely impact the character of the neighborhood in which they are proposed to be established. It is important that PRD ordinances provide a balance of flexibilities to developers while maintaining protections for residents. 

Alan Shuckrow and Alexis Wheeler of Strassburger McKenna Gutnick & Gefsky represented the residents/neighbors in the Gouwens case. 

Today the United States Court of Appeals for the Fifth Circuit granted an emergency motion to stay enforcement of OSHA’s November 5, 2021 Emergency Temporary Standard. A number of parties, including several businesses, advocacy groups, and the states of Texas, Louisiana, Mississippi, South Carolina, and Utah filed the motion for a permanent injunction. Citing “grave statutory and constitutional issues,” the court ordered the government stay enforcement of the ETS pending expedited judicial review.

Solicitor of Labor Seema Nanda said the U.S. Department of Labor is “confident in its legal authority” to issue the rule, stating that the Occupational Safety and Health Act of 1970 “explicitly gives OSHA the authority to act quickly in an emergency” and the Department is “fully prepared to defend [the ETS] in court.” 

The court ordered the government to respond to the petitioners’ motion by 5:00 PM on Monday, November 8th

We are monitoring this situation as it develops. Please contact Jean Novak, at jnovak@smgglaw.com, or Matt Morella, at mmorella@smgglaw.com, if you have questions.

As expected, the Emergency Temporary Standard (ETS) for mandatory vaccinations was published today.  The ETS is available here.

Contrary to news reports that the compliance date is January 4, the first compliance date is December 5.  The final compliance date is January 4.  From the ETS:

The effective date for this ETS… is the date of publication in the Federal Register [November 5, 2021]. The compliance date for all provisions in the ETS is 30 days after the effective date [December 5, 2021], except for (COVID-19 testing for employees who are not fully vaccinated), which requires compliance within 60 days of the effective date [January 4, 2022].

The confusion regarding compliance is understandable.  The 60 day compliance period is intended to allow time for businesses to develop policies and procedures and to allow employees to be vaccinated before employee testing becomes mandatory.  According to OSHA, employees receiving the Johnson & Johnson vaccine can be vaccinated anytime through January 4, 2022. But employees receiving the other vaccines must begin the vaccination process earlier.  For employees receiving the Pfizer-BioNTech vaccination, the first shot can be received “up to 39 days from” November 5, i.e., December 14. Employees receiving the Moderna vaccine must begin the process “up to 32 days from” November 5, i.e., December 7.  As of January 4, 2022, unvaccinated employees will be subject to weekly testing, and employers with unvaccinated employees will be subject to reporting requirements.

News reports this morning indicate that more than 20 states intend to take legal action challenging the mandate.  In the meantime, businesses covered by the mandate should begin planning to comply in case the legal challenges fail.  Covered businesses should develop:

  1. A vaccination policy
  2. An employee vaccination status tracking process
  3. An employee vaccination support policy
  4. A face coverings policy (for unvaccinated employees)

This is an evolving situation.  We’re here to help.  Please contact Jean Novak, at jnovak@smgglaw.com, or Matt Morella, at mmorella@smgglaw.com, if you have questions.

The unpublished version of the federal vaccine mandate for private employers was released today. (Federal workers and contractors were covered under prior Executive Orders.) The ETS (Emergency Temporary Standard) will be published and become effective tomorrow, Nov. 5.  Based on the unpublished version, the rule will contain a 60 day comment period to determine whether the ETS will become a final rule.

This mandate covers all private employers with 100 or more employees.  Despite its common name, the ETS requires vaccination OR “regular COVID-19 testing and face covering at work in lieu of vaccination.”  Employers may impose mandatory vaccination without the option of regular testing and masking, but that is more than is required under the ETS.

Employees who work 100% remotely or completely away from others (i.e., removed from co-workers, customers, clients, vendors) are not covered by the mandate.  Employees who work “exclusively” outside aren’t covered, but the ETS narrowly defines “exclusively.” Employees who spend most of their time outside but, for example, travel together to and from the job site don’t work “exclusively” outside.  Construction workers working in a partially constructed structure don’t work “exclusively” outside.  Although “de minimis” indoor time will not remove an employee from the definition of “exclusively” outside, OSHA will aggregate such time to determine whether the employee works “exclusively” outside.

The ETS does not change the exemptions for health or religious reasons and the requirement that employers provide reasonable accommodation for the same unless doing so would create undue hardship.

Employers will be required to provide paid time off for employees to receive vaccinations and to recover from side effects.  Employers, however, aren’t required to pay for weekly tests for employees who choose not to be vaccinated.  The compliance deadline is 30 days after publication, which will be December 5.

At this time, public employers in Pennsylvania, including local governments, municipalities, and school districts, will not need to comply with the ETS.  Note, however, the Pennsylvania General Assembly is currently considering two bills that would extend the mandate to the state’s public employers.

It’s likely that there will be challenges to the mandate – and it’s likely that there will be questions about the requirements, exemptions, and other portions of the mandate as employers work to comply.  We’re here to help.  Please contact Jean Novak, at jnovak@smgglaw.com, or Matt Morella, at mmorella@smgglaw.com, if you have questions.

The government is forcing the hand of healthcare providers who have dragged their feet on enacting COVID-19 vaccine requirements.  Today, November 4, 2021, the Centers for Medicare & Medicaid Services issued a Rule requiring healthcare providers that participate in Medicare and Medicaid require their workers to be fully vaccinated by January 4, 2022.  Providers must enact a vaccination policy for their workers by December 5, 2021.  Exemptions based on certain medical conditions or religious beliefs will be available. 

The interim final rule is excepted to be published in the Federal Register on November 5, 2021, but a PDF copy can be found here: https://public-inspection.federalregister.gov/2021-23831.pdf.

CMS will advise and train state surveyors on how to assess compliance with these new requirements.  This will include staff interviews, review of policies and procedures and how to cite for noncompliance.  Potential penalties could include civil money penalties, denial of payment for new admissions, or termination of the Medicare/Medicaid provider agreement.

If you are a medical provider looking for assistance implementing a COVID-19 vaccination policy, please contact Danielle Dietrich at 412-227-0284 or ddietrich@smgglaw.com.

On October 29, 2021, the U.S. Attorney’s Office in the Western District of Texas announced a $188,879.59 settlement with Muniz Concrete and Contracting, Inc. to resolve False Claims Act allegations arising out of false information being provided in accordance with the company’s Disadvantaged Business Enterprise (“DBE”) certification.  The DBE program is designed to encourage and increase the participation of women- and minority-owned businesses in federally funded projects.   

The U.S. Attorney alleged company owner, Jose Muniz, was no longer “economically disadvantaged” beginning in 2017 when his personal net worth exceeded the threshold to qualify as a DBE.  Muniz is alleged to have made several false certifications concerning his personal net worth after 2017 to continue receiving DBE contracts. 

You can read more details in the Department of Justice press release here: https://www.justice.gov/usao-wdtx/pr/austin-construction-company-and-owner-settle-false-claims-act-allegations.

If you are a DBE owner who would like to discuss concerns about your personal net worth statement, please contact Danielle Dietrich at 412-227-0284 or ddietrich@smgglaw.com.

There are many tax and estate planning reasons why a person may want to put their ownership interest in a business into a trust.  However, if that business is or wants to be certified as a Disadvantaged Business Enterprise (DBE), trusts must be used carefully.  

At the heart of the DBE certification process is an examination of whether the socially and economically disadvantaged owner actually owns and controls the business.  According to 49 C.F.R. §26.69(d), “[a]ll securities that constitute ownership of a firm shall be held directly by the disadvantaged person.” The direct ownership is where the trust comes into issue. Generally, an ownership held by a trust cannot qualify as disadvantaged, with two exceptions explained in 49 C.F.R. §26.69(d).

The first exception is when the beneficial owner of the trust holding the ownership is a disadvantaged individual who is also the trustee. So, if there is a single beneficial owner of the trust, and that owner is also the trustee of the trust, the business may be able to become DBE certified. 49 C.F.R. §26.69(d)(1).

The second exception is when the beneficial owner of the trust is disadvantaged and who actually exercises effective control (rather than the trustee) “over the management, policy-making, and daily operational activities of the firm.” 49 C.F.R. §26.69(d)(2). This would be a more complicated situation and require more work to prove.

Trusts can be complicated and must be entered into with a full understanding of the potential ramifications.  For instance, if there are other assets held in the trust other than the ownership interest in the applicant disadvantaged business, the value of those assets will count towards the personal net worth limit of the disadvantaged applicant. Further, the applicant owner must also be able to show that they have significant financial investment in the firm.  For more information on that subject, please visit my prior blog post on ownership investment in a DBE company: https://www.natlawreview.com/article/do-owners-have-to-buy-to-their-company-order-to-get-disadvantaged-business.

If you or your company needs advice regarding DBE certifications, please contact Danielle Dietrich at 412-227-0284 or ddietrich@smgglaw.com.