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Davis to present on Oklahoma open records laws issues

Eric Davis

Eric Davis is an attorney in the Firm’s Clean Energy Practice Group and the Government Relations and Compliance Practice Group. He represents clients in a range of regulatory and energy matters.

C. Eric Davis, an attorney in the Firm’s Government Relations and Compliance Practice Group, will give a presentation on Oklahoma open records laws Oct. 18 for Continuing Legal Education individuals.

Davis will present at 10:15 a.m. at the National Business Institute’s seminar titled “Ensuring Local Governments Comply with the Law,” focusing on public records issues.

“Oklahoma’s open records laws help make government more transparent,” Davis said. “Most documents generated when conducting government business are subject to disclosure, even texts and emails.

“Whether you’re a public official needing to maintain records, or a member of the public seeking access, it’s important to understand the public’s right to see government documents.”

The seminar will run from 9 a.m. to 4:30 p.m. Friday in Oklahoma City. Those interested in registering can find more information here. Attendees receive CLE credit for participating.

Phillips Murrah rowing team takes silver in 2019 Oklahoma Regatta Festival

Law & Oarder, Phillips Murrah’s rowing team, wins Second Place in the 2019 Oklahoma Regatta Festival.

Phillips Murrah’s rowing team Law & Oarder ended the Fall 2019 season on top, placing second in the annual regatta competition.

The team competed on Oct. 4 at the 2019 Oklahoma Regatta Festival held at the OKC Boathouse District and achieved a 500-meter run of 2:00:06, up five seconds from last year.

“Another great season in the books,” said Deena Baker, Legal Assistant and Law & Oarder team captain. “We had a few new team members this season which is always exciting, and then to top it off with another medal after a lot of hard work.

“Friday night was a blast, being in a neck-in-neck race in the finale between First and Third Place. Way to go team Law & Oarder!”

In all eleven seasons the Firm’s rowing team has competed, team members consisted of both attorneys and staff members.

“This being my first season on the rowing team, I was thrilled to stand on the winners’ podium after a hard fought race,” Attorney Martin J. Lopez III said. “Being a part of the rowing team was a phenomenal opportunity to compete alongside my coworkers against other Oklahoma City companies.

“There’s so much excitement about the end-of-season regatta—it was a thrilling experience to take part in it.”

The team will resume practice in the Spring for the Stars & Stripes Festival in June 2020.

Check out video of the team crossing the finishline here.


Phillips Murrah has been recognized as an Oklahoma Top Work Place by The Oklahoman/Energage four years in a row. Our Firm strives to recognize and reward our employees for excellence.

 

Three main methods of acquiring business

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on October 10, 2019.


Travis Harrison

Travis E. Harrison is a transactional attorney who represents individuals and both privately-held and public companies in a wide range of transactional matters.

By Phillips Murrah Attorney Travis E. Harrison

Acquiring a business is done through three main methods: merging with the selling company, referred to as the target company; purchasing the assets of the target company; or purchasing the stock or other equity interests of the target company. Each method has pros and cons depending on the legal, tax and business implications. Therefore, it is imperative the parties carefully consider these at the outset.

A merger is simply a combination of two legal entities becoming one. The one that survives the merger, called the surviving entity, assumes all assets and liabilities of the other. The logistics of a merger are driven by state statute and case law, which informs the parties of the legal requirements and procedures. For example, an Oklahoma limited liability company that is the surviving entity must file articles of merger or consolidation with the Oklahoma secretary of state containing details of the merger and entities involved. Additionally, the parties should review the organizational documents to ensure compliance with any contractual procedures.

Purchasing the assets of the target company means the buyer acquires the assets of the target company, including real property, IP, equipment, inventory and licenses. The buyer also acquires contractual liabilities and tax obligations. This method affords the parties great flexibility for the buyer to choose specific assets and liabilities, and to carve out liabilities the target company should keep. However, this method can be more complicated because it may need preparation of ancillary agreements to transfer contracts, tangible property and title to certain assets.

Purchasing the stock of the target company means the buyer acquires all of the target company’s assets and liabilities. In this method, the stock purchase buyer essentially acquires the target company rather than the components of the business. A stock sale can benefit sellers where it effectively transfers all liabilities without requiring all of the formalities in an asset purchase agreement, such as documents to retitle assets to the buyer. A stock acquisition generally will not have the same statutory constraints of a merger.

Each method has unique advantages and disadvantages depending on the specifics of the deal. The parties need to analyze and evaluate all implications for each method. Careful consideration and planning leads to the best deal for both sides and prevents unnecessary complications down the line.

Travis E. Harrison is an attorney with the law firm of Phillips Murrah.

Gardner addresses current issues regarding Oklahoma Native American law

Melissa Gardner is a Director who practices in the Energy & Natural Resources Practice Group. She represents both privately-owned and public companies in a wide variety of oil and gas matters, with a strong emphasis on oil and gas title examination.

Director Melissa R. Gardner participated in a seminar in September for the Oklahoma Bar Association’s Continuing Legal Education individuals focusing on matters relevant to the oil and gas industry in Oklahoma.

“My presentation covered the statutory landscape for Native American law,” Gardner said. “I discussed all of the Congressional acts that control the United States’s legal position in regards to the tribes.”

On the topic of tribes, Gardner addressed the most recent Supreme Court case involving the tribes, Sharp v. Murphy, and emphasized possible, incredible implications on the state of Oklahoma and 19 million acres lying East of Oklahoma City.

The case is pending and raises the question of whether Congress disestablished the Muscogee Nation reservation. Click here for more information on issues surrounding the case.

Gardner is a Director and an attorney in the Energy & Natural Resources Practice Group. She represents energy companies in a variety of matters in both Oklahoma and Texas.

Attorney Ashley Schovanec in article on potential Oklahoma civil lawsuit award caps

Attorney Ashley Schovanec Web

Ashley M. Schovanec is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters.

Ashley M. Schovanec, Phillips Murrah Litigation Attorney, was quoted in a Journal Record article by Steve Metzer regarding the decision by Chris Kannady, chairman of the Oklahoma House Judiciary Committee, to consider a legislative compromise to a ruling that made caps on certain damages in civil lawsuits unconstitutional.

Read Schovanec’s comments below:

Ashley M. Schovanec, a litigation attorney with the firm of Phillips Murrah, said another result of the Supreme Court’s decision might be that businesses will be more likely to settle lawsuits than contest them on legal grounds,

Because the risk of large verdicts just went up, cases may settle earlier because of the uncertainty associated with leaving a damages calculation up to a jury,” she said.

Read the full article from the Journal Record.

Buying in to medical practices entails special planning

Erica K. Halley

Erica K. Halley represents individuals and businesses in a broad range of transactional matters.

In this article, Oklahoma City Attorney Erica K. Halley answers questions about the basics of investing in a medical practice.

What does it mean to buy in to a medical practice?

Small health care practices are typically owned by one or more of the health care providers at the practice. Such practices are usually organized as professional corporations (PCs) or professional limited liability companies (PLLCs). Although PCs and often PLLCs are considered corporations for legal and tax purposes, where the owners are technically “shareholders,” owners of a medical practice are colloquially referred to as “partners.” For a junior provider in a small practice, the pathway to partnership and the partnership itself can take on many different forms, but the key concerns are generally the same in every case.

Health care providers interested in purchasing ownership in a practice should invest with a comprehensive understanding of the valuation of the business, the compensation structure among partners and the exit strategies available to each of the partners. Retaining advisers who can alleviate this burden, such as an accountant and an attorney having experience in medical practice transactions, will ensure the tax implications are favorable and the exposure to risk is minimized.

How are medical practices valued and how do partners buy in?

Ordinarily, valuations consider the values of the hard assets, the accounts receivables and other intangibles, and the goodwill of the practice. Unlike other types of companies, it is common in health care practices for all partners to share ownership equally. This means a new partner to an existing two-partner practice will own a full 33.33% of the practice either immediately or shortly after the buy-in.

How the new partner pays for his or her share of the business varies. Sometimes, buy-ins are structured over time. For example, if a buy-in were to take place over the course of three years, the new partner would pay one-third of the total purchase price every year, and he or she would slowly purchase their interest in the practice, not becoming an equal partner with full voting power until the third payment in the third year. Alternatively, a practice may grant the new partner his or her full ownership (with full voting power) at the outset, and treat the buy-in like a loan being paid off over time. In either event, the payoff of the purchase price is frequently in the form of income-shifting or plain reductions in salary and/or bonuses.

How are partners paid?

Compensation structures in medical practices also differ across the board. Many times, a partner’s compensation is determined, at least in part, by the partner’s “productivity” in the practice according to how much revenue each provider generates, how many patients each provider sees, how many hours each provider works, or a combination of any of the foregoing. Other variables used in determining partner compensation include the management duties of the partners, seniority, special training and allocations of expenses. Such formulas among the partners ought to be negotiated and agreed upon prior to a buy-in.

How do partners get out of practices?

Before partners buy in, they need to understand how to get out — and how the other partners can get out at their expense. Shareholder agreements in professional corporations and operating agreements in professional limited liability companies usually set forth the procedures for a partner leaving the practice in the event of employment termination, retirement and death, as well as the calculations for valuing the exiting-partner’s ownership. In most cases, the other partners will be ultimately responsible for buying that partner (or his/her estate) out of the business. In addition, practices often bind their partners to noncompetition covenants, which restrict them from competing with the practice after they leave the practice.

 

Erica K. Halley is an attorney with Phillips Murrah.

Norman selected for LOYAL XV Class

Kendra Norman Web

Kendra M. Norman represents individuals and businesses in a broad range of transactional matters.

Leadership Oklahoma City recently selected members for Linking OKC’s Young Adult Leaders’ (LOYAL) 2019-20 class, and Phillips Murrah attorney Kendra M. Norman made the cut.

“I see my role in LOYAL as a community member and community leader who wants to experience personal growth with respect to leadership skills as well as further develop skills to improve the community,” Norman said. “I’m so excited to make new contacts and learn from others in different areas and professions as well.”

The LOYAL Program runs from September through April and focuses on enhancing personal leadership skills and cultivating community leadership skills by giving participants unique opportunities to learn leadership skills from Oklahoma’s most influential and accomplished business people, public servants, and non-profit managers.

“When you become an attorney, you join the legal profession and view yourself as an attorney, not just at work, but all the time,” Norman said. “No matter if you’re at work or at home, you are always an attorney and it’s a persona that you take on for life.

“But I’m so much more than just an attorney. I wanted to join the LOYAL program to help me make an impact on the community outside of this profession. I’m a leader in the Oklahoma City community and volunteer in several capacities, so I wanted to further develop those skills so that I can help improve the community and be a better leader and board member.”

Norman is a transactional attorney who represents clients in a broad range of matters in the areas of Mergers and Acquisitions, Real Estate Law, Tax Law, Clean Energy Law, and Private Wealth, Estate Planning and Business Succession.

Other Phillips Murrah graduates of Leadership Oklahoma City programs include Jim Roth, Signature Program Class XXII, and G. Calvin Sharpe, Signature Program Class XXIII.

Phillips Murrah welcomes three new attorneys to legal team

Phillips Murrah is proud to welcome Justin G. Bates, Kara K. Laster, and Phoebe B. Mitchell to our Firm.

Phillips Murrah welcomed Justin and Phoebe to the Firm’s Litigation Practice Group as associate attorneys. Each represents individuals and both privately-held and public companies in a wide range of civil litigation matters.

Justin attended the University of Oklahoma College of Law where he earned American Jurisprudence Awards for Civil Procedure II and Torts. He served as a member of the American Indian Law Review and was a member of the Phi Delta Phi Legal Honor Society. Justin also had the privilege of arguing in the final rounds of both the 2017 1L moot court competition and the 2018 Calvert Competition before an esteemed panel of Oklahoma justices.

Justin was born and raised in the metro area, where he currently lives. In his free time, he enjoys traveling, watching college football, discussing what could have been for the Oklahoma City Thunder, and spending time with friends and family.

Phoebe attended the University of Oklahoma College of Law where she earned the American Jurisprudence award for Civil Procedure II and was on the Dean’s Honor Roll. She served as the Research Editor and Candidate Mentor on the Oklahoma Law Review and was a member of the Phi Delta Phi Legal Honor Society. Phoebe also served as a mentor on the Dean’s Leadership Council, was selected as a Dean’s Leadership Fellow, and was selected to serve on the Academic Appeals Board.

While in law school, Phoebe had the opportunity to clerk as a judicial intern for the Honorable Judge Rob Hudson of the Oklahoma Court of Criminal Appeals.

Phoebe was born and raised in Oklahoma City and received a Bachelor’s Degree from Vanderbilt University in Nashville, Tennessee. She enjoys Thunder basketball, OU football and cheering on her Vanderbilt Commodores in her spare time.

Kara has joined Phillips Murrah’s Transactional Practice Group as an associate attorney where she represents individuals and businesses in a broad range of transactional matters.

Kara was part of the dual degree program at the University of Oklahoma College of Law and Price College of Business, achieving both her J.D. and M.B.A. During her third and fourth years of school, Kara worked as a Graduate Assistant for the Editor-in-Chief of the Southern Law Journal and business law professor at both the undergraduate and graduate levels. She was a member of the Phi Delta Phi Legal Honor Society, received the Elkouri Scholarship, and graduated with honors.

Kara was born and raised in Shawnee, Oklahoma, and now lives in Oklahoma City. In her free time, she enjoys traveling, snow skiing, spending time at the lake with friends and family, and attending OSU sporting events.

Norman elected Chapter Adviser for University of Oklahoma sorority

Alpha Omicron Pi’s house at the University of Oklahoma campus

Alpha Omicron Pi’s Xi Chapter members recently elected Phillips Murrah Attorney Kendra M. Norman to serve as Chapter Adviser for the sorority’s University of Oklahoma house.

Chapter Adviser is elected annually and advises the Chapter President, the Leader’s Council—which consists of women elected as leaders of the chapter—as well as the chapter as a whole, which is made up of over 250 women.

“I serve as a resource, a role model, and a coach to the chapter and its members,” Norman said. “I have the privilege of working one-on-one with the amazing women of Xi Chapter and have gotten to watch them grow as leaders, achieve their goals, and become professionals, and I am so proud to call each one of them my sisters.”

The Chapter Adviser also serves as the chairman of the chapter’s Alumnae Advisory Committee, comprised of alumnae who mentor the women on the Leader’s Council individually. Norman has served on the committee for about five years in various leadership roles.

“Alpha Omicron Pi’s motto is ‘Inspire Ambition,’ and I truly take that to heart as I practice law at Phillips Murrah P.C. and volunteer with Xi Chapter of AOII,” she said. “I find that being a collegiate member and now an alumna member of AOII has been an empowering experience, and it is amazing to see what women can do when they work together and build each other up.

“I am thrilled to be able to take on this new challenge and to have this opportunity to work side by side with the women of Xi Chapter as well as Inspire Ambition through my service.”

Norman represents individuals and businesses in a broad range of transactional matters in the Firm’s downtown Oklahoma City office.

Attorney Lauren Voth leads SmartTalks presentation on medical marijuana in the workplace

SmartTalks Virtual User Group Meeting:
Medical Marijuana in the Workplace

Thursday, Aug. 15
12 PM to 1 PM (CST)

Free to participate with registration

 

Employers can still enforce drug-free workplace policies and implement drug-testing policies even after their state legalizes Medical Marijuana.  However, you must ensure your policies comply with state law.

Phillips Murrah Attorney Lauren Symcox Voth will review what your company can do to ensure the safety and security of your workforce and organization even after the legalization of medical marijuana.

To register, click here.

Presenter:

Lauren Voth

Lauren Symcox Voth

Lauren Symcox Voth is a member of Phillip’s Murrah P.C. Labor and Employment Practice Group. She represents individuals and both privately-held and public companies in litigation, administrative matters, mediations and negotiations. Specifically, Lauren has experience representing large and small corporations in employment-related matters.

Attorney Mary Holloway Richard delivers presentation on behavioral health protections

Mary Holloway

Mary Richard represents institutional and non-institutional providers of health services, as well as patients and their families.

Mary Holloway Richard, Phillips Murrah healthcare law attorney, participated in a CLE webinar panel for healthcare counsel on Wednesday.

Strafford Publications presented the webinar on protecting patients’ behavioral health information, and disclosure requirements and limitations.

Richard’s presentation defines best practices for healthcare providers in situations where a potential breach in patient privacy may arise.

The panel addressed the distinction between instances when the release of behavioral health information is permissible or required.

A slideshow of the presentation is available to view here, and those interested in viewing the webinar may do so via Strafford’s website here.

For more information about Phillips Murrah’s Healthcare Law practice, click here.

Child support payments based on several variables

A headshot of Robert K. Campbell, a lawyer focused in the area of family law.

Robert K. Campbell’s legal practice is focused in the area of family law, specifically concentrated in matters of divorce, legal separation and custody issues.

In this article, Oklahoma City Attorney Robert K. Campbell answers questions about the basics of arranging and handling Oklahoma child support.

Who pays child support in a divorce proceeding?

Oklahoma law requires both parents to provide financial support for their children during a divorce. That being said, typically it is one parent paying the other parent. There are, however, situations wherein neither parent may owe the other parent child support.

How is the amount of child support calculated?

The child support amount is calculated based upon the Oklahoma Child Support Guidelines. The Oklahoma Child Support Guidelines will calculate the child support obligation of each parent.

What does the Oklahoma child support calculation take into consideration when determining the amount of child support?

There are several variables that go into the Oklahoma Child Support Guideline calculation. The primary variables determine the base child support amount consist of the parties’ gross monthly income, the number of minor children of the parties, and the number of overnights each parent has with the children. There are other variables that can be taken into consideration. A common example of these are health insurance premiums and child care costs.

What is considered gross income for child support purposes?

Oklahoma’s definition of gross income is broad and intended to include earned income and passive income. Gross income consists of wages, salaries, tips, commissions, bonuses, etc. Passive income can include dividends, pensions, rent, interest income, trust income, gifts, gambling winnings, lottery winnings, etc.

If both parents agree, can the child support agreement differ from the Oklahoma Child Support Guidelines calculations?

Typically, an agreed amount other than the guidelines will likely be approved if it is in the best interest of the minor child and the amount of support indicated by the guidelines is unjust or inappropriate under the circumstances; both parties are represented by counsel and have agreed to a different amount; or one party is represented by counsel and the deviation benefits the unrepresented party.

How long does a parent have to pay child support?

In Oklahoma, the law typically provides that a child is entitled to support by the parents until the child reaches the age of 18, or graduates high school, whichever occurs later; however, it shall not extend beyond the age of 20. There are certain situations where the law may provide support to an adult child with a disability beyond the age of majority. If you are paying support for more than one child, your payment amount does not drop automatically when one child no longer qualifies for support. You must take affirmative steps to recalculate future support for the remaining child or children and ask the court to enter a revised support order. When the last child no longer qualifies for child support, the support obligation ends if there is no past due support owed.

Can child support be modified?

Yes. In Oklahoma, either parent may request a modification of the amount of child support based upon a “material change in circumstances.” The increase or decrease in either parent’s income may constitute a material change in circumstances warranting a modification.

What happens if a parent who is ordered to pay child support fails to pay?

The parent who fails or refuses to pay their child support obligation can be cited for indirect contempt of court, which if found guilty can result in a $500 fine and/or up to six months in jail. Additionally, state licenses can be revoked, suspended or not renewed.

 

Robert K. Campbell is a family law attorney with Phillips Murrah.

Employers should examine paid parental leave policies

The notorious absence of any federally mandated paid family leave in the United States was a significant issue during the 2016 presidential election. Recent legislative proposals indicate that the issue will only gain steam through 2020 and beyond. Paid parental leave is not a partisan issue, as demonstrated by legislators on both sides of the aisle introducing bills in 2019, including Marco Rubio and Kirsten Gillibrand.

Phillips Murrah litigation attorney Hillary Clifton discusses holiday legal hazards.

Hilary Hudson Clifton is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters. Click photo to visit her attorney profile.

With parental leave policies under particular scrutiny, it is a good idea for employers to examine their existing policies. As it looks ever more likely that paid leave will be federally mandated in the not-too-distant future, now might be the right time for employers without a paid leave policy to consider implementing one.

Though some states have passed laws requiring paid parental leave benefits, Oklahoma is not among them, and employers in Oklahoma currently offering paid leave to new parents do so voluntarily. Still, employers could find themselves in legal trouble if their policies impermissibly distinguish between different classes of parents. For example, while it might be tempting to offer a certain period of paid maternity leave to a mother, and a different period of paternity leave to a father, employers must be careful to draft policies that do not discriminate on the basis of sex, sexual orientation, and other potentially protected categories.

Paid parental leave to care for a new child, sometimes referred to as bonding time, should apply equally to all new parents, including biological mothers and fathers, adoptive parents, and same-sex couples. However, with biological mothers requiring medical attention and recovery time related to pregnancy and childbirth, it is not discriminatory to offer biological mothers an additional period of paid leave, provided the policy specifies that such leave is for the mother’s medical/physical needs.

Increasingly, employers around the country are opting for generous parental leave policies to attract and retain qualified employees. In that regard, employers considering a policy that offers a birth mother significant paid leave for recovery but little time for bonding and childcare might consider whether such a policy could encourage fathers or adoptive parents to look elsewhere for job opportunities.

With no federal or state mandate in Oklahoma, there remains room for any employer to adopt a policy in line with its particular needs and preferences. That said, well-intentioned employers should take measures to avoid inadvertent discrimination in their policies.

Hilary H. Clifton is a litigation attorney with the law firm of Phillips Murrah.


Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on July 18, 2019.

How to determine whether to hold or terminate an oil and gas lease

When a landowner leases property to an energy company, the lease agreement typically contains a held-by-production provision, also known as a habendum clause. In Oklahoma, habendum clauses in oil and gas leases establish that after the primary lease term has ended, the lease shall remain in force as long as the land is capable of producing a minimum amount of oil or gas. But how do courts decide whether to hold or end such a lease?

Habendum clauses typically describe the lease term as, “from the date hereof and as long thereafter as oil or gas … is produced from said land.” When the term “produced” is used in a “thereafter” provision of the habendum clause, it has been determined by courts to mean production in “paying quantities.”

However, “paying quantities” is not determined by a specific dollar amount. Rather, it is defined as an amount of production sufficient to yield a profit to the lessee beyond lifting expenses, which include costs of operating the pumps, gross production taxes and electricity.

To determine whether a lease is commercially producing and, therefore, may be held by production, there are four factors that courts take into account: the accounting period, revenue during that period, expenses during that period, and equitable considerations.

The accounting period chosen for any production analysis varies and is determined by examining facts and circumstances specific to the lease. Accounting periods can make or break a case when trying to ascertain whether there was production in paying quantities. Thus, to reflect the production status, it is crucial to determine a sufficient amount of time that would provide information that would allow a “reasonable and prudent operator” to decide whether to continue or cease operation.

For example, in Hoyt v. Continental Oil Co., the accounting period was 14 months. In Smith v. Marshall Oil Corp., the accounting period was 35 months.

Once an accounting period is established, all revenue generated by the lease during that period is considered. Next, lifting expenses are considered and compared against revenue to see which is greater. However, this consideration does not include overriding royalties, overhead, and depreciation.

Lastly, if the lease is unprofitable, the court will examine any equitable considerations to determine if any justify maintaining the lease. These considerations are very specific to the circumstances of the lease that may affect profitability, which could include market conditions, changes in public policy, pipeline access, and conflict resolution activity.

If, after examining all factors, it is determined that the oil and gas lease is returning a profit over lifting expenses, the lease will not be vulnerable to termination and shall be allowed to continue beyond the primary lease term.

Originally published in The Journal Record on July 5, 2019.

Deadline Monday for pharmacies’ annual inventory of controlled dangerous substances

In this article, Oklahoma City Attorney Martin J. Lopez III discusses requirements pharmacies must abide by when submitting controlled substance inventories and the consequences they may face if they neglect to do so.

attorney Martin J Lopez III

Martin J. Lopez III is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters.

There seems to be increasing regulation of pharmacies in recent years, and this has been heightened by the responses to the opioid crisis. What are the various inventory requirements of the Oklahoma State Board of Pharmacy (OSBP)?

According to state regulation, and because of the dangerous propensities of these controlled medications, OSBP requires pharmacies to perform inventories much like any retailer, although there are some distinctions based upon the nature of the pharmacy’s product. The regulation, Oklahoma Administrative Code 535:15-3-10, sets forth four distinct circumstances where inventories must be performed: The first is an annual inventory of controlled dangerous substances (“CDS”). Most relevant for all pharmacies at this particular time, the OSBP requires an inventory of all CDS be performed between May 1 and July 1 of each year; this annual inventory must be included with the pharmacy’s annual license renewal application. This annual license renewal application must be in writing, must contain the names of the pharmacy’s owners and shall provide any other information deemed relevant by the board — including the CDS inventory. Inventory is required for a Change of Ownership or a change of the Pharmacist-in-Charge (PIC) and must be sent to the board within 10 days. The OSBP requires the inventory include the new manager’s name and registration number and recommends that it include the outgoing manager’s name, registration number, and current place of employment. The OSBP further recommends that both the incoming and outgoing managers sign the inventory. Inventory also may be triggered by circumstances such as theft. In the case of suspected loss, theft, or other event, the OSBP may require an inventory be performed and sent to the board within ten days of the completion of the inventory. Inventory is also required when a pharmacy closes and must be sent to the board within 10 days of the pharmacy’s closing.

What is a controlled dangerous substance for the purposes of the annual inventory to be performed between May 1 and July 1?

Generally, a CDS is a drug, substance or immediate precursor (a substance that serves as a chemical intermediary to manufacture a controlled dangerous substance) in Schedules I through V of the Oklahoma Uniform Controlled Dangerous Substance Act, found at Title 63, Sections 2-203 through 2-212 of the Oklahoma Statutes; these Schedules range from those with high potential for abuse and no accepted medical use (includes many “street” drugs like heroin) to those with low potential for abuse and which are accepted for medical use (such as pseudoephedrine—such as brands commonly known as Sudafed PE and Allegra D.

What happens if a pharmacy misses or fails to complete an inventory or doesn’t perform or submit the inventory on time? For example, what happens if a pharmacy doesn’t perform inventories of its controlled dangerous substances between May 1 and July 1?

If a pharmacy fails to comply with the annual CDS inventory, both the PIC and the pharmacy itself are deemed to have violated the administrative code. A violation of the administrative code amounts to a violation of the Oklahoma Pharmacy Act, over which the OSBP may take a number of actions, including a reprimand, probation, suspension, permanent revocation of a pharmacy’s license, or other disciplinary action in its discretion; the OSPB also can levy fines up to $3,000.

Martin J. Lopez III is an attorney with Phillips Murrah law firm.

OCBA Young Lawyers Division deems Phillips Murrah “Friend of the YLD”

Ben Grubb, YLD Chair, Hilary Clifton & David Cheek, Awards Committee Chair

YLD Chair Ben Grubb, Phillips Murrah Attorney Hilary Clifton and Awards Committee Chair David Cheek

The Oklahoma County Bar Association Young Lawyers Division honored Phillips Murrah as a “Friend of the YLD” at the annual OCBA Awards Luncheon on June 21.

“Phillips Murrah was chosen for this award because of their consistent support of the Harvest Food Drive and the Regional Food Bank,” said Debbie Gorden, OCBA Executive Director. “They have also continued to sponsor the events of the Chili Cook-Off and Striking Out Hunger Bowling Tournament by monetary donations as well as team participation.”

Many Phillips Murrah attorneys have dedicated their time to supporting OCBA’s mission. Multiple attorneys have even served on the OCBA Board of Directors.

“The Firm is honored to be acknowledged by OCBA Young Lawyers’ Division as a Friend of the YLD,” said Cody J. Cooper, Phillips Murrah Attorney and Past Chair of YLD. “Our attorneys are motivated to give back to Oklahoma’s community and privileged to support the YLD with their ongoing service efforts.”

Read more about the Firm’s past support of OCBA at the links below:

Journal Record awards Phillips Murrah law firm top Reader Rankings honors

PM Reader Rankings attendees 2019

Phillips Murrah attorneys and executive leaders attend The Journal Record’s Reader Rankings Gala where the Firm won in five categories.

Phillips Murrah is proud to announce our Firm received top honors in five of The Journal Record’s Reader Rankings categories.

“It’s an honor to be recognized in our community for the challenging work our attorneys do every day,” Marketing Director Dave Rhea said.

Phillips Murrah received awards for Best Civil Litigation Firm, Best Family Law Firm, Best Intellectual Property Firm, Best Malpractice Firm and Best Overall Leadership at Reader Rankings Gala on June 20.

“We take pride in providing exceptional legal services while striving to provide a positive, balanced atmosphere for our attorneys and staff,” said Thomas G. Wolfe, Phillips Murrah President and Managing Partner.

The Reader Rankings program recognizes and celebrates the achievements of Oklahoma businesses and entrepreneurs.

Journal Record readers nominate and vote for the best businesses and organizations across a wide variety of categories encompassing the areas of construction and design, entertainment, finance/accounting, general business, health care, higher education, hospitality, legal services, real estate and information technology.

To learn more about the workplace culture and opportunities at Phillips Murrah, visit our Careers pagehttps://phillipsmurrah.com/careers.

Hasenfratz inducted into American College of Real Estate Lawyers

Sally Hasenfrats

Sally Hasenfratz is a Director in the firm. She is a veteran real estate and transactional attorney with over 25 years of experience.

Phillips Murrah is proud to announce Director and Shareholder Sally A. Hasenfratz has been elected as a Fellow of the American College of Real Estate Lawyers.

Admission to ACREL is by invitation only, following a rigorous screening process and significant peer review. Members are elected based on recognition locally and nationally as a distinguished real estate practitioner, high standards of professional and ethical conduct, and contributions within both the legal and non-legal communities to the improvement of the practice of commercial real estate law.

Sally is the leader of the Firm’s Real Estate Practice Group, where she focuses her practice on the acquisition, development, leasing and financing of all types of commercial real estate. She is a co-founder and past president of CREW-OKC, Inc., which is the local chapter CREW Network, a global organization formed to transform the commercial real estate by advancing women in the industry.

Sally has receive a number of other honors such as being named in Chambers USA Guide to America’s Leading Lawyers in Real Estate, The Best Lawyers in America (real estate, construction, land use and commercial transactions), and Super Lawyers (real estate, top 25 women lawyers in Oklahoma, top 50 lawyers in Oklahoma).

She brings to her transactional practice an LL.M. degree in taxation, which allows her to strategize with her clients from a broad view of their projects, helping them to plan, structure and execute each piece of the deal to maximize business objectives.

For more information about ACREL, visit their website here.

Maule to present at nonprofit business seminar

Byrona Maule

Byrona J. Maule is a Director and litigation attorney as well as a member of the Firm’s Labor & Employment and Healthcare practice groups.

Byrona J. Maule, Director and member in the Firm’s Labor and Employment Practice Group, will give a presentation on the current state of human resources on June 4 at a Nonprofit Accounting and Finance Seminar hosted by Arledge & Associates, P.C.

Accounting and finance professionals are invited to attend the seminar which is tailored to address tax and accounting issues specific to the nonprofit sector.

The seminar will cover a wide range of topics including audits, tax law changes and Financial Accounting Standards Board updates. Sessions will also cover employment law issues for nonprofits, donor relations matters and online marketing.

Byrona represents executives and companies in a wide range of business and litigation matters with a strong emphasis on employment matters, ensuring their compliance before various state and federal regulatory boards.

For more information about the seminar, click here.

Federal income tax challenges for medical marijuana businesses in Oklahoma

Jessica Cory web

Jessica N. Cory represents businesses and individuals in a wide range of transactional matters, with an emphasis on tax planning.

In this article, Oklahoma City Attorney Jessica N. Cory explores the conflict between federal and state law as it pertains to Oklahoma medical marijuana businesses.

What is the primary federal tax issue for Oklahoma medical marijuana businesses?

Jessica Cory, attorney with Phillips Murrah law firm answers: The primary tax issue for Oklahoma medical marijuana businesses stems from the conflicting treatment of the marijuana industry under federal and state law. Although the approval of State Question 788 last summer legalized the use, growth and sale of medical marijuana for state purposes, marijuana remains an illegal drug under the federal Controlled Substances Act. Special tax provisions apply to penalize anything deemed illegal drug trafficking under federal law, including licensed medical marijuana businesses.

What are the specific federal tax burdens a medical marijuana business will face?

Internal Revenue Code Section 280E represents the biggest tax challenge for medical marijuana businesses. Generally, the Internal Revenue Code allows a taxpayer to take a deduction for all “ordinary and necessary” business expenses paid or incurred during the taxable year. Congress has created an exception to this rule in certain instances, however.

One such exception is Code Section 280E, which prohibits a taxpayer engaged in the business of “trafficking in controlled substances” from taking a deduction for ordinary business expenses. Because the federal Controlled Substances Act defines marijuana as a Schedule I drug, Code Section 280E severely limits the types of deductions available to a medical marijuana business.

Although Code Section 280E prevents a marijuana business from taking normal business deductions, it does not bar a business from offsetting its gross receipts with its cost of goods sold (“COGS”). This means a business can at least reduce its potential taxable income by its direct costs of production. However, the Internal Revenue Code has issued guidance strictly limiting the types of costs a taxpayer engaging in a marijuana business can allocate to COGS, to prevent an end-run around Code Section 280E.

Case law supports this narrower interpretation of COGS for the marijuana industry, including prohibiting resellers of marijuana from including any indirect costs — costs other than the price paid for inventory plus any transportation or other necessary acquisition costs — in COGS.

Is there anything marijuana business owners can do to minimize their federal tax burden?

Yes, a tax professional can help marijuana businesses develop strategies for minimizing the impact of Code Section 280E. For example, a tax adviser can help a business differentiate between COGS and business deductions to take full advantage of the COGS offset allowed under federal law. In addition, a tax professional may be able to help a company structure its business to separate out its different activities to avoid having Code Section 280E apply too broadly. It is also essential for marijuana businesses to keep careful records, particularly if the business also engages in additional activities unrelated to growing, processing or selling marijuana.

Has there been any effort in Congress to fix the disparity in treatment under federal and state law?

Members of Congress have repeatedly introduced legislation to exempt marijuana businesses lawfully operating under state law from the parameters of Section 280E. For example, the Strengthening the Tenth Amendment through Entrusting States (“STATES”) Act, which would amend the Controlled Substances Act to protect people operating within the bounds of state cannabis laws, was recently reintroduced. Unfortunately, despite bipartisan support and the backing of several 2020 presidential candidates, the odds are not in favor of passage at this time.

Jessica Cory is an attorney with Phillips Murrah law firm.

Who should define the terms of an oil and gas lease?

Whose job is it to determine which expenses can be deducted from royalty payments under the terms of an oil and gas lease? Is it the lessee or the operator? People argue both positions and all parties desire clarity in who bears this burden.

Molly Tipton

Molly Tipton is an attorney in the Energy & Natural Resources Practice Group. She represents both privately-owned and public companies in a wide variety of oil and gas matters, with a strong emphasis on oil and gas title examination.

Unfortunately, there are many interpretations of the differing forms of deductions language in leases, and the courts have not had the opportunity to make a decision. Many operators have recently requested input from the lessee on royalty valuation, but some lessees may balk at this idea because current practice typically provides that the operator cuts the checks.

Pursuant to 52 O.S. § 570.8(A), a working interest owner in a gas well shall furnish to the operator the name, address, royalty interest, taxpayer identification number, and payment status of royalty interest owners for whom they hold a lease. While this language does not place the burden on the working interest owner to tell the operator how royalty proceeds should be valued under the terms of the lease, it is understandable that an operator wishes for input from the lessee, as they are a party to the lease.

However, when an operator asks a lessee to determine how royalty proceeds should be valued under the terms of the lease, the lessee may fear liability to the royalty interest owner in the event that the operator is paying the royalty contrary to how the lessor interprets the terms of the lease.

The lessee should take comfort in the language in 52 O.S. § 570.9(D), which states that any working interest owner that pays or causes to be paid royalty proceeds for gas production in accordance with the Production Revenue Standards Act valued according to the terms of such working interest owner’s lease shall be relieved of all liability to the royalty interest owners for any further payment of proceeds from such production.

The valuation of royalties will affect both the royalty owner and the lessee, and without any guidance from the courts, there is no definitive answer as to who should define the exact terms of the lease. One can understand why neither the operator, nor the lessee, wants the burden of defining the lease terms, as they affect royalty deductions. Only time will tell whose job it is after all.

 


By Phillips Murrah Attorney Molly E. Tipton

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on May 30, 2019.

Firm supports Big Brothers Big Sisters 2019 Bowl for Kid’s Sake campaign

Bowling Night attendees

Director Jennifer Miller, Director Melissa Gardner, Amy Bradt, and Director Zac Bradt wait for their turns at Bowling Night.

Months of fundraising events culminated into a night of bowling for Phillips Murrah employees, families and friends.

The Firm celebrated its annual fundraising efforts for Big Brothers Big Sisters’ Bowl for Kids’ Sake campaign on May 16 with a Bowling Night event at Dust Bowl Lanes.

Director Byrona Maule spearheaded the campaign, raising $4,700.

“Thank you for your generous support of Bowl for Kids’ Sake. It is the biggest fundraiser for Big Brothers Big Sisters of Oklahoma. The Phillips Murrah family is just that, a family. But not everyone is blessed with a family like ours – and that is where Big Brothers Big Sisters of Oklahoma assists.”

The Firm hosts a series of firm-wide events to garner support for the campaign and raise money to help the organization’s cause.

“The money raised from Bowl For Kids’ Sake is used to support one-to-one mentoring. Big Brothers Big Sisters evidence-based mentoring programs are designed to create positive, measurable outcomes for youth, including educational success, avoidance of risky behaviors, higher aspirations, greater confidence and better relationships. They match children, ages 6-18, (“Littles”) with caring adult role models (“Bigs”). The Bigs share experiences with the Littles that expand the Littles world in new ways.”

To learn more about Big Brothers Big Sisters of Oklahoma or to make a donation, visit their website here.


Phillips Murrah has been recognized as an Oklahoma Top Work Place by The Oklahoman/Energage four years in a row. Our Firm strives to recognize and reward our employees for excellence.

 

Phillips Murrah law firm names new Director and Shareholder

Cindy Murray Web

Cindy Hastie Murray

OKLAHOMA CITY (May 8, 2019) – Phillips Murrah proudly announces the promotion of Cindy Hastie Murray to a Director and Shareholder for the Firm. Murray’s selection brings the Firm’s total number of Directors to 40.

Cindy is a member of the Firm’s Real Estate Practice Group. She represents individuals as well as privately-held and public companies in a wide range of commercial real estate matters, including purchasing and selling commercial real estate and assisting both landlords and tenants in leasing matters.

“After having been Of Counsel with Phillips Murrah, practicing with my dad in the Norman office for many years, I am absolutely thrilled to have the opportunity to join the many fine attorneys in the Oklahoma City office and look forward to collaborating with them on a daily basis,” Cindy said.

While still in law school, Cindy co-authored The ABC’s of the UCC: Related and Supplementary Consumer Law, ABA 1999 with Professor Frederick H. Miller. She also clerked for the late Justice Marian P. Opala at the Oklahoma Supreme Court in 1999.

Born in Arlington Heights, Illinois, and raised in Oklahoma City and Edmond, Cindy lives in Norman with her family.

#MeToo movement reaches merger transactions

In this article, Oklahoma City Attorney Erica K. Halley discusses the “#MeToo” movement and the Weinstein Clause as they relate to requirements in buying and selling companies.

Erica K. Halley

Erica K. Halley represents individuals and businesses in a broad range of transactional matters.

What is the #MeToo movement and how did it start?

In October 2017, The New York Times published an article detailing decades of sexual misconduct by film producer Harvey Weinstein. The scandal ultimately left Weinstein disgraced, his film studio bankrupt and victims of sexual harassment and assault emboldened. The #MeToo movement ensued, wherein victims tweeted (or otherwise went public with) their experiences, which highlighted the prevalence of such misconduct in the workplace. As a result, the chickens have come home to roost for many predators in power. This means, among many other things, companies must adapt and prepare for the potential PR and legal nightmare that necessarily follows misconduct allegations against employees, particularly those having influence over compensation, promotions/demotions and workplace culture. One way we see the #MeToo movement in the doldrums of corporate paperwork is through what is becoming known as the “Weinstein Clause” in merger and acquisition agreements.

What is a Weinstein Clause?

When a company is sold or merged, the selling company is typically required to make a litany of representations to the buyer concerning the status of the selling company. A Weinstein Clause is a representation made by the selling company where the seller promises that none of the selling company’s employees is the subject of allegations of sexual misconduct. In its broadest form, a seller represents that no allegations of sexual harassment or misconduct have been made to the company against any individual in his or her capacity as an employee of the company or any of its affiliates. Usually, if a seller makes a false representation, the buyer can sue the seller for all damages resulting from the breach.

How do sellers negotiate Weinstein Clauses in M&A transactions?

Just like any representation in an M&A (merger and acquisition) transaction, sellers will try to limit the scope of the representation by adding knowledge qualifiers (ex: to the seller’s knowledge, there are no sexual harassment or misconduct allegations), defining or reducing the look-back period (ex: the seller represents that there have been no allegations in the past five years) and minimizing the number or type of employees subject to such allegations (ex: the seller represents that there have been no allegations against executive level employees). In addition, the lawyers on both sides will probably spend time negotiating the definitions of “sexual harassment” and/or “sexual misconduct,” as such terms are open to interpretation and, therefore, ambiguity. After the representation itself is determined, if the seller is aware of any such allegations, the seller will try to negotiate an exception to the representation and describe the allegations on a schedule attached to the agreement. In this case, the seller is essentially saying, “except for that one time, which buyer is going to overlook, there have been no allegations of sexual harassment/misconduct.”

Why should people care?

The Weinstein Clause itself will probably not have a noticeable impact on the viability or essential terms of M&A transactions. And most people will probably never lose sleep over how broadly or narrowly any Weinstein Clause is negotiated. However, everyone is affected by companies (some more directly than others), and most companies are led by individuals who have power and influence over other employees. The emergence of the Weinstein Clause is indicative of a broader social change. The Weinstein Clause provides evidence that sexual harassment and misconduct by such individuals is not tolerated, safe and respectful company cultures matter, and victims of sexual harassment and misconduct ought to be protected.

 

Published: 5/7/19; by Paula Burkes
Original article: https://newsok.com/article/5630647/metoo-movement-reaches-merger-transactions

Oklahoma Supreme Court ruling on noneconomic damages could have profound impact

On Tuesday, the Oklahoma Supreme Court ruled Oklahoma’s statutory cap on noneconomic damages violates the Oklahoma Constitution because it singles out for different treatment less than the entire class of similarly situated persons who may sue to recover for bodily injury.

Attorney Ashley Schovanec Web

Ashley M. Schovanec is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters.

In plain terms, the court found the statute is a “special law” that limits a living plaintiff’s right to recover noneconomic damages to no more than $350,000 and cannot be reconciled with the provision of the Oklahoma Constitution that expressly forbids any statutory damages limitation for injuries resulting in death.

Oklahoma’s statutory cap provides that in any civil action arising from claimed bodily injury, the trier of fact may award a plaintiff for noneconomic loss no more than $350,000, regardless of the number of parties against whom the action is brought or the number of actions brought—unless the claimed bodily injury is the result of more than mere negligence (i.e. reckless disregard for the rights of others, gross negligence, fraud, intentional injury, or malice).

The statute defines noneconomic damages as “nonpecuniary harm that arises from a bodily injury that is the subject of a civil action” and includes damages for, among other things, pain and suffering, loss of consortium, companionship, mental anguish, etc.

In Beason v. I.E. Miller Services, Incorporated, an employee was injured while operating a crane in his employment with I.E. Miller Services. As a result of his injuries, the employee underwent two amputations on parts of his arm. The employee and his wife sued I.E. Miller in a personal injury action. The matter went to trial in Oklahoma County and the jury awarded the employee and his wife a combined total of $15 million – $6 million of which was allocated as noneconomic damages. Applying the statutory cap, the district court reduced the jury verdict to $9.7 million, as the noneconomic damages to plaintiffs was lowered to $700,000, or $350,000 per person. On appeal to the Oklahoma Supreme Court, plaintiffs challenged the damages cap.

The Oklahoma Supreme Court held the statutory noneconomic damages cap is unconstitutional for one reason: the statue purports to limit recovery for pain and suffering in cases where the plaintiff survives the injury-causing event, while persons who die from the injury-causing event face no such limitation under Oklahoma Constitution Article 23, section 7 (“The right of action to recover damages for injuries resulting in death shall never be abrogated, and the amount recoverable shall not be subject to any statutory limitation . . . . ”).

The court explained that “[b]y forbidding limits on recovery for injuries resulting in death, the people have left it to juries to determine the amount of compensation for pain and suffering in such cases, and no good reason exists for the Legislature to provide a different rule for the same detriment simply because the victim survives the harm-causing event.”

Moving forward, the court noted that if the people of Oklahoma believe the jury system and judicial review are no longer effective in deciding compensation in private personal injury cases, then constitutional amendment is the proper way to make such a change, “not a special law.”

The impact of the Oklahoma Supreme Court’s decision in Beason is profound.

Now, after Beason, with the statutory damages cap removed, an unemployed, catastrophically injured plaintiff, and a defendant, may be looking at a substantially different recovery and exposure.  Consequently, and somewhat counter-intuitively, because the risk of large verdicts just went up, cases may settle earlier because of the uncertainty associated with leaving a damages calculation up to a jury.

Ashley M. Schovanec is a litigation attorney with the law firm of Phillips Murrah.

Phillips Murrah sponsors OU Law’s 2019 Best Brief Award

Best Brief Award Winners

Attorneys Ashley M. Schovanec and Erika K. Halley presented the Best Brief award to winners in the 1L Class.

The University of Oklahoma’s Competitions and Clinic Awards Luncheon offered first-year law students the chance to compete and show how their studies have paid off on April 18.

“We celebrated the hard work our students have put into our competitions and clinic programs,” said Camal Pennington, Director of Annual Giving at OU College of Law.

Attorneys Erica K. Halley and Ashley M. Schovanec presented the $5,000 Best Brief Award sponsored by Phillips Murrah law firm. The Firm also sponsored the award in 2018. 

“The First Place award is granted to one student from each of the four sections in the 1L Class for best written brief,” Pennington said. “$500 is awarded to each of the First Place winners.

“Phillips Murrah also grants a $250 award to the second place brief for each section.”

OU Law competition teams traveled all over the U.S., from New York City and Albuquerque to Dallas and Washington, D.C. to Denver, San Diego, and Chicago, he said.

“Faculty members, alumni and outside attorneys helped coach these teams,” Pennington said. “For two consecutive years, OU Law has been ranked in the Top 5 in the country for our competitions program.

“OU Law competition teams have won four national championships in the last two years including the 2019 Federal Bar Association Moot Court National Championship.”

Halley and Schovanec are OU College of Law alumni. Halley represents individuals and businesses in a broad range of transactional matters, and Schovanec is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters.

Click here to learn more about the OU College of Law.

Medical practice support can be costly to suppliers, others

In this article, Oklahoma City Healthcare Attorney Mary Holloway Richard discusses the “Anti-Kickback Statute” and potential, federal violations of the statute as it relates to providers in the healthcare industry.

Mary Holloway

Mary Richard is recognized as one of pioneers in health care law in Oklahoma. She has represented institutional and non-institutional providers of health services, as well as patients and their families.

What is the authority for the federal government to oversee providers’ relationships with durable medical equipment (DME) and device suppliers and drug companies, such as educational programs that would seem to benefit the patient? How active is that oversight?

The Anti-Kickback Statute (AKS) prohibits remuneration to induce referrals or use of products reimbursement by Medicare, Medicaid or other federal healthcare programs. The federal government, through its investigators and prosecutors, pursue civil remedies including fines for remuneration considered as kickbacks. Remuneration may be cash of in-kind contributions. Under the AKS both civil and criminal charges may result from an investigation by the federal government. Federal policy is designed to prevent relationships that purportedly “lead to excessive or unnecessary treatment,” drive up health care costs and inhibit free market competition. The kickback prohibition applies to all sources of referrals, even patients. For example, where the Medicare and Medicaid programs require patients to pay copays for services, you generally are required to collect that money from your patients. Routinely waiving these copays could implicate the AKS and you may not advertise that you will forgive copayments. However, providers are free to waive a copayment if the provider makes an individual determination that the patient cannot afford to pay or if reasonable collection efforts fail. In addition, providing free or discounted services to uninsured people is not prohibited. The beneficiary inducement statute (42 U.S.C. § 1320a-7a (a) (5)) also imposes civil monetary penalties on physicians who offer remuneration to Medicare and Medicaid beneficiaries to influence them to use their services.

Is the federal government even active in investigating and prosecuting under the AKS?

Yes. The Office of the Inspector General, counsel for the Department of Health and Human Services (HHS), estimated in 2018 that for every $1 spent on investigating health care fraud, $4 is recouped. The government has investigated, prosecuted and settled claims with many types of providers and continues to do so. The government does not need to prove patient harm or financial loss to the programs to show that a physician violated the Anti-Kickback Statute. A physician can be guilty of violating the AKS even if the physician actually rendered a medically necessary service. Taking money or gifts from drug or device companies or DME suppliers is not justified by arguing that providers would have prescribed that drug or ordered that wheelchair even without a kickback. An example of unlawful activities comes from the Covidien case. A supplier of vein ablation products in California and Florida, Covidien recently settled its claims with the federal government that it offered or provided free to medical practices, or at discounted rates, practice development assistance, lunch-and-learns, dinners with physicians, and market development support, such as vein screening activities designed to recruit new patients to the practices — all provided free of charge or at discounted rates. This virtually uncompensated support, according to the Department of Justice, was designed to induce the use of certain items or services, leading to excessive and unnecessary treatments and driving up health care costs for everyone.

Are there any clear guidelines for physicians and other providers?

HHS has published guidelines for providers, such as “A Roadmap for New Physicians-Avoiding Medicare and Medicaid Fraud and Abuse,” which I routinely provide to new physicians, advanced-practice nurses and other providers. Failure to follow the guidelines can be costly. For example, the outcome of the Covidien investigation was a civil settlement agreement for violation of the AKS in the amount of $17,477,947, with additional payments in excess of $2 million by the company to the states of California and Florida for claims paid by their Medicaid programs.

How are violations of the AKS usually discovered?

Violations of the AKS are often discovered through “qui tam” actions brought by employees of the practice group or those with knowledge of its practices known as “whistleblowers” or “relators.” To avoid vulnerability to qui tam actions providers are advised to adopt and implement robust compliance policies, including training providers and other personnel regarding behavior that may constitute risk under a federal regulatory analysis. It is also advisable to have operating agreements of the practice’s legal entity and written agreements reviewed by counsel in order to shift legal liability where possible.

 

Published: 4/19/19; by Paula Burkes
Original article: https://newsok.com/article/5629122/medical-practice-support-can-be-costly-to-suppliers-others

Gender parity and the rise of women in the boardroom

It should come as no shock that, although women make up just over half of the U.S. population, they are underrepresented in corporate executive management, as well as in the boardrooms of public companies in the U.S. This is often due to stereotypes that characterize female leaders as abrasive, aggressive and emotional. This disparate societal perception rewards certain characteristics in men while condemning them in women, which damages women striving for leadership roles.

Kendra Norman Web

Kendra M. Norman represents individuals and businesses in a broad range of transactional matters.

A 2016 Catalyst report found that in the U.S., women made up only 21.2% of the S&P 500 board seats.

A recent push for diversity on corporate boards of directors may change the gender lines of corporate culture. For example, California is the first state to statutorily require female representation on boards of directors.

In 2018, roughly 25% of California-based companies had no female directors on their board. In October, Gov. Jerry Brown signed a law requiring all public companies having principal executive offices in the state to have at least one woman on the board by the end of 2019. By the end of 2021, any California public company with five directors must have a minimum of two female directors, and those with six or more directors must include at least three women. The law imposes a $100,000 fine for a first-time violation and a $300,000 fine for subsequent violations.

California follows several European countries, including Germany, France, Norway, and Sweden, which have implemented quotas and fines to increase female representation in the boardroom. Additionally, shareholder advisory firms such as Institutional Shareholder Services and Glass, Lewis & Co. are now using gender diversity as a factor for shareholder vote recommendations.

While a government-mandated requirement may not be the ultimate solution, it could accelerate the achievement of gender equality.

Such a change in gender representation is likely to benefit companies, as gender and culture diversity results in diverse perspectives, which is likely to improve a company’s performance. It will also create less gender discrimination in recruitment, promotion, and retention.

While Oklahoma continuously ranks in the bottom of states for women when it comes to the income gap, workplace environment, education, and health, Oklahoma ranks 20th with respect to the executive positions gap, according to a recent 2018 WalletHub study. While there is much room for improvement, there may be hope for Oklahoma in achieving executive gender equality.


By Phillips Murrah Attorney Kendra M. Norman

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on April 18, 2019.

Firm selects Employee of the Month for March 2019

Timi Mitchell, Legal Assistant, is Phillips Murrah’s Employee of the Month for March 2019.

“I am very honored to be Employee of the Month,” Timi said. “I think we have a great team atmosphere at our firm, and am blessed to be a small part of it.”

The Employee of the Month is selected anonymously by Phillips Murrah staff on merits of teamwork and overall contributions to the Firm.

“Timi is the perfect example of an Employee of the Month,” Director Lyndon W. Whitmire said. “She works incredibly hard, and always with a smile on her face. She is always ready to help others.”

The Firm recently began making a donation to the winner’s charity of choice, and Timi chose the Oklahoma Lung Cancer Initiative in honor of her father who recently passed away due to lung cancer.

To learn more about the Oklahoma Lung Cancer Initiative, click here.


Phillips Murrah has been recognized as an Oklahoma Top Work Place by The Oklahoman/Energage four years in a row. Our Firm strives to recognize and reward our employees for excellence.

Doing business by email can cause legal concerns

In this article, Oklahoma City Attorney A. Michelle Campney discusses email practices that could be considered legally binding.

A. Michelle Campney

As a litigation attorney, A. Michelle Campney represents companies in a wide range of business litigation matters with an emphasis on the construction industry.

What are the general legal concerns regarding conducting business through email?

It is estimated that there will be almost 3 billion email users by the end of this year, with an average of 128 business emails sent and received per person, per day. Often, only passively mentioned in employee handbooks and with little to no training during onboarding, employers and employees adopt varied practices for email use. The sheer volume of emails creates logistical problems for businesses (e.g., server space, data protection), but it can also create legal issues when exchanges can bind companies or reveal confidential, privileged or personal information.

How can emails bind someone until they actually sign an agreement?

Does the party you are working with know that you require hard copy agreement with handwritten signatures? If not, and if the email contains all the material terms and the facts, and circumstances surrounding that show that you were conducting the transaction electronically, then you could have an enforceable agreement under the Oklahoma Uniform Electronic Transactions Act (“UETA”).

But no one actually signed the agreement, so how can it be enforceable?

Not all agreements have to be signed to be enforceable, and specifically under the UETA, a signature only need be “attributable to a person if it was the act of the person.” Furthermore, an electronic signature under the act is “determined from the context and surrounding circumstances at the time of its creation, execution, or adoption … .” While Oklahoma does not have any case law on the issue, a Texas court found a simple “Thank you, Clyde” typed above the signature block was sufficient for a signature. Parks v. Seybold (Tex. App.—Dallas, 2015). Additionally, some courts (including those in Texas) broadly interpret the signature requirement to include an automatically generated signature block.

What are other potential concerns for email?

Let’s say that your company is involved in litigation regarding a contractual dispute. Most attorneys ask that all communications, including email communications, regarding the issue be turned over during the discovery process. While the communication may not ultimately be admissible in court, if there are emails between employees discussing the dispute and the surrounding facts and circumstances, those will generally have to be turned over to the other side. Additionally, if certain individuals are involved then you may have to turn over all emails regarding that person. Thus, if any mentions of any disciplinary action regarding that person or even your own personal feelings about the person are on email those may have to be turned over. While the emails may not ultimately impact your case, they could embarrass your company.

Are there any practices or policies that would help alleviate the concerns surrounding email?

While policies and procedures will be specific to each type of business and its standard practices, at the most basic level, having a robust email use policy will set a good foundation and, if properly drafted, help educate your employees on what to do and not to do. One important thing to remember is that email will only continue to grow as a means of communication. Setting good groundwork for how it is to be used in your company may help prevent issues down the road.

 

Published: 4/11/19; by Paula Burkes
Original article: https://newsok.com/article/5628396/doing-business-by-email-can-cause-legal-concerns