In Roche Molecular Systems, Inc. v Cepheid, (Slip Op. 2017-1690, October 9, 2018), the Federal Circuit held that patent claims directed to primers and methods of detecting pathogenic bacteria using the primers are invalid for failing to claim patent-eligible subject matter. The decision summarizes this panel’s current thinking on the patent-eligibility of unmodified polynucleotides and methods to detect “natural phenomena” using “conventional” tools. Also, the panel deferred opining on the patent-eligibility of modified polynucleotides and the use of polynucleotides as therapeutics.
U.S. Patent No. 5,643,723 (“the ‘723 Patent”), titled “Detection of a Genetic Locus Encoding Resistance to Rifampin in Microbacterial Cultures and in Clinical Specimens” is owned by Appellant Roche Molecular Systems, Inc. (“Roche”). The ‘723 Patent claims methods for detecting pathogenic bacterium Mycobacterium tuberculosis (“MTB”) and in particular, rifampin-resistant MTB in cultured or clinical samples. MTB infection is a major cause of tuberculosis and rifampin is first-line treatment for treating MTB infection.
Claims 1 and 17 are representative of Roche’s asserted claims.
a T at nucleotide position 2465.
The ‘723 Patent exploits the discovery that certain mutations are present only in MTB. If a clinician detects one of the eleven “signature nucleotides” from a biological sample, it is a positive result for MTB and in particular, a specific species of MTB – rifampin-resistant MTB. The genetic tests, expressed by the methods and primer tools to perform these tests in the ‘723 Patent, are faster and more specific than tests available at the time the ‘723 patent application was filed. Physicians, armed with this knowledge, can avoid prescribing rifampin to patients who will not receive any therapeutic benefit from the drug. Thus, similar to certain companion diagnostics used in precision cancer therapy, genetic tests are employed to determine the most appropriate treatment for the patient at the time of diagnosis, thus avoiding the use of ineffective treatments.
The United States District Court for the Northern District of California found on a motion for summary judgment that the asserted claims of the ‘723 patent are directed to patent-ineligible subject matter and therefore invalid under 35 U.S.C. § 101. The Federal Circuit affirmed.
The Federal Circuit relied on the US Supreme Court’s two-step test for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts. Slip Op. at 8-9, citing Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014) and Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 77–79 (2012). The Alice/Mayo two-step test requires the court to determine whether the claims at issue are directed to a patent-ineligible concept. Slip Op. at 9. At the first step, it is insufficient to merely identify a patent-ineligible concept underlying the claim; the court must also determine whether that patent-ineligible concept is what the claim is “directed to.” Slip Op. at 9, citing Rapid Litig. Mgmt. Ltd. v. CellzDirect, Inc., 827 F.3d 1042, 1050 (Fed. Cir. 2016). If the claim is directed to a patent-ineligible concept, then the claim is evaluated to “examine the elements of the claim to determine whether it contains an ‘inventive concept’ sufficient to ‘transform’ the claimed abstract idea into a patent-eligible application.” Id., citing Alice, 134 S. Ct. at 2357 (quoting Mayo, 566 U.S. at 72–73, 78). The court noted that at this second step, there must be a further inventive concept to take the claim into the realm of patent-eligibility. “For claims that encompass natural phenomena, the method steps are the ‘additional features that must be new and useful.’” Id., citing Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1377 (Fed. Cir. 2015) and Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d 1369, 1376 (Fed. Cir. 2016), cert. denied, 137 S. Ct. 242 (2016).
Roche argued that the primer claims were patent-eligible because as artificial, man-made primers they are different from naturally occurring DNA specifically because the claimed primers have both a 3-prime end and a 3-prime hydroxyl group. Naturally occurring, counterpart bacterial MTB DNA contains neither of these. Slip Op. at 10.
Slip Op. at 10-11, citations omitted.
In reaching this result, the Federal Circuit noted that the Roche inventors did not introduce any mutations that would have made the primers’ nucleotide sequences different from those found in nature.
The Federal Circuit also rejected Roche’s argument that the linear primers are distinguishable from native MTB DNA that has a circular chromosome, and thus, contains neither a 3-prime end nor a 3-prime hydroxyl group. Slip Op. at 11. The court opined that “the subject matter eligibility inquiry of primer claims hinges on comparing a claimed primer to its corresponding DNA segment on the chromosome—not the whole chromosome.” Slip Op. at 12.
Roche’s argument that the specificity of the primers distinguishes them from native DNA also was rejected by the court. Roche argued that the claimed primers hybridize to only one of eleven position specific signature nucleotides on the MTB rpoB gene thereby transforming the primers into patent-eligible subject matter. The court did not find the function of the primers as evidence to distinguish the primers from native DNA because in the court’s opinion, a primer having an identical nucleotide sequence to naturally occurring DNA without further chemical modification is a natural phenomenon. Slip Op. at 14.
While the court reaffirmed that unmodified nucleotides are patent-ineligible, it expressly withheld judgment on whether modified primers would be patent-eligible. “We do not address the subject matter eligibility of primers that have been altered—e.g., investigator induced mutation(s) such that their nucleotide sequences are not found in nature, or primers which are chemically modified or labeled by investigators such that they cannot be isolated directly from naturally occurring DNA” citing Myriad, 569 U.S. at 596 (“Scientific alteration of the genetic code presents a different inquiry, and we express no opinion about the application of § 101 to such endeavors.”). Slip Op. at 13, footnote 5.
The methods of claim 1 and its dependents were determined by the court to be directed to a patent-ineligible relationship between the eleven naturally occurring position-specific signature nucleotides and the presence of MTB in a sample. In the court’s opinion, this “relationship between the signature nucleotides and MTB is a phenomenon that exists in nature apart from any human action, meaning the method claims are directed to a natural phenomenon, which itself is ineligible for patenting.” Slip Op. at 15.
The court analyzed the method claims in light of the specification which noted in the Summary of the Invention section that “[t]his invention involves a comparative analysis of the rpoB sequences in MTB, other mycobacteria and related . . . bacteria . . . demonstrating the heretofore undiscovered presence of a set of MTB specific position-specific ‘signature nucleotides’ that permits unequivocal identification of MTB …. Slip Op. at 15, citing the ‘723 Patent at column 2, lines 60–65 (emphasis added).
The court also focused on the patent language itself which characterized the inventors’ discovery as a previously undiscovered natural phenomenon found upon inspection of MTB sequence alignment. The specification noted that the inventors’ discovery related to eleven sites at which the nucleotide observed for MTB were different from all or most related organisms. Id. The court concluded that because these signature nucleotides are naturally occurring, the method claims are ineligible for patenting.
The court continued in its analysis by stating that the use of primers in a PCR step in the claims also fails to satisfy the “something more” requirement of the Alice/Mayo test because PCR was “routine” at the time the patent application was filed. The court divorced the use of this technique from its application for MTB detection, noting that “[w]hile it may be true that Roche inventors were the first to use PCR to detect MTB in a biological sample, being the first to discover a previously unknown naturally occurring phenomenon or a law of nature alone is not enough to confer patent eligibility. Many groundbreaking, innovative, and brilliant discoveries have been held patent-ineligible.” Slip Op. at 16-17, citing Mayo, 566 U.S. at 73–77 (discovery of natural correlation between level of certain metabolites and drug dosage, resulting in claimed method of optimizing treatment using standard techniques to administer the drug and then check if the metabolite level indicated the need for a dosage change); Genetic Techs., 818 F.3d at 1374 (discovery of natural correlation between non-coding regions of DNA and the presence of an allele in the coding region, resulting in claimed method of detecting alleles using standard PCR to amplify and detect); and Ariosa, 788 F.3d at 1373 (discovery of natural phenomenon that pregnant women’s blood contains cffDNA, resulting in claimed methods using standard techniques to amplify and detect cffDNA in maternal blood).
The court also rejected Roche’s argument that the use of PCR to detect MTB is no less inventive than the use of an artificial new drug to treat MTB. The court disagreed stating that the primers in the methods do not perform a significantly new function. “Thus, unlike a method of treating a disease with a new drug, Roche’s method claims do not involve ‘a significantly new function’ for the primers. . . This case is distinguishable from CellzDirect, where this court vacated a district court’s decision that the method claims at issue were ineligible for patenting. … This court held that while the claims were based on the discovery of a natural phenomenon (the ability of certain liver cells, or hepatocytes, to survive multiple freeze cycles), they were ‘directed to a new and useful laboratory technique for preserving hepatocytes’— namely, freezing and thawing hepatocytes twice even though the prior art taught away from this process. . . This court held that ‘[t]his type of constructive process, carried out by an artisan to achieve ‘a new and useful end,’ is precisely the type of claim that is eligible for patenting . . . [The inventors] employed their natural discovery to create a new and improved way of preserving hepatocyte cells for later use.” Slip Op. at 18.
The court also distinguished its more recent Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals International Ltd. decision where claimed methods of treatment are subject matter eligible because they claim a new way of using an existing drug. The court emphasized that Vanda underscores the distinction between method of treatment claims and those in Mayo, i.e., claims “directed to a diagnostic method.” Slip Op at 19, footnote 7. In the court’s opinion, Roche’s method claims, consisting of a standard PCR amplification step and a mental determination step, are not directed to a method of treatment.
The panel further expressly reserved its opinion on the subject matter eligibility of method claims that exploit DNA or RNA (e.g., siRNA or RNAi) for drug-like new applications. Slip Op. at 18, footnote 6.
The Roche panel made clear that isolated polynucleotides that are identical in primary sequence to a naturally occurring polynucleotide molecule are not patent-eligible. Whether modified polynucleotides are patent-eligible, and if so, what modifications transform patent-eligibility, was left unanswered by the court.
However, even though polynucleotides having identical sequence to a naturally occurring polynucleotide and methods for detecting natural phenomenon that use conventional tools are not patent-eligible, the court reaffirmed that methods of treatment that include diagnostic elements, remain patent-eligible. The court also reaffirmed that use of conventional tools in an unconventional manner to create a new product as explained in CellzDirect, remains patent-eligible.


Andrew DePeau, a member the firm's Business Litigation Group, focuses his practice on all aspects of business litigation and dispute resolution. Specifically, he represents clients in the banking, finance, and securities industries and has handled matters involving business torts, breach of contract, bankruptcy and creditors’ rights, and real estate issues.
Andrew represents clients across the country in a variety of business disputes. His litigation experience includes representing clients in federal and state lawsuits, arbitrations, foreclosures, and appeals. He has previously handled class action disputes involving consumer products, tax assessments, and insurance contracts. Andrew obtained a favorable decision on a motion for summary judgment for an investment management company in a commercial foreclosure case. He also successfully moved to preclude an opposing party’s expert witness in a class action tax appeal.
Andrew represents banks, investment management companies, insurance companies, and others in the financial services industry. He has represented investment management companies and their officers against claims of negligence, breach of fiduciary duty, and intentional mismanagement. He has also successfully assisted clients with complying with third-party subpoenas and responding to threats of litigation.
Andrew also represents secured and unsecured creditor clients in bankruptcy and creditors’ rights disputes. His bankruptcy experience has included fraudulent conveyance claims, preference claims, adversary proceedings, and relief from stay disputes. Andrew has handled creditors’ rights disputes, including representing mortgagees in foreclosure proceedings. He successfully obtained a judgment of strict foreclosure for a client in a contested case involving a commercial foreclosure.
Andrew contributes to the firm's Data Privacy + Security Insider blog.
Prior to joining the firm, Andrew was a law clerk for Judge F. Herbert Gruendel of the Connecticut Appellate Court. During law school he was an intern law clerk for the State of Connecticut and two Hartford-based corporations. He was awarded the Bankruptcy Medal of Honor and the Aspen Law and Business Award for Evidence.
In addition to his legal experience, Andrewhas substantial experience in business. Prior to attending law school, he spent eight years working for a successful startup business that conducts investigations of hedge fund managers for banks, large endowments, family offices, and fund-of-funds.
Obtained favorable settlement on behalf of a Connecticut-based investment company in a civil lawsuit brought by a former investor. The plaintiff initially sought six-figure damages. After briefing a motion to dismiss and serving discovery, the plaintiff agreed to a settlement that was a fraction of its initial demand.
Prevailed at the summary judgment stage on breach of contract action brought by our client against a company that refused to pay for goods and services rendered. After fully briefing the issue, the court granted summary judgment and the client was able to avoid the necessity and expense of trial.
After a court hearing, succeeded in foreclosing a large commercial property in South Windsor and obtaining a multi-million dollar deficiency judgment for our distressed investment company client.
Succeeded in obtaining a protective order to avoid subjecting client to burdensome and unnecessary depositions.
Precluded opposing party’s expert witness in a class action tax appeal where we represented a group of Connecticut property owners.
Successfully argued against summary judgment in commercial foreclosure action brought by investment bank client in Connecticut state court.
Briefed and obtained partial summary judgment in high stakes litigation involving a private school in Connecticut.
Selected as a Rising Star to the Connecticut Super Lawyers list in 2017 and 2018.
In the article, Mr. DePeau poses the question of whether a bankruptcy court's permission is required as a condition to sue a member of an official committee of unsecured creditors, a question before the Ninth Circuit Court of Appeals in Blixseth v. Brown (In re Yellowstone Mt. Club). He then presents the origins of the Barton Doctrine, its application to bankruptcy cases, the Yellowstone Mountain Club case, and the Ninth Circuit decision. Mr. Depeau concludes with analysis and lessons for practitioners.
Overall, the article reviews the government exception to the automatic stay provision under § 326(a) of the Bankruptcy Code. In more detail, it provides a primer on the government exception, a discussion of the three-factor Brennan test, and an analysis of the Second Circuit's decision in SEC v. Miller.
Business Litigation Group lawyer Andrew A. DePeau wrote the article "Permission to Sue: Applying the Barton Doctrine to Unsecured Creditors' Committee Members," published in the April 2017 issue of the American Bankruptcy Institute Journal (ABI Journal). In the article, Mr. DePeau poses the question of whether a bankruptcy court's permission is required as a condition to sue a member of an official committee of unsecured creditors, a question before the Ninth Circuit Court of Appeals in Blixseth v. Brown (In re Yellowstone Mt. Club). He then presents the origins of the Barton Doctrine, its application to bankruptcy cases, the Yellowstone Mountain Club case, and the Ninth Circuit decision. Mr. DePeau concludes with analysis and lessons for practitioners. Please click here to view the entire article.
Business litigation and bankruptcy and creditors' rights lawyers Patrick M. Birney and Andrew A. DePeau wrote the article "Unharnessing the Governmental-Unit Stay Exception: SEC v. Miller" for the May 2016 issue of the American Bankruptcy Institute Journal (ABI Journal). Overall, the article reviews the government exception to the automatic stay provision under § 326(a) of the Bankruptcy Code. In more detail, it provides a primer on the government exception, a discussion of the three-factor Brennan test, and an analysis of the Second Circuit's decision in SEC v. Miller. Please click here for more in-depth information on the topic.
Mr. Birney serves as a contributing editor of the ABI Journal.
Massachusetts, New York, and Florida. The lawyers bring additional breadth to a variety of our practices, including business transactions, environmental and utilities, finance, insurance, labor and employment, litigation, real estate, nonprofit organizations, and trusts and estates. Additionally, the firm is pleased to welcome two recent law school graduates. Read about our new lawyers here.


Pro se*fn1 petitioner Sakora Varone ("Petitioner") timely filed this petition for a writ of habeas corpus pursuant to 28 U.S.C. § 2255 ("Section 2255"), challenging her conviction for knowingly and intentionally conspiring to distribute and possess with intent to distribute one or more controlled substances in violation of 21 U.S.C. §§ 841(a)(1). (See generally Docket 09-CV-5703, Entry No. 1 ("Petition").) On February 18, 2009, Petitioner was sentenced to 135 months of imprisonment followed by five years of supervised release. (Docket 09-CV-5703, Entry No. 4, Ex. C, February 18, 2009 Sentencing Transcript ("Sentencing Tr.") at 39.) On March 5, 2009, Petitioner filed a notice of appeal with the Second Circuit Court of Appeals ("Second Circuit"), which was dismissed by order dated February 8, 2010. (See Second Circuit Docket 09-CR-912.) In the instant petition, Petitioner contends that she received ineffective assistance of counsel, and, as a result: (i) her Sixth Amendment rights were violated; (ii) she unknowingly, involuntarily or unintelligently pled guilty; and (iii) she was denied her right to appeal her conviction and sentence. (Petition at ¶ 12.) The Government opposed. For the reasons set forth below, the petition for writ of habeas corpus is denied in its entirety.
In general, the Second Circuit rejects attempts to challenge a conviction where a petitioner waived that right pursuant to a written plea agreement. See Garcia-Santos v. United States, 273 F. 3d 506, 508-09 (2d Cir. 2001) (per curiam); United States v. Pipitone, 67 F. 3d 34, 39 (2d Cir. 1995). Courts have also enforced such waivers when a petitioner agrees, pursuant to a written plea agreement, not to challenge a sentence within a stipulated U.S.S.G. range. See Garcia-Santos, 273 F. 3d at 507-09 (holding a petitioner's waiver of appeal and collateral attack binding in a Section 2255 proceeding where the imprisonment term was within the stipulated guideline range); Pipitone, 67 F. 3d at 39 (holding a petitioner's "explicit undertaking in the [Plea] Agreement not to appeal a sentence that fell within [the] guideline range," within which he was ultimately sentenced, precluded him from both directly appealing or collaterally challenging his sentence).
Petitioner seeks to circumvent the waiver of her right to appeal by raising claims of ineffective assistance of counsel. The Second Circuit has held that "a plea agreement containing a waiver of the right to appeal is not enforceable where the defendant claims that the plea agreement was entered into without effective assistance of counsel." United States v. Hernandez, 242 F. 3d 110, 113-14 (2d Cir. 2001) (citing United States v. Djelevic, 161 F. 3d 104, 107 (2d Cir. 1998)). Therefore, a waiver is not enforceable if a defendant can demonstrate that she unknowingly or involuntarily agreed to the plea directly due to the ineffective assistance of her counsel. See Hernandez, 242 F. 3d at 113-14.
The court evaluates Petitioner's claim of ineffective assistance of counsel under the framework set forth in Strickland v. Washington, 466 U.S. 668 (1984). The petitioner "must show that counsel's representation fell below an objective standard of reasonableness . . . under prevailing professional norms." Strickland, 466 U.S. at 687-88. If that burden is overcome, the petitioner must also show "that there is a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different." Id. at 694. "[C]counsel is strongly presumed to have rendered adequate assistance and made all significant decisions in the exercise of reasonable professional judgment." Id. at 690. In light of this standard, Petitioner has failed to establish that her attorney provided ineffective assistance.
Petitioner's claim of ineffective assistance due to counsel's alleged statements assuring Petitioner she would receive a sentence lower than that indicated in the Plea Agreement is unfounded and belied by the record. Petitioner stated to the court under oath during her plea allocution that she understood her ultimate sentence could not be guaranteed in advance and, indeed, that no one had made a promise to her as to what her sentence would be. (See Guilty Plea Tr. at 13, 16-17, 20, 26.) Petitioner also stated that she understood that the statute she was accused of violating "carries with it a maximum term of imprisonment of life and . . . has a minimum term of imprisonment of ten years." (Guilty Plea Tr. at 16.) The court repeatedly advised Petitioner that it did not know exactly what sentence it would impose, and, each time, Petitioner responded that she understood that fact. (See Guilty Plea Tr. at 16-17, 20.) Petitioner further stated under oath that her plea of guilty was voluntary, and that no one had made any promises to induce her to plead guilty including any promise as to what Petitioner's final sentence would be. (Guilty Plea Tr. at 26.) As explicitly stated in the plea agreement and as reiterated by the court, the court is not bound by the sentencing guideline range set forth in the plea agreement. (See Plea Agreement at ¶ 3 ("The Guidelines estimate set forth in paragraph 2 [of the plea agreement] is not binding on the Office, Probation Department or the Court."); Guilty Plea Tr. at 16-20.) Notably, however, the Plea Agreement entered into by Petitioner indicated that the applicable guideline range sentence would be 135-168 months, and the court ultimately sentenced Petitioner to the low end of that guideline range. (See Sentencing Tr. at 39.) It is abundantly clear from the record that Petitioner understood that no promises were being made regarding her sentence, the court was not bound by the plea agreement or the applicable advisory sentencing guideline range and, even if the advisory sentencing guideline range estimate was wrong, she would not be permitted to withdraw her guilty plea.


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For most of our nation's history the Supreme Court did not get involved in state controversies concerning school prayer. But the Court was not silent, as some might try to argue, because it approved of such practices. Rather, the Court became involved only after it has settled the issue of whether the Fourteenth Amendment incorporated portions of the Bill of Rights (i.e., made the Bill of Rights applicable to the states). The Court began incorporating the Bill of Rights in the late 1800s. In 1947, the Court held that the Fourteenth Amendment incorporated the establishment clause of the First Amendment (Everson v. Board of Education). It was this ruling that ultimately led to the line of cases discussed here.
We turn first to the "released time" cases, McCollum v. Board of Education, 333 U.S. 203 (1947), and Zorach v. Clausen, 343 U.S. 306 (1952). In these cases, states had created plans whereby students would be allowed time for religious instruction during school time. In McCollum, a Champaign, Ill. plan allowed for religious teachers to come into the schools and conduct religious classes. In Zorach, a New York City plan called for students to be released from school instruction to attend religious classes off school grounds.
In McCollum, the Court found the plan to be unconstitutional. Allowing religious teachers in the school gave them a "captive audience" and made illegal use of taxpayers dollars.
That a child is offered an alternative may reduce the constraint; it does not eliminate the operation of influence by the school in matters sacred to conscience and outside the school's domain. The result [of the school's 'release-time plan] is an obvious pressure upon the children to attend. Again, while the Champaign school population represents only a fraction of the more than two hundred and fifty sects of the nation, not even all of the practicing sects in Champaign are willing or able to provide religious instruction. The children belonging to these non-participating sects will thus have inculcated in them a feeling of separatism when the school should be the training ground for habits of community, or they will have religious instruction in a faith which is not that of their parents.
In Zorach, a released-time plan which allowed students to leave school grounds during the course of the school day to attend religious classes was held to be constitutional. The Court decided that the plan merely promoted governmental neutrality among competing sects. Three strong dissents were filed in the Zorach case. Justice Black found the Zorach plan to be the same as the McCollum plan. The coercive aspect of the McCollum plan was that children who may not have wanted to participate in the religious exercises would be forced to sit through such programs or risk ridicule by fellow classmates for refusing to participate. The Zorach plan was just as coercive in that the school was required to release children so they could attend religious classes, receive reports on whether or not they attended and hold non-participating students in school until the released-time hour is up. Quoting McCollum, Black continues, "The State also affords sectarian groups an invaluable aid in that it helps to provide pupils for their religious classes through the use of the State's compulsory public school machinery." This is not separation of Church and State.
As one whose children, as a matter of free choice, have been sent to privately supported Church schools, I may challenge the Court's suggestion that opposition to this plan can only be antireligious, atheistic, or agnostic. My evangelistic brethren confuse an objection to compulsion with an objection to religion. It is possible to hold a faith with enough confidence to believe that what should be rendered to God does not need to be decided and collected by Caesar.
The McCollum and Zorach cases can be seen as an attempt to find the proper place of religious instruction in schools. Released-time plans, however, only indirectly addressed the issue of school prayer. In Engel v. Vitale, the Court confronted head on the constitutionality of organized prayer in school. 370 U.S. 421 (1962).
State law had allowed the reading of the following prayer in each class in the presence of a teacher at the beginning of each school day: "Almighty God, we acknowledge our dependence upon Thee, and we beg Thy blessings upon us, our parents, our teachers and our Country." Parents of ten students sued the school Board of Education in New York State Court claiming that the prayer was unconstitutional.
Justice Black wrote the opinion for the Court which determined that compulsion - an important factor in the McCollum and Zorach cases) was not necessary to show a violation of the Establishment Clause.
. . . we think that the constitutional prohibition against laws respecting an establishment of religion must at least mean that in this country it is not part of the business of government to composes official prayers for any group of the American people to recite as a part of a religious program carried on by government. ... The New York laws officially prescribing the Regents' prayer are inconsistent both with the purposes of the Establishment Clause and with the Establishment Clause itself.
It is important to stress that the Court found official prayers...to recite as part of a religious program carried on by government was unconstitutional. Only Government mandated or required programs of prayer and Bible reading violated the Establishment Clause. No other type of prayer activity was prohibited by the Engel Case.
The case Abington Township School District v. Schempp was a combination of the Schempp and Murray v. Curlett cases. 374 U.S. 203 (1963). In Schempp, a Pennsylvania law allowed for the reading of ten Bible verses every day at the beginning of class. In Murray v. Curlett, Maryland had passed a law requiring the reading of a passage out of the Bible or the recitation of the Lord's Prayer during the school's opening exercises. As a result of the Schempp decision, the Court created the "secular purpose" and "primary effect" tests for interpreting the Establishment Clause. Instead of relying solely on some element of coercion or compulsion inherent in a school prayer plan, the Court began its attempt at devising a test which could be to determine constitutionality.
Schempp did not stand for the proposition that school teachers cannot teach about religion in the public schools. In fact, quite the opposite, the Court recognized that teaching religion in the context of history and other secular subjects was not only constitutional but desirable.
In effect, these cases are the law governing school prayer. None said that a student was absolutely prohibited from partaking in his or her daily prayer rituals in school. None has said that a prayer in the morning, at lunch time, at recess, before a test or with other students after school is unconstitutional. Students may distribute religious literature to students and talk to students about their religious beliefs. Students may discuss religion in class and write reports concerning religion for class assignments. They may wear religious clothing and symbols.
For a more detailed list of what is and is not legal in the public schools, please consult the following document: Religion in the Public Schools: A Joint Statement of Current Law.

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In addition, Jennifer frequently works with employers to customize and present in-house training programs to educate employees and supervisors about employment laws and workplace policies.
Laferty v. UPS, Inc., No. 3:14-cv-00853-TBR, ____ F. Supp.3d ____ (W.D. Ky. May 4, 2016) (granting summary judgment to employer on employee's disability discrimination and failure-to-accommodate claims).
Sharp v. Waste Management of Ohio, Inc., et al., 47 F.Supp.3d 584 (S.D. Ohio Sept. 16, 2014) (granting summary judgment to corporate and individual defendants on employee's federal and state claims for disability discrimination and retaliation, FMLA interference and retaliation, workers' compensation retaliation, and wrongful discharge).
Brian Johnson v. Five Rivers Metro Parks, et al., Montgomery County Common Pleas Court Case No. 2014 CV 00022 (July 21, 2014) (granting 12(b)(6) dismissal to public agency and public employees on claims of negligent hiring, negligent retention, negligent supervision, intentional infliction of emotional distress, and public records violations).
Titus v. Verizon Wireless, Case No. 3:10-cv-469, 2012 WL 4089898 (S.D. Ohio Sept. 17, 2012) (granting summary judgment to corporate and individual defendants on employee's federal and state claims for race and gender discrimination and retaliation).
In re Rotek Incorporated and USW Local 8565, 131 LA 895 (Miles, 2012) (denying union's contract interpretation grievance and rejecting union's argument that crews had to be fully-staffed before employer could implement new 24/7 schedule).
Berryman, et al. v. SuperValu Holdings, Inc., et al., 669 F.3d 714 (6th Cir. Feb. 24, 2012) (upholding grant of summary judgment to employer in eleven-plaintiff, nine-defendant race discrimination, harassment, and retaliation lawsuit filed under state and federal law).
In re Moyno, ODJFS Docket No. 000000001200010, Determination ID 224640498-1 (May 24, 2012) (issuing global denial of unemployment benefits for employees involved in four-month labor dispute).
Moyno, Inc. v. UAW et al., Clark County Court of Common Pleas Case No. 12-CV-0249 (March 12, 2012) (granting employer's request for injunctive relief to control union behavior during strike).
In re Chemineer, ODJFS Docket No. 000000001000003, Determination ID 220449532-1 (April 16, 2010) (issuing global denial of unemployment benefits for employees involved in two-month labor dispute).
Berryman v. SuperValu Holdings, Inc., Case No. 3:05cv169, S.D. Ohio (March 31, 2010) (issuing eleven separate summary judgment decisions in favor of corporate and individual defendants on employees' federal and state claims for race discrimination, harassment, and retaliation).
Chemineer, Inc. v. Int’l Assoc. of Machinists and Aerospace Workers, Montgomery County Court of Common Pleas Case No. 2010CV02008 (March 9, 2010) (granting employer's request for injunctive relief to control union behavior during strike).
Joy v. Robbins & Myers, Inc., DOL ARB Case No. 08-049 (Oct. 29, 2009) (upholding dismissal of former employee's SOX complaint in ALJ Case No. 2007-SOX-074).
IAMAW Local Lodge 225 and Chemineer, Inc., 12-2 ARB ¶5588 (Zeiser, Sept. 17, 2009) (denying union's contractual grievance filed on behalf of materials handler who was discharged for sleeping on-the-job).
Meade v. Honda of Am. Mfg., et al., Case No. 3:02cv419, 2009 WL 10457600 (S.D. Ohio Feb. 27, 2009) (dismissing plaintiff's COBRA claims).
Liberty Township v. SERB, 2007-Ohio-295 (10th Dist. 2007) (sustaining employer's objections to union representation election, invalidating certified election results, and ordering new election).
Magnode Corp. v. ODJFS, 2006-Ohio-3086 (12th Dist. 2006) (upholding global denial of unemployment benefits for employees involved in nine-month labor dispute, saving employer almost $400,000).
Author: Alison Stemler, Taxation of Executive Compensation - Planning and Practice, Chapter 1A - “Negotiating and Drafting Executive Employment Agreements” (Matthew Bender 2017).

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Davis, Polk, Wardwell, Sunderland Kiendl, New York City (D. Nelson Adams, New York City, of counsel), for plaintiff-appellant.
Thomas B. Gilchrist, Jr., Chief Asst. U.S. Atty., for the Southern Dist. of New York, New York City (Howard A. Heffron and Miriam R. Goldman, Asst. U.S. Attys., New York City, of counsel), for defendant-appellee.
This action was brought to enjoin the collection of an assessment of interest in respect of alleged "deficiencies" in appellant's excess profits taxes for the years 1943 and 1944. The District Court ruled that it was without jurisdiction to grant the relief sought and dismissed the complaint. 139 F. Supp. 690. This appeal followed.
The term is defined in Section 271, Internal Revenue Code of 1939, 26 U.S.C.A. § 271. It does not include amounts due as interest.
In its excess profits tax returns for the years 1943 and 1944 appellant claimed unused excess profits tax credit carryovers from the years 1941 and 1942, as a result of which it paid less in taxes than would otherwise have been due. Upon final audit of these returns some years later, the Commissioner disallowed a portion of these carryovers, thus determining "deficiencies" to that extent for the years in question. The Government does not seek to collect those asserted "deficiencies," inasmuch as they were abated, if they ever existed, by the application of an excess profits tax credit carryback in 1945. The Government does, however, claim interest on the alleged "deficiencies" for the period during which it says there were such "deficiencies." Appellant, since it maintains that there never was any "deficiency," has resisted the claim for interest.
26 U.S.C.A. Excess Profits Taxes, § 710(b) and (c).
In 1954, the statutes of limitations having been extended by appropriate stipulations, the Government assessed the interest claimed. No notice of deficiency had been mailed. Appellant thereupon commenced this action to restrain collection of the assessment on the ground that Section 272(a)(1) of the Internal Revenue Code of 1939 prohibited such an assessment without a prior notice of deficiency. The sole issue before us is whether the procedure set forth in Section 272 is applicable.
"If in the case of any taxpayer, the Commissioner determines that there is a deficiency in respect of the tax imposed by this chapter, the Commissioner is authorized to send notice of such deficiency to the taxpayer by registered mail. Within ninety days after such notice is mailed * * * the taxpayer may file a petition with the Tax Court of the United States for a redetermination of the deficiency. No assessment of a deficiency in respect of the tax imposed by this chapter and no distraint or proceeding in court for its collection shall be made, begun, or prosecuted until such notice has been mailed to the taxpayer, nor until the expiration of such ninety-day period, nor, if a petition has been filed with the Tax Court, until the decision of the Tax Court has become final. * * *" 26 U.S.C.A. § 272(a)(1).
Section 272 had its origin in Section 274 of the Revenue Act of 1924, 43 Stat. 297. Before that time taxpayers were not permitted to litigate the correctness of the Commissioner's determination of tax until they had paid the amount claimed. In that year, the Congress established the Board of Tax Appeals (known since 1942 as the Tax Court) "to provide taxpayers an opportunity to secure an independent review * * * in advance of their paying the tax found by the Commissioner to be due. Before the Act of 1924 the taxpayer could only contest the Commissioner's determination of the amount of the tax after its payment. The Board's duty under the Act of 1924 was to hear, consider, and decide whether deficiencies reported by the Commissioner were right." Old Colony Trust Co. v. Commissioner of Internal Revenue, 279 U.S. 716, 721, 49 S.Ct. 499, 501, 73 L.Ed. 918.
The Tax Court's jurisdiction under Section 272 is on its face limited to situations in which "the Commissioner determines there is a deficiency," and the Tax Court has power only to redetermine such a "deficiency." Thus, it has no jurisdiction of questions which relate solely to the assessment of interest. Commissioner of Internal Revenue v. Kilpatrick's Estate, 6 Cir., 140 F.2d 887; United States v. Globe Indemnity Co., 2 Cir., 94 F.2d 576; Standard Portland Cement Co. v. Commissioner of Internal Revenue, 3 Cir., 80 F.2d 585; Crolich v. United States, D.C., 144 F. Supp. 109; Guaranty Trust Co. of New York v. United States, D.C., 95 F. Supp. 776; Estate of Sloane, 3 T.C.M. 555, 570. Similarly, if prior payment has extinguished the "deficiency," there is no jurisdiction in the Tax Court even though this be contrary to the intention of the parties. Bendheim v. Commissioner of Internal Revenue, 2 Cir., 214 F.2d 26; McConkey v. Commissioner of Internal Revenue, 4 Cir., 199 F.2d 892; Superheater Co. v. Commissioner of Internal Revenue, 2 Cir., 125 F.2d 514; Walsh, 21 T.C. 1063; Anderson, 11 T.C. 841. The statutory procedure urged by appellant is applicable, of course, only where the Tax Court has jurisdiction, since the deficiency notice procedure was designed only to allow such a determination prior to payment.
Two points should be made very clear in limine. First, it is settled that the Government is entitled to interest if the asserted "deficiencies" did exist for a period of time. Manning v. Seeley Tube Box Co., 338 U.S. 561, 70 S.Ct. 386, 94 L.Ed. 346. The only dispute in the case at bar relates to the proper procedure to be used. Second, the Government does not seek to prevent appellant from litigating the existence of the asserted "deficiencies." If the interest is collected under the challenged procedure, appellant will be free to litigate that issue in a suit for refund.
Appellant contends that, despite the fact that the Code couches the Tax Court's jurisdiction in terms of a present "deficiency," the Code as a whole indicates that the Congress meant the Tax Court to have jurisdiction whenever there is a "live" dispute concerning a "deficiency," past or present, so long as the taxpayer has not waived recourse to that tribunal. Appellant relies on two propositions, which it says are implicit in the Code: (1) that a taxpayer normally need not pay disputed sums without the opportunity to secure a prior adjudication, and (2) that a taxpayer is entitled to a determination by the Tax Court, irrespective of its right to litigate the issues in controversy in some other federal court, unless it has waived the right. These propositions, while distinct, are necessarily closely interrelated, as the only forum normally available for litigation prior to payment is the Tax Court.
The Government contends that appellant's claims have been rejected by cases holding that the deficiency notice procedure set forth in Section 272 is inapplicable where the Government is seeking to collect interest on abated "deficiencies," citing United States v. Koppers Co., 348 U.S. 254, 75 S.Ct. 268, 99 L.Ed. 302; Hastings Co. v. Smith, 3 Cir., 224 F.2d 875; Rodgers v. United States, 123 Ct.Cl. 779, 108 F. Supp. 727; Cumberland Portland Cement Co. v. United States, D.C., 101 F. Supp. 577, affirmed per curiam 6 Cir., 202 F.2d 152. These cases are not dispositive of this appeal, however, for in each of them the taxpayer admitted the existence of the former "deficiency" but denied liability for interest on other grounds. Under these circumstances there would have been no point in insisting upon a deficiency notice, since, as noted above, the Tax Court has no jurisdiction of questions relating solely to interest. But these cases are not totally inapplicable. In each of them the court approved a procedure whereby a taxpayer may be required to pay a disputed sum of interest without an opportunity to secure a prior determination. Thus, these cases are at odds with the first of appellant's two propositions. Furthermore, Subtitle B of the Code, 26 U.S.C.A. § 1250 et seq. imposes a host of taxes collectible without an opportunity for prior adjudication. We must conclude, therefore, that the Congress did not intend taxpayers to have a right to a prior adjudication in any and all circumstances. The Congress saw fit to limit this right to cases in which the Commissioner is asserting a present "deficiency" in respect of certain taxes and we are not at liberty to override that legislative determination.
The second of appellant's propositions is that a taxpayer who has not waived recourse to that tribunal is entitled as of right to secure a Tax Court determination of his contentions relating to the existence of a "deficiency." It points out that, even where a jeopardy assessment has been made, specific provision is made to preserve to the taxpayer an opportunity to secure a Tax Court adjudication although there is no present "deficiency." Section 273(b). Appellant finds the provision of Section 271(b) "a further indication of Congressional intent to permit taxpayers to avail themselves of the jurisdiction of the Tax Court in all cases except where they waive their rights by voluntary payment in advance." This section eliminates from consideration in determining "deficiencies," required payments of estimated tax.
But appellant overlooks the provisions of Section 274, which specifically provide for assessment of "deficiencies" without recourse to the Tax Court following an adjudication of bankruptcy or the appointment of a receiver. Thus, even in this instance of involuntary payment, the Congress has denied the taxpayer access to the Tax Court. In addition, it is undisputed that a mistaken overpayment in one respect will prevent the taxpayer from litigating other questions in the Tax Court if no net "deficiency" results. It is clear that such a taxpayer has not voluntarily waived the opportunity to litigate in the Tax Court. Moreover, it is inconceivable that the Congress considered the right to litigate in the Tax Court rather than in some other federal court a matter of significance, since it unequivocally denied the opportunity to any taxpayer who promptly paid an asserted "deficiency." We do not believe that the Congress meant to discriminate against dutiful taxpayers or that it intended to discourage prompt collection of revenue. We accordingly reject appellant's second proposition.
We find no overriding policy which requires us to depart from the normal rule that the jurisdiction of the Tax Court depends upon the assertion of a present "deficiency." As the 1945 carryback precluded the Commissioner from asserting such a "deficiency," the Tax Court is without jurisdiction of the dispute in the case at bar. Accordingly it was not necessary for the Commissioner to send appellant a deficiency notice as a condition precedent to assessment of the interest on the asserted former "deficiencies."
The case turns on § 272 of the Code of 1939 which says: "If * * * the Commissioner determines that there is a deficiency * * *" (emphasis supplied), within ninety days after notice by the Commissioner "the taxpayer may file a petition with the Tax Court of the United States for a redetermination of the deficiency."
All references in this opinion to statutory sections and titles are to the Internal Revenue Code of 1939, unless otherwise indicated.
The cardinal objective of § 272 was to provide a procedure whereby at his option the taxpayer might obtain an independent review of the tax deficiency as determined by the Commissioner in advance of payment. Old Colony Trust Co. v. Commissioner of Internal Revenue, 279 U.S. 716, 721, 49 S.Ct. 499, 73 L.Ed. 918; Everett Knitting Works, 1 B.T.A. 5; Ventura Consolidated Oil Fields v. Rogan, 9 Cir., 86 F.2d 149, certiorari denied 300 U.S. 672, 57 S.Ct. 610, 81 L. Ed. 878. Not only did the optional procedure thus provided enable the taxpayer to litigate the deficiency in advance of payment, but also it afforded other advantages both practical and legal. For instance, a taxpayer might occasionally desire a redetermination by the Tax Court — a tribunal composed of tax specialists — in preference to a plenary action in a district court, especially if the former were able to act and decide more promptly. Review by the Tax Court might be preferred because there the Commissioner cannot depart from the position taken in his notice of deficiency without assuming the burden of proof. Tauber, 24 T.C. 179, 185; Briggs, 15 T.C.M. 440, 451 (April 16, 1956). More important considerations are that in an action at law on a claim for a refund in the district court the burden is on the taxpayer to disprove every justification advanced by the Government for retaining the tax payment and that Government claims against the taxpayer, even though barred by the statute of limitations, may be offset against his claim for refund. Lewis v. Reynolds, 284 U.S. 281, 52 S.Ct. 145, 76 L.Ed. 293; United States v. Pfister, 8 Cir., 205 F.2d 538. The very fact that § 272(a)(1) expressly gives the taxpayer a right to enjoin assessment and collection until he has been given the prescribed opportunity for a redetermination by the Tax Court, shows that Congress considered the right important. Its importance is further attested by the legislative care to provide opportunity for a redetermination by the Tax Court even in cases of jeopardy assessments under § 273(b) and (c).
Section 272 by its express terms is applicable to taxes "imposed by this chapter," i.e., Chapter 1 of Subtitle A, which includes income and excess profits taxes. That it is not applicable to the comparatively simple miscellaneous taxes imposed under Subtitle B of the Code is a fact which, though noted in the majority opinion, I find of no pertinence to the problem presented by this appeal which involves a disputed deficiency asserted under the complex provisions of the law imposing excess profits taxes.
The defendant-collector argues that a taxpayer's access to the Tax Court under § 272 depends literally upon the existence of the stated condition, viz.: a determination by the Commissioner "that there is a deficiency," — that is to say, a deficiency in existence when the determination is made; that if the Commissioner defers his determination until a once-existing deficiency shall have been eliminated by the accrual of a carry-back under § 710 of the Code as amended, the result is that § 272 is no longer applicable and the taxpayer can challenge a determination of the deficiency which, although discharged by a carry-back, gave rise to a continuing liability for interest, only by paying the interest assessed and then suing in the district court for its recovery. In other words, the defendant maintains that although § 272 entitles a taxpayer to a redetermination by the Tax Court of a disputed deficiency for the purpose of assessing and collecting the principal amount of a tax deficiency, it does not entitle him to a redetermination for the purpose of assessing and collecting interest on a disputed tax deficiency. My brothers seem to have accepted this contention.
Implicit in this argument is the proposition that under the rule of Manning v. Seeley Tube Box Co., 338 U.S. 561, 70 S.Ct. 386, 94 L.Ed. 346, when a deficiency exists for a time until abated or canceled by a carry-back, the liability for interest accruing on the deficiency during the period of its existence survives the abatement of the deficiency by the carry-back. The appellant does not dispute this proposition.
With this thesis I am unable to agree. Section 272(a) of the 1939 Code derives from § 274 of the Act of 1924 and first appeared in its present form in § 272 of the Act of May 28, 1938, c. 289, 52 Stat. 535. In 1938, there was no provision under then existing tax law for a carry-back the effect of which might be to discharge or abate an existing deficiency: under the structure of that tax law as it then existed every deficiency in the tax reported, unless voluntarily reported and paid by the taxpayer, continued in existence until determined by the Commissioner. Consequently, under the Act of 1938 — as also under the Code of 1939 — § 272 was intended to apply, and literally did apply, to every deficiency determined by the Commissioner: the taxpayer at his option could utilize the § 272 procedure to obtain a redetermination of each and every deficiency in the tax law which the Commissioner was authorized to determine.
When the device of the carry-back was introduced into the structure of the income and excess profits tax law by the Revenue Act of 1942, the obvious purpose was to provide for the reduction of the taxpayer's tax liability and thus to reduce or abate any possible or asserted deficiency which might otherwise be determined, — not to rescind or modify the taxpayer's rights under § 272 to a redetermination of disputed deficiencies. There is no Congressional history to show, and no conceivable reason to suggest, an intent to exclude from the § 272 review, which had been provided for every deficiency, deficiencies which, if they ever existed, had been abated by a carry-back accrued prior to the determination of the deficiency. Under § 292 of the Code, interest on a tax deficiency accrues as an integral part of the tax liability: interest and principal are assessed and collected at the same time and by the same procedure. An authoritative determination of a deficiency is a prerequisite to the accrual of the taxpayer's liability not only for the principal of the deficiency but also for interest thereon. If a taxpayer is entitled to a redetermination by the Tax Court of the Commissioner's determination of an existing deficiency prior to the assessment of the deficiency and of interest thereon, I think he is equally entitled to such a redetermination of a disputed deficiency, which — if it ever did exist — had been abated as a result of a carry-back, prior to the assessment of interest thereon. Otherwise a semantic accident operates to frustrate the legislative objective.
Section 153 of the 1942 Act, § 122 of the 1939 Code as amended, provided for the carry-back of net operating loss deductions. And § 204 of the 1942 Act, § 710(c) of said Code as amended, provided for the carry-back of unused excess profits credits.
Although, as my brothers have noted, the procedure provided in § 274 for the liquidation of claims against bankrupt taxpayers is somewhat different from that generally provided for the determination of deficiencies, I am unable to see how that difference strengthens the defendant's position. Surely the fact that in a bankruptcy case the Commissioner must prove his claim in the bankruptcy court thus entitling the taxpayer to an adjudication in advance of payment, as § 274 provides, does not suggest that a solvent taxpayer may not petition the Tax Court for a final determination of a deficiency in advance of payment.
The cases cited by the Government, and indeed those cited by my brothers, seem to me not to justify the dismissal below. It will serve no useful purpose to analyze these cases individually. In some, as the majority opinion notes, "the court approved a procedure whereby a taxpayer may be required to pay a disputed sum of interest without an opportunity to secure a prior determination." But in none of these cases was the dispute as to interest an underlying and consistently maintained dispute as to the validity of the Commissioner's determination of the deficiency upon which the claim of interest depended.
I would hold that for failure to comply with the procedure prescribed by § 272 there has been no valid assessment. The fact that the statute of limitations has run so that it is now too late for the Commissioner to make an enforceable assessment after compliance with § 272, is of course not a pertinent consideration. I would reverse in order that the appellant might have the injunctive relief under § 272 to which — as I believe — it is entitled.


After examining the briefs and appellate records in these related appeals, this panel has determined unanimously to grant the parties' request for a decision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). These cases are therefore ordered submitted without oral argument.
Michael Flores, a minor, was shot and permanently injured when a Winchester 30-30 caliber repeating rifle (the "Rifle") accidently discharged. Plaintiffs, Michael's parents and trustee, claim the Rifle had a defective safety mechanism and filed a products liability and negligence action against defendants, seeking to hold them liable for Michael's injuries.
Defendant Olin Corporation owns and licenses the Winchester trademark. However, it sold its firearm manufacturing business in 1981 to a Connecticut corporation then known as U.S. Repeating Arms Company, but later known as CARSU, Inc. ("CARSU"). It is undisputed that CARSU manufactured the Rifle in 1983, while it was still named U.S. Repeating Arms Company. CARSU filed for bankruptcy in 1986 and, upon confirmation of the plan of reorganization, changed its name to CARSU. As part of its 1987 plan of reorganization, a majority of CARSU's assets were sold to the other defendant in this case, New Haven Arms Company, a Massachusetts corporation, which changed its name to U.S. Repeating Arms Company ("USRAC"). CARSU was dissolved in 1990.
On cross-motions for summary judgment, the district court, sitting in diversity and applying Oklahoma law, granted defendants' motion for summary judgment, finding that neither defendant manufactured, distributed or sold the Rifle, that USRAC was not liable under any theories of successor liability, and that Olin was not liable under general partnership law.(1) We review a district court's determinations of state law in a diversity case such as this de novo. Salve Regina Coll. v. Russell, 499 U.S. 225, 231 (1991). Further, "[w]e review the district court's grant of summary judgment de novo, applying the same legal standard used by the district court." Simms v. Okla. ex rel. Dep't of Mental Health & Substance Abuse Servs., 165 F.3d 1321, 1326 (10th Cir. 1999). Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c).
(1) Where there is an agreement to assume such debts or liabilities (2) Where the circumstances surrounding the transaction warrant a finding that there was a consolidation or merger of the corporations, or (3) that the transaction was fraudulent in fact or (4) that the purchasing corporation was a mere continuation of the selling company.
Plaintiffs claim on appeal that the fourth exception applies in this case: that although USRAC did not manufacture, distribute or sell the Rifle, it should nevertheless be liable for Michael's injuries because it is a "mere continuation" of CARSU, the Rifle's manufacturer.(2) To determine whether a corporation has successor liability under the mere continuation exception, Oklahoma courts examine whether the selling corporation ceased to exist after the sale of assets to the purchasing corporation, and whether there was a common identity of directors, officers and stockholders before and after the sale. See id. at 71.
USRAC filed a motion for summary judgment contending that it was not a mere continuation of CARSU. It presented an affidavit from its president, Don Gobel, which stated that CARSU "continues to exist with assets in excess of $1,000,000," and that "[i]n comparing the current [USRAC] to the former [USRAC, now CARSU], there is independent management; different employees [and] no common officers or directors." Aplt. App., Vol. II at 468.
Plaintiffs responded and filed a cross-motion for summary judgment. Although plaintiffs alleged there were common officers and employees, the only supporting evidence they presented was a statement in CARSU's 1987 plan of reorganization stating that USRAC intended to offer the position of executive vice-president to Richard Pelton, who, in 1987, was the president and chief executive officer of CARSU. Plaintiffs did not present any evidence, however, indicating that Mr. Pelton accepted the offer or ever became an officer of USRAC. Indeed, plaintiffs failed to present any evidence demonstrating a common identity of directors, officers and stockholders between CARSU and USRAC. Further, although plaintiffs presented evidence that CARSU had been dissolved in 1990 for failing to file certain reports, they did not dispute that CARSU continued to exist for several years after the sale of its assets, nor did they dispute USRAC's evidence that CARSU had $1,000,000 in assets after the 1987 sale of assets to USRAC. The district court granted USRAC's motion for summary judgment because plaintiffs failed to present evidence that USRAC was a mere continuation of the CARSU corporate entity, that is, they failed to present evidence that CARSU ceased to exist after the sale of assets to USRAC or evidence of a common identity of directors, officers and stockholders between CARSU and USRAC.
On appeal, plaintiffs contend the district court erroneously considered USRAC's evidence that USRAC did not currently have any common officers or directors and failed to consider whether there had been directors and officers in common immediately following the sale of assets. Yet, in none of their summary judgment pleadings did plaintiffs ever present any evidence to the district court indicating that there were common officers or directors at any time following the sale. Further, plaintiffs did not challenge or contradict Mr. Gobel's affidavit. As the district court stated, the record "reflects no effort by plaintiffs to depose Mr. Gobel" concerning his testimony or to depose "Mr. Pelton concerning his relationship with USRAC." Aplt. App., Vol. I at 16.
Plaintiffs contend it was error for the district court to grant summary judgment in the absence of evidence concerning any commonality of management immediately following the sale. They cite Pulis, in which the Oklahoma Supreme Court refused to grant summary judgment in favor of the defendant corporation because the record was "void of any specific information about the seller corporation's business activities after the sale." 561 P.2d at 72. Plaintiffs further claim they should not be faulted for not supplying such evidence because USRAC is in a better position to provide specific information regarding the factors enumerated in Pulis.
These arguments are unavailing. Unlike the facts in Pulis, the record before the district court was not "void" of information concerning the activities of CARSU after the sale. Plaintiffs did not present any evidence disputing USRAC's evidence that CARSU retained $1,000,000 in assets, had independent management, and remained in existence for several years after the sale. Thus, the undisputed evidence in front of the district court demonstrated that CARSU and USRAC "were distinct corporate entities after the sale," Goucher v. Parmac, Inc., 694 P.2d 953, 954 (Okla. Ct. App. 1984), that CARSU continued to exist and function after the sale of assets, and that the sale was not a mere reorganization of the selling corporation, see Pulis, 561 P.2d at 71. On this basis, the district court properly concluded that USRAC had met its burden of demonstrating it was entitled to judgment as a matter of law and that plaintiffs failed to meet their burden.
While the [summary judgment] movant bears the burden of showing the absence of a genuine issue of material fact, the movant need not negate the non-movant's claim, but need only point to an absence of evidence to support the non-movant's claim. If the movant carries this initial burden, the non-movant may not rest upon its pleadings, but must set forth specific facts showing a genuine issue for trial as to those dispositive matters for which it carries the burden of proof.
Kaul v. Stephan, 83 F.3d 1208, 1212 (10th Cir. 1996) (quotation and citation omitted). We agree with the district court's conclusion that "[p]laintiffs' failure to respond to USRAC's summary judgment [motion] with sufficient facts to create a genuine issue as to the applicability of the continuation exception entitles USRAC to entry of summary judgment in its favor." Aplt. App., Vol. I at 19.
"cannot . . . present by affidavit facts essential to justify the party's opposition [to summary judgment]." Id.
However, Rule 56(f) does not operate automatically. Its protections must be invoked and can be applied only if a party satisfies certain requirements. . . . A prerequisite to granting relief [pursuant to Rule 56(f)] . . . is an affidavit furnished by the nonmovant. Although the affidavit need not contain evidentiary facts, it must explain why facts precluding summary judgment cannot be presented. This includes identifying the probable facts not available and what steps have been taken to obtain these facts. In this circuit, the nonmovant also must explain how additional time will enable him to rebut movant's allegations of no genuine issue of fact.
Price ex rel. Price v. W. Res., Inc., 232 F.3d 779, 783 (10th Cir. 2000) (quotations omitted). Essentially, the party must show precisely how additional discovery will lead to a genuine issue of material fact. See Jensen v. Redevelopment Agency of Sandy City, 998 F.2d 1550, 1554 (10th Cir. 1993). "Furthermore, if the party filing the Rule 56(f) affidavit has been dilatory, . . . no extension will be granted." Id.
We review a denial of a Rule 56(f) motion for an abuse of discretion. Price, 232 F.3d at 783. We have reviewed the record and agree with the district court's conclusion that plaintiffs failed to comply with Rule 56(f)'s requirements. The cursory affidavit filed by plaintiffs' counsel requesting additional time to depose Messrs. Gobel and Pelton failed to explain why plaintiffs had not previously deposed these witnesses and failed to explain with any specificity how additional time would enable them to rebut USRAC's motion. It appears from our review of the record that plaintiffs did little if any discovery while this case was pending. They failed to pursue their few outstanding discovery requests, which were served six months prior to USRAC's motion for summary judgment, and made no attempt to depose key witnesses until more than two months after USRAC filed its summary judgment motion. We agree with the district court that plaintiffs had "ample opportunity to discover all facts necessary to their claims during the one-year pendency of this case." Aplt. App., Vol. I at 16 (footnote omitted). Thus, we hold that the district court did not abuse its discretion in denying relief under Rule 56(f).
More than four months after the district court granted summary judgment, and while their first appeal was pending, plaintiffs filed a motion for new trial under Fed. R. Civ. P. 60(b). Plaintiffs presented an affidavit from Mr. Pelton stating that, immediately following the sale of assets to USRAC, CARSU was not involved in any business activities, had no remaining assets, no employees, and did not function as a corporation. He also stated that CARSU and USRAC had at least six common officers immediately following the sale.
Plaintiffs claim they are entitled to a new trial under Rule 60(b)'s first three grounds for relief: "(1) mistake . . .; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial . . . ; [and] (3) fraud . . ., misrepresentation, or other misconduct of an adverse party." Id. They claim the fact that Mr. Gobel's affidavit was stated in the present tense misled them and the district court to mistakenly conclude that CARSU and USRAC did not have common officers immediately before and after the sale of assets.
We review the district court's denial of Rule 60(b) relief for abuse of discretion. Massengale v. Okla. Bd. of Exam'rs in Optometry, 30 F.3d 1325, 1330 (10th Cir. 1994). "Relief under Rule 60(b) is extraordinary and may only be granted in exceptional circumstances." Bud Brooks Trucking, Inc. v. Bill Hodges Trucking Co., 909 F.2d 1437, 1440 (10th Cir. 1990).
To prevail on a Rule 60(b)(3) motion, a movant must prove the adverse party committed the alleged fraud, misrepresentation, or misconduct by clear and convincing evidence. Anderson v. Dep't of Health & Human Servs., 907 F.2d 936, 952 (10th Cir. 1990). Further, the movant must show that the alleged misrepresentations prevented him from fully and fairly presenting his case. See Walsh v. McCain Foods Ltd., 81 F.3d 722, 726 (7th Cir. 1996); 11 Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2860 (2d ed. 1995). Plaintiffs have not shown either requirement. Mr. Gobel's affidavit was clearly stated in the present tense and he plainly made no representation as to existence of any common officers or directors immediately following the sale. Plaintiffs were in no way prevented from investigating his statements, from deposing him in order to further probe his knowledge, or from conducting their own discovery.
Plaintiffs also failed to show that, with due diligence, they could not have deposed Mr. Gobel, located and deposed Mr. Pelton, or obtained corporate records to establish the identity of any common officers or directors before and after the sale or to ascertain whether CARSU continued to exist and function as a separate corporate entity after the sale. Thus, plaintiffs did not establish mistake or surprise under Rule 60(b)(1). See Yapp v. Excel Corp., 186 F.3d 1222, 1231 (10th Cir. 1999) ("the kinds of mistakes remediable under a Rule 60(b)(1) motion are litigation mistakes that a party could not have protected against"). Nor can the evidence submitted in plaintiffs' Rule 60(b) motion be considered "newly discovered" under Rule 60(b)(2); plaintiffs could have acquired it earlier had they been properly diligent. See Harris v. Illinois-California Express, Inc., 687 F.2d 1361, 1375 (10th Cir. 1982) (holding that failure to exercise due diligence precludes relief under Rule 60(b)(2)). Thus, the district court did not err in denying plaintiffs' Rule 60(b) motion.
1. Although plaintiffs identify Olin as an appellee, they do not claim on appeal that the district court erred in granting summary judgment in favor of Olin. Thus, plaintiffs waived any right to appellate review of that judgment. See State Farm Fire & Cas. Co. v. Mhoon, 31 F.3d 979, 984 n.7 (10th Cir. 1994).
2. Plaintiffs argued before the district court that the first, second and fourth Pulis exceptions applied, but on appeal plaintiffs claim only that the district court erred in rejecting their "mere continuation" theory of liability.


text:
Baydakov A. N. Babkina O. N. Zvyagintseva O. S. Zaporozhets D. V. Nazarenko A. V.
Zvyagintseva O. S. Zaporozhets E. N. Zaporozhets D. V. Nazarenko A. V.
Nazarenko A. V. Zaporozhets D. V. Chernobay N. B. Sergienko E. G. Kenina D. S. Chernikova L. I. Babkina O. N.
Belikova I. P. Zaporozhets D. V.
The most important component of the region's competitiveness is its ability to attract and build up limited resources in the economy in a competitive market, which is also an indispensable condition for the sustainable development of the region's economic system in today's conditions. The development of regional entrepreneurship is correlated with the features of the socio-economic systems of the region. Thus, demographic, social, state regulation and support factors, as well as the availability of resources in the region, have a significant impact on the definition of regional business specifics. For the Russian Federation with its immense length and high heterogeneity of economic space, the most important task in this context is the formation and rational use of progressive forms of innovative activity. With this in mind, a special mechanism is needed that can ensure coordination and cooperation in innovation activities. Such a mechanism is the innovative infrastructure of the region, which provides access to various resources and is itself a potential for economic development. In general, the competitiveness of the region rests on the competitiveness of goods, commodity producers and industries, its ability to produce goods and services that are in demand on the market, both at home and international, target targets for the formation of regional competitiveness include the growth of limited economic resources in the region, the progressive development of the regional economy , maintaining and increasing the share of the regional economy in the national and world markets for goods and services, etc.
Etlukhov O. A. Zaporozhets D. V.

matches: V. V. V. V. V. V. V.


text:
Appellant United States Fid. and Guar. Co.
United States Fidelity and Guaranty Company v.
There is always a strong presumption that a statute was not meant to act retrospectively, and it should never receive such a construction if susceptible of any other, nor unless the words are so clear, strong and imperative as to have no other meaning.
The Act of February 24, 1905, c. 778, 33 Stat. 811, amending the Act of August 13, 1894, c. 280, 28 Stat. 278, is prospective, and does not relate to or affect actions based on rights of materialmen which had accrued prior to its passage, and such actions are properly brought under the act of 1894.
The absolute taking away of a present right to sue and suspending it until after certain events have happened and the giving of preferences between creditors are not mere matters of procedure, but affect substantial rights, and, as the Act of February 24, 1905, consists of but a single section, and deals with such subjects, and only incidentally applies to procedure, the entire statute must be construed under the general rule that it is not retrospective in any respect.
below) against the plaintiff in error for the sum of $2,054.23. The action was brought in the circuit court above mentioned in the name of the United States for the use and benefit of Struthers Wells Company against the plaintiff in error, and against the individual defendant Flaherty, as well as one Lande, upon a bond dated December 10, 1903, executed by Flaherty as well as one the above-mentioned plaintiff in error as surety, by which they were held bound in the sum of $40,000, to be paid the United States as liquidated damages, the condition of the obligation being that, if Flaherty, his successors, heirs, etc., should well and truly execute the contract annexed to the bond, which he had entered into with Colonel W. A. Jones, U.S.A. Engineer of the Fifth Lighthouse District, for and in behalf of the United States, by which Flaherty covenanted and agreed to completely construct and deliver the metal work for the Baltimore Lighthouse, Maryland, according to all the conditions of the said contract, and should promptly make payments to all persons supplying said Flaherty labor and materials in the prosecution of the work provided for in such contract, then the obligation was to be void; otherwise to remain in full force and virtue.
The Struthers Wells Company, under an agreement with the defendants Flaherty and Lande and in or about the month of March, 1904, supplied to them certain materials, described in the complaint, for use by them in the prosecution of the work which they had contracted with the United States to do in constructing the metal work for the Baltimore Lighthouse, as mentioned in the bond. The material furnished by the company was of the value of $1,890.25. The company duly performed all the conditions of its contract with the defendants which it had agreed to perform, and made delivery as provided for in its agreement, and by reason of the premises, there became due and payable to the company from the defendants, including the plaintiff in error, the sum of $1,890.25, with interest from June 7, 1904, no part of which has been paid. Judgment was demanded for that sum, with interest, as stated.
The action was commenced on the twelfth of April, 1905. The plaintiff in error demurred to the complaint on the ground first that the court had no jurisdiction of the person of the defendant the United States Fidelity & Guaranty Company, second that the court had not jurisdiction of the subject of the action, and third that the complaint does not state facts sufficient to constitute a cause of action against the defendant the United States Fidelity & Guaranty Company. This demurrer was overruled, with leave to the defendant to answer, which the defendant refused to do, and thereupon judgment was entered for the plaintiff against it, which was affirmed by the circuit court of appeals.
been completed, or that six months had expired since its completion, or that the United States had not itself sued on the bond.
The act which is amended consists of but one material section, the second section providing only for the comparatively unimportant matter of security for costs. The act amending the section also consists of but one section. The question is whether the amended act applies to this case.
There are certain principles which have been adhered to with great strictness by the courts in relation to the construction of statutes, as to whether they are or are not retroactive in their effect. The presumption is very strong that a statute was not meant to act retrospectively, and it ought never to receive such a construction if it is susceptible of any other. It ought not to receive such a construction unless the words used are so clear, strong, and imperative that no other meaning can be annexed to them, or unless the intention of the legislature cannot be otherwise satisfied. Dash v. Van Kleeck, 7 Johns. 499; Jackson v. Van Zandt, 12 Johns. 169; United States v. Heth, 3 Cranch 399, 7 U. S. 414 ; Southwestern Coal Co. v. McBride, 185 U. S. 499 , 185 U. S. 503 ; United States v. American Sugar Co., 202 U. S. 563 , 202 U. S. 577 .
The language of the amended act is prospective, as it provides "that hereafter any person or persons entering into a formal contract with the United States," etc. That language, standing alone, would leave little doubt as to the intention of Congress in the matter of the taking effect of the amendment.
It is urged, however, that as the amendment in this respect but reiterates the language of the original act, the use of the word "hereafter" in the commencement of the amendment ought not to have the significance which would otherwise attach to it, because it is simply in this particular reenacting the law as it already stood.
as to the intention of Congress, and when we come to look at the provisions of the statute, as amended, we are convinced that Congress did not intend that the amendment should apply to cases where the bond had already been executed, the work done, the respective rights of the parties settled, and the cause of action already in existence. If Congress had intended otherwise, we think it would have still further amended the original act by providing in plain language that the amendment should apply to all cases, and not be confined to the future.
The plaintiff in error contends that, where an amendment to an act relates only to procedure, it takes effect upon causes of action existing when the amendment was passed, and hence that part of the amendment in question applies and prevents the taking of jurisdiction by the circuit court for the Eastern District of New York. It is admitted by the plaintiff in error that the act is not confined to procedure, but deals with substantive rights in some instances, one of which is the provision granting a preference to the United States over all other creditors. In such case, counsel admits that the provision must be construed and held to apply to bonds executed subsequent to the enactment of the statute, and to such bonds alone. Under the statute of 1894, no such preference could be obtained. American Surety Co. of New York v.Lawrenceville Cement Co., 96 F. 25; United States v. Heaton, 128 F. 414.
to its pro rata share, while, if executed subsequently, the full amount of its claim, regardless of the claims of the other creditors, would be the amount due. In other words, these provisions, contained in the single section of the act, are to be considered as prospective only, and as applicable to bonds executed subsequently to the passage of the amendment.
There is another most important amendment, by which the materialman's right to sue is suspended until after the completion of the work and final settlement and for six months thereafter, during which the United States can alone sue upon the bond. Instead of a right to sue at once upon the nonpayment of his claim, he is precluded from doing so, perhaps for years.
Although the time in which to commence action may be shortened and made applicable to causes of action already accrued, provided a reasonable time is left in which such actions may be commenced ( Terry v. Anderson, 95 U. S. 628 ; Wilson v. Iseminger, 185 U. S. 55 ), yet that is a different principle from taking away absolutely a present right to sue until a period of time, measured possibly by years, shall have elapsed.
of it made applicable to cases already existing and other portions applicable only to the future. We are convinced Congress did not intend such separation. Viewing the whole section, we think Congress meant that only in future cases should the provisions of the amendment apply, although some trifling portion of those provisions might be regarded, technically, as in the nature of procedure. It is therefore wiser to hold the entire section governed by the usual rule, and as applying only to the future.
" Be it enacted, etc., That hereafter any person or persons entering into a formal contract with the United States for the construction of any public building, or the prosecution and completion of any public work, or for repairs upon any public building or public work shall be required, before commencing such work, to execute the usual penal bond, with good and sufficient sureties, with the additional obligations that such contractor or contractors shall promptly make payments to all persons supplying him or them labor and materials in the prosecution of the work provided for in such contract, and any person or persons making application therefor, and furnishing affidavit to the department under the direction of which said work is being, or has been, prosecuted, that labor or materials for the prosecution of such work has been supplied by him or them, and payment for which has not been made, shall be furnished with a certified copy of said contract and bond, upon which said person or persons supplying such labor and materials shall have a right of action, and shall be authorized to bring suit in the name of the United States for his or their use and benefit against said contractor and sureties, and to prosecute the same to final judgment and execution: Provided, That such action and its prosecution shall involve the United States in no expense."
" Be it enacted, etc., That the act entitled 'An Act for the Protection of Persons Furnishing Materials and Labor for the Construction of Public Works,' approved August thirteenth, eighteen hundred and ninety-four, is hereby amended so as to read as follows:"
" That hereafter any person or persons entering into a formal contract with the United States for the construction of any public building, or the prosecution and completion of any public work, or for repairs upon any public building or public work, shall be required, before commencing such work, to execute the usual penal bond, with good and sufficient sureties, with the additional obligation that such contractor or contractors shall promptly make payments to all persons supplying him or them with labor and materials in the prosecution of the work provided for in such contract, and any person, company, or corporation who has furnished labor or materials used in the construction or repair of any public building or public work, and payment for which has not been made, shall have the right to intervene and be made a party to any action instituted by the United States on the bond of the contractor, and to have their rights and claims adjudicated in such action, and judgment rendered thereon, subject, however, to the priority of the claim and judgment of the United States. If the full amount of the liability of the surety on said bond is insufficient to pay the full amount of said claims and demands, then, after paying the full amount due the United States, the remainder shall be distributed pro rata among said interveners. If no suit should be brought by the United States within six months from the completion and final settlement of said contract, then the person or persons supplying the contractor with labor and materials shall, upon application therefor, and furnishing affidavit to the Department under the direction of which said work has been prosecuted, that labor or materials for the prosecution of such work has been supplied by him or them, and payment for which has not been made, be furnished with a certified copy of said contract and bond, upon which he or they shall have a right of action, and shall be and are hereby authorized to bring suit in the name of the United States in the circuit court of the United States in the district in which said contract was to be performed and executed, irrespective of the amount in controversy in such suit, and not elsewhere, for his or their use and benefit, against said contractor and his sureties, and to prosecute the same to final judgment and execution: Provided, That where suit is instituted by any of such creditors on the bond of the contractor, it shall not be commenced until after the complete performance of said contract and final settlement thereof, and shall be commenced within one year after the performance and final settlement of said contract, and not later: And provided further, That where suit is so instituted by a creditor or by creditors, only one action shall be brought, and any creditor may file his claim in such action and be made party thereto within one year from the completion of the work under said contract, and not later. If the recovery on the bond should be inadequate to pay the amounts found due to all of said creditors, judgment shall be given to each creditor pro rata of the amount of the recovery. The surety on said bond may pay into court, for distribution among said claimants and creditors, the full amount of the sureties' liability, to-wit, the penalty named in the bond, less any amount which said surety may have had to pay to the United States by reason of the execution of said bond, and, upon so doing, the surety will be relieved from further liability: Provided further, That in all suits instituted under the provisions of this act, such personal notice of the pendency of such suits, informing them of their right to intervene, as the court may order shall be given to all known creditors, and, in addition thereto, notice of publication in some newspaper of general circulation, published in the state or town where the contract is being performed, for at least three successive weeks, the last publication to be at least three months before the time limited therefor."

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These Standard HIPAA Business Associate Agreement Terms and Conditions (“HIPAA Addendum”) shall be incorporated into the Terms of Service (which may be found at https://setshape.com/terms-of-service/) and any other agreement that a person or entity signs with Shape Software LLC (“Shape” “Covered Entity” or “Company”) for Customers that are Covered Entities (as defined below) and that provide Protected Health Information (“PHI”)(as defined below) to Shape in connection with services they have purchased. These terms supplement and are made part of any agreement between Shape and Customers (“Underlying Agreement”) in order to comply with the federal Standards for Privacy of Individually Identifiable Health Information, located at 45 C.F.R. Part 160 and Part 164, Subparts A through E (“Privacy Rule”) and the Health Information Technology for Economic and Clinical Health Act, Public Law 111-005 (the “HITECH Act”).
b) “Business Associate” shall generally have the same meaning as the term “business associate” at 45 CFR 160.103, and in reference to the party to this agreement, shall mean Shape.
c) “Covered Entity” shall generally have the same meaning as the term “covered entity” at 45 CFR 160.103, and in reference to the party to this agreement.
2.1 Use and Disclosure of PHI. Shape shall not use or disclose PHI other than as permitted or required by this HIPAA Addendum or as Required by Law. Shape shall not use or disclose PHI for fundraising or marketing purposes. Shape shall not directly or indirectly receive remuneration in exchange for PHI, except with the prior written consent of Covered Entity and as permitted by the HITECH Act; however, this prohibition shall not affect payment by Covered Entity to Shape for services provided pursuant to the Underlying Agreement.
2.2 Safeguards. Shape shall use appropriate safeguards, and comply with Subpart C of 45 CFR Part 164 with respect to electronic protected health information, to prevent use or disclosure of protected health information other than as provided for by the Agreement.
2.3 Mitigation. Shape shall mitigate, to the extent practicable, any harmful effect that is known to Shape of a use or disclosure of PHI by Shape in violation of the requirements of this HIPAA Addendum.
2.4 Reporting. Shape shall notify in writing Covered Entity of any access, use or disclosure of PHI for a purpose that is not provided for in this HIPAA Addendum or the Underlying Agreement, and any Breach of Unsecured PHI, of which Shape becomes aware without unreasonable delay and in no case later than thirty (30) calendar days after discovery.
2.5 Disclosure to Agents and Subcontractors. Shape shall ensure that any covered subcontractor to whom Shape discloses PHI received from Covered Entity, has in place an appropriate Business Associate agreement.
2.6 Designated Record Set. Shape shall provide access, at the request of Covered Entity, to PHI in a Designated Record Set in order to meet the requirements under 45 C.F.R. § 164.524.
2.7 Internal Practices, Policies and Procedures. Shape shall make available its internal practices, books, and records, including policies and procedures and PHI, relating to the use and disclosure of PHI received from, or created or received by Shape on behalf of, Covered Entity available to the Covered Entity and to the Secretary of Health and Human Services (“Secretary”) for purposes of the Secretary determining Covered Entity’s compliance with the Privacy Rule and the HITECH Act.
2.8 Accounting for Disclosures. Shape agrees to maintain the information required to provide an accounting of disclosures of PHI in accordance with 45 C.F.R. § 164.528 and to make this information available to Covered Entity upon Covered Entity’s request in order to allow Covered Entity to respond to an Individual’s request for accounting of disclosures.
2.9 Security Obligations. Shape shall implement appropriate safeguards as are necessary to prevent the use or disclosure of PHI otherwise than as permitted by the Underlying Agreement or this HIPAA Addendum including, but not limited to, administrative, physical, and technical safeguards that reasonably and appropriately protect the confidentiality, integrity, and availability of Covered Entity’s electronic PHI as required by 45 C.F.R. Sections 164.308, 164.310, and 164.312, as amended from time to time. Shape shall ensure that any agent, including a subcontractor, to whom it provides such electronic PHI, agrees to implement reasonable and appropriate safeguards to protect it. Shape shall comply with the policies and procedures and document requirements of the Privacy Rule including, but not limited to, 45 C.F.R. Section 164.316. Shape agrees to report promptly to Covered Entity any security incident of which it becomes aware.
2.10 Breach Pattern or Practice by Covered Entity. If Shape knows of a pattern of activity or practice of Covered Entity that constitutes a material breach or violation of Covered Entity’s obligations under the HIPAA Addendum, Shape must take reasonable steps to cure the breach or end the violation. If the steps are unsuccessful, Shape must terminate the Underlying Agreement, if feasible, or if termination is not feasible, report the problem to the Secretary.
3.1 Permitted Uses and Disclosures. Except as otherwise limited in this HIPAA Addendum, Shape may use or disclose PHI to perform functions, activities, or services for, or on behalf of, Covered Entity as specified in the Underlying Agreement provided such use or disclosure would not violate the Privacy Rule including, but not limited to, each applicable requirement of 45 C.F.R. § 164.504(e) and the HITECH Act if done by the Covered Entity.
3.2 Use for Management and Administration. Except as otherwise limited in this HIPAA Addendum, Shape may use PHI for the proper management and administration of Shape or to carry out the legal responsibilities of Shape.
3.3 Disclosure for Management and Administration. Except as otherwise limited in this HIPAA Addendum, Shape may disclose PHI for the proper management and administration of Shape, provided that disclosures are Required by Law, or Shape obtains reasonable assurances from the person to whom the information is disclosed that it will remain confidential and used or further disclosed only as Required by Law or for the purpose for which it was disclosed to the person, and the person notifies Shape of any instances of which it is aware in which the confidentiality of the information has been breached.
3.5 Data Aggregation. Except as otherwise limited in this HIPAA Addendum, Shape may use PHI to provide Data Aggregation services to Covered Entity as permitted by 45 C.F.R. §164.504(e)(2)(i)(B).
3.6 Report Violations of Law. Shape may use PHI to report violations of law to appropriate Federal and State authorities consistent with 45 C.F.R. §164.502(j)(1).
4.1 Notice of Privacy Practices. Covered Entity shall provide Shape with the notice of privacy practices that Covered Entity maintains in accordance with 45 C.F.R. § 164.520, to the extent that such limitations may affect Shape’s use or disclosure of PHI.
4.2 Changes in Permission. Covered Entity shall notify Shape of any changes in, or revocation of, permission by an Individual to use or disclose PHI, to the extent that such changes may affect Shape’s use or disclosure of PHI.
4.3 Notification of Restrictions. Covered Entity shall notify Shape of any restriction to the use or disclosure of PHI that Covered Entity has agreed to in accordance with 45 C.F.R. § 164.522, to the extent that such restriction may affect Shape’s use or disclosure of PHI.
4.4 Permissible Requests by Covered Entity. Covered Entity shall not request Shape to use or disclose PHI in any manner that would not be permissible under the Privacy Rule and the HITECH Act if done by Covered Entity.
5.1 Term. The Term of this HIPAA Addendum shall be effective as of the first day that Covered Entity provides PHI to Shape and shall terminate when all of the PHI provided by Covered Entity to Shape, or created or received by Shape on behalf of Covered Entity, is destroyed or returned to Covered Entity, or, if it is infeasible to return or destroy Protected Health Information, protections are extended to such information, in accordance with the termination provisions in this Section.
(a) Except as provided in Section 4.3b, upon termination of this HIPAA Addendum or the Underlying Agreement, for any reason, Shape shall return or destroy all PHI received from Covered Entity, or created or received by Shape on behalf of Covered Entity. This provision shall apply to PHI that is in the possession of subcontractors or agents of Shape. Shape shall retain no copies of the PHI.
(b) In the event that Shape determines that returning or destroying PHI is not feasible, Shape shall notify Covered Entity in writing of the conditions that make return or destruction infeasible. If return or destruction of the PHI is infeasible, Shape shall extend the protections of this HIPAA Addendum to such PHI and limit further uses and disclosures of such PHI to those purposes that make the return or destruction infeasible, for so long as Shape maintains such PHI.
6.3 Amendments. Shape reserves the right to change the terms and conditions of this HIPAA Addendum at any time. Shape will notify Covered Entity of any material changes to this HIPAA Addendum by sending Covered Entity an e-mail to the last e-mail address Covered Entity provided to Shape or by prominently posting notice of the changes on Shape’s website. Any material changes to this HIPAA Addendum will be effective upon the earlier of thirty (30) calendar days following Shape’s dispatch of an e-mail notice to Covered Entity or thirty (30) calendar days following Shape’s posting of notice of the changes on its website. These changes will be effective immediately for new Shape Clients. Please note that at all times Covered Entity is responsible for providing Shape with its most current e-mail address. In the event that the last e-mail address that Covered Entity has provided Shape is not valid, or for any reason is not capable of delivering to Covered Entity the notice described above, Shape’s dispatch of the e-mail containing such notice will nonetheless constitute effective notice of the changes described in the notice. If Covered Entity does not agree with the changes to this HIPAA Addendum, Covered Entity must notify Shape prior to the effective date of the changes that Covered Entity wishes to terminate its subscription to the applicable Shape services. Continued use of Shape services, following notice of such changes, shall indicate Covered Entity’s acknowledgement of such changes and agreement to be bound by the terms and conditions of such changes.