Hunt & Associates, PC

OxyContin and Other Prescription Painkillers: Following the Tobacco Lawsuits Model?

Michael Litvin — Thu, 27 Jul 2017 18:16:36 +0000

“Recently my advertising agency ended a long relationship with Lucky Strike cigarettes, and I’m relieved.” – Don Draper, “Mad Men”.

Like Don Draper “quitting” cigarettes, more lawmakers and health researchers are ready to fight the makers of OxyContin and other opioid painkillers.

In January 2017, the City of Everett, Washington filed a lawsuit against OxyContin maker Purdue Pharma. Purdue Pharma filed a motion to dismiss the lawsuit, and the court’s decision might come soon. Follow the City of Everett’s take here and some of the pushback from Purdue Pharma here.

A number of U.S. states and individual plaintiffs have filed similar lawsuits. Plaintiffs typically allege that drugmakers have misled the public about the addictive qualities of OxyContin and other opioids, causing an epidemic of addicted patients buying opioids and heroin on the black market.

Drug companies have pushed back by stressing the need to use opioid painkillers responsibly. The companies also allege that the use of contingency fee agreements by law firms representing various plaintiffs amounts to a money grab and shakedown of the painkiller industry.

Some results are now in. In 2007, Purdue Pharma and three of its executives agreed to pay $634.5 million in fines and pled guilty to criminal charges of misleading the public about the addictive qualities of OxyContin. Just days prior, Purdue Pharma agreed to pay $19.5 million to 26 states and the District of Columbia to settle allegations that the company encouraged physicians to overprescribe OxyContin.

No matter the legal outcomes, the health toll is real. The Centers for Disease Control and Prevention (CDC) estimates that more than 300,000 Americans have died of opioid overdoses since the year 2000. The Oregon Health Authority now states that “[i]n Oregon, more drug poisoning deaths involve prescription opioids than any other type of drug, including alcohol, methamphetamines, heroin and cocaine. An average of 3 Oregonians die every week from prescription opioid overdose, and many more develop opioid use disorder.”

A bit of history may help predict the way forward. Under the Tobacco Master Settlement Agreement of 1998, tobacco companies are now shielded from many lawsuits in exchange for modified sales practices and annual tobacco fund payments to the states. Will the opioid epidemic follow a similar legal pattern? The answer is probably yes, but the economic terms and long-term effectiveness of a potential master settlement are yet to be shaped by the results of many lawsuits.

Oregon Will Decide If You’re Smart Enough to Keep Your Kids

Lawrence Hunt — Tue, 25 Jul 2017 18:05:56 +0000

A recent story in the Oregonian tells how the state of Oregon has taken a married couple’s children because the state claims the couple isn’t smart enough to be parents. In fact, the state took their younger child from the hospital before his mother was even able to see him.

As the story points out, both parents have held jobs and they maintain a household. While neither parent looks like another Einstein, when has anyone encountered a brilliant bureaucrat or an intellectually gifted social worker? Since when do you have to be smart to love and care for your kids? Somehow the state of Oregon seems to think that a foster parent it pays will care for these children better than the kids’ own parents.

The parents continue to exercise “supervised visits” with their children in foster care without any factually established basis for concern except that each parent has below average intellectual ability as measured by standard I.Q. tests. As the Oregonian story mentions, it turns out that the vast majority of parents in this country who are found to be “intellectually deficient” lose custody of their children because they’re thought to be intellectually incapable of being an adequate parent.

In many ways, this Oregon story is a reminder of the eugenics movement’s efforts to rid the United States of the “feeble minded” and “socially degenerate” which Oliver Wendell Holmes, Jr. articulated as law in Buck v. Bell, 274 U.S. 200 (1927) when he famously wrote on behalf of an almost unanimous Court that “. . . three generations of imbeciles is enough.”

Of course, subsequent scholarship has established that Carrie Buck was not an imbecile nor was she incapable of living independently after the state of Virginia involuntarily sterilized her. She was, instead, railroaded through the legal system to validate the forced sterilization of thousands. Read about the facts and history of Buck v. Bell here and here.

Not surprisingly, the American Eugenics movement had the enthusiastic support of such luminaries as Teddy Roosevelt, Louis Brandeis, the young A.C.L.U. and, as pointed out here, Margaret Sanger and Planned Parenthood. The eugenics movement was also a source of inspiration for the young Nazi party in Germany as discussed here.

The Oregonian story about how parents can lose their children because a social worker thinks they aren’t smart enough to parent is a disquieting reminder of how thin the wall is that protects us all from the meddlesome grasp of the state.

Standalone Retirement Trusts and Estate Planning

Charles Ford — Tue, 18 Jul 2017 23:37:08 +0000

In a recent blog, we discussed the advantages of incorporating your retirement plan (i.e., pension plans, 401(k) plans, employer established IRA plans, etc.) into your overall estate plan. As we discussed, this can be a complex matter because the tax advantages which are accorded to retirement accounts are generally not extended to heirs or designated beneficiaries once the retirement account owner has died.

By way of summary, we have identified three goals you may want to consider when incorporating your retirement plan into your estate plan:

Maximizing the “stretch period” so that the assets in the retirement account can continue their tax-free growth for the maximum length of time;

Ensuring that the assets are shielded from the beneficiary’s creditors; and,

Providing a structure for the distribution of the retirement funds, e.g., limiting the disbursements in order to prevent a spendthrift beneficiary from squandering his or her share of the funds in one fell swoop.

A standalone retirement trust (SRT) may be precisely what you need in order to achieve the above goals. An SRT is a separate trust specifically designed to receive your tax deferred retirement plan on your death. It should be entirely separate from any revocable living trust you may have already established as part of your estate plan. Upon your death, an SRT will allow your retirement account to continue to grow tax deferred, thus maximizing the account’s stretch period.

An SRT will also allow protection from creditors, much like an irrevocable, third party trust. This alone might be an important incentive for establishing an SRT, given that the Supreme Court has ruled that inherited assets are not shielded from creditor claims in bankruptcy proceedings. Lastly, you can instruct your trustee in the SRT instrument as to when and how the trustee is to disburse funds to your chosen beneficiaries. This allows you to structure distributions and thus protect your hard-earned retirement funds from being dissipated by a spendthrift heir.

Although retirement accounts present complex issues in estate planning, we recommend you consider how an SRT might enable you to achieve maximum benefit from your retirement benefits as part of your overall estate plan.

The Fair Work Week Act: New Work Schedule Restrictions on the Horizon for Certain Oregon Workers and Employers

Michael Litvin — Thu, 13 Jul 2017 16:22:05 +0000

The Oregon legislature passed the Fair Work Week Act (SB 828) on June 29, 2017 and the potential new law awaits Governor Brown’s signature before implementation. If implemented, the new law would be the first of its kind adopted by a U.S. State.

Supporters claim passage of the Fair Work Week Act as a win for workers in the retail, hospitality and food service industries. Opponents of the Fair Work Week Act criticize the new regulations and predict that they will drive economic growth away from Oregon.

Following is an overview of the main elements of the Fair Work Week Act.

Who is Covered

The Fair Work Week Act applies to businesses in the retail, hospitality and food service industries with 500 or more employees worldwide (“Covered Employers”).

Hourly wage employees are generally covered by the Fair Work Week Act. However, salaried workers and workers on lease from outsourcing firms are generally exempted from the requirements of the Fair Work Week Act.

New Key Restrictions

Assuming that Governor Brown signs the Fair Work Week Act into law, then effective in July 2018, Covered Employers will be required to provide employees with seven days’ notice describing their schedules, including on call shifts for the following week. Effective July 1, 2020, the seven-day notice period becomes even longer at two weeks.

After a work schedule is set, the Fair Work Week Act requires additional pay to the employee if a Covered Employer requests a change in the set work schedule. In addition, the Fair Work Week prohibits Covered Employees from scheduling work shifts that do not allow specified rest time between shifts unless the employee consents and receives additional pay for time worked during the rest time.

For violations of the Fair Work Week Act, the affected employees and the State of Oregon will be able to seek penalties and other remedies in court.

How Workers and Businesses May Choose to Lessen the Impact of the Restrictions

Despite the new restrictions imposed on Covered Employees, the Fair Work Week Act also creates the concept of a standby list. By adding themselves to a standby list, workers can voluntarily accept additional work hours from Covered Employers without the advance notice and extra pay requirements of the anticipated new law.

Theoretically, the standby list means that before needing to pay extra for last minute work requests and shift changes, Covered Employers should be able to dip into a pool of standby employees who are willing to accept last minute work hours without the extra pay required by the Fair Work Week Act.

However, whether the standby list concept proves successful at balancing the needs of Covered Employees and worker rights advocates remains to be seen.

When You’re Not Who You Are; When an Architect is Not an Architect

Lawrence Hunt — Wed, 05 Jul 2017 18:10:36 +0000

In a recent bizarre trip down the rabbit hole, in Twist Architecture v. Board of Architect Examiners, 361 Or. 507 (2017), the Oregon Supreme Court upheld a fine against architects, duly licensed in Washington, for daring to call themselves “architects” on their correspondence and website read by Oregon clients who hired them to prepare master plans for possible commercial development in the state of Oregon.

Even though the drawings the architects here were hired to draft were simply preliminary and provided no basis for actual construction of any building, the court held that the architects here were not “architects” in Oregon and so upheld the fines. In fact, the court even said that even though the website noted that the architects here had applied for licensure in Oregon, that wasn’t good enough because they also showed some of their master plans in Oregon thereby implicitly claiming to be “architects in Oregon”.

The holding essentially says that an architect licensed in Washington can’t call themselves an architect when they’re in Oregon. Yet the laws of physics and chemistry, the principles of geology, and the properties of materials do not change when you cross a state line. An architect in Washington does not lose their knowledge and expertise as an architect when they cross the Columbia River into Oregon. In an act of statutorily compelled self-delusion, the court in Twist Architecture requires the Washington architect to deny their professional identity whenever they’re in Oregon.

Must a Phone Make a Sound in Order to “Ring” Under Oregon Law? Yes, Says the Court of Appeals in a Ten-Page Open Letter to the State

Michael Litvin — Mon, 26 Jun 2017 16:42:00 +0000

In a win for statutory plain meaning, the Oregon Court of Appeals on May 24, 2017 reversed a defendant’s conviction for telephonic harassment because “the plain and unambiguous text of ORS 166.090(1)(b) requires the other person’s telephone ‘to ring,’ which we interpret to mean that the telephone must emit an audible sound.”

Like Humpty Dumpty in Lewis Carroll’s sequel to Alice’s Adventures in Wonderland, it seems that the Oregon Department of Justice (DOJ) attempted to stretch the meaning of a word (“ring”) beyond its normal definition. The defendant cried foul, and the Court of Appeals agreed with the defendant.

Interestingly, prosecutors could have charged this defendant under a different part of the telephonic harassment statute, ORS 166.090(1)(c), which prohibits leaving a voicemail after being forbidden to do so. It is unclear why prosecutors did not charge the defendant with violating this part of the statute given that the evidence was probably more likely to yield a conviction. (Hooray for double jeopardy rules, anyone?)

After the defendant appealed, the DOJ admitted that the plain meaning of the word “ring” implies that the telephone must make a sound. However, the DOJ argued that based on the legislative history of the statute, the legislature must have intended to prohibit a person’s unauthorized calls to another person regardless of the specific statutory wording. Therefore, the DOJ reasoned that violating the statute should not require evidence that the other person’s telephone made any sound when the defendant called.

The Oregon legislature passed the telephonic harassment statute at issue in 1987. At that time (long before cell phones became commonplace) silent and vibrating phone ring capability was not something that the legislators probably considered.

The Court of Appeals ultimately sided with the defendant because Oregon law prohibits interpreting a statute in a way that is inconsistent with its plain text. The Court of Appeals thus refused to rewrite the statute to keep pace with modern technology, but left the door open for the Oregon legislature to do so.

Final score this round: Defendant 1; Webster’s Dictionary 1; DOJ 0; Humpty Dumpty 0.

Scrubbing the Internet of What You Don’t Like – What Works and What Doesn’t

Lawrence Hunt — Tue, 20 Jun 2017 17:34:18 +0000

From time to time we get calls asking us to help remove items posted to the internet that the caller finds embarrassing, unfair or just plain wrong. Sometimes we can help but often we can’t. Recently Walter Olson at the Overlawyered web site of the Cato Institute collected a number of recent posts by law professor Eugene Volokh here, here and here as well as this story in Tech Dirt.

A few simple morals from these stories: It’s not prudent to forge legal documents or judge’s signatures; it’s even more reckless to publicize your fraud; and, just icing on the cake, it’s suicidal to brag online about saving money by not using lawyers.

We Welcome Michael Litvin to Our Firm

Lawrence Hunt — Tue, 13 Jun 2017 20:35:52 +0000

We jubilantly welcome Michael Litvin to our firm. Michael graduated from Southridge High School in Beaverton, Oregon before graduating from University of California, Berkeley with a double major in Rhetoric and Political Science in 2-1/2 years with Highest Distinction in General Scholarship. Michael earned his Juris Doctorate from Cornell Law School in 2009 where he served as an Associate Editor and Fellow with the Legal Information Institute (LII), Managing Editor of the Cornell International Law Journal and was a Member of the Moot Court Board.

Since his admission to the Oregon Bar, Michael has worked on a wide range of legal matters including general corporate and business law, mergers and acquisitions, employment law, executive compensation, real estate, and tax and estate-planning coordination. Michael coauthored a case note entitled Supreme Court Preview: Riegel v. Medtronic which was published in The Federal Lawyer in February 2008 and has presented on various topics including M&A Agreements: Preparing Effective Representations and Warranties which was sponsored in May 2016 by the Oregon Law Institute (OLI) of Lewis & Clark Law School.

Michael was born in Ukraine and immigrated to the United States at the age of 8. Michael speaks fluent Russian and enjoys fishing, soccer and ice hockey (as a spectator sport) along with nurturing his bonsai avocado trees.

Retirement Plans and Estate Planning

Charles Ford — Mon, 12 Jun 2017 17:41:07 +0000

Retirement plans (i.e., pension plans, 401(k) plans, employer established IRA plans, etc.) account for the majority of assets held by most Americans. Plans which meet certain legal requirements set forth under the federal ERISA law enjoy favorable tax treatment in order to promote growth and provide a comfortable retirement for the account holder. For example, the account holder is permitted to defer taking any distributions from his/her retirement account until the calendar year in which he/she reaches 70-1/2 years of age, thereby allowing the account to grow tax-free during that interim period. Once the account owner reaches 70-1/2 years of age, he/she is required to begin taking minimum required distributions (MRDs) and those distributions are subject to income tax.

However, the tax advantages of retirement accounts are not intended to benefit the heirs or designated beneficiaries once the account owner has died, with one exception. If the account owner has designated his or her spouse as the beneficiary of the retirement account then, upon the account holder’s death, the surviving spouse can either roll the decedent’s account into his/her own account or remain as the beneficiary of the deceased’s account and postpone taking distributions until the calendar year in which the deceased spouse would have reached age 70-1/2.

Estate planning becomes more complex, however, when the beneficiaries of the retirement plan are persons other than the surviving spouse. In that instance, the beneficiary is required to take MRDs over a period of five years or over the beneficiary’s life expectancy, sometimes referred to as “the stretch period”. If a trust is the designated beneficiary of the deceased’s retirement account and all of the trust’s beneficiaries are individuals, the MRDs are calculated according to the beneficiary with the shortest life expectancy (i.e., the oldest beneficiary).

The entire subject of retirement plans is extremely technical, given the requirements of ERISA and the regulations issued by the Internal Revenue Service. Similarly, incorporating an individual’s retirement plan assets into his or her estate plan can be a complex exercise. Among the issues to be considered are the following:

How to maximize the stretch period so that the assets in the retirement account can continue their tax-free growth for the maximum length of time;

Ensuring that the assets are shielded from the beneficiary’s creditors; and,

Providing a structure for the distribution of the retirement funds (e.g., limiting the disbursements in order to prevent a spendthrift beneficiary from squandering his or her share of the funds in one fell swoop).

We’ll consider these issues in more detail and suggest some planning strategies in upcoming blogs.

Now That We’ve Taken Your Money, Prove Why We Shouldn’t Keep It; Or, The Advantages of a Presumption of Guilt

Lawrence Hunt — Tue, 16 May 2017 15:41:50 +0000

Some states apparently insist that even if your criminal conviction is overturned on appeal and the charges against you are dismissed, the state should still keep any fines you’ve paid unless and until you can prove that you were actually innocent of the crime you were charged with in the first place. In other words, they actually have a presumption of guilt that you have to overcome before the state will return the fines you paid when you were improperly convicted. Colorado was such a state, at least until April 2017 when the U.S. Supreme Court ruled (7-1, opinion by Ginsberg) in Nelson v. Colorado that Colorado could not supplant the “presumption of innocence” with a “presumption of guilt” in actions to recover the fines paid by those whose criminal convictions had been overturned on appeal.

The Colorado statute in question, entitled “the Exoneration Act”, required a criminal defendant whose conviction had been reversed on appeal to prove their innocence of the charges that had been brought against them before they could obtain a refund of the fines they’d paid as part of their sentences. Read a more detailed summary here.

Of course, there’s still no compensation to the wrongly convicted claimants for their time spent in confinement or for the costs of defense, which can both be devastating.