New Jersey Supreme Court
Case BriefsForeign Courts

   

Supreme Court of New Jersey: While considering whether certain workers employed by East Bay Drywall, LLC, were properly classified as employees or independent contractors as per the “ABC Test” set forth under the Unemployment Compensation Law; the Supreme Court of New Jersey held that East Bay did not supply sufficient information to prove the workers' independence under the ABC Test and the Commissioner's findings of the same was not arbitrary, capricious, or unreasonable. The Court decided that East Bay misclassified its workers as independent contractors. The Bench of the Court comprising Stuart Rabner, CJ., and Anne M. Patterson, Lee Solomon and Fabiana Pierre-Louis JJ., joined the opinion delivered by Jose L. Fuentes, J.

Facts and Legal Trajectory: East Bay (a business registered as an employer), is a drywall installation business that hires on a per-job basis. Once a builder accepts East Bay's bid for a particular project, East Bay contacts workers to see who is available. Workers are free to accept or decline East Bay's offer of employment. East Bay provides the workers with the raw materials necessary to complete the drywall installation. The workers perform the labor but must provide their own tools and arrange for their own transportation to the worksites. East Bay does not dictate who or how many laborers the workers must hire to complete the project and also does not direct how the workers install drywall. However, East Bay remains responsible for the finished product.

On 30-06-2013, East Bay ceased reporting wages to the Department of Labor and Workforce Development (hereinafter Department). Consequently, an auditor for the Department conducted a status audit that reviewed the workers hired between 2013 and 2016, to determine whether they were independent contractors, as defined by the ABC Test, or employees of East Bay, requiring the employer to contribute to the unemployment compensation and temporary disability funds. In addition to meeting with East Bay's principal and accountant, the auditor requested documentation such as tax forms, business cards, and business insurance to determine whether the workers' businesses were independent entities. The auditor found that approximately half of the alleged sub-contractors working for East Bay between 2013 and 2016 — four individuals and twelve business entities (total- 16) should have been classified as employees. East Bay owed $42,120.79 in unpaid unemployment and temporary disability contributions as per the findings of the auditor.

East Bay challenged the results of the audit and requested a hearing in the Office of Administrative Law, which concluded that three of the workers were employees but the other thirteen were independent contractors. The Commissioner of the Department determined that all sixteen workers failed all three prongs of the ABC Test and that they were therefore employees of East Bay. The Appellate Division affirmed the Commissioner's final determination as to five workers but reversed as to the eleven other workers. The Department then appealed for the eleven workers, and the Court granted certification.

What is the ‘ABC Test' under Unemployment Compensation Law? 1

The ABC test is used in some states to determine whether a person is an employee or an independent contractor for the purpose of determining state unemployment tax. Some courts use this test to look at whether a worker meets three separate criteria (prongs) to be considered an independent contractor:

  1. The worker is free from the employer’s control or direction in performing the work.

  2. The work takes place outside the usual course of the business of the company and off the site of the business.

  3. Customarily, the worker is engaged in an independent trade, occupation, profession, or business.

Observations and Conclusion: The unanimous decision of the Court was delivered by temporarily assigned Justice Jose L. Fuentes, P.J.A.D.

  • The Court observed that The Unemployment Compensation Law (UCL), N.J.S.A. 43:21-1 to -71, acts as a “cushion against the shocks and rigours of unemployment”. The law requires that employers and employees make contributions to the unemployment compensation and temporary disability benefit funds. However, even if a worker receives compensation for work performed, the worker will not be considered an employee if the ABC Test is fulfilled.

  • Regarding the ABC Test, the Court observed that test is conjunctive; thus, all three prongs must be satisfied for a worker to be considered an independent contractor. The ABC Test presumes a worker is an employee therefore, the party challenging the classification carries the burden to establish the existence of all three criteria of the ABC test.

  • It was further observed that East Bay did not supply sufficient information to satisfy prong C burden regarding the eleven entities whose classification has been challenged by the Department. Prong C of the ABC Test broadly asks whether a worker can maintain a business independent of and apart from the employer. If the worker “would join the ranks of the unemployed” when the relationship ends, the worker cannot be considered independent under prong C.

  • The information East Bay provided is insufficient to prove the entities' independence. The probative value of refusal to accept or complete work is limited because, like an employee, even a bonafide independent contractor is not free from the pressure to accept a job. “A certificate of insurance could be a significant indication of independence, and business registration information may bolster the inference of independence. Here, however, these documents do not elucidate whether the disputed entities were engaged in independent businesses separate and apart from East Bay”.

  • The Court concluded that the instant case presents one of those less-obvious situations of whether the workers are truly independent business entities. Thus, consideration of the prong C factors is appropriate; but, in attempting to meet its burden, East Bay has provided little or no documentary evidence to address those factors. “For example, East Bay has not provided evidence that the entities maintained independent business locations, advertised, or had employees”.

  • It was further stated that any business practice that requires workers to assume the appearance of an independent business entity, can give rise to speculation that such a practice was intended to obscure the employer's responsibility to remit its fund contributions. “That type of subterfuge is particularly damaging in the construction context, where workers may be less likely to be familiar with the public policy protections afforded by the ABC test and consequently particularly vulnerable to the manipulation of the laws intended to protect all employees. Such a business practice also undermines the public policy codified in the UCL”.

Decision: With the afore-stated observations, the Court held that, since each entity at issue fails prong C of the ABC Test, therefore they can be properly classified as an employee. The Court remanded the matter to the Department for calculation of the appropriate back-owed contributions.

[East Bay Drywall, LLC v. Department of Labor & Workforce Development, (A-7-21) (085770), decided on 02-08-2022]


Advocates who appeared in this case :

Christopher Hamner, Deputy Attorney General, Advocate, for the Appellant;

Jennifer B. Barr, Advocate, for the Respondent;

Ravi Sattiraju, Advocate, for the Amicus Curiae.


*Sucheta Sarkar, Editorial Assistant has prepared this brief.


1. ABC Test, LII, Cornell Law School

Madras High Court
Case BriefsHigh Courts

There came a time when Rama was going to perform a huge sacrifice, or yajna, such as the old kings used to celebrate. But no ceremony in India can be performed by a married man without his wife; he must have the wife with him, the sahadharmini, the “co-religionist” – that is the expression for a wife. The Hindu householder has to perform hundreds of ceremonies but not one can be duly performed according to the shastras, if he has not a wife to complement it with her part in it. Now Rama’s wife was not with him then, as she had been banished. So, the people asked him to marry again. But at this request Rama for the first time in his life stood against the people. He said, “this cannot be. My life is Sita’s”. So, as a substitute, a golden statue of Sita was made, in order that the ceremony could be accomplished”.

[Lectures of Swami Vivekananda, California on 31-01-1900]   

Madras High Court: G R Swaminathan, J. allowed a couple to solemnize their marriage virtually, having sanction under Section 12 Special Marriage Act, 1954 wherein the petitioner-bride was a resident from Kanyakumari and her groom was an American national. The Court cited various historical, mythological references along with international covenants and foreign law that supports virtual weddings. It remarked that since law has to keep pace with the march of technology, the choice of the parties being online mode very much passes legal muster.

A joint application was filed before the respondent under Section 5 of Special Marriage Act, 1954; notice was thereby published, and objections were received which was found to be unreasonable. The mandatory 30 days period expired on 12-06-2022. The parties appeared before the respondent on 13-06-2022 but did not facilitate the solemnization of marriage in his presence. Rahul could not wait further as he had to return owing to Visa requirements. Now the demand made by the parties is that they should be allowed to solemnize their marriage under Section 12 of the Act even though the bride is in India and the bridegroom is in USA.

The writ petition was filed under Article 226 Constitution of India, to issue a writ of mandamus, to direct Sub Registrar (‘respondent’) to solemnize the marriage of Vasmi Sudarshini (‘petitioner’), a resident of Kanyakumari with bridegroom namely Rahul Leena Madhu, a US national, through video conference and register the same under Special Marriage Act, 1954 and issue marriage certificate by considering the representation of the petitioner dated 06-07-2022 within the time stipulated by the Court.

The Court noted that one has read in history books that a Rajput bride can marry a Rajput warrior by garlanding his sword. Soldiers of First World War were allowed to marry their sweethearts in the United States through interchanging a marriage contract by mail subject to non-contravention of State statutes; Ernest Lorenzen had written a scholarly article in Harvard Law Review on “Marriage by Proxy and The Conflict of Laws” which states marriage by proxy has been expressly sanctioned by law in three of the continental countries — Belgium, France and Italy and that it was allowed by Roman Law and Canon Law.

Thus, the Court further noted that in this case, the parties do not propose to conduct proxy marriage as the bridegroom will be very much present. The only distinguishing feature will be his presence being virtual and not physical. Section 12 of Special Marriage Act, 1954 does not exclude virtual presence.

The Court observed that Singapore had enacted Covid-19 (Temporary Measures for Solemnization and Registration of Marriages) Act, 2020 providing for solemnization and registration of marriages using remote communication technology. Eligible couples may solemnize their marriage online through a video link. Even statutory declarations can be made virtually. According to school of thought in Pakistan, marriage can be performed through Skype and there is no need for bride or groom to join their Nikah ceremony personally.

The Court opined that the right to marry being a fundamental human right, Sections 12 and 13 of Special Marriage Act, 1954 should be so construed as to effectuate this right. Section 12 (2) Special Marriage Act, 1954 states that marriage may be solemnized in any form which the parties may choose to adopt which happens to be online mode in the instant case.

Thus, there being no legal impediment, the Court directed the respondent to facilitate the solemnization of the marriage of the writ petitioner with Rahul L. Madhu in the presence of three witnesses through virtual mode. Once the declaration is made as per Section 12 (2) Special Marriage Act, 1954, the marriage shall be deemed to be complete and binding on the parties.

Further, the petitioner was directed to affix her signature in the marriage certificate book both for herself and on behalf of Rahul L. Madhu (as the petitioner has power of attorney of Rahul L Madhu), the marriage certificate will be issued under Section 13 Special Marriage Act, 1954.

[Vasmi Sudarshini v. Sub Registrar, WP (MD) No. 15511 of 2022, decided on 28-07-2022]


Advocates who appeared in this case :

Mr. M. Gnanagurunathan, Advocate, for the Petitioner;

Mr. K. S. Selvaganesan Additional Government Pleader, Advocate, for the Respondent.


*Arunima Bose, Editorial Assistant has reported this brief.

Foreign LegislationLegislation Updates

The Senate Bill 22-234 has received the assent of Governor. The legislation is intended to update the notice requirements regarding unemployment insurance that employers must provide to employees upon termination.

Key Points:

  • Division of unemployment insurance is required to issue revenue bonds, power to levy bond assessments and the state treasurer, as the advisor to the division to issue the bonds.
  • The requirement that an individual wait at least one week before becoming eligible for unemployment compensation has been repealed. It will take effect when the unemployment compensation fund reaches a balance of at least $1 billion.
  • The Division is required to study how to implement a dependent allowance for individuals receiving unemployment compensation.
  • Section 4 and 10 deals with employment support fund. The Department of Labor and Employment requires the state treasurer to credit .00035 of the premium each employer and to submit to the division and require to grants to one or more third-party administrators for the purpose of providing recovery benefits to eligible individuals.
  • Employer is required to provide an employee with certain information about unemployment compensation upon the employee’s separation from employment.Employers hold on solvency surcharge has been extended and sub-section (7)(c) of Section 6 is repealed, effective 01-01-2024.
  • Section 8 requires the transfer from money received by the State under the federal “American Rescue Plan Act 2021”. The money in fund is only used to repay the outstanding balance of federal advances.
  • Section 11 deals with the waive in the division which determines such repayment to be inequitable.
  • Section 12 requires the State Treasurer to transfer $ 600 million from the revenue loss restoration cash fund.

*Disha Srivastava, Publication Assistant has reported this brief.

Supreme Court of The United States
Case BriefsForeign Courts

Supreme Court of The United States: The Full Bench of the SCOTUS on 13th January, 2022 gave its decision on the Vaccine Mandates issued for large employers and healthcare workers. While the Court with a ratio of 6:3, put a stay on the Biden Administration’s vaccine-or-test rule for large private employers; however, at the same time the Bench with a ratio of 5:4, upheld a regulation issued by the Secretary of Health and Human Services that mandated vaccines for employees at hospitals, nursing homes and other healthcare providers.

National Federation of Independent Businesses v. Dept. of Labor, Occupational Safety and Health Administration  

Background: In the backdrop of unprecedented challenges posed by Covid19 pandemic and in view of the rising cases, on September 9, 2021, President Biden announced a new plan to require more Americans to be vaccinated. The Secretary of Labor, acting through the Occupational Safety and Health Administration (hereinafter OSHA), thus enacted a vaccine mandate for USA’s work force. The mandate was applicable to roughly 84 million workers, covering approximately all employers with at least 100 employees. It required that covered workers receive a COVID–19 vaccine, and it pre-empts contrary state laws. The only exception is for workers who obtain a medical test each week at their own expense and on their own time, and also wear a mask each workday.

The Congress enacted the Occupational Safety and Health Act in 1970 in order to – ensure occupational safety—“safe and healthful working conditions.” by enforcing occupational safety and health stand­ards promulgated by the Secretary. Such stand­ards must be “reasonably necessary or appropriate to pro­vide safe or healthful employment.” They must also be developed using a rigorous pro­cess that includes notice, comment, and an opportunity for a public hearing.

The Challenge: OSHA’s ‘never done before’ Vaccine Mandate was challenged by many States, businesses, and nonprofit organizations in Courts of Appeals across USA. The Fifth Circuit initially entered a stay, but when the cases were consolidated before the Sixth Circuit, that court lifted the stay and allowed OSHA’s rule to take effect. The challengers contended that OSHA’s mandate exceeds its statutory authority and is therefore unlawful.

Key Observations by the Majority: The Majority comprising of John Roberts, CJ., Samuel Alito, Clarence Thomas, Brett Kavanaugh, Neil Gorsuch (concurring) and Amy Coney Barret, JJ., focused upon the core issue of institutional competence- whether the 1970 Act plainly authorizes the OSHA’s mandate. It was observed that, “Administrative agencies are creatures of statute. They accordingly possess only the authority that Congress has provided”. Mandating roughly 82 million Americans “to either obtain a COVID–19 vaccine or undergo weekly medical testing at their own expense” is a major encroachment in the life and health of a vast number of employees.

The majority observed that the Act empowers the Secretary to set workplace safety standards, not broad public health measures; furthermore no provision of the Act addresses public health more generally, which falls outside of OSHA’s sphere of expertise. “Although COVID–19 is a risk that occurs in many workplaces, it is not an oc­cupational hazard in most. COVID–19 can and does spread at home, schools, sporting events, and gatherings. That kind of universal risk is no different from the day-to-day dangers that all face from crime, air pollution, or any number of communicable dis­eases”; therefore permitting OSHA to regulate the hazards of daily life, would significantly ex­pand OSHA’s regulatory authority without clear congres­sional authorization.

The majority further noted that OSHA indeed has the authority to regulate occu­pation-specific risks related to COVID–19, however, their indiscrimi­nate approach fails to take account of a crucial distinction between occupational risk and risk more generally and ac­cordingly the vaccine mandate takes on the character of a general public health measure, rather than an occupational safety or health standard.

Lastly, the majority noted that in its half century of existence, OSHA has never adopted a broad public health regulation of this kind—addressing a threat that is untethered, in any causal sense, from the workplace. “This lack of historical precedent, coupled with the breadth of authority that the Secretary now claims, is a “telling indication” that the man­date extends beyond the agency’s legitimate reach”.

With the aforementioned observations, the Court put a stay on OSHA’s Covid–19 Vaccination and Testing; Emergency Temporary Standard, 86 Fed. Reg. 61402.

The Dissent:  Stephen Breyer, Sonia Sotomayor and Elena Kagan, JJ., dissented with the decision to stay the vaccine mandate for the work force. Expressing their disappointment with the reasoning applied by the majority, the Judges observed that OSHA – an agency charged by Congress with safeguarding employees from workplace dangers has decided that action is needed by thoroughly evaluating the risks that the disease poses to workers across all sectors of the economy. It has considered the extent to which various pol­icies will mitigate those risks and the costs those policies will entail. After detailed considerations it landed on an approach that encourages vaccination, but allows employers to use masking and test­ing instead. In doing all this, it has acted within the four corners of its statutory authorization. OSHA, has responded in the way necessary to alleviate the dan­ger” that workplace exposure to the “new hazard” the COVID–19 poses to employees across the USA,for OSHA is responsible to the President, and the President is responsible to—and can be held to account by—the American public”.

The dissenting Judges also stated that as disease and death are raging due to the pandemic, this Court’s decision to tell off the concerned agency that it cannot respond in the most effective way possible, undercuts the capacity of the responsible federal officials, acting well within the scope of their au­thority, to protect American workers from grave danger. Who decides how much protection, and of what kind, American workers need from COVID–19? An agency with expertise in workplace health and safety, act­ing as Congress and the President authorized? Or a court, lacking any knowledge of how to safeguard workplaces, and insulated from responsibility for any damage it causes?

Joseph R. Biden Jr. v. Missouri

Background: The instant matter dealt with the same issue, but this time the concerned sector was healthcare.  In November 2021, the Secretary of Health and Human Services announced that, in order to receive Medicare and Medicaid funding, participating facilities must ensure that their staff (unless exempt for medical or religious reasons) are vaccinated against Covid–19. A facility’s failure to comply would lead to monetary penalties, denial of payment for new admis­sions, and ultimately termination of participation in the programs.

Submissions: The Secretary submitted before the Court that the interim rule was issued after finding that vaccina­tion of healthcare workers against COVID–19 was neces­sary for the health and safety of individuals to whom care and services are furnished. That deter­mination was based on data showing that COVID–19 can spread rapidly among healthcare workers and from them to patients, and that such spread is more likely when healthcare workers are unvaccinated and any further delay would endanger patient health and safety, given the spread of the Delta variant and the upcoming winter season.

The States of Louisiana and Missouri challenged the mandate terming it as arbitrary and impulsive and that the Secretary examine the relevant data before imposing the vac­cine mandate instead of a testing mandate. They also contended that in issuing the mandate, the Secretary departed from the agency’s prior approach of merely encouraging vaccination.

Key Observations: For this matter, Chief Justice John Roberts and Justice Brett Kavanaugh along with Stephen Breyer, Sonia Sotomayor and Elena Kagan, JJ., noted the overwhelming support that the vaccine mandate got from the healthcare workers and public health officials.

Deliberating upon the question that whether the Secretary had exceeded his statutory authority in issuing the vaccine mandate in order ensure eligibility for Medicare and Medicaid dollars, the majority stated that Congress has authorized the Secretary to impose conditions on the receipt of Medicaid and Medicare funds that “the Secretary finds necessary in the interest of the health and safety of individuals who are furnished services”. Given the highly dangerous and contagious nature of Covid19, especially for the patients, the Secretary determined that a COVID–19 vaccine man­date will substantially reduce the likelihood that healthcare workers will contract the virus and transmit it to their patients and concluded that a vaccine mandate was “necessary to pro­mote and protect patient health and safety” in the face of the ongoing pandemic.  Ensuring that providers take steps to avoid transmitting a dangerous virus to their patients is con­sistent with the fundamental principle of the medical pro­fession.

The Majority concluded their observations by holding that the Secretary of Health and Human Services did nothing out of his statutory purview in issuing the vaccine mandate fir the healthcare workers. “The challenges posed by a global pandemic do not allow a federal agency to exercise power that Congress has not con­ferred upon it. At the same time, such unprecedented cir­cumstances provide no grounds for limiting the exercise of authorities the agency has long been recognized to have”.

The Dissent: Meanwhile Amy Coney Barret, Samuel Alito, Clarence Thomas and Neil Gorsuch, JJ., dissented on the matter. Commenting upon how the Executive ‘already touches nearly every aspect of Americans’ lives’, the Judges noted that Majority’s decision will “ripple through administrative agen­cies’ future decision making” because if Congress had wanted to grant the concerned authority to impose a nationwide vaccine mandate, and consequently alter the state-federal balance, it would have said so clearly.

In conclud­ing that the Secretary had good cause to avoid notice-and-comment rulemaking while issuing the vaccine mandate, “the Court shifts the presumption against com­pliance with procedural strictures from the unelected agency to the people they regulate. Neither CMS nor the Court articulates a limiting principle for why, after an un­explained and unjustified delay, an agency can regulate first and listen later, and then put more than 10 million healthcare workers to the choice of their jobs or an irre­versible medical treatment”.

[NFIB v. OSHA, Nos. 21A244 and 21A247 and Biden v. Missouri, Nos. 21A240 and 21A241, decided on 13.1.2022]


Sucheta Sarkar, Editorial Assistant has reported this brief.

Supreme Court of The United States
Case BriefsForeign Courts

Supreme Court of the United States: While addressing inter-state water dispute between Mississippi and Tennessee, the Full Bench held that Mississippi’s ownership approach on its underground water would allow an upstream State to completely cut off flow to a downstream one, which is contrary to equitable apportionment jurisprudence. The Bench expressed,

Although the transboundary flow might be a mere “one or two inches per day,” that amounts to over 35 million gallons of water per day, and over ten billion gallons per year. So the speed of the flow, at least in the context of this case, does not place the aquifer beyond equitable apportionment.

The City of Memphis sits on the banks of the Mississippi River in the southwest corner of. Mississippi marks the City’s southern border of the Tennessee and hundreds of feet beneath Memphis lies one of the City’s most valuable resources: the Middle Claiborne Aquifer.

The Beginning of Dispute

Mississippi invoked original jurisdiction of the Court alleging that Tennessee’s pumping had taken hundreds of billions of gallons of water that were once located beneath Mississippi with regard to which it sought at least $615 million in damages, as well as declaratory and injunctive relief. Additionally, Mississippi claimed an absolute “ownership” right to all groundwater beneath its surface—even after that water has crossed its borders.

Mississippi argued that the Memphis Light, Gas and Water Division’s (MLGW ) pumping had altered the historic flow of groundwater within the Aquifer. Further, Mississippi conceded that though some water naturally flows from the part of the aquifer beneath Mississippi to the part beneath Tennessee but MLGW’s pumping had substantially hastened this existing flow, allowing Memphis to take billions of gallons of groundwater that otherwise would have remained under Mississippi for thousands of years.  Consequently, it had to drill its own wells deeper to access the aquifer, and use more electricity to pump water to the surface.

Doctrine of Equitable Apportionment

The doctrine of equitable apportionment is invoked for allocation of a shared water resource between two or more States. (Colorado v. New Mexico, 1982 SCC OnLine US SC 219) It stands alone as the federal common-law principle for disputes over interstate water. The doctrine’s “guiding principle” is that States “have an equal right to make a reasonable use” of a shared water resource. Florida v. Georgia, 2021 SCC OnLine US SC 18

Application of the Doctrine

This Court has never before held that an interstate aquifer is subject to equitable apportionment, so Mississippi’s suit implicated a question of first impression.  It was also pertinent that the Middle Claiborne Aquifer contains water that flows naturally between the States. Observing that all the cases of equitable apportionment had concerned such water (Kansas v. Colorado, 1907 SCC OnLine US SC 131), or fish that live in it (Idaho ex rel. Evans v. Oregon, 1983 SCC OnLine US SC 143), the Bench rejected Mississippi’s suggestion that the Middle Claiborne Aquifer was distinguishable from interstate rivers and streams because its natural flow is “extremely slow”. The Bench stated, “we have long applied equitable apportionment even to streams that run dry from time to time”. (Kansas v. Colorado, 1907 SCC OnLine US SC 131)

On Plea of Sovereign Ownership

Mississippi contended that it has sovereign ownership of all groundwater beneath its surface, so equitable apportionment ought not apply. Rejecting the aforesaid argument, the Bench stated that it is certainly true that “each State has full jurisdiction over the lands within its borders, including the beds of streams and other waters” but such jurisdiction does not confer unfettered “ownership or control” of flowing interstate waters themselves. And when a water resource is shared between several States, each one “has an interest which should be respected by the other.” (Wyoming v. Colorado, 1922 SCC OnLine US SC 129). Thus, the Bench denied the proposition that a State may exercise exclusive ownership or control of interstate “waters flowing within her boundaries.”

Verdict

In the light of the above, the Bench held that waters of the Middle Claiborne Aquifer are subject to the judicial remedy of equitable apportionment. Accordingly, Mississippi’s request for certiorari was declined. [Mississippi v. Tennessee, 595 U. S. ____ (2021), decided on 22-11-2021]


Kamini Sharma, Editorial Assistant has reported this brief.

Foreign LegislationLegislation Updates

The Government of California has signed, Assembly Bill AB-45, into law which will regulate industrial hemp products, removing restrictions on the sale of dietary supplements, food, beverages, cosmetics, and pet foods that include industrial hemp or cannabinoids, extracts, or derivatives of industrial hemp.

 

Key highlights of the law are:

  • The new legislation sets new registration process, under the State Department of Public Health, for hemp manufacturers who produce specified products that include industrial hemp or who produce raw hemp extract, as defined, including requirements for testing and labelling on products.
  • Ingestible CBD products – including dietary supplements and food – and topical CBD products made in compliance with this law will be legal for retail sale without restriction in California.
  • The legislation allows for the sale of inhalable hemp products; however, the sale of these inhalable products is prohibited until the passage of legislation that would establish a tax on inhalable hemp products.

 


*Tanvi Singh, Editorial Assistant has reported this brief.

Foreign LegislationLegislation Updates

The Ohio Department of Health has released guidelines for administering booster shots of the Pfizer COVID-19 vaccine across the state. Key points of the guidelines are:

  • Pfizer booster shots are now available for people who have gone six months past completing their second dose of the vaccine.
  • According to the guidance, the criteria for people eligible to get booster shots are:
    1. Ages 65 years and older or residents in long-term care settings should receive a booster shot.
    2. Ages 50 to 64 with certain underlying medical conditions should receive a booster shot.
    3. Ages 18 to 49 with certain underlying medical conditions may receive a booster shot based on their individual benefits and risks.
    4. Age 18 and older who are at increased risk for COVID-19 exposure and transmission because of their job or living in an institutional setting may receive a booster shot based on their individual benefits and risks.

 


*Tanvi Singh, Editorial Assistant has reported this brief.

Foreign LegislationLegislation Updates

On September 08, 2021, the California State Senate passed Senate Bill (SB-41) on genetic testing companies’ data practices.

Key highlights:

  • Genetic data has been defined as

(A) any data, regardless of its format, that results from the analysis of a biological sample from a consumer, or from another element enabling equivalent information to be obtained, and concerns genetic material. Genetic material includes, but is not limited to, deoxyribonucleic acids (DNA), ribonucleic acids (RNA), genes, chromosomes, alleles, genomes, alterations or modifications to DNA or RNA, single nucleotide polymorphisms (SNPs), uninterpreted data that results from the analysis of the biological sample, and any information extrapolated, derived, or inferred therefrom.
(B) “Genetic data” does not include de-identified data. For purposes of this subparagraph, “deidentified data” means data that cannot be used to infer information about, or otherwise be linked to, a particular individual, provided that the business that possesses the information does all of the following:
(i) Takes reasonable measures to ensure that the information cannot be associated with a consumer or household.
(ii) Publicly commits to maintain and use the information only in deidentified form and not to attempt to reidentify the information, except that the business may attempt to reidentify the information solely for the purpose of determining whether its deidentification processes satisfy the requirements of this subparagraph, provided that the business does not use or disclose any information reidentified in this process and destroys the reidentified information upon completion of that assessment.
(iii) Contractually obligates any recipients of the information to take reasonable measures to ensure that the information cannot be associated with a consumer or household and to commit to maintaining and using the information only in deidentified form and not to reidentify the information.
(C) “Genetic data” does not include data or a biological sample to the extent that data or a biological sample is collected, used, maintained, and disclosed exclusively for scientific research conducted by an investigator with an institution that holds an assurance with the United States Department of Health and Human Services pursuant to Part 46 (commencing with Section 46.101) of Title 45 of the Code of Federal Regulations, in compliance with all applicable federal and state laws and regulations for the protection of human subjects in research, including, but not limited to, the Common Rule pursuant to Part 46 (commencing with Section 46.101) of Title 45 of the Code of Federal Regulations, United States Food and Drug Administration regulations pursuant to Parts 50 and 56 of Title 21 of the Code of Federal Regulations, the federal Family Educational Rights and Privacy Act (20 U.S.C. Sec. 1232g), and the Protection of Human Subjects in Medical Experimentation Act, Chapter 1.3 (commencing with Section 24170) of Division 20 of the Health and Safety Code.
  • A direct-to-consumer genetic testing company is required to do both of the following:
1. Provide clear and complete information regarding the company’s policies and procedures for the collection, use, maintenance, and disclosure, as applicable, of genetic data by making available to a consumer all of the following:

(i) A summary of its privacy practices, written in plain language, that includes information about the company’s collection, use, maintenance, and disclosure, as applicable, of genetic data.

(ii) A prominent and easily accessible privacy notice that includes, at a minimum, complete information about the company’s data collection, consent, use, access, disclosure, maintenance, transfer, security, and retention and deletion practices, and information that clearly describes how to file a complaint alleging a violation of this chapter, pursuant to subdivision (c) of Section 56.182.
(iii) A notice that the consumer’s de-identified genetic or phenotypic information may be shared with or disclosed to third parties for research purposes in accordance with Part 46 (commencing with Section 46.101) of Title 45 of the Code of Federal Regulations.
2. Obtain a consumer’s express consent for collection, use, and disclosure of the consumer’s genetic data, including, at a minimum, separate and express consent.

Read the Bill here

Foreign LegislationLegislation Updates

On September 8, 2021, the New York government has signed Senate Bill no. S2758 into law. The Act amends the environmental conservation law which seeks to provide those sales of all new passenger cars and trucks shall be zero-emissions by 2035. The purpose of the Act is to reduce greenhouse gas emissions and air pollution from transportation sector.

Under the Act, new passenger cars, trucks, off road vehicles and equipment sold in New York are targeted to be zero-emissions by 2035, and new medium-duty and heavy-duty vehicles by 2045. The Act also seeks to develop a zero-emissions vehicle development strategy by 2023.

 


*Tanvi Singh, Editorial Assistant has reported this brief.

Foreign LegislationLegislation Updates

After the United States Supreme Court declined the request of urgent stay of Heartbeat Act, 2021, the New Abortion Law comes into force in Texas on September 1, 2021.

 

Key highlights of the Act are:

  • The Heartbeat Act, 2021 bans abortions if there is a fetal heartbeat that can be detected. It has been in controversy as it bans most abortions after about six weeks of pregnancy as per the medical experts (Act has not specified the weeks).
  • The Heartbeat Act provides that any physician planning to perform an abortion has to check whether the unborn child has a detectable heartbeat. Then if a fetal heartbeat has been detected by the physician, the physician may not knowingly perform or induce an abortion on a pregnant woman.
  • In cases of medical emergencies, an exception has been provided under the Act. However, it will be the decision of the physician to determine what qualifies.
  • A civil liability for violation or aiding or abetting violation can be raised by private citizens. Any person, other than an officer or employee of a state or local governmental entity in this state, may bring a civil action against any person who:
  • performs or induces an abortion in violation;
  • knowingly engages in conduct that aids or abets the performance or inducement of an abortion, including paying for or reimbursing the costs of an abortion through insurance or otherwise.
  • The private citizens can be awarded injunctive relief to prevent the defendant from breaking the law and statutory damages for about $10,000 for each abortion, as well as costs and attorney’s fees through the law suit.
  • The lawsuit must be filed within four years of the abortion.

*Tanvi Singh, Editorial Assistant has reported this brief.

Legislation Updates

The brief discusses minimum wages of Federal and State Level of USA.

 

USA Minimum Wage 2021

States

2021

Federal $7.25
Alaska $10.34
Arizona $ 12.15
Arkansas $11.00
California $13.00 (employer with 25 employees or less)
$14.00 (employer with 26 employee or more)
Connecticut $12.00 (September 1, 2020)
$13.00 (August 1, 2021)
Colorado $12.32
Delaware $9.25
District of Colombia $15
Florida $8.65
Georgia $5.15
Note: Georgia’s law sets minimum wage as $5.15 per hour. However, the federal minimum wage of $7.25 still applies to most jobs. But those that are not covered under the Fair Labor Standards Act may pay the lower rate.
Hawaii $10.10
Idaho $7.25
Illinois $11.00 (January 1, 2021)
Indiana $ 7.25
Iowa $7.25
Kansas $7.25
Kentucky $7.25
Louisiana No state law governing minimum wage.
Federal Law Minimum wage applicable
$7.25
Maine $12.15
Maryland $11.75 ( non-exempt Maryland workers who work for employers with more than 14 employees)
$11.60 ( non-exempt Maryland workers who work for employers with 14 or fewer employees)
Massachusetts $13.50
Michigan $9.65
Minnesota $10.08 (Large employer)
$ 8.21 (small employer)
Mississippi No state law governing minimum wage.
Federal Law Minimum wage applicable
$7.25
Missouri $10.30
Montana $8.75
Nebraska $9.00
Nevada $8.75 (for employees with employer-offered qualifying health benefits)
$9.75 ( for all other employees)
New Hampshire $7.25
New Jersey $12.00
New Mexico $10.50
New York $14.00(employer in Long Island & Westchester)
$12.50 (remainder of new York state workers)
$15.00 (New York City- Small employer)
$15.00 (New York City- Big employer, i.e. every employer with 11 or more employees)
North Carolina $7.25
North Dakota $7.25
Ohio $8.80
Oklahoma $7.25
Oregon $12.75 Standard Counties (effective July 01, 2021)
$14.00 Portland Metro (effective July 01, 2021)
Pennsylvania $7.25
Puerto Rico $6.55
Note: Puerto Rico law sets minimum wage as $6.55 per hour. However, the federal minimum wage of $7.25 still applies to most jobs. But those that are not covered under the Fair Labor Standards Act may pay the lower rate.
South Carolina No state law governing minimum wage.
Federal Law Minimum wage applicable
$7.25
South Dakota $9.45
Tennessee No state law governing minimum wage.
Federal Law Minimum wage applicable
$7.25
Texas $7.25
Utah $7.25
Vermont $11.75 per hour
Virginia $9.50 – Effective May 1, 2021;
$11.00- Effective January 1, 2022;
$12.00- Effective January 1, 2023;
$13.50- Effective January 1, 2025
$15.00- Effective January 1, 2026
Washington $13.69
West Virginia $8.75
Wisconsin $7.25
Wyoming $ 7.25
Supreme Court of The United States
Case BriefsForeign Courts

Supreme Court of The United States: In a significant decision, the Court by a ratio of 6:3, declined to review petitions challenging Pennsylvania’s “mail-in ballots” policy. The lawsuits that the court turned down concerned Republican Party’s bids to invalidate Pennsylvania’s extended mail ballot due date. It was claimed that Pennsylvania’s policy of ‘accepting timely sent ballots that arrived up to three days after Election Day was illegal’.

Pennsylvania has a long history of lim­iting the use of mail-in ballots. However in October 2019, the Pennsylvania Legislature overhauled its election laws and gave all voters the option of voting by mail, and it extended the deadline for officials to receive mail bal­lots by several days to 8 p.m. on Election Day. Then, in response to COVID–19, the legislature again amended the law but decided not to ex­tend the receipt deadline further. Displeased with that decision, the Pennsylvania Demo­cratic Party sued in state court. It argued that the court could extend the deadline through a vague clause in the State Constitution providing, in relevant part, that “elec­tions shall be free and equal.” [Art. I,§5]. The Pennsylvania Supreme Court agreed and held that the “free and equal” provision enabled the court to extend the deadline three days to accommodate concerns about postal delays.

Although the SCOTUS majority refused to entertain any more petitions, however, Clarence Thomas, Samuel Alito and Neil Gorsuch, JJ., dissented from the majority. Clarence Thomas, J., stated that it is the Federal Constitution, not state con­stitutions, which gives state legislatures the authority to regulate Fed­eral elections; the Republicans had a strong argument that the Pennsylvania Supreme Court’s decision violated the Constitution by overriding “the clearly expressed intent of the legislature”. He further observed that it is fortunate that the Pennsylvania Supreme Court’s decision to change the receipt deadline for mail-in ballots did not appear to have changed the outcome in any federal election, but he also pointed out that, “We may not be so lucky in the future. Indeed, a sep­arate decision by the Pennsylvania Supreme Court may have already altered an election result. A different petition argues that after Election Day the Pennsylvania Supreme Court nullified the legislative requirement that voters write the date on mail-in ballots”. Thomas, J., also pointed out that in 2018 the percentage of mail-in ballots cast was at 4%, but the legislature dramatically expanded the process in 2019, thereby increasing the mail-in ballots cast in 2020 to 38%. According to Thomas, J., this expansion impeded post election judicial review be­cause litigation about mail-in ballots is substantially more complicated. “The Pennsylvania Supreme Court issued its decision about six weeks before the election, leaving little time for review in this Court. And there is a reasonable expectation that these petitioners—the State Republican Party and leg­islators—will again confront non legislative officials alter­ing election rules. … we failed to set­tle this dispute before the election, and thus provide clear rules. Now we again fail to provide clear rules for future elections. The decision to leave election law hidden beneath a shroud of doubt is baffling. By doing nothing, we invite further confusion and erosion of voter confidence”.

Samuel Alito, J., (for himself and Neil Gorsuch, J.,) observed that the Republican petitions present an important and recurring constitutional question, that whether the Elections or Electors Clauses of the United States Constitution Art. I, §4, cl. 1; Art. II, §1, cl. 2, are violated when a state court holds that a state constitutional provision overrides a state statute governing the manner in which a federal election is to be conducted. Noting that since this constitutional issue has baffled the lower courts time and again, therefore a SCOTUS review would have been helpful to provide a clear path for them to follow in case of future disputes of such nature. Moreover, now, that the Presidential Election is over, there is no reason for refus­ing to decide the important question that these cases pose. “The provisions of the Federal Constitution conferring on state legislatures, not state courts, the authority to make rules governing federal elections would be meaningless if a state court could override the rules adopted by the legisla­ture simply by claiming that a state constitutional provi­sion gave the courts the authority to make whatever rules it thought appropriate for the conduct of a fair election.” Bush v. Palm Beach County Canvassing Bd., 2000 SCC OnLine US SC 81.[Republican Party of Pennsylvania v. Veronica Degraffenreid (Nos. 20–542), 592 U. S. (2021), decided on 22-02-2021]


Sucheta Sarkar, Editorial Assistant has put this story together.

COVID 19Op EdsOP. ED.

The emergence, subsequent inter-continental spread and the inevitability of the ensuring mounting death toll across almost every region of this planet has exposed the spectacular lack of preparedness of many Governments in facing the COVID-19 pandemic. Notably, up until the middle of January 2020, the novel Coronavirus was not even considered sophisticated enough for human to human transmission and yet by the end of February 2020 continental Europe had been ravaged. In the consequent incursion into and subjugation of the United States of America (USA), the novel coronavirus achieved that which no invading army ever could.

As a direct result of the same and almost without exception, the world, led by America, clamoured to fix culpability upon Communist China. However, it need not be reiterated that no pre-eminent global power in the post-WW2 decades has ever of its own accord ever submitted to the jurisdiction of international law. The western nations, short of bilateral or multilateral reprisals (the validity and legality of which under international law would be questionable at the very least), are therefore wholly bereft of an effective means of bringing the ‘guilty’ to book. Regardless, remedial inadequacy has not deterred those seeking reprisal against the People’s Republic of China (PRC), from filing suits and petitions against PRC’s communist leadership, its armed forces as well as the Institute of Virology situated at Wuhan. These however are nothing but, as the Solicitor General so deftly put it in another context, ‘self-employment generating petitions’.

Succinctly stated, the concept of ‘State responsibility’ vis-à-vis international law arises primarily under three scenarios; (1) breach of obligations arising out of treaties and/or contracts, and (2) international delinquencies. There’s a third area of study i.e. international criminal law, however, that pertains to individual criminal liability and has been discussed separately below. It must also be borne out that though the conceptualisation of ‘sovereignty’ has undergone a transformation in the post-WW2 period of the 20th century, yet devoid of any supranational agency, ‘State responsibility’ in consonance with international law must be tempered by the sovereign autonomy of a nation State.

Insofar as the COVID-19 pandemic is concerned, there evidently does not exist any treaty obligation governing the manner of transaction between the world and the PRC. Thus the discussion surrounding ‘State responsibility’ must revolve around the idea of international delinquency whereby culpability can be attributed to a State in connection with its non-contractual international law obligations. Quite interestingly, in most cases of such nature, responsibility arises as a result of injury suffered by the citizens abroad i.e. aliens in the host nation. However, a key constituent of ‘international delinquency’ is ‘imputability’. Consonantly, if a certain State-action resulting in injury to an alien cannot be directly attributed to an agency of the host State (for instance China in the current scenario) then the same may not amount to fixation of responsibility unto the said host. Naturally thus, no act of a private citizen resulting in injurious consequences for an alien can be termed an ‘international delinquency’.

If one is to consider the present scenario wherein claims against the PRC are sought to be brought forth, no case of international delinquency is made out short of the international community being able to conclusively prove that the Communist Party of China in cohorts with its armed forces and/or other agencies of the State sought to inflict the alleged harm and injury to the global population. It is further imperative to take note of the fact that ‘force majeure/fortuitous event’ presents itself as a complete defence to any such action of State responsibility.

In addition to the above enunciation of State responsibility, it is notably that the clamour to fix criminal liability under international law vis-à-vis the top leadership of the Communist Party of China, makes it crucial that the phrase ‘crimes against humanity’ is understood in terms of its specific legality vide the Rome Statute for International Criminal Court[1]. The Rome Statute under Article 7 explicitly defines ‘crimes against humanity’ as being in the nature of murder, extermination, enslavement, deportation, torture, rape, etc. coupled with an element of systemic attack against any civilian population[2].

Additionally, although the International Criminal Court (ICC) has the jurisdiction to try everyone equally regardless of any official position held thereof, such jurisdiction can only arise by way of (1) the accused person being a national/citizen of a State party to the Rome Statute, (2) the alleged crime of most serious concern to the international community having been committed on the territory of a State party to the ICC, and (3) referral of a matter from the United Nations Security Council (UNSC).

In that regard, fastening of criminal liability unto any Chinese State official is bleak to say the least for not only is PRC a veto-wielding member of the UNSC, it not a State party to the Rome Statute and thus does not recognise the jurisdiction of the ICC. Furthermore, as would become manifest from the definition above, there exists no intelligible and coherent evidence as to satisfy the threshold of international criminal law.

In conclusion, it becomes important to analyse the complaint forwarded before the United National Human Rights Council, Geneva (UNHRC) by the International Council of Jurists. Regardless of the allegations made thereby, it must be understood that though the UNHRC has a very wide ambit and scope to entertains such complaints, it has one of the weakest mechanisms under international law to provide any remedy. No recommendation of the UNHRC has any binding force upon the member States. At the most, a mere cognizance of the matter can be taken by the Human Rights Council and recommendations forwarded thereof to the governing executive of the d State concerned.

An inward looking world as at present will surely find a way to penalise the commissions and omissions of the PRC in due time. Rest assured it will not be by means of the numerous yet woefully inadequate international law remedial instruments at the disposal of the international res publica.


*The Author is a practising Advocate in Delhi

[1] The Rome Statute of the International Criminal Court was adopted on 17th July 1998 at the United Nations Diplomatic Conference of Plenipotentiaries on the Establishment of an International Criminal Court and it came into force on 1st July 2002 upon being ratified by at least 60 signatory nations.

[2] ‘Crimes against Humanity’; Article 7 of Rome Statute

Legislation UpdatesNotifications

The United States of America (USA) has w.e.f. 5 June 2019 withdrawn India’s GSP benefits. These are unilateral, non-reciprocal and non-discriminatory benefits extended by some developed countries to developing countries. India as part of our bilateral trade discussions, had offered resolution on significant US requests in an effort to find a mutually acceptable way forward.


[Source: PIB]

Ministry of Commerce & Industry

Business NewsNewsTreaties/Conventions/International Agreements

Sub-section (4) of Section 286 of the Income-tax Act, 1961 requires that a constituent entity of an international group, resident in India, other than a parent entity or an alternate reporting entity of an international group, resident in India, shall furnish the Country-by-Country (CbC) Report in respect of the said international group for a reporting accounting year within the period as may be prescribed, if the parent entity of the said international group is resident of a country or territory,—

  •  where the parent entity is not obligated to file the CBC Report;
  •  with which India does not have an agreement providing for exchange of the CbC Report; or
  • where there has been a systemic failure of the country or territory and the said failure has been intimated by the prescribed authority to such constituent
    entity.

2. Vide Notification in GSR 1217 (E) dated 18th December, 2018 with effect from 18th December, 2018, amendments to the Income-tax Rules. 1962 (the “Rules”) have been carried out to provide that the period for furnishing of the CbC report (local filing) shall be twelve months from the end of the reporting accounting year.

3. Further, vide Circular No.9/2018, dated 26th December, 2018, CBDT as a one-time measure, in exercise of powers conferred under Section 119 of the Act, extended the period for furnishing of the CbC Report (local filing) in respect of reporting accounting years ending on or before 28 February, 2018 up to 31st March, 2019.

4. The absence of an agreement between India and USA till now entailed a possibility of local filing of CbC Reports in India. However, a Bilateral Competent Authority Arrangement, along with an underlying Inter-Governmental Agreement, for exchange of CbC Reports between India and the USA has now been finalized and will be signed on or before 31st March, 2019. This would enable both the countries to exchange CbC Reports filed by the ultimate parent entities of International Groups in
the respective jurisdictions, pertaining to the financial years commencing on or after 1st January, 2016. As a result, Indian constituent entities of international groups headquartered in USA, who have already filed CbC Reports in the USA, would not be required to do local filing of the CbC Reports of their international groups in India.

[Press Release dt. 15-03-2019]

Central Board of Direct Taxes

Ministry of Finance

International CourtsNews

International Court of Justice (ICJ): The ICJ will hold public hearings devoted to Preliminary Objections raised by the United States in the case concerning Certain Iranian Assets [Islamic Republic of Iran (Iran) v. United States of America (USA)], from 8 to 12 October 2018, at the Peace Palace in The Hague, the seat of the Court.

Iran instituted proceedings on 14 June 2016 against the USA before ICJ with regard to a dispute concerning violations by the USA of the Treaty of Amity, Economic Relations, and Consular Rights between them. It was signed in Tehran on 15 August 1955 and entered into force on 16 June 1957” (hereinafter “the 1955 Treaty”). The 1955 Treaty was signed with the then regime of the Shah long before he was ousted in the 1979 Islamic Revolution. But the US severed bilateral diplomatic ties with Iran in 1979 after 52 Americans were taken hostage in the US embassy in Tehran. They have not yet been fully restored.

The case was filed just weeks after the US Supreme Court ruled in April 2016 that $2 billion in frozen Iranian assets should be paid to about 1,000 survivors and relatives of those killed in attacks blamed on Iran. These attacks included the 1983 bombing of a US Marine barracks in Beirut and the 1996 Khobar Towers bombing in Saudi Arabia. According to Iran, US courts have awarded total damages of over $56 billion against it in respect of its alleged involvement in various terrorist acts mainly outside the US.

[Source: The New Indian Express]