USA updates

Arbitration & ADR

Contributed by Norton Rose Fulbright
Monster Energy distribution dispute: amicus briefs do not create evident partiality
  • USA
  • 01 April 2021

In a six-year dispute between Monster Energy Co and City Beverages, LLC d/b/a Olympic Eagles Distributing (Olympic), a judge sitting in the Central District of California has denied Olympic's motion to compel arbitration in a forum other than the Judicial Arbitration and Mediation Services (JAMS), finding that the JAMS' filing of two amicus briefs did not create reasonable doubt as to its partiality.

New York Convention does not prohibit enforcement by non-signatory under doctrine of equitable estoppel
  • USA
  • 11 June 2020

The US Supreme Court has unanimously held that the Convention on the Recognition and Enforcement of Foreign Arbitral Awards does not prohibit US courts from applying the domestic law doctrine of equitable estoppel when determining whether an international arbitration clause can be enforced by a non-signatory to compel arbitration. In doing so, the court effectively extended the holding in Arthur Andersen LLP to international arbitrations under Chapter 2 of the Federal Arbitration Act.

COVID-19: AAA-ICDR's approach to arbitration
  • USA
  • 07 May 2020

Existing dispute resolution proceedings are inevitably experiencing the impact of the COVID-19 outbreak. Where possible, hearings have been delayed or relocated. However, with many lockdowns extended for the foreseeable future, some hearings will still need to be held. Notably, the American Arbitration Association acknowledges that these are appropriate times to permit (and indeed require) the use of viable alternatives to in-person hearings.

New York Appellate Division confirms narrow scope of manifest disregard doctrine
  • USA
  • 30 May 2019

The New York Appellate Division has reaffirmed that the manifest disregard doctrine is a "severely limited… doctrine of last resort" that requires more than a mere error of law to warrant vacating an arbitral award. This case involved the acquisition contracts between Daesang and NutraSweet, under which NutraSweet could rescind the deal if it was sued for antitrust law violations. After NutraSweet exercised this right, Daesang commenced an arbitration proceeding for breach of contract.

Disclosure in international arbitration: using US courts to obtain discovery for non-US proceedings
  • USA
  • 23 May 2019

Unbeknown to many, Section 1782 of Title 28 of the US Code permits parties to obtain discovery in the United States in aid of non-US legal proceedings, including – in some instances – international arbitrations. Such discovery can include documents and sworn testimony (eg, depositions). In conducting an arbitration seated outside the United States (or other non-US legal proceedings), it is useful to understand the mechanics, requirements and key issues of Section 1782 discovery.


Aviation

Contributed by Cozen O'Connor
DHS postpones REAL ID deadline again
  • USA
  • 12 May 2021

The US Department of Homeland Security has again postponed the deadline for compliance with the REAL ID Act 2005. Under the REAL ID Act, federal agencies may not accept state-issued driver's licences or ID cards for 'official purposes' – including clearance through Transport Security Administration security checkpoints at airports – unless those documents meet certain minimum requirements. The deadline extension is welcome news for US airlines and the US travel industry.

Airlines and aviation contractors to receive additional $15 billion under Rescue Plan Act
  • USA
  • 24 March 2021

The Rescue Plan Act 2021 was recently signed into law, providing much-needed relief that will enable airlines and aviation contractors to keep employees on payrolls. The act provides eligible air carriers and eligible contractors with $14 billion and $1 billion in financial assistance, respectively, exclusively for the continuation of employee wages, salaries and benefits.

CDC mask mandate versus rights of passengers with disabilities
  • USA
  • 03 March 2021

Air carriers must comply with federal law that mandates mask wearing but also accommodate passengers with a disability that prevents them from wearing a mask. To guide carriers, the Department of Transport recently issued a notice of enforcement policy describing the factors which it will take into consideration when deciding how to enforce these potentially conflicting obligations.

DOT confirms that comfort animals are not service animals
  • USA
  • 23 December 2020

The US Department of Transportation has issued a new regulation which substantially revises its rules governing the transportation of service animals on board aircraft. Under the new regulation, airlines will no longer be required to transport emotional support or comfort animals in cabin. Airlines will be required to transport only service dogs (and not other species) and a passenger with a disability may bring a maximum of two service dogs in cabin.

Senate bill would require TSA temperature checks at US airports
  • USA
  • 14 October 2020

Under a bipartisan bill introduced in the US Senate, the Transportation Security Administration (TSA) would be required to conduct temperature checks on all passengers and other individuals seeking entry to an airport's sterile area. Airlines have been lobbying for the TSA to conduct such temperature checks for several months. During a 120-day pilot programme, the TSA would screen all individuals for a fever of 100.4 degrees Fahrenheit or higher before they would be allowed to enter an airport's sterile area.


Banking & Financial Services

Contributed by Shearman & Sterling LLP
Getting smart: financial regulators seek input on AI
  • USA
  • 13 April 2021

Various federal agencies recently issued a request for information (RFI) which seeks insight into the financial industry's use of AI in the provision of financial services to customers and appropriate AI governance, risk management and controls. The RFI reflects the federal agencies' increasing interest in AI, particularly regarding the risks that it poses to consumers and the safety and soundness of financial institutions.

LIBOR transition update: financial institutions brace for exam scrutiny
  • USA
  • 06 April 2021

The Federal Reserve Board recently published guidance for examiners on how to assess a supervised firm's progress in its transition away from the use of the London Interbank Offered Rate (LIBOR). This article summarises the notable features of this guidance. Firms should allocate adequate attention and resources to the effective design, implementation and execution of their LIBOR transition plans

OCC releases self-assessment tool to help institutions prepare for LIBOR cessation
  • USA
  • 30 March 2021

The London Interbank Offered Rate (LIBOR) is being phased out and replaced by risk-free rates globally. The Office of the Comptroller of the Currency recently issued a self-assessment tool to help national banks, federal savings associations and federal branches and agencies of foreign banking organisations evaluate their preparedness for LIBOR's expected cessation.

Annual reports: SEC updates and other changes to consider for Form 20-F
  • USA
  • 23 March 2021

In 2020 the Securities and Exchange Commission (SEC) issued new guidance and adopted amendments to its rules and forms, including Form 20-F, to modernise and simplify disclosure requirements. Registrants should consider the guidance on key performance indicators and management discussion and analysis disclosure, and the related amendments, when preparing Form 20-F. For companies with a calendar year end, Form 20-F must be filed with the SEC by 30 April 2021.

Annual reports: developments and trends to consider for Form 20-F
  • USA
  • 16 March 2021

It is time for foreign private issuers to prepare their annual reports on Form 20-F. For companies with a calendar year end, Form 20-F must be filed with the Securities and Exchange Commission (SEC) by 30 April 2021. This article discusses the developments, trends and topics that may be the SEC's areas of focus during the 2021 review process.


Competition & Antitrust

Contributed by Baker & Miller PLLC
Supreme Court clarifies scope of FTC's powers and prohibits it from common strategy for seeking monetary relief
  • USA
  • 06 May 2021

More than four decades after the Federal Trade Commission began filing consumer protection actions in federal court for retroactive monetary relief without first completing an administrative proceeding, and more than two decades after it began using this same approach in antitrust cases, the Supreme Court has finally weighed in on the practice, unanimously declaring that it has never been authorised by law.

Novel court ruling offers insight into antitrust exemptions and legitimate competitor communications
  • USA
  • 29 April 2021

The District of Columbia District Court recently issued the first judicial interpretation of 49 US Code Section 10706(a)(3)(B)(ii), which sets out an evidentiary exemption relating to certain agreements among railroads. On its face, the decision's reach appears limited. However, the opinion provides insight into the judicial interpretation of antitrust exemptions and practical reminders for rail and other industries that have legitimate, and sometimes legally protected, communications with competitors.

Conceding the battle, but still waging the war: FTC will continue to target patent licensing practices
  • USA
  • 22 April 2021

It may be tempting to draw conclusions from the Federal Trade Commission's (FTC's) recent decision to abandon its antitrust case against Qualcomm, but companies should not construe this as an indication that the FTC will cease pursuing similar cases. Companies considering adopting licensing practices similar to those used by Qualcomm, and particularly companies that arguably have market power in the same or a related market, should carefully consider the risks of becoming an enforcement target.

Pending legislative attempts to curb tech giants have much broader implications
  • USA
  • 25 March 2021

A recent influx of proposed federal and state legislation seeks to strengthen and modernise the antitrust laws and expand antitrust enforcement. The political momentum behind these attempts reflects noisy bipartisan support for legislators to do something about the ever-growing economic power and political influence of Google, Facebook, Amazon and other so-called 'tech giants'. However, the proposed legislative 'solutions' may go well beyond the original causes of political concern.

Do three rights make a wrong? Private party challenging consummated merger can obtain divestiture years later
  • USA
  • 25 February 2021

For the first time, a private party has successfully challenged an acquisition and obtained an order requiring a divestiture of a company that had been acquired years before the case was filed. In a highly anticipated decision, a court of appeals has affirmed that order. The decision serves as a stark reminder of the antitrust litigation risk that the acquiring party to a transaction faces, potentially even years after the transaction closes.


Corporate & Commercial

Contributed by Cooley LLP
Do boards have enough ESG expertise?
  • USA
  • 08 March 2021

One topic that directors were asked about in the PwC 2020 Annual Corporate Directors Survey was environmental, social and corporate governance (ESG). Although 55% of directors surveyed considered ESG issues to be a part of the board's enterprise risk management discussions, 49% saw a link between ESG issues and the company's strategy and 51% recognised that ESG issues were important to shareholders, directors were not convinced that they are connected to the company's bottom line.

New initiative asks companies to disclose board racial and ethnic composition
  • USA
  • 23 November 2020

Legislation (eg, California's board racial and ethnic and gender diversity mandates) is not the only route that diversity advocates are employing to diversify the ranks of corporate directors. Moral suasion, together with implicit or explicit voting pressure, is another avenue that some groups are pursuing. One group following this path is the Russell 3000 Board Diversity Disclosure Initiative, which sent a letter to companies on the Russell 3000, urging that they all disclose board racial, ethnic and gender data.

How has COVID-19 affected CEO pay?
  • USA
  • 12 October 2020

CEO pay attracts a lot of attention in ordinary times, but in times of severe economic distress when corporate performance and stock prices plummet and companies engage in substantial lay-offs, furloughs and pay cuts for employees, CEO pay can attract intense scrutiny. In those circumstances, paying the same or greater levels of CEO compensation can seem unfair to employees and invite shareholder and public criticism. How have boards addressed this issue?

FRC updates company guidance on reporting exceptional or similar items and alternative performance measures
  • USA
  • 08 June 2020

The Financial Reporting Council recently published an updated version of its guidance for companies on corporate governance and reporting during the COVID-19 crisis to include new sections on exceptional or similar items and alternative performance measures.

New statement on key reminders for audit committees
  • USA
  • 10 February 2020

While company managements have long engaged with shareholders at annual meetings and investor presentations, the notion of director engagement with shareholders is a more recent development. But why is shareholder engagement increasingly being added to corporate director job descriptions? This article posits several theories for the trend and identifies the most common engagement topics, provides data on the frequency of engagement and highlights emerging practices relating to director engagement.