On June 4, 2015, the U.S. Environmental Protection Agency (EPA) published a draft study report entitled Assessment of the Potential Impacts of Hydraulic Fracturing for Oil and Gas on Drinking Water Resources, which analyzes the relationship between hydraulic fracturing and drinking water. The draft report reflects over four years of work by EPA; is the most robust report on this subject to date; and includes the review and analysis of over 950 published sources and reports, data from at least 20 states and 1,500 counties, and participation by stakeholders from states, non-governmental organizations, tribes, industry, academia, the public, and EPA’s Science Advisory Board (SAB). This Client Alert summarizes the key findings of the draft report, namely that hydraulic fracturing has not had widespread or systemic negative impacts on the nation’s drinking water.
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Hardening Targets: The NSA Guide to Defending Against Destructive Malware
Faced with the increasing threat of cyber attack, boards of directors and C-level executives of public and private companies alike are becoming increasingly aware of the need to establish and maintain strategies at the C-level for preventing, detecting, and containing cybersecurity threats. While high-level decision makers may not be directly involved with the day-to-day operations of their information technology or data assets, it is becoming increasingly clear that they must have at minimum a basic understanding of how company network systems susceptible to cyberattack are managed to fight cyberattacks. As Nick Milne-Home of the software lifecycle management firm 1E pointed out recently at the MIT Sloan CIO Symposium, “If you focus on security only, without systems management, it is like putting a state-of-the-art burglar alarm into your home while leaving the doors and windows open.”
While federal policymakers have signaled deep concern about cybersecurity issues and the important role these issues play in the health of the nation’s economy, Congress has not yet made any significant move to compel business practices in the area of cybersecurity. In lieu of legislation, several federal agencies have developed guidance as to what are considered “best practices” to reduce the risks associated with cybersecurity threats. However, much of the available guidance–for example, the February 2014 Cybersecurity Framework by the National Institute of Standards and Technology (NIST)–is aimed at IT experts, which makes it of limited use to audiences unfamiliar with technology industry jargon and other existing security standards that help to form the agency guidance.
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Treasury Issues Proposed Regulations on Qualifying Income for Master Limited Partnerships
On May 5, 2015, the Treasury Department issued proposed regulations that provide guidance on whether income of a master limited partnership (MLP) related to minerals or natural resources constitutes “qualifying income” for purposes of classifying the MLP as a partnership (and not as a corporation) for tax purposes.
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Three Revisions to EPA’s CERCLA Model Settlement Documents Every PRP Should Know About
Last Fall, EPA published revisions to its 2009 guidance on EPA’s model agreements for settlements under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), entitled Revisions to 2009 ARC Memo and Issuance of Revised CERCLA Past Cost, Peripheral, De Minimis, De Micromis, and Municipal Solid Waste Settlement Models (the Guidance). Although the Guidance covers a number of topics, this Alert focuses on changes affecting potential contribution rights and the scope of potential contribution protection under CERCLA § 113(f). While the revisions are largely helpful in nature, companies and other entities affected by CERCLA should be aware of the recent changes, as the changes may affect their ability to recover costs or receive contribution protection.
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Hacked! What To Do if Your Company is Cyber Attacked
You are on the 13th tee of your Saturday morning golf game. This game and the rest of your foursome are just the distractions you need from your job as CFO of a rapidly growing electronic parts distribution company. When you glance at your silenced smartphone, however, you notice a string of missed calls from your chief technology officer. You step back from the tee to listen to several messages, including a nearly hysterical one from your CEO, ranting about the company website, servers, unscrupulous hackers, and other indecipherable topics. The gist is that the company website and servers have been hacked and several types of sensitive information may have been accessed, including customer information and possibly even company trade secrets.
So what do you do next?
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Avoiding Liability in Public Securities Offerings: The Lesson of Omnicare
On March 24, 2015, the U.S. Supreme Court decided Omnicare v. Laborers District Council Construction Industry Pension Fund, a case with which public companies should be familiar before their next issuance of securities.
Omnicare addresses the circumstances in which companies are liable under Section 11 of the Securities Act of 1933 for statements in registration statements that later prove to be incorrect. The Court held that liability may exist if any of the following are true: (i) a statement of fact is incorrect, (ii) a statement of opinion is not sincerely held, or (iii) a statement of opinion omits accompanying disclosure of material facts supporting the opinion that a reasonable investor would consider important or disclosure that the opinion is tentative.
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Online Retailers’ Supreme Court Win on State Taxation Fight May Be Short-Lived
A March 2015 United States Supreme Court case delivers a short-term victory to online retailers who do not collect sales taxes in Colorado, while at the same time sending a clear warning about the future viability of the practice.
Out-of-state retailers without a physical presence in a state have not been required to collect sales taxes under a nearly 50-year-old Supreme Court case involving a catalog retailer, Quill Corp. v. North Dakota. In an effort to remove the sales tax advantage enjoyed by many online retailers, Colorado enacted a statute in 2010 requiring non-tax-collecting online retailers whose gross sales in Colorado exceed $100,000 to collect and report information to the Colorado Department of Revenue on their Colorado customers. The object of the law was to help the Department of Revenue collect use taxes–the state’s substitute for sales taxes for purchases made from out-of-state retailers, which are generally required to be paid directly to the state by the customers.
In Direct Marketing Association v. Brohl, a trade group representing online and catalog retailers convinced a federal district court that Colorado’s information collection and reporting requirements were unconstitutional. The Court of Appeals later held that the district court did not have jurisdiction over the case, but the recent Supreme Court opinion allows the challenge to Colorado’s law to continue by deciding that the case could be heard in federal court.
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The Federal Government Joins the Fray: The BLM’s Final Hydraulic Fracturing Rules
On March 20, 2015, the Bureau of Land Management (BLM) issued its final rules for hydraulic fracturing on federal and tribal lands (Final Rules). The Final Rules govern approximately 700 million subsurface acres overseen by the BLM, and they culminate a rulemaking process that began in November 2010. Among other things, they are intended to ensure the integrity of hydraulically fractured wells, protect water quality, and provide the public with information on fracturing fluid constituents. During the rulemaking process, the BLM received more than 1.5 million public comments, with some commenters arguing that new federal rules will duplicate current state regulations and impose unnecessary regulatory burdens, while others argued that the proposed rules did not go far enough. Assistant Secretary for Land and Minerals Management Janice Schneider said the Final Rules “will protect public health and the environment during and after hydraulic fracturing operations at a modest cost while both respecting the work previously done by the industry, the states and the tribes and promoting the adoption of more protective standards across the country.” However, the Final Rules are likely to continue to draw criticism from all sides as they are implemented, and have already been challenged in federal district court.
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What Net Neutrality Will Mean for Cyber-Street
The Federal Communications Commission’s publication of new rules on March 12, 2015 treating internet service providers as common carriers (akin to utility companies) is seen by many to be a meaningful step toward ensuring “net neutrality” or an “open internet.” Others fear the move could significantly hamper internet innovation due to unnecessary and uncertain government regulation. However, it is difficult to predict at this time what effect the FCC’s new rules – or the bill introduced in the House of Representatives on March 4, 2015, intended to roll back the FCC’s decision before the final rules had even been published – will have on everyday life in cyberspace for consumers and business-to-business users.