Fraser Blog | Fraser Trebilcock Blog

January Update: Legal, Legislative and Regulatory Developments Impacting the Michigan Cannabis Industry

Despite some bumps in the road—which are to be expected for any nascent industry—the year 2021 was a remarkable and record-breaking one for the legal cannabis industry in Michigan. As we gear up for what’s ahead in 2022, here are a few recent, noteworthy developments that those competing in the industry should be aware of.

Governor Signs Legislation Easing Financial Reporting Requirements for Medical Marijuana Growers

Medical marijuana growers in Michigan previously were required to submit financial statements to the Michigan Regulatory Agency (“MRA”) and the municipality in which they operate every state fiscal year. That requirement was eased with Governor Whitmer’s signing of Michigan House Bill 4921, which amends the Michigan Medical Marijuana Licensing Act to allow medical marijuana growers to submit financial statements every three years. A copy of the bill, which became effective as of December 7, 2021, can be viewed here.

The MRA issued a bulletin on January 3, 2022, explaining that, based on the legislation, the MRA will revise the AFS report forms and combine the AFS requirements for medical and adult-use licensees into a consolidated report.

The MRA also explained that in the interim, the requirements for annual financial statements are as follows:

An annual financial statement will not be required for fiscal year 2022, unless a licensee is required to file a fiscal year 2022 report as a condition of a final order.
Licensees must file an annual financial statement for fiscal year 2020 and fiscal year 2021.

Most Recent Sales Numbers Show that Industry is Strong

The MRA’s most recent financial numbers for Michigan’s adult-use marijuana market show strong sales in November of 2021 (the most recent data available from the MRA at the time this was published). Combined medical and recreational sales were approximately $153 million in November. In addition, a recent report by the Marijuana Policy Project estimates that Michigan will collect nearly $350 million in taxes related to recreational marijuana sales in 2021, which includes $80 million in sales tax and $270 million in excise tax.

Massive Marijuana Recall Cut in Half, MRA Asks Judge to Reconsider

In mid-November, the MRA issued a massive recall affecting more than $200 million in marijuana products tested by Viridis Laboratories and Viridis North over a three-month period. Viridis filed a lawsuit, and the Michigan Court of Claims, on December 3, partially granted Viridis’ request for a preliminary injunction that halted the recall for Viridis North but not Viridis Laboratories.

On December 15, the MRA requested that the judge reconsider his decision that limited the scope of the recall to just Viridis Laboratories. The MRA asserted that it had gathered more testing data since the judge’s initial decision and found 26 percent of Viridis North recalled and retested source packages failed microbial retesting for total yeast and mold.

On December 20, 2021, the Court of Claims denied the MRA’s motion for reconsideration.

We will continue to keep you apprised of these and other important developments in the Michigan legal cannabis industry. If you have any questions, please contact Paul Mallon or your Fraser Trebilcock attorney.

Paul C. Mallon, Jr. is Shareholder and Chair of Fraser Trebilcock’s cannabis law practice. You can reach him at pmallon@fraserlawfirm.com or (313) 965-9043.

Client Alert/Reminder: Form W-2 Reporting Due for Employer-Provided Health Care / Disclosure Due to CMS for Medicare Part D

Upcoming Deadlines: (1) Form W-2 Reporting of Employer-Provided Health Coverage; and (2) Medicare Part D Notices to CMS

Reminder: Form W-2 Reporting on Aggregate Cost of Employer Sponsored Coverage

Unless subject to an exemption, employers must report the aggregate cost of employer-sponsored health coverage provided in 2021 on their employees’ Form W-2 (Code DD in Box 12) issued in January 2022. Please see IRS Notice 2012-09 and our previous e-mail alerts for more information.

The following IRS link is helpful and includes a chart setting forth various types of coverage and whether reporting is required; see here.

Please note this is a summary only and Notice 2012-09 should also be consulted. The IRS has issued questions and answers regarding reporting the cost of coverage under an employer-sponsored group health plan, which can be found here.

If you have questions regarding whether you or your particular benefits are subject to reporting, please feel free to contact us.

Deadline Coming Up for Calendar Year Plans to Submit Medicare Part D Notice to CMS

As you know, group health plans offering prescription drug coverage are required to disclose to all Part D-eligible individuals who are enrolled in or were seeking to enroll in the group health plan coverage whether such coverage was “actuarially equivalent,” i.e., creditable. (Coverage is creditable if its actuarial value equals or exceeds the actuarial value of standard prescription drug coverage under Part D). This notice is required to be provided to all Part D eligible persons, including active employees, retirees, spouses, dependents and COBRA qualified beneficiaries.

The regulations also require group health plan sponsors with Part D eligible individuals to submit a similar notice to the Centers for Medicare and Medicaid Services (“CMS”). Specifically, employers must electronically file these notices each year through the form supplied on the CMS website.

The filing deadline is 60 days following the first day of the plan year. If you operate a calendar year plan, the deadline is the end of February. If you operate a non-calendar year plan, please be sure to keep track of your deadline.

At a minimum, the Disclosure to CMS Form must be provided to CMS annually and upon the occurrence of certain other events including:

Within 60 days after the beginning date of the plan year for which disclosure is provided;
Within 30 days after termination of the prescription drug plan; and
Within 30 days after any change in creditable status of the prescription drug plan.

The Disclosure to CMS Form must be completed online at the CMS Creditable Coverage Disclosure to CMS Form web page found here.

The online process is composed of the following three step process: Enter the Disclosure Information;
Verify and Submit Disclosure Information; and
Receive Submission Confirmation.

The Disclosure to CMS Form requires employers to provide detailed information to CMS including but not limited to, the name of the entity offering coverage, whether the entity has any subsidiaries, the number of benefit options offered, the creditable coverage status of the options offered, the period covered by the Disclosure to CMS Form, the number of Part D eligible individuals, the date of the notice of creditable coverage, and any change in creditable coverage status.

For more information about this disclosure requirement (including instructions for submitting the notice), please see the CMS website for updated guidance found here.

As with the Part D Notices to Part D Medicare-eligible individuals, while nothing in the regulations prevents a third-party from submitting the notices (such as a TPA or insurer), ultimate responsibility falls on the plan sponsor.

This email serves solely as a general summary of the Form W-2 reporting requirements and CMS disclosure for Medicare Part D.

If you have any questions, please contact your Fraser Trebilcock attorney.

Client Alert: PCORI Fees Due by July 31, 2022!

The Internal Revenue Service recently released Notice 2022-04 which sets forth the PCORI amount imposed on insured and self-funded health plans for policy and plan years that end on or after October 1, 2021 and before October 1, 2022.

Background

The Patient-Centered Outcomes Research Institute (PCORI) fee is used to partially fund the Patient-Centered Outcomes Research Institute which was implemented as part of the Patient Protection and Affordable Care Act.

The PCORI fees were originally set to expire for plan years ending before October 1, 2019. However, on December 20, 2019, the Further Consolidated Appropriations Act was enacted and extended the fee to plan years ending before October 1, 2029.

The fee is calculated by using the average number of lives covered under a plan and the applicable dollar amount for that plan year. Code section 4375 imposes the fee on issuers of specified health insurance policies. Code section 4376 imposed the fee on plan sponsors of applicable self-insured health plans. This Client Alert focuses on the latter.

Adjusted Applicable Dollar Amount

Notice 2022-04 sets the adjusted applicable dollar amount used to calculate the fee at $2.79. Specifically, this fee is imposed per average number of covered lives for plan years that end on or after October 1, 2021 and before October 1, 2022. For self-funded plans, the average number of covered lives is calculated by one of three methods: (1) the actual count method; (2) the snapshot method; or (3) the Form 5500 method.

Deadline and How to Report

The PCORI fee is due by July 31, 2022 and must be reported on Form 720.

Instructions are found here (see Part II, pages 8-9).

The Form 720 itself is found here (see Part II, page 2).

Form 720, as well as the attached Form 720-V to submit payment, must be used to report and pay the requisite PCORI fee to the IRS. While Form 720 is used for other purposes to report excise taxes on a quarterly basis, for purposes of this PCORI fee, it is only used annually and is due by July 31st of each relevant year.

As previously advised, plan sponsors of applicable self-funded health plans are liable for this fee imposed by Code section 4376. Insurers of specified health insurance policies are also responsible for this fee.

For plan years ending on or after October 1, 2017 and before October 1, 2018, the fee is $2.39 per covered life.
For plan years ending on or after October 1, 2018 and before October 1, 2019, the fee is $2.45 per covered life.
For plan years ending on or after October 1, 2019 and before October 1, 2020, the fee is $2.54 per covered life.
For plan years ending on or after October 1, 2020 and before October 1, 2021, the fee is $2.66 per covered life.
For plan years ending on or after October 1, 2021 and before October 1, 2022, the fee is $2.79 per covered life.

Again, the fee is due no later than July 31 of the year following the last day of the plan year.

As mentioned above, there are specific calculation methods used to configure the number of covered lives and special rules may apply depending on the type of plan being reported. While generally all covered lives are counted, that is not the case for all plans. For example, HRAs and health FSAs that are not excepted from reporting only must count the covered participants and not the spouses and dependents. The Form 720 instructions do not outline all of these rules.

More information about calculating and reporting the fees can be found here.

Questions and answers about the PCORI fee and the extension may be found here.

As you are well aware, the law and guidance are continually evolving. Please check with your Fraser Trebilcock attorney for the most recent updates.

This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions.

Elizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, in both 2019 and 2015, Beth was selected as “Lawyer of the Year” in Lansing for Employee Benefits (ERISA) Law by Best Lawyers, and in 2017 as one of the Top 30 “Women in the Law” by Michigan Lawyers Weekly. Contact her for more information on this reminder or other matters at 517.377.0826 or elatchana@fraserlawfirm.com.

Brian T. Gallagher is an attorney at Fraser Trebilcock specializing in ERISA, Employee Benefits, and Deferred and Executive Compensation. He can be reached at (517) 377-0886 or bgallagher@fraserlawfirm.com.

Colleges Object to “Name, Image and Likeness” Public Information Requests from News Media

As the University of Georgia prepares to compete in the NCAA College Football Playoff championship, it’s also fighting another battle, on another playing field: defending itself against public record lawsuits following its refusal to disclose its athletes’ “name, image and likeness” contracts. A similar lawsuit has also been brought against Louisiana State University.

By way of background, in 2021, the NCAA announced an interim policy that allows student-athletes from all three divisions to monetize their name, image and likeness (often referred to as “NIL”). The new policy went into effect on July 1, 2021.

The NCAA’s new policy was enacted on the cusp of laws taking effect in a number of states, such as Alabama, Florida, Georgia, Mississippi, New Mexico and Texas, which allow NCAA athletes to monetize their NIL.

The lawsuits against the University of Georgia and Louisiana State University were filed by two news organizations who sought details of NIL contracts, arguing that such records are not exempt from a public records request. In refusing the requests, the universities cited the Family Educational Rights and Privacy Act (“FERPA”), a federal law which protects certain records from public release without student or parent consent.

The court in the Louisiana State University case ultimately ruled against the news organization. At the time this post was written, the case against the University of Georgia was still pending.

As NIL deals become more common, and the dollar amounts of those deals grow larger, there will be increasing media scrutiny of them. As schools push back against public records requests, more lawsuits will be filed, and FERPA will likely continue to be cited as grounds for withholding records. Until a federal court of appeals has a chance to weigh in, there may be a patchwork of decisions with varying outcomes as to the question of whether the public has a right to the details of NIL deals at public universities.

We will continue to keep you apprised of developments in this evolving area of higher education law and regulations.

If you have any questions, please contact Ryan Kauffman.

Ryan K. Kauffman is a Shareholder at Fraser Trebilcock with more than a decade of experience handling complex litigation matters and representing higher education institutions. You can contact him at rkauffman@fraserlawfirm.com or 517.377.0881.

UPDATE: COVID-19 Vaccination Mandates Head for Resolution from the United States Supreme Court January 7, 2022

Occupational Safety and Health Administration’s (OSHA) COVID-19
Vaccination and Testing Emergency Temporary Standard
(Vaccine Mandate for Private Employers of 100+)

Following a nationwide injunction prohibiting implementation and enforcement, on December 17, 2021, the Sixth Circuit Court of Appeals dissolved the stay previously placed on OSHA’s Emergency Temporary Standard (“ETS”) … meaning the standard is currently in full effect nationwide.

After reviewing the language of the Occupational Safety and Health Act and the history of OSHA’s participation in curbing other infectious diseases, the court held “OSHA’s authority includes protection against infectious diseases that present a significant risk in the workplace, without regard to exposure to that same hazard in some form outside the workplace. OSHA’s [responsibility] to protect the safety and health of employees, moreover, is hardly limited to hard hats and safety goggles. OSHA has wide discretion to form and implement the best possible solution to ensure the health and safety of all workers, and has historically exercised that discretion.”

Shortly after the court reinstated the vaccine mandate, OSHA announced that it would not issue citations for noncompliance with the mandate’s requirements before January 10, 2022 and would not enforce the standard’s testing requirements until February 9, 2022, so long as the employer is exercising reasonable, good faith efforts to come into compliance with the standard.

Nonetheless, the Sixth Circuit decision of consolidated cases reinstating the mandate was appealed to the United States Supreme Court where the Court decided that it will hear oral argument on applications for stay on January 7, 2022. Until the validity of the mandate is decided by the US Supreme Court, the Sixth Circuit reinstatement and OSHA’s new deadlines are still in effect.

Center for Medicare and Medicaid Services’ (CMS) Interim
Final Rule: “Omnibus COVID-19 Health Care Staff Vaccination”

There have not been many changes since the December 15, 2021 Fifth Circuit stay to the nationwide preliminary injunction of the health care worker vaccine mandate. As mentioned in our latest vaccine mandate blog post, the Fifth Circuit decision prohibited implementation and enforcement of the mandate in 24 states (Louisiana, Montana, Arizona, Alabama, Georgia, Idaho, Indiana, Mississippi, Oklahoma, South Carolina, Utah, West Virginia, Kentucky, Ohio, Alaska, Arkansas, Iowa, Kansas, Missouri, Nebraska, New Hampshire, North Dakota, South Dakota, and Wyoming).

On the same day however, a District Court in the Northern District of Texas granted the state’s request for a preliminary injunction, enjoining the Department of Health and Human Services and CMS from implementing and enforcing the mandate against Medicare and Medicaid certified-providers and suppliers in the state of Texas. So adding to that list of states where the mandate is not effective, is Texas, bringing the total to 25. Unlike OSHA, CMS has not announced new deadlines or whether they will begin to enforce the requirements on those providers and suppliers in the other applicable 25 states. CMS appears to be waiting on a final resolution from the US Supreme Court. The validity of this mandate is also set to be heard for oral argument before the US Supreme Court on January 7, 2022.

As the future of both mandates fall upon the conservative-leaning Justices of the United States Supreme Court, it is hard to predict an outcome. Given the Supreme Court’s recent validation of state vaccine mandates in Maine and New York, employers should consult with legal counsel to navigate applicable mandate requirements and stay up to date on recent changes through litigation.

This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions.

Lauren D. Harrington is an associate attorney at Fraser Trebilcock focusing on Employment Law. You can reach her at 517.377.0874, or email her at lharrington@fraserlawfirm.com.

Michigan Supreme Court Eliminates Mandatory Case Evaluation Requirement for Tort Cases, Effective January 1, 2022

The Michigan Supreme Court, by Order dated December 2, 2021, eliminated the mandatory case evaluation requirement for all tort cases in Michigan courts, effective January 1, 2022. This change, and others, are reflected in amendments to Michigan Court Rule 2.403.

Under the amended rule, the parties may stipulate to, and the court may approve, an alternative dispute resolution process, such as mediation or facilitation in the discovery plan. However, case evaluation remains the default method of dispute resolution.

The Supreme Court also did away with Michigan Court Rule 2.403(O), which outlines a party’s potential liability for costs to the extent it rejects a case evaluation award. According to the soon-to-be-deleted rule:

“If a party has rejected an evaluation and the action proceeds to verdict, that party must pay the opposing party’s actual costs unless the verdict is more favorable to the rejecting party than the case evaluation. However, if the opposing party has also rejected the evaluation, a party is entitled to costs only if the verdict is more favorable to that party than the case evaluation.”

As of January 1, 2022, there will be no liability for an opposing party’s costs when a party rejects the case evaluation and proceeds to trial, even if they do not prevail at trial or by way of motion.

The new rule also reduces the number of days in advance the parties must submit case evaluation materials from fourteen (14) to seven (7).

These changes will give parties to litigation and their legal counsel more control and flexibility over how they develop and execute their litigation strategies.

If you have any questions about these issues, please contact your Fraser Trebilcock attorney.

Morgan, Thaddeus.jpg Thaddeus E. Morgan is a shareholder with Fraser Trebilcock and formerly served as President of the firm. Thad is the firm’s Litigation Department Chair and serves as the firm’s State Capital Group voting representative. He can be reached at tmorgan@fraserlawfirm.com or (517) 377-0877.

Matthew J. Meyerhuber is an associate at Fraser Trebilcock focusing on general litigation, environmental law, and real estate. Matthew can be reached at mmeyerhuber@fraserlawfirm.com or 517.377.0885.

UPDATE to the Center for Medicare and Medicaid Services’ (CMS) Interim Final Rule: “Omnibus COVID-19 Health Care Staff Vaccination”

Today, December 15, 2021, the United States Court of Appeals for the Fifth Circuit stayed the nationwide preliminary injunction pertaining to the CMS health care worker vaccine mandate. The court decided to limit the injunction to the 14 states that filed the initial action, including: Louisiana, Montana, Arizona, Alabama, Georgia, Idaho, Indiana, Mississippi, Oklahoma, South Carolina, Utah, West Virginia, Kentucky and Ohio. In a brief opinion, the court found little justification for issuing an injunction outside the 14 states that brought suit. Lacking was the need for “constitutional uniformity” or “the concern that patchwork rulings would undermine an injunction limited to certain jurisdictions.” The court held that ultimate resolution of the vaccine mandate would “benefit from the airing of competing views in our sister circuits.”

This decision did not impact the preliminary injunction over the 10 states that filed suit in Missouri v Biden, (ED Mo, Nov. 29, 2021) including: Alaska, Arkansas, Iowa, Kansas, Missouri, Nebraska, New Hampshire, North Dakota, South Dakota, and Wyoming. Meaning, that only the 24 states listed are currently protected by court order and are not required to comply with the CMS mandate. As for the other 26 states and territories, including Michigan, there is nothing prohibiting CMS from implementing and enforcing the mandate’s requirements. CMS has not yet provided further guidance as to whether it will enforce the mandate in eligible jurisdictions or wait until litigation is complete. The merits challenging the mandate have yet to be addressed. Nonetheless, health care providers and suppliers in eligible jurisdictions should prepare to comply given today’s ruling.

See further details about the mandate’s requirements in our prior blog post: Across the Board Halt on Vaccine Mandates: Employers, What Does That Mean for You?

This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions.

Lauren D. Harrington is an associate attorney at Fraser Trebilcock focusing on Employment Law. You can reach her at 517.377.0874, or email her at lharrington@fraserlawfirm.com.

Across the Board Halt on Vaccine Mandates: Employers, What Does That Mean for You?

The Biden administration faces setbacks as federal courts across the nation challenge several attempts to employ mandatory Covid-19 vaccinations, leaving employers in limbo. Whether you are a health care provider, federal contractor or private employer of 100 or more, here is the guidance you need to help navigate the current state of vaccine legislation:

As of today, agencies tasked with the execution of mandatory Covid-19 vaccination requirements pursuant to 86 Fed. Reg. 61555 (Health Care Workers), Executive Order 14042 (federal contractors), and 86 Fed. Reg. 61402 (Private Employers of 100+) have suspended all implementation and enforcement pending litigation in federal courts.

Center for Medicare and Medicaid Services’ (CMS) Interim Final Rule:
“Omnibus COVID-19 Health Care Staff Vaccination”

On November 4, 2021, CMS published a rule requiring staff working for Medicare-or Medicaid-certified providers to have the shots necessary to be fully vaccinated against COVID-19 by January 4, 2022 and to receive their first shot prior to December 6, 2021. The Rule applied to:

Ambulatory Surgery Centers.
Community Mental Health Centers.
Comprehensive Outpatient Rehabilitation Facilities.
Critical Access Hospitals.
End-Stage Renal Disease Facilities.
Home Health Agencies.
Home Infusion Therapy Suppliers.
Hospices.
Hospitals.
Intermediate Care Facilities for Individuals with Intellectual Disabilities.
Clinics, Rehabilitation Agencies, and Public Health Agencies as Providers of Outpatient Physical Therapy and Speech-Language Pathology Services.
Psychiatric Residential Treatment Facilities (PRTFs).
Programs for All-Inclusive Care for the Elderly Organizations (PACE).
Rural Health Clinics.
Medicare Federally Qualified Health Centers.
Long Term Care facilities.

Specifically excluded were: Religious Nonmedical Health Care Institutions, Organ Procurement Organizations, Portable X-Ray Suppliers, Assisted Living Facilities, Group Homes, Home and Community-based Services, and Physician’s Offices. All eligible staff, both current and new, working at a facility regardless of clinical responsibility or patient contact were required to comply, including: Facility Employees, Licensed Practitioners, Students, Trainees, Volunteers and Contracted Staff. Even those who performed duties offsite (such as home health, home infusion therapy, etc.) and individuals who entered into a CMS regulated facility were required to be fully vaccinated.

Under this rule, regulated employers were not only required to ensure full vaccination of its staff but to also develop processes for tracking staff vaccinations and verifying medical and religious based exemptions in alignment with federal law (ADA, Title VII of the Civil Rights Act of 1964, etc.). Those who failed to comply were advised they’d face penalties ranging from civil monetary penalties, to denial of payment, and even termination from the Medicare and Medicaid program.

As employers scrambled to meet the first dose December 6, 2021 deadline, the United States District Court for the Eastern District of Missouri, on November 29, 2021, issued a preliminary injunction against the implementation and enforcement of the Rule in ten states: Alaska, Arkansas, Iowa, Kansas, Missouri, Nebraska, New Hampshire, North Dakota, South Dakota, and Wyoming. See Missouri v Biden, (ED Mo, Nov. 29, 2021). And just a day later, on November 30, 2021, the United States District Court for the Western District of Louisiana issued a nationwide preliminary injunction to the same effect. See Louisiana v Becerra, (WD La, Nov. 30, 2021). Between the two of them, these injunctions cover all states, the District of Columbia and the US Territories. CMS has appealed both of these decisions and has filed motions for stays of these orders. Accordingly, as of December 2, 2021, CMS has suspended all activities related to the implementation and enforcement of the Rule pending future developments in the litigation.

Executive Order 14042 – Safer Federal Workforce Taskforce COVID-19 Workplace
Safety Guidance for Federal Contractors and Subcontractors

On September 9, President Biden signed Executive Order 14042, Ensuring Adequate COVID Safety Protocols for Federal Contractors, directing executive departments and agencies to ensure that contracts and contract-like instruments covered by the order include a clause requiring the contractor—and their subcontractors at any tier—to, for the duration of the contract, comply with all guidance for contractor or subcontractor workplace locations published by the Safer Federal Workforce Taskforce. The guidance published required contractors and subcontractors who work on contracts of a value over $250,000 to receive full Covid-19 vaccinations by January 18, 2022.

On October 29, 2021, the States of Georgia, Alabama, Idaho, Kansas, South Carolina, Utah and West Virginia, the governors of several of those states and various state agencies, including the Board of Regents of the University System of Georgia, filed suit seeking declaratory and injunctive relief against enforcement of Executive Order No. 14042. On November 19, 2021, the Director of the Office of Management and Budget (OMB) extended the deadline to comply (ensure full vaccination) from December 8th to January 18, 2022 and provided a public comment period through December 16, 2021. Unsatisfied, Plaintiffs amended their complaint and motion for preliminary injunction; and Intervenors and Amicus Curiae filed briefs in support of their positions. Oral arguments were held December 3, 2021.

In an order issued December 7, 2021, the District Court for the Southern District of Georgia Augusta Division: (1) granted the Associated Builders and Contractors, Inc. (“ABC”) motion to intervene, (2) denied the Associated Builders and Contractors of Georgia, Inc. (“ABC-Georgia”) motion to intervene, (3) found that the Plaintiffs showed a sufficient injury-in-fact to have standing, and (4) issued a nationwide preliminary injunction prohibiting the enforcement of the vaccine mandate for federal contractors and sub-contractors in all covered contracts in any state or territory of the United States pending litigation. See Georgia v Biden, (SD Ga, Dec. 7, 2021). While federal contractors and sub-contractors in Tennessee, Kentucky and Ohio were already discharged from the vaccine requirements due to the injunction issued by the Eastern District of Kentucky November 30, 2021, the injunction issued December 7th is nationwide, including all federal contractors and sub-contractors in Michigan.

In issuing its injunction, the court conducted an analysis of the four requisites entitling a party to a preliminary injunction: (1) a substantial likelihood of ultimate success on the merit; (2) that an injunction or protective order is necessary to prevent irreparable injury; (3) the threatened injury outweighs the harm the injunction would inflict on the non-movant; and (4) the injunction or protective order would not be adverse to the public interest. The court found that the Executive Order went far beyond addressing administrative and management issues in order to promote efficiency and economy in procurement and contracting, and instead in application, worked as a regulation of public health. Simply put, the court found that the Executive Order’s directive and resulting impact radiated too far beyond the purposes of the Procurement Act and the authority it granted to the President. In balancing the interests, the court empathized with the employees who would face termination if they refused the vaccine and stressed the burden on staffing employers would face. While the Safer Federal Workforce Task Force Guidance for Federal Contractors and Subcontractors has not yet been updated, it is clear that enforcement and implementation has been suspended.

Occupational Safety and Health Administration’s (OSHA) COVID-19
Vaccination and Testing Emergency Temporary Standard

On November 5, 2021, OSHA issued a standard requiring all employers with a total of 100 or more employees to develop, implement, and enforce a mandatory COVID-19 vaccination policy, with an exception for employers that instead adopt a policy requiring employees to elect either to get vaccinated or to undergo regular COVID-19 testing and wear a face covering at work.

The Standard applied to all private employers with 100 or more employees firm or corporate wide. In states with OSHA-approved State Plans, state and local-government employers, as well as private employers, with 100 or more employees were also subject to the requirements. Those who were not required to comply included:

workplaces covered under the Safer Federal Workforce Task Force COVID-19 Workplace Safety Guidance for Federal Contractors and subcontractors;
settings where any employee provided healthcare services or healthcare support services pursuant to the Healthcare ETS (§ 1910.502);
employers with fewer than 100 employees in total;
and, public employers in states without state plans.

The requirements of the Standard did not apply to employees who did not report to a workplace where other individuals were present, employees who work entirely remote, or employees who work exclusively outdoors.

Employers were given 30 days to come into compliance for most requirements and 60 days for others. Nonetheless, before deadlines approached on November 12, 2021 a nationwide stay was granted by the U.S. Court of Appeals for the Fifth Circuit (with jurisdiction over Louisiana, Mississippi, and Texas) prohibiting further effect and enforcement. See BST Holdings, LLC v OSHA, (CA 5, Nov. 6, 2021). The stay is in effect while the U.S. Court of Appeals for the Sixth Circuit decides the merits of the challenges. The Sixth Circuit was chosen at random to hear the consolidated cases through a lottery system under the procedures governing multi-district litigation. As the Sixth Circuit is predominately comprised of judges nominated by former Republican presidents, those who oppose the mandate foresee the selected jurisdiction will aid in a successful final invalidation. As of December 8, 2021, the US Senate voted 52 to 48 blocking the mandate from enforcement. The resolution still needs to pass through the House of Representatives and President Biden himself. Accordingly, as of November 12, 2021, OSHA has suspended all activities related to the implementation and enforcement of the Rule pending future developments in the litigation.

Moving Forward for Employers

As discussed above, the suspension of these mandates are due to temporary equitable remedies issued by federal district and appellate courts. There has yet to be a final determination on the validity of any Covid-19 vaccine mandate. The US Supreme Court is currently not posed to address this issue, and Congress has yet to do so either. Until vaccination requirements are set in stone, employers are in position to choose. Employers are free to encourage their staff to receive the vaccine, and employers can also wait until a final determination has been issued. If you are an employer with questions on how these mandates apply to your organization, or would like to establish your own Covid-19 vaccine policies and procedures, please connect with an attorney at Fraser Trebilcock. Our team is well-versed in these issues and ready to assist as more information becomes available.

This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions.

Lauren D. Harrington is an associate attorney at Fraser Trebilcock focusing on Employment Law. You can reach her at 517.377.0874, or email her at lharrington@fraserlawfirm.com.

Financial Amnesty for Uninsured Michigan Drivers Ends January 1, 2022

In 2020, Governor Whitmer signed automotive no-fault reform legislation into law. One of the objectives of the new law was to get more drivers in Michigan insured given that Michigan has historically had high numbers of uninsured drivers on the roads, and the new law established an amnesty program meant to address this issue. According to reports, 20% of Michiganders and 60% of Detroiters were allegedly driving without insurance when the reforms took effect.

Beginning on July 2, 2020, uninsured drivers could obtain coverage without penalties. Generally, insurance companies will impose penalties and coverage restrictions for drivers with lapsed coverage. Under the law, during the amnesty period, insurers are not permitted to limit coverage, charge a reinstatement fee, or increase the premium for a driver solely due to a lapse in coverage.

That will soon change. Drivers who remain uninsured have until January 1, 2022 to take advantage of the financial amnesty by obtaining coverage. Thereafter, the limitations on insurance companies’ abilities to impose penalties on those with lapsed coverage will be lifted.

Emily M. Vanderlaan is a litigation associate at Fraser Trebilcock serving some of the largest and most sophisticated insurers in Michigan. From case evaluation, to settlement negotiations, to trial and appeal work, Emily has experience representing insurance companies in a wide range of cases in Michigan state courts. You can reach her at (517) 377.0882 or at evanderlaan@fraserlawfirm.com.

Why You May Need a Certificate of Trust When Selling Real Estate in Michigan

A last will and testament and a living trust are two of the most common estate planning methods. A living trust is attractive for many because it provides for an efficient and effective disposition of assets to loved ones, and unlike a will a living trust avoids probate court.

Once a trust is established it must be funded. Funding a trust is the process of transferring ownership of assets from the individual(s) who established the trust to the trustee of the trust, which involves titling assets in the name of the trustee. In almost all cases, the person who establishes and funds the trust also names himself or herself the trustee who has the right to manage all of the money, property, and assets that are placed inside of the living trust.

One asset that many people put in their trusts is real estate, be it a primary residence, vacant land, or otherwise. In Michigan, to the extent that a trustee decides to sell real estate that is part of a living trust, a certificate of trust will be required at or before the real estate closing.

What is a Certificate of Trust in Michigan?

Up until a few years ago, there were two different types of certificates of trust used in Michigan. One type was used for real estate transactions and the other was used mainly for financial transactions involving a trust.

Each type was governed by a different set of laws with quite different requirements. While each set of laws used the term “certificate of trust existence and authority,” one set was found in the statutes relating to Conveyances of Real Property and the other set was in the Michigan Trust Code. In 2018, as discussed below, Michigan law changed to harmonize the two statutes, simplifying our laws, reducing costs, errors, and confusion.

New legislation was signed into law in 2018 that, in essence, consolidated the two types of certificates of trust into one. Pursuant to the current law, a certificate of trust must include:

The name of the trust, the date of the trust, and the date of each operative trust instrument.
The name and address of each current trustee.
The powers of the trustee relating to the purposes for which the certificate of trust is offered.
The revocability or irrevocability of the trust and the identity of any person holding the power to revoke the trust.
The authority of co-trustees to sign on behalf of the trust or otherwise authenticate on behalf of the trust and whether all or less than all co-trustees are required to exercise the trustee powers.
A statement that the trust has not been revoked, modified or amended in any manner that would cause the representations included in the certificate of trust to be incorrect.

The certificate of trust may be signed or otherwise authenticated by the settlor, any trustee (including a successor trustee), or an attorney for the settlor or the trustee.

Do You Need a Certificate of Trust?

If you have a living trust, a certificate of trust will help the trustee open new financial accounts without needing to provide the entire trust. To the extent that real estate is in your trust, and you desire to sell it, the title company will require you to have a certificate of trust. Often, trustees are unaware of the need for a certificate of trust as part of the sale and are left scrambling in final days prior to the closing. If you are about to sell real estate titled in your name as trustee, you should obtain a certificate of trust early in the process to eliminate the stress and possible delays caused by not having the proper paperwork.

Even if you have a certificate of trust, it may need updating depending on when it was created. Because of the requirements imposed by the new statute, many certificates of trust that were created prior to 2018 are invalid. Additionally, since trustees and their addresses change from time to time, older certificates of trust are often out of date.

If you require assistance, the experienced trusts and estates and real estate lawyers at Fraser Trebilcock can provide the guidance you need. Please contact us.

Chair of Fraser Trebilcock’s Trusts and Estates Department, attorney Marlaine C. Teahan is a Fellow of the American College of Trust and Estate Counsel, and is the past Chair of the Probate and Estate Planning Section of the State Bar of Michigan. For help getting necessary legal authority for your loved one’s COVID-19 vaccine consent form, contact Marlaine at 517.290.0057 (cell) or mteahan@fraserlawfirm.com.