December 2000
Vol. 9, Issue 3
(Get a printer-friendly version)

Proposed House Bill 3308 May Affect The Way Franchisors Do Business In Many States

By Robert J. Newbold, Esq.

The Coble/Conyers Bill was introduced in November, 1999 with 22 cosponsors and is gaining momentum in the House of Representatives. There are currently 47 House cosponsors.  With the advent of the recent election, many proponents of the Bill are slating H.R. 3308 for re-consideration.  Sections 1 and 2 of the bill contain the short title, table of contents, findings of fact and purpose of the bill.  Section 3 entitled "Franchise Sales Practices" imposes strict guidelines for standards of conduct, sourcing, transfers, encroachment, and private rights of action against franchisors and franchisees.

The proposed legislation is not designed to circumvent existing state authority, but to add an additional level of examination to the current individual state requirements.  In addition, those franchisors filing an FTC compliant document would be subject to the additional disclosure legislation on the state level.  The bill also creates a private right of action for violations of the FTC Rule.  Transferring franchisees and renewals would require full disclosure under the Coble bill and the duty of compliance and liability associated with the FTC disclosure process would fall upon the transferring franchisee.

Proposed Sections
"Transfer of Franchise by Franchisor" Section 9, requires that a franchisor cannot be acquired or enter into an agreement to sell a substantial portion of its interest in the franchise concept unless the franchisor provides a 30 day notice to every franchisee of the intent to transfer and copies of financial terms and conditions of the transaction must be disclosed to every franchisee.

Section 12, "Private Right of Action," provides that parties alleging violations of this Act or of the FTC Franchise Rule may sue franchisors directly, and shall have a right to rescind the contract and receive damages including litigation expenses and attorneys fees, as well as expert witness fees.

Opposition To H.R. 3308
There is currently a grass roots campaign organized to lobby against this bill.  The original format of the bill contains 14 sections and subsections and has 47 House cosponsors.

Robert Newbold is a member of the Business Practice Group practicing in Franchise Law.  For a complete copy of the Coble/Conyers Bill or for additional information please contact Rob via e-mail at rnewbold@bdblaw.com  or phone 330.491.5258.

Are You Aware Of Ohio's New Taxpayer Services Laws?

By Andrew S. Perry, Esq.

On September 29, 2000, Ohio enacted the Taxpayer Services Bill.  This law provides many administrative changes to help you interact with the Ohio Department of Taxation.  Some of the general changes include:

• Giving the Tax Commissioner discretion to impose certain tax and tax-related penalties rather than forcing him to impose mandatory penalties;
  
• Lengthening the deadline for taxpayers to file administrative appeals from 30 to 60 days for most Ohio taxes after a notice of assessment has been issued;
  
• Authorizing the Tax Commissioner to allow Ohio taxpayers to send tax-related documents by delivery services other than U.P.S.;
  
• Allowing taxpayers to round.  If $.49 and below round down, if $.50 and above, round up; and
  
• Authorizing the Tax Commissioner to permit alternative forms for filing tax-related documents, including electronic forms.

Although these changes will not eliminate your tax burden, they are a positive step in making your dealings with the Tax Commissioner easier.  

Andrew Perry is a member of the BDB Tax & Employee Benefits Practice Group.  For more information about Ohio's Taxpayer Services law or about changes to specific taxes, please contact Andrew via e-mail at aperry@bdblaw.com or call 330.258.6479.

Self-Insuring Employers Again Eligible For Reimbursement Of Workers' Compensation Claim Costs Where A Claim Is Denied After Payment Of Benefits

By Michael L. Williams, Esq.

On September 13, 2000, the Supreme Court of Ohio opined that self-insuring employers have a constitutional right to reimbursement from the Ohio Bureau of Workers' Compensation when they have paid a claim pursuant to an order that is subsequently reversed. In effect, the Supreme Court's decision reinstates the procedures that were in place prior to October 20, 1993.

Before October 20, 1993, R.C. §4123.515 and §4123.519 provided that the Bureau of Workers' Compensation would reimburse self-insuring employers for claim payments made pursuant to administrative orders or court decisions that were subsequently reversed. The Ohio legislature rescinded those code sections in amended Substitute House Bill No. 107, which became effective on October 20, 1993. As a result of these changes, a self-insuring employer was no longer entitled to reimbursement from the Bureau of Workers' Compensation. Instead, the self-insuring employer was permitted to deduct compensation paid pursuant to the reversed order for purposes of reporting paid compensation and calculating administrative assessments. The effect was to dramatically reduce the impact of a favorable self-insuring employer appeal.

In Sysco Food Serv. of Cleveland, Inc. v. Indus. Comm. (2000), 89 Ohio St.3d 612, the Supreme Court found that the legislative changes enacted in 1993 were unconstitutional. The Supreme Court's rationale was that self-insuring employers are denied the right to a judicial remedy because a successful court appeal does not result in a significant financial benefit to the self-insuring employer. The Supreme Court's rationale relied largely on the fact that the employers do not receive a dollar-for-dollar benefit from a successful appeal. The Supreme Court also noted that self-insuring employers were being treated differently from state-fund employers because state-fund employers received full credit, through future premium reductions, for claim payments that are subsequently reversed.

The final impact of the Supreme Court's decision is not yet clear. The Bureau of Workers' Compensation has enacted a procedure for filing for claim payment refunds. But a significant question remains concerning the manner in which the Bureau of Workers' Compensation intends to fund these refunds. Prior to 1993, the Bureau of Workers' Compensation maintained a special assessment against self-insuring employers and collected only as much money as it needed to make reimbursements. One can anticipate that the Bureau of Workers' Compensation will enact a similar method for funding the Supreme Court's recent decision. But an argument could be made that the Bureau of Workers' Compensation should fund the matter in a manner similar to the existing self-insurance handicap reimbursement fund. In that fund, self-insuring employers can collect refunds only to the extent of their individual premium contributions.

For the immediate future, it appears that the Bureau of Workers' Compensation intends to revert to the manner of collection and payment that was in place prior to 1993. On an individual claims basis, self-insuring employers certainly benefit, as employers once again have incentive to fully prosecute claims through trial in order to recoup claim payments erroneously ordered by the state.

Michael Williams is a member of the BDB Workers' Compensation Practice Group. He can be reached by e-mail at mwilliams@bdblaw.com or phone at 800-686-2825.

Ten Shareholders Were Recently Selected By Their Peers For Inclusion In The Best Lawyers In America® 2001-2002.

Practice Group(s)	Attorney Names
Business and Real Estate & Construction Law	Nicholas T. George, Shareholder and President James L. Fisher, Shareholder
Health Law	Thomas W. Hess, Shareholder
Finance & Public Law	Thomas R. Trotter, Shareholder Stephen M. Hammersmith, Shareholder
Litigation	Orville L. Reed III, Shareholder Mark J. Skakun III, Shareholder
Tax & Employee Benefits and Mergers & Acquisitions	Robert W. Malone, Shareholder
Trusts & Estates	Patricia A. Pacenta, Shareholder
Workers' Compensation	Deborah Sesek, Shareholder

The 2001-2002 edition is the ninth edition of The Best Lawyers in America. Since its inception in 1983,  Best Lawyers has become universally regarded as the definitive guide to legal excellence in the United States. Because Best Lawyers is based on an exhaustive peer-review survey in which 15,000 leading attorneys throughout the country cast more than a half million votes on the legal abilities of other lawyers in their specialties, and because lawyers are not required or allowed to pay a fee to be listed, inclusion in Best Lawyers is considered a singular honor.

George	Fisher	Hess	Trotter
Reed	Skakun	Malone	Pacenta
	Hammersmith	Sesek

Rana M. Gorzeck, Shareholder
Real Estate & Construction and Finance & Public Law Practice Groups - Boca Raton Office
Rana has extensive experience in many aspects of business law and transactions, corporate matters and real estate, including secured lending, commercial real estate, residential real estate, industrial development bond financings, shareholder, operating and joint venture agreements, leases, contracts, entity selection and formation, title examination, purchases and sales of businesses. Her practice has also included defense of product liability suits, commercial litigation, First Amendment media defense, foreclosures, estate litigation and contract disputes.

Ronald J. Ziehm, Of Counsel  
Medical Malpractice Group - Cleveland Office
His area of practice includes all aspects of civil litigation, arbitrations, mediations, bench trials and appellate practice as insurance defense counsel on auto, homeowner and commercial policies. Ron has extensive trial experience.

David H. Krause, Associate  
Real Estate and Construction Practice Group - Cleveland Office
David represents closely held corporations in all stages of commercial litigation, including fiduciary duties, real estate, construction and contract disputes.

Lance A. Lanier, Associate  
Litigation, Creditors' Rights/Bankruptcy - Akron Office
Lance provides representation on commercial collections, creditors' rights and general litigation.

Four New BDB Associates Pass Bar

Please join us in congratulating our four new associates on passing the Ohio Bar:

Phylip J. Divine, Esq.
Trusts & Estates Practice Group - Akron Office
Phylip received his Juris Doctorate from The University of Notre Dame in 2000,  was a Law School Scholar and served as President of the Married Law Students Organization. He graduated from The University of Akron, with a B.S. in Business Administration, Finance.

David J. Hrina, Esq.
Health Law Practice Group - Akron Office
David earned his J.D., magna cum laude, from the University of Akron School of Law, where he was Research Case and Comment Editor with the Akron Law Review and a recipient of the Judge and Mrs. Charles Sacks Scholarship, the Dean's Club Scholarship and the Oscar Smith Scholarship, all for academic merit. He received his B.E and M.S. in Civil Engineering from Youngstown State University in 1993 and 1995, respectively.

Clay Keller, Esq.
Real Estate and Construction Practice Group - Columbus Office
He is a 2000 graduate of Notre Dame Law School where he received honors on his moot court  brief. He received his B.S. in political science from the University of Wisconsin-LaCrosse.

James S. Simon, Esq.
Business Practice Group - Canton Office
He earned his J.D. from the University of Akron School of Law in 2000 and his B.A. in American Studies from Bennington College, Bennington, Vermont, in 1997. Jim worked as a law clerk for the University of Akron's Office of General Counsel, where his responsibilities included ADA, FERPA, Court of Claims and litigation research. He also served as a Law Review intern and Managing Editor of the Akron Law Review. He is co-author of the Nacua Contract Forms and Procedure Manual. Jim is a Historical Interpreter and Special Event Volunteer for Stan Hywet Hall & Gardens and is a member of the Board of Trustees of Bennington College.

Dianne Blocker Braun, Associate, Canton Office
Presented an estate planning seminar sponsored by the Great Trail Council of the Girl Scouts of America and by FirstMerit Bank at the North Canton, Ohio Civic Center.

Steve Dimengo, Shareholder, Akron Office
Steve participates in seminars provided by National Business Institute and Lorman Educational Services on Sales/Use Tax issues. In 2000, Steve has presented on eight occasions and will also present December 15, 2000 in Akron, Ohio: "Ohio Sales and Use Tax Update" and March 15, 2001 in Akron, Ohio: "Sales and Use Tax: A Beginner's Basic Course in Ohio."

David Drechsler and Mark Skakun, Shareholders, Akron Office
Louis Wagner, Of Counsel, Akron Office
Karen Butera, Associate, Canton Office
Presented at the "Intellectual Property" seminar held by the Akron Bar Association and the University of Akron School of Law.

Thomas Hess, Shareholder and Andrew Owen, Associate, Columbus Office
Recently spoke at a health law seminar sponsored by the Columbus Bar Association. Their topic was legal issues affecting physicians.

James Kurek, John McKenzie and Vince Tersigni, Shareholders, Akron Office
Ashley Stouffer, Associate, Akron Office
Each of these attorneys recently completed a series of speaking engagements in conjunction with CompManagement seminars on the topics of ADA and FMLA.

Beth Langton, Director of Library Services, Akron Office
Moderated and spoke at a program for the Ohio Regional Association of Law Libraries.

Donald Leach, Shareholder, Columbus Office
The CBA Construction Law Committee will hold its annual seminar on December 12, 2000 from 9:00 a.m. to 12:15 p.m. at the CBA offices. Don will speak on the Economic Loss Rule. Joining him will be Rebecca Rutherford of the Army Corps of Engineers who will speak on the new Wetlands National Permit Process, and Daniel Edwards will speak on Eichleay Damages.

The seminar is not limited to CBA members. For more information call 614.221.4112 and ask for CLE.

Don also spoke for Professional Education Systems at the Ohio Mechanics' Liens and HOT Construction Topics seminar. His topics were "Economic Loss Rule" and "Design-Build: Insurance and Contracting Considerations."

Robert Malone, Shareholder, Akron Office
Terry Vincent, Shareholder, Cleveland, Office
Rob and Terry presented for one of the largest seminars held for tax practitioners in Cleveland, Ohio. Their respective topics were "Employment Tax Issues in the Use of LLC's" and "Innocent Spouse Equitable Relief from Income Tax Liabilities."

Joel Mirman, Shareholder, Columbus Office
Joel spoke on the topic of Voir Dire Examination at the Litigation Basics 2000 seminar presented by the Ohio State Bar Association/CLE.

Rhonda Warren, Associate, Canton Office
Rhonda presented "Anatomy of a Law Suit" to registered nurses at the Wayne County Nursing Consortium.

At the Third Annual Women's Health Symposium at Summa Health Care, nurses and resident physicians from the NE Ohio Area heard Rhonda present "Malpractice Issues for Nurses and Physicians."

The sophomore class of the University of Akron School of Nursing heard Rhonda speak on the topic of "Nursing Liability."

George Weinstein, Of Counsel, Boca Raton Office
George was featured November 24 on "Wealth & Wisdom," a public affairs program on WXEL-TV in Palm Beach, Florida. George provided insight in preserving and growing your assets.

If you are interested in having a speaker from BDB make a presentation to your organization, please contact: Cheryl Warren, Director of Client Relations and Marketing 800.686.2825 ext. 546 or cwarren@bdblaw.com


At BDB we are always improving our processes so that we operate efficiently and effectively. Please let us know how you like our new broadcast format. E-mail: bdb@bdblaw.com Phone: 330.258.6473 Fax: 330.252.5473. 
Thank you.