On December 16, 2015, the New York State Court of Appeals issued a decision that has important implications for medical malpractice liability. In Davis v. South Nassau Communities Hospital, the Court held that treating physicians and hospitals owe third parties a duty to warn patients of the risks or side effects associated with medications. In this case, the physicians at the hospital administered medication to a patient that had the potential to impair her ability to safely operate an automobile. The patient subsequently drove away from the hospital and, allegedly impaired by the medication she received, caused an accident with Davis, who sustained injury. Davis sued the physicians and the hospital for medical malpractice for failing to warn the patient of the side effects of administered medication. Although the Court admonishes readers against interpreting this decision as an erosion of the prevailing New York principle that a physician’s duty of care does not extend beyond the patient to the community at-large, this belies the actual effect of the decision. In fact, the decision expands the potential pool of litigants who can sue a physician for malpractice. Specifically, unknown third parties with whom the physician has no doctor-patient relationship now have standing to sue if they have been injured by the physician’s patient. In our view, this case illustrates a shift from prior New York case law which required a direct relationship between the doctor and the patient before a valid medical malpractice action could arise. The Court also argues that its decision imposes no additional obligation on a physician who administers medication to a patient. This argument, however, overlooks the increased burden upon the provider to carefully document the specific warning to the patient, since one has to assume that the patient will not be a credible witness. If the patient ignored the warning and injured someone else while their judgement was impaired by the medication prescribed by the physician the only witness to the warning may be the chart. Physicians should continue to comply with their obligation to advise patients of the specific risks and side effects of administered medications. This decision does not compel physicians to prevent patients from leaving the hospital after receiving certain medication, but requires physicians to ensure that when patients leave the hospital, they are properly warned about the side effects of that medication. Careful documentation of specific warnings to the patient will be critical to defending these cases in the future. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

Jessie Gregorio has been named a 2016 recipient of the Rochester Business Journal's Forty Under 40 award.  The Forty Under 40 honorees are professionals younger than 40 who demonstrate leadership in the workplace and in the community.\ Jessie is an associate in the firm's Litigation and Health Care Practice Groups, and focuses her practice in the areas of civil litigation, medical malpractice defense and health care law. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

Recently news agencies have publicized reports of nursing home staff using smart phones and other electronic devices to record residents in demeaning or humiliating situations, and posting those recordings on social media platforms such as Facebook, Snapchat or Instagram. In response, the Centers for Medicare and Medicaid Services (CMS) issued a Memorandum to State Survey Agency Directors requiring immediate action. On August 5, 2016, CMS advised Surveyors to immediately begin requesting and reviewing nursing home policies and procedures prohibiting staff from taking or using photographs or recordings of any type that would demean or humiliate a resident. In order to be in compliance, a nursing home must do the following: 1. Include in its written policies and procedures a prohibition of nursing home staff taking or using photographs or recordings of any type that would demean or humiliate a resident; 2. Provide training on the prohibition of staff using any type of equipment to take, keep or distribute photographs and recordings of residents that are demeaning or humiliating, including educating staff on reporting responsibilities; and 3. Ensure that these policies and procedures are implemented as written by providing ongoing oversight and supervision of the nursing home staff. Nursing homes should immediately review and revise their policies and procedures to comply with the attached CMS Memorandum. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

Underberg & Kessler LLP is proud to announce that 11 of its attorneys have been selected by their peers for inclusion in The Best Lawyers in America® 2017, and one attorney was named Rochester “Lawyer of the Year” in his area of practice. Jim Coniglio, Pat Cusato, Steve Gersz, Lew Heisman, Ron Hull, Kate Karl, Paul Keneally, Anna Lynch, Paul Nunes, Margaret Somerset and George Van Nest are included in the 2017 edition under the following specialties: Jim Coniglio – Municipal Law Pat Cusato – Real Estate Law Steve Gersz – Closely Held Companies and Family Businesses Law, Corporate Law Lew Heisman – Family Law Ron Hull – Environmental Law, Litigation – Environmental Kate Karl – Commercial Finance Law, Real Estate Law Paul Keneally – Commercial Litigation, Litigation – Labor & Employment Anna Lynch – Corporate Law, Elder Law, Health Care Law Paul Nunes – Mass Tort Litigation/Class Actions–Plaintiffs, Mass Tort Litigation/Class Actions–Defendants, Personal Injury Litigation–Plaintiffs, Personal Injury Litigation–Defendants Margaret Somerset – Medical Malpractice Law–Defendants George Van Nest – Environmental Law Additionally, Steve Gersz was named “Lawyer of the Year” in Rochester for Closely Held Companies and Family Businesses Law.  Only one area lawyer in each specialty receives this honor. Best Lawyers® conducted its annual peer-review survey in which 55,000 attorneys cast more than 7.3 million votes on the legal abilities of other lawyers in their practice areas. Lawyers are neither required nor allowed to pay a fee to be listed, and are included solely based on the results of the peer review. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

Seven attorneys from Underberg & Kessler LLP have been named 2016 Upstate New York “Super Lawyers”, and four have been named 2016 Upstate New York “Rising Stars”. Jim Coniglio, Ron Hull, Paul Keneally, Tom Knab, Anna Lynch, Paul Nunes and Margaret Somerset were included in the 2016 “Super Lawyers” group under the following practice areas.  This group represents the top 5% of attorneys in Upstate New York and is awarded to those attorneys who have attained a high degree of peer recognition and professional achievement. Jim Coniglio – Government Finance Ron Hull - Environmental Law Paul Keneally – Employment & Labor Tom Knab – Business Litigation Anna Lynch - Health Care Paul Nunes – Real Estate Margaret Somerset – Personal Injury Medical Malpractice: Defense Leah Tarantino Cintineo, Trisha Kirsch, Colin Ramsey and David Tang and were included in the 2016 group of Upstate New York “Rising Stars” under the following practice areas.  This group represents the top 2.5% of lawyers who are under 40 years old or who have been practicing for 10 years or less. Leah Tarantino Cintineo - Family Law Trisha Kirsch - Business/Corporate Colin Ramsey- Construction Litigation David Tang - Creditor Debtor Rights The “Super Lawyer” list is produced annually, through a rigorous selection process of statewide nominations, peer review within the local legal community, and independent research of candidates. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

On August 1, the Governor’s Office announced that the New York State Public Service Commission (PSC) approved New York’s most far reaching clean energy mandate. The Clean Energy Standard is aimed at fighting climate change, reducing air pollution and diversifying the energy supply. The standard seeks to force reductions in fossil fuel use by mandating that an increased percentage of the State’s energy come from “clean” energy sources. Specifically, the standard will require that 50% of the State’s electricity come from renewable energy sources such as wind and solar by 2030, starting with an intense phase-in over the next few years. At the outset, utilities will be required to obtain and procure new renewable power sources starting with 26.31% of the State’s electricity load in 2017, increasing to 30.54% of the State’s total in 2021. Under the standard, the 50% renewable mandate by 2030 is aimed at reducing greenhouse gas emissions by 40% (from 1990 levels) and up to 80% by 2050. The standard is to be implemented by requiring utilities to obtain a targeted number of Renewable Energy Credits each year. The credits will in turn be paid to developers of renewable energy to assist in financing renewable energy projects. Among other steps, the PSC is to work with NYS Energy Research and Development Agency on a variety of matters, including: creating a NY-certified clean electric product that can be labeled and sold; maximizing energy efficiency and renewable heating and cooling technologies; and developing a report on offshore wind energy. The Clean Energy Standard will be subject to reviews every three years. Interestingly, the standard relies on nuclear power plants to achieve the goals. As early as April 2017, the standard requires all State investor-owned and energy suppliers to purchase Zero Emission Credits to pay for the carbon-free emissions from NY’s nuclear plants. This is aimed at supporting upstate nuclear plants. Almost one-third of the State’s power comes from nuclear plants. The plants are financially stressed due to historic low natural gas prices, subsidies to renewable energy sources, mandates for wind and solar capacity and stagnant growth in power demand. Apparently, the State has judged that the long-term questions posed by nuclear power opponents regarding storage and disposal of nuclear fuel waste are outweighed by the carbon free emissions from the plants and need for generating capacity. The Nuclear Energy Institute has lauded the standard saying “Gov. Cuomo and the Public Service Commission correctly acknowledge nuclear power plants as indispensable sources of emissions-free power, meriting explicit valuation by the state as a clean energy source. Other states should strongly consider emulating New York’s new energy standard.” The costs of the Clean Energy Standard for business and consumers are expected to be significant. PSC has suggested that the costs are likely to exceed $3 billion over the next 14 years. Additionally, the cost per megawatt-hour is expected to be higher than the nuclear subsidies that are part of the standard. As anticipated, PSC and green groups praised the standard and argue that the costs will be outweighed by anticipated benefits through reduction of greenhouse gas emissions and expansion of the renewable power supply. A comparison of statements following announcement of the standard is instructive. The Chair of Energy and Finance for NY, Richard Kauffman, stated that “[u] nder Governor Cuomo’s leadership, New York State has started a clean energy revolution and today is just the latest step in our path to a cleaner energy future. The Clean Energy Standard aligns with the Governor’s directive to phase out coal power by 2020 and affirms New York’s position as a leader in combating climate change.” In sharp contrast, the New York Business Counsel has stated that “[w]ith today’s action, it is clear the Public Service Commission has failed to properly evaluate the significant costs associated with the Clean Energy Standard. This failure will cost New York State businesses billions of dollars and put current and future New York manufacturing jobs, and jobs in other energy-intensive sectors, in mortal danger.” While increasing renewable energy may be a worthwhile goal, doing so in a command and control fashion under the Clean Energy Standard without a clear understanding of costs, economic impact and benefit, has the potential for significant consequences to all New York businesses and consumers. Download the Reprint from The Daily Record As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

"When you’re thrust into litigation, you obviously have to make sure you’re prepared to deal with that.” — Roger Goodell The U.S. Court of Appeals for the Second Circuit recently issued decisions in the “Deflategate” matter, which involved spoliation of relevant evidence – specifically, destruction of a three-time Super Bowl MVP’s cell phone. The case offers a good reminder to civil litigation counsel about the importance of litigation holds and preservation notices. A litigation hold is a process that an organization follows to preserve all forms of relevant information in anticipation of future litigation. Hold notices are typically directed to in-house counsel, executives or custodians of certain documents or electronically stored information (ESI). They provide a description of the pending or anticipated proceeding and instructions to suspend normal document retention or destruction policies and institute a hold on all material which may be relevant evidence. Spoliation of ESI was a significant issue for NFL Commissioner Roger Goodell in the proceeding and internal appeal that led to the four-game suspension of NFL Quarterback Tom Brady stemming from allegations that Brady’s team, the New England Patriots, tampered with game balls used in the 2015 AFC Championship Game. In May 2015, the NFL announced the suspension of Brady. The Commissioner, presiding as arbitrator in the internal appeal – pursuant to the League and Players Association’s collective bargaining agreement – later upheld the suspension. In September 2015, the U.S. District Court denied the NFL’s motion to confirm the arbitrator’s decision and vacated the suspension of Brady, citing legal deficiencies such as inadequate notice to Brady, denial of the opportunity for Brady to examine a lead investigator, and denial of equal access to investigative files. In April 2016, the Second Circuit reversed the district court and reinstated the arbitrator’s decision and, on July 13, the Second Circuit denied a request filed by Brady’s lawyers for a rehearing of the case by the full court. In its April 2016 decision, National Football League Management Council v. NFL Players Association (on its own behalf and on behalf of Tom Brady), the Second Circuit confirmed that a federal court’s review of an arbitration decision is highly deferential to the arbitrator’s decision. The court wrote that the NFL Commissioner has broad authority to impose discipline in matters involving players and the case was not one where the arbitration award should be disturbed. With respect to the destruction of the cell phone, the Commissioner cited Brady’s failure to cooperate with the investigation and his deliberate effort to ensure that the requesting party would never have access to the requested information as bases for drawing an adverse inference that the cell phone would have revealed incriminating evidence. The Second Circuit, in a 2-1 decision, found no fault with the Commissioner’s determination. To secure an adverse inference instruction based on destruction of evidence, a party must establish that: (a) the party having control over the evidence had an obligation to preserve it; (b) the records were destroyed with a “culpable state of mind;” and (c) the destroyed evidence was “relevant” to the moving party’s claim or defense, such that a reasonable trier of fact could find that it would support that claim or defense. Chin v. Port Authority, 685 F.3d 135 (2d Cir 2012). Under NY Civil Practice Law and Rules section 3126, a party’s willful failure to disclose information, which the Court finds ought to have been disclosed, can result in harsh penalties. A court can order that: (1) the issues to which the information is relevant are deemed resolved in accordance with the claims of the party obtaining the order; (2) the disobedient party is prohibited from opposing a claim or supporting a defense; or (3) a pleading be struck and judgment by default be entered against the disobedient party. See e.g. Voom HD Holdings v. EchoStar Satellite, 93 AD3d 33 (affirming adverse inference against company that implemented a hold but failed to suspend automatic deletion of emails until four months after suit was filed). Tips for Implementing a Litigation Hold Courts have consistently held that the obligation to preserve begins when a party knows or should have known that the evidence is relevant to future or current litigation. At a minimum, that means counsel must direct the client to ensure documents are preserved, not deleted from an ESI system or otherwise destroyed or made unavailable. Failure to do so has been found to be grossly negligent.   The following practices will help the practitioner execute a litigation hold. 1. Put the hold notice in writing. Clearly identify the reason for the hold and issue instructions for locating material to be preserved. The hold notice should state clearly the prohibition on destruction of relevant documents and ESI and should be shared with all key personnel, not just the official custodian of records. Be prepared to modify the hold notice if new locations of information are discovered or new issues arise in the course of the litigation. 2. Talk with your client. Discuss who will oversee the hold (see 5. below) and develop a plan with client input to assess the types of ESI they have, where and how it is stored and who are the employees and individuals with access.   Are sources of data with relevant information stored on laptops, mobile devices, thumb drives, or home computers that access the company’s network?  Consult with your client’s IT manager to identify whether text and voice messages are included in the universe of data sources so the preservation obligation can be fully explained and monitored.  Establishing clear channels of communication early will make it easy for custodians to ask questions. 3. Provide guidance on what is relevant. Take a moment to specify what material is, in fact, relevant to the facts most likely to be at issue in the litigation. Is the scope of the hold covering information “reasonably calculated to lead to the discovery of admissible evidence”? 4. Plan ahead. It is not too early to review or refresh your client’s litigation readiness plan so that, if necessary, a litigation hold can be effectively implemented. This can include suspending document/data destruction policies, implementing ESI collection procedures and locating and preserving backup tapes. Create a checklist for identifying who will be contacted for timely preservation of data so that documents and ESI are properly stored. 5. Have a point person. To ensure proper implementation and compliance, identify an individual who will be responsible for sending periodic reminders about the litigation hold to keep key individuals updated and in the loop in the event the scope of the hold should change. That individual can also be the go-to person for answering questions, advising key employees once a litigation hold release is authorized, and notifying the relevant individuals of a return to normal document retention and destruction practices. The courts have made clear that negligence is not an acceptable excuse to spoliation of relevant evidence. To that end, preparation is the key for executing a successful hold process. Whether your client owns Super Bowl rings or not, the above strategies should help guide those who find themselves thrust into litigation avoid the potentially severe consequences of disregarding a litigation hold notice. Download the Reprint from The Daily Record As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

For over 50 years, federal contractors and private employers with more than 100 employees have completed the EEO-1 form to provide the U.S. Equal Employment Opportunity Commission (EEOC) and Office of Federal Contract Compliance Programs with workforce data by race, ethnicity, sex and job category. Following the release of a proposed rule earlier this year, yesterday the EEOC issued another revised version of its proposal to expand pay data collection for those employers by having employers collect W-2 income and hours worked data within 12 distinct pay bands for each job category.  The employer would then report the number of employees whose W-2 earnings for the prior 12-month period fell within each pay band.  The expanded pay data will assist the agencies in identifying possible pay discrimination, and assist employers in promoting equal pay in their workplaces. In issuing the updated version, the EEOC said it considered suggestions made by commenters during the initial 60-day comment period.  The proposed revision will still include collecting summary pay data from employers.  The updated rule comes with a new 30-day comment period that runs through August 15. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

It has long been the law in New York that employment contract covenants restricting what employees can do post-employment, generally difficult to enforce, are much easier to enforce against physicians. However, a New York trial court in Suffolk County recently refused to enforce a restrictive covenant against a physician, finding the covenant unreasonable in the circumstances. The Court utilized the standard New York test for enforcement of restrictive covenants: reasonable as to time and area, necessary to protect a legitimate purpose, not harmful to the public, and not unduly burdensome. The Court noted that the same practice's physician covenant had been enforced previously, but that had been against a partner while the current case was against a physician employee. It was also important to the Court that the physician employee was willing to discontinue anesthesiology, the practice's primary or sole area, and only sought to work going forward in pain management. It is important to note that the decision was made in the beginning of the case, in the context of a preliminary injunction application and a summary judgment motion, so the outcome could be different after fact discovery is conducted. Nonetheless, these issues and arguments are coming as doctors are increasingly sub-specializing and hospital systems and medical practices are increasingly growing and using restrictive covenants. For those seeking to enforce physician (or any) restrictive covenants, careful, specific drafting by or with the assistance of experienced employment counsel is vital. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

My general practice partner and I have noticed a sharp increase in the number of patients who wish to communicate by email or text. What concerns should we have about this electronic exchange of HIPAA-protected information? Smart phone technology, and its recent meteoric rise in use, has provided a completely new platform for care providers and patients to communicate. Whether texting or emailing, these electronic mediums allow physicians to treat more patients than actually walk through the door, and enables patients to provide symptoms and information, and receive treatment recommendations, in real-time without the delay or “inconvenience” of the traditional callback, page, or in-office visit. Notwithstanding these advantages, physicians must be cognizant of the requirements under HIPAA and the HITECH Act (together, HIPAA) when they or their staff email or text with patients. A practice’s failure to protect the personal health information (PHI) of its patients could result in significant HIPAA penalties. The security rules under HIPAA relating to electronic PHI require care providers and their business associates to implement appropriate physical, administrative, and technical safeguards to ensure the confidentiality, integrity, and availability of all electronic PHI they create, receive, maintain, or transmit. Aside from just making sure such communication is made part of a patient’s chart, this includes conducting risk analyses, securing network servers in locked locations, training staff, shielding screens from unauthorized viewers, implementing secure passwords, and encrypting messages sent and received. The Office of the National Coordinator for Health Information Technology (ONC) has outlined five steps for care providers to help manage the secure use of mobile devices. First, a provider, practice, or organization must decide whether mobile devices will be used to access, receive, transmit, or store patients’ health information. Next, a risk assessment that analyzes the threats and weaknesses of the personal health information being maintained should be conducted. Although the size of an organization, and the complexity and reach of its practice, will determine the methods used, all providers are required to conduct an appropriate risk analysis. Third, a mobile device risk management strategy which includes security and privacy protections should be created. This may include the use of third-party messaging solutions to ensure a secure communication platform for texting or emailing on approved, password-protected mobile devices, including those personally-owned by staff, and the safe disposal of those devices. Mobile device policies and procedures must then be created and implemented throughout the practice. Finally, in-service privacy and security training for all medical staff must be provided. This requires being vigilant of changes in the regulatory landscape, which may include additional guidance from ONC and the enforcement of electronic communications-related HIPAA violations. For more information, visit: www.healthit.gov/providers-professionals/fivesteps-organizations-can-take-manage-mobile-devices-used-health-care-pro. The advent of the digital age and recent technological advances in electronic communication has forever changed how care providers interface and treat patients. This provides significant opportunities for physicians and their staff to render more efficient, high-quality care to more people, but it’s imperative to first understand and implement HIPAArequired safeguards to protect patients’ health information. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

Jessie Gregorio has joined Underberg & Kessler LLP as an associate in our Rochester office. Jessie will focus her practice in the areas of civil litigation, medical malpractice defense and health care law.  Jessie earned her B.A. from Canisius College, and her J.D. from SUNY Buffalo Law School. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

David H. Fitch and Colin D. Ramsey have been elected partners in the law firm of Underberg & Kessler LLP. Mr. Fitch is a partner in the firm’s Litigation, Health Care, and Municipal practice groups.  He represents business owners, health care entities and providers, and municipalities in complex commercial litigation and medical malpractice defense.  Mr. Fitch holds a B.S. degree from Virginia Tech, and is a graduate of SUNY Buffalo Law School.  He is a member of the Advisory Board of Directors for the National Center for Missing & Exploited Children.  Mr. Fitch and his family reside in Pittsford. Mr. Ramsey is a partner in the firm’s Litigation and Labor & Employment practice groups.  He represents Underberg & Kessler clients in commercial disputes, construction law, business torts, personal injury, and insurance defense.  Mr. Ramsey earned his B.A. degree from Hamilton College, and his J. D. from Syracuse University College of Law.  He is a board member of the Chippewa Alliance.  Mr. Ramsey and his family reside in the City of Buffalo. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.