Attorneys Say Clients Left in Limbo

Yet again, the U.S. Senate reached a dead-end this week on a possible solution to the expired estate tax. Unless action is taken soon, the federal tax -- temporarily phased completely for this year only -- will jump to a 55 percent rate with a $1 million per spouse exemption in January.

“Hope was in sight,” said Boston area attorney Hank Whittenberg, a tax and estate planning specialist, "but Congressional bickering blocked a reasonable solution. It seems that each party will continue using this as political fodder until after the mid-term elections -- and then it might be too late to take any action before the end of the year."

Members of the Senate appeared to be in general agreement of a proposal to eliminate a retroactive estate tax increase and reduce the tax to 35 percent while raising the exemption to $5 million. However, following a policy luncheon this week, key finance leaders disclosed any such agreement no longer existed.

Meanwhile, the current House proposal resurrects the 2009 estate taxes retroactively to January 1, 2010, allowing for a $3.5 million per person exemption and a flat rate of 45 percent. That proposal is exempt from the Pay-As-You-Go rules, while the lower Senate proposal would not be exempt from the Pay-Go rules.

"Either proposal is better than the limbo our clients are being left in," Whittenberg said. "Without clear indications of whether a retroactive tax will be instituted for 2010, how much of an exemption will be allowed, or what tax rates will be, those pursuing even the most basic planning face a number of uncertainties. We're still able to help families establish effective plans, but the situation could be so much better and more streamlined. Estate attorneys across the nation join me in calling on Congress to simply address this issue once and for all. Action is long overdue." 

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Serving clients throughout the Northeast region, attorneys at Whittenberg Knudsen, LLP focus primarily on estate planning, business law, and probate and trust administration and litigation. Attorney Whittenberg is recognized nationally for expertise in estate and tax planning. He is a partner of Whittenberg Knudsen, LLP, a founding member of WealthCounsel (a national attorney organization of approximately 1,500 estate and wealth strategies attorneys), and a former elected board member of the Member Advisory Board of the National Network of Estate Planning Attorneys.

CDC, COUNTY AND ILLINOIS STATE HEALTH DEPARTMENT REPORTS ARE “INADMISSIBLE,” JUDGE RULES;

A state court judge is barring from evidence studies by the U.S. Centers for Disease Control (CDC), Illinois Department of Health, and the McHenry County Health Department in what is believed to be the largest brain cancer cluster cases in the U.S. courts. The first trial in the group of 31 cases is to begin here on June 7.

Court of Common Pleas Judge Allan Tereshko last week ruled against Rohm & Haas/Dow Chemical, the defendant, deciding that the public health epidemiological studies are “irrelevant” to the case and “can only serve as a source of confusion and misdirection.”

The brain cancer cluster victims from McCullom Lake, Illinois, are asserting that Philadelphia-based Rohm & Haas, a wholly-owned subsidiary of Dow, poisoned the air and groundwater in the McCullom Lake community with vinyl chloride (among other toxic chemicals) discharged from its chemical-manufacturing plant into an unlined waste pit near their homes. The Plaintiffs allege that prolonged exposure caused them to contract rare malignant brain cancers and brain tumors; 10 of the victims have died.

The first three brain cancer victims – next-door neighbors who were each diagnosed with malignant brain cancer within the same year – filed suit in April 2006.  Less than a month later, the McHenry Health Department, using outdated cancer-rate data (based on zip codes) for the area that includes McCullom Lake, told local residents there was no epidemiological evidence of a brain cancer cluster.  McCullom Lake’s population is only about 1,000 people; the population of its zip-code region is roughly 50,000.   Later, the state Department of Health announced that more recent data showed that there was no epidemiological evidence of a brain cancer cluster in McHenry County – population more than 300,000.  Under public pressure, the county government then asked the CDC to review the analyses of the two health departments. 

The Court’s order comes after attorneys for Rohm and Haas/Dow have claimed in pre-trial proceedings and in the news media that no public agency has found a brain cancer cluster in McCullom Lake.  Their statements rely on the flawed studies that the judge has now ruled inadmissible, according to Aaron J. Freiwald, lead trial attorney for the plaintiffs.

“The studies cited by the defendant were about as valid in this case as if you did a study of brain cancer rates in the entire state of Illinois or in all of the Western Hemisphere,” Freiwald said.  “They, too, wouldn’t tell you anything about brain cancer rates in McCullom Lake. When you do the math, using reliable, objective data, there is no escaping the fact there was and is a cancer cluster in McCullom Lake Village.”

The trial Court, in granting Plaintiff’s Motion to Preclude evidence of the studies, noted that the studies supported by the defendants “do not attempt to discretely address the pattern of brain cancer represented in the significantly smaller subset which is the Village.”

The first brain cancer cluster case to go to trial will be on behalf of Joanne Branham, who lived with her husband Franklin Delano Branham in McCullom Lake for 30 years.  Mr. Branham was diagnosed with glioblastoma, a lethal form of brain cancer, in 2004, just a few years after he and Joanne relocated to Apache Junction, Arizona, near Phoenix. He died just one month after brain surgery. 

Jury selection is scheduled for June 3rd. 

Contacts:
Aaron J. Freiwald, Esq.
ajf@layserfreiwald.com
215.875.8000
Stephan Rosenfeld (for Layser & Freiwald)
215.514.4101
steph@idadvisors.com

The operators of the Deepwater Horizon left burned and injured rig workers for 10 hours alongside the burning rig before taking them ashore for medical treatment, a Houston law firm alleges in a lawsuit.

The suit was filed in Galveston County Court at Law on behalf of four plaintiffs involved in the April 20 explosion and fire on the drilling platform, which sank 50 miles off the Louisiana shore in the Gulf of Mexico.

Attorneys with Arnold & Itkin filed the lawsuit May 4, seeking a jury trial to obtain an unspecified judgment against 10 defendants, including three divisions of Transocean Inc., the rig owner; four divisions of BP, which leased the rig; Halliburton Energy Systems; Sperry-Sun Drilling Systems and Cameron International Corp.

The plaintiffs are Joshua Kritzer, Bill Johnson and Nick Watkins, all of Louisiana, and Rhonda Burkeen of Mississippi, the widow of Aaron Burkeen, one of the 11 men killed in the Deepwater Horizon explosion and fire.

Kritzer was an employee of Offshore Cleaning Systems, and was working on the rig when an explosion threw him 30 feet down a hallway, where the ceiling collapsed on him, the lawsuit says. He suffered head and other physical injuries.

Sheppard, Mullin, Richter & Hampton LLP has honored partner Dianne Baquet Smith with the firm's first Diversity & Inclusion Award, an award that recognizes the significant diversity and inclusion commitment of a Sheppard Mullin attorney.  As part of the award, the firm has made a contribution to two pipeline programs: The USC Street Law Program and Loyola Law School's Young Lawyers Program.  These pipeline programs expose primary, secondary, or college students to the legal profession.  

The Street Law Program is a student organization at USC's Law School, whose goal is to connect law students with inner-city middle and high-school students.  The primary aspect of Street Law's program is the classroom teaching session, which provides opportunities to the students and benefits the law students.  Six Sheppard Mullin attorneys participate in the Street Law Program, including firm liaison and associate Olivier Theard.

The Judge Stephen O'Neil Trial Advocacy Mentoring Program (aka "Young Lawyers Program") is a collaborative effort of students of the Black Law Students Association and the La Raza Law Students Association of Loyola Law School.  These two law student groups created the Young Lawyers Program to bridge the gap between the law school and youth in the communities of color that surround Loyola Law School.  Five Sheppard Mullin attorneys participate in the Young Lawyers Program, including firm liaison and associate Claudia Gutierrez.

“Dianne has led the firm's diversity efforts for decades and we are thrilled to recognize her dedication to the firm's efforts and initiatives in this area,” said Guy Halgren, chair of the firm's Executive Committee.  "Dianne has been a diversity advocate within and outside the firm, and we are pleased to contribute on her behalf to two pipeline programs that are making a difference in our local communities."  

In addition to Smith's internal Sheppard Mullin achievements and accomplishments, she is the current president of the Black Women Lawyers Association of Los Angeles' Foundation, a member of the LA County Bar Association's Diversity Committee, and a founding member of the Association of Law Firm Diversity Professionals. 

"I am honored by the firm's recognition and support," said Smith.  "Diversity is important to Sheppard Mullin, to our clients, and to our profession.  Serving as the firm's diversity chair has been both personally and professionally fulfilling.  I am pleased that Sheppard Mullin's donation will support the vital work performed by the Street Law and Young Lawyer's programs, as our firm teams with them to address the current pipeline crisis."

Smith is a Labor and Employment group partner in the Los Angeles/Downtown office.  She has extensive experience representing management in litigation of wrongful discharge, discrimination, breach of contract, breach of public policy, wage and hour, unfair labor practice, ERISA, and other types of labor and employment cases, through trial. 

The Sheppard Mullin Diversity & Inclusion Award was created to recognize an individual or team of attorneys in the firm for their commitment to diversity & inclusion programs and initiatives in the legal profession.  Recipients are selected based on their overall contributions and dedication to advancing the firm’s mission in this area.  

About Sheppard, Mullin, Richter & Hampton LLP

Sheppard Mullin is a full service AmLaw 100 firm with 550 attorneys in 11 offices located in the United States and Asia.  Since 1927, companies have turned to Sheppard Mullin to handle corporate and technology matters, high stakes litigation and complex financial transactions.  In the U.S., the firm's clients include more than half of the Fortune 100.  For more information, please visit www.sheppardmullin.com.

In addition, the jury ruled in Perrigo’s favor on its false advertising counterclaim against Rexall Sundown under Section 43 of the Lanham Act based on a statement used by Rexall Sundown on packaging from 2006 to 2008. The jury determined that the Rexall Sundown statement was false and misleading and awarded Perrigo damages.

Perrigo’s Chairman and CEO Joseph C. Papa stated, “This verdict is an important victory for store brands, US retailers and consumers. The jury verdict confirms that statements on our wholesalers’ and retailers’ packaging, inviting consumers to compare store brand products to the higher priced national brand products are fair and legal. This kind of statement helps consumers to identify store brand products they want and helps them save as they choose the affordable, high-quality store brand option. We are gratified with this victory as another accomplishment in making quality healthcare more affordable to the US consumer.”

Perrigo was represented by Paul W. Garrity, Robert S. Friedman and Mark McGrath of Sheppard Mullin Richter & Hampton LLP and John E. Villafranco, Michael C. Lynch, August Horvath, Matthew Marcotte and Joel Hankin of Kelley Drye & Warren LLP.

Perrigo Company is a leading global healthcare supplier that develops, manufactures and distributes OTC and generic prescription (Rx) pharmaceuticals, nutritional products, active pharmaceutical ingredients (API) and pharmaceutical and medical diagnostic products. The Company is the world’s largest manufacturer of OTC pharmaceutical products for the store brand market. The Company’s primary markets and locations of manufacturing and logistics operations are the United States, Australia, Israel, Mexico and the United Kingdom. Visit Perrigo on the Internet (http://www.perrigo.com).

Note: Certain statements in this press release are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. These statements relate to future events or the Company’s future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the Company or its industry to be materially different from those expressed or implied by any forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential” or other comparable terminology. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the Company’s control. These and other important factors, including those discussed under “Risk Factors” in the Company’s Form 10-K for the year ended June 27, 2009, as well as the Company’s subsequent filings with the Securities and Exchange Commission, may cause actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. The forward-looking statements in this press release are made only as of the date hereof, and unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The temporary absence of a federal estate tax is expected to be addressed by the U.S. House and Ways Committee this month. Rep. Sander Levin, incoming chair of the committee, indicated action could begin as early as April 12, just after Congress returns from spring recess.

Many predicted Congress would take action last year, long before changes – which also include a zero percent generation-skipping transfer tax and dramatically reduced gift tax rate – took place. Instead, a lengthy delay, combined with little direction on what the future tax structure might be, left estate plans across the nation in jeopardy of failure and families unsure how to address potential problems.

“The uncertainty affects all our clients,” said Boston area attorney Hank Whittenberg, a tax and estate planning specialist. Whittenberg suggested many families don’t know how to structure estate plans with so many variables in play. Some consider taking advantage of the lowered gift tax rate – the lowest it’s been since it was enacted in the 1930s – but fear a retroactive penalty if they do. Others face troubling tax challenges with investments and division of assets. “The ambiguity is terrible,” Whittenberg said. “We need something, anything to pass. Just give us some clarity,”

The Economic Growth and Tax Relief Reconciliation Act of 2001 phased the estate tax out over a 10-year period, resulting in a zero percent estate tax in 2010. If unaddressed, the tax will jump back to 2001 levels with a maximum individual exemption of $1 million and top tax rate of 55%. In 2009, the exemption was $3.5 million and rate capped at 45 percent – a far better scenario for taxpayers.

The House is thought to favor a return to 2009 levels and subject estate transfers in 2010 to a retroactive tax. But doing so may pose larger issues. “Constitutional litigators aren’t going to let this fly by without a fight. The notion of enacting a new tax is different than adjusting an existing tax,” Whittenberg said. “But whatever Congress decides, it will impact our clients and the sooner we know what to expect, the better we can meet our clients’ objectives.”

Recognized nationally for expertise in tax planning, Attorney Whittenberg began practicing law more than 15 years ago. He is a partner of Whittenberg Knudsen, LLP, a founding member of WealthCounsel (a national attorney organization of approximately 1,500 estate and wealth strategies attorneys), and a former elected board member of the Member Advisory Board of the National Network of Estate Planning Attorneys. Serving clients throughout the Northeast region, attorneys at Whittenberg Knudsen, LLP focus primarily on estate planning, business law, and probate and trust administration and litigation.