November 2018 Business Newsletter

Lessons Learned from Tonawanda Coke Corporation

With the sources from which we receive information being so diverse and services purporting to handle your company’s research being so ubiquitous, it is important to know and understand the rules, regulations and statutes that govern your respective industry.  Western New York residents are familiar with the near decade long battle between the State and Federal Government (specifically the Environmental Protection Agency and the New York State Department of Environmental Conservation) and the Tonawanda Coke Corporation regarding violations of environmental regulations. 

The Tonawanda Coke Corporation, located along the Niagara River approximately a mile north of Buffalo, New York operates a foundry on a one hundred and eighty-eight acre site.  The foundry produces coke, a form of fuel with a high carbon content, which is created by heating coal to a high temperature without contact with oxygen until substantially all of the volatile elements within the coal have been removed.  Coke has a variety of purposes including heating homes and commercial buildings and even smelting iron ores.  However, as a result of the manufacturing process, smoke is produced which emits toxins, particularly benzene, which the CDC says can put those exposed to it at a greater risk of developing leukemia. 

In 2009, a study showed that the foundry at Tonawanda Coke was emitting benzene, among other contaminants, into the air at a much higher rate than the legal limit.  Subsequently, in 2013, Tonawanda Coke was found guilty of violating the Clean Air Act from 2005 through 2009.  This violation led to the Tonawanda Coke Corporation being placed on probation.  In 2016, another study was conducted by the New York State Department of Environmental Conservation, which concluded that although the amount of benzene being emitted was reduced by 92%, Tonawanda Coke was still emitting benzene above the legal limit.  In July of 2018, the New York State Department of Environmental Conservation issued a cease and desist order to Tonawanda Coke and an appeal ensued.  In September of 2018, U.S. District Court Judge William Skretny ruled that Tonawanda Coke violated its probation through emissions from its waste heat stack, and ruled that Tonawanda Coke can still operate, but modified and added additional conditions to the company's probation.

In October of 2018, New York State Department of Environmental Conservation was informed by the Tonawanda Coke Corporation that due to their financial inability to legally operate the plant, Tonawanda Coke Corporation intends to shut down the plant.  The shutdown is being monitored by the New York State Department of Environmental Conservation and the State Department of Labor dispatched a rapid response team to assist impacted workers with intensive job placement.
There are advocates on both sides of the aisle.  Local residents and leaders have been outspoken against Tonawanda Coke and many residents have complained of illness due to the emissions.  On the other end, supporters for the company have generally been workers in the industry and individuals that believe the industry is over regulated by over restrictive laws including the Clean Air Act.
Tonawanda Coke is an example of a worst case scenario situation where noncompliance with or failure to understand the regulations that govern the industry led to a tragic ending for the business.  One of the lessons learned is that it is not enough to just know the best business practices of an industry but one must consider how one’s business may overlap into other sectors and require knowledge of other laws and regulations.  It is important to be active in the professional community of your industry and also consult with attorneys regarding the legal implications of your business.  It is even more important to be proactive in managing one’s business by determining problems that may arise and facing them head on. 

Electronic Wills in the Digital Age?

As many of us have experienced, with every new convenience rendered by technology comes a plethora of complications, some of which lead to legal disputes.  With the promulgation and relative success of electronic filing, courts and legislators have been open to ideas that implement the use of technology to expedite the legal process in an increasingly litigious society.  Some believe that technology should and can be used in handling wills and other types of donative transfers.

A long held and closely guarded idea in American Law as it relates to donative transfers is the idea of freedom of disposition, or in other words, when making a donation one should have absolute control in determining what happens with the subject of that donation.  When most of us make a donation to a non-profit organization, we anticipate the funds will be used in furtherance of the goals of that organization and sometimes we even get to determine how those funds are used or which causes those funds will be directed to.  Similarly, with wills and estate planning, we get to determine who gets what and can even designate a purpose. 

In an effort to expedite the probate process, legal scholars and practitioners have suggested options to courts and legislators for accepting and managing electronic wills. 

As one can imagine, one of the most important factors about a will is its authenticity.  As wills are often contested, courts want to be sure that the testator’s wishes are being fulfilled.  Therefore, a will has certain formalities such as that it must be in writing, it must be signed the testator, and it must be witnessed by two individuals.  To ensure that a testator’s true intentions for his estate plan are given effect these formalities answer the questions of whether or not the decedent intended to make a will and if so, what are the terms of that will.  These formalities also assist the court in determining whether the purported will is authentic and the specific terms of the will.  Formalities act as an evidentiary tool to assist in performing the testator’s wishes without the testator being present to give testimony.  The formalities also have the effect of emphasizing the importance and significance of making a will to the testator (the cautionary function), protect the testator from manipulative imposition (the protective function), and the formalities standardizing the form of wills (the channeling function). 

An electronic will can mean a variety of things.  An electronic will could encompass a situation wherein the testator typed his will on a computer with a word processing program and stored it on the hard drive.  An electronic will could also mean a will signed by the testator using an authenticated digital signature, witnessed or notarized via webcam, and stored by a for profit company.  Scholars have organized the vast array of “electronic will” into three distinct categories including (1) offline electronic wills, (2) online electronic wills, and (3) qualified custodian electronic wills. 

Offline electronic wills are wills that can be typed or even hand written with a stylist onto an electronic device prepared by the testator himself, signed by way of the testator typing his or her name or putting another signatory mark into the electronic document, and stored on the electronic device’s local hard drive.  Generally, this will may remain electronic.  Online electronic wills are those that by their very nature require another private actor, typically a technology company, cell phone service provider, etc. and often times stored on an online server/cloud.  Online electronic wills would hypothetically permit a neutral third-party to provide objective evidence on critical questions such as when the document was created and its authenticity.  The third type of electronic will is the qualified custodian electronic will, which involves a company becoming a “qualified custodian” that would create, execute, and store the testator’s will as required by the rules and regulations of the respective state. 

Although New York State has not implemented a framework for dealing with electronic wills, other countries have started to do so.  It should be noted that even with technology to assist there will no doubt be cases where adding tech to this process will still fall short.  Much of the push for electronic processes within the legal industry is driven by the trend of increasing internet use.  But one thing is for sure, scholars agree that in order to properly implement electronic wills, a systematic approach from courts and legislators is imperative. 

Time to Pay: New York State Attorney General Barbara Underwood puts a Hold on New York State Debt Collection Group

The debt collection operation in Buffalo controlled by Robert Heidenreich including six firms is being sued by the NY Attorney General’s Office for alleged illegal debt collection practices.  The lawsuit claims that the collectors used “deceptive and abusive” tactics when contacting debtors for repayment of debts including allegedly demanding more money from consumers than what they owed and even pretending to be law enforcement or attorneys.  The complaint alleges that employees were instructed to use a variety of un-registered fictitious business names when interacting with consumers and threatened consumers with arrest unless they made payment and even falsely claimed that lawsuits have been filed against consumers. 

The practices of debt collectors are regulated under the Fair Debt Collection Practices Act (FDCPA), wherein debtors are protected from illegal collections made by debt collectors.  The Federal Trade Commission (FTC) has enforcement power over the FDCPA, and as an administrator agency, the FTC assures compliance and administrative enforcement.  Decisions of the FTC to investigate or prosecute alleged violations of the FDCPA are completely discretionary.  It should be noted that the FDCPA is specifically designed to permit states to regulate conduct of a debt collection practice so long as those laws are not inconsistent with the act, thus, the FDCPA serves as a baseline.  New York State allows the Attorney General or the District Attorney of a particular county to bring an action under General Business Law §600 against a debt collector for violations of New York’s Debt Collection Practice Statute therein.  However, unlike the FDCPA, the New York State statute does not afford an individual a private cause of action, but an individual may be entitled to assert a claim for deceptive practices under General Business Law §349.  The FDCPA has specific requirements for contacting debtors, including required information in initial collection letters, privacy requirements that prevent debt collection agencies from referring to themselves as debt collectors on their company envelopes that are mailed to consumers nor are they allowed to send post-cards to consumers alleging a debt.  In the United States, one cannot be arrested or sent to prison for not paying a consumer debt and threats of such action are illegal. 

Whether you have been contacted by a debt collector or you are seeking to collect a debt, it is prudent to consult an attorney to understand your rights as a consumer and/or to understand your options and follow the proper procedure if you are seeking to have a debt collected. 

Prepared by Jonathan A. Emdin
Chelus, Herdzik, Speyer & Monte, P.C., Main Court Building, 438 Main Street, Tenth Floor, Buffalo, NY 14202

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