October 2020 | Compliance Update

Federal Developments

EEOC Updates COVID-19 Guidance

At the beginning of September, the U.S. Equal Employment Opportunity Commission (“EEOC”) published an update to its guidance titled “What You Should Know About COVID-19 and the ADA, Rehabilitation Act, and Other EEO Laws (WYSK).” The updated guidance adds new questions and answers adapted from other EEOC technical resources, with a focus on providing employers with guidance on testing, inquiries, and return-to-work issues. Below are a few highlights from the update:

  • Testing: The guidance reiterates that employer testing to determine whether employees entering the workplace have COVID-19 is generally permissible when “job-related and consistent with business necessity” to determine whether such employees may be a direct threat to others. The updated guidance also confirms that employers who follow CDC recommendations regarding whether, when, and for whom testing is appropriate will be considered as compliant with the “job-related and consistent with business necessity” standard. Any employee who refuses permissible testing (or who refuses permissible inquiries, as discussed below) may be denied entry into the workplace.
  • Inquiries: The updated guidance confirms that employers are generally permitted to ask employees who will be physically entering the workplace whether they have symptoms associated with COVID-19, and that any employee who reports symptoms may be denied entry into the workplace. However, employers are generally not entitled to ask symptom-related questions of employees who will be teleworking or who will not be in close contact with coworkers or others while performing their jobs. In addition, the guidance reiterates that if an employer wishes to make inquiries (or impose testing) on only one (rather than all) employees, the ADA requires the employer to have a “reasonable belief based on objective evidence” that the particular employee may have COVID-19.
  • Absences From Work: The guidance confirms that employers are always permitted to ask an employee why he/she was absent from work, even if the reason may be health-related. The guidance also confirms that an employer may ask an employee returning from personal travel where he/she has been and may require that employees comply with quarantine guidance before returning to work depending on the location of their travel.
  • Reasonable Accommodations: Some employers who have adopted temporary, pandemic-related “work from home” policies are concerned that employees will request permanent telework as a “reasonable accommodation” under the ADA, even after the pandemic subsides. The guidance confirms that employers are not required to grant every telework request as a “reasonable accommodation,” even if the employee has demonstrated the ability to perform his/her job remotely during the pandemic. Rather, the EEOC states that if there is no disability-related limitation that requires teleworking, then the employer does not have to provide telework as an accommodation. In addition, if the employee has a disability-related limitation that can be effectively addressed with another form of accommodation in the workplace, the employer can choose the alternative to telework.


U.S. Immigration and Customs Enforcement (ICE) Has Once Again Extended Its Flexibility Regarding the Physical Presence Requirement For Section 2 Of The Form I-9

Employers operating 100% remotely due to COVID-19 are not required to review an employee’s identity and employment authorization documents in the employee’s physical presence (as is required to complete section 2 of the Form I-9). Previously extended through August 19, 2020, the agency’s enforcement flexibility has been extended for an additional 30 days such that it will now expire on September 19, 2020. Once normal operations resume, employees who were on-boarded during this time must report to their employer within three business days for in-person verification of the document(s) presented for section 2 of the Form I-9. Also, it is important for employers to understand that although the in-person requirement is currently waived if operating remotely due to COVID-19 restrictions, the Form I-9 must still be completed within three business days of hire and this waiver of the physical presence requirement is limited in duration. Click here to read about the extension and here to read the original guidance.


Marijuana Legalization Update For 2020: A Primer on The Latest Medicinal and Recreational Use News

In the past several years, marijuana legalization has become an increasingly difficult issue for employers to navigate. Marijuana legalization raises challenging workplace questions related to drug testing, disability accommodation, workplace safety, hiring, and employment termination, among other issues. Because of the fast-evolving nature of marijuana laws, and the wide variance in laws and protections from state to state, employers have struggled to keep up.

The COVID-19 pandemic put a halt to many state legislative or citizen-driven initiative efforts to legalize marijuana for either medicinal or recreational purposes, or to expand current marijuana legalization, including in Alabama, Arkansas, FloridaKentucky, Idaho, Missouri, and North Dakota.

However, several states will have the opportunity in November 2020 to vote on marijuana legalization through ballot initiatives and state constitutional amendments. In addition, the United States House of Representatives will soon vote on legislation that would remove marijuana from Schedule I of the Controlled Substances Act. Here is a roundup of marijuana legalization efforts that could affect employers as we head into 2021.

The United States House of Representatives is set to vote in September 2020 on the Marijuana Opportunity Reinvestment and Expungement (MORE) Act of 2019 (H.R. 3884). The bill, among other things, would remove cannabis as a Schedule I controlled substance and, in turn, essentially decriminalize marijuana at the federal level. While this is an intriguing development, regardless of the results of the House vote, it seems unlikely that the bill will be able to advance through the United States Senate given its current makeup. Perhaps the more important takeaway from this development is that federal decriminalization of marijuana could be an issue that gains momentum in the coming years.

Proposition 207 (the Smart and Safe Arizona Act) would legalize the possession and recreational (i.e., nonmedicinal) use of marijuana by adults age 21 and over in Arizona. Proposition 207 does not contain any express protections for applicants for employment or employees, and it does not prohibit employers from testing for marijuana. If passed, Proposition 207 would join the current Arizona Medical Marijuana Act—which does contain employment protections for medical marijuana cardholders in Arizona.

If Arizona voters approve Proposition 207, the deadline for Arizona lawmakers to establish regulations governing the Arizona recreational marijuana industry would be April 5, 2021.

Initiative Measure No. 65 and Alternative Initiative Measure No. 65A (House Concurrent Resolution 39) represent two versions of a medical marijuana amendment to the Mississippi Constitution. Initiative Measure No. 65 is a citizen-driven ballot initiative, whereas Alternative Initiative Measure No. 65A was referred to the ballot as an alternative measure by the Mississippi Legislature. While both measures would amend the state constitution to create a state medical marijuana program, Alternative Initiative Measure No. 65A is less specific in its language, meaning that the state legislature would subsequently be able to include further details as to its scope.

Importantly, Alternative Initiative Measure No. 65A would limit medical marijuana access only to “qualified persons with debilitating medical conditions” and restrict “[t]he smoking of marijuana products…to the treatment of qualified persons who have terminal medical conditions.” In contrast, Initiative Measure No. 65 reflects a more traditional medical marijuana law and lists more than 20 qualifying conditions for cardholder status. Neither option contains any express protections for applicants for employment or employees, nor prohibits testing for marijuana.

If Initiative Measure No. 65 is passed, the deadline for the medical marijuana program to be operational would be August 15, 2021. Alternative Initiative Measure No. 65A does not contain a similar deadline.

Statutory Initiative No. 190 (I-190) and Constitutional Initiative No. 118 (CI-118) would legalize the possession and recreational use of marijuana for adults age 21 and over in Montana. I-190 and CI-118 do not contain any express protections for applicants for employment or employees, and they do not prohibit testing for marijuana. If passed, I-190 and CI-118 would join the current Montana Medical Marijuana Act—which also does not provide employment protections for medical marijuana cardholders in Montana. If passed, the most relevant portions of I-190 and CI-118 would go into effect on January 1, 2021.

The Nebraska Medical Cannabis Constitutional Amendment would amend the Nebraska Constitution to legalize marijuana for medicinal purposes and would authorize the Nebraska Legislature to develop laws, rules, and regulations to govern the medical marijuana program. The ballot initiative does not contain any express protections for applicants for employment or employees, and it does not prohibit testing for marijuana.

Notably, the ballot initiative is currently being challenged in Nebraska state court. The Nebraska Supreme Court will determine whether the initiative violates state rules requiring ballot initiatives to focus on a “single subject.” Whether the initiative stays on the ballot for Nebraska voters remains to be seen.

New Jersey
Public Question No. 1 would add an amendment to the Constitution of the State of New Jersey to legalize the possession and recreational use of marijuana for adults age 21 and over in New Jersey. Public Question No. 1 does not contain any express protections for applicants for employment or employees, and it does not prohibit testing for marijuana. If passed, Public Question No. 1 would take its place alongside the current Jake Honig Compassionate Use Medical Cannabis Act—which does contain employment protections for medical marijuana cardholders in New Jersey. If passed, Public Question No. 1 would go into effect on January 1, 2021.

South Dakota
Initiated Measure 26 would legalize marijuana for medicinal purposes. Initiated Measure 26 does not contain any express protections for applicants for employment or employees, and it does not prohibit testing for marijuana.

If passed, the deadline for the South Dakota Department of Health to enact rules implementing the medical marijuana program would be approximately October 29, 2021. Constitutional Amendment A would legalize the possession and recreational use of marijuana for adults age 21 and over in South Dakota. Constitutional Amendment A does not contain any express protections for applicants for employment or employees, and it does not prohibit testing for marijuana.


State Developments

The California Legislature Passed Assembly Bill 1281 (AB 1281) Extending Until January 1, 2022 The Partial Exemption for Employment Data Under The California Consumer Privacy Act (CCPA)

The partial exemption applies to information collected by a business about job applicants and employees, but it does not exempt a business from the responsibility to inform employees and job applicants of the personal information it collects about them and for what purposes it is used. AB 1281 now awaits Governor Newsom’s signature, and will only take effect if the California Privacy Rights Act (CPRA), a ballot initiative to amend the CCPA, is not approved in the election on November 3, 2020. In other words, if the CPRA is not approved, the exemption will expire on January 1, 2022. If the CPRA is approved, the exemption will expire on January 1, 2023. Click here to read the bill.


D.C. Enacts COVID-19 Workplace Protections

The District of Columbia Council passed the Protecting Businesses and Workers from COVID-19 Emergency Amendment Act of 2020, which temporarily mandates certain COVID-19 workplace protections for all employers with at least one employee in D.C. This law, which will remain in effect from August 13 through November 11, 2020, imposes the following requirements:

  • Employers must adopt and implement social distancing policies that adhere to Mayor’s Order 2020-080, concerning the wearing of masks in D.C. The Mayor’s Order requires that employers ensure that all persons in the workplace wear face coverings, except customers who are eating, drinking, or engaging in socially-distanced exercising.
  • Employers are prohibited from disclosing the identity of a COVID-positive employee to anyone aside from the Department of Health, or other District or federal agency responsible for contract tracing and the containment of COVID-19.
  • Employers may choose to establish a workplace policy that requires an employee to report a positive test for an active COVID-19 infection.
  • Employers are prohibited from retaliation against employees who refuse to serve a customer or client or work within 6 feet of another individual who is not complying with the employer’s social distancing policy. In addition, employers may not take adverse action against employees who: have tested positive for COVID-19 (unless the employee reports to work after testing positive), are symptomatic and awaiting test results, must quarantine after exposure, or are caring or seeks to care for someone who is symptomatic or quarantined.

In addition, the Mayor is authorized to issue grants in an amount up to $1,000 to businesses eligible for certification as a small business enterprise or a nonprofit entity for the purpose of purchasing personal protective equipment for its employees. Such business must demonstrate financial distress due to a COVID-19-related reduction in business revenue.

As to enforcement, the Mayor has the authority to conduct investigations, enforce the bill administratively, and assess discretionary penalties. The Attorney General may also conduct investigations and bring a civil action in District courts to seek reasonable attorneys’ fees and costs, payment of lost wages, statutory penalties, and other equitable relief as appropriate.


Hawaii Amends Its Ban The Box Law To Fortify Protections For Ex-Offenders

Hawaii has long had a law limiting the discretion that employers have to consider older conviction records in making employment decisions. Effective September 15, 2020, SB 2193 prevents most private sector employers from considering conviction records within the last 10 years, but only convictions within seven years for felony convictions, and five years for misdemeanor convictions, excluding periods of incarceration.1 Hawaii shortened the 10-year lookback period “to reduce unnecessary employment discrimination against individuals with old and relatively minor conviction records, in furtherance of economic self-sufficiency, and to reduce crime and recidivism rates.”

The legislative findings for the amendment explain:
Even employers and human resource professionals with good intentions may be affected by unconscious biases and make adverse decisions against wholly qualified employees and prospective employees who have a ten-year-old record. Compounding this problem, background checks are often inaccurate, and can still show arrest and expunged records in conflict with what is currently allowed to be used under the existing statute. Accordingly, even individuals who have not been convicted of a crime or have had their records expunged may continue to face employment challenges as a result of the ten-year “lookback” period.

To account for the amendment, employers with operations in Hawaii should consider taking the following measures:

  • Review and update post-offer, pre-employment questionnaires that ask job applicants to disclose prior felony or misdemeanor convictions.
  • Review and update policies and procedures to reflect the shorter lookback period for consideration of felony or misdemeanor convictions.
  • Consider training for personnel involved in the hiring process, particularly those tasked with adjudicating criminal background checks.

In addition to updates to these types of ban-the-box laws,2 employers also should continue to be mindful of continued developments regarding criminal record screening policies and Title VII of the Civil Rights Act of 19643 and the federal Fair Credit Reporting Act (FCRA).4 Efforts to help ensure compliance with the FCRA’s hyper-technical notice and disclosure requirements is especially important in order to mitigate against class action risks.


Maryland Bans Another Box From Employment Applications

“Ban the Box” (the little box asking about criminal history that applicants check off) became the law in Maryland effective February 29, 2020. There are more boxes to ban from a Maryland employment application effective October 1, 2020. As of that date, applicants may not be asked about their pay history on an application. You also cannot ask about prior pay during employment interviews or rely on prior pay (with one exception I’ll describe later). You can’t find out what applicants are making in the job that they are leaving, which often is helpful information in deciding what to offer. Employers also cannot use “backdoor” methods to obtain pay history, like calling a prior employer or asking a friend with inside info. Make sure your managers are trained not to ask about salary history. Stop providing this information in response reference checks from Maryland companies if you have done so in the past since the caller isn’t supposed to be asking.

Please also be aware that this law provides that if applicants request information on the pay range for the position, you have to provide the information. Yes, they get to know your top range number right from the start. But if you don’t have a pay range—if there is a single set salary—then you needn’t provide one (you simply can’t). The law does provide an exception where salary history is, in the eyes of our elected officials, relevant: specifically, after a “conditional offer” of employment is made, employers are allowed to rely on “voluntarily-provided” wage history but only if this is provided in order to support a higher wage than initially offered. So, if an applicant is trying to negotiate for more, and they decide to disclose their prior salary, the employer can rely on that information in deciding whether to offer more money. But note that that you are not allowed to rely on this information if that higher wage offer would create a pay disparity based on gender or gender identity (in other words, don’t violate that equal pay law). Do not fret, however, because the law makes clear that nothing in it should be read to prohibit applicants from voluntarily sharing their pay history with you. Sensible stuff. But if disclosed, you cannot rely on the information in deciding on pay (except as noted above to agree to pay more).

Of course, employers still may ask applicants what they are looking for by way of compensation. For what that’s worth!


Medical Cannabis in USA (New Jersey)

Medical Use

Which medical conditions qualify for treatment with cannabis products? What other rules and restrictions govern medical use of cannabis (e.g. dosage limits)?

A patient qualifies for treatment with cannabis products if a physician certifies that the individual has one of the following approved debilitating medical conditions:

  • amyotrophic lateral sclerosis;
  • anxiety;
  • chronic pain related to musculoskeletal disorders;
  • chronic pain of visceral origin;
  • migraine;
  • multiple sclerosis;
  • terminal cancer;
  • muscular dystrophy;
  • inflammatory bowel disease (including Crohn’s disease);
  • terminal illness (if the physician has determined a prognosis of fewer than 12 months of life); and
  • Tourette’s Syndrome.

A patient also qualifies for treatment if they are resistant or intolerant to conventional therapy for:

  • seizure disorder (including epilepsy);
  • intractable skeletal muscular spasticity;
  • glaucoma; or
  • post-traumatic stress disorder.

A patient also qualifies for treatment if they have severe or chronic pain, severe nausea or vomiting, cachexia, or wasting syndrome resulting from the condition or treatment of:

  • positive status for human immunodeficiency virus;
  • acquired immune deficiency syndrome; or
  • cancer.

A physician registered with the state’s Medicinal Marijuana Program must provide written instructions establishing the total amount of medicinal cannabis that a patient may be dispensed in a 30-day period. However, the amount cannot exceed two ounces. A patient may register at only one alternative treatment centers (ATC) to purchase medical cannabis. Cannabis in an edible form is only available to qualifying patients who are under the age of 18. The maximum tetrahydrocannabinol content of any product sold to 10%.

Qualifying patients may not operate, navigate, or be in actual physical control of any vehicle, aircraft, railroad train, stationary heavy equipment or vessel while under the influence of cannabis; or smoke cannabis in a school bus or other form of public transportation, in a private vehicle unless the vehicle is not in operation, on any school grounds, in any correctional facility, at any public park or beach, at any recreation center, or in any place where smoking is prohibited. ATCs are not permitted to deliver medicinal cannabis to patients.

Physician Licensing

What licensing requirements apply for physicians seeking to prescribe cannabis products to patients?

Physicians are required to register with the New Jersey Department of Health (DOH). To qualify, a physician must:

  • hold an active New Jersey Medical license in good standing issued by the New Jersey Board of Medical Examiners;
  • possess an active controlled dangerous substances registration issued by the New Jersey Division of Consumer Affairs that is not subject to limitation; and
  • practice within New Jersey.

Pharmacy Licensing

What licensing requirements apply for pharmacies seeking to dispense cannabis products?

Pharmacies are not permitted dispense cannabis products.

Health Insurance

How are cannabis products covered by health insurers (both public and private)? Are there any rules or restrictions in this regard?

There are no restrictions or requirements regarding the coverage by health insurers. Instead, the act provides that nothing in this act shall be construed to require… private health insurer to reimburse a person for costs associated with the medical use of marijuana.”

Notwithstanding the statutory language, New Jersey workers’ compensation judges have ordered workers’ compensation carriers to pay for injured workers’ medical cannabis (see McNeary v. Township of Freehold, Claim Petition No. 2008-8094 (June 28, 2018); Watson v. 84 Lumber, Claim Petition No. 2009-15740 (December 15, 2016)). On its website, the DOH advises patients that medicinal cannabis is not a covered service under Medicaid or any other health plans in New Jersey.

Product Development

What opportunities are available for cannabis businesses to cooperate with healthcare providers, pharmaceutical companies and research institutes in the development of new medical cannabis products? Are there any notable regulatory considerations in this regard?

Because cannabis remains illegal under federal law, opportunities for cannabis businesses to cooperate with others in the development of new medical cannabis products are limited. The Food and Drug Administration (FDA) has not approved cannabis as a safe and effective drug for any indication. However, the FDA has approved one drug product that contains the purified substance cannabidiol. The FDA has also approved two drugs containing a synthetic version of a substance that is present in the cannabis plant, as well as one other drug containing a synthetic substance that acts similarly to compounds from cannabis.

The FDA recognizes that it plays a vital role in supporting scientific research into the medical uses of cannabis. As a part of its role, the FDA supports those in the medical research community who intend to study cannabis and does so through cooperation with other federal agencies. On its website, the FDA outlines the process for conducting research with cannabis.


Ohio Grants Broad Immunity From COVID-19 Lawsuits; Includes Health Care Providers

Ohio House Bill 606 grants temporary immunity from civil actions related to the transmission of COVID-19 and limited immunity to health care providers related to civil actions and professional disciplinary actions. On September 14, 2020, Ohio Governor Mike DeWine signed into law Ohio House Bill 606, which grants temporary immunity from civil actions related to the transmission of COVID-19 and limited immunity to health care providers related to civil actions and professional disciplinary actions.

Ohio House Bill 606 provides that a person may not bring a civil action for damages for injury, death, or loss to person or property if the action is based in whole or in part on the allegation that the injury was caused by the exposure, transmission, or contraction of MERS-CoV, SARS-CoV, or SARS-CoV-2 (i.e., the virus that causes COVID-19) or any mutation thereof. However, this immunity does not apply if the exposure, transmission, or contraction resulted from the defendant’s reckless, intentional, or willful or wanton misconduct. The law protects individuals, corporations, business trusts, estates, trusts, partnerships, and associations and explicitly states that schools, for-profit or nonprofit entities, governmental entities, religious entities, and state institutions for higher education are intended to be covered under the foregoing broader categories.

In addition, Ohio House Bill 606 provides protection to a broad range of health care providers. Health care providers are not subject to professional disciplinary action and are not liable for damages for injury, death, or loss to a person or property arising from the provision, withholding, or withdrawing of services or the compliance with an order issued during or in response to an emergency or disaster (such as COVID-19). There are exceptions to this general rule. A health care provider can still be subject to professional disciplinary actions if their conduct constitutes gross negligence. Additionally, health care providers are not extended immunity in a civil action if their conduct constitutes a “reckless disregard for the consequences so as to affect the life or health of the patient” or intentional or willful or wanton misconduct. Notably, the immunity applies only to (i) the provision, withholding, or withdrawal of health care services and medical care; (ii) decisions related to such services or care; and (iii) compliance with an executive order or director’s order by a health care provider as a result of or in response to a disaster or emergency and through the duration of the disaster or emergency, and not simply care provided during the subject period.

The law further specifies that governmental orders, recommendations, and guidelines regarding COVID-19 do not create a duty of care or substantive legal right that could be used to establish civil liability, and there is a presumption that any such government order, recommendation, or guideline is not admissible as evidence establishing a legal duty or new cause of action. Likewise, the law does not create a new cause of action or substantive legal right against a health care provider. Additionally, even if immunity pursuant to this law does not apply, no class action may be brought against a person or health care provider alleging liability on a cause of action arising from the immunized actions in this law.

The law goes into effect on December 13, 2020, and applies to causes of action arising from March 9, 2020, through September 30, 2021.


Court Cases

The U.S. District Court For The Southern District Of New York Has Certified A Proposed Class Action Settlement To Resolve Claims That Madison Square Garden Violated The Fair Credit Reporting Act (FCRA) By Denying Employment Based On Criminal Background Checks

The lawsuit alleged that Madison Square Garden rejected job applicants based on information contained in their background check reports without first providing them with a copy of the report, the statement of rights under the FCRA, or a copy of Article 23-A of the New York Correction Law. The lawsuit alleged this was a violation of the FCRA as well as New York state law, which require certain disclosures before any adverse action is taken against job applicants. Under the terms of the settlement, Madison Square Garden will pay approximately $1.3 million and agrees to make substantial changes to its hiring policies. Click here to read more.


What Is A “Legitimate Business Need” Under The FCRA? The Eleventh Circuit Provides A Critical Answer

In a new and critical ruling, the Eleventh Circuit Court of Appeals just held that business has a “legitimate business need” to pull a credit report any time it is responding directly to a consumer-initiated request—even if that consumer is not who he purports to be. This ruling provides a much needed clarification to one of the Fair Credit Reporting Act’s (“FCRA”) most often used permissible purposes, “legitimate business need.”

In Domante v. Dish Networks, L.L.C., No. 19-11100, 2020 U.S. App. LEXIS 28682, at *7-8 (11th Cir. Sept. 9, 2020), the Eleventh Circuit affirmed summary judgment for a satellite TV provider, finding that it had a “legitimate business need” for obtaining a consumer report to verify the identity of a person applying for satellite TV services. This case, however, was not the first time the parties had encountered one another. Prior to this suit, the plaintiff (a repeat victim of identity theft) and the defendant had settled a previous lawsuit stemming from the fraudulent use of the plaintiff’s identity to open an account with the defendant. Pursuant to that settlement, the defendant agreed to flag any future applications using the plaintiff’s identity—specifically, the plaintiff’s first and last names, date of birth, and Social Security number—and preclude opening an account in plaintiff’s name. Several years later, in the events that prompted this suit, someone attempted to fraudulently register for satellite TV services using a limited amount of the plaintiff’s personal information. Specifically, the applicant provided only the last four digits of the plaintiff’s Social Security number, her date of birth, and her first name. The applicant provided a different last name, address, and phone number. The defendant’s automated system submitted this information to a consumer reporting agency, which matched the applicant’s information to the plaintiff’s information and returned to the defendant a consumer report for the plaintiff. Upon receipt of the report and after realizing this connection, the defendant rejected the fraudulent application and requested that the consumer reporting agency delete the credit inquiry it made for the plaintiff.

In affirming summary judgment that the defendant did not violate the FCRA, the Eleventh Circuit followed the Sixth Circuit’s lead in Bickley v. Dish Networks, LLC, 751 F.3d 724 (6th Cir. 2014). In Bickley, the Sixth Circuit affirmed summary judgment for the same on a similar factual pattern: the defendant had requested a consumer report for that plaintiff after receiving a fraudulent application. Upon receiving the report, the defendant detected that the application was fraudulent and cancelled it. The Sixth Circuit found that the defendant had a “legitimate business need” for obtaining the consumer report, which was “verifying the identity of a customer and assessing his eligibility for a service.”

The Eleventh Circuit found that the defendant had a “legitimate business need” because a consumer (the fraudulent applicant) initiated the transaction. In doing so, the court rejected the plaintiff’s argument that the defendant did not have a “legitimate business need” due to its requirement under the settlement agreement to deny any future applications using the plaintiff’s information. The court observed that at the time of the application, the applicant did not provide sufficient information such that the defendant would be aware of what was occurring. The applicant provided only a first name, the last four digits of a Social Security number, and a date of birth. He did not provide the correct last name or a complete Social Security number. The defendant required the information presented in the consumer report to realize that the pending application was fraudulent and involved the plaintiff.

Domante has a few takeaways. First, in what may be a prelude for cases to come, the court stated in a footnote that the FCRA does not require a user of consumer reports to “confirm beyond doubt” the identity of potential consumers prior to requesting a consumer report. With the issue of what constitutes a “legitimate business need” picking up within the circuits, courts may find themselves determining whether the FCRA requires a certain level of due diligence prior to requesting a consumer report. Second, the consumer initiating a request does not necessarily have to be the person he purports himself to be in order for the user to have a permissible purpose under the FCRA. Missing from the court’s opinion is any indication that the identity of the consumer for purposes of a consumer-initiated transaction was relevant to the outcome. Given the hodgepodge of information fraudulent consumers may supply, Domante suggests that users of consumer reports do not face increased liability under these circumstances.


Tenth Circuit Upholds Constitutionality Of Sex Offender Registry

The Tenth Circuit reversed an unprecedented ruling in which the district court had held Colorado’s sex offender registration act to be unconstitutional on multiple grounds.

In Millard v. Camper, F.3d, 2020 WL 4875290 (10th Cir. 2020), the Tenth Circuit reversed an unprecedented ruling in which the district court had held Colorado’s sex offender registration act to be unconstitutional on multiple grounds. Following both Supreme Court and Tenth Circuit precedent, the circuit court rejected plaintiffs’ as-applied constitutional challenges based on cruel and unusual punishment and substantive due process. The court also overturned the lower court’s ruling that one plaintiff had been deprived of procedural due process by state courts, because the federal district court lacked appellate jurisdiction under the Rooker-Feldman doctrine to hear a challenge to those state-court decisions.

History of Federal and State Sex Offender Registries
States began adopting sex-offender registries in the 1990s in response to high-profile sexual assaults and murders by persons with prior histories of sex offenses. Id. at *1. In 1994, Congress conditioned certain federal funding on states enacting such laws. “‘By 1996, every State, the District of Columbia, and the Federal Government had enacted some variation of’” a sex-offender registry. Id. (quoting Smith v. Doe, 538 U.S. 84, 90 (2003)). In 2006, Congress adopted the Sex Offender Registration and Notification Act (SORNA), in which it created a nationwide sex-offender registry and required states and registrants to provide registry information to the federal government.

Colorado has had a sex-offender registry since 1991. Id. at *2. In 2002, the state legislature adopted the Colorado Sex Offender Registration Act (CSORA), which complies with SORNA. CSORA has three basic elements: (1) sex offenders must register with local law enforcement; (2) the Colorado Bureau of Investigation (CBI) compiles a sex-offender registry; and (3) CBI allows limited public disclosure of some information contained in the registry. Id. Offenders must register if, among other things, they are convicted of any of 30-plus felonies or misdemeanors, or of an offense in which the “underlying factual basis involves” any of those 30-plus offenses. Id. (citation omitted). Most registrants must register annually, but those convicted of especially serious offenses must register quarterly. Though juveniles must register, if they satisfy certain criteria, they can petition for deregistration.

Under CSORA, the CBI must make some registrant information publicly available. On request, it must issue a list of persons on the registry, which must include their names and aliases, birth date, photo, and offense. CBI also maintains a website searchable by name and geographic area. Third-party businesses republish registrants’ personal information on the Internet, and the information can be republished with no limitation or regulation.

Plaintiffs’ Claims and the District Court’s Rulings
Plaintiffs, three convicted sex offenders subject to CSORA’s registration mandate, sued under 42 U.S.C. § 1983, claiming that CSORA’s registration requirements violated the Eighth Amendment’s prohibition against cruel and unusual punishment, and their Fourteenth Amendment right to substantive due process. Id. at *3. One plaintiff, who was convicted as a juvenile, contended that two state-court magistrates violated his right to procedural due process by denying his deregistration petitions. Id. at *3, 9.

After a bench trial, the district court ruled that CSORA constituted cruel and unusual punishment, and thus, violated the Eighth Amendment as applied to plaintiffs, and also violated their substantive due process rights. Id. at *4 (citing Millard v. Rankin, 265 F. Supp. 3d 1211, 1231-32, 1235 (D. Colo. 2017)). The court also ruled that the state courts violated the juvenile offender’s procedural due process rights. Id. (citing Millard, 265 F. Supp. 3d at 1233).

The Tenth Circuit’s Eighth Amendment Analysis
In addressing the Eighth Amendment claim, the circuit court focused on whether CSORA’s registration requirement constituted “punishment.” Id. This turns on whether the legislature intended to punish, and if not, whether there is the “clearest proof” that the law’s punitive effects negate the legislature’s intent. Id. (quoting Smith, 538 U.S. at 92). The court noted that it had twice, and the Supreme Court had once, ruled that sex offender registration requirements in other states were not punishment, and it reached the same conclusion here. Id.

The court observed that the Colorado General Assembly did not intend any punishment. The legislature had explicitly declared that CSORA was not “to be used to inflict retribution or additional punishment on any person,” but rather to address “the public’s need to adequately protect themselves and their children” from those with prior sexual convictions. Id. (quoting Colo. Rev. Stat. §16-22-110(6)(a)).

The court then applied the Supreme Court’s five-factor test to determine whether CSORA’s effects negated this express intent. Id. at *5 (citing Kennedy v. Mendoza-Martinez, 372 U.S. 144, 168 (1963)). This test comprises whether the statutory scheme “[1] resembles traditional forms of punishment, [2] imposes an affirmative disability or restraint, [3] promotes the traditional aims of punishment, [4] has a rational connection to a nonpunitive purpose, or [5] is excessive with respect to this purpose.” Id. (brackets supplied). The court concluded that all five factors weighed against finding that CSORA inflicted punishment.

First, the circuit court disagreed with the district court, which had concluded that CSORA’s requirements resembled three types of traditional punishment—public shaming, banishment, and parole and probation. Id. It reasoned that Colorado was not shaming by putting plaintiffs on display but disseminating accurate information about criminal records. It disagreed that the state was banishing plaintiffs by erecting obstacles to finding homes and jobs, when the court had previously upheld Oklahoma’s much more onerous residency restrictions. Id. (citing Shaw v. Patton, 823 F.3d 556, 559, 568 (10th Cir. 2016)). And it concluded that the reporting requirements did not amount to probation, when they fell short of the much more active role law enforcement plays in probationers’ lives.

Second, the court ruled that CSORA did not impose an affirmative disability or restraint. It noted that it had rejected this argument in Shaw, where Oklahoma had similar reporting requirements and much more onerous residency restrictions. Id. at *6 (citing Shaw, 823 F.3d at 569, 571).

Third, the court disagreed that the statute promoted the traditional aims of punishment. The district court had held that the statute promoted retribution and deterrence. But, relying on Smith, the circuit court explained that deterrence alone is not enough to render a statutory scheme criminal in nature. Id. (citing Smith, 538 U.S. at 102). Citing the same discussion in Smith, the court added that tying the length of a reporting requirement to the nature of an offense was not retributive but was reasonably related to the risk of recidivism. Id.

Fourth, the court agreed with the district court that CSORA was rationally related to a non-punitive purpose: public safety. Finally, and relatedly, the court opined that the statute was not excessive in its non-punitive purpose. The lower court had concluded that CSORA was excessive, because it required persons to divulge substantial personal information over a long time, without any individual risk assessment or opportunity to ease the requirements based on evidence of rehabilitation. Id. But the circuit court observed that in Smith, the Supreme Court had rejected similar reasoning, and in Shaw, the court itself had, again, approved more stringent requirements. Id. at *7.

Substantive Due Process
The Tenth Circuit next determined that CSORA did not violate substantive due process. The district court ruled that it did, because the statute allows the public to arbitrarily, and without notice, “inflict punishments beyond those imposed through the courts.” Id. (quoting Millard, 265 F. Supp 3d at 1235). Separately, plaintiffs contended that CSORA creates an irrebuttable presumption that a registered sex offender will reoffend.

The circuit court began by holding that CSORA did not violate any fundamental right. Id. at *8. It thus framed the substantive due process issue as “whether CSORA is rationally related to a legitimate government interest.” Id. The court found this test was “easily” met, because there was a “rational connection” between the statute and “the government’s interest in public safety.” Id. It added that substantive due process protects persons from government action but not public action. Id. And it rejected plaintiffs’ separate argument because they failed to connect the claimed “irrebuttable presumption” to any fundamental right. Id.

The ‘Rooker-Feldman’ Doctrine
Finally, the court made short work of the juvenile offender’s procedural due process claim. That plaintiff alleged that two Colorado magistrates had denied him due process in rejecting his deregistration petitions, because they had applied the wrong legal standard. Id. at *9. But the Tenth Circuit explained that the Rooker-Feldman doctrine “precludes lower federal courts from exercising appellate jurisdiction over state-court judgments.” Id. And a plaintiff cannot circumvent the doctrine by couching his request for appellate review of a state-court judgment as a due-process claim. The court thus vacated the district court’s judgment for lack of jurisdiction. Id.




This information has been prepared by Validity Screening Solutions for informational purposes only and is not legal advice. The content is intended for general information purposes only, and you are urged to consult a lawyer concerning your own situation and any specific legal questions you may have.