1) Major Current Legal Topics Noel L. Allen, Esq.
2) Major Current Legal Topics Noel L. Allen, NASBA Legal Counsel Annual Meeting October 2015
3) Major Current Legal Topics Marijuana Legalization & Accountancy Regulation Use of Title & Deceptive Credentials • The legal landscape • The UAA • State agency policies on legalization • Relevant court decisions • Regulatory challenges • Recent credential litigation N.C. Dental Board v. FTC • State executive and legislative responses • Case updates • The future
4) Marijuana Legalization & Accountancy Regulation Marijuana laws State agency responses Regulatory challenges • Medical and/or recreational marijuana sale/use has been decriminalized or legalized in over 20 states. • At least 10 states require marijuana businesses to undergo annual audits. • Federal law has not decriminalized or legalized marijuana. • Board of accountancy policies on CPAs providing services to marijuana businesses pursuant to state laws. • Other state agencies’ responses to licensees using marijuana or providing services to marijuana businesses pursuant to state laws. • What is the effect on good moral character? • Considerations in states where marijuana sale and use continues to be illegal. • What if the federal enforcement policy changes?
5) Use of Title & Deceptive Credentials Court decisions • Ibanez v. Florida Dept. of Bus. And Prof. Regulation, et al. • Stuart v. American Express Tax & Business Services, Inc. • Volin v. Mass. Bd. of Public Accountancy • Moore v. Cal. State Bd. of Accountants • Carberry v. Cal. State Bd. of Accountants • Tx. State Bd. of Accountancy v. American Express • More recent decisions The UAA UAA §2: Prohibits the “use of titles that have a capacity or tendency to deceive the public as to the status or competence of the persons ..” UAA §14(h)(2) : Non-CPA cannot use “any title or designation that includes the words ‘accountant,’ ‘auditor,’ or ‘accounting,’ in connection with any other language ...that implies that such person or firm has special competence as an accountant or auditor.” See also: UAA § § 14(c), 14(g), 14(h)(2) Recent litigation • AICPA v. IRS • CPA Australia v. CAANZ • N.C. Dental Board v. FTC: “Nothing in this Order prohibits the Board from” investigating, suing, or bringing administrative proceedings against nonlicensees for violations. • Other interesting pending litigation
6) NC State Board of Dental Examiners v. FTC: Key Outcomes How do licensee-controlled state boards qualify for state action immunity? What constitutes active supervision? What does the FTC Order permit the Dental Board to still do? • Act pursuant to a clearly articulated state law, and • Demonstrate active state supervision. • State supervisor must review the substance of the anticompetitive decision, not merely the procedures. • State supervisor must have the power to veto or modify decisions to ensure they accord with state policy. • Mere potential for state supervision is not an adequate substitute. • State supervisor may not itself be an active market participant. • Investigate unauthorized practice; • Seek an injunction in court against an unlicensed party; and • Pursue administrative remedies against a licensee.
7) Active Supervision - What is Not Required by the Court? Justice Kennedy, writing for the 6-3 majority, stated: “Active supervision need not entail day-to-day involvement in an agency’s operations or micromanagement of its every decision. Rather the question is whether the State’s review mechanisms provide ‘realistic assurance’ that the nonsovereign’s actor’s anticompetitive conduct ‘promotes state policy, rather than merely the party’s individual interests.”’
8) States Begin to Respond at All Levels State boards taking a close look at practices & procedures Governors & Attorneys General weigh in State legislatures are beginning to take notice • Enforcement and rulemaking; • Informal enforcement efforts; and • Communications with non-licensees. • Several states’ AGs have issued their interpretation or an official AG opinion of how their state should respond. • Some states have proposed the creation of a new body to oversee certain proposed board actions. • When 2016 sessions begin, some states will see bills directly relating to the NC Dental Board case. • Each state will have to chart its own path with an eye towards how the case is being interpreted by the federal courts
9) Post-Dental Board Cases Against State Boards Teladoc, Inc. v. TX Medical Bd. Axcess Medical v. MS State Bd. of Medical Licensure Coestervms.com, Inc. v. VA Real Estate Appraiser Bd. Express Lien, Inc. v. Cleveland Metropolitan Bar Association LegalZoom.com, Inc. v. NC State Bar Rodgers v. LA State Bd. of Nursing Patel v. TX Dept. of Licensing & Regulation NC State Bd. of Dental Examiners v. FTC Petri v. VA Bd. of Medicine Robb v. CT Bd. of Veterinary Medicine Murphy-Dubay v. MI Dept. of Licensing & Regulatory Affairs
10) Post-Dental Board Cases Against State Agencies Who is being sued? • Medical, Nursing, Vet, & Real Estate Appraisers Boards, Umbrellas; • Board members in their individual and official capacities; and • In at least one case, the national association was alleged to have colluded with its member board. What is the conduct at issue? • Enforcement, rulemaking, and licensure denial. • The most notable cases involve enforcement and rulemaking where the restraint of trade involves non-licensees. What do the plaintiffs seek? • Declaratory judgments, • Injunctive relief, and • In some cases, monetary relief including treble damages