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Attevo’s problems are mounting Former employees have complained to Labor Department that tech consultant mishandled retirement contributions By CHUCK SODER csoder@crain.com
Former Attevo employees have sent complaints to the U.S. Department of Labor stating that money deducted from their paychecks for their retirement accounts never
ended up in those accounts, according to Matt Wienke, who led the Cleveland technology consulting company’s data analysis practice until April 2011, and four other ex-employees who did not want their names printed. The Department of Labor con-
firmed that it had “received complaints from members of the public about possible mishandling of 401(k) contributions” at Attevo, according to a statement from Scott Allen, who is the department’s director of public relations for the Midwest. Mr. Allen said he could not con-
firm or deny whether the department is investigating the situation. The complaints to the Labor Department are the latest in a string of problems at Attevo. The company employed about 100 people, including about 20 contractors, in May 2011, but since then many employees have left, including several in management. Mr. Wienke listed 10 mid- and upperlevel managers, including himself,
INSIDE In the palm of his hand Leon Polott, right, and his Sterionics Inc. are working to commercialize a pen-shaped device they believe will transform the way health care providers treat wounds. The product is being tested at Akron General and Kent State. PAGE 3
See ATTEVO Page 23
Nonprofits could be uniting for HANGE city’s sake
ABIG C
Three groups are in talks to form alliance that would save money and improve efficiency By JAY MILLER jmiller@crain.com
and patients aren’t likely to notice much of a change. However, hospitals are investing heavily to ensure the conversion goes smoothly, because any stumbles in the transition could affect their billing cycles and could jeopardize their alreadysensitive revenue streams.
Just as businesses and even communities are looking for ways to collaborate and be more efficient, three nonprofit organizations that play key roles in economic development in the city of Cleveland are moving toward consolidating their efforts. Cleveland Neighborhood Development Coalition, LiveCleveland and Neighborhood Progress Inc. are in talks to bring their organizations and their missions under a single umbrella organization that would work to fund, promote and revitalize commercial and residential development in Cleveland’s neighborhoods. The groups have not yet committed to an alliance, though. Consolidation is partly a realization that it’s time to sharpen the focus of the nonprofit groups that are working to build the central city. But it is also a recognition that money is tight — and getting tighter — and that the groups need to be more efficient.
See CHANGE Page 26
See NONPROFITS Page 8
Hospitals are spending millions to meet diagnostic coding requirement set by the government; transition must be complete by October 2014 By TIMOTHY MAGAW tmagaw@crain.com
F
orget the Jackson 5 song. For Northeast Ohio’s hospitals, ABC is not as easy as 123.
05
Local hospitals are in the midst of mul-
timillion-dollar initiatives to train thousands of their employees and upgrade their information technology infrastructure to cope with ICD-10, an arduous new diagnosis coding requirement — one that injects more alpha characters into what was a mostly numeric code. Sure, it all sounds like alphabet soup,
0
NEWSPAPER
74470 01032
6
SPECIAL SECTION
LEGAL AFFAIRS Law firms shorten their names in an effort to be more memorable ■ Pages 13-21 PLUS: ADVISER ■ THE SWITCH FROM PUBLIC TO PRIVATE ■ & MORE
Entire contents © 2013 by Crain Communications Inc. Vol. 34, No. 5
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COMING NEXT WEEK Yes, please and thank you Next week’s Small Business section will look at the importance of knowing — and the business of teaching — proper etiquette, especially in the age of smart phones and high-tech gadgets. The section also will include our monthly Tax Tips feature, an expert adviser column and much more.
REGULAR FEATURES Big Issue .....................10 Classified ....................26 Editorial ......................10
Going Places ...............12 Reporters’ Notebook....27 What’s New..................27
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FEBRUARY 4 - 10, 2013
THE LONG ROAD DOWN Organized labor continues to struggle, with union members comprising just 11.3% of the U.S. work force in 2012, down from 11.8% in 2011. Less than three decades ago, union members accounted for more than 20% of the country’s labor force. There now are more public-sector union members — 7.3 million — than in the private sector, 7 million. The union membership rate for public-sector workers in 2012 was 35.9%; for the private sector, it was just 6.6%. A look at the union affiliation of U.S. workers at various years from 1983 to 2012:
Year
Total union members
Share of U.S. work force
2012
14,366,000
11.3%
2007
15,670,000
12.1%
2002
16,145,000
13.3%
1997
16,110,000
14.1%
1992
16,418,000
15.7%
1987
16,913,000
17.0%
1983
17,717,000
20.1%
SOURCE: U.S. BUREAU OF LABOR STATISTICS; WWW.BLS.GOV
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INSIGHT
Diebold head isn’t afraid to shake things up Wallace’s history at Ford suggests big changes are ahead By MARK DODOSH mdodosh@crain.com
On the day Diebold Inc. announced that he had been elected to lead the company’s board of directors, Henry D.G. Wallace signaled that he would be no caretaker chairman.
“The company has a lot of potential for greater value creation, and I look forward to making a significant contribution to the company’s leadership and hope to build upon Diebold’s rich history,” Mr. Wallace stated in Diebold’s Jan. 21 news release about his new role on the board.
Just three days later, Mr. Wallace would be quoted prominently in another Diebold news release — this one revealing that Thomas Swidarski, its CEO of the last seven years, suddenly was out of a job. The abrupt exit of Mr. Swidarski came as an apparent shock to in-
vestors; they sent Diebold’s stock down more than 8% on Jan. 24, the day the company announced that the 17-year veteran also had Wallace stepped down as president and a director.
But anyone familiar with the later stages of Mr. Wallace’s 30-year career at Ford Motor Co. shouldn’t have been surprised by the swift action of Diebold’s board under his headship. The man born in Edinburgh, Scotland, 67 years ago hasn’t been afraid to be an agent of change, nor has he shied away from a challenge. See DIEBOLD Page 11
Ratner will cede some power at Forest City
AT THE TIPS OF THEIR FINGERS
CEO of New York subsidiary expected to remain involved after stepping down
Tech startup Sterionics is developing pen-shaped device to treat wounds
By MATT CHABAN Crain’s New York Business
By CHUCK SODER csoder@crain.com
T
he other day, Leon Polott cut his thumb on a metal hanger while picking up clothes at the dry cleaner. So, he put cold plasma on it. Through a company in Cleveland called Sterionics Inc., Mr. Polott and his colleagues are working to commercialize a pen-shaped device they believe will change the way health care providers treat wounds. See STERIONICS Page 26
MCKINLEY WILEY PHOTOS
ABOVE: Dr. Stephen Weeks, left, and Leon Polott are leading Sterionics Inc. LEFT: The company is developing a pen-shaped device to treat wounds.
Brooklyn, N.Y.’s biggest developer, Bruce Ratner, is preparing to step down as chief executive of Forest City Ratner, the New York City subsidiary of his family’s Clevelandbased Forest City Enterprises Inc. Taking Mr. Ratner’s place will be MaryAnne Gilmartin, who became executive vice president in 2007. The switch will elevate her to Mr. Ratner’s clear No. 2, as he continues on in his Ratner role as chairman. It was not entirely clear why Mr. Ratner will be stepping down or exactly when he would be ceding his CEO responsibilities at the company, but according to one source, his departure will be “sooner rather than later, likely the next few months.” Added another, “I wouldn’t expect him to disappear. He’ll still be very much involved at Forest City.” See RATNER Page 7
THE WEEK IN QUOTES “You have to do all this work, cross your fingers, flip the switch overnight and hope to God it’s translating in the right way. If not, we might not get paid.”
“People don’t want to move to a ghost town. People want to move to a place that’s vibrant, that can support the movement of goods and services.”
— Jill Barber, Southwest General Health Center’s director of revenue integrity and managed care operations. Page One
— Grace Gallucci, executive director, Northeast Ohio Areawide Coordinating Agency. Page 6
“It’s a lot more contemporary to have a law firm with a short, succinct, memorable name than it is to have a string of three, four, five names.” — Rick Rymond, Reminger Co. LPA executive group. Page 13
“The discerning attorney can determine pretty readily what programming is actually going to benefit them in their practice as opposed to simply fulfilling their required hours.” — Steven L. Wasserman, chairman of the Cleveland Metropolitan Bar Association’s continuing legal education committee, and partner, Chernett Wasserman. Page 20
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Nonprofit gets more engaged
SOLD 36600 LAKELAND BLVD EASTLAKE, OHIO
Civic Commons increases its consulting efforts by offering online services to groups By TIMOTHY MAGAW tmagaw@crain.com
Newmark Grubb Knight Frank is pleased to announce the sale of the 31,127 SF former HQ of Modern International Graphics, Inc. Terry Coyne represented the seller Margiotta Enterprises, Inc.
FEBRUARY 4 - 10, 2013
Full Selection of Commercial & Investment Offerings Available at
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The Civic Commons, a Cleveland nonprofit geared toward fostering constructive dialogue around issues facing Northeast Ohio, is getting into the consulting business and has locked down a handful of well-known clients. The organization, which launched in 2010 thanks to a $3 million grant from the Knight Foundation and additional support from
the Fund for Our Economic Future, made a strategic decision late last year to focus more of its time and resources on providing online engagement services to organizations, institutions and civic initiatives. For a fee, the Commons is offering its custom-built online discussion platform and consulting services to other organizations engaged in some sort of decisionmaking that requires input from a large group of people. As the Commons’ puts it, consider
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“Our little subscription model has great promise for a large, growing market for these kinds of services. The potential is huge, but in a larger context, it’s part of a movement that is shifting the way decisions are made” – Mike Shafarenko, president, Civic Commons it “social media for stuff that matters.” The efforts, which last year brought in more than $200,000 in revenue and made up about 20% of the group’s overall budget, should help prop up the still-burgeoning organization, according to Mike Shafarenko, Civic Commons’ president. The Commons’ client roster includes the Cleveland Metropolitan School District, ClevelandCuyahoga County Port Authority, the city of Cleveland’s Office of Sustainability, Hathaway Brown School in Shaker Heights and Kent State University. “How do we in the 21st century act as a nonprofit that isn’t solely reliant on philanthropic donations but also have a market-driven approach to what we’re doing to subsidize our costs?” Mr. Shafarenko said. Kent State, for one, engaged the Commons to help with its strategic planning process for its academic affairs division. Late last year, the university posed several questions on the Commons’ online platform related to its goals of increasing student success, bolstering academic quality, expanding research, securing its finances, developing talent and fostering internationalization efforts. After six weeks, more than 300 members of the university community registered for the project. Overall, the project garnered more than 10,000 page views. The Commons compiled all the data generated on the site, coded and analyzed it and produced a report that the university plans to use in shaping its three- to five-year strategic plan. “There was healthy disagreement at times online, but it was always very respectful, which I really liked,” said Stan Wearden, dean of Kent State’s College of Communication and Information and cochairman of a group guiding the planning process. “It felt like there was a lot of honest expression.” The Commons offers three groups of services, ranging from a free model to one that costs $7,500 for a year-long subscription. “Our little subscription model has great promise for a large, growing market for these kinds of services,” Mr. Shafarenko said. “The potential is huge, but in a larger context, it’s part of a movement that is shifting the way decisions are being made.” ■
Volume 34, Number 5 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of December and fifth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2013 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 800-290-5460 Ext. 136
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Gallucci relies on lessons learned in Chicago as she guides local agency focused on transportation policies By JAY MILLER jmiller@crain.com
One of Grace Gallucci’s first acts after she became executive director of the Northeast Ohio Areawide Coordinating Agency was to take down the sign on the front door of the transportation planning agency’s office on Superior Avenue in Cleveland. It read: “We’re not the driver’s license bureau.” The sign, di- Gallucci recting people one door down if they wanted a new auto title or driver’s license, bugged her. Removing it was a first step in her effort to raise awareness of NOACA, which is the arbiter of how federal transportation money is spent in Cuyahoga, Geauga, Lake, Lorain and Medina counties. The time will come, she hopes, when people looking for the title bureau will see the NOACA logo on the door — a map of the five counties — and recognize what’s inside. More importantly, she hopes the agency, through its planning for roads, bridges, buses and even bicycle riding, will help boost the region’s economy. Ms. Gallucci joined NOACA last July 1, replacing Howard Maier, who retired after leading the agency for 28 years. “I find it hard to imagine attracting a major industrial employer (to this region) because our infrastructure isn’t attractive, it doesn’t look good and it suggests disinvestment and decline,” she said. “We’ve got to change that around to suggest investment and forward movement. “People don’t want to move to a ghost town,” Ms. Gallucci added. “People want to move to a place that’s vibrant, that can support the movement of goods and services.”
Thinking big Called “No Action” by its severest critics, NOACA is governed by a sometimes unwieldy governing board of 55 public officials. Ms. Gallucci knows implementing the ideas she brings from her 20-plus years of working for public transit agencies will need to run a rigorous gauntlet. Before coming to NOACA, Ms. Gallucci spent five years as a deputy executive director of the Regional Transportation Authority in Chicago. She previously worked for a decade at the Greater Cleveland Regional Transit Authority, where she had risen to executive director of the office of management and budget before leaving for Chicago. “If I learned one thing in my time in Chicago, it was make no small plans,” she said in an interview. “I would be doing a disservice to this job, to this organization, this city, this region if I didn’t think big.” Ms. Gallucci was paraphrasing
Daniel Burnham, the pre-eminent Chicago planner of the early 20th century who is reported to have said on his deathbed, “Make no little plans. They have no magic to stir men’s blood and probably will not themselves be realized.” Her big plan is to expand NOACA’s role in the region by instigating a regional strategic planning process that would allow NOACA and the region to make better use of the limited transportation dollars at its disposal. “I may not be able to do all that I dream of, that I wish for this organization, but I can start it, I can change the trajectory,” she said. And that, she believes, will make it easier to attract new businesses to the region and keep existing businesses here.
Here’s a TIP NOACA is a federally financed metropolitan planning organization, or MPO, that helps the U.S. Department of Transportation make transportation policy. These MPOs develop 20-year transportation plans for all modes of transportation — not just highways, but public transit, aviation, bicycles and even pedestrians. The MPOs also help the federal government prioritize projects for federal money through three- to five-year transportation improvement plans, or TIPs, that designate which roads to fix, which bikeways to build and how much federal money a transit agency will have to replace aging buses. NOACA’s 2012-2015 TIP, for instance, includes projects ranging in size from $1.2 billion for Cleveland’s Inner Belt and its bridges to $22,000 to replace a culvert along U.S. Route 224 in Westfield Township in Medina County. Ms. Gallucci, though, envisions NOACA taking an even broader role. She sees the agency creating a broad regional strategic plan that would look at population trends and how land is used and could be used. From there, planners could recommend where residential development should happen and where new businesses could be ocated. The plan also would assess what roads, sewers and other infrastructure would be needed to support those goals. A key reason for such planning would be to attract new business, she said. “I’d love to start looking at attracting a worldwide manufacturing firm as well as intellectual industries, and in order to attract that you have to be able to demonstrate you can support that with infrastructure,” Ms. Gallucci said. “I’ve had conversations with major local business leaders who would say things like, ‘If I could just get that road expanded I could do so much more with my business.’ But they don’t know how to make that happen.” Ms. Gallucci would like to
“I may not be able to do all that I dream of, that I wish for this organization, but I can start it, I can change the trajectory.” – Grace Gallucci, executive director, NOACA include businesspeople in the regional planning process so the region can figure out which modes of transportation — highways but also rail and water — need to be improved to make Northeast Ohio more attractive to businesses.
A critic comes around Cleveland resident Angie Schmitt, a writer at the Streetsblog Network, a national network of dozens of websites that focus on transportation and infrastructure issues, has been critical of NOACA in the past. She said it has neglected public transportation and the needs of those who prefer bicycles and walking, instead focusing almost exclusively on fighting auto congestion and building highways. Ms. Schmitt interned at NOACA while getting her master’s degree in urban studies at Cleveland State University. She now owns a home in Cleveland’s Detroit-Shoreway neighborhood, and at Rustwire.com, her local affiliate in the Streetsblog Network, she until recently maintained a post titled, “30 Reasons Why NOACA Sucks.” Among those reasons: “Their board is controlled by exurban political officials who put the interests of their communities over the interests of the region;” “They refuse to consider the land-use implications of planning decisions and as a result perpetuate sprawl and inequality;” and “Their transit planning is uninspired and minimal.” She took down the post after meeting Ms. Gallucci and coming away hopeful. “Grace has a tough job,” Ms. Schmitt said. “When I heard they hired someone from out of town, with a public transit background and a woman, I was excited immediately.” Ms. Schmitt said she believes NOACA “has the potential to be critical in dealing with the problems the community faces. We’ve lacked regional leadership.” Ed Jerse, director of regional collaboration for Cuyahoga County, who recently ended his term as president of NOACA, was attracted to Ms. Gallucci’s range of experience and familiarity with Northeast Ohio and to her vision for getting more involved in regional planning. “She’s creative and smart,” he said. “Having been in Cleveland and Chicago I think she brings the kind of experience you need to advance that kind of agenda.” Mr. Jerse also said he believes NOACA communities are ready to embrace her ideas about regional planning. “It’s just kind of something most public officials are looking increasingly to” with the cuts in state funds coming to communities, he said. “There are a lot of different groups looking at regional approaches and she’s hitting the wave of that.” ■
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Ratner: Businessman was instrumental in opening of Barclays Center continued from PAGE 3
Forest City Enterprises last Thursday, Jan. 31, issued a one-paragraph statement saying the company at this time “has no definitive announcement to make concerning potential leadership succession” at Forest City Ratner. “The company emphasizes that any such announcement and change in leadership, when appropriate, would be the result of ongoing succession planning that the company undertakes continuously and as a matter of course,” Forest City stated. “Moreover, under any potential leadership succession for FCRC, the company expects that Bruce C. Ratner, FCRC chairman and CEO, will remain deeply engaged and involved in the business that he founded and built into one of New York City’s pre-eminent real estate concerns.” A change would come after a banner 2012 for Mr. Ratner. Following a decade-long struggle to realize the biggest project of what has been a very big career in New York City real estate, Mr. Ratner finally opened Barclays Center, the arena jewel of his 16-acre Atlantic Yards project in the heart of Brooklyn. That opening was followed last month by the groundbreaking for
the first of what ultimately may be over a dozen apartment towers on the site. All will be built using modular construction, a process that has fascinated Mr. Ratner for some time and stands to revolutionize the way housing gets built in the city. Even the NBA’s once-lowly Nets, the Barclays Center’s anchor tenant in which Mr. Ratner remains a minority owner, have racked up a winning record this season.
Veteran New Yorkers Mr. Ratner arrived in New York in the late 1960s, and attended law school at Columbia University before working for the administration of Mayor John Lindsay from 1970 to 1973 as director of the Consumer Protection Division and head of the Model Cities Program, a huge federal urban-renewal program that was a key part of President Lyndon Johnson’s War on Poverty. He spent the next four years teaching law at New York University before returning to City Hall, where he served as commissioner of consumer affairs for Mayor Ed Koch from 1978 to 1982. After leaving public service, Mr. Ratner launched Forest City Ratner Cos. in New York with the backing of his cousins from Cleveland.
According to sources, Mr. Ratner, who is 68, is expected to continue working at the company he built up over three decades, though he will be less involved in the dayto-day operations. Ms. Gilmartin, the future CEO of the company, joined Forest City in 1994 as an assistant vice president for commercial development. Like Mr. Ratner, she got her start in the public sector, previously working at the Public Development Corp., now known as the Economic Development Corp. Since becoming Mr. Ratner’s deputy, Ms. Gilmartin has become a fixture on the real estate scene, earning numerous awards, speaking on panels and at symposia and enjoying profiles in various media outlets. In an industry with few female leaders, Ms. Gilmartin has been a visible force in the testosterone-filled world of New York real estate, and in 2011, she was named the 35th most powerful woman in New York by Crain’s New York Business, a sister publication of Crain’s Cleveland Business. People close to Mr. Ratner say he’s earned a break. “He’s done an incredible amount for the city, and he’s got a great team in position to keep up that
great work,” a source says.
Ahead of the curve One of the first projects he tackled with Forest City was the massive MetroTech Center officebuilding complex in downtown Brooklyn. The development would come to characterize the company’s appetite for complex, contentious projects, but also ones that held the promise of transforming entire neighborhoods. Located on a prime, 16-acre site along Flatbush Avenue at the foot of the Manhattan Bridge, the complex was designed to win over Fortune 500 companies that increasingly had been looking across the Hudson in Jersey City, Hoboken and elsewhere for affordable backoffice space. Chase Manhattan Bank, Morgan Stanley and Brooklyn Union Gas, along with a number of city agencies, were the first big tenants to take space in the development. Later in his career, design became a hallmark of Mr. Ratner’s developments. Early projects such as MetroTech, 111 Worth St. and the massive Atlantic Center Mall, built in the mid-1990s, were considered unspectacular, but more recently,
Forest City has employed some of the best-known architects in the world. To design the new home of the New York Times Co., he tapped Pritzker Prize-winner Renzo Piano. Similarly, he chose one of America’s top architects, Frank Gehry, for a couple big projects — including Atlantic Yards, where Mr. Gehry’s designs ultimately were shelved owing to cost concerns when the recession hit. At that point, Mr. Ratner turned to local hotshot SHoP Architects to redesign Barclays Center. The firm also has been tapped to design the three modular towers that will surround the arena, and Mr. Ratner has spoken openly of his fascination with prefabricated construction and its ability to speed along a project, reducing costs and ensuring quality. Mr. Gehry did, however, design one of Mr. Ratner’s best-known buildings, New York by Gehry, at 8 Spruce St. in downtown Manhattan. That tower, with its rippling façade, was the tallest apartment building in the city when it opened. ■ Matt Chaban is a reporter with Crain’s New York Business, a sister publication of Crain’s Cleveland Business.
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Nonprofits: Coalition would be strong ‘voice’ continued from PAGE 1
They see, for example, an opportunity to combine functions such as financial reporting and human resources. “We’re in the discussion phase to see what could come of this idea,” said Brian Friedman, president of Cleveland Neighborhood Development Coalition’s board of trustees. “I’m really expecting this to be a transformative moment for community development in Cleveland. “We haven’t all been on the same page and I think we’d be stronger together than apart,” said Mr. Friedman, whose full-time job is as executive director of Northeast Shores Development Corp., the community development corporation in the city’s North Collinwood neighborhood. Indirectly, the merger discussions involve leaders of many of the nonprofit community development corporations, or CDCs, that work in Cleveland’s neighborhoods to attract capital investment and new residents. Directors of 27 CDCs are voting members of Cleveland Neighborhood Development Coalition and make up a majority of its board.
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Building a model The coalition describes itself as the trade association for the community development corporations. It’s the place the neighborhood groups gather to hash out strategies for fighting foreclosures, creating neighborhood safety programs and promoting retail opportunities. Among the coalition’s members is Detroit Shoreway Community Development Corp., which has won raves for its redevelopment of the area around West 65th Street and Detroit Avenue with a mix of new housing, including Battery Park, new shops and restaurants and the reopening of the Capitol Theatre. Other member CDCs include Ohio City Inc., the St. Clair Superior Neighborhood Development Association and the Famicos Founda-
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tion, which develops affordable housing largely in the Glenville and Hough neighborhoods on Cleveland’s East Side. These groups, along with the city, Neighborhood Progress Inc. and other financial backers, have created what is considered a standard for big-city community development. “They definitely have been national models for how you do things, compared to a lot of other cities,” said W. Dennis Keating, a Cleveland State University professor whose teaching and research career has focused on neighborhood development. LiveCleveland, formerly the Living in Cleveland Center, markets the city’s neighborhoods and their housing opportunities. It produces a periodic “Live CLEVELAND!” guide, and its website offers extensive information on neighborhoods to potential city residents. Neighborhood Progress Inc. is what the development community calls an intermediary. Although much of the money for the CDCs comes from federal community development grants, Neighborhood Progress was created by foundations, including the Cleveland and Gund foundations, and business interests to supplement the federal money with private dollars for neighborhood economic development. Standard Oil Co. (Ohio), the Greater Cleveland Growth Association and several banks were founding financial backers; KeyCorp, Charter One, US Bank, Giant Eagle and the Home Depot Foundation are current supporters. Observers have noted that Neighborhood Progress, because of its reliance on the private sector for support, has focused its support to CDCs on attracting new residents through real estate development and public safety, rather than backing efforts to promote the educational, health and social service needs of current residents. Neighborhood Progress acknowledges as much and has adopted a new strategic plan that would expand its scope. “We looked at reconnecting the CDCs with residents, expanding beyond bricks and mortar,” said Kathryn Hexter, director of the Cen-
ter for Community Planning and Development at Cleveland State University, who is working as a consultant to the organizations.
Follow the money Regardless of whether the three groups join together, mergers of some struggling CDCs are likely a part of the future. Joel Ratner, CEO of Neighborhood Progress, described the consolidation plan before Cleveland City Council in a Jan. 15 meeting. “We’re working with all CDCs to develop the strongest possible voice for community development and moving towards the most efficient system,” Mr. Ratner said at the meeting. “We believe we need to have the right number of CDCs.” Money, of course, is pushing the groups to act. In particular, money for the federal Community Development Block Grant program is declining. The block grants are made to the city of Cleveland, which uses part of its allocation for citywide programs through its Community Development Department. The rest is allocated to neighborhood programs through the CDCs, though the local City Council member has considerable discretion over that money. At council meetings, it’s common to hear a council member talk about “my CDC.” The CDC structure was created when Cleveland had 33 City Council wards and twice the population, and each council member wanted a CDC for his or her ward. Now the city has 19 wards and will lose two more before November’s council election, cutting the number of wards almost in half. For the fiscal year that ends May 31, the city allocated $2.6 million of its $20 million in block grant money to CDCs. Councilman Matt Zone estimates the block grant total was as high as $40 million a decade ago. The drop in dollars means the nonprofit groups must adjust accordingly. “The demand for services is not going to decline,” said Jeff Lipp, executive director of LiveCleveland. “But the pool of resources is declining, so it’s a matter of utilizing the resources to the best of our ability and being as efficient as possible.” ■
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CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
FEBRUARY 4 - 10, 2013
PUBLISHER/EDITORIAL DIRECTOR:
Brian D. Tucker (btucker@crain.com) EDITOR:
Mark Dodosh (mdodosh@crain.com) MANAGING EDITOR:
Scott Suttell (ssuttell@crain.com)
OPINION
Here we go Ed FitzGerald looks like a candidate for governor, even if he hasn’t declared himself in the race. Now, far be it from us to discourage the Democrat from pursuing the state’s highest office in 2014. We only ask one thing of Mr. FitzGerald if he does make a run. Don’t neglect your responsibilites as Cuyahoga County executive over the next two years. County government only now is regaining its legs after the corruption-filled years that preceded your election in November 2010. It’s critical that you keep your eye on your day job if the county’s progress isn’t to stall out or, worse yet, slip away. Campaigns in American politics stretch out longer and longer with each election cycle. Ohioans just got relief from the barrage of campaign ads that started a full year before the presidential election of 2012. The next election for governor isn’t until 2014, but already potential Democratic challengers to Republican Gov. John Kasich are sizing up their chances. Mr. FitzGerald never has run for statewide office, so he has been busy in recent weeks getting in front of Democratic groups downstate — and he isn’t formally campaigning yet. Should Mr. FitzGerald enter the race, he’ll be running from city to city and town to town across the state as he works to become a known commodity beyond his Northeast Ohio roots. It’s a process that could go on for almost two years — should he win his party’s primary in early 2014 — and it would be extremely demanding of his time, energy and attention. The fine work Mr. FitzGerald has done as county executive over the last two years has put him in position to take on Gov. Kasich. Our concern is that the job that has given Mr. FitzGerald a springboard to higher office could suffer because of the diversion that a statewide campaign would cause. The old, three-member Board of Cuyahoga County Commissioners didn’t provide the same platform for creating a political star that the post of county executive does today. The top job in Cuyahoga County is highly visible and, arguably, the second most powerful in the state. That’s not to say voters made a mistake when they changed the county charter to create a government with a single executive and an 11-member County Council. Quite the contrary. As Mr. FitzGerald’s tenure has shown, an effective administrator and leader with strong authority can create a leaner, more efficient government than a trio of politicians with little to no oversight over individual county departments. But it is precisely because a single individual holds so much authority over county operations that it’s imperative for the person in that job not to neglect it. Mr. FitzGerald has assembled a good team, and we suspect it functions well in his absence. But the people of Cuyahoga County voted him, not his team, to the job. They have a right to expect Mr. FitzGerald to be involved intimately in seeing through his agenda to move the county forward after years of corruption tainted the operations of its government. He owes them as much.
FROM THE PUBLISHER
Fears of newspaper withdrawal heavily documented that generations folhose of you who are regular readlowing us have radically different ways of ers of this column know that I finding their news. In a recent column I have a tendency (proclivity might referred to my daughter (an avid be a better choice) to newspaper reader and adept sobemoan the demise of the dai- BRIAN cial media user) and her ly newspaper. I sincerely be- TUCKER boyfriend as representative of a lieve — for many reasons — generation that doesn’t — necesthat the paring back of metro sarily — feel obliged to depend daily newspapers to less than on just newspaper editors to seven days of publication poschoose their news for them. es a real threat to our form of And granted, those very same government. editors make mistakes, and one My reasoning is that newscould — or should — question papers traditionally have been their choices from time to time. the only local news operations But my point was not that social media with enough people to cover the goingsisn’t highly valuable and effective; it’s on of government and elected officials. that I worry about our society losing Take away the lurking presence of a rewhat I often refer to as a serendipitous porter and his or her notebook, and it’s education. not difficult to imagine what could hapThat’s the one you get while paging pen. Think Jimmy Dimora and Frank through a daily newspaper. When I do Russo, among others. so, I don’t necessarily read every story, Speculation abounds that Cleveland’s but I get a great, general sense of what’s newspaper could cut back its days of pubhappening on the Arab street, at area lishing sometime in 2013, and that’s going universities, in the corridors of elected to be a great shock for those of us raised on power or in the executive suite. a diet of daily newspaper reading. A metro daily newspaper’s “A” section But for younger folks — well, it’s been is a great source for just that sort of expe-
T
rience, one that can’t be easily found in the news universe of social media, in which others that you trust are sending you news stories of interest. My point was never to minimize social media. Indeed, I believe it’s a powerful tool (that I wish I could use with the skill of the aforementioned couple). I just remain concerned that technology enables us to build such refined silos — by relying on RSS feeds or social media networks — that we only are taking in that information that we have indicated an interest in, or agree with, rather than getting a broader look at the day’s world. But then, technology can be fouled up by those same well-intended newspapers as well. Case in point: the Akron Beacon Journal recently had to scramble to take down a 5-year-old story about a drug bust at Kent State University’s airport when the story somehow made its way back onto its website. Ouch. That wouldn’t happen with social media because it lives in the oh-sovery present. I’ll just have to get more comfortable with alternative sources of news. I’ll just miss that paper in my hands. ■
THE BIG ISSUE Do you think the federal government should enforce universal background checks for those people looking to buy a gun?
COURTNEY DIAMOND
CHRIS SABOL
ELBERT SLAUGHTER
AUBREY DELARA
Berea
Cleveland
Cleveland
Lakewood
No, I don’t think so. It seems like a pain and kind of unnecessary. I feel like criminals don’t follow the laws, so why make more laws to make it more difficult for people who do follow the laws?
Yes. You shouldn’t be a criminal and be able to get a gun if you have a felony conviction.
I think they should, yeah. There’s too much killing going on out here, especially with the young people. Young teenagers today, they’re getting hold of guns and stuff like that real easy.
I think so. If someone has a criminal background, they shouldn’t have a gun just for that purpose. But it depends on their situation, I guess. If it was a gun-related crime, they shouldn’t be allowed to have it.
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Diebold: Company searching for new CEO continued from PAGE 3
Perhaps the best example of Mr. Wallace’s resolve and his willingness to shake up the status quo was seen in the late 1990s, when he became the first westerner to head a Japanese carmaker. It was the spring of 1996, and Ford had raised its stake in Mazda Motor Corp. from 25% to 33.4% — enough to give the U.S. automaker, under Japanese law, veto power over any board decision. As Crain’s sister publication, Automotive News, would report at the time, Mr. Wallace had been a quiet No. 2 to Mazda’s then-president, Yoshihiro Wada, the two previous years of his assignment in Japan. He deferred to Mr. Wada at all meetings. But with Ford acquiring a larger stake in Mazda, Mr. Wallace’s quiet days were coming to an end. Mr. Wallace would ascend to Mazda’s presidency in June. Just a few weeks later, he was outlining his plans for uprooting Mazda from its roots in rural Japan and planting it in the global marketplace. “We are a Japanese company with 60% of our customers overseas,� Mr. Wallace told Automotive News in mid-July. “So, we have to be and act like a real multinational. That is why we will change completely the corporate culture of Mazda. “I shall be the catalyst of this change,� Mr. Wallace said. Not that change would be welcome.
Balancing act As Automotive News would report, Mr. Wallace had radical ideas. He would promote executives by merit, not seniority. And he would promote women. Both ideas went against the norm in a company and a country where men always had held the important jobs, and in an orderly, age-bound way. Mr. Wallace also wanted to promote synergies with Ford. “But,� added Mr. Wallace, wearing his Mazda president’s hat, “we are not prepared to let them dilute our character as a strictly separate company and brand.� By the end of 1997, Mr. Wallace was moving on to Ford of Europe. But he definitely had left his mark in Japan.
In an editorial in November 1997, Automotive News would write that Mr. Wallace “can feel rightfully proud of his 18-month tenure� at Mazda, and not just because the company had halted a four-year string of losses and had gained market share in Japan. “Wallace’s contribution, rather, lay in ensuring Mazda’s independence and preserving its sense of self, even as he strengthened its cooperation� with Ford, the editorial would say. “Wallace adroitly handled the delicate balance.�
Swidarski isn’t alone How adroitly Mr. Wallace manages the change that has been kicked off at Diebold with Mr. Swidarski’s departure remains to be seen. For now, Mr. Wallace has assumed what Diebold called “regular oversight� of the maker of auto- Swidarski mated teller machines and bank security equipment until a new CEO is hired. George S. Mayes Jr., Diebold’s executive vice president of global operations, was promoted to the newly created position of chief operating officer and was given responsibility for daily operations as part of the change. Mr. Wallace’s remarks about the reasons for the change were unusual in their candor, considering that most companies say little in their public announcements about such sudden transitions of power. “As we look to the future, the board feels Diebold’s strategies are sound given the company’s progress on several fronts, including integrated services and the growth potential of electronic security,� Mr. Wallace stated in Diebold’s Jan. 24 news release. “However, the company’s execution of its strategies has not been what we want or expect and we have underperformed against the opportunities in the marketplace. “This reflects the need for deeper, faster operational transformation,� said Mr. Wallace, who has
Colliers International in Cleveland Welcomes Chris Seelig
been a Diebold director since 2003. Mr. Wallace did not outline what form that transformation may take, and a Diebold spokesman said last week the chairman would not be commenting further until the company releases its year-end earnings on Feb. 12. However, the transformation will not involve Charles Ducey Jr., who, like Mr. Swidarski, agreed Jan. 23 to step down as executive vice president of Diebold’s North American operations, effective immediately. Diebold said Mychal Kempt has been appointed vice president, North American operations, and will be responsible for leading the company’s financial self-service operations in the region.
The Cleveland office of Colliers International is pleased to have Chris Seelig join their team as First Vice PresidentŇPrincipal for the Retail Services Group. CHRIS SEELIG is a retail veteran in Northeast Ohio with more than 13 years Chris Seelig of experience in retail and First Vice PresidentŇPrincipal restaurant leasing and Retail Services Group sales. Chris has completed more than $100 million in Main +1 216 239 5060 transactions and is widely Dir +1 216 239 5073 recognized as a top broker in chris.seelig@colliers.com the Cleveland market.
Rough patch of road The last several months have seen little positive news come out of Diebold. Since last summer, Diebold has lowered its full-year earnings guidance three times — once in late July, once in mid-October, and again on Jan. 24, the day it announced Mr. Swidarski’s departure. In late October, the company suffered the embarrassment of announcing that it was suspending indefinitely its plans to construct a new global headquarters in suburban Green — a big project it had trumpeted with much fanfare only 18 months before. “As we’ve been analyzing our near- and long-term growth priorities, it has become clear that investing more than $100 million in a headquarters facility is not economically feasible given the other priorities for the business at this time,â€? Mr. Swidarski said at the time. Now Mr. Swidarski is gone, and the search in on for his successor. Mr. Wallace has indicated that the search will focus “on attracting a candidate with a proven track record for successfully executing growth strategies in a global software and services environment.â€? â–
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FEB 18TH ISSUE
The Future of Retail An analysis of how retailers are adapting to technological change and consumersâ&#x20AC;&#x2122; evolving needs and demands
12/17/2012
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BUSINESS
.COM WWW.CRAINSCLEVELAND
RE CAPITAL FIRMS
6, 2013 2012 - JANUARY DECEMBER 24,
EQUITY & VENTU PRIVATE ALPHABETICALLY LISTED
1,000-5,000
$1,000
Allos Ventures Suite 1100, Cincinnati 45202 ntures.com 250 E. Fifth St., (513) 456-1001/www.allosve
Partners 44114 Blue Point Capital Suite 5100, Cleveland intcapital.com 127 Public Square, (216) 535-4700/www.bluepo Pepper Pike 44124 Brantley Partners Road, Suite 300,ypartners.com 3550 Lander (216) 464-8400/www.brantle
44122 LLC CapitalWorksDrive, Suite 430, Beachwood works.net 3000 Auburn (216) 781-3233/www.capital
(1) Partners LLC 44114 Cyprium Investment Suite 2020, Cleveland .com 200 Public Square, (216) 453-4500/www.cyprium
$500
Ventures Columbus 43215 Fletcher Spaght St., Suite 810, rspaght.com 180 E. Broad (614) 429-4236/www.fletche Capital Partners Heights 44124 Gates Group Blvd., Suite 202, Mayfield roupcp.com 6120 Parkland (440) 684-9900/www.gatesg Glengary LLC Parkway, Suite 430, Beachwood ryllc.com 3201 Enterprise (216) 378-9200/www.glenga
4,000
44122
44122 Partners Kirtland CapitalPkwy., Suite 200, Beachwood capital.com 3201 Enterprise (216) 593-0100/www.kirtland Partners Heights Linsalata Capital Drive, Suite 280, Mayfield 5900 Landerbrook acapital.com 44124 (440) 684-1400/www.linsalat Partners LLC Main MarketSt.., Suite 401, Akron 44308 com 39 E. Market mainmarketpartners (216) 409 8983/www
Christopher Childres, managing partner; Ryan Meany, partner
Partners LLC Beachwood 44122 RockWood Equity Pkwy., Suite 370, odequity.com 3201 Enterprise (216) 342-1790/www.rockwo LLC Signet Enterprises St., Akron 44308 enterprises.com 75 E. Market (330) 762-9102/www.signet-
Brendan D. D. Anderson, Jeffrey Kadlic, managing partners R. John Fletcher, CEO, founder; Pearson M. Spaght, Linda Tufts, general 2,000-6,000 partners; Peter Kleinhenz, venture partner
$1,000
$100
$10,000
$10,000
$500
5,000-25,000
Street Partners Falls 44022 South Franklin St., Chagrin ners.com 10 1/2 E. Washington (440) 264-8040/www.sfspart
Jr. E. M. de Windt senior managing director, CEO
500
10,000-30,000
20,000-35,000
1,000-10,000
Stephen R. Haynes managing director John G. Nestor chairman, senior managing partner Frank N. Linsalata, V. chairman; Eric B. Bacon, Stephen Perry, senior managing directors Clifford Croley, Michael Martell, Philip Rice partners
Sunbridge Partners Suite 118, Beachwood com 3659 Green Road, (216) 360-0151/www.sbpvc.
44122
Ventures Cincinnati 45241 Triathlon Medical Way, Suite 200, om 300 E-Business (513) 723-2600/www.tmvp.c Group LLC 44145 Zapis Capital Road, Suite 300, Westlake pital.com 26202 Detroit (440) 871-1300/www.zapisca
Todd Peter president
Curtis D. Crocker managing partner Bassem Mansour, coSteven Rosen, CEOS; Michael Lundin, partner
15,000
$5,000
1,000-75,000
Stewart A. Kohl Bela Szigethy co-CEOs
500-6,000
$500
Karen Spilizewski vice president
Robert J. Savage fund manager
500
$100
LLC Rocket Ventures Toledo 43606 entures.org 2600 Dorr St., (419) 530-6083/www.rocketv
2,000-8,000
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Partners LLCPepper Pike 44122 Evolution Capital Blvd., Suite 302, ncp.com 29325 Chagrin (216) 593-0402/www.evolutio
James M. Petras managing director
1,000
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Partners Cleveland 44122 Edgewater Capital Blvd., Suite 205, atercapital.com 28601 Chagrin (216) 292-3838/www.edgew
Michael Stubler managing director
2,000
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Partners Cleveland 44106 RiverVest Venture Ave., Suite 100,st.com 11000 Cedar (216) 658-3982/www.riverve
Loyal W. Wilson managing director
1,000
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Co. 44113 The Riverside 29th floor, Cleveland ecompany.com 50 Public Square, (216) 344-1040/www.riversid
John R. Sinnenberg chairman
Edward S. Pentecost, managing director, president
1,000
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Partners Cleveland 44122 Resilience Capital Blvd., Suite 350, cecapital.com 25101 Chagrin (216) 292-0200/www.resilien
Bob Savage, Jeff Barry, Mark Horne, Ian Bund, partners
15,000-40,000
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43085 Partners 130, Columbus Reservoir Venture Bridge Road, Suite irvp.com 400 W. Wilson (614) 846-7241/www.reservo
F. Howard Mandel president
5,000-35,000
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Midwest Capital Cleveland 44122 Redline Capital, Blvd., Suite 495, capital.com 20600 Chagrin (216) 991-1201/www.redline
Eric Von Hendrix,E. president; June Taylor, co-president
2,000
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44124 Funds Primus Capital Drive, Suite 200, Cleveland capital.com 5900 Landerbrook (440) 684-7300/www.primus
Robert J. Savage managing partner
15,000-60,000
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LP 44114 Early Stage Partners St., Cleveland om 1801 E. Ninth (216) 781-4600/www.esplp.c
Peter G. Kleinhenz managing director
250
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Ventures 44115 Draper Triangle Suite 1500, Cleveland triangle.com 737 Bolivar Road, (216) 363-5300/www.draper
David A. Jones, chairman, managing director; Koleman Karleski, managing director; Wright Steenrod, principal
2,000-10,000
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CoreNetworkAve., Suite 1525, Toledo 43604 twork.org 300 Madison (419) 697-9696/www.core-ne
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2,000-5,000
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Bill Trainor Wayne Wallace general partners
10,000
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Capital(1) PNC ErieviewSt., 17th floor, Cleveland 44114 view.com 1900 E. Ninth (216) 222-2491/www.pncerie
Richard R. Hollington III president
2,000-3,000
$2,000
Columbus
Michael Goldberg managing partner
250-1,000
4,000-8,000
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44115 Chrysalis Ventures Suite 1500, Cleveland lisventures.com 737 Bolivar Road, (216) 453-1299/www.chrysa 130, CID Capital Bridge Road, Suite 400 West Wilson .com 43085 (614) 429-4236/www.cidcap
10,000-20,000
$250
$3,000
Cincinnati Sciences A, Suite 161, Charter Life Road, Building 2120 E. Galbraith om 45237 (513) 558-6397/www.clsvc.c
Peter G. Taft partner
1,000
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Robert P. Pinkas founding partner
3,000-10,000
$1,000
LP Capital Fund MWV Pinnacle Cleveland 44124 P.O. Box 241065, (216) 502-4740
David P. Given John F. Kirby managing partners
5,000-15,000
$500
44113
Partners Funds Mutual Capital Cleveland 44102 capitalpartners.com 5805 Bridge Ave., (216) 928-1908/www.mutual
Jack Wyant managing director
20,000
$5,000
Fund LP Cleveland 44106 Bridge Investment Ave., Suite 100,undllc.com 11000 Cedar (216) 658-5470/www.bridgef
Morgenthaler Suite 2700, Cleveland nthaler.com 50 Public Square, (216) 416-7500/www.morge
Darrell W. Austin managing partner
2,000-5,000
$10,000
Mark E. Mansour senior managing partner
5,000
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44122 Partners MCM Capital Blvd., Suite 360, Beachwood pital.com 25201 Chagrin (216) 514-1840/www.mcmca
Karl O. Elderkin managing partner
1,000-4,000
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$1,000
Co. Blue Chip Venture Cincinnati 45202 om 250 E. Fifth St., (513) 723-2300/www.bcvc.c
Jan Garfinkle founder, managing director
NA
NA
Partners Athenian Venture Suite 229 #37146, Athens 20 E. Circle Drive, nvp.com 45701-3751 (614) 360-1155/www.athenia Partners LP Austin Capital Suite 500, Cleveland 44115 apitalpartners.com 1422 Euclid Ave., (216) 574-2284/www.austinc
Michael CEO, senior managing director
5,000-10,000
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LLC 4, Cleveland Max-Ventures Parkway, Suite 4400 Renaissance ntures.com 44128-5794 (216) 765-2505/www.max-ve
John Aquilano, managing directors; Dov Rosenberg, director
NA
NA
44106 Arboretum Ventures Ave., Clevelandtumvc.com 11000 Cedar (216) 658-3989/www.arbore
project Top executive Minimum Preferred investment Title investment (thousands) (thousands) Feuer
Name Address Phone/Website
project Top executive Minimum Preferred investment Title investment (thousands) (thousands) McIlwraith, Don
Name Address Phone/Website
4,000-10,000
$2,000
$1,000
$2,000
$1,000
$250
$50
Owen M. Colligan Brett R. Keith managing directors
5,000-20,000
2,000-10,000
2,500
3,000-5,000
Anthony S. Manna chairman William W. Vogelgesang, managing director; Lynn W. Carpenter, director John Gannon general partner John M. Rice, Suzette Dutch, Dennis Costello, Carrie Bates, managing partners; George Emont, venture partner
100-500
Crain's Cleveland unless footnoted. guarantee these the companies and there is no is supplied by will Source: Informationindependently verify the information to our lists and not welcome all responses Individual lists and The Business does or accurate. We coming issues. listings are complete om. Originally clarifications in information or include omitted purchase at www.crainscleveland.c Corp. (2) Previously are available to Principal Partners Book of Lists Formerly Key 20, 2012. (1) published Feb. Partners. National City Equity
Lee Zapis Rich Bongorno CEO CFO
BY RESEARCHED Deborah W. Hillyer
LI LIST: Largest La Private P Equity an Venture and Ca Capital Firms
Ad close: Feb 7 Advertising Information: Nicole Mastrangelo at 216-771-5158 or nmastrangelo@crain.com
11
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Attn: Manufacturers & Warehouses
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KA ARCHITECTURE: John G. Burk to president, COO; Craig H. Wasserman to executive vice president. Burk
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FIRSTCREDIT INC./REVCARE/PAYMED SOLUTIONS: Paula Zamary to early out team lead; Michelle Lingenhoel to client support and billing team lead; Angela Williams, Heather Horn, Amy Marazzi and Stephanie Foore to patient account managers. HOWARD, WERSHBALE & CO.:
Patricia M. Ianni, Helen E. Weeber and Michael G. Duffy to senior managers; Deborah L. Whims and Shawn Philabaum to managers; Timothy I. Kadylak, Siobhan M. Lukowski, Randy T. Wolan and Brent R. Meyer to senior accountants; Scarlette N. Streeter to senior; Mengchen Zhang and Chelsea Francisco to staff accountants; Kirsten H. Thompson to staff development director; Melissa C. Miavez to assistant controller; Dottie Hauman to revenue cycle specialist; Mari I. Engelhardt to manager, software system trainer; Heather A. Fitzgerald, Mary V. Horvath, Stacey R. Kovalchuk and Sandra Touschner to consultants, software system trainers. PEASE & ASSOCIATES INC.: Alex Semerano to shareholder; Joseph Velkos to senior manager; Kelly Mocarski to supervisor; Jennifer MacDowell to senior staff; Scott Caine, Tiffany Klimcak and Emily Briesath to staff, tax; John Brasofsky to staff, audit; Roxanne Rakicevic and Bethany Hollowell to administrative assistants.
HEALTH CARE NEIGHBORHOOD FAMILY PRACTICE: Dr. Richard Hill to medical staff.
LEGAL BRICKER & ECKLER LLP: Tom Onusko to member. TUCKER ELLIS: Christopher Hewitt and John McCaffrey to partners; Anthony Petruzzi to counsel; Adrienne Kirshner to associate.
MANUFACTURING CUSTOM CLUTCH, JOINT & HYDRAULICS INC.: Scott Ballantyne to owner, CEO.
MARKETING HIGHLAND PR: Blake Ferguson to graphic designer; Bethany English to assistant account executive. INNIS MAGGIORE: Dallas Witmer to web developer.
NONPROFIT GORDON SQUARE ARTS DISTRICT: Judi Feniger to executive director.
SERVICE PRADCO: Larry Borodkin to vice president. VEDISCOVERY LLC: Wayne Pignolet to chief operating officer; Paul Cervelloni to vice president, sales; Martin J. Mangan to vice president, product development; Ryan T. Steele to sales representative; William J. Krueger to sales executive; Lisa A. Canter to manager, quality assurance; Therese A. Healey to project manager; Dan Carl to software developer.
TECHNOLOGY ONOSYS: Hayley O’Hare to client support specialist.
UTILITY FIRSTENERGY CORP.: Fred O’Hare von Ahn to vice president, Central Fleet Operations.
BOARDS ADOPTION NETWORK CLEVELAND: John Zaranec (KPMG) to chair; Anita Miller to first vice chair; Lisa Buescher to second vice chair; Joshua Berman to secretary; Ted Grabowski to treasurer. AMERICA SCORES CLEVELAND: Ruth Coffey (Invacare Corp.) to chair. FEDERAL RESERVE BANK OF CLEVELAND: Richard K. Smucker (J.M. Smucker Co.) to chairman; Christopher M. Connor to deputy chairman. ROCKY RIVER CHAMBER OF COMMERCE: Debra Bernard (Rocky River City School District) to chairwoman; Rusty Deane, Kevin New, Marc Hustek and Bill Ferry to vice chairmen; Mike Trifiletti to treasurer; Nick Cronin to secretary.
AWARD NATIONAL ASSOCIATION OF CORPORATE DIRECTORS: Janet Jankura to fellow.
RETIREMENT FIRSTENERGY CORP.: Frank Lubich, after 35 years.
Send information for Going Places to dhillyer@crain.com.
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INSIDE
14 FORMER PUBLIC OFFICIALS FACE CHALLENGES IN PRIVATE SECTOR
13
LEGAL AFFAIRS
LAW FIRMS PLAY THE NAME GAME
IN BRIEF ■ THE RIGHT PRESCRIPTION: A medical/legal summit will be held April 12 and 13 at the Cleveland-Marshall College of Law. The event, co-sponsored by the Cleveland Metropolitan Bar Association, the Academy of Medicine Education Foundation and the Academy of Medicine of Cleveland & Northern Ohio. The aim of the summit is to bring together doctors, lawyers, health care professionals and others who work in allied professions in Northeast Ohio. The featured presenter, on April 12, will be Dr. Ezekiel “Zeke” Emanuel, vice provost for global initiatives and chairman of the Department of Medical Ethics and Health Policy at the University of Pennsylvania. Dr. Emanuel from 2009 to 2011 was special adviser for health policy to the director of the White House Office of Management and Budget. Some of the topics to be covered during the summit are: ■ Apologies and disclosures of adverse events: What to say when something bad happens to a patient? ■ Debate on end of life and other medical, legal and ethical issues ■ Physician practice acquisitions ■ A frank conversation with government regulators ■ Protecting patient information from technological threats ■ Pain management in the face of the prescription drug abuse epidemic For more information on the summit, call the bar association at 216-6962404 or the Academy of Medicine of Cleveland & Northern Ohio at 216-5201000.
Practices shorten identities in effort to be more memorable By MICHELLE PARK mpark@crain.com
D
etermined to become more memorable in this increasingly succinct, social media-immersed world, more law firms want the world to get to know them on a first-name basis. By the end of February, Akron-based Roetzel & Andress will roll out a new logo and website bearing only the word, Roetzel. And, in early 2012, Squire Sanders dropped the Dempsey that used to round out its name. Benesch, Friedlander, Coplan and Aronoff LLP in fall 2010 began using only the Benesch for marketing purposes, and Calfee, Halter & Griswold LLP, too, has since 2005 used only the Calfee in its logo. “It’s a lot more contemporary to have a law firm with a short, succinct, memorable name than it is to have a string of three, four, five names,” said Rick Rymond, a member of Reminger Co. LPA’s executive group and the man behind the firm’s advertising and marketing.
“It’s easier to brand,” he added. “We don’t think of PepsiCo as the PepsiCo Bottling Co. of North America, or whatever it is. Shorter is easier. Shorter is more identifiable.” While some firms shortened their names years, even a decade, ago, the trend seems to have accelerated in recent years, legal insiders say. Nationwide, a number of firms also have abbreviated their names to initials, following in the footsteps of big accounting firms such as KPMG, noted Peter Zeughauser, chairman of Zeughauser Group, a legal consulting firm with offices in Chicago, Washington, D.C., and California. He cited DLA Piper and K&L Gates as examples. “There has been a somewhat long-term trend to go (to) one name for firms,” Mr. Zeughauser said. “Easier to remember. Better for graphics. Both add up to more effective branding.” Limiting a firm to one name also can make things easier in the event of mergers, he noted. Consolidation has been on the rise in the legal field. See NAME Page 15
■ WHO TO WATCH IN LAW: Crain’s Cleveland Business is looking to profile some of the region’s legal up-and-comers in “Who to Watch: Law,” a special section slated for publication July 15. If you think you know who will be among those leading the Northeast Ohio legal sector of the future, drop an email to Amy Ann Stoessel, astoessel@crain.com, or call 216-771-5155. Start thinking now, and send in your suggestions by June 10. There are no hard and fast requirements for possible inclusion in this section, other than the candidate needs to have exhibited the kind of potential that makes him or her someone to watch.
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LEGAL AFFAIRS
Former public officials face not-so-private changes LaTourette, Mason and other high-profile figures often are heavily recruited to increase visibility of regionâ&#x20AC;&#x2122;s law firms By MICHELLE PARK mpark@crain.com
If recent examples are any indication, the road to law firm work remains quite direct for those whoâ&#x20AC;&#x2122;ve led public service careers. The phone started ringing not long after Steven C. LaTourette announced his retirement from the U.S. House of Representatives, and in short order, he said he found himself being courted by eight prospective employers, including law firms. And when former Cuyahoga County prosecutor Bill Mason decided to retire, he dialed a lawyer whoâ&#x20AC;&#x2122;d encouraged him years ago to call if and when he was ready to leave the public realm. Both men now are leveraging their high profiles for local law firms. Mr. LaTourette joined Cleveland law firm McDonald Hopkins
ness, Mr. Bower said. But not every politician-turned-partner makes the transition successfully, and some do not prove to be successful rainmakers and attorneys, he added. â&#x20AC;&#x153;The whole hiring of politicians, it can cut either way,â&#x20AC;? he said. â&#x20AC;&#x153;Politicians make friends, but they also make enemies. You just donâ&#x20AC;&#x2122;t know how thatâ&#x20AC;&#x2122;s going to work out.â&#x20AC;?
The wow factor
LaTourette
Mason
LLC on Jan. 7 â&#x20AC;&#x201D; less than a week after his ninth and final term ended â&#x20AC;&#x201D; to launch its new government strategies subsidiary, and Mr. Mason left the public space in September and became on Oct. 1 a public finance partner in the Cleveland office of Bricker & Eckler LLP, a Columbus-based firm. The hiring of high-profile public officials by law firms is no new
phenomenon, but it does pick up every election season, said Ward Bower, a principal with Altman Weil Inc., a legal management consulting firm based in Newtown Square, Pa. â&#x20AC;&#x153;We just finished an election year, and people are available,â&#x20AC;? he said. The expectation is that big-name recognition will produce big busi-
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Carl J. Grassi, whoâ&#x20AC;&#x2122;d seen Mr. LaTourette in action as a congressman and a prosecutor, wasted no time contacting Mr. LaTourette once he learned he would retire. â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s a great commoditization thatâ&#x20AC;&#x2122;s going on with law firms unless theyâ&#x20AC;&#x2122;re unique,â&#x20AC;? said Mr. Grassi, president of McDonald Hopkins. â&#x20AC;&#x153;We donâ&#x20AC;&#x2122;t want to just be purely perceived as people who produce documents. I think what Steve does for us is bring a whole other perspective in terms of his role and what heâ&#x20AC;&#x2122;s seen.â&#x20AC;? Mr. LaTourette and his wife, Jennifer, who spent 10 years lobbying for Van Scoyoc Associates, are heading McDonald Hopkins Government Strategies LLC, a federal lobbying arm that Mr. Grassi called a natural extension of the firmâ&#x20AC;&#x2122;s state lobbying practice. The subsidiaryâ&#x20AC;&#x2122;s Washington, D.C., office opened Jan. 7 and brought the firmâ&#x20AC;&#x2122;s number of offices to seven. â&#x20AC;&#x153;The question (from clients) is, do you have somebody in Washington who can help me take care of this,â&#x20AC;? Mr. LaTourette said. â&#x20AC;&#x153;Now, McDonald Hopkins can answer yes.â&#x20AC;? McDonald Hopkins has hired other public officials over the years â&#x20AC;&#x201D; prosecutors, mayors, judges â&#x20AC;&#x201D; but no one with Mr. LaTouretteâ&#x20AC;&#x2122;s 18-year, nine-term experience, Mr. Grassi said. Restricted for a year from lobbying Congress, Mr. LaTourette is focused on business development; in one recent week, he traveled to Chicago, California, and Orlando and Jacksonville, Fla., in five days, pitching business and doing media appearances. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s busy, which is a good problem to have,â&#x20AC;? he said. Also in high demand is Brian Hayes, a former National Labor Relations Board member who in early January joined labor and employment law firm Ogletree, Deakins, Nash, Smoak & Stewart P.C. â&#x20AC;&#x153;His schedule is literally booking out months in advance,â&#x20AC;? said Wade Fricke, a founding shareholder of the Atlanta-based firmâ&#x20AC;&#x2122;s Cleveland office. Although Mr. Hayes is based in Washington, D.C., he is available for consulting clients in Cleveland and the firmâ&#x20AC;&#x2122;s other markets â&#x20AC;&#x201D; something Mr. Fricke said carries a â&#x20AC;&#x153;wow factorâ&#x20AC;? in that Mr. Hayes â&#x20AC;&#x153;is as solid a person as you can find to help our clients understand what theyâ&#x20AC;&#x2122;re supposed to do.â&#x20AC;?
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For his part, Brickerâ&#x20AC;&#x2122;s Glenn Krassen is confident that Mr. Mason will enhance the firmâ&#x20AC;&#x2122;s service to political subdivisions, such as school districts and port authorities.
â&#x20AC;&#x153;The network of contacts that has been developed by (a) former public official over the years can prove invaluable in terms of both business development as well as helping to get solutions for existing clients,â&#x20AC;? said Mr. Krassen, partner in charge of the Cleveland office. â&#x20AC;&#x153;Bill knows many public and private sector leaders, so he understands the challenges that are being faced.â&#x20AC;? Both Mr. LaTourette and Mr. Mason say they were drawn to their new roles because they complement what theyâ&#x20AC;&#x2122;ve been doing. When asked, they confirmed that their private-sector salaries are more lucrative. â&#x20AC;&#x153;Nobody makes a lot of money working for the federal government or the government at any level,â&#x20AC;? Mr. LaTourette said. It doesnâ&#x20AC;&#x2122;t surprise David S. Goodman, managing partner of Squire Sandersâ&#x20AC;&#x2122; Cleveland office, that law firms continue to pursue public officials, particularly in light of how the interactions between the private sector and government â&#x20AC;&#x153;become greater all the time.â&#x20AC;? That makes any firmâ&#x20AC;&#x2122;s regulatory practice all the more significant, he said. Squire Sanders recently commemorated the late 2012 retirement of its own high-profile attorney, Louis Stokes, who joined the firm in 1999 after 30 years of congressional service. â&#x20AC;&#x153;For us to have someone Stokes of his stature, not just locally but nationally, be one of our colleagues was an honor and privilege,â&#x20AC;? Mr. Goodman said. â&#x20AC;&#x153;After 30 years in Congress â&#x20AC;Ś he was capable of enabling us to provide our clients with an extraordinary ability to develop strategy and analyze how best to achieve goals that involved government at all levels.â&#x20AC;?
Not without some baggage Thatâ&#x20AC;&#x2122;s not to say Mr. Goodman and other law firm leaders donâ&#x20AC;&#x2122;t see challenges to hiring high-profile figures. For one, some former politicians â&#x20AC;&#x201D; not Mr. Stokes, Mr. Goodman noted â&#x20AC;&#x201D; can have a â&#x20AC;&#x153;very difficult adjustmentâ&#x20AC;? to becoming someone who provides a service rather than being a figure who is heavily pursued and courted, Mr. Goodman said. â&#x20AC;&#x153;I think people who have spent a long career in prominent public service are accustomed to having people come to them,â&#x20AC;? he said. Plus, legal consultant Mr. Bower noted, sometimes, hiring a former elected official can alienate some of a firmâ&#x20AC;&#x2122;s clients. Another temporary hurdle: Sometimes, as in the case of Mr. LaTourette, the hired partner cannot be fully engaged for some period of time until restrictions are lifted, noted Jim Friedman, a partner of Benesch law firm. And, a public figureâ&#x20AC;&#x2122;s prior service can lead to perceived conflicts of interest and extra scrutiny from the public and the media, he added. â&#x2013;
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Name: Some firms won’t ‘get caught up’ in shortening monikers continued from PAGE 13
And, with more firms joining the Twitter-sphere, where users may use only 140 characters in a single post, the shorter your name, the longer the rest of your post can be, noted Jeanne Hammerstrom, chief marketing and recruiting officer for Benesch who served as 2011 president of the international Legal Marketing Association. “You only have so much room, and you don’t want to use up all of the room with names,” she said.
More than just name dropping Most law firm executives cite branding and marketing as the reasons they’ve shortened their firms’ names. Many also note that legally, their firms’ names remain their longer versions of the past. Reminger & Reminger Co. LPA, however, did legally change its name to Reminger Co. LPA in 2007. Being a more identifiable law firm in the marketing realm is more important today, Mr. Rymond asserted. “The sources by which people select a lawyer are far more driven by media outlets than they were 20 years ago,” he said. “Twenty years ago, people selected lawyers because that’s who their dad used. Now people select law firms based upon, I think, a lot more objective information that’s available.” Changing Reminger’s name actually was quite inexpensive, Mr. Rymond noted, which begs the question: Why, then, isn’t everyone doing it? “One of the reasons that some firms may be slow to adopt a name change is you’ve still got multiple principals whose names still appear in the firm name and there may be an ego factor, a pride factor,” Mr. Rymond said. “We didn’t have that. We had no Reminger here when we changed our name.” The name shortening is symptomatic of the evolution of larger law firms to now emphasize the entity over the individual lawyer, said Rob Roland, managing partner of Day Ketterer Ltd., a Cantonbased law firm that dropped three names in 2004. “By removing the names of influential individual attorneys from the firm name, law firms are consciously or unconsciously, I don’t know which, emphasizing the organization over the individual,” he said. “This is the opposite of how the law firm world operated in the past.” The mobility of attorneys today is a major motivator of that trend, Mr. Roland said. “There was, for many, many, many years, very little mobility of attorneys between offices,” he said. “Now, you see attorneys moving all the time. A main player today at a big firm could be a main player at another firm tomorrow, and so therefore, the logical extension of that is that the law firm cannot tie its identity as tightly as it has in the past to a particular attorney.” Cleveland firms aren’t just dropping names. BakerHostetler — formerly Baker & Hostetler — and Walter | Haverfield LLP — no longer Walter & Haverfield — in 2012 eliminated what executives say is the “antiquated” ampersand. Walter | Haverfield’s logo now is presented in a linear, not stacked, way. “Ampersand is an old form of
punctuation,” said Ralph Cascarilla, managing partner of Walter | Haverfield. “We thought … the bar approach, the linear approach would be an updated presentation of the firm name. “It’s a recognition of exactly how people speak,” he added. “People don’t say Calfee, Halter and Griswold. People say Squire Sanders or Thompson Hine or Walter Haverfield. The shortening of the names is a reflection of the current culture.
Nod to history Some firms’ names remain a mouthful, and they’re not apolo-
gizing for it. “We did not get caught up in the marketing whim of the moment,” said Christian Patno, who serves on the eight-person strategic committee for McCarthy, Lebit, Crystal & Liffman Co. LPA in Cleveland — often dubbed McCarthy Lebit anyway, he noted. “We have no plans to change,” he added. “This firm is about the lawyers; it’s about the history of the lawyers. We don’t need taglines or catch phrases to try to compete for clients. Our clients know us.” McCarthy Lebit executives considered shortening the name and
decided against it, Mr. Patno said. “Who we are is who we were 50 years ago, only larger,” he said. “It’s what works for us. If what you’re doing is working for you, why change it just to keep up with the Joneses?” Those least likely to make the change are first-generation firms, said Ward Bower, a principal of Altman Weil Inc., a legal management consulting firm based in Newtown Square, Pa. “Partners are still around and sensitive to keeping their name in the firm name, even if it’s the fourth out of six,” he said. “It’s just ego.”
The reason for no name change at Kohrman Jackson & Krantz PLL in Cleveland is “respect for our history,” said Marc Krantz, the firm’s managing partner and son of Byron Krantz, one of the founders. The three named partners remain active in the firm, he said. “You lose a little bit of history of the firm whenever you start dropping names,” Mr. Krantz said. “We actually think that our three names sound good, with the two k’s bookending the Jackson in the middle,” he added. “We’re not worried about anything being more snazzy than our name.” ■
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EMPLOYMENT LAW. COVERED. AT REMINGER, our employment practices defense group strives to defend your company vigilantly when legal matters arise. We routinely work with the Equal Employment Opportunity Commission and OSHA, and frequently defend common law claims as well as all areas of discrimination law in jury trials at both the state and federal court levels. RESULTS. PERIOD. It’s more than just our motto, it’s our passion. To learn more about our employment law practice, contact Co-Chair Nicholas Satullo. Pictured L to R: Co-Chairs Nicholas Satullo & Joseph Borchelt, Stephanie Hathaway, Practice Group Leaders Andrew Dorman and Roy Hulme
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Recent rulings help illustrate employers’ injury law exposure
R
ecently, Ohio’s Supreme Court reaffirmed the validity of the 2005 Ohio law on workplace accidents limiting an employee’s ability to sue his employer for being injured on the job. The Ohio Supreme Court revisited challenges to the 2005 Ohio law in the cases of Bruce Houdek v. Thyssenkrupp Materials NA and Larry Hewitt v. L.E. Myers Co. In both cases, the Ohio Supreme Court reiterated that an employee must show that his employer acted with intent to cause the employee’s injury and that without evidence to show such intent, an employee could not maintain such a lawsuit. The 2005 Ohio law on workplace accidents re-establishes the “bargain” between employers and employees giving rise to Ohio’s workers’ compensation system, which was designated as the exclusive remedy for employees injured in an accident on the job. On the one hand, the system does not require that the employee establish that the accident was the fault of the employer. The employee’s compensation and medical expenses are provided through the workers’ compensation system, without regard to fault. In exchange, the employer receives immunity from all other liability exposure beyond the exclusive remedy under the workers’ compensation system. The only recognized exception to the employer’s immunity arises in the situation where the actions of the employer are deemed so egregious that the law characterizes the actions of the employer as rising to a level of an intentional act to cause the employee’s injury. The 2005 Ohio law (as well as its previous incarnations) was enacted to define and limit the scope of this exception to the worker’s compensation system. The Houdek and Hewitt cases help illustrate the limitations of the intentional tort remedy. In the Houdek case, the court re-affirmed that there must be a showing of a “specific intent” by the employer to cause the injury. Specifically, the Ohio Supreme Court rejected a lower court’s use of a “reasonable employer” test to establish an employer’s “intent.” The Ohio Supreme Court affirmed that only upon a showing of an employer’s specific intent, not simply a showing that the reasonable employer would have acted differently, could an employer be held liable for a workplace injury. The requirement of proof of showing intent to injure, while an extremely high burden, fits within the “bargain” giving rise to the worker’s compensation system. Recognizing the high burden of showing specific intent, the 2005 law codifies the historical situations where intent has been found and allows a presumption of intent in certain circumstances. If the employee has evidence that the employer either removed an equipment safety guard or deliberately misrepresented the existence
GREGORYGUICE CLIFFORDMASCH
ADVISERS of a toxic or hazardous substance, then the intent requirements of the 2005 law are presumed, although this presumption can be rebutted by the employer. The Hewitt decision helps to define the limits of the section of the 2005 law regarding presumed intent. In Hewitt, the employee argued that he was not issued proper safety equipment that would have protected him from an accident. The Ohio Supreme Court, however, found that the 2005 law was clear as what circumstances would create the presumption of intent. Specifically, the “removal of an equipment safety guard” exception is limited to situations where the employer actually removed a safety guard from a piece of equipment. The mere alleged failure of an employer to provide safety equipment is not commensurate with the “removal of safety equipment.” It has generally been acknowledged by both plaintiff and defense lawyers that the 2005 law would severely curtail an employee’s ability to bring an employer intentional tort claim. However, despite the limitations upheld in the Houdek and Hewitt cases, this claim still remains viable. The most likely focus of future cases will be the “safety guard” exception. In that regard, employers should be careful to ensure all existing safety equipment on any machinery remain in place and operational. Employers should be careful of any scenario that can be described as substantially similar to removing a guard from equipment. Employers should keep and maintain any documents coming with a piece of equipment. Employers should also have in place a protocol to provide a clear description and warning relative to the existence of any toxic or hazardous substance in the industrial or medical setting. If possible and appropriate, employers should have designated safety personnel that can serve as point personnel on safety issues to ensure a clear and consistent message relative to safety issues and for informational purposes. ■ Mr. Guice and Mr. Masch are shareholders in the Cleveland office of Reminger Co. LPA. Mr. Masch is the co-chairman of the firm’s Appellate Advocacy Practice Group and Mr. Guice is the chairman of the firm’s Retail and Hospitality Practice Group. Mr. Guice and Mr. Masch represented Thyssenkrupp Materials NA in the Houdek v. Thyssenkupp matter.
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LEGAL AFFAIRS BEST OF THE EXPERT BLOGS Excerpts from recent blogs in Crain’s industry emails. To subscribe to the daily emails, go to www.crainscleveland. com/section/email_products
It happened in Vegas ■ At the end of last year, in one of the more interesting opinions of 2012, a federal judge upheld an employee’s right to take Family Medical Leave Act (FMLA) leave to care for her mother during a recreational trip to Las Vegas. The employee, Beverly Ballard, was a swimming instructor. Her mother, who had been diagnosed with end-stage congestive heart failure, won a trip to Las Vegas through the Fairy Godmother Foundation. Despite the fact that Ballard’s employer denied her request for leave, Ballard accompanied her mother on the trip and was subsequently terminated for taking unauthorized time off. Ballard sued, claiming that the employer interfered with her ability to take FMLA leave to care for her mother. At issue was whether or not Ballard qualified for FMLA leave to care for her parent. There was no question that Ballard met the threshold eligibility requirements of FMLA based on her length of employment and number of service hours. Ballard also argued, and the court accepted as true, that she was her mother’s primary care giver, which included Ballard preparing her mother’s meals, administering her mother’s insulin shots and medicine, tending to her mother’s other medical needs, bathing her, transporting her, and providing emotional support. This case is unique, however, because the purpose of the trip was not for her mother to seek medical treatment. In the past, courts have typically dismissed FMLA lawsuits involving trips when the family member being cared for was not seeking treatment at a remote location. Ballard’s attorney, however, argued that since she was still providing care to her mother in Las Vegas, even though she was on a purely recreational trip, the trip was one which qualified Ballard for leave. … In prior cases, courts have mandated that caregiver leave under the FMLA should either be at home or part of in-patient treatment. Bucking this trend, the judge in the Ballard case ruled that it didn’t matter where the employee provided care as long as she was, in fact, providing care. It’s important to note that this case is now being appealed, so we will have to wait to see if this court’s opinion holds. In the meantime, this opinion opens the door to a possible onslaught of lawsuits in which employees may seek to “stretch” the limits of FMLA to include caregiver-related activities not traditionally covered by the FMLA. … — Susan Keating Anderson, labor and employment attorney at Walter & Haverfield LLP. (Jan. 29, Crain’s Work Force Report)
Investigation Top 10 ■ Whether it’s an organization of 20 or 200, today’s employer must be ever-mindful that numerous federal and state laws impose on them a duty to investigate allegations of wrongdoing, misconduct, safety violations, or accidents. …
Although the scope of each investigation will vary ... there are 10 fundamental actions every employer conducting a workplace investigation must take … 1. Identify all key allegations and relevant witnesses. After receiving the complaint, it is critical to prepare an agenda or outline for interviewing witnesses and, then, right away set up times to interview all relevant witnesses. ... 2. Develop an “opening statement” when talking to employees and managers. Because many employees will be nervous and apprehensive in participating in workplace investigations, it is crit-
ical to lessen these fears in order to ensure a cooperative and truthful witness. … 3. Listen carefully to the interviewee. Although it is important to focus on the central allegations and claims triggering the investigation, it is equally important to explore issues that come to light in the investigation, particularly if they appear to relate to the allegations or claims you are exploring. 4. Document, document, document. Take clear, concise notes at each interview to ensure an accurate record .... 5. Remain neutral. Nothing stops an investigation quicker or
prevents candid disclosure than the perception of impartiality. ... 6. Ask for specific examples when discussing the complainant’s allegations. Do not accept the complainant’s allegations at face value but, rather, ask them questions designed to elicit specific examples that you can explore with other witnesses. 7. Analyze the facts and reach a conclusion. Once you have concluded the investigation, you should review the information gathered shortly thereafter and, then, assess the validity of the complaining party’s allegations and consult with legal counsel in
determining whether the facts uncovered violate any laws. 8. Report back to the complaining party. … 9. Take appropriate corrective action, if necessary. The range of discipline could include any of the following: written warning, suspension, demotion, placement on a performance improvement plan, corrective action plan, termination. 10. Consider other “lessons learned.” Employers should revise or re-consider any problematic policies or practices exposed by the investigation ... — Mike Jackson, associate, Fisher & Phillips. (Jan. 29, Crain’s Work Force Report)
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LEGAL AFFAIRS
Many companies in need of device policies As more employees bring own gadgets to work, businesses must be protected By JUDY STRINGER clbfreelancer@crain.com
For better or worse, smart phones, tablets and personal laptops are infiltrating the workplace. Statistics suggest a growing number of employees are bringing their own mobile devices to work and using those devices to access company information and applications, a practice that’s commonly referred to as Bring Your Own Device (BYOD). A February 2012 survey by Harris Interactive found that more than 80% of 1,300 U.S. respondents use some kind of personally owned electronic device for workrelated functions. Avanade, a Seattle-based consulting firm, pegged global BYOD penetration at nearly 90% based on its November 2011 survey of 605 high-ranking executives, IT decision makers and business unit leaders at companies in 17 countries. Of course, BYOD is not an entirely new trend, say local legal and business experts, yet with the recent proliferation of iPads, iPhones and Androids, companies are facing mounting employee requests to connect consumer
BEWARE OF BYOD Issues to consider
Creating a policy
■ Are employees permitted to connect to enterprise applications via their smart phones or tablets? ■ Can they store company information? ■ What happens to that data when an employee upgrades his device and gives the older model to his daughter or sells it on eBay? ■ What if the device is stolen or lost?
■ BYOD policies should draw restrictions on what employees can and cannot do. ■ What applications and/or networks may be accessed with personal devices? ■ Can any of the company’s documents be downloaded? ■ Some companies may restrict tools that facilitate the sharing of information, such as iCloud and Dropbox.
devices to corporate networks and access, as well as manipulate and store company data on them. It comes down to “more and more employees really wanting a digital office in lieu of a brick-andmortar office,” said Charles Billington, a labor and employment attorney in the Cleveland office of Ogletree, Deakins, Nash, Smoak & Stewart P.C. And, while BYOD as a practice is undeniably on the rise, Mr. Billington and others in Northeast Ohio report that companies have been slow to implement written policies that dictate the role and responsibilities of employees when a personal device is used for business.
nies, in particular, are falling dangerously behind in drafting BYOD safeguards, according to Jim Kerr, president of CRU Solutions, a Middleburg Heights firm that assists small companies with their IT needs. These smaller organizations are quick to say “yes” to BYOD, hoping to cut costs as employees foot the bill for mobile gadgets, Mr. Kerr said. But, they lack the in-house expertise and resources to institute a formal policy. For these businesses, the absence of such a policy often comes to light when an employee is exiting the company, especially if the circumstances around that severed relationship are not friendly. The company can have a difficult time recouping any businessrelated information on the former
Don’t skip the formalities Small and mid-sized compa-
employee’s personal device. “Really at that point it is nearly too late to think about it,” Mr. Kerr said, adding that the data in question need not be something as sensitive as trade secrets. The loss of contact lists and appointment calendars, for example, can greatly disrupt the transition to a new sales rep. Of course, the more sensitive and privileged the data, the greater the need to control and protect it. Companies that handle defense department contracts or those in highly regulated industries such as health care and finance should have huge concerns related to BYOD, said Timothy M. Opsitnick, founder of Cleveland-based JurInnov, a company the helps businesses manage and track information. Highly creative organizations typically have fewer issues with information confidentially and security, he said. “Most everybody is in the middle somewhere,” Mr. Opsitnick said. “You have to find some way to make employees happy, but somehow take guard.” Mr. Opsitnick and his colleagues stressed the need for a written BYOD policy that employees can understand. The first question employers should ask is, “Will BYOD be permitted at all?” said Bill Blackie, a Clevelandbased attorney with the employment law firm Fisher & Phillips. Some companies may prefer to ban all personal mobile digital devices rather than risk information security breaches. Mr. Opsitnick believes that stance could be a hard sell to employees at companies that claim to be nimble and to prize innovation. “To tell them you can’t use this device or that one, it has an effect on the culture,” he said. “In many cases it is much better to find a way to (allow it) and put some necessary constraints in place.”
Sensitivity training Any policy should make clear
that company data — even when it is on personal devices — is still the company’s property, Mr. Opsitnick said. It should state that the company has the right to protect its data and take it back when appropriate. In practice, that might mean the device has to be password controlled with the password changed periodically. It might mean certain information must be encrypted or, in the case of employment termination, “the employee must delete any company information,” Mr. Kerr said. Further employee notice is needed if the company is using or intends to install software on the device that locks it up or “wipes” it clean — including the deletion of personal photos and data — in the event the device is lost or stolen. Finally, the policy should inform employees that using a personal phone, tablet or laptop for business means the device might be subject to searches by the company or during litigation, which most certainly would include shifting through personal data. “There is almost no way you can ensure searching (a device for company information) will avoid searching your personal data. You have to search the whole device,” Mr. Blackie said. The bottom line, Mr. Billington said, is to make the policy clear and concise and to educate employees on what the policy means. Since much of the concern centers on confidential data, take some time to train employees on the proper way to protect sensitive information, much like you would train them on other aspects of the IT infrastructure. “Tell them not to put company data on a cloud server; do not email it to yourself,” he said. Importantly, Mr. Billington added, counter the inclination to use less secure outlets by providing employees with the ability to easily retrieve, analyze and apply business data with their devices in a secure network environment. ■
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Court overturns $450,000 award in Goodyear case By MILES MOORE Rubber & Plastics News
F
AYETTEVILLE, N.C. — The North Carolina Court of Appeal has overturned a $450,000 award to a former worker at the Goodyear Tire & Rubber Co. Fayetteville plant, ruling the trial court lacked jurisdiction over her claims of harassment and wrongful termination. LaShanda Shaw worked at Fayetteville as an area manager from 2007 until she was fired in 2009. During that time, Ms. Shaw verbally was harassed by her male supervisor; the harassment was “obnoxious and rude,” but not of a sexual nature, wrote Appeals Court Judge Donna Stroud in her Jan. 15 decision. In April 2011, a jury in the Cumberland County Superior Court awarded Ms. Shaw $450,000. The jury found that Ms. Shaw suffered severe emotional distress because of Akron-based Goodyear’s negligence, and that Goodyear retaliated against her for her complaints of discrimination. But it also found that Goodyear didn’t intentionally discriminate against Ms. Shaw, and that Goodyear would have terminated her even if she had not complained. “In summary, the jury did not
award plaintiff any damages for her wrongful discharge claim, but only for her (negligent infliction of emotional distress) claim,” Judge Stroud wrote. Therefore, the only issue on appeal in the case was whether the trial court had jurisdiction over the emotional distress claim, Judge Stroud said. The jury determined Goodyear was guilty of “willful or wanton” negligence, and such claims are covered under the Workers’ Compensation Act, Judge Stroud wrote. Ms. Shaw should have pursued her claim in the North Carolina Industrial Commission instead of the state courts, she said. Goodyear said it is pleased by the unanimous decision of the three-judge appeals court panel. The company lawfully terminated Ms. Shaw for poor performance, and the jury found as much, the company said. “Goodyear actively promotes a zero-tolerance policy prohibiting discrimination, harassment and violence in the workplace at all of its facilities,” the company said. Harold Kennedy III, Ms. Shaw’s attorney, said he will file a petition for review of the appeals court decision with the North Carolina Supreme Court. ■
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Required education can be big business for some groups By JENNIFER KEIRN clbfreelancer@crain.com
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n the final months of each year, Shannon Polk sees his mail filling up with letters, postcards and brochures from organizations hoping to woo him to their continuing legal education (CLE) seminars and conferences. “We get flooded with them, probably three or four every day,” said Mr. Polk, partner at Haber Polk Kabat, which specializes in labor and employment law. “I just look for the topics that interest me.” Among those vying for Mr. Polk’s attention are national conferences in sunny places promising big-name speakers, localized programs specific to Ohio law just a short walk from his downtown office and online CLE programs he can take in his pajamas. Lots of choices, but earning CLE credits isn’t optional for Ohio’s lawyers. All licensed attorneys must complete 24 CLE hours every two years with a reporting deadline of Dec. 31, explaining the market blitz launched in the fall by companies and organizations hoping to appeal to attorneys cramming at the last minute. CLE delivery in Ohio is big business, and it pits local entities like the Cleveland Metropolitan Bar Association and the ClevelandMarshall College of Law against national for-profits like the National Business Institute,
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The Cleveland Metropolitan Bar Association offers about 200 CLE programs a year, such as this one held May 17 in partnership with the Northeast Ohio chapter of the Association of Corporate Counsel America. Lawline.com or LexisNexis. “It’s a very competitive business,” says Steven L. Wasserman, CLE committee chairman of the CMBA and partner at Chernett Wasserman. “The more people you can get to an event, the higher head count and higher participation fee, it drives our revenues.” CLE income accounts for 25% of the Cleveland Metropolitan Bar Association’s budget of $3.1 million; it is derived from an offering of about 200 courses each year that attract about 5,500 participants, according to Rita Klein, a CMBA spokeswoman.
All CLE created equal? Soon, the competition for CLE business will get even tougher, when new standards from the Supreme Court of Ohio effective in 2014 will allow 12 of an attorney’s 24 credits to be completed online or through self study, up from its current guideline of six. The change will make it even easier for attorneys to get credit from outfits like Attorney Credits.com, which boasts the tagline “CLE Your Way” and advertises a bundle of six Ohio CLE credits for just $79.99. So is all CLE created equal? “Absolutely not,” said Brad Lagusch, director of marketing for the Ohio State Bar Association, which currently offers about 150 CLE titles. He can offer a half dozen reasons why attorneys should use local organizations to earn at least some of their CLE credits — such as programming that’s specific to Ohio law, access to the most relevant local experts in a field, and discounted pricing for bar members. “We aren’t just looking for a transaction,” said Mr. Lagusch. “We have an ongoing relationship with these people, they are our members. We have a lot more at risk than, say, an outfit in New York just doing self-study CLE.” Mr. Lagusch said that the OSBA is also beefing up its self-study resources for members; attorneys can earn credits through online study, webinars, telephone seminars and CLEtoGo, a tool for accessing education through a mobile device. The organization’s latest addition is the eBook Library, which provides free access to e-books from all OSBA CLE
seminars to any member who registers for a live event. In Northeast Ohio, the CMBA is taking similar steps in the face of increased competition. Mr. Wasserman emphasizes the community connection and networking value of local CLE programming. CMBA is periodically able to offer free programming through community partnerships, and is pushing more events into the suburbs to gain easier access for its nearly 5,200 members. “The discerning attorney can determine pretty readily what programming is actually going to benefit them in their practice as opposed to simply fulfilling their required hours,” he said.
Full menu of choices Local providers like the CMBA don’t get a leg up over their national competition when it comes to getting courses approved for credit, according to Susan Christoff, director of continuing legal education for the Supreme Court of Ohio. “We approve the course, not the sponsor,” said Ms. Christoff, whose office receives 10,000 to 12,000 course applications each year and approves about 95% of them. While “established” sponsors like the OSBA and CMBA get a break on filing fees and a quicker turnaround on approvals, their content is judged objectively against the same criteria as the nationals. A recent survey by the Supreme Court found that two-thirds of Ohio’s attorneys are satisfied with CLE requirements, and 86% reported being able to attain CLE instruction “with significant intellectual or practical content that improved their professional competence.” The coming increase in self-study hours permitted was driven by the survey’s feedback that attorneys wanted easier ways to earn their CLE. For Mr. Polk, the choices he makes in earning CLE credits are driven solely by topic, not sponsor. He estimates he’s earned credit by attending or speaking at programs by nearly a dozen organizations, both national and local. “I don’t see a meaningful difference in quality from provider to provider,” Mr. Polk said. “The menu of available courses out there is very good.” ■
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Firms move in as Utica shale business builds By MICHELLE PARK mpark@crain.com
A couple of out-of-town law firms have moved into Canton in recent months, drawn here to serve clients that are — or will be — tapping into the Utica shale. And, if what has played out in Pennsylvania’s Marcellus shale region repeats itself, more will come. Jackson Kelly PLLC and Steptoe & Johnson PLLC — both based in West Virginia and both specializing in oil-and-gas legal work — have opened Canton offices, motivated, their executives say, by existing clients who need them here. Jackson Kelly’s office opened in June, while Steptoe & Johnson’s office opened just last month. “Without the shale play, I know of no reason why we would have opened in Ohio,” said Michael D. Foster, managing member and CEO of Jackson Kelly, which is based in Charleston. “Ohio has plenty of lawyers; they don’t need lawyers from West Virginia coming to meet typical consumer demand.” Most say it’s likely other law firms will follow. “I think you’re going to see more out-of-state firms come into Ohio as the fracking technologies become refined and the economic appeal of it becomes more evident,” said Ward Bower, a principal with Altman Weil Inc., a legal management consulting firm in Newtown Square, Pa. “We’ve seen that in Pennsylvania.” In what was described by the Pittsburgh Business Times as a “his-
toric influx of out-of-town law firms,” six law firms entered southwestern Pennsylvania between December 2011 and July 2012, the newspaper reported last July. Most of the firms’ executives told the newspaper that Marcellus shale activity triggered their moves. Such influxes carry benefits and disadvantages, Mr. Bower said. “It’s probably a little scary for the local legal community,” he said. “Outside firms coming in … look to diversify so they are not a one-trick pony. As they do that, they inevitably impinge upon the legal practice in the local community.” But, Mr. Bower continued, “Somebody with deep experience coming into the legal community (is) likely to benefit clients because they will have experienced shale gas lawyers.”
Likely trailblazers Jackson Kelly’s Mr. Foster wouldn’t be surprised if other firms follow his firm’s lead. “A number of Houston law firms have opened offices or acquired firms in Pittsburgh, so common sense seems to indicate that those same firms, with a rich history of representing people in the oil and gas industry, would also look for a merger or opening their own office in the Utica area,” he said. And, if an influx of new firms does play out, competition will sharpen, Mr. Foster said. “If a competitor says he can do a title for $15,000, and you’ve been charging them $20,000, you need to find a way to match that price,”
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Mr. Foster said. Jackson Kelly’s Canton office is staffed with two full-time attorneys and one part-time lawyer who travels from the firm’s Pittsburgh office four days a week, Mr. Foster said. The goal is to grow to five or 10 lawyers within 24 months. Steptoe & Johnson, which in recent years also opened a Pittsburgharea office — in part, because of the Marcellus shale — employs two attorneys now in Canton and should scale to 10 by summer, said Dan Kostrub, managing member of the new office. The Canton location is the second in Ohio for the firm, which is based in Bridgeport, W. Va. In the short term, the opportunity lies in leasing and title work, Mr. Foster said. In the long term, he anticipates other disputes involving oil and gas and said the firm will “staff up with litigation lawyers” who have relevant experience. Plus, as facilities are built or expanded, there will be additional demand for legal services, such as commercial contracts, Mr. Foster predicted.
“While we intend to service our clients in the oil and gas industry, our interest really is longer term,” Mr. Foster said. “Ohio will be a success for us not because of the title work we do over the next three or four years, but if 10 years from now … we are obtaining (other) legal work.” Likewise, Steptoe & Johnson’s plan is to have a full-service office in Canton for each of its practice groups, Mr. Kostrub said. “I would say it’s a good thing,” he said. “We’re going to hire some local people, so there’s job creation.”
Company or crowd? From at least one local oil-andgas attorney’s perspective, the verdict still is out as to whether out-ofstate law firms moving into Ohio’s shale country carries more advantages or disadvantages for firms and clients already in Northeast Ohio. “A lot of precedent-setting work has been done and is being done by firms such as ourselves, who are already here,” said Rafael “Raf” McLaughlin, a partner in the
oil, natural gas and utilities practice group of Reminger Co. LPA in Cleveland. “This is a fast-evolving area, one which the people who have the boots on the ground right now are handling capably.” Mr. McLaughlin said an influx of law firms into the area could be a reflection of the “rather well-organized and increasingly well-represented property owners and associations” that have improved their negotiating positions when dealing with drillers. That’s not to say Mr. McLaughlin wants to show out-of-towners the proverbial door. Firms are going to locate where their clients want them to be, he knows. But energy producers, landowners and others involved in shale should do their research about law firms that come to the market not because existing clients asked for them to, but to capitalize on the “next big thing,” he said. “We can expect some company,” he said. “The question is, who is it and what experience do they have?” ■
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LARGEST ENGINEERING FIRMS
RANKED BY NUMBER OF LOCAL REGISTERED ENGINEERS(1)
Rank
Company Address Phone/Website
Number of local Number of registered local engineers employees
Corporate headquarters
Year founded 2012 projects
2012 local engineering billings ($ Top local executive millions) Title
1
GPD Group 520 S. Main St., Suite 2531, Akron 44311 (800) 955-4731/www.gpdgroup.com
94
375
Akron
1961
Eaton Blvd., Beachwood; Northfield Racino, civil design; Ohio Turnpike Commission
53.5
Darrin Kotecki president
2
Arcadis U.S. Inc. 1100 Superior Ave., Suite 1250, Cleveland 44114 (216) 781-6177/www.arcadis-us.com
81
89
Highlands Ranch, Colo.
1888
NEORSD-Southerly WWTC, renewable energy facility; Akron-WPCS, step feed process; ODOT-Anthony Wayne Suspension Bridge/Maumee River rehabilitation
18.2
Nick Rodzianko operations leader, vice president
3
URS Corp. 1375 Euclid Ave., Suite 600, Cleveland 44115 (216) 622-2400/www.urscorp.com
72
307
San Francisco
1904
Flats East Bank; Medical Mart/Convention Center; Main/ Broadway interchange; Cleveland Hopkins backup power upgrade
56.0
Dana S. Mitchell vice president
4
Middough Inc. 1901 E. 13th St., Suite 400, Cleveland 44114 (216) 367-6000/www.middough.com
64
214
Cleveland
1950
NEORSD, program system integration and programming services PSIM-28, Cleveland; TPCO America Corp., Gregory, Texas; BP Husky Toledo refinery
51.0
Ronald R. Ledin president, CEO
5
DLZ Ohio Inc. 614 W. Superior Ave., Cleveland 44113 (216) 771-1090/www.dlz.com
53
162
Columbus
1947
I-271 lane addition project; I-90 construction inspection; NEORSD projects
22.6
Thomas G. Sisley senior vice president
6
HWH Architects Engineers Planners Inc. 1300 E. Ninth St., Suite 900, Cleveland 44114 (216) 875-4000/www.hwhaep.com
38
76
Cleveland
1908
GE Energy; Goodyear Tire & Rubber Co.; Lubrizol Corp.
14.0
Peter P. Jancar chairman
7
Westlake Reed Leskosky 1422 Euclid Ave., Suite 300, PlayhouseSquare, Cleveland 44115 (216) 522-1350/www.wrldesign.com
37
110
Cleveland
1905
PlayhouseSquare Allen theatre complex; Point Park University arts complex; MOCA (Museum of Contemporary Art Cleveland)
14.0
Paul E. Westlake Jr. managing principal
8
CT Consultants Inc. 8150 Sterling Court, Mentor 44060 (440) 951-9000/www.ctconsultants.com
34
107
Mentor
1922
ODOT District 12 construction inspection; Euclid long-term control plan implementation; Lakewood long-term control plan negotiation and planning
14.5
Dave Wiles president
8
The Equity Engineering Group Inc. 20600 Chagrin Blvd., Suite 1200, Shaker Heights 44122 (216) 283-9519/www.equityeng.com
34
89
Shaker Heights
2002
KOCH Suitability for Service; Orica dynamic blast analysis for nitric acid tank; Santos Australia RBI implementation
NA
David A. Osage president
10
Osborn Engineering 1300 E. Ninth St., Suite 1500, Cleveland 44114 (216) 861-2020/www.osborn-eng.com
30
68
Cleveland
1892
Cleveland Medical Mart/Convention Ctr.; Wrigley Field expansion; Akron Children's Hospital commissioning; Cleveland Climate Action Plan
8.0
Gary F. Hribar president
10
TranSystems Corp. of Ohio 55 Public Square, Suite 1900, Cleveland 44113 (216) 861-1780/www.transystems.com
30
42
Kansas City, Mo.
1966
I-77 add lane; Columbus Road lift bridge; Avon I-90 interchange
6.1
Hamid V. Homaee principal, senior vice president
12
MWH Global 1300 E. Ninth St., Suite 1100, Cleveland 44114 (216) 621-2407/www.mwhglobal.com
25
51
Broomfield, Colo.
1820
NEORSD tunneling dewatering pump station; Cleveland Water Plant enhancement program; City of Lima long-term control plan
10.0
Kristen M. Miller vice president, region manager
13
Thorson Baker & Associates Inc. 3030 W. Streetsboro Road, Richfield 44286 (330) 659-6688/www.thorsonbaker.com
24
108
Richfield
1993
Akron Children's Hospital Critical Care Tower; Ohio Department of Mental Health; Green Local Schools
13.9
Gordon R. Baker Michael G. Thorson principals
14
ms consultants inc. 600 Superior Ave. East, Suite 1300, Cleveland 44114 (216) 522-1926/www.msconsultants.com
23
93
Youngstown
1963
I-80 design/build, Trumbull County
10.0
David J. Mosure vice president
15
Burgess & Niple 1300 E. Ninth St., Suite 612, Cleveland 44114 (216) 241-9600/www.burgessniple.com
21
36
Columbus
1912
ODOT, Lorain-Carnegie Bridge Cuyahoga River Crossing Trail; Shamrock & Brookstone Blvd. extension, Painesville; Lake County Dept. of Utilities
11.4
Charles J. Zibbel director, Great Lakes region
15
R. E. Warner & Associates Inc. 25777 Detroit Road, Suite 200, Westlake 44145 (440) 835-9400/www.rewarner.com
21
55
Westlake
1951
RTI International, titanium plating facility: PPG Teslin project; NEORSD Easterly chemical storage; NEORSD low voltage electrical upgrades
6.8
Theodore A. Beltavski president
17
Karpinski Engineering 3135 Euclid Ave., Cleveland 44115 (216) 391-3700/www.karpinskieng.com
20
76
Cleveland
1983
Cleveland Medical Mart & Convention Center; Eaton Corp. worldwide headquarters; Cleveland Clinic Pathology and Laboratory Medicine Institute
9.0
James T. Cicero president
18
Scheeser Buckley Mayfield LLC 1540 Corporate Woods Parkway, Uniontown 44685 (330) 896-4664/www.sbmce.com
16
51
Uniontown
1959
NEOMED lab expansion; St. Elizabeth Boardman Hospital; ODMH, Northcoast Behavioral Healthcare Campus
NA
James E. Eckman president
19
HNTB Corp. 1100 Superior Ave., Suite 1701, Cleveland 44114 (216) 522-1140/www.hntb.com
14
22
Kansas City, Mo.
1914
Cleveland Inner Belt Bridge; Opportunity Corridor study; I-270 improvements
2.8
Scott Campbell office leader, associate vice president
19
Richard L. Bowen + Associates Inc. 13000 Shaker Blvd., Cleveland 44120 (216) 491-9300/www.rlba.com
14
83
Cleveland
1959
Ohio Turnpike twin plazas; Vitamix headquarters; Cleveland Third District Police Station
NA
Richard L. Bowen president
21
The Austin Co. 6095 Parkland Blvd., Cleveland 44124 (440) 544-2600/www.theaustin.com
13
86
Cleveland
1878
Bimbo Bakeries Elkhart, Ind. expansion; Pepperidge Farm Utah bakery expansion; Mitsubishi Power Systems generator plant
6.8
Michael G. Pierce president
21
Euthenics Inc. 8235 Mohawk Drive, Cleveland 44136 (440) 260-1555/www.euthenics-inc.com
13
27
Strongsville
1969
Pearl Road widening, Strongsville; Pleasant Valley/Bagley Road widening, Middleburg Heights; Madison Ave./W. 61st St. RTA pedestrian bridges
3.3
Alan R. Piatak president
23
CDM Smith Inc. 1468 W. Ninth St., Suite 750, Cleveland 44113 (216) 579-0404/www.cdmsmith.com
12
20
Cambridge, Mass.
1947
NEORSD, Southerly WWTC renewable energy facility; NEORSD, asset management implementation; ODOT, Access Ohio 2040
NA
Edward J. St. John, principal; Robert Parker, associate
23
Hatch Mott MacDonald LLC 18013 Cleveland Parkway Drive, Suite 200, Cleveland 44135 (216) 535-3640/www.hatchmott.com
12
20
Millburn, N.J.
1966
Euclid Creek tunnel; Stumph Road (CR266) highway
9.7
Michael G. Vitale, sr. vice president; Michael F. McCarthy, vice president
23
KS Associates Inc. 260 Burns Road, Suite 100, Elyria 44035 (440) 365-4730/www.ksassociates.com
12
29
Elyria
1987
Cuyahoga County Bridge load rating project; NEORSD interceptor surveying and mapping project, Cleveland; state Route 57 corridor improvement project, Elyria
NA
Lynn S. Miggins president
23
The Mannik & Smith Group Inc. 23225 Mercantile Road, Beachwood 44122 (216) 378-1490/www.manniksmithgroup.com
12
23
Maumee
1955
Lake County Solid Waste facility, design, permits; Miceli's, factory expansion and brownfield redevelopment; McDonalds, major renovation program
NA
Mark A. Smoley senior vice president, principal
27
Barber & Hoffman Inc. 1100 W. Ninth St., 3rd floor, Cleveland 44113 (216) 875-0100/www.barberhoffman.com
11
20
Cleveland
1934
Cleveland School of the Arts; Westin Hotel; St. Johns Hospital expansion and modernization program; U.S. Coast Guard Station
NA
Robert Jordan president, treasurer
27
Chagrin Valley Engineering Ltd. 22999 Forbes Road, Suite B, Cleveland 44146 (440) 439-1999/www.cvelimited.com
11
36
Cleveland
1996
Engineering services and infrastructure and roadway projects for municipalities
NA
Donald F. Sheehy president
27
Environmental Design Group(2) 450 Grant St., Akron 44311 (330) 375-1390/www.envdesigngroup.com
11
34
Akron
1984
City of Green, municipal engineering services; Akron Children's Hospital Critical Care Tower; Stark County Fulton Road improvements
NA
Dwayne Groll president
27
McHenry & Associates Inc. 25001 Emery Road, Suite 200, Warrensville Heights 44128 (216) 292-4696/www.mchenryassociates.com
11
31
Warrensville Heights
1986
Menorah Park Wiggins Place expansion, Beachwood; Canton Water Reclamation facility; several Giant Eagle stores in Ohio and Pa.
5.0
William Hulsey president
27
Peters, Tschantz & Associates Inc. 275 Springside Drive, Suite 300, Akron 44333 (330) 666-3702/www.ptaengineering.com
11
28
Akron
1953
Southwest General Hospital Emergency Department and bed tower addition; Verizon Wireless, Twinsburg Data Center expansion; Landmark Theatre renovation
5.5
James E. Peters president
Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. (1) Numbers as of Jan. 1, 2013. (2) Formerly Floyd Browne Group.
RESEARCHED BY Deborah W. Hillyer
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Attevo: Many employees have left continued from PAGE 1
who no longer work for the company. None of the former employees knew exactly how many people remain at Attevo. Attevo also faces several lawsuits and tax liens. Plus, it was ordered to vacate its 20,000-square-foot headquarters at One Cleveland Center in downtown Cleveland by the end of January, according to documents filed in Cuyahoga County Common Pleas Court with Judge Brendan Sheehan. The company — which last year changed its legal name to Cirric Inc. — is using an address on Chagrin Boulevard in Beachwood, according to an email from a current employee that was forwarded to Crain’s. Whole Health Management LLC of Deerfield, Ill., filed a request to evict Attevo from One Cleveland Center after Attevo failed to pay its rent. Attevo president and CEO C. David Snyder in September 2012 signed a commercial cognovit promissory note stating that the company would pay Whole Health a total of $475,000 over four years, according to a previous case filed by Whole Health with Judge Hollie Gallagher. After making one payment that September, Attevo defaulted on the note, documents from the case in Judge Gallagher’s court show.
Litigation piles up Whole Health, which subleased the space to Attevo, isn’t the only entity trying to get money from the company. The federal government in March 2011 filed a $2.8 million tax lien against Attevo. It’s unclear how much of the lien the company might have paid off, as Mr. Snyder declined to answer several questions sent by Crain’s to his email address. “Due to different circumstances pertaining to each, matters dealing with former employees should be dealt with on a case by case basis, and the newspaper is not the medium by which those issues should be addressed,” Mr. Snyder stated in an email response to Crain’s. “Moreover, several of the issues raised pertain to matters which are currently in litigation and therefore not appropriate for me to comment on.” However, the federal govern-
“Several of the issues raised pertain to matters which are currently in litigation and therefore not appropriate for me to comment on.” – C. David Snyder, president and CEO, Attevo ment since last Dec. 14 has filed two more liens seeking a total of about $600,000 in taxes — most of which was to be withheld from employee paychecks — that have accrued since the fourth quarter of 2008. The state of Ohio on Jan. 11 filed two liens seeking about $230,000 in withholding taxes from either Attevo or Mr. Snyder, the company’s largest shareholder. The state last September filed four other liens against the company seeking a total of $58,635 in corporate franchise taxes. Attevo also faces lawsuits from contractors and former employees. Some of the lawsuits name Mr. Snyder personally. For instance, John P. Frankovich, the company’s former chief operating officer, last September filed a lawsuit against Mr. Snyder and his wife, Michelle Snyder, seeking $100,000 that he says he lent to Mr. Snyder six years ago. Mr. Frankovich’s lawsuit says he loaned the money after Mr. Snyder lost $300,000 in a previous lawsuit. In a response to the lawsuit, the Snyders denied many of the allegations made by Mr. Frankovich, who lives in Austin, Texas.
financial issues. However, in the defendants’ counterclaim, they argue that they bought the two properties. They also say Mr. Snyder failed to pay a total of $790,000 in lease payments and real estate taxes, and that he never followed up on a promise to give them a 15% stake in Attevo. Mr. Wienke and three other former employees still are involved in a lawsuit they filed against Attevo in May 2011, shortly after they left the company. Among other allegations, they argue in the lawsuit that the company “repeatedly delayed the processing of payroll,” a complaint reiterated by many former employees who spoke to Crain’s for this story. Some say they still are owed money by the company. Since leaving Attevo, Mr. Wienke has started Infoverity LLC, a consulting firm that focuses on information management, which was the Dublin, Ohio, resident’s specialty at Attevo. Mr. Wienke said he keeps in touch with many former Attevo employees, noting that his lawsuit against Attevo shouldn’t reflect poorly on them. “It was a great group of people. They were hard-working. They did great work,” he said. ■
Philadelphia developer purchases Canton properties for $9 million A Philadelphia real lawyers involved in ON THE WEB Story from shale gas drilling,” estate developer www.crainscleveland.com Mr. Cooper said. drawn to Northeast Ohio by economic Although the buildgrowth spurred by shale ing is more than gas exploration has acquired Hunt87% leased and anchored by a ington Bank Plaza and the nearby Huntington Bank regional headquarNew Market Parking Deck in downters, Mr. Cooper said there is room town Canton. to increase its fiscal performance David Marshall, chairman and by relocating tenants to free up CEO of Amerimar Realty Co., said in space for new, larger tenants and a news release that his company by making other changes to the bought the properties because it building. believes Northeast Ohio “is strongly Amerimar plans to add automatpositioned for the future and we are ed parking equipment to the committed to maintaining the buildgarage, Mr. Cooper said. ing’s status as the address of Amerimar first surfaced in Northchoice for top companies in the reeast Ohio last year when it agreed gion.” with the city of Akron to undertake An Amerimar affiliate paid almost the conversion of the former Fire$9 million for the 11-story, stone headquarters in Akron to 160,000-square-foot building, acmultitenant office and research cording to Robert Cooper, a CBRE space. Group Inc. broker who works with The seller was Canton InvestAmerimar. ments LLC of Charlotte, N.C., which The 522-car parking garage cost had owned the properties since Amerimar $3 million. 1998, according to the Stark Coun“We see this as an area for ofty auditor’s office. — Stan Bullard fices for engineers, consultants and
Presented by
Trouble on the homefront Mr. Snyder also is fighting for ownership rights of his primary residence in Lakewood and a second house in Chautauqua County, New York. Last September, he sued Kenneth Grant of Copley and his daughter, Susan J. Grant Kalal of Akron, arguing that they illegally locked him out of the Chautauqua house and refused to let him repurchase the legal title to his 10,897square-foot Lakewood residence on Edgewater Drive. Mr. Snyder said in the lawsuit that he retains “equitable ownership” of the properties despite transferring the property deeds to Ms. Kalal to secure a $4 million loan Mr. Grant gave to Mr. Snyder in 2007 when he was facing
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20130204-NEWS--24-NAT-CCI-CL_--
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CRAIN’S CLEVELAND BUSINESS
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FEBRUARY 4 - 10, 2013
Cequent drives into cleaning tool arena Solon-based maker of automotive aftermarket products grows its business via acquisitions in effort to diversify By GINGER CHRIST clbfreelancer@crain.com
Cequent Consumer Products, a Solon-based maker of automotive aftermarket products such as towing hitches and rooftop cargo carriers, is driving its growth through acquisitions of cleaning tool companies. In 2012, Cequent Consumer Products, which is owned by publicly traded TriMas Corp. of Bloomfield Hills, Mich., bought two cleaning tool companies — Harper Brush Works of Fairfield, Iowa, and Laitner Brush Co. of Traverse City, Mich. — as part of an effort to diversify and enter new markets, according to Francis Bernart, director of marketing and new product development at Cequent Consumer Products. “We started to run out of places to go and grow the business,” Mr. Bernart said. “We had to find other avenues, and adding companies is a great way to do it.” TriMas in the third quarter reported sales of $103 million for its
Cequent Americas business segment, which includes Cequent Consumer Products and its sister company, Cequent Performance Products, a Plymouth, Mich.-based maker of aftermarket and original equipment towing and trailer accessories. That total for the segment was up 6.7% from the third quarter of 2011. Cequent Consumer Products typically hires two to three people each year and currently has a 120person work force, 60 of whom work at its headquarters in Solon, Mr. Bernart said. “We’re very conservative in bringing people on board, but we do it with regularity because our business continues to grow,” Mr. Bernart said. Cequent Consumer Products, which for years has provided retail customers such as AutoZone and Walmart with automotive aftermarket products, hopes to enter the commercial market with its purchase of the bankrupt Harper Brush and to diversify its product
offerings in existing retail channels with its February purchase of Laitner, Mr. Bernart said. Despite Cequent Consumer Products’ recent growth, Mr. Bernart said it doesn’t have its sights yet on other acquisitions. “We typically keep our eyes open for acquisitions that could help us in terms of our growth. We haven’t had those opportunities come to us as of late,” he said. “But you never know when an opportunity may arise.”
Ask, and ye shall receive Rich White, senior vice president of the Automotive Aftermarket Industry Association of Bethesda, Md., sees opportunities for growth in the automotive aftermarket business in the coming year. The association predicts the $307.5 billion sector will grow 3.5% in 2013. “While we always watch the possible headwinds from higher gas prices and lower miles driven, we point to favorable tailwinds resulting from the increase in the average age of vehi-
ON THE WEB Story from www.crainscleveland.com
“We started to run out of places to go and grow the business.”
Phillips Edison sets sights on Fairlawn
– Francis Bernart, director of marketing and new product development, Cequent Consumer Products
Cincinnati-based Phillips EdisonARC Shopping Center REIT Inc. is preparing to take another bite out of the Northeast Ohio shopping center market. This time, it plans to buy Fairlawn Town Centre in suburban Akron from a unit of WP Realty of Bryn Mawr, Pa. According to a Securities and Exchange Commission filing, Phillips Edison has agreed to acquire the property for about $42 million. If Phillips Edison does not complete the transaction, it would forfeit $600,000, according to the SEC filing. In contrast to Phillips Edison’s high-profile purchase of Parmatown Mall and Shopping Center in Parma last fall to undertake a makeover of the aging mall and associated properties, it is acquiring in Fairlawn Town Centre a property that WP Carey has repositioned over three years. The 30-acre property at 2855 W. Market St., Fairlawn, includes 447,000 square feet of selling space. — Stan Bullard
cles and the increase in vehicles over 11 years of age,” Mr. White said. The biggest challenge in taking advantage of those opportunities is competition, according to Mr. Bernart. Because some areas of its business, such as cargo-securing equipment, have a low barrier to entry, Cequent Consumer Products must find ways to be more marketable to its customers. One way it’s doing so is through its warehouse operations. At its distribution center in Indiana, the company three years ago installed a voice-activated picking system and last year added voice automation to its receiving operations. Now, throughout the distribution center, a worker can speak the name of a product or order and a computer will guide him or her to the correct place in the warehouse, which has improved accuracy and efficiency, Mr. Bernart said. ■
Goodyear attempting to make inroads in Europe By JENNIFER KARPUS Tire Business
Goodyear Tire & Rubber Co. is looking to the European market — especially the aftermarket — as a key component in its financial success. The Akron-based tiremaker made that pronouncement during its Jan. 15 presentation at the 2013 Deutsche Bank Global Auto Industry Conference in Detroit, which it also webcast. Darren Wells, executive vice president and chief financial officer for Goodyear, said the tiremaker has executed a turnaround over the last eight years, improving consistently with the exception of the 2008-2009 financial crisis. “I think the fundamental years, 2011 and 2012, particularly in 2012, through a pretty tough economic environment, we’ve actually delivered very consistent performance,” he said. Mr. Wells said that although the company’s North American business proved to be the most challenging area to improve, it is expected to exceed targeted earnings one year ahead of plans. “We had a goal for North America that for a long time was to get to 5% return on sales,” he said. “Two years ago we announced the target that by 2013 we wanted to get to $450 million of operating earnings. … We’re going to get to that target in 2012, rather than 2013, and we feel great about that. And that’s in a pretty soft tire market in North America.” However, the European market, especially the European aftermarket, has been a tough environment and Goodyear aims for improvement there. “We continue to struggle there.... For us to get to our financial goals, it’s clear that we’ve got to see some recovery in our European business,” Mr. Wells said. “And part of
that may be volume, but part of that may be things we can do to improve the business there.” The industry environment remained very weak in the fourth quarter, he said, crediting part of the weakness to the mild winter weather, although it has been slightly colder than winter 2011. Goodyear said improvement in EMEA (Europe, Middle East, Africa) results, especially volume, will be critical for achieving its 2013 segment operating income target. “Clearly, dealers in Europe have had soft volumes,” Mr. Wells said. “But 2013 is a new year. It gives us an opportunity to start again. And that’s really where we’re focused.” The company’s strategy is based on a strong start to the 2013 summer season, Mr. Wells said, including its product lineup with strong label scores. This summer season will be the first on which the newly placed European tire labeling law will have an impact, and Mr. Wells said Goodyear is feeling pretty good about its label scores. “That label gives a standard test performance on rolling resistance, wet braking and noise for a tire,” he said. “Those criteria don’t mean as much in the winter tire market because people are not necessarily looking for rolling resistance and wet traction in a winter tire. They want snow and ice performance, so while the labels may have been there for the winter season for consumers, when the summer season rolls around, that’s where the label really is going to be critical.” Mr. Wells noted that key balance sheet issues include the company’s unfunded pension obligation, which was funded once already, but grew again because of historically low interest rates. Goodyear said union associates hired since 2006 receive a 401(k). ■
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LEGAL NOTICE
LEGAL NOTICE
LEGAL NOTICE
To merchants who have accepted Visa and MasterCard at any time since January 1, 2004: Notice of a 6+ billion dollar class action settlement. Si desea leer este aviso en espaĂąol, llĂĄmenos o visite nuestro sitio web. Notice of a class action settlement authorized by the U.S. District Court, Eastern District of New York. This notice is authorized by the Court to inform you about an agreement to settle a class action lawsuit that may affect you. The lawsuit claims that Visa and MasterCard, separately, and together with banks, violated antitrust laws and caused merchants to pay excessive fees for accepting Visa and MasterCard credit and debit cards, including by: Â&#x2122; Agreeing to set, apply, and enforce rules about merchant fees (called default interchange fees); Â&#x2122; Limiting what merchants could do to encourage their customers to use other forms of payment through, for example, charging customers an extra fee or offering discounts; and Â&#x2122; Continuing that conduct after Visa and MasterCard changed their corporate structures. The defendants say they have done nothing wrong. They say that their business practices are legal and the result of competition, and have beneďŹ tted merchants and consumers. The Court has not decided who is right because the parties agreed to a settlement. On November 27, 2012, the Court gave preliminary approval to this settlement.
THE SETTLEMENT Under the settlement, Visa, MasterCard, and the bank defendants have agreed to make payments to two settlement funds: Â&#x2122; I]Z Ă&#x201E;ghi ^h V š8Vh] ;jcYÂş ¡ V +#%* W^aa^dc [jcY i]Vi will pay valid claims of merchants that accepted Visa or MasterCard credit or debit cards at any time between January 1, 2004 and November 28, 2012. Â&#x2122; I]Z hZXdcY ^h Vc š>ciZgX]Vc\Z ;jcYÂş ¡ Zhi^bViZY id WZ Veegdm^bViZan &#' W^aa^dc ¡ i]Vi l^aa WZ WVhZY dc V edgi^dc of the interchange fees attributable to certain merchants that accept Visa or MasterCard credit cards for an Z^\]i"bdci] š>ciZgX]Vc\Z EZg^dY#Âş Additionally, the settlement changes some of the Visa and MasterCard rules applicable to merchants who accept their cards. This settlement creates two classes: Â&#x2122; A Cash Settlement Class (Rule 23(b)(3) Settlement Class), which includes all persons, businesses, and other entities that accepted any Visa or MasterCard cards in the U.S. at any time from January 1, 2004 to November 28, 2012, and Â&#x2122; A Rule Changes Settlement Class (Rule 23(b)(2) Settlement Class), which includes all persons, businesses, and entities that as of November 28, 2012 or in the future accept any Visa or MasterCard cards in the U.S.
WHAT MERCHANTS WILL GET FROM THE SETTLEMENT Every merchant in the Cash Settlement Class that ďŹ les a valid XaV^b l^aa \Zi bdcZn [gdb i]Z +#%* W^aa^dc 8Vh] ;jcY! hjW_ZXi id V YZYjXi^dc cdi id ZmXZZY '* d[ i]Z [jcY id VXXdjci [dg merchants who exclude themselves from the Cash Settlement Class. The value of each claim, where possible, will be based on the actual or estimated interchange fees attributable to the merchantâ&#x20AC;&#x2122;s MasterCard and Visa payment card transactions [gdb ?VcjVgn &! '%%) id CdkZbWZg '-! '%&'# EVnbZcih id merchants who ďŹ le valid claims for a portion of the Cash ;jcY l^aa WZ WVhZY dc/ Â&#x2122; The money available to pay all claims, Â&#x2122; The total dollar value of all valid claims ďŹ led, Â&#x2122; I]Z YZYjXi^dc YZhXg^WZY VWdkZ cdi id ZmXZZY '* d[ i]Z 8Vh] HZiiaZbZci ;jcY! VcY Â&#x2122; The cost of settlement administration and notice, money awarded to the class representatives, and attorneysâ&#x20AC;&#x2122; fees and expenses all as approved by the Court. >c VYY^i^dc! bZgX]Vcih ^c i]Z 8Vh] HZiiaZbZci 8aVhh that accept Visa and MasterCard during the eight-month >ciZgX]Vc\Z EZg^dY VcY Ă&#x201E;aZ V kVa^Y XaV^b l^aa \Zi bdcZn [gdb i]Z hZeVgViZ >ciZgX]Vc\Z ;jcY! Zhi^bViZY id WZ Veegdm^bViZan
&#' W^aa^dc# I]Z kVajZ d[ ZVX] XaV^b! l]ZgZ edhh^WaZ! l^aa WZ WVhZY dc Vc Zhi^bViZ d[ dcZ"iZci] d[ & d[ i]Z bZgX]VciÂźh Visa and MasterCard credit card dollar sales volume during i]Vi eZg^dY# EVnbZcih id bZgX]Vcih l]d Ă&#x201E;aZ kVa^Y XaV^bh [dg V edgi^dc d[ i]Z >ciZgX]Vc\Z ;jcY l^aa WZ WVhZY dc/ Â&#x2122; The money available to pay all claims, Â&#x2122; The total dollar value of all valid claims ďŹ led, and Â&#x2122; The cost of settlement administration and notice, and any attorneysâ&#x20AC;&#x2122; fees and expenses that may be approved by the Court. Attorneysâ&#x20AC;&#x2122; fees and expenses and money awarded to the class representatives/ ;dg ldg` YdcZ i]gdj\] Ă&#x201E;cVa VeegdkVa d[ i]Z settlement by the district court, Class Counsel will ask the Court for attorneysâ&#x20AC;&#x2122; fees in an amount that is a reasonable egdedgi^dc d[ i]Z 8Vh] HZiiaZbZci ;jcY! cdi id ZmXZZY &&#* d[ i]Z 8Vh] HZiiaZbZci ;jcY d[ +#%* W^aa^dc VcY &&#* d[ i]Z >ciZgX]Vc\Z ;jcY Zhi^bViZY id WZ &#' W^aa^dc id XdbeZchViZ all of the lawyers and their law ďŹ rms that have worked on the XaVhh XVhZ# ;dg VYY^i^dcVa ldg` id VYb^c^hiZg i]Z hZiiaZbZci! distribute both funds, and through any appeals, Class Counsel may seek reimbursement at their normal hourly rates, not id ZmXZZY Vc VYY^i^dcVa & d[ i]Z 8Vh] HZiiaZbZci ;jcY d[ +#%* W^aa^dc VcY Vc VYY^i^dcVa & d[ i]Z >ciZgX]Vc\Z ;jcY Zhi^bViZY id WZ &#' W^aa^dc# 8aVhh 8djchZa l^aa Vahd request reimbursement of their expenses (not including the administrative costs of settlement or notice), not to exceed )% b^aa^dc VcY je id '%%!%%% eZg 8aVhh EaV^ci^[[ ^c hZgk^XZ awards for their efforts on behalf of the classes.
HOW
TO
ASK
FOR
PAYMENT
To receive payment, merchants must ďŹ ll out a claim form. >[ i]Z 8djgi Ă&#x201E;cVaan VeegdkZh i]Z hZiiaZbZci! VcY ndj Yd cdi exclude yourself from the Cash Settlement Class, you will receive a claim form in the mail or by email. Or you may Vh` [dg dcZ Vi/ lll#EVnbZci8VgYHZiiaZbZci#Xdb! dg XVaa/ &"-%%"+'*"+))%#
OTHER BENEFITS
FOR
MERCHANTS
Merchants will beneďŹ t from changes to certain MasterCard and Visa rules, which will allow merchants to, among other things: Â&#x2122; Charge customers an extra fee if they pay with Visa or MasterCard credit cards, Â&#x2122; Offer discounts to customers who do not pay with Visa or MasterCard credit or debit cards, and Â&#x2122; ;dgb Wjn^c\ \gdjeh i]Vi bZZi XZgiV^c Xg^iZg^V id cZ\di^ViZ with Visa and MasterCard. Merchants that operate multiple businesses under different trade names or banners will also be able to accept Visa or MasterCard at fewer than all of the merchantâ&#x20AC;&#x2122;s trade names and banners.
LEGAL RIGHTS
AND
OPTIONS
Merchants who are included in this lawsuit have the legal rights and options explained below. You may: Â&#x161; <_b[ W YbW_c je Wia \eh fWoc[dj$ You will receive a claim form in the mail or email or ďŹ le online at: lll#EVnbZci8VgYHZiiaZbZci#Xdb# Â&#x161; ;nYbkZ[ oekhi[b\ from the Cash Settlement Class (Rule '( W ( HZiiaZbZci 8aVhh # >[ ndj ZmXajYZ ndjghZa[! ndj can sue the Defendants for damages based on alleged conduct occurring on or before November 27, 2012 on ndjg dlc Vi ndjg dlc ZmeZchZ! ^[ ndj lVci id# >[ ndj exclude yourself, you will not get any money from this hZiiaZbZci# >[ ndj VgZ V bZgX]Vci VcY l^h] id ZmXajYZ yourself, you must make a written request, place it in an envelope, and mail it with postage prepaid and postmarked no later than CWo (." (&') to Class Administrator, EVnbZci 8VgY >ciZgX]Vc\Z ;ZZ HZiiaZbZci! E#D# 7dm '*(%! EdgiaVcY! DG .,'%-"'*(%# I]Z lg^iiZc gZfjZhi bjhi WZ signed by a person authorized to do so and provide all of i]Z [daadl^c\ ^c[dgbVi^dc/ & i]Z ldgYh š>c gZ EVnbZci 8VgY >ciZgX]Vc\Z ;ZZ VcY BZgX]Vci 9^hXdjci 6ci^igjhi A^i^\Vi^dc!Âş ' ndjg [jaa cVbZ! VYYgZhh! iZaZe]dcZ cjbWZg!
and taxpayer identiďŹ cation number, (3) the merchant that wishes to be excluded from the Cash Settlement Class (Rule 23(b)(3) Settlement Class), and what position or authority you have to exclude the merchant, and (4) the business names, brand names, and addresses of any stores or sales locations whose sales the merchant desires to be excluded. Note: Oek YWddej X[ [nYbkZ[Z \hec j^[ Hkb[ 9^Wd][i I[jjb[c[dj 9bWii (Rule 23(b)(2) Settlement Class). Â&#x161; EX`[Yj je j^[ i[jjb[c[dj# I]Z YZVYa^cZ id dW_ZXi is: CWo (." (&')# Id aZVgc ]dl id dW_ZXi! hZZ/ lll#EVnbZci8VgYHZiiaZbZci#Xdb dg XVaa &"-%%"+'*"+))%# CdiZ/ >[ ndj ZmXajYZ ndjghZa[ [gdb i]Z 8Vh] HZiiaZbZci 8aVhh ndj XVccdi dW_ZXi id i]Z iZgbh d[ i]Vi edgi^dc d[ i]Z settlement. ;dg bdgZ ^c[dgbVi^dc VWdji i]ZhZ g^\]ih VcY dei^dch! k^h^i/ lll#EVnbZci8VgYHZiiaZbZci#Xdb#
IF
COURT APPROVES FINAL SETTLEMENT
THE
THE
Members of the Rule Changes Settlement Class are bound by the terms of this settlement. Members of the Cash Settlement Class, who do not exclude themselves by the deadline, are bound by the terms of this settlement whether or not they ďŹ le a claim for payment. Members of both classes release all claims against all released parties listed in the Settlement Agreement. The settlement will resolve and release any claims by merchants against Visa, MasterCard or other defendants that were or could have been alleged in the lawsuit, including any claims based on interchange or other fees, no-surcharge rules, no-discounting rules, honor-all-cards rules and other rules. The settlement will also resolve any merchant claims based upon the future effect of any Visa or MasterCard rules, as of November 27, 2012 and not to be modiďŹ ed pursuant to the settlement, the modiďŹ ed rules provided for in the settlement, or any other rules substantially similar to any such rules. The releases will not bar claims involving certain speciďŹ ed standard commercial disputes arising in the ordinary course of business. ;dg bdgZ ^c[dgbVi^dc dc i]Z gZaZVhZ! hZZ i]Z hZiiaZbZci V\gZZbZci Vi/ lll#EVnbZci8VgYHZiiaZbZci#Xdb#
THE COURT HEARING ABOUT THIS SETTLEMENT On September 12, 2013, there will be a Court hearing to decide whether to approve the proposed settlement, class counselsâ&#x20AC;&#x2122; requests for attorneysâ&#x20AC;&#x2122; fees and expenses, and awards for the class representatives. The hearing will take place at: United States District Court for the Eastern District of New York ''* 8VYbVc EaVoV 7gdd`anc! CN &&'%& You do not have to go to the court hearing or hire an attorney. 7ji ndj XVc ^[ ndj lVci id! Vi ndjg dlc Xdhi# I]Z 8djgi ]Vh appointed the law ďŹ rms of Robins, Kaplan, Miller & Ciresi AAE! 7Zg\Zg BdciV\jZ! E8! VcY GdWW^ch <ZaaZg GjYbVc 9dlY AAE id gZegZhZci i]Z 8aVhh š8aVhh 8djchZaÂş #
QUESTIONS? ;dg bdgZ ^c[dgbVi^dc VWdji i]^h XVhZ In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, MDL 1720), you may: 8Vaa idaa"[gZZ/ &"-%%"+'*"+))% K^h^i/ lll#EVnbZci8VgYHZiiaZbZci#Xdb Write to the Class Administrator: EVnbZci 8VgY >ciZgX]Vc\Z ;ZZ HZiiaZbZci E#D# 7dm '*(% EdgiaVcY! DG .,'%-"'*(% :bV^a/ ^c[d5EVnbZci8VgYHZiiaZbZci#Xdb EaZVhZ X]ZX` lll#EVnbZci8VgYHZiiaZbZci#Xdb [dg Vcn jeYViZh relating to the settlement or the settlement approval process.
w w w. P a y m e n t C a r d S e t t l e m e n t . c o m s INFO 0AYMENT#ARD3ETTLEMENT COM LEGAL NOTICE
LEGAL NOTICE
LEGAL NOTICE
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Change: Many countries have made switch Sterionics: Russians have used device continued from PAGE 1
“You have to do all this work, cross your fingers, flip the switch overnight and hope to God it’s translating in the right way,” said Jill Barber, Southwest General Health Center’s director of revenue integrity and managed care operations. “If not, we might not get paid.” Health care providers and insurers nationwide are migrating toward ICD-10, a set of diagnostic and procedural codes developed by the World Health Organization that government payers and insurance companies use to determine reimbursement levels for certain services. According to the American Medical Association, the new standard expands the number of diagnostic codes from about 13,000 combinations to roughly 68,000, allowing care providers to be more specific in their reporting. Many other countries transitioned to ICD-10 over the last decade. The United States has lagged because it’s the only country that also uses the coding for its billing, which has made the transition from a set of codes the health care field has used for 30 years particularly daunting. The transition deadline set by the federal government already has been delayed by a year until October 2014 to give providers more time for the change. “Almost everyone in a health care organization has to be educated about this process,” said Gary Ryan, a partner in PricewaterhouseCoopers LLP’s Lake Erie market. “This is huge.”
Coding conundrum In the most basic sense, medical coders have served as the intermediaries between the physicians and the insurance companies or government payers, essentially translating the doctors’ documentation of services into a code that can be digested by those that dole out the cash. But because coders are going to require more information from the physicians and other caregivers, education is paramount. The Cleveland Clinic, for instance, anticipates educating more than 7,600 employees about the process. Some hospitals already are employing largescale training programs for all staff involved with the conversion. Summa Health System in Akron recently had all its coders certified in the new coding system. The health system also engaged an outside vendor to craft web-based training programs for Summa employees. “The software only is as good as what people put in it,” said Kevin Theiss, Summa’s vice president of revenue cycle. “We felt this was going to be a pretty large undertaking.” Officials at Akron General Health System said the transition will cost the organization between $5 million and $10 million by the time it’s fully implemented. Moreover, Akron General’s leaders anticipate more than 50,000 work hours will be spent on the project — “a tremendous manpower resource,”
according to Dr. David Peter, the health system’s senior vice president and chief medical officer. Because of the level of detail the codes will entail, Akron General estimates the productivity of a medical coder could be slashed by about 30%. “That level of specificity is going to be a real challenge,” Dr. Peter said. To siphon those productivity losses, Akron General and other local health systems are investing in computer-assisted coding software — an automated process that will translate a physicians’ documentation into the ICD-10 codes, which then would be verified by the coder. “Computer-assisted coding is felt to be the one and only solution that won’t devastate your coder productivity,” said Southwest General’s Ms. Barber, noting the software costs well over $500,000.
A mixed bag Health care observers say the driving force of the conversion is it will allow the United States to compare its clinical data more easily with that of other countries. In addition, the new level of specificity could drive better quality reporting metrics and research efforts nationwide, according to Karen Mihalik, the Clinic’s interim executive director of revenue cycle management. Still, while all the local hospitals contacted by Crain’s appear to be on track for the 2014 deadline, the health care community hasn’t completely cozied up to the mandate. The American Medical Association has lobbied against the shift, citing the high costs of implementation and its potential to drive smaller providers — particularly independent physicians — out of business. Some health care leaders across the county have suggested waiting until the World Health Organization debuts ICD-11, which is expected in 2015. Local hospital leaders say there is some concern that all the vendors or payers with which they do business might not be ready for the conversion. The MetroHealth System said it is working with an insurer, though it wouldn’t identify which one, to translate old codes to the new format to see whether each other’s operations are up to snuff with ICD-10. Medical Mutual of Ohio, meanwhile, said it’s poised to be ready for the ICD-10 conversion by the end of the first quarter of 2013 and will spend the rest of the time until next year’s deadline testing its systems. Despite the uncertainty that still swirls around the issue, Northeast Ohio’s health providers show no signs of slowing their preparations for the change. “If we don’t do it right, we’ll have to hold our claims. In other words, we can’t send them to the payers until we know they are accurate,” said Liz Novak, University Hospitals’ vice president of technology projects. “That could negatively impact cash flow.” ■
continued from PAGE 3
From its tip, the device emits what looks like a blue spark, but it won’t start a fire. It’s cold plasma — a semigaseous substance that kills even the toughest bacteria and helps wounds heal faster by promoting the growth of new skin cells, according to laboratory studies conducted by Akron General Health System and Kent State University. Other studies back up that data, said Stephen Weeks, interim CEO of Sterionics, which licensed cold plasma technology developed at Petrozavodsk State University in northwestern Russia. “The Russians have already tested it on humans, and it works,” said Dr. Weeks, who used the pen on Mr. Polott’s cut thumb — and this reporter’s index finger — to prove that it doesn’t hurt. The U.S. Food & Drug Administration has yet to give any company the right to market cold plasma as a treatment for wounds, according to Dr. Weeks and Mr. Polott, president and CEO of 5iTech LLC in Cleveland, which provides product commercialization advisory services. It also creates companies that license existing technologies and works to turn them into products. Among the Cleveland-based startups 5iTech has created are Sterionics, eye treatment products developer Oculatek Inc. and Aria Analytics Inc., which is working to commercialize a device that can identify the makeup of liquids. Other cold plasma devices exist, but the prototype developed by Sterionics, a 5iTech spinoff, has several advantages, they said. For one, it’s extremely portable. It uses the air around it as the raw material to create the plasma, while other cold plasma devices need to be attached to a tank of gas. The pen-shaped prototype — which for now is housed in a gray plastic tube that once held a Sharpie marker — is connected to a small box that provides the electricity needed to turn the air into plasma. However, Sterionics plans to develop a version that runs on household batteries, Mr. Polott said. “We can make this device into a true pen. A double-A battery kind of thing,” he said, noting that portability would be particularly valuable to the military. Sterionics’ device also works on uneven surfaces, unlike some cold plasma devices. And it doesn’t use the patient as a
ground for the electricity, which could cause problems for people with pacemakers, Mr. Polott said.
Killer application Even if all goes according to plan, it will be a few years before the device hits the market, Mr. Polott said. However, the company just received two grants that should allow it to take a few steps toward that goal. The National Science Foundation in December awarded Sterionics a $150,000 grant the company will use to analyze how the device performs using feed gases other than air, how long the plasma must be applied to the wound and how deep into the tissue it works. Sterionics also received a $25,000 grant from the Akron BioInnovation Fund in late 2011. The company — which works with both the Magnet business incubator in Cleveland and the Akron Global Business Accelerator — will use the money to test the device on animals at Akron General. Cold plasma technology could represent a big improvement over antibiotics and topical treatments that use silver, said Judy Fulton, director of wound research at Akron General. Unlike antibiotics, cold plasma doesn’t cause bacteria to become resistant to it, nor does it appear to cause significant side effects, Dr. Fulton said. And unlike silver dressings, cold plasma can penetrate biofilms that groups of bacteria form to protect themselves, she said. Cold plasma doesn’t appear to damage human tissue significantly, but Dr. Fulton noted that the plasma does emit ultraviolet light and other charged particles. More tests will be needed to figure out dose levels that humans can tolerate. But Dr. Fulton does know the bacteria can’t tolerate a whole lot. “It pretty much kills everything,” she said. Akron General started testing the device on pieces of human tissue about four years ago, and a graduate student later continued that work as part of his dissertation at Kent State. The work was not paid for by Sterionics; the first set of tests was financed by the Akron General Foundation, Dr. Fulton said. A $25,000 grant from the Lorain County Community College Foundation’s Innovation Fund paid for microbiology testing at Kent State. “The more work we’ve done with it, the more exciting it’s looking,” she said. ■
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Crain’s Executive Recruiter Urbancode, Inc. seeks Lead Sales Engr to drive sales of sft’wr (SW). Loc: Cleveland, OH. Reqs: MS in CS, CE, or rel., + 3 yrs exp. in job off’rd or SW dev/ comp prog’mr - must incl 3 yrs exp. in bld & deploy autom’n. Must have subst. exp. & expert. in AnthillPro; dem’d exp/prof w/ Java/J2EE; SQL; Groovy; XML; Lnx sys admin; Wdws svcs; Wndws & Lnx com. line; Oracle; SQL Server; MySQL; network; test, issue track & cont. integ. tools. Cslt exp. in ent’prse SW prods req’d. & trvl up to 75%. Urbancode.com for full descp. Send resume to Chris Pritchard @ 2044 Euclid Ave. – Ste 600, Cleveland, OH 44115, cwp@urbancode.com
To place your Crain’s Cleveland Business Executive Recruiter ad Call Denise Donaldson at 216-522-1383
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THEWEEK JANUARY 3 3 JANUARY28 28- –FEBRUARY FEBRUARY The big story: The operator of the underconstruction Cleveland convention center and medical mart is doubling its staff, to 16 employees, in anticipation of the scheduled July opening of the $465 million complex. MMPI Inc. of Chicago is adding eight staffers who will beef up the Cleveland office’s operations and sales efforts. Among them is Dick Anter, who will be the director of finance and administration, a new position. Mr. Anter is a former mayor of Fairview Park who also served as director of downtown development for the Greater Cleveland Growth Association, now called the Greater Cleveland Partnership. Follow the bouncing ball: The University of Akron’s board of trustees signed off on the sale of the Rubber Bowl — the Zips’ former football stadium and an Akron icon that sits near the All-American Soapbox Derby — for $38,000. The university sold the stadium to Team1 Marketing, a Canton-based group that expressed interest last summer in installing a United States Football League team in the stadium. The university bought the stadium from the city of Akron in 1971 for $1. Almost full: Apartment occupancy in downtown Cleveland remains strong at more than 96% despite additional rental units, the Downtown Cleveland Alliance nonprofit reported. The alliance estimated apartment occupancy at 96.2% at the end of 2012 compared with 95.9% at the end of 2011, even though about 220 apartments recently have cone online. Downtown occupancy has been at 95% or better for the last seven quarters. The alliance estimated 1,165 new residential units will become available in the next 18 months; current rental inventory is 4,705 suites. It puts the downtown rental rate at $1.14 per square foot compared with $1.05 per square foot at the end of 2011. A new boss: Transtar Industries Inc. said former Meritor Inc. executive Timothy E. Bowes will join the distributor of transmission kits and components as its chief executive officer. Bob Keegan, who acted as interim CEO during the search, will remain as executive chairman of Transtar. Mr. Bowes most recently served as an executive officer and president of Meritor’s Commercial Truck and Industrial business unit.
Howdy, partner: The Cleveland Indians and WTAM-AM, 1100, will remain partners through 2017, and the Tribe found a near-permanent home on the FM dial, too, the team and broadcaster Clear Channel announced. WTAM and the Indians agreed to a five-year contract extension. In addition, WMMS-FM, 100.7, will simulcast “a majority” of the Indians’ games, the two parties said.
Shop talk: The International Council of Shopping Centers trade group selected David LaRue, president and CEO of Forest City Enterprises Inc., as its chairman for the 2013-2014 term. If Mr. LaRue is elected at ICSC’s annual meeting in May, he will become the association’s 54th chairman.
This and that: Gojo Industries Inc. in Akron announced a new contract with group purchasing organization HealthTrust of Brentwood, Tenn., to provide its 1,400 member hospitals and 10,600 ambulatory surgery centers, physician practices and alternate care sites with access to Gojo’s Purell Instant Hand Sanitizer and Provon hand hygiene and skin care products. … Passenger traffic levels at Akron-Canton Airport climbed in 2012 as the airport recorded its third straight record year of activity. A total of 1,838,083 passengers traveled to and from Akron-Canton, which was a 10.4% jump from the number of passengers in 2011.
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
PR could come in handy here
— said in an email the university doesn’t comment on personnel matters. — Timothy Magaw
■ The architect of a successful online degree program at Kent State University soon will be out of a job, and many people connected with the program are scratching their heads as to why. Gene Sasso, who built Kent State’s online master’s degree in public relations, was notified in January that his contract would not be renewed beyond May. Mr. Sasso, a well-known PR practitioner in the region, said he wasn’t given a reason for the firing. “We hit a lot of balls out of the park for Kent State and (the School of Journalism and Mass Communication), which is more of a reason why the decision is a huge, huge surprise,” Mr. Sasso said. In the two years since its launch, Mr. Sasso said, the online PR program has enrolled more than 250 students and generated between $5.5 million and $6 million in revenue for the university. In a letter addressed to Kent State’s administration, members of the online program’s first class lamented Mr. Sasso’s firing and asked officials to reconsider. “We can’t know about the day-to-day workings of the Journalism and Mass Communications School — and even less so about academic politics,” the letter read. “But if you judge Gene Sasso solely on his performance as program manager, teacher, advisor and student advocate, he should be earning a promotion and a raise.” Kent State spokesman Eric Mansfield — himself a graduate of the online PR program
Buy it — it’s good for you
WHAT’S NEW
BEST OF THE BLOGS
COMPANY: Ridgid, Elyria
Excerpts from recent blog entries on CrainsCleveland.com.
PRODUCT: 238-P Powered Soil Pipe Cutter The 238-P, the latest addition to Ridgid’s soil pipecutting product lineup, is designed “to make it easier for plumbers and mechanical contractors to quickly cut soil pipe in hardto-reach spaces such as those in the rafters of a building or below grade,” the company says. It’s lightweight — a little more than 13 pounds — and compact, at 11½ inches long. Ridgid says the 238-P “incorporates a chain that can effortlessly cut no-hub cast iron, service-weight cast iron and clay pipe up to 8 inches in diameter and concrete pipe up to 6 inches in diameter.” With its removable handle and low-profile cutter wheels, the product “provides the versatility to work with inconveniently placed pipe,” according to the company. In addition, the 238-P’s unique, two-directional operation “lets users score pipe before cutting, helping make the cut cleaner,” Ridgid says. And, as a safety precaution, the tool’s torque limit protects it from overloading. For information, visit www.Ridgid.com.
Send information about new products to managing editor Scott Suttell at ssuttell@crain.com.
■ Cuyahoga County may end up spending as much as $300,000 to insure against the public finance equivalent of a lightning strike. County law director Mahjeed Makhlouf last Monday, Jan. 28, brought up the need for the insurance policy during a meeting of the county Board of Control, where mid-level purchases are approved or rejected. The policy would insure the county against the unlikely event that the Ameritrust property — where the county plans to put its new headquarters — would be taken by eminent domain. That’s the legal process governments at every level use to compel a private property owner to sell land to the government. But, you say, what government might swoop in and take county-owned land for its own use? And why would the county need to pay so much for an insurance policy to protect against such an unlikely occurrence? Those are questions Mr. Makhlouf gamely tried to answer for County Executive Ed FitzGerald. The nuances of the risk management aspect of public finance were uncharted territory even for a lawyer such as Mr. Makhlouf, with years of business law under his belt. The issue was tabled until more information was available. The rationale for the insurance had to do with bonds the Cleveland-Cuyahoga County Port Authority will issue to finance con-
On a roll ■ The Horseshoe Casino Cleveland was singled out for praise in a USA Today story about a revival in the casino business. “Despite the sluggish economic recovery, it seems the American casino is back in a big way,” the newspaper reported. “Nationwide commercial gambling revenues are on track to surpass the $35.6 billion notched in 2011, which was up slightly from $34.6 billion in 2010.” The newspaper identified the “lucky seven” casinos that are “bold, eccentric and unpredictable,” offering surprises to their visitors. The Cleveland casino made the cut for its standout architectural features. “Smack in the middle of the Public Square neighborhood in downtown Cleveland, the Horseshoe’s claim to fame is the building in which it occupies,” USA Today said. “The Art Deco Higbee Building dates to 1931, and was the city’s first department store. The building (and surrounding Tower City Center complex) was added to the National Register of Historic Places in 1976.”
Consumers see the light ■ The LED bulb is emerging as “an energyefficient replacement for the standard incandescent bulb that people actually seem to like,” according to a New York Times story that included comments from an executive at Aurora-based lighting manufacturer TCP Inc. “Although priced at around 20 times more than the old-fashioned incandescents, bulbs based on LEDs, or light-emitting diodes, last much longer and use far less electricity, a saving that homeowners are beginning to recognize,” The Times said. Prices for the bulbs are “falling steadily as retailers like
struction. Because the buyers of this kind of bond value low risk above high returns, Port Authority chief financial officer Brent Leslie explained later, the insurance makes the bonds more attractive to the market — and that means the bonds could be priced lower, conceivably saving the county more than the cost of the insurance. — Jay Miller
Bonding is their bond ■ The Fedeli Group in Independence has become a shareholder in The DLK Group, a surety bonding agency in Stow that has been renamed Fedeli Liptak & Keller. The investment is the first such arrangement for Fedeli Group, and it may become a model for bringing in other specialists, said Umberto P. Fedeli, its president and CEO. Terms weren’t disclosed. Fedeli Liptak & Keller was drawn to the deal because Fedeli Group brings to the table “a tremendous amount of insurance acumen and ability,” said Kevin Keller, a partner of the renamed firm. Fedeli Liptak & Keller specializes in performance and payment bonds for contractors, primarily for public work. When a contractor is bidding on a project, such as building a new school, it must provide a performance and payment bond to the owner of the project, Mr. Keller said. That bond provides a third-party guarantee that the contractor will complete the project and pay subcontractors, among other things. Fedeli Group’s investment gives it a minority stake in Fedeli Liptak & Keller, Mr. Keller said. — Michelle Park
Home Depot and Lowe’s sell them aggressively” and manufacturers like TCP help to improve the technology. “Most of the manufacturers are moving toward new designs in solid state lighting, as are we,” said Jim Crowcroft, vice president for market development at TCP, which makes energy-efficient lighting under its own brand as well as the house brands of several mass retailers. Although TCP still sells far more compact fluorescent lights, growth in that business has slowed, while demand for LEDs is skyrocketing. “In the long run, solid-state lighting is going to make a whole lot of sense for almost every lighting application,” Mr. Crowcroft told the newspaper.
Coming to a theater near you ■ A movie filmed in the Cleveland area was one of the breakout hits of the just-completed Sundance Film Festival. “Toy’s House” is drawing comparisons to “Stand By Me,” “Moonrise Kingdom” and “Napoleon Dynamite.” It stars Nick Robinson, a 17-year-old actor who appears on the ABC Family sitcom “Melissa & Joey,” as a high school kid who runs away from his dad to live with two quirky pals in the woods in a shack they build together. The comedy was acquired at Sundance by CBS Films for distribution later this year. “Toy’s House” boasts a great supporting cast, including Nick Offerman, Megan Mullally, Alison Brie and Mary Lynn Rajskub. The film was shot over 27 days in Lyndhurst, North Royalton, Peninsula, the South Chagrin Reservation in the Cleveland Metroparks, Happy Days Ledges and Nelson Ledges.
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