SFLG MHBM July 10 2017

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YOUR GUIDE T O L AW, A CCOUN T ING & F IN A N CE

Stanley I. Foodman : The CPA You Want on Your Side

Also: Thomas Julin on Free Speech, Fake News & Social Media Technology, Healthcare, Infrastructure Offer Growth Opportunities www.sflegalguide.com

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Technology – Reshaping the Professional Workplace If you were practicing law, accounting, banking, real estate or a similar profession in the 1990s, you probably remember the arrival of the Internet. No longer did you have to go to the law library and search through case after case in a dusty hardcover volume. Instead, you could type a few keywords into Netscape, AOL, Yahoo or Google and find information in just a few clicks.

Professionals who adapted these new tools generally saw a remarkable increase in their productivity.

However, the rise of the online world also decreased the need for clerical staffers, including research assistants fetching material from the files and secretaries typing letters for their bosses.

In the past 20-plus years, the volume of information available online has multiplied many times.

Now, one of the hardest tasks is determining what information is accurate and relevant, and deter-

mining the reliability of online sources.

Now, we stand on the brink of another dramatic change in the professional landscape, as several of our managing partners have pointed out in the feature article on page 6 of this issue. Predictive analytics and artificial intelligence (AI) are already making their mark in the consumer world, and will soon reshape the workplace as well.

If you use a car navigation system to avoid traffic gridlock, ask Apple’s Siri a question or use Amazon’s Alexa to control your “smart

home” features, you’ve gotten a taste of the power of these new technology tools. If you shop for goods or services online, advertisers use predictive analytics to show you ads for similar products based on your online behaviors.

Predictive analytics and AI are very powerful tools for understanding huge quantities of data, including banking transactions, legal cases, global accounting rules and client behaviors. They will empower professionals to spend more time counseling and advising clients and less time handling

If you use a car navigation system to avoid traffic gridlock, ask Apple’s Siri a question or use Amazon’s Alexa to control your “smart home” features, you’ve gotten a taste of the power of the new technology tools.

routine matters.

However, technology still has its limits. There is still no substitute for human intelligence, decision-making and interaction.

A business owner considering an acquisition, a foreign national facing criminal or civil tax charges or a developer planning a new office building will continue to rely on the services of an experienced and knowledgeable professional.

In the next five to 10 years, technology will again push professionals to perform at their highest levels, while reducing the need for less-skilled positions. Therefore, forward-thinking firms and companies should keep this trend in mind when recruiting new people.

Intelligence, flexibility, willingness to learn and the “soft skills” will be increasingly important to delivering a positive client experience.

RICHARD WESTLUND

Richard Westlund Editor@sflegalguide.com

PUBLISHER JACOB SAFDEYE EDITOR IN CHIEF RICHARD WESTLUND GUEST CONTRIBUTORS STANLEY I. FOODMAN ANDREW C. HALL MEY-LING PEREZ SOUTH FLORIDA LEGAL GUIDE - BM Volume 1, Number 3, 2017 This is an independent supplement by South Florida Legal Guide Mailing address PO Box 630428, Miami, FL 33163. All rights reserved. All titles registered and may not be used without permission. Reproduction in whole or in part of any text, photograph or illustration without written permission of the publisher is strictly prohibited. The South Florida Legal Guide makes no guarantee regarding the accuracy of information presented, results reported, or safety of products or activities described herein. The publisher notifies readers that the hiring of a professional is an important decision that should not be based solely on advertisements. Before you decide, ask the professional to send you free written information about qualifications and experience.

Contact: info@sflegalguide.com or call: (786) 879-7638 • www.sflegalguide.com

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[ WEALTH MANAGEMENT CORNER ]

The Importance of Using a Corporate Trustee

BY MEY-LING PEREZ

As families and individuals accumulate wealth, proper tax and estate planning becomes an important subject to consider. One essential decision clients face when discussing estate planning with advisors, is the proper selection of a trustee. The trustee, after all, will be designated to carry out the plan’s stated goals. In today’s complex legal and economic environment, the role of a trustee can be time consuming and demanding. It is a role that entails critical duties, legal liability and specific expertise. This task can at times become

daunting on family and friends.

Some of the common tasks are: • Legal responsibility for administering the trust • Accurate accounting and reporting • Paying any associated debt and expenses • Reviewing assets and evaluating their performance • Filing of annual tax returns • Proper disbursement of any required distributions and discretionary expenses • Managing family dynamics

Selecting a corporate trustee to administer the trust is a prudent choice, and an excellent way to remove the burden from loved ones. Corporate trustees add significant value to trusts with complex planning structures, or trusts with substantial investable assets. There are various reasons why selecting a corporate fiduciary is a practical choice. Four key elements are: 1) Critical Knowledge and Experience A corporate trustee can provide focused attention

as it is solely dedicated to the administration of trusts. The familiarity and expertise in this space, makes them a reliable choice. Corporate trustees are required to stay current with regulatory changes, which provides grantors and beneficiaries with peace of mind. They also have access to experts to effectively oversee and evaluate the management of the trust’s assets.

2) Impartiality Sensitive family issues may arise during the administration of a trust. It is important to have an unbiased party serving as trustee or co-trustee in these cases.

The trustee’s duties include making impartial decisions without being pressured or

[ INTERNATIONAL TAX COMPLIANCE ]

Do You Know About FATCA International Payments?

BY STANLEY I. FOODMAN

U.S. companies that are making cross-border U.S. source payments are affected by the Foreign Account Tax Compliance Act (FATCA).

Certain payments made by U.S. payors are known as “withholdable payments,” and U.S. companies making international payments must now be FATCA compliant.

This is known as FATCA Accounts Payable Compliance. The risk of Accounts Payable FATCA Compliance rests with the U.S. payor and not the payee. IRS will look at the U.S. payor, referred to as the withholding agent, as the responsible party. U.S.

companies that have relationships with global suppliers, vendors and partners are responsible for obtaining the required information.

Those companies that don’t have necessary compliance information are subject to a 30 percent withholding tax penalty as well as a potential IRS audit.

What is a “withholdable payment”? Any FDAP – Fixed, Determinable, Annual, or Periodical – payment is considered a “withholdable payment.” According to the IRS website, FDAP is: “Income is fixed when it is paid in amounts known ahead of

time. Income is determinable whenever there is a basis for figuring the amount to be paid. Income can be periodic if it is paid from time to time. It does not have to be paid annually or at regular intervals. Income can be determinable or periodic, even if the length of time during which the payments are made is increased or decreased.”

The IRS lists some FDAP examples as: • Compensation for personal services • Dividends • Interest • Pensions and annuities

• Alimony • Rents (not gains from property) • Royalties • A sales commission paid or credited monthly • A commission paid for a single transaction • Taxes, mortgage interest or insurance premiums U.S. companies acting as U.S. payors must know and identify their payees. U.S.

affected by family dynamics. A corporate fiduciary will follow in detail the provisions stated in the trust to make sure the grantor’s wishes are carried out accordingly.

3) Continuity Depending on its type when established, a trust can stretch over many years, often outliving a generation or two. Corporate fiduciaries are best positioned to provide continuity over the life of the trust, with uninterrupted administration and accurate record keeping.

4) Fiduciary Responsibility/Regulation of Assets Corporate trustees are highly regulated by both state and federal agencies

companies that have U.S.based payees should ask for W-9s and a Social Security number for an Individual or a tax ID number for a business.

If a payee is foreign, the U.S. payor has a more complex FATCA responsibility.

There are multiple forms in the W series that apply to foreign Payees: W-8BEN, W-8BEN-E, W-8ECI, W-8IMY and W-8EXP. This places a burden on U.S. payors to obtain the right payee form. Commonly, the accounts payable department, the U.S. company’s CPA or legal counsel would make the determination as to which withholding certificate form to request from the foreign payee. For the foreign payee, these tax forms can be challenging to complete, hard

and must adhere to regulatory oversight. Trustees are held to a fiduciary standard of care and must always act in good faith and make sure all the wishes are carried out according to the trust documents.

As the financial landscape becomes more complex the use of professional advisors becomes a critical part of the execution and

• CONTINUES ON PAGE 8

to understand and require training.

Under FATCA, U.S. payors that have global suppliers are responsible to ensure that they have updated FATCA withholding certificates in their records to ensure compliance. Otherwise, they are required to withhold 30 percent. Non-compliant U.S. payors could face penalties and/or be subject to IRS examination. U.S. companies should not be victims of their own making. They should consult a tax specialist and make sure that they implement the right FATCA accounts payable procedures.

Foodman CPAs and Advisors, 1201 Brickell Avenue, Suite 610, Miami, FL 33131, (305) 365-1111, www.foodmanpa. com, info@foodmanpa.com

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STANLEY I. FOODMAN THE CPA YOU WANT ON YOUR SIDE Whether advising on complex tax issues, testifying in court or consulting with financial institutions, Stanley I. Foodman is dedicated to finding the truth. “While I enjoy digging deeply into the facts, analyzing the evidence and presenting my conclusions, my greatest satisfaction comes from bringing peace of mind to my clients.”

As the CEO of Foodman CPAs & Advisors in Miami, Foodman leads a team of professionals who specialize in complex international and domestic tax matters, commercial litigation support, forensic accounting, and advisory services. His client base includes high-net-worth individuals, business executives and professionals, financial institutions, governments, healthcare, entertainment and real estate organizations.

“I have seen cases where people’s health has been shattered by the accusations in a federal criminal tax case,” Foodman said. “We are part of a legal and accounting team trying to resolve the matter as quickly and effectively as possible so those stresses go away.”

In his practice, Foodman assists clients with a full range of accounting matters including tax compliance, voluntary disclosure, corporate and individual taxation, estate and trust tax and wealth planning," said Foodman, who is a Florida certified public accountant (CPA), certified fraud examiner (CFE), a cer-

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tified anti-money laundering specialist (CAMS), is certified in financial forensics (CFF), Chartered Global Management Account (CGMA) and he also holds a Trust & Estate Practitioner designation (TEP).

"We are the forensic accounting and litigation support firm of choice for some of the best criminal defense and civil litigation attorneys in the business," added Foodman. "We also work closely with financial institutions, helping them address compliance issues with federal regulators.”

ADVISING INDIVIDUALS AND BUSINESSES Foodman has advised both U.S. and foreign nationals facing both civil and criminal tax charges. “Individuals who own income-producing properties, businesses and assets in the U.S. and other countries may not realize their reporting responsibilities or potential tax liabilities,” he said. “We help them come into compliance with the far-reaching provisions of the Internal Revenue Code so they can move forward with their lives.”

Drawing on his extensive forensic accounting experience, Foodman helps businesses investigate “inside frauds,” tracking down stolen funds or other assets and gathering evidence that may be used in a criminal case.

But he also assists defendants, such as employees

accused of embezzlement and shareholders and executives who have been victimized by their business partners.

“An employee may have been told to do something illegal or lose his job,” Foodman says. “Then, when the fraud has been exposed, the owner may point the finger at the employee and deny responsibility.”

In embezzlement and in tax fraud cases, Foodman looks closely at the personal financial situation of the defendant to see if he or she profited from a crime. “In a federal criminal money laundering case, our client was acquitted because we were able to show that all his income was legitimate and that changes to his net worth was traceable to his legitimate sources of income. ” he said.

“With our knowledge of the tax code, we were able to explain to the jury why the profit shown on his return was not equal to the funds going into his bank account.

LAUNCHING HIS CAREER Foodman was born in Miami Beach and grew up in Coral Gables. He began learning Spanish helping his father manage a retail store in Little Havana. After graduating from Coral Gables High, Foodman attended University of Miami and went on to earn an Accounting degree in 1971 and a Master’s degree at the University of Miami in 1972 respectively.

After obtaining his

CPA, Foodman joined Peat Marwick as an accountant before opening his own firm in 1976. Right from the start, Foodman was interested in the forensics side of the accounting field. "I got involved with a lawsuit against a general contractor for a U.S. Navy base in Jacksonville," Foodman says. "The client's attorney hired me as an expert accountant, and won the case."

Foodman also began building an accounting and advisory practice, with a focus on international as well as U.S. transactions. He became involved in federal and state criminal investigations and served as an auxiliary special agent for the Florida Department of Law Enforcement (FDLE) to investigate economic crimes, such as money laundering, bank fraud, public corruption and discovery of hidden assets.

"Because of my skill-set in public accounting, the FDLE would lend me to federal agencies to help on their cases as well," says Foodman, who was a consultant to the Miami office of the U.S. Attorney for civil racketeering and money laundering recoveries. He later joined the advisory board of the International Association for Asset Recovery.

Today, Foodman is frequently asked to serve as an expert witness in tax, money laundering, auditing and other types of matters. He also assists immigration and real estate attorneys in helping

clients with tax planning, including compliance with the Foreign Investment in Real Property Tax Act (FIRPTA).

In addition, he consults with attorneys from Latin America, Europe and other regions on matters relating to the U.S. tax code and compliance.

In addition to his professional activities, Foodman is an active member of the Anti-Defamation League and an informal mentor to younger professionals. He also teaches karate and unwinds by swimming, fishing, listening to operas and symphonies and watching sporting events.

"Most of all, I enjoy time with my wife, son Daniel (an attorney with WNF Law in Miami) and two grandsons," he adds. "My family is everything to me."

A PUSH FOR TRANSPARENCY As the U.S. government has taken steps to lift the veil of secrecy in traditional "tax havens," Foodman has become a knowledgeable authority on the Foreign Account Tax Compliance

Act (FATCA), which requires foreign financial institutions to disclose information about accounts held by U.S. taxpayers who meet certain criteria.

Over the last seven years, Foodman CPAs & Advisors has gathered over 100 Foreign Financial Institutions as bank clients. These institutions rely on Foodman for their FATCA, CRS, QI Compliance programs.

Foodman also counsels South Florida financial institutions on FATCA, anti-money laundering rules and other compliance issues. "A robust internal audit program is usually a best solution," he adds.

Reflecting on the many roles of Foodman CPAs & Advisors, Foodman says.

"We know our place in the scheme of things, and provide advice and litigation support within an accounting and tax T framework. If there are legal issues, we advise the client to speak with an attorney. A team approach is essential in navigating complex financial matters in today's changing world."

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FREE SPEECH, FAKE NEWS & SOCIAL MEDIA: THE FIRST AMENDMENT IN THE SPOTLIGHT South Florida Legal Guide recently interviewed Thomas R. Julin, a shareholder in Gunster’s Miami office whose practice focuses on free speech, libel law and freedom of information cases for the press. Here are his thoughts on current First Amendment issues.

Q. WHAT IS THE FIRST AMENDMENT AND WHY IS IT IMPORTANT? The First Amendment to the U.S. Constitution says, “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” In this amendment, the founding fathers recognized that citizens need to be able to speak their minds and that the press plays a vital role in society by exposing excessive, unlawful or corrupt governmental actions.

Q. WHY IS IT IN THE NEWS TODAY? President Trump's repeated attacks on the media are testing the First Amendment right from the top. But that's not the only issue facing the press. In South Dakota a beef products company

accused by a government official of using fillers called “pink slime” filed a $6 billion libel suit against ABC News, which reported the controversy accurately. After a three-week trial, the case was settled recently. Hulk Hogan’s successful invasion of privacy suit against the Gawker website has inspired a lot of hostility against the media.

Q. HOW DO THE COURTS VIEW THE FIRST AMENDMENT? It will be important for the courts to rein in excessive libel and privacy invasion claims so that facts and viewpoints can continue to be freely expressed in our country. The U.S. Supreme Court in recent years has been a strong protector of speech of large corporate interests, but has not shown as much concern for individuals’ speech rights.

Q. WHEN IT COMES TO LIBEL, WHAT CAN THE PRESIDENT SAY OR NOT SAY? Libel law provides immunity to government officials whenever they are speaking in their roles. It also protects them from other types of tort actions. Although former FBI director James Comey told Congress that he was defamed by Trump's comments, basic common

law principles protect the President.

Q. WHAT ABOUT SATIRISTS AND COMEDIANS? The First Amendment also protects satirists and comedians, unless their words create a true threat to the President.

The portrayal of Trump as "Julius Caesar" in a Broadway play, and Kathy Gifford's repulsive showing of the bloody head of President Trump are close to the edge.

But anyone threatening real violence needs to be aware that the First Amendment does not provide protection.

Q. DO WE HAVE POLARIZATION IN THE MEDIA? To some extent, the answer is yes. Many people listen to their own echo chambers, whether it’s MSNBC or Fox News. However, the media as a whole does an excellent job presenting both sides of a story. While commentators today might be critical of the other side or focus on certain aspects of a story, they don't ignore it.

Q. SO IS THE MEDIA THE REAL PROBLEM? No. Americans today are divided. Some favor Trump's approach with tax cuts and support for business, while others believe issues like healthcare and education for

THOMAS JULIN all are far more important.

The media is very good at reporting on these issues, and people choose the arguments that fit their beliefs and values on both sides. So, what we have is a very healthy debate in our society. What we need to do is learn how to use these debates to solve our problems.

Q. HOW DO YOU DEAL WITH THE TORRENT OF FAKE NEWS ON SOCIAL MEDIA? Both Facebook and Twitter have recognized that their platforms are being used by people who want to

propagate false statements.

They are implementing more fact checking, technical and social solutions, because they realize that people will turn away if they can no longer rely on their social media platforms.

Q. WHAT ABOUT TRADITIONAL MEDIA? Newspapers and TV stations have implemented fact checking and editorial review systems throughout their existence. That’s very different from social media where no one is filtering the news, and anyone can disseminate any-

thing to millions of people.

Q. ANY FURTHER THOUGHTS? The quality and depth of information now available to Americans is unparalleled in our history. During the Presidential campaign, we regularly saw fact-checking articles run side-by-side with the candidates’ statements.

In some cases, reporters have made mistakes and columnists have gone too far with their opinions. That’s an ongoing concern, but nothing to warrant the ongoing campaign to undermine the integrity of serious journalism.

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TECHNOLOGY, HEALTHCARE, INFRASTRUCTURE OFFER GROWTH OPPORTUNITIES From technology to healthcare and infrastructure projects, South Florida offers a wide array of growth opportunities in the coming months for the region’s businesses, as well as law and accounting firms.

“We see real opportunities for growth in IT and the life sciences,” said Barry Gould, CPA, partner-in-charge of South Florida, EisnerAmper in Miami. “New products and applications are being developed with the financial support of wealthy individuals, private equity and venture capital sources.”

On the federal level, tax reform and some deregulation of the nation’s financial sector could act as a stimulus to business growth. “However, a loosening of credit or a decrease in financial regulations can lead to volatility in real estate, which generates litigation work for South Florida firms,” said John Genovese, partner, Genovese Joblove & Battista in Miami.

Healthcare is another sector that could be changed by the U.S. Congress and the Trump administration, which is wrestling with potential new regulations to “repeal

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and replace” the Affordable Care Act. “In South Florida, healthcare is a major element of our economy,” said Mark Raymond, Miami managing partner, Broad and Cassel. “Physicians, hospitals and other providers have an ongoing need for transactional, regulatory, compliance, investigative and litigation services.”

But regardless of what happens in Washington in the coming months, the region’s economy is expected to stay on its upward path, according to managing partners at law and accounting firms interviewed

by South Florida Legal Guide. In turn, those firms are growing to serve their clients, including advising on mergers and acquisitions, financing, taxes and litigation matters.

“With 300,000 people a year moving to Florida, there are plenty of legal opportunities in tax and estate planning, to take just one example,” said Raymond. “Knowing the nuances of Florida’s laws and regulations is particularly important in these fields.”

INFRASTRUCTURE New roadways, utility facilities and transit-oriented developments (TODs)

will generate new jobs for the region, says Al Dotson, partner, Bilzin Sumberg Baena Price & Axelrod LLP. “These projects generate a significant amount of construction activity, as well as new employment opportunities after completion,” said Dotson, whose practice includes land development, government relations and public-private partnerships (P3s) involving the design, building, operations, maintenance and financing of new developments.

“P3 projects shift risk from the public to the private sector, and each has a unique structure,” said Dotson, whose firm is advising on Genting’s Resorts World Miami development, involving a hotel, retail and other uses above and around the Omni Metromover site just north of downtown Miami.

Other P3 developments involving Bilzin Sumberg include the Virginia Key Marina, the Brightline/All Aboard Florida multimodal terminal with TriRail and Metrorail.

Along with increasing staffing to handle P3 transactions, Bilzin Sumberg has added attorneys in international tax, inbound investment and antitrust

SHERI FISKE SCHULTZ

JOHN GENOVESE

MICHAEL JOBLOVE

ALBERT DOTSON

litigation in the past year.

“If federal infrastructure funding comes through at the federal level, we expect that will lead to increased land use, zoning and other corporate work,” Dotson said.

REAL ESTATE Alexander I. Tachmes, chairman of government relations, zoning and land use at Shutts & Bowen LLP in Miami, also expects continued growth in P3 projects. “Governments

are using this approach to attract developers and generate tax revenue for their residents,” he said. For example, Shutts & Bowen represented ESJ Capital Partners, an Aventura-based asset management

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firm that purchased Jungle Island from the City of Miami through a long-term ground lease. “A developer can allocate more funds to improve a property through a ground lease, because it eliminates the upfront cost of buying the land,” Tachmes added.

In the hospitality sector, Tachmes says the renovation of the Miami Beach Convention Center will help attract more business-related travel to the region. Now under construction, the center will reopen briefly for Art Basel Miami Beach in December, and then close until the project is completed in late 2018.

“South Florida’s hotel sector has grown substantially in the past decade, and there are more rooms competing for tourist dollars,” he said.

“Therefore, investors need to take a tactical approach and carefully identify potential opportunities.”

Tachmes also advises caution in the high-rise residential construction sector.

“While there are still many towers under construction, there aren’t many developers walking into a zoning lawyer’s office and wanting to start a new project, especially in the Brickell and downtown markets,” he said.

The flow of money into South Florida’s real estate market is likely to lead to financial distress and litigation in the future, says Genovese. “Our firm is handling two Federal Trade Commission (FTC) receiverships, which suggests there is economic

pressure in the marketplace,” he said.

In addition to litigation and bankruptcy, Genovese Joblove & Battista is expanding its fiduciary and franchising practices, said partner Michael Joblove.

“Litigation is on the uptick now,” he said. “Our firm is handling more cases on Florida’s Gulf Coast, and we continue to expand our services across the state.”

MARIJUANA While real estate, healthcare and hospitality will continue to be mainstays of South Florida’s economy, the marijuana business may take off in the next year, says Michael Ehrenstein, partner, Ehrenstein Charbonneau Calderin in Miami who concentrates his practice on litigation.

“The state Legislature hammered out a deal to add 10 new licenses to the previous seven,” he said. “Each licensee will be able to build a vertically integrated operation from seed to sale with up to 25 dispensaries,’ Ehrenstein said. “That will increase demand for real estate for growing, distribution and retail facilities, and result in more legal work, from arranging financing to transactions and litigation.”

Immigration will be another active sector for the region’s law firms due to the Trump administration’s changes in policy, political turmoil in Central and South America, and other factors, adds Ehrenstein.

“Legal immigrants play a vital role in our economy,” he said. “They add to

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highly diverse professional workforce and they establish businesses and create new jobs. “In turn, they need advice in negotiating a lease, buying a home and complying with our tax code.”

Looking at the long term, Ehrenstein says global trade will propel the economic vitality of South Florida. “Our transportation, logistics and import-export businesses will be powerful drivers of growth for the region,” he said.

TECHNOLOGY South Florida’s technology sector continues to gain traction, as indicated by the success of the recent eMerge conference, which showcased the region’s capabilities. That growth offers opportunities for law and accounting firms to address issues like licensing, financing and strategic partnerships.

Shutts & Bowen has hired more than 20 new lawyers in the past year, including several in the intellectual property (IP) and cyber security sectors, said Tachmes. “Businesses have many questions about their liabilities in the event of a cyber attack,” he said. “We have also seen law firms hit with hacking attempts as criminals attempt to gain information on clients and pending deals. Our firm hired a cyber security professional and we expect other law firms to do so as well.”

However, advances in technology, such as artificial intelligence (AI) and predictive analytics will also

MARK RAYMOND

MICHAEL EHRENSTEIN

ALEXANDER TACHMES

BARRY GOULD

be changing the legal and accounting sectors. “AI will also have a huge impact on law firms, said Raymond.

For example, an AI application could draw on a database of court decisions throughout Florida and the

U.S. and predict the outcome of a new cases, such as a personal liability lawsuit filed by an elderly Floridian who slips and falls at a store.

“A general counsel for the defendant could look at the findings from an AI system

and decide to settle 85 cases of 100 cases,” Raymond said. “It might fight 10 of those cases where the facts are in its favor and decide individually on five cases

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Supreme Court Decisions May Overturn State’s ‘Long-Arm’ Statute

BY ANDREW C. HALL

Every litigator must consider the issue of in personam jurisdiction, the process for serving someone with a summons and complaint in order to give a court jurisdiction to try a case. In Venetian Salami Co. v. Parthenais, 554 So.2d 499 (Florida 1989), the Florida Supreme Court stated the jurisdictional standards over non–resident defendants; the complaint must allege sufficient facts to bring the action within the ambit of the long arm statute and demonstrate that the defendants have sufficient contacts to satisfy due process.

In light of two recent Supreme Court decisions, F.S. §48.193 (2) appears to be unconstitutional.

This section of the long arm statue provides for jurisdiction when an entity engages in substantial and not isolated activity within the State of Florida even though the claim does not arise from that activity.

In BNSF Railway, Co. v. Tyrell, decided on May 30, 2017, Justice Ginsberg, joined by seven other justices, examined in personam jurisdiction under the FELA. The Court first confirmed the concept of general in personam

jurisdiction being limited to where a corporation is deemed “at home,” the state of organization or where the corporation has sufficient activities, when viewed a whole, to make that state the primary place from which the corporation operates.

In the absence of general jurisdiction, specific jurisdiction requires that a nexus between the forum and the claim must be established. In BristolMyers Squibb Co. v.

Superior Court of California, San Francisco County, decided on June 19, 2017, Justice Alito clarified specific jurisdiction. Bristol

Meyers Squibb, (BMS), a Delaware corporation, and a Fortune 500 company headquartered in New York, employed 25,000 people worldwide and earned $15 billion annually. It had substantial activities within California, including five research laboratories, 160 research employees, and 250 sales representatives. BMS had a small government advocacy office in Sacramento.

BMS made Plavix, the alleged cause of plaintiffs’ damages. Between 2006 and 2012, BMS sold 187 million Plavix pills in California earning $900 million. While those contacts

would be sufficient under F.S. §48.193(2) as written, the Supreme Court deemed them insufficient under the due process clause without a nexus to the actual claim.

F.S. 48.193(2), Florida’s version of a similar approach to jurisdiction, is now inconsistent with due process. This failure can result in a dismissal at trial or on appeal. At least one case has been stopped in mid-trial because of the application of the BMS ruling. Absent changes in the application of the due process clause, lawyers should not rely on this statute.

Technology, Healthcare, Infrastructure Offer Growth Opportunities • CONTINUED FROM PAGE 7 considered toss-ups. But the law firm may only be handling 15 of those 100 cases, while the rest would be sent to an adjuster to settle.”

Gould says artificial intelligence will also be disrupting the traditional accounting field, handle some aspects of tax compliance and audit work. “Our firm is investing in AI, because that is the future,” he said, adding that AI’s decision-making support will free up accountants to focus on value-added services, such as consulting and business planning.

“When our clients are buying, selling or investing they want to talk with our people

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before making a decision,” Gould said. “That’s something AI can’t do.”

In South Florida, EisnerAmper has added expertise in areas like real estate, healthcare and financial services, including hedge funds and private equity firms, as well as trusts and estates.

KNOWING THE NUMBERS Getting an accurate financial picture is crucial when buying or selling a business, developing an estate plan, mediating a divorce or representing a client in court, says Sheri Fiske Schultz, CPA, managing director and director of litigation support & valuation services at Fiske & Company.

“We are seeing a great deal of merger activity, as smaller companies are being acquired or merging with others in order to compete with larger competitors,” Schultz said. “That’s a huge part of our practice, and we see no signs of a drop in M&A activity, especially in the service industries.”

On the litigation side Schultz says 99 percent of the cases are settled rather than going to trial. That means discussing “the numbers” during mediation, including using forensic experts to analyze the finances, she said.

South Florida business owners also need to pay close attention to developments in Washington relating to taxes,

Schultz said. For instance, the Internal Revenue Service has proposed eliminating discounts when interests in closely held businesses or family-controlled entities are gifted to family members.

“These discounts enable the individual making the gift, usually the parent, to reduce the value of the gift by discounts for lack of marketability and lack of control,” Schultz said.

“Because valuation professionals have previously been able to support such discounts of up to half of the value of the original interest, this is significant. Individuals should take full advantage of the existing discounts while the proposed regulations are in a state of flux.”

Andrew C. Hall is the founder and managing partner of Hall, Lamb, Hall & Leto, P.A., a Miami-based law firm specializing in complex corporate, business, and securities litigation. The firm can be contacted at 2665 S. Bayshore Dr., PH 1 Miami, FL 33133 (305) 374-5030 www.hlhlawfirm.com

The Importance of Using a Corporate Trustee • CONTINUED FROM PAGE 3 ongoing management of a trust. Sabadell United Bank, with a dedicated team and decades of experience, is well positioned to serve as corporate trustee for our clients and their families. Our commitment to the highest levels of customer service and expertise, while adhering to fiduciary standards, makes us the smart choice for today and the future.

Mey-Ling Perez is Senior Vice President, Private Banking and Wealth Management at Sabadell United Bank. She is responsible for assisting clients with private and commercial banking needs, as well as investment and trust services. Perez can be reached at mey-ling.perez@sabadellbank.com or 305.376.2469. www.sabadellbank.com.