Both the Senate and the National Assembly Resume Sittings Today – The Zimbabwean

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Both the Senate and the National Assembly Resume Sittings Today

Note:  The President has declared Friday 25th October a public holiday

to allow Zimbabweans to attend solidarity against sanctions on Zimbabwe events.

Coming up in Parliament

The Second Session of this Parliament – the Ninth Parliament of Parliament [and second Parliament under the 2013 Constitution of Zimbabwe] was officially opened by President Mnangagwa on Tuesday 1st October at a joint sitting of both Houses.  The President delivered a State of the Nation address [link] during which he outlined the Government’s legislative agenda for the session.  After the joint sitting both Houses reconvened briefly before adjourning until today.

MPs have not, however, been idle in the interim – they have been attending committee meetings and engaging members of the public at public consultations on Bills and the forthcoming 2020 National Budget.  Yesterday they attended a pre-Budget briefing in preparation for their coming labours on the 2020 National Budget – including the detailed pre-Budget Seminar at Victoria Falls scheduled for 30th October to 4th November.

The presentation of the 2020 Budget by the Minister of Finance and Economic Development will be on Thursday 14th November.

Today’s agenda

As today’s sittings will be the first working sittings of the new session and as all unfinished business of the First Session, including uncompleted Bills, lapsed at the end of that session, the agenda for this afternoon’s sittings is very brief.  It is the same in each House: the moving of the customary beginning-of-session motions expressing loyalty to Zimbabwe and respectful thanks to the President for the speech that he delivered when opening the new session on 1st October.

Upcoming Business

Unfinished business from the last session it is likely that motions will be put, and approved, that Bills be restored to the Order Paper at the stage reached in the last session:

Education Amendment Bill

Zimbabwe Investment and Development Agency Bill

Money Laundering and Proceeds of Crime Amendment Bill

Coroner’s Office Bill

Marriages Bill

New Business, for example, tabling of three recently gazetted Bills so that they can go for consideration by the Parliamentary Legal Committee:

Reserve Bank of Zimbabwe Amendment Bill

International Treaties Bill

Constitutional Court Bill

The Government’s Legislative Agenda for the Second Session

Twenty-six Bills were listed by the President in the Government’s legislative agenda for this session.  We have divided the list into the following parts and indicated the Bills that have already been gazetted or are awaiting gazetting, having been sent to the Government Printer for printing and gazetting:

Bills repeated from the legislative agenda for the First Session

  1. High Court Amendment Bill
  2.  Public Finance Management Amendment Bill
  3.  Gold Trade Amendment Bill
  4. Precious Stones Trade Amendment Bill
  5. Mines and Minerals Amendment Bill
  6. Freedom of Information Bill [already gazetted]
  7. Zimbabwe Media Commission Bill [already gazetted]
  8. Broadcasting Services Amendment Bill
  9. Cyber Crime and Cyber Security Bill [awaiting gazetting]
  10. Data Protection and Electronic Transactions Bill
  11. Child Justice Bill
  12. Mandatory Sentencing for Rape and Sexual Offences Bill
  13. Immigration Bill.

Bills appearing on the legislative agenda for the first time

  1. Labour Court Bill
  2. Magistrates Court Amendment Bill
  3. Police Bill
  4. Insurance and Pensions Commission Amendment Bill
  5. Pension and Provident Funds Amendment Bill
  6. Securities and Exchange Commission Bill
  7. Deposit Protection Corporation Amendment Bill
  8. Competition Amendment Bill
  9. Petroleum Amendment Bill
  10. Medical Aid Societies Bill
  11. Persons with Disabilities Bill
  12. Private Voluntary Organisations Bill
  13. Prisons and Correctional Services Bill

Veritas makes every effort to ensure reliable information, but cannot take legal responsibility for information supplied.

Breast, cervical cancer, Zimbabwe’s new twin evils
The MDC’s unflighted interview with the ZBC

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Zimbabwe says 55 elephants have died in two months following severe drought – The Zimbabwean

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Some of the animals died while searching for water at the Hwange National Park. Others were killed by residents after wandering into surrounding communities looking for food, Tinashe Farawo, spokesman for Zimbabwe’s Parks and Wild Life Management Authority said.

“The elephants are traveling long distances to look for water and end up invading communities. Some died of thirst in the park, some while in search of water. Community members killed others after they destroyed their properties,” Farawo said.

Twenty people have killed in human-animal conflict in the country since January, according to the spokesman.

Farawo said an elephant mauled a man to death after he tried to chase the animal, which had wandered into his garden to drink water in his backyard in a local settlement last week.

“That’s why we are saying allow us to trade in these animals, and we can raise funds for their security and food. But the so-called conservationists condemn us. The park was meant for 15,000 elephants, but we are now talking of over 50,000,” he said.

Farawo said the water crisis at the park was at a dire stage, and authorities have had to dig boreholes deeper to provide care for the animals.

The El-Nino drought that lasted between last October and May has devastated water sources in Zimbabwe, and citizens are bearing the brunt of the disaster.

Zimbabwe’s government has often complained about its elephant numbers, arguing that selling the animals will help reduce their population and generate funds to care for them, a position that has been opposed by animal conservationists.

In May, Zimbabwe said it had made $2.7 million from the sale of 90 elephants to Dubai and China, and profits will be plowed into animals conservation efforts.

Lenin Chisaira, director of Advocates4Earth, a group challenging a purported plan to sell 35 elephants to countries in Asia, said the water problems at the park were not enough to justify elephants’ sale.

Chisaira said mining operations in Hwange have contaminated water sources and affected grazing lands, leaving the animals with no choice but to fend for themselves.

“The government has over the years been allowing mines to develop in Hwange and that’s reducing grazing land, and those operations have impact on water. Even polluting the water. So the government is squarely to blame for all this,” Chisaira told CNN.

Agriculture in Masvingo’s communal areas: limited prospects – The Zimbabwean

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We investigated agricultural production across our communal area sites throughout Masvingo province during the 2016 and 2017 harvest seasons. These were relatively good rainfall years, with 690 mm recorded in Masvingo town in 2016-17, for instance. Compared to the past seasons, these were bumper harvest years, especially in the Lowveld site of Mwenezi.

Yet, as the table below shows, with the exception of Mwenezi, none of the sites produced on average sufficient grain to feed a family. If this is estimated to be one tonne of grain per year, three of the sites produced about half this amount on average. Of course there was a wide range, but across three sites only 14-18% households produced over a tonne of grain.

The Mwenezi results are unusual, given that this is drought prone area, but good soils under higher rainfall can produce the occasional good crop, especially as land areas are significantly higher. Here 51% of households produced over a tonne of grain on average across the two seasons, much of this from sorghum. Some sorghum is sold under contract to brewers, but most is retained for food, and because of good storage can tide people over through a number of years.

  Mwenezi Chivi Gutu West Gutu North
Maize 16/17 seasons average (kg) 915 543 509 613
Sorghum (kg) 1312 20 21 36
Pearl millet (kg) 0 3.4 3.9 0
Finger millet (kg) 3.3 1.7 37.6 52.5
% households producing over 1 tonne of grain (16/17 average) 51 16 14 18
Sunflower (kg) 5.8 0 18 12.7
Cotton (kg) 0 0 0 0
Groundnuts (kg) 73 182 189 220
Horticulture sales $ per household 26 6 5 8
Maize sales 16/17 seasons average(kg) 159 60 18 18
Zero maize sales 16/17 seasons (%) 85 89 96 95
Maize certified seed purchase (%) 59 88 90 100
Fertiliser purchase (%) 2 23 52 44
Manure applied (%) 3 37 44 65
Pesticide purchase (%) 40 41 45 23
Credit (%) 0 0 0 0
Contract (%) 13 0 0 0

Overall, crop diversity is limited. Outside Mwenezi, maize dominates, and pearl and finger millet have nearly disappeared, beyond being grown on very small plots for specialist production, usually for home brewing. Groundnuts are grown but not in large quantities and in these sites sunflowers are rare, because of the lack of markets these days. Cotton and tobacco are absent except for a few isolated cases.

Sales are also very limited. A few larger maize and sorghum producers sell, but most don’t. In fact across the two years on average 85%, 89%, 96% and 95% in the Mwenezi, Chivi, Gutu West and Gutu North communal area sites sold nothing, even in these relatively good years. With very few cash crops and little surplus to sell, this is largely a subsistence economy, one that requires off-farm income to supplement meagre agricultural production, as explored in a subsequent blog.

Tillage is especially reliant on access to livestock, which, as discussed in an earlier blog in this series, have a skewed ownership pattern. 50-68% of households use their own oxen, while others hire. Tractors are not a feature outside Mwenezi where a few have bought second-hand machines. Those with without other options must hoe their land, a feature most evident in Mwenezi.

% Mwenezi Chivi Gutu West Gutu North
Own oxen 54 68 51 50
Hired oxen 14 28 29 35
Loaned oxen 2 5 11 4
Own Tractor 7 0 0 0
Rented tractor 2 0 0 0
Hoeing 21 3 9 11

Big contrasts with the A1 resettlements

These patterns of agricultural production contrast significantly with the nearby A1 resettlement areas where, especially in the higher rainfall areas, production is higher. In 2010-11 for example, sites nearby the two Gutu sites produced on average 844kg and 1238kg of maize, with 38% of households selling surplus maize. Over the period from 2003-2013, 44% of households in those A1 sites produced more than one tonne of maize. Cultivated land areas are higher, averaging 3.2 ha in the resettlements near our Gutu sites, but also the intensity of production is greater, with higher inputs, including fertiliser (with over half of the households applying fertiliser).

As discussed in a later blog in this series, labour hiring is more common, both of permanent and temporary workers. Across our A1 land reform sites, excluding Mwenezi, over a third of households are regularly producing surpluses and reinvesting in the development of the farm. At the time of our last major census of A1 sites in 2011-12, the level of mechanisation was modest, however, with only half a dozen tractors across all the A1 sites, but this has changed since as people have invested in tractors and other equipment, notably pumps.

In the A1 resettlement areas, this results in a dynamic of accumulation for a significant group, where investments in farm and house improvements occur year on year. Not everyone manages this, and the patterns of differentiation – and associated dynamics of class formation – are very evident, with those not able to accumulate either dropping out and moving away or becoming wage labourers supporting the production of the accumulators.

Across the communal area sites this dynamic is not seen. Those able to realise surpluses are vanishingly few. Only around 15 percent in three of the areas achieved levels of output of grain sufficient to provide for household food needs, and even fewer sold surpluses. And this in relatively good rainfall years.

Although there is obvious differentiation in assets, production, labour hiring and so on, as other blogs in this series show, most communal area households are poor, unable to do much more than subsist off their farms and rely on off-farm incomes of various sorts. Agricultural production in the communal areas is therefore very low input and low output.

As the table shows, across the communal area sites, fertiliser input levels were low, although increasing in the wetter Gutu sites. Virtually no-one uses synthetic fertiliser or manure in Mwenezi, where soils are good and the potential for crop ‘burning’ due to excessive fertiliser is high. This contrasts with the sandy soils of the miombo areas further north, where higher rainfall and leaching means soil fertility is low and additions are required. In all sites, as another blog will discuss further, labour hiring is minimal, and outside Mwenezi collective work parties are very rare.

Perhaps surprisingly, given the low levels of production, outside Mwenezi the vast majority use certified maize seed, purchased hybrids or open-pollinated improved varieties. The proportion is less in Mwenezi, but still nearly 60%. The long-term commitment to improved varieties across Zimbabwe persists, supported by a 50-year tradition and continued extension reinforcement. This makes the economics of production of maize very risky, especially if purchased fertilisers are added too, and so this seed, along with most effort in agricultural production, is focused on the homefield areas, where extra labour, fertilisation and, if needed, additional irrigation can be applied. In small quantities, such maize may be produced as green maize for local consumption and sale rather than for grain.

Pesticides were bought by around a quarter of households, but these were in very small quantities and mostly applied to vegetables. Horticulture as a source of income, however, was highest (but not very high) in Mwenezi where irrigation projects provide opportunities. This again contrasts with the A1 resettlement areas, where informal irrigation has taken off in all sites, resulting in significant production of vegetables and green maize for market.

Finally, commercial credit was purchased by no one across the sites. Limited contracting for sorghum in Mwenezi provides some finance, but otherwise farmers are on their own. They rely on off-farm sources and remittances to finance agriculture, but overall, and by contrast to the A1 resettlements, this is a very low input, low output form of agriculture. Indeed, the possibilities of improvement are constrained. Land areas are small, soils are poor or rainfall is highly variable, labour is scarce and many farm owners are old and unable to invest effort.

Communal area projects: missing the mark

Agricultural production remains important of course, but more as stop-gap social security rather than as a basis for accumulation. This is vital given the absence of wider welfare opportunities and declining employment possibilities in Zimbabwe, but it is no surprise that government, NGO and donor food and cash for work schemes are an important source of livelihood for a significant group in these areas.

While there are many well-meaning projects aimed at improving agriculture in the communal areas of Masvingo province – usually with a ‘climate smart’ or ‘resilience building’ tag these days – you have to wonder whether these can have any impact, beyond marginal, often very labour intensive, improvements (like ‘conservation agriculture’). The communal areas, as discussed in other blogs, are structurally poor and disadvantaged and technical tinkering will make little difference. Maybe there are some high value, niche products that can be promoted – such as has been done with chillies in some parts of the country – but our Masvingo sites are in lower rainfall areas, more remote from markets, and it may make sense.

In sum, contrasting the communal areas with the A1 resettlements demonstrates how important land redistribution is if agriculture is to become more than a marginal, subsistence activity for most.

This post is the fourth in a series of nine and was written by Ian Scoones and first appeared on Zimbabweland.

This field research was led by Felix Murimbarimba and Jacob Mahenehene. Data entry was undertaken by Tafadzwa Mavedzenge

You know what it is?
Update on Statutory Instruments: Part 2

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Ruth Bader Ginsburg Wins $1M Prize For Her Profound Impact On Human Life

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Justice Ruth Bader Ginsburg (Photo via Wikimedia Commons)

By grit and determination, brains, courage, compassion and a fiery commitment to justice, Ruth Bader Ginsburg rose from modest beginnings to become one of the most respected, and most beloved, jurists of our time. She inspires women and men of all ages to realize that a democracy thrives to the extent that it provides every citizen equal footing to achieve their dreams. Justice Ginsburg has few peers in advancing the cause of human equality through the law.

— Amy Gutmann, President of the University of Pennsylvania and Berggruen Prize Juror, in remarks given following the announcement of Justice Ruth Bader Ginsburg as the winner of the 2019 Berggruen Prize for Philosophy & Culture. Ginsburg was chosen from a pool of more than 500 nominees, and the $1 million award is given each year to thinkers whose ideas have profoundly shaped human ideals. “Throughout her career, Ginsburg has used the law to advance ethical and philosophical principles of equality and human rights as basic tenets of the USA. Her contributions have shaped our way of life and way of thinking and have demonstrated to the world the importance of the rule of law in disabling discrimination,” said Berggruen Institute Founder and Chairman Nicolas Berggruen. Ginsburg will accept the award in December, and plans to donate the prize money to charitable or non-profit organizations.

Staci ZaretskyStaci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.

Update on Statutory Instruments: Part 2 – The Zimbabwean

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Update on Statutory Instruments: Part 2

This bulletin continues where Bill Watch 52 of 16th October [“Statutory Instruments:  Part 1]” [link] stopped;  it will deal with Government Gazettes from SI 205/2019 of 20th September up to SI 221/2019 of 18th October.

But first we draw attention to Constitution Watch 8/2019 of 19th October [link] commenting on the implications of the High Court decision in the important case of Mlilo v Minister of Finance and Economic Development [link].  The judgment invalidated SI 2015 gazetted on 12th October 2018 – the statutory instrument that imposed the 2% transaction tax.  The government then made it lawful in the Finance No 2 Act gazetted on the 21st August 2019 and backdated it to the time the 2% tax was introduced.

This bulletin indicates three recent statutory instruments which amend Acts of Parliament  –their validity could be challenged in the High Court using the Mlilo decision as a precedent.

Gazette of 20th September 2019

Correction of maximum income tax rate to 40%

SI 205/2019 [link] which amends the Finance Act is the first of the statutory instrument that are open to challenge on the basis of Mlilo’s case.  The SI amends the income tax bands for the period 1st August to 31st December 2019, correcting the rate for the top taxable bracket to 40% from 45% specified in the Finance (No. 2) Act.  It has been plausibly suggested that the 45% may have been a typographical error in the Finance (No 2) Act, because the Budget Presentation itself specified 40%.  The change went undetected and uncorrected while the Bill was going through Parliament and a few days later appeared in the Finance (No. 2) Act.

Note: The Minister can easily resolve doubts about the SI’s validity by including in the next Finance Bill a clause confirming 40% as the highest income tax rate for the five-month period August-December 2019.  He will have the opportunity to do so when he presents the 2020 National Budget during November.

Insurance:  Increased minimum prescribed assets ratios for insurers

SI 206/2019 [link] is aimed at registered insurers.  It effectively doubles the minimum prescribed asset ratios, i.e., the proportions of an insurer’s total assets that must be held in “prescribed securities” such as stocks or bonds issued by the State, statutory bodies and local authorities [including, for non-life insurers, Treasury bills and similar short-term instruments] or other investments  approved by the Minister of Finance and Economic Development.  The SI replaces SI 24/2016, the previous SI on the subject and goes into far greater detail than its predecessor on the penalties that can be imposed by the Insurance and Pensions Commission [IPEC] for non-compliance.

Note: A “prescribed assets” mechanism for insurers is usually justified as protecting policy holders against the consequences of injudicious investments by their insurers.  Another view, however, is that these prescribed assets were increased so that the State has access to more financial resources that would not otherwise be available to the State from investors from the money market.

High Court civil cases fees: correction of error

SI 207/2019 [link] corrects an error in SI 187/2019 [link] by replacing item 2 of the Schedule of fees [item 2 deals with court fees chargeable for a summons in civil cases claiming payment of money.

Persons who may lawfully acquire, possess and supply industrial hemp

SI 208/2019 [link] is a set of regulations, made by the Minister of Justice, Legal and Parliamentary Affairs in terms of section 161(g) of the Criminal Law Code, listing the following as persons who may lawfully acquire, possess and supply hemp:

  • any “farmer” [the term is not defined] so authorised in writing by the Minister of Lands, Agriculture, Water, Climate and Rural Resettlement,
  • the State or any of its organs on farms operated by the State or by any State organ,

as long as they are cultivating “industrial hemp” [there is a definition] for industrial purposes.  At least, that is how Veritas interprets the regulations, which could – and should – be much more clearly and tightly stated, given that the they are intended to create an additional class of persons exempted from the criminal penalties normally associated with possession of cannabis plants, prepared cannabis and cannabis resin.

Gazette of 23rd September 2019

New Standard Scale of Fines in ZWL dollars

SI 209/2019 [link] by the Minister of Justice, Legal and Parliamentary Affairs amends an Act of Parliament – it repeals and replaces the First Schedule to the Criminal Law (Codification and Reform) Act.  The enabling provisions cited by the Minister – section 280 of that Act and section 24(1) of the Finance (No. 2) Act, 2019 (No. 7 of 2019) – expressly confer the power to amend Acts of Parliament.  This SI, too, is open to challenge on the basis of Mlilo’s case.

It is important to remember that the new figures apply only to offences committed on or after the date the SI was gazetted, 23rd September.  Some examples of the new levels are: level 1 is ZWL$ 40, level 3 is ZWL$ 100 [the maximum fine to be imposed by a police officer for a petty offence under the admission of guilt procedure], level 14, the highest level, is ZWL$ 30 000.

Gazettes of 27th September 2019

ZWL dollar wages and allowances for Cotton Industry

SI 210/2019 [link] records a collective bargaining agreement fixing wages and allowances in the cotton industry, back-dated to 1st June.

Customs duty suspensions (1) disabled persons and (2) commercial tyres imported by approved importers

SI 211/2019 [link] fine-tunes the effect of the suspension of duty for motor vehicles imported for disabled persons by section 4 of the principal regulations, SI 257/2003.

It also modifies the suspension allowed on commercial tyres imported by approved manufacturers by section 9EE of SI 257/2003.

Prohibition on the use of forex in domestic transactions

SIs 212 and 213/2019 have already been covered in Bill Watch 50/2019 dated 29th September [link].

SI 213/2019, which amends the Exchange Control Act under the powers conferred on the President by the Presidential Powers (Temporary Measures) Act, is the third recent SI open to challenge on the basis of Mlilo’s case.

Gazette of 4th October 2019

Annual registration fees for land surveyors

SI 214/2019 [link] – new fees, stated in ZWL, for land surveyors, land surveyors-in-training and land survey technicians.

Local authority by-laws

SI 215/2017 [link] – Chiredzi Town Council By-laws amending rents and refuse removal charges for the “incorporated area”, i.e., the high density township/s administered by the council.

Customs duty

SI 216/2019 [link] – amendment of the duty rebate for food, soap and cosmetics manufacturers.

SI 217/2019 – a lengthy set of Suspension Regulations giving effect to the Economic Partnership Agreement between the European Community (EC) and Eastern & Southern Africa states (ESA).  Veritas is trying to obtain this to post in on the Veritas website.

Collective bargaining agreement: ZESA

SI 218/2019 [link] – temporary interim hardship allowances for ZESA Grades A1 to D2, January to March 2019.

Gazette of 11th October 2019

No statutory instruments were published in this regular Friday gazette.

General Notices

Those interested in the mining sector should note the 32 General Notices from the Mining Affairs Board.  These GNs notified applications to the Board for Exclusive Prospecting Orders for a variety of minerals in most of the country’s mining districts.  The Board has set a deadline of 1st November for receipt by the Board of any objections to the orders being granted.

Gazette of 18th October 2019

Statutory Instruments

Local authority by-laws – Masvingo RDC and Epworth Local Board

SI 219/2019 [link] – the Masvingo Rural District Council (Environmental and Natural Resources Conservation) By-laws, 2019 is a 32-page set of controls for many aspects of use of land and natural resources within the area of the council.

SI 220/2019 [link] – the Epworth Local Board (Dog Licensing and Control) By-laws, 2019 is marred by a meaningless final section 21 which assumes that section 4 restricts the number of dogs that an individual can own – but neither section 4 nor any other section contains such a restriction.

Defence Forces – Medical Professions Cadets

SI 221/2019 [link] – the Defence (Regular Force) (Nursing, Radiography, Pharmaceuticals, Physiotherapy, Laboratory Science, Veterinary Science and other Medical Professions) (Cadets) Regulations, 2019 is a brief set of regulations for the engagement of cadets studying to qualify for one of the professions listed.  Cadets will be engaged as privates, but be subject to specified provisions of the regulations applicable to Defence Force officers.  During university/college vacations they will be liable for military duty as determined by the Commander.  They will be responsible for all training, registration, living and other expenses incurred while studying.  On qualification they will be commissioned and be obliged to serve for a further five years.

General Notices

New Special Economic Zone in Selous for Karo Resources

GN 1838/2019 [link] notifies the declaration by the Special Economic Zones Authority as a special economic zone of “a portion of Selous covering 50 667 hectares located on land covered by special mining grants issued to Karo Zimbabwe Holdings (Pvt). Ltd.”

Veritas makes every effort to ensure reliable information, but cannot take legal responsibility for information supplied.

Agriculture in Masvingo’s communal areas: limited prospects
Zimbabwe Police Block Planned MDC Protest

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Beware Of The Home DNA Test! Mom Strikes Back Against Sperm Bank

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Earlier this year, we learned about the shocking case of Danielle Teuscher, and what she thought was the innocent activity of using a home DNA kit for her and her five-year-old daughter. You know, just like the rest of America is doing. Given that her child was conceived with the help of an unknown sperm donor, she thought it would be fun and informative to learn more about her daughter’s background and origins. She had no idea what a mess she was in for.

After the results to the DNA test came back, 23andMe identified a paternal grandmother of her daughter (aka the sperm donor’s mother) that was “open to contact” on the genealogy site. Teuscher sent a message through 23andMe’s portal, where she said that they were related and also open to contact. The surprised grandmother sent a confused message back. Teuscher apologized, and that was the end of their contact. It was not, however, the end of the saga to come. Two weeks later, Teuscher received a cease-and-desist letter from NW Cryobank, the sperm bank where she had purchased the donor sperm that had helped her conceive her daughter.

The letter notified Teuscher that she was in “flagrant violation” of the agreement she had signed with them. Pursuant to the liquidated damages clause barring such contact, the sperm bank said, they were entitled to at least $20,000 in damages from her. That was $10,000 for every breach whereby she failed to live up to her agreement that she would not “seek or make any effort to obtain any information not directly provided through NW Cryobank concerning the identity, background, or whereabouts of the Donor at any time and from any source whether directly or indirectly and/or by any means.” Wait, why two breaches? Well, the sperm bank counted merely having her daughter take a DNA test as one breach, and the message to the donor’s mother as the second breach.

It Gets Worse

The cease-and-desist letter didn’t just mention the $20,000. It also stated:

Moreover, we hereby notify you that as a direct result of your flagrant and material breach of the Agreement we are revoking your right to receive the four (4) additional vials of Donor’s sperm that you purchased. No refund will be given.

(The letter was wrong. Teuscher actually still had five vials of sperm, not four, still at the bank.)

The sperm also cut off Teuscher’s access to her online portal — unless she signed another agreement with the bank severely limiting her rights to testing purchased DNA and exonerating the bank for not providing medical information to donor recipients. The portal is used to access any updated medical information from the donor, as well as to communicate with other parents who conceived children using the same donor. Teuscher was now — absent signing the new agreement — unable to access any medical updates that could affect her child’s health.

Mom Sues Sperm Bank

Like any good American, what else could Teuscher do but, of course, sue. This summer, Teuscher filed suit against NW Cryobank in federal court in the Eastern District of Washington. Her arguments are thought-provoking and compelling.

Can They Take the Sperm Back?!

In her lawsuit, Teuscher is asking the court to grant an injunction against NW Cryobank for an immediate return of her property — the donor sperm vials. To her, the vials are her potential future children, fully genetically related to her daughter. She notes that nowhere in any of the agreements she signed with the sperm bank did it specify they could confiscate the sperm they were storing. They could, under the storage contract, terminate their duty to store the client’s gametes when “the customer or their doctor requests the release of the gametes, upon the written direction of the customer to destroy the gametes, or when payment is not delivered to NW Cryo.” Those conditions all seem fair. But none of those circumstances apply here.

Thirty years ago, in York v. Jones, a federal court established a now well-examined and frequently followed precedent concerning property rights to embryos. The court ruled against a fertility clinic that refused to release a couple’s embryos to them to be transferred to another clinic. The court deemed the clinic a “bailee,” and required it to return the plaintiffs’ property. Here, Teuscher clearly had ownership rights to the sperm specimens she purchased. NW Cryobank, like the Jones clinic, was merely holding these vials in storage, as a bailee. I’m not sure where NW Cryobank believed they derived the right to dispossess Teuscher of her property, even if she did violate their agreement.

Violations of Public Policy?

Teuscher further argues that the court should find that it’s against public policy for the sperm bank to prevent a donor-conceived person (or their parent on their behalf) from accessing their DNA information. She points to declarations by the U.S. Surgeon General’s Office in their Family Health History campaign encouraging everyone to trace illnesses suffered by blood relatives in order to assist their doctor in taking action to protect their health.

I can see NW Cryobank’s argument against contacting the sperm donor’s relatives. But it seems seriously problematic to claim that it was a violation of their contract to merely take the DNA test in the first place. We have a right to our own information, right? DNA, by its very nature, also reveals interconnected information about others. This, admittedly, has led to a number of problems and more information than anyone ever anticipated coming to light. But blocking off access to this type of critical information cannot possibly be the right answer.

I empathize that sperm banks previously assured their donors anonymity, and now those assurances are worthless. Clearly all sperm banks (and those facilitating egg and embryo donations) need to have long ago stopped making such assurances. Everyone now knows anonymity is not a promise anyone can keep. My unsolicited advice for sperm banks: when these situations arise, don’t go nuclear on your purchasers and their children. Explain to the donors, when they complain, that the world has changed. Information is out there. Offer mental health and educational resources on being a donor now identified by offspring. You can pay for those services with all the money saved from not sending cease-and-desist letters and not needing to defend against Teuscher-type lawsuits.

Ellen TrachmanEllen Trachman is the Managing Attorney of Trachman Law Center, LLC, a Denver-based law firm specializing in assisted reproductive technology law, and co-host of the podcast I Want To Put A Baby In You. You can reach her at babies@abovethelaw.com.

Third Woman With Allegations Against Former DLA Piper Partner Says He’s A Bully Who Called Her A ‘Dumb B*tch’

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Louis Lehot

A third woman has come forward to the Equal Employment Opportunity Commission with allegations about the inappropriate behavior of former DLA Piper partner Louis Lehot. Leah M. Christensen, a professor at the University of San Diego School of Law and former Professional Responsibility Counsel within the firm’s Office of General Counsel, claims Lehot acted like a “textbook bully” and was allowed to get away with it because of the size of his book of business, saying:

Lehot is a textbook bully. There is simply no other way to describe him. He bulldozed his way through DLA Piper like a tank, rolling over anything or anyone in his way. In order to get his way, Lehot yelled, threatened, intimidated and terrorized people around him. I know because I was one of the people around him.

She also says that when, in the course of her work, she spoke with Lehot about his interpretation of an ethics rule, he lashed out calling her a “dumb bitch”:

For example, one time when I told Lehot that he was not following the ethics rules, in front of other DLA staff, Lehot called me a “dumb bitch.” I reported Lehot’s abusive conduct and “loose” interpretation of the ethics rules during our weekly department meetings to my boss, Peter Lindau, Assistant General Counsel, and to Joe Davis, Associate General Counsel. Nothing was done.

The allegations against Lehot are starting to pile up. Earlier this month, DLA Piper partner Vanina Guerrero alleged that Lehot repeatedly sexually assaulted her. She asked the firm to release her from their mandatory arbitration agreement so she can pursue her claims in court. The firm has been conspicuously silent on the forced arbitration agreement — despite the attention their arbitration stance in this case has garnered, but, they did announce that Lehot had been let go from the firm. But the firm also put Guerrero on administrative leave, saying they’d uncovered allegations against her unrelated to Lehot during their investigation of her claims. Lehot released a statement contesting the allegations against him and saying Guerrero was “exploiting” the #MeToo movement. Then a second woman, an anonymous HR manager, came forward with her own allegations against Lehot, saying he made her “physically afraid,” and further alleging the firm let her go when she complained about Lehot.

As part of Christensen’s letter to the EEOC, she also says she’s been contacted by other women at the firm who’ve had similar experiences with Lehot but are “too scared” to come forward.

headshotKathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

Maximize Revenue & Efficiency With The Right IP Operations Strategy

Posted on by TSA Press

Among the most vital examples of the application of business discipline and strong process to the legal function is the burgeoning field of IP operations. The capacity to carefully manage and extract maximum value from intellectual property assets can be the difference between a thriving company and a fading also-ran.

On October 31st at 1 p.m. ET, join us for a free webinar, The IP Operations Landscape, moderated by leading industry consultant Brad Blickstein. Brad will be joined by Annya Dushine of CPA Global and Amy Gagich of Koch Industries and our program will explore the following topics, among others:

  • The four pillars of IP operations — people, processes, technology, data — that define the field;
  • Benchmarking your organization by way of the IP ops “maturity spectrum”;
  • Firsthand case study of how one of the U.S.’s largest privately held corporations implemented a successful IP ops function; and
  • Analysis of the first-ever demographic study of the professionals developing the IP ops field.

Student Loans Can Be The Homewrecker In A Marriage

Posted on by TSA Press

While married life is a happy one (I say this solely based on my friends’ social media postings), sometimes student loans can be the homewrecker. Student loans have been blamed for people delaying marriages and starting families. It also complicates financial and tax planning for couples. Finally, it might be the deciding factor in a divorce. So let’s look at a few events in a married couple’s life and how student loans can affect them.

Before getting married

As I mentioned in a previous article, a large student loan should not be a barrier to marriage. A marriage can last even if one or both spouses have large student loan debts. Before getting married, each person should disclose their total student loan debt to the other and have a plan to manage and ultimately pay off or settle the loan.

Refinancing their loans while married

For some married couples, as their joint income increases, it might make them think differently about what to do with their debt. For example, a couple on an income-based repayment plan might want to pay the balance in full in 10 years rather than pay for 20 or 25 years until forgiveness if only a small amount of the debt will be forgiven.

In this case, the couple might want to either consolidate their loans or combine them into a private loan with a lower interest rate. But some banks will agree only if both spouses’ names are on the loan or if one spouse co-signs the other.

Personally, I would run from any lender that demanded this. If there is one thing I don’t want to share with the person I love, it is my massive debt.

For those who live in community property states, refinancing your pre-marriage student loan debt during marriage could convert it into a community debt where each spouse will be liable for one-half of the debt. In most community property states, any debt incurred during marriage is considered a community debt while any debt incurred outside of marriage is a separate property debt.

When a student loan is refinanced during marriage, some states view this as a community debt because community funds were being used to pay off older separate property debt. But other states do not see a refinance as a conversion into community property so long as only one spouse refinances his or her own debt without the other spouse’s involvement.

I think the latter is the better way to go. Otherwise, one spouse might be tempted to secretly refinance the loan in order to convert their separate property loan into a community property loan.

Divorce

Every state has its own rules and nuances on how student loans are divided (or not) between spouses in a divorce. While I am sure an entire column can be devoted to this topic alone, for now I suggest checking with your state’s rules to see when a spouse must pay the other’s student loans in a divorce.

The law may not be black and white. For example, in California, student loans generally must be paid by the party who received the education unless there is a written agreement to the contrary. But a court can say otherwise it if it thinks the result will be unjust. In this situation, the court looks at whether the community substantially benefitted from the training or the loan, whether the other spouse has a similar education, and whether the education or training resulted in gainful employment which reduced the need for support. For example, if student loan money was used to pay rent in a fancy apartment for the formerly married couple, the court is likely to find that the community benefitted from the loan proceeds.

Also, a couple where one or both spouses are on an IBR plan may be tempted to divorce and structure their dissolution in a way that minimizes loan payments and the cancellation of debt income tax described below. A few couples might divorce on paper while continuing to live as spouses. But most couples might have troubled marriages and the possibility of avoiding a huge income tax bill can be the incentive they need to divorce instead of staying together.

Tax planning

Tax planning for those on income-based repayment plans takes a different turn when student loans are involved.

Couples may need to determine whether it is financially efficient to file jointly or separately. An easy way to calculate a monthly repayment plan through an income-based repayment program is to look at the debtor’s adjusted gross income (AGI) on their tax returns. Most income based repayment programs look at only the debtor’s AGI when filing single or married filing separately. But when they file jointly, the monthly payment looks the joint AGI which can result in a higher monthly payment.

As a result, some married couples will file separately in order to pay lower student loan taxes. The problem is that in most cases, filing separately will result in higher taxes because they are taxed at a different bracket and lose certain deductions and credits — like the student loan interest deduction and the child tax credit, to name a few.

And of course, when the loans are forgiven, the forgiven amount is includible as taxable income — otherwise known as the infamous “tax bomb.” In a few years, we will see all kinds of techniques taxpayers can use to avoid or minimize the effects of the income tax bomb.

The most common way to minimize cancellation of debt income is to show insolvency. This is where the taxpayers show that their liabilities exceed their assets. Business structures will be customized to minimize income to the debtor spouse. Estate plans may include early gifting of assets. Divorces may be structured where the debtor spouse gets little to no assets. All of this could defuse the tax bomb.

Being married with student loans can be done with the proper planning before and during the marriage. But in case it does not work out at some point, at least it might give an opportunity to avoid a huge income tax debt.

If you live in Southern California and want to know more about some of the tax strategies I mentioned above, I am giving a presentation before the Pasadena Section of CalCPA on Monday, October 28, 2019 at 12 p.m. Click here for more details and registration information. This presentation may be eligible for CLE credit. But most importantly, the venue has fantastic Mexican food.

Steven Chung is a tax attorney in Los Angeles, California. He helps people with basic tax planning and resolve tax disputes. He is also sympathetic to people with large student loans. He can be reached via email at sachimalbe@excite.com. Or you can connect with him on Twitter (@stevenchung) and connect with him on LinkedIn.