By MATT CHANDLER
mchandler@bizjournals.com | 541-1654

The question of whether Congress would attempt to vote for a retroactive federal estate tax was answered recently with a resounding "no" by area lawyers.

When presented with a "what if" scenario, they speculated how long such a regulation would be tied up in litigation.

"Ten years," one attorney said.

"If it goes to the Supreme Court, 10 easily, maybe 15," offered another.

There are a lot of billable hours available if companies pursue a lawsuit to block, overturn or reshape federal legislation. That's why, upon release of the voluminous health-care legislation this year, many assumed that once the bulk of the plan was digested and understood, attorneys would come calling.

While there have been some lawsuits nationally - and a much-publicized group of attorneys general filing suit on behalf of their individual states - Western New York isn't likely to see significant legal challenges to the new rules and regulations.

That's according to area attorneys who work heavily on the health-care side of the legal profession.

Mark Brand is among them. A member of the health-care practice group at Phillips Lytle LLP, he advises doctors and hospitals about compliance with a variety of laws, including health-care reform. He also practices in the firm's employee benefits group, advising employers who sponsor employee benefit plans.

At this point, he said, litigation doesn't seem to be on the radar screen of his clients.

"I have probably a couple hundred clients to whom I provide employee welfare benefit advice to," Brand said. "Most of those, if not all of them, sponsor some sort of employee health plan. And none of those clients have called me to say they want to bring a lawsuit challenging the constitutionality of the legislation."

There currently are lawsuits filed by attorneys general in some states, as well as business interest groups, that challenge portions of the health-care legislation. But none have originated from Western New York.

"I clearly expected people to challenge the law through litigation, but I didn't expect many, if any of them, to come from Western New York," Brand said.

Court cases that are gaining traction around the country revolve around four basic arguments, he said:

• Challenging the constitutionality of the exercise of the Congressional taxing and spending authority.

• Claiming a constitutional violation of the Interstate Commerce Clause.

• Asserting that there has been a depravation of due-process rights in passing the new laws.

• Calling the legislation an interference with states' rights to regulate insurance.

Brand said he has been closely following cases on the national level and some of the arguments have legitimate merit. He doesn't rule out successful lawsuits to block some or all of the legislation currently in effect.

Until that time, though, he and other local attorneys say they are continuing to advise clients on how to ensure compliance with each provision as it is rolled out.

Pam Fielding is an attorney with Damon Morey LLP in Buffalo. Like Brand, she said the question of lawsuits has yet to be raised by any of her clients.

"My clients are calling and saying, ‘What do I need to do to adapt and comply with the legislation?' as opposed to considering a lawsuit to challenge some part of the legislation," Fielding said. "Initially, most of my clients are concerned with grandfathering their plans, because if they are grandfathered, there is a lot of the legislation they don't have to comply with."

However, she said it will be difficult for companies to maintain that grandfathered status over the long term.

"Any change in your plan could trigger the loss of that status," she said. "So to the extent that they increase the employee's portion of the premium or they increase co-pays out of pocket, they lose their grandfathered status."

The key is not to seek litigation options but guide clients toward full compliance once that grandfathered status is lost and they are subjected to the full provisions of the health-care legislation.

The lack of litigation may be due in part to the phase-in plan, in which Congress has staggered the implementation of new legislation over several years.

"I think they (the regulations) are reasonable," Fielding said. "My clients, while frustrated with the complexities of the legislation, see that it is phased out over time to enable the companies to comply with the provisions."

William Keefer of Phillips Lytle said that like Brand, he hasn't received a push from his clients for relief through litigation from the impending legislation.

"Most of our clients participate in the Medicare system, so they aren't the typical clients who would be challenging the law on a constitutional basis," he said. "From the perspective of the health-care providers, this law is a good thing. It's going to get more people to be covered in the system and to get preventative care."

While there are provisions in the legislation that will require full compliance on the part of his clients - with stiff penalties for noncompliance - he still sees it as a win for those he represents, Keefer said.

"My clients wouldn't benefit from challenging the law," he said. "And although I know there are lawsuits out there, for the people I represent, the legislation is a positive step for them."