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Androvett Blog

by Robert Tharp at 3:57:15 pm

San Antonio attorney Allan B. Polunsky has been appointed to a new six-year term on the Texas Public Safety Commission, the state board responsible for formulating and overseeing enforcing criminal, traffic and safety laws, for preventing and detecting crime, for apprehending law violators and for educating citizens about laws and public safety.

Mr. Polunsky is the only person to serve as chairman of the state's top two criminal justice agencies - the Texas Public Safety Commission and the Texas Board of Criminal Justice. He has served as Chairman of the Public Safety Commissoin since 2007. He previously served 13 years on the state Board of Criminal Justice, including five years as chairman.

"The safety and security of our state is a key concern of Gov. Perry and Texans everywhere," says Mr. Polunsky. "I am honored to assist the governor and law enforcement officials in assuring that all our resources are properly supported and coordinated in making Texas the safest state in the nation."

Mr. Polunsky is managing partner and founder of Polunsky & Beitel, LLP, a law firm that specializes in real estate and mortgage lending with offices in San Antonio and Dallas. He was among the first 50 attorneys in Texas to be Board Certified in both Residential Real Estate Law and Commercial Real Estate Law by the Texas Board of Legal Specialization.

Mr. Polunsky also has served the City of San Antonio as Chairman of the city's Zoning Commission, President of the Industrial Development Authority and member of the Planning Commission. He also served on the San Antonio River Authority Board of Directors for 12 years. Mr. Polunsky is a past board member of the Texas Lyceum Association, Special Olympics of Texas and San Antonio Food Bank.



by Robert Tharp at 1:59:23 pm

White-collar defense attorney Bill Mateja has penned an interesting op-ed analysis published in the Dallas Morning News regarding the federal honest services statute. Following oral arguments earlier this month in which the Supremes expressed grave concerns about the statute's constitutionality, it's widely believed that the Court will strike down this widely used statute.

Mateja, a former head of the DOJ's Corporate Fraud Task Force and now in practice at Fish & Richardson's Dallas offices, writes: What began in 1988 as a law targeting mail and wire fraud by making it a crime to deprive an employer or the government of the "intangible right of honest services" quickly has become a favorite tool of federal prosecutors targeting not just public officials but employees in the private sector.
In many cases, it's the charge prosecutors turn to when nothing else will stick, a way to secure a fraud conviction without proving financial gain or any quid pro quo deal. And, it's been used to criminalize conduct that could be construed as nothing more than self-serving acts, conflicts of interest and slight ethical transgressions, including failing to give your employer an honest day's work.
Undoubtedly, were the Supreme Court to strike down the statute, defendants previously convicted under the statute would come out of the woodwork asking to have their convictions overturned. Additionally, prosecutors who depend on the statute to prosecute worthy public corruption cases would be hamstrung.
In Dallas, the statute was used just last October to obtain high-profile convictions against some of those involved in the Dallas City Hall corruption scandal, although those convictions were coupled with other charges that are safe from Supreme Court review. Striking down the statute, however, would have voided convictions obtained against three Baylor men's basketball coaches in the mid-1990s for scheming to obtain credits and scholarships for junior college transfers. The coaches' actions may have violated NCAA rules, but no law was broken except for this so-called honest services statute.
Notwithstanding these potential shockwaves, the Supremes should strike down the honest services statute because its use leads to selective prosecutions and makes federal prosecutors omnipotent in interpreting the law. When a prosecutor's mere discretion (or whim) wields that kind of power, it can hardly be said that the rule of law is alive and well.
While we're at it, our justice system should revisit the more than 4,000 federal offenses scattered throughout the federal criminal code, as well as untold numbers of federal regulatory criminal provisions. Enforcement of this ever-growing criminal code has contributed to a backlogged judiciary, overflowing prisons and the incarceration of innocent individuals who are persuaded to plead guilty not because they are guilty, but because exercising their constitutional right to a trial is all too risky.
To this end, Congress heard testimony last summer from strange bedfellows who have formed a coalition to bring "overcriminalization" to lawmakers' attention, namely, the American Bar Association, American Civil Liberties Union, Cato Institute, Constitution Project, Federalist Society, Heritage Foundation, National Association of Criminal Defense Lawyers, and Washington Legal Foundation.
Unquestionably, neither fraud nor public corruption can be tolerated, but relying upon flawed laws and an overcriminalized justice system are not solutions we can live with.


by Robert Tharp at 11:38:08 am

As a noted appellate attorney working for a highly respected Texas-based appellate firm, you'd expect Ryan Clinton of Hankinson Levinger to be the kind of guy who has passion for a cause. That drive extends outside the courtroom as well. Clinton has been named one of just six people nationwide honored by a national animal welfare organization for his work promoting no-kill animal shelters.

No Kill Advocacy Center, an organization committed to ending euthanasia at animal shelters, conferred its Henry Bergh Leadership Award on Mr. Clinton and five other individuals at animal welfare organizations across the country. The award is named for the 19th century animal advocate who founded the American Society for the Prevention of Cruelty to Animals. Among other things, Clinton was instrumental in the movement to place a no-kill item on the Austin City Council agenda. As a result of his work, the elected officials voted unanimously to direct the city manager to formulate a plan for Austin to implement no-kill policies and procedures.

"This is a tremendous honor, especially when you consider the other people that were named and the outstanding work they have done," Clinton says. "My hope is that this award will help inspire animal lovers all over the country to demand the enactment of life-saving policies and programs at their community animal shelters."
Mr. Clinton is the founder of, a grass-roots, non-profit organization dedicated to ending the killing of lost and homeless pets in Austin. The group has served as a national model for other such efforts in California, Florida, Oregon and North Carolina. Mr. Clinton also serves as volunteer legal counsel for Austin Pets Alive, a non-profit pet adoption group responsible for saving 2,500 lost and homeless pets from the city's shelter in less than two years.
Prior to joining Hankinson Levinger, where he provides appellate services to a wide range of business clients, Mr. Clinton served six years as an Assistant Solicitor General for the State of Texas. He has successfully argued cases in state and federal appellate courts, including four arguments before the Supreme Court of Texas. He also has been named as one of the top young lawyers in Texas five different times in the Texas Rising Stars list published in Texas Monthly magazine.


by Robert Tharp at 3:40:13 pm

While the Seattle Post Intelligencer rates it as only the No. 7 biggest Microsoft-related news story of 2009, the stunning David vs. Goliath patent case involving i4i Inc.(represented by McKool Smith and Tyler, Texas-based Parker, Bunt & Ainsworth) is certainly one of the top IP stories of the year.

Writes the Seattle PI: Though the lawsuit was filed in 2007, the hubbub started in August when a judge slapped Microsoft with an injunction that said it could no longer sell Word. i4i Inc. had sued Microsoft for patent infringement, alleging the ubiquitous word-processor incorporated custom-XML technology owned by the small Canadian company. A Texas jury agreed that Microsoft was liable for willful infringement and awarded i4i $200 million in damages.
Microsoft, determined to prove i4i's patent invalid, was granted an appeal and a temporary stay on the injunction. In September, the companies fought over the case in a Washington, D.C., federal appeals court - Microsoft arguing that i4i was out for easy money, and i4i arguing that Microsoft killed its business model. Just days before Christmas, a three-judge panel upheld the Texas ruling, reinstating the injunction and imposing $290 million in damages after fees and interest. Microsoft has until Jan. 11 to strip the custom-XML editor from Word - or stop selling Word altogether.


by Robert Tharp at 3:14:18 pm

Thanks to the recession and heightened vigilance following Bernard Madoff's 2008 arrest, Ponzi scheme investigations really spiked in 2009, according to an excellent Associated Press analysis. In fact, the AP is declaring 2009 the year of the Ponzi scheme.
The AP reports that 2009 saw four times as many Ponzi schemes unravel than in 2008. Writes the AP: Tens of thousands of investors, some of them losing their life's savings, watched more than $16.5 billion disappear like smoke in 2009, according to an Associated Press analysis of scams in all 50 states.
In all, more than 150 Ponzi schemes collapsed in 2009, compared to about 40 in 2008, according to the AP's examination of criminal cases at all U.S. attorneys' offices and the FBI, as well as criminal and civil actions taken by state prosecutors and regulators at both the federal and state levels.
A Ponzi scheme depends on a constant infusion of new investors to pay older ones and furnish the cash for the scammers' lavish lifestyles. This year, when the pool of people willing to become new investors shrank and existing investors clamored to withdraw money, scams collapsed across the country.
They're also resulting in a spike in federal class-action filings. "Increasingly common are class actions based on what a bank should have known, even if the institution acted as a passive custodian of the funds," says  Kenneth Johnston of Dallas's Kane Russell Coleman & Logan. "Banks may face costly claims for failing to identify that, for example, one of its customers was in fact a Ponzi scheme." Johnston also notes that SEC receivers and bankruptcy trustees are aggressively pursuing fraudulent transfer claims against both banks and investors who merely held or received Ponzi scheme distributions.

by Robert Tharp at 2:04:41 pm

Social media guru Brian Solis posts some very interesting numbers regarding the explosive growth and our collective embrace of social media networks. Time spent on social networks tripled over the last year and now accounts for 17 percent of the time we spend online. As a result, we are now spending more time on social networks and blogs than e-mail.

Writes Brian: As a result of our online interaction, advertisers are following our activities attempting to capture our attention where it is focused. The same report also found that online display advertising in top social networks has more than doubled year-over-year, increasing 119 percent. The jump represents an increase in spending from approximately $49 million in August 2008 to roughly $108 million in August 2009. Also of note, the share of estimated spend in social networks as also increased, expanding from seven percent in August 2008 to 15 percent in August 2009.


by Robert Tharp at 3:41:06 pm

Commercial bankruptcy has been one of 2009's hot spots in the legal industry, and McKool Smith's new bankruptcy practice group continues to expand with some of the industry's top legal minds. After forming its bankruptcy group and opening Houston offices led by noted bankruptcy specialist Hugh Ray, the firm has hired bankruptcy litigator Basil A. Umari

Umari, who comes to the firm from Andrews Kurth, represents debtors, creditor committees, secured and unsecured creditors, and other parties in virtually every type of bankruptcy proceeding. He has represented clients from a variety of industries, including banks, oil and gas producers, healthcare entities, ship manufacturers, and many others.

by Robert Tharp at 4:46:03 pm

Here's something for business owners to look forward to in 2010 ... random IRS audits of payroll tax practices. With an estimated $14 billion in corporate tax underpayments every year, the IRS is ramping up an enforcement plan that will identify and target businesses with the greatest compliance risks. Those companies will be targeted for future audits. The IRS reportedly has its sites set on everything from executive compensation to fringe benefits, and some businesses have already received requests for documents.
"The major focus will be the traditional hot-button issues - worker classification, fringe benefits, reimbursed expenses and executive compensation," says  Elizabeth Schartz of Thompson & Knight's Dallas office. "You can expect increased activity from both federal and state agencies that are looking to increase revenues in a difficult economic environment. Employers need to get ahead of the issue now by conducting a preemptive self-audit to correct any problems."
Reports Reuters: The audits will begin in February 2010 and stretch across all types and sizes of companies. The exams will be deeper than typical audits, and also look at the use of independent contractors and other worker classification issues.
IRS Commissioner Douglas Shulman has said the agency will focus on the wealthy and large corporations as it seeks to recover billions that go unpaid in taxes each year.

by Robert Tharp at 3:45:58 pm

It's now easier than ever for would-be Santas to research a toy's safety before hitting the check-out line. The new Web site,, allows shoppers to avoid common hazards and report potential dangers they find on toy store shelves, right from their mobile phones or home computers.
Reports the Washington Post, despite stricter laws, toys containing dangerous chemicals are still prevalent on stores shelves. The Post note: In a report released Tuesday called "Trouble in Toyland," the U.S. Public Interest Research Group (U.S. PIRG) found that while many manufacturers and retailers are complying with the new law, a handful are not, and it is hard for consumers to tell the difference.
"This year's dangerous toy list is divided into three categories: choking hazards, chemicals - such as lead paint - and noisy toys that can harm a child's ears," says Dallas attorney Angel Reyes of Reyes Bartolomei Browne. He notes that safety advocates have made it easy for parents to check on toy safety even while shopping, with the new Web site, "Beyond that, parents need to use common sense and remember that they are on the front lines in the battle to keep their kids safe."

by Robert Tharp at 3:15:33 pm

Did the Florida Judicial Ethics Advisory Committee go too far when it advised judges and lawyers to no longer "friend" each other on Facebook and other social media networking sites? The harm, according to a majority on the committee, is that such connections might create the impression of favoritism and special influence.

FindLaw columnist Anita Ramasastry sums it up this way: Judges may use Facebook for political campaigns (since many states require judges to run for election), for communicating with the public, or simply to communicate with friends and acquaintances. The Committee felt that the "friending" of lawyers by judges could send the wrong message to the public -- suggesting that certain attorneys have cozy relationships with a given judge, and thus have the power to influence his or her decisions. A person who is on Facebook might have dozens, hundreds, or even thousands of "Facebook friends." Some legal ethics experts thus conclude that being a Facebook "friend" conveys very little, and that the Committee got it wrong.
And indeed, a minority of the Committee's panel would have allowed Facebook friendship between lawyers and judges, because the minority characterized being a Facebook "friend" as a status that is actually more like that of "a contact or acquaintance," one that does not convey the notion of "feelings of affection or personal regard."
But there is a strong basis for the Committee's ruling: Judges hold a very special position of trust. They must take extra pains to avoid even the appearance of impropriety or conflicts of interest.

Thompson & Knight partner  Greg Curry, president of the Texas Association of Defense Counsel, says that while the committee's intentions are well-placed, such passive and low-level contact is not likely to create ethical problems. However, lawyers with cases before a judge should rethink their on-line relationships. "The decision properly highlights that if you have an ongoing matter before a judge, then you should evaluate and properly limit any inappropriate contact." In such cases, Curry advises that it may be best for lawyers to remove a judge as a friend, and vice-versa.



by Robert Tharp at 1:27:37 pm

In-house counsel at Fortune 500 companies have selected the national law firm of McKool Smith as a "Go-To Law Firm" for litigation involving business and intellectual property. The firm, which maintains offices in Texas, New York, and Washington, D.C., will be recognized in the upcoming legal guide, "In House Law Departments at the Top 500 Companies."

This marks only the latest in a long line of accolades and accomplishments earned by the attorneys at McKool Smith. In the last year alone, the firm has added new practice areas, opened an office in Houston and beefed up recently opened offices in D.C. and New York City. The firm was recognized in The National Law Journal as having won more of the nation's Top 100 verdicts in 2008 than any other U.S. law firm. The firm also was named as one of the country's most innovated law firms in The National Law Journal's "Midsize Hot List."

In 2009 litigation, the firm successfully took on some of the tech sector's biggest household names, including winning a $200 million patent-infringement verdict against Microsoft and a $139 million verdict against SAP AG. Meanwhile, McKool Smith attorneys turned heads in a closely watched class-action, winning a $20 million class-action jury verdict on behalf of more than 170 Texas cities.


by Robert Tharp at 1:30:16 pm

The clock is ticking for potential members of a $4.6 million class-action settlement related to former First City Bancorporation workers whose retirement plans were mishandled. Eligible former employees have until Friday, Dec. 18, 2009, to submit claims and join the class, says business attorney  David Furlow of Thompson & Knight LLP and counsel for the class.
A Houston judge has approved a settlement in the case that would distribute approximately $4.6 million to former First City workers. The case centers around a defined-benefit retirement plan established and funded solely by First City for employees in 1976. First City cancelled the plan for being overfunded 10 years later. The company then made lump-sum payments to some participants and purchased long-term annuities on behalf of other employees from the Prudential Insurance Company.  After First City was declared insolvent in 1992 and went through an involuntary bankruptcy, successor corporations took the position that the former First City employees should receive nothing from the annuity investments. Former First City employees who have questions about their eligibility should review the information on the Class Administrator's Web site at
Lead Class Counsel Robert S. MacIntyre, Jr. of Houston's MacIntyre & McCulloch, LLP, emphasizes that these payments will not affect anyone's right to receive pension benefits.
"These beneficiaries are likely to be retirees in their 70s and 80s for whom this financial settlement could be very welcome," Furlow says. "There remain several hundred former First City employees who have not responded to our efforts to contact them about their rights to receive a distribution from the settlement fund, and the deadline to do so is approaching."

by Robert Tharp at 4:16:16 pm

The folks over at the Legal Bytes blog have an interesting take on the recent settlement struck by NetMass regarding a cloud computing patent held by inventor Mitchell Prust. Says Legal Bytes: This may be just the beginning of a wave of intellectual property lawsuits as cloud computing begins to evolve and become part of a commercial operational toolkit around the globe - not much different from those surrounding ATMs, online banking, networking and other once-emergent technology platforms. Stay tuned. You will be hearing more from us about clouds in the year ahead.

According to the settlement signed off on by Judge T. John Ward of the U.S. District Court for the Eastern District, NetMass admitted to infringing three online storage and computing patents(specifically U.S. Patent Numbers 6,714,968; 6,735,623 and 6,952,724) held by Prust and permanently enjoining NetMass from infringing on those patents in the future.

"We are extremely pleased to have resolved this matter in favor of Mr. Prust," says Christopher D. Banys of The Lanier Law Firm , who represtented Mr. Prust. "The patents in this litigation represent the building blocks for some of today's most sophisticated online applications, and we will continue to help our client protect his interests in these valuable patents."

IP Law 360 weighed in on the case, writing: Cloud storage and cloud computing technology has to do with moving away from storing information in physical locations like hard drives and instead keeping that data "in the ether," Banys said. Prust has been working on cloud technology for some time, but the technology "is just now catching fire."
Prust also is asserting the three patents against Apple Inc. in a separate case pending in the U.S. District Court for the Northern District of California.
The stipulated judgment and request for permanent injunction filed on behalf of Prust and NetMass in the Texas court on Monday said NetMass admitted every allegation in the complaint, except to the extent that willful infringement is alleged or exceptional case status was sought.
The case is ongoing with respect to Softlayer Technologies Inc., which Prust also named as a defendant when he filed the suit Aug. 5, though the parties are in settlement talks.
Prust's case against Apple was filed in the Texas court in April, and Judge Ward granted a motion to transfer the case to California in October.

by Robert Tharp at 3:07:51 pm

Lots of jaws have been dropping over law professor Brent T. White's recent academic paper in which he advises beleaguered homeowners to stop feeling guilty about walking away from their underwater mortgages.

Writes the LA Times: Go ahead. Break the chains. Stop paying on your mortgage if you owe more than the house is owrth. And most important: Don't feel guilty about it. Don't think you're doing something morally wrong.

The main point is that too often people's emotions get in the way of clear financial thinking about mortgages, turning them into what he calls "woodheads" - "individuals who choose not to act in their own self-interest." Most owners are too worried about feeling so f shame and embarrassment after a foreclosure, and ignore the powerful financial reasons for doing so."

Real estate attorney  Robert Miller of Dallas-based Prager & Miller says Texas' situation is less dicey than that of areas that saw dramatic home value run-ups, but much hinges on the economy. "If people have jobs and can afford the payment, they won't walk away," Miller says. "But if you're in a house with no equity and it's overvalued by 50 percent, people are deciding that there's no reason to continue, unless it's cheaper than renting." Against that backdrop, more mortgage lenders are participating in so-called short sales, selling foreclosed properties for less than the value of the foreclosed mortgage. In fact, the Obama administration is trying to reduce what has been described as a contentious, time-consuming short-sale process by requiring lenders and others to use nationally uniform documents, timelines and financial incentives. 

by Robert Tharp at 2:36:54 pm

Holiday parties are more dangerous than ever, thanks to the always-connected social media world we not inhabit. No longer are our embarrassing excesses limited to whispered comments around the water cooler - your drunken holiday party gaffs could become the next viral Internet sensation.

With party season in full swing, revelers should remember that these functions are rife with peril. "A work party is just that, an extension of work, and one false step can jeopardize your job," says Austin employment litigator Geoff Weisbart. "As a practical matter, you should never say or do anything at an office party that would not be permitted at the office." Weisbart notes that technology makes it increasingly easy to document events in any setting, and executives may be particularly susceptible to everything from embarrassment to sexual harassment claims when their bad behavior is immortalized in a worldwide YouTube video. "There is obviously a little relaxing of the lines of authority at a work party, but remember that the lines are not extinguished."

by Robert Tharp at 3:05:57 pm

As if environmental attorney Richard O. Faulk's CV isn't long and distinguished enough, the well-known litigator will soon add "working journalist" to his work history. Faulk, chair of Gardere's Environmental Practice Group and Climate Change Task Force, is one of the few U.S. lawyers traveling to Copenhagen for the United Nations Climate Change Conference. His presence in Copenhagen provides a ringside seat as countries hammer out a new international climate change agreement that would take the place of the Kyoto Protocol set to expire in 2012. But he's not just a passive observer, Faulk has secured a press pass as a credentialed journalist and plans to supply coverage of the proceedings to business and legal publications.

President Barack Obama is among world leaders representing more than 75 nations scheduled to attend the two-week conference, which begins Dec. 7 in Copenhagen, Denmark. Many nations and delegates believe that a global climate change agreement is necessary to limit the negative man-made effects on the climate system for future generations. Faulk says U.S. business interests need an agreement that's fair and includes industrialized and emerging nations. "This conference must produce an equitable international agreement to avoid the destructive effects of unilateral climate change measures on the United States economy. Even massive reductions in American greenhouse gas emissions will not be sufficient to impact climate in the absence of a universal agreement that binds all nations, including developing nations like China and India," he says.

That concern will be front-and-center in the conference, reports the Washington Post.  

That critical question -- to what extent China and India, which are not bound by the same obligations as industrialized countries under the U.N. process, would cut their emissions as part of a global pact -- remains unanswered. The top leader of each nation, both of whom met with Obama over the past week and a half, are expected to announce their own climate plans within days. Ned Helme, president of the Center for Clean Air Policy, said Obama is "walking a knife's edge" to encourage China and India to act without alienating Congress."

Faulk says such a comprehensive approach to climate change is vital to its success. "In the absence of universal and verifiable international accords, American industry will suffer major competitive disadvantages - and, more importantly, climate changes will not be effectively redressed," he says. "However important climate issues may be, we must have comprehensive tools to solve the situation as opposed to unilateral platitudes."