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Androvett Blog

by Robert Tharp at 3:29:58 pm

There's no doubt that Hurricane Ike made a terrible mess of things along the Texas Gulf Coast more than a year ago, but the National Law Journal revisits the scene and notes that bad-faith insurors and a new rule issued by the Texas Department of Insurance have created a world of problems for property owners trying to rebuild. Since Ike, the Texas Department of Insurance requires property owners along the coast to prove they have flood insurance before they can buy or renew state-backed windstorm policies. 

That's proving to be salt in the wounds for thousands of storm victims still wrestling over claims with insurers operating in bad faith. The rule change means that storm victims will have to pay more for insurance going forward, and they won't be able to obtain wind policies without first securing flood coverage. Attorneys like Phillip Sanov, who heads the bad-faith insurance practice group at Houston's Lanier Law Firm, report that many insurance companies continue to lowball property owners on claims. "We're hopeful that just like in most places, once a lawyer gets involved, the carrier will start doing closer to the right thing by their policy holder," Sanov says.

Meanwhile, bad faith insurance attorney  Kurt Arnold, a partner in Houston's Arnold & Itkin, tells the NLJ that hundreds of lawsuits remain pending against insurance carriers that have denied or underpaid claims for Hurricane Ike victims. Arnold has more than 150 such lawsuits himself - another colleague has more than 1,000.
"They're sending adjusters out who just don't know what they're doing. I have some claims that had $150,000 in damages, and [the adjuster] wrote up $2,000," he says, adding that the adjusters are often way off. "Some of the houses that are nearly totaled might get written up for $2,000."

by Robert Tharp at 4:37:57 pm

Since it's not news until The New York Times weighs in, we bring you this story about the growth of climate change practices.
Law Firms Prep Clients for Climate Policy Implications

Stalled congressional action on greenhouse gas legislation has not stopped prominent law firms from taking the lead in helping companies navigate the legal, public policy and business implications related to climate change.
"Climate change and renewable energy developments are the next big thing in environmental and energy law," said Michael Gerrard, director of Columbia Law School's new Center for Climate Change Law and senior counsel to Arnold & Porter. "Every law firm that has a practice in either of those areas is trying to position itself so that when the major work arrives, they will be able to grab a good chunk of it."
Businesses face state and regional and -- in some cases -- international emissions restrictions. They seek legal advice on everything from verifying energy credits to addressing Securities and Exchange Commission disclosure requirements, according to Robert McKinstry, the partner in charge of the Climate Change and Sustainability Initiative at Ballard Spahr Andrews & Ingersoll.
READ THE ENTIRE ARTICLE HERE
"We have a cross-sectional group that works on climate change and carbon changing -- it's a clean-tech group," said  Scott Deatherage, a partner and leader of the Climate Change and Renewable Energy Practice Group at Thompson & Knight.
"There are security issues with respect to disclosure," Deatherage said. "When it comes to incentives, there are a lot of tax issues also. I do work for renewable energy companies and companies developing carbon credit projects both domestically and internationally."
The fast-growing practice area has drawn upon attorneys from existing corporate, energy, tax and, of course, environmental groups.
For example, the Climate Change and Sustainability Initiative at Ballard integrates the environmental, energy and project finance, real estate and litigation practices.
Deatherage said his firm has also tried to steer clients toward the incentives to be gained from a corporate climate change strategy.
"I do work for renewable energy companies and companies developing carbon credit projects both domestically and internationally," he said. "I was contacted to have a client participate in the Carbon Disclosure Project. The company was facing shareholder petitions, and that was the resolution they reached with shareholders -- voluntary greenhouse gas reporting."
Deatherage runs a blog called "The New Carbon Cycle," which offers news and analysis about "the rapidly evolving law and policy surrounding climate change, carbon trading and markets."

by Robert Tharp at 2:14:20 pm

As U.S. Immigration and Customs Enforcement shifts to cracking down on employers rather than individual illegal immigrants, U.S. businesses are increasingly in need of expert guidance for navigating the complicated legal and policy landscape. Dallas-based Yarbrough Strategic Advisors has broadened its growing investigations group with the addition of longtime federal immigration investigator A.J. Irwin.

In his capacity as the firm's Director of Investigations, Irwin advises client companies on best practices for complying with federal immigration laws and policies, as well strategies for avoiding audits and fines related to employment matters.

Before stepping down as a federal investigator, Irwin managed the Joint Terrorism Task Force and anti-smuggling operations for an 18-state region from Canada to Mexico. He also led an investigation that resulted in the largest human-smuggling case ever prosecuted by the U.S. Attorney General. Another investigation led to the largest criminal fine imposed for immigration law violations against an employer.

Following the Sept. 11 terrorist attacks, Irwin played a key role in implementing policy changes and department reorganizations. At Yarbrough Strategic Advisors, the consulting arm of the Yarbrough Law Group, Irwin supervises investigations involving intellectual property, financial fraud and corporate compliance, among other things.

These can be troubling times indeed for employers trying to keep up with rapidly changing laws and policies. Earlier this month, the Department of Homeland Security began enforcing an E-verify program that requires federal contractors to electronically verify the immigration status of workers. The program is designed to identify workers who are in the U.S. illegally and using fake identities in order to work. "A.J.'s unmatched base of knowledge of investigations and practices within the Department of Justice provides a huge benefit to our clients," says attorney Matt Yarbrough, founder of Yarbrough Strategic Advisors. "With A.J. and others on our team, we are able to offer invaluable expertise to employers who want to stay on top of the important changes in immigration law."

by Robert Tharp at 11:57:18 am

Consider this factoid about the legal relationship that Americans increasingly have with product manufacturers, service providers, credit card companies and employers: if you use credit cards or cell phones, have purchased a house from a builder or placed a loved one in a nursing home, chances are you've signed away your constitutional right to a jury trial if there's a problem.

From routine credit card contracts to multi-million-dollar home purchases, the increasingly popular and controversial use of mandatory predispute arbitration clauses puts consumers at a distinct legal disadvantage when problems arise, says Dallas attorney Mark McQuality of Shackelford Melton & McKinley. It's a lopsided system in which consumers lose 94 percent of the time, according to a recent California study. Decisions by arbitrators -- lawyers or professionals who oversee and rule on cases -- are final and cannot be appealed.

U.S. lawmakers are now debating the Arbitration Fairness Act, which would ban such predispute arbitration clauses in consumer, franchise and employment matters. McQuality, who represents homeowners in construction-related complaints and other business torts, says it's about time. "These hidden clauses cause consumers to sign away their constitutional right to a jury trial," he says. "There's a place for arbitration, but it should be a voluntary option once a dispute has surfaced, as opposed to something that's buried in paperwork."

by Robert Tharp at 3:38:26 pm

As insolvent businesses struggle to restructure their finances, an alternative to traditional Chapter 11 reorganization plans is growing in popularity. Prepackaged bankruptcies, or "prepacks," offer companies a way to negotiate and gain approval of key constituencies before formally filing for reorganization. Such prepacs typically offer a new capital structure involving an exchange of debt for equity that is hammered out between the company and its main creditors before it is signed off by the court."It's likely there will be a significant increase in the number of prepacks in 2009 compared to last year," says Ira Herman of Thompson & Knight's New York office. "The financial crisis coupled with changes in the Bankruptcy Code make prepacks a cost-effective way to resolve balance sheet issues. However, if there is an unwillingness among a secured class of bondholders to negotiate a resolution, or if a large class of unsecured creditors cannot be dealt with consensually, then a prepack is unlikely to work."

by Robert Tharp at 3:21:21 pm

I can't help imagining the jailhouse conversation:....I robbed a bank, what are you in for? ... I sold defective shoes at a garage sale.

That great American staple of the free enterprise system - the garage sale - has gotten a lot more complicated. Used to be, holding a garage sale was as simple as posting a few well-placed signs, dragging your junk out on the driveway and watching the cash come in. But a federal law now makes it a crime to sell items that the Consumer Product Safety Commission has recalled. While CPSC officials have educated the larger thrift stores about the new law, individuals are also on the hook if they sell a defective car seat, children's shoes or even a garlic press/slicer. "If you're selling a crib or a car seat, the responsibility is yours to make sure the CPSC has not recalled it and that it doesn't present a danger," says Dallas attorney Angel Reyes, managing partner of Managing Partner of Reyes Bartolomei Browne. "And remember, it's not just baby items. The government recalls products adults use too."

This is all particularly relevant because individual reselling has increased during the economic downturn. Reports the Wall Street Journal: Amid the recession, more sellers are trying to wring some cash out of their old possessions. Listings on Craigslist for garage sales have increased 60% in the past year, and another resale site, Tagsellit.com, has seen a rising trend, with 3,000 listings for tag sales in the month of June. Large-scale yard sales have actually declined as fewer people have moved in the weak housing market. But those who monitor the resale industry say that more sellers are trying to get cash for smaller-ticket items.

The sheer variety of products being recalled in a given year can make it hard to guess what products might be unsafe. The ten biggest recalls of 2008 included toys, cribs, electric blowers, cosmetic accessory bags and window blinds. But buyers and sellers who want to check for recalls can search on cpsc.gov, which offers searches by product type, company name, or hazard, among other categories, or on recalls.gov, a site that lists recalls by the Consumer Product Safety Commission and five other federal agencies. They can also sign up with the safety commission to receive recall alerts by email.

by Robert Tharp at 11:16:41 am

Plenty has been said about the role that nationwide tort reform could or should play in health care reform debate. The discussion has prompted many to take a look at the Texas experience, where wide-ranging tort reform was implemented in 2003. Among other things, state law in Texas limits noneconomic damages like pain and suffering to $250,000.

Proponents of the reforms point to the influx of medical doctors who have relocated to Texas since 2003 and a decline in medical liability insurance rates and liability lawsuit filings. Critics note that health care costs continue to escalate and that tort reform has made it difficult if not impossible for many legitimate lawsuits to proceed, while the noneconomic caps are onerous to the poor, the young and the elderly because they have little to show for lost earning ability necessary to calculate economic damages. With health care reform front-and-center, we asked some of the state's top attorneys about the Texas tort reform model and how it might affect health care reform if emulated nationwide. Not surprisingly, we got three distinct and different perspectives.

Big Verdicts Still Possible Under Tort Reform, MedMal Caps
Even in a state such as Texas with caps on punitive damages in medical malpractice cases, large verdicts can still occur. "Once tort reform passed, we saw an immediate drop in lawsuits, but the number of filings began to rise as both plaintiff and defense attorneys learned the new rules and courts began interpreting the practical limits of the new rules," says Linda Stimmel of Stewart Stimmel LLP, a Dallas-based firm focused on health care law. "It is not a perfect system, but it has been very beneficial in reducing the number of frivolous lawsuits, allowing reasonable settlements because of the defined limits and allowing physicians to practice medicine without going broke trying to pay their insurance premiums." 

Lawsuit Caps No Prescription for Healthcare Troubles
One look at the six years of tort reform in Texas should convince President Obama that the idea of national medical malpractice reform is a bad one, says nationally recognized trial attorney Mark Lanier of The Lanier Law Firm. "Doctors and insurance companies claimed tort reform was the cure for our state's healthcare problems, but six years of rising healthcare costs are all we have to show for it," says Lanier, who also disagrees with the President's hypothetical of keeping medical malpractice cases out of courtrooms by assigning them to special review panels. "Our founding fathers got it right by trusting juries to settle disputes rather than politicians or hired committees," he says.

Healthcare Tort Law Best Left to States
Tort reform in Texas provides some valuable lessons for any federal healthcare reform package. "If there were to be federal legislation in an area, I think some aspects of the Texas medical malpractice laws are good," says defense attorney John Martin of Dallas' Thompson & Knight and incoming president of the Lawyers for Civil Justice. "I think the informed consent and expert reports parts are good, although the expert reports concept could be written much better than the one we have in Texas so that less litigation is required. However, my personal belief is that tort law should be handled at the state level, not the federal level."

 

by Robert Tharp at 2:47:45 pm

The attorneys at Jackson, Miss.-based Forman Perry Watkins Krutz & Tardy LLP know all about defending toxic exposre cases in venues traditionally viewed as friendly to plaintiffs. Earlier this year, their defense victory in a jurisdiction described as a "judicial hell holl" drew national media attention. Last week, the firm walked away with another take-nothing defense verdict in a Mississippi asbestos exposure case.

Plaintiff Bob K. Martin, a former oilfield worker, claimed that his health problems were caused by exposure to asbestos between 1965 and 1986 while working in oilfields in the southeastern United States. Following a two week trial, jurors returned a defense victory for Union Carbide Corporation, ConocoPhillips Company and Montello, Inc. Forman Perry is a real pioneer in multidistrict litigation covering silica and asbestos products, and their work has led to the dismissals of tens of thousands of claims.

"We are very pleased about the juror's careful consideration of the facts in this case," says Marcy B. Croft, lead counsel from the Forman Perry defense team representing Union Carbide, who worked in conjunction with National Trial Counsel Kevin M. Jordan of Baker Botts, LLP, and Michael G. Terry of Hartline, Dacus, Barger, Dryer & Kern, LLP. "We maintained from day one that our client acted responsibly, and this verdict is proof."

 

by Robert Tharp at 4:04:31 pm

Just two years after establishing an office in New York City, McKool Smith continues to expand and now counts 21 attorneys in New York with the addition of trial-tested litigator Kyle Lonergan. Mr. Lonergan joins McKool Smith from the firm of Simpson Thacher & Bartlett. His practice focuses on complex commercial litigation and white collar matters, and he has litigated high profile cases in a number of areas, including securities, antitrust, insurance coverage and breach of contract.
Mr. Lonergan has represented clients throughout all phases of litigation, including trial and arbitration, and in connection with investigations by the U.S. Securities and Exchange Commission, the U.S. Department of Justice and the Federal Bureau of Investigation. He will continue his work in these areas at McKool Smith, including handling matters with the firm's International White Collar practice led by firm principals Jack Cooney and Tom Engel.
Mr. Lonergan maintains an active pro bono practice in the environmental field. He has represented the Natural Resources Defense Council and other environmental groups for the past decade in litigation that has resulted in significant protections for some of the country's most important national parks, including Everglades National Park in Florida and Grand Teton National Park in Wyoming.

by Robert Tharp at 2:20:10 pm

As Brazil eyes what appears to be the largest oil reserve discovered in the Western Hemisphere in the last 30 years, a raft of U.S. energy sector service providers stand to gain considerably. The so-called `pre-salt' region off Brazil's southeastern coast contains an estimated 50 billion barrels of oil, and Brazil will no doubt need assistance from U.S. oil field service industry companies, says  Andrew Derman of Thompson & Knight. "This will require massive financial investments, advanced technologies and a highly skilled workforce over many years, if not decades, to fully assess and recover these reserves," Derman says. The plan calls for Brazilian energy giant Petrobras to be the region's sole operator and hold a 30 percent stake in all development joint ventures, while allowing the government to keep a bigger share of oil profits. To interview Mr. Derman, contact Barry Pound at 800-559-4534 or barry@androvett.com.

by Robert Tharp at 1:52:33 pm

The U.S. Small Business Administration is trying to help small businesses score government contracts through the American Recovery and Reinvestment Act of 2009 via a new online training course designed to provide insight into the government contracting process. While helpful, the training course fails to disclose some important risks that small businesses need to know about when working on government contracts, says Marshall Doke Jr., head of the Government Contracts practice at Gardere Wynne Swell LLP. For example, the training course does not detail how these contracts include certain unallowable costs and unique accounting rules, as well as special rules for purchasing, estimating, quality controls and socio-economic policies. These rules essentially provide a mandate for how the business must be run. "Some basic rules of commercial business are not applicable to government contracts," Doke says. "The contracts all favor the government, including criminal and civil laws, dispute resolution, and voluminous contract clauses. It is a good business if you know the rules, but it is dangerous if you do not." To interview Mr. Doke, contact Rhonda Reddick at 800-559-4534 or rhonda@androvett.com.

by Robert Tharp at 2:27:19 pm

Those watching out for the rights of the disabled hailed a new state law that quietly went in effect last week, but few others took notice of House Bill 978. Like the federal Americans With Disabilities Act that was broadened a year ago, employers should view this legislation as a wake-up call to update policies and educate supervisors regarding the definition of "disability" in employment matters, says labor & employment attorney Bryan Neal of the Dallas office of Thompson & Knight. HB 978 makes state law consistent with the ADA's defining criteria and clarifies terminology for medical conditions that may be used as the basis in workplace discrimination claims. As a result, authorities, employers and employees will have a single legal standard that governs this issues, rather than one set of rules for state claims and another for federal complaints.

The law generally provides a broader definition for employees to be considered disabled and consequently able to sue under the statute. For example, it spells out that episodic medical conditions such as epilepsy, now qualify as disabilities. Also, when deciding whether an individual is disabled, courts no longer may consider the ameliorative effects of mitigating measures such as medication, hearing aids, or prosthetic limbs.

Neal says the law will likely prompt more state workplace discrimination claims. "HB 978 provides that episodic diseases such as diabetes, cancer and epilepsy qualify as a disability, and the beneficial use of medication or devices by individuals to manage these conditions can't be considered by the courts," he says. "Business coalitions and other opponents foresee an increase in disability discrimination lawsuits as this legislation makes state law conform to the broader standards of disability found in federal discrimination claims." To interview Mr. Neal, contact Barry Pound at 800-559-4534 or barry@androvett.com.

by Robert Tharp at 11:43:31 am

Bad Faith Insurance Attorney Kurt Arnold: With New Law, Some May Not Even Have Insurance for the Next Storm

Hurricane Ike damaged or destroyed thousands of structures when it blew across the upper Texas Gulf Coast. A little over a year later, hundreds of lawsuits remain pending against insurance companies that have denied or underpaid claims for storm damage. Obtaining insurance for homes and businesses along the Gulf Coast is never easy. The Texas Windstorm Insurance Association is considered the insurer of last resort - the kind of insurance company that property owners can turn to when they can't get coverage anywhere else. Policy holders' post-Ike experience with the TWIA has not been stellar, and the association is named in numerous bad faith insurance lawsuits.

But bad faith insurance attorne  Kurt Arnold of Houston-based Arnold & Itkin LLP says the situation has gotten even more bleak. A new state law that went in effect this week makes it even harder to obtain TWIA coverage to begin with. "As an 'insurer of last resort,' the TWIA should help protect Texans," says Arnold. "Now homeowners who are still struggling to rebuild are wondering if they'll be covered at all the next time a storm blows in." To interview Mr. Arnold, contact Alan Bentrup at 800-559-4534 or alan@androvett.com.