December 23, 2010 by Barry Pound at 11:38:24 am
We all know by now that just about every piece of litigation today has some kind of costly electronic discovery component. The National Law Journal’s latest e-Discovery special section includes an interesting and very common-sense overview with a special focus on what budget-conscious lawyers involved in smaller litigation need to know about the e-discovery landscape.
Writes Jane Politz and Danny Thankachan of Thompson & Knight, lawyers involved in smaller litigation are “justifiably worried” about the costs of preserving and collecting data, and this anxiety forces many to choose between two equally troubling extremes: being too cautious and over preserving on one hand and the abdication of preservation responsibilities to vendors or clients on the other.
Without the benefit of large electronic discovery budgets, attorneys handling smaller matters may find themselves trapped. Engaging an outside expert to assess the client’s technology infrastructure and implement an appropriate e-discovery protocol is often prohibitively expensive. Even when such a project is proposed, clients question the need to hire outside experts when their own information technology(IT) personnel are intimately familiar with the technology in use within the company. These are, of course, reasonable arguments.
With that as a starting point, Politz and Thankachan provide a comprehensive overview of options for lawyers facing such a dilemma. The complete article(subscription required) can be found here.
December 21, 2010 by Robert Tharp at 9:47:04 am
Things were looking up back in 2007 for the Giovanni Homes’ townhouse and office development along Creek Run Road in east Fort Worth. Buyers were already lined up for the development’s first three townhouses, and the developer had purchased additional property to build office space and additional townhomes.
But as Giovanni Homes waited for Oncor Electric to bring electrical lines to the property as promised, days turned to weeks and still no electricity. Months passed and the seasons changed, but the structures remained in the dark and interested buyers looked elsewhere.
Turns out, Oncor had mistakenly placed its underground electrical line far outside the 10-foot-wide easement that the utility owned. In fact, the line, including a three-phase transformer box, was running right through the middle of the Giovanni Homes property. As the real estate losses mounted, Oncor came up with one explanation after another why the line could not be moved in order to bring electrical service to the properties as promised.
More than three years later, a Tarrant County jury last week awarded $1.2 million in actual damages plus $575,000 in attorneys’ fees to Giovanni after determining that Oncor breached its contract and effectively trespassed on the private property. Giovanni’s lawyer, Charla Aldous of the Aldous Law Firm, called it a classic David-and-Goliath legal moment. “We’re glad David won,” Aldous says. “Giovanni Homes is a quality developer that just wanted to improve a neighborhood in Fort Worth, but Oncor kept delaying those efforts for seemingly no good reason.”
December 17, 2010 by Robert Tharp at 2:51:02 pm
Even before they walked out of an El Paso courtroom with a $124 million verdict last month, the young lawyers at Sico, White, Hoelscher & Braugh L.L.P. already had racked up an impressive string of jury verdicts in 2010.
The seven-lawyer, Corpus Christi-based firm secured six multimillion-dollar jury verdicts in the last 12 months alone. The string culminated with the stunning $124 million verdict against El Paso-based bus company, Los Paisanos Autobuses Inc., and others responsible for a bus crash near Denver that killed two.
Firm co-founder Craig M. Sico says that though tort reformers portray jurors as sometimes making thoughtless responses to meritless lawsuits, people take jury service very seriously and need to see solid evidence to grant awards. “Jurors aren’t lemmings, no matter what you might hear from the tort reform movement,” says Sico. “When there is true injury presented in a clear way, juries react with common sense and compassion, which can mean millions of dollars depending on the facts of the case.”
The firm’s additional multimillion-dollar jury verdicts in 2010, all in actual damages, range from commercial oil-and-gas disputes to workplace injury and product liability cases, and include:
- $42.7 million verdict in a vehicle wreck case in which a homecoming queen was paralyzed in Dimmit County, Texas. Rocha, et. al., v. Michelin North America, Inc., No. 09-06-11001-DCVAJA
- $21.4 million verdict in a commercial dispute between two oil and gas companies in McMullen County, Texas. Umma Resources, LLC, v. Key Energy Services, Inc., No. M-05-006-CV-A
- $18 million verdict in a faulty tire death case in Superior Court of Los Angeles. Ramon Moreno Sr., et. al. v. ATV, Inc., d/b/a American Tire Depot, No. JCCP-4160
- $9.2 million verdict in a commercial vehicle crash case in Nueces County, Texas. Rose Barnett and Jerry Barnett v. Highway Technologies Inc., et. al., No. 09-60431-4
- $6.2 million verdict in a workplace injury and product liability case in Nueces County, Texas. Maria Elizando, et. al. v. Masport Inc., et. al., No. 06-62341-1
December 17, 2010 by Dave Moore at 2:21:13 pm
Speaking of year-end news roundups, Androvett Legal Media’s Mary Flood has compiled a list of the top 10 legal news stories impacting Houston in 2010 on her Houston Legal blog.
Besides the obvious mention of the Deepwater Horizon catastrophe, Flood delves into the conviction of former Republican House majority leader Tom DeLay; the ongoing state and federal battle against Mexican drug cartels; and the travails of former financier R. Allen Stanford, who has been beaten, drugged and locked away for more than a year while awaiting a jury trial.
Let’s hope for a happier 2011 for all of us.
December 17, 2010 by Robert Tharp at 1:59:51 pm
“Shackelford going country in Nashville” reads the headline in today’s Dallas Business Journal describing the Dallas-based law firm’s move to join forces with a group of Nashville’s most venerated entertainment lawyers.
Beginning Jan. 1, the growing firm’s new partnership will include the Nashville office of Shackelford, Zumwalt & Hayes, reflecting a merger with a firm that counts some of the biggest names in entertainment as longtime clients. Firm founder John C. Shackelford, whose firm is known throughout the Southwest based on work for clients in aviation, financial institutions, hospitality, real estate, and the retail automobile industry, says this move makes good business sense.
“We’re very excited to be working with the top entertainment lawyers in the city,” Shackelford says. “From contracts to global licensing deals to helping navigate the intersection of music and technology, we provide a level of service you just don’t find at many law firms.”
Jim Zumwalt and Craig Hayes and the lawyers at their firm represent some of the country’s leading entertainers, including Faith Hill, Creed, Aaron Neville, Lifehouse, Tanya Tucker and The Bar-Kays. The firm is most known for launching recording careers by advancing deals for such artists as Toby Keith. “John Shackelford and his team bring significant capabilities to our firm,” Mr. Zumwalt says. “By combining our global entertainment expertise from Nashville with the business and technology capabilities in Dallas and Austin, I believe we’ve put together a group of legal talent that’s second to none.”
December 16, 2010 by Robert Tharp at 4:20:57 pm
The Omega watch company was not pleased when retailer giant Costco purchased its watches at a discount overseas before selling them domestically at bargain prices. In a split 4-4 vote on Monday, the U.S. Supreme Court upheld Omega’s claims that it can control the pricing, resale and redistribution of such “gray market” goods. Munck Carter copyright attorney Dyan House of Dallas says the Supreme Court’s split vote resolves the Costco case, but failed to settle the broader question over the ongoing sale of such copyrighted gray market goods. “Because the court split on the issue, it effectively upheld the lower court’s decision without setting a precedent,” House says. “Manufacturers and retailers are still in need of clarity about this business practice.”
Writes Bloomberg: Today’s high court action means that “if someone is selling goods 30 percent cheaper in some other country, any retailer who wants to pass that cost benefit on to the consumer would likely be denied,” said John Mitchell, a Washington lawyer who filed a brief backing Costco on behalf of trade groups that represent video-game, home-video and music retailers.
The case turned on the scope of the first-sale doctrine, which says a copyright holder can profit only from the original sale of a product. In 1998, the Supreme Court unanimously ruled against copyright holders by saying the doctrine applies to U.S.-made products sold overseas. The court said copyright holders can’t block those goods from being brought back into the U.S. through unauthorized channels.
The latest question was whether that same reasoning applies to goods manufactured abroad, including Omega’s Seamaster watches, which carry a copyrighted logo on the back. The 9th Circuit sided with Omega on the issue, ruling that the first- sale doctrine doesn’t apply to foreign-made goods. The case now returns to a federal trial court, where Costco will have a chance to mount additional arguments, including its contention that Omega engaged in so-called copyright misuse.
December 16, 2010 by Dave Moore at 12:57:05 pm
While many old-school holiday traditions have gone by the wayside, there are some traditions that never seem to die; among them, lists that sum up the year’s events. Some of us at Androvett Legal Media & Marketing have put together what we believe to be the 10 biggest legal stories of the past year in North Texas. You may not agree with every matter on our list, but that's part of the fun. Let us know what you think were the top stories.
Dallas/Fort Worth Top 10
Legal News Stories of 2010
1) Tax-credit corruption cases rock Dallas City Hall
The 2010 Dallas City Hall extortion/bribery case over valuable federal tax credits resulted in the incarceration of former State Rep. Terri Hodge, former Dallas Mayor Pro-Tem Don Hill, and many others. The scheduled Dec. 17 sentencing for former prominent developer Brian Potashnik and his wife will close one of the biggest legal stories and one of the darkest chapters in Dallas City Hall history.
2) FAA fines American Airlines record $24.2 million
The FAA hit American Airlines Inc. with a record $24.2 million fine in August for allegedly failing to follow a 2006 airworthiness directive. The penalty stemmed from a series of groundings in 2008 after wiring harnesses on some 300 jets were not properly fastened. The penalty was more than double the largest fine ever assessed by the FAA, and drew negative national attention to the area’s largest employer.
3) Cowboys groups, others settle cases after practice facility collapse
Cowboys scouting assistant Richard Behm and special teams coach Joe DeCamillis settled lawsuits against a group of companies owned by Dallas Cowboys owner Jerry Jones and others after both men were severely injured in the May 2009 collapse of a team practice facility in Irving. The settlement preempted a full-blown trial with America’s Team facing the court of public opinion.
4) Dallas County Constables face indictments
What began as an investigation of aggressive and unregulated towing operations evolved into a year-long probe into alleged coercive campaign tactics by Dallas constables Derick Evans and Jaime Cortes, both who are accused of illegally requiring their deputies to raise campaign funds. DA Craig Watkins’ refusal to investigate the case added another layer to one of Dallas’ biggest legal dramas of 2010.
5) $51 million construction defect verdict against political contributor and Perry Homes owner Bob Perry
In one of the longest-running lawsuits in state history, a Fort Worth jury ordered Houston homebuilder and major political donor Bob Perry to pay $51 million to a Mansfield couple over an alleged defective home sold by Perry. The verdict ended a decade-long dispute between Bob and Jane Cull and the Perry Homes owner, including appeals that reached the Supreme Court of Texas. The jury awarded $40 million in punitive damages alone – a far cry from the $800,000 judgment that resulted after the two sides went into arbitration in 2002.
6) Smadi pleads guilty to bomb plot charges
Hosam “Sam” Smadi was sentenced to 24 years in prison for trying to blow up the 60-story Fountain Place building in downtown Dallas. Despite alleged encouragement from government agents and renouncing Osama bin Laden at his sentencing, Smadi was told by U.S. District Judge Barbara Lynn that “your actions were yours.” The Smadi case showed how law enforcement officials are increasingly willing to allow terror suspects to take “overt actions” before making arrests in order to bolster the government’s cases in court.
7) Beer and wine sales legalized in Dallas
Dallas voters collectively booted the patchwork of Prohibition-era dry laws to legalize the sales of beer and wine citywide. Several community leaders opposed the vote, and legal counsel for the opposition argued that the city didn’t properly validate the signatures that initiated the referendum. Despite the flurry of legal attempts to suppress the vote results, employees at Dallas City Hall are now processing applications for beer and wine sales across the city.
8) (Tie) Blockbuster Inc. and Texas Rangers file for bankruptcy
Bludgeoned by the success of Netflix, Redbox, and other online and mail order movie services, venerable Dallas video entertainment provider Blockbuster Inc. filed for bankruptcy protection in September. The chain, with 5,600 stores worldwide, has until Dec. 15 to files its plan to emerge from bankruptcy. The company has announced plans to reinvent itself as a leaner competitor with more digital video offerings.
In a scene reminiscent of the movies, a group of lawyers, reporters and sports moguls gathered in a Fort Worth courthouse on a steamy summer night to decide the fate of the beleaguered Texas Rangers baseball team. After hours of wrangling and a cameo appearance by billionaire Mark Cuban, the team landed in the hands of team president Nolan Ryan and an investment group led by attorney Chuck Greenberg.
9) M&A’s and IPO’s show signs of life
Mergers, acquisitions and initial public offerings in D/FW during 2010 showed that the Great Recession is starting to give way to the Great Thaw. Most recently, McKinney-based Newtoy, maker of the popular Words with Friends game, was purchased for an undisclosed amount by Farmville creator Zynga. In September, Southwest Airlines put some of its cash and stock to work by purchasing AirTran for $1.4 billion. ExxonMobil completed its $41 billion merger with Fort Worth-based XTO in June.
10) Northern District federal prosecutor nowhere in sight
Political gridlock continues to stall the appointment of four top federal prosecutor spots in Texas, including the Northern District of Texas, which has been without a permanent U.S. attorney since before President Obama was elected. The Obama administration and Texas’ Democratic delegation unsuccessfully have squared off against Texas’ two Republican senators in search of mutually agreeable appointees. The lack of a permanent U.S. attorney to direct law-enforcement priorities and approve work on big projects is causing a statewide slowdown in work for criminal defense lawyers and a sigh of relief from the clients they typically represent.
December 14, 2010 by Robert Tharp at 10:06:18 am
We’ve seen plenty of kooky schemes for tweaking a website’s search-engine performance, but online merchant Vitaly Borker took it to such a level that it appears he’s a shoe-in for a special prize all his own: prison time.
As described by the New York Times last week, Borker was convinced that Google’s inscrutable algorithm that determines a website’s search engine rankings could not distinguish between praise and complaints. According to his website optimization strategy, Borker embraced the old chestnut that there's no such thing as bad pr and took it a step futher. He figured that even negative postings translated into buzz that helped push his business, DecorMyEyes, higher in search results and increased his sales.
According to police reports, Borker set about menacing his customers with disturbing threats of violence. He is now being held without bail, charged with one count each of mail fraud, wire fraud, making interstate threats and cyberstalking.
Writes the NY Times: It is unclear if Mr. Borker was right about the cause of DecorMyEyes’ surprisingly strong showing in online searches. But last week, Google published a post on its official blog stating that it had changed its search formula so that companies were penalized if they provided customers with what it called “an extremely poor user experience.”
December 10, 2010 by Dave Moore at 9:25:15 am
Imagine a world where utility rates are set in a patchwork quilt across the nation, in each instance decided by local magistrates. That is a possibility, based on a court decision that climate change issues – and, as such, the regulation of energy providers – may be decided by local courts.
Opponents to that notion scored a major victory recently when the U.S. Supreme Court agreed to hear an appeal in American Electric Power v. Connecticut, in which state attorneys general and other authorities claim that public utilities' greenhouse gas emissions contributed to climate change. Utility firms say that the universal issues of climate change cannot be addressed by individual lawsuits, but rather should be resolved by the executive and legislative branches of government.
Richard O. Faulk, chair of the Litigation Department of Gardere Wynne Sewell LLP in Texas and a frequent commentator on mass tort litigation trends, and John S. Gray, who co-chairs the firm’s Climate Change Task Force with Faulk, have weighed in on behalf of several industry associations by filing an amicus brief before the court.
They said the Court’s decision to hear the case may portend the demise of mass tort litigation based on global warming. Here’s the reaction of Faulk, who at the time of the ruling, was in Washington, D.C., to address a conference of the nation’s trial and appellate judges regarding climate change litigation:
The use of isolated and ad hoc lawsuits against an arbitrarily selected group of emitters cannot possibly solve the global warming phenomenon. The issue is best left to the international community, the Congress and the EPA, which have the resources and power to deal with this alleged problem. Hopefully, the Supreme Court will now recognize the primacy of those institutions.
To view a YouTube video where Faulk discusses the Supreme Court case, click here. A copy of Faulk and Gray’s AEP v. Connecticut amicus brief can be found at: http://www.gardere.com/Binaries/Press%20and%20Publications/AmElectricvStConnecticutBrief.pdf.
If the arguments made by the likes of Faulk and Gray succeed, corporations and consumers alike will continue to benefit from utilities that are regulated at the state and national levels, and will be spared the vicissitudes of local courts.
December 9, 2010 by Robert Tharp at 4:31:09 pm
Free booze, food someone else cooks—what’s not to love about an office party?
While being the life of the party was a goal worth pursuing in college, it’s not such a brass ring once we’re in the professional world. Dallas lawyer Kathleen Wu, who writes and speaks about issues affecting professional women, says Rule Number One is not to make others uncomfortable. “That means not discussing compensation, particularly with year-end bonuses around the corner,” she says. “And if they’re bringing a date or a spouse to the party, keep public displays of affection to a bare minimum.”
The best bet is to get acquainted with others outside your department. “Think of it as cross-pollination,” Wu says. “You’re making yourself known outside your regular circle and you’re learning more about what goes on in the rest of the company. There’s no downside to that.”
Other office party tips:
- “Open bar” isn’t an invitation to get wasted. You don’t have to be a complete teetotaler, but know your limits and stop drinking long before you reach them. Particularly if you’re new to the company, you don’t want to develop a reputation for embarrassing yourself at the company party. Bosses notice when an employee lacks discretion and they make assignments accordingly.
- Keep the talk light and only marginally work-related. Bosses want to relax too, so don’t insist on discussing business at the office party. If your boss brings up a work matter, feel free to engage, but you risk being seen as a toady if your conversational repertoire is limited to company business. The office party is a great time to find commonalities (besides work) with the people you spend the majority of your waking hours with, so maximize that time.
December 8, 2010 by Robert Tharp at 1:51:36 pm
Representing a nearly $100 billion annual market, the humble prepaid gift card has become the gift of choice for uninspired shoppers during the holiday season. While gift cards have long resided in mostly unregulated territory, new FTC rules provide a degree of protection to cardholders by restricting fees and providing transparency for expiration dates, says Zahara Alarakhia of Munck Carter in Dallas.
The reforms’ goal is to reduce so-called “breakage” – unspent gift card credits that cardholders unwittingly leave on the table. Breakage amounted to $5 billion last year. Best Buy alone netted $38 million of breakage in a recent fiscal year, while Home Depot banked $37 million during the same year, reports The New York Times. In her recent personal finance column, the Dallas Morning News' Pamela Yip provides a rundown on the new provisions spelled out in the Card Accountability Responsibility and Disclosure Act. The takeaway: it’s wise to know the terms and conditions, particularly the expiration date, of any given gift card before you put it in you put it in your sock drawer and forget about it for 11 months.
“These regulations will help diminish the significant amount of money lost every year by gift card holders,” Alarakhia says. “Still, cardholders are wise to understand the limits of these cards, and ideally they should try to redeem gift cards relatively quickly.”
December 3, 2010 by Rhonda Reddick at 2:08:47 pm
The inaugural Annual Gardere MLK Jr. Oratory Competition in 1993 was by all accounts a modest affair. Held in a conference room in the downtown offices of Gardere Wynne Sewell LLP, just a handful of Dallas ISD elementary schools were invited to send representatives to compete in the new speech contest. However, the day proved to be an unqualified success, leaving no question that it would become an annual event. The continued growth of the event over the next 19 years required a move first to Dallas’ First Baptist Church and then to its current location, The Majestic Theatre.
“As we have seen first-hand since we started this contest 19 years ago in Dallas, these students excel in carrying forward Dr. King’s legacy, and I am confident they will continue to do so throughout their lives,” says Gardere Managing Partner Steve Good.
Gardere attorneys were not alone in noticing the benefits the students get from this experience, and over the years more and more DISD schools have sought to be among the participating schools. This year, 15 schools held preliminary competitions between Nov. 9 and Dec. 1 to select their speakers for the Dec. 7 semifinals at the Dallas ISD Administration Building. Speaking on the theme "How Will You Carry Forward the Legacy of Dr. King in Your Personal and Professional Life?" the eight top-scoring fourth- and fifth-grade students from the semifinals qualify to participate in the finals, set for Jan. 14 at The Majestic Theatre.
Meanwhile, students from 23 Houston ISD elementary schools will compete Jan. 7 in the semifinals of the 15th annual Houston Gardere MLK Jr. Oratory Competition. The top 12 students qualify for the Jan. 14 finals at Antioch Missionary Baptist Church of Christ.
December 2, 2010 by Amy Hunt at 3:42:14 pm
Garden variety sleuthing will never go out of style, but there’s a new brand of detectives who extract clues from bits and bytes of data buried deep within companies’ computer networks. Computer security breaches have become so widespread and so costly that firms specializing in cyberforensics, data security, business intelligence and forensic accounting, such as Stroz Friedberg, have found themselves in demand across the globe. While the sector barely existed just a decade ago, it’s seeing red hot growth.
Case in point: Stroz Friedberg recently received a $115 million investment from private equity firm New Mountain Capital to open new offices across the U.S., Europe and Asia. According to a Nov. 23, 2010 article in USA Today highlighting Stroz Friedberg’s plans, Demand for cyberforensics is being driven by "the proliferation and complexity of security issues companies are facing," says Alok Singh, New Mountain's managing director. "Issues of data security and integrity are critical for all companies around the world."
Cyber detectives, like their traditional counterparts, must preserve crime scenes and hunt for evidence. “But instead of looking for fingerprints, DNA and ballistics, they hunt for ‘subtle data attributes inside company networks that have been changed or altered,’ says Ed Stroz, ex-FBI agent and co-founder of Stroz Friedberg,” USA Today reports. A number of factors are causing the explosive growth. Writes USA Today: U.S. Internet crime losses reached $560 million in 2009, up from $265 million in 2008, says the Federal Deposit Insurance Corp. Research firm Market Research Media estimates that the federal government will spend $55 billion from now through 2015 on cybersecurity.
Globally, a recent study by the Computing Technology Industry Association, a non-profit trade group, found that 63% of large organizations surveyed in 10 nations experienced at least one security incident in the past 12 months, with 45% of those incidents classified as serious.
December 1, 2010 by Dave Moore at 4:05:12 pm
Under the Hire Act of 2010, businesses are eligible for tax breaks for hiring workers who have been unemployed at least 60 days. NBC 5’s Ken Kalthoff interviewed Munck Carter’s Audrey Mross about the law and its likely impact.
“The purpose was to incentivize employers to hire people who had been unemployed for a while,” says Mross, a former HR executive who leads Munck Carter’s labor and employment section. “So, the rule was, the tax credit only applied to someone who had not worked at all for the last 60 days, or at most worked at most for 40 hours in the last 60 days.”
Further, if those new hires remain employed for a full year, employers get another $1,000 tax break, she says.
According to the New York Times, an estimated 4.5 million workers hired already this year qualify for the tax credit, representing a payroll tax savings of $5.1 billion. But, the Times adds:
… no one knows whether any of those tax benefits were actually the cause of the new hires, or were just happily discovered after a hiring decision had already been made and therefore had no immediate effect on job market conditions.
Andy Warlick, president and chief executive of Parkdale Mills, a yarn manufacturer in North Carolina, had been brought onto the conference call this morning by Treasury officials as an example of an appreciative employer who had recently hired 30 workers eligible for the Hire Act tax exemptions. But when asked by a reporter about whether the tax benefit was actually responsible for his decision to expand his staff, he said it had not.
Whether or not the Hire Act tax breaks are happy surprises for employers, adding jobs is a sure-fire way to help strengthen the nation’s economic pulse.
“This is the government’s way of encouraging employers to attack that double-digit unemployment,” Mross tells NBC 5.
December 1, 2010 by Dave Moore at 2:57:41 pm
The Jury Room is one of only two blogs authored by non-attorneys to be selected for the 4th Annual ABA Journal Blawg 100.
The ABA Journal, the flagship magazine for the American Bar Association, reviewed more than 3,000 legal blogs from across the nation before deciding on the ABA Journal Blawg 100.
According to an attorney interviewed by the magazine, The Jury Room “wraps legal analysis, psychology and persuasion into edible, bite-size chunks.” The magazine also notes that “litigation consultants Douglas Keene and Rita Handrich look inside the heads of potential jurors—who are all of us, really—and share what they find.”
In the blog, Drs. Douglas Keene and Rita Handrich focus on the interface between human behavior and the law, covering topics as diverse as preparing witnesses for more effective testimony, the role of racial and gender bias in jury decision-making, how best to apologize, the art and science of jury selection, jury persuasion, and voir dire.
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