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Androvett Blog

by Amy Boardman Hunt at 3:30:36 pm

So, is the biggest problem facing women lawyers the fact that they earn, on average, tens of thousands of dollars less than their male colleagues, or is it that their work hours are so brutal that they leave the profession? Both are serious problems, writes Dallas lawyer Kathleen Wu in this week’s Texas Lawyer, and one of the best ways to address both of them is for firms to get serious about offering flex-time.

I realize the disconnect: How will women ever close the pay gap if firms offer flextime policies, which allow women to downshift their careers temporarily and thereby get paid less but have more time off? The answer is simple: Because one of the main reasons the pay gap exists — lack of diversity on compensation committees — won't ever get resolved if women keep leaving the profession before they're senior enough to get on to those committees.

According to a recent study released by the Project for Attorney Retention, "New Millennium, Same Glass Ceiling? The Impact of Law Firm Compensation Systems on Women," women partners earn dramatically less than their male counterparts, with equity partners averaging $66,000 less and income partners averaging $25,000 less.

While some of the disparity was attributed to origination credit policies (which gives the “originating” attorney a larger share of the fees earned by a particular client), one of the main reasons cited for the pay gap was a lack of women on compensation committees. More than half of the firms surveyed by PAR have one or no women on the compensation committee.

But if firms allow women to downshift and work more manageable hours, those lawyers stay on track. They maintain their contacts, they stay on top of the law and they don't disappear into the void that so many women find themselves in when they step off the treadmill altogether. Yes, lawyers need to address the pay gap. It's enraging and should be remedied. But the legal profession can't do that by putting work-life policies on the back-burner. Only by keeping women in the work force — even if it's not at 100 percent — will there be enough of us in a position to make sure the rest of us are paid what we're worth.

by Robert Tharp at 4:11:47 pm

After seeing their $16 million investment in a Plano, Texas-based hedge fund vaporize in less than 90 days, stunned investors turned to Houston’s Ahmad, Zavitsanos & Anaipakos for answers. 

Last week, Ahmad, Zavitsanos & Anaipakos lawyers Demetrios Anaipakos and Amir H. Alavi sued Ernst & Young for its role in the spectacular implosion of the Parkcentral Global hedge fund. The lawsuit claims that Ernst & Young falsely represented that it had fairly audited Parkcentral Global and failed in its “watchdog” role to warn relying investors of the risk of fraud and noncompliance by management, among other things.

The lawsuit focuses on two funds sold by Plano’s Parkcentral Global and was filed on behalf of Houston financial consultant Gus H. Comiskey and four Tucson, Ariz.-based entities, including the Thomas R. Brown Family Private Foundation. The now-defunct Parkcentral Global was operated by affiliates of billionaire and former presidential candidate H. Ross Perot before closing its doors after the bottom fell out of the securities market and credit froze in November 2008, losing more than $2.6 billion in a matter of days.

Earlier this month, Brown Investment Management, L.P., one of the plaintiffs in this suit against Ernst & Young, won a Delaware Supreme Court ruling that requires Parkcentral Global to disclose its former investors. Those investors could be added to the new Houston lawsuit. “Our clients were told that an investment in Parkcentral was designed to preserve capital,” Mr. Anaipakos says. “Instead, they lost every penny in record time.  E&Y was supposed to be auditing Parkcentral, but the audited financial statements never once warned Parkcentral’s investors of their impending doom.”

by Robert Tharp at 4:02:11 pm

Not only has Dallas defense attorney Barry Sorrels slugged it out in more than 300 state and federal trials on both sides of the aisle. The Ivy League gridiron star with the syrupy Texas drawl has over the years become a sought-after legal analyst at the local and national level. Earlier this month, Barry was in the TruTV’s New York studios to discuss the day’s testimony in the Javon Walker robbery and kidnapping trial.

by Rhonda Reddick at 1:52:03 pm

For eight long years, a group of Century 21 franchisees has soldiered on in litigation against Century 21 owner Cendant (now known as Realogy) over the proper use of more than $40 million in annual contributions to a trust for the benefit of franchisees and the withholding of services required in the franchise agreements. These individual Century 21 real estate offices point to franchise agreements that require revenue from a so-called National Advertising Fund to be used for marketing for the benefit of Century 21 franchisees. According to court documents, Cendant has instead diverted the funds for its own benefit and the benefit of Century 21’s competitors, including Coldwell Banker and ERA, both wholly owned by Cendant.

Newly released court transcripts indicate that Century 21 real estate franchisees might have clear cause to recoup some of their money via a class-action lawsuit against Cendant, which bought Century 21 back in 1995. In an August 17 ruling from the bench, New Jersey Superior Court Judge Robert Brennan indicated that the Century 21 franchises have an interest in ensuring that Cendant abides by the franchise agreement.

Importantly, the Plaintiffs in this case do not seek to change the franchise agreement, they simply want Cendant to abide by the terms of the agreement and to deliver the full panoply of benefits that it undertook to supply. No former franchisee has disavowed this goal.

Brennan added that the lawyers at Zwerling, Schachter & Zwerling LLP argued successfully for a class-action suit because they proved that all Century 21 franchisees were impacted by Cendant’s actions. The sheer number of potential plaintiffs – more than 1,000 – also helped qualify the matter for class-action status, he said.

Before it’s over, the class-action suit could include more than 4,000 individuals who held Century 21 franchises between 1995 and 2002.

"Class certification is a difficult hurdle to overcome," plaintiffs’ attorney Robert S. Schachter of Zwerling Schachter & Zwerling LLP told Law360. "You have to show why and how it's necessary, which we did. The judge found that we overcame that burden."

In 1995, former Century 21 CEO Richard J. Loughlin told the Orange County Register that Cendant’s purchase would have little impact on Century 21. The newspaper also quoted one franchisee saying that she hoped the purchase might mean more money to promulgate more sales.

But the lawsuit, which was filed in 2002, contends the opposite happened: that following the purchase, Cendant started using money from the National Advertising Fund to promote its other holdings, which included Century 21 competitors Coldwell Banker and ERA. Cendant also cut the Century 21 support staff from about 5,000 workers to fewer than 300 and trimmed Century 21’s salesperson training and recruiting programs as well, the suit maintains. At the time of the purchase, Cendant was known as Hospitality Franchise Systems Inc.

by Robert Tharp at 11:11:59 am

A recent ruling by U.S. District Court Judge Nina Gershon might be a major break in the case against Arab Bank, which plaintiffs claim is funding global terrorism. But to Dallas lawyer Mark Werbner, it’s one more step in an extended spiritual journey.

Werbner, co-founder of Sayles Werbner, is one of the lawyers representing plaintiffs in claims that Arab Bank has helped fund Hamas and other terrorist organizations in their attacks. About 200 plaintiffs – including 50 U.S. families – have signed on to the suit, which seeks $1 billion in damages from the bank.

D Magazine detailed how the case became a personal quest for Werbner: Werbner shifted from secular lawyer to Zionist activist in 1984, when he and his wife took a trip abroad with a group of Dallas Jews. Visiting Auschwitz, they saw the shower rooms where Jews were gassed; the ovens where their remains were burned; the shoes, eyeglasses, and luggage left behind. For Werbner, it was all suddenly much more than the history books. And from these camps, the group traveled to Israel.

This juxtaposition—"coming from the ashes of the crematorium to the steps of the parliament in Israel," says Cheryl Pollman—was transformative. After returning to Dallas, they joined just about every Jewish service organization in town. "It was like I had what I considered to be a fairly boring, average life,” says Werbner. “Suddenly I saw I had this great treasure of things that offered purpose, challenge, and adventure."

The protracted litigation – which began in 2004 -- has tested both Werbner’s resolve and previous legal boundaries. The case is among the first to apply new provisions of the Anti-Terrorist Act, passed by Congress in 2001, in part to prevent the secret bank financing of international terrorism. Through the course of litigation, Arab Bank has steadily resisted the discovery efforts of the plaintiffs, many of whom have lost loved ones or been wounded themselves by terrorist attacks in Israel. The ruling from the Eastern DIstrict of New York instructed the jury that based on Arab Bank's resistence to producing discovery material requested by the plaintiffs, they may infer from that Arab Bank processed and distributed payments to terrorists on behalf of the Saudi Committee to Support the Intifada Al Quds.

"This ruling is an important turning point in this long-running terror financing case," says Mr. Werbner, lead counsel for many of the victims. "It clears the way for a jury trial in Brooklyn and represents a landmark ruling for Americans injured or killed by international terrorism."

The instructions have given new fire for Werbner’s fight on behalf of terror victims. And likely they have strengthened Werbner’s faith in both his cause and his case.

by Robert Tharp at 4:02:28 pm

Potential defendants in the BP oil spill prosecutions—and that list could be very long indeed—need to do two things: 1) keep their mouths shut and 2) settle in for a long, hard fight with the feds. This advice comes courtesy of Houston criminal defense attorney Dan Cogdell, of Cogdell & Ardoin, in an Aug. 22 editorial in the Houston Chronicle.

Cogdell’s editorial came out the day before federal prosecutors gather ammunition at the U.S. Coast Guard and the Interior Department's Bureau of Ocean Energy Management, Regulation and Enforcement hearings on the BP disaster. The hearings began today in Houston.

Cogdell, who has represented numerous clients in environmental and white-collar criminal cases, admits that staying silent may seem uncooperative, but it will be “the smartest path.” The federal government is preparing its BP prosecutions across a variety of fronts, including the Clean Water Act, the Refuse Act, and the Migratory Bird Treaty Act—and they won’t just be seeking slaps on the wrist, Cogdell says.

First, the government will rely on the "Responsible Corporate Officer Doctrine," which allows Clean Water Act violations to be directed at even top corporate officers. Prosecutions under this theory have resulted in convictions of people who were not even at work sites and, in one case, a person not even working for a company but who had "honorary power." The Responsible Corporate Officer Doctrine may be the prosecutor's ticket to tag BP's hierarchical elite while soothing the related political nightmare currently facing the U.S. government.

With such threats looming, employees of BP and other companies involved “must balance the idea of seeing justice done with protecting themselves and their employer. Taking the Fifth at this point may be the least popular but most prudent move,” Cogdell writes.

Defendants have two other things working against them, Cogdell writes. First, to secure a misdemeanor Clean Water Act violation, the government doesn’t have to prove intentional harm. It only needs to show that employees were negligent and failed to provide the proper care to avoid an accident—a much lower bar for prosecutors. Second, “this is not BP's first rodeo,” according to Cogdell.

A company culture that prosecutors contend encourages money-saving over safety has landed BP in the government's sights time and time again, and will only bolster the efforts of Howard Stewart, the formidable top prosecutor on the BP spill.

by Robert Tharp at 2:14:44 pm

Houston law firm Ahmad, Zavitsanos & Anaipakos have earned a significant court ruling that helps lift a veil of secrecy that has allowed hedge funds to avoid disclosing the identities of their investors. In its August 12 ruling, the Delaware Supreme Court rejected the idea that federal law keeps investors who suffered hedge fund losses from learning who else might be interested in joining an investigation or a lawsuit against fund managers or third parties like auditors. 

The ruling from Delaware’s highest civil court stems from a case involving Brown Investment Management, L.P., a limited partner that invested in Plano, Texas-based hedge fund, Parkcentral Global. In less than 90 days, Brown Investment Management lost all of its investment in the hedge fund. Parkcentral Global is now a liquidated hedge fund run by affiliates of billionaire and former presidential candidate H. Ross Perot. Court documents show Parkcentral Global’s loses at approximately $2.6 billion. 

“Hedge funds exploded in the last decade because pooled investments provide a largely unregulated way for hedge fund managers to make money for themselves. This ruling helps those who lost money in poorly-managed funds to find other investors and join together to take legal action,” says attorney Amir H. Alavi, with Ahmad, Zavitsanos & Anaipakos who tried the case for Brown Investment Management. “Hedge funds where managers lacked diligence and proper risk analysis can no longer use divide-and-conquer tactics to avoid responsibility for losses.” 

 

by Rhonda Reddick at 10:20:17 am

Much has changed in the legal world since Steve Good began his first term as Gardere’s managing partner back in 2000. Under Good’s leadership the firm doubled its profits, expanded its expertise and added new offices, among other things.

Facing a term limit that would have prevented Good from serving a third term as managing partner, Gardere’s Management Committee realized that a shake-up at the top was unnecessary and voted instead to waive the partnership agreement in his case and allow him to serve another term. The popular Mr. Good will now continue as managing partner until 2017.

The decision to extend his term was an “overall vote of confidence” in the work Mr. Good has done since becoming Managing Partner, according to committee member Eric Blumrosen. Gardere has seen its profits more than double under Mr. Good's leadership. In that same period, the firm also went from three offices to four as he was instrumental in adding the Austin office which provides legislative and regulatory services. The firm also has offices in Dallas, Houston and Mexico City.

"In this job, you want to look around at the end of the day and see success not only for your clients, but also for your fellow lawyers and employees,” says Mr. Good, who also maintains an active tax practice at Gardere.

by Robert Tharp at 2:53:38 pm

An Irving, Texas, high school student wasn’t at all happy when school administrators confiscated her cell phone recently and read through her text messages.  Now, Madelyn Beaird’s father is demanding $7.5 million in damages because, he says, the school violated his daughter’s constitutional rights.   

"The sender of text messages to the recipient enjoys an expectation of privacy," said John Beaird. "Probable cause is not just a hunch."

Mr. Beaird spoke to The Dallas Morning News, which reported that he also asked that the school fire individual administrators who were involved in the search. But attorney Tom Brandt of Fanning Harper Martinson Brandt & Kutchin in Dallas, who represents school districts, other public entities, and businesses, says it’s not always that clear-cut.  In fact, he tells FOX 4 News reporter Peter Daut that schools often struggle to find the balance between students’ rights and other concerns:

“The students’ rights to privacy usually give way to the concerns for public safety,” Brandt said. “The case law decisions that have been made in the past don’t necessarily address directly text messaging or Facebook or whatever it might be.”

You can view the FOX 4 News story in its entirety here.

The school, MacArthur High School, released a statement saying it was working in the interests of all students.  Administrators say they were investigating reports of possible criminal activity, including the keying of two cars and the possibility that someone brought a gun onto the campus.  The Irving ISD School Board later found the search was proper; Mr. Beaird indicates he will file suit.

 

by Robert Tharp at 3:33:23 pm

Minnesota resident Koua Fong Lee is now a free man.

Lee walked out of prison this week following court hearings that focused on concerns that a cruise control problem in the Toyota Camry he was driving caused a 2006 crash that killed three people. Lee has been serving an eight-year prison sentence after a jury determined that he was to blame for causing the crash. Based on new testimony related to widespread problems with the Camry's cruise control system, Lee was granted a new trial. Prosecutors later indicated that they wouldn’t seek a new trial.

In June 2006, Mr. Lee was driving his Toyota Camry when it unexpectedly accelerated before crashing into another car and killing Javis Adams, 33, his son Javis Adams Jr., 10, and his niece Devyn Bolton, 7. Mr. Lee was convicted of criminal vehicular homicide in October 2007 and sentenced to eight years in prison. A fourth person in the car, Quincy Adams, recently told a Minnesota TV station that he felt joy when he heard Lee had been released.

Attorneys Bob Hilliard from the Corpus Christi, Texas-based law firm of Hilliard Muńoz Gonzales LLP and Brent Schafer of Minneapolis’ Schafer Law Firm, P.A. argued in court that an inspection of Lee’s car found a cable actuator in the cruise control mechanism stuck in the open position, which would have caused the car to accelerate uncontrollably.

Hilliard and Schafer warned that the deadly defect remains in older, non-recalled Toyotas. In fact, 11 owners of similar Toyota models testified at the hearing that they have experienced the same sudden, unintentional acceleration in their cars. Mr. Hilliard says prosecutors in at least three states are reevaluating cases of fatal accidents involving older Toyotas, and that the “Toyota Defense” used in Mr. Lee’s trial could help in those cases.

In a recent interview with Minnesota Public Radio, Hilliard said:

"I know there is at least one fellow in Oregon who's serving time whose lawyers have contacted me to take a look at his Toyota. He claimed that he was with his daughter in the middle of the day and it took off on him and there was a fatality. I know the prosecutor in Florida and perhaps California is considering charges and is reevaluating charges for two different individuals because they were driving Toyotas."

 

 

by Robert Tharp at 4:24:04 pm

As an attorney focusing on appellate law, you could say that Ryan Clinton knows a thing or two about taking in stray cases; over time, he’s learned that, with proper care, no case is hopeless. 

Outside his Austin law offices at Hankinson Levinger, Clinton enjoys equally high esteem for his passionate work to improve conditions for stray animals in our nation’s animal shelters, and he has become a national voice in the cause of saving homeless pets. In a speech last month at the 2010 No-Kill Conference in Washington, D.C., Clinton delivered a detailed description of efforts by FixAustin.org to improve conditions and practices at the city of Austin’s animal shelter.

As reported by the San Francisco Chronicle: Clinton and other Austin animal lovers banded together as FixAustin.org and vowed to change things for the city's animals. At first, they had no luck. "No one wanted to even talk about improving things," he said. Not only were the head of animal control and even the large private animal organizations hostile, but "the City Council wasn't interested; it was like talking to a brick wall."

This is the point when a lot of animal lovers give up. After all, if the local government doesn't care, and the animal welfare groups don't care, and the shelter director doesn't care, what can you do?

But Clinton and other members of the FixAustin.org nonprofit went to battle. The result, so far, has been a reduction in shelter animals killed in Austin from about 50 percent to about 29 percent. The goal is to save the lives of at least 90 percent of the city’s shelter animals.

Last December, Clinton received the Henry Bergh Leadership Award, which salutes individuals for their animal-welfare efforts. (Clinton was one of five recipients of that award in 2009.) As a result of Clinton’s work, members of Austin City Council voted unanimously to direct the city manager to formulate a plan for Austin to implement no-kill policies and procedures.

While Clinton’s advice was definitely pertinent to animal lovers, it was extremely applicable to anyone who would like to work within the system (READ: an uncooperative bureaucracy) to improve a community’s quality of life, including:

  • Don’t only criticize your local government, politicians or bureaucrats, but offer specific alternatives and solutions to current, flawed policies.
  • Find those solutions by researching communities that have successfully met similar challenges with solutions elsewhere.
  • Analyze the power structure in government to determine who can best affect change from the inside.
  • It’s more important to look well-funded, well-organized and professional than to be all those things. Those elements are important in projecting power to those in power.
  • Above all things, don’t give up. Bureaucracies often count on individuals eventually shrugging their shoulders and walking away. When those in government learn that you’re going to stick around, they’ll act.

 

by Robert Tharp at 10:02:41 am

BP Oilspill damages claims to be heard in New Orleans venue a plus for plaintiffs
The national litigation over the Deepwater Horizon environmental disaster will stay in the Gulf Coast region, now that the Judicial Panel on Multidistrict Litigation consolidated the country’s pending cases before U.S. District Judges Carl J. Barbier and Keith P. Ellison. As a result of the consolidation, all injury and economic damages claims related to the oil well blowout will be heard by Judge Barbier of the U.S. District Court for the Eastern District of Louisiana, while all investor lawsuits will be heard by Judge Ellison of the U.S. District Court for the Southern District of Texas.

Houston attorney Mark Lanier, founder of The Lanier Law Firm, filed the motion for national consolidation, and presented his case at a July 29 hearing in Boise, Idaho, before a panel of judges. Lanier argued that efficiency, economies of scale and fairness are achieved by some consolidation of cases against BP, Transocean, Cameron International, Halliburton Energy Services and others.

The New York Times reports: The choice of New Orleans is a significant defeat for BP and other companies being sued over the spill, which had asked the same panel to consolidate cases in Houston, where their headquarters are located — and where, plaintiffs had argued, they might find a friendlier legal environment.

Lanier tells the NY Times the decision to hear the cases in New Orleans bodes well for those negatively impacted by the oilspill: "[T]he decision by the panel was “logical,” but added, “BP is probably beside themselves.” In New Orleans, he said, “It will be very hard for them to find a jury that doesn’t want to hang ’em,” he said.

As for the investor cases consolidated in Houston, Lanier was quoted in a Bloomberg article saying: [T]he securities cases may have more value in the long run than the economic loss cases.”

The Lanier Law Firm represents hundreds of individuals and business owners in claims against the companies responsible for the April 20 explosion in the Gulf of Mexico, and Lanier was among the first attorneys in the nation to file suit against BP following the blast.

 

by Robert Tharp at 9:31:41 am

Gulf residents and businesses need to be ready to document their losses and expect a fair amount of scrutiny if they plan to seek compensation from British Petroleum’s $20 billion compensation fund, says Houston criminal defense attorney Dan Cogdell, who represented people accused of defrauding FEMA after the 2005 Gulf Coast hurricanes. The way prosecutors vigorously pursued those storm cases provides a blueprint for what could happen next, Cogdell says.

“Federal prosecutors filed charges over even a few thousand dollars thought to have been grabbed improperly,” says Cogdell of Cogdell & Ardoin. “Victims who feel massively wronged by what happened need to be careful to document everything in support of their claims, and not let the injustice of the situation lead them to bend rules and potentially wind up facing criminal charges.”

That kind of scrutiny may be difficult on those seeking quick compensation for valid claims, but it’s probably not unjustified, say experts. Even Kenneth R. Feinberg, who was appointed by President Obama to administer the fund, acknowledged that fraud is always a concern.

According to a report in the New York Times,

Nothing can undercut the credibility of a program more than the perception that you’re paying fraudulent claims,’ said Mr. Feinberg, who administered the settlement for victims of the 9/11 attacks and has done similar work for people affected by Hurricane Katrina, the defoliant Agent Orange and the 2007 killings at Virginia Tech University.

The key to fighting fraud, he said, is corroboration of large claims. Of the 7,300 claims processed in the $7 billion 9/11 fund, he said, his team determined that 35 were fraudulent. ‘Some people went to jail, others paid a fine,’ he said.

Emergency claims, which tend to be smaller, will not get that kind of scrutiny, he said. ‘You’ve got to get these payments out quicker, so people can stay in business and pay the light bill and put food on the table.

If history is precedent, though, some fraudulent claims are bound to get through. According to a 2006 report in USA Today, FEMA paid out at least $1 billion in fraudulent claims after Hurricanes Katrina and Rita. Among the Hall of Shame:

• FEMA sent $2,358 to someone who claimed a damaged house in a New Orleans cemetery.

• Another $4,358 went to a Mississippi prisoner who gave officials his correct mailing address — at the prison where he'd been locked up since 2004.

• The agency paid $8,000 for someone to stay in a California hotel for five months, all while paying $6,700 in rental assistance for the same period.

by Kassi Schmitt at 3:53:40 pm

Working mothers everywhere cheered when news broke earlier this year that a little-known aspect of health care reform legislation would grant protections to working mothers and ensure that they are provided with time and resources to pump breast milk during the work day.

Turns out, while the amendment to the Fair Labor Standards Act grants these protections to many working women, one important segment of the workforce is left out of the protections – those so-called exempt employees, executive-level workers who receive a salary rather than an hourly wage.

The legislation puts companies in a difficult position and threatens to alienate a valuable segment of their workforce, says Audrey Mross, who heads the Labor and Employment practice at Dallas’ Munck Carter. “No matter the law, companies need to ask themselves whether they really want to risk angering some of the more powerful, successful women in the building,” Mross says.  “I don’t know if that’s a policy they want to follow.” A recent USA Today article published some general information from a “Fact Sheet” the U.S. Department of Labor’s Wage and Hour Division released that states:

•Employers must provide "reasonable break time" for an employee to express breast milk. Advocates say nursing mothers need about a half-hour break for every four hours worked.

•Employers must be flexible as far as the timing and length of breaks needed by nursing mothers to express milk. Although a bathroom is not a permissible space, employers don't need a dedicated lactation center, as long as a suitable temporary space is available when needed by a nursing mother. Companies with fewer than 50 workers don't have to give breast-feeding breaks if they can show that doing so would impose an "undue hardship."

by Rhonda Reddick at 3:04:31 pm

Imagine, for just a moment, a roomful of lawyers, paralegals and legal staff forbidden from speaking. It’s not a lawyer joke – it’s one of a series of exercises that employees at Gardere Wynne Sewell LLP must complete during diversity workshops staged by the Anti-Defamation League.

There’s plenty to learn within any company about diversity and inclusion, and the ADL has figured out a way to teach this lesson in a memorable manner. For example, in the “Human Time Line” exercise, participants have to figure out how to communicate with each other and physically line up by order of firm seniority – all without speaking a word.

In other exercises designed by A WORKPLACE OF DIFFERENCE®, a program of the ADL’s A WORLD OF DIFFERENCE® Institute, participants explore “Conflict Triggers” where individual flashpoints are discussed openly in order to explore methods of effective responses to conflict.

The idea is that firm employees walk away with a greater sense of camaraderie and heightened morale. As a byproduct, the program enhances recruitment and promotion opportunities, improves client relations and customer loyalty and generally increases productivity. For more than 15 years, Gardere has required that attorneys and staff participate in the program during their first year of employment at Gardere, and the program now serves as a cornerstone for Gardere’s commitment to diversity.

“We are focused on encouraging and fostering diversity of thought, and creating a workplace that is truly inclusive,” says Managing Partner Steve Good. “This program has provided each of us with the tools and resources to better understand the needs of not only our colleagues, but our clients as well.”

by Robert Tharp at 2:00:04 pm

The law of economics and human nature seem to agree on this much: If you pay someone for reporting a crime, you’ll probably catch more criminals. With that in mind, federal lawmakers are hoping that more financial fraud whistleblowers will come forward now that they’re offering them a piece of any ill-gotten gains that are recovered.

Explains the LA Times: Tucked in the massive bill is a provision that for the first time extends a concept long applied to government contracts to the private sector. It gives whistle-blowers a mandatory 10% — and as much as 30% — of what the government recoups in fines and settlements in financial fraud cases. These can include insider trading, false earnings reports and classic Ponzi schemes. To claim a bounty, the whistle-blower must provide the Securities and Exchange Commission with "original information" that reveals the fraud and leads to a successful recovery. 

But Vivienne Schiffer of the Houston office of Thompson & Knight says that a new whistleblower incentive in the new U.S. financial reform package could work against the best interests of companies. Schiffer says that in the past, company employees might have tried to prevent corruption from occurring in the first place. But thanks to the new incentive, now they might simply wait for the right moment to dial regulators.

“Unfortunately, instead of employees working with the company to improve anti-corruption standards, I can see employees looking the other way until they find just the right economic advantage for themselves,” Schiffer says.

The SEC isn’t the only government agency in the business of rewarding whistleblowers. The Tax Relief and Health Care Act of 2006 allows the Internal Revenue Service to pay whistleblowers 15 to 30 percent of all funds recovered by the IRS when they successfully pursue a case. That program is limited to claims against taxpayers whose gross annual income exceeds $200,000 and whose potential indebtedness for taxes, penalties, and interest is more than $2 million.

More recently, the the health care reform legislation of 2011 calls for high-tech bounty hunters to root out health care fraud. According to Bloomberg: The health overhaul makes it easier for citizens to be rewarded for uncovering swindles, cuts the time before medical providers can be accused of withholding overpayments from Medicare and Medicaid, and includes pages of complicated new rules that can be broken.

by Robert Tharp at 9:09:48 am

As a reporter, Mary Flood utilized a rare combination of talents to become one of Texas’ most respected legal writers. She was a seasoned Houston Post newspaper reporter before she decided to go to law school – graduating cum laude from Harvard Law School, no less. Mary practiced law in the Washington, D.C., offices of Morrison & Foerster, and as a solo plaintiff’s attorney in Houston before she returned to journalism. She worked for The Wall Street Journal’s Texas Journal and most recently the Houston Chronicle. Flood also taught Media Law & Ethics at the University of Houston for several years while working as a reporter. 

Covering the legal beat, including the business of law, for the Chronicle, Mary developed an enviable network of sources – from judges to clerks, solos to large firms and everyone in between – and led the Chronicle’s award-winning legal coverage of the Enron scandal. She covered hundreds of trials and penned a Chronicle blog and a hard-copy column about the legal business. NPR listeners came to know Mary as the regular guest analyst who could break down the complexities of the Enron scandal in a way that common folks could understand.

Androvett Legal Media & Marketing is proud to welcome Mary to its Houston office, where she will use her news judgment and knowledge of the Texas legal landscape to help lawyers and their clients frame litigation issues and handle crisis communications and mount effective public relations, marketing and advertising campaigns.

“We’ve worked with Mary as a reporter for many, many years,” says Mike Androvett, founder and President of Androvett Legal Media & Marketing. “She is a tough journalist who always asks the hard questions and leaves no stone unturned. She’s exactly the kind of reporter we prepare our clients for, so she’s the first person we thought of to help grow our Houston office.”

by Robert Tharp at 11:14:21 am

Online travel companies like Hotels.com, Travelocity, Expedia and Priceline have suffered another legal blow as cities across the U.S. challenge the companies’ business models and seek to collect millions in unpaid hotel taxes. 

The latest development: a $21.2 million award for the City of San Diego based on unpaid hotel taxes.

Attorneys from McKool Smith, including Gary Cruciani and Steve Wolens, represented the city with evidence that the online travel companies failed to pay the fair amount of hotel room occupancy taxes. Instead of paying taxes on the room price they charge to consumers, the hotel companies practice has been to pay taxes only on the bulk, wholesale price they pay for rooms before reselling to customers online.

Like other California cities, San Diego required the city to first exhaust its administrative remedies before going to court. After a contested evidentiary hearing that took place in January, the Hearing Officer found that the online travel companies owe the city slightly more than $17 million in unpaid taxes in addition to $4.25 million in penalties. The award was recently disclosed in documents filed by the defendants in a related case.

The San Diego case is one of hundreds filed by cities across the country. In October 2009, McKool Smith won a $20 million verdict for the City of San Antonio and more than 170 other Texas cities in a federal lawsuit based on similar claims. In California, the firm prevailed in another administrative hearing that resulted in a $21 million award for the City of Anaheim in February 2009. McKool Smith also represents Broward County, Florida, and many other governmental entities in similar proceedings over unpaid hotel occupancy taxes.

by Robert Tharp at 4:29:51 pm

 

Consumer debt, it seems, is ubiquitous in the United States. While we all know about the practical reasons to avoid massive credit card debt, the big unknown is the emotional and psychological impact that debt can have on individuals’ personal and professional lives when it spirals out of control.

Last month's murder/suicide involving Coppell Mayor Jayne Peters and her daughter, Corinne, provides a grim glimpse at how debt can magnify stress and cause individuals to lose perspective. According to police reports, Jayne Peters was leading a secret life when it came to her financial situation. She was facing home foreclosure, as well as queries about her personal use of a city-owned credit card. As her financial situation reached a crisis, she fatally shot her teenaged daughter before killing herself. A city review of her municipal credit-card use indicates she spent more than $800 on restaurants between November 2009 and June 2010, when only about $100 of the charges appeared to be related to city business. Other charges included purchases at Anthropologie and Hollister clothiers.

Dallas collections attorney Darrell Cook of Darrell W. Cook & Associates says the Coppell tragedy offers valuable lessons about the stress and anxiety that accompanies people facing high amounts of debt. “Stress levels can go sky high when collections calls start coming, and people must prepare themselves beforehand,” Cook says.

One of the biggest mistakes people make is overreacting to calls from creditors, he says. “Even though most creditors are willing to negotiate, I’ve seen everything from people leaving the country to threatening to commit suicide simply because they couldn’t pay the bills,” he says.

by Rhonda Reddick at 5:09:09 pm

When the Family and Medical Leave Act (FMLA) went into effect Aug. 5, 1993, great hopes were placed on the legislation, one of the first signed by new President Bill Clinton. And with few exceptions the act has been a success in providing job protections for those facing serious health issues or who are responsible for helping seriously ill family members.

However, as the 17th anniversary approaches, it would be easy to assume employers as well as employees now have a good understanding of this important protection. But you know what they say about what happens when you assume anything.

Despite claims by the Department of Labor touting the success of the FMLA and the ease of administering associated leave, a high number of employers continue to struggle with issues such as record-keeping, determining eligibility, and coordinating with other leave and attendance policies under state and federal law. Unfortunately though there seems to always be a small percentage of workers who understand the system all too well, and take the opportunity to use it to their personal advantage.

Finding a way to deal with employees suspected of abusing FMLA protections is a continuing source of frustrations for employers who are otherwise happy to do everything possible to help when their workers need the protected leave, says labor and employment attorney Carrie Hoffman of the Dallas office of Gardere Wynne Sewell LLP. “FMLA provides few rights to employers to curb potential abuse of this very important leave, and when employees abuse FMLA it can wreak havoc on workplace productivity, leaving not only the employer, but also coworkers to suffer.”

by Robert Tharp at 11:29:51 am

While the Deepwater Horizon blowout finally appears to be contained, there’s still a steady flow of new details coming out related to the events leading up to and following the blowout and explosion.

Witnesses testified at a recent hearing held by the U.S. Coast Guard and the federal agency overseeing deepwater drilling that new mechanical and electrical problems plagued the rig. Among other things, crew members were unable to activate emergency systems that might have prevented the rig from burning and sinking to the ocean floor, says Houston attorney Mark Lanier, founder of The Lanier Law Firm.

“The evidence is clear that BP and Transocean were grossly negligent and clearly responsible for the deaths, injuries and financial losses caused by the explosion and rush of oil that’s devastating the Gulf Coast,” says Lanier. “As more facts are revealed, the culpability of these companies and others will only grow."

Now, the Houston Chronicle also is reporting that BP executives say they don't expect to be found grossly negligent, but a letter from Texas officials indicates otherwise. From the article:

According to a letter from Texas Gov. Rick Perry and Attorney General Greg Abbott, BP General Counsel Jack Lynch said in a conference call the company would be found grossly negligent. That would mean BP would face fines of up to $4,300 per barrel spilled under federal environmental laws, instead of the $1,100 per barrel for spills where the party isn't negligent.

And in a recent Reuters article looking at shareholder lawsuits against BP, Lanier had this to say about the company:

"BP was telling the world that they are really a safe company," said Houston-based plaintiffs' lawyer Mark Lanier. "What was being told to the public -- including the shareholders -- was a fraudulent facade."

by Robert Tharp at 11:14:09 am

As the Boy Scouts of America recently celebrated its centennial in Washington, D.C., Houston lawyer and Scout historian Nelson R. Block was on hand for a book signing at the Smithsonian Museum of American History.

Block, a shareholder at Winstead PC, is co-editor of Scouting Frontiers: Youth and the Scout Movement’s First Century. Scouting Frontiers features 15 of the best papers from a 2008 symposium on Scouting history held at Johns Hopkins University, which included such diverse topics as Muslim Scouting in Wales, the growth of Scouting in Israel and Scouting in India and Australia.

Texas Lawyer newspaper recently spoke with Block about his book and the event, which helped kick off the 10-day National Scout Jamboree.

Block has been the pro bono attorney for the Sam Houston Area Council of the Boy Scouts of America for 20 years, and his work in Scouting history has been honored by Scout associations in the United States and Great Britain.