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Androvett Blog

by Androvett Legal Media & Marketing at 10:31:00 am

The Obama administration recently issued an order requiring that public schools permit transgender students to use the bathroom corresponding to their gender identity. The administration threatened to withhold federal funds from schools that don’t comply with this directive. Yesterday, Texas and 10 other states filed a federal lawsuit challenging the constitutionality of the administration’s order. Chad Ruback, a Dallas appellate lawyer, explains:

There is simply not much precedent—one way or the other—as to the rights of transgender individuals. Consequently, it is quite difficult to predict how the states will fare in this lawsuit.  However, by filing their lawsuit in a West Texas federal court, the states have chosen one of the most conservative venues in the country. Wichita Falls, Texas, is not known for its sympathy to transgender individuals or to the Obama administration. However, it is quite possible that this case won’t turn on whether transgender individuals should have certain rights, but instead on whether the administration overstepped its authority by creating such rights by executive decree.

by Androvett Legal Media & Marketing at 10:55:00 am

Texas-based NextSeed is setting its sights on revolutionizing the way small business financing and investing are done nationwide. NextSeed is the first SEC-registered crowdfunding portal under Title III of the JOBS Act.

In October 2015, the Securities and Exchange Commission passed Title III of the JOBS Act, which is intended to facilitate investments by non-accredited investors in private placement deals. Until now, investors who did not meet specific income or net worth qualifications had difficulty investing in private businesses due to strict disclosure requirements. Under the new crowdfunding rules, U.S. private businesses are now able to raise up to $1 million a year by offering securities to investors, including non-accredited investors, through broker-dealers or online platforms operated by funding portals such as NextSeed.

NextSeed was represented in its efforts to secure SEC approval by venture capital and emerging business attorneys from Gardere Wynne Sewell LLP. Led by Gardere partners Adam Hull and Rick Jordan, the firm developed a model that will help the shape the future of online crowdfunding and the way securities and broker-dealer laws, lending regulations, internal structuring and tax-related concerns are addressed. Gardere represents investors and issuers in venture capital and later-stage transactions and has a portfolio of emerging business clients throughout the country.

To celebrate the launch of this new national platform, NextSeed will present an evening of festivities spotlighting small business and investors at 6:30 p.m., Thursday, May 26, at the former downtown Central Post Office in Houston. The newly remodeled small business marketplace is at 401 Franklin Street. The evening will include live music and complimentary food and drink from some of the most exciting new businesses in Houston. RSVPs are required and can be made here

“NextSeed is at the forefront of online funding innovation, and Gardere is honored to represent an organization that is truly the first of its kind in the country,” says Mr. Hull. “NextSeed’s early success is directly attributable to the quality and commitment of its seasoned, sophisticated leadership team. “Co-founder and CEO Youngro Lee and his dedicated team are ideally suited to make NextSeed a breakout success.”

 

by Androvett Legal Media & Marketing at 2:15:00 pm

This weekend the Houston Chronicle reported that Texas Land Commissioner George P. Bush had paid former state employees who were fired nearly $1 million not to sue his office or him personally and to keep quiet about the arrangement.

The news follows earlier revelations that Texas Attorney General Ken Paxton continued to pay three employees from his office after they stopped working for the state. Since severance pay for state workers is not allowed, the payments by both officials are drawing scrutiny. 

Veteran Dallas employment lawyer Rogge Dunn says he believes the agreements likely are improper. 

“The practice of paying government employees after they've been terminated is highly questionable and likely violates the ban on paying state workers severance,” Mr. Dunn says. “This practice should concern taxpayers and regulators alike because it’s so vague and lacks transparency.” 

Mr. Dunn says the payment structure Mr. Bush relied on for former General Land Office employees is particularly confusing since any lawsuits that could have been filed or may still be filed would be handled just like any other claim against the state, which means a settlement or a trial. 

“Without any checks and balances, taxpayers are at risk for abuse of the standard, above-board process by which the state settles claims and lawsuits,” he says. 

 

 

by Androvett Legal Media & Marketing at 1:25:00 pm

Rusty Hardin, Houston-based litigator and founder of Rusty Hardin & Associates, was recently featured in Law360’s Trial Pros series, which you can read here. The nationally known lawyer began his career as a prosecutor in Houston before starting a private practice where he works on both civil and criminal cases and often helps high-profile clients from the sports, political and business worlds.  

Mr. Hardin says pitcher Roger Clemens’ perjury case over allegedly lying to Congress about using performance enhancing drugs was the most interesting he’s worked on:

“I so deeply felt that he was the victim of a congressional witch hunt that observed no rules. The only reason Roger Clemens ever testified before Congress, was because he was unwilling to invoke his Fifth Amendment rights. He was unwilling to refuse because he believed so strongly that he had done nothing wrong. The first trial ended in a mistrial because of government mistakes… but when we got the not guilty at the end of the second perjury trial, it was an incredibly satisfying moment.”

His biggest advice to new trial lawyers:

“To listen and not be so bound up in your trial preparation that you fail to constantly be listening to witnesses in a way that is unencumbered by your expectations. [You] may miss incredible nuggets that both the jury and the facts scream out to be further examined. I’ve never seen a trial where we were not able to elicit favorable information that we never expected and didn’t see coming. Total preparation can free you up… thereby allowing you to be able to pounce on the unexpected.”

The most unexpected or amusing thing he’s experienced while working on a trial: 

“During litigation over the hundreds of millions of dollars in the estate of the late J. Howard Marshall II, the questioning of the one-time Playboy centerfold Anna Nicole Smith took a life of its own. It was interesting to watch a witness say and do whatever outrageous things come to their mind in a totally unstructured way that made cross-examination a wonderfully extemporaneous experience. I asked Anna Nicole how she spent $100,000 a week, she responded with ‘Rusty, it’s very expensive being me.’”

 

by Androvett Legal Media & Marketing at 8:43:00 am

The Ohio Court of Appeals is reviewing a judge’s $11,000 fine of  a lawyer for telling a reporter about an upcoming civil trial. Media organizations already have submitted briefs in support of attorney Peter Pattakos, arguing that the fine levied against him amounts to an unconstitutional infringement on a free press.

“In some extraordinary cases, for good cause, judges have restricted lawyers’ ability to discuss the facts of a case with the media – but this clearly is not one of those instances,” says Dallas appellate attorney Chad Ruback.

“The Ohio judge’s order would effectively prohibit all communication between lawyers and media members in all cases, even communicating such innocuous details as when a trial is scheduled to begin. The Ohio court’s order violates both the lawyer’s right to free speech and the media’s right to free press. If the courts in Ohio do not clarify that such an order is highly inappropriate, then this is the type of ruling that would draw the U.S. Supreme Court’s interest.

Ever since the days of Ben Franklin’s printing press, the public has relied upon the media to stay informed about court proceedings. The media historically have provided a means for average citizens to keep watch over the courts. Our founding fathers were well-aware that, without reasonable media access to information about court cases, the public’s trust in the legal system would quickly erode.”

 

by Androvett Legal Media & Marketing at 4:00:00 pm

Despite an outpouring of negative commentary from the business community and a congressional attempt to block enactment (more on that below), the Department of Labor’s new overtime rule has arrived. The rule is a whopping 508 pages long, but here are the basics gleaned from the summaries by Audrey Mross, who leads the Labor and Employment Section at Dallas’ Munck Wilson Mandala:

  • The effective date is Dec. 1, 2016, so you’ve got some time to get your house in order.
  • The minimum salary to preserve most exemptions (in addition to meeting the proper duties test) will jump from $23,660 to $47,476 per year (lower than expected, based on the proposed regulations).
  • The minimum salary to preserve the exemption for highly compensated workers will rise from $100,000 to $134,004 per year, higher than expected.
  • The minimum salary will reset every three years, starting Jan. 1, 2020. Each new minimum will be announced 150 days in advance (Aug. 1, 2019 for the January 2020 increase).
  • Those minimum salary levels are tied to a percentage of the earnings of full-time salaried workers in the lowest-paid Census region, the South. The non-Highly Compensated Minimum salary is pegged at the 40 percent mark when looking at the weekly earnings of all full-time, salaried workers in the South. The Highly Compensated Employee rate is pegged at 90 percent.
  • Up to 10 percent of the salary minimum for non-HCE workers can be met via payment of non-discretionary bonuses, commissions or incentive pay so long as the payments are made quarterly or more frequently.
  • No changes were made to any of the duties tests.

The administration purposefully pushed the new regulation out now to try to avoid nullification via the Congressional Review Act after the upcoming elections. The Protecting Workplace Advancement and Opportunity Act, which attempts to block the rule and requires further economic impact study, has only 36 sponsors in the Senate and 155 in the House, so not a lot of traction there yet. Today’s announcement means it’s time for businesses to review those job classifications and compensation levels and make some decisions. For example, do you increase the minimum salary, where needed, to preserve the exemption? Or do you concede nonexempt status and manage the overtime liability by clamping down on hours worked? Policies and procedures will need updating, and plan on educating newly nonexempt workers and their managers on unfamiliar topics such as proper record-keeping, compensability of travel time and more.

 

by Androvett Legal Media & Marketing at 12:45:00 pm

All efforts by Texas Attorney General Ken Paxton to block Syrian refugees from coming to Texas have failed. Yesterday he announced that Texas state officials could impose additional security checks on refugees settling in the state. Gordon Quan, a nationally recognized, 30-year immigration lawyer who has a weekly radio show about immigration law, responds to Paxton’s statement:

“I feel exasperated with a Texas  administration that continues to look for boogeymen whether in restrooms, voting booths or with women and children fleeing terrorism. What a waste of time! The only way the state leaders can retain power is to spread fear about the other – gays, minorities and refugees. We are better than this.”  - Gordon Quan, founding partner of Houston law firm Quan Law Group, PLLC.

 

by Androvett Legal Media & Marketing at 3:00:00 pm

Last weekend’s baseball series between the Texas Rangers and Toronto Blue Jays continues to dominate headlines based on the late-game brawl that started with a punch delivered by the Rangers infielder Rougned Odor. Major League Baseball has announced an 8-game suspension for the Rangers star, who reportedly says he will appeal.

Dallas criminal defense attorney Barry Sorrels recently told the Fort Worth Star-Telegram that the violent punch that landed on the jaw of Blue Jays outfielder Jose Bautista may have earned Mr. Odor a suspension, but criminal charges will not be coming given the circumstances. “In sports, if you’re out there, you know this is going to happen and everybody sort of recognizes that this is going to happen,” Mr. Sorrels says. “Just by being out there, you’re kind of consenting to be involved in this.”

Even if Mr. Odor were to face criminal charges based on the fight, which the Arlington Police Department has told media it has no interest in pursuing, he still would likely prevail in court, Mr. Sorrels says. How? He says Mr. Odor’s response to the hard slide directed at his legs would be very easily defended at trial.

“He absolutely had a right to defend himself,” says the Dallas attorney who’s represented a variety of professional athletes during his storied legal career.

by Androvett Legal Media & Marketing at 12:03:00 pm

The head of a group of women lawyers in Dallas is getting behind an effort to create emojis showing women in professional situations – as doctors, lawyers, etc. – in addition to the traditional ones girls see.

“I’d love to see a female judge,” says Dallas Women Lawyers Association President Angela Zambrano. “Think about it. Kids always have their phones and they’re always texting.  This is one of those small things that can make a huge difference in how girls and young women see themselves and what they see as possibilities when they grow up.”

Google has proposed the new professional women emojis to the Unicode Consortium, the organization that creates them. Young girls and teenagers, who use their phones daily to text a smiley face, a heart, maybe a bride to their friends, may soon see a woman as an executive, a farm or factory worker.

Michelle Obama and the feminine products company Always are advocates for better portrayal of women in emojis (Always published a video of girls saying emojis don’t represent them).

Zambrano believes the Google proposal elevates the standing of women in all professions and sends a strong message to young girls and teenagers about women’s roles in today’s society.

“When girls see us in professional roles, they learn at an early age that women deserve equal representation in the workforce,” said Zambrano.

by Androvett Legal Media & Marketing at 1:30:00 pm

Attorneys with the Dallas litigation boutique Aldous \ Walker have secured a confidential settlement in a lawsuit against Texas Health Resources and LHP Hospital Group based on fraud allegations stemming from the companies’ 2010 acquisition of Wilson N. Jones Memorial Hospital in Sherman, Texas. “I am happy that we were able to hold the defendants accountable and send a message that you cannot hurt communities like THR did and abandon them without consequences,” says attorney Charla Aldous of Aldous \ Walker, lead counsel for the foundation. “And I am especially proud that the proceeds from this agreement will go to the Wilson N. Jones Community Foundation to help provide health care to the indigent in Grayson County.”

The civil lawsuit filed in January 2015 on behalf of the hospital’s foundation claimed that Arlington, Texas-based THR and Plano, Texas-based LHP induced the WNJ board of trustees to sell the hospital to them six years ago even though there were higher offers from other potential buyers. The sale was predicated on THR and LHP committing $25 million for capital improvements within five years, in addition to the companies’ promising not to sell the hospital to any outside group for 10 years. However, Ms. Aldous says the capital improvements never reached the $25 million mark. THR and LHP also notified the foundation board that they intended to sell the hospital in September 2014 instead of honoring the previously agreed 10-year ownership pledge. The WNJ Foundation owned the hospital since 1914 until its sale to THR.

by Androvett Legal Media & Marketing at 9:00:00 am

In January, Texas Attorney General Ken Paxton issued an opinion that Texas courts most likely would view paid daily fantasy sports as illegal gambling. FanDuel, a popular fantasy sports website, prohibited participation by all Texans earlier this month as a result. However, leading fantasy sports website DraftKings decided to take a different route by filing a lawsuit against the AG, claiming he caused the company to lose customers and jeopardized its relationship with the Dallas Cowboys.

Dallas appellate lawyer Chad Ruback recently discussed the DraftKings lawsuit in a Bloomberg BNA story that you can read here.

“While [filing a lawsuit] is a risk, it’s not an irrational decision,” Mr. Ruback said. “If ultimately the court rules against DraftKings, at least they have certainty, but right now, there is no certainty. Do they keep pouring money into a business model that very well might be determined illegal in Texas sometime in the future?”

“This is not something that would come up often,” Mr. Ruback said. “You know armed robbery is a crime, murder is a crime, but DraftKings wants the court to rule on its business model. The attorney general gave his opinion, but that’s just one man’s opinion.”

 

 

by Androvett Legal Media & Marketing at 11:48:00 am

The Consumer Financial Protection Bureau – the federally sanctioned consumer watchdog – has unveiled a proposal that would restore customers’ rights to bring class-action lawsuits against financial firms. Dallas attorney Warren Burns of Burns Charest says the proposal will protect “the most important tool in the consumer’s toolbox.” The new rule is expected to give Americans major new protections and deliver a serious blow to Wall Street by removing requirements to take any dispute to arbitration. “For decades, Americans have been duped by a highly coordinated campaign to malign class actions and the lawyers who routinely protect consumer rights,” says Mr. Burns. “The American economic system has always been built on a compromise designed to permit businesses to conduct their activities without excessive regulation, but at the same time to permit consumers to protect their rights through litigation.” The proposed rule, which would apply to bank accounts, credit cards and other types of consumer loans, seems almost certain to take effect since it does not require congressional approval.

by Androvett Legal Media & Marketing at 8:00:00 am

The late music icon Prince certainly isn’t the most famous person to have died without a will and has an estate greater than their debts. Howard Hughes, Jimi Hendrix and Pablo Picasso are among those that also died with substantial estates but no wills. Prince’s lack of a formalized, up-to-date estate plan indicates that the entertainer was much more like the rest of us than we might have ever expected.

By some estimates, more than 60 percent of Americans may not have a recognized will. However, Dallas estate planning attorney Sam Long of Shackelford, Bowen, McKinley & Norton, LLP says those estimates are misleading since everyone arguably already has a will. The question, Mr. Long says, is “whether someone has their own or the state drafts it for them,” as seems to be the case with Prince.

“If you choose the latter route by default, then the resulting beneficiaries and fiduciaries under state laws are not always as one would intend or assume,” says Mr. Long, who also serves as an adjunct professor of wills, trusts and estates at the UNT-Dallas College of Law.

“Having no will also can cause additional expense and complexity, and sometimes a greater tax burden on heirs that could have been prevented with some planning. For many people, private wealth now is passed along by beneficiary designations on IRAs, life insurance policies, multiple-party bank accounts, living trusts and/or other forms of ‘nontestamentary transfers.’ But wills still play a vital role in the succession of property at death.”

by Androvett Legal Media & Marketing at 11:45:00 am

Experienced maritime lawyer Charles Herd of The Lanier Law Firm in Houston says he expects as many 85,000 individual lawsuits will be filed against BP by the middle of this month over damages caused by the 2010 Deepwater Horizon oil spill. Mr. Herd says many people wrongly believe that a 2012 class-action settlement resolved all the Deepwater Horizon claims against BP, but those who did not participate in the settlement can file lawsuits by May 16 under a court-ordered deadline.

Mr. Herd recently discussed the claims of the more than 200 clients he’s representing against BP in a story by The National Law Journal that you can read here. He told the publication that the federal judge overseeing the claims against BP is working to make sure the local residents and small businesses who did not participate in the class-action settlement will get their day in court.

“[The judge has] now turned his attention to what most people thought the case was going to be about from the beginning—all the individuals, mom and pop stores, who were economically and otherwise harmed by the spill itself,” Mr. Herd told The National Law Journal.

by Androvett Legal Media & Marketing at 11:30:00 am

Faced with an apparently unsuccessful deal to reorganize electricity transmission unit Oncor, Energy Future Holdings Corp. may now be staring at a lengthy and expensive bankruptcy fight, according to Sam Stricklin of Dallas’ Gruber Elrod Johansen Hail Shank

“If this transaction is really dead, the bankruptcy case could drag on for a year or more and accumulate gigantic amounts of professional fees,” Mr. Stricklin told the national legal news service Law360. According to the article, professional fees in the EFH case already have reached $300 million, not counting the month-long trial that resulted in EFH's Chapter 11 plan confirmation. Late last week EFH told the Delaware bankruptcy court that the deal at the heart of its Chapter 11 plan could not be concluded due to conditions imposed by Texas regulators. The state’s Public Utility Commission balked at the tax savings from the deal structure not being shared with ratepayers. But Mr. Stricklin says those costs may ultimately wind up being passed onto consumers. “I applaud the commission’s desire to share some of those tax savings, but they may be cutting off their nose to spite their face,” he says.