January 12, 2015 by Dave Moore at 4:00:00 pm
An upcoming United States Supreme Court case – Texas Department of Housing and Community Affairs v. The Inclusive Communities Projects Inc. – demonstrates the ripple effect the Court can have on how business is done in the United States.
On Jan. 21, the Court will hear arguments over whether Texas discriminates and violates fair housing laws when it decides where federally subsidized low-income affordable housing developments are built. But in agreeing to hear the case, the Supreme Court has agreed to clarify the use of a principle called the “disparate impact” theory.
The disparate impact theory suggests that discrimination can still occur even if an institution’s business policies are designed to avoid prejudice. If those policies are shown to disproportionately impact one protected group more than another, the theory states that discrimination has occurred, despite efforts to avoid it.
“Because the federal government uses the theory in settling fair-lending cases, this decision could affect not only affordable housing in the U.S. but also the automobile finance industry and banking industry," says Dallas attorney John Shackelford, managing partner at Shackelford, Melton, McKinley & Norton, L.P.
Shackelford, who has more than 20 years of experience representing financial institutions, automobile dealerships and real estate developers in land acquisition, tax-credit acquisition and approval matters, can readily see the ripple effect that the Court's decision can have on major sectors of the U.S. economy.
December 11, 2014 by Dave Moore at 3:00:00 pm
From Texas' multiple Ebola diagnoses to an indicted governor to lawsuits over immigration policy, the Lone Star State once again was at the forefront of the country’s top legal news for 2014. Following are the state’s top legal news stories this year as determined by the staff at Androvett Legal Media & Marketing.
10. Mexico Announces Energy Reform
After three-quarters of a century, Mexico’s federal government moved to end its complete control of the country’s energy production in 2014. A bill signed by Mexican President Enrique Pena Nieto in August set numerous wheels in motion: The government now is establishing ground rules for private investment in energy while sorting out what oil fields should remain with Mexico’s state-owned oil company Pemex. The move toward privatization has spurred Texas energy companies and law firms alike to prepare for an increased number of transactions and greater activity in exploring Mexico’s energy potential.
9. Adrian Peterson Pleads No Contest
In a case that grabbed international headlines and roused spirited debate over corporal punishment, NFL standout running back Adrian Peterson pleaded no contest to a Texas charge that he injured his 4-year-old son while disciplining him in May 2014. Prosecutors alleged that Peterson struck his son with a thin tree branch, or “switch.” Peterson remains suspended by the NFL while the league decides when he should return, with media outlets predicting that Peterson will not return to the field this season. An East Texas native, Peterson holds numerous NFL records, including the most yards rushed in a single game, and the second-most yards rushed in a single season.
8. Undocumented Immigrant Children Pouring In
Texas made national headlines in July when immigration officials announced a sudden surge in unaccompanied children crossing the Texas-Mexico border. The state’s Office of Refugee Resettlement reported handling more than 42,000 children in the first half of 2014, compared to only 24,668 in all of 2013. Communities across the state offered to set up facilities to accommodate the children, who are fleeing from gang violence, sexual assaults and kidnapping. The influx of immigrant children further intensified political arguments over U.S. border-enforcement policies, with lawsuits coming from Texas and other states.
7. Governor-Elect Abbott Continues to Sue Feds
Prior to the July 2013 launch of his campaign for Texas governor, Attorney General Greg Abbott proudly claimed, “I go into the office, I sue the federal government and then I go home.” Abbot has sued the federal government more than 30 times. In early December, he joined 17 states in suing President Barack Obama for his executive order suspending deportations of immigrants with clean criminal records. Abbott and the co-plaintiffs say they have standing to sue because state taxpayers will be left on the hook for expenses related to health care, education, and police to handle illegal immigrants who now have federal permission to stay in the U.S. without permanent citizenship.
6. Lethal Injections Continue Despite Drug Controversy
As a result of highly publicized shortages of the drugs used for legal injection, Ohio, Arizona and Oklahoma have begun relying on various cocktails of drugs to execute those sentenced to death. However, Texas continued to find a way to obtain pentobarbital for the same purpose even though the manufacturer stopped sales in 2011. While many anesthesiologists say a single, fatal dose of pentobarbital – the same drug used to euthanize animals – likely is painless, critics question whether the drug is actually used by Texas since the state won’t disclose its source. State District Judge Darlene Byrne of Austin ordered the state to identify its lethal drug supplier in December after ruling the information should be public. Related lawsuits continue to work their way through Texas courts. Since 2012, Texas has fatally injected more than 40 inmates, at least three times more than any other state.
5. BP Slapped for Gross Negligence
In September, U.S. District Judge Carl Barbier of New Orleans issued gross negligence findings against energy giant BP Plc. in a criminal case stemming from the 2010 Deepwater Horizon explosion, which killed 11 people and leaked 208 million gallons of oil into the Gulf of Mexico. The London-based oil company presumably hoped for a negligence finding, but the judge completely rejected BP’s arguments, clearing the way for possible fines of up to $18 billion. The judge found BP largely responsible before assigning lesser blame to rig operator Transocean and Houston-based contractor Halliburton. BP previously pleaded guilty to 14 federal charges for the explosion and for obstructing a related Congressional investigation. Now, BP has until January before it will hear how much the court says the company should pay.
4. Denton Bans Fracking
Denton’s voter-approved citywide ban on fracking unleashed a firestorm of litigation and heated debate over land and property rights in a state whose economy is largely built on oil and gas. In early November, 58 percent of Denton’s voters approved a referendum that drastically restricts drillers’ efforts to employ hydraulic fracturing of oil and natural gas. Within hours of the vote, the Texas Oil and Gas Association and the Texas General Land Commission filed lawsuits attempting to declare the ordinance illegal based on claims that municipalities do not have the authority to govern drilling. Since then, the Natural Resources Defense Council and other interest groups have aligned with Denton voters to support the ban in the ongoing dispute.
3. Voter ID Law Approved
In the balancing act between eliminating voter fraud and potentially disenfranchising voters, the U.S. Supreme Court upheld a 2011 Texas law requiring voters to present a valid photo ID at polling places. The high court’s unsigned opinion did not spell out the reasoning for upholding the law, but Justice Ruth Bader Ginsberg did not hide her opinion in an accompanying dissent. “The greatest threat to public confidence in elections . . . is the prospect of enforcing a purposefully discriminatory law, one that likely imposes an unconstitutional poll tax and risks denying the right to vote to hundreds of thousands of eligible voters,” Ginsburg wrote.
2. Ground Zero for Ebola
Infectious disease experts knew the United States eventually would see its first case of Ebola, but the when and where were unknown. The answer came in September, with Presbyterian Hospital of Dallas as ground zero. Thomas Eric Duncan’s well-publicized early dismissal from the hospital’s emergency room and his death in early October dominated international headlines. The nurses who treated him, Nina Pham and Amber Joy Vinson, were diagnosed with Ebola and later recovered. With the media and public focused on the hospital’s alleged lack of protocols and proper equipment for handling the deadly disease, Presbyterian Dallas ultimately apologized to Duncan’s family and reached an out-of-court settlement for an undisclosed amount.
1. Gov. Rick Perry Indicted
Texas political wonks got a crash course in criminal justice in August with the indictment of Gov. Rick Perry on a first-degree felony charge for allegedly abusing his power and a third-degree felony claim of coercion. The charges came after a Travis County grand jury found a potential smoking gun when Perry made good on his threat to cut funding for the state’s Public Integrity Unit. Travis County District Attorney Rosemary Lehmberg leads the unit, which lost funding after the DA refused Perry’s ultimatum that she resign following her arrest for driving under the influence. A month after the indictment, Perry’s political action committee printed T-shirts with his mug shot. Perry’s well-heeled defense team has vowed to fight the charges until the bitter end.
October 28, 2014 by Dave Moore at 3:30:00 pm
Far too often, the practice of law focuses on fixing blame and seeking cash awards, rather than solving problems. In a column recently published by Texas Lawyer, Bill Chamblee discusses how Texas Health Presbyterian Hospital Dallas – which treated the first U.S. Ebola patient, Thomas Eric Duncan – became the proving ground for how to take ownership of medical mishaps.
Amidst all the panic, hysteria and moral indignation, leaders at Presbyterian Dallas did something unexpected by personally apologizing to Duncan's fiancée, Louise Troh, and taking responsibility for what happened.
"This official said the hospital was 'deeply sorry' for the way this tragedy played out," Troh said in the statement released to the media. "I am grateful to the hospital for this personal call. I am grateful to God that this leader reached out and took responsibility for the hospital's actions. Hearing this information will help me as I mourn Eric's death."
Suddenly, the discussion no longer focused on how Presbyterian Dallas wronged a West African carrier of Ebola and threatened the public health. The hospital's apology shifted the conversation to the importance of caring for people such as Mr. Duncan who have contracted the Ebola virus. Most would agree that it was inevitable that Ebola would appear somewhere in our country, but the important question was how our health care providers and government officials would respond.
Chamblee, who has defended health care providers for 29 years, adds that medical professionals frequently overlook the fact that a kind word, a thoughtful gesture and an open ear can prevent lawsuits from patients who are unhappy about a medical outcome.
September 22, 2014 by Robert Tharp at 4:40:00 pm
More than a few called Dallas attorney Mark Werbner quixotic when he first posed a complex legal argument more than 10 years ago on behalf of a group of American victims of terror attacks in Israel. Over the subsequent decade the civil action would extend its reach around the world with claims that Arab Bank, an international Jordan-based bank, should be held responsible for a wave of suicide bombings in the early 2000s that left several Americans dead or wounded.
On Monday in a Brooklyn federal courtroom – more than five weeks after jury selection began in the long-awaited trial – jurors returned a verdict for Werbner’s clients, finding that the bank should be held responsible.
Writes the AP this afternoon:
The high-stakes legal offshoot of the Israeli-Palestinian conflict had pitted American victims of terror attacks in Israel in the early 2000s against an international bank with several branches in Gaza and the West Bank. The victims sued in 2004, accusing the bank of knowingly helping Hamas fund a "death and dismemberment benefit plan" for martyrs from the occupied territories. The civil action marked the first time a bank had faced a trial under the Anti-Terrorism Act, which allows victims of U.S.-designated foreign terrorist organizations to seek compensation. The U.S. State Department designated Hamas a terrorist group in 1997.
During closing arguments last week, Werbner, co-founder of Dallas-based Sayles Werbner, acknowledged the challenge in bringing a case of such importance to trial.
“What am I doing here? What difference will it make?” he told jurors. “You know what’s going on in the world since then. It’s not any better. You know what we’re facing.”
The argument's complexity was obvious to international media watching the trial.
The burden of proof was high, notes the New York Times. The plaintiffs had to prove that the terrorist attacks were indeed conducted by Hamas, and that the bank’s support of Hamas was the “proximate cause” of the events. In addition, the plaintiffs had to demonstrate that their injuries were “reasonably foreseeable” as a consequence of the bank’s acts.
After 10 years of litigation and a five-week trial, the jury apparently found that the plaintiffs met the legal threshold, and ruled that the bank was liable. A separate hearing will be held to determine damages.
September 17, 2014 by Dave Moore at 12:00:00 am
There’s no doubt that prearranged bankruptcies have become popular in the realm of corporate reorganizations. There are plenty of reasons: many key players are incorporated into the process of settling debt issues; they’re much quicker and (as a result) less expensive than traditional bankruptcies; and the company can continue to operate throughout the process.
But, as Dallas bankruptcy attorney Rakhee Patel wrote (paywall-protected link here) recently for Texas Lawbook, something unanticipated happened in the prearranged bankruptcy planned for Energy Future Holdings (EFH) and its subsidiaries:
From the start of the bankruptcy process, one of EFH’s main goals has been a tax-free spinoff of its TXU Energy division. However, an unexpected wrinkle arose when a competitive bidding war emerged relating in part to the Oncor division, resulting in EFH potentially having more value than initially thought.
Patel, a partner in the restructuring and bankruptcy section of Shackelford, Melton, McKinley & Norton, LLP, indicates that the increased value of the Oncor division effectively nixed the prearranged bankruptcy planned for Energy Future Holdings, very likely increasing the length and expense of the bankruptcy.
The gain in Oncor’s value in the EFH reorganization might reinforce the maxim: Good things come to those who wait.
July 15, 2014 by Dave Moore at 12:00:00 am
One in seven people worldwide use Microsoft Office. Civilized free time is dominated by Netflix and Facebook. Many of our communications depend on smartphones.
Since modern society leans so heavily on software that operates those and other technological wonders, many had hoped that the U.S. Supreme Court would define what sort of software deserves legal patent protection when it decided Alice Corp. v. CLS Bank.
To some degree, it did just that.
“The Supreme Court’s ruling … confirms that United States patent laws will continue to protect investors who create truly innovative software,” Dallas patent litigation attorney Adam Sanderson told Texas Lawbook’s Jeff Bounds recently. In the case of Alice Corp., however, the Supreme Court determined that abstract ideas aren’t patentable, even if they involve the use of computers to help apply them. However, the court stopped short of defining what is patentable.
“Software presents a special challenge to courts because it has not always been easy to recognize when a software engineer has done enough to ‘transform’ a mere idea into a new and useful invention,” Sanderson, a partner at Dallas-based Reese Gordon Marketos, told Lawbook.
Since the question of what’s a truly innovative patent has yet to be answered, it’s likely the Supreme Court will face the question again.
May 13, 2014 by Robert Tharp at 3:15:00 pm
Popular comedian and top-rated iTunes podcaster Adam Carolla is going on the offensive to defend himself in a suit filed against him in the U.S. District Court for the Eastern District of Texas by so-called patent troll Personal Audio Inc. The company claims Carolla is infringing its patent for podcasting technology. But Carolla says he will not settle, and he’s calling on crowd funding to raise money for his defense.
Writes Inside Counsel:
James Logan, founder of PersonalAudio, claims he has never made a podcast, but has helped create the medium of podcasting in 1996 – and he has the patents to prove it. According to USA Today, in a legal battle, PersonalAudio is suing comedian Carolla's ACE Broadcasting, two other podcasters and networks Fox, CBS and NBC, claiming they are infringing on his intellectual property. According to The Economist, PersonalAudio once owned a patent on customized cassette tapes with current news. It updated that patent in 2009 to cover any serialized podcast that can be downloaded from a specific URL.
Before the trial begins in September, Carolla is raising money for legal fees against patent trolls. According to Carolla, he needs $1.5 million to face PersonalAudio in an East Texas courtroom that has been favored by patent litigants. So far, Carolla has pulled in just over $370,000 on the Fundanything.com, including a $20,000 donation from e-commerce giant Amazon.
“Carolla argues that Personal Audio is not a legitimate patent owner enforcing its ‘technology ownership rights’ but rather an entity formed for no redeeming industry purpose with no intention to ever manufacture or market the patented invention,” says intellectual property attorney William Munck of Dallas’ Munck Wilson Mandala. “Carolla’s argument strikes a nerve because what he argues Personal Audio is doing feels un-American. The U.S. patent system is broken. The Patent and Trademark Office issues too many fundamentally flawed patents that years later place tremendous financial burdens on U.S. businesses defending against cost-of-defense patent trolls.”
April 11, 2014 by Dave Moore at 12:00:00 am
In a recent interview published in the Dallas Business Journal, Dallas trial lawyer Bill Chamblee explained the 76 percent spike in the number of cases before the Texas Medical Board.
Chamblee, who handles cases on behalf of physicians facing actions before the Texas Medical Board, says that when Texas passed laws that capped noneconomic damages in medical malpractice cases, it also expanded the enforcement powers of the state.
The Dallas Business Journal’s Bill Hethcock writes:
Once tort reform passed, measures such as a $250,000 cap on noneconomic damages took away plaintiff’s lawyers’ financial incentive to pursue cases, Chamblee added.
“Even though a plaintiff’s attorney today might believe there was negligence on the part of a health care provider, the economics aren’t there to pursue it,” he [Chamblee] said. “So the plaintiff’s lawyer will tell the client, 'The only real avenue is to file a board complaint.’”
Texas isn’t alone in this phenomenon. Other states that implemented tort reform, including California, Florida and others, have seen an increase in medical board complaints and investigations as well, said Chamblee, managing partner of Chamblee, Ryan, Kershaw & Anderson.
The winners in this sea change?
“Tort reform primarily — not exclusively, but primarily — benefited health care professionals,” Chamblee told Hethcock.
March 7, 2014 by Robert Tharp at 4:10:00 pm
KTRK-TV in Houston recently piggybacked on the popularity of ABC’s hit show “Scandal” by seeking out a real-life local example of the show’s brilliant fixer, Olivia Pope. They found her in Androvett Legal Media’s own Mary Flood.
In a segment that aired on the opening night of the show’s new season, KTRK’s Melanie Lawson spoke with Mary about the show (she’s a big fan), the challenges of crisis-related public relations, and how her real-world professional life differs from what viewers see on “Scandal.”
While Mary hasn’t had to deal with any PR-crises involving dead bodies (yet), she routinely helps clients navigate the media gauntlet. The stakes can be high, often involving professional reputations or critical business conflicts and criminal or ethical questions. Discretion is at a premium here, so anyone wanting juicy stories will have to stick to “Scandal.”
Those who find themselves in a jam listen to Mary because she has the professional bona fides – she’s a Harvard-trained lawyer and a former nationally respected news reporter – but also because she doesn’t put any shellac on her advice.
“We find out what the true story is, and we remind them that you never, ever, ever lie,” she tells KTRK.
A full list of our crisis-communications advice can be found here.
March 4, 2014 by Robert Tharp at 3:30:00 pm
Business analysts are expecting a jump in the number of H-1B visa applications filed this year by U.S. companies trying to fill coveted science, technology and engineering jobs. As many as 160,000 or more foreign-worker visa applications are expected when the H-1B visa filing season begins April 1. While job offers are plentiful, the H-1B applicants will be vying for 85,000 available visas this year. Businesses must seek the visas because U.S. universities are simply not turning out enough U.S. students with these specialized skills.
“It just shows the U.S. still lags behind other countries when it comes to an emphasis on educating American-born students in computer science, math and other areas," said Dallas immigration attorney Marc Klein of Thompson & Knight in an interview with CNBC.
"So many get advanced degrees at American universities that natural-born citizens don't receive, and (which) are needed for the hard-to-fill jobs," he said. "They go home, and yet so many of them make up the number of applications to work here."
Writes CNBC: It's not just the areas of technology and science that are seeing a need for foreign-born workers in the U.S., Klein added. He said he's processing applications for jobs in accounting, advertising and architecture.
H-1B visas have been part of immigration reform talks that have stalled in Congress, with many on Capitol Hill and the business community— especially those in high-tech industries—urging the government to raise the 85,000 limit or remove it completely. With reform stalled in Congress, the quota will remain for now.
Some U.S. business leaders say they have no problem finding American-born workers for the high-tech jobs that often go to foreign nationals. However, Klein said the economics indicate otherwise.
"It's not cheap to try and get H-1B visas," he said. "Companies don't really want the expense if they can avoid it. But they're having trouble avoiding it."
February 20, 2014 by Robert Tharp at 11:28:00 am
The U.S. Supreme Court will hear two cases next week in which businesses are seeking to recover attorney fees for the cost of defending frivolous lawsuits. The two cases – Highmark Inc v. Allcare Health Management Systems, Inc. and Octane Fitness, LLC v. Icon Health & Fitness, Inc.– ask the Court to revisit the Patent Act and the Federal Rules of Civil Procedure and invoke “loser pays” fee-shifting in patent disputes.
“Making fee-shifting more common in patent litigation could be one tool to help control the rise in filings from patent trolls or so-called non-practicing entities,” says intellectual property attorney Matthew Anderson of Dallas’ Munck Wilson Mandala.
Indeed, patent infringement lawsuits filed by non-practicing entities have risen sharply, costing U.S. businesses dearly. According to RPX Corporation, patent trolls in 2012 filed more than 2,900 infringement lawsuits nationwide (nearly six times higher than the number in 2006).
The cost of defending against bogus patent litigation reached $29 billion in 2011, according to a Boston University study. Lawsuits by "patent assertion companies" made up 61 percent of all patent cases filed in 2012, according to the Santa Clara University School of Law.
Meanwhile, this litigation trend is ncreasingly targeting smaller businesses. In 2005 patent trolls sued 800 small firms (those with less than $100 million annual revenue), the number growing to nearly 2,900 such firms in 2011; the median defendant's annual revenue was $10.3 million.
“Even frivolous patent lawsuits can be extremely expensive for businesses to defend against," Mr. Anderson says. "The Court here has an opportunity to expand the definition of what constitutes an ‘exceptional case’ that allows fee-shifting. A broader application of fee-shifting could discourage trolls from filing suits that are frivolous or primarily aimed at ‘shaking down’ the defendants for a quick settlement.”
January 17, 2014 by Robert Tharp at 11:55:00 am
Now that adults over age 21 in Colorado can purchase and consume marijuana without fear of prosecution under state law, hospitality industry entrepreneurs are already gearing up for a boom in what they’re calling “weed tourism.” Imagine just 5 percent of the state’s 60 million visitors testing the newly decriminalized recreational marijuana market – that’s roughly 3 million individuals that Slate describes as “wealthy old stoners” on the equivalent of a Napa Valley wine tour.
But it’s not that simple. The Colorado law creates confusion for marijuana tourists who might not realize that while smoking small amounts of marijuana will not get you arrested in Colorado, the actions may run afoul of employment policies back home. After all, evidence of a weekend of smoking weed in Colorado could still show up in employment-related blood tests 30 days later. Many job candidates and employees in certain occupations must undergo periodic drug screenings. Meanwhile, workers involved in on-the-job accidents are often required to submit to a drug test. Even if an employee isn't intoxicated at the time of the incident, a drug test that returns positive for marijuana could jeopardize a career.
"Employers everywhere should view this as an opportunity to review HR handbooks and policies to ensure that, for example, policies are crystal-clear for workers who may be subject to for-cause, post-accident or random drug tests," says employment attorney Audrey Mross of Dallas' Munck Wilson Mandala. "Making sure that workers know and understand employment policies is far preferable to being surprised by consequences that can end a career. A well-written handbook is a great medium for conveying that information."
December 18, 2013 by Dave Moore at 9:30:00 am
There certainly was no shortage of angst and drama in the Texas legal scene during 2013. From the state's new restrictive abortion law taking effect to billionaire Mark Cuban escaping insider-trading charges, the Lone Star State once again was home to some of the nation's most intriguing legal news. Following is a list of the year's top Texas legal stories as determined by Androvett Legal Media & Marketing, which specializes in work for law firms and legal clients:
1. Perry signs voter ID law
After a six-year legislative battle, Gov. Rick Perry signed Texas' version of a voter ID law. Effective Oct. 21, voters now must present one of five forms of identification before they can cast a ballot. Supporters argued that the law was needed to curtail voter fraud. Opponents argued that voter fraud is rare, and that the new law's actual intention is to reduce voter turnout, mostly among Democrats.
2. Texas abortion law survives appeals
Texas' new abortion law survived a significant challenge when the U.S. Supreme Court declined to hear an appeal in November. Shortly after an earlier injunction that blocked the law was lifted, Planned Parenthood reported 12 of Texas' 36 licensed abortion providers stopped offering abortions. The case now will be heard by the 5th U.S. Circuit Court of Appeals in January.
3. New Chief at Supreme Court of Texas
After 25 years on the bench, Wallace Jefferson stepped down as chief justice of the Supreme Court of Texas in October. Gov. Rick Perry selected Nathan Hecht – who has served for 24 years on the court – as Jefferson’s successor. Hecht's appointment caused many pundits and other observers to speculate that the court won't change its pro-business stance in the near future.
4. Harris County DA Mike Anderson dies; widow appointed successor
In May 2013, after serving just five months in office, Harris County District Attorney Mike Anderson announced he had cancer. Four months later, he passed away, leaving his seat vacant. Gov. Rick Perry appointed Anderson's widow, Devon Anderson, to complete her late husband's unexpired term. Anderson spent 12 years as a felony criminal court judge after serving 16 years as a prosecutor. The new DA previously worked as a criminal defense attorney and served as a state district judge.
5. American Airlines merger with US Airways approved, DOJ drops case
Air travelers breathed a collective sigh of relief in November when the Department of Justice dropped its antitrust case against American Airlines and US Airways, effectively approving the two airlines' merger. Key to the DOJ's decision were concessions by both airlines to give up gates at Reagan National Airport near Washington, D.C., LaGuardia Airport in New York, and others. That compromise eased the federal government's fears that the merger will result in a monopoly.
6. First phase of the DeepWater Horizon case concludes, first criminal trial starts
Energy giant BP and its partners, Transocean Ltd. and Halliburton, went to civil trial in February on charges that they were responsible for causing one of the biggest environmental catastrophes in U.S. history. The second phase of the trial began in late September, focusing on the extent of the damage and which party/parties were responsible. The final decision could result in more than $13 billion in Clean Water Act penalties, and possibly tens of billions more in punitive damages. Earlier this month, the first criminal trial started for a former BP engineer, who faces obstruction of justice charges.
7. Jury clears Mark Cuban of insider trading
Dallas Mavericks owner and billionaire Mark Cuban stood his ground against the Securities Exchange Commission, which claimed he used insider information to avoid a $750,000 stock loss in one of the year's highest profile insider trading cases. Cuban’s victory lap following the October verdict was more somber than his exuberant celebration of the Mavs' World Championship in 2011. "This is a horrific example of how government does work," Cuban told reporters who gathered around him following the verdict. "I won't be bullied. I don't care if it’s the United States government."
8. Houston-area judges under fire
It would be an understatement to say that 2013 was a bad year for Houston-area judges. County Court-at-Law Judge Christopher Dupuy resigned after pleading guilty to abuse of office and perjury. Houston federal Judge Lynn Hughes and Judge Edith Jones of the 5th U.S. Circuit Court of Appeals both came under fire for racially-charged comments. And Harris County Family Law Judge Denise Pratt was accused of falsifying court records.
9. Enron's Jeff Skilling’s sentence reduced, appeals end
The vestiges of the Enron collapse continued to wash ashore in Texas courts in 2013. In June, a federal judge trimmed 10 years from the 24-year sentence for Enron executive Jeffrey Skilling, saying trial Judge Sim Lake erred in determining Skilling's sentence. The resentencing will free up about $41 million in assets from Skilling's estate to be distributed to victims of the fraud. This includes about $3 million from the sale of a Dallas condominium and a Houston home Skilling owned, funds from bank accounts, and $5 million he posted as bond when he was first indicted.
10. Lance Armstrong admits drug lies, unleashes torrent of litigation
Embracing the newfound American tradition of "televised confession makes everything OK," Lance Armstrong admitted to Oprah Winfrey on national television that he'd lied for 10 years about being drug free when he racked up seven Tour de France victories. Soon after his January confession, former Armstrong sponsors started lining up to claim that the disgraced athlete committed fraud when he accepted their money while claiming to be clean. Among those is the U.S. Postal Service, which seeks $100 million.
11. Kaufman County district attorneys assassinated
First, Kaufman County assistant district attorney Mark Hasse was gunned down in broad daylight near the county courthouse. That case was still unsolved when Kaufman County District Attorney Mike McLelland and his wife, Cynthia, fell in a hail of gunfire in their own home two months later. The horrific murders sparked rumors that white supremacists were waging open war against the Texas legal community before authorities arrested former Kaufman County Justice of the Peace Eric Williams and his wife, Kim, on murder charges. Investigators believe the hits were in retaliation for Williams' dismissal from his JP job for allegedly stealing county property.
12. Brownsville courthouse corruption
A multi-year federal investigation into corruption at the Cameron County courthouse led to the December sentencing of Austin attorney Marc Rosenthal to 20 years in prison for racketeering and bribery. Former state district Judge Abel Limas also began serving his six-year prison sentence in December for racketeering. Limas' cooperation with federal authorities led to guilty pleas and convictions of numerous defendants, including former Cameron County District Attorney Armando R. Villalobos, who was convicted of racketeering, conspiracy to commit racketeering, and five counts of extortion.
13. Michael Morton Law to take effect
It was a nightmare scenario worthy of a Hollywood script: After serving 25 years for murdering his wife, Michael Morton was freed from prison after it was revealed that his trial prosecutor had buried evidence of his innocence. In the intervening years, Morton's prosecutor, Ken Anderson, became judge of the 277th District Court in Williamson County. Anderson eventually was charged with contempt of court over his misdeeds, earning him 10 days in jail, a nominal fine, 500 hours of community service and loss of his law license. On Jan. 1, the Michael Morton Act will require prosecutors in criminal cases to disclose all evidence in their files to defense lawyers.
December 12, 2013 by Robert Tharp at 12:15:00 pm
Benjamin Stewart, who recently joined the Dallas complex commercial litigation boutique Bailey Brauer PLLC, joined KLIF-AM’s Kurt Gilchrist to talk about the ongoing kerfuffle between Snuffer’s Restaurant and Pat Snuffer, the restaurant’s former owner.
Mr. Snuffer, who lost control of the Snuffer’s name after Snuffer’s Restaurants filed for bankruptcy earlier this year, planned to open a new Snuffer’s in the original lower Greenville Ave. location. However, the new owner of Snuffer’s Restaurants, Firebird Restaurant Group, demanded that Mr. Snuffer stop using the Snuffer’s name. Consequently, Mr. Snuffer changed the name of his new restaurant to Pat’s Burgers & Cheddar Fries. Problem solved, right?
Snuffer’s Restaurants then filed suit and obtained a TRO against Mr. Snuffer to prevent Pat’s from opening.
The lawsuit makes many complaints against Mr. Snuffer, but the toughest one to prove may be the trademark and trade dress violation claims, said Mr. Stewart, whose extensive litigation experience includes claims made in conjunction with bankruptcy proceedings.
“The Snuffer’s brand isn’t as well-known as some of the others,” he explained, referencing McDonald’s Golden Arches and the brown background and distinctive blue font on a Snickers candy bar wrapper. “You know what a McDonald’s looks like. When you drive past those arches, you know . . . Snuffer’s hasn’t reached that level.”
Neither Mr. Stewart nor Bailey Brauer PLLC are involved in the Snuffer’s litigation.
November 25, 2013 by Dave Moore at 3:50:00 pm
The forced relocation of Native American tribes from their ancestral homes in Georgia, Florida, Alabama, Mississippi, North Carolina and Tennessee in the 1830s is considered by many to be among the most shameful chapters in American history. Suffering from exposure, disease and starvation, thousands died along the “Trail of Tears” en route to present-day Oklahoma.
Given the tragic connection, the run-through banner the cheerleaders from Alabama’s McAdory High School displayed at a recent football playoff game was especially troubling. Facing the Pinson Valley Indians, the sign’s message was “Hey Indians, Get Ready to Leave in a Trail of Tears.”
The principal at McAdory issued an immediate apology, claiming that the squad’s sponsor who is tasked with reviewing banner content was out on maternity leave and that role unintentionally had gone unfilled.
Dallas attorney Tom Brandt of Fanning Harper Martinson Brandt & Kutchin, P.C. cites the McAdory controversy as a clear example of why school districts need to have the authority to oversee what signs are displayed at school-sponsored events. Brandt represents Kountze ISD in ongoing litigation involving the right of approval for that district's banners after its cheerleaders began using Christian themes for their spirit signs.
"If a district loses the right to review and approve school-sponsored messaging, it opens the door to situations such as what happened in McAdory," he says. "In Alabama, the district has acknowledged that the absence of adequate district oversight helped create a situation where a glaringly offensive message was brought to the football field."
October 15, 2013 by Amy Hunt at 11:04:00 am
If you’re a divorced parent receiving child support payments, you might be getting a little more money now than you did a few months ago. That’s thanks to the Texas Legislature updating the Texas Family Code with changes that took effect Sept. 1.
"This could mean an extra $210 a month for one child, which is a lot to parents struggling to make ends meet,” says Brad LaMorgese, a partner in the Dallas Family Law boutique McCurley Orsinger McCurley Nelson & Downing, L.L.P. "Of course, there are possible exceptions to the child support guidelines, so be sure to talk to your attorney if your needs exceed those envisioned by the Family Code.”
There has long been a cap on the amount of income the parent paying child support must pay. Before Sept. 1, the cap was $7,500 a month. Using the standard percentage formula under child support guidelines, that meant the most a parent would pay in support for one child would be 20 percent of $7,500, or $1,500 a month. The updated cap is now $8,550, meaning a parent paying child support for one child could now pay up to $1,710, 20 percent of $8,550.
Under the guidelines, 5 percent is added for each child with a maximum of up to 40 percent for five or more children. (It’s important to note that adjustments can be made if the non-custodial parent has children from other marriages or relationships.)
October 10, 2013 by Amy Hunt at 10:30:00 am
A May 2013 ruling by the Texas Supreme Court temporarily put a chill up the collective spine of the Texas Family Law bar when the court declared in Tedder v. Aldrich that attorney fees and expenses in a divorce case shouldn’t be considered part of one spouse’s statutory requirement to support the other while the divorce is pending.
Traditionally, Texas courts have considered such expenses to be “necessaries” and often ordered one of the parties to pay them. The Tedder ruling, however, meant that those fees would no longer fall under the heading of “necessaries.” That opened up the possibility that they could end up being the responsibility of the lesser-earning spouse, who may not have the money to pay them.
Fortunately, the Texas Legislature was in session when the high court handed down its ruling and amended the Family Code to say that such expenses may be included as “necessaries,” thus restoring balance to the universe. Kind of.
"We're glad the Legislature and Gov. Perry addressed the availability of legal fees in divorce, but the courts still have a lot of discretion to order – or not order – legal fees to be paid," says Brad LaMorgese, a partner in the Dallas Family Law boutique McCurley Orsinger McCurley Nelson & Downing, L.L.P. "Unless a premarital agreement says otherwise, legal fees should be considered 'necessary.'"
October 1, 2013 by Dave Moore at 12:00:00 am
Big Tex – the symbol of the State Fair of Texas – was publically unveiled Thursday, a day earlier than planned. Intense winds actually caused the premature premiere, according to media accounts.
Big Tex 2.0 was scheduled to be unveiled on opening day of the State Fair. But due to high winds, and the size of the tarp, covering him, as a precaution, State Fair officials unveiled him early. The new size of Big Tex is: 55ft high, and weighs 25,000 pounds. Big Tex has had a facelift and looks 25 years younger and more cartoonish.
Dallas real estate attorney Marc Fanning says the early unveiling calls further attention to the vulnerability of – and need for properly insuring – all possessions, even reborn 55-foot-tall cowboy statues.
“Like all property owners, the State Fair organization should insure their prized possessions in an appropriate amount to cover repair or replacement in the event of a catastrophe,” says Fanning, a director in the Dallas office of Fanning Harper Martinson Brandt & Kutchin, P.C.
A little less than a year ago, Big Tex’s predecessor was engulfed in a fiery inferno caused by a mechanical failure. Fair organizers were reportedly reimbursed approximately $155,000 through insurance coverage toward the estimated replacement cost of $500,000 estimated replacement cost of the new Big Tex. Donations gladly poured in to make up the difference. “The campaign to generate donations to build the new Big Tex – who will make his debut this weekend – was brilliant, but fair leaders can't continue to rely on the kindness of strangers.”
September 5, 2013 by Robert Tharp at 11:00:00 am
In the East Texas town of Kountze, a district court judge ruled that it is not unlawful to post Biblical references on spirit banners inside the taxpayer-funded school’s walls, although the legal basis for ruling was not clear. Meanwhile in Georgia, posters highlighting a particularly provocative line from Arthur Miller’s play, “The Crucible,” are drawing nationwide attention and complaints that the line “God is Dead” is religiously offensive.
The two cases underscore how the mixing of religious messages inside public schools remains far from resolved legally. And until judicial clarity arrives, school administrators should be prepared for unpopular decisions that may upset all sides.
"Although the law regarding student speech continues to be unclear, the safest course of action for the school district is to let the artwork remain," says Dallas attorney Tom Brandt of Fanning Harper Martinson Brandt & Kutchin, P.C., who represents Kountze ISD. "It may not be popular, but given the current status of the law regarding student speech, it is the safest thing to do."
August 6, 2013 by Dave Moore at 12:00:00 am
The successful public offering of Fort Worth-based Athlon Energy Inc. (NYSE: ATHL) demonstrates the importance of attracting savvy investors early on, Dallas attorney Phil Whitcomb recently told the Dallas Business Journal. Upon review of the company’s filings, Whitcomb noted to the publication that Athlon has drawn the backing of noted Apollo Global Management, which has a strong track record of success.
DBJ reporter Nicholas Sakelaris notes:
Whitcomb studied the company’s revenues, assets and business plan and said Athlon is poised to do well through 2013. The so-called conventional wells are cheaper to drill than the unconventional horizontal wells that have become the rage in recent years. Athlon has identified 3,857 potential vertical drilling locations and another 931 locations that could be targeted with horizontal drilling and hydraulic fracturing.
Whitcomb, who specializes in corporate securities and private equity in the Dallas office of Shackelford, Melton & McKinley, told Sakelaris: “They’re going to generate a good amount of cash. They’ve got a great underwriting certificate.”
While predicting how an IPO will do can be difficult (ask anyone at Facebook), Athlon’s successful launch wasn’t just a roll of the dice.
July 22, 2013 by Robert Tharp at 3:00:00 pm
A large swath of the Midwest and East Coast remains in the throes of an epic heat wave, sending residents in search of relief and creating special challenges for employers. The tri-state area in particular is hard hit, with LaGuardia Airport this week reporting all-time high temps of 100 degrees.
Writes MSNBC: In many cases the temperature has become too hot to handle. Employees at a New York City McDonald’s walked out after having worked without air conditioning. In Jersey City, N.J., over 25 firefighters had to be treated for heat exhaustion after battling a blaze in the sweltering weather.
With such dangerously hot temperatures come new considerations for employers, says Audrey Mross, who leads the labor and employment practice at Munck Wilson Mandala in Dallas.
OSHA requirements call on employers to provide a workplace free of recognized hazards, and that includes extreme heat. To make things easier, OSHA now has a "Heat Safety Tool" app with a heat-risk index calculator. Then, there's the other kind of workplace heat. "Plain and simple – some clothing is fine for a night out, but inappropriate at work," says Mross. "It's always a good idea to remind people about any dress code requirements you've established in order to maintain the proper professional appearance in the workplace."
July 19, 2013 by Robert Tharp at 2:30:00 pm
The tragic 2010 death of a University of Mississippi football player is leading to fundamental changes in the way the NCAA and member universities regulate the workouts of student athletes. The changes are part of a settlement related to the death of Bennie "Buster" Abram, a junior defensive backwho collapsed and died on the first day of spring practice in 2010.
According to the lawsuit, the university failed to follow workout guidelines for Abram, who had sickle cell trait, which can deform red blood cells after strenuous exercise. As a result of the settlement, the sports medicine staff at NCAA schools now have “unchallengeable authority” to cancel or modify athletics workouts based on safety concerns.
Writes the Associated Press:
The NCAA made sickle cell trait testing mandatory for all Division I athletes in 2010, though carrying the trait does not prevent an athlete from playing sports. The NCAA has a set of guidelines for institutions to follow regarding the training of athletes with sickle cell trait, including a "slow and gradual" preseason conditioning regimen and for athletes to "stop immediately upon struggling."
The lawsuit alleged that the first day of workouts was "carelessly and recklessly excessive," especially for athletes with sickle cell trait. It also claims there was no evidence Abram was informed of his condition, and that he didn't receive proper medical attention when he began struggling during the workouts, and was instead pushed to continue.
Sickle cell trait is found in approximately 8 percent of African-Americans in the United States, according to the NCAA.
Believed to be the leading killer of Division I football players, the condition has been linked to at least nine deaths among college athletes since 2000.
"This settlement is another step in raising awareness of the dangers of sickle cell trait among athletes, and helping prevent tragic deaths such as Buster's," says The Lanier Law Firm's Gene Egdorf, who represents the Abram family along with Merrida "Buddy" Coxwell and Charles R. "Chuck" Mullins of Coxwell & Associates, PLLC, in Jackson, Miss. "We are pleased that Ole Miss and the NCAA stepped up and settled this matter in a way that honors Buster's memory and will help save lives in the future."
July 17, 2013 by Susan Wheat at 12:00:00 am
When thinking of animal rights groups, the obvious example that comes to mind is People for the Ethical Treatment of Animals (PETA). However, PETA has recently come under fire after investigations into their shelter, based in Norfolk, Va., revealed astoundingly high euthanasia rates. According to an article published in The New York Times , PETA euthanized 2,000 dogs and cats last year, while facilitating only 19 adoptions.
The current trend in animal welfare programs across the country has shifted to a “no kill” standard, in which shelters avoid euthanizing animals barring extenuating circumstances. In order to achieve “no kill” status, cities must save 90 percent of shelter animals. One of the leading cities in the “no kill” movement is Austin, which is the largest city in the country to reach this standing.
"If a handful of people in Austin can change everything for their community's homeless pets, anyone dedicated to change can do the same," says Ryan Clinton, an Austin-based appellate attorney at Hankinson LLP, who is largely responsible for Austin's No Kill initiative. To help other communities achieve no kill success, Clinton led four presentations during the national No Kill Conference last weekend in Washington, D.C.
While most shelters have embraced this system, PETA has remained one of the stragglers, maintaining that its shelter is one of “last resort” and that some of the animals there are better off dead due to overcrowding and depletion of lifestyle.
"You don't have to reinvent the wheel," Clinton says. "But you do have to reject the excuses of public officials, established shelter leadership, and groups such as PETA, who cling to the status quo of killing despite readily available alternatives."
June 19, 2013 by Susan Wheat at 12:00:00 am
Summer is here, and for kids that means one thing: school is out! However, for parents this means a whole new schedule. While the change in children’s activities (or more likely, lack there-of) is a difficult adjustment for any parent to make, it can be especially difficult for newly divorced parents dealing with joint custody arrangements.
Joint custody agreements follow a specific set of rules when school is in session, but once that final bell rings in June, some of those rules become a little more difficult to follow. Who gets the kids on the 4th of July? What about when you want to take them on vacation for a week or two? These questions become much more common when free time becomes more available and schedules are more loosely defined.
“It's always a good idea to notify the other parent of your vacation plans or if those plans change,” says Huffington Post blogger Liz Mandarano. “If for some reason or another you have decided not to tell the other parent of your plans, be prepared for the other parent to possibly bring legal action against you.”
Newly divorced parents need to be especially careful when making assumptions about leeway during the summer. "Generally, the non-primary parent should get 30 days of uninterrupted visitation, but that parent should still get the first, third and fifth weekend of the other months," " says San Antonio divorce lawyer Amber Liddell Alwais, a partner in the Family Law firm McCurley Orsinger McCurley Nelson & Downing L.L.P. "The typical Thursday night visitation, however, probably doesn't apply.”
She says divorced parents need to look over their possession orders carefully and make any specific decisions in advance. "You're not stuck with the standard possession order," Alwais says. "If there are days that are important to you, tell your lawyer and get them negotiated into your possession order."
So if July 4th is your favorite holiday, or if you want to ensure that annual summer visit to Grandma’s, it is possible, as long as you walk the fine line of summer custody with care.
June 18, 2013 by Erin Dooley at 2:19:00 pm
Consumers download over four million mobile health apps daily, Mobi Health News reports. Most people view these apps as convenient and effective healthcare alternatives. However, they may not be as foolproof as they seem. In fact, many haven’t received proper FDA approval.
While some apps simply track health habits, others purportedly perform diagnostic assessments. For as little as 99 cents (plus the price of attachments), patients can purchase apps that monitor blood pressure, test blood sugar, and even perform EKGs.
Some sources estimate that by 2017, these mobile health aids will significantly reduce hospital visits, saving consumers more than $400 billion.
Trouble is, the U.S. Food and Drug Administration can’t seem to keep pace with the medical app onslaught. Despite the potential for misuse, it’s only after the problematic apps are released via Apple’s App Store that they’re identified as system violations.
“It raises an interesting problem when Apple can approve an app before the FDA is certain it meets its guidelines,” Wired blogger Michael Copland writes. “The future has arrived…. The FDA needs to catch up.”
The FDA has just begun to identify and examine offending apps. Its first target was uChek, a free app that supposedly analyses urinalysis test strips to estimate patients’ glucose, protein, leukocyte and nitrite levels.
The FDA doesn’t claim the app is defective or misleading. Rather, it says that the creators should have submitted the device to a more rigorous approval and post-market surveillance program. The app, the FDA says, should have been registered as a Class II medical device, which poses minimal – but actual –risk to patients if misused. The creators claim it’s a Class I device, which implies that improper use presents virtually no patient risk.
In a letter to uChek, FDA administrators explained, “though the types of urinalysis dipsticks you reference for use with your application are cleared, they are only cleared when interpreted by direct visual reading. Since your app allows a mobile phone to analyze the dipsticks, the phone… requires new clearance as part of the test system.”
Though the FDA strives to promote mobile health innovation, it recognizes the need to “narrowly” and “judiciously” regulate an industry that some believe may soon spin out of control.
"The FDA is smart to step into this relationship now, while casual in the U.S., to provide necessary guidance to help keep the public safe," says Houston attorney Maura Kolb from The Lanier Law Firm. “But as these types of smart apps are developed, they will likely attract the attention of Big Pharma and medical device manufacturers, who have shown time and time again that hiding information from the FDA is something they are capable of and willing to do."
June 13, 2013 by Erin Dooley at 12:00:00 am
The 5th Circuit has spoken: lactation is related to pregnancy and childbirth.
But one judge wasn’t so sure.
In a 2012 ruling, District Judge Lynn Hughes dismissed a workplace discrimination lawsuit filed by the Equal Employment Opportunity Commission on behalf of a working mother who was fired after requesting to pump breast milk during business hours. Because lactation is “not a condition related to pregnancy and childbirth,” Hughes reasoned, a Houston collections company’s dismissal of the mother, Donnicia Venters, did not constitute sex discrimination.
“My 4-year-old understands basic biology better than some judges,” remarked ACLU blogger Galen Sherwin, who claimed the company blatantly tried to force Venters to choose between her career and her baby’s wellbeing.
The 5th Circuit Court of Appeals agreed that lactation bias shouldn’t be tolerated. In an opinion filed in May 2013, the appellate court reversed Judge Hughes’ dismissal, citing several medical dictionaries and asserting that because “lactation is initiated by pregnancy,” firing a woman based on her pumping habits violates the Civil Rights Act’s Title VII, which protects employees who are pregnant or have recently given birth, and the Pregnancy Discrimination Act. Venters’ case may now proceed to trial.
"The District Court's decision seemed to strain credibility, as this certainly fits the standard needed to bring a sexual discrimination case,” she said. “However, given the conservative nature of the 5th Circuit, it still came as somewhat of a surprise to some that the appeals court sided with the employee. This decision is a strong indication of the general opinion on this issue, and certainly bolsters the Equal Employment Opportunity Commission's view that addressing pregnancy-related discrimination should be a national priority."
June 5, 2013 by Robert Tharp at 4:30:00 pm
For the fifth year straight, federal FLSA lawsuits involving wage-and-hour disputes are on the rise. In fact, filings are up 10 percent, according to published reports. Brought under the Fair Labor Standards Act (FLSA), the claims typically involve salaried employees who believe they’re owed overtime pay or hourly workers who content hey weren’t paid for all of the hours worked. Communication trends and mobile technology are also playing a role in the trend, says employment attorney Mark Shank of Dallas' Gruber Hurst Johansen Hail Shank LLP.
These are cases alleging violations of the Fair Labor Standards Act and typically fall under three categories: salaried employees claiming they are owed overtime pay, hourly workers who claim they weren’t paid for all of their hours, and restaurant workers who claim they weren’t given additional pay to make up for when tips didn’t bring their overall pay to the minimum wage.
Violations of wage and hour laws have become widespread in today’s economy. Sixty-eight percent of low-wage workers interviewed for a report in 2009 said they had experienced a pay violation in the previous work week, including 26 percent who were paid under the minimum wage and 76 percent who didn’t receive overtime pay. Suits have similarly risen, jumping 400 percent in the last decade. And they’ve seen a surge during the recession in particular as employers cut corners looking to cut costs.
"A fundamental problem for employers is that the FLSA, which was adopted in the 1930s, doesn't fit today's world of cellphones, PDAs, email and telecommuting," says Mr. Shank. "This virtual workplace makes it much more difficult for employers and employees to comply with the strict letter of the law, so it's not surprising that the number of claims continues to rise."
May 24, 2013 by Robert Tharp at 10:40:00 am
A bill that would give property owners a streamlined way to finance conservation and clean energy improvements is headed for Texas Governor Rick Perry’s desk.
Known as PACE(Property Assessed Clean Energy), the legislation is designed to provide an innovative and market-based solution to overcome one of the most vexing hurdles for achieving widespread investment in energy efficiency projects for existing structures – obtaining low-cost and long-term financing for conservation projects. Under the bills sponsored by Rep. Jim Keffer in the House and Sen. John Carona in the Senate, owners of commercial and industrial buildings could finance the cost of conservation upgrades for up to 20 years in cities or counties that create the special financing program.
The loan is then attached to the property, rather than the owner, and can be transferred if the property is sold. PACE loans can be issued by city or county financing districts or financial institutions, such as banks.The bill cleared both the Texas House and Senate earlier this month with unanimous votes.
Writes the Austin American-Statesman: The loans are repaid through special property tax assessments. If the property is sold before the loan is repaid, the repayment obligation automatically transfers to the next owner because the lien securing the tax assessment follows title to the property.
The program is expected to allow for the upgrade and enhancement of existing structures, provide substantial water and energy cost savings, and create thousands of jobs statewide. A non-profit association organized by attorneys at Thompson & Knight assisted in the legislative effort. "A PACE assessment will have the same legal status as a lien for ad valorem taxes," says Stephen Block, a partner in the Houston office of Thompson & Knight. "Because the lien will attach to the land, property owners will be obligated to pay only the portion of the cost that accrues during its period of ownership."
May 17, 2013 by Dave Moore at 2:45:00 pm
The Internal Revenue Service’s apparent targeting of tax-exempt conservative groups has set both Republicans and Democrats on a mission to get to the bottom of what’s happening at the agency.
If political biases were in play at the IRS, or even in the Oval Office, it certainly wouldn’t be the first time.
Political consultant Chris Gober says the reports of the IRS’ apparent selective treatment of conservative political groups are symptoms of a larger problem within the federal government’s tax-collection office.
"The IRS is aware that it also has a problem with its employees illegally disclosing pending applications and donors, having reached out to those who were victims of the improper disclosure,” says Gober of Gober Hilgers PLLC. “But they have not taken steps to quell the fears of further disclosures. Nor have they been completely upfront when saying no targeted applications were denied, as they have not released the number actually approved."
While Steven Miller, the agency’s acting commissioner was forced to resign in the wake of the scandal, it’s possible more heads will roll before all the dust settles.
May 15, 2013 by Robert Tharp at 10:30:00 am
Like voting, the call of jury duty is one of those widely underappreciated privileges of citizenship. In courthouses across the country, judges often have a difficult time getting enough qualified jurors to show up for any given trial.
If anything, a bill making its way through the California legislature is prompting a reexamination of our cavalier attitude about jury service. The proposed bill would expand the jury service privilege to allow permanent legal residents – those living in the U.S. legally but who are not citizens. While this may appear to be a practical solution to the problem of dwindling jury pool numbers, it represents a dilution of the responsibilities of citizenship, says Brian Hail of Dallas' Gruber Hurst Johansen Hail Shank.
"As someone who regularly tries cases before juries, it concerns me to see what could be an erosion of the rights and importance of citizenship," he says. "To serve on a jury is to serve as a representative of your country. To be judged by those without true ownership – citizenship – seems fundamentally contrary to our nation's founding principles."
The proposal is prompting a necessary debate about jury service. Writes the LA Times: Jury service is not burdensome drudge work imposed by an overbearing government on an unwilling citizenry. Nor is it a favor that citizens do for their courts. To the contrary, it is a citizen's chief means of oversight on the judicial branch, allowing him or her not merely to help rule on the facts of a particular case but to keep tabs on the judge, the prosecutors, the public defenders and the court system itself. It's the place where citizens observe firsthand the effect of court budget cuts.
Just as citizens, and only citizens, have the power to elect their executive branch leaders and their delegates to the legislative branch, citizen jurors have the final check on at least some judicial branch decisions.
May 3, 2013 by Robert Tharp at 2:30:00 pm
Severe thunderstorms in the Houston area last month brought large hail, strong wind gusts and lightening that caused extensive property damage, broken tree limbs and downed power lines. Home and business owners reported roof damage, broken windows and pock-mocked cars.
The hailstorm and flash floods provide a stark reminder that the severe storm season is upon us, and home and business owners should be prepared. After all, a recent study ranks Texas tops for wind and hail damage claims, noting that such storm damage is among the most common and severe causes of property damage.
Houston attorney Phillip Sanov, head of The Lanier Law Firm's Bad Faith Insurance Practice Group, says now’s the time for property owners to make sure polices are up to date and to document the pre-storm condition of homes, offices and belongings. "Too often, we see insurance companies that deny, delay or vastly underpay legitimate claims, often citing 'pre-existing' conditions," he says.
Among other things, Sanov recommends taking photos and videos of structures and personal property as proof of ownership and existing conditions. "But those pictures do no good if they too are lost in a storm, so be sure to store them online or at a friend's or relative's house," warns Sanov, who represents home and business owners following storms and other disasters.
May 1, 2013 by Robert Tharp at 4:20:00 pm
There’s a well-documented problem with one of the world’s most popular hunting rifles – a defect in the trigger mechanism makes it susceptible to firing when the trigger is not pulled. Accidental discharges are blamed for two dozen deaths and more than 100 injuries.
Houston attorney Mark Lanier says Remington has known for decades that the design flaw in the trigger mechanism has made the rifle unreasonably dangerous. "Gun owners and their loved ones are literally taking a bullet because Remington Arms decided to put profits over safety," says Lanier. In 2012, The Lanier Law Firm successfully represented a Texas man who was severely injured when his Remington Model 700 rifle fired unexpectedly, striking the man in the foot.
Writes USA Today: The 700 series of rifles dates back to the 1940s, when Remington—which had been purchased a decade earlier by the giant chemical company DuPont—was transitioning from a major supplier of the war effort to a more consumer-oriented company. DuPont, which sold Remington in 1993, declined to be interviewed, referring inquiries to Remington.
The rifle series—which debuted with the Remington 721—featured a unique trigger system patented by a young Remington engineer named Merle "Mike" Walker. Walker has called his design "a perfect trigger," with a smooth pull favored by expert shooters. According to Walker's patent, the secret was a tiny piece of metal called a "trigger connector," which is mounted loosely inside the firing mechanism. But critics, including ballistics experts who have been hired to testify against the company, say small amounts of rust, debris, or even a small jolt can cause the trigger connector to become misaligned, forcing the trigger itself to lose contact with the rest of the firing mechanism. Then, the gun can be fired when other parts are operated, such as the safety or the bolt.
But internal documents obtained by CNBC show that in 1948—before the gun went on the market—Mike Walker himself proposed a design change to prevent the trigger's internal parts from falling out of alignment. Other documents show the added cost for Walker's "trigger block" came to pennies per gun, but with the rifle already over budget, officials decided against making a change.
April 26, 2013 by Dave Moore at 12:00:00 am
As traditional media outlets have migrated toward Twitter, Facebook and other social media, it would seem inevitable that they would be susceptible to hacking, just as other users have.
The Associated Press learned this lesson in dramatic fashion on April 23, when a hacker erroneously tweeted on the AP’s Twitter account that explosions were reported in the White House, and that the president was injured. Almost immediately, the U.S. stock market tumbled. The S&P 500 index momentarily dropped in value by more than $100 billion before the report was proven false.
In a recent interview on KLIF-AM, Dallas cyber security attorney Matthew Yarbrough said that the hacking of the Associated Press’ Twitter account typifies the vulnerability of Corporate America’s data.
“As you can see, tweets are becoming incredibly popular,” Mr. Yarbrough said. “Look at what happened up in Boston, when the police announced the capture of one of the Boston Marathon bombers via tweet. We must believe it's true, because it came from a tweet, right? I think these sorts of hoaxes are something hackers like to do, to point out vulnerabilities in systems and networks. And it does show we're putting more confidence into a very short electronic message. I can't believe people are trading upon that, but it does happen. And there will be people at some point in time, who will be prosecuted for things like this.”
Mr. Yarbrough added that many corporations are extremely vulnerable to password hacking. “I often find that typically, when I audit major companies for their cyber security, people in the CEO position have the worst passwords. There's a lot that people can do to really make sure that they're using more complex passwords that aren't so susceptible to something called a “password cracker” that's easily downloaded and someone could point at your account and gain access.”
While the Associated Press reports that it has resolved its vulnerabilities to Twitter hacking, it’s likely only a matter of time before the next major news outlet falls victim to hackers.
April 25, 2013 by Robert Tharp at 4:20:00 pm
Travelers at major airports in Los Angeles, Chicago, New York and Dallas have started experiencing delays and interruptions as mandatory furloughs for air traffic controllers kick in as part of the 2013 budget sequester.
Writes the LA Times: After the first week of furloughs because of light traffic and good weather, the nation's air travel system operated without serious problems. The FAA warned Monday that more delays are on the horizon when air traffic is heavier and severe weather puts pressure on understaffed air traffic control facilities.
Furloughs of air traffic controllers have prompted an outcry from Washington lawmakers and litigation by pilots and airlines who say they could have been avoided. Airline workers have even started to urge frustrated passengers to pressure the FAA to reconsider the budget cuts. To help cut more than $600 million called for by budget sequestration, the FAA ordered air traffic controllers starting Sunday to take one furlough day in every two-week pay period. That would cut the total of the nation's nearly 15,000 air traffic controllers about 10% on any given day.
Also on the list of cuts is a plan to close smaller air traffic control towers nationwide, including 14 in mostly smaller communities in Texas. The proposal is indicative of the significant struggle the federal agency is encountering in trying to balance mandates to cut costs as part of the 2013 budget sequestration against its primary purpose of preserving safety in the national airspace system, says Dallas aviation attorney and pilot David Norton.
"There are procedures in place that certainly make it possible to safely operate an airport without a control tower," says Norton, a partner at Shackelford, Melton & McKinley. "However, the larger and more active the airport is, the more important it is to have an active control tower in order to ensure the safety of pilots, passengers and everyone on the ground."
April 2, 2013 by Dave Moore at 2:30:00 pm
Dallas corporate marketing and advertising attorney Jane Fergason of the Dallas office of Gardere Wynne Sewell LLP has a few words of warning to consumers who innocently give their ZIP code information to merchants during everyday transactions.
“Once you give the merchant your ZIP code, that information can be sold to a data broker, or the merchant can use that to find out your address or phone number, and other types of publicly available, but hard-to-get information,” Ms. Fergason recently told KLIF-AM radio show host Kurt Gilchrist. The result can be unwanted junk mail or, much worse, identity theft. The abuse of ZIP code and other information has become so pervasive that some states have banned stores from collecting it, Fergason says.
“In California and Massachusetts, they’ve passed laws that say you can’t ask for ZIP code information because that is personal identification information, prohibited by the statute.”
Other states, including Texas, are considering similar measures, she says.
What’s a consumer in other states to do?
For starters, consumers shouldn’t give merchants personal information such as ZIP codes, email addresses or phone numbers, Fergason says. Consumers aren’t required to give that information to venders to complete transactions, she says.
Fergason’s one exception: “There are certain times, such as when you’re at a gas station, when you have to type in your ZIP code, and that’s to help protect you from fraudulent purchases. That’s the credit card company asking for that information; that is not the store where you’re getting your gas … using that information.”
March 26, 2013 by Dave Moore at 1:24:00 pm
Corporate espionage and trade secret theft goes back hundreds of years, by some accounts.
The fact that it was documented in North Texas a few years ago should surprise no one. What might alarm perpetrators, however, is the fact that executives who are caught red handed in the act of stealing company trade secrets can serve hard time for their misdeeds.
Such is the case of Michael Musacchio, who faces a June 14 sentencing date for criminal computer hacking charges relating to trade secret theft that occurred against Exel Transportation Services. Mr. Musacchio was found guilty of one felony count of conspiracy to make unauthorized access to a protected computer (hacking) and two substantive felony counts of computer hacking. Each conviction carries a maximum statutory penalty of five years in federal prison and a $250,000 fine. Court documents say Mr. Musacchio and others hacked Exel’s computers so they could direct Exel’s clients to Frisco, Texas-based Total Transportation Services LLC, where they had become employed.
"Much of the evidence used to convict Mr. Musacchio was collected more than six years ago, for a civil trade secret theft case I filed against Total Transportation Services. That lawsuit resulted in a $10 million settlement," says Dallas trade secret theft attorney Matthew Yarbrough, founder of the Yarbrough Law Group.
The upcoming criminal sentencing for Mr. Musacchio ratchets up the stakes for those considering hacking into their employers’ or former employers’ trade secrets.
March 18, 2013 by Robert Tharp at 1:50:00 pm
You’d think Ted Cruz would know better. That’s not the punch line to a lawyer joke but a sad observation of how our newest senator from Texas has chosen to approach the duties that Texas voters placed on him last November. A lawyer by training and profession and no stranger to a courtroom, Sen. Cruz ought to be familiar with a civil justice system that puts a premium on zealous advocacy of one’s positions but also abjures personal attacks or demonization of the opponent.
That’s the observation in an op-ed by State District Court Judge Craig Smith and Fish & Richardson Managing Principal Tom Melsheimer published last week in the Austin American-Statesman. In the piece, the two hold up the much-maligned civil justice system as an example of one of the few surviving institutions where mutual respect and civil discourse still survive.
Melsheimer and Smith note, for example, that lawyers and the legal system may be easy targets for clichés and jokes, but consider:
• The courts are one of the last places where facts still rule over opinion.
• Where just about everyone knows that character attacks and unfounded insults will cause you to lose the trust of juries and judges and lose your case.
• Where everyone expects zealous advocacy but also courtesy and respect of your opponent and ultimately, compromise.
• Where compromise is often viewed as a victory
They write: This flame-throwing tack is clearly winning him points with his loyal base inside and outside of Texas, but it’s not a winning strategy. It’s a prescription for ending up on the wrong side of votes and, ultimately, becoming marginalized. Certainly, it’s a strategy that would find a trial lawyer on the wrong side of a jury verdict where the jury is a group of citizens called to decide the facts of a case, not cheer for one side or another.
There are plenty of examples of lawyers behaving badly out there, and we don’t suggest that our civil justice system is perfect. Yet when it’s time to step in the courtroom, we have been blessed with a system that rewards and adherence to facts and rejects speculation, surmise, and insults. The civil justice system has lasted so long in part because it embraces “civility.” That’s something that our newest senator and the rest of Congress would do well to remember.
February 28, 2013 by Robert Tharp at 3:45:00 pm
I give God 10 percent. Why do you get 18?
That was a St. Louis minister’s response when faced with a restaurant tab that included a mandatory 18 percent tip for a group meal. The pastor’s note – written on the restaurant receipt in lieu of the tip – went viral after an Applebee’s waitress snapped a picture of it and posted it on the Internet, stoking public discussion about the widely reviled mandatory gratuity.
Although many restaurants say a mandatory gratuity is imposed as a way to protect wait staff from the possibility of being under-compensated for the hard work that goes into serving a large group, the practice often draws the ire of customers. And patrons aren’t alone in their disdain for mandatory tip policies. They are equally unpopular with many servers for income tax reasons.
Often compensated at a sub-minimum wage rate, many servers rely on tips to supplement their wages. But because mandatory “tips” are viewed by the IRS as a “service charge,” the money typically goes to the business, not the person serving the table, explains Dallas attorney Celeste Yeager, vice chair of the Hospitality Industry Team at Gardere Wynne Sewell LLP. “For these employees, it can negatively affect pay classification, causing tremendous income tax headaches,” says Yeager. “For these and other reasons, as an industry, it is time for restaurants and bars to consider stopping the practice of imposing automatic tips.”
February 1, 2013 by Robert Tharp at 3:15:00 pm
From pizza delivery businesses and neighborhood bars to car dealerships and major retailers, the NFL’s Super Bowl has become a perennial marketing opportunity and cash cow. But businesses that try to crib on the NFL’s closely guarded and trademarked words, “Super Bowl,” without permission can expect to get stiff-armed by the league’s legal team. Ever notice how so many advertisements and marketing materials have migrated to using “The Big Game” as a legal euphemism for Super Bowl Sunday?
The experience of Roy Fox is the latest example of the NFL’s Dick Butkus approach to guarding its trademarks. More than a year ago, the Indiana man had the premonition that one day the Super Bowl would feature a unique rivalry between two brothers who also happen to be head coaches: Jim and John Harbaugh. His idea: trademark the word “HarBowl” for t-shirts and other merchandise, and watch the money roll in. So Fox plunked down a $1,000 trademark application fee and set the application in motion.
Fox soon started getting calls from the NFL’s legal team, threatening the non-lawyer with stiff financial penalties if he didn’t voluntarily give up his trademark application for “HarBowl.” Clearly a true NFL fan and not a lawyer, Fox proceeded to negotiate his position all the way down to zero. He unsuccessfully offered to give up the trademark in exchange for some Indianapolis Colts tickets and an autographed photo of NFL commissioner Roger Goodell. As the legal blitz showed no sign of letting up, Fox finally took a knee and abandoned the effort.
Trademark and copyright attorney Amanda Greenspon of Dallas-based Munck Wilson Mandala says trademark owners of all kinds are obligated by law to protect and enforce their trademarks or risk losing them, but the NFL is widely known for its aggressive protection of its intellectual property.
“The NFL would have had to argue that it’s confusingly similar to the `Super Bowl’ trademark or some other mark they already own,” she says. “I don’t think it’s as clear-cut as the NFL makes it sound, but it takes would have taken some resources to go up against the NFL.”
January 22, 2013 by Robert Tharp at 4:11:00 am
Eight long years after the filing of a groundbreaking lawsuit on behalf of hundreds of terrorism victims, Dallas trial lawyer Mark Werbner says last week's federal appellate court ruling is a key step in finally getting the case in front of a judge and jury. As reported by Law360 and others, the ruling means that terrorism victims can continue the lawsuit against Jordan-based Arab Bank over claims that the bank and its New York branch served as catalysts for financing worldwide terrorism activities.
Writes Law360: Friday's decision upholds an earlier ruling by U.S. District Judge Nina Gershon, which imposed tough sanctions on Arab Bank for failing to turn over documents the plaintiffs said would link them to terrorist financing rings. The sanctions included instructions to jurors that they could infer from the Arab Bank's refusal to comply with discovery requests that the bank willfully and knowingly provided financial services to foreign terrorist organizations.
"It's an exciting, clear, important victory for the families who suffered losses by terrorism," Werbner told Law360 on Friday. "I really believe that with this opinion today, the trial judge is going to set it for trial."
The original lawsuit, Courtney Linde , et al. v. Arab Bank, PLC, No. 04 CV 2799, was filed in 2004 under the 1990 Anti-Terrorism Act. Currently, more than 100 families and 700 individuals in the Linde case and related cases are seeking more than $1 billion in damages based on Arab Bank's alleged role in financially supporting terrorist activities.
The plaintiffs claim that Arab Bank provided "systematic" financial support to the families of all Palestinian terrorists killed, injured or incarcerated since the start of the Al-Aqsa (Second) Intifada in the Fall of 2000. Specially, the plaintiffs say Arab Bank administered a terrorist death-and-dismemberment insurance scheme that allowed families of so-called "martyrs" to collect financial payments by registering with the bank.
"We are extremely pleased that the 2nd Circuit has cleared the way for our clients to go to trial on behalf of their loved ones who suffered severe injuries and lost their lives as a result of terrorist acts," says Werbner, cofounder of Dallas-based Sayles Werbner. "Arab Bank should be held accountable for its role in terrorism, and my clients are looking forward to presenting their evidence before a judge and jury."
January 18, 2013 by Robert Tharp at 11:43:00 am
The New Year’s confetti is long gone and the U.S. workforce has been back on the job for a few solid weeks, and with that workers are finding something sobering in their first paychecks of 2013. As a result of the late-hour fiscal cliff brinkmanship, U.S. employees’ share of the Social Security payroll tax has reverted back to 6.2 percent (it was temporarily reduced in 2010 to 4.2 percent). That means a worker earning $50,000 this year will see $38.46 less in each twice-monthly paycheck. That’s some real pocket change for families out there living on the narrow margins, something Bloomberg Businessweek dubs “the anti-stimulus.”
The tax is no doubt a touchy subject around many workplace watercoolers, and employment lawyer Rachel Ziolkowski warns that employers need to be cautious in how they discuss this tax hit with their work force. "Employers should feel free to communicate the impact of the tax, but they should stick to the facts and avoid expressing political opinions that criticize or rationalize the increase," says Ziolkowski, a lawyer at Dallas' Gruber Hurst Johansen Hail Shank. "Such comments could lead to unwelcome political debates in the workplace and cause an already upset employee to make a discriminatory claim about their employer based on political beliefs."
January 17, 2013 by Dave Moore at 3:00:00 pm
Big Tex rates up there with barbecue and the Alamo for what makes Texas, Texas. It’s no wonder that when the State Fair of Texas icon burst into flames on Oct. 19 due to an electrical short, many Texans acted as though they’d lost a member of their family. Some Texans left flowers and photographs at the site of the disaster, mourning his passing.
Mitchell Glieber, vice president of marketing for the State Fair, tells WFAA-TV that Big Tex was the symbol of the 126-year-old fair.
He is definitely our icon. He is our Mickey Mouse. It's sad to see, but obviously we will be able to rebuild Big Tex and he'll be back here for sure for the 2013 State Fair of Texas.
However, media reports indicate that Big Tex was insured by the fair for only $200,000 – only half of his anticipated replacement cost.
On Dec. 27, reports surfaced that the fair’s board of directors is seeking private contributions to help bridge the gap and rebuild Big Tex, giving Texans another way to show their support for their favorite 52-foot-tall cowboy after he was burned to a crisp.
According to Dallas insurance attorney Marc Fanning, the fact that the appeal for money came during the holidays was probably more than coincidence.
“It’s very clever of the state fair to kind of tug on everyone emotionally at this time of year, in the giving season, to try to help them cover their shortfall,” Fanning, of the Dallas office of Fanning Harper Martinson Brandt & Kutchin, P.C., tells KLIF-AM.
Fanning adds that it is somewhat unusual that an organization would ask for help when it found itself underinsured. “I think it would only happen in the case of an icon like Big Tex, or some other landmark that is destroyed,” Fanning says. The state fair likely saved a substantial sum of money over the decades by not insuring 60-year-old Big Tex for full replacement value, he says.
January 4, 2013 by Robert Tharp at 12:00:00 am
Ah, the Texas Legislature. According to the Texas Tribune, it's five months of fierce legislating — a bit of which has as much to do with politics and elections as with governing the state. Whatever you call it, the flurry of bill filing has already begun in advance of Tuesday’s official start of the 20-week legislative session.
Already attracting serious debate is a bill filed by Rep. Helen Giddings, D-DeSoto, that(mirroring laws already in place in six other states) would forbid employers from requiring prospective and current employees from disclosing their social media login credentials. As detailed by Law360, H.B. 318 would bar employers from requesting employees' passwords to social media sites like LinkedIn and Facebook. Employment lawyers point out that the bill is unclear on several important details, including the kind of damages, if any, that employers would face for violating the rule.
Writes Law360: Loopholes in the bill could let employers bypass its rules. While the legislation would clearly bar employers from requesting employees' passwords, its language leaves open the possibility that a company could make an applicant or employee log on to an account, then view it in what's known as "shoulder surfing," according to Michael McCabe of Munck Wilson Mandala LLP. Clarification on whether employers could use information publicly available on social media sites to evaluate prospective employees will also be crucial, he said.
Additionally, employment attorney Stephen E. Fox of Fish & Richardson notes that the bill lacks a distinction between job applicants and existing employees. For example, there are valid reasons why an employer, in certain instances, might need to access an employee’s social media files.
An employer may want the right to look at social media profiles to determine if an employee out on medical leave is faking injuries, he said. And a company may want to be able to require passwords to LinkedIn accounts to ensure former employees aren’t using the site to communicate with past clients in violation of nonsolicitation agreements, he said.
“The business community will seek to significantly narrow the restraints of this bill, not in the application process, but in the context of potentially conducting an investigation while the person is employed,” Fox said. Businesses also will want the bill to let them seek social media information in the course of litigation discovery, according to Fox.
Still, the privacy implications for employees deserve consideration as well, he said. “Arguably, giving people access to social media sites is allowing the employer to invade privacy in a way that hasn’t been done before,” Fox said. “That’s a legitimate concern, and we have to find the right balance.”
Others question whether Giddings’ bill represents a solution in search of a problem, noting that few reporters are requesting this kind of information during the job interview process.
Stephen Fink of Thompson & Knight LLP said in his experience it’s rare for a company to request the information outside investigations of suspected wrongdoing, such as disclosure of trade secrets or derogatory statements about a manager.
“Maybe Texas isn’t representative of the nation as a whole, but it does look to me more like a warning to employers than actually addressing a widespread practice,” Fink said.
December 21, 2012 by Robert Tharp at 3:30:00 pm
The sun may be setting on the Hostess empire, but the company’s iconic Twinkies, Ho Hos and Ding Dongs trademarks appear poised to rise from the ashes of bankruptcy liquidation. Latest reports indicate that buyers are lining up to acquire portions of the Hostess trademark portfolio, which includes more than 200 trademarks valued at more than $100 million.
"Those trademarks and their goodwill are valuable because they evoke products that have strong sentimental value and inherent goodwill for so many Americans," says trademark attorney Amanda Greenspon of Dallas' Munck Wilson Mandala. "Other terms trademarked by Hostess like ‘Brownie Bites' are potentially valuable because consumers know exactly what they're getting, which is a plus for marketing purposes
According to the Associated Press, Twinkies, Wonder Bread and Devil Dogs are likely to return to shelves in coming months. But more than one company will probably manufacture different snack cakes once made by Hostess. Hostess Brands said in bankruptcy court Friday that it's narrowing down the bids it received for its brands and expects to sell off its snack cakes and bread brands to separate buyers. The testimony came from an investment banker for Hostess, which is in the process of liquidating.
Hostess, based in Irving, Tex., has said potential buyers include major packaged food companies and national retailers, such as big-box retailers and supermarkets. The company has stressed it needs to move quickly in the sale process to capitalize on the outpouring of nostalgia sparked by its bankruptcy.
December 14, 2012 by Robert Tharp at 4:05:00 pm
A seamingly innocuous Facebook post by Netflix CEO Reed Hastings touting the publicly traded company’s viewership numbers has run afoul with SEC watchdogs. The problem: Hastings' choice to disclose this potentially “material” information through social media rather than traditional information sources may be a violation of the SEC’s “Regulation FD.”
A recent New York Times piece does a good job laying out the issues at play involving Regulation FD:
In general, Regulation FD says that when a public company gives material nonpublic information to anyone, the company must also publicly disclose that information to all investors. Regulation FD in that way prevents selective leaks and, according to the S.E.C., promotes “full and fair disclosure.”
Regulation FD was the brainchild of Arthur Levitt, a former chairman of the commission. During Mr. Levitt’s time, companies would often disclose earnings estimates and other important information not to the markets but to select analysts. Companies did so to preserve confidentiality and drip out earnings information gently to the markets, and in that way avoid the volatility associated with a single announcement.
For Mr. Levitt, this was heresy. He believed not only in disclosure, but in the principle that all investors should have equal access to company information. Regulation FD was the answer.
If the idea behind Regulation FD is to encourage disclosure, then allowing executives to comment freely on Facebook and Twitter, recognizing them as a public space akin to a news release, is almost certain to result in more disclosure, not less, and reach many more people than an S.E.C. filing would. The agency’s position will only force executives to check with lawyers and avoid social media, chilling disclosure.
"Technology frequently evolves much faster than regulation and law," says corporate compliance attorney Randy Ray of Dallas' Munck Wilson Mandala. "Regulation FD already has evolved since it was adopted in 2000. Businesses now may provide material information to investors on their websites as a public disclosure. That was not permitted originally under Regulation FD," he says. "This case raises the question of whether a disclosure to social media followers should be viewed as a selective disclosure to ‘friends' or amounts to a public disclosure in which all interested parties have an equal opportunity to receive."
December 13, 2012 by Amy Hunt at 11:45:00 am
A deadly train/truck accident in Nevada that killed six and injured scores of train passengers has prompted at least 15 lawsuits, according to the most recent blog post by The Law Offices of Frank L. Branson.
The truck’s driver, who was killed in the crash, had frequently complained about the rig’s unreliability and called it “a piece of junk,” according to a report by the National Transportation Safety Board.
Another contributing factor may have been driver inattention, the NTSB reported. According to the report, another trucker who witnessed the crash said the driver, Lawrence Valli, "was driving like he didn't see the train and lights that were flashing well before impact." According to an Associated Press report:
The witness said he was traveling about 65 mph one-quarter to one-half mile from the crossing when he noticed the train. When he saw that Valli wasn't slowing, the man said he looked to see if the crossing mechanisms were working.
"He saw the lights flashing and saw the cross arm down," the report said.
Just before impact, the witness said he saw the truck brakes lock up and black smoke coming from the brakes.
Mr. Valli previously had received 11 speeding tickets and other violations, including inattentive driving and improper lane location. The NTSB report also said that Mr. Valli had earlier been diagnosed with amblyopia, an eye condition that can cause poor depth perception of reduced vision in one eye. However, according to the report, he had passed his most recent eye exam.
December 13, 2012 by Dave Moore at 10:31:00 am
The Androvett Legal Media & Marketing team, which spends its days immersed in legal news, has developed a list of the top news stories for 2012 in North Texas. As you’ll see, our list spans a broad range of law – from mineral rights legal work in the Oil Patch to a Constitutional question of freedom of religion in Kountze, Texas. Below are what we consider to be North Texas’ top 10 legal news stories, ranked from 10 to 1.
10. SCOTUS Stops Irving Attempt to Buy Oklahoma Water
With Texas mired in a prolonged drought, a water rights ruling from the U.S. Supreme Court in March is being seen as increasingly important. The case centered on an agreement between the cities of Irving and Hugo, Okla., that would have allowed Irving to buy water from its northern neighbor. Irving and Hugo sued the Oklahoma Water Resources Board and the Oklahoma Water Conservation Storage Commission with constitutional challenges to Oklahoma laws requiring state approval for water sales. The U.S. 10th Circuit Court of Appeals eventually ruled that the cities had no standing to sue, with the U.S. Supreme Court upholding the decision without comment.
9. Texas Regains Stature as Energy Patch State
High oil prices and increased natural gas production propelled Texas to the forefront of U.S. energy production in 2012, sending energy lawyers and landmen scurrying to keep up. Experts say the boom might push U.S. production to 11 million barrels a day by 2013, approaching Saudi Arabia-like levels. Much of that production has come via fracking – fracturing rock layers with pressurized fluids to release oil or natural gas – which originated in Texas and is generating its own legal scrutiny in some circles.
8. U.S. Supreme Court Declines to Hear ‘Candy Cane’ Case
A religious-themed case from North Texas once again gained national attention in 2012 when the U.S. Supreme Court decided not to hear a dispute over the Plano Independent School District’s decision to prevent students from handing out religious-themed gifts at school parties. The controversy stemmed from a student who wanted to give classmates a candy cane with a card that included the line: "So, every time you see a candy cane, remember the message of the candy maker: Jesus is the Christ!" The nation’s highest court declined to review a lower court ruling that public school principals have qualified immunity.
7. Cheerleader Signs Spark Another Religion Lawsuit
Public school cheerleaders from Kountze, Texas, (pop. 2,147) became the unlikely national champions for religious free speech in 2012. The dispute centers on whether the Kountze Independent School District cheer squad can display biblically themed banners at school-sponsored sporting events. School officials maintain that the practice violates the separation of church and state. Advocates for the cheerleaders claim the students are simply exercising their free speech rights. Temporary restraining orders allowed the banners to be displayed throughout the football season.
6. SCOTUS Reviewing UT Admissions Policy for Reverse Discrimination
The University of Texas’ affirmative action admissions policy was scrutinized by the U.S. Supreme Court in October after a white student who was denied admission to the school claimed she was passed over for less-qualified minority students. The high court’s pending decision could have far-reaching implications for colleges and universities across the nation. Legal experts say the UT case hinges on whether the Supreme Court is willing to continue to uphold affirmative action precedents established in cases involving other state colleges in Michigan and California.
5. Whistleblower Spurs Largest Medicaid Settlement in Texas History
The Texas Attorney General and attorneys for Pennsylvania whistleblower Allen Jones secured the largest Medicaid fraud settlement in state history in August when pharmaceutical giant Johnson & Johnson agreed to pay $158 million to resolve claims that it used false marketing tactics to convince Texas officials to put the anti-psychotic drug Risperdal on the state’s Medicaid drug plan. The state district court trial in Austin was settled after a week of trial after jurors heard evidence that Johnson & Johnson targeted every level of the Texas Medicaid Program with misrepresentations about the drug.
4. Bankruptcy for Hostess Could Spell Twinkie’s End
Irving-based Hostess Brands Inc. filed for bankruptcy protection in 2012, putting in peril such cherished brands such as Twinkies and Ding Dongs. Bankruptcy lawyers flocked to New York to work on the expansive case, with the company courting potential buyers for its various brands. Hostess officials came under fire for accepting nearly $2 million in bonuses as part of the planned liquidation, while workers complained that their pensions were not funded as Hostess had promised.
3. American Airlines Attempts to Emerge from Bankruptcy
Fort Worth-based American Airlines cleared a major hurdle in its attempt to emerge from bankruptcy protection after reaching a compromise with pilots in December. The cost for the massive reorganization topped $200 million, with American eyeing a potential partnership with US Airways. Unions for American’s pilots, flight attendants and mechanics reportedly have signed off on a US Airway merger, which could create a combined entity worth more than $8 billion.
2. Irving-based Boy Scouts of America Releases “Perversion Files”
In October, an Oregon court ordered Irving-based Boy Scouts of America to release thousands of files detailing decades of sexual abuse by troop leaders. Experts estimate that the organization maintained nearly 5,000 records of sexual deviance dating back to the 1920s, dubbing them the “perversion files.” The Boy Scouts say they have upgraded youth protection policies since the 1980s, including criminal background checks conducted on paid employees and adult volunteers. However, the group is still withholding portions of the files dating from 1985 to the present. A lawsuit in San Antonio seeks their release.
1. Legal Fight Over Texas’ Legislative Redistricting Nullifies Texas’ Political Impact
The legal dispute over Texas’ legislative redistricting made the Lone Star State a non-player in the presidential election. Texas originally was set to be a part of the Super Tuesday primary elections in March, but was delayed to May 29 when Democrats challenged legislative boundaries redrawn by Republicans. By then, Mitt Romney’s remaining Republican challengers – Rick Santorum, Newt Gingrich and Ron Paul – had effectively folded their campaigns. At the root of the Democratic challenge was the assertion that 3.7 million additional minority Texans should warrant at least one additional Democratic district. A U.S. District Court in San Antonio redrew the legislative boundaries to resemble new census data, but was then slapped down when the U.S. Supreme Court ordered a version more closely resembling Texas legislators’ original map.
December 13, 2012 by Robert Tharp at 10:30:00 am
Houston and South Texas provided an interesting variety of legal drama in 2012, from fraud to murder to indicted lawmen. Some legal cases heard in other parts of the country provided significant local impact.
Below is Androvett Legal Media & Marketing’s list of the Top 10 Houston/South Texas Legal Stories of 2012:
10. Jury Convicts Lawyer in Ongoing South Texas Judicial Bribery Scandal
Attorney Ray R. Marchan was convicted of bribing a South Texas judge, earning him a 42-month federal prison sentence in the ongoing Rio Grande Valley scandal. Marchan, a well-known Stanford Law grad, was the first lawyer to go to trial in the federal investigation involving wiretaps and years of investigation. Ex-judge Abel Limas was convicted of taking bribes, but has not been sentenced. More trials are set. Among the eight people already convicted in the scheme is former state lawmaker Jim Solis. Limas, Solis and others pleaded guilty to charges relating to the bribery.
9. Policeman Who Beat Teen Chad Holley Gets Off, Holley Arrested Again
Houston Police Officer Andrew Bloomberg was acquitted in 2012 on official oppression charges stemming from the 2010 videotaped beating of then-15-year-old burglary suspect Chad Holley. There was great community outrage over both the videotape and Bloomberg’s acquittal. Holley was convicted in the 2010 burglary and was arrested on another burglary in 2012. Other involved officers, some who were fired or suspended, are still awaiting trial.
8. Harris County Probation Department in Chaos
Widespread problems with drug testing in the Harris County Probation Department were revealed in an August hearing, and the district attorney’s office stopped using the department’s recommendations. Judges called for the ouster of the director of the 800-employee organization, who instead resigned. An interim leader was appointed to begin the agency’s rebuilding effort. One big change was the move to urine testing for alcohol offenses instead of less-effective breath tests. The department also implemented sophisticated drug testing that measures additional gradations beyond positive or negative.
7. Voter Registration and Voter Roll Problems
The seemingly never-ending redistricting battle continued to plague the Houston area when confusion emerged over changes to polling locations. But worse, the League of United Latin American Citizens sued after claiming that Harris County rejected more voter applications than any other Texas county and systematically targeted Hispanics and African-Americans in roll purges. On top of these woes, people who registered to vote when they got their drivers licenses were not properly added to the local rolls. A Texas voter ID law was placed in legal limbo as well, creating even more confusion. Still, the November elections went through without recalls.
6. Ex-Houston Astro Roger Clemens Acquitted On Charges of Lying To Congress
Pitcher Roger Clemens and Houston lawyer Rusty Hardin tried the long-running case in Washington, D.C., and came away victorious. Clemens was charged with lying under oath to a Congressional committee about using performance enhancing drugs. He claimed his innocence for years before the trial, and still found himself vilified by some in the sports press even after the jury said the evidence wasn’t there. Clemens came back home to Houston and took a couple of victory laps pitching for the minor league Sugar Land Skeeters.
5. Two Harris County Constables Face State, Federal Indictments
Harris County Precinct 6 Constable Victor Trevino was indicted by a state grand jury for failing to report cash campaign contributions, diverting money from his youth charity for personal use, and using deputies to serve eviction notices while keeping the delivery fees. Meanwhile, over in federal court, Harris County Precinct 1 Constable Jack Abercia and others face charges of conspiracy to violate various federal laws for unlawfully accessing the National Crime Information Center database on multiple occasions for private financial gain. Their lawyers say they are innocent and will fight what they claim are technical violations.
4. BP Engineer, Officials Hit with Criminal Charges in Gulf Oil Spill
Energy giant BP faced criminal allegations in Houston related to several deaths in the 2005 Texas City refinery explosion, so the criminal complaint against the company in the Gulf Oil spill were not as big a surprise as charges against employees. Though the filings are in New Orleans, the reverberations for employees reach Houston, into the Gulf, and elsewhere. In November, federal officials charged two well-site leaders with manslaughter, and a third BP official was charged with obstruction of justice. An engineer also was charged with obstruction earlier in the year. Local lawyers say additional charges could be in the works.
3. Harris County District Attorney’s Office Awkwardly Changes Hands
After the 2011 scandal over the Houston Police Department’s Breath Alcohol Testing (BAT) van and prosecutors’ handling of grand jury investigations, Texas Rangers and the FBI also took a look at Harris County DA Pat Lykos’ office. She fell in the Republican primary to Mike Anderson, a former prosecutor and judge. He faced Lloyd Oliver, a previously-indicted perennial candidate who said he puts his name on ballots to get clients. Unhappy Democrats failed to get Oliver off the ballot. Anderson beat Oliver in November, and the ex-cop and ex-GOP judge Lykos now will hand the reigns to the ex-ADA and ex-GOP judge Anderson. But the Republican Party did not keep all its county offices, voters split on judicial races, and the local judiciary appears more permanently mixed than in years.
2. Absent Day-Care Worker Jessica Tata Gets 80 Years in Child’s Fire Death
Four children age three and under died in a Houston home day care fire while caretaker Jessica Tata was shopping instead of tending to the children or monitoring the hot oil she left on the stove. A jury sentenced the 24-year-old to 80 years in prison for the death of one child following a sad and dramatic November trial. But her lawyer Mike DeGeurin says he thinks the verdict will not stand on appeal because the fire was an accident, and should not be prosecuted as felony murder. Prosecutors say they are ready to go forward with more trials on behalf of the other children who died, in addition to three others who were injured in the blaze.
1. The Stanford Financial Empire’s Day in Criminal Court
R. Allen Stanford, the former Texan turned billionaire and Caribbean knight, received a 110-year-sentence from a federal judge in Houston in June after jurors found him guilty of 13 crimes tied to the $7 billion fraud he maintained through an international financial empire. Four other Stanford Financial executives went down with him as politicians were made to return political contributions from the disgraced investment guru. Investor victims and the court-appointed receiver for the company also sued Stanford’s former law firms to try to reclaim some of the stolen funds.
November 29, 2012 by Amy Hunt at 1:45:00 pm
A truck driver who failed to heed warning signs about a traffic jam on the road ahead of him is being blamed for setting off a fatal chain reaction of vehicle collisions on Interstate 80 in western Nebraska. The resulting truck accident killed an entire family, according to the most recent blog post by The Law Offices of Frank L. Branson.
The truck was driven by Josef Slezak of River Grove, Ill., who has been charged with four counts of manslaughter and four counts of vehicular homicide.
Mr. Slezak was travelling on I-80 when he approached an earlier truck accident that had killed another semi driver, Keith Johnson. According to news reports, area truckers had been warning one another about the accident for some time on their CB radios, but Mr. Slezak never reduced his speed.
His truck collided with a car being driven by Christopher Schmidt, who then collided with the car being driven by his wife, Diana, who was travelling with the couple’s two children, Connor, 2, and Samuel, 3. All four of the Schmidts died at the scene. An autopsy later revealed that Ms. Schmidt was 30 weeks pregnant, which resulted in Mr. Slezak being charged with an additional count of vehicular homicide of an unborn child.
Mr. Slezak drove for AKI Trucking, which, according to a news report, “has a Fatigued Driving (Hours of Service) BASIC score of 80.9 percent, which exceeds the threshold for intervention by 15.9 percent.”
November 26, 2012 by Amy Hunt at 12:00:00 am
The stress of divorce can cause as much, or more, damage than the divorce itself. But if recent divorcees cope with their stress in positive ways, they can be on a better footing than they were before the divorce, says the Dallas family law firm of McCurley Orsinger McCurley Nelson & Downing in its most recent blog post.
In addition to sleep, exercise and good nutrition (which were covered in an earlier blog post), the firm offers seven tips for turning divorce anxiety into “an opportunity for improvement.”
1. Meditation, whether on its own or combined with a tai chi or yoga practice;
2. Journaling, which can help you process complex, often conflicting, emotions;
3. Friends, “the real kind, not the Facebook kind,” are key to staving off depression;
4. Nature has amazing restorative effects, both in adults and kids;
5. Laughter “distracts us, releases positive hormones, reduces anxiety, and just generally makes us happier”;
6. Prioritize your life by doing the “important but not urgent” things that would make your life better;
7. Organize your home, car and office. Even if you tackle it one drawer at a time, it’s energizing and liberating.
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