NewsWire

Credit Checks under Fire
A growing number of companies are using pre-employment credit checks in hiring decisions, but some state lawmakers have introduced or passed legislation banning the practice. "Employers should weigh carefully the benefits and risks of requesting credit histories, although federal laws don't specifically prohibit their use," says Tony Campiti of Thompson & Knight. "Consumer advocates and public pressure are driving the passage of these laws at the state level, and now the EEOC is examining whether employers' use of credit and background checks is illegal discrimination." Campiti notes that using a credit report in hiring decisions can open the employer to a federal lawsuit if the report reveals a bankruptcy. "While employers must get written permission to run a credit check, many applicants may not feel they're in a position deny the request." To interview Mr. Campiti, contact Barry Pound at 800-559-4534 or barry@androvett.com.

Review of ‘Honest Services' Law Overdue
Former Enron CEO Jeffrey Skilling's bid for a new trial was bolstered this week when the U.S. Supreme Court heard oral arguments related to the federal "honest services" law. A reexamination of the law is imperative, says Gardere Wynne Sewell's Tom Hagemann, who tried United States v. Bayly, et al., the case that led on appeal to a wave of cases challenging private-sector honest services fraud prosecutions. "The statute is extraordinarily broad and arguably vague," he says. "The law prohibits employees from depriving employers ‘of the intangible right of honest services,' giving the government almost unbridled prosecutorial power to apply that ‘right' as it sees fit. While limiting principles may mean fewer prosecutions, they are long overdue." Hagemann explores these issues in his recent article, "The Sea and the Mirror: Some Reflections on Corporate Honest Services Fraud and the (Hypothetically) Innocent Corporation." To interview Mr. Hagemann, contact Rhonda Reddick at 800-559-4534 or rhonda@legalpr.com.

Bankruptcies Decline, But Risks Remain
In a possible sign of further economic recovery, just five public companies filed for Chapter 11 or Chapter 7 bankruptcy protection last month, down from a total of 19 filings in February 2009. Those figures continue a consistent decline in such filings from the previous two months. "While we're seeing this pattern, you have to view these statistics with caution," says Rhett Campbell, head of the bankruptcy section in the Houston office of Thompson & Knight. "Some cash-starved companies are avoiding bankruptcy by raising capital through high-risk, high-yield sources and others are working with lenders to delay debt payments and change credit agreements. While the mega-corporations may have weathered the storm, many other publicly held companies with fewer tangible assets remain at risk in a volatile market." To interview Mr. Campbell on bankruptcy-related matters, contact Barry Pound at 800-559-4534 or barry@androvett.com.  

Lawsuit Filed in Fort Worth Police Intoxication Manslaughter Case
The Fort Worth bar that served an off-duty police officer at least eight drinks has been sued by relatives of a woman who was killed when the officer broadsided her car. Attorneys Jeff Rasansky of The Rasansky Law Firm and Chuck Noteboom of The Noteboom Law Firm represent the family of Sonia Baker, 27, who died on Dec. 11, 2009, when her car was struck by a city-owned SUV driven by officer Jesus Cisneros. "Sonia had a loving family and a great career ahead of her before she was killed because The Pour House wanted to serve more drinks," says Rasansky. Cisneros, who resigned, is facing intoxication manslaughter charges. For more information, contact Bruce Vincent at 800-559-4534 or bruce@androvett.com.

Is Toyota Ignoring the Real Problem?
Houston attorneys Mark Lanier of The Lanier Law Firm and Tammy Tran of The Tammy Tran Law Firm filed a lawsuit in state court yesterday on behalf of a Houston woman injured when her Toyota Camry with a defective acceleration control system crashed. "We have a company that has known for some time that there is a problem," says Lanier. "Yet they've done little to nothing to fix it while customers suffer the consequences." The Lanier Law Firm is handling more than 300 cases against Toyota. The company has recalled millions of vehicles for problems ranging from faulty floor mats and brake problems to drive shaft malfunctions. However, Toyota has ignored Lanier's call for an investigation of whether the recalls are a process problem, such as malfunctioning electronics, rather than a parts problem, such as faulty floor mats. For more information, contact Bruce Vincent at 800-559-4534 or bruce@androvett.com.

$8.37 Million Jury Verdict in 2004 Houston Warehouse Fire
A Harris County jury has awarded Houston-based Control Solutions Inc. $8.37 million after finding that chemicals supplied by an Indian manufacturer were the cause of a 2004 fire that destroyed the company's warehouse and offices. "This fire not only destroyed Control Solutions' buildings, but also threatened the health and safety of everyone in the surrounding area," says George H. Lugrin IV, a shareholder in Houston's Westmoreland Hall Maines & Lugrin, P.C. and lead counsel for Control Solutions. "Hopefully Gharda Chemicals, and other companies, now will think twice before selling products that put us all in danger." Evidence showed that Gharda Chemicals sold contaminated drums of Chlorpyrifos Technical, a product used to make various pesticide products. Investigations following the fire showed that the chemicals were contaminated with a flammable solvent. For more information, contact Alan Bentrup at 800-559-4534 or alan@androvett.com.

Court Enters Judgment for $7.3 Million In Video Game Case
Dallas County District Court Judge Carl Ginsberg has entered a judgment for the full amount of the jury verdict in favor of video game maker MumboJumbo against rival game maker PopCap. The amount includes $2.7 million in attorneys' fees. The judgment follows last month's trial, in which a jury found PopCap liable for fraud and tortious interference against MumboJumbo. The two companies had an agreement to sell and distribute certain games, but the jurors found PopCap had gone behind MumboJumbo's back and decided to sell and market games on its own, and intentionally soured MumboJumbo's business relationship with a key retailer. "We're happy to see the judge enter a judgment for the full $7.3 million," says attorney Marty Rose of Rose•Walker, who represented MumboJumbo at trial. For more information on the MumboJumbo judgment, contact Mark Annick at 800-559-4534 or mark@androvett.com.