Tuesday, May 30, 2017

Super Fight over ‘Superhero’ Trademark

Originally published by Peggy Keene.

In this day and age, geek is chic.  Superheroes and comic book characters dominate movies, video games, and even television shows now.  Brands like DC […]

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Well, you proved liability . . .

Originally published by David Coale.

The Fifth Circuit reversed a JNOV on liability for breach of contract in Kerr v. Mapei Corp., holding: “The jury was presented with two alternative, but plausible, accounts of the formation and authorization of a contract. The jury reasonably selected one of those alternatives.” As to consequential-type damages for lost profits for other sales, however, the Court affirmed the judgment for the defendants, finding that the plaintiff’s damages model “was not supported by any empirical analysis or any evidence outside of the [contract] relationship . . . (e.g., real-world sales, customer surveys, or current market demand).” In particular, it noted the lack of evidence that the substantial business opportunity related to the contract would recur, the fact that the contract was terminable at will, and the lack of weight for a party’s own “unsubstantiated, self-serving speculations” about future business. No. 16-10430 (May 23, 2017, unpublished).

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Texas: Law firm failed to provide sufficient notice of its arbitration agreement

Originally published by Gene Roberts.

In Alexander Dubose Jefferson & Townsend, LLP v. Vance, the United States District Court (Western District, Austin) held that a law firm did “fairly suggest to employees that the firm was implementing a mandatory, binding arbitration policy” and denied the firm’s motion to compel arbitration.

According to the decision, ADJT terminated Vance’s employement with the firm. The firm sued Vance on causes of action including the Computer Fraud and Abuse Act, the Texas Uniform Trade Secrets Act, and the Texas Theft Liability Ace. Vance, a non-equity partner, counterclaimed for conversion, breach of contract, negligence, and violations of Title VII and the Age Discrimination in Employment Act. ADJT moved to compel all claims to arbitration. Vance responded that there was no valid arbitration agreement.

The court found that ADJT emailed its employees, under the subject line “Firm Policies” that it was “organizing, updating, and supplementing the firm’s employeee and p …

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Free legal clinic for Conroe veterans

Originally published by Eric Quitugua.


Veterans in need of legal help will be able to meet with volunteer attorneys for advice and assistance at a free clinic in Montgomery County on Saturday, June 3.

Attorneys will be available to offer advice in family law, wills and probate, consumer law, and real estate and tax law, as well as disability and veterans benefits. Veterans in need of ongoing legal representation, and who qualify for legal aid, will be assigned a pro bono attorney from the Houston Volunteer Lawyers.

The clinic will be held from 9 a.m. to noon at the Conroe VA Outpatient Clinic, 690 S. Loop 336 W., Conroe 77304.

No appointment is necessary.

The clinic is a service of the Montgomery County Bar Association, the Woodlands Bar Association, and the Houston Bar Foundation’s Veterans Legal Initiative. The HBF sponsors additional clinics Friday afternoons at the Michael E. DeBakey VA Medical Center in Houston from 1 p.m. to 5 p.m.

For more information, go to hba.org.

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Texas House congratulates Joe K. Longley with resolution

Originally published by Jillian Beck.

Joe_Longley_FullSizeRenderThe Texas House of Representatives adopted a resolution May 28 congratulating Joe K. Longley of Austin on his recent election as 2017-2018 State Bar of Texas president-elect.

“… the House of Representatives of the 85th Texas Legislature hereby congratulate Joe K. Longley on his election as (2018-2019) president of the State Bar of Texas and extend to him sincere best wishes for a successful and productive term … ,” said House Resolution 2642, which was authored by State Rep. Yvonne Davis.

Read the full resolution here.

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4 Times You Need to Talk to an Attorney

Originally published by Bob Kraft.

The legal process in the United States can be extremely complicated. To help ensure that you are being treated appropriately by the legal process, most people would benefit greatly by hiring a lawyer during any legal situation. While there are many times you would benefit from hiring an attorney, there are four situations in which you should definitely hire an attorney for legal representation.

Buying a Home or Other Major Investment

The first situation in which you should speak with an attorney is when you are buying a home, or making another similar major investment. When you are buying a home or making a big investment, there will likely be a lot of different contracts and legal negotiations involved. While you may be able to understand some of the language on your own, it is highly likely you will miss something. The people you are negotiating with probably have their own lawyers writing the contract and contract lawyers specialize in making their language complex and hard to understand. To ensure that you are properly represented, and not signing a bad contract, it is advisable to have legal representation.


While a divorce can always be a difficult situation, it can also be a challenging legal situation as well. Since there is a lot at stake during a divorce, including sharing assets and child custody, having strong legal representation is very important. A lawyer will help you negotiate with the other party to come to a fair settlement. An attorney can also help you work through mediation if you choose not to go to court for your divorce.

Any Criminal Issue

If you have been charged with any crime, even if it is as simple as a misdemeanor, it would be a good idea to speak with an attorney. An attorney will be able to review your case, help you to negotiate a lower penalty, or even defend you in a criminal trial. This can greatly help to reduce the ultimate penalty and will greatly increase your chance of having the charges dropped.

Insurance Disputes

Occasionally, when trying to reach a settlement with an insurance company, you run into a wall. The insurance company may not be paying you the full amount you are owed, or they may be delaying your payment. If your discussions are still civil and you are making progress, even if it is slow, you can continue to negotiate on your own. On the other hand, if you are no longer making progress or there is a time limit on your claim, hire a qualified attorney. The attorney can give you the advice you need and will represent you and your best interests.

While possibly expensive, hiring an attorney can be beneficial for you and your peace of mind in many situations. Examine your specific situation carefully and arrange for consultations if you think that you may need extra legal help.

Author Information: Jenn Montgomery is a freelance writer, editor, and blogger based in San Diego. She writes on a variety of topics and enjoys learning new things. She graduated from San Diego State University with a degree in Rhetoric and Writing Studies. In her free time, she enjoys hiking, baking, and knitting. You can contact her on Twitter at @jennmontgomery5.


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BP America v. Red Deer Resources – the Shut-in Royalty Clause

Originally published by John McFarland.

On April 28, the Texas Supreme Court issued its opinion in BP America Production Company v. Red Deer Resources, LLC, No. 15-0569, a unanimous opinion written by Justice Green. The case concerns operation of a shut-in royalty clause in a lease granted in 1962 covering 2,113 acres in Lipscomb and Hemphill Counties.  BP had one gas well on the lease that produced less than 10 mcf per day. In 2011, Red Deer obtained a top lease on the 2,113 acres. BP turned off the valve on the well on June 12, 201 and tendered a shut-in royalty payment to the lessors on June 13. The well last produced gas on June 4. In August 2012, Red Deer sued BP, alleging that the lease had terminated for lack of production in paying quantities prior the date the well was shut in.

The shut-in royalty clause reads:

Where gas from any well or wells capable of producing gas … is not sold or used during or after the primary term and this lease is not otherwise maintained in effect, lessee may pay or tender as shut-in royalty …, payable annually on or before the end of each twelve month period during which such gas is not sold or used and this lease is not otherwise maintained in force, and if such shut-in royalty is so paid or tendered and while lessee’s right to pay or tender same is accruing, it shall be considered that gas is being produced in paying quantities, and this lease shall remain in force during each twelve-month period for which shut-in royalty is so paid or tendered ….

Continue reading →

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Government Policies Seek to Make Findings from Clinical Trials More Widely Available

Originally published by Robert Kraft.


In “To Your Health,” the Washington Post reported that, “the government unveiled new policies” intended “to make findings from clinical trials of therapies and devices more widely available, warning that it would block future funding for universities and other institutions that do not comply.” Starting “on Jan. 18, researchers in most studies of therapies and devices funded by NIH or regulated by the” FDA “will have 90 days to come into compliance with the new rules.” During “a briefing for reporters,” Francis S. Collins, director of the National Institutes of Health, said, “We, as a community, have a disappointing record of making those results available.” Collins added, “This is about maintaining the trust that we have with participants in clinical trials who volunteer to take part in these efforts with the expectation that it will add to the body of knowledge.”

Bloomberg News reported that in a call with reporters, FDA Commissioner Robert Califf said, “If it’s not a good clinical trial, we’re saying you’ve got to put it out there anyway. It’s going to lead people to do things more thoughtfully, and I think the quality of the trials will get better.” Bloomberg News points out that “NIH first proposed the rule in 2014, and the final version released Friday is similar to the draft, said Kathy Hudson, the deputy director for science outreach and policy at NIH.”

On its website, CBS News reported that Califf said, “This, is in my view, is a really exciting statement that we’re going to hold true to that pledge we make when we do research on people, to make that general knowledge available.” Meanwhile, Collins said, “Our goal is to have all NIH-funded trials in ClinicalTrials.gov.” This “new policy ‘has some teeth,’ he added, and will help maximize the value of clinical trials, whether publicly or privately funded.”

From the news release of the American Association for Justice.

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Shots Across the Bow: Using Texas Rule 202 in Trade Secrets Disputes

Originally published by Kenny Sumner.

Sugar Land Business Law Attorneys Assisting Businesses with Trade Secret Liltigation

When management of a business enterprise has solid evidence that a former employee has begun to take inappropriate advantage of business trade secrets or perhaps has failed to live up to the terms of a noncompete agreement, it often would like to fire a warning shot across the bow of the former employee to let that former employee know that his or her activities are not to be tolerated. In most states, there are no tools short of actual litigation – e.g., a suit for injunctive relief.

Texas businesses, however, have an underutilized strategy that can sometime prove effective in stopping the inappropriate activity before any significant damage is done. Texas attorneys know it as Rule 202 of the Texas Rules of Civil Procedure. Under Rule 202, a Texas business may be able to investigate possible trade secrets claims before it files a lawsuit. Under the right circumstances, Rule 202 can save time and money.

Texas Rule 202

Where improper use of trade secrets is expected, yet still before filing an actual lawsuit, a business enterprise’s attorney may petition the court for an order authorizing the taking of an oral deposition or the submission of written questions to:

  • Perpetuate or obtain a person’s testimony for use in an anticipated suit, or
  • Investigate a potential claim or suit.

The petition must be verified (i.e., sworn) and it must state the subject matter of the anticipated action and the requesting party’s interest therein. The court must grant the request or petition, provided it finds that either:

  • Allowing the requesting party to take the requested deposition may prevent a failure or delay of justice in an anticipated suit; or
  • The likely benefit of allowing the petitioner to take the requested deposition to investigate a potential claim outweighs the burden or expense of the procedure.

Recent Texas Appellate Decision is Instructive

A recent Texas appellate decision added clarity as to the type of evidence a petitioning business should show in order to get a judicial order requiring the deposition of the former employee [In re Pickrell, No. 10-17-00091-CV (Tex. App. 10th Dist. 4/19/17). The court ruled that a verified petition, coupled with the attorney’s arguments in court, were insufficient to support a Rule 202 petition. The petitioning business, through its counsel, should be prepared to present witness testimony at the Rule 202 hearing. The 10th District Court also indicated the rule covers depositions; it does not allow for orders requiring the production of documents or other written evidence. Such production need not be required until the business enterprise has filed a civil action against the former employee.

Rule 202 is not Appropriate in Every Trade Secrets Dispute

In many situations, businesses have been successful in getting the attention of a former employee (and his or her new employer) with a Rule 202 request for pre-litigation deposition. The former employee can often be made to understand the seriousness of the allegations and that the former employer is not going to stand by and watch its secrets be used or acquiesce in a breach of a noncompete agreement by the former employee. Following the Rule 202 hearing, or perhaps after the actual deposition itself, the parties may be able to negotiate some compromise that saves the costs of further litigation.

The Rule 202 process, if handled correctly, can sometimes provide an enterprise with security without the business disruption and expense of a full-fledged civil action.

Romano & Sumner: Attorneys Who Think Outside the Box

Texas BarToday Top Ten Badge
Paul Romano & Kenny Sumner have more than 20 years of combined experience in litigation and transactional law. They know exactly how to handle tough legal situations, including the steps that should be taken to protect your trade secrets or to prevent employees from acting outside appropriate bounds. They have aggressively gone to court, when necessary, in order to protect and promote the rights of clients.

The law firm of Romano & Sumner is committed to providing legal services to you or your business in a timely manner. Our business law lawyers answer questions in a language that you can understand. We provide individualized attention to your situation; we don’t have a cookie cutter approach. We respond promptly to phone calls and email communications. Call us at 281-242-0995 or complete our online contact form.

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Texas Supreme Court Nixes Employee’s Defamation Claim, Reinforces At-Will Employment Doctrine

Originally published by Leiza Dolghih.

Historically, Texas employers have been able to avoid defamation claims from terminated employees by keeping mum about the cause of termination when asked to provide references. However,  some employees were able to bring defamation claims anyway by alleging that because they had to disclose the reason for their termination to potential employers, they were compelled to defame themselves – a so-called theory of compelled self-defamation.

Over the years, several Texas courts of appeals bought into this doctrine, creating a heartburn for many employers.

However, last week, the Texas Supreme Court closed the loophole created by the doctrine of compelled self-defamation and expressly and unequivocally ruled that such doctrine was not recognized under Texas law.  In Exxon Mobil Corp, et al. v. Rincones, an employee terminated for alleged drug use, brought a defamation claim against Exxon and other parties and alleged the doctrine of compelled self-defamation on the grounds that each time he applied for a new job, he had to repeat his employer’s defamatory statements about himself, i.e. that he used drugs, to others.  The Supreme Court ruled that: 

“We expressly decline to recognize a theory of compelled self-defamation in Texas. In rejecting it, we join an emerging majority of state courts that have considered the issue, including those in Connecticut, Massachusetts, Hawaii, Tennessee, Iowa, Pennsylvania, and New York.”

The court explained that if it were to recognize compelled self-defamation, it would risk discouraging plaintiff employees from mitigating damages to their own reputations and encouraging them to publish defamatory statements just to increase the damages associated with their claim. Furthermore, allowing a claim based on compelled self-defamation would impinge on the at-will employment doctrine, which allows employers to terminate employees for any lawful reason, however unreasonable or careless that reason might be. Allowing these types of claims to proceed, would impose a burden on employers to conduct investigations and make accurate findings before taking any action against an employee or risk being sued for defamation.    

BOTTOM LINE: The Rincones decision reinforces the at-will employment doctrine in Texas and serves as a reminder that employers in Texas may terminate at-will employees for any lawful reason.  Employers, however, should continue to be cautious about disclosing the reasons for termination to third parties such as potential employers looking for references.

Leiza represents companies in business and employment litigation.  If you need assistance with a business or employment dispute contact Leiza for a confidential consultation at Leiza.Dolghih@lewisbrisbois.com or (214) 722-7108.

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A SLAPP in the Face to Texas Trade Secrets Lawsuits – Part 1

Originally published by Zach Wolfe.

In Elite Auto Body v. Autocraft Bodywerks, the Austin Court of Appeals held that the Texas anti-SLAPP statute applies to a company’s claim that a former employee communicated confidential information and trade secrets to a competitor. This meant that the company was required to produce evidence to support every element of the claim at the beginning of the lawsuit—a significant burden.

This sounds like a fairly technical issue, but it’s an important development, with potentially far-reaching consequences for departing employee litigation—and other kinds of litigation. Elite Auto Body is also a great case to read if you’re fascinated by questions of statutory interpretation. And who isn’t?

Textualism vs. originalism

Interpreting the text of a statute or constitution is a fundamental challenge in the law.  The “textualist” would say that courts should apply the “plain meaning” of the text of a statute, without resort to any extrinsic sources such as the intent of the legislature or what would make better public policy.

This view probably resonates with the average “man on the street,” but in its strict form, textualism borders on the absurd.  If hard cases could really be decided by simply applying the plain text, we wouldn’t need judges schooled in the law.

Textualism is often associated with “originalism,” which is the view that a statutory or constitutional provision should be interpreted based on the original understanding of the text. But the two are not the same. In fact, originalism shows that textualism is insufficient (at least in hard cases). If the text alone were sufficient to resolve disputes, then resort to the original understanding of the text would be unnecessary.

Trade secret protection vs. freedom of speech

Let’s take an example everyone knows: the First Amendment protection of “freedom of speech.” Then let’s take a statute pertinent to the Elite Auto Body case: the Texas Uniform Trade Secrets Act (TUTSA). TUTSA provides civil remedies for “misappropriation” of “trade secrets.”[1]  Emailing your employer’s trade secrets to a competitor would be a clear violation of TUTSA.

So does TUTSA violate the First Amendment? If I can’t email my employer’s confidential information to another company, doesn’t that restrict my “freedom of speech”?

The “vulgar textualist” would say no, under the plain meaning of the First Amendment, sending an email is not “speech,” so the First Amendment doesn’t apply. But no serious person in the law, even a “textualist,” would apply such a hyper-literal interpretation. Obviously, the First Amendment is intended to protect forms of communication broader than actual “speech.”

And it is well established that there are certain categories of communication that do not enjoy full First Amendment protection: fraudulent statements, intentionally defamatory statements, communications between participants in a criminal conspiracy, just to name a few. People may disagree on the exact contours of the categories of expression that do not enjoy First Amendment protection, but no one seriously questions the basic premise that some kinds of communication are not protected (even though the premise is not derived from the “plain meaning” of the text).

Similarly, just about everyone would agree that communication of trade secrets is one of these categories. People may argue about where to draw the line on trade secret protection, but few would seriously dispute the general principle that the First Amendment allows laws that prohibit the communication of trade secrets.

With this point established, we have set the stage for the Texas anti-SLAPP statute, the recent Elite Auto Body case, and an interesting test for textualism.

The Texas anti-SLAPP statute

Texas adopted its anti-SLAPP statute in 2011. SLAPP stands for Strategic Lawsuit Against Public Participation. The term SLAPP doesn’t actually appear in the statute, but the “anti-SLAPP” purpose of the statute is widely recognized. (For background, see A Primer on the Texas Anti-SLAPP Statute and Five Years of Anti-SLAPP in Texas.)

The idea was to give defendants the right to seek early dismissal of unfounded lawsuits that plaintiffs file to punish Texas citizens for exercising their free speech rights. When the statute applies, the defendant can require the plaintiff to produce evidence to support each element of its claims at the beginning of the lawsuit. If the plaintiff fails to meet this burden, the lawsuit gets dismissed.[2]

This is a big deal. As Texas litigators will recognize, a SLAPP motion is equivalent to a “no-evidence” motion for summary judgment. The Texas Rules of Civil Procedure allow a defendant to file a no-evidence motion for summary judgment, which places the burden on the plaintiff to come forward with evidence to support the challenged elements of its claims. If the plaintiff fails to respond with evidence, the claim gets dismissed.

That’s effectively the same thing the anti-SLAPP statute does. So why is it such a big deal? The key difference is that you can’t file a no-evidence motion for summary judgment until after the plaintiff has had adequate time for discovery.[3] This is a significant limitation.

The anti-SLAPP statute, in contrast, allows the defendant to file a motion to dismiss at the beginning of the case, before the plaintiff has had any time for discovery.[4] This is a major strategic advantage for the defendant. Often the plaintiff needs discovery in order to obtain evidence to support all of the elements of its claims. If the legislature gave defendants the right to file this kind of motion in every case, it would be a tectonic shift in the balance of power between Texas plaintiffs and defendants.

But the anti-SLAPP statute only applies to SLAPP lawsuits, right?

The problem with the anti-SLAPP statute

The problem is that it is not so easy to distinguish between a SLAPP lawsuit and an ordinary lawsuit. A SLAPP, as the term is commonly used, has two distinguishing characteristics, one going to the merits of the lawsuit and the other going to the motive behind it. First, a SLAPP lawsuit has no merit, meaning no evidence to back it up. Second, a SLAPP lawsuit is filed for an improper motive—i.e. to silence or punish the defendant by forcing the defendant to spend money defending a lawsuit.

But defendants say these things about all kinds of lawsuits. So the first problem with the anti-SLAPP statute is that it singles out one type of litigation, when the problem it purports to address applies to all kinds of litigation.

In my view, this sort of thing is generally a bad idea. I haven’t seen a compelling explanation of why defendants in SLAPP lawsuits should get to file an early motion to dismiss while defendants in other kinds of unfounded lawsuits don’t.

Of course, there is a long tradition of the Texas legislature singling out certain types of litigation for special treatment. For example, plaintiffs in medical malpractice cases have to get an expert report just to file a lawsuit, before any discovery, while plaintiffs in other cases don’t. Defendants in residential construction lawsuits have special statutory rights that defendants in other lawsuits don’t. But why? Why should special rules apply to medical malpractice lawsuits and not, say, architectural malpractice suits?

The answer is pretty obvious. You don’t have to be a political scientist or a reporter covering the Texas legislature to understand that laws like this get passed in response to pressure from interest groups seeking protection from lawsuits. That doesn’t necessarily mean that these laws are bad public policy. We could debate all day whether the limits on medical malpractice suits are good policy or not.

But it does mean that we should approach these special-interest statutes with some skepticism. The same is true of the anti-SLAPP statute. Granted, it appears that a wide range of groups from across the political spectrum backed it, but we should still ask whether it makes sense to single out one type of lawsuit for special treatment.

While it is clear that the anti-SLAPP statute singles out one type of lawsuit, it is not so clear what type of lawsuit that is. This gets to the second problem with the statute: it tries to do surgery with a meat cleaver. The “cancer” it tries to cut out is the “big guy” filing a frivolous lawsuit against the “little guy” to try to deter the little guy from exercising his First Amendment right to criticize the big guy.

The statute does say that its purpose is to safeguard constitutional rights, but the operative language of the statute–particularly the definition of the “right of association”–is much broader than that. Nothing in the statute expressly limits its reach to “big guy vs. little guy” lawsuits, or even to lawsuits involving the exercise of First Amendment rights.

Perhaps the language of the statute could be made more precise so that it cuts like a scalpel. But no, this second problem is almost unsolvable. It would be very difficult to come up with language that would apply only to “true” SLAPP lawsuits and not to ordinary lawsuits. Like obscenity, a SLAPP is hard to define with precision. You just “know it when you see it.” That doesn’t make for a good statutory definition.

Does the anti-SLAPP statute apply to trade secrets lawsuits?

And that brings us to the question presented in Elite Auto Body v. Autocraft Bodywerks.

Misappropriation of trade secrets is not protected by the First Amendment, and it does not appear that the Texas legislature had trade secrets lawsuits in mind when it passed the anti-SLAPP statute. Yet the plain language of the statute is broad enough to apply to a claim that an employee communicated a company’s trade secrets to a competitor she has joined. So, can the defendant in that kind of trade secrets case file a motion to dismiss under the statute?

Stay tuned. I’ll address that in Part 2.


head-shot-photo-of-zach-wolfeZach Wolfe is a Texas trial lawyer who handles non-compete and trade secret litigation. His firm Fleckman & McGlynn, PLLC has offices in Austin, Houston, and The Woodlands.

These are his opinions, not the opinions of his firm or clients, so don’t cite part of this post against him in an actual case. Every case is different, so don’t rely on this post as legal advice for your case.

[1] See Tex. Civ. Prac. & Rem. Code § 134A.002-004.

[2] Tex. Civ. Prac. & Rem. Code §§ 27.001-011.

[3] Tex. R. Civ. Pro. 166a(i).

[4] The defendant must serve the anti-SLAPP motion within 60 days of service of the lawsuit. Tex. Civ. Prac. & Rem. Code § 27.003(b). On the filing of such a motion, all discovery is suspended until the court has ruled on the motion. Tex. Civ. Prac. & Rem. Code § 27.003(c). For good cause, the court can allow specific limited discovery relevant to the motion. Tex. Civ. Prac. & Rem. Code § 27.006(b).

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Lawyer Sanctioned for Too Many Objections at Deposition

Originally published by Thomas J. Crane.

People new to lawsuits do not appreciate how depositions work. No judge is present at a deposition. So, the lawyers’ behavior, good or bad, depends entirely on them. We see this regarding objections. In front of a jury, we lawyers avoid objections, because the jury will not understand. They may think we are trying to hide something – which sometimes we are. But, with no judge and no jury, its “katy bar the door.” Some lawyers go crazy objecting at depositions. In one case, a lawyer was sanctioned by a New York federal court because she objected some 600 times in one deposition. At some point during the eight hour deposition, the parties called the judge’s office, but the judge could not take the call. He told them to make concise objections that only address the form of the question. But, the lawyer, Amatullah Booth, continued to make frequent objections that appeared to affect the testimony of the witness. Her objections appeared on 400 pages and 83% of the transcript.

Later, the lawyers contacted the judge’s office again. The judge’s instructed Ms. Booth to just mark questions in the transcript which she felt should not be answered. Despite that instruction, Ms. Booth later instructed the witness, a police officer, not to answer those questions. Ms. Booth, an assistant corporate counsel, instructed the witness not to answer 20 times. Magistrate Judge Pollack ordered the City of New York to pay for the deposition. The judge found that Ms. Booth sometimes objected “asked and answered” even thought the question had not been answered. Sometimes, she objected based on relevance and harassment, even though the question was relevant.

Magistrate Judge Pollack cited some examples:

Opposing Counsel: “Did you see yourself on the video?”

Witness: “Yes”

Opposing counsel: “What were you doing?

Booth: “Objection. Vague”

Witness: “What — where?”

Another example:

Booth: “Objection. Asked and answered.”

Opposing counsel: “Asked and answered is not an appropriate objection.”

Booth: “Harassment.”

Opposing counsel: “None of those are.”

Booth: “It is harassment.”

See ABA Bar Journal report. It is harder to behave when no judge and no jury are present.

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Your Blog: Will Your Readers get to Know You?

Originally published by Cordell Parvin.

As you might imagine, I read dozens of blogs written by lawyers at least one time. What causes  your dream potential client to go back and read a second, third, fourth post and subscribe?

If we’ve worked together, you already know the answer.  Your potential client is looking for three things when he or she reads a blog written by a lawyer:

  1. Does the blog help him with his business?
  2. Does the blogger know her stuff?
  3. Is the blogger someone he or she would like to know?

Seth Godin posted recently: Microcopy in the age of a glance It’s worth a moment to read it. He points out that today, most people rarely get to the end of what you have written. He’s right.

If you read on, you’ll find he describes the importance of being human and being confident.

If your dream client read your blog for the first time today, would he or she see those two important elements?

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Facebook lied to the EU about privacy & will pay a $122 million fine!

Originally published by Peter S. Vogel.

The Washington Post reported that “Facebook was not honest about its ability to identify users who had both Facebook and WhatsApp accounts and link those accounts” during Facebook acquisition in 2014.  The May 18, 2017 report entitled “Facebook will pay $122 million in fines to the E.U.” included these details:

When Facebook notified the acquisition of WhatsApp in 2014, it informed the Commission that it would be unable to establish reliable automated matching between Facebook users’ accounts and WhatsApp users’ accounts…

However, in August 2016, WhatsApp announced updates to its terms of service and privacy policy, including the possibility of linking WhatsApp users’ phone numbers with Facebook users’ identities.

Moreover, regulators said, Facebook staff knew that matching accounts was technically possible at the time of the review…

What do you think about Facebook’s confession of privacy dishonesty to the EU?

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Protecting Your Business’ Trade Secrets

Originally published by Austin TX Business Law Blog.

How can I prevent my employees from revealing my trade secrets?

Your trade secrets are often invaluable to the success of your business.  Trade secrets can consist of processes, designs, formulas, practices, or patterns that are not widely known and cannot be easily ascertained.  No matter the size of your business, you likely have valuable trade secrets.  Examples of trade secrets could include customer lists, technological innovations, secret recipes, and supplier lists.  With high employee turnover rates nationwide, it is critical that you as an employer take steps to protect your trade secrets.  

What Are Your Trade Secrets?

Before you can protect your trade secrets, you will need to identify your key trade secrets.  Trade secrets will vary among businesses and the definition of a trade secret is quite broad.  One of the ways to determine what your trade secrets are is to think about what information or process your competitors would want to use.  If release of this important formula, technique, or the like would harm your business, it is likely a trade secrets.  Trade secrets have commercial value, but only if kept secret. 

Take Steps to Protect Your Trade Secrets

Now that you understand what your company’s trade secrets are, you can take steps to limit general employee knowledge about them.  To keep your trade secrets legally protected, you must take explicit steps to protect them.  Without an attempt to shield these secrets, a court might hold that the trade secret is not a secret at all and thus not subject to protection.  You can take steps to guard your secrets by keeping them in a locked, safe place, if they are on paper, or limiting access of electronic files of trade secrets on the computer. 

Limit who knows about your trade secrets as much as possible.  Draft a confidentiality or nondisclosure agreement for employees and business partners that clearly bars the sharing of the company’s confidential information, both while the employee is employed and after.  It can be helpful to remind employees of the laws concerning trade secrets from time to time.  Given that trade secrets can mean the difference between the success or failure of a business, it is important that you consult with a trade secret lawyer for assistance with protecting your important trade secrets. 

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Friday, May 26, 2017

Texas Bar Today Top Ten: Cloaks, Buzzwords, and School Lockers

Originally published by Teri Rodriguez.

To highlight some of the posts that stand out from the crowd, the editors of Texas Bar Today have created a list from the week’s blog posts of the top ten based on subject matter, writing style, headline, and imagery. We hope you enjoy this installment.

Top Ten Logo10. Can Police Search School Lockers?  Broden & Mickelsen, LLP @BrodenLaw in Dallas

9. What Is “Account Takeover” Fraud? – John T. Floyd of John T. Floyd Law Firm @HoustonDefender in Houston

8. The Invisibility Cloak Illusion: We are more observant (and yet, less observed) than all others –  Rita Handrich @TheJuryExpert of Keene Trial Consulting in Austin

7. Organization & Efficiency: Top Ways Lawyers Can Make Their Work Load Lighter – Bob Kraft of Kraft & Associates @BobKraft in Dallas

6. Alaska Oil Company Fined with Largest Jones Act Penalty in History of the Act – Scott Armstrong of Abraham, Watkins, Nichols, Sorrels, Agosto & Friend @AbrahamWatkins in Houston

5. Thousands of Madoff’s Ponzi Scam Victims Have Yet to Get Any of Their Money Back – Shepherd Smith Edwards & Kantas LTD LLP

4. Would You Like a Power of Attorney with that Diploma? – Rania Combs of Rania Combs Law @raniacombs in Houston

3. Whether “Unconfirmed” Insurance Creates Reasonable Suspicion to Stop – Brandon Barnett of Barnett Howard & Williams PLLC @BHWLAWFIRM in Fort Worth

2. Stop Using These Corporate Buzzwords. Except When They’re Effective – Zach Wolfe of Fleckman & McGlynn, PLLC @zachwolfelaw in The Woodlands

1. COPPA and Online Privacy for Children  Peggy Keene of Klemchuk LLP @K_LLP in Dallas


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Whether “Unconfirmed” Insurance Creates Reasonable Suspicion to Stop

Originally published by Brandon Barnett.

Is “Unconfirmed” Insurance Enough to Justify a Traffic Stop? While conducting surveillance on an illegal immigration investigation, Homeland Security agents saw a vehicle leave a residence suspected of harboring undocumented…

The post Whether “Unconfirmed” Insurance Creates Reasonable Suspicion to Stop appeared first on Fort Worth Criminal Defense Attorney, DWI Lawyer, Sexual Assault Defense.

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Austin attorney Joe K. Longley elected State Bar president-elect

Originally published by Jillian Beck.

Joe LongleyTexas attorneys have elected Joe K. Longley of Austin as the 2017-2018 president-elect of the State Bar of Texas.

The result comes after a May 11-25 runoff election between Longley and Chad Baruch of Dallas after they were the top two vote-getters in a month-long, three-way race for the position that ended May 2.

Read the news release for more results.

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Can Police Search School Lockers?

Originally published by AZ.

Sometimes the interests of public safety outweigh any single person’s privacy rights.

According to an April 2017 report, police in Georgia conducted a drug dog sweep of a high school, then followed it up with pat down searches of 900 students. Some students said the searchers were “aggressive.” School officials stated that they did not authorize the searches.

The report states that many parents and school administrators are angry about the personal searches of students. It’s also worth noting that none of the searches turned up any drugs.

The story raises a good question: Can police enter a school and search whatever they want — including students?

Police Searches in Schools

The default rule under the Fourth Amendment to the U.S. Constitution is that police need a warrant to conduct a search anywhere people have a “reasonable expectation of privacy.” As you might expect, there is an entire canon of case law devoted to defining where citizens can expect to enjoy privacy.

In many cases, the U.S. Supreme Court has carved out exceptions to the Fourth Amendment. For example, sometimes the interests of public safety outweigh any single person’s privacy rights.

This is precisely why the Court has ruled that students don’t have a right to expect privacy in school. In New Jersey v. T.L.O. (1985), the Court ruled that a school’s interest in maintaining order and discipline outweighed a student’s legitimate expectation of privacy.

In the T.L.O. case, a teacher caught a 14-year-old girl and her friend smoking in a bathroom. When the teacher took the students to the principal’s office, they denied smoking. The principal then searched one student’s purse and discovered cigarettes, marijuana, and other drug paraphernalia. The Court ruled that the search was reasonable. The teacher had a reasonable basis to suspect that the student had cigarettes in her purse — a violation of school rules. Thus, the search was permissible.

Police School Searches Must Be Reasonable

However, police searches — or searches conducted by school administrators — must be backed up by “reasonable grounds.” In other words, school staff or police officers can’t just randomly show up at a school and demand access to students’ lockers just because they feel like it. They need a reasonable suspicion that the search will turn up evidence of a crime.

The U.S. Supreme Court has also held that police searches of schools can’t be excessively intrusive.

It remains to be seen if the sheriff’s department that conducted the search in Georgia will experience any negative consequences resulting from its decisions to conduct a warrantless search of 900 high school students. Because the search involved pat down searches of every student, it’s likely the department could be named in a lawsuit. At the very least, it has undermined the public’s trust in its law enforcement, as well as caused hundreds of young people to possibly fear the police instead of viewing them as a source of help and support in the community.  


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2600 State St Dallas, Texas 75204

Main Phone: (214) 720-9552

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Fourth Circuit Upholds Travel Ban

Originally published by Thomas J. Crane.

The Fourth Court of Appeals in Richmond, Virginia has upheld the lower court’s preliminary injunction regarding the Trump travel ban. This ruling applies to the second ban, not the first. The second ban was written better after the administration encountered so many problems with the first ban.

A Maryland district court issued the preliminary injunction. Thirteen judges heard the appeal, indicating it was an en banc ruling. At the hearing, many of the judges were skeptical that the ban did not have the desired effect of applying to Muslims. The lengthy decision refers to Pres. Trump’s comments about Islam. It discussed comments by administration officials. The court found the ban implicated the establishment of religion clause in the U.S. Constitution. That clause forbids the government from establishing any one particular religion.

Among the facts causing concern for the court were the first travel ban. The administration claims the first travel ban and the second were based on national security concerns. But, the alleged national security issues were not identified until after the administration issued the first travel ban. Too, one recent report by the Department of Homeland Security explicitly said that most terrorist acts were committed by persons who grew up in the U.S. The report mentioned that no one has died at the hands of any person from the six nations identified in the second travel ban in the last 40 years.

In a display of poor appellate strategy, DOJ argued that “unofficial” comments by a candidate should not be considered, especially those made during a campaign. The government lawyers made the specious argument that somehow when Candidate Trump became President Trump, his statements became less probative. But, citing to various caselaw involving candidates for election and other issues, the court noted that such statements are probative if closely related in time and if uttered by the same deciding official. The court added, “Just as the reasonable observer’s world is not made brand new with every morning, . . . nor are we able to awake without the vivid memory of these statements.” The court cited to McReary County v. ACLU, 545 U.S. 844, at 866 (2005). Quoting Jonathan Swift, Polite Conversation (Chiswick Press, 1892), the court added a comment that we cannot shut our eyes to such evidence when it starts us in the face and there are none so blind as those who cannot see. Slip opinion, at 66. Anytime a court reaches back to the 1800’s for a non-law related book, you know the court is annoyed. The court was annoyed with the administration’s disingenuous attempt to pretend Pres. Trump did not say the things the country knows he said.

[Note: It is very poor form to argue obvious fallacies. It is a technique likely to lead to defeat. If a normal litigator had tried to argue an obvious fallacy like Candidate and President Trump’s comments about Muslims, the court would come down very hard on us.]

The DOJ also argued that the second travel ban was neutral in its language. But, responded, the court, even a neutral executive order can discriminate. See the Fourth Circuit’s decision in International Refugee Project v. Trump, No. 17-1351 (5/25/2017) here. The Fourth Circuit was once one of the two most conservative courts in the country. It is perhaps more liberal now than it was. The court reached this result with a 10-3 vote. See CBS news report here.

There is another preliminary inunction working its way through the appellate process in the Ninth Circuit. A federal judge in Hawaii also issued an injunction against the travel ban.

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Cassandra’s Regret: The Psychology of Not Wanting to  Know

Originally published by Douglas Keene.

Do you want to know the future? You may want to say it all depends on which aspects of your future. Typically, while we seek information routinely to make decisions in our day-to-day lives, we don’t always want to know for sure what will happen in our futures. These researchers remind us about the story of Cassandra in Greek mythology.

“According to Greek mythology, Apollo granted Cassandra, daughter of the king of Troy, the power of foreseeing the future. Yet after his failed attempt to seduce her, he placed a curse on her so that her prophecies would never be believed. Cassandra foresaw the fall of Troy, the death of her father, the hour of her own death, and the name of her murderer. To helplessly watch the approach of future horrors became a source of endless pain, suffering, and regret of her terrible solitary knowledge.”

They also invoke Bob Dylan’s classic line from the song ‘Blowin’ in the Wind’,

“How many times can a man turn his head, pretending he just doesn’t see?”

They then summarize the research which shows us that people do not often want to know about specific results of genetic testing, or HIV tests, or even whether they are likely to become demented. What the researchers are most interested in, however, is what they call “deliberate ignorance”.

“We use the term deliberate ignorance to refer to the willful decision not to know, as opposed to the inability to access information or disinterest in the question. Deliberate ignorance can result from inaction, that is, not searching for diagnostic information, or from action, such as refusing information that someone else offers.”

In other words, when you actively choose not to know, you are willfully choosing to remain deliberately ignorant which is very different, according to the researchers, than simply not knowing—i.e., being ignorant. So the researchers did two different experiments (one in Germany and one in Spain (both with non-student populations) to see how common deliberate ignorance was and to investigate whether there was a pattern to choices to remain deliberately ignorant.

In Germany, they asked participants five positive questions and five negative questions — to ascertain in which situations the individual would choose deliberate ignorance. Here is how their sample (of more than 900 participants) responded:

Negative events:

Would you want to know today when your partner will die? No: 89.5%.

Would you want to know today from what cause your partner will die? No: 90.4%.

Would you want to know today when you will die? No: 87.7%.

Would you want to know today from what cause you will die? No: 87.3%.

Assume you are newly married. Would you want to know today whether your marriage will eventually end in divorce or not? No: 86.5%.

Positive events:

Assume you video-recorded a soccer world-champion game because you could not watch it live. While you are watching the recording, a friend enters who has already watched the game. Would you want to know from the friend how it ended (as opposed to asking not to tell)? No: 76.9%.

Would you want to know in advance what you are getting for Christmas? No: 59.6%.

Would you like to know whether there is life after death? No: 56.9%.

Assume you bought a blue sapphire for 2,000 euros during your vacation in Sri Lanka. The dealer assured you that the sapphire is genuine. Back home, you can check this, but you have no chance of lodging a complaint or returning the stone. A test would cost 50 euros. Would you have the sapphire tested to be sure whether it is genuine or not? No: 48.6%.

Assume you/your partner is pregnant. The gender of the child can be reliably determined by ultrasound. Would you want to know the gender of your child before birth? No: 40.3%.

The researchers saw this response pattern as showing “widespread deliberate ignorance” for both negative events and for positive events. They thought this inconsistent with the human desire to avoid uncertainty so they went to Spain to see if things were different there. They found the same patterns in Spain.

The researchers conclude it is common for people to choose to remain “deliberately ignorant” to avoid negative news but also to maintain the positive emotions of surprise and suspense surrounding personally important events. Cassandra, in Greek mythology, was unable to make the choice to remain deliberately ignorant. That is not the case for us—as is seen in the choices many of the German and Spanish citizens made to remain deliberately ignorant.

Additionally, the researchers found that the closer in age the participants were to the likelihood of a negative event happening (e.g., divorce, death of a partner, old-age health problems), the more likely they were to choose deliberate ignorance.

There was also an odd (and potentially useful) finding in this study. One of the questions researchers asked was what kind of insurance policies the participants had purchased. What they found was those that had purchased policies that were not mandated by the country or immediate area in which they lived, were slightly more likely to choose deliberate ignorance for future events.

From a litigation advocacy perspective, this is a good point to remember and to educate jurors on in opening statement. There are times we simply do not want to know (whether about something positive or something negative) and so we make a choice. We have all done this and it allows us to be happier before negative things happen and to enjoy the surprise inherent in good things happening. That choice does not mean we have failed to do something, it simply means we are doing what (apparently) the majority of people do and choosing not to know.

Gigerenzer G, & Garcia-Retamero R (2017). Cassandra’s regret: The psychology of not wanting to know. Psychological Review, 124 (2), 179-196 PMID: 28221086



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Alaska Oil Company Fined with Largest Jones Act Penalty in History of the Act

Originally published by By Scott Armstrong.

In 2011, Furie Operating Alaska, an Alaskan oil and gas company, transported the Spartan 151 jack-up drill rig from the Gulf of Mexico to Alaska using a foreign-flagged vessel. The company agreed to pay a record $10,000,000 fine for failing to get pre-approval from the U.S. government to use a foreign-flagged vessel for the transport.

Passed in 1920, the Jones Act prohibits a foreign vessel from transporting merchandise between points in the United States. Any party violating the Jones Act may receive a civil penalty equal to the value of the merchandise. Some circumstances may allow for a waiver obtainable from the Secretary of the Department of Homeland Security; the applicant must show that such waiver is in the interest of national defense and that no U.S. vessel is available to carry the merchandise between the designated points.

As a result of the penalty, Furie filed a civil lawsuit in 2012 to challenge the assessment of the civil penalty. However, the parties finally resolved the lawsuit with a record breaking $10,000,000 settlement.

The Department of Justice reported that while the settlement is not designed to hinder Furie’s ability to bring natural gas to the Alaskan market, it provides important precedent and illustrates how seriously the Jones Act will be enforced.

There are many other Jones Act violations that vessel owners or operators are held responsible for. If you have been seriously injured or your loved one has been killed in a maritime accident, it is important to find an attorney with experience handling complex maritime injury cases. Abraham, Watkins, Nichols, Sorrels, Agosto & Aziz is the oldest personal injury firm in Texas, and our attorneys have successfully handled numerous maritime injury claims. Contact us today by calling 713-222-7211 or toll free at 1-800-870-9584 for your free consultation.

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Make a difference: Volunteer attorneys sought to help with pro bono legal advice website

Originally published by Amy Starnes.

TexasLegalAnswers.org, debuting June 1, will operate as a free, online legal advice clinic for low-income Texans, and volunteer attorneys are needed to help answer their questions.

The site will allow individuals who meet certain financial guidelines and who need basic legal guidance to log on, post questions, and have them answered by volunteer attorneys across the state. Individuals with complex legal matters will be referred to legal aid agencies for more in-depth assistance.

Attorneys interested in volunteering with Texas Legal Answers can visit TexasLegalAnswers.org to learn more and sign up under the Volunteer Attorney Registration tab.

The online Q&A style of Texas Legal Answers will ensure that individuals in rural communities who lack transportation can still receive assistance. It will also enable attorneys who have a desire to help to do so without hours of commitment at an in-person clinic.

Texas Legal Answers is administered by the State Bar of Texas Legal Access Division as part of a nationwide project of the American Bar Association’s Standing Committee on Pro Bono and Public Service. As part of the program, the ABA offers malpractice insurance for all volunteer attorneys who participate.

To date more than 32 states have rolled out state-specific Legal Answers web pages. Other states have seen significant responses to the free legal advice sites. For example, a model site in Tennessee has received more than 10,000 legal questions in just a few years of service.

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Thursday, May 25, 2017

Best Types of Facebook Ads for Law Firm Marketing

Originally published by Stacey E Burke Blog.

As I’ve written about before, Facebook’s advertising platform is growing at an exponential rate, giving Google AdWords a run for its money. In fact, Facebook says over 1.8 billion peope use its social media platform every month. But to the social media advertising novice, Facebook’s advertising platform may appear to be a little overwhelming. In this, the first of a two-part series, we will discuss the different types of Facebook ads and the corresponding metrics you should pay attention to as they are running.


Facebook’s advanced advertising platform is comprised of three main components: campaigns, ad sets, and ads. Campaigns are the highest tier and the most important in determining the success of your ads: the campaign is where you determine the objective of the advertisements. Are you trying to increase followers for your Company Page? Do you want more users to see a video about your law firm? Or are you seeking to increase contact form submissions for specific types of clients? Establishing your objective will determine which campaign type to utilize.

Facebook categorizes campaigns into three categories: awareness, consideration, and conversion. As indicated by their titles, each category has a specific purpose and should be used accordingly.

Facebook Advertising Options


Awareness ads do exactly that: they raise awareness about your law firm to targeted users. For newly established law firms, or law firms diving into the social media world for the first time, these ads are a great way to build your following and attract new “likes” for your Company Page. We recommend selecting the “Brand Awareness” objective, as it will ensure users who are the most likely to be interested in your Page see the ads. Conversely, the “Reach” objective focuses on serving the ad up to the maximum number of people, without concern for their interest levels.

Use for:

  • Announcing a new law firm
  • Generating followers for a new Company Page
  • Increasing your followers periodically


Consideration ads focus on the first step of lead generation: engaging with the follower by enticing them to perform an action of some sort. This could include visiting your website, commenting on the ad, watching a video, or providing an email address. Utilizing these types of ads can provide another layer of brand exposure by capitalizing on the “social” portion of social media. When individual Facebook users comment and interact with your ads, this allows your ads to reach all of their friends organically. Each of the different objectives is worthwhile, and you should select based on what you are looking to accomplish.

Use for:

  • Driving traffic to your website
  • Increasing views of your video content
  • Capturing email addresses for an e-newsletter
  • Obtaining responses to an event


Conversion ads are the answer to, “How do I get more leads?” For law firm demand generation, we recommend using the “Conversions” objective. Conversion ads drive valuable actions on your website. They target Facebook users with specific criteria and entice them to convert. In the case of law firms, this generally means having them complete a contact form or click-to-call.

Use for:

  • Targeting potential new clients
  • Increasing contact form submissions and phone calls

Once you’ve selected your campaign objective, Facebook walks you through building out your ad sets and ads. This includes setting your targeting (who you want to see your ads), setting your budget, crafting the content, selecting images, and determining how long you want them to run.

Once your ads are launched, Facebook provides a variety of metrics. Next week, I’ll discuss what all of those numbers mean, and which ones you should pay attention to for a successful ad campaign.

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Tough Time Flying? Soon There Could be a (Patented) Digital Pill For That

Originally published by Kirby B. Drake.

If you ever have a tough time flying, struggle with how to combat potential jet leg, or just wish that the flight attendant would bring […]

The post Tough Time Flying? Soon There Could be a (Patented) Digital Pill For That appeared first on Klemchuk LLP.

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Law Firm Marketing with Social Media: Getting Started

Originally published by Christina DiPinto.

After previously outlining some of the more common social media dangers for lawyers, we are now focusing on how you can market your practice by getting started on the top social media networking platforms. When handled properly, social media can be a valuable tool to promote your firm’s brand, raise your public profile, grow your […]

The post Law Firm Marketing with Social Media: Getting Started appeared first on Muse Communications.

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Fifth Circuit Holds Payday Lender Waived Right to Arbitration

Originally published by Beth Graham.

In a 2-1 decision, the nation’s Fifth Circuit Court of Appeals has ruled a payday loan lending company that sought criminal charges against customers who failed to repay their loans waived its right to arbitration by substantially invoking the judicial process.  In Lucinda Vine, et al. v. PLS Financial Services, Inc., No. 16-50847 (5th Cir., May 19, 2017), a Texas payday lender, PLS, provided short-term loans to two customers, Vine and Pond, in exchange for a fee.  Before the loan was provided, each customer signed a credit services agreement that included an arbitration provision.   As part of the loan process, the customers also provided PLS with post-dated checks.

Both customers later defaulted on their payday loans and PLS unsuccessfully attempted to cash the post-dated checks.  After the checks were returned for insufficient funds, PLS submitted a worthless check affidavit for each customer to the local district attorney’s office.  Next, the district attorney’s office advised the customers via letter that they would face criminal prosecution if they did not pay restitution to PLS.

In response to PLS’s worthless check affidavit, Vine and Pond filed a class-action lawsuit against the payday lender.  According to the customers, PLS violated Section 392.301 of the Texas Finance Code and certain provisions of the Texas Deceptive Trade Practices Act.  In their complaint, the customers also accused PLS of engaging in malicious prosecution and fraud.

PLS responded to the class-action lawsuit by filing a motion to compel the dispute to arbitration based on the credit services agreement that was signed by each customer.  A district court found that PLS waived its right to arbitration by substantially invoking the judicial process when the company filed the worthless check affidavits.  As a result, the court denied PLS’s motion.

On appeal to the United States Court of Appeals for the Fifth Circuit, PLS argued the district court committed error by:

(1) deciding whether PLS waived its right to compel arbitration by participating in litigation conduct;

(2) ignoring the parties’ express agreement to arbitrate all disputes, including any litigation-conduct waiver claims; and

(3) concluding that PLS waived its right to arbitrate by submitting worthless check affidavits.

The appellate court first ruled “the district court did not err by deciding the litigation-conduct waiver.”  The Fifth Circuit stated:

In Tristar Fin. Ins. Agency v. Equicredit Corp. of Am., 97 F. App’x 465, 464 (5th Cir. 2004), we recognized that when “waiver . . . depends on the conduct of the parties before the district court,” “the court, not the arbitrator, is in the best position to decide whether the conduct amounts to a waiver under applicable law.” Here, the district court’s waiver decision depended on the conduct of PLS—a party to the litigation. Consequently, the district court was “in the best position” to decide the litigation-conduct waiver. Id.

Next, the Court of Appeals found that “the parties’ express agreement does not address litigation-conduct waiver.”  After stating PLS waived the issue by failing to bring it up when the payday lender filed its motion for reconsideration with the district court, the appellate court added:

While the language of an arbitration agreement can displace the presumption that a court should decide an issue, “[a]n issue that is presumptively for the court to decide will be referred to the arbitrator for determination only where the parties’ arbitration agreement contains `clear and unmistakable evidence’ of such an intent.” See Ehleiter, 482 F.3d at 221 (quoting First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995)).

Here, we do not find “clear and unmistakable evidence” that the parties intended to arbitrate litigation-conduct waiver. Id. Though the parties’ agreement requires arbitration of “any claim or attempt to set aside this Arbitration Provision,” it does not explicitly mention litigation-conduct waiver. See Principal Investments, Inc. v. Cassandra Harrison, 366 P.3d 688, 696 (Nev. 2016) (“Had Rapid Cash intended to delegate litigation-conduct waiver to the arbitrator, rather than the court, the agreements could and should have been written to say that explicitly.”). Furthermore, we “cannot interpret the Agreement’s silence regarding who decides the waiver issue here `as giving the arbitrators that power for doing so . . . [would] force [an] unwilling part[y] to arbitrate a matter he reasonably would have thought a judge, not an arbitrator, would decide.’” Ehleiter, 482 F.3d at 222 (quoting First Options, 514 U.S. at 945). Because the Agreement does not contain “clear and unmistakable evidence” of an intent to arbitrate the instant litigation-conduct waiver issue, the district court did not err. Id. at 221.

With regard to PLS’s third argument, the Fifth Circuit held “the district court correctly found that Vine and Pond plausibly alleged that PLS waived arbitration when it submitted false worthless check affidavits.”  According to the court:

“The question of what constitutes a waiver of the right of arbitration depends on the facts of each case.” Tenneco Resins, Inc. v. Davy Int’l AG, 770 F.2d 416, 420 (5th Cir. 1985). “Waiver will be found when the party seeking arbitration substantially invokes the judicial process to the detriment or prejudice of the other party.” Subway Equipment Leasing Corp., 169 F.3d at 326 (quoting Miller Brewing Co. v. Fort Worth Distrib. Co., 781 F.2d 494, 497 (5th Cir. 1986)).

Next, the appellate court distinguished the Fourth Court of Appeals’ recent decision in Cash Biz, LP v. Henry et al., (Tex. App.-San Antonio 2016, pet. filed) from the case at hand.  (You may read more about the Cash Biz case in a prior blog post.) After that, the Fifth Circuit stated:

Therefore, by allegedly submitting false worthless check affidavits, PLS “invoke[d] the judicial process to the extent it litigate[d] a specific claim it subsequently [sought] to arbitrate.” See Subway Equip. Leasing Corp., 169 F.3d at 328. As the district court made clear, “Defendants have initiated a process that invites Texas district attorneys’ offices to address issues that are at stake in the instant action.” Most obviously, all claims involve whether PLS misled or threatened Vine, Pond, and the class of PLS customers they purport to represent in order to obtain outstanding debt owed to PLS.

Finally, the appeals court ruled the customers successfully demonstrated that they were prejudiced by PLS’s actions when the company filed worthless check affidavits with the district attorney’s office.  The court said:

Vine and Pond have also demonstrated detriment or prejudice from PLS’s submission of worthless check affidavits. “Prejudice in the context of arbitration waiver refers to delay, expense, and damage to a party’s legal position.” Nicholas v. KBR, Inc., 565 F.3d 904, 910 (5th Cir. 2009). Here, Vine and Pond would have borne the costs of defending against any theft by check prosecution. In addition, they would have suffered the preclusive effect of a conviction in any subsequent litigation. Consequently, they have sufficiently shown detriment or prejudice. See Subway Equip. Leasing Corp., 169 F.3d at 327.

Because PLS waived its right to arbitration, the U.S. Court of Appeals for the Fifth Circuit affirmed the district court’s order denying the company’s motion to compel arbitration.

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Client development coaching: Why start now?

Originally published by Cordell Parvin.

I could answer by simply saying that every lawyer I have coached wishes he or she had started focusing on client development earlier in their career. But, let me give my own example.

Is your firm providing client development coaching for it next generation?

I tell law firm leaders that when I was growing up I played baseball every day during the summer. I played all the way through college.

I have not swung a baseball bat in 30 years or more. If I went to a batting cage today, I am not positive I would hit the ball, but I am postive I would not think about the technique of my swing.


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Wednesday, May 24, 2017

Can You Recover Damages in a Texas Car Accident if You Weren’t Wearing a Seatbelt?

Originally published by » Blog.

Under Texas law, you are required to wear a seatbelt if you are operating or riding in a vehicle. Unfortunately, not everyone follows this important safety law. According to the Texas Department of Transportation, 25% of people who died and 11% who suffered serious injuries in a Texas car accident in 2015 were not wearing a seatbelt…

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Texting While Driving Ban Possible in Texas

Originally published by Anderson Law Firm's Injury Blog.

Image result for texting while driving

After numerous attempts over the last decade to legally ban texting while driving in Texas, there is a real possibility that a law to formally institute a statewide ban. Even though the ban is being driven on the state government by families, friends, and organizations that have been impacted by the death of a loved one, there are opponents that have arguments against the ban, as this post will show.

The push for a statewide ban would have been successful in 2011, but the governor at the time, Rick Perry, vetoed the bill and thus prevented the bill from becoming law. After multiple attempts, however, both governmental chambers approved the ban this year, the Texas House of Representatives doing so in March, followed by a set of revisions proposed by the Texas Senate (by allowing for smartphone GPS applications to be used).

Tell Me About the Bill

In the proposed law – currently titled “HB 62” (HB stands for “House Bill”) – drivers who are found using their phones for texting, emailing, or using social media such as Facebook, Instagram, Twitter, etc., could potentially pay up to a $99 fine for their first offense, followed by a $200 fine for offenses that occur thereafter.

However, HB 62 would only be applied to those using the mentioned phone usages while the car is in motion. Drivers who have their vehicles parked or stationary can still text and use their phones in other ways. Also, HB 62 could not be used for drivers using their phones as a music player.

While the legal matter is relatively new in Texas, there are 46 states that currently have some form of statewide texting while driving ban.

Enforcement Concerns

There have been several concerns that the proposed bill would be too confusing and difficult to enforce. A sample of concerns surrounding HB 62 is:

  • What if the driver was not texting while driving?
  • Can a violation of appear on a driving record?
  • What defines a vehicle as stationery or idle?
  • What will be the fairness of the bill?
  • How would the proposed bill be properly enforced?

These and other concerns have been surrounding texting while driving bills throughout the decade. While HB 62 may appear to be a simple law, there may be greater complications involved with its legality, enforceability, and legitimacy.

HB 62: Government Intervention…or Interference?

A classical approach to dealing with the arguments for- and against- HB 62 lies within two basic political principles: intervention versus interference. The first concept means that the government is coming to action for the benefit of the people and is typically met with positive response from the population, while the latter concept means that the government is entering a sphere where their reach is perhaps not wanted or needed. Similar examples of the issue of government intervention vs. interference lies within business regulations, price controls, and wage statutes.

Using these principles, the question could be asked: is the proposed HB 62 a way for the government to use legal methods to prevent accidents from occurring in the future, or is the government reaching their scope into the personal and daily lives of its population? If passed, will HB 62 be an example of how a government could use its legal abilities for the benefit and safety of its people, or will HB 62 be an unwanted gateway for future restrains on the individual?

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What Is “Account Takeover” Fraud?

Originally published by John Floyd.

What Is "Account Takeover" Fraud?

Any online banking accounts or credit cards are subject to fraudulent takeover. There was a time not so long ago when fraudsters targeted credit card numbers. With the advent of EMV chip-card technology, credit card fraudsters are now going after a complete account takeover because the financial gain is obviously greater.


Patrick Reemts, president of ID Analytics in San Diego, says that “account takeover is a type of identity theft where a fraudster uses parts of the victim’s identity such as an email address to gain access to financial accounts.”


Once the fraudster gains access to the account, Reemts says, “the perpetrator often reroutes communication about the account, keeping the victim in the dark so the thievery can continue longer. Affected accounts can include credit cards, checking and savings accounts, brokerage accounts and store loyalty rewards accounts …”


Reemts compares this new type of fraud to relationships. He says that when a person steals a credit card, he has “stolen one relationship,” but when he or she accomplishes an account takeover, they have “access to several relationships.”


Clearly, account takeover has proven to be more lucrative for fraudsters than simply stealing a credit card number. What used to be one-time credit card fraud schemes have turned into longer schemes that can affect multiple accounts.


And account takeover is not as difficult as one might think. Once a fraudster gains access to a victim’s password, they can open the door to the house that then leads to every room inside the house.


Think of how many passwords you have, and how many accounts use the same password. With normal credit card fraud schemes, the fraudster loses access to the person’s money as soon as the card is cancelled (which is usually done within a few days of the victim finding out someone stole their information). However, it may take quite a bit longer for victims to go and change all of the passwords for their bank accounts, PayPal accounts, email, and so on.


This type of fraud scheme is quickly gaining in popularity.


In the first quarter of 2015, account takeover fraud jumped 112%. It grew an additional 31% from 2015 to 2016, and losses to victim grew 61% to $2.3 billion.


Penalties for Account Takeover Fraud


Houston Bank Fraud Defense Attorney

Like most white collar crimes, sentences for bank fraud and other charges related to account takeover schemes are based on the amount of money stolen. Many of these crimes are tried and sentenced in federal court. Federal offenses do not have parole eligibility and the offender must serve roughly 85 percent of their sentence before securing a good conduct release. Other penalties may include paying restitution to victims, which could reach tens (or even hundreds of thousands of dollars depending on the amount that was stolen.


Let’s look at one example.


In early 2017, six individuals were sentenced on bank fraud and identity theft charges. The scheme was classic account takeover fraud: one of the fraudsters impersonated an account holder with their information to transfer out $150,000. A related account takeover resulted in the transfer of $500,000. That’s a big scheme, so the fraudsters received big penalties.


Of the six fraudsters, Darnell Crutcher received the harshest sentence. He was one of the main individuals involved with obtaining the victims’ account information. He received nine years and one month behind bars, five years of supervised release, and ordered to pay $794,825.90 in restitution. The least sentence imposed was13 months, which was probate d, and three months of home confinement. In addition, there was a $222,825.90 restitution order that had to be satisfied. This sentence, though relatively lenient for a federal offender, was for merely assisting one of the fraudsters in their scheme.


Bottom line?


The charges and penalties for account takeover fraud are not to be taken lightly. The more you take, the more you will have to pay back if you are convicted. If you have been arrested or charged for bank fraud schemes, talk to a federal criminal defense lawyer.


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