“Taking Responsibility” ≠ Negligence as a Matter of Law

Yedlapalli v. Jaldu

Dallas Court of Appeals, No. 05-20-00531-CV (June 28, 2022)

Justices Myers, Partida-Kipness (Opinion, linked here), and Carlyle

Brent M. Rubin

While Yedlapalli was stopped at a stop sign, Jaldu rear-ended her. Yedlapalli testified that, from her rear-view mirror, she saw Jaldu on her cell phone and that Jaldu never slowed down. Jaldu, in contrast, claimed she was at a complete stop behind Yedlapalli and reached down to get a piece of paper on the floor, which caused her foot to slip off the brake and her car to roll forward and tap Yedlapalli’s car.

Yedlapalli sued Jaldu, claiming not only damage to her car but also bodily injury. On cross-examination, Yedlapalli’s attorney asked Jaldu if she was “taking one hundred percent responsibility for the crash.” Jaldu agreed that her car hit Yedlapalli’s when her foot slipped from the brake. Jaldu also admitted she told Yedlapalli at the scene that it was her “mistake,” making her responsible for the damage to Yedlapalli’s car. But Jaldu refused to take responsibility for Yedlapalli’s purported injuries, claiming everyone was “completely fine” immediately after the accident. Jaldu also explained to the jury that it was “fishy” that Yedlapalli sued only after Yedlapalli did not pay her medical bills.

Yedlapalli moved for a directed verdict based on Jaldu’s purportedly “taking one hundred percent responsibility” for the accident. The trial court denied the request for directed verdict. The jury later answered “no” on the question whether Jaldu’s negligence caused the occurrence in question. So, the trial court entered a take-nothing judgment against Yedlapalli.

Yedlapalli appealed, challenging the denial of the motion for directed verdict and the factual sufficiency of the evidence supporting the jury’s finding on negligence. On the directed verdict, the court of appeals explained that acceptance of responsibility, standing alone, does not establish negligence as a matter of law. The court observed that a jury could have concluded a person of ordinary prudence, sitting at a complete stop a safe distance behind Yedlapalli, could have reached down to pick up a piece of paper, as Jaldu testified. On factual sufficiency, the court similarly explained that a rear-end collision, standing alone, does not mean a jury’s failure to find negligence is not supported by sufficient evidence. The jury could have credited Jaldu’s account and concluded that a reasonably prudent person would have acted in the same way. Or, the jury could have concluded Yedlapalli failed to meet her burden of proving negligence by a preponderance of the evidence. Therefore, the court of appeals affirmed.

from Texas Bar Today https://ift.tt/PqbHOeE
via Abogado Aly Website

Force Majeure Clauses

Sometimes, despite our best efforts, life and the world throw us curve balls that few could have foreseen and are completely beyond your control. Because of this, sometimes a business contract you entered into may become impossible or impractical to perform. This is where a force majeure clause can come in handy.

Force Majeure Clauses

A force majeure clause in a contract is a provision excusing one or both parties to the contract from performing their contractual obligations when circumstance beyond either parties’ control arise which make performance of the contract either impractical or impossible.

What would constitute such circumstances that would trigger a force majeure clause? Well, these clauses themselves usually list qualifying events. For instance, the force majeure clause may include a qualifying event such as an act of God. An act of God may be further defined as include severe weathers such as flooding, earthquakes, hurricanes, and more. Other qualifying events may include war and acts of terrorisms. Epidemics are also often included in force majeure clauses and there are likely many that utilized a contract’s force majeure clause during the Covid-19 pandemic. Other qualifying events may include things like strikes, labor disputes, and governmental acts such as changes in laws and regulations.

Whether or not you can invoke a contract’s force majeure clause requires a fact specific and fact intensive analysis. The precise language of the clause itself must be examined and there must be evidence that the allegedly triggering event was actually unforeseeable. Furthermore, there must be proof that the event was the reason for a party’s failure to uphold their contractual obligations. States also have different laws regarding the enforceability of force majeure clause so be mindful of those, particularly when you are drafting the contract and including the choice of law to apply in the event of a contract dispute.

While you should definitely consider including a force majeure clause in your contracts, be aware that courts are generally hesitant when approaching them and will do so with caution. These clauses are usually narrowly interpreted by courts and are unlikely to apply outside specifically listed circumstances in the clause itself. The good news is that you may still have options available to excuse lack of contract performance outside of a force majeure clause. In fact, the Uniform Commercial Code (UCC) itself has a provision for excuse from contract provision due to impossibility and impracticability. The specific language of the UCC excuses a seller from contract performance when such performance is made impracticable by circumstances not considered when the contract was formed or when such failure to performance is due to an attempt to comply with a governmental regulation or order, regardless of whether the regulation or order later proves to be invalid.

Business Law Attorney

Put strong business contracts in place that protect you and your business in all types of weather. You just never know what life is going to throw your way. At the Kumar Law Firm, we are here to help you plan in the face of an otherwise uncertain future. Contact us today.

from Texas Bar Today https://ift.tt/INes2h0
via Abogado Aly Website

The Value Standard in a Partnership Agreement

The value standard in a partnership agreement is, as it suggests, the standard at which the partnership is valued. It is a critical component of a partnership agreement and one which should be serious considered before being memorialized in this legally binding contract. At some point, a partner may want to leave the partnership. In this case, the value standard will play a pivotal role in determining the equity the exiting partner has in the partnership. When an improper value standard is used, it discourages partners who want to leave from leaving which can lead to big problems in and of itself. So, before you put just any old standard in your partnership agreement, consider the big implications misvaluing your partnership could have on its longevity.

The Value Standard in a Partnership Agreement

You will often see partnership agreements that set the value standard of the partnership at its book value in order to determine how much a partner has paid for their equity in the business. Book value is the company’s tangible asset value minus the business’s liability times a partner’s equity interest. While you may see the book value as the default method for determining the value of a partner’s equity in a business, it is far from the ideal standard.

When you use the book value, you are only accounting for the value of the company’s tangible assets. Intangible assets, however, can create significant value in a business. Intangible assets include:

• Patents and other intellectual property,
• Trade names
• Customer relationships
• Goodwill

When it comes down to it, many modern businesses do not have many tangible assets, but can still be successful at generating revenue and steady cash flow. When tangible assets make up only a portion of a business’s value, and even when it may make up a significant chunk of the business’s value, it makes important omissions from the value calculation. As a result, the value of a partner’s equity in the partnership can be greatly reduced.

When including the value standard in your partnership agreement, consider going beyond its book value. Consider the value of goodwill. Consider accounting for how much partners are being paid and the impact that could have on the company’s financial statements. The future cash flow of the business should also be considered in valuing the partner’s equity including the potential impact on the business’s future prospects after the partner leaves. Additionally, market data can be important in valuation of a business. Look to what other similar business operations and cash flow have sold for to get a better idea of what the partnership’s value really is on the open market.

Providing a sound value standard in a partnership agreement is important for a number of reasons. If a partner wants to leave a partnership, having a bad value standard could deter them from leaving. This could lead to resentment and a bad business relation. Such souring relationships can quickly eat away at what would otherwise be a successful business endeavor.

Business Law Attorney

Put a solid partnership agreement in place that promotes the best interests of your business and protects the partners involved. For all of your business agreement needs, you can trust the team at Kumar Law Firm. Contact us today.

from Texas Bar Today https://ift.tt/vl5GrVR
via Abogado Aly Website

Oil & Gas Companies Underreported Methane Leaks in the Permian Basin

According to a report by the House Committee on Science, Space, and Technology, oil and gas companies in the Permian Basin are underreporting their methane gas emissions to the EPA.

The report found that the companies were not properly tracking, identifying, or controlling the methane leaks and were failing to properly use methane detection and repair technologies.  It also found that a disproportionate share of the methane emissions came from a tiny number of “super-emitting leaks,” which the companies were not tracking or even noticing.

“The point is brutally clear,” the report says.  “The operator’s technology experts were warning that the technology’s biggest risk was not that it would fail, but rather that it would succeed — and in doing so, would find more methane leaks that the operator would then be responsible for, with all of the accompanying repair costs and reputational risks that might ensue.”

Methane is the second-largest contributor to global warming, accounting for 30% of global warming.  It is 85 times as potent as carbon dioxide.  When captured and stored properly, it is the main component of natural gas and a revenue generator.  However, when methane leaks into the atmosphere, it becomes one of our earth’s most dangerous climate pollutants.

The Committee discovered the companies were underreporting their methane emissions during its investigations of ten oil and gas companies in the Permian Basin:

• Admiral Permian Resources
• Ameredev II
• Chevron
• ConocoPhillips
• Coterra Energy
• Devon Energy
• ExxonMobil
• Mewbourne Oil
• Occidental Petroleum
• Pioneer Natural Resources

The Committee chose to focus on the Permian Basin (a land area from West Texas to Southeast New Mexico) because it is the largest methane-emitting region in the U.S.  It accounted for 42.6% of U.S. oil production in December 2021.

The report found that Permian Basin oil and gas companies are failing to address super-emitting leaks, failing to use quantification data to mitigate methane leak emissions, and deploying innovative Methane Leak Detection and Repair (LDAR) technologies in a limited and inconsistent manner.

The largest amount of methane is emitted when the equipment malfunctions, known as “methane leaks.”  A small subset of massive methane leaks, known as “super-emitting leaks,” are responsible for a disproportionate amount of the oil and gas sector’s total methane emissions.  Just 12% of methane emitters are responsible for 50% of methane emissions in the Permian Basin.  One company experienced a single leak equivalent to more than 80% of all the methane emissions it reported to the EPA.

Super-emitting leaks are difficult to track because they tend to be intermittent and unpredictable, starting and stopping irregularly for extended periods of time.  Thus, companies must be prepared to track and identify super-emitting leaks outside of normal procedures.  However, the report found that Permian Basin companies are unprepared for identifying and tracking the super-emitting leaks.  Most companies don’t even have a definition of a super-emitting leak: “Of the ten operators that provided information to the Committee, nine out of ten revealed that they lack any internal definition of a super-emitting leak, whether persistent or intermittent.  Only one operator cited an actual size threshold for a super-emitting leak.”  One company even stated that it preferred not to single-out super leaks because it is distracting from its objective of identifying emission leaks generally.

The Committee report urged the companies to make greater and more accurate use of the innovative leak surveillance equipment known as Methane Leak Detection and Repair, or LDAR.

Innovative LDAR technology allows operators to properly measure and track their methane emissions and is adept at finding leaks, including super-emitters.

“Many innovative technologies can provide operators with data regarding the size of individual methane emission events within their operations.  But the operators themselves must accept the validity of these measurements, integrate the measurement data into their repair procedures, and respond to super-emitting leaks as quickly as possible,” the report stated.

The companies were not utilizing this technology, according to the report.

“Oil and gas companies are deploying innovative LDAR technologies in a limited and inconsistent manner,” the report said.  “Most deployments remain in the pilot phase with scopes that are too narrow to support emissions reductions on a timeline that meets the urgency of the climate crisis.”

As a result, the companies’ methane emissions “are likely significantly higher than official data.”

Currently, the EPA requires oil and gas firms to inspect for leaks twice a year.  However, U.S. has recently made methane a major priority.  The EPA issued a proposed rule to strengthen the regulatory framework around methane emissions in the oil and gas sector for the first time.  Biden’s new proposals at the U.N. climate summit represented the first time U.S. will address methane seepage from the oil and gas industry.  Oil companies will need to keep up with LDAR technology and policies to detect super-leaks and properly report emissions, so our future generations can live and breathe.

If you or someone you know was injured in a methane leak-related accident, contact our experienced oilfield accident lawyer at Morrow & Sheppard LLP for a free, confidential consultation.

from Texas Bar Today https://ift.tt/C2nXS8E
via Abogado Aly Website

Were the Mineral Deeds a Gift or a Sale? It Made a Difference.

Co-author Carolina Cuppitelli*

The question presented in Aaron v. Fisher et al: Did mineral deeds bestow separate property upon the grantees by gift, or did they convey a community property interest to the grantees and their spouses by sale for consideration?

Why was the question important? A gift is the grantee’s separate property; a sale is community property if the grantee is married.

In 1971, Lilly Parker conveyed to each of her six children, including W. T. and Chester, an undivided 1/12 interest in minerals in land in Glasscock County, Texas. Each deed recited consideration and referred to the conveyance as “this sale.”

There followed a series of intestate successions, details of which are more tedious than the entire first chapter of the Gospel of Matthew and not significant for our discussion. Among Lilly’s descendants were Aaron, the appellant, and the Elams and the Fishers, the appellees. Pioneer, relying on an affidavit of death and heirship from Aaron and a division order signed by him, paid Aaron royalties that Pioneer credited to the mineral interest originally conveyed from Lilly.

The conveyances were sales for consideration

The Court held that the 1971 deeds conveyed the mineral interests by sale for consideration and not by gift. The deeds expressly referred to the conveyance as a “sale” and recited a purported consideration of $10.00. The Court declared that the plain language of the unambiguous deeds indicated that the parties intended for the conveyances to be sales for consideration. It follows, then, that the mineral interests became the community property of W.T. and Chester and ultimately passed to their spouses. Had the transaction been a gift, the minerals would have passed to their sister, Aaron’s aunt. Did Lilly intend a sale? We suspect not in this mother-to-children transaction, but the plain language of the document required the Court to call it a sale.

Money Had and Received

The trial court granted the Fishers’ claim for money had and received. That remedy is a form of equitable relief to prevent unjust enrichment when the defendant holds money that rightly belongs to the plaintiff. The Fishers prevailed because they established that the royalty payments Aaron received from Pioneer, in equity and good conscience, belonged to them.

Takeaways

First, in any document transferring property is the importance of accurately stating the parties’ intent. Perhaps Lilly intended to give, not sell, the mineral interests to her children, but because of the express language of the deed the court was left with little choice but to declare the conveyance a sale. Had the scrivener clearly stated that Lilly wanted to gift her interests to her children, the result would have been different.

Second, make a will, even though you are currently immortal and therefore don’t need one, and you might have to pay a lawyer. Fail to accomplish this modest task and upon your transition to the hereafter your loved ones will curse you for your indolence and lack of foresight and your memory will be diminished from the dearly departed to the just plain departed. A mournful legacy indeed, but you’ll be dead so maybe you don’t care.

Your musical interlude.

*Carolina is a Gray Reed summer associate and will soon begin her third year at SMU law school.

from Texas Bar Today https://ift.tt/7xO2UJ1
via Abogado Aly Website

Longhorn Litigation Lives

As Dickens famously wrote in Bleak House: “Jarndyce and Jarndyce drones on. This scarecrow of a suit has, in course of time, become so complicated that no man alive knows what it means. … Innumerable children have been born into the cause; innumerable young people have married into it; innumerable old people have died out of it.”

So to, the affirmative-action litigation about admissions policy at the University of Texas at Austin, where the Fifth Circuit held, inter alia, that an organization called “Students for Fair Admissions” was not barred by claim preclusion from bringing suit when (1) its principals were involved in earlier litigation, but did not control the new entity and had sued before in different capacities, and (2) the facts about UT’s policies and the makeup of its student body had materially changed since the earlier litigation. Students for Fair Admission, Inc. v. Univ. of Tex. at Austin, No. 21-50715 (June 20, 2022).

The post Longhorn Litigation Lives appeared first on 600 Camp.

from Texas Bar Today https://ift.tt/RPsxzQe
via Abogado Aly Website

Not too late for an injunction

Robinson v. Ardoin addressed whether to stay a preliminary injunction in a highly technical Voting Rights Act case about Louisiana’s congressional districts. The Court’s analysis of timeliness is of general interest in preliminary injunction practice involving similar situations (a board election or vote, etc.), even though some of the policy interests involved are unique to elections for public office. The key facts were:

• The primary election at issue was five months away; the deadline for a candidate to qualify for that election by paying a fee was approximately a month away, which was the path chosen by most candidates;
• While “multiple mailings could confuse some voters,” there was “[m]ore than enough time … for the state to assuage any uncertainty,” especially when no one had yet cast a ballot; and
• While “administrative burdens” related to equipment maintenance and voter-roll review were legitimate concerns, evidence showed that the state had significant administrative experience in adjusting to changes in the time, place, and manner of elections.

No. 22-30333 (June 12, 2022).

The post Not too late for an injunction appeared first on 600 Camp.

from Texas Bar Today https://ift.tt/dxHRe3q
via Abogado Aly Website

Supreme Court Grants Cert in Bittner v U.S. On FBAR Nonwillful Penalty Per Form or Per Account Issue (6/21/22)

The Supreme Court today granted certiorari in the Bittner case to address the issue of whether the FBAR nonwillful penalty is per form or per account.  See Order List, p. 2, here.  I covered the key points at this stage in a prior blog.  Solicitor General Acquiesces in Bittner Petition for Cert on Issue of FBAR Nonwillful Penalty Per Form or Per Account (Federal Tax Crimes Blog 5/19/22), here.  So I will defer further comment now.

The docket entries where the briefings and other documents as they are filed may be retrieved in the following web pages:

• Supreme Court here.
• Scotusblog here (Note, as of this posting the cert granted entry has not been posted but should be posted by the end of the day.

from Texas Bar Today https://ift.tt/KnvGq5t
via Abogado Aly Website

Understanding Duty of Care for Commercial Property Owners

One of the biggest risks commercial property owners face is that someone may be harmed on their property. In that event, the injured person may file a premises liability lawsuit seeking financial compensation. The main legal issues, in that case, would involve the property owner’s duty of care and whether they breached it. If they owed a duty of care and breached it, the commercial property owner would be liable.

In general, the duty of care refers to the legal obligation of an individual or business to exercise reasonable care. You assume certain duties just by virtue of being a property owner. You must keep your premises reasonably safe when someone else has a legal right to be on your property. This includes customers, renters, and anyone who has the right to pass through your property.

If you are found to have breached the duty of care in a manner that caused someone else’s injury, you could be found negligent. That is what triggers your obligation to pay the injured claimant. Any negligence case will be a facts-and-circumstances analysis that depends on the evidence the plaintiff gathers.

You Must Use Reasonable (But Not Extraordinary) Care

Note that the duty is for you to use a reasonable amount of care. What is reasonable is determined in comparison with what an average commercial property owner would do. Your role is not to be an absolute guarantor of everyone’s safety on your property. There are times when accidents really do happen, and you are not automatically liable for them. You are not expected to be absolutely perfect, nor are you expected to prevent every single mishap.

However, your actions would be compared to what a reasonable person would do under similar circumstances. That reasonable person would likely be another commercial property owner. You are being judged by the standards they would uphold. Therefore, you need to be aware of safety and inspection measures in your particular industry. If your commercial real estate is a shopping mall, then your actions would be compared to those of the average mall owner.

Your actions would be analyzed in the context of what transpired. If someone just tripped and was injured with no other factors present, you may not have violated the duty of care. The accident victim would have the burden of proof to show that you either did or did not do something that caused the accident. For example, they could argue you ignored a dangerous condition on the property for an unreasonable amount of time and did not fix it or alert the public to the problem.

Act Ahead of Time to Protect Against Liability

As a commercial property owner, your first step towards meeting your duty of care is to be proactive in both inspection and maintenance. You should have written inspection and maintenance guidelines that meet or exceed industry standards. Then, you should ensure your employees closely follow the guidelines. One of the first things a plaintiff may ask for in the discovery phase of a lawsuit is your maintenance and risk management procedures. Then, they will request documentation regarding whether you followed those procedures.

Your policies and procedures should be geared towards your own specific property. They should cover specific areas and functions. Policies should be extensive, but not overly intricate so they are clear. Documentation will be a key component of preventing liability exposure. You must show that you took reasonable steps to keep the property safe.

Some of the areas to pay particularly close attention to in inspections and maintenance include:

• Parking lot
• Interior areas, such as floors and walkways
• Stairs
• Restrooms
• Exterior areas in front of and behind your property

As a property owner, you must exercise care beyond just the physical maintenance of the property. You have additional obligations to ensure others’ well-being. For example, depending on the known safety hazards in the area and/or on the property, you may need to take steps to boost security. If you have escalators or elevators, you must exercise reasonable care to ensure they are safe and in proper working order.

Commercial Owners May Not Be Liable When They Rent the Property

A commercial property owner may not have a duty of care when they are not in control of their property. When the owner leases the property, the lessee may assume the duty of care to maintain the premises in reasonable condition. In addition, the owner would not be liable for any injuries suffered on the property.

A lease should clearly state that the renter is responsible in premises liability cases, and it should require that the lessor indemnify the owner in any lawsuits and pay the costs to defend these lawsuits. Before you sign a document that leases your property, you should have an attorney ensure it extensively protects you from liability.

If someone has been injured on a commercial property, their attorney will likely seek a copy of the lease to determine who should be legally responsible for the damages. The lease would dictate who was responsible for key maintenance functions on the property. You should not be surprised if the plaintiff’s attorney tries to file a claim against both the owner and the lessee since they will want to tap into more than one insurance policy.

The post Understanding Duty of Care for Commercial Property Owners appeared first on MehaffyWeber.

from Texas Bar Today https://ift.tt/rvblnFc
via Abogado Aly Website

$427,662 ≠ $75,000

The Fifth Circuit reversed the denial of a motion to remand when:

1. The defendant’s claimed amount in controversy did not tie to the plaintiff’s specific claim. “Deutsche Bank failed to establish by a preponderance of the evidence that the amount in controversy was over $75,000. Deutsche Bank submitted evidence of the Property’s value [$427,662], which obviously exceeded the jurisdictional threshold. But Deutsche Bank failed to show that the automatic stay at issue here put the house’s value in controversy.”
2. The plaintiff stipulated it sought no more than $74,500. Citing a statement in the plaintiff’s pleading and an near-identical one in a later declaration, the Court said: “The best reading of these two statements is that Durbois is seeking–and will accept–no more than $74,500.” It continued: “Deutsche Bank claims these statements are insufficient. We don’t see why. Durbois used two forms of the word ‘stipulation’ and even bolded it once. A reasonable reader would understand that Durbois was limiting not only what he demanded but what he would accept from the suit. Perhaps Deutsche Bank thinks Durbois “should have used CAPITAL LETTERS …. [o]r maybe … should have added: ‘And [I] really mean it!!!’” But we don’t think such measures are necessary.”

Durbois v. Deutsche Bank, No. 20-11082 (June 16, 2022) (emphasis added, citation omitted)). The opinion thoroughly reviews the case law on these basic issues, and the “CAPITAL LETTERS” point may prove meme-worthy in the months ahead.

The post $427,662 ≠ $75,000 appeared first on 600 Camp.

from Texas Bar Today https://ift.tt/EwQxIka
via Abogado Aly Website

Order Not Mooted.

The Fifth Court recently granted mandamus relief as to an excessive e-discovery order in In re Meadowbrook Baptist Church, No. 05-22-00271-CV (June 15, 2022) (mem. op.), even though the real party in interest had written a letter saying it did not intend to enforce the relevant order. The Court found that the proceeding was not mooted by that letter, since the order itself remained in effect.

The post Order Not Mooted. appeared first on 600 Commerce.

from Texas Bar Today https://ift.tt/YrUVTmX
via Abogado Aly Website

SCOTx: No “Informal” Fiduciary Duty from Corporate Director to Shareholder, Regardless of Pre-Existing Relationship of Trust and Confidence

In the Matter of the Estate of Richard C. Poe

Supreme Court of Texas, No. 20-0178 (June 17, 2022)
Opinion (linked here) by Justice Huddle

Ken Carroll

In Ritchie v. Rupe, the Texas Supreme Court held that, “[a]bsent a contractual or other legal obligation, [an] officer or director [of even a closely held corporation] has no duty to conduct the corporation’s business in a manner that suits an individual shareholder’s interests.” Instead, officers and directors owe fiduciary duties only to the corporation, itself, including “the dedication of [their] uncorrupted business judgment for the sole benefit of the corporation.” But what if a director has a relationship of trust and confidence with a shareholder that arose prior to and independent of their relationship as director and shareholder? The Supreme Court has held previously that such a relationship can give rise to an “informal fiduciary duty.” Can a director simultaneously owe both (i) conventional fiduciary duties to the corporation and (ii) an “informal” fiduciary duty to an individual shareholder, based on their pre-existing relationship? Is the latter an “other legal obligation” that is the exception to the rule as announced in Ritchie? In Poe, the Supreme Court answered, no, “a director cannot simultaneously owe these two potentially conflicting duties.”

Richard C. (“Dick”) Poe operated several car dealerships in El Paso. He consolidated control of them in PMI, a Texas corporation, which was the general partner of several limited partnerships that, in turn, owned and operated the dealerships. Poe’s son, Richard, was the sole shareholder of PMI. But Richard gave his father, Dick, an irrevocable proxy to vote those shares, and Dick was the sole director of PMI. In 2015, Dick caused PMI to issue additional shares of stock, which he bought from PMI for $3.2 million. These new shares made Dick the majority shareholder. Son Richard was not notified of these additional shares until after Dick died, shortly after the shares were issued. Richard sued Dick’s longtime accountant, his office manager, and his attorney for, among other things, conspiring with Dick to breach his fiduciary duties both to PMI and to Richard in issuing the new shares to himself. Richard contended his father’s “informal” fiduciary duty to him, arising from their longstanding relationship of trust and confidence, triggered the “other legal obligation” language of Ritchie, meaning that Dick owed fiduciary duties to Richard, individually, as well as to PMI.

A unanimous Supreme Court of Texas disagreed, holding that

[A]s a matter of law, a corporation’s director cannot owe an informal duty to operate or manage the corporation in the best interest of or for the benefit of an individual shareholder. A director’s fiduciary duty in the management of a corporation is solely for the benefit of the corporation.

Because the trial court erred by allowing the jury to decide about the existence and breach of an alleged “informal” fiduciary duty from Dick to Richard, the Supreme Court reversed and (i) rendered judgment against Richard on his claims for breach of an “informal” fiduciary duty, and, (ii) because of other errors in the charge, remanded for a new trial on the remaining issues

from Texas Bar Today https://ift.tt/WQCaUbt
via Abogado Aly Website

Is ADA Title II, III Tester Standing a Thing Anymore?

There must be an art to reading what is really going on by the questionings of Justices at oral argument. If there is such an art, I haven’t mastered it yet. Case in point, we previously discussed a case that appeared to raise the question of whether Chevron deference would survive, here. On June 8, 2022, Justice Kavanaugh wrote a unanimous opinion for the court completely ignoring the Chevron question and holding that the case could be resolved strictly by a matter of statutory interpretation. So, we will have to wait for another day to see if the Supreme Court wants to take on Chevron deference in a way that it took on Auer deference in Kisor, which we discussed here.

 

The case of the day, Pierre v. Midland Credit Management, Inc. is actually a dissenting opinion filed in response to the denial of a request for an en banc rehearing denial and its dissenting opinion here, involving the question of whether emotional distress was sufficient to confer standing on a plaintiff when the defendant violated her rights under the FDCPA (FDCPA), in trying to collect zombie debts- debts where the defendant knew the statute of limitations had expired. The panel had said there was not standing and the plaintiff asked for a rehearing en banc. A majority of the Seventh Circuit decided against granting the rehearing but four judges dissented. The dissenting opinion as to why emotional distress justify standing in FDCPA cases is instructive because it become crystal clear that such arguments will not carry over to title III or for that matter to title II of the ADA. As usual the blog entry is divided into categories and they are dissenting opinion as to why emotional distress justifies standing under the FDCPA, and thoughts/takeaways. The nature of this blog entry pretty much assumes that the reader will read the whole thing, but I suppose you could have a reader that focuses on either of the categories as well.

 

I

Dissenting Opinion as to Why Emotional Distress Justifies Standing under the FDCPA

 

1. The Supreme Court has made clear that an intangible injury can be a concrete injury for purposes of standing. The question is when is an intangible injury sufficiently concrete.
2. In figuring out whether an intangible injury is sufficiently concrete, both history and the judgment of Congress play important roles. In particular, courts have to consider whether an alleged intangible harm has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit in English or American courts. Courts also have to treat the judgment of Congress as, “instructive and important.”
3. Plaintiff proved all elements of a FDCPA claim for deceptive and unfair practices. She also offered evidence of harms lying close to the heart of the protection Congress reasonably offered consumer debtors in the FDCPA. Also, those harms bear a very close relationship to harms long recognized under the common law and constitutional law.
4. The FDCPA in its statutory finding talks about marital instability and the prohibitions on using threats, obscene language, and harassing calls. As such, Congress recognized how such abusive practices can upset the lives of those targeted by debt collectors.
5. The emotional distress, confusion, and anxiety suffered by the plaintiff in response to the zombie debt collection effort fits well within the harms expected from many of the abusive practices listed in the statute.
6. The opinion cited another Seventh Circuit concurring opinion that highlighted Congress’s judgment about the need to protect consumers from abusive debt collection practices and its choice to rely on private enforcement. In particular, it ignores the findings of Congress, constitutes a direct affront to a congressional prerogative at the core of legislative function, and ignores the reality of everyday life when a person receives a letter demanding money that is not owed. The failure to recognize an injury that Congress saw and addressed testifies to the failure of courts to appreciate how the people courts judicially govern live. It also testifies to the court’s failure to defer to congressional appreciation as to how citizens live.
7. The emotional distress, anxiety, fear, and stress experienced by the plaintiff was foreseeable, even intended, responses to defendant’s attempt to collect a zombie debt. Congress authorized damages for such harms and that demand is well within congressional legislative power over interstate commerce to go beyond the common law.
8. Other FDCPA violations parallel the tort of invasion of privacy, including its branches for intrusion upon seclusion, unreasonable publicity given to a person’s private life, and false light. None of those torts involve tangible injuries and all of those have been around for some time.
9. The tort of assault is the fear and emotional distress of being attacked and standing is never an issue there.
10. With respect to intentional and reckless conduct, the common law has long supported damages for emotional distress.
11. Congress is not required in its enactments to have congruence with the common law.
12. The fear, anxiety, confusion, and more general emotional distress fits comfortably within the common law of torts.
13. The Seventh Circuit’s pattern jury instruction for §1983 claims say jurors have to consider mental and emotional pain and suffering.
14. Damages for intangible injuries are appropriate for denials of free speech, free exercise of religion, or due process of law as well. They are also available for intrusions on privacy and for excessive force cases under the fourth amendment.
15. The general rule is that nominal damages are available and even presumed where a plaintiff proves a violation of her legal rights. If that is correct under both the common law and on the constitutional law, it is difficult to see why Congress cannot authorize a modest damage remedy under the FDCPA when a plaintiff’s statutory rights are violated.
16. The idea that intangible harms like emotional distress are not sufficient to support article III standing is simply wrong-especially when Congress has authorized such claims under a federal statute.
17. The Seventh Circuit cases of late have restricted standing so sharply that the FDCPA very close to being completely neutered in Illinois, Wisconsin, and Indiana.
18. Plaintiff testified in detail about the letter demanding that she pay a debt that was known longer owed and her reaction to that letter.
19. The panel got it wrong when it said that emotional distress and other psychological states can never support standing under the FDCPA.
20. With respect to figuring out when nominal damages are authorized under a statute, a good idea would be to look to Justice Thomas’s opinions in the Supreme Court cases of Spokeo and TransUnion (TransUnion we discussed here). In those opinions, Justice Thomas talked about private rights and public rights with courts having jurisdiction over actions without a showing of actual damages for rights privately held by an individual and not for rights broadly owed to the community. Adopting Justice Thomas’s private versus public right distinction could go a long way to clearing up Supreme Court precedents on nominal damages with its recent opinions on standing for intangible injuries. It also provides a clear and manageable line between standing when a private right under the statute is involved v. the universal standing feared by the panel in this case and similar cases.

 

II

Thoughts/Takeaways

 

1. It is absolutely true that the Supreme Court has held that testers have standing when it comes to the Fair Housing Act. However, the Fair Housing Act has specific references to foreseeable emotional harms within its statute (see this blog entry for a further discussion).
2. Title III of the ADA only allows for injunctive relief and attorney fees.
3. As we discussed here, the Rehabilitation Act does not allow for emotional distress damages.
4. Hard to believe that in a title II or III matter that a court could find a history showing how damages for discrimination against a person with a disability have been around for a long time. A court is also going to have a problem with the judgment of Congress prong as well because of the statutory provisions of both the Rehabilitation Act and title III of the ADA. The statutory provisions of the Rehabilitation Act are important because title II of the ADA specifically hooks into Rehabilitation Act for its remedies. The remedy provisions for §504 of the Rehabilitation Act, 29 U.S.C. §794a, do not mention emotional distress damages being available for §504 violations.
5. There isn’t anything in 42 U.S.C. §12101 (the ADA’s findings section), explicitly addressing intangible harms. You simply do not see language like you do in the FDCPA that foreseeably leads to the conclusion that emotional distress is in play.
6. Applying Justice Thomas’s private versus public right distinction is of no help because disability discrimination would be a public right.
7. One can expect that defense counsel when dealing with architectural accessibility cases or website accessibility cases under title III of the ADA in particular to reflectively take the position that an ADA tester can never have standing. They could also do that with respect to title II, assuming a tester is involved, because of the remedies for title II linking to the Rehabilitation Act remedies, which the Supreme Court has held emotional distress damages are not available, as we discussed in this blog entry. To phrase it another way, the argument against testers having standing under the ADA or §504 of the Rehabilitation Act is that the injury being alleged as the basis for standing is not something contemplated as an injury allowed by the statute or by Supreme Court decision.
8. With respect to employment matters, assuming testers can be in play in that situation, you get to a completely different place because the relevant statutory provisions do authorize emotional distress damages as we discussed when mentioning the petition for rehearing in Cummings, here. Whether that petition gets granted is anybody’s guess. If that petition gets granted, what the Supreme Court opinion would look like is also anybody’s guess.

from Texas Bar Today https://ift.tt/gliDpf6
via Abogado Aly Website

Dividing cryptocurrency during divorce

Texas is one of nine states that still has community property laws. That means that in a divorce, you and your spouse need to divide your assets equally (not equitably). If you are the primary breadwinner or have put more money into your relationship, that can be frustrating, since you have more to lose.

In particular, if you’ve been investing in cryptocurrency, you may be in a position where you could lose much of what you’d put into the system. Fortunately, depending on the value of the currency at the time of your divorce, you may be able to minimize how much you need to divide.

It’s complicated to divide cryptocurrencies

The first thing you should know about dividing crypto is that it’s hard to do so. It’s not tracked like normal transactions, and you may have to have a special wallet or application to access it at all.

Unlike some other, more traditional investments, it could be more complicated to divide your crypto, since your spouse will need to have the tools needed to accept this currency. The volatility of cryptocurrencies adds another layer of difficulty to the division.

Cryptocurrency volatility can make division difficult

Cryptocurrencies can be volatile, which means that they could be worth a lot at the time of an appraisal and not much at all by the time your divorce is over. If you plan to divide cryptocurrencies, you will need to consider a volatility computation of some kind.

For example, you may agree that your spouse is entitled to half of the currency or its value, but what if that value skyrockets or plunges? You will need to think through how to address that volatility.

Sometimes, avoiding the division of crypto is a good idea

While crypto has the potential to grow, it’s not always easy to predict. If this is something you collect yourself, your spouse may not be interested in the currency but instead be willing to divide assets based on the value of that currency at the time of your separation. For instance, if it was worth $50,000 and you wanted to keep it at that time, they might accept $50,000 of other assets.

This is a complex situation, but with good accounting and legal help, you’ll be able to figure out a reasonable solution.

from Texas Bar Today https://ift.tt/HIFyrOV
via Abogado Aly Website

Unreasonable Delay in Granting a Reasonable Accommodation Request is Actionable

What if an entity slow walks the reasonable accommodation process with the hope that the person with the disability will, for example, graduate, age out of the program, simply go away? Is an unreasonable delay in granting a reasonable accommodation actionable under the ADA? Two cases out of the jurisdiction of the Seventh Circuit say that it is. It is interesting that it is two cases from Illinois as the Seventh Circuit is not generally speaking, particularly generous to people with disabilities with the exception of mandatory reassignment, which we discussed here, and unreasonable delay. The cases of the day are McCray v. Wilkie decided by the Seventh Circuit on July 16, 2020, here, and DiFranco v. City of Chicago decided by the Northern District of Illinois on March 7, 2022, here. As usual, the blog entry is divided into categories and they are: McCray facts taken from the opinion; McCray’s reasoning that a delay in providing an adequate replacement van was actionable; McCray’s reasoning with respect to failing to reassign plaintiff or give him a new office; DiFranco facts taken from the opinion; DiFranco’s reasoning that failure to accommodate claims can proceed; DiFranco’s reasoning that the ADA and the Illinois Human Rights Act discrimination claims get tossed; and McCray DiFranco thoughts/takeaways . Of course, the reader is free to concentrate on any or all of the categories.

 

I

McCray Facts

 

McCray is an employee of the Department of Veterans Affairs (“VA”). McCray worked at the Milwaukee VA Vet Center as a readjustment counselor from July 1997 until September 2000, when he left for graduate studies. After earning a Master’s degree in Educational Psychology/ Community Counseling and practicing as a community psychologist, he returned to the VA in March 2004 as a Mental Health Case Manager. In that capacity, McCray provides a variety of support services for military veterans, among them engaging in one‐on‐one counseling (including drug and alcohol counseling), conducting clinical groups, helping to complete benefits applications, making in‐home visits in at‐risk neighborhoods, providing case management for veterans with severe mental illness, and transporting clients to clinical appointments.

 

McCray alleges that he was subject to multiple forms of workplace discrimination. Two of the three claims he has pursued on appeal are claims that the VA failed to accommodate his disabilities; the third is a disparate treatment claim positing that other VA employees received more favorable accommodations than he did based on their race. (McCray is African American; the comparators are white women.) No. 19‐3145 3

 

McCray served in the Army for a period of eight years in the 1980s (achieving the rank of Sergeant prior to his honorable discharge), and in the course of his service sustained injuries to his big toes, ankles, knees, lower back, and shoulders. He also sustained mental injuries and has been diagnosed as having an adjustment disorder with depressed moods. As of February 2013, his VA disability rating was 100 percent. In addition to his service‐related disabilities, McCray suffers from hypertension, arthritis, diabetes, sarcoidosis (which is in remission), and post‐traumatic stress disorder (“PTSD”). McCray’s physical disabilities have a substantial negative impact on his ability to bend, stoop, climb, reach, twist, carry, sleep, and walk; pain attributed to McCray’s arthritis also causes him to experience difficulty with concentration. His mental disabilities likewise affect his ability to concentrate and in addition his breathing ability; they also contribute to a sense of extreme fatigue.

 

In July 2012, McCray asked his supervisor, Dr. Erin Williams, that the van he was using to transport VA clients to their appointments be replaced, because the van was hurting his knee. Since his return to the VA in 2004, McCray had not previously needed an accommodation in order to perform his duties. After a preliminary meeting between McCray and an ergonomics employee in August, the van was evaluated in October by a specialist, who concluded that the “knot” on McCray’s knee seemed to be caused by a lack of leg room in the van. (McCray is 6 feet 3 inches tall and weighs 390 pounds.) In November, the van began to “buck and jerk” in traffic. Although the motor pool evaluated the van and told McCray they could find nothing wrong, a co‐worker who drove the van one day experienced the same problem and told McCray the van was unsafe. In December, he was offered a temporary replacement van which he eventually accepted, but the replacement van allegedly had a cracked windshield, no rear brakes, inoperable power steering and horn, and was too small: McCray described it as worse than the original. McCray continued to ask for an appropriate replacement van as he had since he first made the request in July, but he did not get it until June 2013, 19 days after he told Williams that he was going to file an EEO complaint over the matter. In 2014, shortly after a white female coworker complained about her van bucking and jerking, all of the case managers received new vans.

 

In August 2013, McCray filed a charge (his second) with the Equal Opportunity Employment Commission (“EEOC”) complaining that he had improperly been denied a promotion to a higher grade level and that the VA had not reasonably accommodated him when he had requested a replacement van.

 

In October 2013, McCray experienced difficulty concentrating at work, which he attributed to various acts of discrimination and retaliation committed by co‐workers in the wake of the charges he had filed with the EEOC. He was initially granted a two‐week leave of absence, after which he returned to work and suffered a series of panic attacks. He asked that he be reassigned to another position as a reasonable accommodation; he also was prescribed (and granted) a second leave of 30 days. The following month, he was advised that the VA was unable to find him a reassignment.

 

In response, McCray indicated that he could probably manage to continue working without reassignment if he were to be given an office on a lower floor as an accommodation to his disabilities. That request was denied, notwithstanding the fact that there were vacant offices two floors down in the building. By contrast, when a white female co‐worker requested in February or March 2014 that her office be moved due to a medical condition, her request was granted.

 

II

McCray’s Reasoning That a Delay in Providing an Adequate Replacement Van Was Actionable

 

1. Rehabilitation Act requires a federal employer to reasonably accommodate the known physical and mental disabilities of a qualified employee.
2. The Rehabilitation Act incorporate the standards of the ADA when determining whether an employer had discriminated against an employee. Therefore, cases under both statutes are looked to in evaluating an employer’s compliance with that duty.
3. Plaintiff alleged that he had a variety of physical and mental conditions that could obviously affect major life activities. He also alleged that prior to 2012, he had been able to perform the essential functions of the job without any accommodations, and that all he needed to continue was a new van to resolve the difficulty have begun to experience with his knee.
4. An unreasonable delay in providing an accommodation for an employee’s known disability can amount to a failure to accommodate his disability that violates the Rehabilitation Act.
5. Whether a particular delay qualifies as an unreasonable one necessarily turns on the totality of the circumstances, including but not limited to looking at such factors as: 1) the employer’s good faith in attempting to accommodate the disability; 2) the length of the delay; 3) the reason for the delay; 4) the nature, complexity, and burden of the accommodation requested; and 5) whether the employer offered alternative accommodations.
6. Plaintiff informed his supervisor that the van he was driving was causing him pain when he was driving and an ergonomics specialist agreed that he needed a different van. Replacing the van was not an especially complex or burdensome accommodation since new vans were given to all counselors in the following year. Plaintiff also raised the issue at weekly staff meetings with his supervisor, and yet the only interim accommodation he was offered was a van that was even worse in material respects.
7. The employer had no dialogue with the plaintiff about what else could be done and on what timeline. Such a lack of dialogue could be understood to violate the employer’s duty to engage in the interactive process with its employee to arrive in an appropriate accommodation. It is also evidence of the employer’s lack of good faith.
8. None of the other cases cited by the defendant, which were summary judgment matters, suggest that a delay in granting a reasonable accommodation of any particular duration will be invariably reasonable regardless of the surrounding circumstances.

II

McCray’s Reasoning with Respect to Failing to Reassign Plaintiff or Give Him a New Office

 

1. It is unclear whether the failure to reassign or to give plaintiff a new office is a failure to accommodate claim or a retaliation claim.
2. Such confusion can be cleared up because the case is remanded for further proceedings and plaintiff can then clarify and support that claim.

III

Di Franco Facts Taken Directly from the Opinion

 

Marco suffered from cystic fibrosis, a permanent and progressive lung disease, and cystic fibrosis-related diabetes. Doc. 1 at ¶ 9. At the time of his death, he was employed by the City as a CPD police officer. Id. at ¶ 1. Marco informed the City of his cystic fibrosis and cystic fibrosis-related diabetes when he began working for CPD in May 1998. Id. at ¶ 11. In 2005, Marco was assigned to the Narcotics Division, which required him to work at CPD’s Homan Square facility and in the field. Id. at ¶¶ 12-13.

On March 9, 2020, in response to the COVID-19 outbreak, the Governor of Illinois issued a Disaster Proclamation, and on March 13, the President declared a National Emergency. Id. at ¶¶ 19, 21. COVID-19 can lead to “serious, long-term complications in some cases, including inflammation and clogged air sacs in the lungs, restriction of the body’s oxygen supply, blood clots, organ failure, liver damage, intestinal damage, heart inflammation, neurological malfunction, and acute kidney disease.” Id. at ¶ 15. According to the Centers for Disease Control and Prevention (“CDC”), individuals with underlying medical conditions, such as lung disease and diabetes, face an increased risk of severe illness and death from COVID-19. Id. at ¶ 16.

On March 19, 2020, Marco received an email from CPD’s Chief Communications Officer advising all CPD employees of the CDC’s guidance that individuals with “health conditions like heart disease, diabetes, and lung disease are more likely to have serious illness” if they contract COVID-19. Id. at ¶ 22; Doc. 1-2 at 9. The email instructed employees who “believe[d] that [their] . . . medical condition places [them] at a higher risk of serious illness from COVID-19” to “contact the Medical Section of the Chicago Police Department to discuss next steps.” Doc. 1 at ¶ 22; Doc. 1-2 at 9. The Medical Section oversees and approves medical and sick leaves for CPD employees. Doc. 1 at ¶ 23. The email further instructed “[s]worn [m]embers” like Marco to “have your healthcare provider provide documentation related to your condition to medical.section@chicagopolice.org,” and stated that, “[o]nce your documentation is reviewed by the Medical Director, you will be contacted by Medical Services staff for instructions.” Id. at ¶ 25; Doc. 1-2 at 9.

Less than two hours after Marco received the email, his doctor sent a letter to the Medical Section stating that Marco had cystic fibrosis and cystic fibrosis-related diabetes. Doc. 1 at ¶ 26; Doc. 1-2 at 11. The letter further stated that, “[w]ith this underlying lung condition and these comorbidities, [Marco] is at higher risk of developing serious illness from COVID-19,” and asked that he “be given the opportunity to work remotely or be provided with alternative accommodations to distance himself from others while at work.” Doc. 1 at ¶ 26; Doc. 1-2 at 11.

While that request was pending, Marco was required to and did continue reporting for work at Homan Square and in the field. Doc. 1 at ¶ 27. On March 20, Marco called the Medical Section about his accommodation request and was told that someone would call him back. Id. at ¶ 28. He did not receive a call back that day. Id. at ¶ 29. On March 21, Marco called the Medical Section six times, but nobody answered his calls, and he could not leave a voicemail because the Medical Section’s voicemail inbox was full. Id. at ¶¶ 30-31. Also on March 21, Marco emailed the Medical Section a signed “Employee Self-Certification of Medical Condition” form certifying that he had a serious chronic medical condition placing him at an increased risk for contracting or suffering from complications of COVID-19. Id. at ¶ 32; Doc. 1-2 at 13. Later that day, a non-medical member of the Medial Section told Marco that a doctor employed by the City would review his accommodation request and contact him. Doc. 1 at ¶ 33. No City doctor contacted Marco on either March 21 or March 22. Id. at ¶ 34.

On March 23, Marco received a call from his commanding officer, Commander Ronald Kimble, who had learned from CPD’s Human Resources Department about his accommodation request. Id. at ¶ 36. Kimble “berated” Marco for submitting the request and accused him of trying to draw attention to himself. Id. at ¶ 37. Marco explained the severity of his cystic fibrosis and cystic fibrosis-related diabetes, and said that his sister, who had the same conditions, had died after being infected by a communicable virus. Id. at ¶ 38. Kimble continued to berate Marco, telling him to retire or to go on disability instead of seeking medical leave or placement on “sworn medical roll,” which “has a negative stigma” at CPD. Id. at ¶ 39. Kimble then ordered Marco to advise his sergeant, Sergeant Mark Vanek, of his conditions and of his request for an accommodation, which Marco did that day. Id. at ¶¶ 40-42.

After speaking to Vanek, Marco went to the Medical Section to inquire about the status of his accommodation request, as he still had not been contacted by a City doctor. Id. at ¶ 43. Marco was again advised by non-medical staff that a City doctor would review his request and contact him. Id. at ¶ 44.

From March 19 through March 27, despite his continued inquiries, Marco was not contacted by a City doctor regarding his accommodation request. Id. at ¶¶ 45-46. During that time, as required by CPD policy, Marco continued to report to work at Homan Square, as he had neither received information about his accommodation request nor received clearance from the City to take medical leave. Id. at ¶¶ 45, 47. To access the Homan Square facility, Marco had to place his palm on a biometric palm scanning system, which was used by hundreds of individuals per day and was not sanitized between uses. Id. at ¶¶ 48-51. Marco also had to take communal elevators, in which he came into contact with individuals from other CPD departments who were not wearing masks. Id. at ¶ 52.

On March 28, Marco began experiencing COVID-19 symptoms. Id. at ¶ 53. Around the same time, he was told that three individuals with whom he had been in contact at Homan Square during the previous week had tested positive for COVID-19. Id. at ¶ 54. At least one other detective in the building had also tested positive. Ibid. The next day, on March 29, Marco tested positive for COVID-19. Id. at ¶ 55. Between March 29 and April 2, Marco continued to attempt to contact CPD and the Medical Section about his accommodation request, but he was ignored. Id. at ¶¶ 57, 59, 61. He was never contacted by a City doctor about his accommodation request, nor was his request approved. Id. at ¶ 60. The City and CPD did grant accommodation requests made by other officers and employees, some of which had been submitted after Marco’s. Id. at ¶ 62.

Marco died on April 2 of COVID-related complications. Id. at ¶ 56. CPD classified his death as being in the line of duty. Id. at ¶ 58. On September 18, 2020, in her capacity as the independent administrator of Marco’s estate, Maria cross-filed charges with the Illinois Department of Human Rights (“IDHR”) and the U.S. Equal Employment Opportunity Commission (“EEOC”), alleging ADA and IHRA violations. Id. at ¶ 5. The IDHR and EEOC sent Maria right-to-sue letters, id. at ¶¶ 6-7, after which Maria timely filed this suit.

IV

DiFranco’s Reasoning That Failure to Accommodate Claims Can Proceed

1. Under the ADA, discrimination includes not making reasonable accommodations to the known physical or mental limitations of an otherwise qualified individual with a disability in the absence of an undue hardship on the operation of its business.
2. Establishing a claim for failure to accommodate, means that a plaintiff has to show: 1) he is a qualified individual with a disability; 2) the employer was aware of his disability; and 3) the employer failed to reasonably accommodate the disability.
3. An unreasonable delay in providing an accommodation for an employee’s known disability can amount to a failure to accommodate his disability.
4. Citing to McCray, above, the court said that whether a particular delay qualifies as unreasonable turns on the totality of the circumstances and cited to the McCray factors.
5. Plaintiff’s allegations give rise to a plausible inference that the City’s delay in responding to plaintiff was unreasonable given the circumstances presented by Covid-19 pandemic and was also in bad faith. In particular, plaintiff alleged: 1) that the medical section failed to respond to his request for an accommodation despite his repeated and diligent effort to follow up on his initial request; 2) plaintiff also alleged that the City was aware that Covid-19 posed serious health risk individuals with lung disease and diabetes; 3) the City knew that plaintiff suffered from those conditions; 4) Cmdr. Kimble berated him for requesting an accommodation; and 5) the City managers in the pertinent timeframe did grant other employees’ accommodation requests. Therefore, these allegations are such that the court cannot hold on the pleading that the City’s failure to take action on plaintiff’s accommodation request within 10 days was not unreasonable.

V

DiFranco’s Reasoning That the ADA and IHRA Discrimination Claims Get Tossed

1. failure to accommodate claims are separate and distinct under the ADA from claims alleging disparate treatment because of a disability.
2. The essence of a failure to accommodate claim is that the plaintiff asked to be treated differently based on his disability-to be allowed to work remotely or socially distant from his co-workers-but that the Chicago Police Department failed to grant his request. Such allegations cannot be repackaged as a discrimination claim because the claim’s focus is that the Chicago Police Department did not treat plaintiff differently based on his disability.
3. Plaintiff’s allegation that she was berated for requesting an accommodation by a commanding officer does not support a discrimination claim either because a single hostile call from a supervisor does not rise to the level of materially adverse employment action.

Separately, the defense argued that the Illinois wrongful death act was preempted by the Illinois pension code, but the court wasn’t buying it.

 

 

 

VI

Thoughts/Takeaways From McCray and DiFranco

 

1. In the Seventh Circuit, a failure to accommodate claim is a separate cause of action.
2. Slow walking a delay in processing a reasonable accommodation request is a very bad idea. Even a short amount of time for processing the request may be an unreasonable delay as seen in DiFranco.
3. McCray does a good job of laying out factors that can be used to figure out whether an unreasonable delay in granting a reasonable accommodation exists.
4. A failure to accommodate claim cannot be repackaged as a disparate treatment claim without more.
5. The ADA definitely applies to hostile work environment, see this blog entry for example, but what is a hostile work environment can be a moving target.
6. You run into trouble when you treat people in protected groups differently from other protected groups in a way that doesn’t make any sense, such as being selective about when you grant accommodations.
7. The Rehabilitation Act and the ADA get treated the same way. There are differences between the two laws (§504 causation, emotional distress damages if it is a matter involving title II or title III, and program accessibility for example), but the differences are not many.
8. Undue hardship can either be financial (very difficult to show), or operational (best to think of that as a fundamental alteration).
9. A bad idea to prorate an employee for requesting a reasonable accommodation. Such conduct raises the issue of hostile work environment. It also raises the issue of retaliation as well.
10. Otherwise qualified (Rehabilitation Act), and qualified (ADA), mean the same thing.
11. Remember the do’s and don’ts of the interactive process, here, and be sure to engage in the interactive process.
12. While both of these cases discussed in this blog entry are title I cases, I see no reason why an unreasonable delay being actionable could not extend to title II and title III cases as well.

from Texas Bar Today https://ift.tt/EApQOm3
via Abogado Aly Website

No WARNing needed

The Fifth Circuit found that the natural-disaster exception to the WARN Act did not apply to COVID-19, reasoning:

The natural-disaster exception provides that “[n]o notice under this chapter shall be required if the plant closing or mass layoff is due to any form of natural disaster, such as a flood, earthquake, or the drought currently ravaging the farmlands of the United States.” Congress’s use of the term “such as” “indicat[es] that there are includable other matters of the same kind which are not specifically enumerated by the standard.”  By providing three examples after “such as,” Congress indicated that the phrase, “natural disaster” includes events of the same kind as floods, earthquakes, and droughts.

Easom v. U.S. Well Servcs., No. 21-20202 (June 15, 2022). The Court went on to discuss specific canons of interpretation relevant to this observation.

The post No WARNing needed appeared first on 600 Camp.

from Texas Bar Today https://ift.tt/xtXgu2A
via Abogado Aly Website

Sovereignty and the Need for Consensus Around “Data Privacy"

Privacy Plus+

Privacy, Technology and Perspective

Sovereignty and the Need for Consensus Around “Data Privacy.” This week,

Whatever happened to the inter-connected world?  Only fifteen or twenty years ago, national borders seemed so passé. International cooperation was all the rage, propelling the world toward greater harmony through sharing comparative advantages. At the same time, conference attendees debated the true allegiances of multinational corporations and traded assurances like Thomas Friedman’s “no two countries which both have McDonald’s have ever gone to war.” And (of course) the ever-smoother, ever-growing, cross-border flow of personal data was a key feature of the age.

That was then, however. But for whatever reasons — Facebook’s algorithms? US intelligence surveillance? Autocratic data-hoovering? Brexit? Tax/bureaucratic havens? Putin’s unforgivable invasion of Ukraine? — this is now. Now, data is increasingly siloed within its source countries, per local, sovereign requirements. Top-level, generally impersonal insights can still be shared internationally, but until the Free World sorts out how Max Schrems, multinational companies, Meta, and the NSA can all live in it together, moving personal data across borders will be a pain.

For a thought-provoking explanation of this trend toward “the end of borderless data,” see the following article:

https://www.nytimes.com/2022/05/23/technology/data-privacy-laws.html?searchResultPosition=1

What’s coming?  As this trend toward “bordered data” develops, we see a new, two-headed paradigm emerging, roughly divided between autocratic countries and free ones.

For autocracies who insist on access to all of their citizens’ personal data, we expect further data localization rules that restrict cross-border data transfer. Foreign or multinational businesses will likely continue to scale back their operations from those jurisdictions or withdraw altogether. Eventually, business operations in autocratic jurisdictions will become too expensive economically, politically, and socially.

For the Free World, we anticipate that compliance requirements across jurisdictions will continue to become increasingly complicated.  Thus, businesses will likely face increasing friction and costs driven by the divergent requirements across jurisdictions. In our view, such requirements are flawed from their foundation, becoming ever-more costly to manage.

What’s the “flaw” in their foundation?  In our view, there are two.

The first lies in trying to anticipate, manage, and control every imaginable issue, here and yet to come, in too much detail. The GDPR, the CCPA, their continuing updates, new Acts, and new regulations are remarkable in their reach and effort. Still, almost all are “too much” – not because they miss things or overreach into trivia, but because their level of detail and specificity is just too big a lift for too many businesses which handle too-sensitive personal data.

The second lies in relying too much on “notice and consent.” Requiring too much detail in disclosures is a real issue, but the real trouble comes from imagining that “notice and consent” will ever work in the first place – much less be enough – to govern data privacy.

“Notice and consent” sounds good, is well-intended, honors the individual, and works fairly well in some settings. But where it works – in securities markets, for example — it works because a dedicated, highly trained, well-compensated priesthood of analysts divines the meanings of regular disclosures and shares them with knowledgeable investment advisors, all under the eye of the SEC and other enforcers.

That paradigm doesn’t work in a world where nobody has the time, attention span, or incentive to read detailed disclosure notices for themselves. Like the regulations with which they struggle to comply, many privacy notices struggle to predict and provide for every issue or contingency and are true marvels of effort and genius.  But they don’t work, and can’t work, as the following article explains all too well:

https://www.washingtonpost.com/technology/2022/05/31/abolish-privacy-policies/

A hopeful note:  We see this long season of frustration continuing for a long time as people throughout the Free World struggle to reach a consensus on what we want data privacy to mean and how we want it to be managed.

However, we have some ideas on how it can and should be resolved.  We’ll share some of those ideas next week.

—

Hosch & Morris, PLLC is a boutique law firm dedicated to data privacy and protection, cybersecurity, the Internet and technology. Open the Future℠.

from Texas Bar Today https://ift.tt/Jplq952
via Abogado Aly Website

Quick Hits – If you’re going through hell edition.

Dante’s hell was a complicated place, as this map by Botticelli suggests. Although Rodney Atkins’ advice “if you’re going through hell, keep on going” appears sound, winding through all the complexities of the ADA and FHA can seem like descending through all nine levels of hell. Nonetheless, I’m happy to act on a temporary basis as Virgil and see how far we can get. No promise about whether we’ll find a Beatrice to take you to Paradise.

Self-service kiosks under fire

Davis v. Laboratory Corp. of Am. Holdings,  2022 WL 1682416, at *1 (C.D. Cal. May 23, 2022) certifies a class of blind users in a class action based on inaccessible self-service kiosks.(7) There is a theme here that runs through a variety of ADA cases dealing with time and cost saving technology. From the famous and finally settled Dominos case through the various kiosk decisions the heart of the question is to what degree those with disabilities must suffer inconvenience in their access to goods and services. Some inconvenience is inevitable – disabilities are disabling – but when the path to goods and services is blocked by technology inconvenience becomes inequality. In Dominos sighted pizza lovers could order a pizza in a few minutes with an app on their phone while blind users had to call and wait on line for a couple of hours. In Davis and similar kiosk cases clients could arrive and log in quickly and easily or, it is alleged, wait a long time for personal service. I find it hard to believe designing an accessible kiosk is especially difficult – standards for ATMs have been in place for a dozen years and the technology is similar. We all know litigation is not the solution to this kind of thoughtlessness, but I advise my clients to avoid the problem by only dealing with vendors who offer accessible technology.

Mootness – non-existence is pretty good proof no meaningful relief is possible.

In Whitaker v. Chan, 2022 WL 1814142 (N.D. Cal. June 2, 2022) the court had little trouble finding the original complaint was moot when there was no operating business in the facility being sued. Along the way it reminded us that damages, including nominal damages, cannot be recovered under the ADA and that Unruh Act claims don’t belong in federal court.

Mootness – pulling the trigger a little too soon.

In Dalfio v. J.G. Mgmt Properties IV, LLC et al, 2022 WL 2079716, at *5 (S.D. Cal. June 9, 2022) the defendants came within 2 alleged ADA violations of getting the case dismissed at the Rule 12 stage. The problem was that while the Court was skeptical about the remaining violations, “the merits of the action are intertwined with the jurisdictional issue of mootness and jurisdictional findings would be inappropriate.” In another case from the same plaintiff the defendant lost a motion for summary judgment because the plaintiff’s expert found remaining ADA violations. Dalfio v. Barlas, 2022 WL 1693827, at *1 (S.D. Cal. May 26, 2022). Mootness is tricky because ADA requirements are numerous and complicated. As a defense strategy it must be carefully managed. (9)

Factual attacks on standing – you need to find the trigger

In Johnson v. Rosvin, Inc., 2022 WL 1987857 (N.D. Cal. June 6, 2022) the defendant leveled what is called a factual attack on standing at the Motion to Dismiss phase. This requires evidence, which the defendant provided in the form of a defective declaration that had some obvious misstatements of fact. You don’t need to like Scott Johnson or his lawyers to know that having filed hundreds, maybe thousands, of lawsuits they know how to say what needs to be said. I wrote long ago that outrage is neither a defense nor a substitute for a carefully planned strategy.²

An HOA on the warpath.

In Parada v. Sandhill Shores Prop. Owners Assn., Inc., 2022 WL 1693977, (S.D. Tex. May 25, 2022) the defendant attacked the plaintiff’s claims in every way imaginable but failed, predictably, in every case. It’s worth looking briefly at the facts. The plaintiff suffers from Alzheimer’s disease which is a handicap or disability under either the FHA or ADA. The defendant claimed it wasn’t, which was foolish and may have made other defenses less believable. The FHA injury claimed by the plaintiff was the inability to use her house without constant fear and distress because a proposed beach access path would constantly bring strangers near her house, something that can be unusually upsetting for those with profound memory loss. Evidence might eventually establish that her distress was not so severe she could not equally use and enjoy her dwelling, but once you assume the pleadings are true the truth becomes an issue for another day. The defendant treated the plaintiff’s ADA claim as if it were the same as her FHA claim; that is, the only question was the use and enjoyment of her home, which is not an ADA public accommodation. The problem, as the court correctly pointed out, is that there was a public accommodation at issue, the beach.(10) Just because an action interferes with the use of a home doesn’t mean it can’t also interfere with the use of a public accommodation. The last gasp was an effort to stop the federal lawsuit because there was a parallel state court action based entirely on state law principles. Because the outcome of neither was determinative of the other abstention was denied.

There was one interesting note at the end of the decision. the HOA claimed it was compelled to place the beach path by the plaintiff’s home by the Texas Open Beaches Act and the City of Galveston Beach Access Plan. It is worth remembering that municipalities and many state agencies are also subject to the accommodation requirements in the Fair Housing Act. Just because it violates the law doesn’t mean it is impossible to do.

Surrender as a strategy, with a twist.

I note default judgment cases, usually from California, just to see what the market price of a default might be. In Cuesta v. DTC Lodging LLC, 2022 WL 2077940 (D. Colo. June 8, 2022) and Meggs v. Colorado Hosp. Group, LLC, 2022 WL 1810597 (D. Colo. June 2, 2022) the defendants took a more affirmative approach to surrender. They admitted all the material allegations in the plaintiff’s complaint and moved for entry of judgment against themselves. The goal was explicit – cut off the expenditure of money on attorneys’ fees. The plaintiff opposed the motion because, I suspect, it did the one thing no plaintiff’s firm can live with – it limited the profit they would make from the litigation. It is worth remembering that almost all Title III ADA lawsuits are about money for lawyers, not access for the disabled. In any case the courts thought the defendant’s approach was reasonable and granted the motion for judgment. I have been a proponent of this kind of strategy for a long time, but this is the first time I have seen it successfully implemented.¹

Default as a strategy

In Gastelum v. C. Valley Hosp. LLC, 2022 WL 2072839 (E.D. Cal. June 9, 2022) the plaintiff, a serial filer who now seems to file pro se because his attorney, Peter Strojnik, is not practicing law, failed to obtain a default judgment because he couldn’t get the defendants’ properly served. The lesson for defendants, found in the details of the decision, is that adequate service is not subject to rigid rules. Another court might have found service was adequate and granted a default judgment. Default as a strategy should be a choice, not an accident.

The market for default judgments is slipping. In Johnson v. Iguanas Burritozilla, Corp., 2022 WL 1750472 (N.D. Cal. May 31, 2022) the court awarded a total of $1085 in attorneys’ fees. All you need to know about the industrial nature of this litigation is that the total attorneys’ time was 2.2 hours and that 14 different legal assistants billed time to the matter. It’s not a law firm, it’s an assembly line.

Johnson and his lawyers did better in Johnson v. Pennylane Frozen Yogurt, LLC, 2022 WL 1750382, (N.D. Cal. May 31, 2022) with an award of $1,912.50. To file this cookie cutter lawsuit required 4 lawyers and 13 legal assistants. It’s a volume business.

If Disney World isn’t your cup of tea

go to Florida for cheap ADA standing. Following the Eleventh Circuit’s lead in Laufer v. Arpan, LLC, 29 F.4th 1268 (11th Cir. 2022), the court in Lugo v. Island Harbor Beach Club, LLC,  2022 WL 1773973, at *2 (M.D. Fla. June 1, 2022) denied a motion to dismiss against a serial website tester. The district court had little choice, but the 11th Circuit got it wrong³ and will have to opportunity to deal with the hundreds or thousands of lawsuits that are sure to result.

Disney Land, on the other hand, may be less welcoming. The Court’s analysis of standing in Gastelum v. Pinnacle Hotel Circle LP, 2022 WL 1608704, at *5 (S.D. Cal. May 20, 2022) is very much in line with the 2nd Circuit’s recent decision in Calcano v. Swarovski N.A. Ltd. (8) The court wanted specific facts justifying an injury and intent to return rather than the usual vague claims about willingness to return at some time in the future. Gastelum is given an opportunity to amend but run into the age old problem of serial litigants: the more you say the easier it is to spot the lies.

It’s hard to make a quick buck with a class action.

Serial litigation is all about making a quick buck. The goal is a lawsuit expensive enough to make the defendant want to settle and an offer of settlement cheaper than the cost of defense. One way to bump up the potential defense costs and risks is a class action, and many ADA serial lawsuits include a class action claim. In Brooks v. Morphe LLC, 2022 WL 2052680, at *1 (E.D. Cal. June 7, 2022) the defendant didn’t bother to answer the lawsuit, but because it was presented as a class action the court declined to enter judgment without certifying the class. Efforts to certify a class were apparently slipshod – not surprising when the goal is to keep costs as low as possible in order to maximize profits. The result was an order requiring a do-over. I don’t understand why the defendant did not appear to fight the lawsuit because unlike many physical access cases, website cases are very risky in terms of the potential remediation costs. I do understand why the plaintiff’s lawyers didn’t do a good job (according to the Court). Nothing in the ADA serial filer business model calls for it.

Remembering the “nexus” requirement in the 9th Circuit.

The Ninth Circuit has held that a website is covered by the ADA only if it is associated with a physical place of business. Langer v. Oval Motor Sports, Inc., 2022 WL 1914063 (N.D. Cal. June 3, 2022) is a reminder that this “nexus” requirement means that a website violates the ADA only if the lack of website accessibility inhibits the user’s ability to take advantage of the goods and services of that physical business. The Court granted a motion to dismiss because the plaintiff only alleged he had trouble accessing the website, not that he had trouble accessing the business itself. The same result was reached in Gomez v. Ackerman Fam. Vineyards LLC, 2022 WL 1693707, at *3 (N.D. Cal. May 26, 2022). This will be a useful defense against plaintiffs who find it easy to sue based on an inaccessible website but might find it hard to drive all the way to the physical business.

Pigs get fat. . .

I’ve never really understood why the saying “pigs get fat, hogs get slaughtered” makes any sense. Not being a farm boy I had to Google the difference between pigs and hogs, the later being (I’m told) bigger than the former. Assuming bigger means greedier I guess this bit of folk wisdom applies to the plaintiffs’ lawyers in Caplan v. All Am. Auto Collision, Inc., 2022 WL 1939553 (11th Cir. June 6, 2022).  It was a standard ADA serial filer case. Mediation failed because the plaintiffs’ lawyers demanded too much in attorneys’ fees. They then moved for summary judgment and won, but the district court cut their fees by 75% based on excessive billing and other conduct that appeared designed to drive up the fees. The Eleventh Circuit agreed, affirming an award of just $7500. On its face that is a very low amount for fees through summary judgment in a federal lawsuit, and I think it can only be understood as reflecting both the District Court and Court of Appeals knowing the case would have settled at mediation but for the excessive attorneys’ fee demands. I have to believe that a more reasonable fee application might have been granted without this kind of reduction. By demanding far too much the plaintiffs’ attorneys showed their true colors.

Real ADA problems make for complicated lawsuits.

Tyler v. Valley MRI and Radiology, Inc., 2022 WL 2067859, (E.D. Cal. June 7, 2022) is not your typical serial filer ADA lawsuit. In fact, it is not a serial filer case at all. The plaintiff was real patient of the defendant and her claim – that the only accessible parking was not as close as it should be to the building – wasn’t obviously correct or incorrect. The legal issue – must accessible parking be as close as possible to a building entrance – couldn’t be resolved without a trial. The discussion of the legal issue is worth reading for any defense counsel facing this kind of claim. The case itself is a refreshing change from the usual endless line of decisions dealing with serial filers.

Lack of pre-suit notice as an ADA defense.

It isn’t clear why the plaintiff in Munoz v. S. Fla. Fair and Palm Beach County Expositions, Inc., 2022 WL 1744013 (S.D. Fla. May 31, 2022) thought it was worthwhile to try to strike an affirmative defense based on lack of pre-suit notice, but the result is a good discussion of the role pre-suit notice might play in an ADA case. The bottom line: pre-suit notice is not required by the ADA but a failure to give notice may be evidence that the plaintiff “acted in bad faith, [was] unduly litigious, or [ ] caused unnecessary trouble and expense.” None of these are easy to prove, but all of them might be present in a typical ADA serial filer case.

Doesn’t the point of the law matter?

I’ve been corresponding with William Goren, who just blogged about an interesting standing decision from the Seventh Circuit.(4) The Rehabilitation Act(5) decision in Ellison v. U.S. Postal Serv., 2022 WL 1617435, at *4 (S.D. Ind. May 19, 2022) gets right at the heart of our discussion about tester standing and whether the goals of the statute matter in determining if the tester suffered an injury. The plaintiff, who was wheelchair bound, could not access her local post office because it had stairs. Various solutions were tried but, she said, were not sufficient. She could, however, get the same goods and services from three other post offices within ten miles of her home. The Court dismissed her claims under the Rehabilitation Act because the law was intended to guarantee access to government programs, not government facilities. In this case the post offices were a little more inconvenient, but that didn’t add up to a denial of meaningful access. The case is being appealed, but Indiana is in the Seventh Circuit and the case Bill blogged about suggests the plaintiff will fare no better in the court of appeals.

Indemnity in FHA design/build cases.

The decision in  U.S. v. J. Randolph Parry Architects, P.C., 2022 WL 1645796, at *4 (E.D. Pa. May 24, 2022) is notable mostly for what it never discusses; that is, whether the FHA as a matter of policy precludes any claim shifting liability to a third party. I’ve blogged about this issue before (6) but the Court never addresses it. Instead the Court simply refuses exercise supplemental jurisdiction over state law contribution and indemnity claims because they would clutter up the discrimination case with related but not relevant issues. Of particular concern was the defendant architect’s desire to add 39 additional third-party defendants, essentially treating the case like a typical construction defect case in which everyone who ever walked onto the job suit is brought into the lawsuit in order to get at their insurance. The Court’s approach is sensible because simply allocating injunctive relief among the parties based on their individual faults can accomplish the same thing as overlapping contribution claims. The lawsuit involves fifteen facilities in four states; meaning there’s probably real money at issue. I wouldn’t be surprised to see the parallel state court cases being filed in the near future.

Sanctions against a pro se – possible but not easy.

In Simmons v. Village of Minier, 2022 WL 1607901 (C.D. Ill. May 20, 2022) the Court sanctioned a pro se serial filer, but only after giving him the benefit of the doubt on most of his abusive claims. The standard, quoted from another case, was “when a layman persists in a hopeless cause long after it should have been clear to him, as a reasonable (though not law-trained) person, that his cause was indeed hopeless, sanctions should be imposed….” Lawyers advising clients on the likelihood of attorneys fees after prevailing in a civil rights case should keep this standard in mind.

+++++++++++++++++++++++++++++++++++

¹ See Strategies for Surrender

² See Quick Hits – Vernal Equinox edition, Standing for serial plaintiffs – it’s a legal issue, not a moral problem and Quick Hits – Polar Vortex edition

³ See Stigmatic injury and how the 11th Circuit got in wrong in Laufer v Arpan

(4) See, Is ADA Title II, III Tester Standing a Thing Anymore?

(5) It is, more or less, the ADA for the federal government.

(6) See, Contribution, Indemnity and Disability – Does the FHA make sense? and Time for a do-over – the 9th Circuit gets indemnity and contribution right among others.

(7) See, FHA and ADA Odds and Ends for my latest note on the subject, and track back through the footnotes to the other blogs on this subject. This and other kiosk cases are not typical serial litigant cases involving a tester with dubious standing. DOJ has been active in kiosk cases and as this class certification shows they aren’t going to settle for a few thousand dollars and a meaningless promise to fix the problem.

(8) See the next blog below this one.

(9) See, Mootness and the ADA – Fighting may not be the best way to win. and my many other blogs with the word “mootness.”

(10) It isn’t clear from the opinion whether the HOA owned the beach or merely owned the land giving access to a publicly owned beach. If the HOA does not own the beach the question of whether the HOA is a public accommodation becomes a little more complex. I suspect that the path to the beach itself is a public accommodation, subjecting the HOA to the ADA with respect to that path.

 

 

from Texas Bar Today https://ift.tt/ct64T5L
via Abogado Aly Website