GM Disasters and the Aftermath: An Update on the Company’s Standings and Recovery Efforts

Originally published by Bob Kraft.

General Motors is still scrambling to deal with the legal, financial and public relations ramifications of the ignition switch defect that lead to the deaths of 13 people and caused the automaker to recall a record-setting number of vehicles. This has been a long, painful process for people on both sides of the problem, however, GM continues to deal with the issues that have persisted since the initial recalls. Read on for an update on where the company stands and how the future looks for them.

More Recalls

On July 23rd, GM announced another six recalls, which involve 717,950 U.S. vehicles, over various safety concerns. This is on top of the single-year record 54 recalls the automaker has already issued for 25 million other vehicles. The recalls were the first wave of quality assurance call-backs the company said it would make as part of more stringent company policies. “These recalls signify how we’ve enhanced our approach to safety,” said Jeff Boyer, Vice President of Global Vehicle Safety. “We are bringing greater rigor and discipline to our analysis and decision making.”

Compensation Fund Established For Victims

GM estimates that it will pay out at least $400 million in settlements to victims of the ignition switch defect. That number may balloon to $600 million depending on the number of people who file claims against the company. The assessment does not include costs for those who choose to forego settlement offers and sue GM. The car manufacturer has said it will fight those suits because its Chapter 11 bankruptcy restructuring, from which it emerged in 2009, protects it from prior claims.

Currently, the automaker is still being investigated by the U.S. Justice Department, the National Highway Traffic Safety Administration and the Securities and Exchange Commission. The NHTSA has already fined GM $35 million for failing to report the ignition switch issue, which the company admits it knew about as far back as 2001.

Steady Sales Despite Tarnished Image

Despite the unprecedented amount of recalls, GM posted its 18th consecutive quarterly profit based on strong sales of SUVs and pickup trucks, particularly the newly introduced 2015 Chevrolet Suburban, Chevy Tahoe and GMC Yukon. On July 24, GM reported a North American operating profit margin of 9.2 percent for the second quarter, but, after factoring in recall costs, its $1.4 billion profit was 41 percent below last year’s figure for the same period. Investors were disappointed with the automaker’s earnings, and GM stock fell by 6.33 percent to close at $35.07 for the business week ending July 25.

Overall, GM’s management feels it has weathered the storm well. “I think we’ve demonstrated resiliency as we’ve gone through this,” Mary Barra, GM CEO, said in a conference call. Recalls of this nature are never easy for companies to overcome, especially when there are deaths involved. However, GM has taken a few notes from those who have experienced devastating blows to the company like this, and plans to rise above the literal and figurative wreckage and push forward.

This article was written by Dixie Somers, a writer who loves to write for business, finance, women’s interests, and the home niches. She lives in Arizona with her husband and three beautiful daughters. Dixie got her advice and information for this article from the Orillia lawyers at Littlejohn Barristers.

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In Texas, a trade association has standing to challenge a tax statute on behalf of its members (at least for now)

Originally published by Alan E. Sherman.

Last Friday, the Texas Third Court of Appeals at Austin issued its opinion affirming the state District Court’s judgment in Combs, et al. v. Texas Small Tobacco Coalition and Global Tobacco, Inc. , No. 03-13-00753-CV (August 15, 2014). This was the court’s latest holding to the effect that a trade association can seek declaratory and injunctive relief against a state fee (treated by court and the parties as a “tax”) on behalf of the association’s members that would otherwise be required to pay it. The earlier case that had allowed such a challenge was Texas Entertainment Association, Inc., and Karpod, Inc. v. Combs, et al. , No. 03-12-00527 (May 9, 2014), involving the so-called sexually-oriented-business tax (and where the taxpayer recently filed a petition for review at the Texas Supreme Court).

In Texas Entertainment Association, the Texas Comptroller of Public Accounts, represented by the Texas Attorney General’s office, had argued that an association was barred from filing this type of suit against state officials under the doctrine of sovereign immunity “…because chapter 112 of the Tax Code requires a party challenging a tax to file a protest payment.” In Texas Small Tobacco Coalition, the Comptroller and the Attorney General, this time around referred to as the “State,” had contended that only an individual taxpayer has standing to sue under Texas Tax Code §112.108 (“Other Actions Prohibited”), and that “lawsuits by associations of taxpayers . . . are forbidden.” Just as it had earlier rejected the Comptroller’s sovereign immunity argument, the Third Court of Appeals had little difficulty in disposing of the State’s standing argument.

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According to the court, “…we have held that section 112.108 is unconstitutional, and that holding has not been overruled by the Texas Supreme Court.” The court cited as authority for that statement its opinion in Richmont Aviation, Inc. v. Combs , No. 03-11-00486-CV (Sept. 12, 2013), now on review at the Texas Supreme Court regarding another part of §112.108, specifically the requirement that a taxpayer can only file suit if it first pays the assessment against it or posts a bond for twice the amount of the assessment. (For more about the Richmont Aviation litigation, readers should refer to a previous post on this site captioned “A possible game changer for bringing Texas tax disputes in the state’s courts.”)

Because Tax Code §112.108 presented no barrier in Texas Small Tobacco Coalition, the court held that a trade association has standing to sue on behalf of its members if the following conditions are met:[T]he members themselves have standing to sue in their own right [footnote omitted]; the interests the association is seeking to protect are germane to its purpose; and participation of the individual members in the lawsuit is not necessary, meaning the pleadings and record show that neither the claim asserted nor the relief sought require the individual members to participate in the suit. [Internal citations omitted.] When, as here, an association seeks injunctive or declaratory relief, as opposed to damages requiring a showing of individualized lost profits, the relief will inure to the benefit of the association’s members and does not require the participation of each individual member. [Internal citations omitted.]

***

Further, none of the statutes cited by the State forbids an association from bringing a lawsuit on behalf of its members to argue that a tax statute is unconstitutional, and we recently reaffirmed that a suit for declaratory relief challenging a tat statute’s constitutionality can be brought by a trade association. Texas Entm’t Ass’n, Inc. v. Combs , 431 S.W.3d 790, 795 & n.3 (Tex. App.–Austin 2014, pet. filed).

For now, the Third Court’s opinion in Texas Small Tobacco Coalition is good news for taxpayers that want to band together to challenge a state tax by having their trade association or other organization seek injunctive and declaratory relief from the the tax without first paying an assessment. Of course, the Texas Supreme Court could always weigh in and reverse the Court of Appeals’ position on the constitutionality of Tax Code §112.108, either in this case (if the State files a petition for review) or in Richmont Aviation . For that reason, businesses, and their Texas tax counsel, should watch for future Supreme Court action in those cases as well as in Texas Entertainment Association .

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Say What?! – Classic Typos

Originally published by State Bar of Texas.

(1) From M.C. (Rick) Walton of Houston (Union Pacific Railroad), this typo he found in a classified advertisement that appeared in the Texas Bar Journal just two pages before the “et cetera” column.

There are vacancies for patent attorneys with the Navel Research Laboratory (NRL) at its Washington, D.C., and Bay St. Louis, Miss. locations.

(2) From Randy Schaffer of Houston, this typo from a petition for habeas corpus relief. …Applicant was denied a fair and impartial judge and sentencing hearing because the visiting judge, by deferring to jury verdicts in other cases, abdicated his responsibility to assess punishment based on applicant’s individualized circumstances. Applicant is entitled to be resented by a different judge.

(3) From Clifford F. McMaster of Fort Worth, this typo made by a pro se plaintiff in an answer filed in a federal civil case in an “Answer to Ordr (sic) to Show Cause”: To the horrible Judge Terry R. Means ….

(4) From District Court Judge Teresa K. Luther of Grand Island, Neb., this typo from a Petition to Modify child support that is currently pending in her court: The Petitioner has a new position whereby his wages have deceased.

(5) From District Judge Joe M. Leonard of Greenville (169th Judicial District), this typo from a brief in a consumer case. The Ard court further went on to disavow the Lee decision and accept instead the descent from the Lee decision.

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"Replacement" is a Condition Precedent to Recovering …

Originally published by Shane Smith.

Insurance policies may provide several methods to calculate the amount it will pay an insured for a loss. The term replacement cost will be defined or explained in the policy. In a recent federal district court case in Kentucky, Hampton v. Safeco Insurance Company of America,1 the court addressed the meaning of the term “replacement cost”, which, under the particular policy in that case, shall not exceed:

the smallest of the following amounts:

(a) the limit of liability under the policy applying to Coverage A or B;

(b) the replacement cost of that part of the damaged building for equivalent construction and use on the same premises as determined shortly following the loss;

(c) the full amount actually and necessarily incurred to repair or replace the damaged building as determined shortly following the loss;

(d) the direct financial loss you incur; or

(e) our pro rata share of any loss when divided with any other valid and collectible insurance applying to the…

.

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Simple Jury Persuasion: When videos are too persuasive…

Originally published by Douglas Keene.

It’s hard to know why research that is a almost a decade old is seen as fodder for a recent Op-Ed in the New York Times , but so it goes. Jennifer Mnookin , a law professor at UCLA, certainly has an impressive resumé, and it is likely most readers of the NYT are not familiar with camera perspective bias . We blogged about this research back in 2010 and mentioned it in our 2012 article on false confessions .

In short, the camera perspective bias research says that when confessions are videotaped, they “should be videotaped in their entirety and with a camera angle that focuses equally on the suspect and interrogator”. Apparently, if the videotape is focused only on the defendant, the observer is less likely to see the police interview as coercive–even when the interrogator makes an explicit threat. When the video is focused on both the interrogator and the defendant, the observer’s bias disappears.

Mnookin’s essay in the NYT describes the camera perspective bias and states that while videotaping interrogations is generally a positive thing, it doesn’t prevent the videotapes from being misleading, to jurors or even legal experts. This shouldn’t surprise us, says Mnookin, since the research has found that even “professionals like judges and police interrogators are not immune” to the camera perspective bias. Mnookin discusses the complexity of disentangling the false confession from the true confession and says videos may make that already difficult task nearly impossible.

“And yet by making confessions so vivid to juries, recording could paper over such complications, and sometimes even make the problem worse. The emotional impact of a suspect declaring his guilt out loud, on video, is powerful and hard to dislodge, even if the defense attorney points out reasons to doubt its accuracy.”

Mnookin’s op-ed piece echoes what many of the experts in the false confessions area have said for years: videotaping interrogations will not fix the problem of false confessions, it is simply a step on the way to making them less likely to occur. Multiple reader comments on Mnookin’s op-ed are remarkably cogent and coherent, in contrast to most comments on major news sites these days. Many of the commenters identify themselves as attorneys and offer thoughts on the advantages of videotaped interrogations, eye-witness fallibility, and the ethics of courtroom personnel. If a reader actually wants to be educated on the issues surrounding videotaped interrogations, it could happen here.

Daniel Lassiter (the researcher responsible for much of the research on camera perspective bias) came to the same conclusions back in 2010 that Mnookin shares in her current-day NYT op-ed.

“The video recording of police interviews and interrogations will bring an unprecedented degree of openness to the process that all interested parties can agree is essential to a fair and humane criminal justice system. That being said, it is far from certain whether this reform will actually reduce the number of wrongful convictions attributable to police-induced false confessions.”

Lassiter’s hope, back in 2010, was that as knowledge continued to grow in the area of false confessions, then jurors could be educated to see the videotaped interrogation as [just] one piece of data upon which to base decisions. We may not yet be at Lassiter’s 2010 wish for the courtroom, but hopefully we are moving in that direction.

On a related note, we are fans of the Sundance Channel’s fictional series Rectify which follows the post-release (based on new DNA evidence) life of a man who spent 19 years on death row for the rape and murder of his teenage girlfriend. This is not a feel good television show. It is dark, disturbing, confusing and poignant all at once. There are no easy answers. Just very hard questions. Did he or didn’t he? We are almost through Season 2 and do not yet know.

Lassiter GD (2010). Videotaped interrogations and confessions: what’s obvious in hindsight may not be in foresight. Law and Human Behavior, 34 (1), 41-2 PMID: 20087637

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Related posts:

1. Simple Jury Persuasion: When a Picture Can Sink Your Case


2. Simple Jury Persuasion: Being “right” versus being persuasive


3. Simple Jury Persuasion: Make Your Expert Optimally Persuasive

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Five Texans to watch vs. Falcons

Originally published by John McClain.

Quarterback Ryan Fitzpatrick

One good thing about being a 10-year veteran is being able to put an awful performance behind you. Fitzpatrick was 6-of-14 for 55 yards and two interceptions with a 14.6 rating against Arizona. That’s not indicative of the kind of quarterback he’s been. He needs to bounce back against the Falcons. It’ll be interesting to see what coach Bill O’Brien, who calls the plays, has prepared for Fitzpatrick and how long he’ll play again. It’s imperative to build consistency when the Texans have the ball and then to finish drives to build confidence in Fitzpatrick’s new teammates and coaches.

Outside linebacker Jadeveon Clowney

He flashed in his debut, playing the run well, getting after the passer and impacting his side of the field except when he was forced to drop into coverage. It’s hard to imagine defensive coordinator Romeo Crennel asking a player with his pass rush skills to go backward very often in regular season. Crennel won’t call anything exotic for preseason. He’ll keep it simple. The coaches want to see Clowney improve each week and develop consistency. The idea is to not make him think too much, just react instinctively and get the quarterback.

Running back Alfred Blue

In his first appearance with the Texans, the sixth-round pick averaged 6 yards a carry – the same average he compiled at LSU. As the first back off the bench at Arizona, he ran for 30 yards on five carries. He caught two passes for 14 yards and dropped one. At 6-2, 223, he’s got good size and speed. He’s improved since he arrived for the offseason program. He’s very smooth, very fluid. He looks like a natural runner, showing some instincts. He wants to get better. He has to improve pass protection. He can be productive as a receiver out of the backfield if they need to use him in that capacity.

Inside linebacker Justin Tuggle

He might be the most excited player on the Texans’ roster about playing against the Falcons. Why? Because he grew up in Atlanta, where his father, linebacker Jessie Tuggle, was one of the best and most popular players in Falcons’ history. Tuggle made the Texans as an undrafted free agent last year and learned inside and outside linebacker. He was a productive special teams player. Now he starts on the inside and has a chance to keep the job when Brian Cushing returns to the lineup. Tuggle is smart, has a good work ethic, is extremely coachable and will get a lot of attention from Atlanta media tonight.

Nose tackle Louis Nix III

He returned to practice this week for the first time since OTAs and could make his debut tonight. Nix had undergone arthroscopic knee surgery before training camp. Because it wasn’t a serious operation, the Texans weren’t in the market for a veteran. They expect him to compete for a starting job. They traded into the third round to get Nix (6-2, 331), who has the ideal build for a 3-4 nose tackle who’s supposed to tie up two blockers. That position requires quickness, leverage, strength and willpower. If Nix stays healthy and keeps his weight under control, he can be an ideal fit for Romeo Crennel’s scheme.

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July 1991 – Doing Voir Dire

Originally published by State Bar of Texas.

Robert Myers of San Antonio (Willis, Hickey, etc) not only believes “that the risks of trial far outweighed the risks of depositions,” he is convinced “that certain aspects of trial (most notably voir dire examination) are more dangerous still.”

Juror No. 19 (Frank Kalani Laa) wished to approach the bench to ask a question; Judge Spears, being understandably unfamiliar with the pronunciation of Mr. Kalani Laa’s last name, sought assistance:

The Court: Number 19, would you step forward please.

The Court: How do you pronounce your name?

Juror 19: Frank.

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