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Archive for the ‘Texas Law’ Category

Standing Your Ground in Texas

In Gun Laws, Self Defense, Texas Law on January 15, 2013 at 9:53 AM

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The February 26, 2012 Trayvon Martin shooting by George Zimmerman shined a spotlight on Florida’s stand-your-ground law and other such laws in states around the country. All states have a self-defense justification for otherwise unlawful violence. One of the important points on which the states differ, however, is whether and to what extent the person defending herself has a duty to retreat. States that do not require retreat, where possible—not even outside the home—are referred to as stand-your-ground states. In other words, they allow potential victims to stand their ground against first-aggressor assailants.

The Sanford, Florida tragedy soon became a cause célébre for stand-your-ground opponents in Florida. Such opponents point to other tragedies as evidence of the need to repeal such laws. For example, a highly publicized case involved a semi-conscious drunk Floridian trying to enter what he thought was his own home. The real homeowner was also a gun owner. When the man sobered up, he was in the hospital with a bullet through his chest.

On the other hand, stand-your-ground proponents point to stories like Norman Borden’s. While Borden was being run down by a jeep in West Palm Beach, he emptied his pistol into the windshield and then side door of the pursuing car as it approached and then passed, killing two of the three occupants. The surviving assailant later testified that the trio’s plan had been to rough Mr. Borden up with a baseball bat. Looking to the stand your ground law for guidance, the jury rightly acquitted him.

Fourteen states, including Texas, currently have a stand-your-ground law on the books. Gun owners, however, should be careful to understand what those laws mean. Misunderstanding the scope of these laws can have tragic consequences. For example, Raul Rodriguez, a middle-aged Houston man, thought the law gave him an umbrella of protection after brandishing a firearm at his neighbor’s house to try and quiet a noisy late-night party. When the neighbor, 36-year-old elementary school teacher, allegedly lunged at him, Rodriguez shot him dead and wounded two others. Rodriguez said he was just standing his ground. The jury said otherwise, convicting him of second-degree murder. Rodriguez was sentenced to 40 years in prison.

The Texas statute allowing potential victims to stand their ground states: “A person who has a right to be present at the location where the force is used, who has not provoked the person against whom the force is used, and who is not engaged in criminal activity at the time the force is used is not required to retreat before using force [in self-defense].” Tex. Penal Code § 9.31(e).

It is difficult to argue that Rodriguez qualified for safe harbor under this section. He approached his victims with a camera, a flashlight and a loaded fire-arm. Most people would see this as an act of provocation.

In order to use deadly force—force capable of causing death or serious injury, such as that used by Rodriguez or any gun owner—subsequent sections of the Texas Penal Code require that the assailant reasonably believe such force is immediately necessary to protect against deadly force, aggravated kidnapping, sexual assault, or robbery. Because Rodriguez’s victims threatened to get a gun, outnumbered him by at least three to one, and showed signs of strong hostility before allegedly lunging at him, Rodriguez’s actions may have not been in conflict with this section of the penal code.

Additionally, other provisions of the penal code provide further restrictions on standing your ground. For example, Texas Penal Code §9.31(b)(5), found in the same section of the penal code as the stand-your-ground provision, states that the use of force is not justified if the shooter sought an explanation from or discussion with the other person concerning the shooter’s difference with the other person while the actor was carrying a firearm without a license and without being in his own home, vehicle, or en route between the two. Thus, if Rodriguez had not held a concealed handgun license, his self-defense argument would have failed under this provision as well.

In conclusion, Raul Rodriguez provides a sobering reminder that gun owners should be extremely careful about the meaning of the stand-your-ground laws. Texas’s stand-your-ground law may be a license to protect oneself against first-aggressor assailants, but it certainly is not a carte-blanche to pick a fight only to shuck smoke wagons and throw lead when an adversary becomes violent.

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A New Day for Texas Water Rights?

In Landowners, Texas Law, Water Law on March 21, 2012 at 10:50 AM

If last summer taught Texans anything, it was that water scarcity is no joke. With record droughts and temperatures affecting everything from agriculture to wakeboarding, water was on everyone’s minds.

With water on the brain in Texas, many waited to see what the state Supreme Court would do with groundwater rights in a long pending case, Edwards Aquifer Authority v. Day, decided on February 24, 2012.

At issue in Day was the validity of the Edwards Aquifer Authority’s (EAA) implementation of a permit system that prioritized water rights based on landowners’ historic usage patterns. The EAA was created by the Texas Legislature in 1993 as part of Texas’s broader groundwater regulation structure through localized Ground Water Districts (GWDs). Under Texas’s regulatory structure, GWDs have the ability to apportion the amount of water that landowners inside the district may pump in a given year. Although the GWDs face some restrictions, they generally have broad authority to regulate the consumption of groundwater in their districts.

While GWDs possess broad authority to craft their regulatory structures, most GWDs have allocated their permits on the consideration of how much groundwater a landowner had previously put to use on their land. The Texas Water Code (TWC) requires GWDs to consider historic use as a factor to be considered by the GWDs, but the TWC does not make that factor dispositive. Indeed, the TWC does not mandate that any historic usage pattern be preserved.

The EAA, by contrast, does not have the same flexibility that GWDs possess. Instead, the Texas legislature included a mandatory consideration in the EAA’s enabling act that “[t]o the extent water is available . . . [the EAA] shall issue the existing user a permit for withdrawal of an amount of water equal to the user’s maximum beneficial use of water . . . for any one calendar year [during June 1, 1972 to May 31, 1993].” Thus, the EAA is not free to choose from a broad array of considerations to structure its permitting system like GWDs are under Chapter 36 of the Texas Water Code. This rigidity is what prompted Day.

Day began when the EAA was first created. R. Burrell Day and Joel McDaniel purchased a tract of land inside the EAA’s authority. That tract of land had a well that tapped into the Edward’s Aquifer and had been used by the previous owners to irrigate the land. Problematic for Day and McDaniel was that the well primarily filled a lake on the property that was used mostly for recreation. Although some of the irrigation water was drawn directly from the well, most of the irrigation water was drawn from the lake. This fact caused the EAA to severely curtail the amount of historic use Day and McDaniel’s property qualified for because the only use that counted under the EAA’s regulatory scheme was water that came directly from the well and was put to a beneficial use; filling a lake to play in does not constitute a beneficial use.

More than ten years after the EAA issued the usage permit to Day and McDaniel, the Supreme Court addressed Day and McDaniel’s challenge. The case centered on the ability of the EAA, a state entity, to curtail access to the water below an owner’s land without any kind of compensation. The challenge implicated the Texas Constitution’s takings clause. Article I, section (17)(a) states “[n]o person’s property shall be taken, damaged, or destroyed for or applied to public use without adequate compensation.”

Day required the court to first address a question it had artfully dodged for over a century: Can someone own water beneath their land if that water is not stationary beneath only their land and instead flows through an underground aquifer that covers anywhere from hundreds to thousands of square miles? The court answered this question in the affirmative by drawing on the court’s similar conclusion in its well settled case law relating to oil and gas rights. Although the court announced that landowners do have property interest in the water underneath their land, the court did not announce a definitive test to determine the amount of water a land owner possesses. Instead, the court merely provided that landowners have a property interest in the “fair share” of water beneath their land.

With that threshold question out of the way, the court then addressed Day and McDaniel’s takings claim. The taking claim at issue was specifically a regulatory taking because the state was not literally taking or occupying the property at issue, but instead limiting its use. To succeed on a regulatory taking claim, one most demonstrate that (1) that the regulation economically interferes with (2) a reasonable investment backed expectation the owner had in acquiring the property, and (3) that the regulation is not reasonable.

The court found that the factual record developed in the courts and agency proceedings below it did not provide enough information for it to determine whether Day and McDaniel could succeed on the first two factors. The key fact absent from the record was what amount of water, if any, Day and McDaniel expected to receive under the EAA’s historic use allocation. But the court did analyze the third factor. To determine whether the EAA’s permitting allocations were reasonable, the court focused on the differences between the EAA’s enabling act and the TWC. The court searched for a justification for the EAA’s specific legislative mandate to absolutely prioritize water allocation based on the historic usage of landowners in light of the TWC’s more flexible test that allows each GWD to form their own priorities in allocating water. Neither the EAA itself, nor the court could supply a viable justification for why the EAA could not follow a similar approach to GWDs that derive their authority from the TWC. Based on the lack of factual development and the court’s inability to say that EAA’s absolute prioritizing of historic use is reasonable, the court sent the case back down to the trial court to develop the facts necessary to decide whether Day and McDaniel had a compensable taking claim.

With the persistence of drought conditions throughout much of Texas, the pronouncement that water rights curtailment through permits issued by the EAA or other GWDs may constitute compensable taking claim has the potential to greatly shake the current structure of Texas water law. When the Texas legislature convenes next January, Day will likely force a hard look at the current structure of GWDs and special entities like EAA. In the intervening months, landowners whose permits are limited mostly by historic use considerations may have the potential to gain compensation through a takings claim theory. Day, then, appears to provide a catalyst for a reconfiguration of water regulation in Texas that will come on the heels of one of the hottest and driest summers in Texas history. Thus, for a case that did very little to advance the litigation of the parties before the court, Day likely constitutes a game-changing case, the impact of which will be felt for many years.

Adult Adoption: The Good, the Bad, and the Unintentional

In Family Law, Texas Law on February 9, 2012 at 11:07 AM

The recent adult adoption by a Florida businessman, John Goodman, of his girlfriend, who is only six years younger than him at the age of 42, has raised a few eyebrows, to say the least. It has been speculated that Goodman adopted his girlfriend for the sole purpose of protecting assets from an ongoing civil dispute of which Goodman is the defendant. Goodman is currently being sued for wrongful death based on events that occurred two years ago when he ran a stop sign and fatally struck a 23 year old man. A trust fund that Goodman created for the benefit of his two minor children has been excluded from Goodman’s financial worth for the jury to take into consideration when determining an appropriate award in the civil suit. With Goodman’s adoption of his girlfriend, he is essentially regaining control of a third of the assets held in the trust through his girlfriend’s claim as a beneficiary. While a court may eventually find that Goodman’s girlfriend may not benefit from the trust because the adoption was a sham, as of now that has not occurred and she is presumed to be a legitimate beneficiary of the trust.

Goodman’s case reveals one of the possible ways a person may abuse the laws allowing adult adoption. While the majority of adult adoptions are not used to manipulate the legal system, there is a (somewhat legitimate) fear that this option will be used in a way that was not intended by the lawmakers. Looking to Texas’s laws covering adult adoption, it is easy to see that the Texas legislature was concerned about the possibility for abuse and attempted to curtail that possibility with some disincentives, making an adult adoption look less attractive to a person looking to use it for abusive purposes.

The Texas Family Code Chapter 162 covers adoption in Texas. Section 162.501 specifically allows the adoption of an adult by another adult. An adult adoption is not very different procedurally from the adoption of a minor. An exception to this is that the adult being adopted must consent to the adoption. See § 162.504. Where the two adoptions become very different is in the effect of each. The effect of an adoption of a minor is that a legal parent-child relationship is created and the adopted child may inherit from and through the adoptive parents, as well as his biological parents. See § 162.017. An adopted adult, however, may not inherit from his biological parents, and may only inherit from and through his adoptive parents. See § 162.507.

This distinction between the inheritance rights of an adopted minor and an adopted adult came about when the legislature amended this chapter of the Texas Family Code in 2005. A possible reason behind this change was to make an adult adoption a less attractive option for people who wanted to use it for a purpose other than its intended purpose (to legally recognize a parent-child relationship). One way it can be used, as we saw in the Goodman case discussed above, is to hide assets by creating a new beneficiary of a trust who would be more inclined to hold that wealth for the adoptive parent. Another way the adult adoption option is abused is when one member of a same sex couple adopts the other. This can ensure inheritance rights that could otherwise be challenged if only preserved in a will. Since same sex couples cannot legally marry in many states, including Texas, this is a potential option for couples who want to leave their property to each other. With the changes made in 2005, however, this decision is a much more serious one because now if a same sex partner adopts the other partner, the adopted adult can no longer inherit from his biological parents (unless, of course, the biological parent provides otherwise in his will). The inheritance consequences of adult adoption are more serious than those of a minor adoption, and this was most likely done intentionally—to discourage adults from adopting other adults that are not actually their “children”.

One negative consequence of the 2005 amendments that might not have been intentional, however, deals with the situation of a step-parent adopting an adult step-child. In this case, even if the step-parent is married to the step-child’s biological parent, the adult adoption would still cut off the child’s right to inherit from the biological parent. While the statute does demand that the step-parent and his spouse (biological mother) both join on the petition to adopt, it would not make practical sense for the mother to join the petition because she is already the child’s parent. See § 162.503(b). Since these amendments were changed fairly recently, it is difficult to determine what the effect will be on adoptions by a step-parent who is married to the child’s biological parent.

Returning to the Goodman case above, if this had occurred in Texas, Goodman’s girlfriend would have had a lot to consider before agreeing to this plan because she would be giving up her right to inherit from her biological parents. But whether an adult adoption occurs in Texas, Florida, or anywhere else, the adopter and adoptee should both be certain of their decision, because no matter what state you are in, one thing is true: Marriage can end in divorce, but adoption is forever.

New Vaccination Requirement for Higher Education

In Texas Law on January 9, 2012 at 11:29 AM


The beginning of a new year always brings with it the beginning of new laws. One law that will have an impact on many people in Texas starting in January 2012 was actually already in effect as of May 27, 2011. The reason this law is now the topic of discussion even though it has been technically effective for over seven months is because the practical effect of the law will arise at the beginning of the 2012 spring academic semester. Starting this semester, all students entering into an institution of higher education must receive a bacterial meningitis vaccine.

Originally, this law, the Jamie Schanbaum Act, only applied to entering students who planned to move into on-campus housing, but after the death of a Texas A&M student caused by bacterial meningitis, the 82nd legislature amended the original law. The first law was passed after Jamie Schanbaum, a student at the University of Texas, lost both of her feet and several fingers due to bacterial meningitis. The amended law, S.B. 1107,  is now known as the Jamie Schanbaum and Nicolis Williams Act to honor the Texas A&M student who passed away in early 2011. Nicolis Williams’s death was significant not only because it was caused by bacterial meningitis, but also because he lived off campus. The original law only applied to those students living on campus, meaning it had no effect for students like Williams who lived off campus.

Under the new law, all entering students at an institution of higher education in Texas are required to receive a vaccine against bacterial meningitis within five years of attending the institution, and no later than ten days prior to attending classes. The exception to this blanket requirement applies to students who are only enrolled in online courses, or some other form of distance education courses, and also to those students who are thirty years of age or older. The law applies to transferring students as well as students who are continuing their higher education after a fall or spring semester off.

While this new law will help protect Texas’s young population from bacterial meningitis, not everyone is a supporter. One specific concern that has been raised by critics is that every incoming student will have to incur a cost in order to comply with this requirement. Vaccinations are not cheap, and the meningitis vaccine is no exception.

Additionally, the vaccination debate has heated considerably since the February 2011 Supreme Court decision Bruesewitz v. Wyeth, and this new law only adds fuel to that fire. In Bruesewitz, the Supreme Court decided that the parents of a child who was allegedly harmed by a vaccine could not bring suit against the vaccine manufacturer under state law, and could only raise complaints about the vaccine’s design within the no-fault compensation program that was created by the 1986 act that was at issue. This decision greatly insulates vaccine manufacturers from future possible tort liability.

The protection accorded to vaccine manufacturers mixed with the government mandate for individuals to undergo vaccination in order to attend an institution of higher education has given many Texans cause for concern. Whether these concerns will ever succeed in enacting change remains to be seen. For now, the law requires vaccinations for students of higher education in Texas, and the reason behind this law is to protect students and hopefully save some lives.

Compare and Contrast Business Structures

In Business, Texas Law on October 18, 2011 at 10:35 AM

When forming a business, there are many different decisions to make. One of the first, and arguably the most important, is how to structure the business. There are many different options, but depending on how big the business will be, or what is important to the owner, there may be a clear choice.

Sole Proprietorship – A sole proprietorship is the smallest and simplest of the business structures. This structure only has one owner and is essentially an extension of that one owner; it is not a separate entity. The owner reports the business’s income and losses on his own personal income tax return. A sole proprietorship is the cheapest business structure because there are no filing fees with the Texas Secretary of State. There are, however, filing fees for an assumed name certificate (if the business is conducted under a name different from the owner’s) that must be filed in the county of principal business, or else in every county where business is conducted. Filing fees will vary from county to county, but on average range from $9-$20.

While this may seem like the best option for an owner who wants to start small and for as little money as possible, there are some drawbacks to the sole proprietorship. Because the business is not a separate entity, but merely an extension of the owner, there is absolutely no liability shield to the owner. The owner will be personally responsible for all debts and liabilities of the business. This includes any unforeseen tort claims that may be brought against the business.

Limited Partnership – A limited partnership (LP) is another structure that can be used by a smaller business. A partnership in general has to have at least two partners. In a LP, at least one of the partners has to be a general partner, and at least one of the partners has to be a limited partner. The LP must file a certificate of formation ($750) as well as an assumed name certificate ($25) with the Texas Secretary of State. It also must file an assumed name certificate in the county where the business is maintained, just like a sole proprietorship. The LP is governed by the partnership agreement which is created by the partners and does not need to be filed for public record.

The liability of the limited partner is, quite appropriately, limited. The limited partner will only be held liable up to the amount he contributed in capital. This is similar to the liability of a shareholder in a corporation. The general partner, however, has unlimited liability for the debts and actions of the partnership. Often limited liability companies or corporations will serve as a general partner in a LP because of the unlimited liability that attaches to the general partner.

A LP is taxed as though the gains and losses went directly to the partners. This means there will not be “double taxation” (taxed once at the entity level, and then again at the individual level), but instead the income and losses, and therefore taxes, will “flow through” to the partners.

Limited Liability Company – A limited liability company (LLC) is a hybrid of a partnership and a corporation. The LLC must file a certificate of formation ($300) and an assumed name certificate ($25) with the Texas Secretary of State, as well as an assumed name certificate in the county where the business is maintained. This business structure is known for being flexible by nature, and is attractive to many business owners for that reason. It can act more like a partnership or a corporation, depending on what is important to the owner.

LLCs can have multiple owners, including both individuals and other business entities. These owners are known as the members of the LLC and can choose how the business is managed. The LLC is a separate entity from the members. LLCs are taxed like partnerships, meaning there is no “double taxation”, but the gains and losses “flow through” to the members on an individual level. Additionally, LLCs do not have rigid formal requirements that are associated with corporations. For example, there is no requirement to record minutes in meetings.

LLC’s are similar to corporations in the liability of the members. Members in LLCs are treated like shareholders in a corporation, meaning they are usually only held liable for the debts or actions of the LLC up to the amount they contributed to the LLC. This is why LLCs are often used as general partners in LPs. Further, the members of a LLC are protected by the “corporate veil”. The veil is not bullet proof, however, and courts have found that the veil can be “pierced” when members abuse the privileges associated with a LLC and blur the separation of the LLC from the member.

Corporation – Corporations are the most formal business structure an owner can choose. In order to form a corporation, a certificate of formation ($300) and an assumed name certificate ($25) must be filed with the Texas Secretary of State. Additionally, the appropriate assumed named certificate must be filed in the county where the business is maintained.

The owners of a corporation are known as the shareholders. There are no limits on how many shareholders there can be in a corporation. There is also no limit to how many classes of stock a corporation can have. Shareholders have mainly a passive role, and only vote on issues that substantially affect the corporation, such as mergers. The managers of a corporation are known as directors and form the board of directors that runs the corporation. The board of directors elects officers to manage the day-to-day obligations of the corporation.

There are formal requirements that follow the formal structure of a corporation. For example, there is a requirement for minutes to be recorded in meetings, and there are strict standards on the bookkeeping procedures of a corporation. The benefit of having these formalities is that the shareholders will only ever be held liable to the extent of their contribution to the corporation. Shareholders will be protected by the “corporate veil” from being held liable for the actions and debts of the corporation.

The flipside, of course, is that the shareholders of a corporation will be subject to “double taxation.” The income and losses of the corporation will first be taxed at the entity level, and then will be taxed again when the shareholders receive a distribution and are taxed on that amount as income.

“S” Corporation – “S” corporations are those corporations that elect with the IRS to be treated differently for tax purposes. There are certain limitations on “S” corporations, meaning not every corporation can elect this beneficial tax treatment. For example, there can be no more than 100 shareholders, and the corporation can only have one class of stock. Additionally, the corporation must be a domestic corporation (be organized in the United States), and shareholders must be citizens of the United States. The benefit of electing this tax treatment is that the corporation is not taxed at the entity level, meaning the income of the corporation is only taxed once at the individual level and “double taxation” is avoided.

Payday Payback: Collecting Earned Wages from Deadbeat Employers

In Contracts, Employment, Legal, Texas Law on September 29, 2011 at 8:24 AM

It is unacceptable for an employer to not pay earned wages. Accordingly, the Texas legislature has provided avenues by which jilted employees can make life very difficult for recalcitrant employer-debtors.

Because wage disputes are usually small—one study shows the average dispute amount to be $420.00—the cost of pursuing redress through litigation usually greatly exceeds the value of the remedy sought. Texas therefore provides a cost-free administrative remedy to unpaid workers by empowering the Texas Workforce Commission (TWC) to investigate, rule on, and then enforce wage claims. Engaging this process requires little effort and education. One need only follow the instructions and complete the form found at http://www.twc.state.tx.us/ui/lablaw/ll1.pdf. These instructions include filling out the form completely and accurately, notarizing it, and then returning it to the address thereon indicated. The claim must be filed within 180 days of the date payment was originally due. (If 180 days have already lapsed, a claimant should NOT file with the TWC, as doing so may endanger a claimant’s ability to seek redress through the courts. See Igal v. Brightstar Information Group Tech. Inc., 250 S.W.3d 78 (Tex. 2007).)

The TWC then conducts an investigation, requesting information from the claimant and the employer as needed.  The investigation timelines can vary, and the TWC informs claimants of the estimated length of investigation. Upon completion of the investigation, the TWC issues a Preliminary Wage Determination Order (PWDO). If the TWC feels the employer engaged in a bad-faith failure to pay, it may assess an administrative penalty against the employer of up to $1,000.00.

After the PWDO is issued, the claimant and the employer have 21 days from the issue date to make an appeal. If neither the claimant nor the employer appeal, and if the employer fails to pay the amount determined by the TWC to be due (if any) then the PWDO becomes a final order 30 days after its issuance. The TWC’s Collections Unit then seeks recovery through a variety of avenues, such as bank account freezes and real property liens. Those employers who: (1) intend to withhold wages at the time the employee is hired; and (2) do not pay wages after a demand is made, can be subject to criminal penalties, including a two-to-ten-year prison sentence and a fine of up to $10,000.00. 

Sometimes—such as when there is a larger amount in controversy or when the TWC’s claims process has born no fruit in the past with a particular employer—an employee may instead decide to enforce a wage claim dispute through the courts. Enforcing a wage claim through the courts is the same as any other lawsuit, however, Texas legislators have likewise made efforts to facilitate this recovery process for jilted workers. The most daunting aspect of filing a civil suit is hiring and paying an attorney, yet under Texas law, the dead-beat employer can be made to pay attorneys’ fees. The Texas Civil Practices and Remedies Code §38.001 allows the plaintiff to recover attorneys’ fees if the claim is for performed labor or an oral or written contract. To recover the attorneys’ fees, the claimant must simply: (1) be represented by an attorney; (2) present the claim to the opposing party; and (3) give the opposing party thirty days to meet the demand.

Because the dead-beat employer-debtor will be footing the bill in a litigation proceeding, because of the administrative penalties the TWC may impose in an administrative proceeding, and because of the potential for criminal liability, Texas legislators have provided attention-getting incentives for employers to timely pay up; otherwise, they expose themselves to painful payback.

Texas Changes Funeral Picketing Law

In First Amendment, Texas Law on September 26, 2011 at 8:51 AM

During the 82nd regular legislative session of the Texas legislature, an amendment to the Texas Penal Code was passed that will affect the right to picket near a funeral service in the state. This law, introduced as HB 718, amends § 42.055(b) of the Texas Penal Code to further restrict the times when a person can lawfully picket a funeral.

The original provision was made effective on May 19, 2006, and made it illegal for a person to picket within “1,000 feet of a facility or cemetery being used for a funeral service” during the period beginning one hour before the service begins and ending one hour after the service is completed. As of September 1, 2011, and because of HB 718, it is a punishable offense to picket within 1,000 feet of a facility or cemetery being used for a funeral service during the period beginning three hours before the service begins and ending three hours after the service is completed. For five years, the one hour before and after a funeral service was sufficient to protect a grieving family from possible offensive picketers. What changed since 2006? Why is Texas changing the law now?

The answer: Snyder v. Phelps, 131 S.Ct. 1207 (2011), a highly controversial case decided by the Supreme Court on March 2, 2011. Matthew Snyder was an American soldier who was killed in action in Iraq. His funeral service was held in his hometown of Finksburg, Maryland. Fred Phelps, the head of the Westboro Baptist Church in Kansas, along with his fellow parishioners, decided to picket near Snyder’s funeral around the same time. The Phelps group informed local authorities in Maryland of their intent to picket near the funeral site while the funeral was taking place. They followed all local laws and restrictions, did not yell or use profanity, and were never violent.

The problem with the picketers, however, was their signs’ messages. The signs contained such statements as “God Hates the USA/Thank God for 9/11,” “America is doomed,” and “Thank God for Dead Soldiers.” Snyder’s father brought suit based on the content of the signs the picketers carried and the effect they had on him. It took a trial at the district court level, an appeal to the Fourth Circuit, and an opinion from the Supreme Court to resolve the matter. The Supreme Court concluded that Phelps and the members of his church were addressing matters of public import, on public property, in a peaceful manner, and in full compliance with the guidance of local officials. They were not liable for any harm Snyder may have suffered because their speech was protected.

While the First Amendment does afford a vast protection over free speech, states have the power to impose content-neutral time, place, and manner restrictions. See Clark v. Community for Creative Non-Violence, 468 U.S. 288, 293 (1984). Texas’s HB 718 is an exercise of that power.

Currently forty-four states have laws restricting protests; some only restrict protests held near or around military funeral services. Of these, most states impose minimal restrictions on the distance that a picketer must keep between himself and the cemetery or funeral location, ranging from 300 to 500 feet. At the time of the Supreme Court’s decision, Maryland’s restriction only mandated that picketers stay 100 feet away; the state has since amended the law to impose a 500 feet restriction.

Texas, however, has one of the most restrictive laws regarding funeral picketing, imposing a 1,000 feet buffer between a funeral service and a picketer. This was true even before the amended law became effective on September 1. Perhaps the amendment to the funeral restriction was just a sign from the Texas legislature that, while the freedom of speech is a right so fundamental that even speech which is offensive or hurtful will be protected, states still have the power to protect their citizens during difficult times.

Employment Law Update

In Employment, Texas Law on September 1, 2011 at 10:39 AM

++This memo summarizes recent developments in Texas employment law during the spring and summer of 2011.

ADA (Americans with Disabilities Act)

  • Medical Certifications

Under the ADA, an employer can request a medical examination or make a medical inquiry, but it must be related to the job and supported by business necessity. The point of the exam must be to determine whether the employee can perform her duties after the employer identifies a legitimate reason to doubt her capacity to do so. The bottom line is that employers must have a legitimate reason before requesting a return-to-work medical exam. Examples of cases in which an employer was found not to have violated the ADA: (1) One court found that it would be “grossly negligent” for an employer not to order a psychiatric examination when an employee makes serious workplace threats; (2) An employer was within its rights to require a medical examination when the job required driving and the employee disclosed a condition that required medications that could impair the ability to drive.

  • Definition of Disability Broadened Under ADAAA (ADA Amendments Act of 2008)

Previously, to establish a disability, an employee had to show not just that he had an impairment, but that the impairment stopped him from leading a normal life (i.e. affected his ability to perform daily activities). That high standard has been wiped away. An employee can now establish that his disability is covered by the ADAAA, even if the only major life activity that is substantially affected is normal cell growth. A Texas federal trial court recently decided this issue and relied on the Equal Employment Opportunity Commission’s (EEOC) recent promulgation of regulations interpreting the ADAAA, which became effective May 24, 2011. The EEOC regulations provide that certain impairments, because of their severity, will almost always result in a determination of an actual disability. And, not surprisingly, cancer is one of them. Managers must be trained to understand that the definition of disability is so broad under the ADAAA, conditions that once seemed as if they were common impairments will now be covered. Managers don’t need to understand the details of the amendments, but when an employee says (a) I have this medical condition and (b) it causes limitations, they should get HR involved immediately.

FMLA (Family Medical Leave Act)

  • Care Defined

An employee brought suit against his employer after he was fired because he missed work to prepare his home for the return of his daughter, who had recently sustained serious head trauma. The employee was at home by himself, and the daughter was in the hospital in another state with her mother. The employee claimed he was “caring” for his daughter because of the work he was doing in the house and that he was in constant telephone communication with her and his wife. The federal court of appeals that covers Texas decided this constant telephone communication was not enough and that under the FMLA, “caring” for a family member with a serious health condition contemplates being in close physical proximity to that family member. The court talked about two other cases in which there was a “to care for” element. In one of those cases, the court said it could be a violation of the FMLA to fire an employee who stayed home with three healthy children for two days while his wife cared for a sick child in the hospital. In the other, the court said it could be a violation of the FMLA to terminate an employee because she returned home to take a nap after spending the entire day with a sick child. As the court noted, in neither case was the caregiver out of state for weeks at a time.

  • Unexcused Leave Grounds for Termination Under FMLA

In another case decided by the same court of appeals, an employee was granted intermittent leave because he had a serious health condition. He used this leave for unplanned absences and scheduled leave. After the employee had missed a number of days in one month, his employer placed him on full-time FMLA leave until his physician authorized his return or he exhausted his leave. After this, the employee called in sick five days in a row. This prompted his employer to look at his attendance record. Upon review, his employer discovered that the employee’s non-FMLA absences had exceeded the permissible limit in the leave policy. The employer fired the employee, and the employee sued for FMLA retaliation. The trial court threw the case out, and the court of appeals said it was right to do so. The employer won because it fired the employee not because he sought to use FMLA leave, but because his non-FMLA absences were excessive. It was those absences that had a negative effect on the office’s productivity. This case underscores an important principle: Whenever an employer terminates an employee for absenteeism, it should double-check to make sure none of the absences he is counting toward termination are FMLA-covered. If they are and the employer decides to terminate the employee anyway, the employer will be violating the FMLA. This case also underscores the point that absences that aren’t FMLA-covered can form the basis of discipline.

  • Temporary Impairments

A federal trial court in South Texas recently refused to dismiss a case based on the issue of whether the employee was entitled to FMLA leave to care for her adult daughter, who was injured in a car accident. The employer argued that the daughter was not “incapable of self-care because of a physical disability,” which is required for an employee-parent’s eligibility for protected leave to care for an adult child. However, evidence indicated that the daughter still needed assistance with grooming, hygiene, bathing, dressing, and eating, and was therefore incapable of self-care. Evidence also showed the daughter was disabled. In this regard, the court looked to the recently amended ADA, which now provides that temporary or non-chronic impairments can be disabilities. Moreover, the daughter was substantially limited in the major life activity of walking, among other things, during her mother’s leave period.

  • Medical Certification

The FMLA allows an employer to require an employee to provide a health provider’s certification supporting the employee’s request for FMLA leave. If the employee fails to provide a certification, the employer may deny leave. In one recent case, the employer requested a medical certification from the employee, and the plaintiff provided a letter from a physician stating that the plaintiff suffered Post-Traumatic Stress Disorder and was unable to return to work. However, the letter failed to include the date on which the employee’s condition began and the probable duration of the condition. The employer then requested a further certification that would include the missing information. The employee did not provide a timely certification with all the necessary information. The court ruled that the employer was authorized to terminate the plaintiff’s employment under these circumstances.

Absenteeism

According to CareerBuilder’s latest annual survey on absenteeism, 29% of workers took a faux sick day in 2010. A similar share of employers, 27%, thought they were seeing a rise in employees calling in sick when they were actually well, possibly from “stress and burnout caused by the weak economy.”

FLSA (Fair Labor Standards Act)

  • Retaliation

The U.S. Supreme Court said earlier this year that employees may sue for retaliation under the FLSA. The Supreme Court held that the FLSA anti-retaliation provision protects an oral complaint about FLSA violations, provided the complaint is “sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context, as an assertion of rights protected by the statute and a class for their protection.”

  • Statute of Limitations

The FLSA’s statute of limitations varies depending on whether a violation was “willful.” If the violation was willful, a three-year statute of limitations applies, but if the violation was not willful, a two-year statute of limitations applies. A separate FLSA remedial provision states that a district court may decline to award liquidated damages if the employer proves it acted in “good faith” and had “reasonable grounds” to believe its actions complied with the FLSA.

Title VII Retaliation

The Fifth Circuit held that an employee’s request to her employer for a copy of a sexual harassment complaint she made against another employee four years earlier (and had declined to pursue) did not qualify as “opposition” to unlawful employment practices under the Title VII retaliation provision. The employee admitted that her motivation in requesting the documentation was to find another position within the employer’s workforce. Therefore, no reasonable jury could find that she made the request in order to “confront, resist, or withstand any long ago discriminatory practices” by the employer.

Sex Discrimination

The U.S. Supreme Court recently ruled in favor of Wal-Mart, the nation’s largest private employer, in a massive law suit that has been called the largest employment class action in U.S. history. The class of plaintiffs in the case included approximately 1.5 million female former and current Wal-Mart employees seeking relief that could have amounted to billions of dollars in back pay. Although the case involved alleged sex discrimination, the Court wasn’t asked to decide whether it occurred. Rather, the Court’s decision was limited to whether the suit could be handled as one massive class-action case. In what could be called a unanimous decision, the justices all held that the case shouldn’t proceed as a class action; however, they were divided in their reasoning. One of the lessons to be taken away from this decision is that for employees to be able to file their claims as a class, they have to show a high level of “commonality” between their claims. They are going to have to be able to demonstrate that they “have suffered the same injury” (e.g., “significant proof that an employer operated under a general policy of discrimination”).

Pregnancy Discrimination

Employment law requires employers to make individualized determinations. The case law says that if an employee makes a decision to put herself in harm’s way in performing her job, the employer cannot stop her.

USERRA (Uniformed Services Employment and Reemployment Rights Act of 1994)

The federal court of appeals covering Texas recently ruled that the USERRA does not create a free-standing cause of action for hostile work environment military service harassment.

Evidence of Discriminatory Intent

The “cat’s paw” theory was recently endorsed by the Supreme Court in a USERRA case. Under the cat’s paw theory, an employer may be liable for the action of a decision maker who was not motivated by illegal intent, if the decision maker was partly influenced by another supervisor who was motivated by illegal intent.

Non-compete Law

  • Money as Consideration

On June 24, 2011, the Texas Supreme Court rewrote Texas non-compete law. While the court’s opinion answers many questions, it leaves some still unanswered. The change is radical. Before: An employer could have a non-compete agreement with employees if he gave them something of value. That “something of value” could be his confidential information. After: Now it appears that money can buy a non-compete.

The case the court addressed involved an employer who gave his employee an option to buy 500 shares of stock in the company and the employee agreed to accept the stock options. However, the option agreement also provided that if the employee left the company within three years after exercising the options, he couldn’t compete with the employer for two years after the termination of his employment. The employee signed the agreement, subsequently left, and then got sued by his former employer. The Texas Supreme Court said the stock options were sufficient consideration. The court’s reasoning was that giving an employee stock options makes him work harder; employees who work harder create greater “goodwill” for their employer. That goodwill is deserving of protection (because it was bought and paid for) and a non-compete can be that protection. The supreme court did not decide whether cash would be sufficient to buy a non-compete, but it said that the business interest being protected (that is, goodwill) has to be “reasonably related” to the consideration being given. Cash would most likely do it. The question then becomes how much money and when. The court answered the “when” part by saying that past consideration can suffice: “There is no requirement under Texas law that the employee receive consideration for the non-compete agreement prior to the time the employer’s interest in protecting its goodwill arises.”

The prediction: Money will do it in the form of a signing bonus when someone first comes onboard or as a bonus while he is currently employed. The amount of money needs to be significant enough that the employer can argue the employee was “incentivized” to go out and create goodwill. Of course, an employer can still use confidential information as consideration, but money makes it easier to enforce a non-compete.

  • Employment at Will

According to the Dallas Court of Appeals, a trial court erred in denying an employer’s request for temporary injunctive relief against two hairstylists who allegedly breached an agreement not to solicit customers or divulge “trade secrets.” The trial court denied such relief strictly on the ground that the employment was at will, but it is now clear after the 2006 Texas Supreme Court case Alex Sheshunoff Management Services, L.P. v. Johnson, that it is possible for parties to agree to an enforceable covenant not to compete in employment that is at will, provided other requirements are satisfied.

Jury Waivers

An employee had signed a mutual waiver during his time of employment that waived his right to a jury should a dispute between him and his employer arise. He later sued his employer for age discrimination and demanded a jury trial. The trial judge denied the employer’s motion to toss the jury demand. The Fort Worth Court of Appeals agreed, but the case is now before the Texas Supreme Court. The Texas Constitution says that the right to a jury trial shall remain “inviolate.” But what the law says is not always what the constitution means.

Prediction: The supreme court will agree with the employer and hold the employee to his promise to forgo a jury.

Legislation

Senate Bill (SB) 1024 amended the Penal Code Section 31.04. The law now says that an employer violates the law if it fails to make “full” payments after a demand for compensation. The legislature also added a section stating that “partial payment” of wages is not a loophole. Also, if the employer pays the employee on a periodic basis, the intent to avoid payment for his services can be formed at any time during or before a pay period. This section also applies to independent contractors.

SB 321, which will take effect September 1, 2011, will allow an employee who holds a license to carry a concealed handgun or who otherwise lawfully possesses a firearm to bring it onto an employer’s property. Property includes any parking lot, parking garage, or other parking area an employer provides for employees. The weapon must be in a locked, privately owned motor vehicle. There are some exceptions. First, if the car is owned or leased by a public or private employer and used by the employee in the course of her duties, then the law is inapplicable. An employer may still prohibit an employee from possessing a weapon on business premises other than the parking lot. There’s also a section of the law that holds the employer immune from lawsuits except in cases of gross negligence. This means that if the gun is used to harm someone at work, the employer is off the hook. Also, the law does not impose a duty on employers to inspect parking lots, garages, or other parking areas to confirm or determine if employees are complying with the laws relating to the ownership or possession of firearms or ammunition. Employers should create a policy or amend one they already have to let employees know they may bring firearms to the workplace – but only if the firearms are kept locked up in their cars. Such a statement will allow the employer an opportunity to reiterate that they are still forbidden from bringing a firearm on business premises.

A Will’s Bare Necessities

In Legal, Texas Law, Uncategorized, Wills on August 30, 2011 at 10:14 AM

The normal goal for a person to have when writing a will is to ensure that all of his property and money are given to the right people after he dies. On the other hand, perhaps the central focus for an attorney drafting a will is to ensure that the will is written in such a way that it would be very difficult to contest. Both of these goals can be reached by following the statutory guidelines for will requirements and by applying common sense and skill to the drafting process.

In Texas, the Probate Code governs the probate process, including the requirements for a valid will. Section 57 describes who may execute a will, and section 59 details the requirements of the will. In order to execute a will, a person must have “legal capacity.” This means that either the testator (person leaving the will) is eighteen years or older, has been married, or is a member of the armed forces. The statute further requires that the testator has “testamentary capacity.” Testamentary capacity is more amorphous than legal capacity. The only language the statute offers to explain testamentary capacity is that the testator must be of “sound mind.” This term has been further defined by Texas case law with the pinnacle case being Stephen v. Coleman, 533 S.W.2d 444 (Tex. Civ. App.—Fort Worth 1976, writ ref’d n.r.e.). Essentially, testamentary capacity boils down to whether the testator has the ability to understand everything that he is doing in relation to leaving a will and the impact that act will have. A testator must also have “testamentary intent,” which simply requires that the testator intends for the document to be his will.

Other formal requirements are mandated by the statute. The will must be signed by the testator. If the will is attested, as opposed to holographic (entirely hand written by the testator), it must be signed by two witnesses who are older than fourteen. The witnesses must sign at the bottom of the will (subscribe) and must sign the will in the presence of the testator. These requirements seem very simple, yet they only provide the bare minimum of what a will must contain. A will that is valid, and therefore follows all of the statutory guidelines, is not necessarily uncontestable. Great care and skill are often required in drafting a contest–safe will. For further reading, see the Texas Probate Code (especially Chapter IV), accessible at http://law.justia.com/codes/texas/2005/pb.html.

What Does Tort Reform Have in Common with Chuck Norris? Loser Pays

In Costly Litigation, Frivolous Lawsuits, H.B. 274, Humor, Litigation, Loser Pays, Texas Law, Tort Reform on August 4, 2011 at 9:18 AM

Chuck Norris may be able to beat the sun at a staring contest, yet even he has been victimized by meritless and costly lawsuits. Recently, two women sued Chuck Norris after they tried to tear each other’s hair out in the bathroom of one of his restaurants. The pugilistas based their lawsuit on the claim that a restaurant employee should have been present to stop the fight. It cost Chuck Norris $2,000 to pay them to drop their meritless suit—a resolution less expensive than litigating. Because exporting pain was a less than adequate expression of his frustration with a legal system that incentivizes such litigiousness, Chuck Norris recently co-authored an article in the Wall Street Journal, “A Texas Roundhouse for the Trial Lawyers,” in which he praised Texas’s new “loser pays.”

In his article, Chuck Norris points out that small businesses, which are the creators of 64% of American jobs, are usually the target of frivolous lawsuits, paying 81% of business tort liability costs in 2008. A small business earning $1 million must spend $20,000 annually on lawsuits, money that could have otherwise been spent on job creation or product development. Frivolous lawsuits also affect individual Americans; according to estimates, meritless lawsuits cost each American $838 a year. Additionally, groundless plaintiffs congest the legal system making the court system more difficult to navigate for those who have legitimate claims.

The “loser pays” law, Texas House Bill 274, becomes effective September 1, 2011. One of the most significant changes made by House Bill 274 is an instruction to the Texas Supreme Court to make rules for courts to dismiss meritless suits before hearing evidence on the claims. This is a landmark measure because Texas previously did not have a procedure to file a Motion to Dismiss; heretofore, the defendant had to endure costly discovery before disposing of the suit through a No-Evidence Motion for Summary Judgment.  To prevail under the new Motion to Dismiss measure, the defendant must show the court that the suit has no basis in law or in fact.

The teeth behind Texas’s new Motion to Dismiss is that it encompasses mandatory fee shifting: the party who prevails on a Motion to Dismiss, whether it is the plaintiff or the defendant, will be entitled to have their attorney’s fees paid by the losing party. For example, if the defendant files a Motion to Dismiss that is ultimately denied because the claim is based in law or fact, the case will continue through litigation and the defendant must pay the plaintiff’s attorney’s fees and costs incurred in responding to the Motion to Dismiss. The fee shifting aspect of the new Motion to Dismiss measure thus creates risk for both plaintiffs and defendants. Plaintiffs are less likely to assert frivolous lawsuits, and defendants are unlikely to move to dismiss non-frivolous lawsuits.

Other changes made by House Bill 274 include: (1) raising the caps on attorneys’ fees required to be paid by those who reject reasonable settlement offers; (2) instructions to the Texas Supreme Court to make new rules to limit discovery costs and expedite suits with claims under $100,000; (3) prohibiting joinder of responsible third  parties after the statute of limitations has expired; and (4) prohibiting defendants from designating responsible third  parties after the limitations period has expired (unless they did not know of the responsible third  party before the statute of limitations expired and they did not purposefully withhold such information).

With these significant changes, Texas is at the forefront of the effort to stop frivolous litigation and, in turn, to improve the economy by spurring job creation and product development. Come September 1, 2011, two old axioms will ring even more true: “Don’t press your luck with Chuck,” and “Don’t mess with Texas.” Those civil litigants who ignore these words of wisdom by filing frivolous lawsuits will be made to feel significant pain.