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Tilting the Scales

Business Issues with a Legal Slant

Whistleblowers, Do Tell?

Posted in Constitutional Rights & Issues, Employment & Labor, Money

Whizzle Blour, a professor of surgery at University Medical School, complained to his supervisor that trauma residents at University Hospital were treating and operating on patients without an attending physician’s supervision in violation of Medicare and Medicaid law.  After agreeing to settle those federal claims, University Hospital stripped Whizzle of his faculty chair position claiming he was a poor administrator. Later he was fired. He filed a whistleblower suit alleging his demotion was in retaliation for reporting the federal law violations. Will Whizzle Blour prevail?

No. Whizzle Blour failed to prove all the required elements for retaliation under the Texas Whistleblower Act (TWA). Reporting the Medicare and Medicaid violations to his supervisor did not satisfy the TWA because the supervisor was not qualified as “an appropriate law enforcement entity.”

The Law.

The TWA protects public employees from retaliatory acts by their employers when the employees in good faith report a violation of law by the employer to a proper law enforcement agency. Telher failed to prove all the elements: (1) while he is a public employee; (2) who acted in good faith in making a report; (3) that involved a violation of law; (4) the report was NOT made to an appropriate law enforcement authority; and (5) even though he suffered retaliation as a result of making the report, the Texas Supreme Court held he was not entitled to relief.

Authorized to Enforce.

To file a lawsuit after facing retaliation or discovering retaliatory actions, employees must report the violation “to an authority the employee believes is authorized to regulate or enforce the law alleged to be violated” or “who is authorized to investigate or prosecute a violation of criminal law.” Despite favorable lower court rulings that Telher’s reports to University Medical School department chairmen who were responsible for “ensuring the goals of billing compliance are met,” the Supreme Court disagreed, finding that “a whistleblower cannot reasonably believe his supervisor is an appropriate law-enforcement authority if the supervisor’s power extends no further than ensuring the governmental body itself complies with the law.”

Sovereign Immunity.

All states have sovereign immunity – they can’t be sued unless the state agrees. Regularly excepted from the general rule is enforceability of a state’s contracts. Another is protecting whistleblowers so that they may be encouraged to report violations of state or federal law. Even the Texas Attorneys’ General Office is not immune from such lawsuits.

Federal Whistleblower Claim?

Yes, there is. No, to these facts. A False Claims Act complaint is not actionable unless the employee’s conduct was directed at exposing fraud on the government. Reporting problems concerning a hospital’s alleged failure to comply with patient standards, for example, does not constitute protected activity under the FCA either.

Tilting the Scales in Your Favor.

Public Employees. Individuals must report the violation to the correct party. Despite different facts and experiences, in the last three Texas Supreme Court cases the complaining party did not report its findings to the correct parties. Public entities such as universities and university hospitals should encourage legitimate whistleblower complaints to protect the public good, regardless of how they may reflect on individual administrators. They should let employees know specifically how and to whom they should report allegations of wrongdoing. The Texas Municipal League posted a useful memorandum explaining the TWA.

Private Employees. Should your company have a Whistleblowing Policy? Despite some downside, there are compelling reasons to encourage employees to disclose wrongdoing within the company by protecting them from retaliation.

See prior Tilting articles – Asylum’s Just Another Word for Nowhere Left to Go (2013) and “Whistleblower” Lawsuits (2011)

The Case of the Defamed Doctor – SLAPP’ing Down Defamation Cases in Texas

Posted in Constitutional Rights & Issues, Legal Risk Management, Social Media & The Internet

Special thanks to guest blogger Alex Fuller for this month’s post.

            Who steals my purse steals trash; ’tis something, nothing;

            ‘Twas mine, ’tis his, and has been slave to thousands;

            But he that filches from me my good name

            Robs me of that which not enriches him,

            And makes me poor indeed.

                        -Othello Act 3, Scene 3

While on a date to the Laugh Factory Comedy Club, Terry Tellsall busted a gut laughing and was rushed to Texas General Hospital. Incensed by the treatment and bedside manner he received from Dr. B.D. Manner, Terry barraged his friend Cindy Cussin with texts detailing Dr. Manner’s inability to remember critical surgical procedures and his comments that “with a belly that size, you’re lucky you only busted one gut.” The next day, Terry posted his accusations on a popular doctor-rating website.

Luckily for Terry, the attending Nurse Nancy smelled Dr. Manner’s whiskey breath, heard his comments, and thankfully reminded him of the right procedure. However, Terry’s friend Cindy Cussin was Dr. Manner’s cousin and forwarded Terry’s texts to him. When Dr. Manner read the texts and received the early morning Google Alert with Terry’s website posts, he immediately instructed Able Attorney, Esq., to file a defamation lawsuit against Terry. Is Terry liable for libel?

Probably not. Truth is still a defense to any claim of verbal (slander) or written (libel) defamation. Better yet, the 2011 Texas Anti-SLAPP statute makes it harder for defamation lawsuits to be used as a bullying tactic.

Defamation in the Internet Age

Both the United States[1] and Texas[2] Constitutions broadly guarantee the right of free speech. However, the tort of defamation creates an exception to these guarantees. While defamation law can be complex and fact intensive, very generally a defamatory statement made about a private person is one that (1) is a statement of fact about that person, (2) is published to a third party, (3) injures their reputation, (4) is false, and (5) causes injury to that person. Truth, of course, is always a defense to a defamation suit.

Public statements that make others look bad will often draw threatened or actual defamation lawsuits. Frequently their purpose is to harass or punish the speaker with an aim to preventing them from making further public statements. To address these harassing lawsuits, in 2011 the Texas Legislature passed the Anti-SLAPP – Strategic Lawsuits Against Public Participation (SLAPPs) law.[3]

 SLAPP’ing Some Sense Into Defamation Law.

The Legislature noted that the Internet has “created a permanent and searchable record of public participation” – in other words, every word an Internet user posts is both permanent and findable! – and that “abuses of the legal system, aimed at silencing these citizens, have also grown.”[4] The Anti-SLAPP statute gives a defendant like Terry the ability, within 60 days of being served with a defamation lawsuit, to file a motion to dismiss the suit if the statements were made about a matter of public concern. Dr. Manner must then present prima facie evidence of each of the elements of his lawsuit and if he can’t, the suit will be dismissed and Dr. Manner will have to pay Terry’s attorneys’ fees. Not only that, but if Terry can prove her defense of truth by present by a preponderance of the evidence at the hearing on the motion, she will win even if Dr. Manner presents his prima facie evidence!

So Can Terry SLAPP Dr. Manner?

Yes and no. Although few courts have weighed in on the Anti-SLAPP statute, those that have uniformly and broadly apply it to “matters of public concern,” including “health and safety” and “good[s], product[s] and service[s] in the marketplace.” This includes online reviews of businesses and professionals.[5] However, one court has held that in order to be a matter of public concern, a statement must be made in a public forum and not to a restricted audience.[6]

Therefore, Terry can file a motion to dismiss Dr. Manner’s claims that he defamed him on the Internet, and if he is able to provide the court with Nurse Nancy’s corroborating testimony, may well win. But, he might not be able to move to dismiss Dr. Manner’s claims regarding the private statements he made to his friends.

Tilting the Scales in Your Favor.

First, don’t talk trash! It’s hard to get in trouble for statements you didn’t make – or those a plaintiff can’t prove you made. The written word, forever memorialized on the internet, just makes a lawyer’s lawsuit easier.

Second, tell the truth! The worst statement isn’t defamatory if it is factually true. While this might not save you from a defamation lawsuit, it can help keep you from having to pay a judgment.

And finally – if you do have to talk true trash, make sure you do it in public. Then you might have a chance to SLAPP a plaintiff before your case has hardly started.

See prior Tilting articles – Keeping a Good Name: Protecting Yourself from Internet Defamation (2012), SLAPP Happy – Can a Business Sue a Customer who Gave a Bad Online Review? (2011), Defamation Primer (2009), and When is a Tweet Not So Sweet? (2009)


[1]               U.S. Const. Amend. I.

[2]               Tex. Const. Art. I, § 8.

[3]               Ch. 27, Tex. Civ. Prac. & Rem. Code.

[4]               Legislative history cited in Whisenhunt v. Lippincott, 416 S.W.3d 689 (Tex. App.—Texarkana 2013).

[5]               See BBB of Metropolitan Dallas, Inc. v. BH DFW, Inc., 402 S.W.3d 299 (Tex.App—Dallas 2013); Avila v. Larrea, 394 S.W.3d 646 (Tex.App.—Dallas 2012).  

[6]               Whisenhunt v. Lippincott, 416 S.W.3d 689 (Tex. App.—Texarkana 2013).

Don’t Be a Target: Mitigating Liability From Cyber Attacks

Posted in Legal Risk Management

During the holiday season, Bullseye, a big box retailer, was the victim of a cyber attack that compromised the credit and debit card information (including PIN and CVV codes) of nearly 40 million of its customers.  The attack immediately spawned dozens of class action lawsuits against Bullseye by customers, alleging that the retailer was negligent in protecting their financial information. What liability does Bullseye face and what can be done to mitigate that exposure?

It’s been said that businesses fall into two categories: Those that have already suffered a cyber attack and those that will. Cyber attacks are coming with increasing frequency and across all sizes of businesses. (In fact, small and medium sized businesses may be most at risk as they present an easier target due to less sophisticated security.) The cyber attack against Bullseye will invite lawsuits alleging generally that it failed to use reasonable measures to properly secure customer information and that it failed to promptly notify customers of the breach. Lawsuits may also be filed against Bullseye’s officers, directors and IT professionals alleging breaches of fiduciary duty and fraud. Despite the unappealing prospect of having to defend against lawsuits, Bullseye’s liability to customers will probably be minimal.  As described in last month’s blog post Lost or Stolen: Liability for Unauthorized Credit Card Charges, the actual damages suffered by customers is usually nominal. However, Bulleye’s liability to credit card companies and financial institutions in connection with fraudulent purchases, refunds and reissuance of cards, etc. will be significant.

There is very little legal guidance on what constitutes negligence and reasonable care in the area of cyber security. The Payment Card Industry Data Security Standard (PCI DSS), which was created in 2006, represents the closest thing to cyber security standards. The PCI DSS, which was created by the major credit card companies, is a set of requirements designed to ensure that all businesses that process, store or transmit credit card information maintain a secure environment.  The PCI DSS applies to all businesses, organizations and merchants regardless of size or number of transactions processed.  However, the PCI DSS has created four merchant levels that contain increasing security requirements based upon a VISA transaction volume over a 12-month period.  Whether or not Bullseye is ultimately held liable may depend on whether it is found to have complied with PCI DSS standards and whether, for example, it had sufficient safeguards in place should a vendor’s access to its computer network become compromised.

(The stolen credentials of an HVAC vendor with access to Target’s portal was apparently the cause of its massive December 2013 cyber breach.) With respect to customer notification, 46 states have passed laws requiring customer disclosure by businesses (both public and private), but the laws vary in terms of when and how notice must be given, and most states allow for delays to investigate the intrusion. There is currently no federal standard delineating when a business must report data breaches.

In an effort to mitigate losses associated with data security breaches, businesses that handle sensitive customer financial information should consider purchasing cyber-liability insurance. These policies can be an effective tool to control the significant expense associated with a breach (e.g. notification costs, regulatory compliance, lawsuit defense, judgments, etc.). Due to an increasing amount of competition and a lack of standardization, the terms in cyber liability policies are usually highly negotiable. 


There’s a Printer for That!

Posted in Money, Social Media & The Internet

Fresh off his last Tonight Show monologue, Jay Lento is scouring the vintage car dealers’ websites to find replacement wheel hubs for his antique BMW. Searching worldwide, he finds none. When his friend N. Gennyus mentions that he can make exact computer replicas with a 3D printer to create a cast to manufacture the vintage wheel hub, Jay wonders if it’s legal?

3D Printing – What is it?

Imagine organizing your closet by entering the measurements you want and printing the containers out right there rather than measuring the containers at a store to make sure they will work. Or, imagine building the diorama of a famous Civil War battle using the same printer to construct all the soldiers, cannons and trees in perfect detail. 3-D printing makes it easier and faster to produce complex objects with multiple moving parts and intricate design. How? By Additive manufacturing that includes 3-D printing and is the means of creating an object by adding material to the object layer by layer. Think of how dripping water creates layers and layers of mineral deposits accumulating over time to form stalagmites and stalactites. Although it adds hair-thin incremental layers, 3-D printing is much faster and follows a predetermined plan provided by computer software that directs new layers as a precise cross-section of the final object. Check out this video to see a 3D printer in action.

Disruptive Technology

3D Printing may be the next, great disruptive technology to push innovation to the edge, to make creating new things easier and to allow collaboration to solve new problems – to do for physical objects what MP3 files did for music. Just as computers allow us to become movie producers, journalists, and songwriters, 3D printers allow everyone to become creators of things – inventors and sculptors. 3D printing merges the physical and the digital permitting collaborative design among people on opposite sides of the globe. Instead of purchasing one of a million identical objects built in a faraway factory, users can customize pre-designed objects and print each one separately at home, customizing it to their specific needs.

Legal Issues?

Of course, it also raises some interesting legal issues. As we have seen from the rise of the internet, the ability to easily create and share goes hand-in-hand with the ability to copy and distribute intellectual property. Copyright and patent rights, traced to the Constitution and protected to encourage creation and dissemination of creativity and knowledge, copyright, patent, and trademark are the three are the primary types of intellectual property impacted. Many, however, argue that patent and copyright laws will stifle the free flowing creativity and collaboration promoted by disruptive technology like 3D printing.

Hot Button? – 3D Guns

You may have heard about the Defense Distributed 3D printed gun demonstrated last year. The Texas-based group made parts for guns, then guns themselves, then fired a gun, then made plans for running up your own pistols on a nearby 3D printer creating a moral panic over 3D printing. There are two prevailing opinions on 3D printed guns: the apocalyptic, including politicos like New York State senator Steve Israel who’s already introduced legislation to ban 3D printed guns, and the nonchalant who point out that the 3D printed gun costs a small fortune to make, requires a highly specialized and even more expensive 3D printer to produce, is fragile and liable to self-destruct after a few rounds are fired, and is much more challenging and expensive to print than to purchase a gun on the black market.

Tilting the Scales in Your Favor

Knowing that expanding 3D printing technology may radically disrupt your industry and your competitive edge, it makes sense to stay abreast of the developing technology. IF you do experiment with 3D printing you should strongly consider getting the advice of a lawyer – and perhaps a patent and copyright lawyer – to explore your rights and your limitations. What you don’t know (and don’t investigate) can hurt you!

See prior Tilting articles – Gentlemen, Start Your Videos, and Music Copyright Infringement

Domain Names – Possession is 9/10ths of the Law

Posted in Employment & Labor, Money, Social Media & The Internet

As 2013 was winding down, the law firm of Dewey, Cheatum & Howe also known as www.BestLawfirmEver.com was calculating its partners’ year end distributions. Before the ink was dry, Dewey announced he was leaving, taking an associate AND the law firm website www.BestLawfirmEver.com. Cheatum and Howe were convinced that the domain name and the website stayed with them and the other lawyers at the firm because their client was the web designer Dee Sine. Who wins?

Who Owns It? Generally, Cheatum & Howe can check WhoIs to find out the registrant’s name for www.BestLawFirmEver.com, In this case the registrant “owner” is probably Dee Sine, the website designer, who registered the website name and signed the contract with the registrar.

So, what’s a registrar? A domain name registrar is a service allowing official registration of a desired website domain name unique to you. Originally, there was just one company that registered domain names. Now there are literally hundreds accredited by the Internet Corporation for Assigned Names and Numbers (ICANN) to allocate IP addresses and manage the Domain Name System. The Domain Name System is what allows you to reach a website by typing in its name, rather than its numerical IP address.

What if you are NOT the legal owner of your domain name? When you searched WhoIs, if your name did not appear as “registrant,” you should be able to identify the person who is. And, hopefully you are still on good terms with them. Most probably Dee will cooperate if asked to change the domain name registration over to your name. However, a disreputable web developer or one that simply goes out of business may make it difficult, if not impossible, for you to switch vendors. 

Tilting the Scales in Your Favor

Register yourself as the owner of the domain name. If you are not the current owner, have the registrar and the current domain name registrant agree to change the domain name registration to your company name. Once the domain name registration is in your company, address the ownership / transfer of the domain name in your organizational documents – that agreement between the owners that details what happens if one or more owners wants a company “divorce.” Should Cheatum& Howe be required to start with a new domain name, it takes a lot of time and SEO (search engine optimization) effort to start showing up in the browser searches.

Know that a registrar cannot cancel, suspend or transfer a domain name without permission in its contract documents or without consent of the named domain registrant or a court order. If your partner-registrar refuses, the first place to look is your entity / organization agreement. If you don’t have one or if the transfer of domain name registration is not addressed, you will need to look to an attorney familiar with these claims to get a court order, or perhaps contact ICANN (the Internet Corporation for Assigned Names and Numbers) and settle the matter using the Uniform Dispute Resolution Policy (UDRP).

By the way, just because Cheatum & Howe were able to persuade Dee Sine to transfer registration of the domain name to them, their troubles are not yet over! Without an agreement detailing otherwise, the partners can still argue over who developed and refined the content, who owns the backlinks, who owns any articles written and paid for by the old lawfirm and who owns or controls the Google Places Listing.

And, don’t forget to renew your domain name registration. Use it or lose it.

For more about Cyberlaw and Cyberspace, check out our own Travis Crabtree’s eMedia blog.

Lost or Stolen: Liability for Unauthorized Credit Card Charges

Posted in Legal Risk Management, Money

On a brisk January day, Mary A. Richman opened her mailbox and was confronted with the sobering sight of thick envelopes from Visa, American Express and MasterCard each containing a month’s worth of extravagant Christmas purchases.  Although she expected the bills to be large, she didn’t expect them to be this large.  When she carefully reviewed the charges, the weather wasn’t the only thing giving Richman the chills. She quickly noticed entries for businesses with which she was unfamiliar, including a $1,200 Visa charge on December 25th for a bar in Chihuahua, Mexico called Tequila Mockingbird.  Richman lost her Visa card on December 21st, but never reported it.  Is Richman liable for the unauthorized charges?

The Fair Credit Billing Act and the Electronic Fund Transfer Act limit a customer’s liability for unauthorized charges.  With credit cards, liability depends on whether the unauthorized charges were made either in person or over the phone or internet.  If a thief uses a customer’s credit card number over the phone or internet, the customer will have no liability.  Similarly, if the credit card is reported stolen before the thief makes the purchase, the customer will have no liability.  As Richman failed to notify the bank that her credit card was stolen before the card was used by the thief, her maximum liability will be $50. 

If an ATM or debit card is at issue, the rules are slightly different.  If the customer reports the card as stolen or lost before any unauthorized charges, then there is no liability.  If the customer reports the card as stolen or lost within 2 business days after they learn of the loss or theft, liability is capped at $50.  If the customer fails to report the card as stolen or lost within two business days after they learn of the loss or theft, but does notify the bank of the unauthorized withdrawals within 60 days after their statement was sent to them, liability is capped at $500.  If the customer fails to notify the bank of the unauthorized charges within 60 days after their statement was sent to them, the customer will be liable for all money taken from their ATM/debit card account and possibly more (e.g. accounts linked to the debit account).

Tilting the Scales in Your Favor

Copy the front and back of your credit/debit cards so that you have access to the account numbers and toll-free reporting numbers.  Always (1) report the loss or theft immediately by telephone followed by a certified letter and (2) check your credit card/bank statements carefully and in a timely manner.  Timelines for giving notice may be extended if there are extenuating circumstances such as vacation or illness. In addition to contacting the card issuer, contacting TransUnion, Equifax or Experian (you only need to contact one) will put a fraud alert on your cards and prevent a thief from opening additional lines of credit. 


Paying Elves and Interns!

Posted in Employment & Labor

Twas the week before Christmas when at the North Pole,

Santa checked his throughput and moaned, “We’re in a hole!”

“We’ll never get done, we’re far from ready, let’s get some interns – some students will do.

Surely they’ll want to learn what elves can do!”

“On Juniors and Seniors, Thetas, Lambda Chi’s, you’ll learn a lot – just kiss your evenings and weekends Good-Bye!”

So, Santa called Magical Elves, Inc. to find college students who would accept his unpaid internships. Is that a problem?

Actually, internships may be a good option for Santa’s non-profit operation – so long as he does not pay a stipend or offer any benefits and clarifies whether interns are unpaid volunteers or paid employees. Paying a “stipend” could cause unintended negative consequences that might cause the Department of Labor to classify Santa’s interns as employees. If employees, Santa would owe back wages (at least minimum wage) and back taxes. On the other hand, if Santa follows the wage regulations closely his interns may be treated as “trainees.” If “trainees,” nonprofit may be relieved from paying minimum wages, yet need carefully to document how the internship primarily benefits the intern — not the nonprofit. And, also, workplace injuries could be a problem.

Internships in the “for-profit” private sector will most often be viewed as employment and violating the law if not paying minimum wages because often the manner and means by which the intern’s work is accomplished is controlled by the hiring party If interns qualify as employees rather than trainees they typically must be paid at least the minimum wage and overtime compensation for hours worked over forty in a workweek. The Fair Labor Standards Act (FLSA) defines “employ” very broadly to include “suffer or permit to work” and  must be compensated under the law for the services they perform for an employer.  

The Test For Unpaid Interns. To confirm FLSA determination of internship and to avoid employment obligations, the following six criteria must be applied:

 The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;

  1. The internship experience is for the benefit of the intern;
  2. The intern does not displace regular employees, but works under close supervision of existing staff;
  3. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  4. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  5. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

 Assuming these are met, no employment relationship exists, and the FLSA’s minimum wage and overtime provisions do not apply. This employment exclusion is necessarily quite narrow because the FLSA’s definition of “employ” is very broad.

Other States. Some state statutes, like New York’s Minimum Wage Act and Wage Orders impose rules and guidelines in addition to the FSLA. California and Oregon recently extended application of sexual harassment and discrimination laws to interns.  By the way, none of these laws are apply to governmental employees.

Tilting the Scales in Your Favor.

The more your internship program is structured around a classroom or academic experience as opposed to your actual operations, the more likely the internship will be viewed as an extension of the student’s educational experience (this often occurs where a college or university exercises oversight over the internship program and provides educational credit).  The more the individual receives skills viable in multiple employment settings, as opposed to skills particular to your particular operation, the more likely your intern would be viewed as receiving training.  Ideally, your intern does not perform routine business work on a regular and recurring basis, and the business is not dependent upon the work of the intern.  On the other hand, if your interns are engaged in your operations or perform productive work (for example, filing, performing other clerical work, or assisting customers), then incidentally receiving new skills or improved work habits will not exclude application of the FLSA’s minimum wage and overtime requirements. 

Living in a State of De-Nile: Are Commercial Drones Viable?

Posted in Legal Risk Management

Soon, the days of having to wait for your online purchase to arrive may be a thing of the past.  Nile, giant online retailer of everything from books to breakfast cereal, announced that it intended to deploy a fleet of commercial drones to deliver packages mere minutes after your order is placed.  Are there legal hurdles that might ground Nile’s ambitious plan?

             FAA:  Drones Pose Air Traffic Nightmare.  Although the FAA allows for governmental use of drones within U.S. airspace (e.g. surveillance along the borders), those drones are operated by ground-based pilots who are in regular contact with air traffic controllers.  Currently, the FAA bans commercial drones, such as those proposed by Nile.  Smaller drones, operated by individuals, utilize the rules for radio-controlled model planes and avoid the ban by flying within the operator’s sight, by staying below an altitude of 400 feet and away from airports.  Congress directed the FAA to propose safety regulations permitting commercial drones in domestic airspace by September 2015. The FAA has promised draft regulations for small commercial drones (weighing less than 55 pounds) by next year.  Even the most optimistic estimates are that commercial drone regulations for operators like Nile are years from enactment.

             Privacy:  Another obstacle to Nile’s drone deployment will be the myriad of privacy concerns.  Privacy concerns have been the focus for most of the forty-three states that have considered around 100 drone-related bills.  Warning that “companies could use drones for information gathering whether that is taking a photograph of your patio furniture or recording the make and model of your car,” Texas Republican Representative Ted Poe introduced legislation to protect people’s privacy from drones. 

            Possible Implications and Responses. How would you feel about a Nile drone flying over your house and then emailing you with suggested products or services?  Rep. Poe’s Preserving American Privacy Act seeks to prohibit individuals and companies from using drones for photography and surveillance and to prohibit surveillance by government drones without a warrant.  Poe stated, “Congress has to make sure that the use of drones in the future does not infringe on the right of individual citizens to privacy… Just because big brother or private companies can look through a person’s windows doesn’t mean they should be able to.”  Just imagine the detailed, current information Nile must gather to safely deliver a package to your doorstep.  We marvel at the functionality of Google Maps, but it is usually out-of-date and only accurate within several meters.  While this is plenty accurate to navigate to a friend’s party, Nile’s drones, on the other hand, would require constant updates about potential obstacles such as trees, new construction, etc., would have to be able to land on a precise GPS coordinate and would know the physical characteristics of your home better than you.  To effectively deliver a package, they might even track when you are home or when you are away.

             Liability:  Even more important than assigning liability for stolen or damages packages will be the inevitable issue of personal liability.  To deliver a 5-pound package, a Nile drone would be equipped with a substantial motor, a dangerous propeller(s), and would have many obstacles to avoid.  Who would be liable when a drone malfunctions (mechanical, weather, a neighbor’s 13-year-old son shooting it down with a bb gun) and hits and injures a person, pet, vehicle or collides with a downtown skyscraper?  Would we ever feel safe with these autonomous, self-guided flying machines filling our skies?  Even Google’s self-driving cars, which prove safer than cars driven by humans, are not yet a reality because of a morass of potential legal issues arising from our inherent distrust of the technology. 

The idea of packages delivered to your doorstep within minutes is incredibly intriguing. However, the significant legal hurdles suggest that Nile’s extraordinary plan may be more PR stunt than practical reality.

In the Line of Fire

Posted in Legal Risk Management

Amon Fire and B.A. Ware have been hunting buddies since high school and have hunted with each other many times.  The two men head out one crisp November day to go turkey hunting, as they are bound and determined that this year’s Thanksgiving bird will not come from the local grocery store.  Fire and Ware quickly spot a flock of toms in a draw and hatch a plan.  Ware will remain at his truck on the rise and will shoot at any birds that are flushed out of the woods, while Fire will circle around on foot and shoot at any birds spotted in the woods.  As was their custom, if the plan were to change, Ware was to honk the truck’s horn.  Fire begins his stalk through the woods and spots the flock 60 yards ahead.  Fire estimates that Ware’s truck, according to their plan, should be at least 400 yards to the right of the line of fire.  However, unbeknownst to Fire, Ware has changed position and is hiding in a tree, obscured by foliage, waiting for the turkeys to be flushed.  Fire squeezes the Beretta’s trigger and immediately hears a human cry for help.  Fire runs to investigate and finds that he has shot, and seriously injured, Ware.  Ware subsequently sues Fire claiming that he did not use ordinary care to ascertain that his hunting companion was positioned in the brush behind the turkey.  Does Ware have a claim?

Probably not.  A hunter found to negligently use a weapon, will be liable for injuries proximately caused by his negligence.  Fire must exercise reasonable care and must not only be sure he is shooting a turkey, but also that no one is in his line of fire.  If Fire can show that Ware deviated from their hunting plan – by not signaling that the plan had changed and by moving into the trees – it would not be foreseeable to Fire that Ware would be in the line of fire and therefore Fire would not be negligent.  Now compare a scenario where Fire shoots at the bird, misses, and his stray bullet hits a person in a house which was obscured through the trees.  In such a case, Fire could likely be civilly and criminally liable even though he was unaware that a residence was located behind the foliage.

Tilting the Scales in Your Favor.

Pay attention to the Rules Hunters Can Live By[1] . . . Ten Commandments of Shooting Safety offered by the Texas Parks & Wildlife Department

1. Always point the muzzle in a safe direction. Do not point a firearm or bow at anything you do not intend to shoot. Keep your finger out of the trigger guard until the instant you are ready to fire.

2. Treat every firearm or bow with the same respect you would show a loaded gun or nocked arrow. When picking up a firearm, the first thing is point the muzzle in a safe direction and check to see if it is loaded. Read your instruction manual carefully before you handle new firearms or bows.

3. Be sure of your target and what is in front of and beyond your target. Before pulling the trigger you must properly identify game animals. Since you do not know what is on the other side, never take a shot at any animals on top of ridges or hillsides. Know how far bullets, arrows and pellets can travel. Never shoot at flat, hard surfaces, such as water, rocks or steel because of ricochets.

4. Unload firearms and unstring conventional bows when not in use. Leave actions open, and store sporting arms in cases and under lock and key when traveling to and from shooting areas. Take bolts out or break down shotguns if necessary.

5. Handle firearms, arrows and ammunition carefully. Avoid horseplay. Never jump a ditch, climb a fence, a tree or a ladder with a loaded firearm or bow and arrows. Never face or look down the barrel from the muzzle end. Be sure the only ammunition you carry correctly matches the gauge or caliber you are shooting. If you fall, disassemble the gun and check the barrel for obstructions. Carry a field cleaning kit.

6. Know your safe zone-of-fire and stick to it.  Your safe zone-of-fire is that area or direction in which you can safely fire a shot. It is “down range” at a shooting facility. In the field it is that mental image you draw in your mind with every step you take. Be sure you know where your companions are at all times. Never swing your gun or bow out of your safe zone-of-fire. If in doubt, never take a shot.

7. Control your emotions. If you lose control of your emotions you may do something carelessly. If you just shot a target or animal, in your excitement you may turn with a loaded firearm back toward your friends or you might run with a loaded firearm toward a downed animal. You may, in anger, lose control of your emotions. Show discipline.

8. Wear hearing and eye protection. Firearms are loud and can create noises damaging to hearing. Wear glasses to protect your eyes from escaping gases, burnt powder and other debris.

9. Don’t drink alcohol or take drugs before or while handling firearms or bow and arrows.Alcohol and drugs impair normal physical and mental body functions  and affect emotions, making it easier to lose control.

10. Use Common Sense to be aware of circumstances requiring added caution.

For additional analysis, Google the Texas case of Thompson vs. Gaar, upon which this fact pattern is loosely based.

Caught Coming and Going!

Posted in Legal Risk Management

Wanting to comply with the latest edict of the Equal Employment Opportunity Commission and give a recently released felon a break, Awft N. Cawssius ignored Pa Roll’s answer of “yes” to whether he had been convicted of a crime in the last five years and hired Pa to work as an armed security guard at Awft’s convenience store. When Pa Roll assaulted and shot a suspiciously acting John Q. Shopper, Shopper sued, alleging that Cawssius knew or in the exercise of reasonable care should have known that Pa Roll was unfit to be a security guard and created an unreasonable risk of danger to the other convenience store patrons. Is Cawssius liable to Shopper? Does the EEOC edict minimize his liability?

EEOC Guidance / Negligent Hiring

The EEOC’s updated Enforcement Guidance on the “Consideration of Arrest and Conviction Records in Employment DecisionsUnder Title VII of the Civil Rights Act of 1964” directs that an employer that uses criminal history to make employment decisions may violate the prohibition against employment discrimination under Title VII of the Civil Rights Act of 1964. The April 2012 Guidance summarizes the EEOC’s long-held position that employers’ reliance on arrest and conviction records may have a disparate impact on individuals because of their race or national origin and mandates significant changes in certain areas that are important to most employers. However, for employers, enforcement of the April 2012 Guidance may increase employer tort claim risk.

This month the State of Texas sued the EEOC in federal court in Lubbock seeking relief from the 2012 arrest and conviction guidance and complaining that the EEOC did not have the authority to implement hiring guidelines that prohibit Texas and its agencies from categorically excluding convicted felons for certain jobs. Texas state law allows for blanket, no-felons policies at certain state agencies, including the Department of Public Safety, the Department of Aging and Disability Services, the General Land Office, the Juvenile Justice Department, the Lottery Commission, the Parks and Wildlife Department and the public school system.

Yes, Awft N. Cawssius is probably liable either way – for negligent hiring of Pa Roll, or for violating the EEOC had he not hired Pa Roll. No, for those employers in Texas and most states who hire a convicted felon, the EEOC edict does not reduce liability. Three states (Colorado, Massachusetts, and North Carolina) adopted laws, in conjunction with other reforms, to limit the liability of employers who hire people with criminal records.

Tilting the Scales in Your Favor 

How Can Employers Legally Conduct Criminal-Background Checks? Several tips to assist employers from the Texas Workforce Commission:

  • Audit. Routinely audit applicant/hire files to determine whether your criminal-background-check policy disparately impacts any group.
  • Criminal Background / Credit. Review current criminal-background-check policies for consistency with the “business necessity” requirement and the EEOC position. Employers may perform criminal background checks themselves, but must give written notice that a credit or background check will be done and get written authorization for the check per the Fair Credit Reporting Act. If turned down, the employer must tell the applicant why, give the applicant a copy of the report, and let them know the name and address of the service that furnished the information.
  • Customer’s Homes. Texas requires in-home service and residential delivery companies to perform a complete criminal history background check on employees sent into customers’ homes (including attached garages or construction areas next to homes). Doing so gives Awft N. Cawssius the upper hand to argue that he did not act negligently in hiring. See the Texas Civil Practice and Remedies Code, Sections 145.002-145.004.
  • Convictions, Not Arrests. Unless required by law, Awft should ask only about  convictions and pleas of guilty or no contest, not arrests, and be prepared to show how the criminal record was relevant to the job in question, i.e., the security guard will be carrying a gun, or otherwise created an unreasonable risk of possible harm to people or property. More EEOC information HERE.
  • Polygraph. Never ask an applicant to take a polygraph exam, unless your organization is statutorily required to do so – that would be a violation of the Employee Polygraph Protection Act of 1988, a federal law.