For over a decade On the Skware Toy Soldiers and its owners, Boo & Woo, the Skware brothers, have enjoyed the shopping traffic brought to their retail store that’s located in the same shopping center as Athletics Authoritiez, a popular sporting goods retailer. However, over the last couple of years the Skware brothers have seen their overall numbers of shoppers go down and, with slowing traffic, their gross sales revenue has dropped by over 15% – straight off the bottom line. Now, blaming E-Commerce woes, the news media (supported by local scuttlebutt) is suggesting that Authoritiez is on the ropes and may close its store. Can Boo & Woo do anything to save On the Skware? Continue Reading E-Commerce Disruption – Tenant’s Tizzy

US Customs and Border ProtectionLast week Emma Grant’s line cook and 25 other undocumented employees at her bar-b-que restaurant Emma Grant’s Bar-B-Que were working the lunch shift when it was raided by Immigration and Customs Enforcement personnel, apparently at least in partial response to a recent executive order. Can the President of the United States do that? Can this be a problem for Emma Grant and her bar-b-que restaurant?

Executive Orders

Recognized since George Washington as being authorized by Article II, Section 1 of the Constitution that provides “the executive power shall be vested in a President of the United States of America,” there have been more than 13,000 issued, in one form or another, since 1789. Notable executive orders were Abraham Lincoln’s Emancipation Proclamation and Franklin Roosevelt’s mandatory registration of aliens from World War II enemy countries. FDR also holds the record, by far, of the most Executive Orders at 3,721; next closest is Woodrow Wilson at 1,803. To date, President Donald Trump has issued twelve executive orders. Suggested as undoing many of President Barack Obama’s policies, here’s a list and short summary of each. The Federal Register details the executive orders transcripts, numbers and disposition tables from Herbert Hoover to date.

The Legal Reality

But what about Emma’s exposure? Yes, as the employer of the undocumented workers, Emma Grant could have liability. Employers must verify the identity and employment authorization of each person hired after Nov. 6, 1986 and complete and retain Form I-9. Failure to do so can result in civil fines ($539 for each at the first offense and up to $21,563 for each after multiple offenses), criminal penalties (when there is a pattern or practice of violations), and debarment from government contracts.

Tilting the Scales in Your Favor

Get a completed I-9 for each employee. Undertake reasonable and diligent investigation, if appropriate. For key employees, consider undertaking steps to secure their legal residency in the United States.

Dr. Nole Specs created a website for his successful optometry practice.  Over the holidays, Dr. Specs received a threatening letter from Mo Dougherty, a plaintiff’s lawyer.  Dougherty’s letter claims Specs’ website is not ADA compliant, and demands that Specs fix the problem immediately and pay Dougherty $2,500 or Dougherty will sue.  While Specs knows the ADA applies to the brick and mortar aspect of his business, he’s never heard of it applying to websites and thinks it’s a scam. Should Specs just ignore Dougherty’s letter?

The Federal Government Believes Websites are Governed by the ADA

Title III of the Americans with Disabilities Act (ADA) prohibits discrimination on the basis of a disability in places of public accommodation, such as a restaurant, movie theater, school, doctor’s office, or other business.  Recently, 60 Minutes ran a story on “Drive-By Lawsuits,” where plaintiffs’ lawyers or people hired by them will drive around looking for businesses that are not ADA compliant.  Typically, the public considers this prohibition applying to wheelchair access.  But in 2010, the Department of Justice (DOJ), which enforces the ADA, issued a notice stating it would amend the language of the ADA to ensure accessibility to websites for individuals with disabilities.  As a result of this notice there has been a proliferation of demand letters from plaintiffs’ lawyers threatening to sue businesses for having non compliant websites, and offering to settle if the business will bring the website into compliance and pay the lawyer a few thousand dollars to go away.

How do you ensure ADA Compliance?

First, it’s important to know that the DOJ has not issued binding rules on regulations on ADA compliance for websites.  The DOJ is not expected to issue binding rules until sometime in 2018, unless the new administration changes course on this issue.  However, the DOJ and plaintiffs’ lawyers consistently suggest that websites will be considered ADA compliant if they follow the Web Content Accessibility Guidelines (WCAG-2.0) Level AA.  For example, if the website includes live audio content, Level AA guidelines call for the website to also provide captioning.

Tilting the Scales in Your Favor

Although the DOJ has not issued binding rules and regulations, you should take steps to bring your website within the WCAG-2.0 Level AA guidelines now.  Some plaintiffs have filed lawsuits against plaintiffs even without the binding rules in place and successfully argued that the website was a place of public accommodation that was not accessible to disabled individuals.  This is especially important for businesses that sell goods online, because courts have routinely considered those businesses’ websites to be places of public accommodation.

Concealed Handgun Permit ApplicationHow do subjective decisions of government officials, when it comes to issuing any kind of permit, affect private citizens?

What are the risks of making any sort of “ownership database” publicly accessible?

Setting aside the emotional pros and cons of gun control, consider how the issuing of a concealed carry permit affects private citizens, or the potential risks involved in a publicly accessible gun ownership database.

California: No permit. No gun.

Carrying a loaded firearm in California public areas of incorporated and certain unincorporated areas without a concealed carry permit is illegal.

A concealed weapon permit applicant must:

  • Live in the city or county
  • Be of “good moral character”
  • Have “good cause” for the license

Five San Diego residents sued the county sheriff after their applications were rejected due to lack of a “good cause” for a concealed carry permit. A three-judge panel found the permitting process unconstitutional, but the process was ultimately upheld as constitutional when reheard by the full 9th Circuit panel.

Complaining of a near-total refusal of some counties to issue carry permits due to lack of “good cause,” the plaintiffs noted that permits are only granted for very rare and specific circumstances. For example, only 138 women within San Diego County’s 3.1 million population have a Concealed Carry Weapon.

This brings to question, what is “good cause?” Who decides? What is the objective criteria? Is there an appeal? Can the result of a subjective process effectively create a ban?

Hawaii: Gun owners, who has access to your data?

Owners of Hawaii firearms required to register with their county police departments will now be enrolled in the FBI “Rap Back” system, a criminal record monitoring service. New legislation allows county police departments in Hawaii to evaluate whether or not the firearm owner may continue to legally possess and own firearms after notification of the owner’s arrest for a criminal offense anywhere in the country. The law also authorizes the Hawaii Criminal Justice Data Center to access firearm registration data.

What should be the objective criteria for maintaining any database containing a list of private citizens? What are the practical implications of making such a list available to the public?

Tilting the Scales in Your Favor.

The regulatory legislation placed on gun owners is interesting to consider, when applied to less emotionally charged topics:

Would there be push back if American Airlines was required to report to law enforcement those who flew to Las Vegas more than every 30 days?

What about having to permit your cell phone with GPS service that could not be disabled?

If there is any conduct requiring a permit or license—health, barber, medical, law, pilot or otherwise—what is the risk to private citizens if the permitting authority has the subjective authority to assess “good cause” or “good moral character”? Are there other permits or regulatory authorizations that can be denied for failure of the applicant to satisfy a governmental official that there is “good cause” for the permit?

Moving to TexasFleeing the California minimum wage increase, N. O. Smelz, owner of Smelz Carpet Cleaning calls his friend and fellow entrepreneur Billy Brazos to announce that he’s moving to Texas and to ask for any advice. Having just completed an end of year checkup on his own business, Brazos offers his top five tips for any company new to Texas, relocating within the state or that just hasn’t had a corporate checkup in a bit.

#1 Think About Your Company Entity

You have 3 options when moving your business:

  1. Continue – You can continue your company in the old state and register as a foreign entity doing business in the new state (undertake foreign qualification in the new state). However, there are a couple of things to note:
    1. Ongoing State Fees. If you keep both entities, you will pay duplicative annual report and/or franchise taxes, and sometimes complicated tax filings for the entity and its owners
    2. Delaware or Nevada. If you incorporated in Delaware or Nevada, you were probably foreign qualified in your current state. You can eliminate your current state and register as a foreign entity in your new state.
  2. Liquidate – You can liquidate your company in the old state and form a new entity in the new state.
    1. This may result in federal tax issues if you have a C corporation, but not likely if you have a limited liability company.
    2. For any company entity, there are state mandated formalities if you dissolve your business, depending upon the state, often at least requiring document preparation (dissolution papers), filing and paying any outstanding taxes and dissolution fees.
  3. Reorganization – You can undergo a reorganization, forming an entity in the new state and merging the old company into the new.
    1. This can be entirely tax-free for a C corporation.

#2 Don’t Forget About Your  Legal Documents

  1. Contracts with Customers and Vendors – Obviously, your choice of law is now likely to be Texas, not California. It is also likely that Texas law will treat other contract provisions differently. Get a contract checkup.
  2. Employee Handbook – Even if you didn’t get your employee handbook off the internet, many aspects of the employment relationship are different in Texas from California. My partner Michael Kelsheimer offers free “Employer Handbook” with easy to understand Texas-specific answers to frequent employment questions.

#3 Update Your Address Change with the Government – Federal, State & Local Agencies

  1. The IRS requires no document change, like your employer ID number (EIN), but you must complete Form 8822-Change of Address (Part II) and designate if only changing mailing address or also changing notifications for business income, excise, employment, and other tax matters.
  2. The Texas Secretary of State requires company registration to do business in Texas perhaps necessitating amending organization documents (Articles of Incorporation for a corporation or Articles of Organization for a limited liability company) and notification of any address change. If you elect to be organized in one state and registered to do business in another, you must maintain registered agents in each state and complete each state’s filing and reporting requirements. California, for example, imposes a franchise tax on every corporation or LLC that is registered to do business there.

#4 Change Your Address Online

  1. Marketing Materials – You’ll want to update your website, email marketing templates, email signature, business cards and social media.
  2. Online – Make sure to your physical address on your website, Google Places, Yelp, Bing Places, Yahoo Local, Google Places, Google Map Maker tool, Bing Places, Yahoo Local, Mapquest, Apple Maps, OpenStreetMap tool, and any other search engines you’ve registered your business with.
  3. Automatic Payments  Any website that auto-charges your business credit card will not accept charges when your address changes at your credit card company or bank.

#5 Tips for Company Owners

  1. Wills and Estates
  2. Texas Driver’s License – You’ll want to update local address within 30 days of your move.
  3. Voter Registration –Whether you move into the state or into another Texas County, you should notify the county voter registrar.
  4. Texas Concealed Handgun License – If you move, you can change your address online.
  5. Insurance – Have you updated your insurance lately?
  6. Safety deposit box  Have you inventoried/ updated safety deposit documents lately?
  7. Personal Move List – This article gives you a pretty good start on a list of other personal items to be addressed in a move.

Tilting the Scales in Your Favor.

Whether your company is moving to Texas or just moving across the street, check out, among other things, your company structure, your contracts with your customers and your vendors, your internet presence and the last time you told your current and prospective customers and vendors who you are, where you are and what you do.

open-carry-airportSince Texas’ open carry law went into effect at the beginning of the year, Pistol Pete has carried his Glock everywhere he can in his shoulder holster. In a rush to make his flight to Houston for a business meeting, Pete forgets to remove his holster and attempts to walk through TSA’s screening with his loaded Glock. Does he face big-time legal trouble when the TSA agent sees his gun?

Pete’s Not Alone.

Apparently, passengers attempt to bring guns through airport security several times a day, and TSA says the numbers keep rising each year.

It’s Okay in Texas—if Concealed.

Some Texas airports took a proactive approach to the new open carry laws by posting statements on where gun owners can carry their weapons on airport property. In addition to open carry, last year the Texas Legislature passed a law that gave concealed carry owners the opportunity to immediately leave the airport screening area when security notified him or her that their weapon was discovered. However, the law also seems to provide that it is not a defense if Pete openly carried the weapon, even though he has his CHL. So, Pete may still be in trouble for his open carry folly—although TSA will probably give him a free pass by allowing him to leave the security area and store the weapon in his truck.

Each State is Different.

Pistol Pete might be in some trouble, had this happened in another state.  Attempting to carry a gun through airport security is a state issue—not a federal issue—and thus the penalty, if any, is determined by the jurisdiction where the airport is located.

Tilting the Scales in Your Favor.

Accidents happen, especially when we’re distracted. If you inadvertently attempt to take a handgun through security (whether open or concealed carry) tell the TSA agents it was a mistake, you forgot you had it on you, and that you would like to go back to your vehicle.  Remember, staying calm is likely to get you the best result under the circumstances!

If you are traveling outside of Texas and plan to bring your gun with you, you should review the gun laws for the states you are traveling through.

arbitration-pitfallsAfter months of arguing over defective solar panels with his supplier, California X-Tra Green Solar, Ed Ezeeout finally calls his favorite attorney at Fixx, Itt & Quick. Dutifully gathering all emails, invoices and transport documents with X-Tra Green, Ezeeout comes across the parties’ master sales agreement. Giving it another look, he discovers a “boiler plate clause” agreeing to mandatory arbitration. In the confidence of his favorite attorney, Ezeeout bemoans the time and cost of resolution and suggests, hopefully, “Well, at least the arbitration will be in Texas, will be confidential and will save me time and money. And, if we don’t like the way things are going, we can avoid arbitration and get a jury trial. Either way, we can appeal any unfavorable or wrong judgment, right?” Does Ezeeout risk even more frustrations?

Yes. Originally a viable alternative to the time and expense of a jury trial, the Federal Arbitration Act and the Texas Arbitration Act hoped to offer a confidential, final dispute resolution that would save litigants time and money. Many claim it now does neither.

Arbitration Pitfalls

  1. Arbitration agreements are valid. Resistance is futile. Texas courts almost always enforce them. Unless both parties agree not to enforce an arbitration clause, either party may send their dispute to arbitration. Ezeeout is not likely to get a jury trial.
  2. Arbitration may not be in Texas. X-Tra Green’s “boiler plate language” will likely require arbitration in California and applying California law, increasing Ezeeout’s cost and uncertainty.
  3. Arbitration isn’t always cheaper. It can be, but only if the arbitration clause is tightly drafted or the clients force a budgeting process. Litigants pay for either one or three arbitrators; even one costs more than a Texas court judge. Litigants often pay administrative services which can be prohibitive for small disputes. Depending upon the agreement, all of the costs of the judge and of administration are imposed either equally or against the losing party. Discovery can be just as expensive, if not more, depending upon the involvement of the arbitrator(s) and the permitted scope of discovery fights.
  4. Arbitrators aren’t always qualified. Selecting the best arbitrator for your circumstances requires careful consideration of cost, demeanor, conflicts of interest with the other attorney and their client, usefulness of fact-specific experience, and, perhaps, predilection to one kind of claim or the other. Depending upon complexity, specific field or industry knowledge may be helpful. Avoiding conflicts and knowing who your adversary knows may be even more critical. Finally, investigate whether your arbitrator is both capable and willing to rule decisively, and to not just “split the baby.”
  5. Arbitration might not be faster. It should be, but that’s not always the case. While intentionally not duplicating all of the rules of civil procedure and evidence, some arbitration service rules risk creating unfamiliarity. And, unfamiliarity affects timeliness. Properly managed, arbitration can provide flexibility to fashion the procedure and discovery to the circumstances. It hinges on the arbitrator(s) pushing to resolution rather than permitting the parities and their counsel to fight over irrelevant discovery and procedural matters. As the saying goes, time is money.
  6. Arbitration isn’t necessarily confidential. This is only true if the arbitration agreement specifically says so. Even then, it should include appropriate confidentiality language to suit the circumstances.
  7. Arbitration isn’t usually appealable. Unless the arbitration agreement provides otherwise (and even if it does, appellate courts disagree on application), an arbitration award is final and not appealable. The only “cure” is to insure that the arbitrator is diligent, qualified and fair.
  8. Arbitration isn’t enforceable unless written. The arbitration award is enforceable only by a written judgment or opinion. Absent the losing party voluntarily fulfilling the award, the arbitration award must be returned to a state or federal court for enforcement. If the trial court vacates the arbitration award, that’s appealable by the winning party in arbitration by court ordered mandamus as fellow blogger Drew York accomplished.

Tilting the Scales in Your Favor.

Properly drafted and implemented, an arbitration clause in your company agreement can permit you to keep dispute resolution in Texas, before an arbitrator of your selection, with narrowly crafted, appropriate discovery. It could even include a limited resolution process permitting an accelerated timetable to reduce expenses, and perhaps even position the resolution to minimize damages to the business relationship between litigants. The starting point?

For example, quality control can be aided by: asking your counsel to prepare a budget and calibrate it to the amount and importance of the case; setting limitations on discovery to avoid discovery overkill by broadly preserving every back-up tape, hard drive and document, and focusing on the specific subject matter, evidence and likely witnesses by promptly investigating to find out what is likely discoverable, where it is stored and who the likely witnesses are; mutually agreeing to exchange access to inspect and copy documents at the expense of the inspecting party; limiting email production, if any, by custodians, search terms and date range; stipulating to facts not in issue; and agreeing to use affidavit and deposition testimony for noncontroversial testimony.

If you are still reading this and you are an in-house counsel or business owner looking to make your arbitration options more cost and time efficient, retired Justice Jim Moseley of my firm and I would like to buy you a cup of coffee. We have some ideas about a streamlined process for arbitration that we would like to poll. No obligations and no warranties, express or implied!

iStock_000080152415_MediumWanting to avoid hang-ups at its annual firm holiday party, the law firm of Dewey Cheatham and Howe invited its employees, their spouses and dates, and offered everyone a complimentary Uber ride home. For those living too far away, they were offered an overnight hotel stay.

Assuming that the free ride home was a license to drink without restraint and choosing not to take his wife, Schleeze Bagg did not work the day of the party, had a couple of drinks before and imbibed to his heart’s content all evening. Rather than Uber home, Schleeze and his assistant Ladda Climbar accepted the free overnight stay. Later that night Schleeze decided to drive Ladda home. The ensuing car wreck sent them both to the hospital and the teenage couple in the other car to the morgue. Problems for DC&H?

Maybe and no. Setting aside the possible sexual harassment exposure, under Texas law DC&H owes no legal duty to prevent someone from drinking and driving … even if they are minors… or even guests… and even if the social host knows the guest is intoxicated. The offer of free lodging or a free ride home was just that, a complimentary offer to employees with no strings attached, unless the employer somehow “took responsibility” for the employee, which could have a different ending.

While DC&H may have dodged legal liability to non-employees for Schleeze Bagg’s alcohol related accident, the relaxed environment and alcohol, and allegations of sexual harassment have possible repercussions beyond legal liability – affecting PR and public perceptions of DC& H and employee morale.

Tilting the Scales in Your Favor.

Even if the company has limited or no legal exposure, actions speak louder than words when it comes to taking care of your employees and your company. Ten tips for planning and safely enjoying your company-sponsored event:

  1. Plan early and well to identify and avoid potential issues and to encourage professional behavior.
  2. Make attendance optional, and don’t take roll.
  3. Invite Spouses and dates to discourage spontaneous interludes.
  4. Celebrate after working hours with a professional bartender or servers trained to manage party goers and their intoxication, maybe even at a restaurant or bar
  5. Offer non-alcoholic beverages and plenty of food, especially if it’s sugary rather than salty.
  6. Consider offering free Uber rides home, being careful that doing so does not promote unrestrained drinking. Encourage the professional servers to assist in their use.
  7. Skip the mistletoe. It can lead to unwanted kissing or touching.
  1. Discourage overindulgence of alcohol, i.e., no “beer-drinking” contests.
  1. Discourage “after parties.”
  2. Post-Party touch base with key players to identify any potential issues and follow up.

After noting the number of alcohol related tips, you may want to ask yourself if alcohol is worth having.

Check out Gray Reed’s own Michael Kelsheimer who writes an employment blog and has tips and tricks described at Employment Law 101: Holiday Parties.

Past Related Articles.

Will Over-Serving Your Guests Ruin Your Holiday (Legally Speaking)?

Believing that a non-binding term sheet and earlier written agreements precluded any unwritten partnership, Original Oil Production Services (OOPS) cut out its colleague Petroleum United Transfer Zenith (PUTZ) and secretly negotiated its own sweet deal with a competitor.

Aghast upon discovering that OOPS took sole ownership and advantage of the joint efforts of these midstream oil and gas transporting giants to solve the puzzle to reverse the normal flow of crude and send it from North Dakota and Canadian oil patches back to the Gulf, PUTZ sued. Concluding that despite prior agreements the parties’ conduct evidenced an unwritten partnership, a jury found that OOPS breached its fiduciary duty of loyalty to the tune of $500 million. Did the jury get it right?

Unwritten Partnership?

A Dallas County judge and jury think so. A partnership is “an association of two or more persons to carry on a business for profit,” regardless of whether they intend to create a partnership. OOPS argues that previously signed documents prohibit any partnership. The jury agreed with PUTZ’s argument that the parties plowed right past some initial agreements and satisfied not just one, but all five partnership statutory factors to establish a partnership: (1) sharing in profits; (2) expressing intent to be partners; (3) participating in control; (4) agreeing / sharing in losses or liability; and (5) agreeing to contribute money or property – consequently overruling any previous, preliminary agreements.

PUTZ argues that a partnership forms when the parties act like partners, despite what they said when conditions precedent were never satisfied. For example, Texas law recognized a  partnership when parties acted as a partnership in the face of an unsatisfied condition precedent to sign a written partnership; in the face of agreeing not to be partners when they agreed to share profits and expenses, contribute property, and obligate each other for debts; and even when calling their agreement a “lease” yet the “lease” terms evidenced profit and loss sharing and a joint enterprise benefiting both.

Fiduciary Duty Breached Until Proven Innocent?

Given the finding of a partnership, OOPS breached its fiduciary duty of loyalty to its partner PUTZ. And, since OOPS violated the trust and confidence owed by its duty of loyalty, OOPS must prove that its conduct was honorable to avoid PUTZ’s breach of duty claim. OOPS, as the accused, must prove its innocence. Guilty until proven otherwise innocent is the much tougher legal standard for fiduciaries.

Disgorgement of Profits?

In Texas, a person is not permitted to profit by his own wrong. All profits from misconduct, such as a stolen business opportunity, are subject to disgorgement. A fiduciary (OOPS) must account for, and yield to its beneficiary partner (PUTZ), any profit made as a result of a breach of a fiduciary duty. Disgorgement discourages disloyalty and strengthens fiduciary relationships by stripping the defendant of any wrongful gain.

Tilting the Scales in Your Favor

Actions speak louder than words when it comes to taking care of your partner. Regardless of the paperwork crafted and signed, if you and your partner start wheeling and dealing your ideas, and the ideas take form in a way different from your initial documents, know that you better act in the best interest of you both. Loose fitting first agreements hardly trump the demands of competitive, heavily negotiated subsequent transactions. How do you prove that you don’t have a partnership and you did not breach your fiduciary duty of loyalty? Sign a new written agreement that either details the evolving arrangement, or clearly disavows any ongoing business relationship.

Epilogue

Circumstances like these happen all the time, particularly in the oil and gas industry. Understandably, the energy industry and lawyers across the state are closely following the real case with very similar facts – Enterprise Products Partners LP v. Energy Transfer Partners, LP before the 5th Court of Appeals in Dallas. Appellant briefs for the trial court Plaintiff Energy Transfer and the appellant- trial court Defendant Enterprise Products Partners can be found on the appellate website. Many predict the appeal will make its way to the Texas Supreme Court.

Past Related Articles

football stadiumWhat a year it has been for the Podunk (Texas) High School football team. After the school opened its new $50 million, 18,000-seat stadium at the beginning of the year, the team has reeled off an undefeated regular season and is headed to the playoffs for the first time since 1974.

The scuttlebutt in Podunk (population 10,000) is about how good the team’s chances are of winning a state title. Leading the way is star quarterback Rock Cannon, a senior whose arm strength matches his last name. A number of colleges have offered Rock a scholarship to play for them, and he’s verbally committed to the University of Arkansas.

While on the way to practice in the school’s stadium before their opening playoff game, Rock tripped on an unmarked hollow pipe, fell, and broke his throwing hand’s wrist. Not only is Podunk’s magical season effectively over, but the injury is so severe that he may not throw the football the same again. Subsequently, the colleges have all withdrawn their scholarship offers. Rock’s parents sue the school district on his behalf for negligence. The district responds that Rock’s claims are barred by either the Texas Tort Claims Act or the State’s Recreational Use Statute. Has Rock run into a solid defense?

Rock’s claims are not barred by the Texas Tort Claims Act.

Governmental entities generally enjoy sovereign immunity, or the legal principle from English law that “the king can do no wrong.” The Texas Legislature has enacted the Texas Tort Claims Act (TTCA), which determines in what instances a governmental entity, such as a school district, may be liable for tortious conduct under Texas law. Under the TTCA, governmental entities are not immune from claims arising out of their proprietary functions (such as the operation or maintenance of a public utility), claims arising from the use of a motor vehicle, or premises liability cases. Because Rock’s injury was allegedly caused by a condition at the football stadium (the unmarked hollow pipe) his claims are not barred by the TTCA.

Football is not “recreation”.

What about the district’s second argument that Rock’s claims are barred by the Recreational Use Statute? This statute is important because it limits a property owner’s liability to injuries resulting from gross negligence or malicious conduct. The Texas Supreme Court recently considered two cases involving recreational and competitive sports. In one case, a mother was injured while watching her daughter’s high school soccer game at a local stadium. In the second case, a grandmother was injured when she tripped while walking to the parking lot after watching her granddaughter’s youth softball game. In both cases, the Court made it clear that spectating at a sporting event is not “recreation” under the statute, and therefore a property owner (such as a school district) may be held liable for injuries resulting from negligent conditions. The Court also did an extensive analysis of the statute and found that “[t]he recreational use statute was originally enacted to encourage landowners to open private land for natural pursuits.” The Court reasoned that competitive sports, while sometimes taking place outdoors, did not fall within the statute’s original purpose. Thus, the district’s second argument is a weak defense.

Tilting the Scales in Your Favor

he Recreational Use Statute applies to private property owners as well. If you own private property and lease the property for hunting or fishing – or even bird watching (!!!) – remember that the Recreational Use Statute limits your liability to grossly negligent or malicious conduct. If your land qualifies for agricultural use, your liability is capped at $500,000 per person and $1 million per incident to incentivize private property owners to open their property for recreational purposes.
As always, watch where you are walking!