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.

What is Qui TamTatt L. Tale was beside himself.  His company FreshLike Grocers was the largest supplier of food sold and shipped to U.S. troops in the Middle East during the Iraq war.  One day, Tatt caught his boss Kot “Red” Handid changing the “use-by” labels on the food it was supplying.  Freshlike Grocers did nothing to stop Red from continuing to falsify the food labeling and in fact seemed to be encouraging it.  Finding no other way to stop this grievous practice, Tatt blew the whistle to the U.S. government.  Following a lengthy trial, the U.S. Department of Justice announced that FreshLike Grocers, Inc. agreed to pay $13.2 million to settle Tatt’s “whistleblower” lawsuit.  Tatt’s take?  Between $1.9 to $4 million.

Qui Tam or “Whistleblower” Lawsuits.  During the Civil War, President Lincoln signed the “Informer’s Act” to incentivize private individuals to help curb a rash of fraud against the United States Army. Sometime referred to as “Lincoln’s Law”, the original False Claims Act focused on fraud committed by government contractors.  Violators then and today were subject to civil and criminal penalties for damages, today tripled plus civil penalties from $5,000 to $10,000 per false claim. 

A private person with information that the defendant knowingly submitted or caused the submission of false claims can “bring a case on behalf of our lord the King, as well as for himself” – a “qui tam” action. If the “whistleblower” (known as a “relator” in the lawsuit) complies with very strict statutory requirements, they can receive between 15% to 30% of the total recovery.  Not a bad tip for Tatt!

Since 1863, Lincoln’s Law has been significantly expanded.  Today, anyone who receives government funds can be subject to the False Claims Act. More recent “whistleblower” lawsuits allege false claims were filed by culpable third parties against the government: for mortgage fraud, for insurance fraud for pressuring engineers to blame hurricane storm damage on flood water instead of wind, for failure to comply with federal student financial aid requirements, for programs run through the Federal Government, for Medicaid and Medicare fraud by nursing home operators,  for illegal inducements to hospitals by a rural ambulance provider, for federally reinsured crop insurance payments, and for waste disposal environmental violations, among others.

Tilting the Scales in Your Favor. If you or your company receive payments under a government contract or statute, make sure that the statutory or contractual requirements are being satisfied. If you are employed by a company that receives government funding and refuses to comply with its obligations, possibly creating criminal liability for you, you may want to consult us or someone else who has handled these types of cases.

Drinking While DrivingSales representatives of Bedlam Pharmaceuticals invited a client’s employee Fonda Looney to join them for lunch. After lunch and an afternoon of drinking at Sam n’ Ella’s Pub & Cafe, a heavily intoxicated Nurse Looney drove home at speeds up to 95 mph when she rammed into another car killing the infant in the passenger seat. Tests confirmed her blood-alcohol content was more than twice the presumed level of intoxication when the fatal accident took place. The mother of the deceased child filed a wrongful death lawsuit against Nurse Looney, her employer, Bedlam Pharmaceuticals, and Sam n’ Ella’s Pub & Cafe where Looney was wined and dined.

Can Bedlam Pharmaceuticals and their sales reps be held liable for injuries caused by Nurse Looney? How about Sam n’ Ella’s?

Liquor Liability Laws. In Texas, it is not likely that Bedlam Pharmaceuticals and their sales representatives will be held liable. Given the ultimate power of guests to control their own alcohol consumption and the absence of any legal right of the host to control the guest, the Texas Supreme Court finds any argument for shifting legal responsibility from the guest to the host, who merely makes alcohol available at social gatherings, unconvincing. In the absence of a promise to arrange a safe ride home, for example, the Texas Supreme Court has declined to impose a duty on social hosts to prevent their intoxicated guests from inflicting injury on others.

However, for Sam n’ Ella’s, there is a possibility of liability. The Texas Alcoholic Beverage Code, commonly known as the Dram Shop Act, provides that a person who sells or serves alcoholic beverages under a license or permit can be held liable for damages to others on proof that (1) it was apparent to the provider that the individual was obviously intoxicated so as to present a clear danger to himself/herself and others, and (2) the intoxication was the proximate cause of the damages suffered.

Not all states view the conduct of the social hosts the same as Texas. In a case deciding relative liabilities for a fatality under similar facts, The New Mexico Supreme Court recently concluded that its liquor liability act does permit a lawsuit against social hosts who recklessly provide alcohol to guests in a licensed establishment.

Tilting the Scales in Your Favor.  Be careful who you and your company wine and dine, and what is promised to your guests.

Tilting the Scales to Manage Your Legal RiskEither do not make promises to your guests about taking care of them if they get intoxicated, or, if you do, follow through. Although one does not generally have the duty to control another person or to aid a person in distress, one who chooses to exercise that control or provide the aid must do so responsibly and not make the circumstances worse.

Whitney Crowne Corporation dba Midnight Rodeo v. George Distributors, Inc., 950 S.W.2d 82 (Texas App-Amarillo 1997, _____).

Gina Delfino v. Don Griffo and Craffty, LLC dba Uptown Sports Bar & Grill, Opin. #2011-NMSC-015, in the Supreme Court of th Ste of New Mexico (April 8, 2011)

“Wining, Dining Clients Can be Costly for Firms,” Albuquerque Journal, Monday, May 23, 2011 by Scott Sandlin

Carter v. Abbyad, 299 S.W.3d 892 (Tex. App. Austin 2009, ___)