January 26, 2012 in Business, Legal, Legal Articles by jferris

Model Severely Injured After Walking Into Plane Propeller

A professional model from Texas recently lost a hand in an accident at an airport when she walked into a moving propeller after deplaning a small airplane at night.

She was up and walking around after only a few days in the hospital with the help of a physical therapist.

The model and fashion blogger, 23-year-old Lauren Scruggs, suffered head, shoulder and brain injuries in addition to losing her left hand. She had gone up in the small, two-seat plane to view holiday light displays around Dallas from the air. Her family speculated that she was trying to return to the plane to thank the pilot when she unknowingly walked into the spinning propeller. Scruggs is the founder of LOLO Magazine and LOLOmag.com.

Small-engine airplane pilots are saying it is rare to let a passenger out of the plane with an open propeller until the engine is cut off and the prop has come to a stop. The plane, an Aviat Husky, has an engine that is far louder than the propeller and it might have been difficult to know in the dark that the loud noise was the engine and not the prop, according to ABC News.

The pilot of the plane is a friend of the Scruggs family and Lauren’s parents have said they have no plans to take legal action against him. But passenger safety is generally regarded to be the responsibility of the pilot – even on the tarmac.

The Federal Aviation Administration is looking into the incident. There is no word whether the engine was running when Scruggs was hit or whether the propeller was powering down. Some pilots have speculated that since it did not kill her, it might have been powering down. It is rare to survive such a catastrophic event.

In many catastrophic injury cases blame can be difficult to place on anyone but the person who was injured. It has been speculated that in this case the pilot may be at fault since the propeller was still running when Scruggs left the plane.

The plane’s propeller struck Scruggs on her left side, fracturing her skull and her collarbone. She was able to open and use her right eye within days of the accident, but her left eye was still bandaged. Doctors said the left eye would be their next focus after they amputated her left hand. Scruggs damaged the globe of her left eye, but doctors were able to repair it in surgery.

Seth Wilburn writes for the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer. To learn more, visit Gomezlawyers.com.

January 25, 2012 in Business, Legal, Legal Articles by jferris

Board Duties During a Sale Best Carried Out with Legal Guidance

When a corporation is being sold, merged, or acquired, the duties of the board of directors shift.
The board members must not think of the business’ survival and instead focus on getting the best price and upholding the shareholders’ interests. Of utmost importance is the duty of care for the directors to utilize and gather all the materially accurate information to be able to determine the most appropriate buyer and make the most informed decision.

The business judgment rule will be used by the courts to see if the duty of care was upheld. This rule analyzes if actions were done in good faith and in line with how a reasonable person would have acted.

Board members should not be acting with self interest, bias, or only looking to preserve their roles. This duty of loyalty also includes the board of directors disclosing any conflicts of interest and a duty of confidentiality to prevent potentially harmful publicity or crises.

In real terms, all efforts must be made to receive the highest value for the corporation. Any preference for one bidder over another should be in line with getting the maximum price. If bias is discovered or a dispute ensues because favoritism is occurring for the wrong reasons, a breach of fiduciary duty can be claimed.

The courts recognize that even when the sale of a corporation is completed, some amount of business risk is taken. If the board of directors has made a decision that is in the shareholders’ best interests to further its’ goals, board members will be greatly protected from liability. But if the duties of care, loyalty, and disclosure are not upheld, a lawsuit can ensue. When wrongdoing is proven and shown to have caused damage to the shareholders, compensation for actual damages and sometimes even punitive damages can be sought. Courts do not rule favorably in circumstances where a board of directors or select individuals on the board have a conscious disregard for their duties in a sale, merger, or acquisition.

It is therefore advised to have a team in place to help the board of directors make the soundest judgments when an opportunity arises for the business to change ownership. An experienced business attorney is essential for the board of directors to have to review their duties and actions as the research and transactions unfold. Enlisting a competent attorney ahead of time can help to minimize risk and comply with all pertinent regulations.

Anthony Spotora is a Los Angeles business lawyer and Los Angeles business litigation lawyer. To learn more, visit Spotoralaw.com.

January 20, 2012 in Business, Legal, Legal Articles by jferris

Two Burger Restaurants Battle Over Signage in Trademark Infringement Case

In-N-Out Burger has a following of restaurant-goers that crave its “fresh to order” hamburgers. Since 1948, the company has excelled in burgers, fries, shakes and a devout commitment to clean, efficient fast food. It has also relied on its boomerang logo and signage to stand out from the competition since its inception. No wonder that In-N-Out Burger was recently shocked to find that another restaurant was using a very similar boomerang to promote its company.

The lawsuit, In-N-Out Burgers vs. Pappas Restaurants alleges that Pappas’ used boomerang arrow signage outside its Houston, Texas airport location. In-N-Out Burgers has more than 260 locations throughout California, Texas, Arizona, Nevada and Utah. They allege that the boomerang logo is closely identified in the marketplace for In-N-Out Burgers and could cause confusion amongst the public. Thus, Pappas’ is allegedly engaging in trademark infringement under federal laws and unfair competition under Texas law, In-N-Out Burgers claims.

Pappas Burger has three burger restaurants in Houston and uses a yellow boomerang that bends with lights similar to In-N-Out’s signage. Case watchers say that the case will come down to how similar the signs are and how much confusion the two signs could have caused. What is interesting is that its logo is more of a baseball-oriented font and feel but the Houston signage does largely use a boomerang.

When companies go after each other for trademark infringement for a sign or logo, it shows that they are concerned about consumers being deceived, confused, or mistaking one company for another. Businesses spend a lot of time and money on signage and logos to have the public associate a set of words and images to their brand. Packaging, advertising, and promotions can also mirror the large-scale logo. Unless there is a partnership or marketing agreement that allows one business to utilize key parts of another’s logo for mutual benefit, trademark infringement can be charged.

An experienced trademark attorney is essential to protecting a logo and associated intellectual property assets. When a problem arises, a company can request a temporary injunction to prevent further harm, amongst other pursuits of resolution. Lost profits and losing part of a customer base can be devastating to a business when a trademark dispute arises. Moreover, in instances where a rival is acting in bad faith or confusion can be proven, monetary awards can be given. Punitive damages and attorney’s fees can also be sought after. Unjust enrichment and deterrence to continue the act of infringement is something that the courts will also look at when deciding a trademark case.

Anthony Spotora is a Los Angeles trademark attorney, Los Angeles intellectual property attorney, and Los Angeles business attorney. To learn more, visit Spotoralaw.com.

January 12, 2012 in Business, Legal, Legal Articles by jferris

Texas Court Keeps Franchise Tax on Partnerships

The Texas Supreme Court recently ruled that a business tax does not violate the state constitution and cleared the way for lawmakers as they attempt to change the tax in 2013.

The tax enacted in 2006 was the first in the state to require partnerships to pay a franchise tax, according to Bloomberg. The tax is not meeting expectations, and raising only about $4 billion a year for schools, prisons and other functions. Texas gets most of its revenue from property taxes, but since property values have been down, the state has had a revenue shortfall.

An insurance adjuster claimed that the tax acted like an income tax on some partnerships. In Texas, voters must approve of any new income taxes. The court found that a business tax does not apply to the partners in a partnership and the tax can stand.

This is good news for tax reform groups who think the Texas Supreme Court’s decision broadens the legislature’s ability to change the tax. Lawmakers had been waiting for a decision on the tax’s constitutionality before taking up tax reform in the legislature, according to the Austin American-Statesman.

Texas law has required a popular vote to enact a state income tax since 1993. The franchise tax came about after a 2005 Texas Supreme Court ruling declared the state’s education finance system was unconstitutional.

After the state’s Supreme Court ruling, the legislature slashed property tax rates and closed a loophole that allowed some businesses to avoid the franchise tax by changing how they were formed. The original idea was that the expanded franchise tax would make up for the changed property tax, according to the Fort Worth Star-Telegram.

The new wider-ranging franchise tax hit smaller businesses. An insurance claims adjusting company called Allcat Claims Service sued the state’s comptroller’s office saying the tax amounted to an income tax on individual partners. Some small firms argued the franchise tax is complicated and puts a costly compliance burden on businesses.

The Star-Telegram also reported that school systems are suing the state again because the financing system is creating unconstitutional inequities.

The court disagreed by a vote of 7-2. One of the dissenting opinions stemmed from the state legislature’s insistence that any challenge to the tax go directly to the high court and that the court be required to address it within 120 days. Justice Don Willett ruled that the court would overstep by acquiescing to the mandate.

Seth Wilburn writes for the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer. To learn more, visit Gomezlawyers.com.

January 9, 2012 in Business, Legal, Legal Articles by jferris

Pregnant Woman Alleges Gender Discrimination When Fired from Texas Nursing Position

A recent Texas employment lawsuit shows what an employer should not do when an employee becomes pregnant. In Dailey v. Millennial Care Management, Inc., a nursing home supervisor in Prestonwood told her employer that she was pregnant. The next day she was fired. The employers, Prestonwood Rehabilitation & Nursing Center Inc. and Millennial Care Management Inc. say they let Seneada Dailey go because she did not take care of a patient situation adequately.

Dailey alleges she was terminated because she was pregnant. The case documents allege that Prestonwood’s human resources director said their “…insurance bills were too high and employees don’t need to be having babies.” Dailey alleges gender discrimination and seeks recovery of front and back pay, compensatory and exemplary damages, and related legal fees. As the Director of Nurses at the Prestonwood facility, Dailey asserts she was in charge of supervising 100 nurses.

Generally speaking, an employer cannot terminate an employee because the employee becomes pregnant. Likewise, an employer subject to the Family and Medical Leave Act cannot terminate an employee for seeking FMLA leave due to pregnancy. FMLA leave can be used for the birth of a child and the first few months of taking care of a newborn. An employee is allowed to use 12 workweeks of unpaid leave under these and other medical circumstances.

Additionally, an employer is required to maintain group health insurance coverage for an employee on FMLA leave. When relevant, employees will still need to pay their portion of the premiums. These health benefits can generally only be stopped if the employee alerts the employer that she will not be returning to work or fails to return to work when the FMLA timeframe ends.

When a worker returns from FMLA leave, she is generally entitled to resume her previous position in the company or hold an equivalent one with similar pay, benefits, status, and other terms of her employment. Workers cannot be subjected to retaliation or discrimination for using FMLA leave.

Pregnancy discrimination is against the law and the Pregnancy Discrimination Act prohibits employers from discriminating against pregnant employees. That said, the Equal Employment Opportunity Commission (EEOC) has noted a rise of 81 percent in alleged pregnancy discrimination cases between 1992 and 2010.

If you are an employer who has been accused of pregnancy discrimination or you are an employee who has been subjected to pregnancy discrimination, you should contact a knowledgeable employment attorney to protect your rights.

Gregory D. Jordan is an Austin employment lawyer, Austin business attorney, and Austin pregnancy discrimination lawyer. To learn more, visit Theaustintriallawyer.com.