Don’t Call It a ‘Trial’: What Litigators Should Know About Arbitration Drafting and Interpreting Indemnity Agreements: Living Forward, Understanding Backwards Stopgap Sanctuary: Temporary Protected Status and the Syrian Conflict HBA Annual Meeting Interview with New President M. Carter Crow
Volume 52 – Number 1
M. Carter Crow 2014-2015 President Houston Bar Association
Jimmy Erwin Justin Kaplan
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contents Volume 52 Number 1
FEATURES Call It a ‘Trial’: What 12 Don’t Litigators Should Know About Arbitration
By Gary McGowan
and Interpreting Indemnity 18 Drafting Agreements: Living Forward, Understanding Backwards By Preston D. Hutson
Sanctuary: Temporary 26 Stopgap Protected Status and the Syrian Conflict
By Emily Smith
30 An Interview with the President Crow Takes Office 32 M.As Carter HBA President 33 50-Year Lawyers 36 President’s Awards
The Houston Lawyer
The Houston Lawyer (ISSN 0439-660X, U.S.P.S 008-175) is published bimonTHLy by The Houston Bar Association, 1111 Bagby Street, FLB 200, Houston, TX 77002. Periodical postage paid at Houston, Texas. Subscription rate: $12 for members. $25.00 non-members. POSTMASTER: Send address changes to: The Houston Lawyer, 1111 Bagby Street, FLB 200, Houston, TX 77002. Telephone: 713-759-1133. All editorial inquiries should be addressed to The Houston Lawyer at the above address. All advertising inquiries should be addressed to: Quantum/SUR, 12818 Willow Centre Dr., Ste. B, Houston, TX 77066, 281-955-2449 ext 16, www.thehoustonlawyer.com, e-mail: firstname.lastname@example.org Views expressed in The Houston Lawyer are those of the authors and do not necessarily reflect the views of the editors or the Houston Bar Association. Publishing of an advertisement does not imply endorsement of any product or service offered. ©The Houston Bar Association, 2014. All rights reserved.
contents Volume 52 Number 1
departments Message 6 Presidentâ€™s Brave Hearts By M. carter crow the Editor 10 From Managing Technology,
Managing Internet Risks & Benefits
By Robert Painter Internet Risks & Benefits 25 Managing Protecting Your Online Reputation By Taunya Painter
Lawyers Who Made a 38 Houston Difference
William W. Kilgarlin
By The Hon. Mark Davidson Profile in Professionalism 39 ACraig Glidden
Executive Vice President & Chief Legal Officer LyondellBasell Industries.
THE RECORD 40 OFF Seth Jaffe Hits the Ground Running By Suzanne Chauvin SPOTLIGHT 41 COMMITTEE MOILP By Farrah Martinez
Trends 42 Legal Attorney Feesâ€”Breach of Implied
By Ronald E. Hood
The Spoliation Instruction: A Thing of the Past? By Chance A. McMillan Reviews 44 Media The Ultimate Lawyer Quote Book:
Words of Wisdom and Humor Reviewed by Taunya Painter
The Houston Lawyer
45 Litigation MarketPlace
The University of Houston Law Center welcomes
Leonard M. Baynes Dean and Professor of Law
As ninth dean of the University of Houston Law Center, Leonard M. Baynes brings a national reputation as a communications law scholar with specializations in business, media, and diversity issues. Baynes has served as the inaugural director of the Ronald H. Brown Center for Civil Rights and Economic Development at St. John’s University School of Law, as chair of three committees for the Association of American Law Schools, as scholar-in-residence at the Federal Communications Commission, as in-house counsel at NYNEX Corp, and as an associate at the Wall Street office of Gaston and Snow LLP. He has written more than 25 law review articles on corporate law, communications law, and diversity, and is in the final stages of co-authoring the case book “Telecommunications Law: Convergence and Competition” to be published by Wolters Kluwer. Baynes is admitted to practice in both New York State and Massachusetts.
Educational leaders and legal professionals are excited about the appointment of Dean Leonard M. Baynes “Dean Leonard M. Baynes possesses a sophisticated understanding of the changing landscape of legal education and the passion, energy and vision to take the University of Houston Law Center to even greater heights.”
Chancellor of the UH System and President of the University of Houston
“Dean Baynes’ dynamic leadership will serve to enhance our relationships with students, alumni, members of the legal profession, the judiciary, community members, state and local government, and other external constituencies.”
Chairman, University of Houston System Board of Regents
“As both scholar and servant-leader, Leonard Baynes bridges rigorous scholarship and real-world impact, the academy and community, ideology and perspective. His selection as dean is a deeply informed and inspired choice.”
Cornell William Brooks President and CEO NAACP
“Dean Baynes possesses, the profile, presence and leadership skills that will serve the University of Houston and its law school incredibly well in the months and years ahead.”
Senior Vice President and General Counsel DuPont
“Dean Baynes is an inspirational and inclusive leader, a prolific scholar, and a wonderful colleague, professor, friend, and mentor. The University of Houston Law Center is fortunate to have Dean Leonard Baynes at its helm.”
Catherine J.K. Sandoval
Commissioner, California Public Utilities Commission; Associate Professor, Santa Clara University School of Law
The University of Houston is a Carnegie-designated Tier One public research university and an EEO/AA institution.
By M. carter crow Norton Rose Fulbright
the days from this day to that for one chance, just one chance, hank you for allowing me to serve as your president to come back here... and tell our enemies that they may take our this year. I look forward to working with you and for lives, but they will never take our freedom!” you to enhance our great organization. As lawyers, we need to be brave. By training, we are the only I moved to Houston in 1991 and joined Fulbright ones who can help with the crucial legal needs of the less fortu& Jaworski, and I have been fortunate to remain there nate in our community, those who cannot afford over 22 years. One of the things that I am proudto pay for the most basic services to protect their est of is the way that our firm, now Norton Rose As lawyers, families and their livelihoods. We need to step up Fulbright, views its obligation to the community we need to be brave. to battle inequality in the access to justice, and and the duty of a lawyer to help people. That that will continue to be a focus of our bar. tradition was established by partners such as By training, we are We will also focus on the changing needs of Jim Sales, Otway Denny, Tom Godbold, Stewart our members. We will help you enhance your Gagnon and others, all of whom have set an exthe only ones who can practice and personal development by continuample of true leadership in our profession, particuhelp with the crucial ing to offer outstanding CLE programs, networklarly in the area of a lawyer’s duty to serve the coming, and community service projects. Our Secmunity through bar work and pro bono work. Our legal needs of the tions will help guide us in developing new, more firm has had many successes, but I am never more less fortunate in accessible CLE seminars and institutes. We will proud than when I think of the leadership of these increase our outreach to law students and new lawyers on the issue of legal services to the poor. our community, those licensees, many of whom will find themselves But what are we to think of these obligations in who cannot afford starting their own practices in a tight legal job the year 2014? Is the idea of lawyers acting as servants to the public just old and outmoded? These to pay for the most basic market. We will offer free online CLE opportunities through our website that are geared toward days, isn’t profits the only goal that really counts? services to protect their helping them establish successful careers. I don’t think so, and I don’t think that most HBA Rapid-fire developments in technology will members do either. You know that we are a profamilies and their continue to impact our practices and even more fession, not just a business. As professionals, we importantly, our families. Our commitment to have an obligation of service. And that includes livelihoods. fighting for basic rights includes our children service to people who have nowhere else to turn. and teens, who are bombarded with technology that expands I am a big fan of movies, and one of my favorites is Braveheart, our knowledge and accomplishments, but can also be a danger. the story of how William Wallace helped lead Scotland to freeWe will work this year to educate our members and the public, dom. My favorite scene is the one where the English and Scotand to develop a plan on how the legal community can assist in tish armies draw up for battle at Stirling Bridge. The English are advocating for a safer Internet. A new series beginning in this spectacular with their armor and plumed horses. The Scotts are a issue of The Houston Lawyer will focus not just on new developrag tag group that is scared and about to run away when Wallace ments in software, but on how to protect our families and our appears. Wallace is fierce and he makes a stirring speech, appealpractices. ing to them as an army of free men who should fight for their I am excited about our possibilities this year, working with freedom. Through his words and his actions, he rallies the Scots all of you to make our bar even better and to make an impact in to victory. At the end of the speech he tells the Scots, “Fight and our community. If we are brave, we can accomplish more than you may die. Run and you will live at least awhile. And dying in we can imagine. your bed many years from now, would you be willing to trade all
The Houston Lawyer
Defending Texans Since 1994 Former Assistant United States Attorney Former Assistant District Attorney Founding Member of the National College of DUI Defense of Counsel Williams Kherkher LLP Law Office of Ned Barnett
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from the editor
By Robert Painter Painter Law Firm PLLC
Angela L. Dixon Attorney at Law
Farrah Martinez Harris County District Clerk’s Office
Jill Yaziji Yaziji Law Firm
The Houston Lawyer
Polly Graham Haynes and Boone, LLP
Taunya Painter Painter Law Firm PLLC
t the Houston Bar Association’s annual dinner, in May, incoming President Carter Crow outlined his goals for the 2014-15 bar year. During his speech, Mr. Crow shared a conversation that he had had with his wife, about how challenging it is to keep up with the ever-changing technology reaching their children. While the internet has a lot to offer us all, through the general dissemination of knowledge throughout society, there are also serious risks to children that can be frightening for parents. Sexual deviants masquerade online as young people so they can solicit minors for a perverted rendezvous. A few years ago, the Houston Chronicle reported that a commercial pilot flew to Houston, thinking that he was going to meet a 12-year-old boy with whom he had been sharing sexually explicit text messages. Fortunately, the boy’s teacher saw the text messages and alerted a Harris County constable. The constable set up a sting operation and thwarted the pilot’s plan, and instead he landed in jail. Beyond the prurient activities, some young people take advantage of the internet as a hub for illegal activities, from the theft of intellectual property to the purchase of illicit drugs. Still others go online, or use text messages, to publish their thoughts and activities instantly, as an extension of their stream of consciousness. They do not consider how those careless words and images can come back to haunt thehoustonlawyer.com
them one day. It is no overstatement to say that technology and the ubiquity of online and technological resources impact almost every aspect of our lives, and those of our loved ones. As a result, President Crow has announced a noble outreach project for the HBA over the next year—develop and distribute information and tools to share with the public about how to manage technology risk with children. To add to that effort during this bar year, each issue of The Houston Lawyer will include an article addressing how we, as attorneys, can better manage our interactions with technology and the internet. This month’s issue includes Taunya Painter’s article on avoiding and dealing with online damage to your professional reputation. With the proliferation of attorney and legal websites that profile all licensed attorneys, more and more prospective clients and fellow lawyers utilize them as research tools. It is important to be aware of these sites and manage your reputation on them. In addition to kicking off our year-long focus on internet and technological issues, this annual general issue of the magazine is full of interesting articles on a variety of topics. Gary McGowan covers what litigators should know about arbitration. Preston Hutson discusses drafting and interpreting indemnity agreements. And Emily Smith informs us about the immigration topic of Temporary Protected Status.
BOARD OF DIRECTORS President
M. Carter Crow
Alistair B. Dawson
Neil D. Kelly
First Vice President
Benny Agosto, Jr.
David A. Chaumette
Second Vice President
Todd M. Frankfort
Hon. David O. Fraga Bill Kroger
Richard Burleson Warren W. Harris
Jennifer A. Hasley Daniella D. Landers
DIRECTORS (2014-2016) Diana Perez Gomez Greg Ulmer
editorial staff Editor in Chief
Robert Painter Associate Editors
Angela Dixon Farrah Martinez Jill Yaziji
Polly Graham Taunya Painter
Nicole Bakare Kimberly Chojnacki Sammy Ford Jason Goff Amy Hargis Matthew Heberlein Jason McLaurin Judy Ney Jeff Oldham Aaron Reimer Matthew Walker Hon. Jeff Work
Yvette Cano Jonathan Day Kelly Fritsch John Gray Al Harrison Preston Hutson Chance McMillan Angie Olalde Raymond Panneton Hon. Josefina Rendon Zach Wolfe
HBA office staff Executive Director
Director of Projects
Receptionist/ Resource Secretary
Membership and Technology Services Director
Director of Education
Communications Assistant /Web Manager
Ashley G. Steininger
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By Gary McGowan
Don’t Call It a ‘Trial’:
What Litigators Should Know About Arbitration T hough demand for arbitration may ebb and wane, it will likely grow substantially over the next decade. International trade will continue to expand. Foreign companies fear our courts, and we fear theirs. Even some domestic companies distrust certain jurisdictions in the United States and, thus, bargain for arbitration. Privacy concerns will continue to drive many contracting companies under the blanket of a confidential proceeding.1 And parties to disputes involving a high degree 12
of complexity or technical challenges will want decision makers with industry expertise. Litigators new to arbitration may benefit from a primer on this alternate arena. Though both arbitration and court litigation are essentially adversarial systems for seeking the truth and meting justice, their respective cultures, procedural rules and even nomenclatures differ in various ways. Lexicon: Talk the Talk “Language is the armory of the human
mind, and at once contains the trophies of its past and the weapons of its future conquests.” –Samuel Taylor Coleridge Using trial lawyer terms in the arbitration arena will brand the speaker as an amateur. A lawyer’s skill set may essentially be the same in each forum, but the lexicons are different. So, here is a glossary of commonly used arbitration terms: 1. “Claimant” is the proper arbitration term for plaintiff. 2. “Respondent” is the term for defendant. 3. Discovery may be called “exchange of information.” 4. “Hearing” is the arbitration counterpart for trial. 5. “Award,” not judgment, is the decision of the arbitrators, even if no affirmative relief is actually “awarded.” A party may obtain a court judgment to enforce an award. 6. “Vacatur” means modification or reversal of the award by a court in an appeals process that starts with the trial-level court. A winning claimant will petition the court to enforce the award by judgment, and the losing respondent may ask the same court to vacate the award. 7. “Solo arbitrator” refers to a single arbitrator appointed to hear and decide a matter by himself. “Panel” and “tribunal” refer to three (rarely more) arbitrators so appointed. Usually, each party will appoint a member of the panel or tribunal, and the two partyappointed members will appoint the third. Sometimes, all three are jointly chosen by the parties. 8. “Administered” means that the process is aided and facilitated by an arbitral institution (privately owned; usually nonprofit) such as the American Arbitration Association (“AAA”) or the International Institute for Conflict Prevention & Resolution (“CPR”). The Addendum on page 14 lists prominent arbitral bodies that administer arbitrations, promulgate rules for arbitration, and maintain
rosters of neutrals vetted for qualifications and experience. 9. “Ad hoc” means not administered by a third party. The arbitrators themselves are responsible for their billing and collection, challenges to panel members and all communications with counsel. 10. “Chair” means the head of the tribunal or panel. 11. “Wing” means an arbitrator who is not Chair. Wing arbitrators may be party appointed or jointly appointed. In either case, they are almost always to remain neutral and independent. 12. “Seat” or “situs” means the place of the arbitration, which will determine whose law governs the conduct of the arbitration. A Word About International Arbitration An “international” arbitration involves a dispute between citizens of different countries, even if the seat is in the U.S. The principal treaty governing international commercial arbitration agreements and awards is the United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the “New York Convention”),2 ratified by more than 140 countries, including the U.S. and the other major industrial nations. Contracting states agree to recognize and enforce international arbitration agreements and foreign arbitral awards issued in other contracting states, subject to certain limited exceptions. Each ratifying state has enacted legislation to implement the terms of the New York Convention. In the U.S., we have Chapter 2 of the Federal Arbitration Act (“FAA”).3 Generally speaking, the institutional rules governing international arbitrations have arisen from civil law (European) culture. Civil law states, and lawyers and parties therein, eschew American-style, aggressive, broad discovery. For example, the United Nations Commission on International Trade Law (“UNCITRAL”) Arbitration Rules,4 sometimes incorporated into international agreements, require each party to produce the documents on
which it intends to rely. The sole reference to any other form of discovery appears in Rule 27.2: “At any time during the arbitral proceedings the arbitral tribunal may require the parties to produce documents, exhibits or other evidence within such a period of time as the arbitral tribunal shall determine.” In some cases, no other discovery occurs, and depositions are uncommon. A Contract Is The Genesis and Writ of Each Arbitration An arbitration proceeding springs from a contract. Typically, a contract providing the terms of an underlying business deal will contain a clause requiring that any dispute arising under the contract be submitted to binding arbitration; or less frequently, after a dispute arises, parties sometimes enter a stand-alone agreement to arbitrate. The contract should define or set: a. The substantive scope of the arbitration—i.e., what subject matter the arbitrator has the power to decide. b. The location or “seat” of the arbitration (more later). c. The number of arbitrators (one or three, rarely more). The contract may also provide: a. That the proceeding will be administered by an arbitral institution whose procedural rules will apply. E.g., AAA, CPR, ICDR, ICC, etc. (see Addendum). If the proceeding will be ad hoc, the agreement may incorporate a set of rules by reference. b. Limitations on permissible discovery (e.g., no more than X depositions or Y cumulative hours of depositions). c. A hearing deadline and maximum days of hearing time. d. Minimum and/or special qualifications for the arbitrators. Arbitration Statutes–The Legal Framework The seat of the arbitration will determine which country’s law will govern the enforceability of the arbitration agreement, the judicial remedies in connection with the arbitration proceeding and the en-
forcement of the award. For arbitrations seated in the U.S., the Federal Arbitration Act (“FAA”), which broadly applies to contracts involving interstate commerce, provides a statutory basis for enforcement of arbitral agreements and arbitral awards.5 The FAA may be invoked in either a federal court or state court, depending upon which has jurisdiction.6 The FAA mandates that arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”7 This mandate preempts inconsistent state law.8 Almost every state has adopted a local version of the FAA.9 In Texas, the Texas Arbitration Act (“TAA”)10 will govern if the arbitration contract so provides,11 or if interstate commerce is not involved. Again, either a federal court or a state court may apply the TAA. “Toto, we’re not in court anymore.” Arbitration Procedures Initiation An arbitration begins with a notice of claim either filed with the administering institution per its rules or served directly on the respondent. The applicable rules, if any, should be consulted as to the form of the notice and any further statement of claim, and whether a responsive pleading is required and in what form. If no rules apply, the arbitrator will determine these matters. Remember, unless incorporated by agreement, the state and federal procedural rules have no application. Seating the Panel The arbitration agreement may specify the arbitrator(s) by name or a method for their selection. If institutional rules apply, they will dictate the selection process. If the agreement is silent on the method of selection, the parties will attempt to agree on a panel or a selection method. If that effort fails, the claimant will need to petition either the administering body (e.g., AAA) or a court (in the case of an ad hoc proceeding) to make the appointment. thehoustonlawyer.com
When three arbitrators will preside, typically each party will appoint one arbitrator, and those two will select the third, with input from the parties. Though some limited ex parte communication (fee discussion; nature and subject of the dispute; names of counsel and parties; chair candidates) is allowed during this selection process, all arbitrators must remain neutral. Once the chair is seated, no further ex parte communication is permitted. When a candidate is appointed, he must disclose all material relationships and contacts with counsel and parties so as to allow them to object to his service in light thereof. Failure to disclose such information can serve as a ground for vacatur of the award. Preliminary Hearing After the panel is approved, it conducts a preliminary hearing, usually by telephone, at which counsel and the panel determine a schedule for the proceeding (including hearing date, and deadlines for completion of discovery, exchanging witness and exhibit lists, pre-hearing briefing dates, etc.), allowable discovery and motion procedures. The panel then memorializes the schedule in an order. Discovery or Exchange of Information Interrogatories and requests for admissions are not recognized as discovery tools in arbitral rules and in any event are generally disfavored by arbitrators as a waste of time and money. Document requests are usually allowed, but under some rules (e.g., AAA) must be narrowly tailored to seek documents “reasonably believed to exist” and “relevant and material” to the dispute.12 The broader “reasonably-calculated-to-lead-to-the-discovery-of-admissible-evidence” standard found in court rules does not apply. A competent panel that gets a whiff of “fishing” will likely dock the boat. Depositions are usually at the discretion of the panel. In substantial U.S. business disputes, depositions are commonly allowed, but they may be limited in number and duration. In international disputes, 14
depositions are often not permitted. Discovery disputes may be handled informally on short notice, and the parties may agree to submit them solely to the chair in order to speed the process. Dispositive Motions Contrary to lore, arbitrators can and do grant dispositive motions, though sparingly.13 Some proceedings present questions of law, either in whole or in part. For example, if a contract unambiguously supports one party’s position as to breach or lack thereof, that party may be entitled to a favorable award on liability as a matter of law. Similarly, if controlling case law precludes claimant’s sole liability theory, the respondent may be entitled to a finding of no liability without an evidentiary hearing or even discovery. Nevertheless, arbitrators do not favor court-style motions urging mere insufficiency of evidence (and often intended to “educate”). As noted below, refusing to hear evidence, weak though it may be, can put the award at risk for vacatur.14 Enforcement of Orders and Rules AAA, JAMS, and CPR rules vest panels with the full range of enforcement powers available to judges (AAA forbids default as a sanction).15 Other rules, all international, allow shifting of costs and fees for bad behavior but contain little express authority for other sanctions.16 Nevertheless, courts have consistently found ways to uphold sanctions awarded against a party for misconduct in arbitration.17 Hearing The hearing, usually ensconced in a hotel or office, is a private, evidentiary proceeding. Its basic structure resembles a bench trial–opening statements, claimant’s evidence, respondent’s evidence, rebuttal evidence and closing arguments. Witnesses are sworn and give direct testimony subject to cross-examination. If either party wishes, the hearing will be transcribed. But, unlike a bench trial, rules of evidence do not strictly apply (unless the parties agree otherwise). Generally, arbi-
trators view extensive use of objections as obstructive and/or time wasting. Moreover, they are reluctant to exclude evidence for fear of vacatur. “[R]efusing to hear evidence pertinent and material to the controversy” is one of the few grounds for vacating an award.18 So, all documents are usually deemed admitted at the outset, unless there are serious questions about authenticity. The hearsay rules bend. Motions to strike experts will likely be denied. As to peripheral maters, affidavits may be allowed with no cross-examination. And so forth. Nevertheless, objections may get traction if the evidence is a. Cumulative or redundant, especially if it jeopardizes the schedule; b. Completely irrelevant or not probative; c. Too much hearsay or double hearsay; or d. Leading a friendly witness on disputed subjects. The parties may agree on almost any hearing procedures, and the panel has broad flexibility to adopt procedures to promote speed, efficiency and fairness. For example, it is common in international arbitrations for direct testimony to be submitted by affidavit (and read by the tribunal in advance) so that hearing testimony is limited to cross-examination. Award After the close of evidence, the Panel deliberates and renders its award, which may be a simple summary of the outcome and relief granted, or reasoned or a detailed statement of findings of fact and conclusions of law. Most institutional rules do not speak to the form of the award (except CPR, which mandates a reasoned one). The parties, by agreement, usually determine the form. Enforcement and Appeal of Awards: The Role of the Judiciary 19 A party who obtains an award of monetary, declaratory or injunctive relief can petition a court to enter judgment on the award pursuant to the applicable state ar-
bitration statute or the FAA. Such appeals are first lodged in the trial court and thereafter follow the normal appellate path. The losing party may seek to vacate the award. Both the FAA and the Texas Arbitration Act provide the same grounds: a. Where the award was “procured by corruption, fraud, or undue means.” Bribery or extortion of an arbitrator comes to mind. b. Where there was “evident partiality or corruption in the arbitrators.” This usually occurs when an arbitrator has failed to disclose a material relationship with a party or counsel. c. Where the arbitrators “refus[ed] to postpone the hearing, upon sufficient cause shown,” or “refus[ed] to hear evidence pertinent and material to the controversy,” or committed “any other misbehavior by which the rights of any party have been prejudiced.” d. Where the arbitrators “exceeded their powers.” This happens when an arbitrator goes beyond the scope of his authority as circumscribed by the parties’ agreement to arbitrate. Examples: • Awarding punitive damages when the contract expressly excludes them. • Hearing and deciding a tort claim where the agreement limits the scope of the arbitration to contract claims. • Exercising arbitral jurisdiction over a party who did not agree to arbitrate (i.e., a nonparty to the arbitration agreement).20 Arbitration and the Rule of Law Are arbitrators bound to follow controlling substantive law? After all, they need not be attorneys (though most are). The answer is “maybe.” Some courts have embraced a ground for vacatur not found in the FAA or the state equivalents—“manifest disregard for the law.”21 On its face, this ground suggests that arbitrators must correctly apply controlling law. But application of the rule
has resulted in vacatur of few awards, and some circuits and states have declined to accept the doctrine.22 A recent case exemplifies how narrowly some courts view “manifest disregard.” In Schafer v. Multiband Corp.,23 the Sixth Circuit candidly stated that “we would reverse the decision if it had been made by a district court.” But “[m]anifest disregard of the law is not just manifest error of the law.” The scope of manifest disregard is “very narrow,” so as to further the goals
of the FAA—finality, efficiency and speed. Thus the arbitrator’s “colorable” reading of ERISA was enough to confirm the award. Nevertheless, with rare exception, parties and counsel expect arbitrators to use best efforts to follow controlling substantive law. And, in this writer’s experience, well-chosen arbitrators try to do so. Gary McGowan is the principal in McGowan Arbitration and Dispute Resolution. A former business litigator and
From left standing: Judy Bozeman, Donnie Roberts, Allen Lewis, Michael Ringger and Elizabeth Leicht From left seated: Bill Cunningham, Maureen Phillips, Rick Morales and Tom Williams
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founding partner of Susman, Godfrey & McGowan, he has for the past 24 years served as an arbitrator and mediator in both national and international disputes involving complex, high-stakes matters. Addendum
such protection. 2. United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 330 U.N.T.S., available at http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/ NYConvention.html. 3. 9 U.S.C. §§ 201–08 (2012). 4. Available at http://www.uncitral.org/pdf/english/texts/arbitration/ arb-rules-revised/arb-rules-revised-2010-e.pdf. 5. See 9 U.S.C.A. § 2. 6. Of course, in cases of diversity of citizenship, fed-
Location Type of Arbitration
American Arbitration Association (“AAA”) www.adr.org
Institute for Conflict Prevention and Resolution (“CPR”) www.cpradr.org
Domestic & International
International Centre for Dispute Resolution (“ICDR”), a division of AAA • www.icdr.org
International Court of Arbitration (“ICC”) www.iccwbo.org London Court of International Arbitration (“LCIA”) www.lcia.org International Centre for Settlement of Investment Disputes (“ICSID”) • https://icsid.worldbank.org/ICSID/Index.jsp Judicial Arbitration & Mediation Service (“JAMS”) www.jamsadr.com
1. Be warned, however, that parties and counsel to an arbitration proceeding are not constrained from publishing the details of the proceeding, including the award, absent an agreement providing for
UH is an EEO/AA institution.
eral jurisdiction may be obtained. The FAA provides a federal question basis for federal jurisdiction when the New York Convention is applicable. See 9 U.S.C. § 203 (2012) (“action or proceeding falling under the Convention shall be deemed to arise under the laws and treaties of the United States”); see, e.g., Telenor Mobile Communs. AS v. Storm LLC, 584 F.3d 396, 404 (2d Cir. 2009); Karaha Bodas Co., L.L.C. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 335 F.3d 357, 364 (5th Cir. 2003). 7. 9 U.S.C. § 2. 8. See, e.g., Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25
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Domestic & International
12. 13. 14.
(1983); THI of New Mexico at Hobbs Center, LCC v. Patton, No. 132012, 2014 WL 292660 (10th Cir. Jan. 28, 2014). Many states have adopted the Uniform Arbitration Act, which tracks the terms of the FAA. The 1955 Uniform Arbitration Act (amended in 1956) was adopted in 49 states. The 2000 Revised Uniform Arbitration Act has been adopted by 18 states, available at http://www. uniformlaws.org/Act.aspx?title=Arbitration%20Act%20(2000). See TEX. CIV. PRAC. & REM. CODE ANN. §§ 171.001–.098. See, e.g., Ford v. NYLCare Health Plans of Gulf Coast, Inc., 141 F.3d 243, 247-48 (5th Cir. 1998). The FAA, however, will preempt conflicting state law. See Volt Info. Sciences, Inc. v. Bd. of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 477 (1989). See AAA Commercial Rule R-22. AAA’s Commercial Arbitration Rules now expressly allow dispositive motions. Id. at R-33. See 9 USC §10 (2012); see also J.S. “Chris” Christie, Jr., Preparing for and Prevailing at an Arbitration Hearing, 32 AM. J. TRIAL ADVOC. 266, 277–79 (2008); see generally George M. VonMehren & Claudia T. Salomon, Submitting Evidence in International Arbitration, 20 J. INT’L ARB., 285 (2003). AAA Commercial Arbitration R-23 and R-58; JAMS Comprehensive Arbitration Rule 29; CPR’s Administered Arbitration Rule 16; CPR’s 2007 Rules for Non-Administered Arbitration of International Disputes Rule 16. See ICDR International Arbitration arts. 28, 31. See Hamstein Cumberland Music Group v. Estate of Williams, No. 0551666, 2013 WL 3227536 at *4 (5th Cir. May 10, 2013) (arbitrator had “inherent authority to police the arbitration process and fashion appropriate remedies to effectuate this authority”); ReliaStar Life Ins. Co. v. EMC Nat’l Life Co., 564 F.3d 81, 85-87 (2d Cir. 2009) (upheld a $3.5 million award of costs and attorney’s fees to a prevailing party whose opponent “lack[ed] good faith); Seagate Tech., L.L.C. v. W. Digital Corp., 834 N.W.2d 555, 563-64 (Minn. Ct. App. 2013). See generally G. McGowan, Sanctions in US and International Arbitrations: Old Law In Modern Context, Kluwer Arbitration Blog, October 10, 2013. See 9 USC § 10; Christie, supra at 277-79; see generally VonMehren & Salomon, supra. This article does not address the other roles a court may play–compelling arbitration at the outset and, in an ad hoc proceeding, appointing arbitrators (when the parties cannot agree) and deciding challenges to arbitrators. See 9 USC §10 (2012) (emphasis added); TEX. CIV. PRAC. & REM. CODE ANN. § 171.008. See, e.g., Comedy Club, Inc. v. Improv W. Assocs., 553 F. 3d 1277, 1290 (9th Cir. 2009); Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 548 F.3d 85, 94-95 (2d Cir. 2008); Coffee Beanery, Ltd. v. WW, LLC, 300 F. App’x 415, 418–19 (6th Cir. 2008); Pearson Dental Supplies, Inc. v. Super Ct., 229 P.3d 83, 91 n.3 (Cal. 2010); Sands v. Menard, Inc., 767 N.W.2d 332, 335 (Wis. 2010). See, e.g., Frazier v. CitiFinancial Corp., 604 F.3d 1313, 1324 (11th Cir. 2010); Citigroup Global Mkts., Inc. v. Bacon, 562 F.3d 349, 355 (5th Cir. 2009); Volvo Trucks N.A., Inc. v. Dolphin Line, Inc., 50 So.3d 1050, 1054 (Ala. 2010). 2014 FED App. 0003N; 2014 U.S. App. LEXIS 288; 2014 WL 30713 (6th Cir. Jan. 6, 2014) (unpublished).
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Drafting and Interpreting Indemnity Agreements:
Living Forward, Understanding Backwards B lack’s Law Dictionary defines indemnity as one’s obligation to make good any loss, damage or liability incurred by another to a third party.1 Typically, this obligation arises within a larger contract, within which the indemnitor contractually assumes responsibility for injuries later sustained by a third party and who, therefore, promises to reimburse the other contracting entities that may be secondarily liable for the given injuries. In the abstract, the concept of indemnity radiates benignity—a simple understanding between two entities that upon the occurrence of a condition, Party X will indemnify Party Y. Indeed, drafting indemnity provisions appears to require no special education or skill, their comprehension being well within the capability of anyone able to read the provision and give effect to 18
its terms by applying their ordinary, popular and commonly-accepted meaning.2 While many lawyers often pretend that indemnity agreements are encrypted in legal jargon and that we alone hold the key to their use and understanding, it remains a poorly guarded secret that nothing inherent to indemnity agreements makes their interpretation the exclusive prerogative of the legal profession. In fact, non-lawyers find these pretentions off-putting, believing that lawyers needlessly frustrate contractual negotiations. Undoubtedly many have encountered the ill-concealed contempt of prospective clients brashly rejecting the need for legal services, as a friend once exclaimed, “I am an engineer paid to negotiate construction contracts involving millions of dollars and I certainly comprehend English well enough to understand a simple indemnity clause.”
Life can only be understood backwards, but it must be lived forwards.3 While acknowledging that most educated and reasonably sophisticated persons can readily understand indemnity agreements in the abstract, my friend’s contempt for legal services ignores the brilliance of Kierkegaard’s maxim and reflects his naïve belief that the mutual cordiality of two parties “living forward” to a prospective contract continues throughout its execution. He fails to temper his expectancy with the practical reality that while indemnity agreements are written, considered and initially understood living forwards, i.e., their authors are looking prospectively onto the black and white possibility of some future event, the agreement will necessarily be interpreted and understood “backwards,” i.e., after an event has occurred. Retrospective interpretation often clouds a once black-andwhite agreement into varying shades of grey. Where flexible, forward-looking negotiators might once have agreed suddenly gives way to the hard reality that preferring one interpretation over another carries costly consequences. Thus, while my friend might feel comfortable negotiating a given indemnity agreement that reflects his common understanding, he should temper that comfort with the practical understanding that if disputed, his “common understanding” might evaporate within the crucible that is litigation. We undertake this study of indemnity agreements with Kierkegaard’s maxim ringing in our ears. At its conclusion, the reader should leave armed with a general framework from which to read and interpret indemnity agreements over and above the reader’s ability to comprehend the English language. To begin, it is necessary to differentiate three types of indemnity agreements, which may be distinguished by the breadth of the indemnitor’s obligation to make good losses, damages or liabilities incurred by a third party: 1. Limited form – a limited indemnity clause obliges the indemnitor to make good those losses, damages
or liabilities arising from the indemnitor’s negligence or fault. Simply stated, the indemnitor must cover only those liabilities it caused. 2. Intermediate form – distinguished from the limited form clause because it obliges the indemnitor to make good those losses, damages or liabilities arising out of the indemnitee’s concurrent or partial negligence. Simply stated, the indemnitor must cover those liabilities it caused, even though the other party contributed to cause those liabilities. 3. Broad form – distinguished from limited and intermediate because it obliges the indemnitor to make good all losses, damages or liabilities regardless of the indemnitee’s sole negligence or fault. Here, the indemnitor covers all liabilities, regardless of whether it contributed to cause those liabilities. Whereas the limited indemnity provision merely requires the indemnitor make good only those losses directly attributable to it, both the intermediate form and the broad form provisions purport, to varying degrees, to shift the burden of indemnitee’s negligent behavior onto the indemnitor. That is, Party X will indemnify Party Y for Party Y’s own negligence, even if Party X was not negligent. Obviously, allowing Party Y an unfettered right to pawn its negligent behavior onto Party X raises red flags as it runs contrary to a fundamental tenet of tort law: an entity should be responsible for its own injurycausing conduct.4 Conversely, however, these more robust indemnity provisions might serve public interest by facilitating the freedom of the contracting entities to mutually allocate risks in accord with their own guideline, rather than a uniform dictate.5 As a primary example substantiating broader indemnity provisions, consider the instance in which an employee of Party X is injured primarily, but not solely, as a result of the employee or Party X’s
negligence. In considering these potential liabilities, X and Y might prefer a reciprocal indemnity agreement where X and Y accept the sole responsibility for their own employees.6 A reciprocal agreement serves the dual purpose of giving X and Y certainty regarding each entity’s liability exposure while ensuring that employees are subject to the direction and control of only one master, their employer. In this instance, Texas acknowledges the right of contracting entities to allocate risks as they see fit. Thus, their apparent benignity aside, the interpretation of indemnity agreements involves more than reading the provision and giving effect to its terms in accord with their ordinary, popular and commonly-accepted meanings. Rather, their interpretation necessitates balancing competing policy interests of allowing contracting entities the liberty to freely and voluntarily enter into a given contract with the State’s interest in ensuring that negligent parties be responsible for their own injury-causing conduct. Inherent within this calculus, courts will often assess the relative “bargaining power” of the contracting entities to ensure that a given indemnity provision was the result of a mutual, bargained exchange among equals rather than a product of the large over the small. In interpreting indemnity language within a contract, Texas applies those same rules of contractual interpretation that it would apply to other contracts.7 So long as the agreement is not ambiguous, the court will ascertain the intentions of those making the agreement and give effect to those intentions.8 If ambiguous, however, the indemnity agreement will be strictly construed in favor of the indemnitor; i.e., the court will void the indemnity agreement.9 But the court will not manufacture ambiguity; words and phrases are given their ordinary, popular and commonly-accepted meaning.10 To balance the competing policy interests discussed above, Texas has established the two-pronged “fair notice” test requiring contracting parties intend-
ing to shift the risk of negligent conduct from one party to another to provide “fair notice” of that intention.11 First, “fair notice” requires the parties to specifically express their intention to transfer risk from one party to another within the four corners of the contract.12 Thus, if Party Y intends Party X to make good those liabilities incurred from Party Y’s own conduct, the proffered indemnity agreement must specify those conditions under which X must make good. For example, if Y intends X to make good liabilities arising from Y’s sole negligence, the agreement must specify that intent because, as we have seen, any ambiguity will nullify the indemnity agreement.13 Courts interpreting these intermediate and broad form agreements in the face of the “express negligence” rule will generally approach the agreement systematically, looking for identifiable “magic language” signifying the mutual intent to shift the consequences of one party’s negligence onto another. Thus, when reading a potential indemnity agreement, the reader should ask whether it includes the “magic language,” e.g., “EVEN TO THE EXTENT SUCH CLAIM IS CAUSED... BY THE CONCURRENT OR SOLE NEGLIGENCE OR FAULT” of the indemnified party. Without these magic words that the agreement specifically protects the indemnified party from its OWN or SOLE negligence, or that the agreement applies “regardless of fault,” the proffered agreement does not give “fair notice.” This rule applies even if an otherwise “fair reading” would indicate that the contracting parties “inferred,” rather than explicitly stated, their intent to create a broad form agreement; an “implicit indemnity agreement requiring the [indemnitor] to deduce [its] full obligation is unenforceable.”14 But “fair notice” involves more than specificity in defining those circumstances under which the indemnity agreement would apply. Under its second prong, the Texas “fair notice” doctrine requires the indemnity provisions to be conspicuous, i.e., something must appear within the contract to attract the attention of a thehoustonlawyer.com
reasonable person when [s]he looks at it.15 Stated more simply, an indemnity agreement should call attention to itself ensuring that the indemnitor (Party X) understands that by executing the contract, it is assuming responsibility to make good certain losses of Party Y. By its nature, conspicuousness ensures a base level of mutuality among the contracting parties. An indemnity agreement hidden within a contract evinces subterfuge rather than a mutual, bargained exchange among equals. Consider the following statements made by courts interpreting whether a given clause is conspicuous. Conspicuous • More visible than other items on the page.16 • The entire contract consists of one page; the indemnity language is on the front side of the contract and is not hidden under a separate heading.17 • Provisions referred specifically to the indemnity provision on the reverse side of the purchase order and there was printed in large, red type on the front of each page of the order a notice that the agreement included the terms on the reverse side of the order.18 • Paragraph containing indemnity agreement is eight lines long and the subject matter of the entire paragraph is “waiver and release.”19 Not Conspicuous • Hidden on the reverse side of a sales order under a paragraph entitled “Warranty” and was surrounded by completely unrelated terms.20 • Appearing on the back side of a delivery order.21 • The language appeared in small, light type on the back of a rental form and was surrounded by unrelated terms.22 • The provisions are located on the back of a work order in a series of numbered paragraphs without headings or contrasting type.23 Because the “fair notice” test remains an imperfect scale from which to weigh 20
competing public policy interests and to ensure that indemnity agreements are a product of mutual bargaining rather than unfair dictates, intermediate and broad form indemnity provisions have come under increasing legislative scrutiny. In 1985, in enacting the Texas Oilfield Anti-Indemnification Act, the Texas Legislature found oil and gas contracts were often the result of an inequality among contractors rather than a mutual obligation and, consequently, against public policy.24 Thereafter, the Legislature mandated that indemnity agreements pertaining to these interests be mutual and supported by insurance.25 Similarly, the Legislature enacted Chapter 130 of the Texas Civil Practices & Remedies Code to protect registered architects and licensed engineers from abusive property owners in certain construction projects by forbidding property owners from requiring architects and engineers to indemnify that property owner from the owner’s negligence.26 Likewise in 2011, the Texas Legislature enacted Texas Insurance Code Section 151.102, prohibiting all intermediate and broad form indemnity provisions in construction contracts after January 1, 2012.27 The Legislature defined “construction contract” broadly, essentially including any agreement affecting the design, construction, or alteration of any building, structure or other improvement.28 Additional Insured Endorsements Recalling the earlier acknowledgment that there is nothing inherent to indemnity agreements making their interpretation the exclusive prerogative of the legal profession, one presumes the reader has readily digested both the different types of indemnity agreements and the essential legal framework under which Texas courts will give effect to these risk-shifting agreements. Indeed, the reader should be motivated to do so because these disputes often involve significant amounts of money and their apparent lack of complexity often operates to increase, rather than decrease, the number of potential interpretations. But no study, however brief, of indemnity
agreements would be complete without a discussion of insurance issues, which add further complexity. Sophisticated risk-shifting agreements usually require a prospective indemnitor to guarantee its ability to comply with its indemnity obligations by purchasing liability insurance, thus protecting the presumed indemnitee against potential insolvency. While this insurance mandate can be a simple directive within the indemnity agreement that the putative indemnitor maintain the requisite liability coverage, most risk-shifting agreements involve a separate and distinct “additional insured” provision requiring the prospective indemnitor to take the additional precaution by adding the indemnitee as an “additional insured” onto its commercial general liability (CGL) insurance policy. Under Texas law, placing the insurance requirement within the indemnity language, rather than as a separate and distinct obligation, makes the directive contingent upon (or supplemental to) the larger indemnity language. Thus, if the indemnity language fails, the insurance obligation fails also; the insurance provision has no effect beyond the applicability of the indemnity agreement.29 But by merely separating the insurance obligation from the indemnity obligation, the insurance obligation stands or falls on its own, independent of the indemnity provision. A properly written, separate “additional insured” provision can effectively relieve the presumed indemnitee of any financial burden associated with its own negligent behavior, even if the indemnity agreement is invalid.30 While a detailed legal discussion of these “additional insurance” provisions is beyond the scope of this paper, a general overview is necessary. Disputes over “additional insured” provisions ultimately boil down to a disagreement between two or more insurance companies over which of them is financially responsible for a given claim. In the abstract, insurance companies loathe providing coverage to “additional insured” for the additional insured’s own negligence and systematically object.
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Thus, the nature of the CGL policy and the language within “additional insured” endorsement is of paramount importance. By and large, additional insured provisions generally come in two types. First, the given policy may specifically name the “additional insured,” providing that additional insured with a “certificate of insurance.”31 More commonly, however, a CGL policy will simply define “insured” to include, for example, “any person or organization that is an owner of real property or
personal property on which you are performing ongoing operations or a contractor on whose behalf you are performing ongoing operations...” Obviously, for the “additional insured,” the certificate of insurance is preferable as it constitutes unmistakable evidence of coverage under the policy and that this coverage applies independently of any indemnity language.32 Conversely, however, the second type of language is often preferable to insured contractors, especially when that insur-
ance needs to be spread among numerous participants in a risk-creating activity.33 Ultimately, when negotiating a services agreement, the parties should consider the extent they desire the additional legal protection afforded by carrying a “certificate of insurance.” In conclusion, one trusts the reader finishes this brief overview of indemnity agreements armed not only with the necessary framework from which to read and interpret indemnity agreements but also with the ability to consider and compose indemnity language that serves their clients’ interests. And while poking fun at omnipresent disconnect between pretentious lawyers and contemptuous clients, applying Kierkegaard’s maxim to enlighten the divergent perspectives between clients’ “living forwards” and lawyers’ “understanding backwards” should embolden us to compose indemnity agreements within the common understanding of lawyers and non-lawyers alike. Indeed, one should not set this article aside determined to encrypt future indemnity agreements in rote legal jargon unintelligible to all. Ultimately, one should draft indemnity agreements with the expectation that they will be read and applied. Preston D. Hutson practices with LeClair Ryan. His practice is dedicated to personal injury and civil litigation. He is a member of The Houston Lawyer editorial board. Endnotes
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1. BLACK’S LAW DICTIONARY 837 (9th ed.). 2. Safeco Ins. Co. of Am. v. Gaubert, 829 S.W.2d 274, 281 (Tex. App.—Dallas 1992, writ denied). 3. SØREN KIERKEGAARD (1843), in THE JOURNALS OF KIERKEGAARD (Alexander Dru ed., 1959), reprinted in THE SOUL OF KIERKEGAARD: SELECTIONS FROM HIS JOURNAL at 89 (Alexander Dru ed., 2003). 4. C.f., F.F.P. Operating Ptnrs., L.P. v. Duenez, 237 S.W.3d 680, 690 (Tex. 2007). 5. C.f., Energy Serv. Co. of Bowie, Inc. v. Superior Snubbing Servs., 236 S.W.3d 190, 196 (Tex. 2007). 6. Id. 7. Dupre v. Penrod Drilling Corp., 993 F.2d 474, 478 (5th Cir. 1993). 8. Id. 9. Keystone Equity Mgmt. v. Thoen, 730 S.W.2d 339, 340 (Tex. App.—Dallas 1987, no writ). 10. Safeco Ins. Co. of Am. v. Gaubert, 829 S.W.2d 274, 281 (Tex. App.—Dallas 1992, writ denied). 11. Houston Lighting & Power Co. v. Atchison, Topeka & Santa Fe Ry. Co., 890 S.W.2d 455, 458 (Tex. 1994). 12. Arthur’s Garage, Inc. v. Racal-Chubb Sec. Sys., 997 S.W.2d 803, 814 (Tex. App.—Dallas 1999, no pet.), citing Ethyl Corp. v. Daniel Const. Co. 725 S.W.2d 705, 708 (Tex. 1987). 13. Ethyl Corp. v. Daniel Const. Co., 725 S.W.2d 705, 708 (Tex. 1987).
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14. Atlantic Richfield Co. v. Petroleum Personnel, Inc., 768 S.W.2d 724, 725 (Tex. 1989). 15. Storage & Processors, Inc. v. Reyes, 134 S.W.3d 190, 192 (Tex. 2004). 16. U.S. Rentals, Inc. v. Mundy Serv. Corp., 901 S.W.2d 789 (Tex. App—Houston [14th Dist.] 1995, writ denied). 17. Enserch Corp. v. Parker, 794 S.W.2d 2, 9 (Tex. 1990). 18. Goodyear Tire & Rubber Co. v. Jefferson Constr. Co., 565 S.W.2d 916, 920 (Tex. 1978). 19. Lawrence v. CDB Servs., Inc., 16 S.W.3d 35 (Tex. App. 2000) aff’d, 44 S.W.3d 544 (Tex. 2001). This case deals with a release of a claim, rather than an indemnity agreement, but releases and indemnity agreements are held to the same standard. 20. K & S Oil Well Serv., Inc. v. Cabot Corp., 491 S.W.2d 733, 737 (Tex. Civ. App.—Corpus Christi 1973, writ ref’d n.r.e.). 21. Rourke v. Garza, 511 S.W.2d 331, 344 (Tex. Civ. App.— Houston [1st Dist.] 1974), aff’d, 530 S.W.2d 794 (Tex.1975). 22. Safway Scaffold Co. v. Safway Steel Prod., Inc., 570 S.W.2d 225, 228 (Tex. Civ. App.—Houston [1st Dist.] 1978, writ ref’d n.r.e.) . 23. Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 506 (Tex. 1993). 24. TEX. CIV. PRAC. & REM. CODE § 127.002. 25. Ranger Ins. Co. v. Am. Int’l Specialty Lines Ins. Co., 78 S.W.3d 659 (Tex. App.—Houston [1st Dist.] 2002, pet. dism’d). 26. TEX. CIV. PRAC. & REM. CODE § 130.001 et seq. 27. TEX. INS. CODE ANN. § 151.102. 28. TEX. INS. CODE ANN. § 151.001(5). 29. ALCOA v. Hydrochem Indus. Servs., Inc., 13-02-00531-CV, 2005 WL 608232 (Tex. App.—Corpus Christi Mar. 17, 2005, pet. denied), citing Getty Oil Co. v. Ins. Co. of N. America, 845 S.W.2d 794, 804-5 (Tex. 1992). 30. Id. 31. Evanston Ins. Co. v. ATOFINA, 256 S.W.3d 660 (Tex. 2008). 32. Id. 33. Polscer, Diane, Additional Insured Status and Contractual Indemnity Provisions, Are You Really Covered? October 18, 2013, available at http://www.insurancelawforum. com/2013/10/articles/liability-coverage/additional-insured-status-and-contractual-indemnity-provisions-areyou-really-covered/
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at the first page of search results, others may be more thorough. I recommend looking through the first five pages of search results.
By Taunya Painter
Managing Internet Risks & Benefits
This is the first in a series of articles covering social media and online issues for attorneys and their families
hile working on creating or enhancing your online presence, it is a good idea, at the same time, to put in place some defenses to potential reputational injury. All too often when it comes to online reputation, we wait for something bad to happen. However, just like you lock your doors, set alarms and maybe take other precautions before going to bed at night, there are protections you can set up to protect against would-be assailants of your reputation. “Lock up” your name and space Buy the domain names for you and your family members. For instance, if you are Jane Doe, buy the domain www.janedoe.com. You can leave the sites dormant, or you can route them to your law firm website or other professional site. This is a way of ensuring that someone with malicious intent does not use the domain name to defame you and, on the positive side, also allows you to pick up a potential asset that you can use in your marketing. This protective measure is cheap and easy. Claim, populate and password protect all of your profiles on professional sites. Start with legal directory sites because they rank high on search engine queries. Highly-ranked sites include: avvo.com, justia.com, martindale.com, texasbar. com, findlaw.com and law.com. There are also business or more general directory sites that may have an unclaimed profile for you. Finally, start a profile for
social networking sites like linkedin.com, facebook.com, plus.google.com and twitter.com. Even if you do not want to be an active participant in these social networking sites, you should claim and populate your profile with at least a link to your professional website. After you claim your profiles, keep them updated and check them regularly for any negative feedback that may be posted. Frequently, this defamation occurs in the form of comments that are anonymous or posted using a pseudonym. Recently, I was looking up a lawyer online and found a handful of terrible reviews by self-identified former clients, including things like the attorney “has no ethics,” “failed to file critical documents,” etc. I do not know if this seasoned practitioner is aware of these online comments, but I know for certain that anyone who searches for this lawyer online has read them. Not paying attention to social media has seriously undermined this attorney’s professional reputation. Set automatic searches for when problems arise Set search alerts for Google, Bing and Yahoo. This will give you quick notice whenever your name appears online. If you have a common name, you might have to include in the search the name of your firm, or distinguishing search terms, such as “lawyer” or “Houston.” If your law firm website contains articles or content that allows reader comments, keep an eye out for those, as well, and have your website administration set notifications when new comments are posted. In addition to your name and website alerts, periodically do search engine queries for different variations of your name. While many people will only look
Act quickly You clearly are in control of your firm website and profiles in sites like LinkedIn and Facebook. If someone posts defamatory comments on those sites, delete them immediately. For sites to which you do not have administrative rights, your options vary. If a comment is libelous, you should request that the site remove it. Site administrators for news websites (e.g., Houston Chronicle, Business Week, New York Times, etc.) are frequently cooperative, if the comment is defamatory and there is a request to have it removed. Thus, if you are interviewed for a news or magazine article, it is always a good idea to monitor the comments. It is harder to get comments removed from YouTube and similar sites, but it is worth a try. These site administrators, and their legal support departments, are typically overwhelmed with requests and only act in the most egregious of circumstances. If you cannot get a defamatory comment removed, there are two approaches. One is file a defamation lawsuit, which sometimes has to be against a John Doe defendant, so you can use discovery to learn the true identity of the defendant. A second method is to ask colleagues and current or former clients to add their online feedback about their positive experience in working with you. Regardless of your decision about litigation, the second approach is always a good idea to do anyway. With a lot of genuine feedback and positive comments, any negative comment is naturally diluted, making a reasonable reader of your feedback wonder whether the poster of the over-the-top negative comment was just a disgruntled person. In the next edition of The Houston Lawyer, we will address strategies for building a positive online reputation that gets the attention of potential clients and referring lawyers. Taunya Painter is a member of Painter Law Firm PLLC, where she specializes in business, contract and international law. She is an associate editor for The Houston Lawyer. thehoustonlawyer.com
By Emily Smith
Temporary Protected Status and the Syrian Conflict
emporary Protected Status” (“TPS”) is an interim immigration status in the United States based on the idea that sometimes our normal, orderly immigration policy should be eclipsed in favor of the more immediate need to protect people from strife and violence. In times of unimaginable crisis, TPS means that however aliens arrive and whatever their legal status, there is a way for America to welcome the tired, poor, and “huddled masses yearning to breathe free.”1 Indeed, TPS provides certain aliens with safe harbor during the storm. By definition, TPS is only applicable in the wake of extraordinary international strife, such as the ongoing Syrian conflict. Currently, Syria is led by President Bashar al-Assad.2 In May 2011, Assad sent army tanks to several Syrian cities killing civilians and devastating political opposition to his rule.3 As the situation deteriorated, opportunists from other countries began to infiltrate the Syrian rebel forces. The latest reports indicate that of the roughly 100,000 rebel fighters, 10 percent are jihadists linked to al-Qaeda.4 With al-Qaeda rushing in, scores of Syrian civilians are rushing out. The latest estimates from the United Nations High Commission for Refugees indicate that seven million Syrians—a full one-third of its population—are either displaced in the country or are refugees abroad, including in the United States.5 Thus, despite a ceasefire, the strife, conflict and need for an American response, have not waned. The Syrian conflict has caused many to look at the TPS procedures and the challenges the law imposes. Process and Effect of TPS Designation TPS is a relatively new status and response to extreme, unexpected crises. It was established in 1990, as part of the Immigration Act.6 To date, there are eight TPS-designated countries, including El
Salvador, Haiti, Honduras, Nicaragua, Somalia, Sudan and South Sudan.7 In order to become a TPS country, the Secretary of Homeland Security must determine that there is: (1) an ongoing armed conflict; (2) an environmental disaster or epidemic; or (3) other extraordinary and temporary circumstances.8 With this designation, the Secretary affirms that the conditions in the foreign country are—briefly—too dangerous or too unstable for an alien to safely return. TPS was therefore created as a temporary humanitarian response. It was not intended to provide a path to citizenship and does not give a beneficiary lawful permanent residency status.9 Indeed, it is not necessarily targeted at those interested in immigrating to America. The designation applies solely to those who, for whatever reason, are already within the U.S. As long as the crisis continues, a beneficiary cannot be detained or removed.10 TPS Application Process TPS protection is neither automatic nor permanent. Even after the Secretary designates a country, an individual applicant must still apply and reapply every six to 18 months.11 In this way, an applicant must constantly meet a set of strict eligibility requirements, each of which comes with high hurdles. While the first two barriers, identification and criminal convictions, challenge TPS applicants from any designated country equally, the third, terrorist activity,12 is uniquely demanding for Syrians. Identification Challenges A TPS candidate must prove his identity and national origin with several forms of “primary” evidence, including a passport or birth certificate.13 While an ostensibly reasonable request, the problem is that refugees are simply not afforded the luxury of unhurried and orderly travel. Survival is the primary goal. Here, the preservation of important paperwork becomes less imperative as Syrian civilians dodge a barrage of “shelling and bombardment by Government forces.”14
Criminal Conviction Challenges An alien is ineligible for TPS if he has been convicted of any felony, or two or more misdemeanors in the United States.15 “Terrorist Activity” Challenges As a result of the September 11, 2001 attacks, TPS applicants, like other immigrants, are subject to Immigration and Nationality Act Section 212(B). This provision states that any alien cannot be admitted who: (1) has engaged in a terrorist activity, (2) has, under circumstances indicating an intention to cause death or serious bodily harm, incited terrorist activity; (3) is a representative of a terrorist organization; or a political, social, or other group that endorses or espouses terrorist activity; or (4) is the spouse or child of an alien who is inadmissible, inter alia.16 In addition, “terrorist activity” includes any action which is either unlawful under the laws of the place where it is committed, or would be unlawful in the U.S., and which involves: (1) highjacking or sabotage of any vehicle; (2) the use of a biological, chemical or nuclear weapon; or explosive, firearm, or dangerous device with the intent to endanger anyone’s safety or to cause substantial property damage; or (3) threat, attempt, or conspiracy to do any of these things.17 Applying these rules to the Syrian conflict makes every rebel activity seem suspect. There is little question that Syrian rebels are being joined and aided by al-Qaeda and other terrorist groups. In fact, there are approximately 100,000 Syrian rebels in over 1,000 different rebel groups.18 The majority of these factions fall somewhere between the most and least extreme ideologies; however, the Syrian insurgency and its numerous components are in a state of constant flux. Relentless fighting—both internally and with the Syrian government—has resulted in little organization, much less membership rosters and ideological polling.19 It is nearly impossible for U.S. Citizen and Immigration Services (“USCIS”) to identify which rebel groups have been infiltrated by terrorists and which have not.
Syrian TPS applicants who once had any connection to any Syrian rebel group are in danger of denial because of a potential tangential link to a terrorist group. Even a TPS hopeful without any connection to violence or terrorism may be vetted and disqualified on the basis of her family’s actions; a father’s attempt to steal a Syrian military truck for its fuel, for instance, may be enough to mark his daughter as a terrorist. This reality separates Syria from other TPS-designated crises; it places a different lens on a Syrian TPS application than that of a Haitian20 or Nicaraguan.21 For Syrians, the banality of war and struggle to survive might be considered evidence of subversion. Restructuring TPS to Incorporate Country-Specific Procedures Currently, TPS treats each humanitarian emergency and arriving alien the same; regardless of the circumstances, the rules, procedures, and barriers are equivalent. These similarities provide arriving aliens and USCIS with structure and clarity. In the case of Syria, however, these one-size procedures also create serious inequities between conflicts; in the end, they may place innocent people at risk. These challenges have called for some to call for restructuring the TPS system, including country-specific requirements. This makes sense, in that TPS protections are only offered to specific countries, in specific situations. In this way, TPS is simply not like asylum or permanent residency; the U.S. is not dealing with a world of immigrants. Rather, the U.S. conducts a careful analysis of particular countries in an effort to understand and appreciate the country’s individual dangers.22 Currently, after the Secretary’s designation, the Department of Homeland Security (“DHS”) and USCIS already set country-specific registration and continuous residency deadlines.23 DHS could also set special procedures for other parts of the TPS application process. In the case of Syria, for instance, DHS could develop thehoustonlawyer.com
a process for recognizing and more carefully evaluating the various rebel groups and their terrorist ties.24 DHS could also work with intelligence agencies to conduct background checks on applicants. While a potentially expensive and time-consuming solution, the U.S. need not apply this heightened procedure to every TPS designated nation. Syrians escaping civil war are simply not facing the same dangers and choices as Haitians escaping the aftermath of an earthquake.
Lumping them into the same immigration status does not make their stories and challenges the same. Conclusion In spite of its faults, TPS is a profoundly creative humanitarian solution. Instead of refugee camps, military intervention or permanent immigration, it provides the U.S. with an alternative response to extreme violence and international crises. As a result, TPS does not force a refugee LIVE IN CONCERT
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to choose between his lifelong home and his interim safety. It appreciates “limbo,” the time between stability. By implementing one change to its procedures, the U.S. can accomplish what the current TPS system cannot: sanctuary, rather than a onesize fits all stopgap. Emily Smith is an attorney with Berg & Androphy Endnotes
1. Emma Lazarus, THE NEW COLOSSUS (1883). 2. Syria profile, BBC NEWS (Sept. 19, 2013), available at http://www.bbc.co.uk/news/world-middleeast-14703995. 3. Id. 4. Ben Farmer & Ruth Sherlock, Syria: nearly half rebel fighters are jihadists or hardline Islamists, says IHS Jane’s report, THE TELEGRAPH, Sept. 15, 2013, available at http://www. telegraph.co.uk/news/worldnews/middleeast/syria/ 10311007/Syria-nearly-half-rebel-fighters-are-jihadistsor-hardline-Islamists-says-IHS-Janes-report.html. 5. Number of Syrian Refugees Tops 2 Million Mark with More on the Way, United Nations High Commissioner for Refugees (Sept. 3, 2013), available at http://www.unhcr. org/522495669.html. 6. Immigration Act of 1990, Pub. L. 101–649, 104 Stat. 4978. 7. Temporary Protected Status, U.S. Citizenship & Immigration Services, available at http://www.uscis.gov/portal/site/uscis/menuitem. eb1d4c2a3e5b9ac89243c6a7543f6d1a/?vgnextoid=848f 7f2ef0745210VgnVCM100000082ca60aRCRD&vgnextc hannel=848f7f2ef0745210VgnVCM100000082ca60aRC RD (last visited Sept. 26, 2013). 8. 8 U.S.C. § 1254a (1996). 9. Id. at § 1255 (detailing procedures for adjustment of status of nonimmigrant to that of person admitted for permanent residence). 10. Id. at § 1254a(a)(1)(A). 11. Id. at § 1254a(b)(3)(C); Extension and Redesignation of Syria for Temporary Protected Status, 78 Fed. Reg. 36223 (June 17, 2013). 12. 8 C.F.R. §§ 1244.3–4 (2013); Immigration & Nationality Act, 8 U.S.C. § 1182(a) (2013). 13. 8 C.F.R. § 1244.9(a)(1). 14. Most Syrians Killed in Unlawful Conventional Attacks, UN Human Rights Panel Says, United Nations News Center (Sept. 16, 2013), available at http://www.un.org/apps/ news/story.asp?NewsID=45858&Cr=syria&Cr1= (emphasis added). 15. 8 C.F.R. § 1244.4. 16. There is a notable exception. This rules does not apply to a spouse or child—(1) who did not know or should not reasonably have known of the activity causing the alien to be found inadmissible under this section; or (2) whom the consular officer or Attorney General has reasonable grounds to believe has renounced the activity causing the alien to be found inadmissible under this section. 8 U.S.C. § 1182(a)(3)(B)(ii). 17. Id. § 1182(a)(3)(B)(iii). 18. Farmer & Sherlock, supra n. 4. 19. See Anne Barnard & Hwaida Saad, Syrian Rebel Infighting Undermines Anti-Assad Effort, NEW YORK TIMES, July 12, 2013, available at http://www.nytimes.com/2013/07/13/ world/middleeast/syrian-rebel-infighting-underminesanti-assad-effort.html?pagewanted=all&_r=0 (“As the fighting has accelerated, the most radical groups have received the most resources from abroad, allowing them to emerge as the most successful fighting forces.”). 20. Haiti was given TPS designation as a result of an earthquake in 2010. Press Release, Dept. of Homeland Security, Statement from Homeland Security Secretary Janet Napolitano on Temporary Protected Status (TPS) for
Haitian Nationals, (Jan. 15, 2010), available at http:// www.dhs.gov/news/2010/01/15/secretary-napolitanotemporary-protected-status-tps-haitian-nationals. 21. The Secretary of Homeland Security recently extended Nicaragua’s TPS designation because “[t]here continues to be a substantial, but temporary, disruption of living conditions in Nicaragua resulting from Hurricane Mitch, and Nicaragua remains unable, temporarily, to handle adequately the return of its nationals.” Extension of the Designation of Nicaragua for Temporary Protected Status, 78 Fed. Reg. 20128 (Apr. 3, 2013). 22. Syria’s redesignation, for example, includes a lengthy analysis of the civil war. In part, it stated, “Conditions in Syria are unstable, volatile and dangerous, and have worsened significantly since the prior designation took effect on March 29, 2012. Acts of violence and human rights abuses have been reported in most major urban centers and have significantly increased over the last year, and access to humanitarian assistance for victims of the ongoing strife continues to be a serious challenge.” Extension and Redesignation of Syria for Temporary Protected Status, 78 Fed. Reg. 36225 (June 17, 2005). 23. See Temporary Protected Status Designated Country: Syria, U.S. Citizenship & Immigration Services, available at http://www.uscis.gov/portal/site/uscis/menuitem. eb1d4c2a3e5b9ac89243c6a7543f6d1a/?vgnextoid=3863 068d9c456310VgnVCM100000082ca60aRCRD&vgnext channel=3863068d9c456310VgnVCM100000082ca60aR CRD (last visited Sept. 26, 2013). 24. The number of TPS applicants is not astronomical. The U.S. only granted TPS to 2,600 Syrian people during the first registration period, and only 9,000 are predicted to enroll in the current registration period. DHS Announces Re-designation and 18-Month Extension of Temporary Protected Status for Syria, U.S. CITIZENSHIP & IMMIGR. SERVICES (June 17, 2013), http://www.uscis. gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614 176543f6d1a/?vgnextoid=70045815fd15f310VgnVCM10 0000082ca60aRCRD&vgnextchannel=17dcb6f2cae6311 0VgnVCM1000004718190aRCRD.
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Meet New HBA President M. Carter Crow The Houston Lawyer talked to new Houston Bar Association President M. Carter Crow about his family, his legal career and his plans for the bar year. THL: Where were you born and where did you grow up? Crow: I was born and raised in Altus, Oklahoma, a small town in western Oklahoma. THL: Tell me about your family. Crow: My wife Meredith and I have been married since 1994, and she is a great support for me. We have three great
THL: Where did you go to college and law school? Crow: I went to Oklahoma State University and the University of Oklahoma College of Law. THL: How did you become interested in law as a career? Crow: My father was a state senator, and I have always been interested in the law. I knew I wanted to be a lawyer from the time I was in elementary school. THL: What are your areas of specialty and with what firms have you worked in your legal career? Crow: I specialize in employment law. I have always practiced at Fulbright & Jaworski LLP, now Norton Rose Fulbright.
alker and C Thomas, W
New HBA Pr
kids, Walker, 16, Charlotte, 13 and Thomas, 11.
THL: Who were your mentors? Crow: I have been fortunate to have many great mentors, such as Bill Maines, John Beckworth, Rick Carrell, Layne Kruse, Otway Denny and Gus Blackshear, and others at our firm. I owe my career to them. THL: How did you get interested in volunteering with the bar? Crow: Bar service is part of our DNA at Norton Rose Fulbright. We believe it is a duty owed by every lawyer to use our abilities as lawyers to give back to the community. THL: What do you think is the role of the organized bar in society today? Crow: Our role is to support lawyers, and help them be the best professionals they can be. We also make our communities better
through pro bono, education and other public service programs. THL: What do you see as the role of the president in the Houston Bar Association? Crow: I believe the presidentâ€™s role is to lead the bar in its efforts to support our members and our service to the community. THL: What areas will you focus on during your administration? Crow: We are focusing on supporting our sections and members in ways such as better access to CLE, providing resources to parents and schools to help them deal with child Internet safety issues, continuing our veterans programs, and immigration law education. We will continue the focus groups we started last year and use that input to continue to improve our communications with members, help newly-licensed attorneys start a practice, and reach out to law students.
THL: Are you involved with other professional or community organizations? Crow: I am a Board member for the Greater Houston Partnership and Central Houston, as well as in my church. THL: Is there anything else you would like to bring out in this interview that is important to you?
THL: What do you think has changed most about the practice of law since you became licensed? Crow: The practice has become more specialized. Our members also have even more demands on their time. THL: What do you like to do outside of the practice of law? Crow: I am very involved in the activities of our three kids, and in my church, Christ the King Presbyterian Church. I also like to play golf and fish. Carter and
d Carter in
Crow: At the HBA we want to support our members. I encourage you to contact the HBA with any ideas on how we can enhance our service to you.
M. Carter Crow Takes Office As HBA President
Carter Crow of Norton Rose Fulbright took up the gavel as the 2014-2015 president of the Houston Bar Association at the organizationâ€™s Annual Dinner Meeting on May 15 at River Oaks Country Club. He succeeded David Chaumette of Chaumette PC. The gala evening was dedicated to the accomplishments of the HBA and its members during the past year. Chaumette presented the Presidentâ€™s Awards to outstanding committee and program chairs for 2013-2014, and the HBA honored its emeritus members who reached their 50th year of practice during the last bar year. Photos by Fred Provada
te with recogniti
met esents David Chau M. Carter Crow prg year. for an outstandin
The Crow fa
, Meredith, C
te and Walke
50-year member Dick Gregg
50-year member Bruce Mosier and his wife, Diane Mosier
50-year member Joseph Witherspoon III and his wife, Ann Witherspoon
50-year member Stephen Smith and his wife, Carol Smith
50-year member Hon. Shelly Hancock and his wife, Jane Hancock
50-year member David Redford and his wife, Jan Redford
50-year member Walter Jefferson and his daughter, Julie Alexander
50-year member N. Elton Dry and his wife, Donna Dry
50-year member S. John Odom and his wife, Carolyn Odom thehoustonlawyer.com
50-year member Joe Horrigan and his law partner, Linda Goehrs
50-year member Marion McDaniel and his wife, Mary McDaniel
50-year member James Boanerges and his guest, Gigi Horner
50-year member James Brannon and his wife, Cynthia Brannon
50-year member Tony Cavender and his wife, Paulette Wolfson
50-year member Robert Hinsley and his wife, Diane Hinsley
50-year member Raymond Kerr and his wife, Nancy Kerr
50-year member Ralph Sharpe, Jr. and his wife, Carol Sharpe
50-year member Daryl Bristow and his wife, Rachel Bristow
50-year member Larry Thompson and his wife, Vicky Thompson
50-year member AlbertTabor, Jr. and his wife, Kay Tabor
50-year member Harry Lawson and his wife, Sue Lawson
50-year member Charles Stephenson and his guest, Verena Zbinden
50-year member Harless Benthul and his daughter, Trace Townsend
50-year member Austin Oâ€™Toole and his wife, Valerie Sherlock
50-year member the Hon. William McCulloch and his wife, Anne McCulloch
50-year member Edward McDonough, Jr. and his wife, Diane McDonough
50-year member Tom Letbetter and his wife, Linda Letbetter thehoustonlawyer.com
President’s Awards David Chaumette presented the 2013-2014 President’s Awards to outstanding committee chairs during the HBA’s Annual Meeting..
The Hon. Denise Collins and Daniel D. Horowitz were honored as co-chairs of the Administration of Justice Committee.
Charles R. Gregg was honored as chair of the Membership and Member Benefits Committee. 36
Angelica M. Hernandez and Knox Nunnally were honored as co-chairs of the Judicial Polls Committee.
Demetri Economou and Bradford Crockard were honored as co-chairs of the Special Olympics Committee.
Stewart W. Gagnon was honored as chair of the County Law Library Committee.
Robert Painter was honored as editor-in-chief of The Houston Lawyer.
Pro Bono in Houston...
Rebuilds Families…Helps Veterans . . .Provides Peace of Mind for Seniors
Equal Access Champions
The firms and corporations listed below have agreed to assume a leadership role in providing equal access to justice for all Harris County citizens. Each has signed a five-year commitment to provide representation in a certain number of cases through the Houston Volunteer Lawyers. For more information contact Kay Sim at (713) 759-1133. *Bold type indicates new Equal access Champion.
Large Firm Champions Andrews Kurth LLP Baker Botts L.L.P. Bracewell & Giuliani LLP Locke Lord LLP Norton Rose Fulbright Vinson & Elkins L.L.P.
Weil, Gotshal & Manges Winstead PC
Small Firm Champions
Gardere Wynne Sewell LLP Haynes and Boone, L.L.P. King & Spalding
Abraham, Watkins, Nichols, Sorrels, Agosto & Friend Beck | Redden LLP Burleson LLP Gibbs & Bruns LLP Hays, McConn, Rice & Pickering, P.C. Hughes Watters Askanase LLP Johnson DeLuca Kurisky & Gould, P.C. Kroger | Burrus McGuireWoods LLP Ogletree, Deakins, Nash, Smoake & Stewart, P.C. ReedSmith LLP Schwartz, Junell, Greenberg & Oathout, L.L.P Sidley Austin LLP Sutherland Asbill & Brennan LLP Weycer, Kaplan, Pulaski & Zuber, P.C. Yetter Coleman LLPP
Mid-Size Firm Champions
Boutique Firm Champions
Baker Hughes Incorporated BP America Inc. CenterPoint Energy, Inc. ConocoPhillips Exxon Mobil Corporation Halliburton LyondellBasell Marathon Oil Company Shell Oil Company
Intermediate Firm Champions
Adams & Reese LLP Akin Gump Strauss Hauer & Feld LLP Baker Hostetler LLP Beirne, Maynard & Parsons, L.L.P. Chamberlain, Hrdlicka, White, Williams & Aughtry Gray Reed & McGraw, P.C. Greenberg Traurig, LLP Jackson Walker L.L.P. Jones Day Gray Reed & McGraw, P.C. Morgan, Lewis & Bockius LLP Porter Hedges LLP Strasburger & Price, L.L.P. Susman Godfrey LLP
Blank Rome LLP Coane & Associates Connelly • Baker • Wotring LLP Edison, McDowell & Hetherington LLP Fullenweider Wilhite PC Funderburk Funderburk & Courtois, LLP Hicks Thomas LLP Hogan Lovells US LLP Jenkins & Kamin, L.L.P. Katten Muchin Rosenman LLP Ogden, Gibson, Broocks, Longoria & Hall, L.L.P. Sutton McAughan Deaver LLP Strong Pipkin Bissell & Ledyard, L.L.P. Wilson, Cribbs & Goren, P.C.
Brian Albrecht Law Office of Peter J. Bennett Law Office of J. Thomas Black, P.C. Law Office of Robbie Gail Charette Chaumette, PLLC Damani Law Firm Helene Dang Law Office of Papa M. Dieye The Ericksen Law Firm Flowers & Frankfort Frye, Steidley, Oaks & Benavidez, PLLC Fuqua & Associates, P.C. Hunton & Williams LLP Law Office of James and Stagg, PLLC The Jurek Law Group, PLLC Katine & Nechman L.L.P. Kim Ly Law Firm PLLC Gregory S. Lindley Law Office of Maria S. Lowry Alejandro Macias Martin R.G. Marasigan Law Offices Danielle H. Maya The Law Office of Evangeline Mitchell, PLLC Bertrand C. Moser Patel Ervin PLLC Law Office of Brent C. Perry, P.C. Pilgrim Law Office Robert E. Price Cindi L. Robison Scardino & Fazel Shortt & Nguyen, P.C. Jeff Skarda Tindall & England, P.C. Travis Torrence Diane C. Treich Norma Levine Trusch Clinton Yu
Houston Lawyers Who Made a Difference
Wil liam W. Kilgarl in By The Hon. Mark Davidson
t is a little-known fact that for much of our nation’s history, the Legislative Branch of government was quite unrepresentative of the population. Since legislators are elected from districts, and legislative bodies are often the creators of those districts, districts were drawn almost entirely to perpetuate those in power. The result was, in most states, the creation of districts that had very wide variations in populations. In Texas, there were variations as late as 1965 of as much as 700% between the most and least populous districts in the state. This was because, until the early 1960s, the Courts refused to enter the “political thicket” of redistricting. In the aftermath of the landmark opinion of Baker v. Carr, Texas legislators refused to act. A Houston lawyer, William W. “Bill” Kilgarlin, agreed to be the Plaintiff in a case to challenge the
the 215th District Court and as a Justice on the Texas Supreme Court. As an appellate judge, he worked to make discovery meaningful and bring Texas tort law into line with the majority of states. His years as a judge gave him the opportunity to be a mentor to a number of young lawyers, many of whom are today leaders of our profession. To residents of urban areas who have their interests heard in state capitols, Bill Kilgarlin brought us forward. To all who appreciate the fact that democracy depends on women and men who are elected from districts that fairly reflect our state, he made a difference.
Austin political establishment. The case of Kilgarlin v. Martin would eventually be appealed to the United States Supreme Court The result of Kilgarlin’s lawsuit was dramatic. Harris County had been limited to one state senator and seven state representatives before the suit, and elected three senators and 23 representatives after the new plan William W. Kilgarlin The Hon. Mark Davidson went into effect. Urban areas is an MDL judge and judge (retired) of around the state received, for the first time, the 11th District Court. His column for voting power that reflected their populations. The Houston Lawyer focuses on Houston Barbara Jordan was known to comment that attorneys who have had significant impact she never could have been elected to office on the law, the legal profession and those but for Kilgarlin’s courage and activism. served by the law. Kilgarlin would go on to serve as Judge of
in pro f e s s io n a l i s m
Craig Glidden Executive Vice President & Chief Legal Officer, LyondellBasell Industries
remember the pride and eagerness I had on my first day as a young associate at a venerable law firm over 30 years ago. My view of what it meant to be a lawyer had been shaped by the lawyers who were pillars of the small town where I grew up. They were not merchants, they were citizens. The rest of the community would rally around their leadership to bring a new business to town, to build a baseball field, or to better our schools. Although the business demands on lawyers today would be unrecognizable to my early heroes, todayâ€™s lawyers must still accept the responsibility of citizenship and leadership in their profession and in their communities. I am all too familiar with the challenges that lawyers face in pursuing a higher plateau of engagement. The best advice I can give to newer lawyers to overcome those challenges is to first master your chosen practice area. Expand your aperture by learning about subjects and events beyond your field. From
the range of community interests you find deserving, determine where you believe you can have a positive impact. Then, get involved and eventually amplify your impact by leading others to make a difference. For me, supporting and providing pro bono legal services has been particularly gratifying. I have been fortunate to work with the dedicated professionals and volunteers of the Houston Bar Foundation and the Houston Bar Association who strive to deliver and expand pro bono services to veterans, families in need, and those less fortunate. But, the most rewarding experience for me has been to personally work with pro bono clients. As one of my pro bono clients departs a meeting, invariably expressing outsized gratitude, I remember that I became a lawyer to make a difference and I just did. I get a taste of the pride and eagerness I had on my first day. I am renewed and rededicated to my profession. I am the one who is most grateful.
OFF THE RECORD
Seth Jaffe Hits the Ground Running
By Suzanne Chauvin
The Houston Lawyer
ow would we ever survive in Houston without our cars? Ask Seth Jaffe. Jaffe, an associate at Norton Rose Fulbright, runs to work every day. Otherwise, his primary mode of transportation is his bicycle. Jaffe started running from his home in Montrose to his downtown law office because he “wanted to commute without having to commute.” Before law school, Jaffe was an engineer at NASA and commuted from his Montrose home to the Clear Lake area every day. Once Jaffe started working downtown, he decided to try running to work to see if he could “pull it off.” He started running in September, when the weather was nice. As time went on, he adapted to changing weather conditions, buying a hat, a rain slicker, and a backpack. As you can imagine, running to work every day can present logistical challenges. So what do you do when it rains, or when it’s cold? Jaffe’s answer: “You get wet. And you get cold.” However, Jaffe has come up with clever solutions to many of the logistical problems. For one thing, he has learned to rely on redundancies. He has several hats, sets of rain gear, and phone bands. He also keeps an extra pair of running shoes at the gym. He leaves suits at the office, and transports shirts in his backpack. He leaves his computer at work, but can work remotely from home when necessary. Jaffe does his grocery shopping piecemeal. He runs by a grocery store on his way home and picks up items as he needs them —Jaffe says he has gone weeks without having to make a major trip to the grocery store. Jaffe has four saddle bags on his bike for grocery and other shopping. He has also incorporated a
hobby into his “green” lifestyle. Jaffe enjoys gardening and his garden supplies fresh vegetables. The engineer side of Jaffe has also noted the efficiencies in running. He found it took twelve and a half minutes to drive to work, as opposed to fifteen and a half minutes to run. The run, however, was actually more efficient because it performed double duty, providing thirty minutes of exercise a day, which reduced Jaffe’s gym time. He has also found out that he can get to work faster by running than on his bike, because he simply turns on the sidewalk when a light turns red. Because Houston is so urbanized, Jaffe finds he does not need to go very far to get everything he needs. Shopping, restaurants, and entertainment are plentiful near the downtown and Montrose areas. Jaffe, an intellectual property lawyer, may occasionally drive when he needs to visit clients outside the loop. However, he has recently installed a zip car program on his phone which allows members to rent cars from various locations in the city, and is in the process of enrolling in the program. Seth Jaffe has made the transition to a green lifestyle that few of us could imagine, particularly in a city the size of Houston. However, Jaffe has not completely given up his car—every few weeks or so, he does start the car just to make sure it still runs. Suzanne Chauvin is a Senior Assistant City Attorney in the Labor, Employment, and Civil Rights section of the Houston City Attorney’s Office.
THE MINORITY OPPORTUNITIES IN THE LEGAL PROFESSION COMMITTEE:
Clerkship Program Focuses on 1L Students By Farrah Martinez
of interviewing. Since last year, the comhe Minority Opportunities in nar to prepare the students for successmittee has increased the number of parthe Legal Profession (MOILP) ful completion of the summer clerkship. ticipating employers as well as increased Committee was established in The seminar focused on legal writing and the number of students hired through the the 1990-1991 bar year by then communication skills, office etiquette HBA President Pearand the importance of professionson Grimes along with the very alism. first co-chairs, Anthony SadberOn June 11, 2014, the commitry and the Honorable Lupe Salitee sponsored its Annual Summer nas. The committee was tasked Associate Luncheon at Rice Hotel with encouraging and promoting Crystal Ballroom. The theme was equal opportunities for minority “Navigating Your Way Within the lawyers in the legal profession Legal Profession and Building your and in the Houston Bar AssociaProfessional Profile.” tion by sponsoring and develop2013-2014 MOILP commiting educational programs as well tee co-chairs were John Spiller as service and support projects. of Strasbuger & Price, Lavonne In the 1996-1997 bar year, the Hopkins of Vinson & Elkins and committee established the 1L Yvonne Ho of Bracewell & GuilSummer Clerkship Program, one iani. The co-chairs encourage law of the only clerkship programs firms, governmental entities, coroffered for first-year law stuporations and non-profits to condents. Houston law firms, cortinue to participate in the MOIP porations, governmental instituProgram because even one placetions and courts have supported ment has the ability to profoundly Students participating in the HBA’s 1L Summer Clerkship Prothe program with the collective change the course of that student’s gram attended the June 11 luncheon at the Rice Hotel. Bookgoal of creating new employment ending the bottom photo, at left, 2014-2015 HBA President career. If you, your firm or agency and mentoring opportunities for M. Carter Crow and at right, 2013-2014 HBA President David is interested in participating in first-year minority law students Chaumette. next summer’s clerkship program, program from 56 students to 70 students. from the three Houston-area law schools. please contact Bonnie Simmons, HBA DiThis year nearly half of the students that The committee continues to reach new rector of Projects, at email@example.com or applied for placement through the MOILP heights and this year is no exception. 713-759-1133. program received and accepted summer The committee not only connects emclerkships. ployers with promising law students, but Farrah Martinez is the Director of LegisFollowing completion of the student it also helps prepare the students for the lative Affairs for the Harris County District application and employer selection proapplication and legal interview process Clerk. She also serves as a board member cess, the committee additionally hosted by hosting a seminar that provides tips for The Houston Lawyer and the Houston a mandatory writing and etiquette semion resume writing and the dos and don’ts Lawyer Referral Service. thehoustonlawyer.com
Attorney Fees— Breach of Implied Warranties By Ronald E. Hood
The Houston Lawyer
n Howard Industries v. Crown Cork & Seal Co., 403 S.W.3d 347 (Tex. App. – Houston [1st Dist.] 2013). the Houston Court of Appeals for the First Circuit recently expanded the law for recovery of attorney fees not only for breach of an express warranty but also for breaches of implied warranties as to upstream sellers of a product. Howard Industries v. Crown Cork & Seal Co., 403 S.W.3d 347 (Tex. App.—Houston [1st Dist.] 2013). In Howard, Crown argued that because its implied warranty claim was “grounded in contract” and because it sought only economic damages, it sounded in contract and was entitled to attorney fees as awarded by the jury. According to Crown, this was sufficient to bring the claim within § 38.001(8) of the Texas Civil Practice and Remedies Code. Howard, on the other hand, argued that since the transaction involved the sale of goods, the Uniform Commercial Code (UCC), as adopted by Texas as Chapter Two of the Business and Commerce Code, governed Crown’s breach of implied warranty of merchantability claim under which attorney fees are not recoverable. The Court simply stated that Howard’s contentions were without merit and did not support the conclusion that Crown could not recover its attorney fees. The Court concluded that as pleaded and tried to a jury, Crown’s breach of implied warranty of merchantability permitted an award of attorney fees for a suit based on a written or oral contract under the Civil Practice and Remedies Code Sec42
tion 38.001(8). Breach of warranty claims are statutorily provided for under the UCC. However, as the Texas Supreme Court observed in Medical City of Dallas, Ltd. v. Carlisle Corp., 251 S.W.3d 55, 60 (Tex. 2008) the provisions in the U.C.C. that set out the breach of warranty claims are silent on the allowance of attorney fees. Thus, several parties have sought attorney fees, mainly under §38.001(8) of the Texas Civil Practice & Remedies Code. In dicta the Texas Supreme Court in PPG Industries, Inc. v. JMB/Houston Centers Partners, Ltd. Partnership, 146 S.W.3d 79, 89 (Tex. 2004) suggested that attorney fees were recoverable under a breach of warranty claim. However, the Court cited no authority for this statement. See id. Notwithstanding these arguments, Texas courts have long refused to award attorney fees for breach of warranty claims under § 38.001(8). This was evident in a series of decisions, such as JHC Ventures, LP v. Fast Trucking, Inc., 94 S.W.3d 762, 769 (Tex. App. – San Antonio 2002) , Helen of Troy, LP v. Zotos Corp., 511 F.Supp. 2d 703, 731 (W.D. Tex. 2006), JCW Elecs., Inc. v. Garza, 176 S.W.3d 618, 633 (Tex. App. – Corpus Christi 2005, no pet.) and Momax, LLC v. Rockland Corp., 223 F.Ed. Appx. 334, 335 (5th Cir. Tex. 2007). These cases have consistently held that attorney fees are not available in breach of warranty cases under Section 38.001. The court in Medical City Dallas Ltd. stated that two years after authorizing attorney fees founded in contract, the Texas Legislature instructed the courts to construe statutory language regarding the award of attorney fees liberally to “promote its underlying purpose.” See
Act of 1979, 66 Leg., R.S., ch.314 1, 1979, Texas Gen. Laws, 718. Section 38.001(8). The Court in Medical City Dallas, Ltd. also noted that the statute allowing the recovery of attorney fees, was recodified in a “topic by topic revision of the state’s general and permanent statute law without substantive change.” See Act of 1985, 69th Leg., R.S., ch.959, sections 1.001, 38.001, 38.005, 1985 Tex. Gen. Laws, 3242, 3244, 3278, 3279, which now provides the Texas Civil Practice and Remedies Code, section 38.001. Medical City Dallas, Ltd. began to alter the landscape of previously allowed recoveries. In Howard, the court stated that because Section 38.001(8) did not limit its scope to just breach of contract claims, it could include those claims that were merely contractually-based such as claims for breach of implied warranties. In summary, there is an obvious trend among the Texas courts to liberally construe Section 38.001(8) which of course may severely impact the value of a products liability claim. Now a consumer that does not have an express warranty or a contract with “upstream” manufacturers could potentially be held liable for an award of attorney fees despite having had no relationship with the parties involved in the manufacturing process. The same interpretation of section 38.001(8) may apply to other causes of action such as construction defect litigation or any other claim arising out of a claim for breach of an implied warranty.
have long refused
to award attorney fees for breach of warranty claims
under § 38.001(8).
Ronald E. Hood is an attorney with the firm of Lugenbuhl, Wheaton, Peck, Rankin & Hubbard. His primary practice focuses on insurance law, general litigation, and construction law.
The Spoliation Instruction: A Thing of the Past? By Chance A. McMillan
n September 12, 2012, the Texas Supreme Court heard oral arguments in Brookshire Brothers, Ltd. v. Jerry Aldridge. Nearly two years later, the Court delivered an opinion clarifying spoliation of evidence standards in Texas. Now, a spoliation instruction will be reserved for situations where the victimized party can somehow show that the wrongdoer had the “specific intent” to conceal discoverable evidence or the “rare” circumstances where the victimized party is “irreparably deprived of any meaningful ability to present a case.”1 On September 2, 2004, Jerry Aldridge (“Aldridge”) was a customer at Brookshire Brothers grocery store (“Brookshire”) when he slipped and fell near a rotisseriechicken display. Aldridge later went to the emergency room and reported the incident to Brookshire’s employees. Brookshire initially preserved approximately eight minutes of video footage from just before Aldridge’s entrance until shortly after his fall in the store. Aldridge’s attorney requested Brookshire preserve approximately two-and-a-half hours of footage from the store’s cameras, but Brookshire claimed the footage had been recorded over. Aldridge sued Brookshire under a premises liability theory. In order to recover for his slip-and-fall, Aldridge had to show Brookshire had actual or construc-
tive knowledge of a dangerous condition prior to Aldridge’s fall. Under Texas law, failure to show knowledge of a dangerous condition is probably the most difficult element Plaintiffs encounter when attempting to prove their premises liability. At trial, Aldridge argued that Brookshire’s failure to preserve and produce additional surveillance footage amounted to the spoliation of evidence. Accordingly, Aldridge moved for a spoliation instruction to be included in the jury charge. At trial, the jury heard evidence on the issue of spoliation, received the charge with a spoliation instruction included, and potentially considered spoliation during its deliberations. The jury delivered a verdict holding Brookshire liable for Aldridge’s damages and the trial court entered judgment. The Court of Appeals affirmed, and the Texas Supreme Court granted review. Upon review, the Court completely rewrote spoliation. When faced with the spoliation of evidence issue, Texas courts must conduct a two-step analysis: (1) determine whether a party’s conduct constitutes spoliation and, if it does, (2) administer an appropriate remedy. When does a party’s conduct rise to the level of spoliation? First, it is now a question of law that must be decided by the judge outside the presence of the jury. Second, a party’s conduct constitutes spoliation when it has a duty to preserve evidence and intentionally or negligently failed to do so.
So, when should a spoliation instruction be used to aid the victimized party who has been denied access to the potentially discoverable evidence? Only when the trial court finds that the spoliating party had the “specific intent” to conceal discoverable evidence. However, the Court did not completely shut the door on spoliation instructions. In the “rare” circumstances where the victimized party cannot put their case on without a spoliation instruction, the Court stated a “negligent” state of mind may do, if another remedy will not suffice. In Brookshire, the Court found that Brookshire’s conduct did not rise to the level of spoliation of evidence. After all, the Court opined, Brookshire did produce approximately eight minutes of surveillance video. Further, following the new law it created, the Court held that no evidence existed that Brookshire had the specific intent to conceal discoverable evidence and that the submission of the instruction was an abuse of discretion by the trial judge. The case has been remanded back to the trial court for a new trial.
the Court found that Brookshire’s conduct did not rise to the
level of spoliation
of evidence. After all, the Court opined, Brookshire did
produce approximately eight minutes of
Chance A. McMillan is an associate with Thomas N. Thurlow & Associates located in Houston, Texas. His practice is dedicated to personal injury and civil litigation. Endnote 1. Brookshire Bros., Ltd. v. Aldridge, No. 10-0846, slip. op. at 3 (Tex. July 3, 2014) available at http://www. supreme.courts.tx.us/historical/2014/jul/100846.pdf.
The Ultimate Lawyer Quote Book:
Words of Wisdom and Humor Compiled by Malcolm Kushner American Bar Association, 2014
The Houston Lawyer
Reviewed by Taunya Painter was listening to opposing counsel make his opening statement to the jury a few years back, and it took complete selfcontrol not to cringe. In preparing for what was an otherwise solid opening, he must have Googled, “sports jokes that will make me look like the common man.” Even the jurors gave him looks of confusion. Just maybe he received a few gracious laughs. Juror consultants would likely advise against opening with a joke, but if you want to work in some wit and humor, but you need to steal shamelessly from someone else, then this book is for you. Malcolm Kushner, “America’s Favorite Humor Consultant” and internationally acclaimed author on humor communication, compiled an exten44
sive list of quotes on every topic to encompass conversations with colleagues, networking, public speaking, client meetings, trial practice, inspiration, comebacks, and even clever put-downs. They are not quotes by lawyers. They are quotes for lawyers. They are short, easy to memorize, and are mostly from famous and some appropriately infamous people. Let’s say you are the senior partner at a firm, talking with a new associate who is doing the tedious discovery for a big trial: • “Spectacular achievements are always preceded by unspectacular preparation.” –Roger Staubach • “Luck is what you have left over after you give 100%.” –Langston Coleman
You are in court cross-examining a witness, or you are taking a deposition, and the person that has sworn to tell the truth starts with “their” version of the facts: • “Everyone is entitled to their own opinions, but not their own facts.” –D. P. Moynihan
It’s a little
like wrestling a gorilla.
You don’t quit
when you’re tired. You quit
when the gorilla
You are sitting at your desk about to pound out an important brief, –Robert Strauss remember: • “This report, by its very length, defends itself against the risk of being read.” –Winston Churchill • “The greatest danger in communication is the illusion it has been achieved.” –George Bernard Shaw
If you can’t
Now you are in court arguing a motion before the judge, and opposing counsel is digging a hole in which to bury himself: • “Never interrupt your enemy when he is making a mistake.” –Napoleon Bonaparte
see the light, make them
While we all know lawyering is strategy and a lot of –Ronald Reagan hard work, many non-lawyers expect that lawyering is a profession of words—spoken words. They expect us to sound good. They expect wit and wisdom. Kushner will help us not to disappoint, as: “The ability to quote is a serviceable substitute for wit.” –W. Somerset Maugham.
feel the heat.
You are giving a speech at a plaintiff’s bar event, maybe about taking on “the big guys” and pushing toward settlement or trial: • “It’s a little like wrestling a gorilla. You don’t quit when you’re tired. You quit when the gorilla is tired.” –Robert Strauss • “If you can’t make them see the light, make them feel the heat.” –Ronald Reagan
Taunya Painter is a member of Painter Law Firm PLLC, where she specializes in business, contract and international law. She is an associate editor for The Houston Lawyer.
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Legal Document Retrieval & Research
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Mary Chavoustie Email: email@example.com
or call her at: 281.955.2449 ext. 13 July/August 2014
The Houston Lawyer
Houston Bar Association (HBA) magazine