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Jury Awards $4.5 Million Punitive Damages Against Company With Negative Net Worth

A Jury Run Amuck Or A Well-reasoned Punishment? Don't Jump To A Conclusion Until You Read Further...

How could a jury be so insensitive?  Certainly this jury is from one of those Judicial Hellholes!  This is exactly why we need tort reform ... runaway juries ... just like that McDonald's spilled coffee cup case. 

You would expect to hear those comments after reading the first headline.  But there's a clue in the subheadline that may cause you to pause for a moment and think that there just might be more than the first headline communicates.

You'd be right.  And you'd be one of those critical thinkers who realizes that the sound bite does a disservice to "the rest of the story," as Paul Harvey would have said.

So here's the set up of Bankhead v. ArvinMeritor.  Now I could spin these facts for you to put you in the mood for the ultimate outcome, but rather than do that, let's let the Court of Appeal tell you what the facts were as they saw it (omitting footnotes):

ArvinMeritor [...] manufactured brake shoes for installation on commercial trucks during the time frame involved in this case. The brake shoes were fitted with asbestos-containing linings [...].

By the 1960's, ArvinMeritor knew that workers exposed to asbestos dust were at risk of developing asbestos-related diseases. Indeed, in 1973 and again in 1975, it wrote letters to [...] manufacturers complaining about the presence of asbestos dust in the brake linings it was receiving from them. Nonetheless, ArvinMeritor did not place any warnings on its products until the early 1980's, and continued to market asbestos-containing brakes until its inventory of them was exhausted sometime in the early 1990's. Not until the fall of 1987 did ArvinMeritor include an express reference to cancer in the warnings on its products.

[Gordon] Bankhead was exposed to asbestos dust from brake linings during the 30 years he worked at automotive maintenance facilities, primarily as a "parts man," starting in 1965 and continuing through his retirement in 1999. As a result of this exposure, Bankhead contracted mesothelioma, a form of lung cancer, in 2009. Before his mesothelioma was diagnosed in January 2010, Bankhead experienced difficulty breathing, and underwent painful medical treatment to drain fluid from one of his lungs. After the diagnosis, Bankhead was told he only had 12 months to live, and as his disease progressed, the quality of his life decreased significantly. At trial, Bankhead's medical experts testified that his condition would become increasingly painful until his inevitable death.

 So there you have it.  In the 1960's the company knew that it was exposing its workers to asbestos fibers, but did not warn its employees of the danger until 1987.  The jury found ArvinMeritor liable for Gordon Bankhead's exposure to asbestos as the cause of his mesothelioma.  After the liability and damages portion of the trial was completed, the Court asked the jury about punitive damages.

Here's where it gets tricky.  ArvinMeritor submitted financial statements that showed the company had a negative net worth.  Despite that "upside down" financial statement, however, the jury awarded Gordon Bankhead $4.5 million in punitive damages.

How could that possibly be, you ask? 

Well, before you get your knickers in a twist, read on and then decide (the following directly quotes the Court of Appeals): 

A separate trial was held to determine the amount of punitive damages to be assessed against each defendant. By the time of that trial, all defendants except ArvinMeritor [...] had settled. At the punitive damages trial, respondents presented an expert witness, Robert Johnson, to testify about ArvinMeritor's financial condition. In evaluating ArvinMeritor's economic status, Johnson reviewed publicly available documents filed with the Securities and Exchange Commission, including ArvinMeritor's 2008, 2009, and 2010 annual 10-K reports; its adjusted 2009 10-K reports; a 2010 proxy statement sent to shareholders; and data regarding its market capitalization. These are "generally accepted financial documents used and relied upon by economists or experts in finance to evaluate a company."

Johnson testified that between 2006 and 2010, ArvinMeritor attained over $3 billion in sales revenue each year, and an average annual cash-flow profit of $111 million. [fn. omitted]  ArvinMeritor's lowest performing year during that period was 2009, but even in that year, it had $95 million in cash available to it. In 2010, ArvinMeritor's annual sales revenues reached $3.59 billion; its annual report indicated it had earned $211 million in cash-flow profit; and it reported to its shareholders that it had earned a $12 million net profit-a conservative figure, as Johnson explained, because companies seek to reduce their reported net income, using legally available deductions such as depreciation, in order to minimize their tax liability. At the end of 2010, ArvinMeritor had on hand some $343 million in cash and cash equivalents, and its outstanding stock had a total market value of almost $2 billion.

ArvinMeritor's chief executive officer, who also served as its board chair and corporate president, earned over $7.6 million in 2010, and stood to receive between $19.9 million and $26.9 million upon leaving the company. Johnson explained that a company's willingness and ability to pay sums of this magnitude to its chief executive is an indicator of financial strength. Given all of these facts, Johnson opined that ArvinMeritor is financially sound.

Johnson acknowledged that ArvinMeritor reported that as of 2010, it had a negative net worth of $1.023 billion. He opined, however, that this number, taken on its own, did not "reflect the full context of ArvinMeritor's financial condition and ability to pay." Johnson explained that net worth is only one of "a number of different tools that we use to assess a company's financial health, wealth and condition," and opined that "net worth is probably one of the least reliable financial metrics or statistics you can use," because there are "a number of financial or accounting transactions" in which a company can engage to lower its net worth, while remaining profitable. Johnson testified that net worth "is not a measure of a company's financial condition totally or their ability to pay," because "even within the guidelines of the generally accepted accounting principles . . . net worth is something that can be pretty easily manipulated." As an example, Johnson noted that a company can reduce its net worth simply by repurchasing shares of its stock.

Johnson explained that because net worth can be unreliable, banks look instead to a company's cash flow and profits, which are the most reliable indicators of its ability to repay debt, in determining whether to lend money to it. For this reason, companies with a negative net worth are still able to borrow money. Indeed, ArvinMeritor itself borrowed a total of $245 million in 2010, and still had $539 million available on its line of credit as of September 30 of that year.

Don't believe it?  Judge for yourself with ArvinMeritor's financial statements.  ArvinMeritor still exists as Meritor, and was a spinoff of Rockwell. 

Now that you've read why the jury awarded what it did, does the headline accurately tell the rest of the story? 

Hmmmm.

Guess you'll have to keep a cynical eye on those headllines.

Legal Crackdown on Human Trafficking

Lawyer2Lawyer Internet Radio Podcast

Human trafficking is "modern-day slavery." And if you think it isn't happening near you, think again. The United Nations estimates nearly 2.4 million people may be the victims of this crime.  Please join me and my fellow Lawyer2Lawyer co-host and attorney, Bob Ambrogi, as we take a legal look at this troubling issue with Professor Bridgette Carr from the University of Michigan Law School, Attorney Ann Johnson from Houston, Texas and Mary C. Ellison, Director of Policy for Polaris Project.

Click on the link below and give a listen!

How Congress Takes A Congressional Junket Without Letting Anyone Know

Members of Congress and their staffers who travel at the expense of private organizations must follow a long list of legal restrictions and requirements.  However, there is a little known exemption that allows the same federal employees to travel with virtually no accountability and very little transparency.  Please join me and my fellow Lawyer2Lawyer co-host and attorney, Bob Ambrogi, as we welome ProPublica.org reporter Justin Elliott and Washington University Law Professor Kathleen Clark to examine the ethics, legalities and secrecy of these Congressional trips abroad.

Women's Rights: Who Gets To Decide What Happens To Women's Bodies? Your Favorite Government?

From the Obama Administration's decision on female contraception coverage, to the Congressional hearing on women's health featuring an all-male panel of witnesses, to the Rush Limbaugh/Sandra Fluke firestorm, legislation targeting women's health is causing quite the political controversy across the country. Please join me as I welcome Attorney Shari Rendall, Director of Legislation and Public Policy for Concerned Women for America and Attorney Gretchen Borchelt, Senior Counsel for Health and Reproductive Rights for the National Women's Law Center, to discuss current legislation aimed at women's issues, reaction from women's groups and the present state of women's rights.

What Would You Do?

Using Endangered Species Laws To Save The Earth's Inhabitants

Lawyer2Lawyer Internet Radio

The world's tiger population has declined by 97%. The African elephant population has been cut in half. 33% of open-ocean sharks are now threatened with extinction. These and other alarming statistics have created worldwide legal action to save the Earth's endangered species. Please join me as I  explore laws and initiatives designed to save threatened species with attorney and WildAid board member, David Kracke of Nichols and Associates in Portland, Oregon.

USEPA's Approval of California Air Quality Plan Overturned Due To Use Of Six-year, Outdated Data

The United States Environmental Protection Agency just lost a battle that it has been fighting with the Sierra Club since 2004.  As you know, the USEPA sets the standards for air quality around the country.  Since the air pollution is particularly bad in California, and especially in the San Joaquin Valley, the Sierra Club filed a challenge to the USEPA's approval of certain air quality standards for the Valley in 2010.

While the Sierra Club argued that the approval had a number of problems - including the fact that the standards were impossible to comply with - the Ninth Circuit relied on just one of those problems to overturn the USEPA's approval. 

The Court said that the USEPA could not rely on data from 2004 in 2010 when approving the standards in California's State Implementation Plan.  That's right - a six-year gap in data.

Six years outdated, and yet the USEPA still approved the 2004 SIP in 2010.  Read that last sentence again.  The USEPA was six years behind in reviewing data supplied to it, and refused to consider more current data in reaching its decision.

The USEPA failed to explain why it would not consider the new data, and the Ninth Circuit consequently held that refusal as "arbitrary and capricious," and ordered the USEPA to do it over again, and this time, consider new, relevant data.

I've had cases against the USEPA before, and this tactic is quite common.  They don't do their homework, and when challenged about it, retort back that they have the statutory/regulatory right to rely on old, out-of-date data.  Finally, thanks to the Sierra Club, the USEPA has been called on its tactics and hopefully, we'll see the last of this bureaucratic nonsense. 

California's State Board of Equalization's End-run Attempt Around Prop 13 Thwarted

If you run a business, you know all about the California State Board of Equalization.  It's a euphemestically named government organization that is our equivalent of the IRS.  You know, those folks who collect taxes.

Proposition 13 was enacted by California voters in an attempt to keep property taxes down.  The SBE's mission, it seems, is to figure out ways to increase tax revenue to the state.  One of the ways the SBE tried to do that was to avoid the annual decrease in the value of fixtures (those things that are attached to real property, like machines bolted to the floor and the like).

You see, each year, fixtures depreciate, which means less taxes are due because the value of those fixtures have declined.  Worn out.  Not as useful as the year before.  Requires more maintenance.

You get the idea.

Well, so did the SBE, and they saw tax revenues slip away.  Until some bright bulb in the SBE got the idea to reclassify fixtures as real property.  We all know that real property increases in value over time - at least that was the theory that fueled the sub-prime mortgage crisis, but that's a whole 'nother story for another day.

In the SBE's test-dummy attempt to pull this switcheroo, the SBE applied this theory to the petroleum industry first before attempting to apply it to every other industry in California.  If you think about that plan, it wasn't the smartest.  The petroleum industry has cash flow, and lots of it - especially since we keeep buying gas for our cards and trucks.  So when the petroleum industry caught wind of this plan, it tasked its association, the Western States Petroleum Association, to file a legal challenge.

The WSPA did just that, citing to the agoe-old division between the valuation of fixtures and the valuation of real property, and the attendant accounting methodologies used to appraise those two items. Accountants depreciate fixtures, but not real estate.

Prop 13 was designed to limit taxes, not increase them, and the Court saw right through the SBE's plan, telling the government to keep the distinction between fixtures and real property, never the twain to meet.

Your fixtures are once again safe from the evil overlord of taxes. 

Whew!

Revisiting Citizens United in an Election Year

The Role Of The Super-PAC

Since 2010, there has been great debate over the controversial ruling commonly called Citizens United.  Most recently, the Montana Supreme Court challenged the decision while Senator McCain called it "one of the worst decisions I have ever seen." Please join me as I welcome Attorney Joseph M. Birkenstock, former chief counsel of the Democratic National Committee and Bradley A. Smith, Chairman and Co-Founder of the Center for Competitive Politics and former Commissioner on the Federal Election Commission, for an in-depth discussion on the impact of the ruling during an election year and its influence on the upcoming Presidential election.

A Lawyer In Your Pocket?

You may say it would be better to have a judge in your pocket, but then, so does everyone else.  I'm talking about a level playing field, with a lawyer in your pocket.  You know, the kind you can ask any question to when you have a legal problem, and get a solid answer that will avoid you having to breach a contract, make a mistake that actually would be a crime or anything else that would land you in a courtroom.

Why not?  You can get a doctor in your pocket with Web MD, so why not all professions, especially law?

Diagnosing a medical condition can be a difficult proposition.  So can diagnosing a legal problem.  But for those problems that have not yet landed you in court, good legal advice can steer you away from that eventuality. 

If you think about it, you do have a lawyer in your pocket.  It's your cell phone.  When you're facing a difficult legal problem, do what my clients do.  Pick up the phone and call your laywer.  We're happy to answer your questions, and even happier when our advice avoids landing you in court.

For those who call their lawyers and get good advice, you're lucky.  Many others who don't call end up calling when a legal disaster hits, and then it's too late.  At that point, you need the other part of what I do - litigation.  It's time consuming and can be very costly.

Good legal advice before the problem hits is worth its weight in gold, especially since you will never experience the inside of a courtroom.  Pay your lawyer a visit and avoid hiring me.  Otherwise, I'm glad to take your call.

What Are The Hottest Legal Trends For 2012?

Lawyer2Lawyer Internet Radio

Decriminalizing medical marijuana, fighting to repeal healthcare reform and using social media as evidence are just a few of the topics trending in the legal industry in 2012.  My co-host, Bob Ambrogi, is off today, so please join me as I discuss the hottest trends currently transforming the legal world with attorney and legal trend-watcher Danny Cevallos, the founding partner of Cevallos & Wong, L.L.P.  

Invest In An Internet Video Start-up And Get Sued

How Michael Eisner Avoided Liability

In yet another of a long line of cases involving copyright infringement, we now have the case of UMG Recordings v. Shelter Capital Group, where Universal Music Group attempted to get around the Digital Millenium Copyright Act by suing the investors in video-sharing case, with hints of Napster-like allegations.  UMG sued Veoh, a web-sharing site for videos.

Unlike Napster, however, Veoh took all kinds of pains to ensure that it was not posting videos that were protected by copyright.  In the Court's words, "Veoh also began developing an additional filtering method of its own, but in 2007 opted instead to adopt a third-party filtering solution produced by a company called Audible Magic. Audible Magic’s technology takes audio “fingerprints” from video files and compares them to a database of copyrighted content provided by copyright holders. If a user attempts to upload a video that matches a fingerprint from Audible Magic’s database of forbidden material, the video never becomes available for viewing."

That's a lot of effort, but it doesn't address the most interesting aspect of Universal's case against Veoh's investor.

That's right.  Read that last line again.  Universal sued Veoh's investors for vicarious infringement, contributory infringement and inducement of infringement.  Gives a whole new meaning to being an angel investor, one of whom was Michael Eisner.  The Court noted, "UMG argues, however, that ... "the [Investor] Defendants remain potentially liable for their related indirect infringement" because ... the Investor Defendants do not qualify as "service providers" who can receive DMCA safe harbor protection."

While the Court held that Veoh was protected by the DCMA for reasons noted in the opinion, it analyzed the contributory copyright infringement claim under the "site and facilities" test first announced in Fonovisa v. Cherry Auction, a test that was used to shut down Napster and hold one investor liable for the copyright infringment because that investor was able to control the start-up's funding, and directed its spending, holding significant power over Napster's operations.

Unlike Napster, however, Michael Eisner was not the only investor.  The Court found that the three investors who were on Veoh's Board of Directors did not  either singly or with the other investors, individually control Veoh's operations to the point that would make them liable to UMG. 

Unfortunately for UMG, its Complaint did not make that allegation, and so the Court found that the "three investors individually acquiring one seat apiece is not the same as agreeing to operate as a unified entity to obtain and leverage majority control. Unless the three independent investors were on some level  working in concert, then none of them actually had sufficient control over the Board to direct Veoh in the way UMG contends."

So, the lesson here is at least two-fold.  Read the copyright cases beforehand and ensure that you know how to properly plead around these issues, and if you're an investor, make sure you're not the only one, and make sure you don't work together with the other investors to control your start-up.

And finally, just go ahead and pay Universal its fees to play its music.

How Many Settlements Will This Insurance Company Have To Pay?

You can bet there will be a host of litigation spawned because of this accident:  the death of a Mother, who was survived by her minor children and an adult daughter.  But it might not be the lawsuits you're thinking.

Let me explain.

Mom was a passenger in a car. After she died, her oldest daughter made a claim against the driver's insurance company, and the insurance company settled without the daughter even filing suit.  She told the insurance company that she was the sole heir of her mother's, and on that basis, the insurance company paid her.

Apparrently someone didn't look too close at Mom's family tree - also known as a Table of Consanguinity.  Mom had five other children through a different father.  It may be that the oldest daughter didn't know about the other FIVE children, but stranger things have happened.  She may also have truly been Mom's only heir - if the other children were written out of the will.  It will likely take some time to sort this out.

As you can expect from what I've told you so far and your keen sense of observation (since you know that the insurance company settled only with the oldest daughter), the FIVE children sued the driver, too.  What a surprise.

So, when the FIVE children sued, the insurance company said, "Oh no you don't.  We already paid the sole heir, and we're not paying you anything."  Well, the insurance company didn't say exactly that, but something probably quite a bit like that.  The insurance company denied the FIVE children's claim, citing to the One Action Rule.   No money was paid to the FIVE children.

Now, if you know anything about the law, you may know about the one-action rule.  That rule does provide the insurance company with a solid defense against any further payments to Mom's heirs.  But, unfortunately for the insurance company, there are a couple of other elements to the One Action Rule.  One of those elements requires the oldest daughter to have sued the insurance company, and then a settlement.

As you know from your keen sense of observation, the oldest daugther did not sue.  In fact, the insurance company settled voluntarily.

Those last two facts doomed the insurance company's denial of the FIVE childrens' claim for wrongful death against the driver of the car, and ultimately his insurance company, who will now have to pay the FIVE children.

You can read more about the case (and the One Action Rule) here in the case of Moody, a Minor, etc., et al, v. Bedford, et al, Cal. Court of Appeal, Second Appellate District, Division Five, No. B226074 (January 9).

Now about that other litigation. 

Yup.  You got that right.  You can bet the insurance company will be suing the oldest daughter for a refund - assuming she hasn't spent all the settlement money yet. 

Predictions For 2012 And Grades For Last Year's Predictions

Lawyer2Lawyer Internet Radio Podcast

From the spectacle of the Casey Anthony trial, to the great debate over the health care law, to the controversial immigration law in Arizona, 2011 was a big year in the law.  Please join me and my fellow Lawyer2Lawyer co-host and attorney, Robert Ambrogi as we welcome our returning guest, Stephen L. Kaplan from the firm Hicks, Mims, Kaplan & Burns, to review his 2011 predictions and look ahead to a brand new year, 2012!

Finally, Some Sanity In CEQA Land Use Decisions

One of my favorite cities, Carmel-by-the-Sea (isn't that a great name for a city?) decided to sell the Flanders Mansion (a historical mansion it owned) because it was tired of paying the upkeep.  True to California law, it completed an Environmental Impact Report (here known as a Final Environmental Impact Report).  As part of that FEIR, the City determined that it did not need to analyze the low-income housing componet because the mansion was subject to certain land use restrictions that would prevent use as a low-income house.

Think about that one logically.  It's a mansion, not a project. 

The Flanders Foundation is trying to raise money to buy the house from the City, but they have been unable to reach an agreement with the City.  So, when the City decided to sell the mansion, the Foundation did what everyone in California does when they are trying to stop development:  they filed a California Environmental Quality Act lawsuit, challenging the City's failure to analyze the low-income housing component required by EIRs. 

At the trial Court, the Foundation won.  The trial court ruled that since CEQA requires analysis of low-income housing and that component was missing in the FEIR, the City had to redo the FEIR.  That apparently bought the Flanders Foundation time to raise more money to buy the mansion.

As with many trial court wins, that ruling wasn't the final decision.  You can read the Court of Appeal's opinion here.  The Court of Appeal looked at the case and essentially said, "Get real."  Given the multiple historical restrictions on the use of the mansion, it could not be used for low income housing, so what was the sense in forcing the City to review the low-income housing component in the FEIR?

Logic won, and that translates into a valid FEIR, allowing the City to sell the mansion.

Anybody got multiple millions?  I don't know what it's worth, but it is surrounded by parkland and in a beautiful area.  If you won the lotto, you may be in business.

Font Row Seats For The Rose Bowl Parade

The sun is rising oh-slow-slowly on the far East side of Colorado Boulevard with the palm trees silhoutted against the pale blue sky with twiges of light orange.  Behind me the sky is still dark blue and black.  A fire crackles in a rusted-out half drum on the grass, and people are still sleeping on tarps and air mattresses nearby. Some enterprising company has erected stadium-style seats just across the street and the liquor store down the street is pedaling coffee and donuts.  Surprisingly cars are driving up and down the street and carts are pushing horns, blow-up characters and stuffed toys.

The street is littered with silly string, marshmellows and tortillas.

Tortillas. You have to have cruised Colorado Boulevard (not at all related to the Rose parade) as a kid to understand the tortillas and marshmellows.  As it has been explained tome, they were used as "weapons" against other cuisers who had the temerity to roll their car windows down.  Go figure.  It's Pasadena.  Home of the newly wed and nearly dead.

 A quiet plan flys overhead and suddenly the conversation turns to the Stealth figher flyby at 8:00 a.m., hours from now.  The sun is up high enoughthat the neon signs are flickering off, but it's still so dark that it can't read the signs.  Half the street lights are off, half still on. In case you've got your map browser handy, MIPTC is at the corner of Colorado Boulevard and San Marino.

Most of the plastic chairs are empty, still waiting for people.  The nearby Volvo dealership has cleared out its inventory of cars and rented out its lot to big, rock-star recreational vehicles.

I've seen the after-effects of the parade before, but never the parade itself.  For several days afer the parade, they display the floats on certain side streets in Pasadena, and it's really cool to see and touch them up close and personal.  This time, there will be no toching, just looking.  Plus there will be bands and dancers.

Maybe I'lleven be able to see Stephanie Edwards, the -on-the-street reporter for KTLA channel 5.  The other co-host on the TV, Bob Eubanks, will be gushing over the horses in the parade.  A stick of cotton candy just walked by with green and pink spun sugar in plastic bags.  The American RedCross pickup truck drove by. Where's the disaster?  Some 30,000 feet overhead, a jet leaves abright pink contrail in the sky.  People are startingto wake up.  Me?  I've been up since 3:30 a.m. to get ready to drive here.

Parade time is getting closer.  A young man in a white suit on a red scooter with a Rose parade sticker quietly scooted by, followed by a pickup truck towing a horse trailer.

The parade is waking up.  A group of runners ran by, followed by my fiance's shouted question to them: "Why are you running?  There's no one chasing you.  After all, we have a bus system and cars." Humor this early in the morning is lost on me.  I'm still not awake.

That's about it for the on-site report so far.

The rest you already know.  You've seen it on TV. 

Happy New Year!

A Remote Wipe May Strand You Without Data: What Now?

While you're flying back from a business trip to a remote corner of Eastern Europe - where you don't speak the language - imagine this:  your mobile phone boarding pass disappears, and your interpreter just spun his heels and waved goodbye when you reached the security line.  No problem, you say, I'll just call <insert name of airline here> and get the boarding pass sent by email.

Then you check your email, and nothing's there.  Nor are your contacts, calendar or any other information on your cell phone.  It's blank, and so is the stare on your face.

Although you didn't know it, your phone just got (accidently) remotely wiped by your company's IT department.  Wiped.  As in erased.  Gone.  Nothing.  Nada.  Zippo.  Dead in the water.  You are suddenly stuck far, far away from help in an inhospitable place with none of the data that you've become dependent upon to live your life.

Think this secenario isn't possible?  Then ask this woman, whose phone was accidently wiped by her employer while she was on a trip from Silicon Valley to Los Angeles.  I just changed the location of the story to highlight the dangers.

She was surprised that her company was able to erase the data stored on her telephone because she owned the phone, the phone number and paid the bills.  Plus, her company hadn't told her that they had the power to wipe all data from her cell phone.

A quick search turned up no cases where employees have sued their employers over such practices, but you can bet there's one in the wings. 

It's not a hard thing to do.  Check out these easy-to-follow instructions on Microsoft's website.  If you have an iPhone, it's just as easy (provided you clicked on the right settings on your phone before you lost it).  Google claims it has the same feature, although many find it hard to use.  Blackberry does the same thing.

This feature may be new to you, but not to many corporate IT departments.

So, if you own a company and have employees who use cell phones, then you might want to consider a cell phone use policy.  Inc. Magazine offers a few tips to consider.  If you're adventurous, you can use LegalZoom to write one for you.  (In fact, I hope you do.  I get a lot of work from entrepreneurs who try to be lawyers). 

If you haven't thought about these issues, it's about time.  Someone's going to sue as this remote wipe feature is used more and more as people continue to lose their cell phones. 

But first, backup your cell phone.  Then call me.

The Fight For Legal Rights Of War Dogs

Lawyer2Lawyer Internet Radio Podcast

War dogs serve bravely alongside the men and women of the U.S. Military.  Their handlers consider them heroes, but the military still classifies military working dogs as equipment.  Up until recently, these canine soldiers were left behind or even euthanized after the fighting stopped.  Please join me and my fellow Lawyer2Lawyer co-host and attorney Robert Ambrogi as we welcome Ron Aiello, the president and co-founder of The United States War Dogs Association, and Carter Dillard, the director of litigation for the Animal Legal Defense Fund, and discuss what laws need to change so that war dogs get the respect that they deserve from the U.S. military.

Merry Christmas To All....

Hope on a Holiday Freeway: The Guy on the 405

Driving back from LA on Friday, traffic was stopped: dead stopped.  You know, the kind of stopped you just know will turn you and several thousand of your nearest friends into a 30-second segment on the 6:00 evening news.  While the rest of us watching groan with an at-too-well understanding of your plight.

Traffic started to move slowly on both sides of the freeway, but not in the middle.  Fortunately, I was on one of the the sides that was moving, not too far from the start of the traffic jam.  Within a car length or two, I saw what was going on.

One 6x6x8 piece of lumber lay askance in the middle lane, blocking traffic.  It looked like it had already been run over; a couple of chunks of lumber (the size of 2x4's) were scattered nearby.

Perhaps realizing the futility of his position, the guy driving - ok, well parked - in the middle lane immediately behind the offending tree trunk, was getting out of his car.  

On the 405 freeway.

In Los Angeles.

One of the busiest freeway in the world. 

As he got out of his car, his intent became clear.  That tree trunk was going into the back seat so he could go forward. It became apparent that the lumber was too big for the back seat, so he finagled it forward into the passenger seat.  Good thing for bucket seats.

And all without a weaving California Highway Patrol car to create a traffic stop, we all waited behind him, stopping the rest of the traffic behind us. 

On our own.  Cooperating.  Without talking.

In the hustle and bustle of the season, we took a moment and by stopping, paid our respects to a honorable citizen doing his duty to all of us on the freeway - at great danger to himself.

Once the lumber was in the car and the back door shut, he got back in the driver's seat and drove off.

I have no idea who you were, but my thanks go out to you for reaffirming my faith in California freeway drivers.

Thanks.

Private Parking Lot Owners Cannot Issue Citations With Fines

Our somewhat new attorney general, Kamala Harris, has give us this Christmas present:  a private parking lot owner can't issue a ticket with a monetary fine.  Even if the private parking lot owner towed your car (something they are allowed to do if the appropriate signs are posted), that owner cannot require you to pay a fine in order to get your car out of hock with the towing company.  If you would like to read the opinion, it should be uploaded here on the Attorney General's website (at the time of this article, Opinion 07-804, filed December 22, 2011, hadn't been uploaded).

Apparently, issuing tickets on private property has become the latest revenue-generating idea.  If police can issue tickets to raise revenue for towns and cities, then .... whoops!  DId I just use my outside voice?  That, along with my other favorite:  "Why aren't the cops out catching real criminals?"  That one always seems to me to miss the point of the ticket. 

But back to our regularly scheduled program:  the parking lot ticket.  If you think about it, the ruling makes a lot of sense.  The California Legislature has already authorized private parking lot owners to tow cars, so if they have that drastic remedy, there is no reason to also "pile on" with more fines. 

And for a bonus round, the Attorney General has also given us this gem:  a parking lot owner can't "boot" a car in the parking lot becuase it constitutes vehicle tampering.  Like the opinion before this one, it is only available on a private search engine, but the citation is:  87 Ops.Cal.Atty.Gen. 114.

The PeaceTones Legal Empowerment Project & the Power of Music

Lawyer2Lawyer Internet Radio Podcast

Music makes the world go ‘round and on this holiday edition of Lawyer2Lawyer, please join me and my fellow co-host and attorney Bob Ambrogi as we celebrate with a music themed show!  First up, Bob and I welcome Attorney Jeffrey M. Aresty, founder and current President of Internetbar.org and Attorney Ruha Devanesan, the Executive Director & Vice President of IBO, to talk about the mission of the Internet Bar's PeaceTones Legal Empowerment project. Later in the program, we share a holiday treat from a great songwriter and longtime friend of our extended family, Attorney Larry Savell!

Happy Holidays!

News Of Chinese Supreme Court Justice's Cancer Met With Applause

Don't get me wrong here; I wish no ill on anyone (whether from China or North Korea), but I can't help but observe what a mixed message that headline generates. Here's the story: lawyers resent the Communist government so much that they greeted the news cited above with cheers and applause. Wow! Can you imagine similar applause for one of our leaders?

But let's examine the root cause of that level of frustration, from our own perspective. While some might quickly point out the new Made in America campaign, I'm not going to be so quick.Let's think about this for a moment.

Here are the facts as I see them.

1. We are in a recession;
2. There are a lot of Americans without jobs.
3. Most of those jobs went overseas, some to China, because the cost of production is cheaper there.
4. China is one of the world's worst polluters (link has sound and video). Few regulations = less cost to produce.
5. China does not regulate much at all.
6. The United States is one of the world's strictest regulators of just about anything that goes into the environment. Lots of regulations = higher cost to produce.
7. The United States regulates just about everything - so much that we've given regulations their own web page:  www.regulations.gov.

(Let me know if I got anything wrong here.)

Now put those factors together with whatever other ones you want to throw in on this conversation (comment below) and explain the question of the day to me: Why is just about everything in our homes Made in China?

Now before you get to answering the question of the day, see if you can figure this one out: a factory in China produces "Free Tibet" flags. That oxymoron should convince you of one thing: the value of the Almighty Yuan, and maybe, just maybe, the answer to today's question.

Maybe we're missing the part that money and goods are simply an exchange between two people. What happened to the folks next door?

Oh that's right.  They moved.

How To Fight City Hall And Win At Building Homes

Back in 1980, you have a little extra cash in your pocket, so you buy a nice parcel of land in San Clemente, some 2.85 acres.  You know, the same town where Nixon bought his La Casa Pacifica, more popularly known as the "Western White House," just for the sake of reference for those who remember that far back.  Anyway, back to the parcel of land.

Well, "you" are actually a group of investors who wanted to make some money on their purchase, so they sought to build homes on the parcel.  The City originally zoned the parcel to allow up to six homes per acre, but the owners only wanted four home and submitted plans to the City, which were approved.  The parcel was practically surrounded by other landowners' homes, who really wanted the parcel kept as open space.  The City attorney at the time told the City council that it would be a taking if it rezoned the parcel as open space, so the City didn't take that step, and as time slipped by, so did the adjacent landowners' voices.  Despite the approval, however, the owners never got around to building on the parcel.

A few years later, the City amended its general plan and added a zoning category that limited developers to one home per 20 acres, and applied that zoning category (designated RVL) to the parcel.  The City was trying to protect development in sensitive canyons.  The parcel sits on a slope, not a canyon.

Fast forward some 30 years.

The owners decide that it's time to start building, but their earlier approvals have now expired and they reapply to the City for approval to build one home on their 2.85 acres, which is 17.15 acres shy of the requirement to build one home under the 1983 zoning.  The City denied the application, and the owners filed an eminent domain suit, claiming the City used spot zoning to "take" their parcel under the 5^th Amendment.  

That the part of the Bill of Rights that doesn't allow the government to take private property without just compensation.  It's not the part of the 5^th Amendment that you know from watching television - you know, the part where they say, "I'm taking the 5^th."  

Wow.  An amendment to the Constitution that does two things at once.  

Since we're dealing with the part about "just compensation," you're probably wondering by now what happened in the lawsuit.  The case is known as Avenida San Juan Partnership v. City of San Clemente.  In the case, the appellate court decided that the City had taken the owners' parcel of property by denying development on the parcel.

The trial court awarded the owners $1.3M for their troubles, and after both parties complained about the size of the award (City, too much; owners not enough), the appellate court sent the case back to the trial judge to consider both parties' arguments and recalculate the amount the City has to pay the owners.

Now don't think the City has only one option here.  The trial court told the City that if it didn't want to pay the inverse condemnation damages that it could instead just approve the owners' application for development and avoid paying the $1.3. That way, the owners can build out their property and sell it to recoup (hopefully) the $1.3M that they would have otherwise gotten from the City.

So, presumably everyone wins.  The nearby neighbors would likely have wanted the parcel to remain open space, but as real estate moves forward in time, that expectation just isn't realistic.  Houses are going to get built.