Texas Supreme Court Confirms Punitive Damages in Sabine Pilot Cases

Revisiting the only public policy exception to the employment at will rule in Texas, the Supreme Court today holds that a plaintiff who prevails can recover punitive damages in a Sabine Pilot case if he or she can establish the appropriate level of malice. Safeshred v. Martinez (Tx 4.20.12).

Unfortunately for Mr. Martinez, he did not meet that standard, thereby losing his $250,000 punitive damage award (which had already been reduced to $200,000 because of the damage cap under Section 41.008 of the Texas Civil Practice and Remedies Code). Given that he had lost his $10,000 mental anguish claim in the Court of Appeals, what once seemed so promising now appears to stand as a judgment of  approximately $7,600 in lost wages.

Beyond the impact to Martinez, the Court in an extended discussion on what would constitute malice, provided guidance for the award of exemplary damages in Sabine Pilot cases in the future.  In dicta, the Court hinted that the Sabine Pilot cause of actions extends only to termination claims; anything less would not be actionable.

For punitive damages, the Court held the proof must be something more than the normal consequence of the termination itself. It rejected Martinez argument that you could consider the consequences if he had performed the illegal act in question in establishing malice.

More generally, it listed three types of circumstances where malice might arise:

Malice in this case could only be shown by clear and convincing evidence that Safeshred, in firing Martinez, intended or ignored an extreme risk of some additional harm like

•  interference with his future employment,
• harassment, or
• terminating him knowing it was unlawful to do so.

There are not a lot of Sabine Pilot cases around, the unique circumstances required and the high burden of a sole standard, re-iterated (although not dwelt upon) in today's decision, make it a hard case to establish.

But for those that do make their way to trial, Safeshred now gives definitive guidance for punitive damages.

Antiquities "Launderer" Pleads Guilty As Co-Defendants Continue to Litigate Case of US v. Khouli et al.

Egyptian coffin seized in
US v. Khouli et al.
Courtesy ICE.

Mousa "Morris" Khouli pleaded guilty yesterday to smuggling Egyptian cultural property into the United States and making a false statement to law enforcement authorities, according to the United States Attorney for the Eastern District of New York.  Khouli, a New York based antiquities dealer, was indicted by a federal grand jury in 2011 for his role in illegally importing ancient artifacts.  Also indicted were Joseph A. Lewis II, Salem Alshdaifat, and Ayman Ramadan. Ramadan remains at large.  (Those indicted are considered innocent unless proven guilty).

A press release issued by U.S. Attorney Loretta Lynch states the following:
"The defendant [Mousa Khouli] entered his plea before the Honorable Edward R. Korman, United States District Judge, at the U.S. Courthouse in Brooklyn. The defendant faces a maximum sentence of 20 years’ imprisonment. The defendant also entered into a stipulation of settlement resolving a civil complaint seeking forfeiture of the Egyptian antiquities, Iraqi artifacts, cash and other pieces of cultural property seized in connection with the government’s investigation." (See here for background).

This guilty plea follows a motion hearing held on March 23, 2012 where co-defendant Joseph Lewis II's lawyer argued a motion to dismiss the case against Lewis.

Lewis is alleged to have received contraband Egyptian archaeological material from Khouli.  But Lewis' lawyer maintained at the hearing that Lewis was never part of the illegal importation process.  At the March court proceeding, Lewis' attorney argued: "The issue for this case is whether this man participated in or agreed to participate in the process by which these objects were brought in deceitfully through United States Customs.  That's the issue.  There's no evidence of that."

Assistant United States Attorney Karin Orenstein countered that it is inappropriate for the court to dismiss a case based on facts that should be heard and evaluated during a trial.  She also stated that Lewis' involvement in an illegally imported Egyptian coffin found in Miami, Florida in 2008 would be used as evidence to show that Lewis knew about the mechanics of the import process into the U.S. of cultural property.

Attorney Orenstein further described how Khouli acted as "a cultural property launderer."  "He creates good provenance for a piece, so that when it comes through Customs, if it is scrutinized, they will see this is an item that left Egypt at a time when there were no laws protecting it from leaving Egypt."  She added that the Egyptian sarcophagus at issue in this criminal case was described as coming from Khouli's father's collection from Israel in the 1960s. Orenstein alleged that Lewis told Khouli: "Put in the provenance from your late[] father's collection, Israel, 1960s."  Orenstein also alleged that "Mr. Lewis had no reason to believe it came from [Khouli's] father's collection."

Lewis' attorney disagreed with the prosecutor, maintaining that the government lacked trial witnesses to back up its suggested evidence.

The court expressed reluctance to rule on the matter prior to trial when a fact finder would hear and weigh all the evidence.

Meanwhile, on April 11, 2012, co-defendants Lewis and Alshdaifat filed a bill of particulars requesting detailed discovery from the prosecution.  The co-defendants seek information about which ports were used to import the cultural property, what documents were provided to Customs, and which representations on the Customs forms were false.

Khouli is scheduled to be sentenced on September 14, 2012.

Reference: Transcript of March 23, 2012 hearing filed as attachment to Joseph Lewis II Bill of Particulars.

CONTACT: www.culturalheritagelawyer.com

An Arbitration Sign of the Times

If you think arbitration is not a significant player in employment law dispute resolution, you would have to think twice when you see that the National Institute for Triall Advocacy (NITA), one of the best known training programs for trial lawyers is holding their first Arbitration Advocacy May 18-20, 2012.

The opening paragraph in the email I received made that point:

In looking at the below list of topics covered in this program your first inclination may be to think this is another of NITA's Trial Advocacy programs. While similar in some regards this 3 day learning-by-doing program is in fact NITA's first Arbitration Skills program.

And like all NITA programs, this one promises to be a hands on experience, culminating in conducting a full arbitration.  Here's a link to NITA's program site if you are interested.

The fact of the matter is although the battles continue over the finer points of enforcibility, and Congressional action could in one fell swoop totally eliminate it, for the foreseeable future, arbitration of employment disputes is very much a reality.

Arbitrations are not the same as trials, and while I think it will be quite some time before we hear anyone refer to themself as an "arbitration lawyer," making sure you understand the difference between the two is important.

Arbitration is much more akin to a bench trial, but one with even more liberal standards of admissibility of documents and testimony.  I think it is also a much "cooler" forum, where emotion as a general rule is much less likely to be found and to carry as much weight.

For the advocate, perhaps one of the big differences is the timing of the feedback. For better or worse, when a case is submitted to a jury, in a matter of hours, or at most days, you will know what the factfinder thought of your case.  In arbitration, as with bench trials, there is no instant gratification (or depression)

Even in relatively recent times, results were delivered in the mail, but today, when you have an arbitration case pending decision, almost any email could be the one carrying the news. 

NLRB's Posting Rule Hits Another Bump in the Road

This afternoon Judge Norton in South Carolina granted summary judgment to a group seeking to block the NLRB's rule that would require a posting notifying employees of certain rights under the NLRA.

His conclusion:

After utilizing the tools of statutory interpretation, the court finds that the Board
lacks the authority to promulgate the notice-posting rule. As such, the rule is unlawful
under the APA, 5 U.S.C. § 706, and the court GRANTS summary judgment in favor of
plaintiffs.

The full opinion can be found on Pacer at this link.

Another sentence for causing death by careless driving

Within a few days of my last post there has been another case.  Putting a table into my post is beyond me, so click here for a table of recent cases.  Karl Austin was killed whilst time trialing on the A 50 dual carriageway in Derbyshire on 30th June last year.  He was struck by a lorry driven carelessly by Michael Bray.  Bray claimed not to have seen Mr Austin on a clear straight dual carriageway notwithstanding a strong flashing rear light.

Bray was sentenced to 24 weeks imprisonment though this sentence was suspended.  He was disqualified from driving for 2 years.  This, as my table demonstrates, is a relatively severe punishment for causing death by careless driving.

The facts of this case bear a striking similarity to those in the Katie Hart case.  One difference though is that Katie Hart was driving a small car.  Bray was in charge of a 26 tonne lorry.  It is not at all clear why the CPS in Derbyshire did not follow the lead of the CPS in Cambridgeshire in the Hart case and charge with causing death by dangerous driving.

The Austin family have in my view good cause to be dissatisfied with the way this case has been handled.   They had to fight heard to ensure it was heard in the Crown Court.  Bray's only 'explanation' for running down Mr Austin was that he did not see him.  There was a muted suggestion that perhaps the sun was responsible (this has worked well in other cases) or that he was driving a lorry notwithstanding some visual defect.

Katie Hart may well feel disgruntled.  She got what she deserved but is almost alone in that.

ENDA Lite Hits a (Temporary?) Dead End

While I didn't actually predict that the Obama Administration would issue an Executive Order implementing protection for lesbians, gays and transgendered individuals employed by federal contractors, reading my post from a couple of weeks ago, you might could have drawn that conclusion. See, ENDA "Lite" On the Way?

But apparently, it is not to be, or at least not now, although the story in the Washington Post reporting that the Administration has chosen to not issue such an Order details both the pressure that is going to be forthcoming and the possibility that somewhere down the road, the decision might be different. See Gay rights groups vow more pressure on Obama to sign nondiscrimination order.

Although denied by the Administration, it is hard not to view such an Order in light of the role it could play in "prresidential politics" which is pretty much the only prism that anything having to do with the Administration is, correctly or not, going to be viewed from now until November.  

Hat tip to the folks at Employment Law 360, whose reporting on this issue brought it to my attention, including today's story, Obama Won't Order Ban on Anti-Gay Bias by Contractors. ($)

News from the West Coast, Brinker (Finally) Decided

Although I have been fortunate enough to avoid any in depth or on-going contact with California employment law, it is hard not to be aware of what is going on. So like many, I have been waiting for the Supreme Court's decision in Brinker v. The Superior Court of San Diego County (CA 4.12.12), for what seems like an extremely long time.

Now that it has been issued, I gather from the general tenor of the posts, that it was a) more than expected, especially about class actions and b) better than expected for employers.

Rather than try to invent the wheel, here are the comments from folks who have much more skin in the game than me, including lawyers from my own firm, Ogletree Deakins, which now a substantial presence in California. Their take can be found at California Supreme Court Issues Major Victory for Employers in Brinker Case.

Here's a summary from other commentators:

• Greg Valenza at What's New in Employment Law has his immediate thoughts, Brinker: Employers Need Not Force Meal Periods, and a follow up, Random Post-Brinker Thoughts

• Brinker Clarifies California Law on Meal and Rest Periods in a Pro-Employer Direction, from SheppardMullin's Labor and Employment Law Blog
• Brinker: California Supreme Court Clarifies Standards for Meal Periods - Steps Employers Should Take Now at JD Supra.
• Steven G. Pearl has (appropriately enough from his perspective as a mediator) a more middle of the road view,  California Supreme Court Issues Mixed Decision in Brinker.
• California employers must "provide" meal breaks, but need not "ensure" employees take them, from Ross Runkel's Law Memo. Ross is not really in California, but is from Oregon (close enough) and gets an "academic" exemption as well.

Brinker seems to be one of those cases that not only generated a tremendous amount of interest but may actually may live up to its hype.