• Lloyd’s of London Is Sued for Denying Insurance Coverage; A Lesson in Ambiguous Contract Language

                

     

    On first blush contract language can seem quite clear. But facts sometimes render words ambiguous. Fortunately, the law provides rules to assist judges in deciphering the meaning of terms.

    An example of words that can become confusing is provided by a case against Lloyd’s of London, the specialist insurance market where insurance companies join together to share insurance coverage of risks. Lloyd’s is refusing to pay legal fees and potential damages in two lawsuits against the town of Greece in upstate New York. The town has sued Lloyd’s in an attempt to force it to pick up the tab.

    The cases against Greece are brought by two women against the town claiming that a police officer threatened them with legal consequences if they refused to have sexual intercourse with him. He told one woman he would arrest her for violation of probation (failing to follow conditions of release from probation which is release of an offender from detention subject to a period of good behavior under supervision)           unless she met the officer after his shift and provided sexual favors. The other woman claimed the officer caught her smoking marijuana and threatened to report her to child protective services, the government agency that investigates child abuse, unless she too met him for sex after his shift. The women are also suing the chief of police who allegedly was buddies with the offending officer and fabricated his background check, thereby enabling the officer to be hired.

    The Lloyd’s policy covers police wrongdoing done “within the scope of (an officer’s) duties”. This is a term of art in law, meaning activities of an employee done in furtherance of the employer’s business, usually performed during working hours.   Lloyd’s claims the after-hour liaisons are not coverd by the insurance.  

    An additional provision of the contract includes a maximum coverage of $900,000 for any one wrongful act. Lloyd’s argues that if it is liable at all, its maximum exposure is $900,000, calling the two alleged sexual encounters both part of a series of related sexual abuse and thus only one illegal act. In furtherance of this argument, Lloyd’s notes both incidents involved the same officer, the same modus operandi, and the same wrongful conduct of sexual abuse.

    The town seeks a declaratory judgment (a decision of a court that determines the rights of parties without ordering damages or directing one party or the other do something) that the officer was acting within the scope of his employment, and the two cases constitute separate wrongful acts.

    Contracts often contain terms and provisions that appear clear and easily understood when read in the abstract but become cloudy when applied to specific facts. Rules of contract interpretation exist to address these circumstances, including some that are particular to insurance contracts. Those rules are as follows.

    1)    The primary rule of contract interpretation is to ascertain and give effect to the parties’ intentions.

    2)    The words in a contract should be given their plain, ordinary and popular meaning

    3)    If contract language is susceptible to more than one meaning, the language is ambiguous. Typically, the ambiguity will be construed in favor of the party that did not draft the contract.

    4)    . Exclusionary clauses (provisions in an insurance contract that exclude certain risks from insurance coverage), will be strictly construed against the insurer if the insurer drafted the clause, which is usually the situation. The reason is – the insurer had the last chance to eliminate ambiguity.

    The rules seem clear enough but, as the case against Lloyd’s demonstrates, the application can be mighty tricky. A court will ultimately decide how the terms will be interpreted. .

    For more information, click here.

    DISCUSSION QUESTIONS:

    1)    Applying the rules of interpretation, how would you rule on the issue of whether the officer acted within the scope of his employment when he committed illegal acts? What is the basis for your decision?

    2)    Applying the rules of interpretation, how would you rule on the issue of the number of incidents involved in this case – one or two? What is the basis for your decision?

     

     

     

  • Abercrombie and Fitch Wins Disability Discrimination Case; Not All Store Entrances Must Be Accessible

                   

    Abercrombie and Fitch (A&F) was sued for allegedly violating the Americans with Disabilities Act (ADA), a law that strives to eliminate discrimination against individuals with disabilities. The case[1] involves the porch-like structure that serves as the central entrance at most Hollister stores, a chain owned by A&F). The structure is designed to look like a southern California surf shack, and is part of the chain’s branding. To reach the porch, shoppers must ascend several steps. To enter the store, customers then walk to the back of the porch and descend additional steps. Typically, on either side of the porch are two doors leading directly into the store without the need to contend with steps.

    The plaintiff in the lawsuit, a wheelchair-bound customer, attempted unsuccessfully to enter a Hollister store in Colorado through the porch entrance. She sued claiming discrimination because the steps rendered the porch impossible for her to access.

    The ADA was passed by Congress in 1990 and prohibits discrimination in places of public accommodation (places that offer goods or services to the public), employment and transportation. Clothing stores are places of public accommodation, which also include hotels, restaurants, casinos, doctor’s offices, schools, theaters, arenas, etc..

    Because the ADA is a federal statute, the case was first heard by a federal district court, the federal court with original jurisdiction. That court’s decision held that A&F violated the ADA by denying wheel-chair bound customers part of the shopping experience that was available to able-bodied shoppers. The court entered an injunction, which is a court order requiring that a litigant cease certain action. The Injunction against A&F required that the company remove the steps from the entry porches.

    A&F appealed to a United States Court of Appeals, the court in which appeals from federal district courts are heard. The appeals court examined ADA design standards. These are guidelines, developed by the Department of Justice (the chief law enforcement agency of the federal government) with input from the Architectural and Transportation Barriers Compliance Board, a federal agency that develops and maintains design criteria to achieve accessibility for people with disabilities. Per the ADA, a public accommodation that complies with the guidelines is deemed accessible.

    The guidelines have rules for public entrances, defined as including any entrance that is not a loading or service entrance. One of the standards requires that 60% of all public entrances be accessible.

    The Court of Appeals determined that Hollister's two accessible public entrances satisfied the guidelines.  The court thus reversed the district court. This latter decision enables A& F to retain the porches, including the steps.

    The appeals court noted that A&F was not intentionally discriminating, and the porch was not a destination in itself but rather merely a means of passage into the store.

    Plaintiff had other complaints but the store satisfactorily addressed them before she began the litigation. Sales counters were lowered, merchandise displays were rearranged to provide unimpeded paths of travel for wheelchairs, and items blocking side entrances was removed.

    For more information see Colorado Cross-Disability Coalition, Hansen et seq v. Abercrombie & Fitch, Co.,  _F.3d_. 2014 WL 4290589 (Colo, 2014).

    DISCUSSION QUESTION:

    Do you think the Court of Appeals’ decision is fair to both parties? Why or why not?

     



    [1] Colorado Cross-Disability Coalition, Hansen et seq v. Abercrombie & Fitch Co, _F3d_, 2014 WL 4290589 (Colo., Aug. 29, 2014).

  • Union’s Fliers Claim Hotel Infested by Bedbugs; True or Defamation?

            

    A New York City hotel is suing a union claiming defamation, meaning an untruthful statement made to third parties that injures the target’s reputation or deters others from associating or doing business with that person or company.

    The recently renovated New Yorker hotel, located at 481 Eighth Avenue, is completing upgrades to its facility. In the process, it has angered a painter’s union, which is an organization of workers (in this case, painters) formed to advance the interests of the group including wages and working conditions,

    The hotel, which has 1,000 rooms, hired a nonunion contractor for the paint work, presumably because it charged less than the union workers. The union is expressing its discontent by distributing fliers to guests and passersby claiming the hotel is “infested with bedbugs,” and containing a picture of an arm covered with the vermin. To emphasize its point, the union is displaying a giant, inflatable bug located on the sidewalk in front of the hotel. Not appetizing to would-be patrons. The hotel fears future customers will be deterred, and apparently some currently registered guests have cancelled after encountering the union protestors.

    A website exists for filing complaints about bedbugs in hotels called Bedbug Registry. . It contains six listings for the New Yorker Hotel . Of those, four report no sightings of the dreaded creatures at the facility, and two reported bed bug bites.

    In this circumstance, while the hotel is understandably unhappy, the constitutional right of free speech plays a role. It protects demonstrators provided they do not unduly interfere with pedestrian or vehicular traffic, or otherwise create a dangerous situation. However, defamatory statements are not protected.

    Truth is a complete defense to defamation. The law permits public disclosure of accurate information, even if it is unflattering or worse yet, damaging. The union will likely argue that its flier and bedbug claims are accurate, using as support the two reviews on the Bedbug Registry. The hotel will no doubt retort that two incidents of bed bugs in a 1,000 room hotel is de minimis (so minor as to be disregarded) and falls far short of “infested.”.

    The hotel is seeking a preliminary injunction. This is a pre-trial court order compelling a party to do or refrain from doing some specified act (in this case, stop the union from protesting in front of the hotel), A court will grant a preliminary injunction only where plaintiff can prove it would be irreparably damaged by defendant pending trial, and it has a likelihood of success on the merits. The irreparable damage the New

    Yorker is asserting is injury to its reputation causing guests to be diverted, now and in the future. Before a preliminary injunction can issue, the court must conduct a hearing to determine if in fact irreparable damage will occur and to assess the plaintiff’s likelihood of success.

    Additionally, the New Yorker’s lawsuit seeks monetary damages for lost business. The hotel will have to prove an amount of loss to a reasonable certainty. While this term is not amenable to a concrete definition, it is described as “fair preponderance of evidence,”  The actual value of people cancelling their reservations on the days of the protest can probably be easily calculated. But determining the actual value of lost business in the future will be difficult because of the speculative nature o determining who would have stayed but chose to go elsewhere.

    The union will probably claim that any injury to the New Yorker’s reputation was caused by the reports in the Bedgug Registry and like review sites, and not from the union’s protests. As with most cases, a jury and judge will have a difficult task sorting out the facts and the law, respectively, to arrive at a decision.

    For more information, click here.

  • Matthew Martoma: Eighth SAC Employee Convicted of Insider Trading and 81st of 89 Charged to Be Sentenced

    Matthew Martoma, a former fund manager for Steven A. Cohen, the billionaire hedge fund owner, was sentenced to 9 years in prison for insider trading.  Mr. Martoma is the eighth SAC employee to be found guilty or enter a guilty plea to charges of insider trading while employed at SAC.  He is the 81st of 89 who have been charged with insider trading by U.S. Attorney Preet Bharara since 2009 who have been found guilty or entered a plea.  His sentence is also one of the longest in all of the cases (with 11 years being given to Galleon Group founder, Raj Rajaratnam).  You can see a slide show of the trial events and sentencing here.

    One of the ironies of the case is that the prosecutors were hoping that Mr. Martoma would enter a guilty plea in exchange for their recommendation for a lesser sentence in exchange for his providing evidence against Mr. Cohen.  Mr. Cohen firms has paid almost $1 billion in fines related to insider trading, but Mr. Cohen has escaped prosecution even though he was involved in many of the same trades that resulted in Mr. Martoma's conviction.  Mr. Martoma refused all possible deals and went to trial with a resulting jury conviction.  The judge imposed the higher number of years, despite Mr. Martoma's lawyers pleading the judge for two to three years because Mr. Martoma (age 40) has small children.  The judge indicated that he felt Mr. Martoma was looking for "one big score," that he got it, and "now he has to deal with the fallout." Christopher M. Matthews, "Ex-SAC Trader Gets Nine-Year Term," Wall Street Journal, September 9, 2014, p. C1. As a result of obtaining inside information on the drug trials for pharmaceutical firms, Mr. Martoma avoided $275 million in losses by selling the companies' stock prior to their public announcements of setbacks in their drugs' developments.  

    Mr. Martoma will also pay a $9.4 million fine, which exceeds his current net worth of $7.4 million.  The $9.4 million represents his bonus for 2008, the year in which he made the sales tied to the inside information he received.  

  • Medical Marijuana Use by Employees: Can Employers Terminate Them for Drug Use?

    Brandon Coats, 35, was paralyzed in an auto accident when he was 16 years old.  A Colorado resident, Mr. Coats carried a medical marijuana card, and used marijuana to ease the pain he experiences as a result of the degeneration of joints and tissue and the use of his wheelchair to function.  Mr. Coats was randomly selected for a drug screening by his employer and tested positive for marijuana.  He was terminated by Dish Network because its drug policy provides that drug use, even under the terms of Colorado’s marijuana laws (which allow for recreational use of marijuana), violated its policy.

     Mr. Coats filed suit alleging that Dish Network’s termination violated Colorado’s Lawful Activities Statute, an employment discrimination provision of the Colorado Civil Rights Act (CCRA). The statute prohibits an employer from discharging an employee for “engaging in any lawful activity off the premises of the employer during nonworking hours.” Dish Network filed a motion to dismiss, arguing that the use of medical marijuana was not “lawful activity” because it was prohibited under both state law and federal law. The trial court dismissed the case on the grounds that marijuana use was not lawful under federal law and, as a national employer, Dish Network, could apply a uniform test of illegality. Mr. Coats appealed, arguing, among other issues related to “lawful activity” that the actions of Dish Network should also have been reviewed as the tort of intrusion upon his private affairs and constituted a breach of privacy privacy (a tort claim).

     The Colorado Court of Appeals held, in a 2-1 decision, that the dismissal was not a violation of the CCRA because marijuana use is still illegal under federal law.  Coats v. Dish Network, L.L.C. 303 P.3d 147 (Colo. App. 2013).  The court also held that there was no invasion of privacy because the drug test was a condition of employment and its results were divulged only to the employer. Mr. Coats appealed that decision to the Colorado Supreme Court, which will hear the case on September 30, 2014. Coats v. Dish Network, LLC, 2014 WL 279960 (Colo. Jan 27, 2014)

    The case represents an interesting conflict between employee protections and the new state laws on marijuana use.  There are now 23 states that have legal medical marijuana use, and two state, Washington and Colorado, have legal recreational use and sales of marijuana.

    Courts have been consistent in upholding employers’ rights to have a comprehensive drug use and testing policy.  There are employment ads that provide, “Please do not apply is you are NOT drug free or carry a medical marijuana card,” or “We screen for medical or recreational marijuana.”  A company in Seattle indicates that it is a “zero-tolerance company, including marijuana!”   Jack Healy, “Legal Use of Marijuana Clashes with Job Rules,” New York Times, September 8, 2014, p. A11.

    The Colorado Supreme Court case will be the first definitive ruling on the marijuana and work issue in that state, with many states soon to follow.

    DISCUSSION STARTERS

    1. Describe the conflict in laws in Colorado.
    2. Explain what a right to privacy is and what that tort provides for those whose privacy is violated. 
  • Bank Sued for Redlining ; Racial Discrimination in Mortgage Loans

             

    The New York State attorney general has sued Evans Bank, a regional lender in western NY, claiming it discriminated against African-Americans by denying them mortgage loans. This type of loan is given for the purpose of buying land, a house and/or other buildings. In exchange, the borrower gives the lender a security interest, called a mortgage, in the property. If the borrower fails to repay the loan, the mortgage enables the lender to foreclose on the property, meaning pursue a legal proceeding designed to oust the borrower and take possession.

    Excluded is a part of Buffalo where 75% of Buffalo’s African American population reside.

    The lawsuit alleges the bank violated the Fair Housing Act, a federal law passed in 1968. That Act prohibits discrimination in the sale or rental of housing by landlords, banks and other lending institutions in the sale or rental of housing. The protected categories include race, color, religion, sex, national origin, family status (children), or disability.

    The bank is accused of redlining, refusing to provide loans in neighborhoods populated with large numbers of African-Americans because of the area’s racial make-up. Additionally, the case accuses the bank of failing to solicit customers and provide branches in those neighborhoods.

    Per the lawsuit, the bank created a map identifying as its lending area most of Buffalo and surrounding suburbs but excluded a part of the city where 75% of Buffalo’s black population resides. Other banks without even an office in Buffalo made more loans to African-American borrowers than Evans Bank, typically at more than double the rate of Evans.

    The bank’s president has characterized the accusations as “unfounded and without substance”.

    A variation of redlining, sometimes referred to as reverse redlining, is the practice of granting subprime loans. Contrary to the apparent definition of the term, these are loans with considerably higher-than- normal interest rates. Prior to the financial crisis of 2008, many large banks practiced reverse redlining. Residents of black and Hispanic neighborhoods were able to secure loans but at steep interest rates. When the economy soured in 2008, many such borrowers were unable to keep up with the high payments and were forced to leave their homes due to foreclosure.

    Without access to mortgage loans, home ownership is out of reach for most people, denying families of a permanent place to live and a hallmark of success in American life. Further, neighborhoods suffer. People who might purchase abandoned and boarded-up homes and renovate them are unable to come to the buildings’ rescue. Abandoned homes breed blight.

    Similar lawsuits against other banks are being pursued in Providence, Rhode Island and Los Angeles, California. Investigations are underway in other states where similar lawsuits are anticipated. The information needed to support such cases is available due to a law called the Home Mortgage Disclosure Act. It requires banks to gather and report to the government important information regarding their lending practices. The required data include the number of mortgages granted, the amount of each loan, information about applicants, the outcome of each application, and location of the property the applicant seeks to purchase. Banks must report the information annually. It is used for a variety of purposes including determining disparities in home loan access and subprime lending.

    For more information, click here.

    DISCUSSION QUESTION:

    If Evens Bank is determined to have violated the Fair Housing Act, what would be an appropriate penalty?

  • BP and a Finding of Gross Negligence in Deepwater Horizon Spill

    Several days ago, a federal judge , In re Oil Spill in Deepwater Horizon Oil Rig, -- F.Supp.2d ----, 2014 WL 4375933 (E.D.La.) found that BP, the international oil company, was chiefly responsible for the Deepwater Horizon oil rig explosion.  That finding, which labeled BP "grossly negligent," means that BP could face penalties of up toe $4300 for each spilled barrel of oil under the Oil Pollution Act (OPA).  The total number of barrels spilled was 4.2 million, which means that BP could owe up to $18 billion, which would be the largest penalty in history.  BP is appealing the decision and hoping for a reversal to just a finding of negligence, which would reduce the fines to $1,100 per barrel. This part of the case was focused on determining responsibility and level of negligence, simple negligence (and contractors Halliburton and Transocean have already been found to be negligent and fined $1,100 per barrel).The amount of the spill is still subject to a factual hearing that will follow the gross negligence determination.  BP is appealing the finding on the grounds that gross negligence has required a much higher standard of proof and deliberate conduct, something the company maintains is lacking in the Deepwater Horizon explosion. 

    The court found that the decision to drill Deepwater Horizon 100 feet deeper was done knowing the risk and done on the basis of greed. One of the engineers who worked on the construction of the rig and testified in the case said that the decision  was “one of the most dangerous things [he] had ever seen in [his] 20 years' experience” and “totally unsafe." The court concluded that the poor design and construction issues in the well were driven by the pressure to get the rig completed and operating. The court apportioned blame among BP and its contractors as follows:  67% BP;  Transocean 30%; and Halliburton  (provided the cement work for the well)3%.  The fines will be less for Transocean and Halliburton because the court found only negligence on their parts, but BP was found to be grossly negligent. 

    BP will appeal the decision.  However, its financial involvement was outlined by the Wall Street Journal. 


    Litigation and settlement costs                 $25.87 billion

    Spill response costs                                    $14.30 billion

    Clean Water Act costs                                 $3.53 billion

    Environment costs                                        $3.03 billion

    Other costs                                                    $ 1.94 billion

    DISCUSSION STARTERS

    1.  What lessons should oil companies take away from BP's experience?

    2.  What is the difference between a finding of negligence and gross negligence?

  • The Made-Up Witness in the Boeing Shareholder Case: Lawyers Sanctioned

    A group of shareholders brought suit against The Boeing Company for alleged misrepresentations by the company regarding the progress and development of its 787 Dreamliner aircraft.  The plaintiff shareholders were represented by Robbins Geller Rudman & Dowd, a law firm that emerged from the former Milberg Weiss firm that fell apart in 2006 after its key partner, Bill Lerach,went to prison for false statements made in tort cases he handled for that firm.  

    The suit against Boeing was based on the testimony of one witness, Bishnujee Singh, a Boeing employee who had worked on the mid-body and fuselage/wing integration of the 787.  Mr. Singh's statement submitted in the case indicated that Boeing was aware of poor wing stress test results but did not disclose those problems in their required public reports.  A delay or failure in the 787 design and production would have a substantial impact on Boeing earnings. Mr. Singh made his statements in 2009, but by April 2010, he had contacted an investigator for Robbins Geller and told her that he no longer wished to cooperate with them on the case. The initial complaint in the case was dismissed.

    Robbins Geller filed a second complaint that was supported by testimony from a confidential witness, an alleged employee at Boeing, who turned out to be Singh. The new complaint added paragraphs that bolstered the original claim of Boeing's knowledge of the problems with the 787.  Boeing again moved for dismissal, but the court, based on the presentation of additional information, denied the dismissal and the case proceeded to discovery. Boeing did appeal the dismissal.  On appeal, 711 F.3d 754 (7th Cir. 2013), the court held that the complaint should be dismissed because there could be no fraud in terms of disclosure during the development phase of a product. 

    However, as discovery proceeded during the appeal, Robbins Geller eventually revealed Singh's identity.  Boeing investigated and found that Singh had never been a Boeing employee and had only worked for a contractor for the company.  Boeing requested documents from Singh, and he responded by repudiating the allegations that Robbins Geller had made in its first and second complaints. Mr. Singh did not see the second complaint until he was deposed by Boeing. In his deposition, he denied that he had ever worked on the 787. This case illustrates how important the discovery process is in litigation.  

    Boeing then moved for dismissal and the court granted it, noting that the complaint was based on unverified hearsay and was "at best unreliable and at worst fraudulent." City of Levonia v. Boeing, 2014 WL 4199136 (N.D. Ill 2014). The result is that the federal district judge, outraged at the false information submitted, has required Robbins Geller to pay Boeing's legal fees and imposed millions in sanctions. The judge noted that this is the fourth time that the firm has been found guilty of misconduct in its cases, with the sanctions increasing each time. The purpose of sanctions is to prevent lawyers from filing cases that are not supported by evidence.  In this case, the problem was that the evidence submitted was false and included without verification by the lawyers.  

    DISCUSSION STARTERS

    1.  What is the issue underlying the suit?

    2.  How did discovery play an important role in this case?

  • Celebrity Chef Charged with DWI; Liquor Licenses at Risk

                      

     

    Celebrity chef Todd English has been arrested for driving while intoxicated.   A police officer allegedly (claimed but not yet proven at a trial) observed him drifting out of his lane on a Long Island, New York roadway, and pulled the foodie over. The officer asked the cook if he had been drinking, and English admitted to two glasses of wine. The officer asked English to submit to a breathalyzer test but he refused. English was arraigned following the arrest. (An arraignment is the first appearance of a defendant before a court. The defendant is officially informed of the charges, a plea of not guilty is typically entered, the judge ensures the defendant has access to an attorney, and bail is addressed.) The charge is a misdemeanor which is a crime for which the maximum jail term is one year. In New York and numerous states, a second DWI charge within ten years is a felony, a more serious crime for which the maximum jail term exceeds one year. The judge imposed bail in the amount of $1,500 which English posted. His lawyer issued a statement saying that the chef “adamantly denies the allegations.”

    English, 54, had been celebrating his birthday at dinner with friends on the evening of the arrest, followed by further partying at two nightclubs.

    English owns numerous restaurants in such cosmopolitan venues as Disney World, Las Vegas, Mexico, Boston, Cape Code and New York City, plus in airports in New York and Boston. He has published several cookbooks and is the host of a PBS TV show called Food Trip withTodd English. He has been a guest on many talk shows and participated in episodes of Iron Chef and Top Chef. His restaurants have won numerous awards and recognitions.

    If he is found guilty of DWI, the conviction could play havoc with his restaurant pursuits. His eateries have liquor licenses, a necessary prerequisite to selling liquor. Alcohol usually constitutes a significant percentage of a restaurant’s sales.

    A license, once issued, must be renewed periodically, typically annually or every second year. If a licensee is convicted of DWI, the guilty finding will automatically prevent renewal in some states, and may trigger immediate suspension (temporary cancellation) or revocation (permanent cancellation) of an existing license. In other states, the subsequent DWI will prompt reexamination of the licensee, which can lead to suspension or revocation.

    If English plans to open any more restaurants, he will need to apply for new licenses because each restaurant must have its own liquor license. They are issued by a regulatory agency within each state with a name not unlike the Alcohol Beverage Control Board or the Liquor Authority. A restaurant seeking a liquor license must apply and be approved. Qualifications usually include minimum age of 21, completion of a certified responsible beverage server course, and “meet criminal record requirements”. These typically include no felony convictions (in some states the prohibition applies to just the five years immediately preceding the application) and no violations of alcohol laws including driving while intoxicated (DWI), also referred to as Driving Under the Influence (DUI).

    States vary on the impact a DWI conviction will have on a license application but all granting agencies frown on licensees having violated laws relevant to alcohol. In some states, such as Texas, a DWI conviction is an automatic disqualification for a liquor license. In many states, including New York where English was arrested, a first DWI, or other misdemeanor, is not an automatic impediment. but can be a contributing factor to a denial . The state will want to know information about the underlying circumstances and then will assess such factors as the severity of the crime, how recent was the conviction, do the facts evidence a disregard of the alcohol control laws.  In addition to DWI, an applicant’s chances for a license will be hindered by a conviction of selling liquor without a license, tax evasion, promoting prostitution, promoting gambling, and more. The license-issuing agency will also review the applicant’s participation in rehabilitation programs and what s/he has done to change behavior, and the person’s overall record in the community. Conviction of crimes unrelated to alcohol will also be examined. The Liquor Authority will consider each situation on a case-by-case basis.

    Failure to disclose a criminal violation on a liquor license application is a misrepresentation of a material fact and is itself grounds to deny, suspend or revoke a license in most states.

    The safety risks associated with DWI should be reason alone to separate one’s drinking and driving. A person with a career in the hospitality industry has additional motivation to avoid driving while intoxicated.

    For more information, click here.

    DISCUSSION QUESTION:

    Why are liquor authorities so particular about checking the backgrounds of liquor license applicants?

  • Miley Sirus’ VMA Date Is A Fugitive from Justice; What Is That Exactly?

       

    Miley Sirus won the Video of the Year at the Video Music Awards. Rather than giving the traditional speech thanking those in her entourage who contribute to her success, she deferred to a dispossessed young friend named Jesse Helt who utilized the few minutes in the limelight to address the issues of homelessness. Miley and Helt met at My Friend’s Place, a nonprofit organization in Los Angeles, California, that assists street youth. Helt is 22 and has lived in shelters all around Los Angeles.

    While he was on stage reading from notes written on scraps of paper, Miley looked on, teary-eyed. Helt said, “I am accepting this award on behalf of the 16.million runaways and homeless youth in the United States who are starving and lost and scared for their lives. I know because I am one of those people.” Once Helt was center stage, the media was quick to investigate. Turns out he is a fugitive from justice, meaning a person who fled a state to evade the law and avoid prosecution for a crime. He is wanted in Oregon in connection with four-year old drug-related charges of criminal mischief (Intentionally causing property damage) and .criminal trespass (entering or remaining unlawfully in someone else’s property).

    .A warrant for Helt’s arrest (a written court order that directs police to detain a designated person) is outstanding in Oregon. This means police in Oregon can arrest him if they find him in that state. The warrant also directs other states to extradite him, meaning if his caught, deliver him to Oregon. Police in any other state who locate Helt must hold him in custody for up to 90 days to enable Oregon to make arrangements to transport him to that state. The requirement of each state to retain a fugitive from justice and alert the state that issued the warrant is contained in the United States Constitution, Article IV, Section 2, clause 2. The purpose of the extradition clause is twofold. It permits states to try offenders in the jurisdiction where the crimes were committed. Additionally, it prevents any state from becoming a sanctuary for fugitives from justice.

    A defendant has a right to contest extradition. This means the defendant can challenge the legality of the warrant. This process is called a habeas corpus proceeding, meaning a challenge to the legality of imprisoning a person. The grounds might be the person arrested is not the person referenced in the warrant, or the detained person is the one identified in the warrant but was never in the state that issued the warrant, or he was in the state but not at the time the crime was committed. Other grounds to challenge the warrant include that the statute defendant is accused of violating is unconstitutional or invalid for some other reason, or or the demanding state made some other error. At such a proceeding, the burden of proof (the legal responsibility to present sufficient evidence) is on the fugitive to prove that extradition is not proper or warranted under the circumstances.

    Miley chastised the media for focusing on the warrant and tweeted, “While the media obsesses over one homeless man’s legal issue, let’s help the other 1.6 million homeless youth.” Helt has decided to turn himself in, meaning he voluntarily reported to Oregon police. They took him into custody. A fugitive from justice is entitled to appear before a judge very soon after the arrest. The judge in Helt’s case imposed bail (a sum of money paid to a court in exchange for a defendant’s release from custody while the case is pending) in the amount of $25,000. Helt (or likely Miley) has paid the bail and so he is no longer behind bars. If he fails to appear on a scheduled court date, the money will be forfeited to the state. His next court date is in two weeks at which time the original charges against him will proceed.

    DISUCSSION QUESTION:

    What do you think prompted Helt to turn himself in? Was that a smart move? Why or why not?