Texas Law Blog

Tipton Jones Blog: Legal Gaming is Coming to Texas: If You Can’t Beat Them... Buy Them.

2009-09-16T07:50:00.000-07:00

Tipton Jones Blog: Legal Gaming is Coming to Texas: If You Can’t Beat Them... Buy Them.

Legal Gaming is Coming to Texas: If You Can’t Beat Them... Buy Them.

2009-09-15T13:39:00.000-07:00

“This is a business that thrives on competition (Casino Resorts). For 24 hours a day, seven days a week, the strip hosts the most violent competition in business in America.” – Steve Wynn.

If you need another sign to believe that legal gaming is coming to Texas, this one comes with neon lights. Oklahoma based Global Gaming LSP, LLC owned by the Chickasaw Nation, is the rumored to be the front runner to buy a controlling interest in Lone Star Park. Yes, this is the same Chickasaw Nation that owns the Winstar World Casino 90 miles away in Thackerville, Oklahoma. So why would the Chickasaw Nation buy a beleaguered horse track in Grand Prairie, Texas? First and foremost, Global Gaming sees the writing on the wall. Texas will legalize gambling and soon. Second, it gives Global Gaming a seat at the table, so it can ante up during the next legislative session and have a say on what kind of gambling will be allowed. Third, owning Lone Star Park will give Global Gaming strategic options. Global Gaming may choose to continue its efforts on growing its Thackerville casino or shift its focus to building a competing facility in heart of one of the largest metropolitan markets in the United States. However, if Global Gaming wins its bid in bankruptcy court, it will be faced with a conundrum. Global Gaming has already invested substantial capital in its Thackerville casino with a brand-new 12-story, 395-room multi-million dollar hotel. On the other hand, there is no question that a Dallas based casino operation would attract a much larger audience of gamers. If Global Gaming wins its bid to buy Lone Star Park and when Texas legalizes gambling, be prepared for another Red River Rivalry, this time between the Oklahoma legislature and the Texas legislature on who can build a bigger and better casino.

Adam W. Vanek
214.998.1365
adam.vanek@tiptonjoneslaw.com
http://www.tiptonjoneslaw.com/bio-adam-w-vanek

Adam is a former international banking officer for a FORTUNE Global 500 investment bank and focuses his legal practice representing entrepreneurs and small to middle market businesses in contracts, litigation and government matters. Adam was recently named 2009 Texas Rising Star by SuperLawyers magazine.

Legal Gaming is Coming to Texas: Part III

2008-10-10T07:10:00.000-07:00

"It's crazy to have Louisiana gamblers mad at Oklahoma for taking away their Texans." – Kinky Friedman

As I noted earlier, legal gaming is coming to Texas. At first, I stated the question was not “if?”, but “when?” Now there is a new question presented and that is “how?”

There is a natural progression of how states legalize gaming: pari-mutuel betting such as dog tracks and horse tracks, state or multi-state lottery, video slot and bingo machines, and finally table games. A pattern that many states, including Texas, has followed. Given the buzz in Austin, I fully expect the 2009 Texas Legislature to legalize 8-Liners or slot machines, video poker, and video bingo at horse tracks, off-shore casino boats along the Texas Coast, and certain Native American reservations.

While the Texas legislature may approve legalized gambling, the more difficult task is how to get typically conservative Texans, especially in East and Central Texas, to vote for it. So, how?

To predict the future, we must first look to the past, the very recent past. Just this past August the Maryland Secretary of State, a former racing industry lobbyist, submitted the final ballot language for their proposed video slot machines. The ballot initiative as decreed the “Authorized Video Lottery Terminals to Fund Education.” That’s right, “to Fund Education.” As American essayist, Gore Vidal, once wrote, “As societies grow decadent, the language grows decadent, too. Words are used to disguise, not to illuminate, action: you liberate a city by destroying it. Words are to confuse, so that at election time people will solemnly vote against their own interests." Not only does the Maryland ballot language include the now ubiquitous language of taxing moral vices for benefit education, but it is also the language that law makers left out, which is important – “slot machines.”

According to an article by Tom LoBlanco of the Washington Times, the Maryland constitutional amendment contains not one mention of slot machines, only video lottery terminals. The ballot language further explains that the measure, “Authorizes the state to issue up to five video lottery licenses for the purpose of raising revenue for education of children in public schools.” As Mr. LoBlanco aptly points out, the ballot language does not inform the voters that one-half of the tax proceeds from legal gambling will go to the State’s general coffers and not to education. This, of course, is reminiscent of the ballot language, or absence thereof, used by Governor Ann Richards to pass the Texas lottery.

Critics of the Maryland gambling bill sued claiming that the ballot language was “misleading.” One month later, in September, a three-judge panel ruled that the ballot language was indeed misleading. However, the court also held that if the word “primary” was added before the word “education”, then the ballot language would most likely pass judicial muster. Most notably, however, the Maryland court did not require the inclusion of the term “slot machines.”

Writing misleading ballot language is a common practice for law makers who know that their propositions are unpopular with the voting public. There is not a better local example of using deceptive ballot language than the Trinity Parkway Project a/k/a Trinity Toll Road, where voting Yes meant No and voting No actually meant Yes.

When the Texas legislature passes legal gaming next year, and it will, and presents the initiative to Texans for a vote, don’t be surprised to find the phrase “to support education” on the ballot. Similarly, don’t be surprised when the term “slot machine” is conspicuously absent. As humorist Henry Wheeler Shaw said over a century ago, "There's a great power in words, if you don't hitch too many of them together."

Adam W. Vanek
avanek@tiptonjoneslaw.com
214-890-0991

Why do I need to hire a lawyer to incorporate? Can’t I just do that online?

2008-07-25T07:30:00.000-07:00

“It is often said that everyone needs a good lawyer, C.P.A. and mechanic.”

One of the most common mistakes entrepreneurs make is incorporate on the cheap. Numerous television advertisements or internet banners advertise, “For just $99.99, you too can incorporate online.” Sometimes, a C.P.A. firm will offer to incorporate a business as part of their services. However, that $99.99 internet special typically costs the business owner thousands of dollars later.

First, one of the prime considerations of incorporating, forming a limited partnership or forming a limited liability company is to protect you, individually, from liability. A lawyer can identify where your business may be vulnerable and what steps should be taken moving forward to protect your assets and minimize your risk.

Second, incorporating may not be the best option for your business. Depending upon the nature of your business, your relationship with other investors, or your long-term goals, forming a limited partnership or limited liability company may be preferable. Third, a lawyer will draft bylaws, a partnership agreement, or company agreement tailor-made on how you want to manage and sell equity in the company. Fourth, a lawyer will need to draft organizational minutes electing the company’s officers and outlining the scope of their duties, which a bank typically requires.

Most importantly, a lawyer drafts company documents with an exit strategy in mind. For example, co-owners of a company often start out the best of friends and continue to be so, especially as the business thrives. All too often, however, some event occurs that causes mistrust or the co-owners decide to part ways. Depending upon the circumstances, the company’s break-up results in an expensive lawsuit. Often a lawsuit could be avoided if the business owner simply hired a lawyer in the beginning. As discussed above, a lawyer could draft the documents that would prevent any ambiguity as to the Company’s management, sharing of profits or losses, requiring additional equity contributions or its dissolution. A lawyer should also discuss the possibilities of whether the business owner’s exit strategy is to sell to another company, his or her co-owner upon retirement or pass the company to his or her children.

The ultimate question is whether the entrepreneur is serious about starting a business or will it be just a hobby. If a business owner is serious about being successful, then the initial investment of sitting down with a lawyer in the beginning will yield big returns, or avoid costly litigation, in the future.

Adam W. Vanek
avanek@tiponjoneslaw.com
214.890.0991

Law Firm Clients Benefit From Technology

2008-06-10T09:16:00.000-07:00

Until a few years ago, I didn't have a cell phone because my early experiences with cell phones were terrible. Spending hours every month dissecting my mobile phone bills and changing my rate plan was an exercise in anger management. I never knew whether my bill was going to be eighty dollars or three hundred dollars. I was disgusted, so I stopped using a mobile phone. My clients were disgusted. They offered to buy one for me. I declined; however, I finally relented when I thought I might lose clients. My new wireless rate plan was good. My clients were happy. Fast forward to today. Now, I not only have a cell phone, I also have a pocket PC that is connected to the office servers. I have a laptop with mobile high-speed internet connectivity. I have web-based server email, mobile and home VPN, Gmail, eFax, .pdf client files on the server, and the list goes on. All of this means that I can do legal work anywhere and at any time, and faster than ever before. Technology allows me to pack substantial amounts of work into each billed hour. Technology also allows me to work after hours and on weekends, which often does not get billed.

Score one for the clients!

Andrew Jones

(214) 979-0100

ajones@tiptonjoneslaw.com

Simplified Probate in Texas

2008-06-03T11:09:00.000-07:00

With simplified techniques allowed by Texas law, taking care of probate issues of a loved one’s estate can be relatively quick, easy, and inexpensive. This is true whether or not the deceased died with a will.

Generally, probate is the process of gathering assets of someone who has died, paying their debts, and distributing the assets to the heirs. If the deceased left a residence or other land including any oil and gas interests, it will almost certainly be necessary to do some kind of probate procedure to clear title to these properties. It may also be necessary to obtain a court's authority to act for the deceased and distribute assets of the estate. Almost universally, it is simpler and less expensive to take care of probate issues sooner rather than later.

A significant benefit in Texas is that often abbreviated procedures may be used, limiting probate within the court to as little as 3-6 weeks, and avoiding excessive cost and paperwork. The method which is most prudent depends on whether or not a Will was used and the size and complexity of the estate, as well as other factors. The attorneys at Tipton Jones handle these simplified methods very often, and have worked hard to devise systems to minimize the cost and time required. Because of this, we generally handle these matter on a flat fee basis (in the $2,000 range in an ordinary case), and the procedure is most often complete in around six weeks, depending on the courts’ schedules.

The Tipton Jones attorneys who practice in this area can quickly advise you on whether any probate procedure at all might be necessary and, if so, the applicable shortcuts that may be helpful.

Paul Tipton

(214)890-0991

ptipton@tiptonjoneslaw.com

BEYOND BRIEFS: Part Three

2008-05-08T07:41:00.000-07:00

If you’re ready to dive into the world of writing fiction -- I mean commercial fiction; I’ve seen many a brief that might also qualify -- a basic decision you’ve got to make at the start is the genre in which you’re writing. Genre simply defines the type of book you’ve written. It’s important because knowing the genre sets the tone for the reader. Mentally, a reader approaches a thriller differently than a romance. From a publisher’s standpoint, it has an even bigger meaning: It determines on which shelf the book will go at the bookstore. It can even drive the publisher’s decision whether to acquire a new novel in the first place, and it certainly is important in helping you target which publishers to submit to.

Genres generally break down this way:

· Commercial fiction: Basically a broad catch-all for fiction that doesn’t fit neatly into other genres, but books for which there is a wide readership potential. Think Dan Brown’s The Da Vinci Code.

· Crime fiction: Stories that revolve around the crime—caper stories, for example—and are often noirish or written from the viewpoint of the criminal. Think Elmore Leonard.

· Detective fiction: Once considered a sub-genre of mystery, this features private or police detective procedurals. Think Ed McBain, James Lee Burke, Robert Crais, Robert Parker.

· Fantasy: Usually involving the same types of elements as found in old legends and folk tales, often with past or future otherworldly settings. Think Lord of the Rings. Again, I sometimes think of briefs I have read.

· Horror: A combination of fantasy and terror, usually fast-paced and often invoking the use of the supernatural. Think Stephen King, Dean Koontz.

· Literary fiction: Can fit in any or all genres, but features the written word as art. Think Joyce Carol Oates, Ayn Rand.

· Mainstream: Another catch-all, novels that don’t fit other genres but which don’t have the same wide commercial appeal as those that would fall into the commercial category. Think Alice Sebold, Wally Lamb.

· Mystery: Mystery doesn’t really have a hard and fast definition. It’s the term that used to be applied to detective stories, but now seems to have a broader definition. At its most basic, it involves the solving of a crime by uncovering clues, ultimately leading to the unknown criminal. There are cozies, which usually involve an amateur sleuth and are somewhat milder in tone, language, and action, and hard-boiled, which usually involve a private eye or police detective and which tend to be more graphic in terms of violence, sex, and language. Think Sue Grafton, Agatha Christie, Mary Higgins Clark.

· Romance: Love stories, often formulaic, that can take on a number of sub-genres: historical romance, time travel romance, romantic suspense, Victorian romance, etc. Think Nora Roberts, Johanna Lindsey.

· Science fiction: This involves fiction arising out of the use of science or technology, often set in the future. Think Michael Crichton.

· Suspense: This crosses a broad range of genres, but always involves creating and maintaining suspense. Think Alfred Hitchcock.

· Thriller: Sometimes viewed as a sub-category of mystery or a hybrid of suspense, thrillers often involve a hunt or chase, usually with the protagonist or someone close to the protagonist placed in jeopardy. They can involve espionage, international intrigue, the medical or legal fields—or just about any other. The idea is that, where the mystery creates uncertainly and suspense, the thriller creates…well, thrills. Think Thomas Harris (Silence of the Lambs), James Patterson, John Grisham.

· Western: Tales of the old west, usually post-Civil War, and extending even into the early 1900s. Think Louis L’Amour, Zane Grey, Elmer Kelton.

· Women’s Fiction: A broad catch-all for books that largely appeal to women readers, but don’t fit into the romance category. They often feature strong female characters and are often told from a female point of view. Think Danielle Steele, Nicholas Sparks.

Mike Farris

(214) 979-0100

mfarris@tiptonjoneslaw.com

Texas Comptroller Extends Franchise Tax Deadline to June 16th

2008-05-05T08:02:00.000-07:00

“Taxes: Of life’s two certainties, the only one for which you can get an automatic extension.” – Author Unknown.

Texas businesses were granted a reprieve from confusion. Comptroller Susan Combs extended the deadline for Texas businesses to file franchise taxes from May 15th to June 16th. Ms. Combs cited overwhelming tax payer confusion over the new franchise tax laws as her reason for the 30 day extension. “We want to make sure businesses and tax practitioners have adequate time to make sure they’re complying with the revised franchise tax,” Ms. Combs explained. “Because they’re dealing with new calculations and enhanced technology for filing reports, the one month penalty waiver will help taxpayers accurately complete their returns…”

The Dallas Morning News reported that an estimated 900,000 businesses are subject to the state tax, but that only 300,000 are actually expected to pay due to an exemption for businesses with less than $300,000 in annual gross revenue or total tax liability of less than $1,000. The new franchise tax is expected to generate $6 billion a year for Texas coffers.

How does the new franchise tax affect your business?

Adam W. Vanek

(214) 890-0991

avanek@tiptonjoneslaw.com

Legal Gaming is Coming to Texas: Part II

2008-04-29T08:42:00.000-07:00

“We know we’re losing that business every August by the lines of cars heading to Texas. We’re losing that tax revenue and watching Oklahoma businesses suffer at the same time. It makes more sense to keep those dollars here in our own state. It’s going to help our citizens, our businesses, and eventually help those businesses grow.” – Oklahoma State Senator Johnnie Crutchfield speaking about the Texas Sales Tax Holiday.

This blog is not a social commentary regarding the morality of legal gambling, but rather its inevitability.

As I noted last week, in 2009 the Texas Legislature will reconvene. High on the Capitol’s priority list is whether or not to legalize gaming. Last week I discussed the natural progression of how states legislate legal gaming: pari-mutuel betting such as dog tracks and horse tracks, state or multi-state lottery, video slot and bingo machines, and finally table games. This week, I want to give you a 2009 preview of the 3 most common arguments in favor of legalizing gaming in Texas: taxes, jobs and economic necessity for horse and dog track industry.

Tax Revenue: As Senator Crutchfield talks about the “line of cars heading to Texas” during the once a year Texas Sales Tax Holiday, some Texas representatives are crying foul as the lines of chartered buses migrate each day from Texas to Oklahoma casinos. Former gubernatorial candidate and famed plain talker, Kinky Friedman, commented on the intense competition between Oklahoma and Louisiana, "It's crazy to have Louisiana gamblers mad at Oklahoma for taking away their Texans." Some of the more realistic figures estimate that Texas will realize nearly $6 billion in direct gaming tax revenue annually. The proponents of legal gambling will argue that this new found money will fund Texas education, health care for children and maybe even put an end to new toll roads, as a lagniappe. But tax revenue is not the only reason, the Legislature will legalize gambling.

Job Creation: The second argument gambling proponents will make is that of job creation. It is true that legal gambling will create jobs, a lot of jobs. First, construction jobs and second, the jobs directly related to the gaming itself. And then there are those jobs that benefit from legal gambling indirectly, such as the hospitality industry, hotels, restaurants and travel. Metropolitan convention and tourism bureaus all across Texas are especially interested in legalizing gambling as a competitive advantage against competing cities such as Chicago, Atlanta and Orlando. If you then include the tax revenue generated from hotel room taxes or rental car taxes, the trickle down economics is compounded.

Economic Necessity: The third argument gaming proponents will cite is the need for legal gaming to save the Texas horse track industry. Despite hosting the Breeder’s Cup in 2004, the operator of Lone Star Park at Grand Prairie is now in dire financial straits. 2008 saw the smallest opening day attendance since the Lone Star Park was first opened in 1997. Magna Entertainment Corp., the operator of Lone Star Park announced that it is considering liquidating it’s assets to fend off creditors. While Magna does not own Lone Star Park, the City of Grand Prairie actually owns the track and leases it back to Magna, it does own significant acreage surrounding the horse track. According to the Dallas Business Journal, Magna Entertainment reported a $113.8 million net loss in 2007, bringing its total debt to $510 million. However, Magna has made it clear that it is hoping that Texas will legalize video slot machines and soon. As reported in the Austin American-Statesman, Reggie Bashur, spokesperson for the horse track industry, describes the need for legal gaming as a necessity for horse racing’s economic viability. "It's not gaming for the sake of gaming. It's gaming for the survival of the horse community as well as the track industry." The horse track industry has captured the attention of the Texas Legislature. In 2007, State Representative Jose Menendez, (D) San Antonio, filed a bill that would allow poker tables at specifically racetracks.

Eventually, the Texas Legislature will declare it is time for Texas to get off the bench and get into the game. And of course, the House will want its cut.

Adam W. Vanek

(214) 890-0991

avanek@tiptonjoneslaw.com

OF SUGAR CANE AND QUEENS: Sovereignty in the Sandwich Islands: Part Two

2008-04-25T09:23:00.000-07:00

I’ve heard from several folks in response to my last entry wanting to know just what in the heck that Hawaiian sovereignty stuff is all about, and what on earth would make President Clinton sign something called The Apology Bill. Well, to paraphrase Keanu Reeves in Bill and Ted’s Excellent Adventure, “Something is afoot in the Sandwich Islands.” (The movie line is actually “Something is afoot at the Circle K.”) You only have to read cases like Office of Hawaiian Affairs v. Housing and Community Development Corporation of Hawaii, 177 P.3rd 884 (HI 2008) and Rice v. Cayetano, 528 U.S. 495 (2000), and study the history and debate over “The Native Hawaiian Government Reorganization Act of 2007,” also known as the Akaka Bill (after its sponsor, Hawaii Senator Daniel Akaka) currently pending in the United States Congress, to know that.

And not only is something afoot today, it has its origins in history. So some with me now as we step into Mr. Peabody’s Wayback Machine and set it for Hawaii. (Is the reference to the world famous Sherman and Mr. Peabody from The Rocky and Bullwinkle Show too obscure? Or am I just showing my age?)

Believe it or not, Hawaii was once a royal kingdom, governed by a monarchy. The islands were divided into separate kingdoms, and the notion of private land ownership was an alien concept. Instead of “owning” the land, the people were essentially trustees of the land, administering it on behalf of the gods. It really wasn’t until the advent of the haoles, the white interlopers I mentioned before, that land ownership crept into the culture.

As an aside, haole comes from the Hawaiian words ha, which means breath, and ‘ole, which means without, so the literal translation is “without breath” or “breathless.” One etymologist says it’s a reference to the fact that when the white people in Hawaii said their prayers, they didn’t breathe three times as the ancient Hawaiians customarily did. Another story, though, says that the Hawaiians found it hard to believe that people could be that pale and actually be alive, or draw breath. Whatever its origin, though, it’s rarely used fondly. According to Wikipedia (so take it for what it’s worth), a tradition began in Hawaii’s public schools in 1950s of calling the last day of school before the summer break “Kill Haole Day,” when native Hawaiian children would harass and sometimes assault white children. An article in the Honolulu Star Bulletin published on March 24, 1999, bore this headline: “’Kill Haole Day’ linked to hate-crime bill.”

Nope, rarely used fondly.

Now where were we? Oh, yeah, no private ownership of land. At last not officially, but the haoles were already gobbling up real estate wherever and however they could. In 1839, King Kamehameha III issued a Declaration of Rights that said that property couldn’t be taken “except by express provision of law.” Sounds good, as far as it goes. But hard on the heels of that, the King also granted the first constitution to Hawaii, which changed the nation’s absolute monarchy to a constitutional monarchy. The constitution set up a bicameral legislature and a supreme court.

It also did something that was the first real crack in the dam: it declared that, even though all land belonged to the King, it was not the King’s private property. Instead, the common people also had some claim to ownership, even though they still couldn’t acquire absolute ownership. In 1845, a Land Commission was established to investigate claims to private ownership of land that were being made by some folks, particularly haoles. The Land Commission recommended to King Kamehameha III a system of land distribution, under which the King would retain his private lands, but the remaining land would be divided equally into thirds among the Hawaiian government, the chiefs (the ali’i) and the tenants or common people.

Three years later, after much debate over this recommendation, came what’s known as The Great Mahele, or the Great Division. It began in January of 1848, but it wasn’t the equitable 1/3-1/3-1/3 originally recommended. Instead, the King ended up holding almost 2.5 million acres (roughly 60%) (it’s good to be king) and the chiefs got about 1.5 million acres. The King then divided his share into two parts, setting aside 1.5 million acres as government lands and keeping 1 million acres as “crown lands.” So the ultimate result was 1.5 million to the chiefs, 1.5 million to the government, 1 million for the king and, -- you do the math -- the good old common folks got screwed, ending up with about 28,600 acres.

And here’s where it gets interesting: an 1846 law had authorized the sale of government lands, and a second law in 1850 authorized any resident of Hawaii to own and convey land, citizen or not. By 1864, Westerners had bought over 320,000 acres of government lands. According to the Native Hawaiian Handbook (University of Hawaii Press 1991), edited by Melody Kapilialoha MacKenzie, by 1890, “Of a total population near 90,000, fewer than 5,000 actually owned land. Hawaiians, if they had any lands, owned small acreages. Consequently, for every four acres belonging to private owners, three were held by Westerners. The relatively small number of Westerners owned over a million acres.”

And something was afoot at the Circle K. Stay tuned for part three.

Mike Farris

(214) 979-0100

mfarris@tiptonjoneslaw.com

Get Ready… Legal Gaming is Coming to Texas

2008-04-23T12:00:00.000-07:00

“Anytime you open the door to any form of legal gambling, entrepreneurs are going to ram it open and run through.” - Nelson Rose, Law Professor, Whittier Law School.

Legal gaming is coming to Texas. The question in everyone’s mind is when? In 2009, the Texas Legislature reconvenes and will have several video gaming bills waiting for them in committee. Each bill will have its own version of how and where to legalize gaming. First, the Texas Legislature will authorize video gaming machines: video 8-Liners or slot machines, video poker, and video bingo. The proposed legislative bills will restrict these gaming machines to horse tracks and dog tracks, “off-shore casinos”, such as riverboats, and Native American reservations primarily located in West Texas. Eventually table games will be allowed and maybe even full-fledged casinos, but that won’t be for some time.

The best way to predict the future legislative course of legal gaming in Texas is to look at what is going on in other states. For example, in 2007, the Indiana legislature authorized legal gaming at horse tracks. Indiana has only 2 horse tracks, Hoosier Park approximately 40 miles north of Indianapolis and Indianapolis Downs Park approximately 30 miles southeast of Indianapolis. Each track must pay an initial license fee of $250 million, provide $100 million or more in additional construction or capital improvements, and the new slot machine facilities must connect to the racetrack facilities. Indiana is expected to generate close to $500 million in annual revenue within the first 5 years, exclusive of the licensing fee. Indiana will also require an annual $100 license fee for each video gaming machine in use. In a cash strapped state, such as Texas, the Legislature cannot afford to ignore those numbers.

Akin to the 1991 campaign establishing the Texas Lottery, gaming proponents will declare that the tax revenue generated from legal gaming will fund public education. And, just like the Texas Lottery, the proceeds will actually be deferred to the State’s general fund. It will be up to the Texas Legislature to actually determine how much is allotted to education. By 2006, the State of Texas received more than $3.7 billion in lottery ticket sales and only allocated $1 billion to public education.

Opponents to legal gaming will declare the need to protect the moral fabric of Texans. However, a closer examination of such opponents will reveal that casinos located in neighboring states, such as the Oklahoma Chickasaw Nation, are some of the largest campaign contributors to Texas politicians. Oklahoma and Louisiana casinos have good cause to play a major role in Texas politics. Texans make up approximately 80% of Choctaw Casino’s revenue. Similarly, shortly after Texas legalized pari-mutuel betting at horse tracks in 1987, Louisiana Downs, located in the border city of Shreveport, declared bankruptcy. Once gaming is made legal in Texas, there will be no need for Dallasites to drive 100 miles to visit the $60 million plus Winstar Casino in Durant, Oklahoma when they can visit Texas Lone Star Park in neighboring Grand Prairie. And that’s the idea.

One thing is for certain, legal gaming is coming to Texas and soon. Whether a new gambling law will pass in 2009 or 2011 is up for grabs. What is not in dispute is that Texans bet millions of dollars annually in Oklahoma, Louisiana and New Mexico. The Texas Legislature will eventually stop this mass exodus of untapped tax revenue in the name of education, our children and all that is good. For those who have doubts, just follow the money.

Adam W. Vanek

(214) 890-0991

avanek@tiptonjoneslaw.com

BEYOND BRIEFS: Part Two

2008-04-22T08:20:00.000-07:00

In my last entry on this topic, I raised the question of why you, as a lawyer, want to write. Assuming you’ve done the necessary soul-searching and you still want to, let me know alert you to some of the dangers you face. Dangers, I might add, that can be somewhat specific to lawyers.

Too wordy—Believe it or not, being a lawyer poses some disadvantages for you as you turn to other forms of writing fiction. Unfortunately, you’ve probably learned some habits in law school and in practice that you’ll have to overcome as you turn to the written word for the masses. After all, that’s who will be reading what you write, not other lawyers and judges. Fact is, most lawyers are not good writers.

I know what you’re thinking: “Moi, not a good writer? Surely you jest.”

Okay, let’s just see. In Texas, we have what’s known as a General Denial, which lawyers assert in defensive pleadings. The typical lawyer files a General Denial that reads like this: “Defendant generally denies each and every, all and singular, the material allegations in Plaintiff’s Original Petition and demands strict proof thereof.”

Sounds good, doesn’t it? Very lawyerly. Did you know that this would have worked just as well: “Defendant generally denies the allegations in Plaintiff’s Original Petition.” Nine words accomplished the same thing that twenty-one words accomplished in the preceding paragraph.

Let me run another one by you. You’re filing a pleading in a lawsuit and need to attach a document to the pleading as an exhibit. Most lawyers refer to the document, then write this: “A true and correct copy of the aforementioned document is attached hereto as Exhibit A and is incorporated herein by reference for all purposes the same as if fully set forth herein.”

Compare that to this: “A copy is attached as Exhibit A.” Seven words versus thirty-two—and you accomplished the same thing.

You’ve probably heard the expression “less is more;” well, it’s true. Unfortunately most lawyers write as if they’re being paid by the word instead of by the hour. The problem with that is that the meaning of what you’re saying can get lost in the avalanche of words, or the emotional impact can be diluted. Better to use fewer, but more direct and powerful, words. Where most lawyers tend to use three where one will suffice, as writers of fiction you need to get into the habit of doing just the opposite. Did you know that “null” means “void,” and “void” means “null”? You don’t have to say “null and void,” and you really don’t have to say “null and void, and without effect.”

Too technical—While we’re on the subject, let’s talk about another of my pet peeves with “lawyerly” writing and that’s the use of jargon where plain English not only will suffice but also will far surpass jargon. Jargon is okay, to a point. In writing fiction, you’ll want to sprinkle your dialogue and exposition with enough jargon to create an aura of authenticity around the world you have created on paper, but not so much that the reader either loses track of what you’re saying or becomes distracted. We all know that lawyers say things like “jurisdictional limits of the court,” and “limine” and “directed verdict,” but if your reader doesn’t understand what these mean, important plot points can get lost.

For an example of how this can work well, study the movie Body Heat. When you were in law school taking Property Law, did it ever occur to you that the Rule Against Perpetuities could ever form the key plot point in a major motion picture? But that’s exactly what screenwriter Lawrence Kasden did—and did it masterfully. The audience may not have known all the finer points of the Rule as articulated in the movie, but they understood generally that because of that rule, the will William Hurt drew up for Kathleen Turner's Husband was invalid and, as a result, she stood to inherit all of her husband’s wealth rather than share it with her niece. Result? Motive for murder.

Too autobiographical—Another problem is one shared by most new writers, not just lawyers: The story is too autobiographical. Yes, you are admonished to write what you know, and you certainly know your own life and your own cases. And, yes, your life is surely fascinating to you and your family, but that doesn’t mean your life and your cases are of any real interest to the rest of the world. That doesn’t mean that parts of your life can’t inspire or inform your stories, but you’ve got to view this as an outsider looking in would. Use events and people in your life to inspire your creative thinking, then put them in a world you know intimately—the world of law—but write fiction! Ultimately your creativity will likely be far more interesting to readers than your real life, hard as that may be to believe.

Too bombastic—Now, I’m treading lightly here because I know a lot of lawyers who think their writing is just brilliant because it sounds so…intelligent? You know, two-dollar, multi-syllable, “educated” words. After all, who isn’t more impressed with a letter that begins with “The Undersigned,” instead of “I”? I hate to be the bearer of bad news to you, but just as it’s better to use one word when you might otherwise want to use three, it’s better to use a two-cent word when you might want to use a two-dollar word. Why? It’s clearer and more to the point. And it just sounds better.

Oh, really? All right, let’s compare (with apologies to police officers everywhere). Which is better? I saw the car driving down the street; or I observed the vehicle proceeding down the boulevard.

I rest my case.

But there is an exception to this general rule against being less bombastic, and it applies to dialogue. Dialogue reveals character—so a snooty, pseudo-intellectual character’s dialogue may well be peppered with bombastic speech. Or a highly educated scientist who has very little social interaction may speak in almost undecipherable scientific language even when thrust out of his laboratory. I’m sure you can think of other examples yourself, but the point is that bombastic language has its uses.

Further on the subject the writer sayeth naught.

Mike Farris

(214) 979-0100

mfarris@tiptonjoneslaw.com

Lawyers do well; lawyers do good

2008-04-18T09:19:00.000-07:00

As a fourth generation Texas trial lawyer, the hackles on the back of my neck always stand up when someone I meet at a cocktail party decides it’s a good idea to share his or her repertoire of lawyer jokes with me. Lawyers occupy a unique position in our system of law and government, and can affect positive changes more so than almost any other profession. My immediate retort is usually along the lines of - “so what do you do for a living that is so damn beneficial for the human race?” (hoping that the offender is a bond trader and not a teacher or social services worker) or “lawyers are like proctologists – everyone hates them until they really need one!”

I now have a better retort. More than 400 Texas lawyers, from all over the state and from diverse areas of specialization, have volunteered to serve as ad litems for the 416 children who were recently removed from the polygamist ranch in Eldorado, Texas. They are traveling to San Angelo at their own expense to carry out a much needed task that will benefit hundreds of children. They will not get a dime for their services. In fact, there are more volunteers than needed. Lawyers are paid well for their services, generally. I think that on the whole, they give back to society in an amount commensurate with the privilege of being licensed to practice law.

Now, where are those cocktail franks I saw being passed around?

Murray Camp

(214) 979-0100

mcamp@tiptonjoneslaw.com

Taxation of Limited Liability Companies

2008-04-16T08:05:00.000-07:00

Doing business as a Limited Liability Company is popular because, similar to a corporation, owners (members) have limited personal liability for the debts and actions of the LLC. At the same time there is great management flexibility, and LLCs enjoy the benefit of pass-through taxation. Members may be individuals, corporations, other LLCs and foreign entities. There can be only one member of an LLC (in most states), or there can be an unlimited number of members. We are frequently asked how LLCs are taxed.

If an LLC has only one member (a single member LLC), the default taxation is that the member files as if the LLC does not exist. So if the single member is an individual, LLC income and expenses are reported on schedule C, E or F of the member’s 1040 return. If the single member is a corporation, the LLC income and expenses are reported on the corporation’s return (usually Form 1120 or 1120S). If an individual LLC single member prefers the LLC to be taxed as a corporation, the LLC must submit IRS Form 8832 to change the default and select the corporate form of taxation.

If an LLC has multiple members, the default is for the LLC to be taxed as a partnership (Form 1065). If the LLC prefers to be taxed as a corporation, the LLC must submit IRS Form 8832 to change the default and select the corporate form of taxation.

Remember that LLCs are subject to withholding of employment tax. Members of single member LLCs are subject to self-employment taxes on earnings. Also, members of multiple member LLCs pay self-employment taxes on their share of partnership earnings.

We would be happy to be of assistance in solidly planning and properly setting up a business entity for your venture.

Paul Tipton

(214) 890-0991

ptipton@tiptonjoneslaw.com

BEYOND BRIEFS

2008-04-14T08:42:00.000-07:00

Over the years, I’ve heard from a lot of lawyers who want to write. Goodness knows plenty have made the successful transition: John Grisham, Scott Turow, James Grippando, Steve Martini -- and the list goes on. So this is for all you lawyers out there who want to tap into that storytelling urge buried deep in your soul.

Let’s start with this inquiry for starters: Why do you want to write?

That seems like a pretty basic question, but it’s one you really need to answer before you get started. After all, you’ve poured three precious years of your life into law school -- too late to get it back now -- and embarked on a noble legal career. An esteemed member of society, you are “Lawyer,” successful in your chosen profession, respected by your peers, king of all you survey. So why would you want to chase after a writing career? One that is sure to frustrate you; one in which success is never guaranteed but, rather, chances are huge that you will fail in the ultimate goal of either being a published novelist or produced screenwriter.

That’s right, chances are good that you’ll never be published or produced. Truth be told, chances are good you may never finish writing the great American novel or completing that screenplay. You might even have better chances of success if you were to enter the space program with aspirations of becoming a space shuttle astronaut.

So let me repeat the question: Why do you want to write?

There are probably as many motivations for you to write as there are lawyers writing, but I suspect most of them can be boiled down into several broad categories. For some of you, a writing career may offer an opportunity to leave the practice of law, to simply walk away from billable hours, depositions, contentious partners meetings, cranky judges, uncooperative clients, and opposing counsel from the pits of hell. Yeah, staying at home, controlling your own time -- and not keeping track of those hours -- while hunched over your computer, spinning yarns, holds great appeal.

For others, it may all be about ego. Go figure -- a lawyer with an ego. You want to see your name on the cover of books in the bookstore, your smiling face peering out from the photo on the book jacket, or your name splashed in huge letters across a silver screen. If that’s your motivation, my advice is to keep practicing law. Believe me when I say that law practice will better fuel the fires of your ego than will writing. If you don’t believe me, just wait until you have enough rejection letters from agents, publishers, and producers to paper the walls of your house. And your second house at the beach. And your kids’ dorm rooms.

Yeah, writing can be an experience in ego-shattering humility.

Some of you want to get rich. Three and four and five hundred dollars an hour, or forty-percent contingencies, just doesn’t seem to be getting you there. You see some author’s name in Forbes Magazine and say to yourself, “Yeah, I could live on thirty million dollars a year.” Or you read about the latest spec screenplay sale for three million dollars and figure that’s not a bad return on 110 pages. If you’re in this to get rich, I’ve got advice for you as well: Buy a lottery ticket; your chances of untold wealth by winning the lottery are better.

But some of you may feel you have a story to tell. It’s been rattling around in your head for years, monopolizing valuable brain cells, distracting you from your law practice, your family, your friends. You’ve got to get it out of your head and down on paper. If someone buys it, that’s just gravy; the reward for you will be in the writing. If that’s your motivation, then go for it.

Mike Farris

(214) 979-0100

mfarris@tiptonjoneslaw.com

OF SUGAR CANE AND QUEENS: Sovereignty in the Sandwich Islands

2008-04-10T08:37:00.000-07:00

“The time has come,” the Walrus said,
“To talk of many things:
Of shoes – and ships – and sealing wax –
Of cabbages and kings –
And why the sea is boiling hot –
and whether pigs have wings.”

The Walrus and the Carpenter
by Lewis Carroll

Hawaii!

The very word evokes visions of Paradise – white, sandy beaches; swaying palm trees; silver waterfalls, hula girls; mai tais; and luaus. Each year, millions flock to the islands to soak up rays, splash in the surf, play golf, and lounge around luxury resorts. But beneath the surface of this tourist Mecca, a simmering resentment threatens to boil over at any moment as a proud people, the native Hawaiians, find themselves servants in their own home, waiting hand and foot on these white interlopers – the dreaded haoles (pronounced “how-li”).

Believe it or not, there are really two Hawaii’s. One is the “tourist” ideal, consisting of the aforementioned (nice legal term, don’tcha think?) white beaches, resort hotels and golf courses, luaus, and hula dancers. The other is the “real” Hawaii – the native peoples living in near poverty because the tourism industry has created prices for food, shelter, and land that they can’t afford. They work in the taro fields, fish in the ocean, and clean up the messes tourists leave behind in hotels and restaurants. They have become second class citizens in their own land.

So what happened? Well, that takes us into a little history lesson.

On January 17, 1993, the Hawaiian people observed the one hundredth anniversary of the overthrow of the Hawaiian monarchy. On that date, one hundred years earlier, the self-proclaimed Committee of Safety, a group of haole businessmen heavily interested in Hawaii’s major crop, sugar, declared that the “Hawaiian Monarchial [sic] system of Government is hereby abrogated” and replaced by a provisional government “for the protection of the public peace . . .” Yeah, right!

That same day, the Hawaiian monarch, Queen Lili’uokalani, temporarily surrendered her sovereignty, not to the provisional government, but “to the superior force of the United States of America, whose Minister Plenipotentiary, His Excellency John L. Stevens, has caused United States troops to be landed at Honolulu and declared that he would support said Provisional Government.” Although she expressly intended her surrender to be temporary, “until such time as the Government of the United States shall . . . undo the action of its representatives and reinstate me in the authority which I claim as the constitutional sovereign of the Hawaiian Islands,” the monarchy has never been restored.

While we, in the United States, celebrate the anniversary of the overthrow of English rule, for many native Hawaiians, the anniversary of the Hawaiian monarchy’s overthrow provides no basis to celebrate. Rather, they lament not only the loss of their form of government, but also the loss of a sacred way of life. Instead of reveling in their U.S. citizenship, they vilify the haoles who stripped them of their queen and their land. They demand reparations from the United States for their loss, and demand a return of their sovereignty for the Hawaiian people – restoration of citizenship in a reconstituted Hawaiian nation, with rights of self-determination, to exercise independent control over their lands and lives. That includes a return to their native language, customs and religions. Harsh words are written and spoken, decrying the illegality of the overthrow and the unlawful intervention by the United States. These Hawaiians believe themselves to be living in a “stolen kingdom” and believe that now is the time to reclaim what was wrongfully taken.

Is this nothing more than chauvinistic saber-rattling from disgruntled natives, or is there something more to what they claim? The words of our own President, Grover Cleveland, about the question may be instructive. On December 18, 1893, he told a joint session of Congress:

"Hawaii is ours. As I look back upon the first steps in this miserable business, and as I contemplate the means used to complete the outrage, I am ashamed of the whole affair.

. . .

It appears that Hawaii was taken possession of by the United States forces without the consent or wish of the government of the islands, or of anybody else so far as shown, except the United States Minister.

Therefore the military occupation of Honolulu by the United States . . . was wholly without justification, either as an occupation by consent or as an occupation necessitated by dangers threatening American life and property.

. . .

By an act of war, committed with the participation of a diplomatic representative of the United States and without authority of Congress, the Government of a feeble but friendly and confiding people has been overthrown. A substantial wrong has thus been done which a due regard for our national character as well as the rights of the injured people requires we should endeavor to repair."

One hundred years later, President Bill Clinton signed Public Law 103 - 150 into effect. Known to native Hawaiians as The Apology Bill, it said:

"The Congress –
(1) on the occasion of the 100th anniversary of the illegal overthrow of the Kingdom of Hawaii on January 17, 1893, acknowledges the historical significance of this event which resulted in the suppression of the inherent sovereignty of the Native Hawaiian people;
(2) recognizes and commends efforts of reconciliation initiated by the State of Hawaii and the United Church of Christ with Native Hawaiians;
(3) apologizes to Native Hawaiians on behalf of the people of the United States for the overthrow of the Kingdom of Hawaii on January 17, 1893 with the participation of agents and citizens of the United States, and the deprivation of the rights of Native Hawaiians to self-determination;
(4) expresses its commitment to acknowledge the ramifications of the overthrow of the Kingdom of Hawaii, in order to provide a proper foundation for reconciliation between the United States and the Native Hawaiian people; and
(5) urges the President of the United States to also acknowledge the ramifications of the overthrow of the Kingdom of Hawaii and to support reconciliation efforts between the United States and the Native Hawaiian people."

So maybe the native Hawaiians have a point. Maybe it would do us well to hear them out. To put a spin on Carroll’s Walrus, “the time has come to talk of many things . . . of sugar cane and queens.”

Mike Farris

(214) 979-0100

mfarris@tiptonjoneslaw.com

The California Talent Agencies Act and Personal Managers:

2008-03-20T13:40:00.000-07:00

Are They or Aren’t They Covered?

Under the heading of “no good deed goes unpunished” comes Marathon Entertainment v. Blasi, 42 Cal. 4^th 974, 174 P.3d 741 (Cal. 2008), which reached some conclusions about the application of the California Talent Agencies Act (Cal. Lab. Code, § 1700 et seq.) to personal managers. That statute governs talent agents in the entertainment world – those people who engage in the occupation of “procuring, offering, promising, or attempting to procure employment or engagements for an artist or artists,” (§ 1700.4(a)) but conventional wisdom has long held that the Act doesn’t apply to personal managers. As is so often the case, conventional wisdom missed it by a mile.

In 1998, Marathon and actress Rosa Blasi entered into an oral contract for Marathon to act as Blasi’s personal manager, providing a variety of management and counseling services, in exchange for a 15% commission from all her entertainment employment income. Over the next three years, Blasi obtained a role in the film Noriega: God’s Favorite and a lead role in the television series Strong Medicine. Among the management services Marathon said it provided during that time were making the down payment on Blasi’s home, paying her business manager’s salary, paying her travel expenses, and giving her professional and personal advice.

So far, so good – right?

Wrong! By the summer of 2001, Blasi unilaterally reduced the commissions she paid Marathon from 15% to 10%, and later stopped paying commissions altogether and terminated the management contract. Marathon then sued her on theories ranging from breach of contract to unfair business practices. As damages, they wanted to recover their unpaid commissions from Blasi’s role in Strong Medicine. Blasi got the action stayed, then filed a petition with the California Labor Commissioner and claimed that – and you could probably see this coming from a mile away – Marathon had violated the Talent Agencies Act by procuring work for her as an actress on Strong Medicine without being licensed as a talent agency. The Labor Commissioner agreed and invalidated the entire management contract between Blasi and Marathon.

Holy mackerel! Let me see if I got that straight: She said that Marathon got her a paying gig as an actress on a TV series, but by doing so, they violated the law so she doesn’t have to pay them for getting her the job in the first place because it was illegal for them to get her that job. And, in fact, the Labor Commissioner essentially said she didn’t have to pay them for anything they had done for her because the entire contract was invalid. If so, that would mean Blasi could have counterclaimed in the lawsuit to recover back all commissions she had already paid, wouldn’t it?

Fortunately, the California Supreme Court ultimately injected a heavy dose of common sense. In Marathon, the Court held that: (1) the Talent Agencies Act regulates conduct, not titles, so if a manager “procures employment” for a client, he/she is performing the services of a talent agency and must be licensed under the Act; but (2) although the Labor Commissioner may invalidate an entire management contract, it doesn’t have to; thus, applying the doctrine of severability, the courts and/or Commissioner may uphold those portions of a management contract that don’t violate the Act while only invalidating those that do.

The Court said: “A personal manager who spends 99 percent of his time engaged in counseling a client and organizing the client’s affairs is not insulated from the Act’s strictures if he spends 1 percent of his time procuring or soliciting; conversely, however, the 1 percent he spends soliciting or procuring does not thereby render illegal the 99 percent of the time spent in conduct that requires no license and that may involve a level of personal service and attention far beyond what a talent agency might have time to provide. Courts are empowered under the severability doctrine to consider the central purposes of a contract; if they determine in a given instance that the parties intended for the representative to function as an unlicensed talent agency or that the representative engaged in substantial procurement activities that are inseparable from managerial services, they may void the entire contract. For the personal manager who truly acts as a personal manager, however, an isolated instance of procurement does not automatically bar recovery for services that could lawfully be provided without a license.” 42 Cal. 4^th at 997-98.

The Court also said that it was not deciding, nor did the Act define, what “procure employment” actually meant, leaving open the question of whether Marathon had actually procured for Blasi the acting job on Strong Medicine. Noting that both parties to the case, as well as letters and briefs the Court received from personal managers, “indicate a uniform dissatisfaction with the Act’s application,” it then concluded by nudging the California Legislature: “We, of course, have no authority to rewrite the regulatory scheme. In the end, whether the present state of affairs is satisfactory is for the Legislature to decide, and we leave that question to the Legislature’s considered judgment.” Id. at 998-99.

Mike Farris

(214) 979-0100

mfarris@tiptonjoneslaw.com

Texas Attorney General Abbott Declares War on Identity Theft…

2008-03-11T15:04:00.000-07:00

and Could Hold Your Company Responsible.

“Texans expect their personal information to remain confidential. The Office of the Attorney General will take all necessary steps to protect consumers from identity thieves.”

– Texas Attorney General Greg Abbott

Don’t mess with Texas and you better be sure not to mess with a Texan’s nonpublic personal information. Texas Attorney General Greg Abbott has declared war on identity theft and he’s holding companies responsible. In 2007, Mr. Abbott filed no less than six lawsuits against companies for violations of the Texas Identity Theft Enforcement and Protection Act of 2005, Tex. Bus. & Com. Code Ann. §§17.41, et seq. In May 2007, Attorney General Abbott filed an enforcement action against CNG Financial Corporation, its subsidiaries, and EZPAWN for improperly dumping customer records, including promissory notes and bank statements. In April, Attorney General Abbott took legal action against CVS/pharmacy and RadioShack Corporation for exposing hundreds of customers to identity theft by failing to properly dispose of records that contained sensitive information. In March, the Attorney General filed an enforcement action against Jones Beauty College in Dallas for improperly discarding student financial aid forms containing Social Security numbers and other personal information. Also in March, Attorney General Abbott took legal action against On Track Modeling, a North Carolina-based talent agency that abruptly shut down its North Texas office and abandoned more than 60 boxes containing hundreds of confidential client records.

The Texas Identity Theft Enforcement and Protection Act.

The Identity Theft Enforcement and Protection Act (the “Identity Theft Act” or “ITEPA”), mandates that businesses have a legal duty to protect and safeguard sensitive personal information. The Identity Theft Act also requires businesses that collect or maintain sensitive personal information in the regular course of business to implement and maintain reasonable procedures and corrective measures to protect and safeguard sensitive personal information from unlawful use or disclosure. Furthermore, the Identity Theft Act includes a “Dumpster Diving” provision where companies are required to destroy customer records no longer in use by shredding, erasing or modifying the records to make the information unreadable or undecipherable.

Why is the ITEPA a big deal? Well first, the Texas Attorney General holds a press conference announcing to anyone who will listen, that a company was negligent and its customers’ may be at risk. Most importantly, however, it goes directly to a company’s bottom line. Section 48.201 of the Identity Theft Act not only allows the Attorney General to seek a permanent injunction against a company that could, in essence, shut it down. The Identity Theft Act also exposes a company to a civil penalty of at least $2,000 and up to $50,000 for each violation. Radio Shack, CVS, EZPAWN, On Track Modeling and Jones Beauty College all settled out of court and quickly. Not even the largest of companies have a checkbook big enough to compete with the Texas Attorney General’s Office.

Adam W. Vanek

(214) 890-0991

avanek@tiptonjoneslaw.com

Score One for the Investors: Employers Liable for Retirement Plan Mismanagement

2008-03-06T12:15:00.000-08:00

The United States Supreme Court ruled in favor of investors this week.

In LaRue v. DeWolff, Boberg & Associates, the court ruled that employees can sue employers under the Employee Retirement Income Security Act for mismanaging their 401(k) retirement plans. Companies are no longer protected from these claims. Business groups have strenuously argued that the law did not allow for individual claims.

James LaRue sued his employer DeWolff, Boberg, a Dallas consulting firm, claiming that the company failed to carry out his investment instructions for his 401(k), resulting in a loss of $150,000 in the value of his plan. Justice John Paul Stevens, writing for a unanimous court, said the law does allow for lawsuits to recover “fiduciary breaches that impair the value of plan assets” in individual accounts.

Murray W. Camp

(214) 979-0100

mcamp@tiptonjoneslaw.com

Important Information for single member limited liability companies!

2008-03-04T09:18:00.000-08:00

Are you a single member limited liability company (SMLLC) who has or will have employees before January 1, 2009? IRS regulations require a single member limited liability company that is (1) owned by one individual and (2) has or will have employees before January 1, 2009 to have two Employer Identification Numbers (EIN). One EIN is assigned to the individual owner (as a sole proprietor) and one is assigned to the LLC.

If the SMLLC does not intend to have employees, then an EIN is not necessary. It should use the name and Taxpayer Identification Number of the single member owner for federal tax purposes. However, if a SMLLC, whose taxable income and loss will be reported by the single member owner, nevertheless needs an EIN to open a bank account or if state tax law requires the SMLLC to have a federal EIN, then the SMLLC can apply for and obtain an EIN. If the SMLLC has no employees, it will not use this EIN for any federal tax reporting purpose.

For more information regarding single member limited liability companies, please contact an experienced lawyer at Tipton Jones.

Paul W. Tipton

(214) 890-0991

ptipton@tiptonjoneslaw.com

Super Bowl XLV

2008-02-28T11:11:00.000-08:00

Hopefully, the Cowboys willplay in Super Bowl XLV in 2011 at the Dallas Cowboys' new stadium in Arlington, Texas. Every year, the Super Bowl creates millions of dollars of business, and many lawsuits that only the lawyers win. Litigation and trial cost exponentially more than good legal planning ("an ounce of prevention..."), so review www.TiptonJonesLaw.com and consult with the quality attorneys at Tipton Jones in preparation for and during good business with good people. If a lawsuit is filed, settle it quickly or prepare to pay substantial legal fees and don't expect to "win" because lawsuits are usually wars of attrition to find out who loses the least. Nevertheless, lawsuits are sometimes necessary when another party is unreasonable. Tipton Jones stands ready to help at all stages of business cycles, from due diligence to transactions, and to litigation and trial if necessary.

Go Cowboys!

Andrew Jones

(214) 979-0100

ajones@tiptonjoneslaw.com

Lawyers (A Morality Tale in 6 Acts)

2008-02-26T09:02:00.000-08:00

ACT SIX

The civil justice system had turned into a game with both sides only interested in winning. It didn’t matter to the fourth lawyer what the truth was; he had to win if he wanted to get his money. And it didn’t matter to the first and second lawyers in the big firm what the truth was; they had to win to keep the rich and powerful happy – and paying them money.

But the lawyers all made money so, even though they were unhappy with each other, they were happy with the civil justice system.

All, that is, but one. The only lawyer who wasn’t happy with the system was the third lawyer. He believed that winning wasn’t as important as justice. He believed that sometimes the truth and the facts dictated that his clients were supposed to lose. He believed his job wasn’t just to win, but also to counsel. He believed that was why lawyers were also called “counselors.” And that was how he approached his cases.

The problem for the third lawyer was that the fourth lawyer took advantage of his beliefs. The third lawyer found that it was difficult dealing with dishonesty and a lack of ethics if he was, himself, honest and ethical. His partners didn’t have that problem. They did whatever it took – whatever it took – to beat the fourth lawyer, who did whatever it took – whatever it took – to beat the big firm lawyers.

The rich and powerful liked the first and second lawyers, who did whatever it took to win, because if they could oppress the poor and lowly and still win, that was what they wanted. They weren’t interested in justice, just in winning.

So the third lawyer’s hours continued to dwindle, as did his compensation. His two partners’ hours went up, as did their compensation. The fourth lawyers’ compensation also went up. All the lawyers got rich, except the third lawyer.

And the people suffered. The rich and powerful paid millions in lawyers’ fees to defend the scams of the poor and lowly. The poor and lowly exacted their revenge by scamming the rich and powerful even more. And the lawyers just got richer and richer.

Except the third lawyer. The third lawyer quit being a lawyer. He left the big firm and went away from the city to live on an island.

The other three lawyers carried on, business as usual. And got richer and richer, and more powerful.

And the people cried out to God for deliverance.

God heard their cries, but had no compassion. God said, “I gave you lawyers, and the lawyers have done what you wanted. You reap what you sow.”

And to the lawyers, God said, “Woe unto you, you lawyers, for you load people down with burdens too grievous to bear, and you, yourselves, lift not a finger to help them.”

And the third lawyer lived on an island and was happy.

Mike Farris

(214) 979-0100

mfarris@tiptonjoneslaw.com

Lawyers (A Morality Tale in 6 Acts)

2008-02-25T08:39:00.000-08:00

ACT FIVE

Soon the people learned what the lawyers were learning. The poor and lowly learned a new way to scam the rich and powerful – hiring the fourth lawyer to file lawsuits against the rich and powerful, even though they weren’t really hurt.

The rich and powerful began to believe that everyone who filed a lawsuit against them was trying to scam them. But they paid more and more money to settle the lawsuits and then passed along the costs to all the people by raising prices on their products and services.

Meanwhile, the third lawyer continued to have trouble in the big firm. His partners told him he had to bill more hours if he wanted to raise his compensation back up. His partners told him to “market” himself and the big firm to find more work. “Sell the sizzle,” they told him. They would not give him any of their work because that would take away from their own hours and their own compensation.

So the third lawyer set out to market himself and the big firm, but he found that it detracted from practicing law. He didn’t want to be a salesman; he wanted to be a lawyer. Meanwhile his billable hours continued to dwindle, even though – and maybe because – he continued to be efficient. His compensation continued to dwindle, as well. He found himself growing dissatisfied with being a lawyer.

The first lawyer marketed himself, but he didn’t really market the firm. He figured he could someday leave the big firm and start his own firm. He wanted his clients to be loyal to him, not to his partners. As he spent more time “selling the sizzle,” it cut into his time for actually practicing law. So he started billing for hours he spent marketing, only he called it something else when he sent out his bills. Working with the second lawyer, he helped cut the third lawyer’s compensation, and they split the extra money between themselves. He still made more than the second lawyer because, after all, he had more clients and made more money for the big firm. He just threatened to take his clients and leave the big firm, so the second lawyer went along with him.

The second lawyer also wasn’t happy with the third lawyer because he didn’t think he was billing enough hours. The second lawyer billed lots and lots of hours, and played lots and lots of golf. He and the first lawyer made an uneasy alliance based on money, working to make sure they both made more money than the third lawyer. He helped the first lawyer in “selling the sizzle” but, like the first lawyer, he marketed himself, not the big firm. He didn’t want to have to share his clients or his money with the other two lawyers.

None of the lawyers in the big firm were happy with the fourth lawyer. He had started filing frivolous lawsuits along with good lawsuits, which made it hard to figure out which was which. He played tricks, hid facts, and coached his clients to lie. He, himself, was willing to lie in order to win. After all, that was the name of the game. If he couldn’t win, he couldn’t get his forty percent.

And as unhappy as the big firm lawyers were with the fourth lawyer, he was equally as unhappy with them. They buried him with paperwork and, since he was only one lawyer, he didn’t have time to respond to everything the big firm threw at him. That was one of the reasons he did some of the things he did to the lawyers in the big firm.

And God saw that it was bad.

Mike Farris

(214) 979-0100

mfarris@tiptonjoneslaw.com

Lawyers (A Morality Tale in 6 Acts)

2008-02-22T08:53:00.000-08:00

ACT FOUR

Over time, the civil justice system changed. The changes were subtle at first, starting with changes in the lawyers. Then the changes made their way to the people.

The third lawyer continued to read fast, learn quickly, think well, and work efficiently. The rich and powerful still liked him because he gave them better results for less money. And that was the problem for the third lawyer – the “less money” part. His partners saw that he billed fewer hours and therefore brought in less money to the big firm than they did. They decided that if he billed fewer hours and brought in less money than they, then he should also make less money than they.

So they voted to reduce his compensation.

The first lawyer continued to work very hard. He worked long hours and worked late every day and kept working on Saturdays. The rich and powerful still liked him because he worked so hard and devoted himself to their cases. He began to think that his way was the only way to do things, and that his two partners should work as long and hard as he did. He began to check their offices at night and on Saturdays to see if they were working. Because they weren’t, he decided that they shouldn’t make as much money as he.

He thought the second lawyer should still make more than the third lawyer because he billed more hours and brought in more money to the firm. But since he didn’t believe the second lawyer actually worked all those hours, he should make a little less than the first lawyer.

The second lawyer continued to bill lots and lots of hours. He kept good records and wrote down lots of time. But the rich and powerful began to suspect that he wasn’t actually working all those hours. And he wasn’t – he had discovered golf. So he golfed on afternoons and on weekends, but he still wrote down lots of time.

The rich and powerful started to question his bills, and his two partners found themselves scrambling to justify charging the rich and powerful for all those unworked hours. But, by and large, the rich and powerful still paid most of the bills. So the first lawyer was happy as long as the money came in, but the third lawyer wasn’t happy. He thought his two partners were ignoring an ethical problem with the second lawyer.

The fourth lawyer continued to be a champion for the poor and lowly. He continued to get them money for their pain when they were hurt and continued to right wrongs when they were wronged, and to get them money for the wrongs. He continued to get money for the poor and lowly from the rich and powerful, and to get forty cents for himself for every dollar he got for them.

He learned that the worse he made their injuries sound, the more money he could get for them – and for himself. He also learned that they didn’t even have to be hurt if he could make it sound like they were. So he started advertising, trying to drum up more business that he could get money for. The big firm started calling him an “ambulance chaser” or, worse yet, a “TV Guide lawyer,” since he advertised in the TV Guide.

And God saw that it was not so good.

Mike Farris

(214) 979-0100

mfarris@tiptonjoneslaw.com

Lawyers (A Morality Tale in 6 Acts)

2008-02-20T13:25:00.000-08:00

ACT THREE

Things went well with the big firm for a while. The three lawyers got along famously.

The third lawyer was very smart. He read fast, learned quickly, thought well, and worked efficiently. In half the time, he could do the same amount of work as his two partners. The rich and powerful liked him because he was smart and efficient. With him, they got more work and better results for less money, so they sent him more business. His partners liked him because the rich and powerful sent him more business, and so they all made more money.

Everyone was happy with the third lawyer.

The first lawyer worked very hard. He didn’t mind working long hours, and so he worked late every day. He even worked on Saturdays. The rich and powerful liked him because he worked very hard and was not afraid to devote himself to their causes, so they sent him more business. His partners liked him because the rich and powerful sent him more business, and so they all made more money.

Everyone was happy with the first lawyer.

The second lawyer billed lots of hours. No one was sure when he actually worked those hours because they didn’t see him late at night or on Saturdays. But he kept good records and he wrote down lots of time. The rich and powerful liked him because when they looked at his bills, they saw that he was spending lots of time on their cases, so they sent him more business. His partners liked him because the rich and powerful sent him more business, and so they all made more money.

Everyone was happy with the second lawyer.

Things went well with the fourth lawyer for a while. When they were hurt, he got them money for their pain. When they were wronged, he got the wrongs righted – and got them money for the wrongs. The poor and lowly liked him because he got money for them from the rich and powerful, so they sent him more business. He liked the poor and lowly because, for every dollar he got for them, he got forty cents for himself.

The big firm liked him because when he sued the rich and powerful, the rich and powerful sent the cases to them, and that created more business for them, and so they all made more money.

Everyone was happy with the fourth lawyer.

Life went on in the big city. Justice replaced injustice.

The rich and powerful didn’t oppress the poor and lowly as much anymore because when they did, the plaintiff’s lawyer sued them and took some of their money. The poor and lowly didn’t scam the rich and powerful as much anymore because when they did, the big firm stepped in and saved the rich and powerful from the scams. A prayer of praise went up from the people, thanking God for giving them lawyers.

And God saw that it was good.

Mike Farris

(214) 979-0100

mfarris@tiptonjoneslaw.com