Top 10 Texas Legal Business Stories of 2011

by Mike Androvett, Lawyer Contributor

(EDITOR’s NOTE: This is the time of the year when media outlets present their year-in-review segments. CNN and CNBC will do theirs. The E Network will rate the “good and bad” in the entertainment industry. The Dallas Morning News will publish its version in the next week or so. Texas Lawyer has one of the best “Year-in-Review” pieces I’ve read in a long time. The article, written by Angela Morris and titled “Impact Players,” is excellent and examines the biggest legal issues of 2011 through the eyes of those involved.

For our part, The Texas Lawbook asked Mike Androvett, a lawyer, former journalist, and founder of Androvett Legal Media, to compile a list of the 10 most important business law stories of 2011. Why Mike? Because he’s smarter than we are. And because he and his team study major legal developments in Texas for a living. If you know of other specific business law related news that you think should be added to this list, please email a paragraph about the matter to comment@texaslawbook.net.)

DECEMBER 21 — A combination of high-profile bankruptcies, political conflicts and contentious business disputes dominated the Texas legal landscape during the past year. This list highlights the most important and compelling business cases of the past year.

10. Dallas Verdict Puts Private Schools on Notice
A $9.3 million verdict against the Espicopal School of Dallas sent shockwaves through the Texas private-school community after spotlighting an improper sexual relationship between a teacher and former student. Shortly after the jury announced its award, former ESD teacher John Nathan Campbell – who was at the center of the civil case – pleaded guilty to criminal charges of sexual assault of a child.

9. Former KBR Employee Loses Sexual Assault Case
One of the year’s most closely-watched employment lawsuits ended with a contract employee losing her sexual harassment claim against former Halliburton subsidiary Kellogg, Brown & Root. The woman claimed she was raped shortly after arriving for work in Baghdad. After her claim was denied, the judge awarded KBR $145,000 in court costs, but found that the lawsuit was not frivolous, sparing the employee from having to pay KBR’s $2 million legal bill.

8. Seating Issues Deliver Final Black Eye to Super Bowl XLV
In what was generally considered a disastrous week for North Texas’ first Super Bowl at Dallas Cowboys Stadium — thanks a lot, Mother Nature — the capper was the game-day snafu that left the NFL red-faced and caused seating problems for thousands of ticketholders. Some 2,000 fans were relocated to temporary seats, while 475 others were forced to stand during the game. The NFL made what it considered generous offers to compensate the displaced, but unimpressed ticketholders are continuing with lawsuits against the league and the Cowboys.

7. Longtime Harris County Commissioner Accepts Plea Deal
Companies doing business with Harris County government took notice when former Harris County Commissioner Jerry Eversole faced an April trial over bribery claims. Eversole’s case ended in a mistrial before he pleaded guilty to making false statements to FBI agents during their investigation of whether Eversole accepted money and landscaping services from Houston real estate developer Michael Surface, who allegedly sought to influence Eversole to gain county contracts.

6. Dallas Stars Bankruptcy, New Ownership
While the Dallas Mavericks and Texas Rangers were competing for championships in their respective leagues, the Dallas Stars were playing in a less-glamorous venue: Delaware bankruptcy court. Far removed from their 1999 Stanley Cup, the Stars saw financial troubles surface when owner Hicks Sports Group defaulted on $525 million in loans in 2009. The club was put up for sale in 2010 and eventually handed over to the National Hockey League. Vancouver businessman Tom Gaglardi skated to the rescue in November, buying the team for an estimated $265 million.

5. Texas Finally Gains Obama-Chosen U.S. Attorneys
Potential corporate defendants have even more reason to behave after Congress ended years of delays by approving the appointments of four Obama-selected attorneys to fill U.S. Attorney posts in Texas. For the Southern District, former Harris County District Attorney Ken Magidson brings a strong track record as a prosecutor and benevolent manager. Sarah Saldaña assumes the leadership role in the Northern District after leading the district’s public corruption unit. U.S. Magistrate Judge Robert Pitman – a former deputy chief U.S. Attorney – brings his extensive experience to the Western District job. And John Malcolm Bales, who has worked as interim U.S. attorney since 2009 for the Eastern District, now officially leads that office.

4. Mark Cuban v. Ross Perot Jr.
The legal wrangling between Dallas billionaires Mark Cuban and Ross Perot Jr. made headlines again in 2011 after Perot relied on his minority interest in the Dallas Mavericks to file a lawsuit alleging the team was mismanaged. Perot’s claim sought to put the team under court supervision at the same time the Mavericks were winning the 2011 NBA championship. Cuban, the Mavs president, responded to Perot’s claims with a summary judgment motion that included a photo of the championship trophy. The filing gained international attention as the “Greatest Legal Scoreboard Ever” before Perot’s lawsuit was tossed by a Dallas court.

3. Blockbuster Goes Bust, Purchased by DISH Network
Dallas-based Blockbuster’s brick-and-mortar business model officially fell under the weight of competition from Netflix and other entertainment providers in 2011. Stepping into the resulting Chapter 7 rubble was satellite television provider DISH Network, which scooped up Blockbuster’s substantial video holdings and other assets. The jury is still out on whether Netflix customers’ anger over price increases will benefit Blockbuster’s new parent company.

2. Corporate Contributions Lead to DeLay Money-Laundering Sentence
Former Sugar Land Congressman Tom DeLay was sentenced to three years in prison following his conviction for conspiring to launder $190,000 in corporate money in order to support Republican candidates. An unrepentant DeLay, once the state’s most powerful Republican, told the sentencing judge that he did nothing wrong.

1. American Airlines Files Chapter 11
The largest private employer in North Texas took its place in line with several other airlines that already have reorganized through their own bankruptcies. Analysts predict that American Airlines’ employee pension fund contributions will be reduced, creditors will take a bath, and stockholders in the airline’s holding company, AMR Corp., will take a beating before the dust settles.

Mike Androvett is a lawyer, former journalist and founder of Androvett Legal Media. For more information, go to www.androvett.com.