’50 Shades’ Greed Could Cost Publisher $10.7M

By David Lee
August 27, 2015
FORT WORTH (CN) – A Texas judge ordered the Australian publisher of the erotic bestseller “Fifty Shades of Grey” to set aside over $10 million for a woman who claims she was cheated our of her share of the book’s royalties.
Jennifer Lynn Pedroza, of Arlington, sued Amanda M. Hayward and TWCS Operations Pty. Ltd. in Tarrant County District Court in May 2014. She accused Hayward of engaging in “greed and self-dealing” by allegedly “conning” her business partners.
“Pedroza and Hayward, along with two others, were partners in The Writers Coffee Shop, which was the original publisher of, and owner of the publishing rights to, the ‘Fifty Shades’ trilogy,” the complaint stated.
“Without consulting her partner Pedroza, and without complying with Texas law, Hayward tried to convert Coffee Shop into TWCS, an Australian sole proprietorship that she, alone, owned. She signed a contract with Random House for the rights to the ‘Fifty Shades’ trilogy, in exchange for millions in advances and future royalties but, because of her chicanery, all payments flowed to her and not to the partnership.
“After having already attempted to convert Coffee Shop, and without disclosing that she had done so, Hayward told her partners that the partnership prospectively needed to be restructured into an entity solely owned by her for ‘tax reasons.’ She then fraudulently induced Pedroza and Beebe into signing ‘service agreements’ with TWCS, and subsequently terminated both of them,” the complaint said.
Over 70 million copies of the “Fifty Shades of Grey” trilogy were sold when the books debuted in 2012, according to publishing industry sources.
A jury ruled in Pedroza’s favor in February, but declined to set a dollar amount for damages. At a hearing Wednesday, State District Judge Susan McCoy ordered Hayward to put the money into the court registry by Sept. 24.
Forensic accountants testified that Pedroza’s 25 percent interest in the $41 million earnings of the book is worth $10.7 million, the Fort Worth Star-Telegram reported.
McCoy declined to enter judgment in Pedroza’s favor, instead allowing attorneys on both sides to negotiate an amount that includes attorneys’ fees and interest. She expressed concern about a “lack of available funds” and that the biggest asset listed was Hayward’s home in the suburbs of Sydney.
“I have still not signed the order,” the judge said. “I have not crystallized what the money should be comprised of.”
Hayward’s attorney, David Keltner with Kelly Hart in Fort Worth, told the Star-Telegram his client does not have $10 million in cash to put into the court registry.

From Courthouse News.

Texas Attorney General Pleads Not Guilty To Felony Securities Fraud

August 28, 2015
By David Lee
FORT WORTH (CN) – Texas Attorney General Ken Paxton pleaded not guilty to felony securities fraud charges during his first court appearance Thursday morning.
Paxton, 53, appeared before State District Judge George Gallagher at the Tim Curry Criminal Justice Center in Fort Worth after the judge denied Paxton’s motion to have his attorneys enter his plea for him. He was indicted last month by a Collin County grand jury on two first-degree felony counts of securities fraud and a third-degree felony count of failing to register with the Texas State Securities Board.
The charges go back to 2011, when Paxton was a member of the Texas House of Representatives.
Paxton is a Republican attorney from McKinney, north of Dallas. He served in the Texas House from 2003 to 2013 and in the Texas Senate from 2013 until he became attorney general this past January.
The securities board fined Paxton $1,000 last year after he admitted he had solicited clients for a friend’s investment firm, Mowery Capital Management, while he was a state senator and without being registered as an investment adviser. Paxton paid the fine and was reprimanded.
The new charges came from a Texas Rangers investigation that began after the board’s findings. The securities fraud charge carries a sentence of five to 99 years or life in state prison if convicted; the failure to register charge is punishable by two to 10 years in state prison if convicted.
Paxton is accused of fraudulently selling more than $100,000 in Servergy stock to two investors in July 2011 without disclosing that he would be paid commissions on it. He also failed to disclose that he had already been given 100,000 shares in the company and that he had not invested in the company himself, according to the indictment.
During the 30-minute hearing, Gallagher granted Paxton’s motion for the withdrawal of his attorney, Joe Kendall in Dallas. The judge gave Paxton until Sept. 3 to hire a replacement.
Citing the intense media coverage of the case, Kendall asked the judge to consider moving the case back to Collin County.
“We do not want to try this case in the media,” Kendall said.
The hearing was Paxton’s first appearance since he was booked at the Collin County jail on Aug. 3. A controversy arose when Gallagher exempted Paxton from wearing a white towel around his neck and shoulders, which is required for all booking shots in Collin County.
Gallagher purportedly ordered Sheriff Terry Box not to use a towel in Paxton’s photo. Paxton was released on $35,000 bail.

From Courthouse News.

Dallas Bars Elephants From Circus

August 20, 2015
By David Lee
DALLAS (CN) – A Texas judge Wednesday refused to stop Dallas officials from blocking two elephants from performing with the UniverSoul Circus, citing fears they have tuberculosis and may be a public health risk.
The Atlanta-based circus sued the city and Dallas County Health and Human Services on Wednesday in Dallas County Court.
The defendants said that elephants Bo and Betty cannot be exhibited during the circus’ current two-week run at the Southwest Center Mall because they tested “reactive” for tuberculosis and are a public health risk.
“The defendants’ position, however, is neither legally nor scientifically justified and in fact is wholly arbitrary,” the circus says in its 13-page complaint, supported by 139 pages of exhibits and attachments.
“In the event defendants are relying on the DPP Vet TB Assay for elephants from December 2014, this test serves only as a screening test to aid in the diagnosis of active tuberculosis. The DPP test is not definitive and often gives false positives.”
UniverSoul said the elephants underwent a “more extensive and definitive” trunk wash test in January that came back clean, meaning the December results were false positives. It says the city and county refused to issue the required permits when given the updated test results.
Hours after the lawsuit was filed, Associate Judge Monica McCoy Purdy declined to sign UniverSoul’s temporary restraining order against the defendants. The circus called the denial of permits “not supported by any statute, ordinance, regulation or law, and … arbitrary and capricious.”
City officials could not be reached for comment Wednesday evening.
Health and Human Services Director Zachary Thompson told the circus on July 27 that the county had consulted with the Texas Department of State Health Services and the U.S. Department of Agriculture about the elephants before rendering a decision.
“Given the potential transmission and tuberculosis from elephants that carry the disease to arena and circus workers, members of the public, and other animals, we believe that these elephants should not be exhibited,” Thompson wrote in a letter attached as an exhibit in the complaint.
UniverSoul and other circuses have faced heavy criticism from animal rights activists for featuring elephant acts.
People for the Ethical Treatment of Animals claims UniverSoul “has a long history of contracting with notorious animal abusers” who have violated the Animal Welfare Act.
“Handlers use bullhooks – sharp metal weapons resembling a fireplace poker – to cause pain and instill fear in elephants and to force them to perform unnatural and confusing tricks,” PETA says on its website, checked Thursday morning. “In addition to the cruelty inherent in elephant acts, two elephants currently on the road with UniverSoul – Betty and Bo, who are exhibited by Larry Carden – have yielded over five years of reactive tuberculosis tests, suggesting that they are likely TB-positive.”
UniverSoul’s competitor, Ringling Brothers and Barnum & Bailey Circus, announced in March it would phase out its elephants by 2018.

From Courthouse News.

Oklahoma Senator Pleads Guilty to Fraud, Resigns

August 20, 2015
By David Lee
TULSA (CN) – An Oklahoma state senator on Thursday admitted stealing $1.8 million while leading the Better Business Bureau and filing a false tax return.
Ricky L. Brinkley, 54, of Owasso, Oklahoma, pleaded guilty to five counts of wire fraud and one count of subscribing to a false tax return in Tulsa Federal Court on Thursday morning, and immediately resigned as senator for the 34th District, which includes Tulsa.
Brinkley had most recently served as chairman of the Committee of Pensions and vice-chair of the Senate Finance Committee.
Between November 2005 and February 2015, Brinkley diverted over $1.2 million while serving as BBB’s president and chief executive officer and later as chief operating officer, the 6-page criminal information states.
Brinkley would “create fraudulent invoices for services not rendered and represent those invoices as legitimate” expenses, prosecutors said.
“He also admitted that he fraudulently signed checks, transferred, used, and disbursed BBB funds to pay personal expenses and debts including mortgage payments, expenses for pool cleaning services at his home, and his personal American Express, Discover, and Visa cards,” prosecutors said in a statement after the plea.
“Brinkley further admitted that he used BBB’s credit card to make cash withdrawals at automated teller machines located within casinos to support his gambling habit and that he would also create and process for payment false invoices using BBB’s funds for payment.”
Brinkley will be sentenced on Nov. 20, U.S. Attorney Danny C. Williams told reporters outside of the courthouse. He faces up to 20 years in federal prison and a $250,000 fine, or double the losses caused by his wire fraud.
He faces up to three years in federal prison and a $250,000 fine on the false tax return charge, and also agreed to forfeit over $1.82 million in proceeds from the scheme.
Williams blasted Brinkley for “abusing the trust” of BBB’s board, business members and consumers and the trust placed in him.
“BBB has worked with federal and state agencies by identifying the diverted funds,” Williams said in a written statement. “I hope this investigation and conviction is a step towards strengthening the trust of BBB members and consumers, and will allow BBB to continue to provide valuable services to the community.”
Williams told reporters the money “was to pay mortgages, to help fund a gambling addiction” and for personal expenses.
“The investigation showed that Brinkley accumulated over a 10-year period over $300,000 in American Express bills, another $146,000 in Visa bills and an additional $150,000 in [other] credit card bills,” Williams said. “He was basically living off the money at the time.”
Williams anticipates Brinkley’s attorney, Mack Martin in Oklahoma City, will ask for a downward adjustment of federal sentencing guidelines in place.
“We preliminarily calculate the guidelines to be between 26 and 37 months and I’m sure he’s going to ask for less time,” Williams said.
Flanked by his wife, Brinkley did not comment as he exited the courthouse. Martin declined to comment as he accompanied Brinkley to his car.

From Courthouse News.

Texas County Pays To Settle Gay Marriage Snit

August 18, 2015
By David Lee
FORT WORTH (CN) – A Texas county will pay $44,000 to settle a civil rights lawsuit over its clerk’s refusal to issue a gay couple a marriage license for religious reasons, the couple’s attorneys said.
James Cato and Joe Stapleton, of Granbury, sued Hood County Clerk Katie Lang in Federal Court on July 6 after she repeatedly refused to issue them a license. The men applied after the U.S. Supreme Court’s landmark ruling in Obergefell v. Hodges on June 26 struck down state bans on same-sex marriage.
Obergefell invalidated a voter-approved 2005 amendment to the Texas Constitution that defined marriage between a man and a woman.
Hood County’s seat, Granbury, is about 40 miles southwest of Fort Worth.
The men said they were “humiliated” by Lang and her staff, who had six deputies sent to guard the office during their latest attempt to get married.
Lang publicly blasted the Supreme Court for “newly inventing” a constitutional right to gay marriage. She cited a June 28 nonbinding opinion by Attorney General Ken Paxton, who urged county clerks and justices of the peace not to issue licenses or perform same-sex marriages if they had religious objections.
Lang then changed her mind, saying her employees could issue same-sex marriage licenses when her office received updated forms from the state. When she turned the plaintiffs away again claiming, there would be a three-week delay in receiving the updated forms, the men sued. Within hours, Lang issued them a marriage license on the office’s existing forms.
Attorneys Jan Soifer and Austin Kaplan, both of Austin, said Monday the county agreed to pay their clients more than $43,800 in attorneys’ fees to settle the lawsuit. They said Cato and Stapleton were “subjected to degrading and disrespectful treatment and unnecessary and malicious delay” in waiting to be married and suffered “significant emotional and mental distress” by having to hire lawyers to get married.
“Hood County’s potential financial exposure for damages and attorneys’ fees in the lawsuit exceeded half a million dollars, not including the amount the county would have had to pay its own lawyers to defend this case,” the attorneys said in a statement. “To avoid this exposure to Hood County taxpayers for the actions of Clerk Land and her Liberty Institute lawyer, Cato and Stapleton agreed to waive any recovery for the harm this caused them and agreed to drop the lawsuit if their attorneys were paid for the legal work done to enforce their civil rights.”
The attorneys will donate a portion of the settlement fee to the Equality Texas Foundation, a gay rights group.
Soifer said Lang is “fortunate” that county commissioners agreed to settle the lawsuit and spare her and the county from “significant financial exposure.”
Cato said he and his spouse are “overjoyed” at the outcome. They are now man and husband.
Lang could not be reached for comment Monday evening.

From Courthouse News.

Alleged Dallas Rape Victim Blames Uber

August 12, 2015
By David Lee
ALLAS (CN) – Uber let “a tiger loose in a shopping mall” when it allowed a felon to drive and then rape a Dallas customer, the woman claims in court.
Jane Doe sued Uber, Triple Class Limousines and driver Talal Ali Chammout on Tuesday in Dallas County Court.
Chammout was arrested on July 25 and charged with sexual assault. He was jailed under $100,000 bond and when his attorney asked for a reduction, the judge raised it to $250,000, citing Chammout’s criminal record.
Doe’s lawsuit comes four days after Uber Dallas general manager Leandre Johns apologized to the city and to her in a letter. Johns acknowledged that Uber had made a mistake. He said Chammout’s Uber account “was marked as ‘Will Not Be Driving,'” after he applied in January 2014 to be an “UberBLACK partner” to “generate business for his family’s limo company.” But in April this year, Uber “mistakenly granted Mr. Chammout access to Uber as a driver.”
“It appears that the license Mr. Chammout provided when he initially applied to use UberBLACK as a partner was fake,” Johns’ Aug. 7 letter states. “This means he never underwent either a City of Dallas or Uber background check.”
Doe’s lawsuit says this is not the first time an Uber driver has been accused or raping or sexually assaulting a customer. She says similar allegations have been filed in Atlanta, Boston, Chicago, Los Angeles, Orlando, San Francisco, Washington, D.C. and New Delhi, India.
Doe’s attorney Quentin Brodgon, with Crane Lewis & Brogdon in Dallas, said Tuesday that what his client suffered “is every woman’s worst nightmare and it’s the worst nightmare of every man with a wife or a daughter.”
He blasted Uber in an interview with The Dallas Morning News, saying, “an 8-year-old with access to the Internet and Google could have determined it was a bad idea for this driver to be driving women to their homes” late at night.
The lawsuit states: “What Uber should have known, and could have known through even the most casual perusal of the internet using Google, was that defendant Chammout had been convicted of felony assault in 1995 and convicted of the federal felony of possession of firearms in 2007.
“In fact, the federal government indicted Chammout in 2006 for being a felon in possession of firearms and conspiracy to possess stolen government property, including pistols and rocket launchers. As part of a plea agreement in 2007, the government dropped the conspiracy charge, and Chammout then served six and a half years in federal prison. He was not released until 2012, just three years before the events made the basis of this suit.
“News reports readily available to Uber on the Internet also should have made Uber aware that the federal judge presiding over the possession of firearms case cited the following other alleged acts of violence in sentencing Chammout to six and half years in prison: 1) allegations that Chammout had shot a juvenile in the leg, 2) allegations that Chammout had struck a juvenile in the face, 3) allegations that Chammout had hit his wife in the head with a crowbar and 4) allegations that Chammout had hired a hitman to kill his wife. Furthermore, Chammout’s criminal records indicated that he had been arrested for prostitution in Dallas in 2014.”
Chammout picked her up on McKinney Avenue at 8 p.m. on July 25, took her home, followed her inside, struck her on the back of the head and raped her, Doe says in the complaint.
After citing the eight other cities in which Uber drivers have been accused of raping a customer, the complaint states: “Each time, Uber apologizes. Each time, Uber promises to take all necessary corrective measures to prevent future similar incidents. And, each time, Uber denies all legal responsibility for the incident. Furthermore, in the face of this parade of horribles, Uber persists in pursuing an agenda of actively opposing any and all regulatory and legislative efforts to mandate that it strengthen the background checks performed on Uber’s drivers. This case is about holding Uber legally accountable for the foreseeable criminal acts of one of its drivers, and forcing Uber to institute basic, common-sense corrective measures to ensure that all of the drivers that it places in cars with its passengers many of whom are young women, truly pose no safety threat to those passengers.”
Uber did not immediately respond to a request for comment Tuesday. Doe seeks punitive damages for sexual assault, negligence, disfigurement, pain and suffering, lost earning capacity and mental anguish.
In his summary at the top of the lawsuit, Brogdon describes Uber as “a $50 billion dollar company that rode into Dallas, Texas and other cities around the world, making big promises of convenience and safety. … Uber certainly honored its promise of convenience. But Uber consistently has failed to honor its promise of safety – all for the sake of padding its bottom line.”

From Courthouse News.

Fired Cop’s Lawyer, Union Blast Arlington Police Chief

August 12, 2015
By David Lee
DALLAS (CN) – Police groups and the attorney for former Arlington police officer Brad Miller blasted his firing over the shooting death of Christian Taylor, citing an alleged lack of due process.
John Snider, with Lyon Gorsky in Dallas, spoke out on Miller’s behalf Wednesday morning. Miller, 49, has yet to publicly comment on his involvement in the death of burglary suspect Taylor, 19, inside the Classic GMC Buick dealership early Aug. 7.
Miller graduated from the Arlington police academy in March and was serving the 16 weeks of field training required of new officers.
Johnson fired Miller on Tuesday “for exercising poor judgment” by following Taylor inside a showroom building alone and putting other officers in danger. He said Miller’s “unilateral decision” to go alone and failure to communicate with other officers and develop an arrest plan created “an environment of cascading consequences” that resulted in Taylor’s death.
Johnson said he had “serious concerns” about the “rationale articulated” by Miller for his use of deadly force. He said Miller fired on Taylor after he failed to comply with commands to get on the ground, instead “actively advancing towards Officer Miller.”
Johnson said training officer Wiggins heard a pop from what he believed was Miller’s Taser, but it was the first bullet. Miller fired his service pistol three more times.
Wiggins is still on administrative leave pending an investigation. Miller cannot appeal his termination because he was a probational employee.
Snider blasted Johnson for making a “politically expedient decision” in firing his client that “is an insult to the rank-and-file officers who put their lives on the line” daily.
“While Chief Johnson sits behind his desk and Monday-morning quarterbacks an officer’s actions when coming face to face with a violent felon, his biggest fears are getting a paper cut or losing his six-figure salary,” Snider told The Dallas Morning News. “Chief Johnson used 20/20 hindsight to protect his job and appease anti-police activists. Officer Miller made decisions in the heat of a violent confrontation to save his and other officers’ lives.”
Snider said a four day-long “investigation” and “media theatrics” are not due process.
The Arlington Municipal Patrolman’s Association said hours after Miller’s termination that “every officer, every employee, every American has a right to be free from a rush to judgment without the facts.”
The group “supports Officer Miller’s right to be judged fairly and completely on facts instead of a snapshot developed in only days,” the association said in a statement. “Investigations take time and as Chief Johnson acknowledged, this investigation is not close to being concluded. With that said, our thoughts and prayers are with the Taylor family in this time of grief. We again ask that citizens obey the commands of police officers in order to prevent these tragedies from occurring in the future.”
Kevin Lawrence, director of the Texas Municipal Police Association, said Miller’s firing creates “an environment where nobody will want to be a police officer, and we will wind up with every kind of people we do not want” as police officers.
“It’s amazing that nobody, including Chief Johnson, seems to care about the science” Lawrence told the Fort Worth Star-Telegram Wednesday. “I’m not saying that the officer didn’t do anything wrong, because I don’t know. It’s another knee-jerk reaction based on public pressure.”
Johnson said the decision to fire Miller was his alone after he met with investigators Tuesday. He said the investigation is continuing and that Miller could face criminal charges. Johnson said he based his decision on a “preponderance of evidence available to me and the facts revealed” by investigators.

From Courthouse News.