Fifth Circuit Orders Yahoo to Cough Up $4.4 Million

August 27, 2017
By David Lee

NEW ORLEANS (CN) — The Fifth Circuit ordered Yahoo to pay a Dallas insurer $4.4 million for backing out of a deal to offer $1 billion to anyone who could correctly pick all 63 winners in 2014’s NCAA Men’s Basketball Tournament.

Yahoo owes plaintiff SCA Promotions a cancellation penalty of 50 percent of the $11 million contract, the three-judge panel said Monday.

Yahoo paid SCA $1.1 million by January 2014, and SCA was bound to pay any contestant with a perfect bracket the $1 billion prize. Yahoo later entered into a similar arrangement with Quicken Loans and Berkshire Hathaway for a similar $1 billion bracket contest. It then terminated the deal with SCA and demanded return of its $1.1 million.

SCA sued Yahoo in February 2014 for the rest of the money. Yahoo fired back with breach of contract counterclaims, resulting in the trial court granting Yahoo summary judgment and awarding it $550,000.

The Fifth Circuit disagreed, reversing Yahoo’s summary judgment, vacating the award and reversing the trial court’s denial of SCA’s motion for summary judgment on its breach of contract claim. It ordered Yahoo to pay the remaining $4.4 million cancellation penalty and remanded to the trial court to award “appropriate attorneys fees and interest” to SCA.

Fifth Circuit Judge Edith Brown Clement, writing for the panel, was not persuaded by Yahoo’s argument that the “50 percent of the fee” contract language applies only to the $1.1 million it had already paid or that it only owes $550,000.

“It is clear to us that ‘50 percent of the fee’ means 50 percent of the $11 million contract fee,” the 11-page opinion states. “This interpretation is consistent with the plain language and structure of the cancellation fees provision, as well as with several other provisions of the contract.”

Nor was Clement persuaded by Yahoo’s argument that SCA breached confidentiality by disclosing the contest to Buffet and Berkshire Hathaway. She agreed with the trial court’s determination that SCA did not violate the “plain language” of the provisions.

“Yahoo does not argue that it designated any information confidential,” the opinion states. “Yahoo argues – for the first time on appeal – that the concept was ‘Yahoo Data.’ But ‘arguments not raised before the district court are waived and cannot be raised for the first time on appeal.’”

Clement also disagreed with Yahoo’s claim that SCA failed to obtain coverage for the full prize amount, concluding it was excused from that obligation.

“As the district court explained, SCA’s coverage obligation was unambiguously conditioned on Yahoo first providing the official promotion rules for the underwriter’s review and approval,” the opinion states. “SCA did not breach the contract by failing to finalize coverage because Yahoo did not provide the official promotion rules before it canceled the contract.”

Yahoo sold its core Internet assets to Verizon in June for $4.5 billion. Verizon declined to comment on the ruling.

Jeff Tillotson, SCA’s Dallas-based attorney, said he was ecstatic with the Fifth Circuit ruling, which “came down to a very simple reading” of the agreement.

“It made my day,” Tillotson told Texas Lawyer. “The Fifth Circuit agreed with us, wiped out the refund to Yahoo and put money in our pocket.”

From Courthouse News.


Baylor Rape Victim Settles Lawsuit Against School

August 16, 2017
By David Lee

WACO, Texas (CN) – A former Baylor University student who claims school counselors told her they were too busy to see her after she was raped by a football player settled her lawsuit against the school, her lawyer said Tuesday.

Irwin Zalkin, of San Diego, said his client, Jasmine Hernandez, is “very happy” with the settlement and that “we are moving on.” He declined to discuss monetary figures.

“I can’t talk about the terms of the agreement,” he toldthe Waco Tribune-Herald. “But I’ll let you guess.”

Baylor declined to comment on the settlement announcement.

Hernandez sued the Baylor Board of Regents, former head football coach Art Briles and former athletic director Ian McCaw in March 2016 in federal court for gender discrimination and negligence. She claimed football player Tevin Elliott grabbed her at a party near campus in 2012 and raped her behind a secluded shack.

Zalkin moved to have Briles and McCaw dropped from the lawsuit earlier Tuesday.

Elliott has been accused of raping or assaulting at least five women between October 2009 and April 2012. He was sentenced in 2014 to 20 years in prison on each of two counts of sexual assault.

Hernandez claims that when her mother was told by school counselors that they were too busy to see her, she was also rejected by the psychology department at Baylor’s Student Health Center. She claims that the school’s Academic Services Department later told her that even “if a plane falls on your daughter, there’s nothing we can do to help you.”

Hernandez alleges her parents tried to contact Briles, but that neither he nor anyone from his office called back. A nursing student on an academic scholarship, Hernandez claims her grades suffered after the rape, resulting in the loss of the scholarship and her dropping out of school.

U.S. District Judge Robert Pitman refused Baylor’s requests to dismiss the lawsuit in April 2016, although he did pare some claims.

The growing number of rape accusations against football players resulting in the school’s board hiring Philadelphia-based law firm Pepper Hamilton to conduct an external investigation into the school’s handling of the cases. The damning results released in May 2016 resulted in the removal of former school president Ken Starr, Briles and McCaw.

Regent Ron Murff apologized to the sexual assault victims at the time, saying “we are deeply sorry for the harm that survivors endured.”

Baylor asked Judge Pitman in June 2016 for more time to file an answer to Hernandez’ lawsuit, indicating it was trying to settle the case.

Later that month, Zalkin made explosive allegations against Briles, saying that he reneged on a promise to come to a mediation session “to support Jasmine” and “help her, and to apologize to her and her family.”

Briles allegedly reached a settlement with the school on the remaining years on his contract the day of the mediation. Zalkin denounced Briles at the time as using “the threat of helping” his client “as leverage” to negotiate his own claim against the school.

Briles steadfastly denied the allegations, asking to be dropped from the lawsuit in July 2016.

Briles’ attorney, W. Mark Lanier, of Houston, said Tuesday that other schools have contacted the coach and he expects his client to be coaching next year.

“There’s no question this is one step toward him getting back into coaching,” Lanier told the Tribune-Herald. “He did not want to get back into coaching until he finished through the legal system.”

Lanier confirmed Hernandez had dropped her claims against Briles and did not ask for money or an apology.

“He does feel bad for anybody who was hurt at all,” he said. “Whether through Baylor or otherwise, he’s still got a soft heart for a victim of any crime at all. He’s cognizant of that.”

From Courthouse News.

Oklahoma Man Accused of Trying to Bomb Bank

August 14, 2017
By David Lee

OKLAHOMA CITY (CN) – An Oklahoma man was arrested for allegedly trying to detonate a massive car bomb in downtown Oklahoma City out of hatred for the federal government, prosecutors said Monday.

Jerry Drake Varnell, 23, of Sayre, Okla., was charged Sunday with one count of malicious attempted destruction of a building used in and affecting interstate commerce by means of an explosive. He faces up to 20 years in federal prison if convicted.

Varnell is accused of trying to detonate “what he believed to be an explosive laden van” he parked next to a BancFirst location in downtown Oklahoma City at 1 a.m. on Saturday. Varnell had earlier agreed to have an undercover FBI agent “obtain the needed explosives in lieu of making it himself,” according to a 16-page affidavit.

FBI Assistant Special Agent in Charge Raul Bujanda assured citizens that Varnell was under surveillance for months and was at no time a danger to the public.

“Once we were aware of his intent, we controlled the situation from beginning to end,” he said at a press conference Monday. “So there was never a threat to the citizens of Oklahoma … there was never a risk to the American people.”

Bujanda said that if the bomb had been real, a detonation would have “damaged at least 50 percent” of the building.

Varnell allegedly told an unidentified FBI source on Facebook Messenger that he changed his target from the Federal Reserve Building in Washington, D.C. to the bank because “I don’t wanna kill a bunch of people.”

He allegedly told the source and a second FBI employee at an Elk City restaurant in June that he wanted to “start the next revolution.”

“Varnell said he wanted to be a part of something and was of the same mind with people who wanted to use explosives and make a statement,” the affidavit stated. “Varnell states, ‘something needs to be done,’ but killing a bunch of people was never a good idea.”

“He identified BancFirst as the target, prepared a statement to be posted on social media after the explosion, helped assemble the device, helped load it into what he believed was a stolen van, drove the van by himself from El Reno to BancFirst in downtown Oklahoma City, and dialed a number on a cellular telephone that he believed would trigger the explosion,” prosecutors allege in a written statement.

The Justice Department claims Varnell’s initial plan of blowing up the Federal Reserve Building involved using a device similar to the one used in the 1995 Oklahoma City bombing.

BancFirst said it has been “working cooperatively” with the FBI and “at no time” were employees, customers or the public in dander.

“We believe our BancFirst downtown Oklahoma City building was a random and convenient selection by the suspect,” BancFirst said in a statement. “There is no further threat or reason for concern.”

From Courthouse News.

Dallas Stars First Pro Team to Denounce Texas ‘Bathroom Bill’

August 10, 2017
By David Lee

DALLAS (CN) – The Dallas Stars hockey club announced its opposition Wednesday to Texas’ “bathroom bill” that would require transgender people to use public facilities matching their biological sex, becoming the first professional sports team to do so.

Team president and CEO Jim Lites said Dallas “was warm and welcoming” when the National Hockey League team moved from Minnesota 25 years ago.

“The Dallas Stars stand strongly opposed to any legislation perceived as discriminatory, including proposed bathroom legislation,” Lites said in a written statement. “We welcome fans from all over the globe, and our roster boasts players from half a dozen countries. Dallas welcomes all, and we welcome all.”

Lites noted the city was selected to host the NHL’s draft next year, and the league “sees the true Dallas” that is friendly and vibrant.

“We are proud of our home and want every visitor to feel at home here, too, and that’s why we oppose this discriminatory bathroom legislation,” he said.

Currently under consideration by a special session of the Texas Legislature, Senate Bill 3 would restrict the use of bathrooms, showers and changing rooms in public schools and government buildings to facilities matching a person’s sex as recorded on his or her birth certificate or on state-issued identification cards.

Critics of the bill say it legalizes discrimination against transgender people and is based on fear and hatred. Supporters contend the law is necessary to protect the safety and privacy of women and children from predators and voyeurs.

Several versions of the “bathroom bill” failed to pass during the legislature’s regular session this year. Republican Texas Gov. Greg Abbott listed it as one of his priorities when he called for the special session that is scheduled to end on Aug. 16.

No other professional sports team in Texas has publicly voiced opposition to the proposal, although some team owners have personally expressed views against it.

Houston Texans owner Bob McNair told the Houston Chronicle in March he doubted it would pass and that the state does not need it.

“There’s opposition in the House,” he told the newspaper. “I think there are other things more important going on in the world.”

Dallas Mavericks owner and TV personality Mark Cuban told The Dallas Morning News last month that the debate over the “bathroom bill” has yet to damage Dallas or Texas, but that it is a “different story” if the bill passes.

“We can only use the excuse of having crazy, entertaining state politicians who are merely a sideshow for so long,” he said.

In February, the National Football League and National Basketball Association warned Texas that passage of a “bathroom bill” would negatively impact the likelihood of the state being selected for major events in the future.

From Courthouse News.

Texas Attorney Admits to $26M Workers’ Comp Scam

August 4, 2017
By David Lee

DALLAS (CN) – A Dallas-area lawyer pleaded guilty Thursday to a scheme to rip off over $26 million in workers’ compensation benefits, federal prosecutors said.

Tshombe Anderson, 54, of Grand Prairie, pleaded guilty to one count of conspiracy to commit health care fraud. He faces up to 10 years in federal prison and a $250,000 fine.

Anderson will also forfeit $375,000 seized from his home, a 2015 Mercedes and his share of over $8.3 million seized from 25 bank accounts.

Prosecutors say Anderson conspired with four relatives to file over $26 million in fraudulent claims for durable medical equipment with the U.S. Department of Labor’s Office of Worker’s Compensation Program.

His sister Lydia Bankhead, 63, wife Brenda Anderson, 47, sister-in-law Janet Anderson, 43 and niece Lydia Taylor, 30, will stand trial on Sept. 25.

Anderson was formerly employed as an attorney at Union Treatment Center in Austin.

He and his wife were fired in May 2011 after an audit showed “they appeared to be engaging in fraudulent billing practices,” according to the criminal complaint.

Prosecutors say Anderson first opened a durable medical equipment company with his wife called Best First Administration to provide equipment to patients referred from UTC.

He later opened Union Medical Supplies and Equipment with Bankhead in April 2013 and started Skycare Medical Supplies and Equipment in with his sister-in-law  in August 2013.

“Both companies were created in order to submit claims that were inappropriate to OWCP,” prosecutors said in a statement Thursday. “The same medical information that BFA had received from UTC was used and billed to the same universe of claimants for duplicate, unwanted durable medical equipment that was not medically necessary, using outdated medical information.”

Prosecutors say that every single bill submitted by at least two of the defendants’ companies was fraudulent.

They claim Anderson “had access to the operating accounts for UMSE and routinely transferred large sums of cash from those accounts for his personal use or to launder through business accounts” for a shell account and accounts for his law office.

Anderson is scheduled to be sentenced on Nov. 29.

From Courthouse News.

Wedding Photographer Wins $1.1 Million From Malicious Clients

August 2, 2017
By David Lee

DALLAS (CN) — A Dallas County jury awarded a wedding photographer more $1 million in damages against a disgruntled married couple who defamed her in a malicious campaign on social media that ruined her business.

In a 10-2 verdict, the jury found on Friday that Neely and Andrew Moldovan of Dallas knowingly published false statements about Andrea Polito that disparaged her business. The jury awarded $880,000 in damages for injury to Polito’s reputation, mental anguish and lost profits, and $200,000 in punitive damages for making false statements to harm Polito with malice.

Polito sued the Moldovans in 2015 after shooting their wedding the previous year.

Polito’s attorney Dave Wishnew, with Gruber Elrod in Dallas, said Monday that the dispute focused on the defendants’ objection to the contract stating they must pick a $125 photo album cover before Polito could turn over photographs taken of the rehearsal dinner and wedding ceremony.

“In a 2014 TV interview, the couple charged that Ms. Polito was ‘holding their pictures hostage,” Wishnew said in a statement. “The Moldovans’ allegations went viral, damaging Ms. Polito’s then-thriving business. Ms. Moldovan, who maintains a lifestyle and beauty blog, said in one Facebook conversation that she was ‘pretty sure [Polito’s] business is done.”

Polito said she hopes the verdict will send the message that “freedom of speech does not mean freedom from consequences,” the attorney said.

Polito said in the complaint that when she was informed of the defendants’ demands, she wanted to keep her clients happy and asked for an album cover to be selected with the intent of waiving the cost.

“In fact, the Moldovans were already meeting with NBC 5 and [reporter Scott] Gordon by the time Polito sent her January 14 [2015] email, dead set in their pursuit of publicity and public shaming,” the complaint states.

“The Moldovans proceeded to republish the story on different electronic forums, such as blogs, Google, Facebook, Instagram, Twitter, NBC, text messages, and emails, and to make disparaging and defamatory statements in those same forums with the direct intent to harm plaintiffs.”

Polito said in the complaint that the Moldovans disparaged her by saying she “cheated,” “scammed,” and “blatantly stole money while holding pictures ransom and then adding on extra fees that weren’t in [the] original contract.””

From Courthouse News.