Colorado Business Litigation Lawyer Blog

Judge Reduces $300 Million Award in Philip Morris Case

2010-03-01T17:17:24Z

I wrote on December 7, 2009 that a Florida jury had awarded $300 million to an ex-smoker with emphysema. Cindy Naugle’s case was one of many formerly involved in a class action against Philip Morris.

On February 25, 2010, law360.com reported that the trial judge reduced the judgment to $30.9 million, finding that the original award was “excessive” and “shocking,” and the result of passion on the part of the jury.

In the initial award, the jury found the ex-smoker 10% at fault and a subsidiary of Philip Morris 90% at fault for the emphysema, resulting in a compensatory damages award of more than $56 million and $244 million in punitive damages.

An appeal is expected.

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Colorado’s Vicious Wiener Dog

2010-02-25T18:28:35Z

Be on the lookout for a wiener dog named “Spork,” especially if you work for a veterinarian.

Deborah Takahara of KDVR.com reports on February 23 that the 10-year old dog’s owners have been charged by the City of Lafayette, Colorado, with keeping a vicious dog because Spork bit a veterinary technician on the chin during oral surgery (on the dog).

The dog’s owners say that Spork is so cool he cries and won’t sleep without a blanket over him. They also say that the veterinarian tech got too close to Spork’s face with some scissors, which scared the dog. Who knows? Maybe Spork just wanted to keep his teeth intact.

State law does not allow people who work with animals to file vicious dog charges. There is no such exemption under Lafayette’s municipal code.

If the owners are convicted, Spork may suffer the ultimate penalty of euthanasia, a fate which the owners say they will spend their life’s savings to prevent.

All attempts at humor aside, I hope the person bitten has a speedy recovery.

A Question of “Face” or Losing the Same

2010-02-22T18:32:41Z

Google, the most popular computer search engine in Colorado and in the U.S., has expanded into China to augment Google’s user base by over 35% of the market share in China. The only problem is that Chinese law allows its government to require the removal of links on the website that China feels are “subversive or offensive.”

Google, of course, isn’t into censorship. It threatened to shut-down its search engine and possibly leave the country completely. Some observers believe the real reason for the censorship is to prevent China’s citizens from gaining access to politically sensitive information and images.

In order to explore the possibility of an acceptable compromise, Google has temporarily agreed to the censored search engine while Google and the Chinese government try to pursue a negotiated solution to the problem. Apparently, China’s public stance differs from its private one. Observers believe China doesn’t want to lose face by appearing to be anti-technology. And at the same time, Google wants to keep China’s very lucrative market. It is widely believed these tensions so far have prevented a compromise.

Google notes that its China web site has been subject to hack attacks from within China that have resulted in some of Google’s intellectual property being stolen. Google has not directly blamed the Chinese government for these attacks, since Google’s site was not the only site hacked. It is believed that a number of other large companies from various business sectors in the U.S. were also attacked. Google and the U.S. government are investigating in an effort to determine the identity of the hackers.

Google suspects the attack on its web site was for the purpose of accessing the Gmail accounts of Chinese dissidents. Google says, however, that the attack was unsuccessful because only two accounts were accessed. The only information accessed in these two accounts was information such as the date the accounts were opened and the subject line of emails, but not the content of the emails themselves.

I will closely be monitoring this controversy to see who blinks first. Stay tuned.

A Colorado Woman with Honor and Integrity

2010-02-19T16:41:44Z

Today’s blog has absolutely nothing to do with legal commentary, court decisions, or business law. 9news.com reported a story on 02/15/10 that warms my heart.

A Cheyenne, Wyoming couple saw a dining room set advertised on Craigslist™ that they were interested in buying. They drove to Aurora, Colorado, where the dining room set was located, with cash for the purchase.

After making the purchase and loading-up the furniture, they decided to stop to eat at a Wendy’s restaurant just off I-25 in Denver. The man apparently dropped his wallet with credit cards, IDs and $1,200 in it as he got out of the car. When they made a temporary stop on I-25, they discovered that the wallet was missing. They called Wendy’s, believing that the billfold--or at least the $1,200--would be missing.

Luckily, Maricella Juarez, a Wendy’s employee, had recently arrived for work. She saw the billfold on the ground and promptly reported the find to her boss, who put the billfold in the store’s safe.

The couple returned to Wendy’s, where the billfold--with all contents intact-- was returned to them. Ms. Juarez was commended by her boss and no doubt by the happy and relieved couple.

Isn’t America a great place?

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The Scoop on Poop in Colorado

2010-02-17T16:21:34Z

The Denver Post reported on February 9, 2010, that a 19-year old University of Northern Colorado student was arrested and charged with attempted arson, reckless endangerment, criminal mischief and illegal possession of alcohol allegedly for attempting to set fire to a bag of dog poop on his neighbor’s front porch. (Most of us remember this old Halloween trick of “make the neighbor stamp out the flaming bag of dog poop and howl with laughter”).

Apparently the neighbor had called the police earlier because the student and his friends were making too much noise. As the student approached the neighbor’s porch, matches and dog poop in hand, the neighbor-- whose newspaper earlier had been set afire on his porch-- was waiting and subdued the miscreant. The neighbor’s wife, armed with a camera, snapped-away as the events unfolded.

The police duly took photographs of the bag of dog poop and confiscated the matches.

A police spokesperson said the student was intoxicated.

Without attempting to minimize the seriousness of the incident, we should remember the old adage, “Boys will be boys.”

Legal Fees Charged to Corporations Going Up in the Economic Downturn

2010-02-11T20:28:50Z

A December study by the legal consultancy firm of Altman Weil showed that the recession notwithstanding, some large law firms are raising their fees to corporations by an average of four per cent in 2010. It is unknown whether or not Colorado law firms were included in the study.

The hourly rate charged by senior partners in these large firms has gone as high as $700-$900 per hour. A local survey by Boston-based BTI Consulting in October disclosed that 15% of Boston’s law firms are raising their rates for 2010, while the remainder is keeping their fees the same as last year.

As I have written before, a corporation that is cost- conscious and result- oriented should look at the advantages of hiring a plaintiff’s firm that charges on a contingent fee basis, whereby legal fees are based upon a percentage of the amount recovered in a lawsuit. If the lawsuit is lost, the lawyer receives no fee. Of course, this type of fee arrangement is normally confined to instances where the corporation is suing another person or legal entity for monetary damages. If the corporation is the defendant in the case (the one being sued), contingent fees are usually not appropriate, although some plaintiff’s firms will fashion a fee agreement whereby the lawyer is paid based upon results in the case.

A corporation or other entity that is considering filing a suit for money damages should feel free to contact this firm for additional information on the various types of legal fee agreements available.

Former Boulder, Colorado Bookkeeper Given a Two-Year Jail Sentence

2010-02-08T18:31:24Z

Amber Turner, a 30-year old mother of one and a former Boulder, Colorado bookkeeper at Boulder-based Precision Phototonics, was sentenced on February 25, 2010, by a Boulder County judge to a 2-year jail sentence for stealing about $230,000 from her employer from early 2007 to the middle of 2008.

Turner apparently spent the money on such items as ski passes, a Mercedes-Benz, lingerie, cruises, trips to Las Vegas and show tickets.

Turner had forged the company president’s name on checks and used company credit cards. She would then intercept bank statements and bills to cover-up her theft.

According to her employer, because of Turners thefts, and Precision Phototonics’ resulting lack of operating funds, the company was forced to lay-off six of its 35 employees, including a Tibetan refugee, two Hmong refugees from Laos, and a grandmother with responsibility for taking care of her two grandchildren.

Turner was originally charged with 17 felony counts, including theft and forgery.

Colorado Jury Awards $37 Million in Damages Against Insurance Company

2010-02-03T16:50:34Z

On January 29, 2010, a Boulder County, Colorado jury awarded $37 million to Jennifer Latham of Lafayette, Colorado, whose health insurance was canceled after the woman sustained severe injuries in an auto accident, including multiple fractures and a brain injury.

Latham had purchased a health insurance policy from Assurant Health just five months before the 2005 accident. After she spent a month in the hospital and another month in rehabilitation at a cost of about $185,000, Assurant Health canceled her policy and refused to pay her medical bills, claiming that Latham had failed to disclose in her application an emergency room visit for shortness of breath and treatment for a uterine prolapse. Latham claimed her insurance company acted in bad faith. The jury agreed with Latham.

Assurant Health was one of the companies investigated by the House Subcommittee on Oversight and Investigations for its policy cancellation practices.

It is not known if Assurant Health will appeal the verdict.

Colorado Man and Girlfriend Steal $11 Million from Revenue Department

2010-01-27T18:33:09Z

In July 2009, a Colorado jury found a man guilty of 52 criminal counts, including violations of the Colorado Organized Crime Control Act, for stealing $11 million from the Colorado Department of Revenue.

The man’s girlfriend, a supervisor at the department, took the money through various schemes, including creating false businesses and fake tax returns. The woman said she took the funds at her boyfriend’s urging because she loved him and wanted him to leave his wife.

The man said that he believed the woman was withdrawing the funds from her trust account, a claim that the jury found incredible. The man lost all of the money in 18 months on business ventures, land deals, jewelry, cars and trips. His girlfriend spent none of the money on herself.

The man’s sentence of 58 years in jail was imposed on September 24. His girlfriend pleaded guilty and was sentenced to 24 years in prison. She must also pay $10.8 million in restitution to the state.

The moral of this story is that one should never take that which the tax man has first taken away.

Federal Court Shuts Down Idaho Tax Preparer - Idaho Falls Woman Fraudulently Claimed Over $93 Million in Refunds for Customers

2010-01-25T18:18:59Z

U.S. District Judge Edward J. Lodge, recently issued a preliminary injunction barring Penny Lea Jones of Idaho Falls, Idaho, from preparing federal income tax returns for others, while the lawsuit is pending. The court found that Jones promotes a tax defier scheme that claims large fraudulent tax refunds for customers.

The court found that Jones repeatedly prepared federal income tax returns claiming bogus refunds based on a tax fraud scheme known as the "redemption" scheme. The court held that Jones prepared and filed 333 income tax returns for customers in 2008 and 2009 claiming more than $93 million in fraudulent refunds. The court said that the redemption scheme is based on a frivolous theory that the federal government maintains secret accounts for its citizens, and that taxpayers can gain access to funds in those accounts by issuing IRS 1099-OID forms to their creditors.

The case against Jones is one of seven lawsuits the Justice Department filed across the nation in October 2009 that seek to shut down tax preparers who allegedly promote the redemption scheme. The defendants in those cases allegedly prepared tax returns fraudulently requesting a total of $562.4 million in refunds. Under the scheme, participants file a series of false IRS forms, including tax returns, amended returns, and Forms 1099 (including Form 1099-OID) or Forms W-2, to request fraudulent tax refunds based on phony claims of large income tax withholding.

The Internal Revenue Service (IRS) catches the vast majority of fraudulent redemption-scheme tax refund claims without issuing any refund. Taxpayers who submit the claims face substantial civil monetary penalties, and possible criminal prosecution.

In the past decade, the Justice Department’s Tax Division has obtained more than 435 injunctions against dishonest tax-return preparers and tax-fraud promoters.

Haiti Earthquake Survivors in Dire Need of Immediate Assistance

2010-01-18T21:11:13Z

The recent 7.0 magnitude earthquake that struck the impoverished nation of Haiti has killed well in excess of 50,000 and injured an unknown number.

Numerous nations, led by the U.S., have begun delivering badly needed food, water, medical supplies and treatment, rescue workers, cleanup and demolition crews and security personnel. One major problem is that the Port Au Prince airport is so crowded that many planes with urgently needed supplies are unable to land and often are delayed for at least one day.

As I’ve written before, when donating to a charitable organization, you should select one or more whose contributions are reasonably sure to get to those in need and are not severely diluted by high administrative expenses, graft and pay-offs.

The internet website charitywatch.org (The American Institute of Philanthropy) has compiled a top-rated list of charities involved in the Haiti earthquake relief efforts. Each charity is given an “A” to “F” rating, based on the portion of their budget going to program services and their fundraising efficiency. You should carefully read the information on the charitywatch.org website in order to diminish the chance of having your credit card number stolen.

In these troubled economic times here in the U.S., many people are financially unable to donate at this time. But if you are able to donate, give an amount you are comfortable with, given your own financial situation. Remember, however, that the need is critical and will be for quit some time to come. I’m sure that all donations will be appreciated sincerely.

FBI Search Causes Work Halt on $1.5 Million Denver Library Construction Project

2010-01-13T20:31:01Z

Denver station KUSA-TV reported January 11, 2010 that Krahl Construction has
halted work on a $1.5 million project at the main branch of the Denver Public Library as
the apparent result of a January 5 FBI search of Krahl's Chicago headquarters. Krahl also
has an office in Centennial, Colorado.

Krahl notified employees on January 8 that the company would be shutting down
the project. Neither the FBI nor Krahl disclosed why the raid took place, but an FBI
official said the search was part of an ongoing investigation and that the FBI was
"looking for evidence of a crime." No arrests were reported.

Krahl has been paid $430,000 for work already completed, but has been paid
nothing for unfinished work. New bids can be solicited after 10 days according to city
rules.

The company has an "A+" rating from the Chicago Better Business Bureau, and
reportedly does around $100 million a year in commercial construction work. It was
recently working as general contractor on an $81 million project at Riverside Medical
Center in Kankakee, IL, but hospital officials immediately hired another company to
finish the project.

Guilty Plea in Galleon Insider Trading Case

2010-01-07T22:08:39Z

In Manhattan’s Federal District Court today, 51 year old, Anil Kumar plead guilty to one count of securities fraud and one count of conspiracy to commit securities fraud with Raj Rajaratnam. He also agreed to cooperate with prosecutors in the widening investigation. Mr. Kumar is the 7th person to pled guilty in what some are calling the biggest hedge fund insider trading scheme case in US history.

Mr. Kumar admitted that from 2003 to 2009 he received $2.6 million from Galleon hedge fund founder and billionaire Raj Rajaratnam in exchange for confidential information about clients he was working with to make illegal stock trades.

In order to hide the cash payments, Mr. Kumar admitted that Mr. Rajaratnam opened a Swiss bank account for him under a different name and then funneled the payments to the account, and eventually into Galleon’s hedge funds. Mr. Rajaratnam praised Mr. Kumar for the information he provided, at one point telling him he was, “a hero,” according to prosecutors.

As a result of his guilt plea, Kumar could face up to 25 years in prison. Charges against Mr. Rajaratnam, who earlier plead not guilty, are also pending.

Our Thanks to the Men and Women of the Military

2009-12-30T16:55:46Z

Irrespective of your opinion about whether we should be at war in two countries or whether these wars are just, the brave men and women who have voluntarily put themselves in harm’s way nevertheless deserve our heartfelt thanks for their sacrifices and bravery.

These men and women unselfishly uprooted themselves from their homes, families and friends to volunteer in the military, not knowing whether they would be sent to Iraq or Afghanistan as front-line troops. And we should not forget those who serve as support personnel-- who ensure that those in the battle zones are properly supplied with intelligence information, weapons, food, clothing, medical care and treatment and other vital support.

This resilient country of ours has survived major world wars and many other military actions that became known as “conflicts” or “police actions” or similar euphemisms. Those who died or were wounded and possibly disfigured, who lost their eyesight or hearing, or who returned home with severe mental trauma from the horrors of battle, were no less brave simply because they were not involved in what we call “war.”

During this holiday season, therefore, let us all take time to remember these courageous troops and the sacrifices they and their families have made and are making. For as the author José Narosky said, “In war, there are no unwounded soldiers.”

The Colorado Toilet Paper Caper

2009-12-22T16:48:24Z

A person who had worked for 26 years for the Community Hospital Association in Boulder, Colorado, was fired and denied unemployment compensation after admittedly taking remnants of toilet paper rolls that she believed to be trash, found on the floor and on a shelf above the toilet paper holders. The employee had been asked by a friend to collect the remnants so they could be sent to GI’s in Iraq, who needed small rolls that would fit in a pocket for use on missions. The employer said they had a zero policy on theft and fired the employee.

The employee applied for unemployment benefits. The employer, who had no written policy on theft, said that the coreless toilet paper rolls were purchased so they could be used almost to the end. The hearing officer found that the claimant had believed that the remnants she had taken were trash, but that the remnants nevertheless belonged to the employer, and taking them without the employer’s authorization constituted theft and disqualified the employee from benefits. The Industrial Claim Appeals Office upheld the hearing officer’s decision.

On appeal to the Colorado Court of Appeals, the court reviewed numerous Colorado and other states’ decisions on similar issues and decided after extensive analysis that the case must bee remanded to the hearing officer for a finding of whether or not the employee acted “intentionally” and “knowingly” (legal words of art) without a belief that the remnants she took were trash.

Frankly, I am astounded that the state would expend the time and money on a case like this, especially given the end use of the toilet paper (no pun intended). If further developments in the Industrial Claim Appeals Office are publicly reported, I will write further on the final decision.