You're a Successful Target — Now What?
Photo by  Annie Spratt  on  Unsplash

You’ve worked hard. You’ve built your brand and your business. You’ve taken prudent steps to protect it—registering trademarks, obtaining insurance coverage, and implementing important training and procedures to ensure safe, legal, ongoing operations. You may still be growing, but you are profitable and successful. You are proud of your business, and increase its visibility in the marketplace by putting its name and logo out there for all to see. Then an accident happens.

Maybe a customer is injured using your product. Maybe a company vehicle is involved in an automobile accident. Maybe a vendor—or employee—is injured on a jobsite. After the initial response of concern for those injured, a fear begins to well up in the back of your mind. What if my success has made me a target?

Regardless of whether justified, it is common for those injured to seek recovery when a company logo appears on the product, uniform, building, or vehicle involved. When an incident occurs, it is important to take appropriate action from the outset to protect your business and brand.

First, ensure anyone involved receives appropriate emergency treatment. Everything else can wait.

Next, begin to document everything you can. Take photographs of the scene before, during, and after any changes are made to it. Write down what happened if you witnessed it, or what others are telling you—and who said it—if you didn’t. Take down the names and contact information of any other witnesses, as well as any first responders who are present. These will be important people to be able to reach should a claim or lawsuit ensue.

Immediately report the incident to your insurer, who will have a process to work through as the investigation proceeds. In the days that follow, ensure that everything related to the incident is retained—emails, reports, witness statements, or other documents. Instruct your staff in this regard, and establish a central repository for collection of any related materials. If a lawsuit arises, you could be responsible for any information you did not secure.

Consider whether to retain counsel in advance of litigation. Many times an injured party’s attorney will issue harsh demands quickly. While your insurer may defend you in a lawsuit, you may need to seek legal counsel before a lawsuit is filed or before your insurer has completed its investigation process. While some claims are resolved pre-litigation, involving litigation counsel early can be helpful in that someone is guiding the process with an eye toward how each development will affect a lawsuit down the road. 

Finally, keep calm. When it’s your business, that you’ve built, it’s difficult. It’s personal. But letting that show through will only escalate the situation. Instead, keep doing what you’ve always done: protect your brand and business.

Mark Killingsworth
When Your Trademark Gets Opposed — Part 1
Photo by  Arisa Chattasa

After countless hours of work, you have finally settled on the trademark which will be your core brand. The words you’ve chosen perfectly fit your vision, and you’ve taken every step you need to secure your presence and begin to build “the next big thing.” Domain names? Check. Social media profiles? Check. Federal trademark application? Check. In fact, your trademark application went straight through with no issue, and now you know that a Trademark Examiner has looked it over and given it the go-ahead. The only thing left is for the mark to be “published” and you’ll finally be at the point of receiving your trademark registration certificate.

And then you get a Notice of Opposition.

What is a Trademark Opposition?

In the normal course of a trademark application, a Trademark Examiner reviews the file to decide if there are any obstacles to registration. These include procedural errors in the filing, potential confusion with other trademarks, or issues with the mark itself which won’t allow it to actually function as a trademark. If the Trademark Examiner doesn’t identify any obstacles, the mark is ready to be published in the Trademark Official Gazette, which the United States Patent and Trademark Office (USPTO) issues weekly.

In this public document, the USPTO provides a snapshot of the trademark application (see the STARBUCKS application for “Alarm clocks; Clocks; Watches; Wristwatches” below). For the next 30 days after this publication, any party believing it may be damaged by the trademark being registered can either oppose the mark or can request 30 days more to decide. If either of these two steps happen, the trademark application process is paused until the underlying issue gets resolved.

STARBUCKS TMOG.png

Why Do Trademarks Get Opposed?

Although Trademark Examiners take steps to determine if there are obstacles to a registration, they can’t be aware of every potential issue. Further, at times the Trademark Examiner may believe that another trademark isn’t an obstacle at all — but the party owning that trademark certainly does. When this happens, the owner of that other trademark may decide that filing an opposition and holding up an application is the best way to protect their rights.

In seeking to protect the valuable intellectual property of a trademark, an owner may decide that a mark about to be registered presents a risk. That mark may cover similar types of products, and the owner is concerned that an ordinary consumer would be confused as to who is providing what. On the other hand, the product offered may be very different, but the trademark owner doesn’t want the public to associate them with that offering. Lastly, and unfortunately, at times a trademark owner may oppose simply to obstruct a legitimate application in hopes of limiting or delaying competition in the marketplace.

Regardless of the reason, a trademark opposition will cause delay in an application’s march towards full registration.

First Steps When Your Mark is Opposed

If your trademark application faces an opposition, or even a letter threatening such, you should contact experienced trademark counsel immediately. An early analysis may help reduce delays and costs, as each opposition is different and the underlying law is constantly changing.

In Part 2, we will introduce the timeline of a trademark opposition and identify methods used to efficiently resolve these matters.

James Creedon
James Creedon on "Protecting & Building Your Cannabis Brand"
Patents,+regulations+&+building+your+cannabis+brand+(4).png

On March 9, 2019, James Creedon joined Richard Cheng of DLA Piper to discuss the many legal issues to consider when starting or growing a business in the cannabis industry. This presentation, hosted by the Texas Cannabis Business Alliance, was attended by a wide variety of entrepreneurs at the Communion Neighborhood Cooperative and was divided into three sections:

The first section was an overview of the current legal status of cannabis laws and regulations on the federal and state level, and included discussion of legislation pending in the U.S. Congress and the Texas legislature. The second section used an example business to walk through the immediate challenges faced by cannabis industry companies in Texas, addressing topics such as the legal status of CBD, industrial hemp farming, and the Texas Compassionate Use program. The final section identified the importance of good business practices and the use of resources such as the TCBA to connect with other industry members and start informed on changes in the law.

For more information about this presentation, please contact us by email at contact@creedonpllc.com or by phone at 972-850-6864. A copy of the presentation slides can be viewed and downloaded below.

Creedon PLLC
Registration means “Registered”
Photo by   Claire Anderson

This morning, copyright attorneys, applicants, registrants, and common law owners were finally given definitive judicial guidance on a concept that has been in dispute for years—whether a copyright owner must have an official federal copyright registration in order to file a copyright infringement suit. Turns out the answer is “yes.” 

The issue has long depended on the definition and application of the word “registration” in Section 411(a) of the Copyright Act, which provides that “no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title.” There are two distinct camps of interpretation pertaining to this section of the Copyright Act—the “registration approach” and the “application approach.”

The Tenth and Eleventh Circuits have maintained the “registration approach” to Section 411(a), which relies on a plain language reading of the statute that “registration” is not “made” until a copyright application is accepted and a registration certificate is issued. Thus, merely filing a copyright application is not the “registration” required prior to filing suit. The Ninth and Fifth Circuits have maintained the “application approach,” which is much more sympathetic to copyright owners who may not have had a chance to procure a copyright registration prior to their works being infringed upon. Courts following the “application approach” argue that the Section 411(a) definition of “registration” is ambiguous because some sections of the Copyright Act indicate there are no prerequisites to registration other than a completed application. These courts have held that, as long as a common law copyright owner took the necessary steps to procure a copyright registration (submitting the copyright application, the work, and the necessary fees to the U.S. Copyright Office), the copyright owner should not be precluded from initiating a copyright infringement suit. In fact, the effective “registration” date listed on a copyright certificate is not the date that the U.S. Copyright Office accepts and registers the work, but the date the applicant filed the application. The other Circuits have either supported both approaches, stayed silent on the matter, or have expressly refused to decide one way or the other. This circuit split has long plagued the U.S. judicial system and frustrated artists hoping to grasp their works back from infringers.

Perhaps to the dismay of unregistered copyright owners and pending applicants, the split is no more.

This morning, the U.S. Supreme Court stepped in to settle the matter—officially adopting the “registration approach.” Justice Ruth Bader Ginsburg delivered the unanimous opinion in Fourth Estate v. Wallstreet.com, et. al., holding that copyright registration occurs—and thus, a plaintiff can only bring a copyright infringement action—once the U.S. Copyright Office issues an official registration. Additionally, after such registration has been granted, a copyright owner can sue for infringement that occurred both before and after registration. The Court held:

Registration occurs, and a copyright claimant may commence an infringement suit, when the Copyright Office registers a copyright. Upon registration of the copyright, however, a copyright owner can recover for infringement that occurred both before and after registration. Pp. 3–12. (a) Under the Copyright Act of 1976, as amended, a copyright author gains “exclusive rights” in her work immediately upon the work’s creation. 17 U. S. C. §106. A copyright owner may institute a civil action for infringement of those exclusive rights, §501(b), but generally only after complying with §411(a)’s requirement that “registration . . . has been made.” Registration is thus akin to an administrative exhaustion requirement that the owner must satisfy before suing to enforce ownership rights.

Notwithstanding, the Court recognized there were limited circumstances where a copyright claimant could bring an infringement suit prior to registration, such as a copyright owner who is preparing to distribute a type of work particularly vulnerable to predistribution infringement—e.g., a movie or musical composition—or a copyright owner of a live broadcast. 17 U.S.C. §§ 408(f)(2), 411(c).

This ruling means that copyright claimants must wait a longer period of time prior to bringing a valid copyright infringement suit, for the administrative process of copyright examination can take months to complete. Nonetheless, the U.S. Copyright Office gives copyright applicants the option of paying a substantially higher copyright application fee to expedite an application’s examination procedure through the Special Handling process. Copyright claimants still have the ability to recover compensatory damages incurred before and after the registration issues, so this process is, at worst, merely a procedural annoyance.

The lesson here is not a new one—anything of actual worth should be protected. Copyright owners seeking to protect their work from infringement should consider registering their work with the U.S. Copyright Office. Registration can establish a public record of a copyright claim and a registration certificate may be offered as prima facie (accepted as correct until proven otherwise) evidence of the validity of a copyright registration. Further, copyright registrations can be recorded with the U.S. Customs Service to prevent the importation of counterfeit copies. Lastly, if a work is registered prior to commencement of an infringement (or within three months of the first publication of the infringement), a litigant may be entitled to attorneys’ fees and statutory damages.

Read the Court’s full opinion here.

Charles Wallace
Charles Wallace Presents at the January 2019 Art & Law Workshop
image4.jpeg

On January 12th, Frisco Arts & Frisco School of Music and Performing Arts hosted Creedon PLLC Associate Charles Wallace for their first joint Art & Law Workshop. Charles relied on his knowledge of entertainment law principles as well as his many years of performing, management, and production experience to offer a presentation focusing on the intersection of law and the performing and visual arts—with practical guidance for the aspiring artist related to trademark, copyright, contracting, and brand development. As an artist himself, Charles embraced the opportunity to give back to the North Texas artistic community, and will be offering additional workshops in 2019 focusing on specific areas of the arts such as musical performance.

Charles graduated from Hendrix College with two BA’s in Theatre Arts & Cinematography, where he also wrote, produced, and edited his own feature-length film “A Road Trip Story.” He studied film marketing at the Accademia dell'Arte in Italy, and he has many years of experience working in theatre, commercial film production, and talent management. He received his JD and the Entertainment Law Certificate from University of New Hampshire School of Law, where he was also awarded the Sports and Entertainment Law Institute Entertainment Law Award.

Creedon PLLC
Unless You “Got the Moves,” Watch Your Step

Many of us know that “authors” can seek federal copyright protection, and many of us also know that “common law” copyright protection exists the moment a copyrightable work is created, but not many people understand what an “author” is within the meaning of the Copyright Act. An author does not need to be a writer or a painter — an author is simply the creator of an original expression in a work. Section 102 of the Copyright Act explains that copyright protection exists in the following categories:

  1.  literary works;

  2. musical Works, including any accompanying words;

  3. dramatic Works, including any accompanying music;

  4. pantomimes and choreographic works;

  5. pictorial, graphic, and sculptural works;

  6. motion pictures and other audiovisual works;

  7. sound recordings; and

  8. architectural works.

Photo by  Michael Afonso  on  Unsplash

Photo by Michael Afonso on Unsplash

Numbers 1, 2, 5, 6, and 7 are pretty straight-forward, and many of us have seen messages telling us that copyright law protects written works, music, pictures, and movies. The other areas are less-known — particularly that a series of body movements can actually be copyrighted. This has not always been the case, however. Prior to the Copyright Act of 1976, choreography was not copyrightable subject matter, and the only way a choreographer could obtain protection against an unauthorized performance was to try and register the dance as a “dramatic composition.” The choreography had to, in a sense, tell a story, portray character, and depict emotion in order to be afforded protection.

Today, in order to be eligible for copyright protection, a choreographed dance must have been entirely originated by the author and must contain at least a small amount of creativity. This threshold is relatively low, so as long as a choreographer creates a choreographed routine of more than a couple moves and steps without copying another’s work.

Although Loie Fuller sued another dancer for performing her “Serpentine Dance” choreography in 1892, and Anne Teresa De Keersmaeker accused Beyoncé of stealing several of her ballet moves in 2011, historically choreographers have not aggressively sought to enforce their rights when it comes to others infringing their choreography. 

Recently, however, Big Freedia filed a federal lawsuit against her former choreographer Wilberto Dejarnetti, seeking a declaration that she owns the choreography for seven dances the two worked on together. Similarly, rapper 2 Milly recently exposed video game developers Visual Concepts and Epic Games for incorporating his viral dance, the “Milly Rock,” into their games — NBA 2K18 and Fortnite, respectively. Visual Concepts includes the Milly Rock as a randomly occurring component of the NBA 2K18 game, but Epic Games designed the Milly Rock (or the “Swipe It,” as it is called in-game) to be an “emote” that can be purchased by Fortnite players for real money as of the Season 5 update. Similarly, Rapper BlocBoy JB recently exposed Epic Games for incorporating his “Shoot Dance” (made famous in 2017 when it was incorporated in Drake’s music video “Look Alive”) into the Fortnite Season 4 update (calling the dance “The Hype”).

So what is all the hype, after all? Why are some artists so worked up about others copying their dance moves? How does this notion of protecting choreography promote copyright law’s purpose of promoting the progress of science and useful arts? These issues implicate a series of questions that must be considered in turn when determining whether a choreographed work can be afforded copyright protection: (1) is the dance original, (2) is the dance “fixed” in a “tangible medium of expression,” (3) is the dance adequate to qualify as protectable choreography under the Copyright Act, and (4) does the choreographer legally own the dance moves?

The first question is easily answered — either the choreography is original or it is copied. Original expression is protectable, and copied material, without more, is not. 

The “fixation” into a “tangible medium” requirement is also easily met, as many choreographers use their own unique form of written shorthand, or “labanotation,” to record the nature, structure, sequence, and timing of movements. Additionally, a choreographer can “fix” the sequence of movements into a tangible form by recording a video of the movements.

The Copyright Act does not protect a single dance move, but it does protect “choreographic works” — meaning a choreographer must include a series of more than just a couple steps or moves in order to qualify for copyright protection. Copyrighting individual steps would not advance copyright law’s purpose of promoting the progress of science and useful arts because such would afford choreographers a monopoly in single movements — thus severely limiting the scope of creativity in future choreographers. Dance would cease to exhibit a series of polished, recognizable moves and would evolve into an amalgam of unconventional, eccentric chaos (although this is an interesting visual). Dance would, in essence, cease to be “dance.” Thus, in order for a choreographed dance to be eligible for copyright protection, a number of dance movements and patterns must be combined into an expressive whole. Although there still exists the ethical dilemma that a particular dance “move” could be diluted or disassociated with the originating performer, this is not a consideration that the Copyright Act currently contemplates.

Oftentimes, choreographers work with directors or producers in creating a show that incorporates the choreography into a number of other elements. The essential question in these situations is whether the choreography was developed as a “work made for hire” or as a work by an “employee.” When the choreography is created in the normal course of regular employment, it is considered a “work made for hire,” and the employer enjoys authorship of the work rather than the employee who created it. However, when a choreographer is specially commissioned to choreograph particular dances, then the work is not considered a “work made for hire” unless there is a signed written agreement expressly stating that the work is a "work made for hire."    

There are a number of legal issues to consider when deciding whether a choreographer enjoys copyright protection in a choreographic work. As we see more and more infringement allegations pertaining to choreographic works pop up in the media, perhaps game developers, performers, and other choreographers will begin to be more cognizant about whether a particular move can and should be used. The best rule of thumb is to avoid stepping on anyone else’s toes — stick to the moves you know.

Charles Wallace
Creedon PLLC Associate Charles Wallace Secures Criminal Sentence 20% Below Guidelines Range

Creedon PLLC associate Charles Wallace marked his first appearance in the United States District Court for the Northern District of Texas by securing a sentence 20% below the lowest federal guidelines range for his client. The defendant, a Houston man facing up to 40 years for his role in a robbery conspiracy, had a number of significant factors in his case which weighed in favor of a lesser sentence. Focusing in on key moments in our client’s life, and clearly explaining how such influences explain the defendant’s role in the conspiracy, Charles successfully argued that a lower sentence would provide greater opportunities for long-term benefit both to our client and his community.

James Creedon, managing attorney for Creedon PLLC, was particularly impressed by how Charles used his extensive background in theater in his presentation of the sentencing argument. “Charles has performed before thousands of people, but a hearing in federal court can be stressful regardless of your background. His articulate and emotional plea for our client made all the difference, and I was proud to hear District Judge Ed Kinkeade commend him for his efforts.”

Creedon PLLC focuses on representing our business clients in intellectual property matters, transactional work, and litigation, but we believe strongly in providing assistance to those in our community most in need. With multiple attorneys on the Northern District of Texas Criminal Justice Act Panel, our firm represents indigent defendants in seeking fair sentences and long-term opportunities to make the most of their lives.

Creedon PLLC
“Don’t Rush to Failure” — Why Company Policies Come First

I am often asked to update a company’s handbooks, contracts, and policies, or to prepare these important documents when none existed. Unfortunately, the first test of the enforceability and utility of these writings comes at the worst possible time for the employer – when needed to justify and support a termination or, even worse, in litigation. When a company is just starting out, there are so many moving pieces to get the business off the ground that, by necessity or inattention, the documents dictating important relationships go by the wayside. Sometimes new business owners will resort to short cuts like searching the internet for something that seems to fit. However, it is often unclear where the language in these documents came from, which state and federal laws apply, and whether the document takes account of changes in authorities such as statutes or administrative regulations. Regrettably, the business owner will generally only discover these issues when the documents become critically important – too late in the game.

Careful preparation of your contracts and policies allows you to think through these questions proactively. For example, one way of drafting may dictate where any litigation occurs – preferably in your preferred courts – whereas another leaves room for the other side to choose where and how to bring a case. With that in mind, here are some points to keep in mind:

  1. CONSIDER INCLUDING VENUE AND FORUM PROVISIONS IN YOUR CONTRACTS AND USING ARBITRATION AGREEMENTS FOR YOUR EMPLOYEES. Including a dispute resolution process in your employee agreements affords you notice before things get out of hand, and can solidify your position by allowing you to determine when, how, and where matters get brought before a court. Additionally, language requiring notice of claims, or requiring that you have the opportunity to cure any alleged issues, can potentially save a relationship before things become irreconcilable. 

  2. INCLUDE NOTICE AND OPPORTUNITY TO CURE PROVISIONS IN YOUR CONTRACTS WITH VENDORS AND BUSINESS AFFILIATES. Similarly, with regard to your vendors and other contracted parties, a robust dispute resolution process can require not only advance notice, but resolution opportunity steps before launching into costly litigation. Advance notice can allow you to get in front of potentially problematic terminations. A jury waiver or arbitration clause can be imposed to lessen the damages potential of a jury verdict, and place decisions in the hands of a former judge or attorney who may be better able to understand the legal issues involved. 

  3. CAREFULLY REVIEW THE CLAUSES IN YOUR EMPLOYEE HANDBOOK. Your company handbooks is your employee’s first experience with understanding how you want to run your business. How lenient do you want to be with absenteeism, or is it critical to your business that your employees show up on time and provide advance notice of absences? Do you want to pay out unused vacation when an employee quits? Do you want the option to withhold pay if an employee leaves owing money? What kind of disciplinary policies do you want to implement? These very important questions can be addressed in a well written and considered handbook. From a practical perspective, these policies will come into play when you terminate an employee and they seek unemployment. The availability of unemployment benefits for a terminated employee can depend on whether there was a policy in place to address the conduct at issue, and whether you provided warnings prior to the termination. Therefore, to manage your unemployment claims, it is important to address in writing conduct that will constitute grounds for termination. It is also important that the employee understand those grounds in order to adjust conduct accordingly.

In the bustle of starting or scaling a business, remember the phrase “don’t rush to failure.” Careful planning at the early stages may pay dividends for years to come, providing a solid foundation on which to build your vision.

Mary Harokopus
Music Law for PROs
Photo by  NeONBRAND  on  Unsplash .

Photo by NeONBRAND on Unsplash.

Most everyone has attended a live music concert at one point or another (if you haven’t, you’re really missing out on a significant facet of life — get out more), but almost no one is lame enough to simultaneously consider the legal implications of what they are watching (notice I said “almost” no one). I have been attending live music concerts, theatrical and dance performances, and other “gigs” since a very early age, and I have always been fascinated by the creativity required in putting together a show. How much of the musical performance, however, really belongs to the performers (or group, company, etc.), and how much of it was taken? Moreover, how much of another’s work is allowed to be performed without permission, if at all?

I became an attorney, in part, to learn the answer to these types of questions inherent in the entertainment industry. Much to my dissatisfaction, I learned that the answer is largely “it depends” — any attorney can tell you that. However, the question of “what material is a band allowed to perform” can be answered with relative certainty, especially when it comes to a band playing another artist’s song publicly.

First, some context:

In the music industry, there are two different types of copyrights: (1) Musical Works and (2) Sound Recordings. A musical work, or simply, a “song,” is both the lyrics and music that make up the written musical composition itself. A sound recording, on the other hand, is a work made up of recorded sound. The owner of a Musical Work copyright often owns both the copyright in the song itself and the copyright in the Sound Recording of that same song (if one exists). 

Among the exclusive rights granted to copyright owners in the music industry is the right to publicly perform the song (see 17 U.S.C. §106(4)) and to perform the sound recording of the song through digital transmission (see 17 U.S.C. §106(6)). For example, if a guitarist plays the all-too-familiar guitar riff to Led Zeppelin’s “Stairway To Heaven” in a public place without permission, that infringes on the band’s Musical Work copyright. Similarly, playing the band’s original recording of the song off a CD or audio track in public would infringe on the band’s Sound Recording copyright. This is where the Performance Rights Organizations (“PROs”) come in.

A PRO, like the American Society of Composers, Authors, and Publishers (“ASCAP”) and Broadcast Music, Inc. (“BMI”), licenses the public performance rights of their songwriter, composer, and producer members to users such as restaurants, bars, and radio stations. These “blanket licenses” give licensees access to a PRO’s full database of songs without licensees having to procure individual licenses from each member of a PRO and without rights holders having to solicit individual licenses to potential customers. Generally, a band does not need a license to perform a cover song live because it is the club, restaurant, or concert venue’s responsibility to obtain the necessary public performance licenses from the PROs. This does not mean, however, that the band is completely insulated from liability when publicly performing others’ songs.. 

Although it is the audience’s job to enjoy the musical performance, show, or concert (or in my case, to spend half my time considering the legality of what I am witnessing), it is the band’s job to make sure its performance is compliant with laws meant to protect artists from infringing and “free-riding” on others’ work. With respect to the everyday garage band, live musician, or recording artist, here are some helpful notes that may help one avoid a potential lawsuit from infringing on another’s public performance rights: 

  1. Play your own material. I can’t stress this enough — this is, by far, the safest (but not always the most fun) way to insulate yourself from copyright infringement liability. You can’t infringe on your own copyrights, so create away, and play to your heart’s content (then make sure other bands aren’t using your material).

  2. Check whether the performance venue secured PRO licensing. If a venue has opted not to buy any music performance licenses from any PROs, then it might tell you that you cannot play any other band’s material (“cover” songs). In this case, try to respect this request and refer back to Note 1 above. When in doubt, ask!

  3. If necessary, purchase your own PRO license. If your show is largely comprised of others’ material, and if the venue you are performing at does not have a license, it is best practice to check with the applicable PRO to see whether they require you to purchase your own license. 

These three steps only speak to performing others’ material in full and does not contemplate other types of use such as sampling, parody, and other fair use. Copyright is a complex and specialized area of the law, so it is best to revel in your own creativity and avoid using another’s work. Or consult the PROs.

Charles Wallace
Standing “To Sue” and Standing “To Be Heard” — On the Texas Association of Business v. City of Austin Standing Analysis

While everyone focuses on the merits of the plaintiffs’ claims in Texas Association of Business v. City of Austin and argue over the constitutionality of the City of Austin’s paid-sick-leave ordinance and the scope of the preemption doctrine, the headline issue should be whether the State of Texas has standing as a plaintiff intervenor to sue the City of Austin. (I’ll explain why in a moment. *hint: It has something to do with the advisory-opinion prohibition.) The Austin Court of Appeals held the state did, in fact, have standing to intervene as a plaintiff and seek affirmative relief against the City of Austin. But the court’s opinion on the standing issue lacks adequate legal analysis and raises serious separation of powers concerns.

Texas Association of Business v. City of Austin—The Court’s Standing Analysis

In City of Austin, the plaintiffs sued the City of Austin and its manager, seeking injunctive relief against enforcement of and an order holding unconstitutional the City’s paid-sick-leave ordinance. The State intervened as a plaintiff in the suit. The trial court denied the plaintiffs’ application for a temporary restraining order against the defendants and denied the defendants’ pleas to the jurisdiction and their motion to strike the state’s intervenor petition.

The plaintiffs and defendants raised various points of error on interlocutory appeal, but this blog focuses on one. The City argued on appeal that the state lacked standing to intervene as a party plaintiff in the suit. Since the state relied on Texas Civil Practice & Remedies Code § 37.006(b) as its jurisdictional basis to pursue a legal remedy against the defendants, the appellate court focused its analysis on that specific statutory provision.

To reach its conclusion, the appellate court first drew a distinction between general “standing” analysis and “statutory-standing” analysis. According to the court, standing generally “focuses on the question who may bring an action.” In “statutory-standing cases,” the court simply conducts “a straight statutory construction of the relevant statute to determine upon whom the Texas Legislature conferred standing.” The “judge-made criteria” ordinarily applied to assess standing do not apply.

The court then looked to the specific statutory provision at issue:

In any proceeding that involves the validity of a municipal ordinance or franchise, the municipality must be made a party and is entitled to be heard, and if the statute, ordinance, or franchise is alleged to be unconstitutional, the attorney general of the state must also be served with a copy of the proceeding and is entitled to be heard.

Tex. Civ. Prac. & Rem. Code § 37.006(b) (emphasis added).

The question raised by the defendants was whether “entitled to be heard” conferred on the state a right to sue as a party under the circumstances in the underlying suit. The court rejected the City of Austin’s position that “entitled to be heard” only allowed the state to file an amicus brief, reasoning that the phrase would be rendered meaningless under such a construction, since any person “who follows the applicable procedural rules” may file an amicus brief.

Entitled to be heard,” according to the court, “suggests the ability to appear in court and present evidence and argument.” From this suggestion, the court suggested that it followed “entitled to be heard” means “to be a party” (note the i.e. in the opinion). The court added, “consistent with this notion,” other courts have not questioned the state’s “right to intervene in the litigation as a party” under section 37.006(b). Since section 37.006(b) entitles the state to be heard when the constitutionality of an ordinance is challenged, the court held the state had standing to intervene as a party plaintiff.

Expostulation and Reply

“Statutory Standing” And “Constitutional Standing” Are Not Synonymous

The court’s claim that “judge-made criteria” do not apply to “statutory-standing cases” may be overstated. Texas aligns its standing jurisprudence with federal law. See Texas Ass’n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 444 (Tex. 1993). Just as the federal Constitution’s separation of powers doctrine prohibits courts from issuing advisory opinions, which is the function of the executive rather than the judicial branch, the Texas constitution prohibits the judicial department from issuing advisory opinions. See id. (citing Tex. Const. art II, § 1). “An opinion issued in a case brought by a party without standing is advisory because rather than remedying an actual or imminent harm, the judgment addresses only a hypothetical injury.” Id.

Likewise, just as Article III of the U.S. Constitution limits judicial power to resolve “cases” and “controversies,” requiring  a litigant to demonstrate standing, the open courts provision in the Texas Constitution has been interpreted by the Texas Supreme Court to require a litigant to demonstrate standing. Id. Central to constitutional standing is a requirement that the litigant allege an “injury in fact.” See id.; see also Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 103-04 (1998) (“The ‘irreducible constitutional minimum of standing’ contains three requirements. . . . First and foremost, there must be alleged (and ultimately proved) an ‘injury in fact’—a harm suffered by the plaintiff that is ‘concrete’ and ‘actual or imminent, not conjectural or hypothetical.’”). In short, the legislature cannot by statute require the judiciary to do what the constitution prohibits—issue an advisory opinion.

So, what led the Austin Court of Appeals to make such a strong-claim regarding “statutory standing cases”? The answer lies in the case the Court cited to in support of its strong claim. The court cited to In re Sullivan, 157 S.W.3d 911, 915 (Tex. App.—Houston [14th Dist.] 2005, orig. proceeding), a case interpreting the “standing” provision in the Texas Family Code, which identifies the proper party to bring a suit adjudicating parentage. But the “statutory standing” label is not a substitute for constitutional standing, as the Fourteenth District Court of Appeals recognized after its In re Sullivan opinion. In In Interest of K.S., the court made clear:

Although courts sometimes refer to the question whether a party has a cause of action under a statute as one of ‘statutory standing,’ that label can be misleading because the absence of a valid cause of action does not implicate subject-matter jurisdiction. . . . Because the Family Code uses the word ‘standing’ in describing its restrictions on who may bring suit, however, we use the term statutory standing here to distinguish the Family Code’s requirements from the constitutional standing requirements necessary to subject-matter jurisdiction.

492 S.W.3d 419, 422-23 & n.5 (Tex. App.—Houston [14th Dist.] 2016, pet. denied).

A Litigant Must Demonstrate Constitutional Standing to Bring an Action Under the Uniform Declaratory Judgment Act.

The law is well-settled in Texas that the Uniform Declaratory Judgment Act is “merely a procedural device for deciding cases already within the court’s jurisdiction rather than a legislative enlargement of a court’s power, permitting the rendition of advisory opinions.” See e.g., Texas Ass’n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 444 (Tex. 1993) (emphasis added); Texas Health Care Info. Council v. Seton Health Plan, Inc., 94 S.W.3d 841, 846 (Tex. App.—Austin 2002, pet. denied). Thus, as recognized by the Austin Court of Appeals prior to its City of Austin decision, a plaintiff bringing a declaratory-relief action must still establish the court’s subject-matter jurisdiction, which requires “that the party bringing the suit must have standing, that there be a live controversy between the parties, and the case must be justiciable.” Trinity Settlement Services, LLC v. Texas State Securities Bd., 417 S.W.3d 494, 504 (Tex. App.—Austin 2013, pet. denied); see also OHBA Corp. v. City of Carrollton, 203 S.W.3d 1, 4-5 (Tex. App.—Dallas 2006, pet. denied) (“Under Texas law, standing limits subject-matter jurisdiction to cases involving a distinct injury to the plaintiff and ‘a real controversy between the parties, which . . . will be actually determined by the judicial declaration sought.’”) (quoting Brown v. Todd, 53 S.W.3d 297, 305 (Tex. 2001)). Contrary to the City of Austin court’s assertion, then, judge-made criteria regarding standing apply to actions—like the state’s action against the City of Austin—under the UDJA.

The court assumed that section 37.006(b) operates as a “standing” statutory provision without addressing the well-settled law that constitutional standing analysis applies to declaratory relief actions. But, even without considering this well-settled law, section 37.006(b) does not, at least not clearly or obviously, vest anyone with standing to sue. Section 37.006(b) provides that a municipality “must be made a party” to a declaratory relief action that challenges the validity of a municipal ordinance. Notice that this provision says nothing about the municipality’s right to bring a suit of its own against anyone; it simply requires a plaintiff to add to its suit the municipality whose ordinance the plaintiff challenges. Likewise, section 37.006(b) does not vest the state with standing to sue anyone. In fact, this section leaves out altogether any mention of making the state a party to an action challenging the constitutionality of an ordinance or statute.

To support its assumption, the City of Austin court pointed to three other cases which referenced section 37.006(b) as the predicate to the state’s “standing” to intervene; the cases, however, do not support the court’s assumption. The court first cited to dicta in Texas Department of Transportation v. Sefzik, 355 S.W.3d 618, 622 (Tex. 2011), where the Texas Supreme Court provided an example of when the UDJA may waive sovereign immunity—“For example, the state may be a proper party to a declaratory judgment action that challenges the validity of a statute.” (citing Tex. Civ. Prac. & Rem. Code § 37.006(b)). Sovereign immunity is different than “standing” in many respects, not the least of which is the fact that the former deals with whether a plaintiff may sue the state, while the latter, under the circumstances in City of Austin, deals with whether the state may sue a defendant for affirmative relief.

The City of Austin court also cited to City of Austin v. Travis Central Appraisal District, 506 S.W.3d 607, 612 n.3 (Tex. App.—Austin 2016, no pet.), and Texas Board of Chiropractic Examiners v. Texas Medical Association, 375 S.W.3d 464, 473 (Tex. App.—Austin 2012, pet. denied). Both cases involved challenges to a state statute, not a municipal ordinance. And, in both cases the state intervened to defend the challenged statutes, not to challenge the statutes as a plaintiff. Moreover, neither case dealt with any issue related to the state’s intervention.

          A “Straight[er] Statutory Construction” of Section 37.006(b)

Even if the standing analysis were reduced to a “straight statutory construction” of section 37.006(b), the City of Austin court’s statutory construction analysis likely misses the mark. The court looked solely to subsection (b). Notice that subsection (b) distinguishes between who must be made a party and who is entitled to be heard. If someone challenges the validity of a municipal ordinance, subsection (b) makes clear that the municipality “must be made a party and is entitled to be heard.” If someone challenges the constitutionality of an ordinance, the statute states that the “attorney general of the state must also be served with a copy of the proceeding and is entitled to be heard.” Why would subsection (b) draw a distinction between being a “party” and being “entitled to be heard” if, as the City of Austin court reasoned, being entitled to be heard means or includes being a party? ***For interested readers, section 37.006(a) may provide some insight***

The court also overstated its “meaningless” analysis. The court rejected the defendants’ claim that section 37.006(b) only allowed the state attorney general to file an amicus brief. The court reasoned that such a construction would render “entitled to be heard” meaningless, because anyone who satisfies Texas Rule of Appellate Procedure 11 may file an amicus brief. However, under TRAP 11, an appellate court for good cause may “refuse to consider” an amicus brief and order the brief returned, even if a party complies with the rule. If anything would be rendered meaningless by the City’s construction, it would be an appellate court’s “good cause” discretion under TRAP 11, as well as the procedural hurdles listed in TRAP 11, when the state attorney general invokes its “entitlement to be heard” pursuant to section 37.006(b).

Final Thoughts

Section 37.006(b) is not a “standing” statute. If the state wishes to intervene as a plaintiff, seeking affirmative relief, it must do more than simply point to section 37.006(b) as its jurisdictional predicate to seek such relief. Otherwise, section 37.006(b) will become an advisory-opinion vehicle for the enforcement branch of government.

When considering that the state attorney general’s “entitlement to be heard” takes place at every level in the litigation, the City of Austin court reasoned that “being heard” must include making argument and putting on evidence. Maybe “being heard” does include these, but it does not follow that “being heard” includes being made a party for all purposes, including to seek affirmative relief. If the state lacks standing or a justiciable claim to seek its own affirmative relief, but is “entitled to be heard,” what does that mean at the trial level? Is it, as the City of Austin suggested, the right of the attorney general to file some briefing at the trial level? Or does it include something more?

Daniel Correa
That’s Not “Stock” . . . Not Chapter 38 “Stock” At Least
Photo by  Bruno Kelzer  on  Unsplash

Photo by Bruno Kelzer on Unsplash

In case you were wondering, injured “stock” for which a litigant may recover attorney fees pursuant to Chapter 38 does not include any ol’ stock. The Houston Court of Appeals (14th Dist.) recently held that “stock” in Texas Civil Practice & Remedies Code section 38.001(6) does not include pet dogs. See Palfreyman v. Gaconnet. Though this holding may appear obvious at first glance, the court’s analysis reveals nuance on the issue.

The plaintiff in Palfreyman successfully litigated a bailment claim based on negligence for the death of her two dogs, both of which were boarded at the defendant’s business. She asserted a claim for attorney fees pursuant to Chapter 38. The trial court denied her request for attorney fees and the court of appeals affirmed.

The appellate court focused on the modifiers “killed” and “injured” that precede the word “stock” in section 38.001(6): “A person may recover reasonable attorney’s fees from an individual or corporation . . . if the claim is for . . . killed or injured stock[.]” The modifiers, according to the court, denote something that was living at some point. The court looked to statutory definitions of “livestock” and the dictionary definition of “stock” for guidance, noting that these definitions all include animals kept or raised on a farm or under agricultural practices, some raised for human consumption. These definitions clearly do not include “a neutered dog kept solely for companionship.”

The court did not hold that “dogs” generally do not constitute “stock.” The court expressly left open the question whether section 38.001(6) included dogs kept solely to breed and sale or dogs bred to work on a farm or ranch. What is clear, though, is “stock” does not include something that was never alive—it does not include an investment portfolio, the merchandise kept in a store or warehouse, or the butt of a rifle. Does “stock” include plants or the “main stem of a plant”? Cf. Tex. Water Code § 36.001(22) (defining “nursery grower” to include “activities associated with the production or multiplying of stock such as the development of new plants”).  

Daniel Correa
A Burden Shift Within a Burden Shift — An Anti-SLAPP ‘Inception’
Photo by Christophe Hautier on Unsplash

         Christopher Nolan’s ‘Inception’ (2010) leaves the audience guessing at the end whether Dom Cobb, played by Leonardo DiCaprio, is awake and back with his children or still dreaming. Cobb’s spinning top is the focus point. To avoid getting trapped in a deep-dream state after trekking through another person’s sub-sub-subconscious, Cobb spins his top. If it falls after a short spin, he is awake; if it keeps spinning, he is dreaming. The film ends with Cobb spinning his top, as he eagerly eyes his children, and then impatiently running toward his children before he verifies whether the top falls or continuously spins. The camera focuses on the top. It tilts. It tilts again. Then the film ends. Is Cobb stuck in a dream within a dream? Has he traveled too far into someone else’s sub-sub-subconscious, unable to “pop” back to the beginning, back to his own reality?

         The Austin Court of Appeals recently dealt with a far less metaphysical, but no less abstract situation in Texas Jewelers Association, et al. v. Ann Glynn. The court was tasked with deciding the following question: Who shoulders the burden to prove “actual malice” in a qualified privilege defense to a defamation claim when Texas Civil Practice & Remedies Code § 27.005(d) applies?

         Section 27.005(d) addresses the burden shift after the burden shift after the initial burden that takes place in an Anti-SLAPP Motion to Dismiss. The movant under Chapter 27 bears the burden to prove by a preponderance of the evidence that Chapter 27 applies. See Tex. Civ. Prac. & Rem. Code § 27.005(b). If the movant sustains its burden, then the burden shifts to the nonmovant to establish by clear and specific evidence a prima facie case for each essential element to its claim. Id. at § 27.005(c). If the nonmovant sustains its burden, then the court may not dismiss the claim unless (here comes the burden shift) the movant establishes by a preponderance of the evidence each essential element of a defense to the nonmovant’s claim. Id. at § 27.005(d).

         But when an affirmative defense includes a burden shift, does Section 27.005(d) cancel out that burden shift? The Austin Court of Appeals did not definitively answer this question. So we are left with a teetering spinning top situation. But law, unlike cinema, cannot keep its audience guessing at the answer. Fortunately, the court’s opinion provides some guidance on how the question might be answered.

         Texas Jewelers Association

         Ann Glynn (plaintiff) sued Texas Jewelers Association and its President (Brad Koen) and Treasurer (Rex Solomon) for tortious interference with an existing contract and defamation, among other causes of action. Glynn resigned as Executive Director from Texas Jewelers Association in 2016, following allegations that funds were missing from the Association’s accounts. In her suit, Glynn alleged that Koen and Solomon engaged in efforts to build a case against her for misuse of association funds.

         The Defendants filed a Motion to Dismiss pursuant to Chapter 27. Glynn conceded that Chapter 27 applied, but argued that she established by clear and specific evidence each element to her causes of action. The trial court granted the defendants motion to dismiss in part, but denied the motion as to the plaintiff’s tortious interference and defamation claims.

         The court of appeals reversed the trial court’s ruling on the plaintiff’s tortious interference claim and her defamation claim against Koen, but affirmed the trial court’s ruling on the plaintiff’s defamation claim against Solomon. With respect to her defamation claims against Koen, the court held that Glynn failed to provide proof that Koen published any defamatory statement about Glynn. Glynn attributed every alleged defamatory statement to Solomon. As a result, she did not prove by clear and specific evidence the element of “publication” as to Koen.

         The court found, on the other hand, that Glynn sustained her burden to prove by clear and specific evidence each element to her defamation claim against Solomon. Relying on section 27.00(d), Solomon argued that the trial court erred in denying his motion to dismiss Glynn’s defamation claim because Solomon proved by a preponderance of the evidence each essential element to his qualified privilege defense.

         The court acknowledged that the qualified privilege defense includes a burden shift. The defendant bears the burden to prove the qualified privilege attaches to the communications at issue. The privilege attaches to a communication that is “made in good faith and the author, the recipient or a third-person, or one of their family members, has an interest that is sufficiently affected by the communication.” Once the defendant proves the privilege attaches to the communication at issue, then “the burden shifts to the plaintiff to prove that the defendant made the statements with actual malice.”

         Notwithstanding the burden shift to the qualified privilege defense, the parties assumed and did not contest that the defendant/movant bears the burden to prove lack of malice. The court of appeals reasoned: “Neither party contests this approach, so we will address the case as the parties litigated it in the court below. Cf. Alamo Heights Indep. Sch. Dist. V. Clark, 544 S.W.3d 755, 783 (Tex. 2018) (applying causation standard advocated by both parties without deciding whether standard was correct).” The court found that Solomon did not sustain his burden to prove lack of malice by a preponderance of the evidence and, as a result, affirmed the trial court’s denial of Solomon’s motion to dismiss Glynn’s defamation claim against him.

         What is the Correct Standard?

         The court of appeals made an interesting decision to forego articulating the correct standard to apply under section 27.005(d) to an affirmative defense with a burden-shifting component. Courts of appeal review de novo “whether each party has met its respective burden under the Act’s . . . dismissal mechanism.” Grant v. Pivot Technology Solutions, Ltd., 2018 WL 3677634 *3 (Tex. App.—Austin Aug. 3, 2018). One might think that looking “brand new” at the issue concerning the parties’ respective burdens under Chapter 27 would include looking “brand new” at whether the correct standard was applied by the court below. Of course, if the parties did not sufficiently brief the issue for the court to ascertain the correct standard, maybe the court does best by going with the standard assumed by the parties. But what if the parties are wrong on the standard?

         The Austin Court of Appeals supported with a Cf. citation its decision to side step determining the correct standard. “Cf.” is short for compare. The Bluebook informs law students and legal practitioners that “cf.” denotes the cited authority may not expressly (or even obviously) support the stated proposition. Black’s Law Dictionary defines “cf.” as “a citation signal [that] directs the reader’s attention to another authority or section of the work in which contrasting, analogous, or explanatory statements may be found.” (243). The Texas Jewelers Association court asks the reader to compare its decision to apply the standard assumed by the parties with the Texas Supreme Court’s decision in Alamo Heights Independent School District v. Clark, 544 S.W.3d 755 (2018):

Clark asserts a factual dispute exists regarding motivation by sexual desire under Oncale’s first evidentiary route. As a predicate matter, the parties disagree about whether “credible evidence” that the harasser is homosexual is required. Some courts have treated Oncale’s “credible evidence” of homosexuality language as imposing a mandatory requirement of such evidence in every first-route evidentiary case. Other courts have determined this route requires only proof of motivation by sexual desire, which may be shown by any relevant evidence, including—but not limited to—sexual propositions combined with “credible evidence” that the harasser is homosexual. We need not determine which approach is correct because, under either, the evidence is lacking.

         There are notable differences between the Texas Jewelers Association issue and the Alamo Heights issue. While both the Texas Jewelers Association and Alamo Heights decisions side-stepped a question of law, to whom the burden of proof falls in the former case and the quality and type of evidence required in the latter case, the Alamo Heights court declined to select “the correct approach” because under either approach the evidence was lacking. The Alamo Heights Court may have been adhering to “the cardinal principle of judicial restraint—if it is not necessary to decide more, it is necessary not to decide more.” PDK Labs, Inc. v. U.S. Drug Enforcement Admin., 362 F.3d 786, 799 (D.C. Cir. 2004) (Roberts, J., concurring). The Texas Jewelers Association court, however, did not side-step the burden of proof issue because the result would be the same whether the movant or nonmovant bore the burden to prove actual malice; rather, the court side-stepped the issue because the parties assumed the burden fell on the defendant/movant. Notably, the result could have been different in Texas Jewelers Association if the burden shifted to the plaintiff/nonmovant to prove actual malice because, arguably, section 27.005(c) would apply and the nonmovant would need to prove actual malice by clear and specific evidence, not merely by a preponderance of the evidence—more on this point below.

         So what is the correct standard? I propose three ways to approach this question. First, look at the qualified privilege defense to determine if “actual” malice” is or should be treated as an element of the defense or something else. Second, look at the difference between a summary judgment, which places the burden on the movant, and a motion to dismiss. Third, consider the purpose of Chapter 27. Although I will not go into much detail here, a sketch of these three inquiries reveals possible answers to our inquiry.

         First, qualified privilege as an affirmative defense against defamation claims serves to safeguard free speech. See Burbage v. Burbage, 447 S.W.3d 249, 254 (Tex. 2014). The privilege itself requires only a showing by the defendant that the communication at issue was “made in good faith and the author, the recipient or a third-person, or one of their family members, has an interest that is sufficiently affected by the communication.” Id. In one sense, once the privilege attaches, it is no different than the privilege attached to a public figure in a defamation case, making “actual malice” part of the plaintiff’s prima facie case. In fact, the Texas Supreme Court included the qualified privilege within the protections afforded in New York Times Co. v. Sullivan:

The New York Times definition of actual malice which this Court applied in El Paso Times is likewise applicable in the instance case, all three cases being libel suits, all three cases involving publishers’ privileges and all three cases requiring malice to overcome the privileges.

Dun & Bradstreet, Inc. v. O’Neil, 456 S.W.2d 896, 900 (Tex. 1970) (citing El Paso Times, Inc. v. Trexler, 447 S.W.2d 403 (Tex. 1969) and New York Times Co. v. Sullivan, 376 U.S. 254 (1964)). Under this scheme, is “actual malice” an element of the qualified privilege defense? If not, then, based on a plain reading of Texas Civil Practice & Remedies Code § 27.005(d), one might argue that the movant does not bear the burden to prove lack of malice. Cf. Goodman v. Gallerano, 695 S.W.2d 286, 287 (Tex. App.—Dallas 1985, no writ.) (“To assert that a defamation is qualifiedly privileged is an affirmative defense that is available only if evidence shows that the communication was made in good faith and without actual malice.”).

         Second, the Texas Jewelers Association court compared the standard assumed by the parties to the standard applied in the summary judgment context. The summary judgment movant always bears the burden to prove the absence of a genuine issue of material fact. When relying on a defense, it is the summary judgment movant’s burden to conclusively prove every element of its defense. Whether “actual malice” is considered an element (stated in the negative) of the movant’s defense or as part of the plaintiff’s prima facie case (stated in the affirmative) once the privilege attaches does not change the fact that the movant bears the burden to demonstrate the absence of a genuine issue of material fact on the actual malice issue; that is, whether it is part of the defense or part of plaintiff’s prima facie case, the summary judgment movant must conclusively negate actual malice—once the movant demonstrates the privilege attaches, the only issue remaining on the defamation action is whether the statement was made with actual malice. Chapter 27 does not operate the same way. It does not require the movant to prove, as a matter of law, every element to its affirmative defense or disprove the facts of at least one of the elements, or the only remaining element, to the nonmovant’s claim or defense. How, if at all, do the difference between a summary judgment motion and Chapter 27 motion to dismiss inform the inquiry into how the burden of proof should be distributed on a defendant’s qualified privilege defense under section 27.005(d)?

         Third, consider Chapter 27’s stated purpose:

The purpose of this chapter is to encourage and safeguard the constitutional rights of persons to petition, speak freely, associate freely, and otherwise participate in government to the maximum extent permitted by law and, at the same time, protect the rights of a person to file meritorious lawsuits for demonstrable injury.

Tex. Civ. Prac. & Rem. Code § 27.002.

         The burden-shifting mechanism in Chapter 27 is designed to promote Chapter 27’s stated purpose. The movant must first demonstrate that Chapter 27 applies, that is, that the legal action is based on, related to, or in response to the movant’s exercise of one of the enumerated First Amendment rights. The burden then shifts to the nonmovant to demonstrate a meritorious claim. If the nonmovant sustains its burden, then the burden shifts again to the movant to prove the elements of a defense to the nonmovant’s claim. This third shift is important to our inquiry here. It affords the movant another opportunity to demonstrate that his, her, or its First Amendment rights are undermined by an unmeritorious claim. Is the purpose of Chapter 27 undermined or otherwise thwarted if section 27.005(d) requires the movant to prove the negative of an element (actual malice) that by law the nonmovant must prove?

Tilt. Tilt. End.

Daniel Correa
Don't Waste Your Money on Lawyers
Photo by  NeONBRAND  on  Unsplash

Photo by NeONBRAND on Unsplash

Lawyers are expensive. Whether you are involved in a transaction such as buying a business, or caught in litigation and having to defend yourself in court, the lawyer fees can mount quickly. Running into hundreds of dollars an hour, these fees can accumulate to thousands for something as basic as reviewing a contract, and your itemized bill can leave you with sticker shock. Every person who has hired a lawyer know this, and jokes about pricey legal fees abound. So what to do? Don’t waste your money on lawyers.

“Ahh — good one. A slick lawyer trick to show how your fees are lower, and that I should choose you instead.” Not quite. At the moment, I think our fees are probably a bit higher than the average in our county (for example, I bill at $395 per hour as of October 2018, and expect to raise rates January 1). That is all the more reason for you not to waste your money.

Hiring a lawyer is, and must be, an investment in your future, and with every invoice you should ask yourself “what kind of return am I getting on my money?” With that in mind, here are some things to consider as you work with your lawyer:

  • Ask, ask, ask. Your lawyer is a professional who has spent years studying the law and the legal system, learning about approaches to problem-solving and discovering counter-intuitive ways some issues get worked out in the courts. You are hiring them to advise and guide you, which means you should come out of the experience with more knowledge and a better sense of how to handle legal questions in the future. Ask your lawyer to explain terms you don’t understand, processes which don’t make sense to you, or strategic moves which don’t square with your experience. By asking questions, your investment provides you with information which will serve you for years to come.

  • Review every invoice carefully. Your bill tells the story of the work being done for you, so take the time to read each line and confirm you understand where the story is going. Your invoice may be a one-liner: “Draft, finalize, and file trademark application in class 25.” Even then, ask yourself — “what does the money pay for?” At Creedon PLLC, our current flat rate for a trademark application is $1,300, which is quite a bit more than sites like Trademarkia or LegalZoom. If you are wondering why, good — you should be. Talk to your lawyer and find out what each line on your invoice means. For example, why did a partner do some work and an associate other work (and what the heck do those terms even mean). Your invoice is the monthly chart of your dollars at work, so be certain to understand it.

  • Get a budget in advance. Asking for a budget gives you two things immediately: a sense of how much money will be required over time, and a roadmap of where the work is going to happen. For many kinds of work (trademark filings, contract reviews, company formations), many lawyers can offer a flat rate. Be certain to ask exactly what is included! For litigation or longer transactions, a budget will be much more conditional and will shift and change. That’s normal! Ask for a range of values, or for an explanation as to which numbers shift the most and why. For example, discovery (the process of both getting and giving documents and statements related to a case) is notoriously hard to budget — are we talking about 500 pages or 500,000? One deposition (sworn interview) for four hours, or four depositions lasting one day each? Your questions up front will reduce surprises down the road, and will help you to plan your investment and determine if it is worth the cost.

  • Prioritize your spending. Most people hiring a lawyer have many things they’d like to spend their money on, and that may even include multiple legal services. Don’t feel compelled to do it all at once. Rather, think carefully about which investments are the most necessary, and which can wait until later. If you are starting a business, you will almost always make forming your entity (for example, an LLC or a corporation) a very early step, but perhaps securing copyright protection on your software code can wait. (Perhaps not! This is an excellent question to ask early on.) One way to manage this is to ask your lawyer explicitly: “what do I need to do now, and what investments am I looking at over the next year?”

Hiring a lawyer is a big step, but you are the one in control — and the person best able to determine what is right for you and your business. While there is never a guarantee of success, you can always demand the guarantees of clear communication, honest assessment, and a commitment to improving your knowledge over time.

Take charge — and don’t waste your money on lawyers.

James Creedon
Judicial Admission Alone Defeats Anti-SLAPP Motion
nathan-dumlao-263787-unsplash.jpg

You may not lose your case if you fail to file a response to an Anti-SLAPP motion to dismiss, but you should always file a response . . . to any dispositive motion. In Bumjin Park and Jaeyoung Park v. Suk Baldwin Properties, LLC, et al., the Austin Court of Appeals, affirming the trial court’s denial of the movants’ motion to dismiss, held that a judicial admission by the movants established by clear and specific evidence the nonmovants’ counterclaim under section 17.50(c) of the Texas Deceptive Trade Practices Act. In other words, the plaintiffs defeated their own motion by their own pleadings.

Facts and Holding in Suk Baldwin Properties, LLC

The plaintiffs in Suk Baldwin Properties, LLC alleged that they purchased property from the defendants for $1,000,000 and that the defendants made various misleading statements about the condition of the property, among other misleading statements, during the negotiations. The plaintiffs asserted causes of action against the defendants for common law fraud and violations of the Deceptive Trade Practices Act. The defendants filed counterclaims for breach of contract, tortious interference with existing contracts and prospective business, and for attorney fees and court costs on the ground that the plaintiffs’ DTPA action was “groundless in fact or law or brought in bad faith, or brought for the purpose of harassment.” Tex. Bus. & Com. Code § 17.50(c). The plaintiffs filed a motion to dismiss the defendant's’ counterclaims pursuant to Texas Civil Practice and Remedies Code § 27.003(a), alleging that the defendants’ counterclaims were based on, related or in response to the plaintiffs’ exercise of their rights to petition government, namely filing their Original Petition.

The appellate court held the defendants’ tortious interference and breach of contract claims were based on alleged conduct by the plaintiffs outside the context of their lawsuit. The plaintiffs’ petition was based on alleged misrepresentations or material-misleading statements during the negotiations for the purchase of the property at issue. The defendants’ tortious interference and breach of contract claims alleged the plaintiffs engaged in a concerted effort to run off all existing tenants, including one of the defendants (Cen-Tex Dental), by “increasing their rent significantly” and “refus[ing] to provide services required by the tenants’ leases” and by preventing Cen-Tex Dental from erecting its sign for its customers to see and blocking customer parking and obstructing the front view of Cen-Tex Dental’s office with large trash dumpsters. The appellate court concluded that the plaintiffs failed to prove by a preponderance of the evidence the defendants’ counterclaims were based on, related or in response to the plaintiffs filing their Original Petition.

For the defendants’ section 17.50(c) counterclaim, however, the appellate court found the plaintiffs sustained their burden to prove Chapter 27 applied. The defendants sought attorney fees and court costs against the plaintiffs on the ground that the plaintiffs’ DTPA causes of action were groundless, in bad faith, or solely to harass the defendants. As a result, the defendants’ section 17.50(c) counterclaim was directly in response to the Plaintiffs’ DTPA claims in their Original Petition. The burden then shifted to the defendants to demonstrate by clear and specific evidence a prima facie case for each essential element to their section 17.50(c) counterclaim. See Tex. Civ. Prac. & Rem. Code § 27.005(c).

Since the plaintiffs filed no affidavits in support of their motion to dismiss and the defendants filed no response whatsoever, the appellate court looked solely to the pleadings to determine whether the defendants met their burden of proof. The plaintiffs relied on the fact that the defendants failed to file a response to the motion to dismiss as a sufficient ground for the court to find the defendants did not sustain their burden. However, the plaintiffs affirmatively pleaded in their Original Petition that they paid $1,000,000 for the property at issue. The plaintiffs’ assertion of fact as to the purchase price, the court held, constituted a judicial admission. Section 17.49(g) of the DTPA exempts from the DTPA commercial transactions “involving total consideration by the consumer of more than $500,000.” As a result, the appellate court held, “‘[the plaintiffs’] judicial admission as to the purchase price of the property was sufficient to establish by clear and specific evidence a prima facie case’ that their DTPA claims are groundless in fact.”

Implications of and Lessons from the Suk Baldwin Properties, LLC Holding

The Suk Baldwin Properties, LLC holding carries two large implications. First, asserting a section 17.50(c) counterclaim brings that counterclaim within Chapter 27’s reach, making it ripe for an Anti-SLAPP motion to dismiss. Section 17.50(c) can only be raised in response to a DTPA cause of action and, therefore, will always implicate Texas Civil Practice & Remedies Code chapter 27. Second, a judicial admission in the movant’s pleadings alone can defeat the movant’s motion, even if the movant demonstrates that Chapter 27 applies and even when the burden of proof lies with the nonmovant.

For practitioners, there are some lessons to glean from Suk Baldwin Properties, LLC. For one thing, if you are representing a client against whom a DTPA action is pending, and you truly believe the DTPA action is groundless in fact, brought in bad faith, or brought solely to harass your client, consider whether an alternative route to filing a counterclaim exist to recover attorney fees and court costs under section 17.50(c). Section 17.50(c) does not state whether a party wishing to recover attorney fees or court costs under its provision must file with the court a request for such fees and costs in a motion or pleading or any other document. Section 17.50(c) simply states: “On a finding by the court that an action under this section was groundless in fact or law or brought in bad faith, or brought for the purpose of harassment, the court shall award to the defendant reasonable and necessary attorneys' fees and court costs.” Also, section 17.50(c) is not an affirmative defense, so it need not be pleaded. See O’Shea v. International Business Machines Corp., 578 S.W.2d 844, 848 (Tex. App.—Houston [1st Dist.] 1979, writ ref’d n.r.e.). Since section 17.50(c)’s plain language makes clear that the judge, not a jury, decides whether the DTPA action was groundless, brought in bad faith or to harass, it would appear one could raise the issue at a hearing on a dispositive motion or raise it in the trial of the matter, rather than in an actual filing with the court, thereby taking the section 17.50(c) issue outside of Chapter 27’s reach. After all, Chapter 27 only applies to pleadings or filings with the court that seek legal or equitable relief. See Tex. Civ. Pray. & Rem. Code § 27.001(6). Section 17.50(c) may be an issue the judge can take up sua sponte, so informing the court of the issue at a hearing may be enough to recover under section 17.50(c). See Blizzard v. Nationwide Mut. Fire Ins. Co., 756 S.W.2d 801, (Tex. App.—Dallas 1988, no writ) (“[F]indings prerequisite to an award of attorney fees under section 17.50(c) must be made by the court and not by the jury.”); see also Schlager v. Clements, 939 S.W.2d 183, 190 (Tex. App.—Houston [14th Dist.] 1996, (holding the question whether a suit is groundless in fact or law or brought in bad faith under section 17.50(c) “is a question of law for the trial court”).

But don’t you have to specifically plead that you seek attorney fees and the statutory basis for an attorney fees award? Not always. For example, section 17.50(c) is similar to Texas Civil Practice & Remedies Code § 27.009(b), which states: “If the court finds that a motion to dismiss filed under this chapter is frivolous or solely intended to delay, the court may award court costs and reasonable attorney's fees to the responding party.” Chapter 27 does not require the party responding to an Anti-SLAPP motion to dismiss to first amend its answer to include a request for an award of attorney fees pursuant to Chapter 27 before the court may award attorney fees to the respondent. The responding party, for all intents and purposes, may simply request the court to award the respondent reasonable attorney fees and court costs if the judge denies the motion and finds that the motion was frivolous or for the purpose of delay.

More obvious lessons to glean from the Suk Baldwin Properties, LLC holding include the following: (1) always check your pleadings before they are filed to ensure you do not affirmatively state facts that defeat your client’s own cause of action; (2) always support an Anti-SLAPP motion to dismiss, or response thereto, with an affidavit; and (3) always file a response to any dispositive motion.

Daniel Correa
An Author’s Rights Go Public
Photo by  Ari He  on  Unsplash

Photo by Ari He on Unsplash

Article 1, Section 8, Clause 8 of the United States Constitution, known as the “Copyright Clause,” gives Congress the power “to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” As such, the exclusive rights held by a copyright author are finite, and the duration of such rights are complex — particularly for works published between 1923 and 1977.There are specific notice requirements that must be adhered to, but as a rule of thumb, it is important to remember that:

  • For works created from 1978 on, copyright protection generally expires 70 years after the individual author’s death.(See Note 1 below)

  • Copyright protection in works created before 1923 have expired and fallen into the public domain.

The following is a general guide, organized by year of registration or first publication, for determining when an author’s work will fall into the public domain. Note that works created before 1978 had renewal requirements that must be met for an author to retain copyright protection (a topic for another discussion—this topic is already complicated enough):

January 1, 1923 — December 31, 1963

Published without copyright notice:

  • The work is in the public domain.

Published with copyright notice, but the registration was not renewed:

  • The work is in the public domain.

Published with copyright notice and renewed during the 28th year of publication:

  • The work is protected for 95 years from the date it was published.

January 1, 1964 — December 31, 1977

Published without copyright notice:

  • The work is in the public domain.

Published with copyright notice (no renewal required):

  • The work is protected for 95 years from the date it was published.

January 1, 1978 — February 28, 1989

Published without copyright notice or registration:

  • The work is in the public domain.

Published without copyright notice, but registers within 5 years of publication:

  • The work is protected for the life of the individual author plus 70 years.

Published with copyright notice (but created on or after January 1, 1978):

  • The work is protected for the life of the individual author plus 70 years.

Published with copyright notice (but created before January 1, 1978):

  • The work is protected for the life of the individual author plus 70 years, or December 31, 2047, whichever is greater.

March 1, 1989 — December 31, 2002

Created on or after January 1, 1978:

  • The work is protected for the life of the individual author plus 70 years.

Created before January 1, 1978 and not previously published:

  • The work is protected for the life of the individual author plus 70 years, or December 31, 2047, whichever is greater

January 1, 2002 — Present Day

  • The work is protected pursuant to the general rule of thumb—70 years after the individual author’s death.

Works prepared by United States government employees as part of their official duties are in the public domain and do not enjoy copyright protection. There are also special rules and exceptions that apply to works first published outside the United States, architectural works, and sound recordings (as opposed to the compositions of such sound recordings). These topics only complicate the above guidelines, and they are also topics for another discussion. 

Although United States law does not allow copyright protection, unlike trademark protection, to persist indefinitely, copyright registrants enjoy a longer duration of protection than patent holders, and copyright registrations do not require the stringent maintenance procedures inherent in trademark law. The good news and takeaway: your copyright registration, assuming you haven’t licensed or sold it, is likely yours for life (plus 70 years).

  • Note 1: Copyright protection in works created from 1978 on (with more than one author) expires 70 years after the death of the last surviving author. Additionally, copyright protection for anonymous works, works authored under a pseudonym, and works made for hire expire 95 years from the date of publication or 120 years from the date of creation, whichever expires first.

Charles Wallace
Daniel Correa Selected to Update Dorsaneo's Texas Litigation Guide
Daniel-Correa+copy-2.jpg

Daniel Correa, Managing Attorney at Creedon PLLC, has been selected to update the Commercial Litigation and Business Entities volumes of the Texas Litigation Guide. This guide, commonly known as Dorsaneo’s, is published by Matthew Bender & Company, Inc. and is written by SMU Law Professor William V. Dorsaneo III. The Texas Litigation Guide is a comprehensive twenty-six volume treatise commonly used in private practice, and Daniel will rely on his experience as a civil litigator and appellate attorney to make a valuable contribution to this resource.

Having graduated first in his class from the Oklahoma City University School of Law, and with an LLM in Legal Theory from the NYU School of Law, Daniel brings academic rigor to this new challenge. Find out more about Daniel here or by reviewing some of his writing.

Creedon PLLC
James Creedon Elected to Three-Year Term as Barrister with the Patrick E. Higginbotham American Inn of Court

Creedon PLLC is proud to announce that attorney James Creedon has again been elected to the Patrick E. Higginbotham American Inn of Court, this time being selected for a three-year term in the role of Barrister. This organization focuses on litigation and brings together some of the most experienced and skilled attorneys in the Dallas-Fort Worth area. Named for Circuit Judge Patrick E. Higginbotham, United States Court of Appeals for the Fifth Circuit, the Inn is committed to excellence, civility, professionalism, and ethics in the legal profession.

aic_logo.png

“I am honored to again serve with such an esteemed gathering of attorneys, and I look forward to giving my best efforts towards the success of the Inn and the development of our profession,” said James Creedon, founding member of Creedon PLLC.

James focuses his litigation practice primarily on intellectual property and associated commercial matters, and his clients range from sole proprietors to billion dollar companies.

Creedon PLLC
Legal Issues When Leaving a Job
Photo by  Fikri Rasyid

Photo by Fikri Rasyid

Employee mobility is becoming more and more common. While changing jobs is exciting, you need to be cautious when making a move to avoid legal liability. If you’re changing jobs, you may want to talk to an attorney to get advice on your specific situation. However, here are a few general points to keep in mind. 

 

Review Post-Employment Restrictions Before Leaving

It’s easy to forget about post-employment restrictions you may have signed on the first day of work with your former employer. Nevertheless, you likely signed agreements that you will need to review to avoid violating duties which carry forward even after you change employers. Post-employment restrictions can include non-competition and non-solicitation provisions, and can often be found in employment contracts, stock option agreements, deferred compensation agreements, bonus plans, and purchase/sale agreements. Often overlooked, post-employment restrictions are one of the easiest ways employers can file lawsuits against former employees. 

Generally, post-employment restrictions must not go beyond what is reasonably necessary to protect a legitimate business interest. This means the restriction must be limited to a geographical location and to specific types of jobs or industries. For example, a company that only operates in Texas will most likely not be able to enforce a non-compete provision against an employee moving to a company which only operates in Florida. Likewise, a company most likely cannot stop an employee working in sales from taking a job in human resources with a competing company.

If it’s clear you signed enforceable post-employment restrictions, you still have options. First, you may be able to structure your new position so that its duties and responsibilities do not violate your restrictions. For example, you may arrange your new job such that you avoid dealing with certain clients or performing particular duties for the duration of your restrictions. Next, see if your new employer will place you “on the bench.” Your new employer may be willing to place you in a temporary position for the duration of your restrictions, which may protect both you and the employer from a greater risk of liability. Lastly, depending upon the circumstances of your departure, your former employer might be willing to waive your post-employment restrictions.

Questions on your post-employment restrictions should be reviewed by an attorney admitted to practice in the applicable state, as the enforceability of post-employment restrictions varies depending on the state and differs from situation to situation. 

 

Preparing to Leave

Even if you are not subject to post-contractual agreements, you may still be liable to your former employer for certain conduct as you take steps to leave. Notably, while you’re working for an employer (even after you’ve given your notice) you owe a fiduciary duty to that employer, which means you owe a legal duty to your employer to act in their best interest before you change jobs. This includes not soliciting clients or business away from them, and continuing to work to the best of your ability to benefit their business. If you are found to have taken a business opportunity away from your former employer while you are still employed by them, you (and possibly your new employer) could be financially liable for that lost opportunity.

It’s best practice to be cautious when informing other employees, clients, customers, vendors, or business partners that you’re changing jobs. Simply let them know you’re leaving, and avoid giving them a lengthy reason why or encouraging them to join you. This can be difficult because you will most likely have built up a business or personal relationship with them. However, you will be able to contact them (absent any post-contractual agreement) once you start with your new employer and can explain the situation. 

Additionally, it’s important to be cautious of what materials you retain and carry over to your new employer. You must be certain to return all company-owned materials to your employer, including your computer, phone, notes, drafts or final documents, or anything that may contain confidential or proprietary information. Simply because you worked on a project or task does not mean you’re allowed to save or keep information related to it. Anything you prepared for your former employer is a work product of your former employer and must not be improperly retained. This includes reports, standard forms, coding, client lists, blueprints, or anything that you created that was related to your job.  An employee retaining confidential or proprietary information is often the spark that ignites a lawsuit.  

 

Starting Your New Job 

Even when you start your new job you may not be out of the woods yet. You may have also signed a non-disclosure agreement (“NDA”). NDA’s prevent you from disclosing confidential or proprietary information, and may have additional restrictions included in them related to trade secrets. Trade secrets are information which provides an economic or competitive advantage to its owner because the information is not generally known to the public or within an industry. Examples of trade secrets include, but are not limited to, marketing plans, commercial drawings, recipes, client list, or manufacturing processes. Employees who take trade secrets to a new job can be liable under the Defend Trade Secrets Act (“DTSA”), and a court may order them to stop working for a new employer and pay any damages, such as lost profits, caused by using those trade secrets. 

The best way to avoid a DTSA claim or an allegation of violating your NDA is to refrain from using practices or procedures gained from your former employer. Stick to commonly known practices in your industry. It can be difficult to perform your new job and separate out the methods or practices you learned from your former employer, but a helpful tool is to avoid the “we did it this way at my old company” mentality. Rely on the skills and knowledge you’ve gained through your education and industry experience rather than confidential or proprietary information from your previous job. Additionally, if you are working for a direct competitor, do not use inside information about your former employer to undercut them. For example, if your previous employer is about to release a new product and marketing campaign, do not disclose that to your new employer. If your new employer ever asks about your previous employer, it is best practice to avoid specific statements about internal methods and procedures. 

 

Conclusion 

It can be easy to be get swept up in the allure of a new job, but it’s important to remember your legal obligations. To the extent you have questions or concerns, contact an attorney to help you review what you signed. This way you can focus on your new job – and not spend those first days worrying about facing a lawsuit. 

Patrick Lewis
Political Parties and Trademarks
Photo by  Jomar  on  Unsplash

Photo by Jomar on Unsplash

Political parties operate just like any other brand. Each political party has distinctive colors, logos, and brand identity. For example, you associate the Republican elephant or the Democrat donkey with a particular source. You may not like that source or agree with that source —but you know the source. Trademarks are an important part of branding, and political parties need trademark protection to promote their ideals and endorse candidates. However, political parties face challenges with the United States Patent and Trademark Office (USPTO), and the USPTO has no clear guidelines for political parties to follow. That said, if done properly, a political party can hold a registered trademark. 

Republican Party and Democratic Party Trademark Portfolios

Neither the Republican Party nor the Democratic Party holds registered word marks for their names. The Democratic Party attempted to register a service mark in 1992 but abandoned their application later the same year. The Republican Party, on the other hand, has never sought federal registration for its name. In fact, the only national political party with a registered word mark is the Libertarian Party (Reg. No. 2423459). 

The national political parties do hold a few federally registered trademarks in their trademark portfolios. The Republican Party holds two registrations for its elephant logo in connection with political activities (Reg. No. 1892445 and Reg. No. 1908397), and the Democratic Party holds a trademark registration for a logo that is an uppercase “D” with a circle around it. (Reg. No. 4139881). Additionally, the Democratic Party holds a trademark for I WILL VOTE. (Reg. No. 5061751)

Issues Political Parties Face When Applying to Register Trademarks

Political parties face a few issues when attempting to register trademarks. First, political parties often receive a “merely descriptive” refusal. The party wants people to know what it stands for when they hear the party’s name, therefore the political party’s name often stems from a quality of the party. This makes the political party names prone to “merely descriptive” refusals, as the name can be said to “merely describe” a quality of the party such as focusing on environmental issues (hence “green”). For example, the CHRISTIAN DEMOCRATIC-REPUBLICAN PARTY and the NATIONAL INDEPENDENT both received a merely descriptive refusal for their applications. (Serial No. 77039315 and Reg. No. 4482846). 

Additionally, political parties often receive “geographically descriptive” refusals. Chapters of political parties need trademarks too, and often the location of the chapter is included in the trademark. Political parties with geographic locations in their name are almost guaranteed a “geographically descriptive” refusal. For example, both the REPUBLICAN PARTY OF LOS ANGELES COUNTY and the DEMOCRATIC PARTY OF NEW JERSEY received “geographically descriptive” refusals. (Serial No. 85056861 and 85403796).

A “geographically descriptive” refusal isn’t the only problem local political party chapters might face. As stated above, the Republican Party holds its elephant logo as a registered trademark. The USPTO has issued “likelihood of confusion” refusals to local Republican Parties applying to register a logo with the Republican elephant logo. Even though a local Republican chapter is affiliated with the national Republican Party, the USPTO sees them as separate marks and prohibits local chapters from using the elephant in their own trademarks. For example, THE REPUBLICAN PARTY OF LOS ANGELES COUNTY and REPUBLICAN PARTY OF PENNSYLVANIA both received “likelihood of confusion” refusals for using the Republican elephant. (Serial No. 85056612 and 86038833). 

Do Political Parties Perform a “Service” Under the Lanham Act?

In United We Stand the Second Circuit Court of Appeals ruled political activities fall within in the meaning of “services” under the Lanham Act. United We Stand Am., Inc. v. United We Stand, Am. N.Y., Inc., 128 F.3d 86. The court reasoned that political parties provide a valuable service to voters by adopting a mark and using that mark to endorse candidates. Voters need to be able to distinguish those marks, so they know which party supports which candidate. If trademark protection were not allowed, any group trading in political ideas would be free to distribute publicity statements, endorsements, and position papers in the name of the Republican Party, the Democratic Party, or any other party. The court noted, “the resulting confusion would be catastrophic.” Id. at 90.

Should Political Parties Register Collective Marks?

The Trademark Manual of Examining Procedure does not speak to the registrability of political party names. However, the term “political parties” does appear in § 1304, which addresses collective marks. Collective marks are a type of trademark that show membership to a particular organization. The term “political parties” appears under § 1304.02(a)(i)(C), which addresses specimens and states, “Flags, pennants, and banners of various types used in connection with political parties, club groups, or the like could be satisfactory specimens.” This suggests that political parties should register their trademarks as collective marks. Political parties need to use their marks to endorse candidates, and using a collective mark would allow a party to show a candidate belongs to its group and ideals. 

In reality, political parties do not take the collective mark route. A trademark search reveals no major political party has registered a collective mark. The Green Party applied to register a collective mark in 1992 but abandoned the application. (Serial No. 74247135). Neither the Democratic Party nor the Republican Party holds a federally registered collective mark. 

Conclusion

While it’s clear political parties are brands and need trademark protection to promote their ideals and endorse candidates, there is significant uncertainty on the best path forward for them to achieve this end. Given increasing tensions within the major U.S. political parties, this may be the year the USPTO sees an uptick in applications and has to clarify its approach.

Patrick Lewis
Justice Guzman’s Dog in the Fight in City of Laredo v. Laredo Merchants Association
It’s not the size of the dog in the fight, it’s the size of the fight in the dog.
— Mark Twain
Photo by Tim Mossholder on Unsplash

State law preempts the City of Laredo’s anti-litter ordinance, which prohibited local merchants from providing to customers “single use” plastic and paper bags for point-of-sale purchases, according to the Texas Supreme Court in City of Laredo v. Laredo Merchants Association. Before engaging in its analysis and supplying reasons for its decision, the Court disclaimed that it had any “dog in this fight”:

The roving, roiling debate over local control of public affairs has not, with increased age, lost any of its vigor. From public education to immigration policy to fracking to shopping bags, the sides are always deeply divided. “Judges have no dog in this fight. Our duty is to apply the rules fairly and equally to both sides.”

This disclaimer is a curious way to begin a judicial opinion. For one thing, the issue in the case was not whether the judges personally agreed with any public policy, nor did any issue in the case involve public education, immigration, or fracking. So why begin with this disclaimer? Or maybe the following is a better question: Is it true that judges have “no dog” in any public policy fight? Footnotes 1 and 5 and Justice Guzman's concurrence in City of Laredo may answer both of these questions. 

What about those Footnotes in the Opening Paragraph? 

City of Laredo concerned “shopping bags,” not public education, immigration policy, or fracking; Yet, the Court made it a point to mention these latter “public affairs” over which local control over state control is desired by some Texas citizens.  For each of these “public affairs” issues, the Court dropped a footnote. Footnote 1 is substantially different from Footnotes 2 and 3, even though all three footnotes serve the same purpose in drawing attention to contentious public affairs issues.

The first footnote starts out with an explanatory background from a prior Texas Supreme Court case, quoting some language from the majority opinion in Neeley v. West Orange-Cove Consol. Independent School Dist., 176 S.W.3d  746, 786 (2005). Interestingly, Justice Brister wrote a scathing dissent in which he advocated a strong public-policy preference for judicial intervention in creating an "efficient" public education system, going as far as saying that the Court cannot simply defer to the legislature when the Texas Constitution requires "a general diffusion of knowledge": "If efficiency is a justiciable question (as the Court holds), then we cannot simply suggest that someone else look into it." See Neeley, 176 S.W.3d at 802-03 (Brister, J., dissenting). Footnotes 2 and 3, on the other hand, simply cite to statutes which prohibit certain local policy-actions. Footnote 5 may provide some insight into why Footnote 1 sticks out the way it does. 

Footnote 5 on its face appears completely benign. The Court cites to a concurring opinion from a case out of the Ninth Circuit Court of Appeals to which it attributes the quote, “Judges have no dog in this fight . . . .” U.S. v. Howard, 793 F.3d 1113, 1115 (9th Cir. 2015). A look at the Howard concurring opinion, however, reveals a similarity to Footnote 1. Judge Kozinski’s concurring opinion in Howard is written to address what he considered patent unfairness in the release conditions imposed on a criminal defendant by the District Court, prohibiting the Defendant from contacting certain witnesses, without an equal prohibition on the state. Judge Kozinski articulates a clear policy-preference. 

After citing to Howard’s concurring opinion, Footnote 5 in City of Laredo adds the following:

For what it’s worth, “[a] person commits an offense if the person intentionally or knowingly . . . causes a dog to fight with another dog” or “attends as a spectator an exhibition of dog fighting.” Tex. Penal Code § 42.10(a)(1), (6). The latter is a Class A misdemeanor, the former a state jail felony. Id. § 42.10(e).

The majority opinion directs readers to two cases, Neeley in Footnote 1 and Howard in Footnote 5, both of which include individual judge's respective concurring and dissenting opinions that include a strong public policy opinion by the respective judges; that is, these cases provide examples of judges with a dog in the fight. Although Footnote 5 in City of Laredo bears no relevance whatsoever to the legal analysis, reason, or conclusion in the case, it may have been directed as a good-natured-professional chide at the concurring opinion written by Justice Guzman, who did “cause a dog to fight with another dog” when she articulated a policy position against the majority’s clear statement that judges have “no dog in this fight.” 

Justice Guzman’s Dog in the Fight

Justice Guzman begins her concurring opinion by acknowledging public policy arguments are largely “legislative concerns” that are “constitutionally removed from judicial purview." Then, she enters the fray:

Even so, these complex public policy determinations have important ramifications for the environmental legacy the next generation will inherit. And allowing plastic debris—bags, Styrofoam cups, water bottles, and similar pollutants—to migrate unchecked into the environment carries grave consequences that must not be ignored. Though I join the Court’s opinion, I write separately to highlight the urgency of the matter. As a society, we are at the point where complacency has become complicity.

Her concurrence goes on for another 9 pages, discussing the deleterious impact improperly discarded plastics have on the environment and wildlife.

Justice Guzman’s concurring opinion concedes what the Majority wished to conceal: Judges are human beings and citizens of the state and are equally impacted, as every other citizens in the state, by the rights, duties, and burdens adjudicated by them. A judge may have children who might attend public school or friends whose kids may attend public school, and the way the judge comes down on public school funding will impact those kids. Every person, including a judge and his or her family and friends, may find themselves in need of fair and equal process in the face of a criminal prosecution. And every person, including a judge and his or her family and friends, are impacted negatively by a polluted environment. Every judge has a dog in the fight when public affairs are at issue.   

Of course, it does not follow from the fact that every judge has a dog in the fight of public affairs that judges are incapable of impartially deciding an issue. Justice Guzman's concurrence demonstrates that judges are capable of deciding cases according to the law as written, even when the outcome goes against the judge's personal or best interest or preference. She agreed with the outcome, but used her concurring opinion to lend some urgency to the issue, with the hope and expectation that the State legislature will act. 

Daniel Correa